2006

STATE SECRECY PROTECTION REGULATIONS FOR COMPUTER INFORMATION SYSTEMS ON THE INTERNET

CIRCULAR OF THE MINISTRY OF INFORMATION INDUSTRY, THE MINISTRY OF EDUCATION, THE MINISTRY OF SCIENCE AND TECHNOLOGY, THE STATE ADMINISTRATION OF TAXATION CONCERNING THE ISSUANCE OF “CERTIFYING STANDARD AND MANAGING MEASURES FOR SOFTWARE ENTERPRISES (FOR TRIAL IMPLEMENTATION)”

The Ministry of Information Industry, the Ministry of Education, the Ministry of Science and Technology, the State Administration
of Taxation

Circular of the Ministry of Information Industry, the Ministry of Education, the Ministry of Science and Technology, the State Administration
of Taxation Concerning the Issuance of “Certifying Standard and Managing Measures for Software Enterprises (for Trial Implementation)”

XinBuLianChan [2000] No.968

October 16,2000

The departments in-charge of information industry, the state tax bureaus, local tax bureaus, association of Chinese software industry
in all provinces, autonomous regions and municipalities directly under the State Council:

This “Certifying Standard and Managing Measures For Software Enterprises (For Trial Implementation)” (hereinafter the “Regulations”)
is promulgated for the purpose of implementing the “Policies on Encouraging the development of Software Industry and Integrated Circuit
Industry” stipulated by the State Council. It is issued now for you to carry out.

In view of the actual conditions of the software enterprises and software industry associations throughout the country, the certifying
work will be carried out at the level of province, autonomous region, municipality directly under the State Council and municipality
separately listed on the State plan for the time being and will extend to the prefecture level when time matures. Attachment:Certifying Standard and Managing Measures for Software Enterprises (for Trial Implementation)

Article 1

This Regulations is promulgated pursuant to “Policies on Encouraging the development of Software Industry and Integrated Circuit Industry”
(hereinafter “Policies”) of the State Council for the purpose of accelerating the development of software industry, increasing creativity
and international competitiveness of information industry.

Article 2

All the software enterprises certified by the standard and procedure of this Regulations are enpost_titled to the encouragement policies
as stipulated in the Policies.

Article 3

Software products in this Regulations shall refer to the computer software, information system provided to the consumer or the software
set in the equipment, or the computer software provided together with technical services such as computer system integration and
applied service.

Article 4

The Ministry of Information Industry stipulates standard and managing measures for certifying software enterprise jointly with the
Education Commission, Ministry of Science and Technology, the Sate Tax Administration, etc. The Ministry of Information Industry
shall manage and supervise the industry of software, coordinate and administer the certifying of software enterprises throughout
the country. Its main duties are:

1.

according to the proposal of the departments in-charge of information industry in all provinces, autonomous regions and municipalities
directly under the State Council, it shall designate the certifying organs for software enterprises at provincial level, authorize
such organs or cancel the authorization, and announce the namelist of certifying organs;

2.

instructing, supervising and examining certification of software enterprises throughout the country;

3.

accepting the application for reconsideration of certifying result and annual examination.

Article 5

The departments in-charge of information industry in all provinces, autonomous regions and municipalities shall be responsible for
certifying software enterprises in their administrative areas. Their duties are:

1.

supervising and examining the certifying work in their administrative areas and designating the certifying organs at prefecture level;

2.

examining and approving the certifying result in their administrative areas jointly with the tax authorities at the same level;

3.

announcing the namelist of certified software enterprises in their administrative areas and issuing certificates for such enterprises;

4.

accepting application for reconsideration of certifying result and annual examination result in their administrative areas.

Article 6

With recommendation of departments in- charge of information industry in all provinces, autonomous regions and municipalities directly
under the State Council, the association of software industry or related associations empowered by the Ministry of Information Industry
shall be the certifying organs. The certifying organs shall meet the following requirements:

1.

It is software industry association or related association above prefecture level that is registered by civil administration departments;

2.

It should take the enterprises as its major members, there should be more than 30 software enterprises in it;

3.

It possesses permanent office premises;

4.

There are not fewer than 5 full-time staff members familiar with software industry and special staff in charge of the organization
of certification and annual examination.

Article 7

In provinces, autonomous regions and municipalities directly under the State Council, where the requirements stipulated in Article
6 of this Regulations can not be satisfied, the Chinese Software Industry Association may act as agent for certifying work.

Article 8

The software enterprise certifying organs are responsible for the certifying work of the software enterprise and annual examination
work in the authorized areas. They shall be responsible for:

1.

accepting and authorizing the software enterprise certifying application in the area;

2.

organizing the examination and annual examination of software enterprise certifying;

3.

proposing the namelist of preliminarily elected organs for certifying software enterprise in the area;

4.

submitting the preliminary namelist to the departments in-charge of information industry for examination;

5.

other certifying work entrusted by the departments in-charge of information industry.

Article 9

For the software enterprise that meets one of the following requirements, the Chinese Software Industry Association shall be responsible
for the certifying and annual examining work, and the preliminarily elected namelist shall be submitted to the Ministry of Information
Industry for examination and approval:

1.

the registered capital is over 10 million US dollars with foreign shares exceeding 50%;

2.

the annual operating income of an enterprise branch amounts to over 300 million yuan and such branch is of the enterprise of trans-provinces,
trans-autonomous regions, or trans-municipalities directly under the State Council.

Article 10

Entrusted by the Ministry of Information Industry, the Chinese Software Industry Association shall instruct, supervise and examine
the certifying work in various areas.

Article 11

The software enterprise certifying organs shall earnestly carry out their work on the principle of publicity, justness, equality for
the purpose of serving the software enterprises and promoting the development of software industry.

The charging standard for certifying software enterprise shall be determined by price authorities of State Council with the request
of the Ministry of Information Industry.

Article 12

The certifying standard of software enterprise shall be as follows:

1.

the enterprise is established within our country according to relevant laws;

2.

the business and major income are technical service such as computer software development and production, system integration, application,
etc.;

3.

the enterprise develops one or more software products or possesses intellectual property right of the products, or provides technical
services such as computer information system integration that has passed qualification and grade certification.

4.

The proportion of technical staff in the work of software development and technical service shall not be lower than 50% of the total
staff in the enterprise;

5.

