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2005

STATE COUNCIL DIRECTIVE ON STRENGTHENING REGULATIONS IN THE MANAGEMENT OF THE TELECOMMINCATIONS SECTOR

THE SUPPLEMENTARY REGULATIONS TO THE INTERIM REGULATIONS OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION ON THE SETTING UP OF INVESTMENT-ORIENTED COMPANIES BY FOREIGN INVESTORS

20030710

The Ministry of Foreign Trade and Economic Cooperation

Decree of the Ministry of Foreign Trade and Economic Cooperation

No. 3

The Supplementary Regulations to the Interim Regulations of the Ministry of Foreign Trade and Economic Cooperation on the Setting
up of Investment-Oriented Companies by Foreign Investors are hereby issued. The present Regulations shall come into force as of the
date of promulgation.

Shi Guangsheng, Minister of the Ministry of Foreign Trade and Economic Cooperation

August 24, 1999

The Supplementary Regulations to the Interim Regulations of the Ministry of Foreign Trade and Economic Cooperation on the Setting
up of Investment-Oriented Companies by Foreign Investors

For the purpose of promoting investment of transnational companies in China, introducing advanced technology and management experiences
from abroad and perfecting functions of investment-oriented companies, the supplementary regulations are made to the Interim Regulations
on the Setting up of Investment-Oriented Companies by Foreign Investors on April 4, 1995 by the Ministry of Foreign Trade and Economic
Cooperation, which run as follows:

1.

The registered capital of an investment-oriented company shall not be below 30 million U.S dollars, its total volume of loans shall
not exceed four times of its registered capital paid up. In case such a company intends, out of operation necessity, to borrow more
loans which exceeds four times of its registered capital paid up, it should report to the Ministry of Foreign Trade and Economic
Cooperation for approval.

2.

An investment-oriented company is encouraged to set up scientific research and development centres or departments to engage in research
and development of new products and high technologies, to transfer its research and development results, and to provide correspondent
technological service.

3.

An investment-oriented company may sell at home and overseas markets in the form of agency or distribution of products produced by
enterprises wherein it invested.

4.

An investment-oriented company may provide comprehensive services such as transportation, storing, etc. for the enterprises wherein
it invested.

5.

An investment-oriented company may purchase within the Chinese territory commodities for export, which are not involved with export
quotas or control by export license.

6.

An investment-oriented company engaged in operation activities prescribed in Articles 3, 4 and 5 of the present Regulations should
submit, according to the procedures, its revised contract and the articles of association and other relevant documents for application
to the Ministry of Foreign Trade and Economic Cooperation for approval, and should meet the following conditions:

An investment-oriented company has paid up in time, according to the provisions of its contract and the articles of association, its
registered capital, and the volume of the registered capital actually paid up is not below 30 million U.S. dollars. An investment-oriented
company applying for providing for enterprises wherein it invested, operation activities as enlisted in Articles 3 and 4 of the present
Regulations, its investment ratio of registered capital in the enterprises wherein it invested should not be lower to 10%, and should
have written entrustment (unanimously adopted by the Board of Directors of the enterprises wherein it invested) from the enterprises
wherein it invested.

7.

Where the present Regulations conflict with the Explanations to the Relevant Issues of the Interim Regulations on the Setting up of
Investment-Oriented Companies by Foreign Investors issued on February 16, 1996 by the Ministry of Foreign Trade and Economic Cooperation,
the present Regulations shall prevail.

8.

The present Regulations shall come into force as of the date of promulgation.



 
The Ministry of Foreign Trade and Economic Cooperation
1999-08-24

 






MAP OF THE MACAO SPECIAL ADMINISTRATIVE REGION

Category  SPECIAL ADMINISTRATIVE REGION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1999-12-20 Effective Date  1999-12-20  


The Map of the Macao Special Administrative Region of the People’s Republic of China


Appendix: The writing statement for the area range of administrative

(promulgated by No. 275 Decreed of the State Council of the People’s

Republic of China on December 20, 1999)

    In accordance with the establishment of the Macao Special Administrative Region of the People’s
Republic of China> adopted at the First Session of the Eighth National
People’s Congress on March 31, 1999, the Administrative Region of the People’s Republic of China> have been adopted
by the 23rd Executive Meeting of the State Council on December 7, 1999. It is
promulgated now.

    Appendex: The writing statement for the area range of administrative
region of the Macao Special Administrative Region of the People’s Republic
of China.

    THE MAP OF THE MACAO SPECIAL ADMINISTRATIVE REGION OF

        THE PEOPLE’S REPUBLIC OF CHINA

    (Note by editor: The map of this administrative region
area is shown in original document issued)

Appendix: The writing statement for the area range of administrative
region of the Macao Special Administrative Region of the People’s Republic
of China.

    The Macao Special Administrative Region of the People’s Republic of China
shall include Macao Peninsula, Dan Zai Island and Lu Huan Inland.

    The north part of the Macao Special Administrative Region is linked with
Gong Bei of Zhu Hai City of Guang Dong Province by land route.  Area to the
south of the arched door of Guang Zha shall be administered by Macao Special
Administrative Region. The area between the north of arched door of Guang Zha
and the original flag building of the frontier inspection station shall be
managed by original measure keeping no change.

    The Macao Special Administrative Region shall maintain its managing range
of the original customary water area with no changing.





CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL ON DOING WELL RELEVANT WORK DURING NATIONAL HOLIDAY PERIODS

Category  MISCELLANEOUS ADMINISTRATIVE AFFAIRS Organ of Promulgation  The General Office of the State Council Status of Effect  In Force
Date of Promulgation  1999-09-18 Effective Date  1999-09-18  


Circular of the General Office of the State Council on Doing Well Relevant Work during National Holiday Periods

(Issued by Document Guobanfa No. 81 [1999] of the General Office of the State Council on September 18, 1999)

    In light of our present political and economic development levels and the daily increasing need of the people
for material and cultural life, the State Council has made amendments to the Measures on Holidays for National Festivals and Commemoration
Days issued by the Administrative Council on December 23, 1949. Upon the amendment to the Measures on Holidays, the holidays for
the “5.1” International Labor Day increase from 1 day to 3 days, the holidays for the “10.1” National Day from 2 days to 3 days,
and thus the national legal holidays increase from 7 days to 10 days. Such decision of the State Council fully indicates that the
Party and the State care for the people and protect citizen’s right of rest. In order to properly arrange the people’s life during
holidays, and at the same time ensure the accomplishment of various production and work tasks, maintain the country’s political stability
and social peace and union, and protect the smooth development of the reform, economic construction and other various causes, this
Circular is hereby issued as follows:

    I. Railways, communications, civil aviation and other communications and transportation departments shall
organize the normal and safe operation during holiday periods; water, electricity, gas, heating and other public utility units shall
ensure the normal supply during holiday periods; the medical and health departments shall arrange well diagnosis and medical treatment
during holiday periods and strengthen the work for health care and epidemic prevention; commercial and banking units as well as cultural
and recreation places shall ensure operations during holiday periods and maintain the service level; the management and service departments
of parks, scenic and historical spots and other tour sites shall do well in receiving visitors and tourists; and the public security
organs shall maintain the order of various public places and relevant road transportation, and take strict precautions against various
incidents.

    II. Departments for education, culture, press and publication, radio, film and television, and sports, urban
subdistrict offices and residents’ committees, people’s governments of townships and towns, and villagers’ committees shall organize
and mobilize forces from various social aspects to strengthen the construction of socialist spiritual civilization, direct the people
to develop healthy and instructive cultural and recreation activities in various forms, enrich the people’s spiritual and cultural
life, and firmly resist feudal and superstitious activities.

    III. Enterprises shall strengthen safe production management, and various industrial and communications sectors
shall strength supervision and take strict precautions against the occurrence of safe production accidents. The labor and social
security departments shall strengthen supervision and inspection for safeguarding employees’ rights of rest and holiday. Leaders
at all levels shall care about the employees who are required to continue production and work during holiday periods due to a demand
arising from the nature of work and the characteristics of production.

    IV. The local people’s governments at all levels, the labor and social security departments, the civil affairs
departments and labor unions shall continue to do their work well during holiday periods, ensure the life of laid-off employees of
State-owned enterprises, the unemployed, needy residents in cities and households enjoying five guarantees in rural areas for expressing
the Party’s and the State’ care about them.

    V. State authorities and important public institutions shall complete and strengthen their on-duty systems
during holiday periods to ensure the normal operation of the administrative work and various undertakings.

