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General Office of the State Council
Opinions of the General Office of the State Council on Implementing the Promotion of Further Opening-up of the Old Industrial Bases
in Northeast China
Guo Ban Fa [2005] No. 36
All the people’s governments of provinces, autonomous regions and municipalities directly under the central government, all the ministries
and commissions of the State Council and all the organs directly under the State Council,
Further opening-up is an important component of the strategy to revitalize the old industrial bases in Northeast China, and also an
important approach to its realization. In accordance with the “Opinions of the Central Committee of CPC and the State Council on
the Implementation of Revitalization Strategy of the Old Industrial Bases in Northeast China” (Zhong Fa [2003] No. 11) and in consideration
of the actual conditions of Northeast China region, the opinions for implementation of its further opening-up have been approved
by the State council and are hereby presented as follows:
1.
We shall encourage foreign investment to participate in the restructuring and transformation of state-owned enterprises, so as to
accelerate structural and mechanism innovation.
(1)
In accordance with the requirements of carrying out the strategic adjustment in state-owned economy, we shall explore and extend new
modes of utilizing foreign investment, encourage foreign investment to participate in the restructuring and transformation of state-owned
enterprises, promote structural and mechanism innovation, and reinforce the adaptive ability of state-owned enterprises in old industrial
bases to market economy.
(2)
We shall encourage foreign investors, through methods such as merger, shareholding, to participate in the restructuring and transformation
of state-owned enterprises. The taxes owed by the enterprises which are historical accumulations and have become really uncollectible
can be exempted with the approval of the State Council in accordance with specific regulations. We shall encourage qualified foreign-invested
stockholding companies to go public in the capital markets in China and overseas.
(3)
We shall actively explore the effective ways to vitalize state-owned assets. We shall permit foreign-invested enterprises to purchase
the bad creditor’s rights and shareholder’s rights from financial property management companies and to reshuffle and dispose of their
properties in accordance with relevant laws.
(4)
We shall continue to improve the social security environment for the development of foreign-invested enterprises. Foreign investors,
after their merger of state-owned enterprises, shall deal with the issues such as labor relations, laying off employees for economic
reasons and social security in compliance with current laws, regulations and rules and the principle of national treatment.
(5)
We shall further regulate and promote the merger and reshuffle of domestic enterprises by foreign investors. We shall establish a
healthy property right exchange mechanism in Northeast China, so as to create a convenient and normative environment to facilitate
foreign investors in their investment through modes like merger and shareholding. Merger of state-owned enterprises by foreign investors
shall be subject to asset assessment carried out in compliance with the relevant Chinese laws and policies, and the price of asset
exchange shall be determined by the results of asset assessment recorded in or approved by relevant departments or bureaus.
2.
We shall strengthen the policy guidance to push forward the technological advancement of key industries and enterprises.
(6)
We shall, on the present basis, bringing into full play of comparative advantages and aiming at the improved overall quality and core
competitiveness, actively introduce foreign investment to accelerate the technological advancement of key industries and enterprises,
enhance the assimilation and absorption of introduced technologies, improve self-driven innovation capabilities and boost industrial
upgradation.
(7)
We shall support foreign investment in key industries and enterprises. We shall actively guide foreign investment to national key
industries, such as modern agriculture, equipment manufacturing, chemistry, hi-tech industry and agricultural products processing
and accelerate development in supporting industries, so as to build modern industrial bases with stronger competitiveness. The state
government will give preferential treatment to Northeast China in the distribution and arrangement of key projects in the above-said
industries and give policy-based loan for the introduction of important key technologies and equipments, with reduced percentage
of capital funds as approved for key projects. Foreign investment in key projects which have been approved by the State to build
with T-bonds can have the approved discount government loans, subsidies and reduced amount of capital funds of the original projects,
and can increase their stockholding rights transferred from Chinese state-owned enterprises upon approval.
(8)
We shall extend the application of the Catalog of Priority Industry for Foreign Investments. The application of “Catalog of Priority
Industry for Foreign Investments in Central and Western Areas” is extended to Liaoning Province (Jilin and Helongjiang have already
been included). Any foreign investment projects in Northeast China which are in conformity with the Catalog are eligible for the
preferential policy in import taxes for the category of encouraged foreign investment.
(9)
We shall encourage foreign investment in hi-tech industries and R&D centers. We encourage multinational corporations, in the form
of sole investment or joint venture with local enterprises, science and research institutions or higher education institutions, to
establish R&D centers in Northeast China. In addition to eligibility for the preferential policies stipulated in the “Notice of the
State Council Concerning the Adjustment in the Taxation Policy of Import Equipment” (Guo Fa [1997] No. 37) and “Notice of the General
Office of the State Council forwarding the Opinions of the Ministry of the Foreign Economic and Trade Concerning the Further Encouragement
of Foreign Investment” (Guo Ban Fa [1999] No. 73), approved foreign-invested enterprises’ technological centers are also eligible
for exemption of import duties and import value-added taxes in accordance with current regulations for the self-use consumptive materials,
reagents, sample equipments, sample products which are not available in China.
