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CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON ISSUES CONCERNING FOREIGN EXCHANGE CONTROL RELATING TO THE RESTRUCTURING OF FOREIGN-FUNDED BANKS

Circular of the State Administration of Foreign Exchange on Issues concerning Foreign Exchange Control Relating to the Restructuring
of Foreign-funded Banks

Hui Fa [2007] No.15

The branches and foreign exchange departments of the State Administration of Foreign Exchange in each province, autonomous region
and municipality directly under the Central Government, as well as the municipal branches of the State Administration of Foreign
Exchange in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo:

According to the Regulation of the People’s Republic of China on the Administration of Foreign-funded Banks as promulgated by the
State Council on November 11, 2006, the related issues concerning foreign exchange control relating to the restructuring of the branches
of foreign banks are hereby notified as follows:

1.

Business qualification

A restructured solely foreign-funded bank shall succeed to the qualification of the original foreign bank branch that has been approved
for developing spot foreign exchange settlement and sale, forward foreign exchange settlement and sale, RMB and foreign currency
swap as well as other derivative business between RMB and foreign currencies, etc., and shall go through the registration alteration
formalities at the branch of the State Administration of Foreign Exchange (including foreign exchange department, hereinafter referred
to as foreign exchange branch) at the place where it is located. A branch of the solely foreign-funded bank shall succeed to its
own qualification for developing the related settlement and sale business as well as the derivative business between RMB and foreign
currencies as approved before the restructuring of bank, and shall go through the registration alteration formalities at the foreign
exchange branch of the place where it is located.

A restructured solely foreign-funded bank shall assume the membership of the original foreign bank branch in the foreign exchange
market. A solely foreign-funded bank that assumes the membership in the inter-bank spot foreign exchange market shall go through
the registration alteration formalities at China Foreign Exchange Trading Center; a solely foreign-funded bank that assumes the forward
foreign exchange trading qualification or the inter-bank RMB and foreign currency swap trading qualification shall go through the
registration alteration formalities at the State Administration of Foreign Exchange after reporting the alteration information to
China Foreign Exchange Trading Center for preliminary examination; a solely foreign-funded bank that assumes the qualification of
market maker for the transactions between RMB and foreign currencies in the inter-bank foreign exchange market shall submit the information
about alteration to the State Administration of Foreign Exchange for archival filing.

With respect to the restructuring of a foreign bank branch that has obtained the custodian qualification for QFII, the successor of
the custodial qualification shall be applied for approval to the State Administration of Foreign Exchange. If the successor is a
solely foreign-funded bank, it shall go through the registration alteration formalities at the State Administration of Foreign Exchange;
if the successor is a foreign bank branch reserved for developing the wholesale business of foreign exchange (hereinafter referred
to as book-keeping bank), it shall apply to the State Administration of Foreign Exchange for archival filing.

Where a solely foreign-funded bank is restructured from a foreign bank branch with QDII business qualification, it may directly succeed
to the QDII quota.

2.

Administration of Synthetic Positions in Foreign Exchange Settlement and Sale

The State Administration of Foreign Exchange and the branches thereof shall manage the synthetic positions in the foreign exchange
settlement and sale of solely foreign-funded banks by following the current management style. A solely foreign-funded bank may assume
the limit of synthetic position in foreign exchange settlement and sale of the original foreign bank branch. In case of any adjustment
to the limit of synthetic position in foreign exchange settlement and sale by any solely foreign-funded bank, it shall, according
to its own capital status, send an application to the foreign exchange branch of the place where it is located subject to the Circular
of the State Administration of Foreign Exchange on the Measures for Adjusting the Administration of Synthetic Positions in the Foreign
Exchange Settlement and Sale of Banks (Hui Fa [2005] No. 69), Circular of the Comprehensive Department of State Administration of
Foreign Exchange on Related Issues concerning the Verification of the Limit of Synthetic Positions in the Foreign Exchange Settlement
and Sale of Banks (Hui Zong Fa [2005] No.118) and other related provisions.

With respect to a book-keeping bank that did not practice uniform management on synthetic positions in foreign exchange settlement
and sale prior to the restructuring, it may assume the limit of synthetic position in foreign exchange settlement and sale of the
original foreign bank branch. As for a book-keeping bank that has practiced uniform management on synthetic position in foreign exchange
settlement and sale before the restructuring, it shall apply to the foreign exchange branch of the place where it is located for
re-examining the limit of synthetic position in foreign exchange settlement and sale along with the related materials.

3.