It has technical equipment and premises essential for software development and relevant technical service;

6.

It has measures and capability to safeguard the quality of software and services;

7.

The development fund for software technique and products shall amount to over 8% of the enterprise’s annual software income;

8.

The annual sale income of software shall be over 35% of the total annual income of the enterprise, with the income of self-developed
software amounting to over 50% of the software sales income;

9.

The enterprise has clear property right, standardized management and complies with disciplines and laws.

Article 13

The applying enterprise shall submit the following materials to the software enterprise certifying organs:

1.

application forms of software enterprise certifying, including statement of assets and liabilities, statement of profit and loss,
statement of cash flow, staff disposition, education structure, software developing environment, operation conditions, etc.;

2.

duplicate and copy of the business license for enterprise legal person;

3.

namelist of the software products developed, produced or managed by the enterprise, including the software products developed and
sold by the enterprise;

4.

certificates for the software products that are developed by the enterprise or certificate that such enterprise possesses the intellectual
property right of the products, including registration certificate of the software, copyright or patent certificate;

5.

qualification grade certificate issued by the Ministry of Information Industry for the system integration enterprise

6.

other materials required by the Ministry of Information Industry.

Article 14

The certifying organs shall examine the application materials submitted by the software enterprise according to standard stipulated
in Artifice 12. The organs shall mainly examine the forms and organize experts to examine when necessary. For the qualified enterprise,
the certifying organs shall make a preliminary namelist and submit to the departments in-charge of information industry at the same
level for examination and approval.

Article 15

The departments in-charge of information industry at the same level of the certifying organ shall examine the enterprise namelist,
and approve, announce jointly with the tax administrations. The authorities shall issue certificate of software enterprise and report
to the departments in-charge of information industry at higher level for record.

Article 16

The software enterprise certification shall be examined annually. The certifying organs shall annually examine the software enterprises
in the authorized areas according to the standard stipulated in Article 12 of this Regulations. The result shall be examined by
departments in-charge of information industry and tax administrations at the same level of the certifying organ and reported to the
higher authorities for record.

After the annual examination, the departments in-charge of information industry shall announce the names and stamp on the certificates
of the qualified software enterprises; the enterprises not qualified shall not be enpost_titled to the encouragement policies provided
in the “Policies” for the current year.

Article 17

By the valid certificate of the current year, the certified software enterprise may go through relevant procedures in relevant institutions
and enjoy the encouragement policies provided in the Policies.

Article 18

Where the enterprise has objection to the result of certification or annual examination, it may apply for reconsideration to the departments
in-charge of information industry in the provinces, autonomous regions, municipalities directly under the State Council, or directly
to the Ministry of Information Industry within one month after the announcement of the result.

The applying enterprise shall submit reconsideration application and relevant certificates; the accepting authorities shall notify
the applicant whether to accept the application or not within 15 days after receiving the application.

The accepting authorities shall investigate and verify the application and make a reconsideration decision within 3 months after accepting
the application.

Article 19

Where the certified software enterprise changes due to the reasons such as adjustment, separation, merger, restructure, it shall go
through the formalities of alteration or apply for re-certification to the governing certifying organ within 3 months of the occurrence
of the above facts.

Article 20

The enterprise of integrated circuit designing shall be considered identically with software enterprise.

The integrated circuit designing enterprise shall be certified according to the standard and procedure stipulated in this Regulations
for the software enterprise, except that its producing process shall comply with the process for integrated circuit designing and
the managing regulations.

Article 21

Where the software enterprises manufacture, produce, sell pirated software, or use software without license, besides those disposed
of by the relevant agencies, the certifying organs shall request the authorities of information industry at the same level to cancel
their certification and report to the higher information industry for record.

The certifying organs may refuse the application of the above enterprise from one to three years according to the circumstances.

Article 22

When applying for certification or annual examination, the enterprise shall submit the true materials and content as required by this
Regulations. If there are any verified false materials or content, the certifying organs shall cease to accept the application or
request the departments in-charge of information industry to cancel the qualification of the enterprise to enjoy encouragement policies,
and report to the higher information industry authority for record.

Article 23

Where the certifying organ violates this Regulations, the authorizing information industry authority shall order it to correct within
a time limit and if it fails, its certifying qualification shall be withdrawn.

Article 24

Where any member of the certifying organ abuses their power, seeks private benefit by fraudulent practices and infringes legal interests
of the enterprise, he shall be imposed administrative sanction by his organ and where the circumstances are so serious as to constitute
an offence, he shall be investigated into the criminal liability by the judicial organs according to law.

Article 25

The forms such as certifying application form, annual examination application form and software enterprise certificates shall be printed
by the Ministry of Information Industry.

Article 26

The Regulations shall be interpreted by the Ministry of Information Industry.

Article 27

This Regulations shall come into force as the date of promulgation.



 
The Ministry of Information Industry, the Ministry of Education, the Ministry of Science and Technology, the State
Administration of Taxation
2000-10-16

 







CIRCULAR OF THE GENERAL ADMINISTRATION OF CUSTOMS ON IMPLEMENTING RELEVANT ARTICLES OF INTERIM PROVISIONS FOR INVESTMENT IN CHINA BY ENTERPRISES WITH FOREIGN INVESTMENT

The General Administration of Customs

Circular of the General Administration of Customs on Implementing Relevant Articles of Interim Provisions for Investment in China
by Enterprises with Foreign Investment

ShuShui [2000] No.642

October 14, 2000

Gaungdong branch and every customs office and college directly under the General Administration of Customs:

Interim Provisions for Investment in China by Enterprises with Foreign Investment (hereinafter referred to as Interim Provisions)
jointly formulated by the Ministry of Foreign Trade and Economic Cooperation and State Administration for Industry and Commerce has
been promulgated, in Article 16 of which it is stipulated that the enterprises with foreign investment that will invest in the central
and western regions of the country may enjoy the treatment of enterprise with foreign investment, if the proportion of foreign contribution
to the registered capital of the company that received the investment is not less than 25%. Relevant issues concerning the implementation
of this Interim Provisions are hereby clearly defined as follows:

I.

