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The Ministry of Foreign Trade and Economic Cooperation
Circular of the Ministry of Foreign Trade and Economic Cooperation Concerning Strengthening the Administration of the Examination
and Approval of Enterprises with Foreign Investment
WaiJingMaoZiZongHanZi [1998] No.260
May 7,1998
Commissions (departments, bureaus) of foreign trade and economic cooperation of all provinces, autonomous regions, municipalities
directly under the Central Government and municipalities separately listed on the State plan:
After the 15th CPC Congress and the 9th National People’s Congress, each new local government has been paying much attention to foreign
capital utilization and has adopted, in varying degrees, certain measures to improve the level of foreign capital utilization and
the investment climate, including simplifying the examination and approval procedures, shortening the time for examination and approval
and promoting “one-stop service”, etc., which all turn out to be quite effective. However, there are a rare number of local authorities
that act against state laws and regulations by canceling the examination and approval of enterprises with foreign investment. This
not only impairs the solemnity of the state laws on foreign capital utilization but also leaves the rights and interests of both
Chinese and foreign investors unprotected because unapproved contracts and statutes of enterprises with foreign investment are considered
invalid. Furthermore, a series of legal issues are left unsolved as a result of this, which confuses the state administration on
foreign capital utilization. To safeguard the solemnity of the state laws and the uniformity of law enforcement in China, the circular
for strengthening the administration of the examination and approval of enterprises with foreign investment by rule of law are hereby
given as follows:
1.
The Law on Chinese-foreign Equity Joint Ventures, the Law on Chinese-foreign Contractual Joint Ventures and the Law on Foreign-capital
Enterprises are laws passed by the National People’s Congress and no local authority at any level should have the right to set contradictory
provisions without authorization. Each should strictly abide by the state laws and regulations and conduct examination and approval
of the enterprises with foreign investment as well as their contracts and statutes (including amendments to these contracts and statutes)
in accordance with the existing examination and approval procedures.
2.
The CPC central committee and the State Council have recently circulated the Opinions for Further Opening-up and Enhancement of Foreign
Capital Utilization (ZhongFa [1998] No.6). Authorities at various levels should carefully study it and comprehend its spirit to ensure
the actual implementation of the state policy on foreign capital utilization.
3.
Faithfully implement each provision of the above-mentioned document ZhongFa [1998] No.6. Local governments at various levels should
improve their work efficiency and reduce layers of management to ensure openness and transparency. The measure of one open window
is encouraged to provide standardized and convenient services of high quality. The governments should also improve the modalities
and simplify the procedures of examination and approval of foreign-capital projects in combination of their further efforts in deepening
the reform of the investment capital system. On the other hand, all authorities at various levels should promote uniform leadership
and coordination on foreign capital utilization and faithfully implement the policies and guidelines of the CPC Central Committee
and the State Council on foreign capital utilization so as to keep in tune and ensure the rule of law. To ensure the uniformity and
faithful observance of the state laws and regulations, all local authorities should have no right to formulate regional and industrial
policies without proper authorization.
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