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INTERPRETATION BY THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS REGARDING ANNEX I (7) AND ANNEX II (III) TO THE BASIC LAW OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE’S REPUBLIC OF CHINA

Interpretation by the Standing Committee of the National People’s Congress Regarding Annex I (7) and Annex II (III) to the Basic Law
of the Hong Kong Special Administrative Region of the People’s Republic of China

(Adopted at the 8th Meeting of the Standing Committee of the Tenth National People’s Congress on April 6, 2004) 

At its 8th Meeting, the Standing Committee of the Tenth National People’s Congress examined the motion proposed by the Council of
Chairmen requesting examination of the Draft Interpretation by the Standing Committee of the National People’s Congress Regarding
Annex I (7) and Annex II (III) to the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China.
Having consulted the Committee for the Basic Law of the Hong Kong Special Administrative Region under the Standing Committee of the
National People’s Congress, the Standing Committee of the National People’s Congress has decided, in accordance with the provisions
in Subparagraph (4) of Article 67 of the Constitution of the People’s Republic of China and the provisions in the first paragraph
of Article 158 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, to make the following
interpretation of the provisions of Annex I (7) to the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic
of China, under the Method for the Selection of the Chief Executive of the Hong Kong Special Administrative Region, which reads,
“If there is a need to amend the method for selecting the Chief Executives for the terms subsequent to the year 2007, such amendments
must be made with the endorsement of a two-thirds majority of all the members of the Legislative Council and the consent of the Chief
Executive, and they shall be reported to the Standing Committee of the National People’s Congress for approval”, and the provisions
of Annex II (III) , under the Method for the Formation of the Legislative Council of the Hong Kong Special Administrative Region
and its Voting Procedures, which reads, “With regard to the method for forming the Legislative Council of the Hong Kong Special Administrative
Region and its procedures for voting on bills and motions after 2007, if there is a need to amend the provisions of this Annex, such
amendments must be made with the endorsement of a two-thirds majority of all the members of the Council and the consent of the Chief
Executive, and they shall be reported to the Standing Committee of the National People’s Congress for the record” : 

1.  The phrases “subsequent to the year 2007” and “after 2007” stipulated in the two Annexes mentioned above include the year
2007. 

2.  The provisions in the two Annexes mentioned above that “if there is a need” to amend the method for selecting the Chief
Executives for the terms subsequent to the year 2007 or the method for forming the Legislative Council and its procedures for voting
on bills and motions after 2007 mean that they may be amended or remain unamended. 

3.  The provisions in the two Annexes mentioned above that any amendment must be made with the endorsement of a two-thirds majority
of all the members of the Legislative Council and the consent of the Chief Executive and shall be reported to the Standing Committee
of the National People’s Congress for approval or for the record mean the legislative process that must be gone through before the
method for selecting the Chief Executive and the method for forming the Legislative Council and its procedures for voting on bills
and motions are to be amended. Such an amendment may become effective only if it has gone through the said process, including the
approval finally given by the said Committee in accordance with law or the reporting to the Committee for the record. The Chief Executive
of the Hong Kong Special Administrative Region shall present a report to the Standing Committee of the National People’s Congress
as regards whether there is a need to make an amendment, and the Committee shall, in accordance with the provisions in Articles 45
and 68 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, make a determination in
the light of the actual situation in the Hong Kong Special Administrative Region and in accordance with the principle of gradual
and orderly progress. The bills on amendments to the method for selecting the Chief Executive and the method for forming the Legislative
Council and its procedures for voting on bills and motions and the proposed amendments to such bills shall be introduced by the Government
of the Hong Kong Special Administrative Region into the Legislative Council. 

4.  If no amendment is made to the method for selecting the Chief Executive, the method for forming the Legislative Council
and its procedures for voting on bills and motions as stipulated in the two Annexes mentioned above, the provisions relating to the
method for selecting the Chief Executive in Annex I will remain applicable to the method for selecting the Chief Executive, and the
provisions relating to the method for forming the third term of the Legislative Council in Annex II and the provisions relating to
its procedures for voting on bills and motions in Annex II will remain applicable to the method for forming the Legislative Council
and its procedures for voting on bills and motions.

Notice: All Rights Reserved to the Legislative Affairs Commission of the Standing Committee of the National People’s Congress.






AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE REPUBLIC OF LATVIA ON THE PROMOTION AND PROTECTION OF INVESTMENTS

AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE REPUBLIC OF LATVIA ON THE PROMOTION AND
PROTECTION OF INVESTMENTS

The Government of the People’s Republic of China and the Government of the Republic of Latvia (hereinafter referred to as the Contracting
Parties).

Intending to create favorable conditions for investment by investors of one Contracting Party in the territory of the other Contracting
Party;

Recognizing that the reciprocal encouragement, promotion and protection of such investment will be conducive to stimulating business
initiative of the investors and will increase prosperity in both States;

Desiring to intensify the cooperation of both States on the basis of equality and mutual benefits;

Have agreed as follows:

Article 1

DEFINITIONS

For the purpose of this Agreement.

1.

The term “investment” means every kind of asset invested by investors of one Contracting Party in accordance with the laws and regulations
of the other Contracting Party in the territory of the latter, and in particularly, though not exclusively, includes:

(a)

movable and immovable property and other property rights such as mortgages, pledges and similar rights;

(b)

shares, debentures, stock and any other kind of participation in companies;

(c)

claims to money or to any other performance having an economic value associated with an investment;

(d)

intellectual property rights, in particularly copyrights, patents, trade-marks, trade-names, technical process know-how and good-will;

(e)

business concessions conferred by law or under contract permitted by law, including concessions to search for, cultivate, extract
or exploit natural resources.

Any change in the form in which assets are invested does not affect their character as investments provided that such change is in
accordance with the laws and regulations of the Contracting Party in whose territory the investment has been made.

2.

The term “investor” means.

(a)

In respect of the Republic of Latvia;

i)”natural person” means a citizen or non-citizen in accordance with the laws and regulations of the Republic of Latvia;

ii)”legal person” means any legal entity such as company, corporation, firm, partnership, business association, institution or organization,
incorporated or constituted in accordance with the laws and regulations of the Republic of Latvia and having its registered office
within the jurisdiction of the Republic of Latvia, whether or not for profit and whether its liabilities are limited or not.

(b)

In respect of the People’s of Republic of China:

i)natural persons who have nationality of the People’s of Republic of China in accordance with the laws of the People’s of Republic
of China;

ii)legal entities, including companies, associations, partnerships and other organizations, incorporated or constituted under the
laws and regulations of the People’s of Republic of China and have their registered offices in the People’s of Republic of China.

3.

The term “return” means the amounts yielded from investments, including profits, dividends, interests, capital gains, royalties, fees
and other legitimate income.

Article 2

PROMOTION AND PROTECTION OF INVESTMENT

1.

