CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION AND THE MINISTRY OF FINANCE ON PRINTING AND DISTRIBUTING THE DETAILED RULES FOR THE IMPLEMENTATION OF THE MEASURES FOR ADMINISTRATION OF INTERNATIONAL MARKET DEVELOPING FUNDS OF SMALL-AND MEDIUM-SIZED ENTERPRISES

The Ministry of Foreign Trade and Economic Cooperation, the Ministry of Finance

Circular of the Ministry of Foreign Trade and Economic Cooperation and the Ministry of Finance on Printing and Distributing the Detailed
Rules for the Implementation of the Measures for Administration of International Market Developing Funds of Small-and Medium-sized
Enterprises

WaiJingMaoJiCaiFa [2001] No.270

June 13, 2001

The commissions of foreign trade and economic cooperation, financial office, enterprise of foreign trade, bureaus of commerce(trade)
of import and export, of all provinces, autonomous regions and municipalitie directly under the Central Government, municipalities
separately listed on the State plan:

In accordance with the spirit of the ” Measures for Administration of International Market Developing Funds of Small-and Medium-sized
Enterprises(for trial)(CaiQi [2000] No.467)” , the MOFTEC and the Ministry of Finance have drew the “Detailed Rules for the Implementation
of the Measures for Administration of International Market Developing Funds of Small-and Medium-sized Enterprises”, and now print
and distribute to you, please carry out sincerely.

This is herby the notification. Attachment:

Detailed Rules for the Implementation of the Measures for Administration of International Market Developing Funds of Small-and Medium-sized
Enterprises (for Interim Implementation)

Chapter 1 General Provisions

Article 1

In order to strengthen the administration of international market developing funds of small-and medium-sized enterprises (hereinafter
referred to as “market developing funds”) and to improve the use of the fund, the Detailed Rules for the Implementation of the Measures
for Administration of International Market Developing Funds of Small-and Medium-Sized Enterprises (for provisional implementation)
(hereinafter referred to as “Detailed Rules for Implementation”) are hereby formulated according to the Measures for Administration
of International Market Developing Funds of Small-and Medium-Sized Enterprises (for provisional implementation) [CaiQi [2000] No.467,
hereinafter referred to as “Measures for Administration”]

Article 2

Market developing funds referred to in these Detailed Rules for Implementation include the governmental funds of the central treasury
used to help the businesses and small-and medium-sized enterprises open up the international markets, and the special funds independently
arranged by the treasuries.

Article 3

The market developing funds are divided into two parts, one for central use and the other for local use, and adopt two-level administration,
central administration and local administration. The part for local use is composed of the special funds appropriated by the central
financial budget and the special funds independently arranged by the local treasuries.

Article 4

The administration and use of the market developing funds shall abide by the principles of open and transparency, directional use,
scientific administration and strengthened supervision.

Chapter 2 Administrative Departments and their Functions and Responsibilities

Article 5

Foreign trade and economic departments and financial departments at all levels are the departments in charge of the market developing
funds, and shall jointly administrate the use of the market developing funds and the implementation of the projects. The foreign
trade and economic departments are responsible for the administration of the operation of the market developing funds, including
determining the support direction and the scope of use of the market developing funds, proposing the annual project fund plan, and
examining and proving the projects using the funds.

The financial departments are responsible for the budgeting and financial administration of the market developing funds, including
examining and approving the annual project fund plan, appropriating the market developing funds, drawing up supervising requirements
for the market developing funds, and shall follow and administrate the projects and the use of the fund jointly with the foreign
trade and economic departments.

Article 6

Upon the approval of the foreign trade and economic departments and the financial departments at all levels, the undertaking units
may be entrusted to be responsible for the specific administration of the operation of the market developing funds.

The part for central use shall be undertaken by the Administrative Office of the International Market Developing Funds of Small-and
Medium-Sized Enterprises (hereinafter referred to as the “Small-and Medium-Sized Enterprise Office”) that is entrusted by the Ministry
of Foreign Trade and Economic Cooperation and the Ministry of Finance; and the part for local use may be undertaken by the local
undertaking units entrusted by local foreign trade and economic departments and financial departments, and shall be reported to the
Ministry of Foreign Trade and Economic Cooperation and the Ministry of Finance for record.

