Whistleblowing generally refers to the lawful disclosure of information that a discloser reasonably believes demonstrates wrongdoing, such as fraud, abuse, corruption, waste, or threats to public health and safety, to an authorized recipient, typically someone in the position to regulate the wrongdoing. The discloser, commonly referred to as a whistleblower, may be any individual or entity that works inside or outside of the organization where the wrongdoing occurs, depending on the sector and applicable regulatory framework. 

Although the concepts of “whistleblower” and “whistleblowing” are not entirely new in China, these were only formally introduced as legal terms in recent years. Since the introduction, the framework has been progressively expanded and refined to provide more detailed guidance on protecting and rewarding whistleblowers across various sectors, particularly those sectors that are difficult to monitor and directly impact public welfare.

General Whistleblowing Legal Framework

In 2009, the term “whistleblower” was formally incorporated in the Basic Rules for Enterprise Internal Control (in Chinese: 企业内部控制基本规范) (“Basic Rules”), which requires companies listed in China to establish whistleblowing policies. Under the Basic Rules, regulated entities must establish whistleblowing and whistleblower protection mechanisms, including whistleblowing hotlines and clear procedures and requirements to ensure effective communication. These measures must be promptly communicated to and updated for all staff members.

However, the Basic Rules provide limited guidance on substantive thresholds, procedural requirements, and the scope of whistleblower protections. In addition, while large and medium-sized enterprises are encouraged to follow the Basic Rules, mandatory application is restricted to listed companies in China.

Following the Basic Rules, three regulatory authorities, including the Ministry of Finance (“MOF”) and the Ministry of Public Security, jointly issued the Provisions on Protecting and Rewarding Whistleblowers for Reporting Duty Crimes (in Chinese: 关于保护、奖励职务犯罪举报人的若干规定) (“Duty Crime Provisions”) in 2016.  Although these provisions strengthened protection of and incentives for whistleblowers, they applied only to misconduct by government officials, serving primarily to reinforce public-sector anti-corruption efforts. The approach was subsequently expanded nationwide by the 2019 Guiding Opinions on Strengthening and Standardizing Regulation In-process and Ex-post Regulation (in Chinese: 关于加强和规范事中事后监管的指导意见) (“Guiding Opinions”), which mandates whistleblower systems (including internal mechanisms) and encourages meaningful rewards and robust protection for individuals reporting serious violations. 

In 2021, the State Administration for Market Regulation (“SAMR”) and the MOF jointly promulgated the Interim Measures for Rewarding Whistleblowing against Major Illegalities in the Market Regulation Field (in Chinese: 市场监管领域重大违法行为举报奖励暂行办法) (“Interim Measures”). These measures aim to encourage the public to report major violations, promote social governance, and safeguard the public interest. The Interim Measures also represent the first nationwide regulations for whistleblowing reporting and rewarding mechanisms across industries, with a particular focus on material violations in the pharmaceuticals sector and those posing regional or systemic risks, which will be further elaborated in the following sections of this article.

Despite these developments, the whistleblowing mechanisms under the Interim Measures have limitations. For instance, rewards are granted under certain stringent conditions, including:

(1) the report must identify a concrete subject and provide key clues or evidence of the subject material violations, such as issues leading to suspension of operations, license revocation, or criminal prosecution;

(2) the reported facts must not be previously known to SAMR; and

(3) the reported case is subsequently substantiated, concluded, and penalized following the investigation.

These requirements are often viewed as imposing a relatively high threshold for reward eligibility.

Whistleblowing Initiatives in Financial Sector

Certain sectors, most notably the financial industry, feature more whistleblowing pilot programs with monetary rewards and protection against retaliation, given their critical importance to systemic stability and market integrity.

In 2001, the China Securities Regulatory Commission (“CSRC”) issued the Notice on Reporting with Rewards for Cheating and Illegal Transactions of Securities and Futures (in Chinese: 关于有奖举报证券期货诈骗和非法证券期货交易行为的通告) (“Reporting Notice”) to encourage the public to report fraudulent and unlawful behaviors in securities and futures markets. The Reporting Notice represents one of the earliest initiatives in China to introduce a reward-based whistleblowing mechanism within the financial sector, laying the foundation for subsequent regulatory developments on whistleblower protection and incentives.