    Tours at public expenses are strictly prohibited, and the supervisory, financial and other departments shall
strengthen financial supervision and inspection.

    VI. Departments for public security, State security and civil affairs and other departments shall strengthen
administration of State security and public order according to law, strengthen administration of activities conducted by social groups
and other non-governmental organizations and strike various illegal and criminal activities so as to maintain social stability during
holiday periods.

    VII. Each locality and each department may formulate corresponding measures in light of the actual conditions
of the region and department, and do the work for education and public awareness among the people, ensuing the smooth progress of
various work during holiday periods.





CIRCULAR ON AMENDING RELEVANT PROVISIONS CONCERNING SETTLEMENT ACCOUNTS OF ENTERPRISES WITH FOREIGN INVESTMENT

The State Administration of Foreign Exchange

Circular on Amending Relevant Provisions Concerning Settlement Accounts of Enterprises with Foreign Investment

Huifa [1999] No.269

August 23, 1999

To further improve the environment for enterprises with foreign investment and make sure the sound and efficient use of their foreign
exchange funds, Category 2 of Paragraph 1 in Article 4 of document (Huifa [1999] No.10), “Circular on Relevant Issues Concerning
Improving Foreign Exchange Administration of Capital Account”, is amended as follows.

1.

Funds in settlement accounts of enterprises with foreign investment can be converted to time deposits, but transfer between different
banks is not permitted.

2.

Time deposits are subject to the restriction on balance ceiling of settlement accounts and shall not invade regulations on foreign
exchange payment under Capital Account.

3.

To transfer funds in settlement accounts to banks other than the opening banks for RMB loans with foreign exchange in pledge, the
opening banks of settlement accounts should subtract the balance ceiling of the settlement accounts by an amount equivalent to the
pledged foreign exchange and should not restore the balance ceiling of the former settlement accounts until the pledged foreign exchange
is transferred back.

This Circular enters into force as of its promulgation. Category 2 of Paragraph 1 in Article 4 of Document (Huifa [1999] No.10) is
nullified simultaneously.



 
The State Administration of Foreign Exchange
1999-08-23

 






SPECIAL MARITIME PROCEDURE LAW

Category  LITIGATION Organ of Promulgation  The Standing Committee of the National People’s Congress Status of Effect  In Force
Date of Promulgation  1999-12-25 Effective Date  2000-07-01  


Special Maritime Procedure Law of the People’s Republic of China

Contents
Chapter I  General Provisions
Chapter II  Jurisdiction
Chapter III Maritime Claims Preservation
Chapter IV  Maritime Injunction
Chapter V  Maritime Evidence Preservation
Chapter VI  Maritime Guarantee
Chapter VII   Service
Chapter VIII  Trial Procedures
Chapter IX Procedures for Constituting a Limitation Fund for Maritime Claims Liability        
Chapter X Procedures for Registering Creditors’ Rights and Repayment of Debt
Chapter XI Procedures for Publicizing Notice for Assertion of Maritime Liens
Chapter XII Supplementary Provisions

(Adopted at the 13th Meeting of the Standing Committee of the Ninth

National People’s Congress on December 25 1999, promulgated by Order No. 28
of the President of the People’s Republic of China on December 25 1999)
Contents

    Chapter I  General Provisions

    Chapter II  Jurisdiction

    Chapter III  Maritime Claims Preservation

      Section 1  General Principles

      Section 2  Arresting or Auction Sale of Ships

      Section 3  Arrest and Auction of the Goods on Board

    Chapter IV  Maritime Injunction

    Chapter V  Maritime Evidence Preservation

    Chapter VI  Maritime Guarantee

    Chapter VII  Service

    Chapter VIII  Trial Procedures

      Section 1  Provisions on Trying Cases Involving Collision of Ships

      Section 2  Provisions on Trying Cases Involving General Average

      Section 3  Provision on Exercising the Right to Indemnity by Subrogation

                 by a Maritime Insurer

      Section 4  Summary Procedures, Procedures for Hastening Debt Recovery

                 and Procedures for Publicizing Public
Notice for Assertion

                 of Claims

    Chapter IX  Procedures for Constituting a Limitation Fund for Maritime Claims Liability      

    Chapter X  Procedures for Registering Creditors’ Rights and Repayment of Debt

    Chapter XI  Procedures for Publicizing Notice for Assertion of Maritime Liens

    Chapter XII  Supplementary Provisions

Chapter I  General Provisions

    Article 1 This Law is formulated for the purposes of maintaining the litigation rights, ensuring the ascertaining of facts by the people’s
courts, distinguishing right from wrong, applying the law correctly, trying maritime cases promptly.

    Article 2 Whoever engages in maritime litigation within the territory of the People’s Republic of China shall apply the Civil Procedure Law
of the People’s Republic of China and this Law. Where otherwise provided for by this Law, such provisions shall prevail.

    Article 3 If an international treaty concluded or acceded to by the People’s Republic of China contains provisions that differ from provisions
of the Civil Procedure Law of the People’s Republic of China and this Law in respect of foreign-related maritime procedures, the
provisions of the international treaty shall apply, except those on which China has made reservations.

    Article 4 The maritime court shall entertain the lawsuits filed in respect of a maritime tortious dispute, maritime contract dispute and other
maritime disputes brought by the parties as provided for by laws.

    Article 5 In dealing with maritime litigation, the maritime courts, the high people’s courts where such courts are located and the Supreme
People’s Court shall apply the provisions of this Law.
Chapter II  Jurisdiction

    Article 6 Maritime territorial jurisdiction shall be conducted in accordance with the relevant provisions of the Civil Procedure Law of the
People’s Republic of China.

    The maritime territorial jurisdiction below shall be conducted in accordance with the following provisions:

    (1) A lawsuit brought on maritime tortious may be, in addition to the provisions of Articles 19 to 31 of the
Civil Procedure Law of the People’s Republic of China, under jurisdiction of the maritime court of the place of its port of registry;

    (2) A lawsuit brought on maritime transportation contract may be, in addition to the provisions of Articles
82 of the Civil Procedure Law of the People’s Republic of China, under jurisdiction of the maritime court of the place of its port
of re-transportation;

    (3) A lawsuit brought on maritime charter parties may be under jurisdiction of the maritime court of the place
of its port of ship delivery, port of ship return, port of ship registry, port where the defendant has its domicile;

    (4) A lawsuit brought on a maritime protection and indemity contract may be under jurisdiction of the maritime
court of the place where the object of the action is located, the place where the accident occurred or the place where the defendant
has its domicile;

    (5) A lawsuit brought on a maritime contract of employment of crew may be under jurisdiction of the maritime
court of the place where the plaintiff has its domicile, the place where the contract is signed, the place of the port where the
crew is abroad or the port where the crew leaves the ship or the place where the defendant has its domicile;

    (6) A lawsuit brought on a maritime guaranty may be under jurisdiction of the maritime court of the place
where the property mortgaged is located or the place where the defendant has its domicile; a lawsuit brought on a ship mortgage may
also be under jurisdiction of the maritime court in the place of registry port;

    (7) a lawsuit brought on ownership, procession, and use, maritime liens of a ship, may be under jurisdiction
of the maritime court of the place where the ship is located, the place of ship registry or the place where the defendant has its
domicile.

    Article 7 The following maritime litigation shall be under the exclusive jurisdiction of the maritime courts specified in this Article:

    (1) A lawsuit brought on a dispute over harbour operations shall be under the jurisdiction of the maritime
court of the place where the harbour is located;

    (2) A lawsuit brought on a dispute over pollution damage for a ship’s discharge, omission or dumping of oil
or other harmful substances, or maritime production, operations, ship scrapping, repairing operations shall be under the jurisdiction
of the maritime court of the place where oil pollution occurred, where injury result occurred or where preventive measures were taken;

    (3) A lawsuit brought on a dispute over a performance of a maritime exploration and development contract within
the territory of the People’s Republic of China and the sea areas under its jurisdiction shall be under the jurisdiction of the maritime
court of the place where the contract is performed.

    Article 8 Where the parties to a maritime dispute are foreign nationals, stateless persons, foreign enterprises or organizations and the parties,
through written agreement, choose the maritime court of the People’s Republic of China to exercise jurisdiction, even if the place
which has practical connections with the dispute is not within the territory of the People’s Republic of China, the maritime court
of the People’s Republic of China shall also have jurisdiction over the dispute.

