1998

DECISION OF THE CENTRAL COMMITTEE OF THE COMMUNIST PARTY OF CHINA AND THE STATE COUNCIL ON ACCELERATING DEVELOPMENT OF TERTIARY INDUSTRY

Category  GENERAL Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1992-06-16 Effective Date  1992-06-16  


Decision of the Central Committee of the Communist Party of China and the State Council on Accelerating Development of Tertiary Industry


I. Accelerating Development of the Tertiary Industry is of Great Strategic
II. The Goal and Key Areas of the Tertiary Industry to be Quickly
III. Main Policies and Measures for Development of the Tertiary Industry

(June 16, 1992)

    With a view to taking advantage of the present opportunity, speeding up
steps of reform and opening up, concentrating efforts to facilitate
economic construction and in accordance with the Ten-Year Programme and Eighth
Five-Year Plan on National Economic Development and Social Progress, the
tertiary industry should be developed comprehensively and swiftly.
I. Accelerating Development of the Tertiary Industry is of Great Strategic
Significance

    1. Speedy development of the tertiary industry is the necessary result of
the growth of productivity and social progress. The situation of the tertiary
industry is an important indicator by which economic development is
measured in a modern society. The tertiary industry of our country suffers
slow and backward development which falls short of demands of national
economic development. The law of economic development observed in many
countries indicates that when an economy is developed to certain level,
the tertiary industry normally enjoys more speedy development than the first
and secondary industries and obviously plays a role of impetus to the overall
growth of national economy. Our country has just entered that stage. With a
view to smoothly realizing the gigantic objectives of socialist modernization,
we must catch up with the opportunity and promote development of the tertiary
industry to a new level.

    2. Acceleration of the development of the tertiary industry can facilitate
the forthcoming of a fully developed market, improve socialization and
standardization of service industry, strengthen social security and be
beneficial to smooth implementation of a series of reforms in respect to
labour, wage, price, operational mechanism in enterprises and the
circulation system, and be beneficial to further opening up, attraction of
larger foreign investment, institutional simplification, efficiency growth
and to gradual change of the undesirable status quo that government
agencies, institutions and enterprises take on what ought to be done by
the society. Consequently the tertiary industrial development can create
better conditions for development of reform and opening up in a broader and
in-depth area.

    3. Our country suffers low industrial economic efficiency, low
commercialization of agricultural products, retarded circulation and
financial difficulties which has severely impeded further development of
the national economy. One of the important reasons for which those problems
arise is the ill structure of the whole economy, which can be indicated by
the fact that the tertiary industry falls short of demands of the first and
secondary industries. Even low investment in the tertiary industry can
create immediate efficiency and good social effect. To quicken development of
the tertiary industry can, on one hand, readjust ratio of three
industries and optimize the overall structure of national economy and, on the
other hand, effectively alleviate in-depth structural contradictions of the
economic life and promote faster economic growth.

    4. The 1990s sees large number of new grown-up labour and those labour
that are removed from the first and secondary industries waiting for
reemployment. The tertiary industry has particular advantages in recruitment
of labour; variety of trades and occupations; co-existence of labour;
technology and knowledge concentrated professions which can recruit large
number of various personnel of different levels, especially large number of
technological and specialized talents. To accelerate development of the
tertiary industry is a major solution to alleviation of employment pressure
which is becoming more and more serious in our country.

    5. Towards the end of this century our people’s lives will become fairly
better off. Compared with the living standard of sufficient food and
clothing, the level of well-to-do livelihood does not only mean certain
standards of income already satisfied, but more importantly it should be
measured in terms of commercialization of services and living quality of
residents. Along with economic development and increase of income, the
people are asking for more and higher demands not only upon material life in
respect to clothing, food, housing, transportation, communication, hygiene and
living environment, but also upon cultural life in respect to cultural
entertainment, broadcasting, movies and TV programmes, publications, physical
training and recuperation, and tourism. Only when the tertiary industry is
quickly developed could the ever increasing material and cultural demands of
the people be satisfied and the construction of the socialist material and
cultural, ethical civilization be advanced.
II. The Goal and Key Areas of the Tertiary Industry to be Quickly
Developed

    6. In the light of national circumstances, we have categorized national
economy into three productive industries with agriculture being the first
productive industry, manufacture and construction the secondary industry
and all trades other than the abovementioned being categorized as the
tertiary industry including circulation departments, departments that
serve production and livelihood and departments that provide services for
improvement of science and culture awareness and quality of citizens.