Relevant work of the Small-and Medium-Sized Enterprise Office and local undertaking departments shall be under the supervision and
guidance of the foreign trade and economic departments and financial departments.

Article 7

The Small-and Medium-Sized Enterprise Office and local undertaking departments entrusted by the foreign trade and economic departments
and the financial departments shall undertake the following tasks:

1.

being responsible for accepting the application for project fund plans, the application of project implementation and the application
for project fund appropriation, and making the initial examination;

2.

drafting the annual project fund plans according to the applications for project fund plans;

3.

being responsible for the arrangement, collection, statistics and analysis of the material of applications for project fund plans,
applications for project implementation and applications for project fund appropriation;

4.

helping the foreign trade and economic departments and the financial departments follow and inspect the use of the market developing
funds;

5.

drafting reports of the implementation of the annual project fund plan;

6.

being responsible for the publicity and training of the relevant administrative provisions on the market developing funds.

Chapter 3 Use of the Funds

Article 8

The market developing funds are used to help the small-and medium-sized enterprises open up the international markets, and help the
enterprises, social organizations, institutions serving the small-and medium-sized enterprises (hereinafter referred to as the “project
organizing units”) organize the small-and medium-sized enterprises.

Article 9

The market developing funds are to support: holding or participating in overseas exhibitions; certification of quality administrative
system, environment administrative system, software export enterprises and all kinds of products; publicity and recommendation to
international markets; opening up new and emerging markets; organizing trainings and seminars; overseas bidding (bid negotiation)
and other aspects (see attachment 1 for the specific support contents and standards).

Article 10

The market developing funds are to priority support the following activities:

1.

carrying out the strategy of market diversity, supporting the developing activities facing the new and emerging international markets
of Latin America, Africa, Middle East, East Europe and South-East Asia, etc;

2.

carrying out the strategy of winning by good quality and developing trade by science and technology, supporting the international
market developing activities of the mechanical and electrical products, high-and new-tech products, the products of which more than
70% components are home-made or the products possessing independent intellectual property, etc;

3.

supporting the activities of small-and medium-sized enterprises to get quality administrative system certification, environment administrative
system certification and product certification; and

4.

supporting the international market developing activities of small-and medium-sized enterprises that have already obtained the quality
administrative system certification, environment administrative system certification and product certification.

Chapter 4 Targets of the Fund Use

Article 11

Applications of small-and medium sized-enterprises for opening up the international markets independently are enterprise project applications;
applications of project organizing units for organizing small-and medium sized-enterprises to open up the international markets are
organization project applications.

Article 12

The small-and medium sized-enterprises meeting the following requirements may apply for enterprise projects:

1.

possessing the qualification for enterprise as legal person, owning import-export operations right or foreign economic cooperation
operation qualification, and the Customs statistics volume of exports of the last year is 15,000,000 dollars or below;

2.

Having not committed any offenses in the aspects of foreign business and economic operational control, financial management, tax administration,
foreign exchange control, and custom supervision in the last two years;

3.

Possessing professionals who specialize in international market developing, having definite work arrangement and market development
plans for developing international markets.

Article 13

Project organizing units meeting the following requirements may apply for the organization projects:

1.

the organized activities are for the purpose of helping the small-and medium-sized enterprises open up international markets and of
improving the international competition capabilities of small and medium-sized enterprises;

2.

there are 10 or more enterprises taking part in the activities, and more than 70% of the enterprises meeting the application requirements
for small-and medium-sized enterprises provided in Article 12 of these Detailed Rules for Implementation;

3.

the funds applied for directly benefit the enterprises taking part in the activities, so as to reduce the expenses and the risks of
market development of those enterprises, and to increase the enterprise’s efficiency.

Article 14

Enterprises taking part in the organization projects may not apply for the market pioneering funds for the same project separately.

Chapter 5 Administration of and Standards for the Use of Funds

Article 15

The market developing funds arranged by the central treasury are divided into two parts, one for central use and the other for local
use. The funds directly used by the central authorities shall occupy 30% of the fund plan of that year, and the funds used by localities
shall occupy 70% of the fund plan of that year.