Each Contracting Party shall encourage investors of the other Contracting Party to make investments in its territory and admit such
investments in accordance with its laws and regulations.

2.

Investments of the investors of either Contracting Party shall enjoy the constant protection and security in the territory of the
other Contracting Party.

3.

Without prejudice to its laws and regulations, neither Contracting Party shall take any unreasonable or discriminatory measures against
the management, maintenance, use, enjoyment and disposal of the investments by the investors of the other Contracting party.

4.

Subject to its laws and regulations, one Contracting Party shall provide assistance in and facilities for obtaining visas and working
permits to nationals of the other Contracting Party engaging in activities associated with investments made in the territory of that
Contracting Party.

Article 3

TREATMENT OF INVESTMENT

1.

Investments of investors of each Contracting Party shall all the time be accorded fair and equitable treatment in the territory of
the other Contracting Party.

2.

Without prejudice to its laws and regulations, each Contracting party shall accord to investments and activities with such investments
by the investors of the other Contraction Party treatment not less favorable than that accorded to the investments and associated
activities by its own investors.

3.

Neither Contracting Party shall subject investments and activities associated with such investments by the investors of the other
Contracting Party to treatment less favorable than that accorded to the investments and associated activities by the investors of
any third State.

4.

Each Contracting Party shall accord to investments and activities associated with such investments by the investors of the other Contracting
Party treatment, which is the most favorable of those stipulated in paragraph 2 and paragraph 3 of this Article.

5.

The provisions of Paragraphs 3 of this Article shall not be construed so as to oblige one Contracting Party to extend to the investors
of the other Contracting Party the benefit of any treatment, preference or privilege by virtue of:

(a)

any customs union, free trade zone, economic union, monetary union and any international agreement resulting in such unions, or similar
institutions;

(b)

any international agreement or arrangement relating wholly or mainly to taxation;

(c)

any arrangements for facilitating small scale frontier trade in border areas.

Article 4

EXPROPRIATION

1.

Neither Contacting Party shall expropriate, nationalize or take other similar measures (hereinafter referred to as “expropriation”)
against the investments of the investors of the other Contracting Party in its territory, unless all the following conditions are
met:

(a)

for the public interests;

(b)

under domestic legal procedure;

(c)

without discrimination;

(d)

against compensation

2.

The compensation mentioned in Paragraph 1 of this Article shall be equivalent to the value of the expropriated investments immediately
before the expropriation is taken or the impending expropriation becomes public knowledge, whichever is earlier. The value shall
be determined in accordance with generally recognized principles of valuation. The compensation shall be in a freely convertible
currency. The compensation shall include interest at a normal commercial rate from the date of expropriation until the date of payment.
The compensation shall also be made without delay, be effectively realizable and freely transferable.

Article 5

COMPENSATION FOR DAMAGES AND LOSSES

Investors of one Contracting Party whose investments in the territory of the other Contracting Party suffer losses owing to war, a
state of national emergency, insurrection, riot or other similar events in the territory of the latter Contracting Party, shall be
accorded by the latter Contracting Party treatment, as regards restitution, indemnification, compensation and other settlements no
less favorable than that accorded to the investors of its own or any third State, whichever is more favorable to the investor concerned.

Article 6

TRANSFERS

1.

Each Contracting Party shall, subject to its laws and regulations, guarantee to the investors of the other Contracting Party the transfer
of their investments and returns held in its territory, including:

(a)

profits, dividends, interests and other legitimate income;

(b)

proceeds obtained from the total or partial sale or liquidation of investments;

(c)

payments pursuant to a loan agreement in connection with investments;

(d)

royalties in relation to the matters in Paragraph 1 (d) of Article 1 ;

(e)

payments of technical assistance or technical service fee, management fee;

(f)

payments in connection with contracting projects

(g)

earnings of nationals of the other Contracting Party who work in connection with an investment in its territory.

Such transfers shall be affected without delay.

2.

Nothing in Paragraph 1 of this Article shall affect the free transfer of compensation paid under Article 4 and 5 of this Agreement.

3.

The transfer mentioned above shall be made in a freely convertible currency and at the prevailing market rate of exchange applicable
within the Contracting Party accepting the investments and on the date of transfer.

Article 7

SUBROGATION

If one Contracting Party or its designated agency makes a payment to its investors under a guarantee or a contract of insurance against
non-commercial risks it has accorded in respect of an investment made in the territory of the other Contracting Party, the latter
Contracting Party shall recognize:

(a)

the assignment, whether under the law or pursuant to a legal transaction in the former Contracting Party, of any rights or claims
by the investors to the former Contracting Party or to its designated agency, as well as.

(b)

that the former Contracting Party or its designated agency is enpost_titled by virtue of subrogation to exercise the rights and enforce
the claims of that investor and assume the obligations related to the investment to the same extent as the investor.

Article 8

SETTLEMENT OF DISPUTES BETWEEN CONTRACTING PARTIES

1.

Any dispute between the Contracting Parties concerning the interpretation or application of this Agreement shall, as far as possible,
be settled with consultation through diplomatic channels.

2.

If a dispute cannot thus be settled within six months, it shall, upon the request of either Contracting Party, be submitted to an
ad hoc arbitral tribunal.

3.

Such tribunal comprises of three arbitrators. Within two months of the receipt of the written notice requesting arbitration, each
Contracting Party shall appoint one arbitrator. Those two arbitrators shall, within further two months, together select a national
of a third State having diplomatic relations with both Contracting Parties as Chairman of the arbitral tribunal.

4.

If the arbitral tribunal has not been constituted within four months from the receipt of the written notice requesting arbitration,
either Contracting Party may, in the absence of any other agreement, invite the President of the International Court of Justice to
make any necessary appointments. If the President is a national of either Contracting Party or is otherwise prevented from discharging
the said functions, the Member of the International Court of Justice next in seniority who is not a national of either Contracting
Party or is not otherwise prevented from discharging the said functions shall be invited to make such necessary appointments.

5.

The arbitral tribunal shall determine its own procedure. The arbitral tribunal shall reach its award in accordance with the provisions
of this Agreement and the principles of international law recognized by both Contracting Parties.

6.

The arbitral tribunal shall reach its award by a majority of votes. Such award shall be final and binding upon both Contracting Parties.
The arbitral tribunal shall, upon the request of either Contracting Party, explain the reasons of its award.

7.

Each Contracting Party shall bear the costs of its appointed arbitrator and of its representation in arbitral proceedings. The relevant
costs of the Chairman and tribunal shall be borne in equal parts by the Contracting Parties.

Article 9

SETTLEMENT OF DISPUTES BETWEEN INVESTORS AND ONE CONTRACTING PARTY

1.

Any legal dispute between an investor of one Contracting Party and the other Contracting Party in connection with an investment in
the territory of the other Contracting party shall, as far as possible, be settled amicably through negotiations between the parties
to the dispute.

2.

