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PROMOTION OF CLEANER PRODUCTION LAW

Law of the People’s Republic of China on Promotion of Cleaner Production



	(Adopted at the 28th Meeting of the Standing Committee of the Ninth National People’s Congress on June 29, 2002 and promulgated by Order No. 72 of the President of the People’s Republic of China on June 29, 2002) Contents Chapter I General Provisions Chapter II Popularization of Cleaner Production Chapter III Implementation of Cleaner Production Chapter IV Incentive Measures Chapter V Legal Responsibility Chapter VI Supplementary Provisions Chapter I General Provisions Article 1 This Law is enacted for the purpose of promoting cleaner production, increasing the utilization ratio of resources, reducing and preventing pollutant-generating, protecting and improving the environment, protecting human health, and promoting the sustainable development of the economy and society. Article 2 For purposes of this Law, cleaner production means, by continuous adopting measures to improve designing, use cleaner energy and raw materials, introduce advanced techniques and equipment, improve management and make comprehensive use of resources as well as other measures, to reduce pollution from its source, increase the utilization ratio of resources, reduce or prevent the generation and discharge of pollutants in the course of production, services and use of products, in order to alleviate or eliminate harm to human health and the environment. Article 3 Within the territory of the People’s Republic of China, units engaged in production and service activities and the departments engaged in administration of such activities shall, in accordance with the provisions of this Law, organize efforts to implement cleaner production. Article 4 The State encourages and promotes cleaner production. The State Council and the local people’s governments at or above the county level shall incorporate cleaner production into their plans for national economic and social development and plans for environment protection, recourses utilization, industrial development, regional development, etc. Article 5 The administrative department for the economy and trade under the State Council shall be responsible for organizing efforts to coordinate the work of promoting cleaner production nationwide. The administrative departments under the State Council for environment protection, planning, science and technology, agriculture, construction, water resources and technical supervision over quality shall, within their respective functions and responsibilities, be responsible for the relevant work of promoting cleaner production. The local people’s governments at or above the county level shall be responsible for directing the work of promoting cleaner production within their own administration areas. The administrative departments for the economy and trade under the said people’s governments shall be responsible for organizing efforts to coordinate the work of promoting cleaner production within their own administrative areas. The administrative departments under the said people’s governments for environment protection, planning, science and technology, agriculture, construction, water resources and technical supervision over quality shall, within their respective functions and responsibilities, be responsible for the relevant work of promoting cleaner production. Article 6 The State encourages scientific research, technological development and international cooperation in the field of cleaner production, organizes efforts to disseminate knowledge about cleaner production and spreads the use of technologies for cleaner production. The State encourages public organizations and the general public to participate in the promotion of, education in, popularization and implementation of and supervision over cleaner production. Chapter II Popularization of Cleaner Production Article 7 The State Council shall formulate financial and taxation policies for the benefit of implementation of cleaner production. The State Council, the relevant administrative departments under it and the people’s governments of provinces, autonomous regions and municipalities directly under the Central Government shall formulate industrial policies and policies for technological development and popularization for the benefit of implementation of cleaner production. Article 8 The administrative departments for the economy and trade under the local people’s governments at or above the county level shall, together with the relevant administrative departments for environment protection, planning, science and technology, agriculture, construction, water resources, etc., formulate plans for popularization of cleaner production. Article 9 The local people’s governments at or above the county level shall make rational plans for the economic layout within their own administrative areas, readjust industrial structures, develop cycling economic sectors and promote cooperation among enterprises in the comprehensive use of recourses and waste materials and in other fields, in order to realize highly effective use and recycling of resources. Article 10 The administrative departments for the economy and trade, environment protection, planning, science and technology, agriculture and other relevant administrative departments under