2006

CIRCULAR OF THE DEPARTMENT OF MEDICAL ADMINISTRATION OF THE MINISTRY OF HEALTH AND THE DEPARTMENT OF FOREIGN INVESTMENT OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION ON ISSUES CONCERNING THE IMPLEMENTATION OF THE INTERIM MEASURES FOR THE ADMINISTRATION OF CHINESE-FOREIGN JOINT-EQUITY AND CONTRACTUAL JOINT MEDICAL INSTITUTIONS

The Department of Medical Treatment and Policies of the Ministry of Health, the Department of Foreign Investment of the Ministry of
Foreign Trade and Economic Cooperation

Circular of the Department of Medical Administration of the Ministry of Health and the Department of Foreign Investment of the Ministry
of Foreign Trade and Economic Cooperation on Issues Concerning the Implementation of the Interim Measures for the Administration
of Chinese-foreign Joint-equity and Contractual Joint Medical Institutions

WeiYiGuanFa [2000] No.28

June 23, 2000

1.

Administrative health and foreign trade and economic departments of various provinces, autonomous regions and municipalities directly
under the Central Government should conduct a rectifying review of established Chinese-foreign joint-equity and contractual medical
institutions. Chinese-foreign joint-equity and contractual medical institutions established locally without the approval of the Ministry
of Health and the Ministry of Foreign Trade and Economic Cooperation before the promulgation of the Interim Measures should be examined
and verified by provincial administrative health and foreign trade and economic departments compliance with the Interim Measures
within 6 months. Institutions that meet the requirements will be reported to the Ministry of Health and the Ministry of Foreign Trade
and Economic Cooperation for examination and approval. Those that fail to meet the requirements will be ordered to terminate their
operation and the issued Medical Institution Operating License will be revoked. Examination and approval authorities and their personnel
that overstep their power and refuse to rectify will be investigated and affixed legal liabilities.

2.

Existing Chinese-foreign joint-equity and contractual medical institutions that have been reported to the Ministry of Health for approval
before the promulgation of the Interim Measures should revise or supplement related application materials and reapplication is not
required.

3.

The applications of Chinese-foreign joint-equity and contractual medical institutions will be handled as of July 1, 2000.

4.

In accordance with the Interim Measures, local administrative health and foreign trade and economic departments at or above the county
level should be responsible for daily supervision and administration of Chinese-foreign joint-equity and contractual medical institutions
under their administration.



 
The Department of Medical Treatment and Policies of the Ministry of Health, the Department of Foreign Investment of
the Ministry of Foreign Trade and Economic Cooperation
2000-06-23

 







CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION CONCERNING THE ESTABLISHMENT OF RESEARCH WITH FOREIGN INVESTMENT AND DEVELOPMENT CENTRE

The Ministry of Foreign Trade and Economic Cooperation

Circular of the Ministry of Foreign Trade and Economic Cooperation Concerning the Establishment of Research with Foreign Investment
and Development Centre

WaiJingMaoZiFa [2000] No.218

April 18, 2000

Commissions of Foreign Trade and Economic Co-operation of all provinces, autonomous regions, municipalities under directly under the
central government and municipalities separately listed on the State plan:

The State adopts a policy of encouraging the establishment of research with foreign investment and development centres in China. MOFTEC
hereby issues the Circular Concerning the Approval of Contracts and Articles of Association for the Establishment of Research with
Foreign Investment and Development Centres:

Article 1

Form and business scope of research with foreign investment and development centres

(1)

A research with foreign investment and development centre may take the form of a Sino-foreign equity joint venture, a Sino-foreign
contractual joint venture or a wholly foreign-owned enterprise established by foreign investors in accordance with the law (including
foreign-funded holding companies). They may also take the form of a separate department or a branch company within an enterprise
with foreign investment.

(2)

Such a centre should be an institution where research and development and experimentation (including intermediate experimentation
or research and development) are conducted in the field of natural sciences and related technology. The content of research and development
includes fundamental research, applied research, high-tech research and research for the purpose of social welfare, excluding those
projects prohibited in the Guideline Catalogue of Foreign Investment Industries. The centre is not allowed to conduct any technology
trading activities not related to the technological result of its research and development, or any production activities other than
intermediate experiments. The centre may transfer fruits of its technological research and development. It may also conduct co-operative
research and development with Chinese research institutions either under a management contract or a co-operation contract. A training
centre is not included in the category of research and development.

Article 2

Conditions for the establishment of a foreign-funded research and development centre

(1)

Having clearly-defined research and development field and specific research and development projects, fixed business location, machinery
and equipment as well as other conditions necessary for conducting research and development, and an investment of no less than 2,000,000
USD for research and development.

(2)

Having professional managerial and technical personnel, 80% or above of which should be technical staff with an educational background
on the undergraduate or higher level directly involved in research and development.

Article 3

Procedure for the establishment of a foreign-funded research and development centre

(1)

A research with foreign investment and development centre which takes the form of an equity or contractual joint venture or a wholly-owned
foreign enterprise should be subject to the approval of competent authorities on the provincial level.

(2)

Establishment of a research and development centre within an enterprise with foreign investment(including investment companies):

(a)

The establishment of a branch company or a separate department of research and development should be subject to the approval of competent
approving authorities in charge of the establishment of enterprises with foreign investment. However, if the enterprise with foreign
investment is within Category A of the Catalogue of Restricted Foreign Investment Industries, the approval should be granted by the
competent authority on the provincial level (or shall be accepted according to the subsequent paragraph for record).

(b)

If the enterprise with foreign investment is already in existence and its business scope includes research or development, materials
for the establishment of a separate department of research and development centre should be submitted retroactively to the original
approving authority for record; if its business scope does not include research and development, the establishment of a separate
department of research and development necessitates the revision of its contract and the articles of association and their submission
to the original approving authority for approval. Such research and development department should also meet the conditions prescribed
in Article 2 .

(3)

The following items should be included in the application submitted to the approving authority:

(a)

orientation, scope, principal objectives and plan for the implementation of research and development;

(b)

Location, personnel and other related technological requirements;

(c)

Sources, uses and amount of fund and relevant budgetary reports;

(d)

List of equipment and related technology, spare parts, research samples and chemical reagents imported for its own specific use within
the total investment or with its own capital;

(e)

Introduction about the advanced nature of the project and about the ownership of research and development results.

Article 4

Miscellaneous provisions

(1)

The research with foreign investment and development centre should conduct its activities in accordance with the law and its investment
should not be used for purposes other than research and development.

(2)

The research with foreign investment and development centre taking the form of a branch company or a separate department within enterprise
foreign investment should maintain a separate financial budget and a separate business account.

(3)

The investment for a research and development centre taking the form of a branch company or a separate department by an enterprise
with foreign investment within Category A of the Catalogue of the Restricted Foreign Investment Industries should not exceed 50%
of its total investment.

(4)

The research with foreign investment and development centre is required to submit to its approving authority its annual report on
its research and development activities by March 31 of each year.

(5)

Please see the attachment for the preferential State policies granted to research with foreign investment and development centres.

Here is notified. Attachment:Policies for Research and Development Centres with Foreign Investment

1.

Equipment and related technology as well as spare parts imported within the total investment for self-use (excluding the items as
mentioned in the “Catalogue of Goods Imported by Enterprises with Foreign Investment Not Exempted from Taxation” and ships, aircraft,
vehicles for special purposes and construction machinery), such as laboratory use or intermediate experiment not reaching a production
scale, can be exempted from customs duties and other taxes related to importation.

2.

