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1994

RULES FOR THE IMPLEMENTATION OF THE REGULATIONS ON ADMINISTRATION OF TECHNOLOGY-INTRODUCTION CONTRACTS

Category  OBLIGATORY RIGHT Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1988-01-20 Effective Date  1988-01-20  


Rules for the Implementation of the Regulations of the People’s Republic of China on Administration of Technology-introduction Contracts



(Approved by the State Council on December 30, 1987, promulgated by the

Ministry of Foreign Economic Relations and Trade on January 20, 1988)

    Article 1  These Rules are formulated in accordance with the provisions of
Article 12 of the Regulations of the People’s Republic of China on
Administration of Technology-Introduction Contracts (hereinafter referred to as
the “Regulations”).

    Article 2  Regardless of the country or region of the supplier, or of the
source of funds and modes of payment of the recipient, the recipient and the
supplier as specified in Article 2 of the Regulations shall apply for
examination and approval to the examining and approving authorities in
accordance with the Regulations and these Rules when they are to conclude any
of the technology-introduction contracts listed below:

    1. Contracts for assignment or licensing of industrial property rights.
Contracts for assignment or licensing of industrial property rights refer to
those for assignment or licensing of rights relating to invention patents, new
utility model patents, exterior design patents as well as trademarks, excluding
those merely for assignment of rights of trademarks.

    2. Contracts for licensing of proprietary technology. Contracts for
licensing of proprietary technology reler to those for supply or impartment of
technical know-how which is not yet publicized nor under legal protection as
industrial property, for manufacturing a product or applying a technology as
well as for product designs, technological processes, formulae, quality control
and management, etc.

    3. Contracts for technical services. Contracts for technical services refer
to those for offering services or consultancy to the recipient by the supplier
with its technology for achieving a specific goal, including contracts for
feasibility study or engineering design undertaken by the supplier upon the
entrustment of the recipient or by the recipient in cooperation with the
supplier, contracts for providing technical services by foreign geological
exploration or engineering teams that are employed and contracts for providing
services or consultancy by the supplier upon the entrustment of the recipient
for technical transformation of an enterprise, improvement of production
technology or product design and quality control as well as enterprise
management (excluding contracts for employing foreigners in China’s
enterprises).

    4. Contracts for co-production and co-design which involve any one of such
items as assignment or licensing of industrial property rights, licensing of
know-how or technical services.

    5. Contracts for importing complete set of equipment, production line or
key equipment which involve any one of such items as assignment or licensing of industrial property rights, licensing of know-how
or technical services.

    6. Other technology-introduction contracts which, according to the
examining and approving authorities, must go through the procedure for
examination and approval.

    Article 3  When companies, enterprises, institutions or individuals with no
rights to engage in foreign technology-introduction business are to introduce
technology from abroad, they shall, with letters of commission, entrust those
companies and enterprises with such rights to conclude technology-introduction
contracts.

    Article 4  Technology-introduction contracts concluded by Chinese-foreign
equity joint ventures, Chinese-foreign contractual joint ventures and foreign
capital enterprises (hereinafter referred to as enterprises with foreign
investment) established in the territory of the People’s Republic of China for
acquiring technology from suppliers shall comply with the procedures of
examination and approval as stipulated in these Rules.

    If foreign investors in enterprises with foreign investment use industrial
property rights or technical know-how as equity shares, the case shall be dealt
with in accordance with the relevant laws and regulations of the State for
enterprises with foreign investment.

    Article 5  The examining and approving authorities for examining and
approving technology-introduction contracts are the Ministry of Foreign
Economic Relations and Trade (hereinafter referred to as MOFERT) and its
authorized departments, commissions, bureaux of foreign economic relations and
trade and other administrative organs of provinces, autonomous regions,
municipalities directly under the Central Government, coastal open cities,
special economic zones and cities under separate planning (hereinafter referred
to as the “authorized examining and approving authorities”).

    Article 6  Technology-introduction contracts shall be examined and approved
at different levels in accordance with the following stipulations:

    1. Technology-introduction contracts for projects with feasibility study
reports approved by the ministries/commissions of and agencies directly under
the State Council shall be examined and approved by MOFERT.

    2. Technology-introduction contracts for projects with feasibility study
reports approved by people’s governments or their authorized competent organs
of provinces, autonomous rigions, municipalities directly under the Central
Government, coastal open cities, special economic zones and cities under
separate planning shall be examined and approved by the authorized examining
and approving authorities at the same level; if the technology-introduction
contracts are concluded by other transregional companies with parties abroad
through entrustment, they may be examined and approved by the authorized
examining and approving authorities of the locality where the conclusion takes
place with the consent of the authorized examining and approving authorities of the locality where the entruster is located. After
approval, the authorized
examining and approving authorities of the locality where the contract is
concluded shall send a copy of the Approval Certificate to the authorized
examining and approving authorities of the locality where the entruster is
located for the record. Neverthless, technology-introduction contracts
concluded with parties abroad by companies located in Beijing pursuant to
transregional entrustment (excluding those companies directly under Beijing
municipality) shall be examined and approved by MOFERT.

    3. Technology-introduction contracts concluded by enterprises with foreign
investment for acquiring technology from suppliers shall be examined and
approved by MOFERT if the enterprises concerned were established with the
approval of ministries/commissions of and angencies directly under the State
Council; or shall be examined and approved by the relevant authorized examing
and approving authorities if the enterprises concerned were otherwise
established.

    Article 7  A technology-introduction contract shall specify the following
items:

    1. name of the contract;

    2. contents, scope and requirements of the target technology to be
introduced;

    3. criteria, timelimits and measures for quality rectification of the
introduced technology and liabilities for risks;

    4. obligation to preserve the secrets of the introduced technology,
ownership and sharing of the improved technology;

    5. price or remuneration in total, prices of separate items and modes of
payment;

    6. calculations for compensation in case of violation of the contract;

    7. settlement of disputes; and

    8. definitions of terms and phrases.

    Annex and data relating to implementation of the contract may constitute an
integral part of the technology-introduction contract in accordance with the
agreement of the contracting parties.

    Article 8  With respect to techmology-introduction contracts involving
assignment or licensing of patent or trademark rights obtained in China,
relevant patent numbers or patent application numbers, trademark registration
numbers together with trademark design shall be expressly specified. Contracts
for assignment of patent rights shall be recorded with the Patent Office in
accordance with provisions of the Patent Law of the People’s Republic of China,
and those for licensing of the trademarks shall be recorded with the Trademark
Office in accordance with the provisions of the Trademark Law of the People’s
Republic of China.

    Article 9  The supplier shall ensure that the technology or data documents
provided are complete, accurate, effective and capable of attaining the
technology target specified in the contract. The time for the delivery of
technology documents shall correspond with the progress of the engineering
programme of the recipient.

    Article 10  If the recipient requires the supplier to provide raw
materials, spare parts or equipment for the introduced technology, the prices
shall not be higher than those of the like products on international market.

    Article 11  The supplier shall ensure that it is the lawful owner of the
technology provided or that it has the right to assign or license the
technology. If the recipient, in producing or selling products with the
assigned or licensed technology, is accused of infringement by a third party,
the supplier shall respond to the lawsuit. If the infringement charged by the
third party is proved, all economic losses the recipient may suffer shall be
compensated for by the supplier.

    Article 12  Within the term of validity of the contract, the ownership of
the improved technology including the right to apply for patents belongs to the
party that has made the improvements. Where the recipient provides the
supplier with an improved technology, the terms shall be the same as those when
the supplier provides the recipient with an improved technology.

    Article 13  The recipient shall undertake the obligation to preserve the
secrets of the proprietary technology and relevant data provided or imparted by
the supplier in accordance with the scope and duration as agreed in the
contract. The duration for preserving secrets shall not generally exceed the
term of validity of the contract. If special circumstances require that the
duration exceed the term of contract, it shall be expressly specified in the
contract, and reasons shall be stated when applying for examination and
approval.

    Within the duration in which the recipient undertakes the obligation to
preserve secrets, if the technology is made public owing to reasons for which
the recipient is not responsible, the obligation undertaken in this regard by
the recipient shall immediately terminate. If it is specified in the contract
that the supplier shall also supply its developed and improved technology to
the recipient within the term of validity of the contract, the recipient may
continue to undertake the obligation of secret-preservation after expiration of the contract. In that case, the new duration shall
begin from the date when
the supplier provides the technology but shall not exceed the duration
originally specified in the contract.

    Article 14  No provisions of restrictions on exportation of products
manufactured by the recipient with the introduced technology may be included in
the contract without the approval of the examining and approving authorities,
however, either of the following cases shall be excepted:

    1. in countries and regions where exclusive license contracts have been
concluded by the supplier;

    2. in countries and regions where sole agent contracts have been concluded
by the supplier.

    Article 15  No provisions of prohibiting the continued use of the
introduced technology by the recipient after the expiration of the contract
shall be included in the contract without the approval of the examining and
approving authorities. Where the duration of the patent relating to the
introduced technology has not expired at the expiry of the contract, the
relevant stipulations of the Patent Law of the People’s Republic of China shall
govern.

    Article 16  The supplier shall pay taxes in accordance with the provisions
of the tax laws of the People’s Republic of China.