Article 16

In principle, the support proportion of market developing funds shall not exceed 50% of the amount the supported project needs. For
small-and medium-sized enterprises of the western regions, and for the market developing activities carried out in accordance with
the strategy of market diversity listed in paragraph 1, Article 10 of these Detailed Rules for Implementation, the support proportion
of funds may be raised to 70%.

Article 17

Expenses paid in foreign currencies shall be converted into Renminbi (RMB) according to the foreign exchange quotation promulgated
by China People’s Bank of the day on which the expense voucher is issued.

Chapter 6 Administration of the Project Fund Plan

Article 18

The Ministry of Foreign Trade and Economic Cooperation and the Ministry of Finance shall jointly negotiate with each other and decide
about the fund quota of the part for central use and the part for local use of next year according to the arrangements of the annual
market developing fund plan.

The Ministry of Foreign Trade and Economic Cooperation and the Ministry of Finance shall make the fund quota for local use known to
the local foreign trade and economic departments and financial departments before July 1 of each year.

Article 19

The Ministry of Foreign Trade and Economic Cooperation and the local foreign trade and economic departments are responsible for proposing
the annual project fund plan of the part for central use and the part for local use of the next year. The contents of the project
fund plan shall include: specific projects, support contents, support proportion and support amount, etc.

Article 20

The project fund plan of the part for local use shall be reported to the Ministry of Foreign Trade and Economic Cooperation before
Aug. 15 of each year by the local foreign trade and economic departments after being examined by the financial departments of the
same level.

The Ministry of Foreign Trade and Economic Cooperation is responsible for proposing the national project fund plan of the market pioneering
funds of the next year, and shall report the plan to the Ministry of Finance before Sep. 10 of each year.

Article 21

The Ministry of Finance shall give a written reply concerning the national project fund plan of market developing funds of the next
year to the Ministry of Foreign Trade and Economic Cooperation before Oct. 10 of each year.

The Ministry of Finance and the Ministry of Foreign Trade and Economic Cooperation shall jointly make the project fund plan of the
next year known to the local financial departments and foreign trade and economic departments before Nov.1 of each year according
to the annual project fund plan.

Article 22

The projects that may be listed in the project fund plan for central use shall include:

1.

organization projects proposed by the project organizing units which organize the small-and medium-sized enterprises of the whole
country or of different regions to open up the international markets;

2.

organization projects proposed by the central enterprises which organize the small-and medium-sized enterprises to pioneer the international
markets;

3.

enterprise projects proposed by the central enterprises that comply with the provisions of Article 12 of these Detail Rules of Implementation
or by the subsidiary companies of the central enterprises that have made industrial and commercial registration in Beijing.

Article 23

Projects that may be listed in the annual project fund plan for local use shall include:

1.

organization projects proposed by project organizing units that organize the local small-and medium-sized enterprises to open up the
international markets;

2.

enterprise projects proposed by the small-and medium-sized enterprises that have made industrial and commercial registration in that
region and that comply with the provisions of Article 12 of these Detailed Rules of Implementation;

3.

enterprise projects proposed by the subsidiary companies of central enterprises that have made industrial and commercial registration
in that region and that comply with the provisions of Article 12 of these Detailed Rules of Implementation.

Article 24

The Ministry of Finance and the Ministry of Foreign Trade and Economic Cooperation may make appropriate adjustment to the project
fund plan of this year that have been made known to the lower levels in the executing year according to the use status and use effect
of the market developing funds.

Article 25

The Ministry of Finance shall appropriate the funds according to the annual project fund plan made known to the lower levels. Among
which, the funds distributed for local use shall be appropriated to the local financial departments once for all or by time; the
market developing funds used by central budget administrative units shall be appropriated directly by the Ministry of Finance; and
the other market developing funds for central use shall be appropriated to the Ministry of Foreign Trade and Economic Cooperation
every three months according to the annual project fund plan.

Chapter 7 Application Procedures

Article 26

Application for project fund plan. Small-and medium-sized enterprises or project organizing units that meet the requirements for application
of Article 12 , Article 13 of these Detailed Rules for Implementation may apply to the Small-and Medium-Sized Enterprise Office
or the local foreign trade and economic departments for the project fund plan of the next year according to the support contents
provided in these Detailed Rules for Implementation from July 1 to July 31 of each year.

