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URGENT NOTICE OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION ON FURTHER IMPLEMENTATION OF THE POLICY CONCERNING EXTENDING VALUE ADDED TAX CREDIT SCOPE

The Ministry of Finance, the State Administration on Taxation

Urgent Notice of the Ministry of Finance and the State Administration on Further Implementation of the Policy Concerning Extending
Value Added Tax Credit Scope

Cai Shui [2004] No. 226

Departments (Bureaus) of finance and bureaus of state taxation of Liaoning province, Jilin province, Heilongjiang province and Dalian
city:

After the distribution of the documents of the Ministry of Finance and the State Administration of Taxation concerning revitalization
of Northeast old industrial base, they have been enthusiastically implemented by the financial and tax sectors in Northeast region.
In order to further implement the spirit of the State Council on revitalization of Northeast old industrial base, to put into practice
the extension of VAT credit scope and year-end tax refund of enterprises’ fixed asset, the supplementary notice concerning the extension
of VAT credit scope is hereby given as follows:

1.

Any enterprise subsumed under the extended scope of VAT credit (hereinafter referred to as “taxpayer”) that fails to pay VAT duly
shall, whether it has new amount of VAT to be paid or not, firstly offset VAT arrears against income tax of fixed assets and carry
it out in strict accordance with the relevant provisions concerning offset of VAT arrears in Notice of the Ministry of Finance,
the State Administration on Taxation on Printing and Distribution of Interim Measure on Extending the Value-Added Tax Credit Scope
in Northeast Region in 2004 (Cai Shui [2004] No. 168).

As for the outstanding tax prior to May 1, 2005 that is offset (deducted), in case that a unified exempt policy comes out in future
, the offset outstanding tax that is exemptible may be adjusted correspondingly.

2.

Where the fixed asset income tax gets surplus after having offset tax arrears by taxpayer(s) from July 1, 2004 to November 30, 2004,
tax reimbursement may be counted in the VAT achieved and paid without following new VAT rebate after the approval of Departments
(Bureaus) of Finance of Liaoning Province, Jilin Province, Heilongjiang Province and Dalian City. The unfinished rebate of fixed
asset income tax shall be credited next year.

3.

All level tax authorities shall perform well in the work of tax refund of fixed assets income tax amount and shall conduct examination
and verification in strict accordance with relevant requirements; the refundable VAT shall be refunded to taxpayers promptly prior
to December 31, 2004.

4.

The measures for credit of income tax amount of enterprises’ fixed assets and for extension of VAT credit scope in Northeast region
in 2005 shall be regulated separately.

The Notice is thereby given and shall be implemented accordingly.

The Ministry of Finance

The State Administration of Taxation

December 27, 2004



 
The Ministry of Finance, the State Administration on Taxation
2004-12-27

 






THE INTERIM PROVISIONS CONCERNING ESTABLISHMENT OF MEETING AND EXHIBITION COMPANY ON FOREIGN BUSINESSMAN INVESTMENT

Ministry of commerce

Decree of Ministry of commerce of people’s Republic of China

No. 1

The interim provisions concerning establishment of meeting and exhibition Company on foreign businessman investment were reviewed
and adopted at the first Ministry Affairs Session of the Ministry of commerce of People’s Republic of China, promulgated now and
effective 30 days after the date of promulgation.

Lu Fu Yuan, Minister of Ministry of commerce

January 13, 2004

The interim provisions concerning establishment of meeting and exhibition Company on foreign businessman investment

Article 1

This provisions were formulated for the purpose of encouraging foreign company, enterprises and other economic organization to establish
meeting and exhibition Company on foreign businessman investment, hold foreign economy and technology exhibition and meeting in accordance
with law of the people’s Republic of China on Chinese-foreign equity joint ventures, law of the people’s Republic of China on Chinese-Foreign
Contractual Joint Ventures, law of the people’s Republic of China on foreign-capital enterprises and relate law and regulations

Article 2

The state encourages to introduce advanced special technology internationally on organizing meeting, exhibition and specialty exchange
to establish meeting and exhibition company on foreign businessman investment, to promote exhibition business of the state to develop,
to gain great social and economic efficient. The proper business activity within the territory of China and legitimate rights and
interests of meeting and exhibition Company on foreign businessman investment shall receive the protection of Chinese law.

Article 3

Ministry of commerce of People’s Republic of China (hereafter referred to as Ministry of commerce) and departments of commercial affairs
with its authorization are organs in charge of inspection, approval and administration of meeting and exhibition Company on foreign
businessman investment.

Article 4

meeting and exhibition Company on foreign businessman investment with its establishment upon approval may operate these businesses
as followed according to regulations:

(1)

To host and undertake various exhibition and meeting on economy and technology within the territory of china

(2)

To hold meetings outside the territory of china

For holding meeting and exhibition outside the territory of china, if there are other stipulations, it shall be followed.

Article 5

the foreign investor may, in accordance with the provisions, establish meeting and exhibition Company on foreign businessman investment
either in the foreign-invested form within the territory of china or in the form of equity joint and Contractual Joint with the company,
enterprises and other economic organization (hereafter referred as Chinese investor) in accordance with the principle of equality,
mutual benefit.

Article 6

the foreign investor applying for establishment of meeting and exhibition Company on foreign businessman investment shall request
the r experiences and achievements that it have ever host ed the international fair, specialty exhibition and international meeting.

Article 7

where the applicant applies for meeting and exhibition Company on foreign businessman investment, it shall submit the followed files
to the commercial affairs department in charge at provincial level of the company’s domicile.

(1)

The application for establishment of meeting and exhibition Company on foreign businessman investment signed by the investor

(2)

The contract and constitution of meeting and exhibition Company on foreign businessman investment signed by the investor (the constitution
is only requested if establishing the meeting and exhibition Company on foreign businessman investment in the form of exclusive investment)

(3)

The registration certificate of investor (copy document), the certificate of legal preventative (copy document), the delegation certificate
of member of board of director and the credit certificate of bank.

(4)

The notice of pre-check and approval for name to establish the meeting and exhibition Company on foreign businessman investment issued
by the administrations for industry and commerce (copy document), and

(5)

The certificate that the foreign investor have ever hosted he international fair, specialty exhibition and international meeting.

Article 8

the commercial affairs department in charge at provincial level shall determine to make approval or not within the 30 days from the
date of receiving the whole documents prescribed as article 7 of this provision. If determining to make approval, it shall issue
the certificate for the foreign-invested company; if not determining to make approval, it shall demonstrate the cause and apprise
the applicant of the right of application for administrative review in accordance with law and bring a administrative suit.

Article 9

the applicant shall, within a month after the date of receiving the certificate for the foreign-invested company issued, apply to
administration for industry and commerce for making registration in accordance with related regulations of the state.

Article 10

where the meeting and exhibition Company on foreign businessman investment apply for hosting exhibition on economy and technology
in china, it shall take action in accordance with relate regulations of the state.

The administrative regulations as far as the meeting and exhibition Company on foreign businessman investment in china invites to
attend the international economic and trade exhibition held outside the territory of china or hold the said exhibition outside territory
of china shall be e old the said exhibition outside the territory of china stipulated separately.

Article 11

where the meeting and exhibition Company on foreign businessman investment alter the Chinese and foreign investor, alter the shares
and alter the branches, after reporting commercial affairs departments in charge at provincial level for approval, it shall complete
the registration formalities of business license in administration for industry and commerce in accordance with the provisions

Article 12

the meeting and exhibition Company on foreign businessman investment shall, while importing the exhibits, handle import procedure
and make administration and supervision in accordance with related supervisory and administrative provisions for imported exhibits.