If the dispute cannot be settled through negotiations within six months from the date it has been raised by either party to the dispute,
it shall be submitted by the choice of the investor:

(a)

to the competent court of the Contracting Party that is a party to the dispute;

(b)

to International Center for Settlement of Investment Disputes (ICSID) under the Convention on the Settlement of Disputes between States
and Nationals of Other States, done at Washington on March 18, 1965.

Once the investor has submitted the dispute to the competent court of the Contracting Party concerned or to the ICSID, the choice
of one of the two procedures shall be final. However, an investor who has submitted the dispute to a national court may nevertheless
have recourse to the arbitral tribunal mentioned in paragraph (b) of this Article, if the investor has withdrawn his case from national
court according to the procedural laws of that Contracting Party before judgment has been delivered on the subject matter.

3.

The arbitration award shall be based on the law of the Contracting Party to the dispute including its rules on the conflict of laws,
the provisions of this Agreement as well as the universally accepted principles of international law.

4.

The arbitration award shall be final and binding upon both parties to the dispute. Both Contracting Parties shall commit themselves
to the enforcement of the award.

Article 10

TRANSPARENCY

1.

Each Contracting Party shall promptly publish, or otherwise make publicly available, its laws, regulations, procedures and administrative
rulings and judicial decisions of general application as well as international agreements which may affect the investment of investors
of the other Contracting Party in the territory of the former Contracting Party.

2.

Nothing in this Agreement shall require a Contracting Party to furnish or allow access to any confidential or proprietary information
concerning particular investors or investments, the disclosure of which would impede law enforcement or be contrary to its laws protecting
confidentiality or prejudice legitimate commercial interests of particular investors.

Article 11

OTHER OBLIGATIONS

1.

If the legislation of either Contracting Party or international obligations existing at present or established hereafter between the
Contracting Parties result in a position entitling investments by investors of the other Contracting Party to a treatment more favorable
than is provided for by the Agreement, such position shall not be affected by this Agreement.

2.

Each Contracting Party shall observe any commitments it may have entered into with the investors of the other Contracting Party as
regards to their investments.

Article 12

APPLICATION

This Agreement shall apply to investment made prior to or after its entry into force by investors of one Contracting Party in the
territory of the other Contracting Party in accordance with the laws and regulations of the Contracting Party concerned, but not
apply to the dispute arose before its entry into force.

Article 13

CONSULTATIONS

1.

The representatives of the Contracting Parties shall hold meetings from time to time for the purpose of:

(a)

reviewing the implementation of this Agreement;

(b)

exchanging legal information and investment opportunities;

(c)

resolving disputes arising out of investments;

(d)

forwarding proposals on promotion of investment;

(e)

studying other issues in connection with investment.

2.

Where either Contracting Party requests consultation on any matter of Paragraph 1 of this Article, the other Contracting Party shall
give prompt response and the consultation be held alternatively in Beijing and Riga.

Article 14

ENTRY INTO FORCE, DURATION AND TERMINATION

1.

This Agreement shall enter into force on the first day of the following month after the date on which both Contracting Parties have
notified each other in writing that their respective internal legal procedures necessary therefore have been fulfilled and remain
in force for a period of ten years.

2.

This Agreement shall continue to be in force unless either Contracting Party has given a written notice to the other Contracting Party
to terminate this Agreement one year before the expiration of the initial ten year period or at any time thereafter.

3.

With respect to investments made prior to the date of termination of this Agreement, the provisions of Article 1 to 13 shall continue
to be effective for a further period of ten years from such date of termination.

4.

This Agreement may be amended by written agreement between the Contracting Parties. Any amendment shall enter into force under the
same procedures required for entry into force of the present Agreement.

In Witness Whereof undersigned, duly authorized thereto by respective Governments, have signed this Agreement.

Done in duplicate at Beijing on April 15, 2004 in the Chinese, Latvian and English languages, all texts being equally authentic. In
case of divergent interpretation, the English text shall prevail.

For the Government of￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿For the Government of

The People’s Republic of China￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿ The Republic of Latvia

PROTOCOL TO AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE REPUBLIC OF LATVIA ON THE
PROMOTION AND PROTECTION OF INVESTMENTS

On the signing of the Agreement between the Government of the People’s Republic of China and the Government of the Republic of Latvia
on the Promotion and Protection of Investments, the undersigned representatives have agreed on the following provisions which constitute
an integral part of the Agreement:

Ad Article 1

The People’s Republic of China takes note of the statement of the Republic of Latvia that the term “non-citizen” referred to in Article
1 , paragraph 2(a)(i), means a person who, in accordance with the Law on Status of Those Former U.S.S.R. Citizens Who Do not Have
Citizenship of Latvia or That of any Other State, has a right to a non-citizen passport issued by the Republic of Latvia.

Ad Article 9

The Republic of Latvia takes note of the statement that the People’s Republic of China requires that the investor concerned exhausts
the domestic administrative review procedure specified by the laws and regulations of the People’s Republic of China, before submission
of the dispute to ICSID under Article 9 , paragraph 2. The People’s Republic of China declares that such a procedure will take a
maximum period of three months.

For the Government of￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿For the Government of

The People’s Republic of China￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿The Republic of Latvia



 
The Government of the People’s Republic of China
2004-04-15

 






DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS ON ISSUES RELATING TO THE METHODS FOR SELECTING THE CHIEF EXECUTIVE OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION IN THE YEAR 2007 AND FOR FORMING THE LEGISLATIVE COUNCIL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION IN THE YEAR 2008

Decision of the Standing Committee of the National People’s Congress on Issues Relating to the Methods for Selecting the Chief Executive
of the Hong Kong Special Administrative Region in the Year 2007 and for Forming the Legislative Council of the Hong Kong Special
Administrative Region in the Year 2008

(Adopted at the 9th Meeting of the Standing Committee of the Tenth National People’s Congress on April 26, 2004) 

At its 9th Meeting, the Standing Committee of the Tenth National People’s Congress examined the Report on Whether There Is a Need
to Amend the Methods for Selecting the Chief Executive of the Hong Kong Special Administrative Region in 2007 and for Forming the
Legislative Council of the Hong Kong Special Administrative Region in 2008, submitted by Tung Chee-hwa, the Chief Executive of the
Hong Kong Special Administrative Region, on April 15, 2004 and, before the meeting, had consulted deputies to the National People’s
Congress and members of the National Committee of the Chinese People’s Political Consultative Conference from the Hong Kong Special
Administrative Region, people from different sectors of Hong Kong, Hong Kong members of the Committee for the Basic Law of the Hong
Kong Special Administrative Region under the Standing Committee of the National People’s Congress, and the Constitutional Development
Task Force of the Government of the Hong Kong Special Administrative Region, and had, at the same time, sought the advice of the
Hong Kong and Macao Affairs Office of the State Council. In the course of examination, the Standing Committee of the National People’s
Congress paid full attention to the recent concerns of the Hong Kong community about the methods for selecting the Chief Executive
and for forming the Legislative Council after the year 2007, including the views of some bodies and public figures that they wish
to see the selection of the Chief Executive by universal suffrage in the year 2007 and the election of all the members of the Legislative
Council by universal suffrage in the year 2008. 

