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DECISION OF THE STATE COUNCIL ON REVISING THE PROVISIONS ON THE ADMINISTRATION OF COLLECTION OF THE MINERAL RESOURCES COMPENSATION

Category  GEOLOGY, MINERAL RESOURCES AND ENERGY INDUSTRY Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-07-03 Effective Date  1997-07-03  


Decision of the State Council on Revising the Provisions on the Administration of Collection of the Mineral Resources Compensation


APPENDIX: PROVISIONS ON THE ADMINISTRATION OF COLLECTION OF THE MINERAL
Appendix:  Table for Rates of Mineral Resources Compensation

(Promulgated by Decree No. 222 of the State Council of the People’s

Republic of China on July 3, 1997, and effective as of the same date)

    The State Council has decided to amend the first paragraph of Article 10
of the Provisions on the Administration of Collection of the Mineral Resources
Compensation as follows: “The mineral resources compensation collected shall
be timely and fully turned over to the respective treasuries according to the
distribution ratio between the Central Government and the provinces,
autonomous regions or municipalities directly under the central government set
forth in the following paragraph, and shall not be settled again at the end of
the year.”

    This Decision shall come into effect on the date of promulgation.

    Appendix: The former provisions of the first paragraph of Article 10 of
the Provisions on the Administration of Collection of the Mineral Resources
Compensation before amended

    “The mineral resources compensation collected shall be timely and fully
turned over to the Central Treasury on the spot, and be separately settled at
the end of the year according to the distribution ratio between the Central
Government and the provinces, autonomous regions or municipalities directly
under the central government set forth in the following paragraph.”

APPENDIX: PROVISIONS ON THE ADMINISTRATION OF COLLECTION OF THE MINERAL
RESOURCES COMPENSATION (1997 revision) (Promulgated by Decree No. 150 of the
State Council of the People’s Republic of China on February 27, 1994, and
revised on July 3, 1997)

    Article 1  These Provisions are formulated, in accordance with the
relevant stipulations of the Mineral Resources Law of the People’s Republic
of China, in order to ensure and promote the exploration, protection and
rational development of mineral resources, and to safeguard the property
rights to and interests of the state to mineral resources.

    Article 2  The mineral resources compensation shall be paid, in
accordance with these Provisions, for mining mineral resources within the
territory of the People’s Republic of China and the sea areas under the
jurisdiction. Where laws or other administrative regulations provide
otherwise, their stipulations shall apply.

    Article 3  The mineral resources compensation shall be computed and
collected at a certain ratio of the sales income of mineral products. The
mineral resources compensation paid by the enterprises shall be included in
the administration fees.

    For any concessioners holding the mining licenses that process mineral
products by themselves, their sales income shall be calculated according to
state prices; where the state does not fix the prices, their sales income
shall be calculated according to the average prices of the mineral products
on the local markets at the time of collection.

    For concessioners that sell mineral products out of the territory, their
sales income shall be calculated according to the prevailing sales prices on
the international markets.

    The term “mineral products” mentioned in these Provisions shall refer to
those products extracted or mined and separated from mineral resources which,
having been mined or separated, are no longer in their natural state.

    Article 4  The mineral resources compensation shall be paid by
concessioners.

    The mineral resources compensation shall be settled in the currency used
in the sales of mineral products; where the mineral products are processed by
concessioners themselves, the settlement shall be made in the currency used
in sales of the end products.

    Article 5  The mineral resources compensation shall be calculated in
accordance with the following formulas:

    amount of the mineral resources compensation to be collected = sales
income of mineral products x compensation rate x coefficient of mining
recovery rate

    Where,

    coefficient of mining recovery rate  =

              approved mining recovery rate

             ________________________________

              actual mining recovery rate

    

    The approved mining recovery rate shall be the rate prescribed in the
mine design that has been approved in accordance with the relevant provisions
of the state. With regard to those mining enterprises that, according to the
relevant provisions of the state, are not required to prepare the mine design
in addition to the mining plan, the mining recovery rate shall be determined
by the administrative departments in charge of geology and mineral resources
under the local people’s governments at or above the county level together
with other relevant departments at the same level.

    For those minerals whose mineral resources compensation cannot be
calculated in the formulas provided for in paragraphs 1 and 2 hereof, the
competent department in charge of geology and mineral resources under the
State Council shall make other calculation formulas together with the
department of finance under the State Council separately.

    Article 6  The mineral resources compensation shall be collected at the
rates prescribed in the appendix of these Provisions.

    Any adjustment to the rates of the mineral resources compensation shall
be jointly determined by the department of finance under the State Council,
the competent department in charge of geology and mineral resources under the
State Council and the competent department in charge of planning under the
State Council, and submitted to the State Council for approval and
implementation.

    Article 7  The mineral resources compensation shall be collected by the
competent departments in charge of geology and mineral resources together
with the departments of finance.

    Where a mining district is within a county-level administrative region,
the administrative department in charge of geology and mineral resources
under the people’s government at the county level of the place where the
mining district is located shall be responsible for collecting the mineral
resources compensation.

    Where a mining district extends across more than one administrative
region at or above the county level, the administrative department in charge
of geology and mineral resources under the people’s government at the next
higher level of all the administrative regions involved shall be responsible
for collecting the mineral resources compensation.

    Where a mining district extends across more than one provincial
administrative region, or is within the territorial seas of the People’s
Republic of China or other sea areas under its jurisdiction, the competent
department in charge of geology and mineral resources under the provincial
people’s governments authorized by the competent department in charge of
geology and mineral resources under the State Council shall be responsible
for collecting the mineral resources compensation.

    Article 8  Concessioners shall pay the mineral resources compensation for
the first half of each year on or before July 31 of the year, and pay the
mineral resources compensation for the second half of the year on or before
January 31 of the following year.

    Concessioners shall, when their mining activities are suspended or
terminated, settle and pay their mineral resources compensation.

    Article 9  Concessioners shall, at the time of paying their mineral
resources compensation, submit at the same time the data as to the mineral,
the output, the sales volume, the sales price, the actual mining recovery
rate and others of their mineral products mined.

    Article 10  The mineral resources compensation collected shall be timely
and fully turned over to the respective treasures according to the
distribution ratio between the Central Government and the provinces,
autonomous regions or municipalities directly under the central government set
forth in the following paragraph, and shall not be settled again at the end of
the year.

    The distribution ratio of the mineral resources compensation between the
central government and the provinces or municipalities directly under the
central government shall be 5:5; and that between the central government and
autonomous regions shall be 4:6.

    Article 11  The mineral resources compensation shall be included in the
state budget, conducted the specific management and mainly used for mineral
resources exploration.

    The department of finance under the State Council, the competent
department in charge of geology and mineral resources under the State Council
and the competent department in charge of planning under the State Council
shall be jointly responsible for formulating the specific measures for the
use and management of the mineral resources compensation received by the
central government.

    The people’s government of a province, autonomous region or municipality
directly under the central government shall be responsible for formulating
the specific measures for the use and management of the mineral resources
compensation received by the localities.

    Article 12  Concessioners may be exempted from the mineral resources
compensation, upon joint approval of the competent department in charge of
geology and mineral resources under the provincial government and the
department of finance at the same level, under any one of the following
circumstances:

    (1) where mineral products are recovered from barren rock (waste rock);

    (2) where non-security left-over ore bodies of closed mines are mined
upon approval pursuant to the relevant provisions of the state; and

    (3) other circumstances where the exemption from the mineral resources
compensation are determined by the competent department in charge of geology
and mineral resources under the State Council together with the department of
finance under the State Council.

    Article 13  The mineral resources compensation may be reduced, upon joint
approval of the competent department in charge of geology and mineral
resources under the provincial people’s government and the department of
finance at the same level, for concessioners under the following
circumstances:

    (1) where the mineral products are recovered from tailings;

    (2) where the low grade mineral resources that are below the industrial
grade or whose reserves have not been calculated are mined;

    (3) where the mineral resources under waters, buildings, or vital
communication lines are mined in accordance with the law;

    (4) where policy losses are incurred as a result of carrying out the
state fixed prices; and

    (5) other circumstances where the reduction of the mineral resources
compensation are determined by the competent department in charge of geology
and mineral resources under the State Council together with the department of
finance under the State Council.

    Approval from the provincial people’s government shall be required if the
mineral resources compensation to be reduced for a concessioner exceeds 50%
of the amount of the mineral resources compensation payable.

    Any reduction approval of the mineral resources compensation shall be
reported to both the competent department in charge of geology and mineral
resources under the State Council and the department of finance under the
State Council for record.

    Article 14  In case any concessioner fails to pay the mineral resources
compensation in full within the prescribed time limit, the collecting
authorities shall, in addition to setting a dead line for the payment, impose
an overdue fine of 0.2% per day on the amount in arrears, counting from the
day on which the payment becomes overdue.

    In case any concessioner fails to pay the mineral resources compensation
fees and the overdue fine in accordance with the provisions of the preceding
paragraph, the collecting authorities shall impose penalty of up to three
times the amount of the compensation payable. If the case is serious, the
concessioner’s mining license shall be revoked by the original licensing
authorities.

    Article 15  In case any concessioners do not pay or underpay the mineral
resources compensation by means of misrepresenting the minerals, concealing
the output, sales volume, or misrepresenting the selling prices or actual
mining recovery rate, the collecting authorities shall pursue the payment
of the compensation payable, and impose a penalty of up to five times the
amount of the compensation payable; if the case is serious, the
concessioner’s mining license shall be revoked by the original licensing
authorities.

    Article 16  In case any concessioner fails to submit the relevant data
pursuant to the provisions of Article 9 of these Provisions, the collecting
authorities shall set a deadline for submission; in case of failure to
submit within the prescribed time limit, a fine up to 5,000 yuan shall be
imposed; and in case the concessioner still fails to submit the data, its
mining license may be revoked by the original licensing authorities.

    Article 17  The penalties imposed on and overdue fines paid by
concessioners in accordance with these Provisions shall be turned over to
the State Treasury.

    Article 18  If a party concerned is not satisfied with the decision on
administrative penalties, the party may, within 15 days from the date of
receipt of the notification on the administrative penalties, apply for
reconsideration to the authorities at the next higher level than that which
made the decision on the administrative penalties; the party may also
directly institute legal proceedings in the people’s court within 15 days
from the date of receipt of the notification on the penalties.

    In the event of the party concerned failing both to apply for
reconsideration or initiate legal proceedings with a people’s court and to
comply with the penalty decision within the specified period, the authorities
which made the decision on the penalties may apply to the people’s court for
enforcement.

    Article 19  Where the contents of any local regulations, rules or
administrative documents promulgated by local people’s governments before the
promulgation of these Provisions are in conflict with these Provisions, these
Provisions shall prevail.

    Article 20  The people’s governments of provinces, autonomous regions and
municipalities directly under the central government may, in accordance with
these Provisions, formulate measures for the implementation of these
Provisions.

    Article 21  The Ministry of Geology and Mineral Resources shall be
responsible for the interpretation of these Provisions.

    Article 22  These Provisions shall enter into force on April 1, 1994.

Appendix:  Table for Rates of Mineral Resources Compensation


_____________________________________________________________________________
Minerals                                                          
Rate ( % )
_____________________________________________________________________________
petroleum                                                            
1      
_____________________________________________________________________________
natural gas                                                          
1
_____________________________________________________________________________
coal, coal-related gas                                                1
_____________________________________________________________________________
uranium, thorium                                                      3

