Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 42

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 3
Chunk 42
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 relation to interpretation and implementation of the FIL, especially in regard to, including, among other things, and specific
rules regulating the organization form of foreign-invested enterprises within the five-year transition period. Under the FIL, foreign
investors and foreign-invested enterprises will be subject to legal liabilities if they fail to report investment information in accordance
with the FIL. In addition, the FIL provides that foreign-invested enterprises established according to the existing laws regulating
foreign investment may maintain their structure and corporate governance within a five-year transition period, which means that we may
be required to adjust the structure and corporate governance of certain of our PRC subsidiaries in such transition period. Failure to
take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely
affect our current corporate structure, corporate governance and business operations.

Risks Related to Doing Business in China and
Hong Kong

A downturn in the Hong Kong, China
or global economy, and economic and political policies of China could materially and adversely affect our business and financial condition.

A part of our operations is
located in Hong Kong and mainland China. Accordingly, our business, prospects, financial condition and results of operations may
be influenced to a significant degree by political, economic and social conditions in Hong Kong and China generally and by continued
economic growth in Hong Kong and China as a whole. The Chinese economy differs from the economies of most developed countries in
many respects, including the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation
of resources. While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically
and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide
the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us.

Economic conditions in Hong Kong
and mainland China are sensitive to global economic conditions. Any prolonged slowdown in the global or Chinese economy may affect potential
clients’ confidence in financial market as a whole and have a negative impact on our business, results of operations and financial
condition. Additionally, continued turbulence in the international markets may adversely affect our ability to access the capital markets
to meet liquidity needs.

The Hong Kong legal system embodies
uncertainties which could limit the legal protections available to us.

Hong Kong is a Special
Administrative Region of the PRC. Following British colonial rule from