National People's Congress Representative and Peking University Distinguished Professor Tian Xuan: Proposes Establishing an Independent Directors Association

Everyday Reporter | Zhang Shoulin Everyday Editor | Du Yu

The 14th National People’s Congress (NPC) Fourth Session recently opened. NPC delegate and Poyang Distinguished Professor at Peking University Tian Xuan has proposed several suggestions this year.

He recommends establishing a national independent director association under the guidance of the China Securities Regulatory Commission (CSRC), building a “regulation + self-discipline” dual safeguard system, and promoting the improvement and efficiency of the independent director system.

He also suggests that, to ensure every child has an equal opportunity to benefit from capital returns, a unified national children’s development account should be established.

Image source: Provided by interviewee

Proposal to Establish an Independent Directors Association

Tian Xuan points out that China’s current independent director system faces prominent issues such as an imbalance of responsibilities and powers.

He recommends establishing a national, non-profit independent directors association under the guidance of the CSRC, clarifying its positioning and management structure. This association would serve as an industry self-regulatory organization supervised by the CSRC, working in coordination with relevant agencies. Its board of directors should have independent directors representing at least 50%, and various professional committees should be set up to enhance management expertise. The association should focus on addressing systemic pain points by designing core functions, establishing a nationwide unified qualification certification and tiered training system for independent directors, and implementing a “certified to serve” system; building an independent director information database and performance support platform; optimizing nomination mechanisms to solve information asymmetry; developing scientific performance evaluation systems; and establishing industry disciplinary mechanisms linked to regulatory oversight. It should also promote differentiated liability insurance for independent directors, participate in setting standards for liability determination, and reasonably mitigate their risks. Additionally, the association needs to establish regular communication and data-sharing mechanisms with regulators, cooperate with listed company associations and stock exchanges, strengthen disciplinary effects, and form a regulatory synergy.

Furthermore, the establishment of the independent directors association should have clear implementation pathways and safeguard measures, advancing step-by-step. The CSRC should lead the preparatory work, completing registration and gradually improving supporting mechanisms. Policy and resource guarantees should be strengthened, including amending relevant laws and regulations, clarifying the legal status of the association, with initial funding provided by the CSRC, and subsequent funding sources regulated. Industry ecosystem development should be promoted, emphasizing independent director ethics, creating platforms for exchange and discussion, promoting best practices, and fostering a healthy industry development environment.

By establishing an independent directors association under the guidance of the CSRC, the independent director system can shift from “regulatory constraint mainly” to a “dual-driven” model of “regulation + self-discipline,” effectively addressing existing issues such as imbalance of responsibilities and powers, irregular nominations, and insufficient performance safeguards.

Proposal to Establish a Unified National Children’s Development Account

Tian Xuan also proposes that, to ensure every child has an equal opportunity to benefit from capital returns, a unified national children’s development account should be established.

He states that establishing a nationwide unified children’s development account is an important institutional innovation based on the shortcomings of China’s pre-distribution system and aligned with human capital investment principles. It is also a key measure to turn the core concept of pre-distribution—“fair starting point and pre-empowerment”—into concrete practice.

Specific suggestions include:

Implementing a system that covers all children with precise targeting, starting accounts at birth, using the child’s ID number as the unique identifier linked automatically to the household registration system. The central government would deposit an initial amount of 1,000–2,000 yuan per child, with higher amounts of 3,000–5,000 yuan for vulnerable groups such as low-income families, children in difficult circumstances, and left-behind children. A dedicated management system would be built on the national social security information platform, interconnected with multiple systems.

Secondly, a diversified fund system should be constructed, combining government fiscal budgets, transfers of state-owned capital, and voluntary deposits by families, which would enjoy higher personal income tax deductions. Enterprises could contribute to their employees’ children and deduct these contributions from corporate income tax proportionally. Charitable donations should also be encouraged. The social security fund council would manage the funds, adjusting asset allocation risk levels according to children’s age stages to ensure principal safety and steady long-term returns.

Thirdly, funds should be used with clear, standardized, and transparent principles. The accounts would generally be unlocked after age 18, with funds directed solely toward human capital investments. Early withdrawals would only be permitted in emergencies under regulations. A multi-departmental supervision mechanism should be established, with accounts being non-transferable, non-mortgageable, and non-inheritable, subject to full-process supervision.