For the purpose of self-funded technical innovation, the equipment and related technology as well as spare parts imported within its
approved business scope in accordance with the Circular on the Importation Taxation Policies to Further Encourage Foreign Investment
(ShuShui [1999] No.791) can be exempted from customs duties and other taxes related to importation.

3.

The income from technological transfer of its own research and development results is exempted from business tax.

4.

If its research and development investment in the current year is 10% higher of that of the previous year, upon approval by the taxation
authority, 50% of the actual research and development investment in the current year may be deducted from the taxable income of the
same period.

5.

Other preferential policies formulated by the State.



 
The Ministry of Foreign Trade and Economic Cooperation
2000-04-18

 







CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON ISSUING THE PROVISIONAL PROCEDURES ON THE FOREIGN EXCHANGE ADMINISTRATION IN EXPORT PROCESSING AREAS

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on Issuing the Provisional Procedures on the Foreign Exchange Administration
in Export Processing Areas

HuiFa [2000] No.116

August 17, 2000

Each branch of the State Administration of Foreign Exchange (hereinafter as the SAFE in brief), Beijing and Chongqing Departments
of the SAFE, and each Chinese-funded designated foreign exchange bank:

Provisional Procedures on the Foreign Exchange Administration in Export Processing Areas have been formulated for implementation by
SAFE in accordance with the State Council’s instructions on launching export processing areas pilot project.

After receiving this Circular, each SAFE branch shall study it seriously, implement it strictly, and transmit it to each branch and
sub-branch of SAFE, foreign-funded bank and relevant unit under its jurisdiction. Each Chinese-funded designated foreign exchange
bank shall transmit it to each branch and sub-branch under its jurisdiction. Domiciled branches and sub-branches where the export
processing areas are located (hereinafter the SAFE Branches) shall formulate detailed rules for implementation to be distributed
and put into force after being reported to and approved by the SAFE. All the relevant certificates shall be independently designed
and printed by the SAFE Branches.

Any problems or questions arising in its implementation shall be reported promptly to the SAFE. Attachment:Provisional Procedures on the Foreign Exchange Administration in Export Processing Areas

Chapter I General provisions

Article 1

This set of provisional procedures has been formulated with a view to normalize the foreign exchange administration in export processing
areas, to ensure healthy foreign exchange flows, to promote export and the development of export processing areas, and to encourage
foreign investment inflows.

Article 2

Export processing areas referred to in this set of provisional procedures are the special economic areas for export processing on
the territory of the People’s Republic of China (hereinafter China) established with the approval of the State Council to be put
under closed supervision of the customs.

Article 3

The departments responsible for the foreign exchange administration are the State Administration of Foreign Exchange (hereinafter
the SAFE) and its subsidiaries.

The SAFE is responsible for formulating foreign exchange regulations in export processing areas. Domiciled branches of the SAFE where
the export processing areas are located (hereinafter the SAFE Branches) are responsible for formulating detailed rules for implementing
relevant regulations. The SAFE Branches are also responsible for supervising foreign exchange revenue and expenditure, as well as
other foreign exchange business in the export processing areas according to relevant regulations and corresponding detailed rules
for implementation.

Article 4

The “inside areas” referred to in this set of procedures are the areas inside the export processing areas, while the “outside areas”
are the areas inside China other than the export processing areas.

The “in-area entities” referred to in this set of procedures are enterprises, public institutions and other economic organizations
inside the export processing areas.

The “out-area entities” referred to in this set of procedures are enterprises, public institutions and other economic organizations
inside China other than the export processing areas.

Article 5

Foreign exchange revenue and expenditure as well as other foreign exchange business of in-area entities and individuals shall be regulated
by this set of procedures.

Article 6

All the economic transactions between in-area and out-area entities as well as individuals shall be subject to balance of payment
reporting procedures in accordance with Procedures on Reporting Balance of Payment Statistics.

Article 7

All the economic transactions between in-area and out-area entities as well as individuals shall be exempt from balance of payment
reporting procedures.

Chapter II Foreign Exchange Registration

Article 8

Within 30 days after acquiring industrial and commercial business license, in-area entities shall handle formalities of foreign exchange
registration with the SAFE Branches and fill out Registration Form of Basic Information upon the following documents:

1.

approval documents for establishment;

2.

industrial and commercial business licenses;

3.

the entity’s contracts, articles of association already approved.

The SAFE Branches, after examining and verifying the validity of the documents, shall issue a Foreign Exchange Registration Certificate
of Export Processing Areas (hereinafter the Registration Certificate) to the applicant.

The Registration Certificate shall be designed by the SAFE and printed by the SAFE Branches.

Article 9

In any case of altering name, address registered capital, and business scope, of transferring shares, and of merger and separate,
in-area entities shall handle formalities of registration alteration with the SAFE Branches by presenting the Registration Certificate
and other prescribed documents within 30 days after acquiring altered industrial and commercial business license.

Article 10

In liquidation due to closing or expiration of the business term, in-area entities shall handle formalities of nullifying foreign
exchange registration with the SAFE Branches by presenting the Registration Certificate and other prescribed documents within 30
days after the liquidation approved.

Article 11

The SAFE Branches shall inspect foreign exchange revenue and expenditure as well as other foreign exchange business of in-area entities
annually. They shall write down the inspection result in and affix a seal to the Registration Certificate.

In-area foreign-funded enterprises shall take joint annual inspection by seven ministries of the State Council. The SAFE Branches
shall inspect foreign exchange revenue and expenditure as well as other foreign exchange business of in-area foreign-funded enterprises
according to Circular on Implementing Joint Annual Inspection of Foreign-funded Enterprises and other relevant regulations.

The SAFE Branches shall inspect foreign exchange revenue and expenditure as well as other foreign exchange business of other in-area
entities in the light of the regulation on annual inspection of in-area foreign-funded enterprises.

Article 12

If they do not engage in foreign exchange business within one year after foreign exchange registration, or for a successive year,
in-area entities shall report on their own initiative to the SAFE Branches within 5 working days after the year passed. If there
are no justified reasons, the SAFE Branches shall have the power to nullify their foreign exchange registration, terminate their
qualification of relevant foreign exchange businesses, require them surrender all the foreign exchange purchased for paid-in capital,
and suggest the administration of industry and commerce nullify their business license.

Article 13

The Registration Certificate shall not be forged, altered, rented, lent, transferred, or sold to other entities.

Article 14

In-area entities, when handling formalities of foreign exchange revenue and expenditure, shall present inspected and valid Registration
Certificate and other prescribed valid certificates and commercial vouchers.

For in-area entities that have not taken or not passed the annual inspection, the SAFE Branches shall order them rectify within a
stated time. Their foreign exchange revenue and expenditure during the period of rectifying shall be verified by the SAFE Branches
case by case.

Chapter III Administration of Foreign Exchange Accounts

Article 15

In-area entities, when opening a foreign exchange account, shall acquire approval of the SAFE Branches.

Article 16

Foreign exchange accounts of in-area entities shall not be classified as settlement accounts and specialized accounts. All foreign
exchange receipts shall be deposited in a unified foreign exchange account; and all foreign exchange expenditures shall be made from
the account.

Article 17

In-area entities shall open foreign exchange accounts with in-area financial institutions in principle. In case of no in-area financial
institutions, they shall open accounts with out-area financial institutions designated by the SAFE Branches.

The SAFE Branches shall independently determinate the number of foreign exchange accounts and out-area financial institutions with
which the accounts shall be opened according to in-area entities’ operation needs and their own supervising ability.

In-area entities, if they want to open overseas foreign exchange accounts, shall conform to Procedures on the Administration of Overseas
Foreign Exchange Accounts.