Transfer of foreign exchange capital and swap between RMB and foreign currencies

The transfer of foreign exchange working capital between a restructured solely foreign-funded bank and the branches thereof may be
handled by the bank independently. As for the swap of the (working) capital of a solely foreign-funded bank between RMB and foreign
currencies, it shall apply for approval to the foreign exchange branch of the place where it is located in advance pursuant to the
Circular of the State Administration of Foreign Exchange on the Banks’ Own Capital and the Principles and Procedure for the Examination
and Approval of Foreign Exchange Settlement and Sale of Financial Projects (Hui Fa [2004] No.61) and other related provisions. With
respect to any bank that has annually accumulated (working) capital swapped between RMB and foreign currencies in excess of the equivalent
amount of 500 million yuan (including 500 million yuan) shall apply to the foreign exchange branch for preliminary examination, and
then it shall be submitted to the State Administration of Foreign Exchange for approval.

4.

Accounting items for foreign exchange settlement and sale

In accordance with the Interim Measures for the Administration of Foreign Exchange Settlement and Sale Operations by Designated Foreign
Exchange Banks (Decree No. 4, 2002 of the People’s Bank of China), a restructured solely foreign-funded bank shall establish independent
accounting items for foreign exchange settlement and foreign exchange sale, it shall respectively treat foreign exchange settlement
and sale for the clients, foreign exchange settlement and sale for self-purpose, sale of exceeding foreign exchange settlement and
sale position within the system, as well as sale of exceeding foreign exchange settlement and sale position in the market, and carry
out accounting treatment under the accounting item for foreign exchange settlement and that for foreign exchange sale separately.
A solely foreign-funded bank that fails to meet the aforesaid requirements by the end of the preparatory work of restructuring shall
comply with the requirements within two years as of its opening as approved by China Banking Regulatory Commission.

5.

Management on surplus quotas for short-term external debts and overseas guarantee

A restructured solely foreign-funded bank shall inherit the original foreign bank branch’s quotas for short-term external debts and
the quotas for offering financing guarantee for Chinese-invested enterprises outside the territory of China, and shall apply for
archival filing to the State Administration of Foreign Exchange and the foreign exchange branch of the place where it is located.
The registration of creditor’s rights, debts and overseas guarantees handled by the original foreign bank branch shall be altered
to be under the name of the solely foreign-funded bank accordingly. The bank shall apply for handling the registration alteration
of overseas debts to the State Administration of Foreign Exchange once and for all. With respect to the registration alteration of
overseas guarantee and domestic foreign exchange loans, the guarantor or the creditor bank shall apply for handling the alteration
to the foreign exchange branch of the place where it is located once and for all.

Where an bank outside the territory of China sets up an solely foreign-funded bank and a book-keeping bank within the territory of
China simultaneously, the surplus quotas that is for short-term external debts and for providing financing guarantee for Chinese-invested
enterprises outside the territory of China may be used by both the solely foreign-funded bank and the book-keeping bank, and the
solely foreign-funded bank shall assume the management duties accordingly.

When going through the registration alteration or filing of all the aforesaid businesses, an applicant shall submit a application
in written form, document as approved for the opening thereof by China Banking Regulatory Commission, the related documents as approved
for its qualification for carrying out such business by the State Administration for Foreign Exchange and other documents as required
by the State Administration for Foreign Exchange. All foreign exchange branches shall simplify the procedures for approving the registration
alteration.

As of the receipt of this Circular, all foreign exchange branches shall transmit it to the sub-bureaus and foreign-funded banks within
their respective jurisdictions. In case of any problem in the implementation of this Circular, please timely feed it back to the
State Administration of Foreign Exchange.

Tel:

Department of Balance of Payments: 010￿￿68402464, 68402311;

Fax: 010￿￿68402315, 68402303

Capital Account Management Department: 010￿￿68402247, 68402348;

Fax: 010￿￿68402208, 68402349

The State Administration of Foreign Exchange

March 20, 2007



 
The State Administration of Foreign Exchange
2007-03-20

 






CIRCULAR OF THE MINISTRY OF EDUCATION CONCERNING FURTHER REGULATING CHINESE-FOREIGN COOPERATION IN SCHOOL RUNNING

Circular of the Ministry of Education Concerning Further Regulating Chinese-Foreign Cooperation in School Running

Jiao Wai Zong [2007] No.14

The education department (commission) of each province, autonomous region and municipality directly under the Central Government,
and the Education Bureau of Xinjiang Production and Construction Corp.:

This Ministry has successively promulgated a series of regulatory documents since the Rules on Chinese-Foreign Cooperation in School
Running and the implementation measures took effect, which play an important role in strengthening the administration of Chinese-foreign
cooperation in school running.