The participants hold that the provisions in Articles 45 and 68 of the Basic Law of the Hong Kong Special Administrative Region of
the People’s Republic of China (hereinafter referred to as the Basic Law of Hong Kong, in short) already expressly stipulate that
the methods for selecting the Chief Executive and for forming the Legislative Council shall be prescribed in the light of the actual
situation in the Hong Kong Special Administrative Region and in accordance with the principle of gradual and orderly progress, and
that the ultimate aims are the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative
nominating committee in accordance with democratic procedures and the election of all the members of the Legislative Council by universal
suffrage. The methods for selecting the Chief Executive of the Hong Kong Special Administrative Region and for forming the Legislative
Council of the Hong Kong Special Administrative Region shall conform to the principles and provisions of the Basic Law of Hong Kong
mentioned above. Any change relating to the methods for selecting the Chief Executive of the Hong Kong Special Administrative Region
and for forming the Legislative Council of the Hong Kong Special Administrative Region shall conform to the principles that it is
compatible with the social, economic and political development of Hong Kong and that it is conducive to the balanced participation
of all strata, sectors and groups of the society, to the effective operation of the executive-led system, and to the maintenance
of long-term prosperity and stability of Hong Kong. 

The participants hold that since the establishment of the Hong Kong Special Administrative Region, Hong Kong residents have enjoyed
democratic rights that they had never had before. The first Chief Executive was elected by the Selection Committee, which was composed
of 400 members. The second Chief Executive was elected by the Election Committee, which was composed of 800 members. Out of the 60
members of the Legislative Council, the number of members returned by geographical constituencies through direct elections has increased
from 20 in the Legislative Council in the first term to 24 in the Legislative Council in the second term and will reach 30 in the
Legislative Council in the third term to be formed in September this year. Hong Kong does not have a long history of practising democratic
elections, and it is not seven years yet since Hong Kong residents exercised the democratic right to participate in the selection
of the Chief Executive of the Special Administrative Region. Since the return of Hong Kong to the motherland, the number of members
of the Legislative Council returned by geographical constituencies through direct elections has increased by a fairly wide margin.
When the setup is such that half of the members are returned by geographical constituencies through direct elections and the other
half by functional constituencies, the impact on the operation of the Hong Kong society as a whole, especially the impact on the
executive-led system, remains to be tested through practice. Moreover, at present, different sectors of the Hong Kong society have
considerable differences on how to determine the methods for selecting the Chief Executive and for forming the Legislative Council
after the year 2007 and have not come to a broad consensus. Such being the case, the conditions do not yet exist for the selection
of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with
democratic procedures, as provided for in Article 45 of the Basic Law of Hong Kong, or for the election of all the members of the
Legislative Council by universal suffrage, as provided for in Article 68 of the Basic Law of Hong Kong. 

In view of the above and pursuant to the relevant provisions of the Basic Law of Hong Kong and the Interpretation by the Standing
Committee of the National People’s Congress of Annex I (7) and Annex II (III) to the Basic Law of the Hong Kong Special Administrative
Region of the People’s Republic of China, the Standing Committee of the National People’s Congress makes the following decision on
the methods for selecting the Chief Executive of the Hong Kong Special Administrative Region in the year 2007 and for forming the
Legislative Council of the Hong Kong Special Administrative Region in the year 2008: 

(1) The election of the third Chief Executive of the Hong Kong Special Administrative Region to be held in the year 2007 shall not
be conducted by means of universal suffrage. The election of the Legislative Council of the Hong Kong Special Administrative Region
in the fourth term in the year 2008 shall not be conducted by means of an election of all the members by universal suffrage, the
ratio between the members returned by functional constituencies and the members returned by geographical constituencies through direct
elections, who shall respectively occupy half of the seats, is to remain unchanged, and the procedures for voting on bills and motions
in the Legislative Council are to remain unchanged. 

(2) On the premise that Decision (1) is not contravened, appropriate amendments that conform to the principle of gradual and orderly
progress may be made to the specific method for selecting the third Chief Executive of the Hong Kong Special Administrative Region
in the year 2007 and the specific method for forming the Legislative Council of the Hong Kong Special Administrative Region in the
fourth term in the year 2008, in accordance with the provisions of Articles 45 and 68 of the Basic Law of Hong Kong and the provisions
of Annex I (7) and Annex II (III) to the Basic Law of Hong Kong. 

The participants hold that developing democracy in the Hong Kong Special Administrative Region in the light of the actual situation
and in a gradual and orderly manner according to the provisions of the Basic Law of Hong Kong has been the unswerving, consistent
position of the Central Authorities. Along with the development and progress in all aspects of the Hong Kong society and through
the joint endeavors of the Government of the Hong Kong Special Administrative Region and Hong Kong residents, the democratic system
of the Hong Kong Special Administrative Region will certainly progress incessantly, and ultimately attain the aims of selecting the
Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic
procedures and electing all the members of the Legislative Council by universal suffrage, as provided for in the Basic Law of Hong
Kong.

Notice: All Rights Reserved to the Legislative Affairs Commission of the Standing Committee of the National People’s Congress.






CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL ON LIQUIDATING FIXED ASSET INVESTMENT PROJECTS

The General Office of the State Council

Circular of the General Office of the State Council on Liquidating Fixed Asset Investment Projects

Guo Ban Fa [2004] No.38

People’s Governments in all provinces, autonomous regions, municipalities under direct control of the Central Government, all Ministries
and Commissions under the State Council, and Organizations directly under the State Council:

At present, China’s economy maintains a steady and rapid development, accompanied with a further-enhanced economic effectiveness and
a good overall economic performance. However, some salient contradictions and problems during the economic development remain ineffectively
relieved, some of which are still growing unchecked, mainly in the overheated and oversized investment in fixed assets, and the salient
tension between demand and supply in coal, electricity, petroleum, transportation and important raw materials.

At present, efforts shall be put forth in solving the problem of overheated investment so as to promote the steady and rapid development
of economy and to avoid large economic fluctuations. In order to further strengthen the macroeconomic regulation, the State decides
to liquidate the fixed asset projects.

I.

Guiding Thought and Principle

1.

The liquidation work shall carry out the scientific development concept, and all are required to unify their thoughts to the decision
of arrangement of the Central Government, fully aware of the problem of overheated investment and its harmful influences. All the
regions and all the authorities are shall, though this liquidation, replace their attentions to the enhancement of the quality and
benefit of the economic growth, and firmly surmount the phenomena of blind competition with each other, rash launching of projects
and rash putting up establishments.

2.