Article 13

where the company, enterprise and other economic organizations of the Hong Kong Special Administrative Region, the Macao Special Administrative
Region, Taiwan establish the said company in the mainland, it shall implement by reference to this provisions.

Article 14

the provisions shall be interpreted by Department of Commerce.

Article 15

the provisions shall come into force as of 30 days after issue.



 
Ministry of commerce
2004-01-13

 






NOTICE OF THE STATE ADMINISTRATION OF TAXATION ON SOME ISSUES CONCERNING THE PUNISHMENTS FOR ACTS IN VIOLATION OF THE REGULATIONS ON STAMP TAX

the State Administration of Taxation

Notice of the State Administration of Taxation on Some Issues Concerning the Punishments for Acts in Violation of the Regulations
on Stamp Tax

GuoShuiFa [2004] No. 15

January 29th, 2004

The bureaus of local taxation of all provinces, autonomous regions, municipalities directly under the Central Government and cities
directly under state planning:

After the amendment and re-promulgation of the Law of the People’s Republic of China on the Administration of Tax Collection (hereinafter
referred to as LATC) and the Detailed Rules for the Implementation of the Law of the People’s Republic of China on the Administration
of Tax Collection (DRILATC), some provisions in Article 13 of the Interim Regulations of the People’s Republic of China on Stamp
Tax (hereinafter referred to as IRST) and in Articles 39 through 41 of the Detailed Rules for the Implementation of the Interim Regulations
on Stamp Tax are inapplicable (hereinafter referred to as DRIIRST). In order to intensify the administration on the collection of
stamp tax, the applicable punitive provisions on acts in violation of the regulations regarding the stamp tax are hereby notified:

Any taxpayer of stamp tax who has committed any of the following acts shall be punished by the tax organ in light of the seriousness
of the actual circumstances:

1.

The punitive provisions in Article 64 of the LATC shall be applicable, if a taxpayer fails to stick or sticks less than the required
fiscal stamps on the tax payment receipts, or fails to cancel or cross out the fiscal stamps stuck on the tax payment receipts.

2.

The punitive provisions in Article 63 of the LATC shall be applicable, if a taxpayer tears off and re-uses the already stuck fiscal
stamps.

3.

The punitive provisions in Article 91 of the DRILATC shall be applicable, if a taxpayer counterfeits fiscal stamps.

4.

With regard to a taxpayer who shall pay the total amount of stamp tax due regularly, if it fails to pay or pays less than the amount
of stamp tax due within the time limit as required by the tax organ, it shall be punished according to the punitive provisions of
Articles 63 and 64 of the LATC in light of the nature of its offence; if the circumstance is serious, its license for the regular
payment of the total amount of stamp tax due shall be cancelled simultaneously.

5.

Where a taxpayer is in violation of any of the following provisions, the punitive provisions in Article 60 of the LATC shall be applicable:

(1)

Article 23 of the DRIIRST, which provides that “Where the stamp tax is paid regularly, the tax payer shall affix an aggregate payment
stamp and serial numbers designated by the tax organ on the tax payment receipts and bind them into a complete book, and after the
stamps or payment slip attachments are cancelled by affixing a seal, the documents shall be kept for future reference”.

(2)

Article 25 of the DRIIRST, which provides that “The taxpayer shall properly preserve the tax payment receipts. With regard to the
preservation periods of the tax payment receipts, those governed by any clear provisions of the state shall be handled according
to these provisions; other documents shall be kept for one year after their expiry date.”

The present Circular shall be implemented as of its promulgation.



 
the State Administration of Taxation
2004-01-29

 






CIRCULAR CONCERNING THE ADDITION OF THE OPEN MARKET OPERATIONS PRIMARY DEALERS AND THE ESTABLISHMENT OF THE MECHANISM CONCERNING APPRAISING AND ADJUSTING THE PRIMARY DEALERS IN 2004






Circular concerning the Addition of the Open Market Operations Primary Dealers and the Establishment of the Mechanism concerning Appraising
and Adjusting the Primary Dealers in 2004

[2004] No 2

Each open market operations primary dealer and national inter-bank bond market member :

The Addition of the Open Market Operations Primary Dealers and the Establishment of the Mechanism concerning Appraising and Adjusting
the Primary Dealers in 2004are hereby notified as follows:

1.

Expanding the range of the open market operations primary dealers

Since 2004, some securities companies, insurance companies and rural credit cooperatives unions are added into the list of the open
market operations primary dealers by People’s Bank of China in addition to the commercial banks. Simultaneously, People’s Bank of
China chooses the open market operations primary dealers of different types of institutions to implement transactions subject to
the different operation varieties of open market operations. All the open market operations primary dealers, including the commercial
banks, securities companies, insurance companies and rural credit cooperatives unions, may take part in the People’s Bank of China’s
operation of the issue of central bank bills; the deposit financial institutions of the open market operations primary dealers, namely
the commercial banks and rural credit cooperatives unions, may take part in the operation of repurchase; priority shall be given
to the bond market-makers among open market operations primary dealers as approved by the People’s Bank of China in implementing
cash bond operation, and the People’s Bank of China may decide to implement the operation with all the open market operations primary
dealers in accordance with the market situation and the operation requirements .

2.

Adding open market operations primary dealers of 2004

According to the bonds underwriting situation of the primary bond market, the transaction situation of the secondary bond market,
assets scale, level of management and financial condition of the financial institutions, after considering the local elements, the
People’s Bank of China decided to add two securities companies, namely Guotai Junan Securities Co., Ltd.. and CITIC Securities Co.,
Ltd.; four insurance companies, namely China Life Insurance Co., Ltd., China Ping An Life Insurance Co., Ltd., Huatai Property Insurance
Co., Ltd. and Taikang Life Insurance Co.,Ltd.; two rural credit cooperatives unions, namely Rural Credit Cooperatives Union of Beijing
and Rural Credit Cooperatives Union of Shanghai; and one commercial bank Baotou Commercial Bank, totally nine institutions in all
as the primary dealers of open market operations. There are altogether 52 open market operations primary institutions in all in 2004.
See Appendix 1 for the detailed name list.

3.

Establishing the mechanism on appraising and adjusting the open market operations primary dealers

The People’s Bank of China establishes the mechanism concerning annually appraising and adjusting the open market operations primary
dealers since 2004. The specific content is as follows:

(1)

Making evaluation index system. The People’s Bank of China makes the evaluation index system towards the national inter-bank bond
market members (hereinafter referred to as market members), the main content of the system contains the situation concerning taking
part in open market operations, underwriting situation of the primary bond market, trading situation of the secondary bond market
and the implementation and conduction of monetary policies, etc. The specific evaluation index system can be found in Appendix 2.

(2)

Setting the index weight coefficient, scoring standards and the calculating value. The People’s Bank of China determines the index
weight coefficient, scoring standards and calculates the score value of major market members through comprehensive consideration
of all kinds of elements.