_____________________________________________________________________________
stone coal, oil sand                                                  1
_____________________________________________________________________________
natural bitumen                                                      
2
_____________________________________________________________________________
geothermal resources                                                  3
_____________________________________________________________________________
oil shale                                                            
2
_____________________________________________________________________________
iron, manganese, chromium, vanadium, titanium                        
2
_____________________________________________________________________________
copper, lead, zinc, bauxite, nickel, cobalt,
tungsten, tin, bismuth, molybdenum, mercury,                          2
antimony, magnesium
______________________________________________________________________________
gold, silver, platinum, palladium, ruthenium,
osmium, iridium, rhodium                                              4
_____________________________________________________________________________
niobium, tantalum, beryllium, lithium, zirconium,
strontium, rubidium, cesium                                          
3
_____________________________________________________________________________
lanthanum, cerium, praseodymium, neodymium,
samarium, europium, yttrium, gadolinium, terbium                      3
dysprosium, holmium, erbium, thulium, ytterbium                    
lutetium
_____________________________________________________________________________
ion-type rare earths                                                  4
_____________________________________________________________________________
scandium, germanium, gallium, indium, thallium,
hafnium, rhenium, cadmium, selenium, tellurium,                      
3
_____________________________________________________________________________
gemstone, jade, gem diamond                                          
4
_____________________________________________________________________________
graphite, phosphorus, natural sulphur, pyrite,
sylvite, boron, crystal (piezoelectric crystal,
smelting crystal, optical crystal, craft crystal),
corundum, kyanite, sillimanite, andalusite,                          
2
tabular spar, nitratite, talc, asbestos, crocidolite,
mica, feldspar, garnet, pyrophyllite, diopside,
tremolite, vermiculite, zeolite, alumstone,
mirabilite (including glauberite)
_____________________________________________________________________________
diamond, gypsum, anhydrite, barite, witherite,
natural alkali, calcite, Iceland spar, magnesite,
fluorite (including common fluorite and optical
fluorite), topaz, tourmaline, agate, mineral
pigments (ochre, pigment loess), limestone (for
use in calcium carbide, manufactured soda,
fertilizers, flux, glass, cement, construction
stone, mortar, and facing), marl, chalk, rock
containing potassium, dolomite (for use in
metallurgy, fertilizers, glass, and construction),
quartz (for use in metallurgy, glass, and
fertilizers), sandstone (for use in metallurgy,
glass, or as cement ingredient, or for use in brick,
fertilizers, casting molds, and ceramics), natural
quartz sand (for use in glass, casting molds,
construction, or as cement ingredient or standard sand
in cement, or for use in bricks), vein quartz (for use
in metallurgy and glass), powdered quartz, natural
oilstone, potassium-bearing shale, diatomite, shale                  
2
(including ceramsite shale, shale used for bricks,
and shale used as cement ingredient), kaolin, ceramic
clay, refractory clay, clay for convexo-concave rod,
sepiolite clay, illite clay, rectorite clay, bentonite,
iron alum, miscellaneous clays (including clay for use
in casting molds, brick, and ceramsite, clay used as
cement ingredient, red clay used as cement ingredient,
yellow clay used as cement ingredient, mudstone used
as cement ingredient, and insulating clays), peridotite
(for use in fertilizers and construction), serpentine
(for use in fertilizers, flux, and facings), basalt
(for use in stone casting and asbestos), diabase (for
use in cement, stone casting, facings, and
construction), andesite (including andesite for use
in facings, andesite for use in construction, and
andesite porphyrite for use in cement mixers), diorite
(for use in cement mixers and construction), granite
(for use in construction and facings), medical stone,
perlite, obsidian, pitch stone, pumice stone, trachyte
(for use in cement and stone casting), nepheline syenite,
tuff (for use in glass, cement, and construction),
volcanic ash, volcanic slag, marble (for use as facing,
and construction, cement, and glass), slate (for use as
facing and cement ingredient), gneiss, amphibole,
peat, magnesium salt, iodine, bromium, arsenium
_____________________________________________________________________________
lake salt, rock salt, natural brine                                  
0.5
_____________________________________________________________________________
carbon dioxide, hydrogen sulphide, helium, radon,                    
3
_____________________________________________________________________________
mineral spring water                                                  4
______________________________________________________________________________
groundwater                                                
The rate and  

                                                            
measures for

                                                            
collection

                                                            
administration

                                                            
will be

                                                            
formulated  

                                &n

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON TAXATION OF THE INCOME FROM THE INTEREST OBTAINED BY FOREIGN BANKS FROM THE FOREIGN-CAPITAL FINANCIAL INSTITUTIONS IN CHINA

The State Taxation Administration

Circular of the State Administration of Taxation on Taxation of the Income from the Interest Obtained by Foreign Banks from the Foreign-capital
Financial Institutions in China

GuoShuiHan [1997] No.372

June 19, 1997

The state and local tax bureaus of various provinces, autonomous regions, municipalities directly under the Central Government and
municipalities separately listed on the State plan:

It is enquired whether interests of loan by the foreign banks which provide the loan to the financial institutions within the territory
of China such as foreign-capital banks, the branches of the foreign banks, Chinese-foreign joint venture banks, foreign-capital financial
companies and financial companies of Chinese-foreign joint venture (hereinafter referred to as foreign-capital financial institutions)
is applied to the tax exemption stipulated in the 3rd Subparagraph of Paragraph 3 of Article 19 of the Income Tax Law of the People’s
Republic of China on the Enterprises with Foreign Investment and Foreign Enterprises (hereinafter referred to as Tax Law). Through
study, it should be clarified as follows:

According to the Article 65 of Rules for the Implement of the Tax Law, the foreign-capital financial institutions do not belong to
the state banks of China stipulated in the 3rd Subparagraph of Paragraph 3 of Article 19 of the Tax Law. Therefore, tax should be
levied on the income from interest of loan according to the relevant provisions.



 
The State Taxation Administration
1997-06-19

 






CIRCULAR OF THE MINISTRY OF FINANCE, THE STATE ADMINISTRATION OF TAXATION AND THE PEOPLE’S BANK OF CHINA ON THE TAXATION OF OPERATING RMB BUSINESS BY FOREIGN-CAPITAL FINANCIAL INSTITUTIONS

The Ministry of Finance, the State Administration of Taxation, the People’s Bank of China

Circular of the Ministry of Finance, the State Administration of Taxation and the People’s Bank of China on the Taxation of Operating
RMB Business by Foreign-capital Financial Institutions

CaiShuiZi [1997] No.52

May 5, 1997

With the deep development of reform and opening-up and expanding of the financial businesses, the foreign-capital financial institutions
are allowed to deal with the business of RMB for trial in the parts of China from 1997 approved by the State Council. In order to
standardize the tax policies and regulations and promote equal competitions among the capital financial institutions at home and
abroad, the taxation policy on undertaking the RMB currency by the foreign capital financial institutions should be clarified as
follows:

I.

The foreign-capital financial institutions that deal with the business of RMB for trial should keep the accounting of RMB and foreign
currency apart and calculate the tax of respectively.

II.

The corporate income tax of earnings from the business of RMB by the foreign-capital financial institutions should be paid according
to the Income Tax Law on Enterprises with Foreign Investment and Foreign Enterprises and its Rules for the Implementation. The dealers
should pay the business income tax at the 30% rate and local tax at the 3% rate from the date when the undertaking the business of
RMB is approved and do not enjoy the preferential tax policy of one exemption and two reduction. The attribution of the business
income tax paid by foreign-capital financial institutions is carried out by the provisions of the document of CaiYuZi [1996] No.200

III.

The sales tax of the foreign-capital financial institutions that deal with the business of RMB should be paid on the base of the relevant
provisions on the unified sales tax of the state, the same as the domestic-funded financial enterprises.

The Circular entered into force as of January 1, 1997.



 
The Ministry of Finance, the State Administration of Taxation, the People’s Bank of China
1997-05-05

 






PROCEDURES FOR THE ELECTION OF DELEGATES OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION TO THE NINETH NATIONALPEOPLE’S CONGRESS

Category  SPECIAL ADMINISTRATIVE REGION Organ of Promulgation  The National People’s Congress Status of Effect  In Force
Date of Promulgation  1997-03-14 Effective Date  1997-03-14  


Procedures for the Election of Delegates of the Hongkong Special Administrative Region of the People’s Republic of China to the Nineth
NationalPeople’s Congress



(Adopted at the Fifth Session of the Eighth National People’s Congress

on March 14, 1997)

    Article 1  These Procedures are formulated in accordance with the
Constitution of the People’s Republic of China, the Basic Law of the Hongkong
Special Administrative Region of the People’s Republic of China and the
provisions of Paragraph 3, Article 15 of the Election Law of the National
People’s Congress and the Local People’s Congresses at All Levels of the
People’s Republic of China and in the light of the actual conditions of the Hongkong Special Administrative Region.

    Article 2  The election of delegates of the Hongkong Special Administra-
tive Region to the Nineth National People’s Congress shall be presided over
by the Standing Committee of the National People’s Congress.

    Article 3  The quota of delegates to be elected from the Hongkong
Special Administrative Region to the Nineth National People’s Congress
shall be thirtysix.

    Article 4  The delegates to be elected from the Hongkong Special
Administrative Region to the National People’s Congress must be Chinese
citizens from among the residents in the Hongkong Special Administrative
Region.

    Article 5  An election conference for the delegates to the Nineth
National People’s Congress shall be established in the Hongkong Special
Administrative Region. The election conference shall be composed of Chinese
citizens from among members of the Recommendation Commission of the first
government prescribed in the Concerning the Procedures of the Formation of the First Government and
the Legislative Council of the Hongkong Special Administrative Region>,
and those residents of the Hongkong Special Administrative Region who are
not members of the Recommendation Commission but are members of the Eighth
National Committee of the Chinese People’s Political Consultative Conference
and members of the Interim Legislative Assembly of the Hongkong Special Admini-
strative Region who are Chinese citizens save that he or she who shows his or
her unwillingness to participate.

    List of members of the election conference shall be published by the
Standing Committee of the National People’s Congress.

    Article 6  The first session of the election conference shall be convened
by the Standing Committee of the National People’s Congress for the recommenda-
tion and election of eleven members of the election conference which shall
constitute the presidium which shall recommend and elect a standing chairman
from among its members.

    The presidium shall preside over the election conference.

    The election conference shall formulate specific election procedures in
accordance with these Procedures pursuant to the proposal of the presidium.

    Article 7  More than ten members of the election conference may
jointly put forth candidates for delegates. The number of candidates for
delegates each member puts forth in joint recommendation shall not exceed
the quota.

    Article 8  Candidates for the Nineth National People’s Congress put
forth by the election conference shall be one fifth to one half more
than the number to be elected and differential election shall be held.

    Election by direct ballot shall be held in case the number of nominated
candidates does not exceed tha one half differential percentage of the
number to be elected. In case the number of nominated candidates exceeds
the one half differential percentage of the number to be elected, all
members of the election conference shall cast their votes, the list of official candidates shall be determined and election by ballot
shall be
held in accordance with the order of precedence of the number of votes
for the candidates and the differential percentage of not more than one
half.

    Article 9  Election of delegates to the Nineth National People’s
Congress by the election conference shall be by ballot.

    When the election conference holds election, votes cast which exceed
the number of voters shall be null and void, while votes cast which are
equal to or less than the number of voters shall be valid.

    The number of candidates voted for on each ballot paper which exceed
the number to be elected shall be invalid, those which are equal to or
less than the number to be elected shall be valid.

    Article 10  Candidates of delegates with more votes shall be elected.
In case the number of votes is equal and the delegate-elect can not be
determined, one more ballot shall be cast with respect to candidates with
equal number of votes and one who gains more votes shall be elected.

    Article 11  The election results shall be announced by the presidium
and submitted to the Delegate Qualification Review Committee of the Standing
Committee of the National People’s Congress.

    The Standing Committee of the National People’s Congress shall confirm
the qualification of the delegates and publish the list of delegates on the
basis of the report submitted by the Delegate Qualification Review Committee.





CONSTRUCTION LAW

Category  INDUSTRY Organ of Promulgation  The Standing Committee of the National People’s Congress Status of Effect  In Force
Date of Promulgation  1997-11-01 Effective Date  1998-03-01  


Construction Law of the People’s Republic of China

Contents
Chapter I  General Provisions
Chapter II  Building Permit
Chapter III  Construction Project Contract Issuance and Contracting
Chapter IV  Construction Project Supervision and Control
Chapter V  Construction Production Safety Management
Chapter VI  Construction Project Quality Control
Chapter VII  Legal Liability
Chapter VIII  Supplementary Provisions

(Adopted at the 28th Meeting of the Standing Committee of the Eighth

National People’s Congress on November 1, 1997 and promulgated by Order
No. 91 of the President of the People’s Republic of China on November 1,
1997)
Contents

    Chapter I  General Provisions

    Chapter II  Building Permit

     Section 1  Building Permit for Construction Project

     Section 2  Qualifications for Operations

    Chapter III  Construction Project Contract Issuance and Contracting

     Section 1  General Rules

     Section 2  Contract Issuance

     Section 3  Contracting

    Chapter IV  Construction Project Supervision and Control

    Chapter V  Construction Production Safety Management

    Chapter VI  Construction Project Quality Control

    Chapter VII  Legal Liability

    Chapter VIII  Supplementary Provisions
Chapter I  General Provisions

    Article 1  This Law is enacted with a view to enhancing supervision and
administration over building operations, maintaining order in the construction
market, ensuring the quality and safety of construction projects and promoting
the sound development of the building industry.

    Article 2  This Law shall be adhered to in engaging in building operations
and in the exercise of supervision and administration over building operations
within the territory of the People’s Republic of China.

    The building operations referred to in this Law mean construction of all
types of housing and the construction of their ancillary facilities as well
as their matching installation operations of wiring, piping and equipment.

    Article 3  The building operations shall ensure the quality and safety
of construction projects and ensure that they are in conformity with the
state safety standards for construction projects.

    Article 4  The State supports the development of the building industry,
supports scientific and technological research in construction to improve
the levels in the design of housing construction, encourages energy economy
and environmental protection, encourages adoption of advanced technologies,
advanced equipment, advanced techniques and new building materials and
modern mode of management.

    Article 5  In engaging in building operations, laws and regulations shall
be adhered to, and public interest of society and the legitimate rights and
interests of others shall not be infringed upon.

    No unit or individual shall hinder or obstruct the building operations
conducted in accordance with law.

    Article 6  The competent department of construction administration under
the State Council exercises uniform supervision and administration over
building operations nationwide.
Chapter II  Building Permit

    Section 1  Building Permit for Construction Project

    Article 7  A construction unit shall, prior to the start of construction
of a construction project, apply to the competent department of construction
administration of the people’s government at or above the county level of the
place wherein the project is to be located for a building permit pursuant to
the relevant state provisions; however, the below-ceiling small projects
determined by the competent department of construction administration under
the State Council are exceptions.