Any company in central and western regions of the country, that received investment and has obtained the Certificate of Approval of
the Enterprise with Foreign Investment and Business License in accordance with the above Interim Provisions, may apply at the local
customs in charge for the customs duties preferential treatment towards enterprises with foreign investment, so long as it accords
with the pertinent regulations in the Urgent Circular of General Administration of Customs on Implementation of Notice of State Council
on Adjustment of Tax Policy for Imported Equipment (ShuShui [1997] No.1062), Circular of the General Administration of Customs on
the Import Duties Policy for further Encouragement of Foreign Investment (ShuShui [1999] No.791) and Circular of the General Administration
of Customs on Transmitting the List of Superiority Industries Inviting Foreign Investment in Central and Western Regions of the Country
(ShuShui [2000] No.426)

II.

This preferential tax policy will be brought into Tax Concession Management System, in which “L” shall be filled as the character
code. Its abbreviation in Chinese will be “Foreign Reinvestment in Central and Western Regions of the Country”. The parameter base
of item characters of the current Tax Concession Management System has been under maintenance.

III.

Every customs office concerned shall adhere to the guideline of administration by law, be firm in implementing three-level examination
and approval system and strengthen follow-up management on goods of concession of tariff and is forbidden to expand the scope of
tax exemption without authorization. Customs at places of import and local customs in charge shall reinforce their contact and cooperation
with each other, improve work style, service and efficiency.

Should anything take place in practice, please promptly notify the department of tariff collection and administration under General
Administration of Customs.

Attachment: Interim Provisions on Domestic investment by Enterprises with Foreign Investment (omitted)



 
The General Administration of Customs
2000-10-14

 







REPLY OF THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE CONCERNING THE RELEVANT QUESTIONS ON STOCK EQUITY TRANSFER

The State Administration for Industry and Commerce

Reply of the State Administration for Industry and Commerce Concerning the Relevant Questions on Stock Equity Transfer

GongShangQiZi [2000] No.262

November 10, 2000

Hainan Administration for Industry and Commerce:

We have studied your Request for Instructions on Related Issues on Stock Equity Transfer (QiongGongShangFaZi [2000] No.10) and now
reply as follows.

In accordance with the Company Law, shareholders of registered companies with limited liability may transfer their stock equity with
one another. They may transfer their stock equity to other parties other than shareholders of the company with the permission of
the shareholders’ meeting. In transfer of stock equity, the transferer and transferee should sign a transfer agreement, according
to which the transferee should pay the transferer an equivalent of the capital the transferer has appropriated in exchange for the
stock equity. Thus the transferee needs no further capitalization in the company and becomes a valid shareholder after the registration
authority approves and makes due alterations on the initial registration. The founders of a company with limited liability have no
right to transfer the stock equity they hold of the company within three years of the company’s operation. Neither have the directors,
supervisors and managers of the company the right to transfer the stock equity they hold of the company during their tenures. Shareholders
should transfer their stock equity in stock exchange centers and need no further capitalization in the company.

The registration for alteration of companies with limited liability and companies limited by shares established in compliance with
the Company Law as a result of stock equity transfer should apply and conclude the registration in accordance with the Regulations
on Company Registration Administration. The stock equity transfer of shareholders of foreign-invested companies with limited liability
should be approached in line with specified provisions.



 
The State Administration for Industry and Commerce
2000-11-10

 







REPLY OF THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE CONCERNING THE ISSUE ON BUSINESS OPERATION PERIOD

The State Administration for Industry and Commerce

Reply of the State Administration for Industry and Commerce Concerning the Issue on Business Operation Period

GongShangQiZi [2000] No.160

August 3, 2000

Yunnan Administration for Industry and Commerce:

We have studied your request for instructions on your reply to the Letter of the Intermediate People’s Court of Kunming, Yunnan Province
(YunGongShangZi[2000] No.35) and now reply as follows:

I.

In accordance with related business registration administration provisions stipulated in the Regulations on Company Registration Administration,
the Regulations for Controlling the Registration of Enterprises as Legal Persons, and the Implementing Opinions on Related Issues
of Business Registration Administration of the State Administration for Industry and Commerce (GongShangQiZi[1999]No.173), the corporate
capacity or operation qualifications of enterprises should be terminated as of the approval of registration cancellation or suspension
of the business license. Enterprises failing to pass the annual examination are deprived of the qualifications for continuance of
operation prior to the approval of registration cancellation or suspension of the business license; however, their corporate capacity
or qualifications as operating units still continue to exist. Enterprises without the registration approval possess neither the corporate
capacity nor the operation qualifications.

II.

In accordance with Article 9 of the Regulations on Company Registration Administration, Article 9 of the Regulations for Controlling
the Registration of Enterprises as Legal Persons as well as Article 33 of its Implementing Provisions, companies, enterprises with
foreign investment and joint-operation enterprises should operate within the operating period (term of business) stated in their
respective business license approved by competent administrative authorities of industry and commerce. In case of operation beyond
the stated operating period (term of business), companies may be considered in violation of the related regulations and should apply
for registration alteration or cancellation and be dealt with in accordance with Article 63 or 66 of the Regulations on Company
Registration Administration; non-corporate enterprises may be considered operating without a business license and should be punished
in accordance with Items 1 and 3 of Article 66 of the Implementing Provisions of the Regulations for Controlling the Registration
of Enterprises as Legal Persons. In most cases, enterprises not included in the above-mentioned two categories are not limited to
any specified operating period while registering with competent authorities; however, if an operating period is specified in compliance
with the state laws and administrative regulations, the enterprise in question should also follow the principles set forth above.



 
The State Administration for Industry and Commerce
2000-08-03

 







CIRCULAR OF CHINA SECURITIES REGULATORY COMMISSION ON ISSUES CONCERNING STOCK ISSUANCE AND PUBLIC OFFERING ABROAD OF OVERSEAS CORPORATIONS WHICH INVOLVE DOMESTIC EQUITY

20031120

The China Securities Regulatory Commission

Circular of China Securities Regulatory Commission on Issues Concerning Stock Issuance and Public Offering Abroad of Overseas Corporations
which Involve Domestic Equity

ZhengJianFaXingZi [2000] No.72

June 9, 2000

Law firms concerned:

Recently, some overseas corporations that involve domestic equity (hereinafter referred to as overseas corporations) have issued stocks
and been listed in foreign stock exchange such as HK Grow Enterprise Market (GEM) and American NASTAQ. In view of the inquiry or
legal opinions submitted to our Commission by domestic lawyers on matters of stock issuance and public offering as mentioned above,
a circular is made as follows:

1.