Following the Reporting Notice, Chinese regulators subsequently issued a series of laws and regulations aimed at strengthening the integrity of the financial markets and formalizing whistleblowing mechanisms. These include the Interim Regulations on Reporting of Illegal Security Futures Activities (in Chinese: 证券期货违法违规行为举报工作暂行规定), first released by the CSRC in 2014 and later replaced in its entirety by a new version in 2020. While the 2020 update raised the overall reward standards for whistleblowers, it notably excluded anonymous whistleblowing from eligibility for rewards. 

However, on September 30, 2025, the CSRC and MOF jointly released the Provisions for Awarding the Whistlers of Illegal Securities and Futures Activities (Draft for Comment) (in Chinese: 证券期货违法行为吹哨人奖励工作规定（征求意见稿）) (“Draft Provisions”). The Draft Provisions further raise the maximum reward to CNY 1 million. Additionally, unlike the existing framework, the Draft Provisions explicitly extend reward eligibility to anonymous whistleblowing, provided that the whistleblowers disclose their real identity at the authorities’ request. This regulatory shift may signal a growing recognition that, to encourage the reporting of market misconduct, it requires a balance between anonymity and accountability of the reporters.

Collectively, these laws, regulations, and implementing measures have established clearer reward criteria and demonstrate China’s steady progress in institutionalizing whistleblowing as an integral component of financial market governance.

Whistleblowing Mechanism in Pharmaceutical Industry

The pharmaceutical sector has long been regarded as a high-risk sector for corruption globally, owing to complex supply chains and intricate web of stakeholders. Whistleblowers, often insiders such as medical professionals and former employees, play a critical role in exposing bribery, kickbacks, data falsification, and unethical marketing practices.

In recent years, China has placed increasing emphasis on strengthening whistleblowing mechanisms within the pharmaceutical industry, recognizing their importance in detecting corruption, ensuring regulatory compliance, and safeguarding public health. 

On May 29, 2025, three regulatory bodies, the National Medical Products Administration, SAMR, and MOF, jointly issued the Notice on Rewarding Internal Whistleblowers for Reporting on the Quality and Safety Issues of Drugs and Medical Devices (in Chinese: 关于对药品医疗器械质量安全内部举报人举报实施奖励的公告) (“New Whistleblowers Notice”), effective immediately.  

The New Whistleblowers Notice aims to reward whistleblowers who report significant quality and safety issues related to drugs and medical devices. As to reward eligibility, the New Whistleblower Notice largely mirrors the stringent standards set out under the Interim Measures, requiring that the reward be contingent upon substantiation, conclusion, and imposition of penalties in the reported case. 

However, compared with the broader eligibility range for qualified whistleblowers in the financial sector, the New Whistleblowers Notice applies only to real-name reports submitted by internal or related informants, such as current employees, former employees who left within the past year, vendors involved in safety and quality issues, and temporary contractors. In contrast, whistleblowing mechanisms in the financial sector generally permit reports from the wider public, including individuals with no direct affiliation to the entity concerned. The narrower eligibility scope under the New Whistleblower Notice may reflect the regulators’ intent to emphasize the credibility and reliability of insider information in the pharmaceutical sector, where technical expertise and first-hand access to quality or safety data can be essential for effective enforcement.

Concluding Remarks

Overall, China’s evolving whistleblowing framework reflects an overall policy shift toward institutionalizing transparency, accountability, and compliance across both public and private sectors.

As new sector-specific initiatives continue to emerge, particularly in the financial and pharmaceutical industries, foreign entities operating in China should ensure that their internal compliance frameworks and reporting mechanisms align with these emerging regulatory developments. This includes strengthening internal reporting mechanisms, safeguarding whistleblower confidentiality, and fostering a corporate culture that supports good-faith, lawful disclosures.