    A construction project the report for the start of construction of which
has been approved pursuant to the terms of reference and procedures prescribed
by the State Council shall no longer obtain a building permit.

    Article 8  Application for a building permit shall meet the following
terms:

    (1) having completed the formalities for the approval of land use for the
said construction project;

    (2) having obtained the planning permit in the case of the construction
project in an urban planning zone;

    (3) in the case of necessity of demolition and shifting, the pace of
demolition and shifting conforming to the requirements of construction;

    (4) having determined the construction enterprise;

    (5) having construction drawings and technical information which meet the
requirements for construction;

    (6) having specific measures for ensuring project quality and safety;

    (7) the construction funds having been made available; and

    (8) other terms prescribed by laws and administrative regulations.

    The competent department of construction administration shall, within
15 days from the date of receipt of an application, issue a building permit
for the application which conforms to the terms.

    Article 9  A construction unit shall start the construction within three
months from the date of acquisition of the building permit. For inability to
start the construction in time due to unforeseen reasons, an application for
extension shall be filed with the permit-issuing organ; the extension shall
be limited to two times, and each time shall not exceed three months. The
building permit shall be automatically annulled in the case of a construction
project which neither gets started nor applies for extension, or which has
exceeded the time limit for extension.

    Article 10  For suspension of construction of a construction project
under construction due to unforeseen reasons, the construction unit shall,
within one month from the date of suspension of the construction, submit
a report to the permit-issuing organ and carry out maintenance and
administration of the construction project in accordance with rules.

    A report shall be submitted to the permit-issuing organ when the
construction project resumes construction; prior to resumption of construction
of a construction project whose construction has been suspended for a year,
the construction unit shall submit a report to the permit-issuing organ for
the verification and examination of the building permit.

    Article 11  For inability to start construction in time or suspension of
construction due to unforeseen reasons, a construction project the report for
the start of construction of which has been approved pursuant to the relevant
provisions of the State Council shall submit a report to the approval
authority in time on the situation. For inability to start construction in
time exceeding six months due to unforeseen reasons, formalities for the
approval of the report for the start of construction shall be completed again.

    Section 2  Qualifications for Operations

    Article 12  Building construction enterprises, survey units, design
units and project supervision units engaging in building operations shall
have the following qualifications:

    (1) having a registered capital conforming to state provisions;

    (2) having specialized technical personnel with qualifications for legal
operations commensurate with the building operations engaged in;

    (3) having technical equipment for engaging in related building
operations; and

    (4) other qualifications prescribed by laws and administrative regulations.

    Article 13  Building construction enterprises, survey units, design
units and project supervision units engaging in building operations shall be
classified into different grades of human quality in accordance with such
human quality qualifications as the registered capital, specialized technical
personnel, technical equipment in their possession and achievements in
construction projects completed, and may engage in building operations within
the scope permitted by their respective human quality grades on acquisition of
the corresponding grade human quality certificates upon passing human quality
examination.

    Article 14  Specialized technical personnel engaging in building
operations shall obtain corresponding qualification certificates for
operations in accordance with law and engage in building operations
within the scope permitted by the qualification certificates for operations.
Chapter III  Construction Project Contract Issuance and Contracting

    Section 1  General Rules

    Article 15  The contract issuing unit and contracting unit of a
construction project shall conclude a contract in writing according to law
expressly defining the rights and obligations of the parties.

    The contract issuing unit and contracting unit shall comprehensively
fulfil the obligations agreed in the contract. The party that fails to
fulfil the obligations pursuant to the agreement in the contract shall bear
the liability for the breach of the agreement according to law.

    Article 16  Invitation to tender and bidding of the tender of contract
issuance and contracting of a construction project shall follow the principle
of openness, fairness and equal competition and the contracting unit shall
be selected on merit.

    For invitation to tender and bidding of the tender of construction
projects not prescribed by this Law, provisions of laws relating to invitation
to tender and bidding of the tender shall apply.

    Article 17  A contract issuing unit and its staff members shall not,
in the contract issuance of a construction project, accept bribes and
commissions or seek other benefits.

    A contracting unit and its staff members shall not employ such unfair
means as offering bribes, commissions or giving other benefits to the
contract issuing unit and its staff members to contract the project.

    Article 18  The cost of a construction project shall, pursuant to
relevant state provisions, be agreed upon by the contract issuing unit
and the contracting unit in the contract. For a construction project with
invitation to open tender, the agreement on its cost shall abide by the
provisions of laws on invitation to tender and bidding.

    The contract issuing unit shall, pursuant to the agreement in the
contract, make allocations for the project in time.

    Section 2  Contract Issuance

    Article 19  Construction projects shall practise contract issuance by
invitation to tender in accordance with law; those construction projects
not suitable for contract issuance by invitation to tender may adopt direct
contract issuance.

    Article 20  For a construction project for invitation to open tender,
the contract issuing unit shall, pursuant to the legal procedures and mode,
publish a tender notice providing tender documents carrying such contents as
major technical requirements of the project open to tender, main articles of
the contract, standards and methods of bid evaluation as well as procedures of
bid opening, bid evaluation and bid finalization.

    Bid opening shall be held in public at the time and place prescribed in
the tender document. Evaluation and comparison of bid proposals shall be
carried out pursuant to the standards and procedures for bid evaluation
prescribed in the tender document after the bids are opened, and selection
of the winning bidder made from among bidders with corresponding human quality
qualifications on merit.

    Article 21  Bid opening, bid evaluation and bid selection of the
construction project open to tender shall be organized and carried out
by the construction unit according to law and subject to the supervision
of the competent administrative departments concerned.

    Article 22  For a construction project following contract issuance
through tender, the contract issuing unit shall award the contract of the
construction project to the contracting unit winning the bid in accordance
with law. For a construction project following direct contract issuance,
the contract issuing unit shall award the contract of the construction
project to the contracting unit with corresponding human quality
qualifications.

    Article 23  The Government and its subordinate departments shall not
abuse their administrative powers in restricting contract issuing units
in awarding contracts of construction projects following contract issuance
through tenders to designated contracting units.

    Article 24  General contracting of construction projects shall be
encouraged and dismemberment of contract issuance of construction projects
shall be prohibited.

    The contract issuing unit of a construction project may award in total
the contract of surveying, design, construction and equipment procurement
of the construction project to a general contracting unit of the project.
It may also award one item or several items of surveying, design, construction
and equipment procurement of the construction project to a general contracting
unit of the project; however, it shall not dismember a construction project
which should be completed by one single contracting unit into several parts
for awarding contracts to several contracting units.

    Article 25  For building materials, building structural pieces and parts
and equipment to be procured by the contracting unit of the project pursuant
to the agreement in the contract, the contract issuing unit shall not
designate the contracting unit in the procurement of building materials,
building structural pieces and parts and equipment for the project, nor
shall it designate the manufacturers and suppliers of the same.

    Section 3  Contracting

    Article 26  The contracting units of construction projects shall contract
projects with human quality certificates obtained in accordance with law and
within the business scope permitted by their human quality grades.

    Building construction enterprises shall be prohibited to contract
projects beyond the business scope permitted by their respective human quality
grades or in the name of other building construction enterprises in any form.
Building construction enterprises shall be prohibited to permit in any form
other units or individuals in the use of their human quality certificates,
business licences to contract projects in the name of their respective
enterprises.

    Article 27  Large construction projects or construction projects with
complex structures may be jointly contracted by more than two contracting
units. Parties to the joint contract shall bear joint responsibilities in
the implementation of the contract.

    In the case of a joint contract by more than two units with different
human quality grades, the project shall be contracted in accordance with
the business scope granted to the unit with lower human quality grade.

    Article 28  Subcontracting to others of the entire construction project
contracted by the contracting unit shall be prohibited. Subcontracting to
others in the name of subcontracting after dismemberment of the entire
construction project contracted by the contracting unit shall be prohibited.

    Article 29  The general contracting unit of a construction project may
award contracts of parts of the contracted project to subcontracting units
with corresponding human quality qualifications; however, except for the
subcontracting agreed upon in the general contracting contract,
acknowledgement of the construction unit shall be obtained. In the case of
general contracting of construction, construction of the main structure of the
construction project must be completed by the general contracting unit itself.

    The general contracting unit of a construction project shall, pursuant to
the agreement in the general contracting contract, be responsible to the
construction unit; subcontracting units shall, pursuant to the agreement in
the subcontracts, be responsible to the general contractor. The general
contracting unit and subcontracting units shall bear joint responsibility
to the construction unit in respect of the subcontracted projects.

    The general contracting unit is prohibited to subcontract the project
to units with no corresponding human quality qualifications. The
subcontracting unit shall be prohibited to re-subcontract the project it
has contracted.
Chapter IV  Construction Project Supervision and Control

    Article 30  The State practises the construction project supervision and
control system.

    The State Council may determine the scope of mandatory supervision and
control of construction projects.

    Article 31  The construction unit of a construction project under
supervision and control shall entrust the supervision and control with
an engineering supervision and control unit with corresponding human quality
qualifications. The construction unit and its entrusted engineering
supervision and control unit shall conclude a contract for entrustment of
supervision and control in writing.

    Article 32  The construction project supervisor-controller shall, pursuant
to the laws, administrative regulations as well as relevant technical
standards, design documents and the construction project contractual contract,
exercise supervision over the contracting unit in construction quality,
construction schedule and use of construction funds on behalf of the
construction unit.

    Engineering supervisors have the power to ask the building construction
enterprise to make corrections when they hold that construction of the
project does not conform to engineering design requirements, construction
technical standards and agreement in the contract.

    Engineering supervisors shall, upon discovery of engineering design not
in conformity with construction project quality standards or quality
requirements agreed in the contract, report to the construction unit to
ask the design unit to make corrections.

    Article 33  The construction unit shall, prior to the exercise of
supervision and control over the construction project, notify the building
construction enterprise to be put under supervision and control in writing
of the entrusted engineering supervision and control unit, the contents of
supervision and control and terms of reference in supervision and control.

    Article 34  An engineering supervision and control unit shall undertake
engineering supervision and control business within the scope of supervision
and control permitted for its human quality grade.

    The engineering supervision and control unit shall, in accordance with
the entrustment of the construction unit, conduct the missions of supervision
and control objectively and fairly.

    The engineering supervision and control unit and the contracting unit
of the project under supervision and control as well as supply units of
building materials, building structural pieces and parts and equipment shall
not have subordinate relationship or other relations of interest.

    The engineering supervision and control unit shall not transfer
its engineering supervision and control business.

    Article 35  An engineering supervision and control unit shall bear
corresponding liability of compensation in the case of failure to fulfil
the obligations of supervision and control agreed in the contract of
entrustment of supervision and control, not carrying out inspection or
carrying out inspection not in accordance with the provisions over items
which should have been put under supervision and inspection, thus causing
losses to the construction unit.

    An engineering supervision and control unit shall bear joint liability of
compensation with the contracting unit for collusion in gaining illegal
interests for the contracting unit thus causing losses to the construction
unit.
Chapter V  Construction Production Safety Management

    Article 36  Construction project production safety management must adhere
to the policy of safety first and prevention first, establish and perfect the
responsibility system of production safety and the system of prevention and
treatment by the masses.

    Article 37  Construction project design shall conform to the construction
safety procedures and technical standards formulated in accordance with
state provisions to ensure the safety performance of the project.

    Article 38  A building construction enterprise shall work out
corresponding safety technical measures according to the characteristics of
the construction project in the compilation of design for construction
organization; for speciality-intensive items of the project, design for
special-purpose safety construction organization shall be compiled and
safety technical measures taken.

    Article 39  A building construction enterprise shall take such measures
as the maintenance of safety, precautions against danger and fire prevention
at the construction site; where there are the required conditions,
construction site closed management shall be followed.

    A building construction enterprise shall take safety protection measures
in the case of the construction site causing possible damage to its adjoining
buildings, structures or special operational environment.

    Article 40  The construction unit shall provide the building construction
enterprise with the relevant information on underground piping and wiring
of the construction site, and the building construction enterprise shall
take measures for their protection.

    Article 41  The building construction enterprise shall abide by the
provisions of the laws and regulations relating to environmental protection
and safety in production and take control and disposal measures at the
construction site of various kinds of dust, waste gas, waste water, solid
waste as well as noise, vibration polluting and damaging the environment.

    Article 42  A construction unit shall, pursuant to the relevant state
provisions, go through the formalities of application for approval in case
of any of the following circumstances:

    (1) need of temporarily occupying sites beyond the approved planned
scope;

    (2) possibility of damaging such public facilities as roads, pipes and
cables, electricity, postal service and telecommunications;

    (3) need of temporary suspension of water supply, electricity supply and
suspension of road traffic;

    (4) need to conduct explosion operations; and

    (5) other circumstances requiring going through the formalities of
application for approval as prescribed by laws and regulations.

    Article 43  The competent department of construction administration
shall be responsible for the administration of construction safety in
production and subject to the guidance and supervision of the competent
department of labour in construction safety in production in accordance
with law.

    Article 44  A building construction enterprise must, in accordance with
law, strengthen construction safety production management, implement the
safety production responsibility system and take effective measures to prevent
casualties and other accidents in safety production from taking place.