Matters on overseas stock issuance and public offering belong to situations stipulated in the Circular of the State Council on Further
Strengthening the Management of Overseas Stock Issuance and Public Offering (GuoFa [1997] No.21) shall be dealt with according to
the said circular.

2.

Legal opinions on the matters of overseas stock issuance and public offering not subject to the document coded GuoFa [1997] No.21
from lawyers shall include, but not limited to, the following contents:

(1)

Basic information of the overseas corporation: time of establishment, place of registration, equity structure (with block diagram)
and the shareholders’ background (ultimate equity beneficiary), listed assets composition (with block diagram) and business involved,
etc;

(2)

Basic information of this issuance: leading underwriter, sponsor, target listing place, expected financing amount and usage etc.

(3)

Where domestic organs or citizens hold, directly or indirectly, equity of the overseas corporation, the process of the formation and
evolution of those equity shall be explained in detail, together with the opinion on their legitimacy and validity;

(4)

Where listed assets of overseas corporation involve, directly or indirectly, domestic equity, the process of the formation and evolution
of those equity shall be explained in detail, together with the opinion on their legitimacy and validity;

(5)

Explain the business of the domestic enterprises whose equity is held, directly or indirectly, by the overseas corporation, together
with the opinions on its conformity with the industrial policy on foreign investment and other relevant laws and regulations.

3.

The Issuance Supervision Department of China Securities Regulatory Commission is in charge of the legal opinions, and shall handle
them according to the following procedures:

(1)

Where there is unclear statement of the facts or improper legal recommendations in the legal opinions, inquiry in written form will
be made to the lawyer, who shall make amendments or renewal in time;

(2)

China Securities Regulatory Commission may solicit opinions of relevant competent authorities of the State Council on matters of laws,
regulations and policies concerning foreign investment;

(3)

Where there is no further opinions, disposal suggestion shall be given within 15 working days since the receipt of the legal opinion,
and the law department shall reply to the law firm to that effect.

4.

China Securities Regulatory Commission shall investigate and dispose, in accordance with relevant laws and regulations, the lawyer
who, or the law firm which, has submitted false, misleading legal opinion, or legal recommendation with significant omission.



 
The China Securities Regulatory Commission
2000-06-09

 







REGULATION OF COMMERCIAL ENCRYPTION CODES

LAW ON LEGISLATION OF THE PEOPLE’S REPUBLIC OF CHINA






The Standing Committee of the National People’s Congress

Order of the President of the People’s Republic of China

No.31

The Law on Legislation of the People’s Republic of China which has been adopted at the 5th Session of the 7th National People’s Congress
on March 15, 2000 is promulgated now, and shall enter into force as of July 1, 2000.

Jiang Zemin, President of the People’s Republic of China

March 15, 2000

Law on Legislation of the People’s Republic of China ContentsChapter I General Provisions

Chapter II Laws

Section 1 Scope of Lawmaking Authorities

Section 2 The Legislative Process of the National People’s Congress

Section 3 The Legislative Process of the Standing Committee of the National People’s Congress

Section 4 Interpretation of Laws

Section 5 Other Provisions

Chapter III Administrative Regulations

Chapter IV Local Regulations, Autonomous Regulations, and Rules

Section 1 Local Regulations, Autonomous Regulations, and Special Rules

Section 2 Administrative and Local Rules

Chapter V Scope of Application and Filing

Chapter VI Supplementary Provisions

Chapter I General Provisions

Article 1

This Law is enacted in accordance with the Constitution in order to standardize lawmaking activities, to perfect state legislative
institutions, to establish and perfect the socialist legal system with Chinese characteristics, to safeguard and develop socialist
democracy, to promote the governance of the country through legal mechanisms, and to build a socialist country under the rule of
law.

Article 2

The enactment, amendment and repeal of any law, administrative regulation, local regulation, autonomous regulation or special rule
shall be governed by this Law.

The enactment, amendment and repeal of administrative rules promulgated by departments of the State Council and local rules promulgated
by local governments shall be carried out in accordance with the relevant provisions of this Law.

Article 3

Lawmaking shall follow the basic principles of the Constitution, center around economic development, follow the socialist road, adhere
to democratic dictatorship by the people, adhere to the leadership of the Chinese Communist Party, adhere to Marxism, Leninism and
Mao Zedong thought and Deng Xiaoping theory, and be consistent with reform and opening up to the outside world.

Article 4

Lawmaking shall be conducted in conformity with legally- prescribed scope of authority and procedure, and shall serve the overall
interests of the state and preserve the uniformity and dignity of the socialist legal system.

Article 5

Lawmaking shall reflect the will of the people, promote socialist democracy, and ensure the participation of the people in lawmaking
in a variety of ways.

Article 6

Lawmaking shall be based on actual circumstances, and shall, in a scientific and reasonable way, prescribe the rights and obligations
of citizens, legal persons and other organizations, and the powers and duties of state organs.

Chapter II Laws

Section 1 Scope of Lawmaking Authority

Article 7

State legislative power shall be exercised by the National People’s Congress and its Standing Committee.

The National People’s Congress enacts and amends criminal, civil, and state organic laws and other basic laws.

The Standing Committee of the National People’s Congress enacts and amends laws other than those that shall be enacted by the National
People’s Congress; during the period of prorogation of the National People’s Congress, the Standing Committee thereof may make partial
amendments and supplements to the laws enacted by the National People’s Congress, but such amendment or supplement shall not contravene
the basic principles of the corresponding laws.

Article 8

Laws may be enacted only in respect to matters regarding:

(1)

state sovereignty;

(2)

the establishment, organization and authority of the People’s Congresses, People’s Governments, People’s Courts and People’s Procuratorates
at all levels;

(3)

the autonomy of ethnic regions, governance of special administrative regions, and autonomy at the grass-root level;

(4)

crimes and criminal punishment;

(5)

deprivation of the political rights of citizens, or compulsory measures and penalties that restrict personal freedom;

(6)

expropriation of non-state assets;

(7)

basic civil systems;

(8)

fundamental aspects of the economic system and fundamentals concerning fiscal, taxation, customs, finance and foreign trade;

(9)

litigation and arbitration systems;

(10)

other matters for which laws must be enacted by the National People’s Congress or its Standing Committee.