Article 18

In-area entities, if they want to open foreign exchange accounts, shall first apply with the SAFE Branches by presenting application
and the Registration Certificate. They shall open accounts with the financial institutions by presenting Account-opening Notice issued
by the SAFE Branches and the Registration Certificate.

Article 19

The financial institutions, when opening foreign exchange accounts for in-area entities, shall fill in the related blanks of the Registration
Certificate with their own name, account number, currency denomination and date of opening, and affix their seal to the Registration
Certificate.

Article 20

The account-opening financial institutions, when opening foreign exchange accounts for in-area entities, shall add a “C” to the account
number to differentiate from other entities strictly.

Financial institutions shall not add a “C” to other entities’ account number.

Article 21

In-area entities, if they want to alter relevant items of the foreign exchange accounts, shall apply with the SAFE Branches by presenting
relevant documents.

Article 22

In-area entities, if they want to close a foreign exchange account, shall handle formalities of closing accounts with the SAFE Branches
by presenting the Registration Certificate and the account-closed certificate issued by account-opening financial institution within
10 days after the account closed.

In case of opening a new account after a current one closed, foreign exchange in the current one shall be transferred into the approved
new one. In case of terminating operation, foreign exchange in the accounts belonging to foreign investors shall be transferred or
remitted abroad. Those belonging to domestic investors shall be repatriated to outside areas and be disposed according to relevant
regulations.

Article 23

In-area entities shall open and use foreign exchange accounts according to this set of procedures. They shall not open foreign exchange
accounts without permission, rent or lend their foreign exchange accounts, and shall not use their accounts collecting, depositing,
or making payment in foreign exchange for other entities as well as individual either.

Chapter IV Administration of Foreign Exchange Collection, Payment, Sales and Purchases

Article 24

In-area entities’ foreign exchange revenue, except that approved by the SAFE Branches, shall be repatriated home and deposited in
their foreign exchange accounts.

Article 25

In-area entities, when they need Renminbi to pay employees’ salaries and life expenses, to pay charges for water and electricity,
and to pay administrative fees, shall apply with the SAFE Branches by presenting relevant documents. They shall sell their foreign
exchange for Renminbi to designated in-area and out-area banks by presenting the approval documents issued by the SAFE Branches.

Article 26

Overseas payments of in-area entities shall be proceeded upon valid certificates and commercial vouchers prescribed in Procedures
on the Administration of Sale, Purchase of and Payment in Foreign Exchange. In case of declaration form of imported goods required,
original record list of goods entering inside areas shall be substitution. This kind of payments except that specially prescribed
in this set of procedures shall be made without approval by or record with the SAFE Branches E.

Designated foreign exchange banks shall keep relevant certificates and vouchers on file for reference.

Article 27

In case of transporting or exporting goods to overseas, in-area entities need not to handle formalities of verification and cancellation
of export collection in foreign exchange.

In case of making payments for imports from overseas, in-area entities need not to handle formalities of verification and cancellation
of import payment in foreign exchange.

Article 28

Formalities of foreign exchange payments by in-area entities to out-area entities shall be handled by out-area entities by presenting
certificates of contracts or agreements, vouchers and etc.. The designated foreign exchange banks shall handle formalities of foreign
exchange surrender or entering into the foreign exchange accounts for the out-area entities according to this set of Procedures.

Article 29

Foreign exchange payments by out-area entities to inside areas shall be regarded as payments to overseas. They shall be made after
being verified bona bide by the designated foreign exchange banks upon relevant valid certificate and commercial vouchers prescribed
in Procedures on the Administration of Sales, Purchase of and Payment in Foreign Exchange.

Article 30

Out-area entities, when exporting goods to inside areas, shall declare at customs by presenting verification and cancellation certificate
of export collection in foreign exchange according to Procedures on the Administration of Verification and Cancellation of Export
Collection in Foreign Exchange and detailed rules for implementing it. The designated foreign exchange banks shall issue special
copy of verification and cancellation certificate of export collection in foreign exchange to the out-area entities after foreign
exchange collected. It is the out-area entities that handle formalities of verification and cancellation of export collection in
foreign exchange.

Out-area entities, when making payments to in-area entities for imported goods, shall handle formalities of verification and cancellation
of import payment in foreign exchange according to Provisional Procedures on Supervision over Verification and Cancellation of Import
Payment in Foreign Exchange and relevant regulations.

Article 31

Foreign exchange payments between in-area entities shall be made from their foreign exchange accounts upon relevant certificates of
contracts or agreements and vouchers etc.. In-area entities are not allowed to purchase foreign exchange for these payments.

Article 32

Foreign exchange payments by in-area entities to overseas and outside areas shall be made from the entities’ foreign exchange accounts.
In-area entities are not allowed to purchase foreign exchange for these payments except those specially provided in this set of procedures.

Article 33

In-area entities whose registered capital was paid in Renminbi with approval, when making foreign exchange payment to overseas or
outside areas, shall use the foreign exchange owned by themselves first. They shall apply with the SAFE Branches by presenting relevant
documents for the short part,. The documents include the Registration Certificate, approval documents for paying registered capital
in Renminbi, verification certificate of the capital contribution issued by CPA, business license, statements of all foreign exchange
accounts issued by account-opening financial institutions, and valid certificates and commercial vouchers prescribed in this set
of procedures. They shall purchase foreign exchange with paid-in capital in Renminbi from the designated foreign exchange banks upon
the approval documents issued by the SAFE Branches. The Renminbi used for purchasing foreign exchange shall not exceed paid-in capital.

Article 34

In-area entities whose products can be partly sold domestically with the approval by the Moftec or its branches and the customs, when
selling goods to outside areas, shall purchase foreign exchange by collected Renminbi from the designated foreign exchange banks
upon approval documents issued by the SAFE Branches. The approval documents shall be applied for by presenting the Registration Certificate,
approval documents for selling product domestically issued by the domiciled administration of export processing area, contracts of
sales, original declaration form of imported goods issued by the customs verifying that the buyer is located in outside areas.

When verifying purchase application for foreign exchange of in-area entities, the SAFE Branches shall stamp the original declaration
form of imported goods with “foreign exchange supplied”, and keep it for record. The SAFE Branches shall verify the original electronic
accounts of the declaration form from the verification network system for import customs declaration form and wind up the case as
in-area entities have handled formalities of verification and cancellation of import payment in foreign exchange.

Article 35

In-area entities are allowed to borrow foreign exchange from home and abroad to meet their operation need without the SAFE’s approval.
However, the borrowing shall be registered with the SAFE according to Provisional Rules on External Debts Statistics and Supervision
and detailed rules for implementing it, as well as Procedures on the Administration of Foreign Exchange Lending (on-lending) Registration.

Foreign exchange financing between in-area and out-area non-financial institutions is prohibited.

Article 36

Guarantees provided by out-area entities for in-area entities to overseas entities and individuals, out-area entities, and to other
in-area entities shall be regarded as external guarantees. They shall be subject to Procedures on the Administration of External
Guarantees by Domestic Entities and detailed rules for implementing it. In-area entities, when providing guarantees to overseas entities,
shall register the guarantee with the SAFE Branches within 15 days after the guarantee contracts being signed.

Article 37

When repaying external debts to overseas, repaying foreign exchange loans extended by out-area financial institutions, or performing
external guarantees to overseas, in-area entities shall acquire the approval from the SAFE Branches.

Article 38

In-area entities are not allowed to make overseas or our-area investment of any kind.

Article 39

In liquidation due to closing or expiration of the business term, in-area entities shall liquid all of their assets according to relevant
regulations. Assets belonging to foreign investors shall be remitted abroad according to relevant regulations. Those belonging to
domestic investors shall be repatriated to outside areas and be disposed according to relevant regulations.