    The legal representative of a building construction enterprise shall be
responsible for the safety in production of the enterprise.

    Article 45  The building construction enterprise shall be responsible
for the construction site safety. The general contracting unit shall be
responsible for the construction site safety of the project under general
contract for construction. Subcontracting units shall be responsible to
the general contracting unit and subordinate themselves to the management
of the general contracting unit for construction site safety in production.

    Article 46  Building construction enterprises shall establish and
perfect the educational and training system of safety in labour and
production, step up the education and training of workers and staff members in
safety in production; no personnel without undergoing education and training
in safety in production shall take up posts in operations.

    Article 47  Building construction enterprises and their personnel shall,
in the process of construction, abide by the laws and regulations relating to
safety in production and safety regulations and procedures of the building
industry, and shall not give command in contravention of regulations or
operate in contravention of regulations. Operators have the right to put
forth suggestions for improvement with regard to the operational procedures
and operational conditions adversely affecting physical health and have the
right to obtain protective gear necessary for safety in production. Operators
have the right to make criticism, report the case of and file charges against
acts endangering lives, safety and physical health.

    Article 48  Building construction enterprises must insure workers and
staff members engaging in dangerous operations against accidental injuries
and pay the insurance premium.

    Article 49  In restoration or rehabilitation project involving the main
body of the building and changes in the weight-bearing structure, the
construction unit shall, prior to the construction, entrust the original
design unit or a design unit with corresponding human quality qualifications
to put forth a design proposal; where there is no design proposal, no
construction shall be undertaken.

    Article 50  Dismantling of houses shall be undertaken by building
construction units with conditions to ensure safety and the person-in-charge
of the building construction units shall be responsible for the safety.

    Article 51  In the event of an accident in the process of construction,
the building construction enterprise shall take emergency measures to reduce
casualties of personnel and losses caused by the accident, and submit a report
in time to the departments concerned pursuant to relevant state provisions.
Chapter VI  Construction Project Quality Control

    Article 52  The quality of survey, design and construction of a
construction project must conform to the requirements of state safety
standards relating to construction projects. Specific control measures
shall be formulated by the State Council.

    State standards relating to safety in construction projects shall be
revised in time when they are unable to adapt to the requirements of ensuring
safety in building.

    Article 53  The State practises the quality system authentication system
with respect to units engaging in building operations. Units engaging in
building operations may, in accordance with the princ

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON ISSUE CONCERNING TAXATION OF THE ENTERPRISES UNDERTAKING LEASING

The State Administration of Taxation

Circular of the State Administration of Taxation on Issue Concerning Taxation of the Enterprises Undertaking Leasing

GuoShuiFa [1997] No.8

January 14, 1997

The state and local tax bureaus of various provinces, autonomous regions, municipalities directly under the Central Government and
municipalities separately listed on the State plan:

In order to in line with the system reform of the small and medium-sized enterprises and strengthen the collection administration
of corporate income tax of leasing enterprises, the taxation of domestic-funded leasing enterprises should be clarified as follows:

I.

All or parts of enterprises are leased and operated by individual, other enterprises and institutions without changing the name of
leasing enterprises and registration in industry and commerce of lesser enterprise. the lessee enterprises that run the business
in name of lesser enterprises should be the tax-payers of corporate income tax and levied the income tax on all the earnings no matter
how the business earnings are allotted between the lesser and lessee.

II.

All or parts of enterprises leased and operated by individual, other enterprises and institutions, the lessee should register in the
industrial and commercial departments again and engage in business in name of lessee. The corporate income tax should be levied on
the earnings of the enterprises by the enterprises and units newly registered in the industrial and commercial departments as a taxpayer.

III.

All the enterprise is leased by another enterprise or unit and registered in the industrial and commercial departments again. The
enterprise newly-registered should not establish new enterprise and not enjoy the policy of tax exemption that the new enterprise
does.



 
The State Administration of Taxation
1997-01-14

 






MEASURES FOR SECURITY PROTECTION ADMINISTRATION OF THE INTERNATIONAL NETWORKING OF COMPUTER INFORMATION NETWORKS

Category  PUBLIC SECURITY Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-12-16 Effective Date  1997-12-30  


Measures for Security Protection Administration of the International Networking of Computer Information Networks

Chapter I  General Provisions
Chapter II  Security Protection Liability
Chapter III  Security Supervision
Chapter IV  Legal Liability
Chapter V  Supplementary Provisions

(Approved by the State Council on December 11, 1997 and promulgated by

Decree No. 33 of the Ministry of Public Security on December 16, 1997)
Chapter I  General Provisions

    Article 1  These Measures are formulated in accordance with the provisions
of the Regulations of the People’s Republic of China for the Security
Protection of Computer Information Systems, Interim Provisions of the
People’s Republic of China on the Administration of the Internattional
Networking of Computer Information Networks and other laws and administrative
regulations with a view to strengthening the security protection of the
Internattional networking of computer information networks and maintaining
public order and social stability.

    Article 2  These Measures shall be applicable to the security protection
administration of the internattional networking of computer information
networks within the territory of the People’s Republic of China.

    Article 3  The agency of computer administration and supervision under
the Ministry of Public Security shall be responsible for the work of security protection administration of the internattional networking
of computer information networks.

    Agencies of computer administration and supervision of public security
organs should protect the public security of the internattional networking of computer information networks and safeguard the legitimate
rights and
interests of units and individuals engaging in international networking
businesses and public interest.

    Article 4  No unit or individual shall use the international networking
to endanger state security, divulge state secrets, nor shall it/he/she
infringe on national, social and collective interests and the legitimate
rights and interests of citizens, nor shall it/he/she engage in illegal
criminal activities.

    Article 5  No unit or individual shall use the international networking
to produce, duplicate, search and disseminate the following information:

    (1)information that instigates the resistance and disruption of the
implementation of the Constitution, laws and administrative regulations;

    (2)information that instigates the subversion of the state political
power and overthrow of the socialist system;

    (3)information that instigates the splitting up of the country and
sabotage of national unity;

    (4)information that instigates hatred and discrimination among
nationalities and sabotages solidarity among nationalities;

    (5)information that fabricates or distorts facts, spreads rumours and
disrupts social order;

    (6)information that propagates feudalistic superstitutions, obscenity,
pornorgraphy, gambling, violence, murder and terror and instigates crimes;

    (7)information that openly insults others or fabricates facts to slander
others;

    (8)information that damages the reputation of state organs; and

    (9)other information that violates the Constitution, laws and
administrative regulations.

    Article 6  No unit or individual shall engage in the following activities
endangering the security of computer information networks:

    (1)access to computer information networks or use of computer information
network resources without permission;

    (2)deletion, revision or addition of computer information network
functions without permission;

    (3)deletion, revision or addition of the data and applied procedures in
memory, processing or transmission in computer information networks without
permission;

    (4)deliberate production and spread of computer viruses and other
disruptive programs;

    (5)other activities that endanger computer information network security.

    Article 7  Users’ freedom of communication and communications secrecy
are protected by law. No unit or individual shall use the internattional
networking to infringe on users’ freedom of communication and communications
secrecy in violation of the provisions of law.
Chapter II  Security Protection Liability

    Article 8  Units and individuals engaging in the international networking
businesses should accept security supervision, inspection and guidance of
public security organs, truthfully provide relevant information, materials
and documents on data to public security organs, and assist public security
organs in investigating and handling illegal criminal acts through
international networking of computer information networks.

    Article 9  Supply units of international exit and entry channels, the
competent departments or the competent units of internetworking units should,
in pursuance of the relevant provisions of law and the state, be responsible
for the work of security protection of international exit and entry channels
and the subordinate internetworking.

    Article 10  Internetworking units, receiving units and legal persons
and other organizations that use the internattional networking of computer
information networks should fulfil the following security protection
responsibilities:

    (1)to be responsible for the work of security protection administration
of the network and establish and perfect rules for security protection
administration.

    (2)to implement technical measures for security protection to ensure the
operational security and information security of the network;

    (3)to be responsible for the security education and training of the users
of the network;

    (4)to register the units and individuals that entrust it to publish
information and carry out scrutiny of the contents of the information provided
in accordance with Article 5 of these Measures;

    (5)to establish user registration and information management system of computer information network electronic
announcement system;

    (6)to preserve the relevant original records upon discovery of any of the
circumstances listed in Articles 4, 5, 6 and 7 of these Measures and report
to the local public security organ within 24 hours; and

    (7)to delete the addresses and contents in the network containing
contents of Article 5 of these Measures or close down the server in pursuance
of relevant provisions of the state.

    Article 11  A user should fill in the user record form when going through
the formalities of access to the network at the receiving unit. The record
form shall be made under the supervision of the Ministry of Public Security.

    Article 12  Internetworking units, receiving units, legal persons and
other organizations that use the internattional networking of computer
information networks(including cross-province, cross-autonomous region and
cross-municipality directly under the Central Government internetworking units
and their susbordinate branches) should, within 30 days starting from the date
of formal hooking up of the network, go through the formalities for the record
at the processing agencies designated by the public security organs of
people’s governments of the provinces, autonomous regions and municipalities
directly under the Central Government wherein the units are located.

    The units listed in the preceding paragraph shall be responsible to
report the information on the receiving units and users hooked up to the
network to local public security organs and report in time changes in the
receiving units and users of the network.

    Article 13  Registrants that use public account numbers should strengthen
the management of the public account numbers and establish the registration
system of account number use. No user account number shall be lended or
transferred.

    Article 14  The units involving such important fields as state affairs,
economic construction, national defense construction, highly sophisticated
science and technology and others shall, while going through the formalities
for the record, present the proof of examination and approval of its competent
administrative department.

    Corresponding security protection measures shall be taken in the computer
information networks and international networking of units listed in the
preceding paragraph.
Chapter III  Security Supervision

    Article 15  Public security departments(bureaus) of the provinces,
autonomous regions and municipalities directly under the Central Government
should have correspondidng agencies to be responsible of the work of security
protection administration of international networking.

    Article 16  Computer administration and supervision agencies of public
security organs should keep themselves abreast of the record information of the networking units, receiving units and users, establish
record files,
make record statistics and report level by level in accordance with relevant
state provisions.

    Article 17  Computer administration and supervision agencies of public
security organs should supervise and urge the networking units, receiving
units and relevant users to establish and perfect the security protection
administration system, supervise and inspect the state of implementation of network security protection administration and the technical
measures.

    While computer administration and supervision agencies of public security
organs organize security inspections, the units concerned should despatch
persons to participate. Computer administration and supervision agencies of public security organs should come up with suggestions
for improvement
with respect to problems discovered in security inspections and make
detailed minutes for the file for future reference.

    Article 18  Computer administration and supervision agencies of public
security organs should notify the units concerned to close down or delete
them on the discoery of the addresses, contents or servers listed in Article 5
of these Measures.    

    Article 19  Computer administration and supervision agencies of public
security organs should be responsible to keep track of and investigate and
handle the illegal acts through computer information networks and criminal
cases directed against computer information networks, and should transfer
the cases to the departments concerned or the judicial organs for handling
in pursuance of relevant state provisions with respect to illegal criminal
acts stipulated in Article 4 and Article 7 of these Measures.
Chapter IV  Legal Liability

    Article 20  Whoever commits any of the acts listed in Articles 5 and 6
of these Measures in violation of laws and administrative regulations shall
be administered a warning by the public security organ; where there is illegal
gains, the illegal gains shall be confisticated, a fine of less than RMB
5,000 Yuan may concurrently be imposed on an individual and a fine of less
than RMB 15,000 Yuan may concurrently be imposed on a unit; where the
circumstances are serious, the penalty of suspension of networking and
computers for consolidation within 6 months may concurrently be imposed,
and when necessary a proposal may be sent to the original licensing,
examination and approval authority to revoke the business license or
nullify the networking qualifications; where acts in violation of public
security administration has been constituted, penalties shall be imposed
in pursuance of the regulations for public security administration penalties;
where a crime has been constituted, criminal liability shall be investigated
in accordance with law.

    Article 21  Whoever commits any of the following acts shall be ordered
by the public security organ to make a rectification within the specified
time period, administered a warning and confisticated of the illegal gains
where there is illegal gains; where no rectification has been made within
the specified time period, the person-in-charge and other persons directly
responsible of the unit may be imposed a fine of less than RMB 5,000 Yuan,
and a fine of less than RMB 15,000 Yuan may concurrently be imposed on the
unit; where the circumstances are serious, the penalty of suspension of networking and shutting down of computers for consolidation
within 6 months
may be imposed, when necessary a proposal may be sent to the original
licensing, examination and approval authority to revoke the business license
or nullify the networking qualifications.

    (1)failure to establish rules for security protection administration;

    (2)failure to take technical protective measures for security;

    (3)failure to conduct security education and training of network users;

    (4)failure to provide information, materials and data documents required
for security protection administration or the contents provided are untrue;

    (5)failure to carry out scrutiny of the contents of the information
entrusted for publication or failure to register the entrusting units or
individuals;

    (6)failure to establish user registration and information management
system for electronic announcement systems;

    (7)failure to delete the website addresses, contents or shut down the
servers in pursuance of relevant state provisions;

    (8)failure to establish the registration system for the use of public
account numbers; and

    (9)lending and transfer of user account numbers.