Article 9

In the event that no law has been enacted with respect to a matter mentioned in Article 8 hereof, the National People’s Congress
and its Standing Committee may authorize the State Council to enact administrative regulations concerning the relevant matters as-needed,
except in matters relating to crime and criminal punishment, deprivation of citizens’ political rights, compulsory measures and penalties
restricting a citizen’s personal freedom , and the judicial system.

Article 10

The authorizing decision shall specify the objective and scope of the authorization.

The organ so authorized shall exercise its power in strict compliance with the objectives and scope of the authorization, and shall
not re-delegate its authority to any other body.

Article 11

In matters covered by an authorization, if conditions are ripe for the enactment of a law, the National People’s Congress or the Standing
Committee thereof shall enact a law in a timely fashion. Upon the enactment of the law, the relevant authorization of lawmaking authority
with respect to the matter accordingly shall be terminated.

Section 2 The Legislative Process of the National People’s Congress

Article 12

The president of the National People’s Congress may propose a bill to the National People’s Congress for deliberation in the current
session.

The State Council, the Central Military Committee, the Supreme People’s Court, the Supreme People’s Procuratorate, and all special
committees of the National People’s Congress may propose a bill to the National People’s Congress, which shall be placed onto the
agenda of the current session by decision of the presidium.

Article 13

A delegation may propose, or a group of not less than 30 delegates may jointly propose, a bill to the National People’s Congress,
and the presidium shall decide whether to place such bill on the agenda of the current session, or whether to refer such bill to
the special committee on deliberation, and such special committee shall recommend whether such bill shall be placed on the agenda
of the current session, whereupon the presidium shall decide whether or not to place the bill on the agenda of the current session.

In the course of deliberation on the bill, the special committee may invite the bill sponsor to offer comments and suggestions during
the deliberation session.

Article 14

During the period of prorogation of the National People’s Congress, a motion may be made to the Standing Committee which shall, after
deliberation according to the procedure stipulated in Section 2 of Chapter 3 of this Law, forward the motion to the National People’s
Congress for decision, whereupon the Standing Committee or the bill’s sponsor shall make statements to the plenary session.

Article 15

In cases where the Standing Committee has decided to submit a bill to the upcoming session of the National People’s Congress for deliberation,
the bill in draft law form shall be distributed to the delegates one month prior to the commencement of the session.

Article 16

In cases where a bill has been put on the agenda of the current session of the National People’s Congress, the plenary session shall,
after hearing the statements of the bill sponsor, forward the bill to the delegations responsible for deliberation.

In the course of deliberation of the bill by the delegations, the bill sponsor shall send representatives to hear comments and answer
questions.

In the course of deliberation of the bill by the delegations, relevant agencies or organizations shall send representatives to make
statements to the delegation upon request by a delegation.

Article 17

A bill that has been put on the agenda of the current session of the National People’s Congress shall be deliberated upon by the relevant
special committee, which shall then submit its opinions to the presidium for distribution to the session’s delegates.

Article 18

For a bill that has been put on the agenda of the current session of the National People’s Congress, the Legislative Committee shall,
on the basis of the opinions of the relevant delegations and the special committees, conduct a general deliberation on the bill,
and afterwards shall submit to the presidium a deliberation report and amended draft law. The deliberation report shall include statements
of important differences in opinion and, after being deliberated by the presidium, shall be distributed to the session’s delegates.

Article 19

For a bill which has been put on the agenda of the current session of the National People’s Congress, the executive chairman of the
presidium may, where necessary, convene a meeting of delegation leaders to hear the deliberation opinions of all delegations on key
issues of the bill, and to hold discussions. The discussions and suggestions concerning key issues shall be reported to the presidium.

The executive chairman of the presidium may also call a session of the relevant delegates selected by the delegations to discuss important
special issues contained in the bill, and shall report its discussion and suggestions to the presidium.

Article 20

If, a bill sponsor requests withdrawal of a bill that already has been put on the agenda of the current session of the National People’s
Congress but that has not yet been brought to a vote, then the bill sponsor shall explain his request; once the presidium has given
consent to the request and so reported its decision to the plenary session, then deliberation over the bill shall terminate accordingly.

Article 21

If, in the deliberation of a bill, there are key issues that need to be studied further, the Standing Committee may, upon the suggestion
of the presidium and the consent of the plenary session, be authorized to conduct further deliberations based on the opinions of
the delegates, make a decision and report its decision to the next session of the National People’s Congress. The Standing Committee
may also be authorized to hold further deliberations according to the opinions of the delegates, and put forward an amendment plan
for deliberation and decision by the next session of the National People’s Congress.

Article 22

After deliberation by the delegations, the amended draft law shall be further amended by the Legislative Committee based on the opinions
of the delegations during deliberation; the Legislative Committee shall present a version of the draft law so that the presidium
may make a case to the plenary session for adoption based on simple majority vote of all delegates.

Article 23

A law enacted by the National People’s Congress shall be promulgated by presidential order signed by the President of the state.

Section 3 The Legislative Process of the Standing Committee of the National People’s Congress

Article 24

The caucus of chairpersons may propose a bill to the Standing Committee for deliberation.

The State Council, the Central Military Committee, the Supreme People’s Court, the Supreme People’s Procuratorate, and all special
committees of the Standing Committee may propose to the Standing Committee that a bill be put on the agenda of the current session
of the Standing Committee by the caucus of chairpersons, or propose a bill to the special committees for deliberations; a report
shall be submitted by the special committee to the caucus of chairpersons which decides whether to put it on the agenda of the upcoming
session of the Standing Committee. If the caucus of chairpersons is of the opinion that substantive issues concerning the billrequire
further study, it may suggest that the bill sponsor make revisions first, and then submit the revised bill to the Standing Committee.

Article 25

Ten or more members of the Standing Committee may jointly propose a bill to the Standing Committee, and the caucus of chairpersons
shall decide whether to put the bill on the agenda of the session of the Standing Committee, or whether first to refer it to the
relevant special committees for deliberation and comment before deciding whether to put it on the agenda. When the decision is made
not to put the bill on the agenda of the current session of the Standing Committee, the caucus of chairpersons shall submit a report
to the Standing Committee or provide an explanation to the bill sponsor.