Chapter V Punishments

Article 40

The SAFE Branches shall conduct regular or irregular supervision and inspection in in-area entities on their balances of foreign exchange.
As to violations of this set of procedures and other foreign exchange regulations, the SAFE Branches shall mete out punishments in
accordance with Regulations on the Foreign Exchange Administration and other relevant regulations.

Article 41

Designated foreign exchange financial institutions shall provide in-area entities with services in accordance with this set of procedures
and other foreign exchange regulations.

As to violations of this set of procedure, SAFE shall punish the designated foreign exchange financial institutions, the responsible
personnel, and directly responsible personnel-in-charge in accordance with Regulations on the Foreign Exchange Administration and
other relevant regulations.

Article 42

In case that in-area entities purchase or sell foreign exchange in violation of this set of procedures, SAFE shall nullify their Registration
Certificate and suspend their qualification of purchasing or selling foreign exchange besides above-mentioned punishments.

Chapter VI Supplementary Provisions

Article 43

Foreign exchange revenue and expenditure as well as other foreign exchange businesses of in-area entities and individuals not touched
upon in this set of procedures shall be subject to relevant foreign exchange regulations in out-areas.

Article 44

This set of procedures shall be interpreted by the SAFE Branches may formulate detailed rules for the implementation of this set of
procedures to be put into force after being reported to and approved by the SAFE.

Article 45

This set of procedures shall enter into force as of September 1, 2000.



 
The State Administration of Foreign Exchange
2000-08-17

 







ANNOUNCEMENT OF THE GENERAL ADMINISTRATION ON RELEVANT ISSUES CONCERNING THE MERGER AND DIVISION OF ENTERPRISES WITH FOREIGN INVESTMENT AND RELATED CUSTOMS ADMINISTRATION ISSUES

The General Customs Administration

Announcement of the General Administration on Relevant Issues Concerning the Merger and Division of Enterprises with Foreign Investment
and Related Customs Administration Issues

January 10, 2000

Pursuant to the Provisions on the Merger and Division of Enterprises with Foreign Investment (WaiJingMaoFaFa [1999] No.395) promulgated
as of September 23, 1999 by the Ministry of Foreign Trade and Economic Cooperation and the State Administration for Industry and
Commerce, relevant issues concerning customs administration are announced as follows:

I.

The enterprise established through merger or division, whether as a continuation of the original enterprise or as an independently
registered one, shall update its customs registration information accordingly, or re-register at the customs with the approval document
from relevant government agencies.

II.

For specific goods imported with duty exemption by the enterprise with foreign investment before the merger or division, and unsettled
bonded imports, the enterprise established through merger or division, whether as a continuation of the original enterprise(s) or
as an independently registered one, shall bear all legal obligations concerning customs supervision and regulations.

III.

It shall be decided by the customs through examination according to relevant prevailing regulations whether an enterprise established
after the merger or division shall continue to enjoy the preferential treatment of tax reduction or exemption. If the customs decides
upon a termination of such preferential treatments, the enterprise shall pay the overdue tariff and import duties for goods imported
previously with duty reduction or exemption. For specific goods imported with duty reduction or exemption whose ownership has been
transferred to the enterprise with foreign investment that shall continue to enjoy such preferential treatment, the supervision period
shall be calculated as of the date of the import.

IV.

It shall be decided by the relevant customs bureau through examination according to relevant prevailing regulations whether an enterprise
with foreign investment established through merger or division shall continue to have the operation right of bonded business. For
unsettled bonded goods imported before the merger or division, the relevant enterprise with foreign investment shall proceed with
re-export formalities, or pay the overdue import duties and import tax with valid approval documents or licenses.



 
The General Customs Administration
2000-01-10

 







CIRCULAR OF THE STATE COUNCIL ON INCOME TAX REDUCTION ON FOREIGN ENTERPRISE INCOME FROM INTEREST ETC. ORIGINATED IN CHINA

The State Council

Circular of the State Council on Income Tax Reduction on Foreign Enterprise Income from Interest Etc. Originated in China

GuoFa [2000] No.37

November 18, 2000

The people’s governments of various provinces, autonomous regions and municipalities directly under the Central Government, each ministry
and commission and each directly subordinate institution of the State Council:

In accordance with provisions in Article 19 of the Law of the People’s Republic of China on Income Tax of Enterprises with Foreign
Investment and Foreign Enterprises, for the promotion of fair taxation and the development of economy of the central and western
regions of the country, this circular on issues concerning levying business income tax on foreign enterprise income from interest,
rent and royalties acquired in China is made as follows:

For foreign enterprises which have no institutions and premises in China or have set up institutions and premises but having no practical
connection with every item of its above income, a business income tax will be levied upon their interest, rent, royalties and other
income at a 10% reduced tax rate from January 1, 2000.



 
The State Council
2000-11-18

 







INTERIM PROVISIONS CONCERNING FOREIGN-INVESTED CINEMAS

e0328620040101

The State General Bureau of Radio, Film and Television, the Ministry of Foreign Trade and Economic Cooperation and the Ministry of
Culture

Decree of the State General Bureau of Radio, Film and Television, the Ministry of Foreign Trade and Economic Cooperation and the Ministry
of Culture

No.3

“The Interim Provisions Concerning Foreign-Invested Cinemas” is promulgated and shall come into force as of the date of promulgation.

Xu Guangchun, General Director of the State General Bureau of Radio, Film and Television

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

Sun Jiazheng, Minister of the Ministry of Culture

October 25, 2000

Interim Provisions Concerning Foreign-invested Cinemas

Article 1 .

These provisions have been formulated according to relevant such as the Law of the People’s Republic of China on Chinese-Foreign Equity
Joint Ventures, Law of the People’s Republic of China on Chinese-Foreign Contractual Joint Ventures, the Provisions on the Regulations
of Film, in order to meet the needs of openness and reform, to attract foreign capital, to introduce advanced technology and equipment,
and to promote the prosperity of the film industry.

Article 2 .

These provisions apply to the establishment of Chinese-foreign equity joint venture and Chinese-foreign cooperative joint venture,
by foreign companies, enterprises and other economic organizations and individuals (hereafter referred to as foreign parties to a
joint venture) with Chinese companies and enterprises (hereafter referred to the Chinese parties to a joint venture) in China, which
are engaged in the construction and renovation of the cinemas, and film projections, in accordance with the principles of equality
and reciprocity and under the approval of the Chinese government.

Article 3 .

No cinema is allowed to be solely funded by foreign investors.

Article 4 .

The establishment of foreign-invested cinemas shall conform to the following conditions:

1.

It shall conform to the layout and planning of the local cultural facilities;

2.

The registered capital shall be no less than RMB10 million;

3.

It shall have a fixed location of business for film projection;

4.

The Chinese-foreign equity joint venture cinemas or cooperative joint venture cinemas shall not be named as foreign film and television
(media), or cinemas;

5.

The ratio of investment of a Chinese party to a Chinese-foreign equity joint cinema shall not be less than 51 percent; decision-making
power shall rest on the Chinese party;

6.

The period of joint investment and cooperation shall not be more than 30 years;

7.

It shall conform to relevant Chinese laws, administrative regulations or other stipulations.

Article 5 .

If a Chinese party to a joint venture cinema invests with state-owned assets (except cash investment), it shall make an evaluation
of these invested assets in accordance with the relevant regulations concerning the evaluation of state-owned assets, and then submit
to the provincial departments in charge of the management of state-owned assets for their confirmation.

Article 6 .

The establishment of foreign-invested cinemas shall undertake the following procedures of reporting and approval:

1.