    Article 17  The recipient of a technology-introduction contract or the
company or enterprise acting as its agent to conclude the contract shall, in
accordance with the provisions of Article 6 of these Rules, submit to the
examining and approving authorities, within 30 days from the date of
conclusion, the following official documents:

    1. a written application for approval of the contract. The contents of the
application shall include the name of the contract, the country of the supplier
and the name of the firm, the contents and scope of the target technology to
be introduced, the organ that has approved the feasibility study report of the
project and its approval number, etc.;

    2. copies of the contract (with a Chinese translation attached, if it is in
a foreign language);

    3. copies for each of the documents certifying the legal status of the
contracting parties;

    4. the approved feasibility study report and statement on funds available.

    To facilitate the examination and approval, the recipient or the company or
enterprise acting as its agent may solicit opinions or request for a
pre-examination from the examining and approving authorities as to the main
contents or certain clauses of the contract either before or during
negotiations.

    Article 18  In case the technology-introduction contracts and other
documents submitted to the examining and approving authorities in accordance
with the provisions of Article 17 of these Rules fall under any one of the
following cases, the examining and approving authorities shall require the
parties concerned to make due amendments within a prescribed time limit, and
the approval shall be denied in case of failure to make amendments:

    1. where they contravene the current laws and regulations of the State and
impair social and public interests;

    2. where they impair national sovereignty;

    3. where the contents of the contract are inconsistent with the approved
feasibility study report of the project;

    4. where the basic clauses and contents of the contract are imperfect;

    5. where the contract contains no explicit and rational stipulations
concerning the responsibilities about and solutions to possible disputes over
property rights arising from the assigned or licensed technology or other
disputes that may occur in the course of implementation of the contract;

    6. where the contract contains no rational stipulations on the technical
level and economic benefits to be attained by the assigned or licensed
technology, including the quality warranty for the products manufactured with
tbe said technology;

    7. where the price or modes of payment for the introduced technology are
unreasonable;

    8. where the stipulations on rights. responsibilities and obligations of
the contracting parties are not sufficiently clear, reciprocal or rational;

    9. where the contract contains preferential tax commitment without the
consent of the state tax authorities.

    Article 19  The examining and approving authorities shall decide to approve
or disapprove the contract within 60 days from the date when the application
is received. If the examining and approving authorities require amendments in
accordance with the provisions of Article 18, the duration needed for
examination and approval shall be counted from the date when the amended
contract or an instrument of amendment is received.

    If the examing and approving authorities make no response at the expiry of
the specified period, the contract shall be deemed to have been approved.

    Article 20  The contract shall come into force as of the date of approval
and the examining and approving authorities shall issue a unified Approval
Certificate for a Technology-Introduction Contract printed and serial-numbered
by MOFERT.

    Article 21  If the term of validity of a technology-introduction contract
exceeds the period of 10 years as stipulated in Article 8 or includes the
restrictive provisions as listed in Article 9 of the Regulations, the recipient
shall submit an application with detailed explanations to the examining and
approving authorities when going through the procedure for examination and
approval in accordance with the stipulations of these Rules.

    Article 22  Any modifications of the clauses relating to the target
technology content, price, duration and secret-preserving time limit of an
approved technology-introduction contract shall be made by consultations
between the contracting parties upon a written consent of the examining and
approving authonties. If the modifications are inconsistent with the approved
content of the target technology or require an amount of foreign exchange
exceeding the approved amount, the procedure for reexamination and reapproval
shall be gone through in accordance with the provisions of Article 4 and
Article 11 of the Regulations and Article 6 of these Rules.

    Article 23  The relevant authorized examining and approving authorities
shall submit a copy of the Approval Certificate for a Technology-Introduction
Contract and other relevant data to MOFERT for the record within 10 days from
the date of the approval of a technology-introduction contract.

    Article 24  In the course of the implementation of a contract, the Approval
Certificate for a Technology-Introduction Contract or its copy must be
presented to the organs concerned in accordance with the relevant stipulations
while handling such matters as bank guarantee, letter of credit, payment,
foreign exchange settlement, Customs declaration and tax payment, etc. Banks,
Customs or tax authorities are enpost_titled to refuse to handle such matters if no
Approval Certificate or its copy is presented.

    Article 25  The authority to interpret and revise these Rules resides in
MOFERT.

    Article 26  These Rules shall enter into force as of the date of
promulgation. The Measures for Examination and Approval of
Technology-Introduction Contracts promulgated on September 18, 1985 by MOFERT
shall be abrogated as of the same date.?






PROVISIONS OF THE MINISTRY OF FOREIGN ECONOMIC RELATIONS AND TRADE, THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE CONCERNING THE INVESTMENTS MADE BY THE VARIOUS PARTIES OF CHINESE-FOREIGN EQUITY JOINT VENTURES

19871230the State Council

The Ministry of Foreign Economic Relations and Trade, the State Administration for Industry and Commerce

Provisions of the Ministry of Foreign Economic Relations and Trade, the State Administration for Industry and Commerce Concerning
the Investments Made by the Various Parties of Chinese-foreign Equity Joint Ventures

January 1,1988

(Approved by the State Council on December 30, 1987, Promulgated by the Ministry of Foreign Economic Relations and Trade and the State
Administration for Industry and Commerce on January 1, 1988)

Article 1

These Provisions are formulated in accordance with the Law of the People’s Republic of China on Chinese-Foreign Equity Joint Ventures
and other pertinent laws and regulations in order to protect the lawful rights and interests of the various parties to Chinese-foreign
equity joint ventures (hereinafter referred to as the “joint ventures”), and to maintain the social economic order.

Article 2

The investments contributed by the various parties to a joint venture in accordance with the stipulations of the contract of the said
joint venture must be the cash owned by the parties themselves as well as the physical goods, the industrial property rights, the
proprietary technology and etc. that are owned by the parties themselves and have not been used to establish any security interests.

In cases where physical goods, industrial property rights and proprietary technology are used as investments at the evaluated price,
the investor shall present valid documents attesting their proprietary rights and their right of disposal.

Article 3

No party to a joint venture may use the loans, rented equipment or other assets it has obtained in the name of the joint venture,
or the assets of persons other than the parties as its own investment contribution to the joint venture; nor may it use the assets
or rights and interests of the joint venture, or the assets or rights and interests of the other parties to the joint venture as
the warranty for its investment contribution to the joint venture.

Article 4

The various parties to a joint venture shall set the time limit in their joint venture contract for paying up their respective investment
contributions to the joint venture, and they shall pay fully their respective investment contributions within the time limit stipulated
in the joint venture contract. The investment contribution certificates issued by the joint venture in accordance with the pertinent
stipulations shall be submitted to the original examining and approving authorities and the relevant administrative department for
industry and commerce for the record.

If the joint venture contract stipulates that investment contributions shall be paid up in one lump, the various parties to the said
joint venture shall make the full payment of their respective investment contributions within six months from the date the business
licence is signed and issued.

If the joint venture contract stipulates that investments shall be paid by installments, the first installment paid by the various
parties shall not be less than 15% of the total amount of their respective investment contributions and be paid within three months
as of the date the business licence is signed and issued.

Article 5

In the event that the various parties to a joint venture fail to make the full payment of their respective investment contributions
within the time limit prescribed in Article 4 , the joint venture shall be considered to be dissolved of its own accord, and the
approval certificate for the joint venture shall automatically cease to be effective. The joint venture shall go through the procedures
for cancellation of registration with the administrative department for industry and commerce, and hand in its business licence for
cancellation; if a joint venture fails to go through the procedures for cancellation of registration or to hand in its business licence
for cancellation, the administrative department for industry and commerce shall revoke its business licence and announce this publicly.

Article 6

After the various parties to a joint venture have paid the first installment of their respective investment contributions, if they
fail to pay or to pay fully any of the remaining installments three months beyond the deadline as stipulated in the joint venture
contract, the administrative department for industry and commerce shall, in conjunction with the original examining and approving
authorities, issue a notice to the various parties to the said joint venture, enjoining them to pay the full amount due within one
month. In the event that the various parties to the said joint venture still fail to make the full payment of their respective investment
contributions in accordance with the time limit prescribed in the notice mentioned in the preceding paragraph, the original examining
and approving authorities have the right to revoke the approval certificate for the said joint venture. After the approval certificate
has been revoked, the said joint venture shall go through the procedures for cancellation of registration with the administrative
department for industry and commerce, hand in its business licence for cancellation, and settle claims and debts. If it fails to
go through the procedures for cancellation of registration or to hand in its business licence for cancellation, the administrative
department for industry and commerce has the right to revoke its business licence and to announce this publicly.

Article 7

The failure of one of the parties to a joint venture to make the payment, or the full payment, of its investment contribution on time
in accordance with the stipulations of the joint venture contract constitutes a breach of the contract. The observant party (parties)
shall urge the defaulting party to make the payment, or the full payment, of its investment contribution within one month. If the
defaulting party still fails to do so before the deadline, this shall be considered as the abandonment by the defaulting party of
all its rights as stipulated in the joint venture contract and its withdrawal from the joint venture of its own accord. The observant
party (parties) shall, within one month from the date when the defaulting party’s prescribed payment is overdue, make an application
to the original examining and approving authorities for the approval to dissolve the said joint venture, or for the approval to find
another joint venture party to assume the defaulting party’s rights and obligations as stipulated in the joint venture contract.
The observant party (parties) may, according to law, claim compensation from the defaulting party for the economic losses caused
by the latter’s failure to make the payment, or the full payment, of its investment contribution.