    Article 9 An application for determining a maritime property as ownerless shall be filed by the parties with the maritime court of the place
where the property is located; an application for declaring a person as dead due to a maritime accident shall be filed with the maritime
court of the place where the competent organ responsible for handling with the accident or the maritime court that accepts the relevant
maritime cases.

    Article 10  In the event of a jurisdictional dispute between a maritime court and a people’s court, it shall be resolved by the disputing
parties through consultation; if the dispute cannot be so resolved, it shall be reported to their common superior people’s court
for the designation of jurisdiction.

    Article 11 When the parties apply for enforcement of maritime arbitral award, apply for recognition and enforcement of a judgement or written
order of a foreign court and foreign maritime arbitral award, an application shall be filed with the maritime court of the place
where the property subjected to execution or of the place where the person subjected to execution has its domicile. In case of no
maritime court in the place where the property subjected to execution or in the place where the person subjected to execution has
its domicile, an application shall be filed with the intermediate people’s court of the place where the property subjected to execution
or of the place where the person subjected to execution has its domicile.
Chapter III Maritime Claims Preservation

    Section 1 General Principles

    Article 12 Maritime claims mean maritime courts, according to applications of  maritime claimants, take compulsory preservation measures
against property of persons against whom the claims are brought up in order to ensure the realization of such rights.

    Article 13 An application for maritime claims by the parties shall, before bring a lawsuit, be filed with the maritime court of the place where
the property subjected to preservation.  

    Article 14 Maritime claims shall not be bound by procedure jurisdiction agreements or arbitration agreements relating to the said maritime claims
between the parties.

    Article 15 Where maritime claimants apply for maritime claims, written applications shall be filed with maritime courts. Maritime claims, application
reasons, objects subjected to preservation and amounts for guaranty shall be stated in applications.

    Article 16 A maritime court may, in accepting a maritime preservation application, order the claimant to provide a guaranty. Where the claimant
fails to provide guaranty, his application shall be rejected.

    Article 17  After receiving an application, the maritime court must make an order within 48 hours; if the court orders the adoption
of maritime preservation measures, the execution thereof shall begin immediately. Where not conforming to the conditions for a maritime
preservation, the application shall be rejected.

    If the party concerned is not satisfied with the order, he may, within five days from the date of the receipt
of the order, apply for reconsideration which could be granted only once. The maritime court shall make a reconsideration decision
within five days from the date of the receipt of the reconsideration application. Execution of the order shall not be suspended during
the time of reconsideration.

    Where the interested party raises objection to the maritime preservation, the maritime court, upon examination
and deeming it reasonable, shall cancel the property preservation.

    Article 18 If the person against whom the application for maritime preservation is made provides guaranty, or the party has justified reasons
for applying cancellation of maritime reservation, the people’s court shall cancel the property reservation promptly.

    If the maritime claimant fails to bring an action or apply for arbitration according to the arbitration agreement
within the time limit specified by this Law, the people’s court shall cancel the property reservation or return the guaranty promptly.

    Article 19 Where the relevant maritime dispute enters into litigation or arbitration procedure after execution of the maritime preservation,
the party may bring an action relating to the maritime claim to the maritime court which has taken maritime claim preservation or
other maritime courts having jurisdiction over it, with the exception of signing of a litigation jurisdiction agreement or an arbitration
agreement between the parties.

    Article 20 If an application for maritime preservation is wrongfully made by a maritime claimant, the claimant shall compensate the person against
whom the application is made for any loss incurred from maritime preservation.

    Section 2  Arresting or Auction Sale of Ships

    Article 21 The following maritime claims may applied for arresting ships:

    (1) the destruction of or damage to the property occurred in the operation of the ship;

    (2) the loss of life or personal injury directly relating to the operation of the ship;

    (3) salvage payment;

    (4) the damage or threat of damage caused by the ship to the environment, seashore or the relevant interested
parties; the measures taken for prevention, reduction and elimination of such damage; payment for compensation of such damage; the
reasonable cost for the measures taken actually or preparing to take for restoring the environment; loses the third party suffered
or will probably suffer due to such damage; and the damage, fees or loses which are similar in nature specified in this Item;

    (5) fees relating to floating, elimination, recycling and destruction of sunken ships, shipwreck, stranded
objects, abandoned ships or making them harmless, including fees relating to floating, elimination, recycling and destruction of
the objects which still are or were abroad such ships or making them harmless, and fees relating to maintenance of abandoned ships
and suppurating the crew members;

    (6) the agreement or use or charter parties of the ship;

    (7) an agreement for carriage of goods or passengers;

    (8) goods (including luggage) on board or loss or damage related thereto;

    (9) general average;

    (10) towage service;

    (11) pilotage service;

    (12) provision of materials or services for operation, management, maintenance and repair of ships;

    (13) ship building, rebuilding, repair, refitting or fitting;

    (14) prescribed fees or fees for ports, canals, wharves, harbors or other waterways;

    (15) wages of ship’s crew or other payments, including the repatriation fee and social insurance premium payable
for ship’s crew;

    (16) expenses paid for a ship or shipowner;

    (17) ship’s insurance premium (including mutual insurance membership fee) paid by a shipowner or bareboat
charterer, or paid on his behalf;

    (18) the commission, brokerage or agency fee related to a ship paid by the shipowner or bareboat charterer,
or paid on his behalf;

    (19) a dispute over ownership or possession of a ship;

    (20) a dispute over use of or profit from a ship between co-owners of the ship;

    (21) a mortgage of a ship or right of the same nature; or

    (22) a dispute arising from a contract for sale of a ship.

    Article 22  No application for arrest of a ship may be filed except for the maritime claims as stipulated in Article 21 of this Law;
there are exceptions, however, for executing judgments, arbitral awards or other legal documents.

    Article 23  If any of the following circumstances exists, a maritime court may arrest the involved ship:

    (1) where the shipowner is held responsible for a maritime claim and is the owner of the ship when the arrest
is executed;

    (2) where the bareboat charterer of the ship is held responsible for a maritime claim and is the bareboat
charterer or the owner of the ship when the arrest is executed;

    (3) where a maritime claim is enpost_titled to a mortgage of the ship or right of the same nature;

    (4) where a maritime claim relates to ownership or possession of the ship; or

    (5) where a maritime claim is enpost_titled to a maritime lien.

    A maritime court may arrest other ships owned by the shipowner, bareboat charterer, time charterer or voyage
charterer who is held responsible for a maritime claim, when the arrest is executed, with the exception of the claims related to
ownership or possession of the ship.

    No ship engaging in military or government duties may be arrested.

    Article 24  A maritime claimant may not apply to arrest a ship having been arrested for the same maritime claim, except that any of
the following circumstances exists:

    (1) where the party who opposes the claim has not provided a sure guarantee;

    (2) where the guarantor probably cannot perform his obligation of guarantee wholly or partly; or

    (3) where the maritime claimant agrees to release the arrested ship or return the existing guarantee for justifiable
reason; or cannot stop the release of the arrested ship or return of the existing guarantee by justifiable means.

    Article 25  For a maritime claimant applying to arrest the involved ship, if the name of the party who opposes the claim cannot be
ascertained at once, the filing of his application shall not be affected.

    Article 26  A maritime court may issue the relevant departments with a notice for assistance in execution at the same time it issues
or cancels an order for arrest of a ship, and the notice shall clearly set forth the scope and content of the assistance in execution
and the relevant departments have the obligation to assist in execution. A maritime may directly dispatch personnel to board the
ship for supervision if it deems necessary.

    Article 27  After a maritime court orders to impose preservation upon a ship, with consent of the maritime claimant, it may allow
the ship to continue the operation by ways of restraining the disposition or mortgage of the ship.

    Article 28  The period of arresting a ship for maritime claim preservation shall be 30 days.

    If a maritime claimant brings a law suit or applies for arbitration within 30 days, and applies for arrest
of a ship in the course of the litigation or arbitration, the arrest of the ship shall not be restrained by the period stipulated
in the preceding paragraph.

    Article 29  If, on the expiration of the period of arresting a ship, the party who opposes the claim fails to provide guarantee, and
the ship is not suitable for being arrested longer, the maritime claimant may apply to the maritime court arresting the ship for
auction of the ship after bringing a law suit or applying for arbitration.

    Article 30  A maritime court shall conduct examination after receiving the application for auction of a ship, and make an order approving
or disapproving the auction of the ship.

    If a party is not satisfied with the order, he may apply for reconsideration once within five days of the
date of receiving the written order. The maritime court shall make a reconsideration decision within five days of receiving the reconsideration
application. Execution of the order shall be suspended during the time of reconsideration.