However, some serious problems still exist there on which all local administrative education departments and all higher education
institutions shall lay great stress. Some regions and schools attach particular importance to the repetitive establishment of low-level
educational programs of business, management, computer, IT and other subjects (specialties) whose cost is relatively cheap without
considering their goals and operation capacity and carefully examining the qualification and school-running capacity of foreign parties;
some schools fail to scrupulously design the mode and teaching arrangement of Chinese-foreign cooperation school running, they have
a low proportion of superior education resources, especially those special series of lectures, introduced from foreign countries,
and also have a low proportion of courses given by foreign-party teachers, so it is very difficult to guarantee quality of school
running; some seek for economic benefits by not following the principle of bringing welfare to the general public in school running
of Chinese-foreign cooperation ; and some even lack the awareness of running schools in accordance with law and maintaining the education
sovereignty, damage the teachers and students’ legal rights and interests and even give rise to group incidents.

In light of the recent field inspection and review results of Chinese-foreign cooperative school running, the publicity of some institutions’
and programs’ enrolment is not true and the students are not enrolled in prescribed ways. In some programs which we incorporated
into the state enrolment plan for schools of higher education, some students are admitted by way of violating the related state policies;
in some programs awarding diploma and academic degree of foreign educational institutions, some students cannot get foreign diploma
and academic degree on schedule and some cannot get a visa for studying abroad; some higher vocational training educational programs
attract students by promising the enrollment by foreign universities for bachelor’s degree even master’s degree, but it is not easy
to address the issue on authentication of the academic diplomas got by students from foreign universities; some higher education
institutions need to be regulated further in terms of fee charging in Chinese-foreign cooperation; some higher education institutions,
especially some key ones, confuse the limits of policies on Chinese-foreign cooperative school running purposely on in giving preparatory
courses of foreign universities or similar courses; some higher education institutions fail to demonstrate the educational programs
built up by Chinese-foreign cooperation sufficiently, the cooperative agreements they concluded are not standard and precise, and
their accounting management is not n line with the related legal requirements or even in chaos. Some schools do not lay enough stress
on the enpost_titled rights of the Chinese parties, their management right in running institutions or programs cooperatively is not given
into full play and their due leadership and decision-making right are even weakened. The coordination and supervision functions of
some local administrative education departments are not discharged sufficiently, and the slack of law enforcement occurs from time
to time.

For the purpose of further regulating Chinese-foreign cooperation in school running, the related issues are hereby notified as follows:

1.

To effectively enhance the sense of responsibility and emergency to maintain the stability of higher education institutions. Maintaining
the stability of higher education institutions is an requirement that is inevitable to build a socialist harmonious society and a
guarantee which is important for higher education undertaking to develop continuously, coordinately and soundly To run schools by
Chinese-foreign cooperation, it is necessary to further enhance political perspicacity responsibility, stick to maintaining education
policies’ seriousness, stability and consistency, stick to safeguarding students’ legitimate rights and interests, prevent and eliminate
the negative effects of student group incidents incurred by all kinds of factors on Chinese-foreign cooperation in school running,
and promote the Chinese-foreign cooperation in school running to develop soundly.

2.

To steadfastly adhere to the principle of for the public welfare in running schools. The related higher education institutions which
have cooperatively-run educational programs shall collect fees strictly according to the charging items stipulated by the state and
the charging rates approved by the people’s governments at the provincial level of the places where they are located, and make the
charging items and rates public to the society. It is necessary to rectify the guiding thoughts for school running, resist and correct
the wrong understanding and practices that running schools involving Chinese-foreign cooperation is taken as a means of bringing
about economic income to schools.

3.

To take the introduction of quality education resources of high quality as the core and examining the satisfaction of requirements
carefully by cooperatively-run programs before being approved. From now on, when conducting the examination and approval for a educational
institution or program involving Chinese-foreign cooperation that undertakes certificated higher education of the college or higher
level, the Ministry of Education shall take whether the foreign educational institution is famous or has famous subjects, specialties
or famous professors as the major basis, and, in principle, shall not approve the same kind of cooperative educational program which
a foreign educational institution has launched in China or of which the specialty is concentrated relatively in China and the charging
rates are obviously far beyond its cost on running schools.

4.