The implementation plan should start with pilot programs in 3–5 provinces and cities across eastern, central, and western regions by 2027.

To ensure smooth implementation, the “Children’s Development Account Management Regulations” should be drafted promptly to provide a legal basis. The central government would lead in funding and establishing a dynamic adjustment mechanism, upgrading the nationwide digital management platform for technical support. Publicity campaigns should be carried out through multiple channels to foster societal support for children’s development.

Proposal to Improve the Commercial Natural Person Bankruptcy System

Tian Xuan also suggests revising the Company Law to incorporate a bankruptcy system for commercial natural persons, which is significant for protecting innovation, entrepreneurship, and optimizing the business environment. His specific recommendations include:

First, initiate the revision of the Company Law. A dedicated chapter on bankruptcy for commercial natural persons should be added, with the core goal of protecting honest but unfortunate operators, providing legal channels for debt relief and economic rebirth. The applicable subjects should be limited to individual industrial and commercial households, rural contract operators, and the founders or contributors of sole proprietorships and partnerships related to business activities. A reasonable exemption system should be established, protecting those who go bankrupt due to force majeure or market risks, while strictly holding accountable malicious debt evaders. The bankruptcy process should be simplified to lower application thresholds, and a specialized bankruptcy administrator system should be established to ensure fair and efficient proceedings.

Second, to support the implementation of the bankruptcy system for commercial natural persons, a series of supporting systems should be developed. A nationwide unified personal credit information platform should be built, integrating data from multiple departments for information sharing. Credit rating and repair mechanisms should track the credit status of bankrupt entrepreneurs. A unified personal property registration system should be established, clarifying property scope and registration procedures. The disposal rules for joint marital property should be clarified in the Civil Code, and debt responsibilities should be delineated. A personal bankruptcy counseling system should be set up to provide professional advice, and judicially appointed bankruptcy administrators with public service backgrounds should be designated to assist financially distressed operators, offering free bankruptcy application services.

Additionally, to address the insufficient support from financial institutions for personal bankruptcy reform, multiple measures should be taken to encourage their participation and support.

Recommendations to Strengthen Supervision of Minors’ Use of Social Media

Considering the prominent issues in the current regulation of minors’ social media use in China, Tian Xuan suggests:

1. Improving legislation to establish a domestically adapted tiered supervision system. A “standard account + student account” dual-track system should be built, with clear rules for registration, use, and management based on age groups. Platforms should be penalized for violations, and algorithm and feature constraints should be strengthened to prevent addictive designs. Default settings should activate youth modes, with algorithm review and reporting systems for student accounts, and platform managers should bear primary responsibility.

2. Enhancing technical controls to improve precise regulation. Leveraging national government service platforms and the national student registration system, multi-department identity verification mechanisms should be established, requiring platforms to connect and integrate identity verification. Offline verification channels should be available for special cases. Dynamic regulation lists should be created to monitor high-frequency usage platforms, with tiered supervision and appropriate sanctions to eliminate blind spots.

3. Enforcing platform responsibilities to build a comprehensive protective barrier. Platforms should establish content review mechanisms for minors, set up rapid response channels for related issues, and regularly send usage reports to guardians and schools. Regulators should periodically evaluate platform protective measures, publish results, and link them to platform licensing and compliance incentives.

4. Building a collaborative mechanism involving government, schools, families, social organizations, and enterprises. Multi-departmental coordination should be normalized, with performance assessments including minors’ online protection. Special funds should support related activities. Digital literacy and skills education should be integrated into school curricula, with guardian training and involvement of civil organizations. Offline activity venues should be expanded to enrich minors’ offline life, and targeted services should be provided for vulnerable children.

5. Strengthening international cooperation to improve domestic regulation practices. Active participation in global rule-making for minors’ digital protection should be pursued.

Implementing these measures can effectively strengthen minors’ digital safety, reduce exposure to harmful content and social media addiction, and promote a comprehensive “legislation + technology + platform responsibility + collaborative governance” supervision system, improving minors’ online protection.