If the defaulting party mentioned in the preceding paragraph has paid part of its prescribed investment contribution, this part of
investment payment shall be liquidated by the joint venture.

In the event that the observant party (parties) fails (fail) to make an application to the original examining and approving authorities,
in accordance with the provisions of the first paragraph of this Article, for the approval to dissolve the joint venture, or for
the approval to find another joint venture party, the examining and approving authorities have the right to revoke the approval certificate
issued to that joint venture. After the approval certificate has been revoked, the said joint venture shall go through the procedures
for cancellation of registration with the administrative department for industry and commerce, and hand in its business licence for
cancellation; if it fails to go through the procedures for registration cancellation or to hand in its business licence for cancellation,
the administrative department for industry and commerce has the right to revoke its business licence and to announce this publicly.

Article 8

With respect to any joint venture which obtained its business licence before the date these Provisions become effective, if the various
parties or any one of these parties have (has) failed to make the payment of the respective investment contributions in accordance
with the time limits stipulated in the joint venture contract, they (it) shall, within two months as of the date these Provisions
become effective, make the full payment of the prescribed investment contributions in accordance with the provisions of the contract.

In the event that the various parties or any one of the parties still fail(s) to make the full payment of the respective investment
contributions within the time limit prescribed in the preceding paragraph, the case may be handled in accordance with the provisions
in Article 5 through Article 7 of these Provisions.

Article 9

With respect to any joint venture which obtained its business licence before the date these Provisions become effective, if the various
parties to that joint venture have not stipulated in their joint venture contract the respective time limits for making their respective
investment contributions, and they have not made the full payment, the various parties shall, within two months as of the date these
Provisions become effective and in accordance with these Provisions, conclude and sign a supplementary agreement to their joint venture
contract prescribing the time limits for the various parties to the joint venture to make the payment of their respective investment
contributions, and submit this supplementary agreement to the original examining and approving authorities for examination and approval;
after they have obtained the approval, they shall submit their case to the administrative department for industry and commerce for
the record.

In the event that a joint venture mentioned in the preceding paragraph fails to establish itself or to start its operations after
six full months since the date of the issuance of its business licence owing to the failure of its various parties to conclude and
sign a supplementary agreement to their joint venture contract within two month prescribed in the preceding paragraph, prescribing
the time limits for making their respective investment payments, and the failure to pay full their respective investment contributions,
the original examining and approving authorities have the right to revoke the approval certificate issued to that joint venture.
After the approval certificate has been revoked, the said joint venture shall go through the procedures for cancellation of registration
with the administrative department for industry and commerce, and hand in its business licence for cancellation. If the said joint
venture fails to go through the procedures for cancellation of registration or to hand in its business licence for cancellation,
the administrative department for industry and commerce has the right to revoke its business licence and to announce this publicly.

Article 10

The investment payment made by the various parties to a Chinese-foreign contractual joint venture shall be handled with reference
to these Provisions.

Article 11

These Provisions shall enter into force as of March 1, 1988.



 
The Ministry of Foreign Economic Relations and Trade, the State Administration for Industry and Commerce
1988-01-01

 






RULES GOVERNING THE APPROVAL OF CLINICAL TRIAL OF FOREIGN DRUG(S)

REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON ADMINISTRATION OF THE REGISTRATION OF ENTERPRISES AS LEGAL PERSONS

The State Council

Regulations of the People’s Republic of China on Administration of the Registration of Enterprises As Legal Persons

Decree [1988] No.1 of the State Council

June 3, 1988

Chapter I General Provisions

Article 1

In accordance with relevant provisions of the General Principles of the Civil Law of the People’s Republic of China, the present Regulations
are formulated with a view to establishing a system for controlling the registration of enterprises as legal persons, confirming
their status as such, safeguarding their legitimate rights and interests, stamping out illegal business operations, and preserving
social and economic order.

Article 2

Any of the following enterprises which are qualified as legal persons shall register as such in accordance with the relevant provisions
of the present Regulations:

(1)

enterprises owned by the whole people;

(2)

enterprises under collective ownership;

(3)

jointly operated enterprises;

(4)

Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and foreign-capital enterprises established within
the territory of the People’s Republic of China;

(5)

privately operated enterprises;

(6)

other enterprises required by the law to register as legal persons.

Article 3

Those enterprises applying for registration as legal persons shall be given Business Licenses for Enterprises as Legal Persons and
the status of legal persons when their applications for registration have been examined and approved by the authorities in charge
of the registration of enterprises as legal persons and their legitimate rights and interests shall be protected by laws of the State.

Those enterprises, which are required by law to register as legal persons but which have not gone through the procedures of examination
and approval registration by the authorities in charge of the registration of enterprises as legal persons, shall not be allowed
to engage in business operations.

Chapter II Registration Authorities

Article 4

The authorities in charge of the registration of enterprises as legal persons (hereinafter referred to as the registration authorities)
are the State Administration for Industry and Commerce and administrative departments for industry and commerce at various levels.
Registration authorities at various levels shall perform their functions according to law under the leadership of higher registration
authorities and be free from unlawful interference.

Article 5

The registration of national corporations, enterprise groups and corporations handling import-export business set up with the approval
of the State Council or departments authorized by the State Council shall be examined and approved by the State Administration for
Industry and Commerce. The registration of Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and
foreign-capital enterprises shall be examined and approved by the State Administration for Industry and Commerce or by local administrative
departments for industry and commerce authorized by the State Administration for Industry and Commerce.

The registration of son (or branch) companies of national corporations, enterprises, enterprise groups or companies handling import-export
trade established with the approval of the people’s governments of provinces, autonomous regions or municipalities directly under
the Central Government or departments authorized by them shall be examined and approved by the administrative departments for industry
and commerce of the provinces, autonomous regions and municipalities directly under the Central Government.

The registration of other enterprises shall be examined and approved by the administrative departments for industry and commerce of
the cities or counties (districts) where the enterprises are located.

Article 6

Registration authorities at various levels shall institute a file of the registration of enterprises as legal persons and a system
for tabulating statistics relating to such registration, and collect basic information about the registration of enterprises as legal
persons so as to serve the development of a planned commodity economy.

Registration authorities shall offer, in a planned manner and according to the needs of society, the service of providing the public
with data about the registration of enterprises as legal persons.

Chapter III Conditions for Registration and Entities to Apply for Registration

Article 7

Entities applying for registration as enterprises as legal persons must satisfy the following conditions, i.e. having:

(1)

name, organization and articles of association;

(2)

fixed sites for business operations and essential facilities;

(3)

funds and employees in conformity with State regulations and in line with their scale of production, operation or service;

(4)

ability to bear civil liabilities independently;

(5)

a scope of business in conformity with the provisions of the relevant laws, regulations and policies of the State.

Article 8

The application of an enterprise for registration as a legal person shall be filed by the person responsible for establishing the
enterprise.

The registration as a legal person of a jointly operated enterprise which bears civil labilities independently shall be applied for
by the person responsible for initiating the said enterprise.

Chapter IV Items of Registration

Article 9

The major items to be registered for an enterprise as a legal person are: name, residence, site for business operation, legal representative,
economic nature, scope of business, mode of operation, registered capital, number of employees, duration of operation and subdivisions.

Article 10

An enterprise as a legal person shall use only one name. The name to be used by the enterprise as a legal person in its application
for registration shall be examined by the registration authorities and, after it is approved and registered, the enterprise as a
legal person shall enjoy the right to the exclusive use of the registered name within a definite limit.

Those who apply for establishing Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures or foreign-capital
enterprises shall apply to the registration authorities for registering the names of the enterprises before their contracts and articles
of association are examined and approved.

Article 11

The legal representative of an enterprise as a legal person, which has been registered after examination and approval by a registration
authority, shall be the signatory who exercises functions and powers on behalf of the enterprise. The signature of the legal representative
shall be submitted to the registration authority for the record.

Article 12

The registered capital of an enterprise as a legal person represents the total value of the property the State entrusts to it for
operation and management or that of the property owned by the enterprise itself.

When an enterprise as a legal person registers for starting operations, the discrepancy between the sum of capital it applies for
registration and the sum of capital it actually possesses shall be handled in accordance with specific regulations of the State.

Article 13

The scope of business of an enterprise as a legal person shall be in harmony, with its capital, sites, equipment, employees and technical
force. It may focus on one line of business as its main operation while engaging in other operations simultaneously in accordance
with relevant regulations of the State. An enterprise as a legal person shall engage in operations within the scope of business as
approved in registration.

Chapter V Registration for Starting Operations

Article 14

An enterprise as a legal person shall apply to a registration authority for registration for starting operations within 30 days after
the approval of the department in charge of it or that of an authority for examination and approval. For an enterprise which does
not have a department in charge or authority for examination and approval, its application for registration for starting operations
shall be examined by a registration authority. The registration authority shall make a decision of approval or disapproval of the
application for registration within 30 days after receiving it.