the State Council and under the people’s governments of provinces, autonomous regions and municipalities directly under the Central Government shall organize efforts to support the establishment of an information system for cleaner production and a system for technical consultancy, in order to provide information and services in respect of the methods and technologies for cleaner production, supply and demand of recyclable waste, policies for cleaner production, etc. Article 11 The administrative department for the economy and trade under the State Council shall, together with the related administrative departments under the State Council, regularly publish directories on technologies, techniques, equipment and products for cleaner production. The administrative departments for the economy and trade, environment protection, agriculture and construction and other departments concerned under the State Council and under the people’s governments of provinces, autonomous regions and municipalities directly under the Central Government shall organize efforts to compile guidebooks and technical manuals for cleaner production in respect of certain trades or regions, for the purpose of guiding the implementation of cleaner production. Article12 With respect to out-dated production technologies, techniques, equipment and products which cause waste of recourses and serious pollution of the environment, the State applies a system of elimination within a time limit. The administrative department for the economy and trade under the State Council shall, together with the other related administrative departments under the State Council, compile and publish catalogues of technologies, techniques, equipment and products to be eliminated within a time limit. Article 13 The relevant administrative departments under the State Council may, where necessary, grant approval to marks for products made for the benefit of environment and resources protection, such as energy- or water-conservation products and products made out of recycled waste, and they shall lay down corresponding standards according to State regulations. Article 14 The administrative departments for science and technology and other relevant administrative departments under the local people’s governments at or above the county level shall provide guidance to and support research in and development of technologies for cleaner production and products conducive to protection of the environment and resources and the demonstration and wide use of technologies for cleaner production. Article 15 The administrative department for education under the State Council shall incorporate the courses of cleaner production technology and management into the related systems of higher education, vocational education and technical training. The relevant administrative departments under the local people’s governments at or above the county level shall organize efforts to disseminate knowledge about cleaner production and conduct training in this area, in order to enhance the awareness of the importance of cleaner production among government functionaries, enterprise managers and the general public and train managerial and technical personnel for cleaner production. The press, publishing, radio, films, television and cultural institutions and relevant public organizations shall give play to their own advantages and make a success of promotion for cleaner production. Article 16 People’s governments at various levels shall give first priority to purchasing energy- and water-conservation products and products made out of recycled waste which are conducive to protection of the environment and resources. People’s governments at various levels shall, through promotion and education or by other means, encourage the general public to purchase and use energy- and water-conservation products and products made out of recycled waste which are conducive to protection of the environment and resources. Article 17 The administrative departments for environment protection under the people’s governments of provinces, autonomous regions and municipalities directly under the Central Government shall exercise strict supervision over the implementation of cleaner production and they may, in light of the need to promote cleaner production and the discharge of pollutants by enterprises, regularly publish, through the principal local media, name lists of the enterprises which cause serious pollution by exceeding the norms specified for the pollutants discharged or for the total amount of the pollutants discharged, providing the basis for public supervision over the enterprises’ implementation of cleaner production. Chapter III Implementation of Cleaner Production Article 18 For new construction, reconstruction and expansion projects, their impact on the environment shall be assessed, the use of raw materials, consumption and comprehensive use of resources, generation and disposition of pollutants shall be analysed and expounded and employment of technologies, techniques and equipment for cleaner production, which serve to make highly effective use of resources and generate less pollutants, shall be given first priority. Article 19 In the course of technological updating, enterprises shall adopt the following measures for cleaner production: (1) replacing highly toxic and harmful raw materials with nontoxic