The liquidation shall be conducted in accordance with the current laws, administrative regulations and state policies, and mainly
with the national industrial policies and industrial program, the laws and regulations governing land administration, environmental
protection, bank loaning, project examination and approval etc., and the circulars of the State on controlling the construction of
steel, electrolytic aluminum, cement, the office buildings training centers of the Party and government authorities, city express
track transportation facilities, golf course etc.. Measures shall be adopted towards a project that fails to be in line with these
requirements, such a project as should be discontinued shall be discontinued, and such a project as should be redressed within a
time limit shall be redressed within the time limit.

3.

The liquidation work shall be subject to the principle of giving prominence to key points, providing guidance tailored to the situation,
and handling each case on its own merits. Importance shall be attached to the structural readjustment while curbing the overheated
investment. Such projects as have low technological contents, exceed the demand of market, and fail to be in line with the requirements
of structural readjustment, and especially those highly energy-consuming, water-consuming, material-consuming, environment-polluting
projects of haphazard investment and low-level redundant construction shall be firmly contracted. The liquidation of the project
promoted by governmental activities shall be strengthened, and the project that has a high technological content and is in line with
the requirements of structural readjustment, and supports shall continually be granted to agriculture, forestry, water conservancy,
ecological construction environmental infrastructure, social programs and other projects in weaker fields that need to be strengthened.

4.

The liquidation work shall be carried out in accordance with the affiliation of the project. The National Development and Reform Commission
shall be responsible for the organization work of the liquidation, and shall, together with the Ministry of Supervision, the Ministry
of Land and Resources, the Ministry of Construction, the People’s Bank of China, the National Audit Office, the State Environmental
Protection Administration, the China Banking Regulatory Commission etc., strengthen the supervision and examination of the liquidation
in accordance with their own division of work.

II.

Liquidation Scope

All regions, all authorities and all related authorities shall conduct a comprehensive examination and liquidation of all the projects
under construction and projects to be constructed. The “project under constriction” as mentioned above refers to such a project as
is already started, and the “project to be constructed” as mentioned above refers to such a project as is already applied for by
a project unit, as is under the handling of the governmental authorities and as is not started yet.

The key areas subject to liquidation: 1 projects of steel, electrolyte aluminum, cement, office building and training centers of the
Party and government authorities, city express track transportation facilities, golf course, exhibition center, logistics park, and
large-sized shopping center etc.; 2 all the projects that has been newly started since 2004.

Projects of agriculture, forestry, water conservancy (including “six small rural projects (water-efficient irrigation, potable water
supplies, road building, methane production facilities, hydroelectric plants, and pasture enclosure)”), ecological construction,
education (excluding university city), public health, and science (excluding scientific and technological park) shall be beyond the
liquidation scope.

III.

Content of Liquidation

The projects under construction and to constructed shall be examined one by one in liquidation, which shall include:

1.

Whether being in line with the national industrial policies and programs; and

2.

Whether being in line with the general program of land utilization and integrated into the annual program of land utilization; and

3.

Whether being in line with the national provisions concerning environmental protection and passing the environmental impact assessment;
and

4.

Whether being in line with the general planning of a city; and

5.

Whether being in line with the procedures governing project examination and approval and other constructions; and

6.

Whether being in line with the credit policies and the relevant provisions governing fixed asset investment; and

7.

Whether being in line with the provisions in Circular of the General Office of the State Council on Transmitting and Issuing Several
Opinions of the National Development and Reform Commission and Other Authorities on Curbing Irrational Investment in Steel, Electrolytic
Aluminum and Cement Industries (Guo Ban Fa [2003] No.103), Circular of the General Office of the Central Committee of the Communist
Party of China and the General Office of the State Council on Continually Tightening the Control the Construction of the Office Building
and Training Center Project of the Party and Government Authorities (Zhong Ban Fa [2003] No.3), Circular of the General Office of
the State Council on Strengthening the Administration of the Construction of the City Express Track Transportation Facilities (Guo
Ban Fa [2003] No.81) and Circular of the General Office of the State Council on Suspending the New Construction of Golf Courses (Guo
Ban Fa [2004] No.1).

8.

Whether falling within the items stipulated in Circular of the General Office of the State Council on Strictly Prohibiting the Illegal
Construction of the Thermal Power Generating Units of Equivalent to or Less than 1.35 Million Kilowatts (Guo Ban Fa Ming Dian [2002]
No.6), and the Catalogue of Outdated Production Capacities, Techniques and Products to Be Eliminated (Batch I, Batch II and Batch
III) (Decree of the State Economic and Trade Commission No.6, No.16, and No.32) promulgated by the former State Economic and Trade
Commission.

9.

Whether being in line with other laws, administrative regulations and State policies governing the project construction.

IV.

Post-liquidation Treatment

1.

Such a project under construction as is prohibited by explicit State orders, and as fails to be in line with the Land Administration
Law and other laws, administrative regulations and State policies shall be discontinued.

2.

Such a project under construction as fails to be in line with the provisions for environmental protection, the city planning, project
examination and approval, and other construction procedures and with the credit policies and other requirements shall be suspended,
and be ordered to redress within a time limit.

3.

With regard to such a project under construction as is in line with the provisions in laws, administrative regulations and State policies,
the construction scheduling shall be reasonably arranged upon the base of carrying out the construction conditions of the project
hereof.

4.

Such a project to be constructed as fails to be in line with laws, administrative regulations and State policies shall be prohibited
from initialization and from an unauthorized starting.

5.

A new project of steel, electrolytic aluminum and cement shall in principle not be launched in this year. And some particular major
projects of structure readjustment and optimization, of which a starting is truly needed in this year, shall obtain an approval of
the State.

V.

Work Style

1.

The provincial people’s government shall be responsible for the liquidation of the local projects, the relevant authorities under
the State Council and shall be responsible for the liquidation of projects subject to the Central Authorities, with regard to the
project co-funded by the Central Authorities and the local authorities, the relevant authorities under the State Council shall be
responsible for the liquidation of the one that has more funds from the Central Authorities, and the provincial people’s government
shall be responsible for the liquidation of the one that has more funds from the local authorities.

2.

The National Development and Reform Commission shall be concretely responsible organizing and urging the carrying-out of liquidation,
and conduct supervisions and selective inspections on the liquidation work from the perspectives of the national industrial policies,
industrial programs, and the procedure governing the project examination and approval etc..

3.

The Ministry of Land and Resources, the Ministry of Construction and the State Environmental Protection Administration shall conduct
supervisions and selective inspections from the perspectives of land administration, city planning and environmental protection etc.,
the China Banking Regulatory Commission shall conduct supervisions and selective inspections from the perspectives of the credit
policies and the provisions governing the fixed asset loaning, and shall be responsible for conducting selective inspections on the
loans for the packed projects of city construction.

4.