    Article 22  Whoever violates the provisions of Articles 4 and 7 of these
Measures shall be imposed a penalty in pursuance of the relevant laws and
regulations.

    Article 23  Whoever fails to fulfil the responsibilities of putting
on record in violation of the provisions of Articles 11 and 12 of these
Measures shall be administered a warning or imposed a penalty of shutting
down the computers for consolidation not exceeding 6 months by the public
security organ.
Chapter V  Supplementary Provisions

    Article 24  Security protection administration of computer information
networks hooked up with the Hong Kong Special Administrative Regions and
the regions of Taiwan and Macau shall be implemented with reference to
these Measures.

    Article 25  These Measures shall enter into force as of December 30, 1997.

                                                                                      





INTERIM MEASURES FOR THE ADMINISTRATION OF SECURITIES INVESTMENT FUNDS

Category  SECURITIES Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-11-14 Effective Date  1997-11-14  


Interim Measures for the Administration of Securities Investment Funds

Chapter I  General Provisions
Chapter II  Fund Establishment, Raising and Transactions
Chapter III  The Fund Trustee and the Fund Administrator
Chapter IV  Fund Holders’ Rights and Obligations
Chapter V  Investment Operations, Supervision and Administration
Chapter VI  Penalty Provisions
Chapter VII  Supplementary Provisions

(Approved by the State Council on November 5, 1997 and promulgated by

the Securities Commission under the State Council on November 14, 1997)
Chapter I  General Provisions

    Article 1  These Measures are formulated with a view to strengthening the
administration of securities investment funds, protecting the legitimate
rights and interests of the parties interested and promoting sound and
steady development of the securities market.

    Article 2  The securities investment funds (hereinafter referred to as
the funds) referred to in these Measures mean an interest-sharing,
risk-sharing collective securities investment mode, namely concentration of
investors’ funds through fund issuing units under the trusteeship of the
fund trustees, funds administered and employed by fund administrators
for engaging in investment in such financial tools as stocks and bonds.

    Article 3  Fund assets shall be independent of the assets of the fund
trustees and fund administrators.

    Article 4  Whoever engages in fund operations and natural persons, legal
persons and other organizations related to such operations within the
territory of China shall abide by these Measures.
Chapter II  Fund Establishment, Raising and Transactions

    Article 5  Establishment of a fund shall be subject to the examination
and approval of China Securities Supervisory and Control Commission
(hereinafter referred to as CSSCC).

    Article 6  A fund sponsor may apply for the establishment of an open
fund or may apply for the establishment of a closed fund.

    Article 7  The following terms shall be met for an application for the
establishment of a fund:

    (1) its main sponsors are securities firms, trust and investment companies
and fund administering companies established in accordance with relevant
state provisions;

    (2) the actual capital of each sponsor shall not be less than RMB 300
million Yuan, and the main sponsors shall have experiences in securities
investment and a record of consecutive profits for over three years. However,
the fund administering companies are excluded;

    (3) the sponsors, fund trustees and fund administrators shall have sound
organizational institutions and management system with good financial status
and standardized acts of operations;

    (4) the fund trustees and fund administrators shall have a site for
business operations, facilities for security and precaution and other
business-related facilities commensurate with requirements; and

    (5) other terms prescribed by CSSCC.

    An applicant for the establishment of an open fund must also be able to
ensure in qualified personnel and technical facilities the announcement at
least once a week for the investors with respect to the net value of the fund
assets and the bid price and the redemption price.

    Article 8  A fund sponsor applying for the establishment of a fund shall
present the following documents to CSSCC:

    (1) an application report;

    (2) a list of sponsors and the agreement;

    (3) the fund deed and the trusteeship agreement;

    (4) the prospectus;

    (5) in the case of a securities company or a trust and investment
company serving as the sponsor, financial reports of the sponsor in
the past three years audited by an accountant firm;

    (6) legal opinion letter issued by a law firm;

    (7) a fund-raising proposal; and

    (8) other documents the presentation of which is required by CSSCC.

    The contents and formats of the fund deed, trusteeship agreement and
prospectus of the preceding paragraph shall be prescribed by CSSCC.

    Article 9  The percentage of the fund sponsors’ subscription of fund
units in the total amount of the fund and the percentage of holding fund
units in the total amount of the fund during the fund’s existence shall be
determined by CSSCC.

    Article 10  The existence of a closed fund shall not be less than five
years and the minimum amount raised shall not be less than RMB 200 million
Yuan.

    Article 11  Expansion of fund-raising and extension of a closed fund
shall have the following qualifications and be subject to the examination
and approval of CSSCC:

    (1) annual rate of returns is higher than the average rate of returns
nationwide;

    (2) the fund trustee and the fund administrator have committed no major
acts in violation of laws and regulations in the past three years;

    (3) the fund holders’ meeting and the fund trustee’s agreement on the
expansion of fund-raising or extension; and

    (4) other qualifications prescribed by CSSCC.

    Relevant documents shall be presented in accordance with the requirements
of CSSCC for application for expansion of fund-raising or extension.

    Article 12  The fund sponsors shall, three days prior to the fund-raising,
publish the prospectus in the newspaper designated by CSSCC.

    Article 13  The duration of fund-raising of a closed fund shall be three
months, which is to be calculated from the date of approval of the said
fund. A closed fund can only be established when the fund raised within
three months from the date of approval of the said fund exceeds 80% of the
approved scale of the said fund. An open fund can only be established
when the net sales within three months from the date of approval of the
said fund exceed RMB 200 million Yuan.

    A closed fund shall not be established when the fund raised is less than
80% of the approved scale of the said fund on expiry of the duration of
fund-raising of the said fund. An open fund shall not be established when
the net sales within three months from the date of approval of the said fund
are less than RMB 200 million Yuan. The fund sponsors must bear expenses for
the fund-raising and the fund raised with additional calculation of bank
current deposit interest must be refunded to fund subscribers within 30 days.

    Article 14  Bidding and redemption of an open fund can only be conducted
in sites in conformity with the state provisions.

    The fund administrator and the fund trustee may, upon establishment of
a closed fund, apply to CSSCC and securities exchanges for listing of the
fund. Rules for fund listing shall be formulated by securities exchanges
and submitted to CSSCC for approval.
Chapter III  The Fund Trustee and the Fund Administrator

    Article 15  The fund established upon approval shall entrust a commercial
bank as the fund trustee for trusteeship of the fund assets and entrust a
fund administering company as the fund administrator for administration and
employment of the fund assets.

    Article 16  The fund trustee must be subject to the examination and
approval of CSSCC and the People’s Bank of China.

    Article 17  The fund trustee and the fund administrator shall be
independent of each other administratively and financially, and their
high-ranking administrative staff shall not take up concurrent positions
of the other party.

    Article 18  The fund trustee shall have the following qualifications:

    (1) has a special fund trusteeship department;

    (2) has an actual capital not less than RMB 8 billion Yuan;

    (3) has adequate specialized staff conversant with trusteeship business;

    (4) has facilities for the safekeeping of the total assets of the fund; and

    (5) has capabilities of secure and high-efficiency settlement and
delivery.

    Article 19  The fund trustee shall fulfil the following functions and
responsibilities:

    (1) safekeeping of the total assets of the fund;

    (2) execution of the investment directives of the fund administrator and
responsibility for the handling of fund transactions under the name of the
fund;

    (3) supervision over the investment operations of the fund administrator,
non-execution of the investment directives in violation of laws and
regulations upon discovery and a report submitted to CSSCC;

    (4) reverification and examination of the net value of the fund assets
and the fund price calculated by the fund administrator;

    (5) safekeeping of the account books and records of the fund for more
than 15 years;

    (6) issuance of a report on the achievements of the fund, provision of
information on the fund trusteeship and a report submitted to CSSCC and the
People’s Bank of China; and

    (7) other functions and responsibilities prescribed by the fund deed and
the trusteeship agreement.

    Article 20  The fund trustee must strictly separate the fund assets
under its trusteeship from the fund trustee’s own assets, establish separate
accounts for different funds and conduct the administration according to
separate accounts.

    Article 21  The fund trustee having any of the following circumstances
must, upon approval of CSSCC and the People’s Bank of China, retire from
office:

    (1) disbandment of the fund trustee, revocation and bankruptcy in
accordance with law or its assets taken over by the person taking over;

    (2) the fund administrator has ample reasons to hold that change of
the fund trustee is in the interests of the fund holders;

    (3) fund holders representing over 50% of the fund units demand the
retirement from office of the fund trustee; and

    (4) the People’s Bank of China has ample reasons to hold that the fund
trustee is unable to continue to fulfil the functions and responsibilities
of fund trusteeship.

    Article 22  The new fund trustee shall be subject to the examination and
approval of CSSCC and the People’s Bank of China; upon approval, the former
fund trustee may retire from office. The fund under the trusteeship of the
former fund trustee without being taken over by a new fund trustee shall
terminate.

    Article 23  An application for the establishment of a fund administering
company shall be subject to the examination and approval of CSSCC.

    Article 24  Establishment of a fund administering company shall have
the following qualifications:

    (1) the main sponsors shall be a securities company and a trust and
investment company established in accordance with relevant state provisions;

    (2) the operating status of the main sponsors has been good with
consecutive profits in the last three years;

    (3) the actual capital of each sponsor shall be no less than RMB 300
million Yuan;

    (4) the minimum actual capital of the fund administering company proposed
to be established shall be RMB 10 million Yuan;

    (5) has a clear-cut and feasible fund administration plan;

    (6) has qualified personnel for fund administration; and

    (7) other qualifications prescribed by CSSCC.

    Relevant documents shall be presented in accordance with the requirements
of CSSCC for an application for the establishment of a fund administering
company.

    Article 25  A fund administering company may, upon approval, engage in
the following businesses:

    (1) business of fund administration; and

    (2) sponsorship for the establishment of funds.

    Article 26  A fund administrator shall fulfil the following functions
and responsibilities:

    (1) employment of the fund assets in investment and administration of the
fund assets in accordance with the fund deed;

    (2) payment of fund benefits to the fund holders in time and in full
amount;

    (3) safekeeping of the account books and records of the fund for more
than 15 years;

    (4) compilation of the financial report of the fund, making an
announcement in time and submitting a report to CSSCC;

    (5) calculation and announcement of the net value of the fund and the
net value of each fund unit asset; and

    (6) other functions and responsibilities prescribed by the fund deed.

    The administrator of an open fund shall also, in accordance with the
relevant state provisions and the provisions of the fund deed, handle
timely and accurately the bidding and redemption of the fund.

    Article 27  The fund administrator having any of the following
circumstances must retire from office upon approval of CSSCC:

    (1) disbandment of the fund administrator, revocation and bankruptcy in
accordance with law or its assets being taken over by the person taking over;

    (2) the fund trustee has ample reasons to hold that change of the fund
administrator is in the interests of the fund holders;

    (3) the fund holders representing more than 50% of the fund units demand
the retirement from office of the fund administrator; and

    (4) CSSCC has ample reasons to believe that the fund administrator is
unable to continue to fulfil the functions and responsibilities of fund
administration.

    Article 28  The new fund administrator shall be subject to the examination
and approval of CSSCC; upon approval, the former fund administrator may
retire from office. The fund under the administration of the former fund
administrator without being taken over by a new fund administrator shall
terminate.
Chapter IV  Fund Holders’ Rights and Obligations

    Article 29  Fund holders have the following rights:

    (1) to attend or to entrust a representative to attend the fund holders’
meeting;

    (2) to obtain fund benefits;

    (3) to oversee the fund management and obtain information on the status
of the fund business and finances;

    (4) to bid, redeem or transfer fund units;

    (5) to obtain the surplus assets of the fund after settlements; and

    (6) other rights provided for in the fund deed.

    Article 30  A fund holders’ meeting shall be convened in the event of
any of the following circumstances:

    (1) revision of the fund deed;

    (2) termination of the fund ahead of time;

    (3) change of the fund trustee;

    (4) change of the fund administrator; and

    (5) other circumstances prescribed by CSSCC.

    Matters of the preceding paragraph shall, upon resolutions being adopted
by the fund holders’ meeting, be subject to the approval of CSSCC.

    Article 31  Fund holders shall fulfil the following obligations:

    (1) to abide by the fund deed;

    (2) to pay the amount subscribed to the fund and the prescribed fees;

    (3) to bear limited liabilities for the losses or termination of the fund;
and

    (4) not to engage in any activity detrimental to the interests of the
fund and other fund holders.
Chapter V  Investment Operations, Supervision and Administration

    Article 32  Prior to the establishment of a fund, the amount subscribed by
the investors shall only be deposited in a commercial bank and shall not
be used.

    Article 33  The investment combination of a fund shall conform to the
following provisions:

    (1) the percentage of investment in stocks and bonds of a fund shall not
be less than 80% of the total value of the assets of the said fund;

    (2) the stocks of a listed company held by a fund shall not exceed 10%
of the net value of the assets of the said fund;

    (3) the securities distributed by a company held by the entire fund under
the administration of the same fund administrator shall not exceed 10% of
the said securities;

    (4) the percentage of investment in state bonds by a fund shall not be
less than 20% of the net value of the assets of the said fund; and

    (5) other restrictions on percentage provided for by CSSCC.

