↑ Hoh Xil Tibetan antelope according to IC photo

　　Red Star Journalist Chen Yifan Du Yuquan

　　Editor-in-Chief Deng Guangguang Editor Peng Jiang

　　The much-watched wildlife protection law (the second draft of the revised draft) (hereinafter referred to as "the second draft of the draft") closed for comments on October 1. During the period, a total of 3,806 people put forward 12,057 suggestions for revision of the second draft.

　　Many experts said that in order to respond to the practical needs of wildlife protection, the second draft of the draft has been refined from the aspects of wildlife use, artificial breeding and heritage resource management, and the punishment for illegal acts has been increased. However, the classification management system of artificially bred wild animals in the second draft still needs to be studied, and the concept of wild animals still needs to be clarified.

　　▍The newly added classification and classification management system for artificially bred wild animals experts said that they should be alert to the theft of "whitewashing".

　　Since its promulgation in 1988, the Wildlife Protection Law has undergone four revisions.

　　On October 16, 2020, the 22nd meeting of the National People’s Congress Standing Committee (NPCSC) conducted a preliminary review of the revised draft of the Wildlife Protection Law. In August, 2022, the revised draft of the Wildlife Protection Law was submitted to the 36th meeting of the 13th the National People’s Congress Standing Committee (NPCSC) for second instance.

　　Yang Heqing, spokesman of the National People’s Congress Standing Committee (NPCSC) Law Commission, said that the second draft has made four major revisions: First, the measures for wildlife protection system have been refined. The second is to link up with the National People’s Congress Standing Committee (NPCSC)’s regulations on the total fasting of wild animals, and increase the punishment for illegal acts. The third is to improve the prevention and control mechanism of wildlife damage. The fourth is to establish a classified management system for artificially bred wild animals.

　　Qin Peng, deputy dean of the Graduate School of Chongqing University and director of the Research Center for Ecological Rule of Law of Chongqing University, believes that "overall, the second draft of the draft has strengthened the thinking of risk management and control, and set many prohibitive regulations, hoping to provide effective support for wildlife supervision through full chain supervision."

　　According to People’s Daily Online, on August 30th, the 36th meeting of the 13th the National People’s Congress Standing Committee (NPCSC) reviewed the revised draft of the Wildlife Protection Law. Some members of the Standing Committee, departments, localities, experts and scholars, enterprises and the public suggested that the specific measures to prohibit and allow the breeding of wild animals should be clear, and it was suggested that differentiated management should be implemented according to the purpose and use of artificial breeding, reflecting the principle of classified and graded management. Therefore, on the basis of the first draft, the second draft of the draft also establishes a classified management system for artificially bred wild animals.

　　As stipulated in the second paragraph of Article 25 of the second draft, the artificial breeding of wildlife under special state protection shall be subject to a licensing system. Artificial breeding of wildlife under special state protection shall be approved by the wildlife protection departments of the people’s governments of provinces, autonomous regions and municipalities directly under the Central Government, and an artificial breeding license shall be obtained, except as otherwise provided by the State Council for the approval authorities.

　　The third paragraph of Article 25 also stipulates that artificial breeding of terrestrial wild animals with important ecological, scientific and social values (hereinafter referred to as "three-owned animals") shall be filed with the wildlife protection department of the people’s government at the county level.

　　Civet cats, bamboo rats, etc., which are well known to the public, all belong to "three animals". Compared with the first draft, it is stipulated that the artificial breeding of "three animals" should be approved by the wildlife protection department of the county-level people’s government and obtain the artificial breeding license. In the second draft, the artificial breeding of "three animals" was changed to the filing system, which caused concern.

　　The wildlife conservation organization "Let Migratory Birds Fly" issued a document pointing out that the new version of the draft list of "Three Animals" in National Forestry and Grassland Administration in 2021 includes nearly 1,800 species of animals. If the filing system is implemented, the legal cost of illegal breeding will be extremely low. In addition, there are also voices that not prohibiting the artificial breeding of wild animals will only make more people continue to hunt and breed wild animals for profit.

　　The domestication and reproduction of wild animals have long cycle, high cost and low success rate. In contrast, the huge profits that can be obtained by "washing white" stolen animals and then changing hands will be more attractive to related enterprises.

　　According to Xinhua News Agency, some breeding enterprises and zoos will try to cover up the origin of the illegally caught wild animals, and then use their own wild animal domestication and breeding licenses and wild animal management and utilization licenses to go through legal procedures under the guise of "self-breeding" and successfully "wash white".

　　Zhou Jinfeng, Secretary-General of China Biodiversity Conservation and Green Development Foundation (hereinafter referred to as "Green Development Association"), suggested that "the national principle does not advocate any form of commercial breeding of wild animals, strict control measures should be implemented in countries where commercial breeding of wild animals is necessary, and the species of wild animals should be gradually reduced" should be added to the second draft.