(3)

Determining the open market operations primary dealers subject to the rules. Since 2004, the number of open market operations primary
dealers shall be maintained at 52, among which, the proportions of commercial banks, insurance companies, insurance companies and
rural credit cooperatives unions shall be determined subject to the trading situation and the monetary regulation requirements of
the previous year. The People’s Bank of China calculates the score value subject to the evaluation index system, weight coefficient
and scoring standards, evaluates and ranks the above-mentioned four categories of institutions among the major market members, those
ranking high should be put on the planned list of open market operations primary dealers. The People’s Bank of China should determine
and publicize the list of the open market operations primary dealers after soliciting the opinions of the related supervising departments
on whether a dealer observes the requirements of the related supervising departments and on its business performance.

Furthermore, as for an institution that fails to perform the related obligations in open market operations, the People’s Bank of China
may suspend the transactions with this institution in accordance with the related provisions.

By the end of 2004￿￿in accordance with the above-mentioned principles and procedures, the People’s Bank of China will choose 42 commercial
banks, 4 securities companies, 4 insurance companies and 2rural credit cooperative unions, a altogether 52institutions in all, as
the open market operations primary dealers of the year 2005.

Appendix 1: Name List of the Open Market Operations Primary Dealers 2004

Appendix 2: Indices for Evaluating the Open Market Operations Primary Dealers

The Operating Office of the Open Market Operations of the People’s Bank of China

February 25, 2004


Appendix 1

￿￿

Appendix 1:

Name List of the Primary Dealers of Open Market Operations 2004

￿￿

Industrial and Commercial Bank of China

Wuhan Commercial Bank

Agricultural Bank of China

Jinan Commercial Bank

Bank of China

Urumchi Commercial Bank

China Construction Bank

Changsha Commercial Bank

Bank of Communications

Dalian Commercial Bank

CITIC Industrial Bank

Zibo Commercial Bank

China Everbright Bank

Evergrowing Bank

Huaxia Bank

Xiamen Commercial Bank

China Minsheng Banking Corp., Ltd.

Shijiazhuang Commercial Bank

Guangdong Development Bank

Qingdao Commercial Bank

Shanghai Pudong Development Bank

Kunming Commercial Bank

Industrial Bank

Taiyuan Commercial Bank

China Merchants Bank

Xi'an Commercial Bank

Shenzhen Development Bank

Luoyang Commercial Bank

Beijing Commercial Bank

Harbin Commercial Bank

Tianjian Commercial Bank

Hefei Commercial Bank

Bank of Shanghai

Guiyang Commercial Bank

Nanjiaing Commercial Bank

Baotou Commercial Bank

Guangzhou Commercial Bank

Guotai Junan Securities Co., Ltd.

Zhuhai Commercial Bank

CITIC Securities Co., Ltd.

Fuzhou Commercial Bank

China Life Insurance Co., Ltd.

Chengdu Commercial Bank

China Ping An Life Insurance Co., Ltd.

Chongqing Commercial Bank

Huatai Property Insurance Co., Ltd.

Shenzhen Commercial Bank

Taikang Life Insurance Co., Ltd.

Hangzhou Commercial Bank

Rural Credit Cooperatives Union of Beijing

Wuxi Commercial Bank

Rural Credit Cooperatives Union of Shanghai

￿￿

Appendix 2:

Indices for Evaluating the Primary Dealers of Open Market Operations

￿￿

Institution Name

Participation in Open Market Operations

Primary Bond Market Conditions

Issuance of Central Bank Bills

Repurchase Transactions

Cash Bond Transactions

Underwriting Volume

Distribution Volume

Hitting Frequency Ratio

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

Secondary Bond Market Conditions

Implementation and Conduction of Monetary Policies

Cash Bond Transactions

Repurchase Transactions

Bilateral Quotation of Bond Market- Maker

Implementation  of Window

 Guidance of the Central  Bank

Daily Report on Liquidity

Suspension of Open Market Transaction

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

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￿￿

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

 



NOTICE OF THE STATE COUNCIL ON ADJUSTING THE PROPORTIONS OF REGISTERED CAPITAL IN FIXED ASSET INVESTMENT PROJECTS OF SOME INDUSTRIES

the State Council on Adjusting

Notice of the State Council on Adjusting the Proportions of Registered Capital in Fixed Asset Investment Projects of Some Industries

No. 13[2004] of the State Council

April 26, 2004

Since this year, the national economy has been maintaining a favorable momentum, the reform and opening has been further carried forward
steadily and the social undertakings have been developed in an all-around way. At the same time, those outstanding conflicts existing
in the economic operation have become increasingly apparent, which are embodied in such aspects as the over-increase in investment,
too many newly started projects, the under-construction scale being too large, and the irrational investment structure. There exists
blind investment in industries of steel, electrolytic aluminum and cement, there is serious phenomenon of low-quality repeated construction,
the increase rate of development and investment of real estate is too high and the development capital is excessively dependent on
bank loans. In order to strengthen the macro regulation, adjust and optimize the economic structure and promote a sound development
of the aforesaid industries, the State Council has decided to adjust the proportions of capital money of construction projects in
industries of steel, electrolytic aluminum, cement and real estate development as prescribed in the Notice of the State Council on
Piloting the System of Registered Capital on Fixed Asset Investment Projects (No. 35 [1996] of the State Council): (1) The proportion
of capital money of steel projects shall be raised from 25% or more to 40% or more; (2) The proportion of registered capital of projects
of cement, electrolytic aluminum and real estate development (excluding projects of affordable houses) shall be raised from 20% or
more to 35% or more.

The relevant provisions of this Notice shall go into effect as of the date of promulgation.



 
the State Council on Adjusting
2004-04-26

 






ANNOUNCEMENT OF THE MINISTRY OF COMMERCE AND THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE

the Ministry of Commerce, the State Administration for Industry and Commerce

Announcement of the Ministry of Commerce and the State Administration for Industry and Commerce

[2004] No. 25

June 3, 2004

In accordance with the Circular of the General Office of the State Council Concerning Sorting out and Consolidating Non-experimental
Commercial Enterprises with Foreign Investment (Guo Ban Fa [1998] No. 98) and the Circular Concerning Better Implement of Sorting
out and Consolidating Non-experimental Commercial Enterprises with Foreign Investment (Guo Jing Mao Wai Jing [2001] No. 787) which
was approved by the General Office of the State Council and promulgated by the former State Economy and Trade Commission, the former
Ministry of Foreign Trade and Economic Cooperation and the State Administration for Industry and Commerce, the five enterprises of
Erbai Yongxin Corp,. Ltd. Shanghai, Aotuo Qibai Mail Order Corp,. Ltd. Shanghai, Stock General Merchandises Corp,. Ltd. Shanghai,
Golden World Shopping Center Corp,. Ltd. Shanghai and Kunlun Taiwan Shopping Mall Corp,. Ltd. Shanghai are in line with the Five
Shall- not Enterprises, which means that they shall have no right to operate import and export, shall not operate wholesale business,
shall not re-expand the business scope and scale of construction, shall not open branches and extend the duration of joint operations
and shall not benefit from the policy of tax reduction or tax exemption for importing equipment and materials of own use.