    7. The goal of accelerating the tertiary industry development is to
gradually establish, in about ten years or longer times, an integrated
socialist market system, a comprehensive socialized service system in both
cities and countryside and a social security system, all of which are adapted
to circumstances of our country. In 1990s, development of the tertiary
industry should enjoy higher speed than before along with development of the
first and secondary industries so that the overall national economy could be
brought to a new stage every couple of years. For this purpose, the tertiary
industry should enjoy development at higher speed than the first and secondary
industries. The proportion of the tertiary industry value to GNP and the
proportion of the employment in the tertiary industry to the total social
labour should be brought up to or nearly to the average level of that
proportion in developing countries.

    8. Key areas of the tertiary industry to be developed at high speed are
specified as the following:

    — Firstly, trades which require small investment but generate immediate
result and high efficiency, have large capacity of labour recruitment and
direct relevance to economic development and people’s livelihood. Such trades
mainly refer to those in commerce, goods and materials, external trade,
banking, insurance, tourism, real estate, storehousing, neighborhood services,
catering, entertainment, hygiene, etc.;

    — Secondly, those newly developed trades related to scientific and
technological progress, which mainly consist of consultancy (including
consultancy in science and technology, law, accounting and auditing, etc.),
information and various technical services, etc.;

    — Thirdly, the tertiary industry in countryside, which mainly refer to
those trades that provide services before, during and after harvest or offer
services for improvement of farmers quality and living standards;

    — Fourthly, those basic trades that have comprehensive influence upon
and guiding significance for development of national economy, including
communication and transportation, posts and telecommunications, scientific
research, education and other public undertakings, etc..
III. Main Policies and Measures for Development of the Tertiary Industry

    9. All positive factors including the state, collectives and individuals
should be fully mobilized. Economic collectives, private-run enterprises
and individuals in both cities and countryside should be given free rein to
develop those trades which are small in investment, quick in result,
concentrated with labour and directly serve production and livelihood. The
trades that have comprehensive influence upon and guiding significance
to national economic development should be mainly run by the state, but
competition should be introduced so that under uniform planning and
management localities, departments and economic collectives could also be
mobilized to establish such trades. The acceleration of the tertiary industry
development should principally depend on social forces subject to the
principle of “whoever invest will hold the ownership and be the beneficiary”.
The state should not be dependent upon too much for investment.

    10. Acceleration of steps for development of the tertiary industry should
depend upon deepening reform and further opening up. Reforms and trials in
different forms should be conducted actively. Overseas funds, technologies
and marketing channels should be utilized boldly. Multiple approaches and
methods such as issue of stocks and bonds should be adopted to collect
funds. The form of business groups should be promoted actively so that
limits of departmental, regional or trade ownership could be broken through
and national and regional enterprise groups in the tertiary industry could
be established to the benefit of accelerated development of the tertiary
industry. All practices that are proved by reality to be effective should
be spread as soon as possible. Those that do not bring forth obvious
result should be tried continuously. Those practices that are proved really
unsuccessful should be changed to other forms.

    11. A vital self-development mechanism oriented to industrialization
should be established for the tertiary industry progress. Most of the tertiary
industry organizations should be transformed to business entities or
operated in business manner and try to be independent in operation and
responsible for both wins and losses. Most of the present tertiary industry
organizations which are charity like or public welfare or public undertaking
like should be gradually transformed into business entities under corporate
management.

    12. Where conditions permit, present information, consultancy
institutions and internal service installments and transport vehicles
attached to state organs or enterprises and public institutions should, to
the direction of socialization, be open, in an active manner, to the society
for paid services subject to confidential and safety requirements. Conditions
should be created to make those institutions to be divorced from their
original units, to be independent in operation and accounting. At the same
time social service organizations should be encouraged to contract rear
services, management of retired personnel and other routine work of state
organs, enterprises and public institutions. The close self-service systems
which are often ” big and complete” or “small but complete” should be broken.
Abovementioned services should be socialized gradually.

    13. Enterprises of the tertiary industry should be encouraged to attempt
transdepartmental, transregional or conglomerate merger of other industrial
enterprises that should be closed, suspended, merged or changed in line of
production, and should be rendered preferential support in terms of assets
transfer, liability settlement, credit and taxation. This should be an
important measure for readjustment of industrial structure.

    14. Part of administrative personnel should be actively encouraged to be
separated from administration and to enter trades of services. Those people
that have been separated should be divorced from the administrations. Those
trades that serve production and people’s lives should be developed
vigorously and should recruit as many personnel separated from
administration as possible so that conditions could be created for smooth
progressing of government organizational reform and staff reduction.