and harmless or less toxic and harmful ones; (2) replacing techniques and equipment which serve to make less effective use of resources to generate greater amount of pollutants with ones which serve to make highly effective use of resources and generate pollutants; (3) making comprehensive or cycle use of solid waste and waste water and heat discharged in the course of production; and (4) adopting technologies for prevention and control of pollution which help keep the pollutants discharged and within the norms specified by the State or local authorities and keep the total amount of the pollutants discharged within the control norms specified by the State or local authorities. Article 20 In the designing of products and packages, consideration shall be given to their effects on human health and the environment during their life cycles, and priority shall be given to options for products and packages that are toxicant-free, harmless, easily dissolved or recycled. Enterprises shall properly pack their products, refraining from overusing the packages and preventing the generation of package waste. Article 21 Enterprises producing large mechanical and electrical equipment, motor-driven means of transport and other products designated by the administrative department for the economy and trade under the State Council shall, in adherence to the technical specifications laid down by the administrative department for standardization under the State Council or the institutions authorized by the department, indicate the standard brand of the material composition on the principal component parts of the product. Article 22 Agricultural producers shall use chemical fertilizers, pesticides, agricultural film and feed additives in a scientific way and improve planting and breeding technologies, so as to produce quality and harmless agricultural products, turn agricultural waste into resources, and prevent the agricultural environment from pollution. Toxic and harmful waste is prohibited to be used as fertilizers or for cultivating new farmland. Article 23 Service enterprises providing food and drinks, entertainment or hotel services shall use energy- and water-conservation and other technologies and equipment conducive to environment protection and shall refrain from using or use less consumer goods which lead to waste of resources and pollution of the environment. Article 24 For construction projects, the designing, construction and decoration materials, construction component and accessory parts and equipment, which are energy- and water-conserving and conducive to environment protection, shall be adopted or used. Construction and decoration materials shall conform to the norms of the State. Production, marketing and use of such materials, the toxic and harmful substances which contain exceed State norms, are prohibited. Article 25 In prospecting and exploiting mineral resources, the methods, techniques and technologies which are conducive to rational use of resources, environment protection and prevention of pollution shall be adopted for better use of resources. Article 26 Enterprises shall, where feasible in financial and technological terms, retrieve wastes and waste heat discharged in the course of production and services, or transfer them to other enterprises or individuals that have the ability of using them. Article 27 Enterprises producing and marketing products or packages included in the catalogue of products or packages for compulsory recycling shall recycle the scrapped products and used packages. The catalogue of products and packages for compulsory recycling and the specific measures for compulsory recycling shall be compiled and formulated by the administrative department for the economy and trade under the State Council. With regard to the products and packages listed in the catalogue of products and packages for compulsory recycling, the State adopts economic measures favorable to their recycling; the administrative departments for the economy and trade under the local people’s governments at or above the county level shall regularly inspect the recycling of such products and packages and make the result of inspection known to the public. The specific measures shall be formulated by the administrative department for the economy and trade under the State Council. Article 28 Enterprises shall monitor the consumption of resources and discharge of waste in the course of production and services and, where necessary, examine whether their production and services conform to the requirements of cleaner production. Enterprises that discharge pollutants in excess of the norms specified by the State or local authorities or of the control norms for the total amount of pollutants discharged approved by the local people’s governments concerned shall conduct examination for cleaner production. Enterprises that use toxic or harmful raw materials in production or discharge toxic or harmful substances in the course of production shall conduct regular examination for cleaner production and report the results to the administrative departments for environment protection and for the economy and trade under the local people’s governments at or above the county level where the enterprises are located. The measures for examination for cleaner production shall be formulated by the administrative department for the