This is hereby notified.



 
the Ministry of Commerce, the State Administration for Industry and Commerce
2004-06-03

 






REPLY OF THE STATE ADMINISTRATION OF TAXATION ON ISSUES CONCERNING THE APPLICATION OF PREFERENTIAL TAX POLICY BY FOREIGN-FUNDED ENTERPRISES FOR THEIR UNDERTAKING OF TAXI BUSINESS AND OTHER PASSENGER TRANSPORTATION BUSINESSES

State Administration of Taxation

Reply of the State Administration of Taxation on Issues concerning the Application of Preferential Tax Policy by Foreign-funded Enterprises
for Their Undertaking of Taxi Business and Other Passenger Transportation Businesses

GuoShuiHan[2004] No. 945

August 3rd, 2004

The Administration of State Taxes of Guangxi Zhuang Autonomous Region:

Your Request for Instructions on the Nanning KangFu Communications Limited Company’ Request for Enjoying Preferential Income Tax Policy
on the Development of Western Areas (No.143 [2003] of the Guangxi Administration of State Taxes) and the Request for Instructions
on Issues regarding the Nanning White Horse Public Traffic Limited Company’s Application for Enjoying Preferential Tax Policy on
the Development of Western Areas (No.130 [2003] of the Guangxi Administration of State Tax) have been received, we hereby make the
following reply:

The “communications and transportation industry” that enjoys the treatment of a production-oriented foreign-funded enterprise as stipulated
in Item (8) of Article 72 of the Detailed Rules for the Implementation of the Income Tax Law of the People’s Republic of China on
Foreign-funded Enterprises and Foreign Enterprises (hereinafter referred to as the Detailed Rules for the Implementation of Tax Law)
shall not include the foreign-funded enterprises engaging in the passenger transportation business; the “traffic enterprises” newly
established in the western areas, which enjoy the exemption of enterprise income tax for two years and collection of half the rate
for three more consecutive years as stipulated in Item (2) of Article 3 of the Notice of the State Council on the Implementation
of Several Policies and Measures for the Development of Western Areas (No.33 [2000] of the State Council) shall refer to the enterprises
engaging in the investment and construction of such traffic infrastructure as roads and bridges. Therefore, the Nanning KangFu Traffic
Limited Company and the Nanning White Horse Public Traffic Limited Company that engage in the taxi business and urban public passenger
transportation business do not fall within the scope of application of the aforesaid preferential enterprise income tax. Please dispose
the issue by referring to other relevant tax provisions.



 
State Administration of Taxation
2004-08-03

 






MEASURES FOR THE ADMINISTRATION OF EXAMINATION AND APPROVAL OF FOREIGNERS’ PERMANENT RESIDENCE IN CHINA

20031213State Council

The Ministry of Public Security, The Ministry of Foreign Affairs

Order of the Ministry of Public Security and the Ministry of Foreign Affairs

No.74

Measures for the Administration of Examination and Approval of Foreigners’ Permanent Residence in China adopted by the State Council
on December 13, 2003, are hereby promulgated and carried out.

Minister of the Ministry of Public Security, Zhou Yongkang

Minister of the Ministry of Foreign Affairs, Li Zhaoxing

August 15, 2004

Measures for the Administration of Examination and Approval of Foreigners’ Permanent Residence in China

Article 1

In order to standardize the examination and approval of foreigners’ permanent residence in China, these Measures are formulated in
accordance with the relevant provisions of the Law of the People’s Republic of China on Control of Entry and Exit of Foreigners and
the Detailed Rules for its implementation.

Article 2

Foreigners’ permanent residence in China refers to that the period of foreigners’ residence in China is not limited.

Article 3

The Foreigner’s Permanent Residence Card is a valid ID certificate for a foreigner who has obtained permanent residence status in
China and may be used independently.

Article 4

A foreigner with permanent residence status in China may enter and leave China with his valid passport and Foreigner’s Permanent Residence
Card.

Article 5

The authorities to accept the applications of foreigners for permanent residence in China are the public security organs of the people’s
governments of cities with subordinate districts and the public security branch bureaus and county-level bureaus of municipalities
directly under the Central Government. The authorities to examine foreigners’ applications for permanent residence in China are the
departments and bureaus of public security of provinces, autonomous regions and municipalities directly under the Central Government.
The authority to examine and approve foreigners’ applications for permanent residence in China is the Ministry of Public Security.

Article 6

Foreigners applying for permanent residence in China must abide by Chinese laws, be in good health and without any criminal record,
and must meet at least one of the following requirements:

(1)

Having made direct investment in China with stable operation and a good tax paying record for three successive years;

(2)

Having been holding the post of deputy general manager, deputy factory director or above or of associate professor, associate research
fellow and other associate senior post_titles of professional post or above or enjoying an equal treatment, for at least four successive
years, with a minimum period of residence in China for three cumulative years within four years and with a good tax paying record;

(3)

Having made a great and outstanding contribution to and being specially needed by China;

(4)

Being the spouse or unmarried child under 18 years old of a person with reference to the item (1), (2) or (3) of this paragraph;

(5)

Being the spouse of a Chinese citizen or of a foreigner with permanent residence status in China, in a marriage relationship for at
least five years, with at least five successive years of residence in China and at least nine months of residence in China each year,
and having stable source of subsistence and a dwelling place;

(6)

Being an unmarried person under 18 years old turning to his parent; or

(7)

Being a person who is or above 60 years old, who has no direct relative abroad and is to turn to any directive relative in China,
and has stayed in China for at least five successive years with at least nine- month residence in China each year, and has stable
source of subsistence and a dwelling place.

The periods of time in this Article mean the successive ones till the date of application.

Article 7

In the case of a foreigner under item (1) of the first paragraph of Article 6 herein, the registered capital paid by him as investment
in China shall meet any of the following requirements:

(1)

In the case of investment in any industry encouraged under the Catalogue for Guidance of Foreign Investment Industries, at least US$500,000
in total;

(2)

In the case of investment in the western area of China or any key county under poverty reduction and development program, at least
US$500,000 in total;

(3)

In the case of investment in the central area of China, at least US$1 million in total; or

(4)

In the case of investment in China, at least US$2 million in total.

Article 8

In the case of a foreigner under item (2) of the first paragraph of Article 6 herein, the entity in which he holds a post must be
any of the following:

(1)

An institution subordinate to any department of the State Council or to the people’s government at the provincial level;

(2)

A key college or university;

(3)

An enterprise or government-sponsored institution implementing a key engineering project or major scientific research project of the
state; or

(4)

A high-tech enterprise, foreign invested enterprise in encouraged fields, technologically advanced enterprise with foreign investment
or export-oriented enterprise with foreign investment.

Article 9

The applicant shall faithfully fill in the Form of Application for Foreigner’s Permanent Residence in China and submit the following
materials:

(1)

A copy of his valid passport or other certificate that may be used instead of the passport;

(2)

A health certificate issued by a health quarantine agency designated by the Chinese government or by a foreign health quarantine agency
recognized by the relevant Chinese embassy or consulate;

(3)

A certificate of no criminal record in the country concerned as issued by the relevant Chinese embassy or consulate;

(4)

Four recent full-face color photos (2 by 2 inches, bareheaded) of the applicant; and

(5)

Other relevant materials provided herein.

Article 10

An applicant under Item (1) of the first paragraph of Article 6 herein shall submit a certificate of approval for the foreign-invested
enterprise, certificate of registration and a joint annual inspection certificate, report on the verification capital and personal
tax payment receipt in addition.

In the case of a foreign-invested enterprise in encouraged fields, a letter of confirmation in respect of the foreign-invested project
as encouraged by the state shall be submitted in addition.