    Article 34  Engagement in the following acts shall be prohibited:

    (1) mutual investment among funds;

    (2) engagement by fund trustees and commercial banks in fund investment;

    (3) buying and selling of securities by fund administrators in the name of
funds by using funds not under the name of the funds;

    (4) engagement by fund administrators in any form in underwriting
securities or engagement in other independently operated business of
securities in addition to state bonds;

    (5) engagement by fund administrators in call loan business;

    (6) engagement in fund investment by using bank credit funds;

    (7) fund scalping by state-owned enterprises in violation of relevant
state provisions;

    (8) fund assets used for mortgage, guarantee, call loans or loans;

    (9) engagement in securities credit transactions;

    (10) engagement in real estate investment with fund assets;

    (11) engagement in investment which might cause the fund assets to bear
unlimited liabilities;

    (12) investment of fund assets in securities distributed by companies
having relations of interests with the fund trustees or fund administrators;
and

    (13) other acts prohibited by the provisions of CSSCC.

    Article 35  An open fund must keep adequate cash or state bonds to pay
for the redemption.

    Article 36  The trusteeship fee of fund trustees, the remuneration
for fund administrators and other expenses which may be deducted from
the fund assets shall be handled pursuant to the relevant state provisions
and made clear in the fund deeds and trusteeship agreements.

    Article 37  Fund trustees and fund administrators shall implement the
financial accounting rules of the State and pay taxes in accordance with law.

    Article 38  Distribution of fund benefits shall take the form of cash
at least once a year. The percentage of distribution of fund benefits shall
not be less than 90% of the net returns of the fund.

    Article 39  CSSCC and the People’s Bank of China shall, pursuant to
their respective functions and powers, carry out inspection and audit
from time to time over fund-raising, transactions, investment operations and
related business activities and financial and accounting material. Fund
trustees, fund administrators and related agencies and personnel shall
provide the relevant information and material in time and shall not refuse
and obstruct.

    Article 40  A fund shall terminate in the event of any of the following
circumstances:

    (1) expiry of the duration of closure of a fund and extension has not
been approved;

    (2) approval has been granted for the termination of a fund ahead of time;
and

    (3) a fund which has been ordered by CSSCC to terminate due to major acts
in violation of laws and regulations.

    Article 41  A settlement team must be formed to carry out settlement of
the fund assets at the time of termination of a fund; the settlement results
shall be submitted to CSSCC for approval and announced.

    CSSCC shall oversee the settlement process of a fund.

    Article 42  All surplus assets after settlement of a fund shall be
distributed to fund holders according to the percentage of the fund units
held by the fund holders in the fund assets.
Chapter VI  Penalty Provisions

    Article 43  Whoever establishes, raises or raises in disguised form a fund
on one’s own without approval shall be banned by CSSCC and ordered to refund
the funds raised as well as their interests; where there are illegal gains,
they shall be confiscated, and a fine more than 100% less than ten times
of the amount of the illegal gains concurrently imposed; where there are no
illegal gains, a fine under RMB 1 million Yuan shall be imposed.

    Article 44  Whoever lists for trading of a fund on one’s own without
approval shall be ordered by CSSCC to stop the trading and imposed a fine
under RMB 1 million Yuan.

    Article 45  Whoever establishes a fund administering company on one’s own
or engages in business of fund administration on one’s own without
approval shall be banned by CSSCC; where there are illegal gains, they
shall be confiscated and a fine more than 100% less than ten
times of the amount of the illegal gains concurrently imposed; where there are
no illegal gains, a fine under RMB 1 million Yuan shall be imposed.

    Article 46  Whoever engages in fund trusteeship business on one’s own
without approval shall be ordered to stop the fund trusteeship business,
the illegal gains shall be confiscated and a fine under RMB 500,000 Yuan
concurrently imposed.

    The fund trustee who fails to separate the fund assets under its
trusteeship from the trustee’s own assets in accordance with provisions,
or fails to conduct separate-account administration of the fund assets
shall be ordered to make a rectification, his/her illegal gains shall be
confiscated and concurrently imposed a fine more than 100% less than
five times of the amount of the illegal gains.

    Article 47  Any fund administrator who violates the provisions of Article
32 of these Measures shall be ordered to make a rectification; where there
are illegal gains, they shall be confiscated and a fine more than 100% less
than five times the amount of the illegal gains shall be concurrently imposed;
where there are no illegal gains, a fine of less than RMB 500,000 Yuan shall
be imposed.

    Article 48  Any fund administrator who violates the provisions of Article
33 of these Measures shall be ordered by CSSCC to make a rectification;
where there are illegal gains, they shall be confiscated and a fine more
than 100% less than three times of the amount of the illegal gains shall be
concurrently imposed; where there are no illegal gains, a fine of under RMB
300,000 Yuan shall be imposed.

    Article 49  Whoever has committed any of the acts listed in Article
34 of these Measures shall be ordered to make a rectification; where there are
illegal gains, they shall be confiscated and a fine more than 100% less than
five times of the amount of the illegal gains shall be concurrently imposed;
where there are no illegal gains, a fine of under RMB 500,000 Yuan shall be
imposed.

    Article 50  Any fund administrator or fund trustee who indulges in
self-seeking misconduct, operates in violation of regulations and fails to
perform its functions and responsibilities in fund administration or fund
trusteeship, or seriously neglects its duties resulting in bad fund
management or major losses, shall be suspended and revoked of its fund
administration business qualifications or fund trusteeship business
qualifications in addition to penalty according to law.

    Article 51  Any fund administrator or fund trustee who, in violation of
the provisions of Article 39 of these Measures, fails to provide or delays
in providing relevant information and material, or refuses and hinders
inspection and audit conducted according to law shall be ordered
to make a rectification, administered a warning and concurrently imposed
a fine of under RMB 50,000 Yuan.

    Article 52  Decisions on penalties prescribed in Articles 46, 47, 49, 50
and 51 of these Measures shall be made by CSSCC and the People’s Bank of
China pursuant to their respective functions and powers; however, no more
than two penalties shall be imposed with respect to the same illegal act.

    Article 53  Whoever commits the securities fraudulent acts of
manipulating the market price, inside trading or false statement shall be
imposed penalties by CSSCC in accordance with law.

    Article 54  The person-in-charge held directly responsible and other
persons directly responsible in violation of the provisions of these Measures,
shall be temporarily suspended and revoked of its qualifications for
operations in addition to imposing administrative sanctions according to law.

    Whoever causes losses to others in violation of the provisions of these
Measures shall bear civil liability for compensation.

    Whoever constitutes a crime in violation of the provisions of these
Measures shall be investigated of the criminal liability.
Chapter VII  Supplementary Provisions

    Article 55  The implications of the following terms in these Measures
are:

    (1) “Fund unit” means the voucher the fund sponsor issues to unspecified
investors indicating that the holder has asset ownership and right of
distribution of benefits of the fund and other related rights and assumes
corresponding obligations.

    (2) “An open fund” means a fund that the total amount of its fund issuance
is not fixed, that the total number of fund units increases or decreases from
time to time, that investors may bid or redeem the fund unit in accordance
with the offering of the fund at business sites prescribed by the State.

    (3) “A closed fund” means a fund the total amount of its issuance is
predetermined, the total number of fund units during closure remains
unchanged and investors may transfer or buy and sell its fund units through
securities markets after the fund is listed.

    (4) “Total value of fund assets” includes the aggregate of the value of
all types of securities purchased by the fund, the principal and interests of
bank deposits as well as the value formed by other investments.

    (5) “Net value of fund assets” means the value of the total value of fund
assets minus the expenses which may be deducted from the fund assets pursuant
to relevant state provisions.

    (6) “Net value of fund assets per unit” means the value of the net value
of fund assets on the date of calculation divided by the total number of
fund units on the date of calculation.

    (7) “Returns on the fund” include dividends, share interests,
bond interests acquired through fund investment, difference in the buying
and selling price of securities, interests from deposits as well as other
revenues.

    (8) “Net returns on the fund” mean the balance of returns on the fund
minus the expenses which may be deducted from the returns on the fund
pursuant to relevant state provisions.

   &nbs

REGULATIONS OF SHANGHAI MUNICIPALITY ON RESIDENTIAL PROPERTY MANAGEMENT






Regulations of Shanghai Municipality on Residential Property MANAGEMENT

     (Effective Date:1997.07.01–Ineffective Date:)

CHAPTER I GENERAL PROVISIONS CHAPTER II PROPRIETORS’ AUTONOMOUS MANAGEMENT CHAPTER III PROPERTY MANAGEMENT SERVICES CHAPTER IV THE
USE OF PROPERTY CHAPTER V THE MAINTENANCE OF PROPERTY CHAPTER VI FIRST-PHASE PROPERTY MANAGEMENT CHAPTER VII COMPLAINTS CHAPTER VIII
LEGAL LIABILITIES CHAPTER IX SUPPLEMENTARY PROVISIONS

   Article 1 With a view to standardizing the use and maintenance of residential property and other management services in this municipality,
protecting the legitimate rights and interests of the proprietors, house users and property management enterprises, and creating
and maintaining a neat, safe and comfortable living environment, the present Regulations are formulated in accordance with the relevant
state laws and regulations, and in line with the actual circumstances of this municipality.

   Article 2 The present Regulations apply to the residential property management within the administrative area of this municipality.

   Article 3 The residential property (hereinafter referred to as property) specified in the present Regulations refers to the residential buildings
and relevant public facilities.

The proprietors specified in the present Regulations refer to those who own the property.

The users specified in the present Regulations refer to the lessees of the property and those other persons who actually use the property.

The property management enterprises specified in the present Regulations refer to those which, entrusted by proprietors or proprietors
committees, perform professional management services in accordance with the property management and service contracts.

   Article 4 Property management shall follow the principle of combining the autonomous management of proprietors with entrusted professional
management services of property management enterprises.

   Article 5 Shanghai Municipal Housing and Land Administration Bureau (hereinafter referred to as the Municipal Housing and Land Administrate
on Bureau) shall be the competent authority of this municipality responsible for organizing the enforcement of the present Regulations.

The property management departments at district or county level shall be the administrative departments within their own areas in
charge of the administration and supervision of the property management in accordance with the present Regulations.

Administrative departments of construction, planning, municipal administration, public utilities, power, post and telecommunication,
environment sanitation, landscape gardening, housing, public security, price control, and industry and commerce shall coordinate
in the enforcement of the present Regulations in accordance with their own responsibilities.

Subdistrict offices and township people’s governments shall assist relevant administrative departments with supervision of property
management and coordination of the mutual relations between property management and community management and services.

CHAPTER II PROPRIETORS’ AUTONOMOUS MANAGEMENT

   Article 6 The proprietors committee is an organization which represents all the proprietors in property management within its property management
area.

Only one proprietors committee shall be set up within one property management area.

The size of a property management area shall be determined by the district or county housing and land administrative departments in
accordance with the relevant conditions of residence and public facilities.

   Article 7 The proprietors committee shall be elected by the proprietors meeting or by the proprietors’ representatives meeting. Members of
the proprietors committee shall be chosen from the proprietors.

When one of the following situations exists within the property management area, the district or county property management departments
concerned shall work jointly with residence-selling units to organize and hold the first proprietors meeting or the proprietors’
representatives meeting so as to establish the proprietors committee through election:

1. More than 30% of the floor area of the publicly-owned residential buildings are sold;

2. More than 50% of the floor area of the newly-built commodity residential buildings are sold;

3. The residential buildings have been sold for two years already.

   Article 8 The proprietors meeting shall be composed of all the proprietors within the property management area; the proprietors’ representatives
meeting shall be formed through proportional election when the proprietors within the property management area are great in number.

The proprietors meeting or the proprietors’ representatives meeting shall be attended by more than half of the proprietors or proprietors’
representatives. The decisions made by the proprietors meeting or the proprietors’ representatives meeting shall be approved by more
than half of the proprietors or by more than half of their representatives.

The proprietors committee shall convene the proprietors meeting or the proprietors’ representative meeting at least once a year and
shall, at the proposal made by more than 15% of the proprietors, or 15% of their representatives, convene the proprietors meeting
or the proprietors’ representatives meeting to discuss the proposals raised.

The proprietors meeting or the proprietors’ representatives meeting shall invite representatives from among the neighborhood committee
and house users to attend the meeting as non-voting delegates.

   Article 9 The proprietors meeting or the proprietors’ representatives meeting shall exercise the following functions and powers:

1. Elect or recall the members of the proprietors committee;

2. Examine and approve the regulations of the proprietors committee and proprietors’ joint pledge;

3. Listen to, examine and approve the work reports on property management services supplied;

4. Make decisions on other major items concerning property management.

   Article 10 The proprietors committee shall, within 15 days after its election, register at the district or county property management departments
concerned with the following documents:

1. Application for the registration of the established proprietors committee;

2. the list of member of the proprietors committee;

3. the regulations of the proprietors committee.

The district or county property management departments shall complete the registration within 15 days after receipt of the registration
application, and shall reject the application and inform the applicants in written form if the establishment of the proprietors committee
does not conform to the provisions of the present Regulations.