The Chinese party shall file an application with the provincial authorities in charge of trade and economic cooperation where the
enterprise is located, and submit the following documents:

(1)

The written application for the project to establish foreign-invested cinemas;

(2)

The Chinese party’s business license as an enterprise with legal person status, certificate of the right to use the site of the cinema,
certificate of credit worthiness.

(3)

Foreign investor’s business license, certificate of creditworthiness, and financial statements issued by an accounting firm.

(4)

The designated names of the foreign-invested cinemas preliminarily approved by the administrative authorities in charge of industry
and commerce.

(5)

The feasibility study report, contract and articles of association;

(6)

Other documents required to be provided in accordance with laws and regulations or by the authorities in charge of examination and
approval.

2.

After the provincial administrative department in charge of foreign trade and economic cooperation in charge of the site consults
with the provincial administrative departments in charge of cinemas, the department shall submit their approvals to the Ministry
of Foreign Trade and Economic Cooperation. After consulting with the State General Bureau of Radio, Film and Television as well as
the Ministry of Culture, the Ministry of Foreign Trade and Economic Cooperation will, in accordance with the relevant laws and regulations
concerning foreign investment, examine and approve these applications, and then grant the Certificate for Approving the Establishment
of Enterprises with Foreign Investment to these enterprises.

3.

The foreign-invested cinemas shall, within one month as of the receipt of the approval certificate, register the certificate with
the state authorities in charge of industry and commerce.

4.

After completing construction and renovation of the cinema, the foreign-invested cinemas shall be checked and approved by the relevant
qualified authorities. They shall then apply to the provincial administrative authorities in charge of cinemas for the Business License
for Film Projection, using their Certificate for Approving the Establishment of Foreign-Invested Enterprises and Business License.
Only after obtaining the Business License for Film Projection can foreign-invested cinemas conduct film screenings.

Article 7 .

If the established foreign-invested cinemas change their stock rights and the total amount of investment, they shall handle these
matters in accordance with the procedures in Article 6 hereof.

Article 8 .

Foreign-invested cinemas shall abide by the relevant State laws and regulations, conduct business in accordance with the Provisions
on the Regulation of Film, and accept the supervision and administration of the relevant authorities. The films shown in the cinemas
shall have the Film Projection License granted by the State General Bureau of Radio, Film and Television. The cinemas shall not show
smuggled or pirated films, as well as project any videos, VCDs and DVDs for the purpose of seeking profits.

Article 9 .

If foreign-invested cinemas conduct other entertainment services, they must abide by the relevant State regulations.

Article 10 .

The construction and renovation of cinemas, or film projections by investors from the Hong Kong Special Administrative Region, Macao
Special Administrative Region and Taiwan in any other province, autonomous region, or municipality of China shall be handled with
reference to these provisions.

Article 11 .

These provisions shall come into force as of the date of the promulgation.



 
The State General Bureau of Radio, Film and Television, the Ministry of Foreign Trade and Economic Cooperation and
the Ministry of Culture
2000-10-25

 







REPLY OF THE DEPARTMENT OF FOREIGN INVESTMENT ADMINISTRATION OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION TO QUESTIONS ON FOREIGN INVESTORS’ REINVESTMENT IN CHINA IN RMB OBTAINED FROM LIQUIDATION, SHARE TRANSFER AND PREVIOUS INVESTMENT

The Administration Department of Foreign Investment of the Ministry of Foreign Trade and Economic Cooperation

Reply of the Department of Foreign Investment Administration of the Ministry of Foreign Trade and Economic Cooperation to Questions
on Foreign Investors’ Reinvestment in China in RMB Obtained from Liquidation, Share Transfer and Previous Investment

April 4, 2000

The Department of Capital Account Administration of the State Foreign Exchange Administration:

Your letter concerning foreign investors’ reinvestment in China in RMB obtained from liquidation, share transfer and previous investment
has been received. After consulting the Department of Law and Treaty of MOFTEC, our reply is given as follows:

Document WaiJingMaoZiZongHanZi (1998) No. 492, i.e. Circular on Issues concerning Foreign Investment in RMB remains effective. At
present, in principle, foreign investors are not allowed to invest in RMB which is not their profit made. However, same policy treatment
as investment in foreign currencies shall be granted to the reinvestment in RMB which the foreign investors obtained from legally
distributed share in the liquidation of the enterprises with foreign investment, share transfer or profit of previous investment.

The above opinions are provided for reference.



 
The Administration Department of Foreign Investment of the Ministry of Foreign Trade and Economic Cooperation
2000-04-04

 







OFFICIAL REPLY OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION TO REPORT ON QUESTIONS ABOUT IMPORT CERTIFICATE TO ENTERPRISES WITH FOREIGN INVESTMENT

The Ministry of Foreign Trade and Economic Cooperation

Official Reply of the Ministry of Foreign Trade and Economic Cooperation to Report on Questions about Import Certificate to Enterprises
with Foreign Investment

WaiJingMaoZiTongJinHanZi [2000] No.565

August 9, 2000

The Shanghai Special Commissioner’s Office of the Ministry of Foreign Trade and Economic Cooperation:

The Report on Questions about Import Certificate to Enterprises with Foreign Investment (WaiJingMaoHuTeHanZi [2000] No.19) is duly
received, and now reply you on the relevant questions as follows:

The existing regulations on import quota license administration over enterprises with foreign investment are worked out in accordance
with the three basic laws for enterprises with foreign investment in China and provisions concerning the administration of import
of goods. Article 2 of the recently publicized Circular on Issues concerning Standard Rules governing the Issuance of Import Certificates
to Enterprises with Foreign Investment ( WaiJingMaoZiTongJinHanZi [2000] No.498) is not contradictory to the questions your office
reported. The main reasons are:

I.

It is simply for the purpose of protecting the legally approved foreign trade right of enterprises with foreign investment capable
of trading products for their own use that the state distributes separate import quota to enterprises with foreign investment and
allow them to import self-use products within their business scope, while continuing the practice of limiting the trade of some products
to authorized companies. Article 2 of Document No.498 provides that the second item, ” Import Applicant”, in the import certificate
must be the same enterprise as in the third item , ” Import Agent” does not mean to ban the foreign trade agency business among enterprises.
As this Ministry knows, foreign trade companies such as SINOCHEM and COFCO with more authorized company business can continue to
sign agency contracts according to the provisions of Document No. 498. The only difference is that enterprises with foreign investment
must now make the payment by themselves to their overseas customers and apply to customs by themselves (or entrust a broker). Therefore,
the provisions of Document No. 498 is not contradictory to Article 9 of the Interim Regulations of the People’s Republic of China
concerning the Licensing System for Import of Goods which says “can entrust relevant foreign trade companies to order from overseas
market”.

II.

Document No.498 provides that Item 2, ” Import Applicant” must be the same company as in Item 3, ” Import Agent”. Therefore, in line
with the relevant provisions on import license application and issuance, “Importer” should corresponds to ” Import Agent” and “Consignee”
to “Import Applicant”, i.e. the same enterprise with foreign investment. In this way, there will not be confusion in the process
of import license issuing work.

III.

With regard to the reported issue concerning fertilizer import of Jiangxi Jinyu Quanyuan Fertilizer Co. Ltd., a result is found after
investigation that the company’s import business through agent (including goods storage on ships) is not substantively affected,
so long as it pays agent fees. In addition, since the company knows the market changes well, it does not ignore cost accounting of
raw materials for reason of agent import by authorized foreign trade company.

The official reply is hereby given.