economy and trade under the State Council, together with the administrative department for environment protection under the State Council. Article 29 Enterprises that have succeeded in keeping the pollutants they discharge within the norms specified by the State and the local authorities of their own free will, sign agreements on further conservation of resources and reduced amount of pollutants discharged with the administrative departments for the economy and trade and for environment protection, which have jurisdiction over them. The said departments shall, through the principal local media, make public the names of the enterprises and their achievements in conserving resources and preventing and controlling pollution. Article 30 Enterprises may, on the principle of voluntariness and in accordance with the State regulations on verification by environment management system, apply for verification to the verification authority authorized by the government department for supervision and control over verification and approval and go through the verification for environment management, so as to raise their level of cleaner production. Article 31 According to the provisions in Article 17 of this Law, enterprises included in the name list of the enterprises which cause serious pollution shall, in compliance with the regulations of the administrative department for environment protection under the State Council, make public their discharge of the main pollutants to accept public supervision. Chapter IV Incentive Measures Article 32 The State establishes a commending and awarding system for cleaner production. The people’s governments shall commend and award units and individuals that achieve remarkable successes in their efforts to bring about cleaner production. Article 33 Projects designed for research, demonstration and training in cleaner production, key technological updating projects of the State for cleaner production, and other technological updating projects clearly stated in the agreements on voluntary reduction of pollutants discharged, as prescribed in Article 29 of this Law, shall be included in the projects for which special funds are arranged by the State Council and the finance department at the same level as the local people’s government at or above the county level in support of their technological updating. Article 34 From the funds established for developing small and medium-sized enterprises in accordance with State regulations, an appropriate amount shall, where necessary, be set aside to support such enterprises in their efforts to engage in cleaner production. Article 35 Where enterprises manufacture products out of waste and obtain raw materials out of recycled waste, the taxation authority shall, in accordance with relevant State regulations, reduce their value-added tax or exempt them from such tax. Article 36 Enterprises may incorporate into their operational cost the fees paid for examination and verification regarding cleaner production and for training in this respect. Chapter V Legal Responsibility Article 37 Where an enterprise that, in violation of the provisions in Article 21 of this Law, fails to indicate the composition of product materials or indicates the said composition untruthfully, the administrative department for quality and technical supervision under the local people’s government at or above the county level shall instruct it to rectify within a time limit; if it refuses to do so, it shall be fined not more than RMB 50,000 yuan. Article 38 Where an enterprise, in violation of the provisions in the second paragraph of Article 24 of this Law, produces or markets construction and decoration materials, the toxic or harmful substances which contain exceed State norms, it shall be investigated for administrative, civil or criminal responsibility in accordance with the provisions in the law on product quality and the relevant civil and criminal laws. Article 39 Where an enterprise, in violation of the provisions in the first paragraph of Article 27 of this Law, fails to fulfill the obligation of recycling scrapped products or used packages, the administrative department for the economy and trade under the local people’s government at or above the county level shall instruct it to rectify within a time limit; if it refuses to do so, it shall be fined not more than 10,000 yuan. Article 40 Where an enterprise, in violation of the provisions in the third paragraph of Article 28 of this Law, fails to conduct examination for cleaner production, or to provide truthful report on the result of the examination which it conducts, the administrative department for environment protection under the local people’s government at or above the county level shall instruct it to rectify within a time limit, if it refuses to do so, it shall be fined not more than 10,000 yuan. Article 41 Where an enterprise, in violation of the provisions in Article 31 of this Law, fails to make public its discharge of pollutants or fails to do so in compliance with the requirements specified, its discharge shall be made public by the administrative department for environment protection under the local people’s government at or above the county level, and it may also be fined not more than 10,000 yuan. Chapter VI Supplementary Provisions Article 42 This Law shall go into effect as of January 1, 2003.