In the course of deliberation, the special committee may invite the bill sponsor to the session to provide comments.

Article 26

For a bill which has been put on the agenda of the session of the Standing Committee, unless special circumstances arise, the draft
law shall be distributed to all the members of the Standing Committee seven days prior to commencement of the session.

Article 27

A bill which has been put on the agenda of the session of the Standing Committee, in general, shall be deliberated three times at
the sessions of the Standing Committee before being put to vote.

During the first deliberation, the Standing Committee hears the statements of the bill sponsor and refers the bill to seminars for
preliminary deliberation.

During the second deliberation, the Standing Committee hears the report of the Legislative Committee concerning amendment and major
issues concerning the draft law, and refers the bill to seminars for further deliberation.

During the third deliberation, the Standing Committee hears the report of the Legislative Committee concerning the result of the deliberation
over the draft law and refers the amended draft law to the seminars for deliberation.

In the course of deliberation, the Standing Committee may, if necessary, convene joint seminars or plenary sessions to discuss the
key issues of the draft law.

Article 28

A bill that has been put on the agenda of the session of the Standing Committee may be brought to a vote after two deliberations by
the Standing Committee if a general consensus has been reached. A bill that partially amends a law may be brought to vote after one
deliberation by the Standing Committee if a general consensus has been reached.

Article 29

In the course of deliberation by the seminars of the Standing Committee, the bill sponsor shall send representatives to hear comments
and answer questions.

In the course of deliberation by the seminars of the Standing Committee, relevant agencies or organizations, if requested by a subgroup,
shall send representatives to brief the subgroup.

Article 30

A bill that has been put on the agenda of the session of the Standing Committee shall be deliberated by the relevant special committee
in order to formulate opinions for distribution at the session of the Standing Committee.

During the deliberation of the bill, the relevant special committee may invite members of other special committees to the session
to provide comments.

Article 31

In cases where a bill has been placed on the Standing Committee’s agenda, the Legislative Committee shalldeliberate on the basis of
the opinions expressed by members of the Standing Committee, the opinions of the relevant special committee and of all sides, and
shall deliver a report concerning the amendment, or the result of deliberation, and the amended draft law; the report shall include
a statement of the major differences in views. If any opinion of importance expressed by a relevant special committee is not adopted,
then the Legislative Committee shall provide feedback to the special committee.

In the course of deliberation, the Legislative Committee may invite members of the relevant special committee to the session to give
comments.

Article 32

During the deliberation process, a special committee shall convene a plenary session for deliberation, and, where necessary, may request
that relevant agencies or organizations dispatch personnel in charge of relevant issues to make statements.

Article 33

When different opinions arise among the special committees on a key issue concerning the draft law, the committees shall report such
differences to the Caucus of Chairpersons.

Article 34

When a bill has been placed on the agenda of a session of the Standing Committee, the relevant special committees and the working
office of the Standing Committee shall hear the comments of all sides by way of symposia, demonstrations, hearings, etc.

The working office of the Standing Committee shall distribute the draft law to the relevant agencies, organizations and experts for
comments, and shall prepare them for submission to the Legislative Committee and the relevant special committees, and, where necessary,
distribute them among the participants of the current session of the Standing Committee.

Article 35

An important bill that has been put on the agenda of the Standing Committee may, upon decision of the Caucus of Chairpersons, be presented
to the public for comments. The comments presented by the various agencies, organizations and citizens shall be submitted to the
working office of the Standing Committee.

Article 36

For a bill that has been put on the agenda of the session of the Standing Committee, the working office of the Standing Committee
shall collect and sort out the comments of all sides made at group deliberations, and, where necessary, shall distribute them to
the current session of the Standing Committee.

Article 37

If the sponsor of a bill that has been put on the Standing Committee agenda requests withdrawal of such bill before it is brought
to a vote, the bill sponsor shall state the reason, and deliberation of the bill shall terminate after the Caucus of Chairpersons
has granted its consent and reported to the Standing Committee.

Article 38

If, after three deliberations by the Standing Committee session, major issues still require further study, a vote on the bill may
be suspended if so proposed by the Caucus of Chairpersons and upon the consent of the joint group session or plenary session, but
such proposal must be submitted to the Legislative Committee and the relevant special committees for further deliberation.

Article 39

If the deliberation on a bill that has been put on the Standing Committee agenda has been suspended for two years due to major discrepancies
on major issues, such as the necessity or feasibility of its enactment, or if the suspension of voting has exceeded two years and
the bill has not been placed anew on the Standing Committee agenda, then the Caucus of chairpersons shall submit a termination of
bill deliberation report to the Standing Committee.

Article 40

The revised version of a draft law shall, upon deliberation by the Standing Committee, be amended by the Legislative Committee based
on comments made by the Standing Committee in order to formulate a version endorsed by the Caucus of chairpersons to be voted upon
in the plenary session of the Standing Committee. The bill shall be adopted if more than half of the votes cast by all the members
of the Standing Committee are affirmative.

Article 41

A law passed by the National People’s Congress shall be promulgated by presidential order signed by the state president.

Section 4 Interpretation of Law

Article 42

The power to interpret law shall be vested in the Standing Committee of National People’s Congress.

The Standing Committee of the National People’s Congress shall issue interpretations of a law when any of the following circumstances
occurs:

(1)

the specific meaning of the provision of a law requires further clarification;

(2)

after the enactment of such law, a new situation arises so that clarification of the rationale underlying its application is needed.

Article 43

The State Council, the Central Military Committee, the Supreme People’s Court, the Supreme People’s Procuratorate, all special committees
of the Standing Committee and the Standing Committee of the People’s Congress of all provinces, autonomous regions and centrally-
governed municipalities may make a request for legislative interpretation to the Standing Committee of the National People’s Congress.

Article 44

The working office of the Standing Committee shall research and formulate draft legislative interpretations to be put on the agenda
of the forthcoming session of the Standing Committee upon decision of the Session of Chairpersons.

Article 45

After deliberation by the Standing Committee, a draft legislative interpretation shall be deliberated and amended by the Legislative
Committee on the basis of comments made by members of the Standing Committee in order to formulate a version of legislative interpretation
for voting purposes.