A leading group led by the National Development and Reform Commission and composed of the Ministry of Supervision, the Ministry of
Land and Resources, the Ministry of Construction, the People’s Bank of China, the National Audit Office, the State Environmental
Protection Administration, the China Banking Regulatory Commission and other authorities, shall be concretely responsible for the
liquidation work.

VI.

Work Schedule

1.

Great importance shall be attached to by all the regions and all the authorities, and the leadership shall be strengthened; the major
persons in charge shall themselves assume leadership, transfer personnel to constitute interim agencies, clearly define the duties,
formulate well-conceived work programs, and organize and carry out the liquidation work as soon as possible.

2.

The liquidation work of all the regions and all the authorities shall be finished within one and half months as the date of the promulgation
of this Circular, and report their liquidation results and treatment measures to the National Development and Reform Commission.

(1)

The liquidation results and treatment measures for all the projects under construction and to be constructed within the liquidation
scope; and

(2)

The per-project treatment opinions of construction discontinuance, construction suspension for redressment within a time limit, abolition
of project initialization and being in line with the requirements for a project with a gross investment of equivalent to or more
than RMB 10 million Yuan in the key liquidation area, and for a project with a gross investment of equivalent to or more than RMB
30 million Yuan in other liquidation areas.

3.

After all the regions and all the authorities finish their liquidation works, the National Development and Reform Commission, the
Ministry of Supervision, the Ministry of Land and Resources, the Ministry of Construction, the People’s Bank of China, the National
Audit Office, the State Environmental Protection Administration, and the China Banking Regulatory Commission shall conduct selective
inspections on the liquidation results. And after finishing the aforesaid selective inspections, the National Development and Reform
Commission shall, together the relevant authorities, formulate liquidation reports and submit them to the State Council.

4.

All the regions and all the authorities shall keep the big pictures in mind, truly do well the liquidation work, submit the liquidation
results according to fact, and avoid the occurrences of local and industrial protectionisms. And a special attention shall be paid
to the problems arising possibly from the discontinuance or suspension of project construction, and preprograms shall be formulated
to do well the post-liquidation work. Once those acts are found true that practicing fraudulences and intentional concealments, and
new undesirable aftermaths arising after the discontinuance or suspension of project construction due to the work, the related leaders
shall be investigated for liabilities.

5.

The liquidation of fixed asset investment projects has wide implications and involves policy considerations. All the authorities under
the State Council shall earnestly fulfill their duties, cooperate closely and strengthen intercommunications, and timely detect and
solve cooperatively the salient problems arising from the liquidation work. And major problems shall be reported to the State Council.

The General Office of the State Council

April 27, 2004



 
The General Office of the State Council
2004-04-27

 






ROAD TRAFFIC SAFETY LAW

Law of the People’s Republic of China on Road Traffic Safety














Law of the People’s Republic of China

CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON RELEVANT ISSUES OF THE STANDARDIZED ADMINISTRATION OF THE FOREIGN EXCHANGE SETTLEMENT BUSINESS OF INDIVIDUAL RESIDENTS

20070201

State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on Relevant Issues of the Standardized Administration of the Foreign Exchange
Settlement Business of Individual Residents

HuiFa [2004] No. 18

March 18th, 2004

The branches and offices under the State Administration of Foreign Exchange in all provinces, autonomous regions and municipalities
directly under the Central Government, the branches of Shenzhen, Dalian, Qingdao, Xiamen and Ningbo, all designated foreign exchange
banks:

Some provisions of the administration of foreign exchange individual residents are properly adjusted with a view to strengthening
and improving foreign exchange administration and promoting the international balance of payments. The guiding principles are to
further promote trade and investment facilitation to ensure smooth proceeding of trade and investment activities which confirm to
the provisions of the national laws and policies,, and at the same time, to manage the capital account effectively and prevent the
speculative cross-boarder capital transaction to be completed through non-trading foreign exchanges channels of resident and non-resident
individuals. Relevant issues of the administration of the foreign exchange settlement business of individual residents are notified
as follows:

I.

The lawful foreign exchange income of individual residents may conduct foreign exchange settlement with banks according to relevant
provisions. The banks shall examine strictly the authenticity of the foreign exchange settlement required by the individual residents.

II.

For the settlement of foreign exchanges with an equivalent amount of less than USD 10,000 (including USD 10,000) required by an individual
resident at a time, real identity certificates should be presented. For the settlement of foreign exchanges with an equivalent amount
of more than USD 10,000 but less than USD 50,000 (including USD 50,000) required by at a time, the bank shall examine the certificates
of real identity and of the source of the lawful foreign exchanges according to Article 10 of the Interim Measures for the Administration
of Foreign Exchanges of Domestic Individual Residents. For the settlement of foreign exchanges with an equivalent amount of more
than USD 50,000, the individual resident shall apply to the local foreign exchange authority with the above-mentioned materials,
and then go through formalities with the bank with the documents of approval issued by the local foreign exchange authority upon
authenticity verification.

III.

After verification by the foreign exchange authority and settlement of foreign exchange for individual residents by the banks, duplicate
copies of the certificate documents provided by the individual residents should be kept for 5 years for future reference.

IV.

Foreign exchange income from the trade account and capital account of individual residents shall be settled according to relevant
provisions.

V.

In the business of foreign exchange settlement for individual residents, the banks shall strictly enforce the Measures for the Administration
of the Reporting by Financial Institutions of Large Amount and Suspicious Foreign Exchange Capital Transactions (Decree No.3 (2003)
of the People’s Bank of China) and in a timely manner report large amount and suspicious foreign exchange capital transactions to
the higher banks and foreign exchange authorities.

VI.

Local foreign exchange authorities shall strength the examination and supervision of the banks’ business of foreign exchange settlement
for individual residents on its conformity with the relevant provisions. Anyone with violation of provisions in this circular shall
be punished by the foreign exchange authorities according to Regulations of the People’s Republic of China on the Administration
of Foreign Exchanges and other relevant stipulations.

VII.

This circular shall be put into implementation as of April 1st, 2004. In the case of any inconsistency between relevant stipulations
and this circular, provisions in this circular shall prevail.

Upon receiving this circular, all foreign exchange authorities shall transmit it to the foreign exchange authorities, foreign invested
banks and the city commercial banks under their respective jurisdiction as quickly as possible. Designated Chinese funded foreign
exchange banks shall transmit it to their respective branches as soon as possible. Feedback can be made to the Department of Current
Account Administration under the State administration of Foreign Exchange for any problems during implementation.