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

PROMOTION OF SMALL AND MEDIUM-SIZED ENTERPRISES LAW

Law of the People’s Republic of China on Promotion of Small and Medium-sized Enterprises



	(Adopted at the 28th Meeting of the Standing Committee of the Ninth National People’s Congress on June 29, 2002 and promulgated by Order No. 69 of the President of the People’s Republic of China on June 29, 2002) Contents Chapter I General Provisions Chapter II Funding Chapter III Support for Establishment of Enterprises Chapter IV Technological Innovation Chapter V Market Development Chapter VI Public Services Chapter VII Supplementary Provisions Chapter I General Provisions Article 1 This Law is enacted for the purpose of improving the business environment for small and medium-sized enterprises, promoting their sound development, creating more job opportunities in both urban and rural areas, and giving play to the important role of such enterprises in national economic and social development. Article 2 For purposes of this Law, small and medium-sized enterprises refer to the different forms of enterprises under different ownerships that are established within the territory of the People’s Republic of China according to law, that help to meet the social needs and create more job opportunities, that comply with the industrial policies of the State and that are small and medium-sized in production and business operation. The criteria for determining small and medium-sized enterprises shall be laid down by the department under the State Council in charge of work in respect of enterprises, on the basis of the number of employees, volume of sale, total assets, etc. of an enterprise and in light of the characteristics of different trades and shall be submitted to the State Council for approval. Article 3 With regard to small and medium-sized enterprises, the State applies the principles of active support, strong guidance, perfect service, lawful standardization and guaranteed rights and interests, in order to create a favorable environment for their establishment and development. Article 4 The State Council shall be responsible for formulating policies regarding small and medium-sized enterprises and make overall planning for their development. The department under the State Council in charge of work in respect of enterprises shall arrange for the implementation of the State policies and plans concerning the small and medium-sized enterprises, making all-round coordination and providing guidance and services in the work regarding such enterprises throughout the country. The related departments under the State Council shall, according to the policies and overall planning of the State for small and medium-sized enterprises and within the scope of their respective functions and responsibilities, provide guidance and services to such enterprises. Local people’s governments at or above the county level, the administrative departments under them in charge of work in respect of enterprises and other departments concerned shall, within the scope of their respective functions and responsibilities, provide guidance and services to small and medium-sized enterprises located within their respective administrative areas. Article 5 The department under the State Council in charge of work in respect of enterprises shall, according to the industrial policies of the State and in light of the characteristics of the small and medium-sized enterprises and the conditions of their development, determine the key ones for support by formulating a catalogue of small and medium-sized enterprises to be provided with guidance for their industrial development or by other means, in order to encourage the development of all such enterprises. Article 6 The State protects the lawful investments made by small and medium-sized enterprises and their investors, as well as the legitimate profits earned from the investments. No unit or individual may infringe upon the property and lawful rights and interests of such enterprises. No unit may, in violation of laws and regulations, charge fees to or impose fines on small and medium-sized enterprises, nor collect money or things of value from them. The enterprises shall have the right to refuse to make the payment and the right to report and accuse violations of the provisions mentioned above. Article 7 Administrative departments shall safeguard the lawful rights and interests of small and medium-sized enterprises, protect their right to participate in fair competition and transaction according to law, and they may not discriminate against the enterprises or add unequal conditions to their transactions. Article 8 small and medium-sized enterprises shall observe State laws and regulations governing occupational safety, occupational health, social security, resources, environment protection, product quality, public finance, taxation, finance, etc., and manage business according to law, and they may not infringe upon the lawful rights and interests of their employees or impair public interests. Article 9 small and medium-sized enterprises shall observe professional ethics, abide by the principle of good faith, work hard to raise their business level and increase the ability to develop themselves. Chapter II Funding Article 10 In the budget of the Central Government there shall be a heading for small and medium-sized enterprises, under which to arrange special funds for supporting the development of such enterprises. Local people’s governments shall, in light of actual conditions, provide financial support to small and medium-sized enterprises. Article 11 The special funds provided by the State for supporting the development of small and medium-sized enterprises shall be used to promote the establishment of a service system for such enterprises, to carry out work in their support, to supplement their funds for development and to support their development in other areas. Article 12 The State establishes development funds for small and medium-sized enterprises, which are composed of the following: (1) the special funds arranged in the budget of the Central Government for supporting the said enterprises; (2) profits