　　Zhou Jinfeng believes that it is necessary to optimize the wildlife protection management system and severely crack down on the behavior of "washing white" called artificial breeding for trading and eating; Reasonably learn from the experience of the ongoing reform of the pollutant discharge permit system, and establish and improve a unified national wildlife permit system as soon as possible; It is necessary to clarify the responsibilities and authorities of relevant departments at central and local levels, appropriately expand the authority of "wildlife protection authorities", increase the "management" function, and establish and improve relevant coordination principles and joint law enforcement mechanisms.

　　▍The revised draft responds to the parrot case. What is the concept of wild animals needs to be clarified.

　　Another major revision of the second draft is to respond to the previous "parrot case".

　　In 2017, Shenzhen man Wang Peng was sentenced to five years in prison for "illegally selling precious and endangered wild animals and their products" for buying and selling artificially bred parrots. The act of "buying and selling artificially domesticated and bred parrots" is included in the scope of the crime of illegally selling precious and endangered wild animals. In March 2018, the Shenzhen Intermediate People’s Court made a second-instance judgment, arguing that the original sentence was too heavy and sentenced Wang Peng to 2 years’ imprisonment. On May 16th of the same year, Wang Peng was released from prison. The case was a sensation, which triggered a heated discussion among legal scholars and the public.

　　Many voices think that it is unreasonable for the judgment to equate artificially bred individuals with wild populations. In addition, some media combed and found that in 21 cases from 2015 to 2017, 32 people were convicted of violating the Criminal Law for buying and selling parrots, and were sentenced to sentences ranging from suspended sentences to 11 years.

　　In the past five years, "parrot cases" have occurred from time to time. Red Star News previously reported that at the end of April 2018, the owner of an aquarium shop in Jiangxi bought 8 parrots and 4 myna from a flower and bird shop, and was later sentenced to 2 years in prison for illegally purchasing and selling endangered wild animals.

　　On August 26th, 2022, Yang Heqing, spokesman of the National People’s Congress Standing Committee (NPCSC) Law Commission, said, "This is actually a question of how to better manage exotic species. The second review draft of this revised draft clearly manages the wild animals in the list of relevant international conventions in accordance with the relevant provisions of this law, instead of managing them according to the national key protected wild animals before the amendment. This is also a major adjustment made by this amendment. "

　　Qin Peng, vice president of the Graduate School of Chongqing University and director of the Research Center for Ecological Rule of Law of Chongqing University, believes that the establishment of a hierarchical management system for artificially breeding wild animals is conducive to reducing the occurrence of "parrot cases".

　　Paragraph 1 of Article 37 of the second draft stipulates that the list of wild animals or their products whose trade is prohibited or restricted by international conventions to which People’s Republic of China (PRC) is a party shall be formulated, adjusted and published by the State Administration for Import and Export of Endangered Species. The wild animals listed in the first paragraph of this article shall be managed in accordance with the relevant provisions of this law with the approval of the competent department of wildlife protection in the State Council.

　　However, at present, the protection of wild animals is only aimed at the wild animals included in the List of National Key Protected Wild Animals, the Appendix of CITES, the List of Three Owns and the Lists of Local Key Protected Wild Animals (hereinafter referred to as the List).

　　Zhou Jinfeng believes that this management of the List will make other species outside the List not protected by national laws. "The protection of the List is ok, but this is only a part. Be sure to add that everything that should be protected outside the Catalogue must be protected, whether it is habitat or species. "

　　He suggested that the legal definition of "wild animals" should be clarified in the second draft, and the protection of wild animals should be changed from key protection to universal protection. "It is necessary to make a clear definition of wild animals, so that it is easy to distinguish between wild animals in natural environment and native environment and some differences between artificially domesticated and bred wild animals. With the legal definition, all our work, including some laws and regulations, will make corresponding institutional arrangements because of the legal definition. "

　　Take catching earthworms with electrical equipment as an example. According to Red Star News, wild earthworms have become scarce after years of catching.

　　On July 8, 2020, the Green Development Association filed a public interest lawsuit against three home appliance enterprises in Zhongshan City, Guangdong Province. The Green Hair Association believes that these businesses provide unspecified users with the opportunity to exterminate earthworms, which destroys the ecological balance of the soil in the earthworm habitat. Excessive hunting of earthworms will also bring irreversible damage to the ecological environment, and their actions have constituted environmental infringement. On August 12, 2021, the Intermediate People’s Court of Zhuhai City, Guangdong Province sentenced three enterprises to compensate for economic losses of about 1.59 million yuan and published an apology statement in the national media. Due to dissatisfaction with the first-instance judgment, three companies appealed to the Guangdong Provincial High Court. On February 17, 2022, the Guangdong Higher People’s Court upheld the original judgment in the second instance.