 
State Administration of Foreign Exchange
2004-03-18

 



CIRCULAR ON ISSUES CONCERNING THE JOINT ANNUAL INSPECTION AND COMPREHENSIVE PERFORMANCE EVALUATION OF OVERSEAS INVESTMENT IN 2004

Ministry of Commerce, State Administration of Foreign Exchange

Circular on Issues concerning the Joint Annual Inspection and Comprehensive Performance Evaluation of Overseas Investment in 2004

Shanghehan [2004] No.6

March 18, 2004

The Foreign Trade and Economic Commissions (Offices or Bureaus), Departments (Bureaus) of Commerce of all provinces, autonomous regions,
municipalities directly under the central government, cities separately listed in the state budgetary planning, and branches/foreign
exchange authorities of the State Administration of Foreign Exchange in provinces, autonomous regions, municipalities directly under
the central government, and Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo, the State Tobacco Monopoly Administration, and all companies
directly under the central government:

In 2003, all local commerce authorities, local foreign exchange authorities and headquarters of companies directly reporting to the
central government (hereinafter referred to as the annual inspectors), on the basis of close coordination and cooperation as well
as efforts to overcome the impacts of the SARS epidemic, carried out the first joint annual inspection and comprehensive performance
evaluation of overseas enterprises set up by Chinese corporations with their direct investment. Anticipated effect was achieved.
Experience shows that the joint annual inspection mechanism has played an important role in reinforcing and perfecting the macro
supervision and regulation of Chinese overseas investment, which therefore should be carried on. However, there still existed some
deficiencies in the joint annual inspection in 2003. For example, a few provincial and municipal investors did not pay enough attention
to the inspection and failed to fulfill their obligation of being supervised and regulated, which was manifested by the fact that
some overseas enterprises did not take part in the inspection as they were not dually informed by their domestic investors.

As the joint annual inspection and comprehensive performance evaluation in 2004 will soon start, all annual inspectors are kindly
requested to be fully and carefully prepared On the basis of the overall experience of 2003, the annual inspection and comprehensive
performance evaluation in 2004 is expected to be more successful. In view of the problems occurred last time, we have made some adjustments
to the procedure and content of the joint annual inspection in 2004. Issues relating to the joint annual inspection in 2004 are publicized
as follows:

1.

Annual Inspectees

All overseas enterprises that were established by Chinese investors prior to January 1, 2002 with their direct investment, through
acquisition or equity purchase (except for overseas companies being set up by aid fund provided by the Chinese government, in countries
and regions without diplomatic ties with China, or in the financial sector) shall take part in the annual inspection and performance
evaluation.

Those overseas enterprises being set up between Jan 1st, 2002 and Dec 31st, 2003, by aid fund to foreign countries or regions, or
in countries and regions with no diplomatic relations with China are only required to submit Form 1, Form 2 and Form 4 provided in
the Annual Inspection Report> , the financial statements for overseas enterprises, the foreign exchange registration paper for overseas
investment or other documents certifying the approval of foreign exchange for overseas investment (Written explanations are required
in case of failure to present the above documents).

The annual inspectors should give enough publicity to the annual inspection; inform all domestic investors to attend the joint annual
inspection 2004 in time through releasing public notices at local media. They are also required to, based on information about the
2003 inspection and their own database, carefully check up the attendance of administered companies with focuses on those that have
completed the overseas investment approval procedures and foreign exchange registration procedures but did not duly attend the 2003
inspection.

2.

Annual inspection Date: Apr 1st – Jun 15th, 2004

3.

Annual inspection documents:

(1)

Due to some changes in the procedures and contents of the joint annual inspection, adjustments are also made to the Annual Inspection
Report accordingly. Investors may download the new from the website of the Ministry of Commerce (www.mofcom.gov.cn) or that of the State Administration of Foreign Exchange (www.safe.gov.cn),
print it on A4 paper, fill it according to the actual information of the overseas enterprise, and submit it in 3 copies.

(2)

Those enterprises which had attended the 2003 ion and attained the Annual Inspection Certificate shall submit one copy of the Annual
Inspection Report and the (3)

Those overseas enterprises which for the first time attend the joint annual inspection shall submit one copy of the Annual Inspection
Report to the local authorities in charge of commerce affairs or headquarters of enterprises directly under the central government,
and another copies together with the financial statements of the overseas enterprises and the foreign exchange registration documents
for overseas investment to the local foreign exchange authorities. Should domestic investors enable to provide the foreign exchange
registration documents for overseas investment, they may present such other documents certifying the approval of foreign exchange
for overseas investment as the written reply from the foreign exchange authority concerning the sources of foreign exchange after
their examination and approval letter concerning the purchase and remittance of foreign exchange. All the above documents shall be
submitted as annexes. Written explanations are needed in case of failure to provide any documents.

4.

Annual inspection procedures for the local foreign exchange authorities.

Local foreign exchange authorities shall, within 15 days after receiving complete annual inspection documents from domestic investors,
carry out the annual inspection following procedures listed below:

(1)

Auditing Form 2 and Form 4 of the Annual Inspection Report. With regard to Form 2, focus of the examination should be put on the authenticity
and validity of the foreign exchange approval for overseas investment based on their working files. The examination of Form 4 shall
be focused mainly on whether the figures filled in by the investors accord with the overseas enterprises’ financial statements.

(2)

Grading the inspectees according to the examination result of the inspection documents and the grading standard, filling the grades
in the Column of ” Comment of the Foreign Exchange Authority” in Form 5 of the Annual Inspection Report, and stamping the Seal of
Approval for Capital Account Foreign Exchange Business (2)” in the “Annual Inspector” Column. All branches of the foreign exchange
administration may authorize the central branches to complete the preliminary audit and grading of the annual inspection documents
presented by enterprises under their jurisdiction according to the actual situation of their localities. Branches and central branches
of the foreign exchange administration re-check the result of the preliminary audit and stamp the Seal of Approval for Capital Account
Foreign Exchange Business (2)” in the “Annual Inspector” Column.

(3)

One copy of the Annual Inspection Report will be handed back to the investor, who shall transmit it to the local foreign exchange
administration or the headquarter of the enterprise directly under the central government. Other documents shall be kept on file.

5.

Annual inspection procedures for the local commerce authorities or the headquarters of enterprises directly under the central government.

After receiving the Annual Inspection Report from the foreign exchange authority, the local commerce authorities or the headquarters
of enterprises directly under the central government carry out the annual inspection following the procedures listed below:

(1)

Evaluate the performance of the overseas enterprises by using the comprehensive overseas investment performance evaluation software.
Multiply the score by 50% to get the final result for filling in the Column of “Overseas Investment Performance” in Form 5. The year
for comprehensive performance evaluation shall be filled in as 2004.

(2)

Undertake the evaluative work of overseas enterprises originally done by the Chinese diplomatic missions abroad in charge of economic
and commercial affairs. The contents and standard will be simplified to: 1 Check, whether the overseas enterprises are established
and running well (the full mark is 6); 2. Check whether there exist serious problems in the operation of the overseas enterprises
(the full mark is 4). The local commerce authorities or the headquarters of enterprises directly under the central government shall
carry out investigations seriously and make objective evaluations. The overseas Chinese diplomatic missions in charge of economic
and commercial affairs may be consulted when necessary.