Article 15

An enterprise as a legal person shall submit the following papers when applying for registration for starting operations:

(1)

an application for registration signed by the person responsible for its establishment;

(2)

the document of approval issued by the department in charge or the authority for examination and approval;

(3)

its articles of association;

(4)

a certificate of its creditworthiness, a certificate of the verification of its capital or a guarantee for its capital;

(5)

a certificate of the identity of the principal responsible person of the enterprise;

(6)

a certificate of the right to use the residence and site for operation;

(7)

other relevant papers and certificates.

Article 16

When the application filed by an entity for starting operations as an enterprise as a legal person has been examined and approved
by a registration authority and a Business License for Enterprise as a Legal Person is received, the enterprise shall be considered
as established. The enterprises as a legal person may henceforth have its official seal made, open a bank account, sign contracts
and conduct business operations by dint of its Business License.

The registration authority may, after a check-up, issue duplicates of the Business License, if the enterprise as a legal person needs
them for its business operations.

Chapter VI Changes in Registration

Article 17

An enterprise as a legal person shall apply for making changes in its registration whenever it changes its name, residence, site,
legal representative, economic nature, scrape of business, mode of operation, registered capital or duration of operation and whenever
it increases or disbands its branches.

Article 18

An enterprise as a legal person shall apply to the registration authority for making changes in its registration within 30 days after
the changes are approved by the department in charge or by the authority for examination and approval.

Article 19

An enterprise as a legal person shall apply to the registration authority for making changes in its registration, or for registration
for starting operations or for cancelling its registration, whenever it is split up, or merged with others or moved elsewhere, within
30 days after these changes are approved by the department in charge or by the authority for examination and approval.

Chapter VII Cancellation of Registration

Article 20

An enterprise as a legal person shall go through the procedures for cancelling its registration with the registration authority when
it closes down, is dissolved, declares bankruptcy or terminates its business operations for other reasons.

Article 21

Whenever an enterprise as a legal person is to cancel its registration, it must submit an application signed by its legal representative,
a document of approval issued by the department in charge or by the authority for examination and approval, a certificate showing
the completion of the clearing up of its liabilities, or a document showing that a liquidation organization will be responsible for
clearing up its creditor’s rights and liabilities. The registration authority, after examining and approving the application, shall
recall the Business License for Enterprise as a Legal Person, duplicates of the License, take over the official seal of the enterprise,
and notify the banks at which it has opened an account of the cancellation of its registration.

Article 22

An enterprise as a legal person, which fails to start operations 6 months after receiving its Business License for Enterprise as a
Legal Person or which has ceased its operations for a year, shall be regarded as having closed down, and the registration authority
shall recall its Business License for Enterprises as a Legal Person, duplicates of the License, take over its official seal and notify
the banks at which it has opened an account of the cancellation of its registration.

Chapter VIII Announcement, Annual Check-up and Control of Certificates

Article 23

The registration authority shall issue registration announcements whenever an enterprise as a legal person starts operations, changes
its name or cancels its registration. No other organ shall be enpost_titled to issue such announcements without the approval of the registration
authority.

Article 24

A system for conducting annual check-up shall be instituted to administer the registration of enterprises as legal persons. An enterprise
as a legal person shall submit its annual check-up report, its balance sheet or statement of assets and liabilities to the registration
authority at the time it prescribes. The registration authority shall check up the major items contained in the registration of the
enterprise as a legal person.

Article 25

The Business License for Enterprises as a Legal Person issued by the registration authority is the certificate of an enterprise as
a legal person. Except the registration authority, which may withhold or cancel it in accordance with the legal procedures, no other
organ or individual is enpost_titled to take over, detain or destroy it.

An enterprise as a legal person, which has lost its Business License for Enterprise as a Legal Person or duplicates of the License,
must announce the loss in a newspaper before it can apply for a replacement.

The Business License for Enterprise as a Legal Person and its duplicates may not be forged, altered, leased, lent, sold or reproduced
without permission.

Article 26

An enterprise as a legal person shall pay registration and annual check-up fees according to the rules when it registers for starting
operations and applies for making changes in its registration and when it receives the annual check-up. The fees to be charged on
registration for starting operations shall be 1 millesimal of the sum of the enterprise’s registered capital; in cases where the
registered capital exceeds 10 million yuan, the fees to be charged on the portion in excess of the said sum shall be 0.5 millesimal
of it; in cases where the registered capital exceeds 100 million yuan, no fees shall be charged on the portion in excess of the said
sum. The minimum registration fee shall be 50 yuan. Fees to be charged on making changes in the registration and conducting the annual
check-up shall be prescribed by the State Administration for Industry and Commerce.

Chapter IX Control of the Registration of Business Operations by Institutions and Scientific and Technological Public Organizations

Article 27

When institutions or scientific and technological public organizations establish enterprises qualified as legal persons in line with
relevant regulations of the state, the applications for registration shall be filed by the enterprises. They may engage in business
operations only after their applications for registration have been approved by the registration authorities and after they have
received their respective Business Licenses for Enterprise as a Legal Person.

Article 28

Institutions, which are run like enterprises in accordance with relevant regulations of the State and which no longer receive operating
funds from the State, or scientific and technological public organizations which are established for business operations, shall apply
for registration if they are qualified to be enterprises as legal persons. They may engage in business operations only after their
applications have been approved by the registration authorities and they have received their respective Business Licenses for Enterprise
as a Legal Person.

Chapter X Supervision and Control

Article 29

The registration authorities shall exercise the following functions of supervision and control over enterprises as legal persons according
to law:

(1)

supervising the registration for starting operations, the application for making changes and the cancellation of registration by enterprises
as legal persons according to regulations;

(2)

supervising the conduct of business operations by enterprises as legal persons in line with the items of registrations, articles of
association and contracts;

(3)

supervising the compliance of enterprises as legal persons and their legal representatives with laws, regulations and policies of
the State;

(4)

stopping, investigating or dealing with illegal business operations of enterprise as legal persons; protecting their legitimate rights
and interests.

Article 30

The registration authority may, in light of the circumstance, penalize an enterprise as legal person by warning, fine, confiscation
of illegal earnings, suspension of business for consideration, or withholding or revoking the Business License for Enterprise as
a legal Person, if it is involved in any of the following case:

(1)

concealing the true situation and resorting to deception in the course of registration or starting operations before the approval
of its registration;

(2)

altering major items in the registration without permission or engaging in business operations beyond the scope of business as approved
in registration;

(3)

failing to cancel registration according to the rules or failing to submit the check-up report or receive the annual check-up;

(4)

forging, altering, leasing, lending, transferring, selling or reproducing the Business License for Enterprise as a Legal Person or
its duplicates without permission;

(5)

withdrawing or transferring capital, concealing assets or dodging liabilities;

(6)

engaging in illegal business operations.

While penalizing an enterprise as a legal person in line with the above provisions, the registration authority shall investigate its
legal representative’s administrative and economic responsibilities according to the seriousness of the violations of the law; judicial
organs shall investigate the criminal responsibilities of those who have violated the criminal law.

Article 31

The registration authority shall ascertain the facts and act according to law when dealing with the illegal activities of an enterprise
as a legal person and notify the parties concerned of its decision in writing.

Article 32

When an enterprise as a legal person disagrees with the penalty meted out but by the registration authority, it may appeal within
15 days after receiving the notice of penalty, to the immediate higher registration authority for reconsideration. The higher registration
authority shall make a reconsideration decision within 30 days after receiving the appeal for reconsideration. The enterprise may
file a suit in a people’s court within 30 days after receiving the notice of reconsideration in it disagrees with the reconsideration
decision. The registration authority may, in accordance with the prescribed procedures, ask the bank at which the enterprise has
an account to transfer from its account the sum to be fined or confiscated as penalty, if it fails to appeal or to pay the fine or
the confiscated sum at the expiry of the prescribed period.

Article 33

When an enterprise as a legal person has its business license revoked, the registration authority shall take over its official seal
and notify the bank at which it has account of the cancellation of its registration, and the department in charge or a liquidation
organization shall be responsible for settling its creditor’s rights and liabilities.

Article 34

Any functionary of the department in charge, the authority for examination and approval or of the registration authority, who has
violated the present Regulations, neglected his duties to a serious extent, abused his powers, practised graft and embezzlement,
extorted and taken bribes or encroached on the legitimate rights and interests of an enterprise as a legal person, shall be given
administrative or economic penalty in light of the circumstances; the judicial organ shall investigate, according to law, his criminal
responsibility, if he violates the criminal law.

Chapter XI Supplementary Provisions

Article 35

When an enterprise as a legal person establishes a branch which is incapable of bearing civil liability independently, the registration
of the branch shall be applied for by the enterprise. The branch shall receive a Business License after the application is approved
by the registration authority and may engage in business operations within the scope of business as approved in registration.

In accordance with relevant State regulations, administrative institutions depending on State funding or scientific and technological
social bodies must apply for registration if they engage in business operations or establish enterprises not qualified; as legal
persons. They shall receive Business Licenses after their applications are approved by the registration authorities and may engage
in business operations within the scope of business as approved in registration.

The specific control of the registration involved shall be enforced with reference to the provisions of the present Regulations.

Article 36

For new enterprises to be established with the approval of relevant departments of the State Council or planning departments at various
levels, if their preparations have been under way for more than 1 year, applications for the registration of the establishment shall
be filed according to specific regulations.

