BEIJING - The Supreme People's Court of China Tuesday issued a circular, requiring courts nationwide to create an entrepreneurial and innovation-friendly legal environment.

Courts at all levels should use their judicial function to protect the legitimate interest of entrepreneurs equally according to law, the circular said.

As long as entrepreneurship and innovation in production, management and financing does not violate criminal law, it cannot be judged a crime, it said.

The circular also requires courts to strictly differentiate between the legal property and illegal gains of entrepreneurs. Courts should not confiscate or restitute property which has not been proved illegal.

The circular states that courts must protect the legitimate interests of honest and trustworthy entrepreneurs, and punish dishonest ones according to law.