(10)
We shall encourage foreign investments in continual industry and substitutive industry. The State will, through priority arrangements
in the distribution of productivity of key projects, encourage and guide foreign investment to the deep processing and continual
industry projects in the resources-exhausted cities of Northeast China, and also bring into full play and make comprehensive use
of existing resources, talents and productive capacities, so as to push forward the transition of these cities.
3.
We shall further extend the areas of opening-up and exert efforts to improve the level of development of the service industry.
(11)
We shall adapt ourselves to the needs of the new situations in the opening-up process, of the development of advantageous industries
in old industrial bases, of the change in the functions of cities and of the promotion of employment, and at the same time actively
introduce foreign investment to upgrade the traditional service industry and focus on developing modern service industry, in order
to push forward the opening-up in the sector of service industry.
(12)
We shall encourage foreign investment in the construction of urban public facilities. Under the condition of the establishment by
city governments of an effective supervising mechanism and the guarantee of public interest and security, the restriction on the
shareholding percentage of foreign investment can be lessened in the construction and operation of gas, heating and water supply
and drainage network. Foreign investor can become the controlling party when approved.
(13)
We shall extend the opening-up of the financial service industry. In accordance with the commitment to WTO in opening up financial
service sector, we shall further extend the opening-up of banking industry and accelerate the development of financial services in
securities, futures and insurance. Priority permits will be granted to sub-branches and operations by foreign banks in Northeast
China. Foreign financial organizations are encouraged to join stock in local city commercial banks and participate in the restructuring
and reshuffle of rural credit cooperatives. Foreign insurance companies, which have advantage in areas such as supplementary pension
and agricultural insurance, are encouraged to begin their operations in Northeast China. Priority permits are also granted to joint
venture securities companies, securities investment and fund management companies, insurance brokers companies and foreign insurance
companies which operate in Northeast China.
(14)
We shall encourage foreign investment in transportation industry. The shareholding percentage of foreign investment, in operations
such as in railway passenger and cargo transportation, cross-border and within-border road transportation, regular or irregular international
freight and international multimodal container transportation, can be raised upon approval. Foreign investment is also encouraged
in air transportation and general aviation.
(15)
We shall extend the pilot scope of foreign-invested logistics enterprises. It can be extended to the provinces of Liaoning, Jilin
and Heilongjiang.
4.
We shall bring into full play the regional advantages to promote the healthy development of regional economic cooperation.
(16)
We shall, by taking advantage of the geographic position of Northeast China region and implementing the “going global” strategy, deepen
the cooperation and development with bordering states in energy sources, raw materials and mineral resources. We shall actively engage
in regional economic cooperation, explore international market, bring along the export of commodities, technologies and labor. We
shall continue to render support to Northeast region in their building of the platform of cooperation with bordering states in international
trade, investment, science and technology and tourism.
(17)
We shall give more impetus to the frontier trade development in Northeast China. We shall study and develop policies conducive to
the development of frontier trade, simplifying procedures in aspects such as export tax rebate, administration of import and export
commodities and personnel exchanges, while strengthening the administration. We shall improve and extend the use of Renminbi in frontier
trade settlement, so as to facilitate trade and investment. A pilot plan is to be carried out in Northeast China for export tax rebate
in Renminbi for small amount export trade.
(18)
We shall strengthen the economic and technological cooperation with Northeastern Asian region to push forward the development and
opening-up of frontier region. We shall continue to expand the international cooperation and development of Tumenjiang area, actively
exploring new modes of development and development and opening-up in frontier region. We shall accelerate the construction of frontier
economic cooperation zone, frontier trade zone and export processing zone, enabling Heihe, Suifenghe (Dongning), Huichun and Dandong
to become areas that assume the functions of logistics, trade, import and export processing and international trade and tourism.
(19)
We shall encourage investment and development abroad in the forms of joint venture, cooperation and merger. We shall, through further
studying relevant policies and improving the policy supporting system, increase the support in the subsidies to the initial cost
of overseas key development projects by enterprises in Northeast China and discount loans to them, and make priority arrangements
for the import of their products.
(20)
We shall encourage qualified enterprises to participate in international tender and contracting international cooperation projects.