   Article 11 The proprietors committee shall be composed of 5 to 15 members according to the size of the property management area.

The chairman and vice-chairmen of the proprietors committee shall be chosen from among the committee members.

The term of the proprietors committee shall be two years.

   Article 12 The proprietors committee shall protect the legitimate rights and interests of all the proprietors and perform the following duties:

1. Convene the proprietors meeting or the proprietors’ representatives meeting and report implementation of property management within
the area;

2. Engage or discharge property management enterprises, and make, alter, or cancel property management contracts signed with property
management enterprises;

3. Be responsible for the raising, use, and management of the property maintenance fund that has been established in accordance with
the present Regulations;

4. Examine and determine the annual plan, budget, and final accounts of property management services put forward by the property management
enterprise;

5. Listen to complaints and suggestions of the proprietors and house users, and supervise management services conducted by the property
management enterprise;

6. Supervise the proper use of public buildings and facilities;

7. Perform other responsibilities delegated by the proprietors or the proprietors’ representatives meeting.

The proprietors committee shall hold meeting regularly which shall be effective only when more than half of the committee members
attend, and decisions shall be made by more than half of the committee member voting for the decisions.

   Article 13 Residence-selling units shall provide the property management area with necessary houses for property management services in accordance
with relevant stipulations, and the ownership of there houses shall belong to all the proprietors; the profit gained from the houses
used for property management services shall be spent to cover working expenses of the proprietors committee and replenish the property
maintenance fund. Detailed measures be worked out by the Municipal People’s Government.

   Article 14 The proprietors group shall be formed by several representatives chosen from among the proprietors in the residential building, and
its shall be:

1. Listen to the complaints and suggestions of the proprietors and house users about property management services and report them
to the proprietors committee or the property management enterprise;

2. Carry out the decisions made by the proprietors committee;

3. Make proposals about the maintenance and renovation space and facilities for common use.

   Article 15 All the proprietors shall be bound by the proprietors’ joint pledge, which is the norms of conduct in the use and maintenance of
property and other management services. House users shall abide by the proprietors’ joint pledge, too.

The proprietors’ joint pledge shall become effective on the day when it is approved by the proprietors meeting or the proprietors’
representatives meeting.

The proprietors committee shall, within 15 days after the proprietors’ joint pledge becomes effective, submit the pledge for the record
to the district (county) property management departments concerned.

   Article 16 The decisions made by the proprietors meeting, the proprietors’ representatives meeting and the proprietors committee shall have
a binding force on all proprietors and house users within the property management area.

The decisions made by the proprietors meeting, the proprietors’ representatives meeting and the proprietors committee shall not contravene
the laws and regulations.

CHAPTER III PROPERTY MANAGEMENT SERVICES

   Article 17 The property management enterprise shall, in accordance with relevant stipulations, apply to the Municipal Housing and Land Bureau
or the district (county) property management departments with whom it has registered for the qualifications certificate in property
management.

The Municipal Housing and Land Bureau and the district (county) property management departments shall, within 20 days after receiving
the application from the property management enterprises, ratify and issue the qualifications certificate.

The property management enterprise shall offer property management services as stipulated in qualifications control.

   Article 18 Proprietors or the proprietors committee shall entrust a property management enterprise to handle their property affairs.

After accepting the entrustment to perform property management services. The property management enterprise shall, on accepting the
entrustment to render property management services, sign a property management service contract with the proprietors or the proprietors
committee.

The property management service contract shall include the following major items:

1. the name and address of the proprietor committee and the property management enterprise;

2. the size of the property management area and the items to be under management;

3. the contents of property management services;

4. the requirements and standards for property management services;

5. the service fees for property management;

6. the duration of property management services;

7. liabilities for breach of contract;

8. the agreement on termination and cancellation of the contract;

9. other items agreed on by both parties concerned.

The duration shall be two years for the property management service contract.

The property management enterprise shall, within 15 days after the property management service contract becomes effective, submit
the contract for the record to the district (county) property management departments.

   Article 19 The parties to the property management service contract shall agree on the following property management services:

1. the use, maintenance and renovation of the areas and installation for common use in the residential buildings;

2. the use, maintenance and renovation of the public facilities within the property management area;

3. proper service of operation of the installations of the building, such as elevators and pumps;

4. sanitation and cleaning service;

5. security service;

6. keep accounts of property maintenance and renovation expenses;

7. safekeep the archives and other datum of the property.

The parties to the property management service contract shall agree on the following items in property management services:

1. maintenance and renovation of the private areas and private installations of the building;

2. other items in property management services entrusted by the proprietors committee.

   Article 20 In order to keep the buildings and public facilities in good condition, to render the environment clean tidy and fine to maintain
good public order and to ensure the convenience and safety in the use of the property, the property management services shall meet
the following requirements:

1. Perform management services in accordance with the technical standards and norms specified by the state and this municipality and
the annual plan of the property management services approved by the proprietors committee;

2. Inform the proprietors and house users in writing of the methods, requirements, points for attention before they begin to use the
buildings; about the use and maintenance of the areas and installations for common use and public facilities in the buildings;

3. Inspect and examine the property management area regularly and thoroughly, and make periodical maintenance of the areas and installation
for common use and public facilities in the residential buildings;

4. Take protective measures immediately after spotting any damage of the areas and installations for common use and public facilities,
and repair them as stipulated in the property management service contract;

5. Repair the damages of the property within a time limit when notified of the damages;

6. Keep a good record of the maintenance and renovation of the property and of incomes received and expenses incurred, and keep the
property archives and relevant account books properly;

7. Submit the income-expense accounts of property maintenance and renovation to the proprietors committee for examination every six
months;

8. Listen to the complaints and suggestions made by the proprietors committee, the proprietors and house users periodically, and improve
and perfect the management services;

9. Dissuade and stop any person from violating the present Regulations or the proprietors’ joint pledge and report the wrongful act
to the proprietors committee and related administrative organs;

10. Offer other management services entrusted by the proprietors committee, the proprietors and house users in accordance with the
stipulations of the property management service contract.

Apart from the provisions mentioned above, the property management enterprise shall cooperate with the neighborhood committee in community
management and services.

   Article 21 The service fees for property management shall be charge on the principle of reasonableness, openness and in conformity with the
management level.

   Article 22 The property management service fees shall include the following:

1. management fees, which shall be used for the daily management within the property management area, including inspection and examination
within the property management area, book-keeping of maintenance and renovation expenses, the safekeeping of property archives and
datum, as well as other relevant management services;

2. operating cost for installations in buildings which is used as expense needed for service rendered to the operating of installations
such as elevators and water-pumps in buildings.

3. sanitation fees, which shall be used for the daily sanitation service within the property management area;

4. security fees, which shall be used for the service rendered to daily security within the property management area;

5. maintenance expenses, which shall be used to pay the expenses for property maintenance.

The fees in Items 1, 2, 3 and 4 above shall be calculated separately once a month. The expenses in Item 5 shall be calculated in accordance
with the maintenance that has been actually done.

   Article 23 The standard of property management service fees charged shall be determined in accordance with the following provisions:

1. The standard of service fees for the publicly-owned residential building already sold to its residents shall be determined jointly
by the Municipal Price Control Bureau and the Municipal Housing and Land Administration Bureau;

2. The standard of service fee for the ordinary commodity residential buildings for the domestic market shall be determined through
negotiation between property management enterprises and proprietors or the proprietors committee within the floating range of base
price set by the district (county) price control departments jointly with the property management departments concerned;

3. The standard of the service fees for the high-quality commodity residential buildings for the domestic market and commodity residential
buildings to be sold to foreigners shall be determined through negotiation between the property management enterprises and proprietors
or the proprietors committee.

The fees for other management services shall be determined through negotiation between the property management enterprise and the
proprietors committee or proprietors or house users.

   Article 24 The property management enterprise shall charge the proprietors the property management service fees as stipulated in the property
management service contract.

If proprietors and house users have agreed that the property management service fees shall be paid by the house users, the service
fees shall be paid as agreed.

If it is agreed that the property management service fees may be collected in advance, the term of advanced payment shall be to more
than 3 months.

   Article 25 The items and standards concerning property management service fees shall be made known to the public. If proprietors or house users
have paid the property management service fees specified in the present Regulations, no other unit and individual person shall charge
any fees of the same nature again.

Proprietors or house users may refuse to pay property management service fees charged by some property management enterprise which
has offered services without being entrusted by the proprietors committee, the proprietors or house users.

   Article 26 The property management enterprise shall, within 10 days after the termination or cancellation of the property management service
contract, handle the following for the proprietors committee, and report to the district (county) property management departments
for the record:

1. Settle the accounts of property management service fees paid in advance and refund the overcharge;

2. Hand over all the archives and relevant account books;

3. Hand over the houses, grounds and other properties jointly owned by the proprietors.

   Article 27 Proprietors and house users shall abide by the relevant provisions of the laws and regulations, follow the principle of being beneficial
to the use and safety of the property, and the principle of, fairness and reasonableness, and properly handle the interrelations
between water supply, drainage, passage, ventilation, lighting, maintenance, sanitation and environmental protection.

   Article 28 The following acts shall be prohibited in the property use:

1. Damage the load-bearing structures of houses and destroy the appearances of houses;

2. Occupy or damage the areas and installations for common use or move installations for common use to another location;

3. Put up buildings or structures in courtyards or gardens, on platforms, roofs, roads or other places;

4. Occupy greenspace or destroy greenery;

5. Set up vendors’ stands and open markets without permission;

6. Dump garbage or odds and ends at random;

7. Put up posters, or draw and carve on building and structures without permission;

8. discharge poisonous or harmful materials or harmful materials, or make noises that go beyond the standard specified;

9. Other acts prohibited by the laws and regulations.

   Article 29 Proprietors or house users shall inform the property management enterprise before they decorate their residential buildings, and
the property management enterprise shall inform the proprietors house users of the prohibitions and points for attention in interior
decoration.

The property management enterprise shall offer advice on and exercise supervision over interior decoration of residential buildings.
When it finds out any act violating Article 28 of the present Regulations, it shall try to stop it and press for correction. It shall
report the case to the proprietors committee timely and ask the relevant administrative organs to impose penalties on those who refuse
to make the correction in accordance with the laws.

   Article 30 The residential function of the building shall not be changed. If there are any special needs that make a functional change necessary,
the change shall be carried out in line with the requirements of the city planning. The proprietor in question shall ask the neighboring
proprietors, the house users and the proprietors committee for a written consent and submit the written consent to the district (county)
property management departments for examination and approval.

The functions of public buildings and facilities built within the property management area according to plan shall not be changed.

   Article 31 No unit or individual person shall occupy any roads and grounds within the property management area. If there is a need to occupy
temporarily any roads or grounds within the management area because of property maintenance or in the public interests, such as digging
the roads or grounds, an agreement has to be reached with the proprietors committee, and the original state has to be restored within
the time limit agreed on.

The proprietors committee shall make the regulations on motor vehicles’ moving about, parking and charging of fee within the property
management area except those special vehicles performing the tasks of security, fire fighting, emergency, first-aid and environment
protection. Parking fees shall be determined in accordance with the provisions of the district (county) price control departments
concerned. The income from vehicle parking shall go into the property maintenance funds and be spent on the maintenance and renovation
of public facilities.

   Article 32 Those who use the property to set up business facilities such as advertisements, shall first ask the relevant proprietors, house
users and the proprietors committee for a written consent, and then go through formalities for examination and approval at the administrative
management department concerned. After given the permission, they shall sign an agreement with the proprietors committee and pay
the set-up fees.

The business facilities set-up fees received shall go into the property maintenance funds.

If the property is used for setting up facilities for public welfare, the relevant provisions stipulated by the Municipal People’s
Government shall be observed.

   Article 33 The disposal and treatment of daily garbage and excrement and urine within the property management area shall follow the relevant
provisions on the management of environmental sanitation in this municipality.

   Article 34 When a proprietor transfers or rent out his residence, the proprietors’ joint pledge shall be attached as an appendix to the residence
transfer contract or the residence lease contract.

The parties concerned shall, within 10 days after the signing of the residence transfer contract or the residence lease contract,
inform in writing the proprietors committee and the property management enterprise of the residence transfer or the residence lease.

CHAPTER V THE MAINTENANCE OF PROPERTY

   Article 35 The property maintenance funds shall be established upon the sale of publicly-owned residences and newly-built ordinary commodity
houses for domestic market.

The property maintenance fund may be established upon the sale of newly- built high-quality commodity houses for domestic and foreign
markets and commodity residential buildings for foreign buyers.

The specific standards and measures for the establishment of property maintenance funds shall be set by the Municipal People’s Government.

   Article 36 The residence selling unit shall deposit the property maintenance funds with a financial institution and open a special account in
the name of the proprietors’ committee at the interest rate of no less than that of the bankdeposit or urban and rural residents.

The property maintenance fund shall have separate accounts for each building, and be calculated household by household.

   Article 37 The property maintenance funds shall be used for the purpose of maintenance and renovation of the areas and installations for common
use and public facilities, and shall not be used otherwise.

The proprietors committee shall periodically make public the financial operations of the property maintenance funds and put itself
under the supervision of the proprietors.