　　Zhou Jinfeng said that according to the current "Wildlife Protection Law", earthworms are not within the scope of protection. "But in reality, a large number of extinct capture of earthworms by motors did occur, and earthworms have a very important ecological role in soil safety."

　　He suggested that the Wildlife Protection Law should move from key protection to universal protection. "Our protection doesn’t mean that we only protect it and don’t use it at all, but how to regulate interests under the protection."

　　▍Improper release behavior is frequent, and specific measures need to be formulated for the release of wild animals.

　　In addition, the second draft of the draft also proposed that the competent department of wildlife protection be authorized to formulate specific measures for release.

　　Improper release behavior is one of the main ways of alien species invasion. According to Red Star News, the news that exotic species Crocodile Eel frequently appears in urban communities or parks has been widely concerned by the society. The reporter’s investigation found that alligator eels were sold as ornamental fish on the online platform, and the alligator eels that appeared in many lakes were probably the result of buyers’ free release.

　　China’s relevant laws and regulations have clear legal provisions on improper release. When the Wildlife Protection Law was revised in 2016, the requirement of "harmlessness" was put forward. Any unit or individual who releases wild animals into the wild environment should choose local species suitable for wild survival in the released areas, and must not interfere with the normal life and production of local residents and avoid doing harm to the ecosystem. Anyone who releases wild animals at will, causing personal or property damage to others or endangering the ecosystem, shall bear legal responsibility according to law.

　　The 11th Amendment to the Criminal Law of People’s Republic of China (PRC), which came into effect on March 1st, 2021, added the criminal responsibility of "illegally introducing, releasing or discarding alien invasive species, if the circumstances are serious", and sentenced to fixed-term imprisonment of not more than three years or criminal detention, with or without a fine.

　　Regarding how to regulate improper release in practice, Qin Peng said that the division of relevant responsibilities is clearly stipulated in Article 7 of the second draft, and daily law enforcement can be carried out according to this Article and existing administrative practice. At the same time, the provisions also set a special responsibility for fines, and gave the special rule-making power to the wildlife protection department. "The subsequent system regulations will become more and more detailed, and the specific situation will wait for time to test."

　　In addition to managing the improper release behavior itself, Chen Juanli, director of northwest university of politics and law Animal Protection Law Research Center, also wrote an article suggesting that supervision should be strengthened from its related pre-and follow-up links. Including setting clear prohibitive clauses for both parties to e-commerce platform transactions and setting certain regulatory responsibilities for e-commerce platform operators. Strengthen the licensing system for the introduction of alien species and the entry quarantine system to curb it from the source.

　　Qin Peng told the Red Star journalist that, on the whole, the second draft of the draft has comprehensively responded to the actual needs of wildlife protection, and its framework structure and specific content are relatively complete. "At the same time, in order to optimize the quality of the second draft, I think we can refine the provisions on compensation for wildlife damage, and we can also promote the insurance pilot work of compensation for wildlife damage through incentives."

　　―END―

　　Tomorrow, our mobile phone will be screened by Buffett again!

　　At 22:15 Beijing time on May 4th, the annual shareholders’ meeting of Berkshire Hathaway will be held in Omaha, USA. It is estimated that about 30,000 shareholders will attend, and millions of people will watch it online. The most noteworthy issues of this shareholders’ meeting include:

　　Who is Buffett’s successor? — — Bashen is 88 years old and Munger is 95 years old.

　　What about Berkshire’s more than $110 billion in cash? — — Look at the company’s share price of $320,000. Do you still think Maotai is expensive?

　　The repurchase scale will be as high as $100 billion? — — There are not many good companies worth buying, so I have to buy myself.

　　However, for A-share investors, they may be more concerned about this question: What does Buffett think of the China market? Which stocks of A shares meet its stock selection criteria?

　　Which A shares can enter the eyes of the law?

　　There are many criteria for Buffett’s stock selection, but there are clear quantitative criteria. He only said one sentence, that is, the annual return on net assets (ROE) is greater than 20% for 10 consecutive years.

　　The so-called return on equity (ROE) is the ratio of company profits to shareholders’ equity. It represents the investment income of investors, in short, how much money the enterprise can earn for investors.

　　ROE is a measure of a company’s long-term profitability. The higher the ROE, the higher the net profit it earns with the same shareholder capital investment. According to Coca-Cola’s standard, that is, keeping the ROE above 20% for 10 consecutive years, it is the company that Buffett may like.

　　So, which companies in A shares meet Buffett’s standards?

　　Wind data shows that in the 10 years from 2009 to 2019, among the listed companies whose ROE (deduction/dilution) continuously exceeds 20%, there are only five listed companies in A shares, namely Kweichow Moutai, Haitian Weiye, Gree Electric, Yanghe and Chengde Lulu.