For the manufacturing and processing projects and technological cooperation projects in overseas construction contract and overseas
investment that can bring along export of equipment and labor, the current supportive measures, such as discount loans, loans on
favorable terms and the market expansion cost in terms of overseas exhibition and advertisement, will be further strengthened and
expanded.
(21)
We shall accelerate the development of Dalian as an international shipping center in Northeaster Asia. We shall lay more emphasis
on the construction of port facilities and further open up Dalian port, so as to enhance its capacity in absorbing foreign investment
and assembling basic shipping elements. We shall expand the scope of the pilot plan of interaction between free trade zone and port.
We shall render policy support and give priority examination and approval to foreign-invested large scale port projects, near-port
industry in encouraged category, and logistics projects.
5.
We shall create a favorable development environment to safeguard an accelerated opening-up.
(22)
We shall make efforts to utilize more international loans on favorable terms in adding to infrastructure construction and development
in social undertakings such as environmental protection, education and public health. We shall continue to shift the government functions
and improve service awareness and service standard, so as to provide convenient favorable environment for foreign-invested enterprises
in carrying out their business activities.
(23)
We shall further improve the development level of existing development zones. We shall push forward the construction of innovation
system in Northeast region, characterized by self-driven innovation under the circumstance of opening-up, in Northeast region in
order to improve the capability of self-driven innovation of existing development zones. When their approved panning areas have been
fully utilized, the national level development zones and the provincial development zones that have good potential of development,
distinctive industrial features and are of high driving power can, in accordance with the requirements of improvement and rectification
of land market, determine on a reasonable land-use scale after going through required procedures. Northeast region is encouraged
to draw upon successful experiences of other regions to build new-type industrial parks and modern manufacturing bases in cooperation
with the EU and its members or other developed countries on the basis of existing development zones with good infrastructure.
(24)
We shall push forward the construction of infrastructural facilities. The State government will put more in the capital investment
of the infrastructural facilities of harbors, frontier ports, bridges, frontier cities and frontier farms, accelerating the construction
of railway passage project in east part of Northeast China and the integrated construction of road, harbor and port with Russia and
the road, harbor and trade zone with DPRK, so as to push forward the implementation of cooperation projects aboard. The State government
will, in carrying out its plan of international aid, make priority arrangements for the construction projects of infrastructural
facilities such as transportation, harbors and airports linking frontier ports in Northeast region.
(25)
We shall encourage foreign investors to establish joint venture vocational training institutions. In accordance with the “Regulations
of the People’s Republic of China on Chinese-Foreign Cooperation in Running Schools”, foreign investors are encouraged to cooperate
with Chinese higher education and vocational education institutions in establishing advanced vocational education institution for
training various vocational professional talents and international business personnel. In such an activity, they are eligible for
the same treatment given to other Chinese vocational education institutions, except stipulated otherwise in other laws and regulations.
In the meantime, other departments and bureaus concerned shall actively study the preferential tax policy concerning the exemption
of import tax on their import of articles for purpose of research and education. Any experiment and training bases that are qualified
to receive financial support from the central government are eligible for unified supportive policies.
(26)
We shall encourage the Northeast region to introduce talented people from overseas and to make avail of studying abroad programs to
foster the most-wanted talents for Northeast region. We shall increase the fund allocation to Northeast region for the recruitment
of foreign experts and sending personnel abroad for training, and support qualified departments and units in conducting extensive
international talent exchange and cooperation. We shall, by actively applying and availing the World Bank loans and other international
cooperation programs and introducing high-quality educational resources, push forward the Sino-foreign cooperation in running schools
and boost the development of education in Northwest China.
(27)
We shall establish a healthy service system for the introduction of foreign investment by small and medium-sized enterprises. Foreign
investors are encouraged to establish guarantee agencies in the form of Sino-foreign joint venture, aiming pertinently at providing
for small and medium-sized enterprises services such as financing guarantee, information consultancy and legal assistance.
(28)
We shall attach great importance to the organization and implementation of extension of opening-up. The extension of opening-up in
Northeast China is a systematic undertaking as well as a long-term task, of which great importance should be attached in terms of
the leadership and implementation. All relevant departments of the State Council and the People’s Governments of the three provinces
in Northeast China shall formulate detailed rules for implementation in accordance with these implementary opinions. The Office of
the Leading Group for Revitalizing Northeast China and Other Old Industrial Bases shall establish an effective coordination mechanism
with relevant departments of the State Council and the three provinces in Northeast China, in an endeavor to bring about the actual
implementation of all policies through consolidated coordination.
(29)
The above-said policies are also applicable to enterprises from the regions of Hong Kong, Macau and Taiwan, other economic organizations
and individuals participating in the revitalization of old industrial bases in Northeast China.
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