Article 37

Enterprises qualified as legal persons, whose registration was approved by the registration authorities before the present Regulations
are put into effect, are not required to go through the formalities again for registration as enterprises as legal persons.

Article 38

The State Administration for Industry and Commerce shall be responsible for interpreting the present Regulations; and the rules for
their implementation shall also be formulated by the State Administration for Industry and Commerce.

Article 39

The present Regulations shall enter into force as of July 1, 1988. The Measures on Administration of the Registration of Chinese-foreign
Equity Joint Ventures promulgated by the State Council on July 26, 1980, the Regulations on Administration of the Registration of
Industrial and Commercial Enterprises promulgated by the State Council on August 9, 1982, and the Interim Provisions on Administration
of the Registration of Companies approved by the State Council on August 14, 1985 and promulgated by the State Administration for
Industry and Commerce on August 25, 1985 shall all be repealed simultaneously.



 
The State Council
1988-06-03

 






REGULATIONS FOR THE ADMINISTRATION OF AFFAIRS CONCERNING EXPERIMENTAL ANIMALS

Regulations for the Administration of Affairs Concerning Experimental Animals

     (Effective Date 1988.11.14)

CONTENTS

CHAPTER I GENERAL PROVISIONS

CHAPTER II THE ADMINISTRATION OF THE FEEDING AND BREEDING

OF EXPERIMENTAL ANIMALS

CHAPTER III THE QUARANTINE OF EXPERIMENTAL ANIMALS AND THE

CONTROL OF THEIR INFECTIOUS DISEASES

CHAPTER IV THE UTILIZATION OF EXPERIMENTAL ANIMALS

CHAPTER V ADMINISTRATION OF THE IMPORT AND EXPORT OF

EXPERIMENTAL ANIMALS

CHAPTER VI PERSONNEL DEALING WITH EXPERIMENTAL ANIMALS

CHAPTER VII REWARDS AND PENALTIES

CHAPTER VIII SUPPLEMENTARY PROVISIONS

CHAPTER I GENERAL PROVISIONS

   Article 1. These Regulations are formulated for the purpose of strengthening the administration of and guaranteeing the
quality of experimental animals so as to meet the needs of scientific research, economic construction and social development.

   Article 2. The term “experimental animals” used in these Regulations refers to animals which are artificially fed and bred, the
micro-organisms on or in whose bodies are kept under control, whose genetic backgrounds are definite or whose sources are
clear, and which are to be used in scientific research, teaching, production, examination and verification and other scientific
experiments.

   Article 3. These Regulations shall apply to units and individuals that are engaged in the research in, and the conservation of
breeds, feeding and breeding, supply, use, administration and supervision of experimental animals.

   Article 4. The administration of experimental animals shall be guided by the principle of unified planning, rational division of
work and being beneficial to the promotion of the scientific research in, and the utilization of, experimental animals.

   Article 5. The State Science and Technology Commission shall be in charge of the work throughout China with respect to experimental
animals.

The science and technology commissions of the provinces, autonomous regions and municipalities directly under the Central
Government shall be in charge of the work in their respective regions with respect to experimental animals.

The various departments under the State Council of the People’s Republic of China shall be in charge of the administration
of the work in their respective departments with respect to experimental animals.

   Article 6. The State shall institute a system of supervision over the quality of experimental animals and of attestation of the up-to-standard
quality of experimental animals. The specific procedures in this respect shall be separately formulated by the
State Science and Technology Commission.

   Article 7. The national standards in respect of genetics, microbiology, untriology and the feeding and breeding environment concerning
experimental animals shall be formulated by the State Bureau of Technology Supervision.

CHAPTER II THE ADMINISTRATION OF THE FEEDING AND BREEDING OF EXPERIMENTAL ANIMALS

   Article 8. Units that are engaged in the work of feeding and breeding experimental animals shall, in accordance with the standards in
respect of genetics, microbiology, nutriology and the feeding and breeding environment, exercise regular quality
monitoring over experimental animals. Comprehensive and accurate records shall be kept of the various work
processes and of the data derived from the monitoring and a statistical report system shall be established.

   Article 9. Feeding and breeding rooms and laboratories for experimental animals shall be built in different areas and each shall be
kept in strict isolation.

There shall be scientific management systems and operating rules for feeding and breeding rooms and laboratories
for experimental animals.

   Article 10. With respect to the conservation of breeds and the feeding and breeding of experimental animals, breeds and strains of breeds
that are domestically or internationally approved shall be adopted, with certificates attesting their being up to standard.

   Article 11. Experimental animals shall be fed separately in accordance with their different sources, different breeds, different strains
of breeds and different experimental purposes.

   Article 12. Experimental animals shall be categorized into four classes, the first being ordinary animals, the second, clean animals,
the third, animals carrying no specific pathogens and the fourth, animals carrying no bacteria.

Experimental animals of different classes shall be administered in accordance with the corresponding
standards for controlling microorganisms.

   Article 13. Experimental animals shall be fed with wholesome feed that is up to standard in quality. No feed that has become mouldy and
rotten, or deteriorated in quality, or moth-eaten or polluted may be used for feeding experimental animals. Green vegetables
and fruit that are to be fed directly to experimental animals shall be washed clean and sterilized and shall be kept
fresh.

   Article 14. The drinking water for experimental animals of the first class shall measure up to the hygiene standards of urban
drinking water. The drinking water for experimental animals of the second, third and fourth classes shall measure
up to the hygiene standards of urban drinking water and undergo treatment to kill bacteria.

   Article 15. The cushioning materials for experimental animals shall, based on the needs of different classes of experimental animals, be
treated accordingly so that they shall be clean, dry, absorptive of water, poison-free, pest-free, infection-free
and pollution-free.

CHAPTER III THE QUARANTINE OF EXPERIMENTAL ANIMALS AND THE CONTROL OF THEIR INFECTIOUS DISEASES

   Article 16. Experimental animals that are newly introduced shall be subject to quarantine in isolation.

Wild animals that are captured for the purpose of supplementing the sources of breeds or developing new breeds shall
be subject to quarantine in isolation in the very localities where they are captured and a certificate to that
effect issued by the animal quarantine department shall be obtained. When a wild animal is carried to the place
where experimental animals are kept, it shall be subject to quarantine once again before it is allowed into a feeding and
breeding room for experimental animals.

   Article 17. Experimental animals that must take preventive inoculations shall, in accordance with the requirements of experiments
or with the relevant provisions of the Regulations for the Immunization of Poultry and Other Domestic Animals, undergo
such inoculations, with the exception of those experimental animals that are to be used as materials for biological products.

   Article 18. When an experimental animal dies of an illness, the cause shall be investigated and ascertained in good time, and the
case shall be properly handled and kept on file.

When an experimental animal contracts an infectious disease, it shall, depending on the circumstances, be destroyed
or given medical treatment in isolation immediately. Experimental animals that are likely to be infected shall
undergo emergency preventive inoculations. Strict sterilization measures shall be taken for areas inside and
outside the feeding and breeding room and the case shall be reported to the higher authority for the administration of
experimental animals and to the local animal quarantine and epidemic prevention unit so that emergency preventive
measures shall be taken to prevent the spread of the disease.

CHAPTER IV THE UTILIZATION OF EXPERIMENTAL ANIMALS

   Article 19. In the utilization of experimental animals, only the related ones that are up to standard shall be selected in accordance
with the different purposes of the respective experiments. The use of up-to-standard experimental animals
shall be taken as one of the basic requirements in the research projects submitted for approval and in assessing
the results of such projects. If experimental animals that come short of standard are used, the results of examination
and safety assessment thus obtained shall be null and void and the products thus made shall not be used.

   Article 20. With respect to an experimental animal that is to be utilized, the following comprehensive data shall be required:

(1) The exact names of the breed, strain and subline;

(2) Its genetic background or its source;

(3) The state concerning the examination of the micro-organisms it carries;

(4) A certificate attesting its being up to standard; and

(5) The signature of the person in charge of the feeding and breeding unit.

In default of the afore-said data, no experimental animals may be used.

   Article 21. The transport of experimental animals shall be put in the charge of persons specially appointed therefor. The means of transport
for experimental animals shall be safe and reliable. No experimental animals of different breeds, strains or sublines
may be mixed together in transportation.

CHAPTER V ADMINISTRATION OF THE IMPORT AND EXPORT OF EXPERIMENTAL ANIMALS

   Article 22. An experimental animal that is imported from abroad as an element breed shall be accompanied by data duly signed by
the person in charge of the feeding and breeding unit, concerning the names of the breed and the strain and the information
concerning its heredity and the micro-organisms it carries.

In default of the afore-said data, no experimental animals may be imported or used.

   Article 23. When importing from abroad experimental animals as element breeds, units dealing with experimental animals shall register
with the unit designated by the State Science and Technology Commission for the conservation of breeds, breeding
and quality control with respect to the said animals.

   Article 24. The export of experimental animals shall be subject to examination and approval by the State Science and Technology
Commission. The export procedures shall be handled only after such approval has been obtained.

With respect to the export of experimental animals developed from using wild animals that enjoy the priority of State
protection, the export procedures shall be handled only after an export licence has been obtained in accordance with
the pertinent provisions of the State.