 
The Ministry of Foreign Trade and Economic Cooperation
2000-08-09

 







SUPPLEMENTARY CIRCULAR OF THE MINISTRY OF SCIENCE AND TECHNOLOGY AND THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE ON ISSUES CONCERNING INVESTMENT WITH HIGH/NEW TECHNOLOGICAL RESEARCH FINDINGS IN EXCHANGE FOR SHARES

The Ministry of Science and Technology, the State Administration for Industry and Commerce

Supplementary Circular of the Ministry of Science and Technology and the State Administration for Industry and Commerce on Issues
Concerning Investment with High/new Technological Research Findings in Exchange for Shares

GuoKeFaZhengZi [2000] No.255

June 20, 2000

The science and technology departments (science and technology commissions) and administrations for industry and commerce of provinces,
autonomous regions, or municipalities directly under the Central Government and municipalities listed on the State plan:

With a view to improving work efficiency of the examination and authentication of investment with high/new technological research
findings in exchange for shares and simplifying the related procedures, in accordance with related provisions of the Ministry of
Science and Technology and the State Administration for Industry and Commerce Concerning the Examination and Authentication Procedures
of Investment with High/new Technological Research Findings in Exchange for Shares (GuoKeFaZhengZi [1998] No.171 and GuoKeFaZhengZi
[1999] No.351), if the examination and authentication result of the Ministry of Science and Technology is required, the Ministry
shall authorize its Department of Policies, Regulations and System Reform and inform the Business Registration Bureau of the State
Administration for Industry and Commerce or other local administrations for industry and commerce in the form of departmental circular.
If the authentication result does not belong to high/new technology, the concerned enterprise shall be informed by the Department
of Policies, Regulations and System Reform of the Ministry of Science and Technology in the form of departmental circular.



 
The Ministry of Science and Technology, the State Administration for Industry and Commerce
2000-06-20

 







REGULATIONS FOR THE IMPLEMENTATION OF FORESTRY LAW

Category  AGRICULTURE, FORESTRY AND WETEOROLOGY Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  2000-01-02 Effective Date  2000-01-02  


Regulations for the Implementation of Forestry Law of the People’s Republic of China

Chapter One  General Provisions
Chapter 2  Operation and Management of Forest
Chapter Three  Forest Protection
Chapter Four  Tree Planting and Afforestation
Chapter Five  Forest Felling
Chapter Six  Legal Liabilities
Chapter Seven  Supplementary Provisions

(Promulgated by Decree No. 278 of the State Council on January 2, 2000)

Chapter One  General Provisions

    Article 1  These Provisions are formulated according to (hereinafter referred to as “Forestry law”).

    Article 2  Forest reserves include forest, forest wood and forest land, as well as wild animals, plants and microbe dependent thereon
surviving by depending on forest, forest wood and forest land.

  Forest includes arbor forest and bamboo forest.

  Forest wood includes tree and bamboo.

  Forest land includes arbor forest land with canopy density exceeding 0.2 as well as bamboo forest land, bush shrub forest
land, open forest land, logging site, the site destroyed by fire, non-mature afforestion land, nursery land and land appropriate
to the afforestation planed by the people’s government at or above level.

    Article 3  The State adopts registration system of forest, forest wood and forest land according to law. The ownership and right
of use of legally registered forest, forest wood and forest land shall be protected by law.  Any unit or individual shall
not infringe.

  The pattern of the certificate of ownership of forest, forest wood and forest land shall be stipulated by the competent
forestry authority of State Council.

    Article 4  The state-owned forest, forest wood or forest land used by law shall be registered in accordance with the following provisions:

  (1) The unit using forest, forest wood or forest land of key state-owned forest zone confirmed by the State Council (hereinafter
referred to as “key forest zone”), shall submit registration application to the competent forestry authority of the State Council,
and the competent forestry authority of the State Council shall record the registration, examine and issue certificates, and confirm
the right of using the forest, forest wood or forest land as well as the post_title of forest wood owned by the user;

  (2) Units or individuals using stated-owned forest, forest wood or forest land crossing administrative domains, shall
submit registration application to the competent forestry authority of their common people’s government above high level, and the
said people’s government shall record the registration, examine and issue certificates, and confirm the right of using the forest,
forest wood or forest land as well as the post_title of forest wood owned by the user;

  (3) Units or individuals using other state-owned forest, forest wood or forest land, shall submit registration application
to the competent forestry authority of the local people’s government at or above county level, and the local people’s government
at or above county level shall record the registration, examine and issue certificates, and confirm the right of using the forest,
forest wood or forest land as well as the post_title of forest wood owned by the user.

  The state-owned forest, forest wood or forest land unconfirmed in the right of use shall be recorded, protected and managed
by the people’s government at county level.

    Article 5 Where a collective owns forest, forest wood or forest land, the owner shall submit registration application to the competent forestry
authority of the local people’s government at or above county level where the same is located, and the people’s government at county
level shall record registration, examine and issue certificate, and confirm post_title.

  For forest wood owned by unit or individual, the owner shall submit registration application to the competent forestry
authority of the people’s government at county level where the same is located, and the people’s government at county level shall
record registration, examine and issue certificate, and confirm post_title of the same.

  Units and individuals using collectively owned forest, forest wood or forest land, shall submit registration application
to the competent forestry authority of the people’s government at or above county level where the same is located, and the people’s
government at or above county level shall make volumes at a registry, examine and issue certificates, and define post_title of the same.

    Article 6  The ones alter the ownership and the right of use of forest, of forest wood and of forest land, they shall handle the
commission for effecting changes in registration according to law.

    Article 7  The competent forestry authority of the people’s government at or above county level shall establish files on the management
of forest, forest wood and forest land.

    Article 8  For national focal point shelter belt, and forest for special uses, the competent forestry authority of State Council
shall produce opinions and report to the State Council for approval, then promulgate it; for local key shelter forest and forest
for special use, the competent forestry authority of the people’s government of a province, autonomous region or municipality directly
under the central authority shall produce opinions and report to the people’s government at the same level for approval, then promulgate
it; for other shelter forest, timber forest or special-use forest as well as economic forest or fuel forest, the competent forestry
authority of people’s government at county level shall demarcate according to the state’s relevant regulations on forest categorization
and the arrangement and organization of the People’s government at the same level, and report to the people’s government at the same
level for approval and promulgation.

  The area of key shelter forest and special-use forest within the administrative domain of province, autonomous region
or municipality directly under central authority shall not be less than 30% of the total forest area of the said administrative domain.

  Modification of forest category approved and promulgated to other forest category shall be reported to the original approving
and promulgating authority.  

    Article 9  The capital drawn according to section 1 (5) Article 8 of the Forestry Law must be specially used for the timber forest
such as planting pit prop and the forest used for making paper and etc., and shall not be embezzled. The auditing authority and competent
forestry authority shall strengthen supervision.

    Article 10  The forest resource supervisory authority sent by the competent forestry authority the of State Council to key forest
zone shall strengthen supervision and inspection on the protection and management of forest resources within key forest zone.
Chapter 2  Operation and Management of Forest

    Article 11  The competent forestry authority of the State Council shall periodically monitor the situation of extinction and growth
of forest resources and changes of forest ecological environment.

  Forest resource investigation, file establishment, formulation of forest operation plan and other work of key forest zone
shall be organized and implemented by the competent forestry authority of the State Council; other forest resource inspection, file
establishment, formulation of forest operation plan and etc., shall be organized and implemented by the competent forestry of the
local people’s government authority at or above county level.

    Article 12  The formulation of long-term forestry plan shall abide by the following principles:

  (1) Protection of ecological environment and promotion of sustainable economic development;

  (2) Based on the existing forest resources;

  (3) Compatible with the overall plan of land utilization, water and soil conservation plan, city plan, village and town
plan.

