Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 45

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 45
---
 foreign currency
denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Any actions
and policies adopted by the PRC government could negatively impact the Chinese economy, which could materially adversely affect our business.

Uncertainties in the interpretation and enforcement of PRC laws,
rules and regulations could materially adversely affect our business.

We, the PRC subsidiaries and the Current VIEs
face risks arising from the legal system in China. The PRC legal system is based on written statutes. In 1979, the PRC government began
to publish a comprehensive system of laws and regulations governing economic matters in general, and forms of foreign investment (including
wholly foreign-owned enterprises and joint ventures) in particular. These laws, regulations and legal requirements are relatively new
and often change, and their interpretation and enforcement may raise uncertainties that could limit the reliability of the legal protections
available to us, the PRC subsidiaries. In addition, the PRC legal system is based in part on government policies and internal rules,
some of which are not published on a timely basis, and which may have retroactive effect. As a result, we may not be aware of violation
of these policies and rules until after the violation occurs.

We cannot predict future developments in the
PRC legal system. We may need to procure additional permits, authorizations and approvals for our operations, which we may not be able
to obtain. Our inability to obtain such permits or authorizations may materially adversely affect our business, results of operations
and financial condition.

Administrative and court proceedings in China
may be protracted, resulting in substantial costs and diversion of resources and management attention. Since PRC administrative and court
authorities retain significant discretion in interpreting and implementing statutory and contractual terms, it may be difficult to evaluate
the outcome of administrative and court proceedings and the level of legal protection that we may enjoy. Uncertainties regarding the
interpretation and enforcement of laws and that rules and regulations in China can change quickly with very short notice, along with
the risk that the Chinese government may intervene or influence our operations at any time, or may exert more control over offerings
conducted overseas and/or foreign investment in China-based issuers may impede our ability to enforce contracts and could materially
adversely affect our business, financial condition and results of operations.

PRC regulations relating to investments in offshore companies
by PRC residents may subject PRC-resident beneficial owners or the PRC subsidiaries to liability or penalties, limit