    15. To advance reform in labour and personnel system, the tertiary
industry enterprises should be offered discretion with labour employment. The
practice of discharge and resignation should be institutionalized gradually
so as to realize mutual selection in employment. Those institutions that
are operated in business manner and no longer need financial allocation
should be given freedom in recruitment of personnel and independence in
determination of staff size. Those institutions that only partially
depend upon financial allocation should be given more freedom in expansion
of staff size. Surplus labour with industrial enterprises, especially those
skilled personnel, should be encouraged to move to the tertiary industry.
Graduates from colleges and training schools and armymen to be transferred to
civilian work should be encouraged to work in units of the tertiary industry.

    16. Price system should be reformed according to the law of value so that
the long standing problem of insufficient value compensation for the
tertiary industry could be solved. Except for a few items for which it is
really necessary for the state to set the prices and fee collection
standards, most of the prices and service fee standards in the tertiary
industry should be open, subject to floating prices, negotiated prices and
self-quoted prices so that a reasonable price parity could be established.

    17. International business should be encouraged. Some large and medium
sized state-run commercial and materials enterprises should be authorized
with the power to import and export business. Where condition permits
external business development should be promoted energetically and active
efforts should be made to establish China-run enterprises overseas. Subject
to approval, large and medium-sized state-run external enterprises can be
authorized the right to enter domestic market so that business could be
operated in a uniform manner within both domestic and global markets.
Procedures regarding examination and approval of overseas business
development should be further simplified.

    18. Banking, taxation and other economic measures should be adopted for
development of the tertiary industry. Demand for loans by key trades should be
satisfied through arrangements under credit planning. Banks and both city and
township credit cooperatives can issue small loans, for maintenance of
fixed assets and simple equipment, to those collective and private
enterprises, individual industrial and commercial households who have good
efficiency and repayable capacity. When it is really necessary, taxation
upon newly established tertiary industry enterprises may, according to
industrial policies, be delayed or deducted over certain period of time.

    19. Procedures regarding examination and approval should be simplified
so as to alleviate business opening difficulties with establishments of the
tertiary industry. Business autonomy of the tertiary industry enterprises
should be set free. Such enterprises should be permitted to adopt more
flexible operations and expand business scope while their administration
and supervision should be strengthened effectively.

    20. Legal systems governing the tertiary industry should be strengthened.
Relevant laws and regulations regarding corporate and market behavious should
be formulate more speedily. Enterprises should operate according to law
while administrative authorities and economic superintendent departments
should exercise administration and supervision according to law so that the
tertiary industry could enjoy healthy development in a legal approach.

    21. Planning and administration of the tertiary industry should be
strengthened. Different regions have different economic structure and
development level. Their tertiary industry development should also be
different in development focus and speed. Development focus should be
determined in the light of local circumstances and in accordance with state
industrial policies. Investment, credit, employment and land use in the
interest of the tertiary industry should be placed under the overall
development planning and general arrangements of cities and townships. All
regions and departments should formulate programmes for implementation of
the present Decision and revise at the soonest possible time those policies
or regulations that run counter to the present Decision.

    The Party Central Committee and the State Council call for close
attention of the whole party and governments at different levels to the
development of the tertiary industry. All party and government officials
at different levels should unify ideology, renew conception, broaden
thinking, give play to creativity and mobilize the cadres and the people to
work strenuously for realization of the important strategic tasks of the
tertiary industry development.






CIRCULAR OF THE STATE COUNCIL CONCERNING THE PILOT PROJECT FOR NATIONAL TOURIST VACATION AREAS

Category  TOURISM Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1992-08-17 Effective Date  1992-08-17  


Circular of the State Council Concerning the Pilot Project for National Tourist Vacation Areas



(August 17, 1992)

    For the purpose of further expanding the opening up of our country,
developing and exploiting our country’s rich tourist resources, promoting the
transformation of the sightseeing industry into a sightseeing and vacationing
industry in our country, and expediting the development of tourism, the State
Council has decided to launch a pilot project for national tourist vacation
areas in the places where the conditions are ripe, in which enterprises and/or
individuals from abroad and/or Taiwan, Hong Kong and Macau (hereinafter
referred to as the foreign investors) are encouraged to invest in the
development of tourist facilities and tourist businesses. A circular is hereby
promulgated as follows:

    1. National tourist vacation areas refer to comprehensive tourist areas
established in conformity with international requirements for vacation tours
and mainly open to overseas tourists. The areas shall be bounded clearly and
shall be located in the places which are suitable for concentrating complete
sets of tourist facilities, abundant with tourist vacation resources and
source of tourists, convenient for communications and have relatively firm
foundations of foreign relations.