    Article 31  Where a maritime claimant, after filing an application for auction of a ship, applies for stopping the auction, whether
or not to give a permission shall be ordered by the maritime court. If the maritime court orders to stop the auction of the ship,
expenses incurred for auctioning the ship shall be paid by the maritime claimant.

    Article 32  A maritime court that orders to auction a ship shall issue a public notice through newspapers or other new media. If a
foreign ship is to be auctioned, a public notice shall be issued through newspapers or other news media distributed abroad.

    A public notice shall contain the following particulars:

    (1) name and nationality of the ship to be auctioned;

    (2) causes and basis for auction of the ship;

    (3) composition of the ship auction committee;

    (4) time and place for auction of the ship;

    (5) time and place for display of the ship to be auctioned;

    (6) procedure to be undergone for participating in the bidding;

    (7) registered items to be handled for claims; and

    (8) other particulars as required to be publicized.

    The period of a public notice for auction of a ship shall not less than 30 days.

    Article 33  A maritime court, 30 days prior to auction of the ship, shall issue notices to the registration authorities of the country
of registry of the ship to be auctioned, and to the known lienor, mortgagee and owner of the ship.

    The contents of the notice contain the name of the ship to be auctioned, time and place for auction of the
ship, causes and basis for auction of the ship, and registration of claims.

    The notice shall be in writing or take other appropriate forms by which receipt can be confirmed.

    Article 34  Auction of a ship shall be executed by a ship auction committee. The ship auction committee shall be composed of three
or five persons, that is, execution officers appointed, as well as auctioneers and surveyors engaged by the maritime court.

    The ship auction committee organizes appraisal and valuation of the ship; organizes and presides over the
auction; signs a letter of confirmation for conclusion of the auction with the bidder; and handles procedures for the transfer of
the ship.

    The ship auction committee shall be responsible to the maritime court and subject to supervision of the maritime
court.

    Article 35  Bidders shall register with the ship auction committee within a prescribed time limit. For registration, they shall submit
for inspection the identity certificates of themselves, enterprises’ legal representatives, or persons-in-charge of other organizations,
as well as powers of attorney of agents, and pay a certain amount of bonds for purchase of the ship.

    Article 36  A ship auction committee shall display the ship to be auctioned before the auction of the ship, and shall provide facilities
for inspecting the ship to be auctioned and relevant data.

    Article 37  The vendee shall pay without delay not less than 20 percent of the ship’s price after he signs a letter of confirmation,
and the remainder of the ship’s price shall be settled within seven days of the date of concluding the auction, however, except otherwise
agreed upon between the ship auction committee and the vendee.

    Article 38  Once the vendee has settled the price in full, the original shipowner shall delivery the ship to the vendee on the basis
of the current condition of the ship, at the place of berth of the ship, within a fixed time limit. The ship auction committee shall
organize and supervise the delivery of the ship, and sign a letter of confirmation of ship’s delivery with the vendee after the delivery
of the ship.

    After the delivery of the ship is finished, the maritime court shall issue an order releasing the arrest of
the ship.

    Article 39  After the delivery of the ship, the maritime court shall issue a public notice through newspapers or other news media,
announcing that the ship has been auctioned openly and delivered to the vendee.

    Article 40  After accepting the ship, the vendee shall undergo formalities for registration of the ship’s ownership at the ship registration
authorities on the basis of the letter of confirmation for conclusion of auction and relevant data. The original shipowner shall
undergo formalities for cancellation of registration of the ship’s ownership at the original ship registration authorities. Failure
to undergo formalities for cancellation of registration of the ship’s ownership by the original shipowner shall not affect the transfer
of the ship’s ownership.

    Article 41  Malicious collusion between bidders makes the auction invalid. Any bidder involved in malicious collusion shall pay expenses
for auctioning the ship and compensate losses incurred. The maritime court may impose upon the bidder involved in malicious collusion
a fine of not more than ten percent and not less than 30 percent of the highest price offered.

    Article 42  In addition to the provisions in this Section, auction shall be governed by the relevant provisions of the Auction Law
of the People’s Republic of China.

    Article 43  Auction of an arrested ship for debt payment during the procedure of execution may be referred to the relevant provisions
of this Section.

    Section 3  Arrest and Auction of the Goods on Board

    Article 44  A maritime claimant may apply to arrest the goods on board for ensuring the fulfillment of his maritime claim.

    The goods on board to be arrested on application shall be under ownership of the party who opposes the claim.

    Article 45  The value of the goods on board to be arrested on application by a maritime claimant shall be equivalent to the amount
of his claim.

    Article 46  The period of arresting the goods on board for maritime claim preservation shall be 30 days.

    If a maritime claimant brings a law suit or applies for arbitration within 15 days, and applies for arrest
of the goods on board in the course of the litigation or arbitration, the arrest of the goods on board shall not be restrained by
the period stipulated in the preceding paragraph.

    Article 47  If, on the expiration of the period of arresting the goods on board, the party who opposes the claim fails to provide
guarantee, and the goods are not suitable for being arrested longer, the maritime claimant may apply to the maritime court arresting
the goods on board for auction of the goods after bringing a law suit or applying for arbitration.

    For articles which cannot be stored, or are difficult to be stored, or the storage expense may exceed their
value, the maritime claimant may apply for auction in advance.

    Article 48  A maritime court shall conduct examination after receiving the application for auction of the goods on board, and make
an order approving or disapproving the auction of the goods on board.

    If a party is not satisfied with the order, he may apply for reconsideration once within five days of the
date of receiving the written order. The maritime court shall make a reconsideration decision within five days of receiving the reconsideration
application. Execution of the order shall be suspended during the time of reconsideration.

    Article 49  Auction of the goods on board shall be executed by an auction organization composed of execution officers appointed, and
auctioneers engaged by the maritime court, or executed by an agency authorized by the maritime court.

    Auction of the goods on board, if not covered by the provisions of this Section, shall be referred to the
relevant provisions of Section 2 of this Chapter on auction of a ship.

    Article 50  Application by a maritime claimant for maritime claim preservation imposed upon fuel and materials used by a ship related
to the maritime claim shall be governed by the provisions of this Section.
Chapter IV  Maritime Injunction

    Article 51  A maritime injunction means any of compulsory measures by which a maritime court, on application by a maritime claimant,
orders an act or omission by the party who opposes the claim, in order to protect the lawful rights and interests of the maritime
claimant against

REGULATIONS ON UNEMPLOYMENT INSURANCE

Category  INSURANCE Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1999-01-22 Effective Date  1999-01-22  


Regulations on Unemployment Insurance

Chapter One  General Provisions
Chapter Two  Unemployment Insurance Funds
Chapter Three  Unemployment Insurance Benefits
Chapter Four  Administration and Supervision
Chapter Five  Penalty  Provisions
Chapter Six  Supplementary Provisions

(Adopted at the Eleventh Executive Meeting of the State Council on

December 26, 1999, promulgated by Decree No.258 of the State Council of People’s Republic of China on January 22, 1999)
Chapter One  General Provisions

    Article 1  These Regulation are formulated to guarantee basic livings of the unemployed during the unemployment period and promote
their reemployment.

    Article 2  Enterprises and institutions in cities and towns as well as their staff and workers shall pay unemployment insurance premium
in accordance with these Regulations.

    The unemployed of enterprises and institutions in cities and towns may enjoy the benefits of unemployment
insurance in accordance with these Regulation .

    Enterprises and institutions in cities and towns mentioned in this Article refer to State-owned enterprises,
collectively owned enterprise in cities and towns, enterprise with foreign investment, privately owned enterprise in cities and towns
as well as other enterprise in cities and towns

    Article 3  The administrative department of labor security under the State Council is in charge of unemployment insurance work throughout
the country. The administrative departments of labor security under the people’s governments at or above the county level are in
charge of unemployment insurance work within their respective administrative areas. Social insurance agencies engaging in unemployment
insurance business established by administrative departments of labor security in accordance with provisions of the State Council
will undertake concretely the unemployment insurance work.

    Article 4 Unemployment insurance premium is collected and paid according to relevant provisions of the State.
Chapter Two  Unemployment Insurance Funds

    Article 5  Unemployment insurance funds include the following items:

    a. unemployment insurance premium paid by enterprises and institutions in cities and towns as well as their
staff and workers;

    b. interest of unemployment insurance fund;

    c. financial subsidies;

    d. other funds incorporated into unemployment insurance funds according to law.