Article 11

An applicant under Item (2) of the first paragraph of Article 6 herein shall submit the following materials in addition:

(1)

A certificate certifying his position or professional post_title as issued by his employer;

(2)

The Foreign Expert Card or Foreigner Employment Card;

(3)

A certificate of registration and certificate of annual inspection of his employer, certificate of personal tax payment issued to
him; where the employer is a foreign-invested enterprise, a certificate of approval for the foreign-invested enterprise and a joint
annual inspection certificate is required in addition; and

(4)

In the case of an applicant who holds a post in an enterprise or institution that carries out a key engineering project or major scientific
research project of the state, a certificate certifying the project as issued by the competent authority of the government at the
provincial or ministry level; in the case of an applicant who holds a post in a high-tech enterprise, a high-tech enterprise certificate;
in the case of a foreign-invested enterprise in encouraged fields, technologically advanced enterprise with foreign investment or
export-oriented enterprise with foreign investment, a certificate certifying the foreign-invested enterprise in encouraged fields,
advanced-tech enterprise with foreign investment or export-oriented enterprise with foreign investment.

Article 12

An applicant under Item (3) of the first paragraph of Article 6 herein shall submit a letter of recommendation and the relevant certificates
as issued by the competent authority of the Chinese government in addition.

Article 13

An applicant under Item (4) of the first paragraph of Article 6 herein shall, in addition, submit a marriage certificate in the case
of a spouse, his birth certificate or parentage certificate in the case of an unmarried child under 18 years old, and a adoption
certificate in the case of an adopted child. The above-mentioned certificates as issued by a foreign agency shall be subject to the
authentication of the Chinese embassy or consulate in the country concerned.

Article 14

An applicant under Item (5) of the first paragraph of Article 6 herein shall, in addition, submit his (her) Chinese spouse’s registered
permanent residence certificate or foreign spouse’s Foreigner’s Permanent Residence Card, marriage certificate, and a notarized certificate
of source of subsistence and house leasing certificate or muniments of post_title. The above-mentioned certificates as issued by a foreign
agency shall be subject to the authentication of the Chinese embassy or consulate in the country concerned.

Article 15

An applicant under Item (6) of the first paragraph of Article 6 herein shall, in addition, submit his Chinese parent’s registered
permanent residence certificate or foreign parent’s Foreigner’s Permanent Resident Card, his birth certificate or parentage certificate
and, in the case of an adopted child, the adoption certificate in addition. The above-mentioned certificates as issued by a foreign
agency shall be subject to the authentication of the Chinese embassy or consulate in the country concerned.

Article 16

An applicant under Item (7) of the first paragraph of Article 6 herein shall, in addition, submit the registered permanent residence
certificate of the Chinese citizen, or the Foreigner’s Permanent Residence Card of the foreigner, to whom he is to turn, a notarized
certificate of kindred and a certificate certifying that the applicant has no direct relative abroad, a notarized certificate certifying
the applicant’s financial source or notarized certificate of financial guarantee by the person to whom the applicant is to turn,
and notarized house leasing certificate or muniments of post_title of the applicant or the person to whom the applicant is to turn. The
above-mentioned certificates as issued by a foreign agency shall be subject to the authentication of the Chinese embassy or consulate
in the country concerned.

Article 17

An application for foreigner’s permanent residence in China shall be submitted by the applicant himself or his parent if he is unmarried
and under 18 years old or his attorney to the public security organ of the people’s government of the city with subordinate districts,
or the branch or county bureau of public security of the municipality directly under the Central Government, in the place where the
principal investment was made or of long-term residence.

In the case of applying through an attorney, a power of attorney issued by the applicant shall be submitted. A power of attorney issued
by the applicant abroad shall be subject to the authentication of the Chinese embassy or consulate in the country concerned.

Article 18

The public security organ shall make an approval or disapproval decision within six months from the date of the acceptance of the
application.

Article 19

The Ministry of Public Security shall issue a Foreigner’s Permanent Residence Card to the applicant whose permanent residence status
in China has been approved. If the applicant is not in China, the Ministry of Public Security shall issue a Confirmation Form of
Foreigner’s Permanent Residence Status to the applicant, who shall apply for a “D” visa to the Chinese embassy or consulate in the
country concerned by producing such Conformation Form and, within 30 days from his entry into China, get the Foreigner’s Permanent
Residence Card from the public security organ that accepted his application.

Article 20

A foreigner who has been approved to permanently reside in China must stay in China for at least three cumulative months a year. If
the foreigner is unable to stay in China for such minimum period due to any reason, he shall apply for the approval of the department
or bureau of public security of the province, autonomous region or municipality directly under the Central Government where he reside
in, provided that the cumulative period of his residence in China shall not be less than one cumulative year in five years.

Article 21

A Foreigner’s Permanent Residence Card shall be valid for five or ten years.

In the case of a foreigner under 18 years old approved to permanently reside in China shall have a Foreigner’s Permanent Residence
Card valid for five years; those being or above 18 years old shall have one valid for ten years.

Article 22

In the case of expiry of, any change of particulars in, damage to or loss of a Foreigner’s Permanent Residence Card, the holder shall
apply for renewal or reissue of the Card to the public security organ of the people’s government of the city with subordinate districts,
or the branch or county bureau of public security of the municipality directly under the Central Government in the place of his long-term
residence. The public security organ shall make such renewal or reissue within one month if, upon examination, it holds that the
holder still meets the requirements for a foreigner to be approved to permanently reside in China.

Article 23

The holder of a Foreigner’s Permanent Residence Card shall apply for a renewal of the Card within a month before the expiry of the
old one, for a renewal within a month after any change of particulars in the Card, or for a renewal or reissue promptly in the case
of any damage to or loss of the Card.

Article 24

The Ministry of Public Security may cancel such status of him and withdraw or revoke his Foreigner’s Permanent Residence Card in the
case of a foreigner with permanent residence status in China under any of the following circumstances:

(1)

Being likely to threaten the national security and interests;

(2)

Being expelled from China by the people’s court;

(3)

Having obtained the permanent residence status in China by submitting false materials or by other illegal means; and

(4)

Having stayed in China without approval for a period less than three cumulative months a year or less than a cumulative year in five
years.

Article 25

Foreigners who have been approved to permanently reside in China before the implementation of these Measures shall, within six months
from the implementation, renew his Foreigner’s Permanent Residence Card with the public security organ of the people’s government
of the city with subordinate districts or the branch and county bureau of public security of the municipality directly under the
Central Government that issued the original Card or in the place of his long-term residence.

Article 26

The items and rates of charge in respect of a foreigner’s application for permanent residence status in China and the issue, renewal
and reissue of a Foreigner’s Permanent Residence Card shall conform to the relevant provisions of the departments of price control
and finance of the State Council.

Article 27

In these Measures:

(1)

“Direct relative” shall include parents (spouse’s parents), grandparents, child being at least 18 years old and his (her) spouse,
and grandchild being at least 18 years old and his (her) spouse; and

(2)

Both “above” and “within” shall include the given figure.

Article 28

The power to interpret these Measures shall be vested in the Ministry of Public Security and the Ministry of Foreign Affairs.

Article 29

These Measures shall go into effect as of the date of promulgation.