   Article 25. The quarantine of import and export experimental animals shall be handled in accordance with the provisions of the Regulations
of the People’s Republic of China Concerning the Quarantine of Import and Export of Animals and Plants.

CHAPTER VI PERSONNEL DEALING WITH EXPERIMENTAL ANIMALS

   Article 26. Units dealing with experimental animals shall, according to the needs, be staffed with technical personnel and specially
trained personnel for the feeding and breeding thereof. Personnel of various kinds shall all abide by the various
rules and regulations concerning the administration of the feeding and breeding of experimental animals and shall
be acquainted with, and have a good mastery of, the operating rules.

   Article 27. Competent authorities at various levels in various localities in charge of the work with respect to experimental animals
shall gradually institute a qualifying system for personnel of various kinds dealing with experimental animals.

   Article 28. Units dealing with experimental animals shall regularly organize physical check-ups for the working personnel who
are in direct contact with experimental animals. Those who have contracted infectious diseases and are no longer
suitable for their jobs shall be transferred in good time.

   Article 29. Personnel dealing with experimental animals shall protect these animals and may not play with or maltreat them.

CHAPTER VII REWARDS AND PENALTIES

   Article 30. Units and individuals that are long engaged in the feeding and breeding and administration of experimental animals and
have scored remarkable achievements shall be praised or rewarded by the department in charge of the administration
of the work with respect to experimental animals.

   Article 31. With respect to units that violate the provisions of these Regulations, the department in charge of the administration
of the work with respect to experimental animals shall, in accordance with the seriousness of the cases, impose
on them such administrative sanctions as giving a warning, setting a deadline for them to improve their work or ordering
them to close down.

   Article 32. Working personnel concerned who violate the provisions of these Regulations shall be given administrative sanctions
by the units where they belong in accordance with the seriousness of the cases and with the pertinent provisions of the
State.

CHAPTER VIII SUPPLEMENTARY PROVISIONS

   Article 33. The people’s governments of the provinces, autonomous regions and municipalities directly under the Central Government
and the departments concerned under the State Council of the People’s Republic of China may, in accordance with
these Regulations and in line with the actualities, formulate procedures of implementation.

The administration of the work with respect to experimental animals in the armed forces shall be governed with reference
to these Regulations.

   Article 34. The State Science and Technology Commission shall be responsible for the interpretation of these Regulations.

   Article 35. These Regulations shall go into effect as of the date of promulgation.

    

Source:MOFTEC





PROVISIONS ON THE CAPITAL CONTRIBUTION BY PARTIES TO SINO-FOREIGN EQUITY JOINT VENTURES

INTERIM PROVISIONS OF THE MINISTRY OF FINANCE OF THE PEOPLE’S REPUBLIC OF CHINA CONCERNING REDUCTION AND EXEMPTION OF ENTERPRISE INCOME TAX AND CONSOLIDATED INDUSTRIAL AND COMMERCIAL TAX FOR THE ENCOURAGEMENT OF FOREIGN INVESTMENT IN CHINA’S OPEN COASTAL ECONOMIC AREAS

The Ministry of Finance

Interim Provisions of the Ministry of Finance of the People’s Republic of China Concerning Reduction and Exemption of Enterprise Income
Tax and Consolidated Industrial and Commercial Tax for the Encouragement of Foreign Investment in China’s Open Coastal Economic Areas

The Ministry of Finance [1988] No.91

June 15, 1988

The present set of interim provisions is formulated in respect of reduction and exemption of enterprise income tax and consolidated
industrial and commercial tax for foreign investors in order to promote the economic and technological exchange, absorb the foreign
investment, import foreign technology and accelerate economic development in China’s open coastal economic areas, namely the East
Liaodong Peninsula, Shandong Peninsula, Yangtze river delta, Zhujiang river delta and a triangular area in south Fujian comprising
Xiamen, Zhangzhou and Quanzhou. It reads as follows:

Article 1

Subject to approval by the Ministry of Finance, the productive enterprises established by foreign investors in China’s open coastal
economic areas (hereinafter referred to as open area enterprises) shall pay their enterprise income tax at a preferential tax rate
of 15% if they are technology-intensive or knowledge-intensive enterprises;or if the foreign investors have contributed more than
US $ 30 million of investment to the enterprise and is expected to take a long time to recoup their investment; or they are engaged
in energy, transport and port construction projects.

Subject to approval by the Ministry of Finance, open area enterprises engaged in the following lines of business but are not qualified
under the requirements set in the preceding paragraph may pay their enterprise income tax at a 20% discount:

1.

machinery manufacturing, electronic industry;

2.

metallurgy, chemical, building materials industry;

3.

light industrial products, textiles, packaging industry;

4.

medical instrument production, pharmaceutical industry;

5.

agriculture, forestry, animal husbandry and aquaculture and their related processing business, and

6.

building industry.

The reduction and exemption of enterprise income tax for open area enterprises shall be carried out, on the basis of the above-mentioned
tax rate and subject to the scope, conditions and terms stipulated in the “Provisions of the State Council of the People’s Republic
of China for the Encouragement of Foreign Investment”, “Income Tax Law on Chinese-foreign Equity Joint Ventures” and “Income Tax
Law on Foreign Enterprises”.

Article 2

The people’s governments of provinces, autonomous regions and municipalities directly under the Central Government are given the authority
to determine the reduction and exemption of the local income tax for open area enterprises.

Article 3

The dividends, interest, rentals and royalties and other income derived from China by foreign investors, where they have not established
an establishment, are subject to income tax at a reduced tax rate of 10% unless such income has already been subject to income tax
exemption by law. The people’s governments of provinces, autonomous regions and municipalities directly under the Central Government
can grant more preferences to the foreign investors regarding tax reduction and exemption if the foreign investors can provide capital
and equipment on favorable terms, or transfer advanced technology to China.

Article 4

The production equipment, operational facilities, construction materials and means of transport, office equipment imported by open
area enterprises as part of their initial investment or new investment shall not be subject to consolidated industrial and commercial
tax.

Article 5

Apart from crude oil, finished oil products and those products according to other State’s regulations, exports produced by open area
enterprises are not subject to consolidated industrial and commercial tax but those products which are to be sold in the domestic
markets will have to pay the said tax according to the provisions.

Article 6

The raw materials and processed materials, parts and components and packing materials imported by open area enterprises and used in
the manufacturing of export products are not subject to consolidated industrial and commercial tax but those used in the manufacturing
of products which are to be sold in the domestic markets are subject to the said tax according to the provisions.

Article 7

The household articles and transport vehicles carried by the foreign workers who work for or reside in an open area enterprise shall
not be subject to consolidated industrial and commercial tax. However, the foreign workers must be able to present a certificate
issued by a municipal government (directly subordinated under a provincial government) or a higher level authority regarding the
exemption and the amount of articles (vehicles) they carried into the country must be within a reasonable limit.

Article 8

In order to facilitate quarantine work on imported plants and animals, experimental farms may be set up in the one or two islands
of Guangdong, Zhejiang, Fujian, Jiangsu or Shandong so that the imported fine strains (breeds) of plants or animals can be tested
and cultivated. Since these experimental farms are of the nature of research and development projects they shall not be subject to
all kinds of tax for five years starting from their first profit-making year.

Attachment:

I. Circular of the State Council Concerning Extending the Range of the Open Coastal Economic Areas(omitted)

II. List of the County and Municipality in the Yangtze river delta, Zhujiang river delta and a triangular area in south Fujian comprising
Xiamen, Zhangzhou and Quanzhou (omitted)



 
The Ministry of Finance
1988-06-15

 






PROVISIONS ON ADMINISTRATION OF BUY AND SALE OF SPOT AND FORWARD FOREIGN EXCHANGE BY FINANCIAL INSTITUTES ON CLIENTS’ BEHALF

Category  BANKING Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1988-03-05 Effective Date  1988-03-05  


Provisions on Administration of Buy and Sale of Spot and Forward Foreign Exchange by Financial Institutes on Clients’ Behalf



(Approved by the State Council on December 13, 1987, promulgated by the

State Administration of Foreign Exchange Control on March 5, 1988)

    Article 1  These Provisions are formulated in order to guard against the
risks of foreign exchange rate, stabilize the costs of import and export trade
(including other foreign economic activities) and develop the businesses of
buy and sale of spot and forward foreign exchange.

    Article 2 The Bank of China may be entrusted to buy and sell spot and
forward foreign exchange by departments, organizations, enterprises,
institutions and other units (hereinafter referred to as the client) in the
territory of China.

    Other financial institutions intending to conduct the businesses mentioned
in the preceding paragraph shall be approved by the State Administration of
Foreign Exchange Control.

    Article 3  Buy and Sale of foreign exchange referred to in these
Provisions means the buy and sale conducted among various convertible
currencies.

    Article 4  The client intending to entrust the Bank of China or other
financial institutions approved by the State Administration of Foreign
Exchange Control (hereinafter referred to as the designated financial agency)
on its behalf to buy and sell spot and forward foreign exchange shall be
approved by the State Administration of Foreign Exchange Control or its local
departments except for the following two situations:

    1) Specialized banks, financial institutions and foreign invested
enterprises with foreign investment with approval to conduct foreign exchange
businesses, for their self-owned or self-raised capitals of foreign exchange,
may buy and sell spot or forward foreign exchange by themselves in the
international financial market or entrust the designated financial agencies
to handle such businesses.