    Article 6  Enterprises and institutions in cities and towns shall pay unemployment insurance premium at a rate of 2% on the basis
of their total amount of salaries. Staff and workers in enterprises and institutions in cities and towns shall pay unemployment insurance
premium at a rate of 1% on the basis of their own salaries. Contract-system farmer workers engaged by enterprises and institutions
in cities and towns do not pay unemployment insurance premium themselves.

    Article 7  Overall planning for unemployment insurance funds is to be conducted in municipalities directly under the Central Government
and cities divided into districts; levels of overall planning in other areas are to be stipulated by people’s governments of provinces
and autonomous regions.

    Article 8  Provinces and autonomous regions may establish adjustment funds of unemployment insurance.

    Adjustment funds of unemployment insurance are to be raised at a ratio prescribed by people’s governments
of provinces or autonomous regions, taking unemployment insurance premium that should be collected according to law in areas where
overall planning is conducted as the base.

    If unemployment funds in areas where overall planning is conducted are not enough for use, adjustment funds
of unemployment insurance may be used as adjustment and local finance may be used as subsidies.

    Specific measures for raising and adjusting adjustment funds of unemployment insurance and for local financial
subsidies are to be stipulated by people’s governments of provinces and autonomous regions.

    Article 9  People’s governments of provinces, autonomous regions and municipalities directly under the Central Government, according
to the number of the unemployed and the amount of unemployment insurance funds for their respective administrative areas, and after
the approval by the State Council, may adjust properly rate of unemployment insurance premium.

    Article 10  Unemployment insurance funs shall be used for the following expenditure:

    a. unemployment insurance compensation;

    b. medical subvention during the period of receiving unemployment insurance compensation;

    c. funeral allowance for the unemployed died during the period of receiving unemployment insurance compensation
and pension for spouse and direct relatives supported by the dead person;

    d. subsidy for accepting job training and job seeking during the period of receiving unemployment insurance
compensation. Measures and Schemes for such subsidy are to be stipulated by people’s governments of provinces, autonomous regions
and municipalities directly under the Central Government;

    e. other expenses relating to unemployment insurance stipulated or approved by the State Council.

    Article 11  Unemployment insurance funds must be deposited into special accounts of social security funds opened by financial departments
in State-owned commercial banks. They shall be managed in a way of separate channeled receipts and expenditures and supervised by
financial departments according to law.

    Unemployment insurance funds deposited into banks and used to buy national debts according to State provisions
are accounted interests respectively according to the deposit rates of resident deposits during the same period and interests of
national debt. The interests are merged into unemployment insurance funds.

    Unemployment insurance funds shall be used for their specific purposes, and may not be misused for other purposes
or used to balance financial expenses and receipts.

    Article 12  Budget and settlement of unemployment insurance funds shall be made by social insurance agencies in areas where overall
planning is conducted, and submitted to people’s governments at the same level for examination and approval upon check by administrative
departments of labor security and verification by financial departments at the same level.

    Article 13  Financial systems and accounting systems for unemployment insurance funds shall be carried out according to relevant provisions
of the State.
Chapter Three  Unemployment Insurance Benefits

    Article 14  Qualifications for the unemployed who may receive unemployment insurance compensation are as follows:

    a. have participated unemployment insurance, the unit to which they belong and they themselves have performed
the obligation of paying premium not less than one year;

    b. have suspended employment undue to their own willingness;

    c. have undergone unemployment registration and have requested new jobs.

    The unemployed are enpost_titled to receive other unemployment insurance benefits during the period of receiving
unemployment insurance compensation.

    Article 15  Where any one of the following circumstances occur during the period of receiving unemployment insurance compensation,
the unemployed shall stop receiving unemployment insurance compensation and shall be deprived of other unemployment insurance benefits:

    a. reemployment;

    b. performance of military service;

    c. emigration to foreign countries;

    d. enjoyment of basic pension benefits;

    e. imprisonment and reeducation through labor;

    f. refusal of reemployment recommend by departments and agencies designated by local people’s governments
without any rational reasons;

    g. other circumstances stipulated by laws and administrative regulations.

    Article 16  Enterprises and institutions in cities and towns shall promptly issue certificates of termination or dissolution of employment
relation for the unemployed, inform persons concerned of the rights to enjoy unemployment insurance benefits and submit name lists
of the unemployed to social insurance agencies for the record within 7 days of the termination and dissolution of the employment
relation.

    After unemployment, staff and workers of enterprises and institutions in cities and towns shall undergo promptly
registration with designated social insurance agencies on the basis of the certificates of termination and dissolution of employment
relation issued by their work units. Unemployment insurance compensation is to be accounted from the day registration.

    Unemployment insurance compensation is paid monthly by social insurance agencies. Social insurance agencies
shall issue documents to the unemployed on the basis of which they receive unemployment insurance compensation from designated bank.

    Article 17  If the accumulative time period in which the units to which the unemployed belong before their unemployment and the unemployed
themselves pay premiums is not less than one year but not more than five years, the maximum period of receiving unemployment insurance
compensation is 12 months; if the accumulative time period of paying premiums is not less than five years but not more than ten years,
the maximum period of receiving unemployment insurance compensation is 18 months; if the time period of paying premiums is not less
than ten years, the maximum period of receiving unemployment insurance compensation is 24 months; if anyone is re-unemployed after
reemployment, the time period of paying premiums shall be recalculated. The time period of receiving unemployment insurance compensation
may be calculated together with the previous period in which he should have received but have not received unemployment insurance
compensation, but the maximum time period may not be longer than 24 months.

    Article 18  The standard for unemployment insurance compensation are to be set by people’s governments of provinces, autonomous regions
and municipalities directly under the Central Government at a level which is lower than the minimal local salary standard but higher
than the minimal living security standard for urban residents.

    Article 19  The unemployed who receive medical treatment during the period of receiving unemployment insurance compensation, may apply
for medical subvention from social insurance agencies. The standard for medical subvention is to be set by  people’s government
of province, autonomous region or municipality directly under the Central Government.

    Article 20  If the unemployed die during the period of receiving unemployment insurance compensation, their family dependents are
to be paid one-off funeral allowance and pension with reference to local regulations on employed staff and workers.

    Article 21  If a contract-system farmer worker engaged by a unit has been working continuously for not less than one year, and the
unit has paid unemployment insurance premium, where no contract is renewed when the employment contract is expired or the contract
is terminated in advance, the social insurance agency shall pay one-off living subsidy to the farmer worker according to the length
of his working period. Measures and standards for such subsidy are to be stipulated by people’s governments of provinces, autonomous
regions and municipalities directly under the Central Government.

    Article 22  If enterprises and institutions in cities and towns move as a whole from one area where overall planning is conducted
to another one, or if the unemployed moves among area where overall planning is conducted, the social insurance credentials are to
be moved together.

    Article 23  If the unemployed are qualified for minimal living ensuring standard for urban residents, they are enpost_titled to enjoy the
benefit of the minimal living ensuring standard for urban residents.
Chapter Four  Administration and Supervision

    Article 24  In the administration of social insurance, the administrative department of labor security shall perform the following
duties:

    a. implement and enforce laws and regulations on unemployment insurance;

    b. guide the work of social insurance agencies;

    c. conduct supervision and inspection on collection of unemployment insurance premium and payment of unemployment
insurance compensation.

    Article 25  When undertaking concretely the work of social insurance, social insurance agencies shall perform the following duties:

    a. being responsible for registration, investigation and statistics of the unemployed;

    b. being responsible for administration of unemployment insurance funds according to provisions;

    c. checking and determining unemployment insurance benefits, and issuing documents for the unemployed by which
they receive unemployment insurance compensation and or other subsidies from designated banks;

    d. appropriating subsidiary fees for vocational training and job seeking for the unemployed;

    e. offering free consultation service to the unemployed;

    f. other duties stipulated by the State to perform.

    Article 26  Financial departments and auditing departments shall supervise the collection, payment and administration of unemployment
insurance funds according to law.

    Article 27  Outlays for social insurance agencies shall be listed into budget and appropriated from government finance.
Chapter Five  Penalty  Provisions

    Article 28  Where anyone disqualified for enjoying unemployment insurance benefits defrauds unemployment insurance compensation and
other unemployment insurance benefits, the social insurance agency shall order them to be returned, where the circumstances are serious,
a fine of not less than one time but not more than three times the amount defrauded shall be imposed by administrative department
of labor security.