 
The Ministry of Public Security, The Ministry of Foreign Affairs
2004-08-15

 






HIGHWAY LAW OF THE PEOPLE’S REPUBLIC OF CHINA (2004 REVISION)

e01582

Standing Committee of the National People’s Congress

Highway Law of the People’s Republic of China (2004 Revision)

(Adopted at the 26th Meeting of the Standing Committee of the Eight National People’s Congress and implementation as of January 1st,
1998; Revised at the 11th session of the Standing Committee of the 10th National People’s Congress of the People’s Republic of China
on August 28th, 2004)

ContentsChapter I General Provisions

Chapter II Highway Planning

Chapter III Construction of Highways

Chapter IV Maintenance of Highway Roads

Chapter V Road Administration

Chapter VI Toll Highways

Chapter VII Supervision and Checking

Chapter VIII Legal Responsibilities

Chapter IX Supplementary Provisions

Appendix

Chapter I General Provisions

Article 1

The law is enacted with a view to strengthening the construction and management and stimulating the development of highways so as
to suit the need of socialist modernization construction and people’s life.

Article 2

The law is applicable to the planning, construction, maintenance, operation, use and management of highways inside the territory of
the People’s Republic of China.

The word “highways” as referred in this law includes facilities such as bridges, tunnels and ferries for the highways.

Article 3

The development of highways shall follow the principles of overall planning, rational distribution, quality guarantee, clearance of
obstructions, environment protection and equal stress to construction, renovation and maintenance.

Article 4

The People’s Governments at all levels shall adopt effective measures to support and boost the construction of highways.

The construction of highways shall be incorporated into the national economic and social development plans.

The State encourages and guides domestic and foreign economic organizations to invest in the construction and operation of highways
according to law.

Article 5

The State shall help and support areas of minority nationalities, remote and border areas and impoverished areas to develop highways.

Article 6

Highways shall be divided, according to their positions in the networks, into State roads, provincial roads, county roads and township
roads and, technically into expressways, first class roads, second class roads, third class roads and fourth class roads. The specific
standards for the division shall be worked out by the State Council department in charge of transportation.

New roads should conform to technical standards in grading. The existing roads that fail to meet the minimum technical grading standards
should be transformed step by step according to the set standards.

Article 7

Highway roads are subject to the protection by the State. No unit or individual is allowed to damage or destroy highways, land or
ancillary facilities for highways or illegally put them into one’s own use.

Any unit or individual is obliged to protect highways and lands or ancillary facilities for highways and has the right to report or
indict acts of damaging or destroying highways, lands or ancillary facilities for highways, or acts affecting road safety.

Article 8

Department under the State Council in charge of transportation shall be responsible for the administration of highways throughout
the country.

Transportation departments of local People’s Governments at and above the county level shall be responsible for the administration
of highways within their respective administrative areas; but the functions and responsibilities of transportation departments of
local People’s Governments at and above the county level for the administration and supervision of State roads and provincial roads
shall be fixed by respective provincial, autonomous regional or municipal People’s Governments.

People’s Governments of townships, townships of minority nationalities areas and towns shall be responsible for the construction and
maintenance of township roads within their respective administrative areas.

Transportation departments of local People’s Governments at and above the county level may decide to entrust road management organizations
to exercise the duties of highway administration according to the provisions of this law.

Article 9

It is forbidden for any unit or individual to set up check posts, collect fees, impose fines or intercept vehicles on highways.

Article 10

The State encourages scientific research in terms of highways and reward units and individuals that have made significant achievements
on scientific and technical research and application in terms of highways.

Article 11

Provisions concerning special roads in this law apply to special roads.

Special highway roads refer to those built, maintained, managed by enterprises or other units exclusively or mainly for their own
respective uses.

Chapter II Highway Planning

Article 12

Highway planning shall be made in the light of the needs of the national economic and social development and national defense and
also in coordination with urban construction and development plans and the development of other traffic means.

Article 13

Plans for requisition of lands for constructing roads shall conform to the overall planning for land use and the land to be used for
such purposes shall be incorporated into the general land use plan of the year.

Article 14

Plans with respect to State roads shall be formulated by the transportation department under the State Council together with other
related departments under the State Council and the People’s Governments of provinces, autonomous regions and municipalities along
the lines and submitted to the State Council for approval.

Plans in respect to provincial roads shall be formulated by the transportation departments of People’s Governments of provinces, autonomous
regions and municipalities together with the People’s Governments of a lower level along the lines and submitted to the People’s
Governments of the respective provinces, autonomous regions and municipalities for approval and to the transportation department
under the State Council for record filing purposes.

Plans with respect to county roads shall be formulated by the transportation departments of the People’s Governments at the county
level together with related departments at the same level and submitted to the people’s governments of the same level for examination
and to the People’s Governments of the next higher level for approval.

Plans with respect to township roads shall be formulated by the people’s governments of township, townships inhabited by people of
minority nationalities and towns with the assistance of the transportation departments of the people’s governments at the county
level and submitted to the people’s governments at the county level for approval.

Plans with respect to county roads and township roads to be approved according to the provisions of paragraph three and paragraph
four of this article shall be submitted to the transportation departments of the people’s governments at the next higher level for
the record.

Plans with respect to provincial roads should be in harmony with plans of State roads; plans of county roads shall be coordinated
with plans of provincial roads; and plans of township roads shall be coordinated with plans of county roads.

Article 15

Plans of special roads shall be formulated by units in charge of special roads and, after being examined by departments in charge
at the next higher level, be submitted to the transportation departments of the People’s Governments at and above the county level
for approval.

Plans of special roads shall be coordinated with highway planning. Transportation departments of the people’s governments at and above
the county level shall put forward proposals for revision should they find the plans of special roads in disagreement with plans
of State roads, provincial roads, county roads and township roads and the departments and units in charge of the special roads shall
make revisions accordingly.

Article 16

Partial adjustments of State road plans shall be determined by the original organ of formulation. For major revisions of State road
plans, the original organ of formulation shall put forward revision plans and submit them to the State Council for approval.

If plans for provincial roads, county roads and township roads already approved need revising, the original organ of formulation shall
put forward revision proposals and submit them to the original organ of approval for re-approval.

Article 17

Names and indexes of State roads shall be set by the transportation department under the State Council. Names and indexes of provincial,
county and township roads shall be set by the transportation departments of the People’s Governments of provinces, autonomous regions
and municipalities according to the relevant provisions of the transportation department of the State Council.

Article 18

New villages and towns and development zones should be planned and built at prescribed distances from highways and absolutely not
to have any highway running across to avoid using highways as part of streets to impede the safety and smooth operations of the highways.

Article 19

The State encourages special roads to be used for public traffic. If a special road is turned to public use, it shall be made part
of provincial, county or township roads at the request of units in charge of the special roads or related departments and with the
consent of the units in charge of special roads and the approval of the transportation departments of the People’s Governments of
provinces, autonomous regions and municipalities.

Chapter III Construction of Highways

Article 20

The departments of transportation administration of the People’s Governments at and above the county level should, according to their
respective duties, safeguard the order and strengthen supervision and control of highway roads construction.

Article 21

In raising funds for highway construction, the People’s Government at all levels may, in addition to appropriations made by the People’s
Government at all levels, can collect special charges for road construction or solicit loans from domestic and foreign financial
organizations or foreign governments according to law and relevant provisions of the State Council on their own decisions.

The State encourages investments for highway construction by domestic and foreign organizations. Companies which engage in development
and/or management of highways may, according to law and administrative regulations, raise funds by means of issuance of stocks or
corporate bonds.

Incomes from the transfer of rights for collection of toll from highways according to the provisions of this law should be used for
construction of highways. Raising funds for highway roads construction from enterprises or individuals should be undertaken under
the principle of free will and in accordance with true needs and possibilities and relevant regulations of the State Council. No
forcible apportioning is permitted.