    2) Other clients not stipulated in the above paragraph who borrow foreign
exchange in cash within or out of China and receive, with permission,
donated foreign exchange, upon the approval to open cash account of foreign
exchange in financial institutions within China, may entrust the designated
financial agencies to buy and sell on their behalf spot or forward foreign
exchange according to the foreign trade contracts or other economic agreements.

    Article 5  The principle of voluntariness shall be adhered to in the
transactions of buy and sale of spot and forward foreign exchange.

    Article 6  The designated financial agency which is entrusted by a client
to buy and sell spot and forward foreign exchange shall base the transaction
on the foreign trade contracts or economic agreements signed by the client,
but transactions entrusted by the financial institutions with approval to
conduct foreign exchange and enterprises with foreign investment are excepted.

    Article 7  When the designated financial agency is entrusted by a client
to buy and sell spot or forward foreign exchange, the client shall provide
performance guarantee. Mortgage of foreign exchange quota or advance payment
of performance bond in cash may be used as the performance guarantee.

    The letter of guarantee for RMB at equal value issued by the deposit
bank shall be simultaneously provided in case the foreign exchange quota is
mortgaged as guarantee.

    In case the foreign exchange quota is settled ahead of time into foreign
exchange in cash to pay the performance bond in advance, the settlement is
limited to using US dollar.

    Article 8  When a client buys and sells forward foreign exchange,
application and copies of trade contracts or other economic agreements shall
be submitted to the local department of foreign exchange control in accordance
with the stipulation of Article 6. After being examined and approved by the
department of foreign exchange control, the client may entrust the designated
financial agency to buy forward foreign exchange by presenting the approval
documents of the department of foreign exchange control.

    Article 9  In case the foreign exchange quota is settled ahead of time
into foreign exchange in cash to pay the performance bond in advance, the
department of foreign exchange control shall endorse the payment notice of
foreign exchange quota issued by the client with the date and its stamp and
shall deduct the foreign exchange ration. The client in the same city shall
within 3 working days after the date of the endorsement (7 working days for
the client in a different city) buy US dollars from the quota and deposit
them into the account of “specific guarantee deposit” in the designated
financial agency.

    In case the foreign exchange quota is mortgaged, the department of foreign
exchange control shall transfer the foreign exchange quota mortgaged by the
client to the account of foreign exchange quota in the designated financial
agency.

    In case the option transaction is entrusted by the client, only foreign
exchange quota can be mortgaged as guarantee, but the insurance premium of
option which should be paid upon conclusion of the transaction may be settled
in advance into foreign exchange in cash.

    Article 10  When the designated financial agency is entrusted to buy
and sell spot and forward foreign exchange, if the client uses the foreign
exchange quota to settle ahead of time into foreign exchange in cash and pay
the performance bond in advance for the transaction of forward foreign
exchange, the designated financial agency shall check and calculate through
the account of “specific guarantee deposit”; but if the client uses the cash
of foreign exchange originally owned to pay the performances bond in advance
for the transaction of forward foreign exchange, the designated financial
agency shall still check and calculate through the account of “guarantee
deposit”.

    Article 11  In case the date of import payment is behind the date of
delivery, if the foreign exchange quota is settled ahead of time into foreign
exchange in cash, designated financial agency shall re-deposit temporarily
the cash position derived from the delivery into the account of “specific
guarantee deposit”; and if the cash of foreign exchange originally owned
is used, the designated financial agency shall re-deposit the cash position
derived from the delivery into the account of “guarantee deposit”.

    Article 12  The authority to interpret these Provisions resides in the
State Administration of Foreign Exchange Control.

    Article 13  These Provisions shall enter into force as of the date of
promulgation.





CIRCULAR OF THE STATE COUNCIL CONCERNING THE ANNULMENT OF A PART OF REGULATIONS GOVERNING FOREIGN-RELATED MATTERS

Category  CATALOGUE OF INVALIDATED LAWS AND ADMINISTRATIVE REGULATIONS GOVERNING FOREIGN-RELATED MATTERS Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1988-06-18 Effective Date  1988-06-18  


Circular of the State Council Concerning the Annulment of a Part of Regulations Governing Foreign-related Matters


Annex I  A CATALOGUE OF THE FIRST BATCH OF REGULATIONS GOVERNING
Annex II  A CATALOGUE OF THE FIRST BATCH OF REGULATIONS GOVERNING

(June 18, 1988)

    In order to speed up the implementation of the strategy for economic
development in the coastal areas, and to promote the development of
export-oriented economy in the coastal areas of our country, the departments
concerned under the State Council, in accordance with the planning and
requirements of the State Council for the sorting out of regulations governing
foreign-related matters, have undertaken the sorting out of the existing
administrative regulations as well as other regulatory documents (hereinafter
referred to as “the regulations”, for short), promulgated by the State Council
or promulgated with the approval of the State Council. At present, the first
batch of seventeen regulations, which have been sorted out and should be
annulled, have been re-examined, piece by piece, by the Leading Group under
the State Council for the Sorting Out of Regulations jointly with the Bureau
of Legislative Affairs of the State Council and by the State Council; and it
is decided to announce the annulment of the aforesaid regulations (See Annex I
for the post_titles of the aforesaid regulations).

    At the same time, the first batch of eleven regulations, which have become
invalid automatically, have also been sorted out and re-examined, piece by
piece, by the Leading Group under the State Council for the Sorting Out of
Regulations jointly with the Bureau of Legislative Affairs of the State
Council; and now these eleven invalid regulations (See Annex II for their
post_titles) are also included here as Annex II in order to help various regions
and departments concerned obtain an overall understanding of the condition of
those invalid regulations governing foreign-related matters, thereby
facilitating their work.

    Annex I: A Catalogue of the First Batch of Regulations Governing
Foreign-Related Matters Which Should Be Annulled (17 pieces)

    Annex II: A Catalogue of the First Batch of Regulations Governing
Foreign-Related Matters Which Have Become Invalid Automatically (11 pieces)

Annex I  A CATALOGUE OF THE FIRST BATCH OF REGULATIONS GOVERNING
FOREIGN-RELATED MATTERS WHICH SHOULD BE ANNULLED


—————————————————————————
|Serial|   The post_title of      | Organ  | Serial  |                        
|
|Number|                     |
and    | Number  |  Reasons for Annulment  |
|      |  the Regulations    | date of|  of    
|                        
|
|      |                    
| promul-| Outgoing|                        
|
|      |                    
| gation | Document|                        
|
|——|———————|——–|———|————————-|
|  1   | Interim Provisions  | Promul-| (1965)  | Relaced by “Approval    |
|      | of the State Council| gated  | State   | and Transmission by the |
|      | Concerning the      | on     | Council,|
State Council Concern-  |
|      | Unified Procedure   |November| No. 394 | ing a Report Submitted  |
|      | for the Price-making| 11,    |        
| by the State Administra-|
|      | of Export           | 1965   |        
| tion for Commodity      |
|      | Commodities         |        |        
| Prices Requesting In-   |
|      |                    
|        |         | structions on Several  
|
|      |                    
|        |         | Problems Concerning the |
|      |                    
|        |         | Price-making of Export  |
|      |                    
|        |         | Commodities” promulgated|
|      |                    
|        |         | by Document (1979)      |
|      |                    
|        |         | No.206 of the State    
|  
|      |                    
|        |         | Council on August 21,  
|
|      |                    
|        |         | 1979, and “Notice      
|
|      |                    
|        |         | Concerning the          |
|      |                    
|        |         | Strengthening of Control|
|      |                    
|        |         | of Purchasing Prices of |
|      |                    
|        |         | Export Commodities”    
|
|      |                    
|        |         | issued by Document      |

|      |                    
|        |         | (1987) No.492 of the    |
|      |                    
|        |         | Ministry of Foreign    
|
|      |                    
|        |         | Economic Relations and  |
|      |                    
|        |         | Trade and the State Ad- |
|      |                    
|        |         | ministration for Com-  
|
|      |                    
|        |         | modity Prices          
|
|——|———————|——–|———|————————-|
|  2   | Interim Provisions  | Promul-| (1974)  | Replaced by “The Law of |
|      | of the People’s     | gated  | State   | the People’s
Republic of|
|      | Republic of China   | by the | Council,| China Concerning the    |
|      | Concerning the      | State  | No. 11  |
Protection of Marine En-|
|      | Prevention of       | Council|        
| vironment”, promulgated |
|      | Pollution in the    | on     |        
| by the Standing         |
|      | Coastals Waters     | January|        
| Committee of the        |
|      |                    
| 30,1974|         | National People’s       |
|      |                    
|        |         | Congress on August 23,  |
|      |                    
|        |         | 1982                    |
|——|———————|——–|———|————————-|
|  3   | Provisions on       | Promul-| (1979)  | Replaced by “Provisions
|
|      | Several Ploblems    | gated  | State   | of the State
Council    |
|      | Concerning Vigorous | by the | Council,| Concerning the speeding |
|      | Development of      | State  | No. 202 | up and deepening
of the |
|      | Foreign Trade and   | Council|         |
Reform in the Systems   |
|      | Increase in Foreign | on     |        
| of Foreign Trade”, pro- |
|      | Exchange Earnings   | August |         |
mulgated by Document    |
|      |                    
|13, 1979|         | (1988) No. 12 of the    |
|      |                    
|        |         |  State Council on      
|
|      |                    
|        |         | February 26, 1988, and  |
|      |                    
|        |         | by other documents      |
|——|———————|——–|———|————————-|
|  4   | Trial Procedures    | Promul-| (1979)  | Replaced by “Procedures |
|      | for the Retention   | gated  | State   | for the Retention of
a  |    
|      | of a Portion of     | by the | Council,| Portion of Foreign      |