    2. The State encourages the development of tourism and treats it as a key
industry for earning foreign exchange. National tourist vacation areas shall
be granted the following preferential policies:

    (1) The income tax on the enterprises with foreign investment established
within the areas shall be levied at a reduced rate of twenty-four percent.
Among them, enterprises with foreign investment of a productive nature
scheduled to operate for a period of not less than ten years shall, from the
first year of beginning to make a profit, be exempted from income tax in the
first and second years and allowed a fifty percent reduction in the third to
fifth years.

    (2) Building materials, production and management equipment,
transportation equipment and office supplies imported for enterprise use and
included in the total amount of investment by enterprises with foreign
investment established within the areas, as well as settling-in articles and
transportation equipment imported in reasonable quantities by foreign
investors or technicians or other personnel residing in the areas, shall be
exempted from customs duties and consolidated industrial and commercial taxes.
Raw materials, spare parts, components, fittings, auxiliary materials and
packaging materials imported for the production of tourist export goods shall
be treated as bonded goods by Customs.

    (3) Machinery, equipment and other materials for capital construction
required by the construction of infrastructure within vacation areas shall be
exempted from customs duties and product taxes (or value-added taxes).

    (4) Foreign exchange payment shops may be established within the areas.
The examination and approval of these shops shall be handled according to the
relevant State provisions.

    (5) Tourist automobile companies with Chinese-made automobiles and in
co-operation with foreign investors may be established within the areas.
Chinese-made automobiles purchased by the companies within a verified quantity
shall be exempted from the horizontal supporting fees, surcharges for
purchases of motor vehicles and extra consumption taxes. Tourist automobile
companies established by domestic enterprises within the areas may be treated
in reference with the above-mentioned policies. Such automobiles shall be used
only by tourist automobile companies established within the areas, and shall
not be transferred to others for sale. These policies shall be put into effect
by the State Planning Commission in consultation with other relevant
departments.

    (6) Tourist agencies of Category 1 in co-operation with foreign investors
may be established within the areas for overseas tourist services. The
National Tourism Administration shall be in charge of the examination and
administration of the tourist agencies.

    (7) The development of land for the construction within the areas shall be
handled according to the Interim Regulations of the People’s Republic of China
Concerning the Assignment and Transfer of the Right to Use of State-Owned Land
in the Urban Areas. Fees for the assignment of land use rights shall, within
five years from the approval date of the establishment of the areas, be
reserved within the areas for the construction of infrastructure.

    (8) Tourist foreign exchange earnings derived from the areas shall, within
five years from the approval date of the establishment of the areas, be
reserved in full as foreign exchange quotas for the sustained development of
the areas.

    3. Projects for tourist facilities built with foreign investment within
national tourist vacation areas shall, if the amount of investment falls
within the limit of powers for approval laid down by the State Council, be
examined and decided by the provinces, autonomous regions and municipalities
directly under the Central Government, and cities separately listed under the
national plan; those of projects for tourist lodging facilities shall be
submitted to the National Tourism Administration, the State Planning
Commission and the Ministry of Economic Relations and Foreign Trade for the
record. If the amount of investment exceeds the limit of powers for approval
laid down by the State Council, the projects shall be decided according to the
relevant State provisions. For enterprises established for projects of tourist
lodging facilities built with foreign investment, their term of operation
shall not exceed thirty years in principle.

    4. The pilot project for national tourist vacation areas shall be
submitted by local people’s governments to the State Council for examination
and approval.

    5. The pilot project for national tourist vacation areas is an important
arrangement in order to deepen the reform, expand the opening of the tourist
industry, change the structure of tourist products in our country, upgrade the
tourist products and improve their competitive power in the international
market. Departments concerned under the State Council and local governments
concerned shall make proper planning in real earnest and do a good job for
this pilot project. It’s inadvisable to establish too large-scale national
tourist vacation areas in the opening stages. They should gradually develop
from small to large.