Other means permitted by law or relevant regulations of the State Council can also be used in raising funds for highways construction.

Article 22

Highway construction should be undertaken in accordance with procedures for infrastructural construction as provided for by the State
and other related regulations.

Article 23

Systems of legal person responsibility, public bidding and project supervision should be introduced in projects of highway construction
according to the relevant regulations of the State.

Article 24

Units undertaking highway roads construction should, according to the characteristics and technical requirements of the projects,
choose qualified survey and designing units, construction units and projects supervisors and sign contracts with them to clearly
define respective rights and obligations of both sides in accordance with provisions of related laws, regulations and rules and the
requirements of the road engineering and technical standards.

Units undertaking feasibility studies, survey and designing, construction, project supervision for highway roads construction projects
must be accommodated with qualification certificates issued by the State.

Article 25

Undertakings of highway construction should be reported to the transportation departments of local people’s governments above the
county level for approval in accordance with the provisions of transportation department under the State Council.

Article 26

Highway construction shall be undertaken strictly in conformance with prescribed technical standards of highway construction.

Entities of designing, construction and project supervision of highway construction projects should establish capable Q/C systems
and strictly carry out the job responsibility system in accordance with related laws of the country and undertake to design, construct
and supervise the projects according to the requirements of related laws, regulations and rules and highway engineering technical
standards and the terms agreed upon in the contracts in order to ensure the quality of construction.

Article 27

The use of land for constructing highway roads shall be handled according to relevant laws and administrative regulations

Highway construction should follow the principle of farmland protection and economical use of land.

Article 28

No unit or individual is allowed to intrude or collect fees illegally for the use of State owned waste hills, wasteland or for the
digging of sand, stone or earth from the State owned waste hills, wasteland, river beds and beach lands for highway construction
only if necessary procedures as provided for by related laws and administrative regulations have been undertaken for the respective
actions.

Article 29

Local People’s Governments at all levels should provide necessary support and assistance to the lawful use of land and resettlement
of people for construction of highway roads.

Article 30

Design and work of highway construction should be done in conformance with requirements of the protection of environment, historical
relics and sites and the prevention of water loss and soil erosion.

Highway construction projects planned to adapt to the requirements of national defense should be undertaken strictly according to
the plans so as to meet the needs of national defense in transportation.

Article 31

Should road construction project affect the normal operation of railways, water conservancy, power, postal and telecommunications
and other facilities, the unit for the construction should convey prior agreements form related units. If the construction of road
has caused damages to the afore-said facilities, the unit responsible for carrying out the construction should undertake to give
a remedy to the facilities affected to help restore their technical standards to no lower than the originals or give them corresponding
economic compensations.

Article 32

In the reconstruction of highway roads, construction units concerned should post signs at both ends of the section under reconstruction.
If the reconstruction requires vehicles to bypass, signs should be posted at the entry of the road to indicate the way to bypass
and on condition that there is no way for bypassing the section, a temporary road should be built by the construction unit concerned
to facilitate the passage of vehicles and pedestrians.

Article 33

Upon completion, highway roads construction and repairing projects are subject to procedures of examination and acceptance according
to relevant regulations of the State. Those projects that have not been examined or have been found unqualified for acceptance shall
not be put to use.

Clear signs and lines should be created for completed highway roads according to the regulations of the transportation under the State
Council.

Article 34

Local People’s Governments above the county level should allocate land on the roadside within 1 meter width from the outer edges of
the side ditches (aqueducts and road protection channel, the same below) on both sides of a road for the use of the related highway.

Chapter IV Maintenance of Highway Roads

Article 35

Related administrative departments of highways should undertake to maintain highway roads according to the technical standards and
operational procedures as prescribed by the transportation department under the State Council to ensure the roads are in a good technical
state.

Article 36

Expenses for highway maintenance should be acquired through the collection of fuel oil surcharge paid by units and individuals in
purchase of fuel oil according to the relevant provisions by the State.

In cases where fuel oil surcharge is collected, no more road maintenance fees shall be collected. Specific procedures and steps shall
be formulated by the State Council for the purpose.

Before the enforcement of collection of fuel oil surcharges, the existing road maintenance fee collection regulations shall remain
in force.

Road maintenance fees should be used for maintaining and reconstructing highway roads. Receipts shall be given by departments in charge
of transportation to units and individuals that have paid road maintenance fees. Receipts of road maintenance fee should be attached
to a place of clear sight on the vehicles. Vehicles bearing no such receipts of road maintenance fees are not allowed to run on the
roads.

Article 37

People’s Governments at the county and township levels should give support and assistance in the fetch of sand, stone, earth or water
for road maintenance.

Article 38

People’s Governments at the county and township levels should organize free services of rural residents on both sides of roads for
highway construction and maintenance according to the related regulations of the State.

Article 39

To ensure the personal safety of road maintenance personnel, road-maintaining personnel should wear safety uniforms when maintaining
roads. Vehicles used in road maintenance should bear obvious signs indicating that there is road maintenance going on.

During road maintenance, vehicles shall not be subject to the restrictions of road signs and road marks in route and direction under
the condition that other vehicles passing by are not affected. Other vehicles running along the road should give way to road maintenance
vehicles and personnel.

If road maintenance operation affects the passage of vehicles and pedestrians, the provisions of Article 32 of this law shall apply.

Article 40

When State highways and provincial roads are interrupted due to serious natural disasters, related highway administrative departments
should give timely repair. Should there be any difficulties for the related highway administration to undertake repair in time, local

People’s Governments above the county level should lose no time to organize local government institutions, people’s organizations,
enterprises and urban and rural residents for rush repairs. They may also ask for assistance from local army so as to restore the
operation of the roads as soon as possible.

Article 41

Highway administrative departments are responsible for soil and water preservation on hill slopes and wasteland at both sides of highways.

Article 42

Highway administration departments shall organize greening of highway roads according to the road engineering technical standards.

Trees at both sides of highways should not be felled without authorization. Required regenerative felling should go through prescribed
examination and approval procedures to get the consent of transportation departments of local people’s governments above the country
level and re-planting should be undertaken.

Chapter V Road Administration

Article 43

Appropriate measures should be undertaken by local people’s governments at all levels to strengthen the protection of the roads.

Departments in charge of transportation of local People’s Governments above the county level should work conscientiously to protect
highways according to law and strive to improve road management by employing scientific methods and advanced technologies, gradually
improve facilities for the road services and ensure good condition, safety, and smooth traffic of the roads.

Article 44

Without authorization, no unit or individual is allowed to occupy or dig the roads for their own uses.

If the construction of railways, airports, power plants, telecommunications facilities, water conservancy projects and other constructions
projects needs to occupy, dig or change the route of roads, prior consents should be obtained by construction unit concerned from
related departments in charge of transportation. If transport safety would also be affected, approval from the related public security
organs should also be sought. After occupying, digging or changing the routes of roads, construction units concerned should repair
or rebuild them at least up to their original technical standards or give corresponding economic compensations.

Article 45

Building of bridges and/or aqueducts or putting up or laying pipelines across over, at or under the roads or erecting or laying pipelines,
cables and other facilities in land for roads, prior consent should be sought from related departments in charge of transportation.
If transport safety would also be affected, prior consent from the related public security organs should also be sought.

Facilities being built, erected or laid should conform to technical standards for road engineering. Damages caused to the roads by
such undertaking should be compensated for according to the seriousness of the cases.