    Article 13  The long-term forestry plan shall include:

  (1) Forestry development target;

  (2) Ratio of forest categories;

  (3) Forest land protection and use plan;

  (4) Tree planting and afforestation plan.

    Article 14  The national long-term forestry plan shall be formulated by the competent forestry authority of the State Council in conjunction
with other relevant departments, and be reported to the State Council for approval, then implementation.

  The national long-term forestry plan at various levels shall be formulated by the competent forestry authority of the
people’s government at or above county level in conjunction with other relevant departments, and be reported to the State Council
for approval and then implementation.   The long-term forestry plan at a lower level shall be formulated based upon the
long-term forestry plan at above high level.

  The adjustment of modification to the long-term forestry plan shall be reported to the original approving authority for
approval.

    Article 15  The state protects the lawful rights and interests of the operator of forest, forest wood or forest land according to
law. Any unit or individual is prohibited to invade illegally the forest woods owned and the forest land used by the operator according
to law.

  The operator of timber forest, economic forest or fuel forest enjoys right of operation, benefits and other lawful rights
and interests according to law.

  The operator of Shelter forest or special-use forest enjoys right of forest ecological benefits compensation.

    Article 16  In the event of surveying or exploiting mineral resources, or constructing road, water conservancy, power, communication
and etc. projects needing to occupy or confiscate forest land, the following provisions must be adhered to:

  (1) The unit using the land shall submit land use application to the competent forestry authority of the people’s government
at or above county level, and, after examination and approval, prepay forest cover restoration fees according to the standard stipulated
by the state and collect approval document on forest land usage. The unit using the land shall conduct examination and approval procedures
for use of land in construction with the approval document according to law. Without examination and approval by the competent forestry
authority for the occupancy or confiscation of forest land, the competent land administration authority shall not process application
for use of land in construction.

  (2) For occupation or confiscation of forest land of shelter forest land or special-use forest land with an area over
10 hectares, or timber forest, economic forest or fuel forest as well as cutting blank over 35 hectares, or other forest land over
70 hectares, it shall be examined by the competent forestry authority of the State Council; for occupation or confiscation of forest
land with an area below the above regulated amount, it shall be examined by the competent forestry authority of the people’s government
of a province, autonomous region or municipality directly under the central authority. Occupation or confiscation of forest land
of key forest zone shall be examined by the competent forestry authority of the State Council.

  (3) When the unit using land needs to cut the forest wood on the forest land occupied or confiscated with approval, it
shall apply for forest wood felling permit from the competent forestry authority of the people’s government at or above county level
where the forest land is located or from the competent forestry authority of State Council.

  (4) If the occupation or confiscation of forest land is not approved, the relevant competent forestry authority shall
refund the forest cover restoration fees charged within 7 days as from the date of receipt of notice of non-approval.

    Article 17  Where ones need to occupy and use forest land temporarily, they shall obtain the approval of the competent departments
of the people’s governments at or above county level.

  The period of temporary usage of forest land shall not exceed 2 years, and it’s prohibited to construct permanent structure
on the temporarily used forest land; after such period expires, unit using land must restore forestry production conditions.

    Article 18  Temporary occupancy of forest land required for building engineering facility directly used for serving forestry production
by forest operation unit within the range of the forest land it operated, shall be approved by the competent forestry authority of
the people’s government at or above county level; for building other engineering facilities and requiring forest land to be changed
to non-forestry land for use in construction, procedures of examination and approval for use of land in construction must be conducted
according to law.

  The engineering facility directly used for serving forestry production in aforesaid section refers to:

  (1) Facility for cultivation or production of seed or nursery stock;

  (2) Facility for storage of seeds, nursery stock, timber;

  (3) Logger road or carriage way;

  (4) Forestry scientific research, test or model base;

  (5) Facility for wild life and plant protection, forest protection, forest disease and pest damage prevention, forest
fire prevention, timber quarantine;

  (6) Infrastructure for water supply, power supply, heat supply, gas supply or communication.
Chapter Three  Forest Protection

    Article 19  The competent forestry authority of the people’s government at or above county level shall, according to the investigation
and monitoring of the targeted object by forest disease and pest damage monitor and forecast center, periodically release long-term,
mid-term and short-term forest disease and pest damage forecast, and give preventive suggestions timely.

  The forest operator shall use fine variety, construct mixed forest, carry out scientific afforestation and improve the
ability to prevent forest disease and pest damages.

  When forest disease and pest damage occurs, relevant departments and forest operators shall take integrated control measures
to timely eliminate and treat the damages.

  When serious forest disease and pest damage occurs, the local people’s government shall take emergency eliminate-and-treat
measures to prevent spreading and eliminate hidden damages.

    Article 20  The competent forestry authority of the State Council is responsible for determination of the national germ chit quarantine
objects of forest wood. The competent forestry authority of people’s government of province, autonomous region, or municipality directly
under the central authority may, according to need of the region, determine supplementary germ chit quarantine objects of forest
wood of the said province, autonomous region or municipality directly under the central authority, and report the same to the competent
forestry authority of the State Council for the record.

    Article 21  It is prohibited to destroy forest for bringing under cultivation or collecting seed, or violate rules of operation technique
to tap resin, dig bamboo shoot, extract stumps, debark or over lop.

    Article 22  Slopes of 25 degrees or above shall be used for tree or grass planting. Hillside cultivated of 25 degrees or above shall
give up cultivation gradually for tree or grass planting according to the plan formulated by the local people’s government.

    Article 23  When forest fires occurs, local people’s government must immediately organize army-civilian forces to put it down; relevant
authority shall actively prepare for fire rescue material supply, transportation and communication, medical and etc. work.
Chapter Four  Tree Planting and Afforestation

    Article 24  The “forest acreage” in Forestry Law, refers to the percentage of forest area to land area as per administrative domain.
Forest area includes arbor forest land area and bamboo forest land area with canopy density over 0.2, shrub forest land area stipulated
specially by the state, and the coverage area of farmland forest net and village-side, roadside, waterside, house-side forest wood.

  The local people’s government at or above county level shall, according to the striving target of forest acreage determined
by the State Council, determine the striving target of forest acreage of the administrative domain, and organize implementation.

    Article 25  Tree planting and afforestation shall comply with rules of afforestation technique, and execute scientific afforestation,
and enhance survival rate.

  The people’s government at county level shall organize inspection and acceptance of the afforestation of the year within
the said administrative domain, and except the arid or semiarid areas stipulated specially by the state, those with less than 85%
survival rate shall not be calculated into the completed annual forestation area.

    Article 26  The state adopts department and unit responsibility system in afforestation and greening.

  The relevant unit in charge of the sides of railway or road, the banks of river or the around of lake or reservoir, shall
be the responsible unit for afforestation and greening. For industrial or mining area, undertaking or school land, troop camp as
well as farm, grazing land, fishery operation area, such unit shall be the responsible unit for afforestation and greening.

  The afforestation and greening task of the responsible unit shall be confirmed by the local people’s government at county
level by issuing a notice of responsibility.

    Article 27  The state protects the post_title of forest wood and other lawful rights and interests owned by the contracted forest grower.
Without both the employer and the contractor’ unanimous agreement, modification to or revocation of the afforestation contract is
prohibited.
Chapter Five  Forest Felling

    Article 28  The annual forest felling limit shall be formulated as per state-owned forestry enterprise or undertaking unit, farms,
or plant or mining unit in respect of state owned forest or forest wood, and as per county in respect of collective-owned forest
or forest wood and individual-owned forest wood, and then the competent forestry authority of people’s government of province, autonomous
region or municipality directly under central authority shall generalize and balance the same, and after being reviewed by the people’s
government at the same level, the same shall be reported to the State Council for approval; among others, the annual forest felling
limit of key forest zone shall be reviewed by the competent forestry authority of State Council, and then be reported to the State
Council for approval.