Article 27

Small-and medium-sized enterprises or project organizing units shall submit the basic information of the applying units, application
report, the basic information of the project applied for (see attachment 2 for details), and shall attach the relevant material together
when applying for the project fund plan.

Article 28

The Ministry of Foreign Trade and Economic Cooperation shall make public announcements of the specific contents of the project fund
plan after the Ministry of Finance and the Ministry of Foreign Trade and Economic Cooperation have given a written reply concerning
the project fund plan of the next year. Small-and medium-sized enterprises and project organizing units shall make relevant preparations
according to the project fund plan replied by the foreign trade and economic departments and the financial departments.

Article 29

Application for project implementation. Small-and medium-sized enterprises or project organizing units shall, according to the annual
project fund plan replied, apply to the Small-and Medium-Sized Enterprise Office or to the local foreign trade and economic departments
for project implementation 30 days before the implementation of the projects starts.

Article 30

Small-and medium-sized enterprises or project organizing units shall submit the application for project implementation, explanations
of project implementation (see attachment 3 for details), and shall attach the relevant material together when applying for project
implementation.

Article 31

The Ministry of Foreign Trade and Economic Cooperation or the local foreign trade and economic departments may directly examine and
reply to the project implementation applications which are included in the annual project fund plan within 10 days, and send a copy
to the financial departments at the same time.

Article 32

The projects that apply for adjusting the contents of the project fund plan shall be reported to the Ministry of Foreign Trade and
Economic Cooperation and the Ministry of Finance for examination and approval after the Small-and Medium-Sized Office or the local
foreign trade and economic departments (financial departments) have given their initial opinions.

Article 33

For the projects that can’t be completed according to the project fund plan within the year, the small-and medium-sized enterprises
or project organizing units shall apply to the Small-and Medium-Sized Enterprise Office or the local foreign trade and economic departments
for project termination or project application postponement which shall be examined and approved by the foreign trade and economic
departments.

Article 34

In case of enterprise project application, the funds given to each project shall not be more than 300,000 RMB at the most, in case
of organization project application, the funds given to each project shall not be more than 3,000,000 RMB at the most.

Chapter 8 Appropriation of the Funds

Article 35

The market developing funds adopt the principle of appropriation afterwards, namely the small-and medium-sized enterprises or project
organizing units shall apply to the Small-and Medium-Sized Enterprise Office or the local foreign trade and economic departments
for project appropriation within 1 month after the project is completed.

Article 36

The following material shall be submitted when applying for the appropriation of project funds:

1.

application form of project fund appropriation of international market developing funds of small-and medium-sized enterprises (see
attachment 4 for details);

2.

project summing-up report of international market developing activities, the contents of which shall include: expenses, achievements
obtained and the problems, etc;

3.

legal vouchers (the copies) of the expenses actually occurred.

Article 37

The market developing funds shall, through the financial departments at all levels, gradually carry out the treasury central payment
according to the requirements of budget reform and treasury central payment.

Article 38

The Small-and Medium-Sized Enterprise Office shall make an initial examination to the applications for the project fund appropriation
of the part for central use according to the annual project fund plan, and shall report them to the Ministry of Foreign Trade and
Economic Cooperation after gathering and arranging the projects each quarter (three months). Among which, the project funds of central
budget administrative units shall be directly appropriated after being examined by the Ministry of Finance, and the project funds
of other units shall be appropriated after being examined by the Ministry of Foreign Trade and Economic Cooperation.

Article 39

Local foreign trade and economic departments shall review the applications for project fund appropriation for local use according
to the annual project fund plan, and report them to the local financial departments for fund appropriation after gathering and arranging
the projects each quarter, and the local financial departments shall appropriate funds to the project organizing units or small-and
medium-sized enterprises after examination.

Chapter 9 Evaluation, Supervision and Inspection

Article 40

The Ministry of Finance and the Ministry of Foreign Trade and Economic Cooperation shall jointly supervise and inspect the market
developing funds. The contents of inspection shall include: the examination and approval of the projects and the implementation,
the use of project funds and the financial management. The forms of inspection may be following the whole process of the projects,
giving selective examination to the relevant material or entrusting intermediary agencies to conduct auditing, etc.