CIRCULAR OF THE STATE SCIENCE AND TECHNOLOGY COMMISSION, THE STATE ECONOMIC RESTRUCTURING COMMISSION ON PRINTING AND ISSUING THE INTERIM PROVISIONS ON SEVERAL ISSUES CONCERNING THE ESTABLISHMENT OF HIGH AND NEW TECHNOLOGY INCORPORATED COMPANIES WITHIN NATIONAL HIGH AND NEW TECHNOLOGY INDUSTRY DEVELOPMENT ZONES

The State Science and Technology Commission, the State Economic Restructuring Commission

Circular of the State Science and Technology Commission, the State Economic Restructuring Commission on Printing and Issuing the Interim
Provisions on Several Issues Concerning the Establishment of High and New Technology Incorporated Companies within National High
and New Technology Industry Development Zones

GuoKeFaGaiZi [1992] No.796

November 19,1992

All the people’s governments of provinces, autonomous regions, municipalitie directly under the Central Government, ministries, commissions
and directly subordinate institutions of the State Council:

“Interim Provisions on Several Issues Concerning the Establishment of High and New Technology Incorporated Companies within National
High and New Technology Industry Development Zones” drafted by the Commission of Science Technology and the commission for economic
restructuring is hereby issued to you for the earnest implementation. Attachment:Interim Provisions on Several Issues Concerning the Establishment of High and New Technology Incorporated Companies within National
High and New Technology Industry Development Zones

Article 1

These Provisions are formulated in accordance with the Opinions on the Standardization of Incorporated Companies issued by the State
Economic Restructuring Commission and in consideration of the actual conditions of high and new technology industry development zones
and for the purposes of promoting the optimal combination of high and new technologies with other production factors and advancing
the development of high and new technology industry.

Article 2

These Provisions apply to the establishment of incorporated companies with a high and new technology nature within high and new technology
industry development zones which are approved by the State Council.

Article 3

High and new technology incorporated companies (hereinafter referred to as the company) mean the enterprise legal persons which are
established according to the Opinions on the Standardization of Incorporated Companies of the State Economic Restructuring Commission
(hereinafter referred to as the Opinions on the Standardization) and these Provisions and meet the requirements issued by the State
Science and for acknowledging high and new technology enterprises Technology Commission.

Article 4

The place of registration of a company is its residence. Both the company’s place of registration and its main working offices must
be located within the prescribed high and new technology industry development zone.

Article 5

When a former high and new technology enterprise is restructured into a company, its initiator may be one person if it is acknowledged
by the State Science and Technology Commission as a large or medium-sized high and new enterprise and is approved by the examination
and approval organ.

Article 6

If an enterprise legal person outside the territory or a foreign-capital enterprise legal person within the territory transferring
a high and new technology published by the State Science and Technology Commission or using the said technology as the share in the
company is to be an initiator of the company, it must be reported to the State Economic Restructuring Commission and the State Science
and Technology Commission for special examination and approval, however, the total number thereof may not exceed one-third of the
initiators.

Article 7

When a former high and new technology enterprise is transformed into a company, the property rights of the enterprise’s original net
assets must be defined. Assets of which property rights are difficult to be defined may be invested into the company and managed
in the form of legal person shares.

Article 8

The administrative departments of high and new technology industry development zones are the competent business departments for the
companies, and are responsible for examining the establishment of the companies within high and new technology development zones.

Article 9

The commissions (offices) for restructuring economic system of provinces, autonomous regions and municipalities directly under the
Central Government in the places where the companies are located or the organs authorized by the government are the examination and
approval organs for the companies.

Article 10

When intangible assets are priced as shares, the total amount of intangible assets priced may not, with special approval of the examination
and approval department for the company, exceed 30% of the company’s registered capital if the intangible assets include high and
new technologies. However, such a high and new technology included must meet the following requirements:

(1)

to be the core technology for the company’s main products;

(2)

to meet the requirements issued by the State Science and Technology Commission for acknowledging the high and new technology ;

(3)

to produce by the share subscriber the documentary evidence of post_title to the technology invested as shares, and to guarantee that the
company’s right over the said technology, within the scope or terms agreed upon, may challenge any third party; and

(4)

to have evaluation certificates issued by the technology evaluation organization approved by the State Science and Technology Commission
or its authorized department and a qualified certified public accountant firm.

Article 11

When a former high and new technology enterprise is transformed into a company, the enterprise may, after examination and approval
by the enterprise’s competent department and unanimous resolution of the active employees’ meeting of the former enterprise, give
reward in the form of personal shares to the scientific and technological personnel of the company who have made outstanding contributions
in creating the former enterprise in order to continue to ensure and promote the company’s consolidation and development and to bring
the advantage of intellectual resources into play.

Article 12

The Opinions on the Standardization apply to any matters not included in these Provisions.

Article 13

The science and technology commissions and the commissions for restructuring economic system of provinces, autonomous regions and
municipalities directly under the Central Government may formulate the rules for implementation in accordance with these Provisions.

Article 14

The State Science and Technology Commission is responsible for the interpretation of these Provisions.

Article 15

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



 
The State Science and Technology Commission, the State Economic Restructuring Commission
1992-11-19

 







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...