Article 46

The draft legislative interpretation put to a vote shall be adopted if affirmed by more than half of all members of the Standing Committee,
and shall be promulgated by the Standing Committee by way of a public announcement.

Article 47

Legislative interpretations issued by the Standing Committee of the National People’s Congress shall have the same force as law.

Section 5 Other Provisions

Article 48

When a bill is proposed, the text, comments on the draft bill and, when necessary, other relevant materials shall be submitted concurrently.
Comments on the draft law shall also elucidate the necessity for its enactment and its main contents.

Article 49

A bill proposed to the National People’s Congress and its Standing Committee may be withdrawn by the bill sponsor prior to the bill’s
being placed on the agenda of the forthcoming session.

Article 50

Where a bill proposed to the National People’s Congress and its Standing Committee fails to be adopted by vote at the plenary session,
and the bill sponsor still deems it necessary to enact such legislation, he may propose it anew in accordance with legal procedures.
The presidium or the Session of Chairpersons shall decide whether the bill is to be put on the agenda; specifically, if a bill fails
to be adopted by the National People’s Congress, it shall be proposed to the National People’s Congress for deliberation and decision.

Article 51

A law shall specify the date of its implementation.

Article 52

The presidential order for the promulgation of a law shall set forth the enactment organ, and the dates of adoption and implementation.

After a law is signed and promulgated, it shall be published in timely fashion in the Bulletin of the Standing Committee of the National
People’s Congress and in nationally-circulated newspapers.

The version of the law printed in the Bulletin of the Standing Committee of the National People’s Congress shall be considered the
official version.

Article 53

The procedure for amendment and repeal of a law shall be governed by the provisions of this Chapter.

Where a law is partially amended or repealed, a new version shall be published.

Article 54

A law may consist of Parts, Chapters, Sections, Articles, Paragraphs, Items, and Sub-items as appropriate for the law’s contents.

The numbers for Parts, Chapters, Sections, and Articles are to be expressed sequentially in Chinese characters, while Paragraphs are
not to be numbered; items and sub-items are to be numbered sequentially in Arabic numbers.

The caption of a law shall set forth the organ of enactment and the date of promulgation.

Article 55

The working office of the Standing Committee of National People’s Congress may handle inquiries regarding a specific aspect of a law,
issue responses, and submit same to the Standing Committee for record.

Chapter III Administrative Regulations

Article 56

The State Council enacts administrative regulations in accordance with the Constitution and law.

An administrative regulation may prescribe any of the issues mentioned below:

(1)

matters that demand the enactment of an administrative regulation for the purpose of implementing a law;

(2)

matters subject to the administration of the State Council under Article 89 of the Constitution.

For a matter for which a law should have been enacted by the National People’s Congress and its Standing Committee, the State Council
may, according to the enabling decision of the National People’s Congress and its Standing Committee, formulate an administrative
regulation instead. If such an administrative regulation proves viable in practice, when necessary conditions for enacting a relevant
law arise, the State Council shall, in timely fashion, propose such enactment to the National People’s Congress and its Standing
Committee.

Article 57

An administrative regulation shall be drafted by the State Council. Where a relevant agency of the State Council deems it necessary
to enact an administrative regulation, it shall apply to the State Council for relevant arrangements to be made.

Article 58

In the process of drafting an administrative regulation, the drafting body shall hear the opinions of the relevant agencies, organizations
and citizens through panel discussion, feasibility study meeting, hearing, etc.

Article 59

Upon completion of a draft administrative regulation, the drafting body shall submit the draft regulation and corresponding commentaries,
opinions from all sides concerning the key issues of the draft regulation, and other relevant materials to the legislative affairs
organization of the State Council for inspection.

The legislative affairs organization of the State Council shall submit to the State Council an inspection report along with a revised
version of the draft; the inspection report shall elucidate the major issues of the draft regulation.

Article 60

The enactment procedure for administrative regulations shall comply with the relevant provisions of the Organization Law of the State
Council of the People’s Republic of China.

Article 61

An administrative regulation shall be promulgated by way of an order of the State Council signed by the Premier.

Article 62

After being signed and promulgated, an administrative regulation shall be published in timely fashion in the State Council Bulletin
and nationally-circulated newspapers.

The version appearing in the State Council Bulletin shall be considered the official version.

Chapter IV Local Regulations, Autonomous Regulations and Special Rules, and Rules

Section 1 Local Regulations, Autonomous Regulations and Special Rules

Article 63

The People’s Congress of a province, autonomous region, or municipality directly under the Central Government and the Standing Committee
thereof may, according to the specific circumstances and actual needs of the jurisdiction, enact local regulations provided that
such enactment does not contravene any provision of the Constitution, laws or administrative regulations.

The people’s congresses and standing committees thereof of comparatively large cities may, according to the specific circumstances
and actual needs of the jurisdiction, enact local regulations provided that they do not contravene any provision of the Constitution,
laws, administrative regulations or local regulations in force in the province or autonomous region in whose jurisdiction the city
is situated, for implementation upon approval by the standing committee of the People’s Congress of the province or autonomous region.
The standing committee of the People’s Congress of the province or autonomous region shall review the legality of a regulation submitted
to it for approval, and shall grant approval within four months if such regulation does not contravene any provision of the Constitution,
laws, administrative regulations, and the local regulations in force in the province or autonomous region in which the city is situated.

If, in the course of reviewing a local regulation submitted by a comparatively large city for approval, the standing committee of
the People’s Congress of the province or autonomous region finds it in contradiction with a local rule of the people’s government
of the province or autonomous region, it shall have authority to decide how to handle such situation.

For the purposes of this Law, a comparatively large city refers to a city where the people’s government of the province or autonomous
region is situated, or a city where a special economic zone is situated, or any other city so approved by the State Council.

Article 64

A local regulation may specify the following:

(1)

matters for which enactment of a local regulation is required in light of actual circumstances of the jurisdiction for the purpose
of implementing a law or administrative regulation;

(2)

matters of local concerns for which enactment of a local regulation is required.