Article 41

The foreign trade and economic departments and financial departments shall establish strict project examination and approval system
and fund examination system, strengthen the inspection over projects and the evaluation of fund use effect, so as to guarantee the
directional use of the funds and make the best the use of the funds.

Article 42

Local foreign trade and economic departments and financial departments shall summarize and analyze the use of the market developing
funds each year, and shall report to the Ministry of Foreign Trade and Economic Cooperation and the Ministry of Finance before the
end of March of the next year. Major projects (more than 1,000,000 RMB ) shall be specially reported to the Ministries within 45
days after the projects are completed.

Article 43

The small-and medium-sized enterprises or project organizing units that use the market developing funds shall keep the relevant original
bills and vouchers in good conditions for future reference according to the relevant financial provisions, and shall cooperate with
and provide the relevant material to the foreign trade and economic departments and financial departments when the departments are
making a special inspection.

Chapter 10 Rules for Punishment

Article 44

Any of the following acts is in violation of the provisions of the Measures for Administration and these Detailed Rules for Implementation:

1.

changing the use scope without authorization against the principles of market developing fund use;

2.

withholding, misappropriating or embezzling the market developing funds;

3.

using the funds for personal welfare, reward and consumer expenses or using the funds to make up the shortage of administrative funds;

4.

repeatedly applying for the same project;

5.

wangling the funds by using false material and vouchers;

6.

the project organizing units directly use the market developing funds to improve their own profits and economic efficiency; and

7.

other acts that violate the Measures for Administration, these Detailed Rules for Implementation and relevant laws and regulations
of the state.

Article 45

For the small-and medium-sized enterprises or project organizing units that have committed any of the acts mentioned above, the financial
departments shall recover the project funds that have already been obtained by the enterprises and the units; the foreign trade and
economic departments shall cancel their qualification for application, and shall prohibit them from applying for using the market
developing funds for 5 years.

Article 46

For those that have seriously violated the Measures for Administration and these Detailed Rules for Implementation, the foreign trade
and economic departments and financial departments shall give administrative punishment to the person in charge of that project and
to the persons held directly responsible, if a crime is constituted, the departments shall submit it to the judicial departments,
and the criminal responsibilities shall be investigated into according to law.

Article 47

If the Small-and Medium-Sized Enterprise Office or any local undertaking unit hasn’t earnestly performed its functions and duties
according to the provisions, the foreign trade and economic departments and financial departments shall make a notice to criticize
them, and shall cancel the undertaking qualification of those whose circumstances are serious.

Chapter 11 Supplementary Provisions

Article 48

Necessary funds may be arranged from the market developing funds for central use and those for local use by the rate of less than
3% according to operation needs to pay the undertaking expenses and operation expenses to the undertaking units, consultation companies,
evaluation companies, accounting firms and other intermediary agencies, so as to ensure the implementation of the evaluation, proving
and auditing of the projects using the market developing funds, and to strengthen the supervision and administration of the project
funds.

Article 49

Local foreign trade and economic departments and financial departments may formulate the specific measures for implementation of the
market developing funds of their own according to the requirements of the Measures for Administration and these Detailed Rules for
Implementation and taking the actual circumstances into consideration.

Article 50

The power to interpret these Detailed Rules for Implementation shall remain with the Ministry of Foreign Trade and Economic Cooperation
jointly with the Ministry of Finance.

Article 51

These Detailed Rules for Implementation shall come into force as of the date of promulgation.

Attachment:

1. Explanation of the contents supported by the international market developing funds of small-and medium-sized enterprises (omitted)

2. Application form of project fund plan of the international market developing funds of small-and medium-sized enterprises (omitted)

3. Application form of project implementation of the international market developing funds of small-and medium-sized enterprises (omitted)

4. Application form of project fund appropriation of the international market developing funds of small-and medium-sized enterprises
(omitted)

5. List of the countries of Latin America, Africa, Middle East, East European and South-East Asia (omitted)

6. List of certification agencies (omitted)

7. List of central enterprises (omitted)