yielded by the funds; (3) donation; and (4) others. The State encourages donations to the development funds for small and medium-sized enterprises through taxation policies. Article 13 The State development funds for small and medium-sized enterprises shall be used to support the following fields of endeavor: (1) instructions on and services for establishment of enterprises; (2) establishment of a credit guaranty system for the enterprises; (3) technological innovation; (4) encouragement for their specialization and their cooperation with large enterprises; (5) personnel training and information consultancy, etc. provided by the service institutions for the enterprises; (6) creation of international market; (7) cleaner production; and (8) others. The administrative measures for establishment and use of the development funds for small and medium-sized enterprises shall be formulated separately by the State Council. Article 14 The People’s Bank of China shall give better guidance in credit policies and help improve the financing environment for small and medium-sized enterprises. The People’s Bank of China shall give more vigorous support to small and medium-sized financial institutions and encourage commercial banks to readjust their credit structure and provide greater credit support to small and medium-sized enterprises. Article 15 All financial institutions shall provide financial support to small and medium-sized enterprises, make efforts to improve financial service, change their style of service, enhance their awareness of the importance of service and improve service quality. All commercial banks and credit cooperatives shall improve credit management, expand the areas of services and develop financial products that are suited to the development of small and medium-sized enterprises, readjust their credit structure, and provide the enterprises with such services as loans, balancing of accounts, financial consultancy and investment management. State policy-oriented financial institutions shall, within their business scope, provide financial services to small and medium-sized enterprises. Article 16 The State takes measures to broaden the channels of direct financing for small and medium-sized enterprises and gives them active guidance in their efforts to create conditions for direct financing through various ways as permitted by laws and administrative regulations. Article 17 The State, through taxation policies, encourages various kinds of risk investment institutions established according to law to increase investment in small and medium-sized enterprises. Article 18 The State promotes the development of the credit system for small and medium-sized enterprises by establishing a collection and assessment system of credit information, in order to socialize the inquiry about and the exchange and sharing of credit information concerning such enterprises. Article 19 People’s governments at or above the county level and related departments shall promote and arrange for the establishment of a credit guaranty system for small and medium-sized enterprises, encourage credit guaranty for them and create conditions for their financing. The administrative measures for credit guaranty for small and medium-sized enterprises shall be formulated separately by the State Council. Article 20 The State encourages all kinds of guaranty institutions to provide credit guaranty to small and medium-sized enterprises. Article 21 The State encourages small and medium-sized enterprises to enter into different forms of mutual-help financing guaranty according to law. Chapter III Support for Establishment of Enterprises Article 22 The government departments concerned shall actively create conditions to provide necessary and suitable information and consultancy and, when working out plans for urban and rural construction, make rational arrangements for the necessary places and facilities to meet the needs for the development of small and medium-sized enterprises and support the establishment of such enterprises. Where unemployed or disabled establish small and medium-sized enterprises, the local government shall actively support them, provide conveniences and better guidance. The government departments concerned shall take measures to broaden channels for the small and medium-sized enterprises to employ graduates of colleges and specialized secondary schools. Article 23 The State supports and encourages, through relevant taxation policies, the establishment and development of small and medium-sized enterprises. Article 24 With regard to the small and medium-sized enterprises that are established by unemployed persons or that employ laid-off workers in the year of their establishment, the number of whom reaches the percentage fixed by the State, the ones that use new and high technologies and conform to State policies for supporting and encouraging the development of such enterprises the ones that are established in minority ethnic areas and poverty-stricken areas, and the ones that provide jobs to disabled persons, the number of whom reaches the percentage fixed by the State, the State reduces the rate of tax or exempts them from income tax during a certain period of time, and adopts preferential taxation policies. Article 25 Local people’s governments shall, in light of actual conditions, provide persons who establish enterprises with policy consultancy and information services concerning industrial and commercial administration, public finance, taxation, financing, labor, employment, social security, etc. Article 26 Government departments in charge of enterprise registration shall, in compliance with the statutory requirements and procedures, handle registration for the small and medium-sized enterprises established, increase their work efficiency and provide conveniences to the registrants. They may not impose preconditions for registration of enterprises beyond the provisions of laws and administrative regulations; and they may not collect fees beyond the ones or rates specified by laws and administrative regulations. Article 27 The State encourages small and medium-sized enterprises, in accordance with the State policies