   Article 38 The expenses on property maintenance and renovation shall be borne in the following ways:

1. Those for private areas and installation shall be borne by the proprietors.

2. Those for areas and installation for common use shall be borne by all the proprietors involved in the whole building in proportion
to the floor area each of them possesses.

3. Those for public facilities shall be borne by all proprietors within the property management area in proportion to the floor area
each of them possesses.

If the areas, and installations for common use and public facilities in residential buildings are intentionally damaged by some person,
the maintenance and renovation expenses shall be borne by the person who is directly liable.

If serious damages occur in the property and affect the safety of the proprietors and house users, the district (county) property
management departments shall press for maintenance within set time limit.

If the property maintenance funds appear to be in sufficient, the proprietors shall pay the property maintenance funds in accordance
with the decisions made by the proprietors committee and in proportion to the floor area each of them possesses. The expenses on
the maintenance and renovation for public facilities in the publicly owned residential building sold to its residents out shall follow
the provisions stipulated by the Municipal People’s Government.

   Article 39 When areas and installations for common use are under repair, the neighboring proprietors and house users shall coordinate. If anyone
brings about property losses to other proprietors and house users by hindering the repairs, he shall be liable for compensation.

If property maintenance and renovation damage the private areas and installations of the neighboring proprietors and house users,
or cause other property losses, those liable for the damage and losses shall restore them to their original state or compensate for
them.

   Article 40 When proprietors transfer their residences, the balance in the property maintenance fund accounts shall not be refunded but continue
to be used for maintenance and renovation of the areas and installation for common use and public facilities in the buildings, the
balance of what was paid by the proprietors shall be paid to the transferor by the transferee.

CHAPTER VI FIRST-PHASE PROPERTY MANAGEMENT

   Article 41 The first-phase property management in the present Regulations refers to the property management from the day when a residence is
sold to the day when the proprietors’ committee is established.

   Article 42 The unit which sells newly-built commodity residential buildings shall make the pledge on residence use before the sale of a residence
and draw up the first-property management contract with the property management enterprise it has selected and appointed, and then
submit both the joint pledge and the contract to the district (county) property management departments concerned for the record.

When signing the residence transfer contract with the residence buyer, the unit which sells newly-built commodity residential buildings
shall attach the residence use contract, first-phase property management service contract and the instructions for using the residence
as appendices to the residence transfer contract.

The pledge on residence use shall not contravene the laws and regulations.

   Article 43 The unit which sells newly-built commodity residential buildings is not allowed to transfer separately the ownership’s of areas and
installations for common use or public facilities and the right to use them.

   Article 44 The unit which sells newly-built commodity residential buildings shall assume the responsibility to maintain them in accordance with
the period of guaranteed maintenance and scope of guaranteed maintenance stipulated by the state and this Municipality.

   Article 45 The units which sells newly-built commodity residential buildings shall not use the property management funds during the period of
first-phase property management.

   Article 46 The first-phase property management fees between the day when the first-phase property management service contract is signed and
the day when the newly-built commodity residential buildings are put to use shall be borne by the residence sellers, while those
between the day when the newly-built residential buildings are put to use and the day when the first-phase propert

MEASURES OF CUSTOMS FOR SUPERVISION AND CONTROL OF THE BONDED AREAS

19970610The State Council

The General Administration of Customs

Decree of the General Administration of Customs of the People’s Republic of China

No.65

Measures of Customs for Supervision and Control of the Bonded Areas adopted by the State Council on June 10, 1997, are hereby promulgated
and shall come into force as of the date of promulgation. The Administration Measures of the Customs of the People’s Republic of
China on Importing and Exporting Goods, Vehicles and Articles Carried by an Individual of Shanghai Waigaoqiao Bonded Area promulgated
by the General Administration of Customs and its relative specific rules formulated according with the Measures, shall be annulled
therefrom.

Director General of the General Administration of Customs, Qian Guanlin

August 1, 1997

Measures of Customs for Supervision and Control of the Bonded Areas

Chapter I General Provisions

Article 1

These Measures are formulated in accordance with the provisions of the Customs Law and other relevant laws with a view to strengthening
and perfecting customs supervision and control of the bonded areas and promoting sound development of the bonded areas.

Article 2

Establishment of the bonded areas within the territory of the People’s Republic of China must be subjected to the approval of the
State Council.

Article 3

The bonded areas are specially designated areas under customs supervision and control. The customs exercise supervision and control
over goods, transportation vehicles and articles carried by individuals entering or leaving the bonded areas pursuant to these Measures.
Isolation facilities meeting the requirements for customs supervision and control should be installed between the bonded areas and
other areas within the territory of the People’s Republic of China(hereinafter referred to as un-bonded areas).

Article 4

Only administrative organs for the bonded areas and enterprises are established in the bonded areas. No persons other than the security
guards shall reside in the bonded areas.

Article 5

Enterprises established in the bonded areas(hereinafter referred to as in-area enterprises) should complete the formalities of registration
at the customs. In-area enterprises should, pursuant to the provisions of the relevant laws and regulations of the State, keep ledgers,
compile statements and tables, do bookkeeping and carry out accounting and settlement on legal and effective vouchers and record
such information as the stocks, transfers, transshipment, sales, processing, utilization and damages and consumption of goods and
articles entering or leaving the bonded areas.

Article 6

The bonded areas practice the customs auditing system. In-area enterprises should hook up with the electronic computer network of
the customs and carry out electronic data exchange.

Article 7

The customs are empowered to conduct inspections and examinations of the goods, articles, transportation vehicles and personnel entering
or leaving the bonded areas as well as related sites in the areas pursuant to the provisions of the Customs Law.

Article 8

Goods and articles the import and export of which are prohibited by the State must not enter or leave the bonded areas.

Chapter II Supervision and Control of Entry and Exit Goods between the Bonded Areas and Beyond-the-boundary Areas

Article 9

The customs exercise simple, convenient and effective supervision and control over entry and exit goods between the bonded areas and
the beyond-the-boundary areas.

Article 10

Consignees, consignors or their agents shall report to the customs for the record on entry and exit goods between the bonded areas
and the beyond-the-boundary areas.

Article 11

No import-export quota and license control shall be exercised other than passive export quota control in respect of entry and exit
goods between the bonded areas and the beyond-the-boundary areas.

Article 12

Import duty and import link taxes of goods entering the bonded areas from places beyond the boundaries, unless otherwise provided
for in laws and regulations, shall be handled in accordance with the following provisions:

(1)

Machinery, equipment and other capital goods needed for in-area construction projects of infrastructure for production shall be exempted
from taxation;

(2)

Production and management equipment and rational quantity of office items for their own use by in-area enterprises as well as their
required parts and components for maintenance, fuels for production, materials and equipment required for the construction of workshops
for production and warehouse facilities shall be exempted from taxation;

(3)

Rational quantity of management equipment and office items as well as the required parts and components for maintenance for their
own use by the administrative organs of the bonded areas shall be exempted from taxation; and

(4)

Raw materials, parts, components and packaging materials required for the processing of export products by in-area enterprises shall
be bonded.

Goods or articles other than those prescribed in subparagraphs(1) to(4) in the preceding paragraph entering the bonded areas shall
be taxed in accordance with law.

Goods for transshipment and goods stored in the bonded areas shall be put under control as bonded goods.

Chapter III Supervision and Control of Entry and Exit Goods between the Bonded Areas and the Un-bonded Areas

Article 13

Formalities for import goods shall be completed for goods from the bonded areas entering un-bonded areas; formalities for export goods
shall be completed for goods from un-bonded areas entering the bonded areas and export tax refund shall be processed in accordance
with the relevant provisions of the State. The customs exercise supervision and control over entry and exit goods between the bonded
areas and the un-bonded areas pursuant to the provisions of the State related to import-export control.

Article 14

For machinery, equipment, capital goods and articles entering the bonded areas from the un-bonded areas for in-area use, user units
should submit lists of the above-mentioned goods or articles which will be cleared upon customs inspection. Goods or articles of
the preceding paragraph, which have already paid import duty and import linked tax, shall not be refunded.

Article 15

For goods of the bonded areas to be imported and exported from the ports of un-bonded areas or goods of one bonded area to be shipped
to another bonded area, written applications should be submitted to customs in advance and these goods will be handled in accordance
with customs transfer shipment and relevant provisions upon the approval of customs.

Chapter IV Supervision and Control over Goods in the Bonded Areas

Article 16

Goods in the bonded areas can be transferred and diverted among in-area enterprises; the interested parties should report to the customs
on matters relating to transfers and diversions for the record.

Article 17

Such simple processing as classification, sorting, painting and pasting of marks and change in packaging forms of transit goods in
the bonded areas can be carried out in in-area warehouses or other in-area sites.

Article 18

When in-area enterprises hold exhibitions and displays of foreign commodities and commodities of the un-bonded areas in the bonded
areas, the displayed commodities should be subjected to customs supervision and control.

Chapter V Control of Goods of Processing Trade in the Bonded Areas

Article 19

In-area processors should complete the formalities at the customs for their required raw materials and components entering or leaving
the bonded areas for the record.

Article 20

Production of export products under passive quota control by in-area processors should be subjected to the approval of the competent
department under the State Council in advance.

Article 21

Formalities should be completed at the customs in accordance with the relevant provisions of the State for the shipment out of the
country of the finished products and the leftover bits and pieces of industrial materials produced in the process of processing by
in-area processors; they shall be exempted from export duty unless otherwise provided for in laws and regulations.

Shipment by in-area processors of in-area processed finished products, substandard products or the leftover bits and pieces of industrial
materials produced in the process of processing to un-bonded areas should go through formalities of import customs declaration at
the customs in accordance with the relevant provisions of the State and pay taxes according to law.

Article 22

For finished products processed entirely with materials and components shipped in from abroad by in-area processors to be sold in
un-bonded areas, the customs shall levy tax as import finished products. For processed finished products containing materials and
components shipped in from abroad to be sold in un-bonded areas, the customs shall levy tax in accordance with their contained shipped-in
materials and components; for untruthful declarations with regard to item names, quantity and value of the shipped-in materials and
components from abroad, the customs shall levy taxes as import finished products.

Article 23

In-area processors entrusting enterprises in un-bonded areas or accepting the entrustment of the enterprises in un-bonded areas for
processing business should gain the approval of the customs in advance and meet the following conditions:

(1)

They have in-area production sites, which have already formally conducted processing business;

(2)

Main working procedure of the processing business entrusted to enterprises in un-bonded areas should be carried out in the bonded
areas;

(3)

The duration of entrusting enterprises in un-bonded areas with processing business shall be six months; when extension becomes necessary
under extraordinary circumstances, application for extension should be submitted to the customs and the duration of extension shall
be six months. Products should be shipped back to the bonded areas upon completion of processing in un-bonded areas; when it becomes
necessary to export the products direct from the un-bonded areas, formalities for verification and deduction should be completed
at the customs; and

(4)

In-area processors taking orders of entrusted processing from enterprises in un-bonded areas should complete the formalities for the
materials and components for entrusted processing at the customs for the record, separate ledgers of the materials, components and
products of entrusted processing and those of the in-area enterprises should be kept and they should be used separately. Products
upon completion of processing should be shipped back to the enterprises in the un-bonded areas, and the in-area processors shall
apply to the customs for writing off the case.

Article 24

The customs do not practice the system of bank guarantee machine account for processing trade for the processing businesses with imported
materials and with customers’ materials conducted by in-area processors.

When the processing business is entrusted to enterprises in un-bonded areas, the enterprises in the un-bonded areas shall go through
the formalities of contract registration for the record and follow the bank guarantee machine account system.

Chapter VI Supervision and Control over Transportation Vehicles and Articles Carried by Individuals Entering and Leaving the Bonded
Areas

Article 25

Transpotation vehicles and personnel entering and leaving the bonded areas should go through the special-purpose passages designated
by the customs and be subjected to customs inspection.

Article 26

The persons-in-charge of the transportation vehicles entering and leaving the bonded areas should complete the formalities for registration
at the customs for the record on the presentation of the certificates of approval by the competent departments of the bonded areas
along with lists of the names, quantity, license plate numbers and drivers’ names.

Article 27

Without the approval of the customs, transportation vehicles and personnel from the bonded areas to the un-bonded areas must not ship
or carry duty-free goods and articles, bonded goods as well as products made with bonded materials and components.

Chapter VII Supplementary Provisions

Article 28

Whoever in violation of the provisions of these Measures shall be dealt with pursuant to the provisions of the Customs Law of the
People’s Republic of China and the Rules for the Implementation of Administrative Penalty of the Customs Law of the People’s Republic
of China; when the offence is of a serious nature, the customs can revoke the qualification of customs registration of the in-area
enterprises.

Article 29

Specific measures relating to putting on record provided for in these Measures shall be worked out by the General Administration of
Customs.

Article 30

These Measures enter into force as of the date of promulgation. The Measures of the Customs of the People’s Republic of China on Administration
of Goods, Transportation Vehicles and Articles Carried by Individuals Entering and Leaving the Shanghai Waigaoqiao Bonded Area is
simultaneously nullified.

 
The General Administration of Customs
1997-08-01

 



1...345...15Page 4 of 15

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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