　　The average share price increase of these five listed companies in the past 10 years is 690.49%, and the annualized rate of return is 22.97%. The biggest increase is Kweichow Moutai, which rose 12 times in 10 years, followed by Gree Electric, which rose more than 11 times in 10 years.

　　If we relax the ROE standard to 15%, that is, we will keep the ROE above 15% for 10 consecutive years. So, how many companies in A shares meet this standard?

　　Wind data shows that in the 10 years from 2009 to 2019, there were 14 listed companies with ROE (deduction/dilution) exceeding 15% continuously, namely Shuanghui Development, Kweichow Moutai, Haitian Weiye, Hikvision, Gree Electric, Huadong Medicine, Yanghe, Chengde Lulu, Hengrui Pharma, Chongda Technology, dongfeng shares, Fuyao Glass and so on.

　　The average share price increase of these 14 listed companies in the past 10 years is 551.72%, and the annualized rate of return is 20.62%. Among them, Hengrui Pharma, Kweichow Moutai and Gree Electric rose more than 10 times, while Huadong Medicine, Hikvision and Golden Mantis rose more than 5 times.

　　Is Bashen’s strategy unacceptable?

　　In the past 10 years, what is the investment income of Warren Buffett?

　　According to media calculations, if an investor bought a dollar of Berkshire stock 10 years ago, the return today is about $2.4, but if this dollar is invested in the Standard & Poor’s 500 Index Fund, the return today is about $3.2. In other words, in the past 10 years, the income from investing in Berkshire has not been as high as that from investing in the S&P 500 index fund.

　　In 2018, the worst performance of global financial assets in the past 100 years, the "stock god" seems to be unhappy. Suffering from various "thunder" such as Apple’s performance falling short of expectations and Kraft Heinz’s performance changing face, Berkshire lost more than $25 billion in the fourth quarter of 2018, but still earned more than $4 billion in the whole year.

　　But in A-share market, Buffett’s stock picking strategy still seems feasible.

　　In the past decade, 108 A-share stocks have increased more than 5 times, and 29 have increased more than 10 times. The median ROE of these 29 stocks is 14.88%. During this period, the Shanghai Composite Index rose by 24.72%, the Shanghai and Shenzhen 300 Index rose by 50.2%, the CSI 500 Index rose by 74.59%, and the Shenzhen dividend index rose by 132.51%.

　　Obviously, those companies with long-term earning ability and dividend-paying ability can surpass the market if they buy at a reasonable price. However, it should be pointed out that value investment is by no means equal to an ROE index, and the stocks selected according to it are not necessarily suitable investment targets, but only help us find out those good companies more easily.

　　The above data illustrates two problems:

　　First, as Buffett said: "By investing in index funds regularly, an investor who knows nothing can usually beat most professional fund managers." Buffett has recommended index funds for more than ten times.

　　In Buffett’s view, the vast majority of investors rarely invest in index funds, and as a result, their performance in investing in stocks is mostly just mediocre, or even disastrous. There are three main reasons for the loss of investment stocks:

　　1. The cost is too high, investors buy and sell too frequently, or the expenses are too large;

　　2. Investment decisions are made according to gossip or market trends, rather than after careful consideration and quantitative analysis of listed companies;

　　3, blindly chasing up and down, buying or selling at the wrong time.

　　Second, practice has proved that the companies with the strongest earning power in A-shares can bring rich long-term returns to investors.

　　The overall growth level of A-share listed companies is better than the average level of social enterprises. The long-term stock price trend charts of leading enterprises such as Gree Electric, Vanke A, China Merchants Bank, China Ping An and Fuyao Glass are all consistent with the development path of enterprises.

　　The method of value investment has not failed in A-shares. In fact, A-shares will create a good opportunity for value investors to pick up bargains every few years, making it easier for investors to meet good prices. Numerous masters have emphasized that all investment is to find a good industry, a good company and a good price.

　　Finally, Buffett has bought two China stocks so far — — China Petroleum and BYD.

　　In 2003, Buffett bought H shares of China Petroleum at a price of HK$ 1.6, and cleared the position when the share price reached HK$ 13.5 in 2007, with a four-year income of more than 7 times (the reinstatement factor has been considered, the same below). When Buffett bought it, the P/E ratio of China Petroleum was only 5 times, while when China Petroleum was listed on A-share in 2007, the P/E ratio of 48 yuan’s opening price was as high as 63 times.

　　In 2008, Buffett subscribed for 225 million shares of BYD at a price of about HK$ 8 per share. At present, Buffett still holds shares in BYD, and its latest share price is HK$ 53.55, and its income has exceeded five times. When Buffett bought BYD shares, the corresponding P/E ratio was only 10.2 times. At present, its latest P/E ratio is 39.29 times.

　　China securities journal Song Zhaoqing