    Article 29  Where a functionary of a social insurance agency, in violation of provisions, issues documents for receiving unemployment
insurance compensation or enjoying other unemployment insurance benefits for the unemployed, thus causing losses of unemployment
insurance funds, the administrative department of labor security shall order them to be recovered; where the circumstances are serious,
administrative sanctions shall be imposed according to law.

    Article 30  Where a functionary of the administrative department of labor security and the social insurance agency abuses his power,
neglects  his duties and practice favoritism, thus resulting in the losses of unemployment insurance funds, the administrative
department of labor security shall recover the lost unemployment insurance funds; if the violations constitute crimes, criminal liability
shall be investigated according to law; if no crime is constituted, administrative sanctions  shall be imposed according
to law.

    Article 31  If any unit or individual misappropriates unemployment insurance funds, the misappropriated fund shall be recovered; if
there is illegal income, such illegal income shall be confiscated and merged into unemployment insurance funds; if the violations
constitute crimes, criminal liability shall be investigated according to law; if no crime is constituted, administrative sanctions
shall be imposed according to law upon the persons in charge who bear direct responsibility and other persons directly responsible.
Chapter Six  Supplementary Provisions

    Article 32  The people’s governments of provinces, autonomous regions and municipalities directly under the Central Government, according
to the actual local situations, may determine whether these Regulations apply to social organizations and their full-time staff,
private non-enterprise units and their staff and workers, or individual industrial and commercial businesses in cities and towns
with employees that are located within their respective administrative areas.

    Article 33  These Regulations take effect as of the date of promulgation. The Provisions on Unemployment Insurance of Staff and Workers
in State-owned Enterprises, promulgated by the State Council on April 12th 1993, is annulled simultaneously.





DIRECTIVE ON REINFORCING THE MANAGEMENT AND CONSTRUCTION OF RADIO AND CABLE TV NETWORKS

INTERPRETATION BY THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS ON SOME QUESTIONS CONCERNING IMPLEMENTATION OF THE NATIONALITY LAW IN THE MACAO SPECIAL ADMINISTRATIVE REGION

Interpretation by the Standing Committee of the National People’s Congress on Some Questions Concerning Implementation of the Nationality
Law of the People’s Republic of China in the Macao Special Administrative Region

(Adopted at the 6th Meeting of the Standing Committee of the Ninth National People’s Congress on December 29, 1998) 

According to the provisions in Article 18 of the Basic Law of the Macao Special Administrative Region of the People’s Republic of
China and in Annex III to that Law, the Nationality Law of the People’s Republic of China shall become effective in the Macao Special
Administrative Region as of December 20, 1999. In view of the historical background and the reality of Macao, an interpretation regarding
implementation of the Nationality Law of the People’s Republic of China in the Macao Special Administrative Region is made as follows: 

1. Any Macao resident of Chinese descent who was born in the territory of China (including Macao), or any other person who meets
the conditions for Chinese nationality as prescribed in the Nationality Law of the People’s Republic of China, whether or not he
or she holds Portuguese travel documents or an identity card, is a Chinese national. 

Any resident in the Macao Special Administrative Region who is of both a Chinese and a Portuguese descent may, out of his or her
own wish, choose either the nationality of the People’s Republic of China or of the Republic of Portugal. Once he or she decides
on one nationality, he or she shall give up the other. The above-mentioned resident in the Macao Special Administrative Region shall,
before he or she chooses his or her nationality, enjoy the rights prescribed in the Basic Law of the Macao Special Administrative
Region, with the exception of the rights that are restricted by nationality. 

2. All Chinese citizens residing in Macao who hold the Portuguese travel documents, after establishment of the Macao Special Administrative
Region, may continue to use these travel documents for the purpose of travelling to other countries or regions. However, they may
not be enpost_titled to Portuguese consular protection in the Macao Special Administrative Region or in any other part of the People’s
Republic of China on account of their holding the Portuguese travel documents mentioned above. 

3. Any Chinese national who resides in the Macao Special Administrative Region and has the right of abode in a foreign country may
use the relevant documents issued by the foreign government for the purpose of travelling to other countries or regions, but he or
she may not be enpost_titled to the consular protection of the foreign country in the Macao Special Administrative Region or in any other
part of the People’s Republic of China on account of their holding the foreign documents mentioned above. 

4. If a Chinese national, who previously resided in Macao and returns to Macao either before or after the Macao Special Administrative
Region is established, wishes to change his or her nationality, he or she may, by producing valid documents, apply to the competent
authorities of the Macao Special Administrative Region that handle nationality applications. 

5. The Government of the Macao Special Administrative Region is authorized to designate a relevant body under it to deal with all
matters relating to nationality applications in accordance with the Nationality Law of the People’s Republic of China and the provisions
mentioned above.

Notice: All Rights Reserved to the Legislative Affairs Commission of the Standing Committee of the National People’s Congress.






DECISION OF THE CHINESE COMMUNIST PARTY CENTRAL COMMITTEE AND THE STATE COUNCIL ON STRENGTHENING TECHNICAL INNOVATION, DEVELOPING HIGH TECHNOLOGY AND REALIZING INDUSTRIALIZATION.

Category  SCIENCE AND TECHNOLOGY Organ of Promulgation  The Chinese Communist Party Central Committee and the State Council Status of Effect  In Force
Date of Promulgation  1999-08-20 Effective Date  1999-08-20  


Decision of the Chinese Communist Party Central Committee and the State Council on Strengthening Technical Innovation, Developing
High Technology and Realizing Industrialization.



(Issued by Document Zhongfa No. [1999] 14 of the Chinese Communist Party Central Committee on August 22, 1999)

    Our country is going to enter the critical period in implementing her third step strategy for modernization.
In the twenty-first century, developing China to be a more prosperous and strong socialist modern country is the grand historical
task of the entire Party and the people of all nationalities across China. In the contemporary world, science and technology develop
and change quickly, and the unprecedented development of high and new technology and its industrialization represented by information
technology and biological technology is deeply influencing the political, economic, military, cultural and other sections of the
nations around the world. During the increased competition in integrated viability of the State mainly consisting of economic power,
military power and the solidarity of its people among countries, whether a country can hold a place in the area of high and new technology
and its industries has become the focus of such competition, and has become the essence of how to safeguard national sovereignty
and the security of economy. We are confronted with stern challenges together with uncommon opportunities. Since the foundation of
New China 50 years ago and especially since the reform and opening up, our country has achieved world-known substantial development
in science and technology. Apparent progress has seen the reform to the science and technology system, and the broad masses of scientists
and technologists have made significant contributions to the socialist modernization drive. However, the problem that science and
technology are loose away with the economy hasn’t been resolved at the root. The weak ability to transform science and technology
into real productivity and the lower level of industrialization of high and new technology remain the impediments to our economic
development. We must, according to the requirements of the Fifteenth National Congress of our Party, that is, “to estimate fully
the substantial effect that the develo
pment of science and technology in the future, especially the high and new technologies, has on the integrated viability of a country,
social and economic structure and the people’s life, and to place the acceleration of scientific and technological advancements as
the key to economic and social development”, and, by furthering the reform, form a system and mechanism conductive to the realization
of scientific and technological achievements from the root, strengthen technical innovation, develop high technology and realize
industrialization. These not only are urgently required by the resolution of deep problems confronting our economic development,
the further improvement of overall quality of our national economy and integrated viability and the realization of leap development,
but also are strategic decisions to face the international competition and guarantee the success of the Chinese nation in the new
century.

    I. Strengthening technical innovation, developing high technologies, realizing industrialization and promoting
leap development of social productivity.

    1. Innovation is the soul of a nation’s advancement, and is the unexhausted power of a county’s prosperity
and wealth. The core of strengthening technical innovation, developing high technologies and realizing industrialization lies in
the complete fulfillment of respected Deng Xiaoping’s key ideas regarding “science and technology being the first productivity”,
“a breakthrough in high technology areas bringing about the development of a group of industries”, “developing high technologies
and realizing industrialization” and etc., that is, in aspects of systems, mechanisms, policies and etc., promoting the close combination
of science and technology and economy, transforming our scientific and technological power into real first productivity, and helping
our integrated viability meet the international advanced level.

    Technical innovation means that an enterprise, applying innovative knowledge and new techniques and processes
and adopting a new mode of production and pattern of business management, improves product quality, develops and produces new products,
provides new services, occupies market and realizes market value. Enterprises are the subject of technical innovation. Technical
innovation is the important prerequisite for developing high technologies and realizing industrialization.