  The annual forest felling limit approved by the State Council shall be reviewed and determined once every 5 years.

    Article 29  The logging of forest or forest wood used for commercial sales must be put them in the state’s annual timber production
plan; notwithstanding, except the felling by rural resident of the individual-owned fuel forest on hill retained for private needs
and the individual-owned odd forest wood on plot for private use or around house.

    Article 30  In application for forest wood felling permit, besides submission of the certificate of post_title or certificate of right
of use in respect of the forest wood intended, other relevant proving documents shall also be submitted in accordance with following
provisions:  

  (1) State-owned forestry enterprise or undertaking unit shall also submit cutting area survey design document and previous
year’s cutting reforestation acceptance certificate;

  (2) Other units shall also submit documents comprising the purpose of cutting, location, forest category, forest condition,
area, amount of growing stock, method, reforestation measures and etc. of the forest wood.

  (3) Individual shall also submit documents comprising the location, area, tree category, number of trees, amount of growing
stock, time of reforestation and etc. of the forest wood.

  In the event of forest wood cutting required by forest fire rescue, flood prevention and other emergency situations, the
units or departments organizing the same shall, within 30 days as from the ending date of such emergency, report the forest wood
cutting condition to the local competent forestry authority of people’s government at or above county level.

    Article 31  Where a unit or individual has committed any of the following conditions, the department in charge shall not issue a permit
for felling of forest trees:

  (1) Non-tending or non-reforestation cutting of shelter forest or special-use forest, or cutting forest wood during period
of “closing of hillsides to facilitate afforestation” or within area thereof;

  (2) Failing to complete reforestation task after previous year’s cutting;

  (3) Failing to take preventive or improving measures provided that material denudation case, forest fire or serious forest
disease and pest damages with large affected areas occurs.

  The pattern of forest wood felling permit shall be stipulated by the competent forestry authority of State Council, and
be printed by the competent forestry authority of people’s government of province, autonomous region, municipality directly under
central authority.

    Article 32  Except expressly provided in Forestry Law, the forest wood felling permit shall be issued after examination in accordance
with following purview:

  (1) For state-owned forestry center subject to county, the permit shall be issued after examination by the competent forestry
authority of people’s government at county level where it is located.

  (2) For state-owned forestry enterprise or undertaking unit or other state-owned enterprise or undertaking unit subject
to province, autonomous region, municipality directly under central authority as well as city with districts or autonomous prefecture,
the permit shall be issued after examination by the competent forestry authority of people’s government of province, autonomous region
or municipality directly under central authority where it is located;

  (3) For state-owned forestry enterprise or undertaking unit within key forest zone, the permit shall be issued after examination
by the competent forestry authority of State Council.

    Article 33  The cutting of timber forest constructed by using foreign investment up to certain scale, shall be approved by the competent
forestry authority of the people’s government of a province, autonomous region or municipality directly under central authority within
the annual forest felling limit approved by the State Council, and shall be listed separately in respect of cutting limit.

    Article 34  The timber operation (including processing) in forest zone must be approved by the competent forestry authority of the
people’s governments at or above county level.

  Timber procurement unit or individual shall not procure timber without forest tree felling permit or other lawful origin
certificates.

  The timber in the immediate section above refers to log, saw timber, bamboo wood, wood chip and other timbers stipulated
by province, autonomous region or municipality directly under central authority.

    Article 35  In order to carry timber that is not generally appropriated by the state out of forest zone, the carrier must have timber
transportation permit issued by the competent forestry authority of the people’s government at or above county level.

  The timber transportation permit for key forest zone shall be issued after examination by the competent forestry authority
of the State Council; other timber transportation permits shall be issued after examination by the competent forestry authority of
local people’s government at county or above level.

  Timber transportation permit is valid during the whole journey from the place of dispatch of timber to the destination,
and must be with the cargo all along. Without timber transportation permit, any unit or individual carrier shall not carry.

  The pattern of the timber transportation permit shall be stipulated by the competent forestry authority of State Council.

    Article 36  In application for timber transportation permit, the following proving documents shall be submitted:

  (1) Forest tree felling permit or other lawful origin certificates;

  (2) Quarantine certificate;

  (3) Other documents stipulated by province, autonomous region or municipality directly under central authority.

  If the conditions in the immediate section above are satisfied, the competent forestry authority of people’s government
at or above county level having accepted such application shall issue the timber transportation permit within 3 days as from the
date of receiving such application.

  The total volume of transported timber allowed by the legally issued timber transportation permit shall not exceed the
total volume of timber allowed to be carried out for sales stipulated by the local annual timber production plan.

    Article 37  The timber prosecution center set in forest zone approved by the people’s government of a province, autonomous region
or municipality directly under central authority shall be responsible for the inspection of timber transportation; for timber transportation
without permit, the timber inspection station shall prevent it from happening, and may seize the timber without permit temporarily,
and immediately report to the competent forestry authority of people’s government at county or above level for legal disposition.

Chapter Six  Legal Liabilities

    Article 38  Where ones fell forest or other forest wood unlawful and results in less than 0.5 cube meters calculated by standing wood
areas or more than 50 young trees felled, the competent forestry departments under the people’s governments at or above county level
order them to plant trees as many as 10 times amount of the unlawful felled trees, confiscate the unlawfully felled timber or sales
proceeds, and impose a fine of not less than 3 times but not more than 5 times the value of the unlawfully felled timber.

  For unlawful felling of forest or other forest wood with standing volume more than 0.5 cube meters or saplings more than
20 stems, the competent forestry authority of people’s government at county or above level shall order replanting of 10 times the
amount of unlawfully felled trees, confiscate the unlawfully felled timber or sales proceeds, and impose a fine of not less than
5 times but not more than10 times the value of the unlawfully felled timber.

    Article 39  For denudation of forest or other forest wood with standing volume less than 2 cube meters or saplings less than 50 stems,
the competent forestry authority of people’s government at county or above level shall order replanting of 5 times the amount of
denudated trees, and impose a fine of not less than 2 times but not more than 3 times the value of the denudated timber.

  For denudation of forest or other forest wood with standing volume more than 2 cube meters or saplings more than 50 stems,
the competent forestry authority of people’s government at county or above level shall order replanting of 5 times the amount of
denudated trees, and impose a fine of not less than 3 times but not more than 5 times the value of the denudated timber.

  For felling of forest or other forest wood exceeding timber production plan, the punishment shall be imposes in accordance
with the provisions of the two sections herein above.

    Article 40  For timber operation (including processing) in forest zone without approval in violation of these Provisions, the competent
forestry authority of people’s government at county or above level shall confiscate the timber operated unlawfully and illegal gains,
and impose a fine of not more than 2 times the illegal gains.

    Article 41  For damages to forest or forest wood resulting from destroying forest to collect seeds or violating rules of operation
technique to tap resin, dig bamboo shoot, extract stumps, debark or over lop in violation of these Provisions, destruction planting
or violation of technique operation, to cause destruction of forest, forest wood, the losses shall be compensated according to law,
and the competent forestry authority of people’s government at or above county level shall order cessation of the illegal conduct,
replant trees of not lees than 1 but not more than 3 times the amount of destroyed stems, and may impose a fine of not less than
1 but not more than 5 times the value of destroyed forest wood; for refusing to replant trees or the replanting not conforming to
relevant state regulations, t

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...