To make more efforts in researching policy and planning on development of running school of Chinese-foreign cooperation undertaking
higher vocational education in order to effectively take strengthening intension construction and improving quality of education
as the major tasks of the reform and development of higher vocational education. By the end of 2008, each region shall suspend accepting
the applications for archive-filing serial number submitted by educational institutions or programs involving Sino-foreign cooperation
of this category. During this period, all regions shall earnestly do a good job in formulating plans and making preparations for
the development planning for the cooperative school-running in higher vocational education of this region in terms of subjects, specialties,
choice of foreign countries, quantity and layout, etc, and submit a report to the Ministry of Education to provide schools with a
guidance for introducing educational resources of high quality from foreign countries, draw upon foreign parties’ good experiences
in the terms of subject and specialty arrangement, curriculum system reform, teaching content renewal and talent cultivation mode
innovation, etc., and reinforce their capability in cultivating high skilled talents in the fields of advanced manufacturing industry,
modern agriculture and modern service industry, especially, in the fields of energy, minerals, environmental protection and banking,
etc.

5.

To accurately hold the policy limit on Chinese-foreign cooperative school running. At present, some higher education institutions,
especially some key ones, provide so-called preparatory course of a certain foreign university of which some are actually foreign
language training. As the foreign university does not take part in the teaching activities conducted within the territory of China,
the Chinese party and foreign party sign a so-called agreement on mutual recognition of credits and promise that the students attending
preparatory courses have opportunities to continue studying at the foreign university and may, after finishing their study, get diplomas
of the university. The educational activity mentioned above is not an educational activity carried out by Chinese-foreign cooperation
and is not beneficial for improving the teaching quality of higher education institutions. All higher education institutions shall
put the emphasis of their work on the improvement of education quality, and no one may conduct any such educational activity, let
alone in the name of Chinese-foreign cooperative school running.

6.

To further strengthen supervision over and management of the whole process of Chinese-foreign cooperative school running according
to the spirit of governing education under law and standardized administration. At present, the major stress in work shall be to
administrate the general regulations and advertisements on recruiting students in a standardize manner and to supervise over such
links which are easy to cause contradictions as issuance of academic credentials and diplomats and educational systems. We shall
conduct an inspection by putting emphasis on the two aspects mentioned above, timely solve the problems found out and firmly and
reliably handle serious problems. Such policies shall be rigidly put into effect as that the general regulations or advertisement
on student recruiting of any educational institution or program involving Chinese-foreign cooperation shall be timely reported to
the organ in charge of the examination and approval for record and that the school-running report of any cooperatively-run educational
institution or program shall, within the prescribed time limit, be submitted to the organ in charge of the examination and approval,
etc.

7.

This Ministry will adopt corresponding measures to further strengthen administrative supervision over school running of Chinese-foreign
cooperation, and the stress shall be laid on the acceleration of the construction of “two platforms” and “two mechanisms”, namely,
information platform for supervision work over school running of Chinese-foreign cooperation, which shall be on the basis of foreign-related
education supervision information net, platform for authenticating the certificates issued by Chinese-foreign cooperatively-run schools,
the mechanism for assessing quality of school running of Chinese-foreign cooperation which is built up in order to assess Chinese-foreign
cooperative school-running quality in some selected provinces and cities according to different major subjects, and the law enforcement
and penalty mechanism for Chinese-foreign cooperative school-running which is built up in order to reinforce the responsibilities
of school-running entities and the administrative departments of various levels as required. For the purpose of doing a better job
in the publicity of governmental affairs and information disclosure, this Ministry will gradually make public the list of approved
Chinese-foreign cooperative educational institutions and programs and other related information. At the beginning of January 2007,
information on some educational institutions and programs involving Chinese-foreign cooperation which undertake the higher diploma
education of college level or higher has been publicly put on the website and the foreign-related education supervision information
net of the Ministry of Education.

8.

The administrative education department, higher education institution in each region shall set forth and constitute the work plan
of further regulating Chinese-foreign cooperation in school running, clean up and rectify the regulation-violating behaviors currently
existing in school running of Chinese-foreign cooperation in a centralized way according to the spirit of the present Circular. They
shall find out the real situation and carry out inspection on Chinese-foreign cooperation in school running in order to keep informed
of the comprehensive situation, find out existing problems and rectify them properly and timely. The work plan and situation relating
to cleaning up and rectification shall be timely reported to this Ministry.

This Ministry will supervise and inspect each region and each higher education institution for the implementation of the present Circular,
and at a proper time organize an inspection team to supervise and inspect the implementation of the related work.

Ministry of Education

April 6, 2007



 
Ministry of Education
2007-04-06

 






1...567Page 7 of 7

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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