Article 46

No unit or individual is allowed to put up stands or stalls, store things, dump refuse, put up obstructions, dig ditches to divert
water, or use roadside ditches to discharge waste matters on highway roads or land for the roads or carry out any other activities
that would result in damages or pollution to the roads or affect the traffic of the roads.

Article 47

No sand collection, stone quarrying, earth digging or waste dumping, explosive operations or other activities threatening the safety
of roads, road bridges, road tunnels and road ferries is allowed within a perimeter of 200 meters of large and medium-sized road
bridges or ferries and within a perimeter of 100 meters above road tunnels or outside the mouths of road tunnels and within a certain
distance on both sides of the roads.

Building of dams, narrowing or widening of river beds for the purpose of rescue operations and flood prevention in the areas mentioned
in the preceding paragraph should get prior approval from transportation departments of the People’s Governments of respective provinces,
autonomous regions and municipalities and related water resources administrative departments, and effective measures should be carried
out to protect the related roads, road bridges, road tunnels and road ferries.

Article 48

Except short crossing by farm machineries to perform necessary operation in fields, iron-wheel carts, caterpillar vehicles and other
machines and tools that might damage road surface are not allowed to run on the roads. If the running of such vehicles is needed,
prior approval should be sought from transportation departments of the local people’s governments above the county level and effective
measures should be adopted to protect road surface and the running can only be carried out at the time and along the routes designated
by the related public security organs. Damages to the roads should be compensated for according to the seriousness of cases.

Article 49

The axle-load mass of vehicles running on roads should conform to the technical standards for road engineering.

Article 50

The vehicles that exceed the limit of load, height, width or length of roads, road bridges, road tunnels or auto ferries are not allowed
to run on such roads, road bridges or in such road tunnel or use such auto ferries. If it is actually necessary for a vehicle to
exceed the load limit for a road or road bridge, it shall be subject to approval of the competent transportation department of local
people’s government at or above the county level and shall adopt effective safety measures as required. If the goods carried by the
vehicle exceed the prescribed limits and can’t be divided into different parts, the vehicle should run at the specified time, along
a specified route and at a specified speed and shall carry an obvious sign

If the transport unit concerned is incapable of carrying out the protective measures prescribed in the preceding paragraph, transportation
departments in charge should assist in action with costs of the actions being borne by the transport unit concerned.

Article 51

Highway roads are not permitted to be used by motor vehicle manufacturers and other units as a testing ground for braking functions
of motor vehicles.

Article 52

No unit or individual is allowed to damage or move or alter ancillary facilities of roads.

Ancillary facilities of roads mentioned in the preceding paragraph refer to facilities, equipment and special buildings or structures
for road protection, water discharge, maintenance, management, services, traffic safety, ferrying, monitoring and control, telecommunications
and fee collection for the purpose of protecting, maintaining and ensuring traffic safety of roads.

Article 53

Those who have caused damages to roads should timely report the cases concerned to and accept on-the-spot investigations by road administrative
organizations.

Article 54

No unit or individual is allowed to erect signs other than road signs within the land for roads without the approval of the transportation
departments of local people’s governments above the county level.

Article 55

The addition of road crossings should get prior approval according to the related regulations of the State and the crossings should
be built according to the State-prescribed standards.

Article 56

Except required by road protection and maintenance, it is forbidden to construct buildings or ground structures within the control
areas on either side of roads. If it is necessary to lay pipelines or cables or other facilities within the control areas of roads,
prior approvals of the transportation departments of local people’s governments above the county level should be sought.

The control area for construction mentioned in the preceding paragraph should be demarcated by the local People’s Governments above
the county level according to the principle of ensuring traffic safety and economical use of land and the provisions of the State
Council.

After the control area for construction has been demarcated by the local people’s governments above the county level, the transportation
departments of local People’s Governments above the county level should put up signs and/or boundary markers. No unit or individual
is allowed to damage or move such signs or boundary markers without authorization.

Article 57

Except the provisions of the second paragraph of Article 47 of this law, the road administration functions exercised by the transportation
departments prescribed by this chapter should be exercised by road management organizations according to the provisions of Paragraph
4 of Article 8 of this law.

Chapter VI Toll Highways

Article 58

The State allows the opening of toll highways according to law and the number of toll highways shall be controlled.

Except highway roads that may collect tolls as prescribed by the provisions of Article 59 of this law, no other roads are allowed
to collect tolls.

Article 59

Collection of tolls is allowed according to law for the following roads that conform to the technical grading and size prescribed
by the transportation departments under the State Council:

1

Roads built by transportation departments of local People’s Governments above the county level on loans or funds raised from enterprises
and individuals;

2

Roads of domestic or foreign economic organizations that have got the right to collect tolls according to law;

3

Roads built with investment from domestic or foreign economic organizations according to law.

Article 60

Terms of collection of tolls of roads built by transportation departments of local people’s governments above the county level with
loans or funds raised should be determined by the people’s governments of respective provinces, autonomous regions and municipalities
according to the principle of return of the loans or funds raised through collection of tolls in line with the provisions of the
transportation department under the State Council.

After a transfer of the right of toll collection, the toll road concerned should be operated by the side to which the toll collection
right is transferred. Terms transfer of collection right should be agreed upon by the transferor and the transferee and submitted
to organ which approves the transfer for approval, but the term shall not exceed the time limit set by the State Council.

Joint construction of roads by domestic and foreign economic organizations should go through the examination and approval procedures
according to the relevant regulations of the State. After completion, the roads shall be managed and the tolls shall be collected
by the investors. Terms for toll collection should be agreed upon by related transportation departments and investors according to
the principle of “return of investment with reasonable profits” and submitted for examination and approval according to the relevant
regulations of the State, but the time limit shall not exceed that set by the State Council.

Article 61

The transfer of toll collection right of State roads as prescribed in Item 1 of Paragraph 1 of Article 59 shall be approved by the
transportation department under the State council. The transfer of toll collection right for other roads shall be approved by the
people’s governments of respective provinces, autonomous regions and municipalities and submitted to the transportation department
under the State Council for a record-filing purpose.

Minimum prices for the transfer of toll collection right prescribed in the preceding paragraph should be determined on the basis of
the value appraised by State property appraisal organizations.

Article 62

Domestic or foreign economic organizations to which the toll collection right has been transferred and which have invested in the
construction of roads should set up enterprises for developing and managing roads according to law (hereinafter referred to as “road
management enterprises”).

Article 63

The standards for toll collection should be proposed by toll collecting units and submitted to the people’s government of respective
provinces, autonomous regions and municipalities together with price departments at the same level for approval.

Article 64

The opening of toll gates for toll collection on the toll roads should get approval from local government of provinces, autonomous
regions or municipalities directly under the jurisdiction of the State Council.

The openings of toll gates that transcend provinces, autonomous regions and municipalities should be determined by the People’s Governments
of related provinces, autonomous regions or municipalities through consultation. Should consultation fail, related decisions shall
be made by transportation department under the State Council. When a single toll road is built by different transportation departments
or run by different road management enterprises, toll gates should be built based on an overall planning and in a rational manner
according to the principle of “unified collection and proportionate sharing of toll fees”.

The distance between two toll gates should not be less than the standards set by the transportation department under the State Council.

Article 65

When a toll collec

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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

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CONSTITUTION ACT, 1982 – page 18

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