    To develop high technologies and realize industrialization, that is, commercialize and industrialize high
and new technology achievements, we shall start with the restructuring, activate existing scientific and technological resources,
strengthen the research and development adapted to the market, popularize strongly and apply high and new technology and applicable
technology, and enable scientific and technological achievements to be transformed speedily and effectively into market-competitive
commodity; rebuild traditional industries, develop existing high and new technology industries, and form a number of new industries
driven by technical innovation and breakthroughs.

    While promoting technical innovation and the commercialization and industrialization of high and new technology
achievements, we shall regard market demand, social demand and national security demand as the basic start point of research and
development, reinforce the status of enterprises as the subject of technical innovation, utilize fully the basic function of the
market mechanism in allocating scientific and technological resources and directing scientific and technological activities, and
encourage most scientific and technological forces into the market to accomplish innovation and business; driven by the reform, further
the component reforms in the economic system, scientific and technological system and educational system, speed the construction
of the State innovation system, and provide a regime as an effective safeguard for the commercialization and industrialization of
high and new technology achievements.

    To strengthen technical innovation, develop high technologies, and realize industrialization, we must widen
our opening up to the outside world, conduct comprehensive international cooperation and exchange, and develop ourselves in competition.
We must combine research and development on our own with introduction and absorption of foreign advanced technologies, prevent low-level
repetitions, pay attention to technical integration, promote interdisciplinary intersection, fusion and penetration, solve key problems
jointly, accomplish technical leaps at a higher level, and shape more independent intellectual property; must insist on combination
of short term and long term targets, and emphasize basic research, strategic high technology research and major scientific research
in social benefits. For significant innovative breakthroughs, we must start with basic research, form continuously new ideas, new
theories and new processes, provide sources for applied research and technological development, and enhance the capacity of continuous
innovation.

    2. We shall strengthen macro direction in the aspects and stresses of technical innovation and the commercialization
and industrialization of high and new technology achievements. On the basis of fully utilizing the market mechanism, we shall correctly
realize the macro control function of the government, make overall planning, highlight the stresses, and, in such technological and
industrial areas with advantages in our country, high-degree industry connection, good market prospects, and conductive to resolving
the key, hot or difficult problems in national economy, select optimally a number of major projects, concentrate powers, crack key
problems jointly, and make breakthroughs.

    We shall strengthen innovation, popularization and application of key technologies in agricultural and rural
economic development. We shall emphasize the combination of information technology, biological technology, science and technology
and traditional agricultural technologies, research and develop a number of key technologies, concentrate powers and achieve new
breakthroughs as soon as possible especially in two major areas such as fine breed cultivation and water-saving agriculture to provide
science and technology as a strong and powerful buttress for our agricultural modernization. We shall highlight independent innovation
in high and new technology industry area, and foster a new growth point of economy. In electronic information area, especially in
integrated circuit design and manufacture, network and communications, computer and software, digital electronic product and etc.,
and in high and new technology industry areas with a certain base such as biological technology and new medicines, new materials,
new energies, aviation and space, and ocean, we shall strengthen technical innovation, and form a number of high and new technology
enterprises with independent intellectual property and competitive advantages.

    We shall accelerate technological updating of our traditional industries. We shall stress the graft of traditional
industries and technologies such as electronic information, develop vigorously competitive new products conductive to expanding domestic
and international markets, improve the quality level of products and technical added value, develop and apply advanced manufacturing
technology, process and equipment, and maximally improve the level of domestically made technical equipment.

    We shall increase the knowledge content in the services industry. We shall promote strongly electronic commerce,
remote education and other emerging services industry, accelerate the application and popularization of high and new technologies
in finance, consulting, trade, culture and other service areas, and fortify the competitiveness of the services industry.

    We shall strengthen technical innovation in areas of environmental protection and integrated development and
use of resources. We shall develop strongly environmental protection technology and its industries, accelerate the development of
technologies relating to clean energy and clean production and their industries, reinforce the development, popularization and application
of technologies relating to disaster monitoring, forecast and prevention and treatment, and realize the strategy of sustainable development
through scientific and technological advancement.

    Technologies used both for civil and military purposes shall be developed vigorously. We shall accelerate
the transfer of military technology to civil areas and the development of its related industries, emphasize the important function
of high and new technology in building our army through science and technology, and provide high technology support for our national
security by cooperation of the army and civilians.

    II. Furthering the restructuring and promoting technical innovation and the commercialization and industrialization
of high and new technology achievements

    3. We shall impel enterprises to be the subject of technical innovation, and enhance the capacity of enterprises
for technical innovation in every aspect. State-owned enterprises shall regard the establishment and completion of technical innovation
mechanisms as an important component of the establishment of the modern enterprise system, regard the improvement of technical innovation
capacity and business management level as key measures to step out of difficult condition and toward development and prosperity,
and thus make the enterprises the true subject of technical innovation. The existence and development of an enterprise must be directed
by the market, and we shall strengthen research and development of technologies and the transformation and application of scientific
and technological achievements, and switch actually to the reliance on technical advancement and industry updating to improve economic
benefits.

    Large- and medium-scale enterprises shall establish and complete their enterprise technical centers, and accelerate
the formation of effective operation mechanisms favoring technical innovation and the prompt transformation of technological achievements.
We shall strengthen post technical training, improve completely the quality of laborers, and encourage employees to conduct technical
invention and technical renovation in all aspects. They shall actively create conditions to attract in various manners more superior
scientists and technologists into their enterprises, and exploit adequately their potential in technical development. They shall
develop continuously new products, new technologies and new processes toward market demand, and organize scientifically the production,
sales and services adopting advanced business management methods and mode of organization. Joint cooperation between enterprises
and higher educational institutions or scientific research institutes shall be strengthened. Bilateral or multilateral technical
cooperation mechanisms shall be established in accordance with principles of mutual complementing in advantages and benefit sharing,
and the exchanges of scientists and technologists in different units shall be strengthened by means of mutual participation and mutual
training. A certain proportion of research and development funds in enterprises shall be applied to the cooperation among production,
study and research. They shall reinforce the effective connection between importation and digestion and absorption of technologies,
and enhance capacities in technical fitness and independent development.

    We shall impel enterprises to increase actively scientific and technological input. The annual funds for research
and development in high and new technology enterprises shall be no less than 5% of the annual sales revenue. The State supports and
encourages large-scale enterprise groups to allocate a certain amount of funds for intensive use in the research and development
and industrialization input of significant scientific and technological problems that are common, critical and the frontiers.

    Technical reformation of enterprises shall be directed by the market. They shall take note of utilization
of existing bases and potentials, and emphasize the combination with development of high and new technology industry. The starting
point of technical reformation shall be high, and the phenomenon of being left behind while reforming shall be avoided. Each year,
the State shall support selectively a number of technical reformation projects in State-owned large- or medium-scale enterprises
that are of strategic importance to national economy and own markets and are going well, and interest discount shall be granted to
the projects that have been scientifically demonstrated and approved.

    Township enterprises shall also endeavor to improve technical innovation capacity, and stride further in developing
and applying advanced technologies and enhancing business management.

    4. We shall push the transformation of applied scientific research institutes and design units into enterprise
system, and promote vigorously the development of scientific and technological enterprises. We shall further deepen the reform of
scientific and technological system, and optimize completely the distribution of scientific and technological power and the allocation
of scientific and technological resources. In principle, the applied scientific research institutes and design units shall be transformed
into scientific and technological enterprises, be transformed into enterprises in part or completely, or be transformed into service
intermediaries. The government shall, by means of inviting bids for scientific and technological projects, continue to support the
technical research activities that are common, critical and the frontiers conducted by these scientific and technological enterprises.
Classified reform shall be applied to existing scientific research institutes for social benefits: for scientific research institutes
with marketing ability, they shall be transformed into scientific and technological enterprises, be transformed into enterprises
in part or completely, or be transformed into service intermediaries of an enterprise nature; for scientific research institutes
providing public services for the society and without corresponding economic compensations, they shall be operated and managed pursuant
to non-profit organization mechanisms based on structure adjustment and employee divergence, and the government shall provide funds
for the scientific research projects and base construction by supporting policies and competitive selection. The scientific research
institutes subordinate to the departments of the State Council (including scientific research institutes transformed into enterprises)
shall generally be managed according to the principle of localization, except a few managed by the Center Government.