Apart from those mentioned in Article 8 of this Law, a province, autonomous region, municipality directly under the Central Government
or a comparatively large city may, according to the specific situation and actual demands of the locality, make local regulations
for those matters for which no laws or regulations have been enacted. When a law or administrative regulation is enacted by the state
and becomes effective, any provision of the local regulations that contravenes such law or administrative regulation shall be invalid,
and the enacting body shall amend or repeal such provision in a timely fashion.

Article 65

The People’s Congress or its standing committee of a province or a city where a special economic zone is located shall, pursuant to
an enabling decision issued by the National People’s Congress, enact regulations for implementation within the special economic zone.

Article 66

The People’s Congress of an autonomous ethnic region has the power to enact autonomous regulations and special rules according to
the political, economic and cultural characteristics of the ethnic groups in the region. An autonomous regulation or special rule
enacted by an autonomous region shall come into force after it is reviewed and approved by the Standing Committee of the National
People’s Congress. An autonomous regulation or special rule enacted by an autonomous prefecture or autonomous county shall come into
force after it is reviewed and approved by the standing committee of the People’s Congress of the province, autonomous region, or
municipality directly under the central government.

An autonomous regulation or special rule may be flexible provisions of a law or administrative regulation, so long as such flexible
provisions do not contravene the basic principles thereof, but such autonomous regulations or special regulations shall not be flexible
provisions of the Constitution, laws or administrative regulations specifically enacted for the ethnic autonomous region.

Article 67

A local regulation concerning matters of special importance of the jurisdiction shall be adopted by the People’s Congress of the jurisdiction.

Article 68

In accordance with the organization law of the People’s Republic of China concerning the local People’s Congress and people’s gov

REPLY OF THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE CONCERNING APPLICABLE REGULATIONS FOR PUNISHING ENTERPRISES WITH FOREIGN INVESTMENT FOR FORGING REPORTS ON THE VERIFICATION OF CAPITAL

The State Administration for Industry and Commerce

Reply of the State Administration for Industry and Commerce Concerning Applicable Regulations for Punishing Enterprises with Foreign
Investment for Forging Reports on the Verification of Capital

GongShangQiZi [2000] No.261

November 8, 2000

Fujian Administration for Industry and Commerce:

We have studied your Request for Instructions on Applicable Regulations for Punishing Enterprises with Foreign Investment for Forging
Reports on the Verification of Capital (MinGongShangWaiQiZi [2000] No.498) and now reply as follows:

1.

The Law of the People’s Republic of China on Foreign-capital Enterprises, the Rules for the Implementation of the Law of the People’s
Republic of China on Foreign-capital Enterprises, the Company Law of the People’s Republic of China and the Regulations of the People’s
Republic of China on Company Registration Administration are applicable to enterprises with foreign investment operating in the form
of companies (hereinafter referred to as enterprises with foreign investment) for violation of registration administration laws and
regulations.

2.

Enterprises with foreign investment that fail to contribute their due capital within the prescribed time should be handled in accordance
with Article 9 of the Law of the People’s Republic of China on Foreign-capital Enterprises and Articles 31 and 32 of the Rules for
the Implemenation of the Law of the People’s Republic of China on Foreign-capital Enterprises.

3.

Foreign-capital enterprises that fail to contribute their due capital and submit falsified reports on the verification of capital
in exchange for the extension of legal capacity should be handled in accordance with Article 58 of the Regulations of the People’s
Republic of China on Company Registration Administration.

In Article 58 of the Regulations of the People’s Republic of China on Company Registration Administration, the phrase “applying for
company registration” should contain procedures and process of registration for company establishment, alteration and other registered-capital
related cases. And the phrase “obtaining the company registration” should cover the procurement of corporate legal capacity, completion
of the alterations of company registration and the acquisition of such recorded registration results as the extension of corporate
legal capacity.

4.

While foreign-capital enterprises that fail to contribute their due capital may be punished in accordance with the Rules for the Implementation
of the Law of the People’s Republic of China on Foreign-capital Enterprises, shareholders that fail to contribute their due capital
may be punished in compliance with Article 60 of Regulations of the People’s Republic of China on Company Registration Administration.

 
The State Administration for Industry and Commerce
2000-11-08

 




CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION CONCERNING DEFINING THE INCOMES OF FOREIGN ENTERPRISES AND INDIVIDUALS FROM TECHNOLOGY TRANSFER WHICH ARE TO BE EXEMPT FROM BUSINESS TAX

The State Administration of Taxation

Circular of the State Administration of Taxation Concerning Defining the Incomes of Foreign Enterprises and Individuals from Technology
Transfer Which Are to be Exempt from Business Tax

GuoShuiFa [2000] No.166

October 8, 2000

The bureau of Local Taxation of every province, autonomous region, municipality directly under the Central Government and municipality
separately listed on the State plan:

According to the provisions of ‘Circular of the Ministry of Finance and the State Administration of Taxation for Implementation of
Provisions Concerning Taxation in “Decision of the Central Committee of the Chinese Communist Party and the State Council on Promotion
of Technological Innovation, Development of High Technologies and Accomplishment of Industrialization “(CaiShuiZi [1999] No.273),
incomes of foreign enterprises and individuals from technology transfer, business of technology development and related business
of technical consultancy and service shall be exempt from business tax. For the purpose of convenient implementation, provisions
are hereby made for clarification of the incomes of foreign enterprises and individuals from technology transfer which are exempt
from business tax.

1.

The income from technology transfer that is exempt from business tax means those earned by the transferor from compensated transfer
of, the ownership of, or the right to use his patent or non-patent technology and from the provision of relevant technical consultancy
and service. Incomes relating to technology transfer earned in the form of ‘admission fee’ or ‘royalty’ determined according to a
certain percentage of the sales shall all be incomes that are free from business tax.

2.

Trademark royalty or other similar incomes under a technology transfer contract are not incomes that are free from business tax under
the CaiShuiZi [1999] No.273. So the tax bearer shall reasonably divide the income that is subject to business tax such as trademark
royalty from the contract price. In case of failure to divide precisely and reasonably, the taxation organ may determine the amount
for which the business tax is to be exempted provided that such amount shall not exceed 50% of the total contract price.

3.

The procedure for examination and approval of the above-mentioned exemption of business tax shall still continue to be handled according
to Item (3), Article 2 of CaiShuiZi [1999] No.273 .



 
The State Administration of Taxation
2000-10-08

 







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...