(3)

Fill the above scores (cumulative total of 10) and the score (cumulative total of 20) for the performance of the investor and its
overseas enterprise in complying with China’s provisions concerning overseas investment in the Column of “Comment of the Local Commerce
Authority or Headquarter of Enterprise Directly under the Central Government” in Form 5 of the Annual Inspection Report. The highest
score for the Column shall be changed to 30 accordingly.

(4)

Fix the annual inspection grade of the overseas enterprises according to their total score and record the grade on the Annual Inspection
Certificate with the special Annual Inspection Seal stamped on, then give the Annual Inspection Certificate to the investors.

(5)

After the annual inspection work is finished, email the data files composed by the overseas investment comprehensive performance evaluation
system to the Ministry of Commerce at pengnanfeng@mofcom.gov.cn ; and then email the annual inspection result (the grade of overseas
enterprises) to the Ministry of Commerce at lijian@mofcom.gov.cn.

6.

Sum-up of the annual inspection work

On the basis of the inspection result, the annual inspectors shall carefully summarize relevant information of overseas investment
and draft the annual inspection work report. The local commerce authorities or headquarters of enterprises directly under the central
government shall submit their work report to the Ministry of Commerce before Jun 30th, 2004. The local foreign exchange authorities
shall submit their work report and the Basic Information Sheet of the Joint Annual Inspection of Overseas Investment (which may be
downloaded from the website of SAFE: www.safe.gov.cn) to State Administration of Foreign Exchange before Jun 30th, 2004.

7.

The Cross-check and sharing of annual inspection data

The local commerce authority and foreign exchange authority shall provide to each other and cross check the annual inspection data
summary.

8.

Management of Archives

Relevant documents in the 2003 and 2004 annual inspections shall be kept in the domestic investors’ corresponding files under the
category of overseas enterprise or that of foreign exchange for overseas investment, and managed by the local commerce authorities
and foreign exchange authorities. All written documents will be kept for as long as 3 years.

9.

Punishments to Enterprises not Attending the Inspection

After the annual inspection is completed, the local commerce authorities and foreign exchange authorities shall focus on penalizing,
according to relevant provisions, those investors within their jurisdiction that are involved in unlawful overseas investment or
failure to fulfill their obligation of being supervised and regulated. Domestic investors that have gone through foreign exchange
registration procedures for overseas investment, or approval procedures for the establishment of overseas enterprises, but did not
take part in the 2004 annual inspection, shall be dealt with differently depending on their specific circumstances. Refer to Annex
1 for the detailed principles for dealing with these enterprises.

10.

Make-up Examination and Approval Procedures

Those domestic investors that have invested abroad without duly going through domestic approval procedures can apply for make-up examination
and approval to the local commerce authority and foreign exchange authority after participating in the 2004 joint annual inspection
and comprehensive performance evaluation. The Annual Inspection Certificate for the concerned year shall be attached in the application.
Refer to Annex 2 for the specific make-up examination and approval procedures for the establishment of overseas enterprises.

11.

For questions concerning the 2004 joint annual inspection, please contact (the Department of Foreign Economic Cooperation of) the
Ministry of Commerce, or (the Department of Capital of) the State Administration of Foreign Exchange. Contact person: (Ministry of
Commerce) Lijian and Pengnanfeng Telephone : 010-65197482 Fax : 010-65197481 ; (State Administration of Foreign Exchange) Ma Shaobo
and Feng Yanqiu Telephone : 010-68402252 Faxes: 010-68402253.

The Circular is hereby publicized.

Annexes:

1.

Principles for Dealing with Enterprises not Attending the Annual Inspection

2.

Make-up Procedures of Domestic Authorities for the Establishment of Overseas Enterprises

3.

Basic Information Sheet of the Joint Annual Inspection of Overseas Investment (omitted)

4.

Annual Inspection Report (omitted)

Annex 1:Principles for Dealing with Enterprises not Attending the Annual Inspection

1.

For those overseas enterprises which have been liquidated or withdrawn their overseas staffs and stopped any substantive business
activities though unliquidated, the local commerce administration shall nullify their approval certificates, while the local foreign
exchange authority shall cancel their foreign exchange registration records for overseas investment and urge them to transmit their
income after liquidation or remaining assets back to China. When going through procedures to cancel foreign exchange registration
records, domestic investors shall deliver the following documents: a written application; liquidation report should the concerned
overseas enterprises be liquidated; financial statements should the overseas enterprises have withdrawn their overseas staffs and
stopped their substantive business activities but have not been liquidated.

2.

For those overseas enterprises which still have not started any business activities after completing the approval procedures for the
establishment of overseas enterprises for 2 years, no local commerce administrations shall handle formalities to extend the validity
of their approval certificates. The local foreign exchange authorities shall cancel their foreign exchange registration records for
overseas investment.

3.

For those overseas enterprises which have not attended the 2004 annual inspection unjustifiably, the local commerce administrations
and foreign exchange authorities shall keep a close watch on them, list these overseas enterprises and their corresponding domestic
investors, and copy the list to the Ministry of Commerce and State Administration of Foreign Exchange. The competent authorities
in charge of commercial affairs and foreign exchange shall grant no overseas investment related preferential policies to them within
3 years starting from the year when the enterprises should have attended the inspection. Before their misconducts are settled, approval
will not be granted to any of their new overseas investment.

Annex 2:Make-up Procedures of Domestic Authorities for the Establishment of Overseas Enterprises

1.

For those overseas enterprises which have completed the procedures for the registration of foreign exchange for overseas investment,
but which have not gone through approval procedures for the establishment of overseas enterprises, the commerce authorities shall
give them an opportunity to go through the make-up procedures for the approval of the establishment of overseas enterprises according
to relevant regulations, and copy the approval documents to the competent authority in charge of foreign exchange.

2.

For those overseas enterprises which have got the approval for the establishment of overseas enterprises but have not gone through
the procedures for the registration of foreign exchange for overseas investment, the foreign exchange authorities shall give them
an opportunity to go through the make-up registration procedures in line with the provision of the Circular of the State Administration
of Foreign Exchange on Issues concerning Deepening the Reform on the Administration of foreign exchange for Overseas Investment (Huifa
[2003] No. 120).

3.

Those overseas enterprises which have gone through neither the approval procedures for the establishment of overseas enterprises nor
the procedures for the registration of foreign exchange for overseas investment, shall apply to the commerce authorities for their
approval of the establishment of overseas enterprises first, and then to the foreign exchange authorities for going through the procedures
for the registration of foreign exchange for overseas investment. In case more fund needs to be remitted abroad to the overseas enterprise
to expand its capital base, before applying to the commerce authority for its approval of establishment of the overseas enterprise,
the domestic investor shall first go to the foreign exchange authority for its examination of the sources of foreign exchange for
overseas investment.

 
Ministry of Commerce, State Administration of Foreign Exchange
2004-03-18

 



CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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