    The 10 scientific research institutes subordinate to State bureaus administered by the State Economic and
Trade Commission have been transformed into enterprises, which provides beneficial experiences for overall advancement of the restructuring
of scientific research institutes. After the transformation of scientific research institutes into enterprises, they shall establish
a modern enterprise system, utilize fully their advantages in research and development directed to the market as well as technical
innovation, form as soon as possible a number of international competitive high technology enterprises or enterprise groups with
independent intellectual property, and develop to be an energetic new economic growth point.

    5. We shall strengthen the construction of State high and new technology industry development zones, and form
high and new technology industrialization bases. Constructing high and new technology industry development zones is the important
achievement of reforms in our economic and scientific and technological systems, and is an effective vehicle conforming to our national
condition to develop high and new technology industry. At the present stage, we shall further strengthen the momentum of the coordinated
reforms for State high and new technology industry development zones, enhance their functions to provide services for various enterprises
transforming high and new technology achievements, build a sound environment attracting and fusing superior scientists and technologists
and business managers to make innovation and business, and make them the important bases of technical innovation, industrialization
of scientific and technological achievements and export of high and new technology products, discharging radiation and driving functions
in regional economic development.

    We shall strengthen supervision and evaluation of State high and new technology industry development zones
and high and new technology enterprises. A few development zones or enterprises losing qualifications and with poor management and
few effect in developing high and new technology industry shall be cancelled their qualifications as State high and new technology
industry development zones or high and new technology enterprises after evaluation and determination.

    Higher educational institutions shall fully utilize their own advantages in human resources, technologies
and information, encourage their teachers and scientific research staff to enter high and new technology industry development zones
engaging in the commercialization and industrialization of scientific and technological achievements. We shall support the development
of scientific and technological zones in higher educational institutions, cultivate a number of knowledge and intelligence intensive
high and new technology enterprises and enterprise groups with advantages in market competition, and thus further fasten the combination
of production, study and research.

    The State shall apply supporting policies to a few State high and new technology industry development zones
selected for their basis, conditions and advantages, and encourage bold exploitation, first establishment of new investment and financing
mechanisms and incentive mechanisms and the prompt formation of internationally influencing high and new technology industrialization
bases, providing beneficial experiences for the national construction of high and new technology industry development zones and the
development of high and new technology industry.

    6. Development of various forms of private scientific and technological enterprises is encouraged. Private
scientific and technological enterprises are a new power to develop our high and new technology industry, and are playing a more
and more important role in our economic and scientific and technological development. The State technical innovation fund for medium-
and small-scale scientific and technological enterprises shall give support to private scientific and technological enterprises.
We shall, in the management system, ensure that private scientific and technological enterprises are able to participate equally
in the bids for governmental scientific and technological programs or projects.

    The financial departments at all levels shall assist and support private scientific and technological enterprises
in solving problems as to unclear post_titles. Disputes over post_titles between private scientific and technological enterprises and State-owned
enterprises or institutions for historical reason shall be solved properly in accordance with the principles of protecting State-owned
assets and rights and interests thereof, favoring encouragement of achievement transformation and supporting scientists and technologists
in making business. In aspects of decision-making, management, distribution and etc. in an enterprise, individual lawful rights and
interests shall be fully protected. We shall permit private scientific and technological enterprises to adopt a stock option plan
and other means to mobilize the enthusiasm of talented scientists and technologists or talented business managers with power in innovation.

    State-owned scientific research institutes, upon approval by relevant departments, may be restructured to
share or share cooperation enterprises.

    7. We shall develop strongly service intermediaries for science and technology. Service intermediaries for
science and technology belong to non-governmental organizations, and are an indispensable service link between science and technology
and their application, and between production and consumption. The State encourages certain scientific research institutes with similar
nature to be transformed into enterprise service intermediaries for science and technology, and encourages scientists and technologists
to establish such intermediaries. We shall formulate and complete laws and regulations regarding service intermediaries for science
and technology as soon as possible, regulating their industrial conduct to strengthen management. We shall direct the various service
intermediaries for technical innovation, intermediaries for technical evaluation, intermediaries for technical brokerage and other
intermediaries to provide good services for accelerating transfer of scientific and technological achievements, and develop actively
information consulting service providers to provide enterprises, especially the comprehensive medium and small ones, with services
in business management, technology, marketing, information, human resources, accounting, finance, law and other areas. The intermediaries
mainly engaged in providing public services for the society may be operated and managed as non-profit organizations after verification.

    We shall further cultivate and complete the technological market. The construction of infrastructure such
as key technical supply and demand databases and scientific and technological information networks shall be strengthened. All regions
shall, according to the characteristics of resources and industries, complete regional intermediary systems, realize gradually the
organizational network, socialization in functions and industrialization of intermediary services, and form a national and even international
electronic network commercial trading market.

    We shall, through reform, complete the agricultural scientific and technological popularization service system,
and establish an agricultural scientific and technological popularization service network closely linked by scientific research institutes
in agriculture, higher educational institutions, various technical service providers and enterprises involving agriculture. Scientific
research institutes in agriculture shall be oriented to agricultural production, and the scientific research achievements in agriculture
shall be transformed into productivity promptly. The State vests an independent sales right as to seeds and other products researched
and developed in scientific research institutes in agriculture, and encourages them to perform various forms of cooperation or consolidation
with all kinds of enterprises in agricultural businesses. The existing popularization service providers of agricultural technologies
in counties (cities) and villages (towns) shall further change their modes of service, and improve continuously their functions and
levels of service. We shall break the administrative land boundaries, develop actively a new type of popularization mode of agricultural
technologies closed linked by leading enterprises, intermediaries and farmers, improve the operating level of agricultural industrialization,
and direct the comprehensive farmers to adjust structures promptly and organize production according to market demand.

    III. Adopting effective measures to build a policy environment favoring technical innovation and developing
high technology and realizing industrialization

    8. Implementing supporting policy in finance and taxation. The financial departments at all levels shall increase
their scientific and technological input. The mode of input by the financial departments to science and technology shall change from
general support to scientific research institutes and scientists and technologists to selective support mainly to projects; the State
scientific research programs adopt a task system, and bidding and intermediary evaluation systems for projects shall be greatly executed;
the technical innovation fund for medium and small-scale scientific and technological enterprises shall be established to provide
capital support for the transformation activities of high and new technology achievements. Supporting policy in finance and taxation
shall be applied to high and new technology products. By enforcing governmental procurement policy, budgetary control, bidding and
other manners, we shall direct and encourage government departments, enterprises and institutions to purchase selectively domestic
high and new technologies and equipment and products thereof. The research and development funds contributed to scientific research
institutes and higher educational institutions by social forces may be deducted by the State from the revenue taxable according to
a certain proportion.

    Revenues from technological transfer and technological development as well as technical consulting and technical
service in connection therewith shall be exempted from business tax. For enterprises developing and manufacturing software products,
the value-added tax on their software products may be levied by a rate of 6%; supporting policy for software sales enterprises shall
be formulated, and the expenditures in wages of software developing and manufacturing enterprises may be deducted according to the
actual occurring amount before enterprise income tax is paid. For export of high and new technology products, zero value-added tax
rate policy shall be enforced. For import of advanced technology and equipment not domestically available, supporting policy in taxation
shall be enforced.

    We shall permit and encourage technology, management and other production elements to participate in benefits
distribution. Experiments in partial high and new technology enterprises shall be made to reward meritorious employees, especially
scientists and technologists and business management personnel, by sharing stocks out of a certain proportion of the increment of
State-owned net assets in recent years.

    9. Implementing supporting policy in banking. The financial institutions shall fully realize the support function
of credit loan, and improve their credit loan services for scientific and technological enterprises by actively developing various
effective instruments. They shall, according to the different characteristics of enterprises, establish corresponding rules on authorization
and loan facility, complete capital management rules, increase the categories of credit loan, develop security manners, and expand
scientific and technological credit input. The rules on security for granting loans to medium- and small-scale scientific and technological
enterprises shall be researched, proposed and settled as soon as possible. For qualified scientific and technological projects with
lawful security, scientific and technological loans and technical reformation loans shall be granted in priority; for high and new
technology achievement transformation projects and technical reformation projects with good market prospects, high content of technology
and good economic results and able to replace imports, the supporting momentum shall be reinforced. The State shall provide corresponding
discount interest support for these projects. The State shall support the export of high and new technology products in credit loan
and discount interest.

    We shall cultivate a capital market favoring the development of high and new technology industry, establish
gradually the risk investment mechanism, develop risk investment companies and risk investment funds, establish a withdrawal mechanism
of risk investment, and increase

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CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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