for the use of foreign funds, to introduce foreign investment and advanced technology and management expertise and to establish Chinese-foreign equity joint ventures and contractual joint ventures. Article 28 The State encourages individuals and legal persons, in accordance with law, to take part in the establishment of small and medium-sized enterprises by investing their industrial property right, nonpatented technology, etc. Chapter IV Technological Innovation Article 29 The State formulates policies to encourage small and medium-sized enterprises to develop new products and to adopt advanced technology, manufacturing technique and equipment to meet market needs and to improve product quality and make technological progress. When launching projects for technological innovation and projects for technological updating in support of the products of large enterprises, small and medium-sized enterprises may enjoy the policy of discount interest on loans. Article 30 The government departments concerned shall give policy-related support to small and medium-sized enterprises in terms of planning, land use and finance, promote the establishment of different kinds of technical service institutions and establish centers for advancing the productive forces and bases for creating science- and technology-oriented enterprises, in order to provide small and medium-sized enterprises with services relating to technological information, consultancy and transferring and services for the development of products and technologies, and to help promote the transformation of scientific and technological achievements and upgrade the technology and product of the enterprises. Article 31 The State encourages technological cooperation, development and exchange between small and medium-sized enterprises on the one hand and research institutions and institutions of higher education on the other, in order to promote the industrialization of scientific and technological achievements and actively develop small and medium-sized enterprises that make use of scientific and technological achievements. Chapter V Market Development Article 32 The State encourages and supports large enterprises to establish, on the basis of resources allocation by the market, stable relations of cooperation with small and medium-sized enterprise in respect of the supply of raw and semi-processed materials, production, marketing, and technological development and updating, in order to help promote the development of small and medium-sized enterprises. Article 33 The State gives guidance to, promotes and regulates the restructuring of the assets of small and medium-sized enterprises through merge, purchase, etc., in order to optimize the allocation of resources. Article 34 When purchasing goods or service, the government shall give first priority to small and medium-sized enterprises. Article 35 The government departments and institutions concerned shall provide guidance and assistance to small and medium-sized enterprises to stimulate the export of their products and promote their economic and technological cooperation and exchange with other countries. The policy-oriented financial institutions of the State concerned shall, by means of providing loans for import and export, export credit insurance, etc., support small and medium-sized enterprises in their efforts to develop market abroad. Article 36 The State formulates policies to encourage qualified small and medium-sized enterprises to invest abroad, participate in international trade and develop international market. Article 37 The State encourages the service institutions for small and medium-sized enterprises to hold exhibitions and fairs for their products and to conduct information consultancy activities. Chapter VI Public Services Article 38 The State encourages all sectors of the society to establish and improve the service system for small and medium-sized enterprises and to provide them with services. Article 39 The government shall, in light of actual needs, support the institutions established in the service of small and medium-sized enterprises and see that they provide top-notch services to the enterprises. The service institutions for small and medium-sized enterprises shall make full use of computer networks and other advanced technologies to gradually establish and improve the information service system opening to the entire community. The service institutions for small and medium-sized enterprises shall contact the various kinds of public intermediary agencies and encourage them to serve such enterprises. Article 40 The State encourages the various kinds of public intermediary agencies to provide the small and medium-sized enterprises with such services as instructions on establishment of enterprises, business consulting, information consultancy, marketing, investment, financing, credit guaranty, property right transaction, technological support, bringing in of talents, personnel training, cooperation with other countries, exhibitions, fairs and legal advice. Article 41 The State encourages related institutions and institutions of higher education to train managerial, technical and other personnel for small and medium-sized enterprises, in order to help raise the enterprises’ level of marketing, management and technology. Article 42 The self-regulating trade organizations shall actively serve the small and medium-sized enterprises. Article 43 The self-regulating organizations in charge of the self-restricting and self serving small and medium-sized enterprises shall safeguard the legitimate rights and interests of the enterprises, express their suggestions and requirements, and serve them in market development and increase of their management ability. Chapter VII Supplementary Provisions Article 44 The provinces, autonomous regions and municipalities directly under the Central Government may, in light of the conditions of the local small and medium-sized enterprises, formulate measures for implementation of this Law. Article 45 This Law shall go into effect as of January 1, 2003.

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

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