|      | Foreign Exchange    | State  | No. 202 | Exchange from Export    |
|      | from Export         | Council|        
| Commodities”, promul-   |
|      | Commodities         | on     |        
| gated by Document       |
|      |                    
| August |         | (1985) No. 43 of the    |
|      |                    
|13, 1979|         | State Council on        |  

|      |                    
|        |         | March 29, 1985          |

|——|———————|——–|———|————————-|
|  5   | Approval and Trans- |December| (1979)  | Replaced by “Notice of  |
|      | mission by the State| 21,    | State   | the State Council Con-  |
|      | Council Concerning  | 1979   | Council,| cerning the Approval and|
|      | the Procedures for  |        | No. 297 |
Transmission of Interim |
|      | the Handling of     |        |        
| Provisions of the State |
|      | Cases of Using      |        |        
| Planning Commission     |
|      | Foreign Loans in    |        |        
| Concerning the Improve- |
|      | the Introduction    |        |        
| ment of the Planning    |
|      | of Technology and   |        |        
| System”, promulgated    |
|      | the Importation of  |        |        
| by Document No. 138,    |
|      | Equipment for       |        |        
| (1984) of the State     |
|      | Carrying Out        |        |        
| Council on October 4,   |
|      | Capital Construction|        |        
| 1984, and also by       |
|      | Projects by Such    |        |        
| “Approval and           |
|      | Departments as      |        |        
| Transmission by the     |  
|      | Foreign Exchange,   |        |        
| State Council Concern-  |
|      | Finance, and        |        |        
| ing Suggestions Raised  |
|      | Planning  for       |        |        
| by the State Planning   |
|      | Capital Construction|        |        
| Comission on the        |
|      |                    
|        |         | Exploitation of        
|
|      |                    
|        |         | Foreign Loans”, promul- |
|      |                    
|        |         | gated by Document      
|
|      |                    
|        |         | No. 83 (1986) of the    |
|      |                    
|        |         | State Council on        |
|      |                    
|        |         | August 16, 1986        
|
|——|———————|——–|———|————————-|
|   6  | Approval and Trans- | June   | (1980)  | Replaced by “Notice of  |
|      | mission by the      | 30,    | State  
| the State Bureau of     |
|      | State Council       | 1980   | Council,| Foreign Expert
Affairs  |
|      | Concerning the      |        |
No. 151 | Concerning the Publica- |
|      | Summary of a        |        |        
| tion of `A Summary of a |
|      | National Forum on   |        |        
| National Conference on  |
|      | the Work of         |        |        
| the Work of Foreign Ex- |
|      | Foreign Experts in  |        |        
| perts in Culture and    |
|      | Cultural and        |        |        
| Education'” promulgated |
|      | Educational Work    |        |        
| by Document No. 78      |
|      |                    
|        |         | (1987) of the State    
|
|      |                    
|        |         | Bureau of Foreign Expert|
|      |                    
|        |         | Affairs on April 10,    |
|      |                    
|        |         | 1987                    |
|——|———————|——–|———|————————-|
|  7   | Notice of the State | June   | (1981)  | Replaced by “Notice of  |
|      | Council Concerning  | 3,     | State   | the State
Council       |
|      | Its Approval and    | 1981   | Council,| Concerning its Approval
|
|      | Transmission of “A  |        | No.97  
| and Transmission of the |
|      | Report Concerning   |        |        
| Suggestions Raised by   |
|      | How the present     |        |        
| the State planning      |
|      | Foreign Economic    |        |        
| Commission, the Economic|
|      | Relations and       |        |        
| Commission and the      |
|      | Trade Can Serve     |        |        
| Ministry of Foreign     |
|      | the Readjustment    |        |        
| Economic Relations and  |  
|      | of National         |        |        
| Trade Concerning        |
|      | Economy”, Submitted |        |        
| Division of Labour in   |
|      | by the State        |        |        
| the Work of Foreign     |
|      | Commission for      |        |        
| Economic Relations and  |
|      | Imports and Exports |        |        
| Trade”, Promulgated     |
|      |                    
|        |         | by Document No. 13      |
|      |                    
|        |         | (1983) of the State    
|
|      |      &n

MEASURES FOR MANAGEMENT OF FOUNDATIONS

Category  BANKING Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1988-09-27 Effective Date  1988-09-27  


Measures for Management of Foundations



(Adopted at the 21st Executive Meeting of the State Council

on September 9, 1988, promulgated by Decree No.18 of the State
Council of the People’s Republic of China on September 27, 1988)

    Article 1  These Measures are formulated in order to
strengthen the management of foundations so as to ensure their
healthy development.

    Article 2  “Foundations”, as referred to in these Measures,
means non-governmental and non-profit organizations which
conduct management of funds donated voluntarily by social
organizations or other organizations or individuals either
at home or abroad and which are legal person social
organizations.

    The purpose of foundations is to promote the development of
scientific research, cultural education, social welfare and
other public welfare undertakings through financial assistance.

    These Measures shall not apply to foundations established
with government appropriations for scientific research, nor to
organizations managing other types of special funds.

    Article 3  Foundations to be established must satisfy the
following requirements:

    (1) The nature and aim of the foundation and the source of
funds accord with the provisions of Article 2 of these Measures;

    (2) Have a registered capital of at least 100,000 RMB yuan
(or at least the equivalent of 200,000 RMB yuan in foreign
exchange);

    (3) Have a foundation constitution, management organization
and necessary financial personnel; and

    (4) Have a fixed working place.

    Article 4  Foundations may raise funds by soliciting
contributions from enterprises, institutions, social
organizations or other organizations or individuals either at
home or abroad who support the aims of the foundation, provided
that the contributions are made on a voluntary basis.
Apportionment is strictly prohibited.

    Article 5  The leading position of a foundation may not be
concurrently held by any active government personnel.

    Foundations shall carry out democratic management, institute
a strict system for the raising, use and management of funds and
publish a balance sheet regularly.

    Article 6  Foundation funds shall be used for those
activities and undertakings which accord with the aim of the
foundation and may not be appropriated for other purposes.
Foundations may not operate or manage enterprises.

    Article 7  Foundations may place their funds in interest-
bearing financial institutions, or may purchase bonds, stocks or
other securities provided that the amount of stocks purchased
from an enterprise shall not exceed 20 percent of the total stock
of the enterprise.

    Article 8  Foundations are enpost_titled to supervise those
accepting an offering of funds with regards to the use of the
funds. In the event that the foundation discovers that the use of
donated funds violates the agreement reached, the foundation is
enpost_titled to reduce or stop the offering of such funds, or to
recall funds already offered.

    Article 9  The salaries of personnel and the administrative
expenses of a foundation shall come from the interest income of
the foundations assets or the like.

    Article 10  Foreign exchange donated to a foundation from
abroad shall be owned by the foundation. Foundations are allowed
to open foreign exchange deposit accounts.

    Goods and materials donated to a foundation from abroad are
exempted from customs duty and shall be owned by the foundation;
foundations are enpost_titled to transfer those goods and materials
free of charge to assist organizations or individuals who are
associated with the aim of the foundation. Such goods and
materials may not be sold.

    Article 11  Application for the establishment of a foundation
shall be submitted to the People’s Bank of China for examination
and approval by the authoritative administrative department.
After examination and approval by the People’s Bank, the
foundation shall register with and obtain a license from the
civil administration department. Only after obtaining qualification
as a body corporate by going through the above procedures may a
foundation begin its activities.

    Application for the establishment of national foundations
shall be submitted to the People’s Bank of China for examination
and approval and shall apply to the Ministry of Civil Affairs for
registration, and then be submitted to the State Council for
filing. Application for the establishment of local foundations
shall be submitted to the local provincial, regional or municipal
branch of the People’s Bank of China for examination and approval
and shall apply for registration to the civil administration
department of the people’s government of that province,
autonomous region or municipality directly under the central
government, and then be submitted for filing to the people’s
government of that province, autonomous region or municipality
directly under the central government.

    Changes in name, merging or rescission of foundations shall
be handled in accordance with the procedures prescribed for their
establishment.

    Article 12  Foundations shall submit annual reports to the
People’s Bank of China and civil administration departments
concerning their revenues, expenditures and activities.
Foundations are subject to the supervision of the People’s Bank
and civil administration departments.

    If any foundation’s activities violate these Measures, the
People’s Bank is enpost_titled to stop payment, freeze foundation
funds and order a rectification; the civil administration
departments are authorized to issue penalties such as warnings
or revocation of the operational license.

    Article 13  The People’s Bank of China and the Ministry of
Civil Affairs shall implement these Measures. They may draw up
the necessary rules for implementation.

    Article 14  These Measures shall go into effect as of the
date of promulgation.





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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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