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CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON AUTHORIZING SAFE BRANCHES TO DEAL WITH THE SHARE TRANSFER, LIQUIDATION, AND OTHER FOREIGN EXCHANGE BUSINESS FOR ENTERPRISES WITH FOREIGN INVESTMENT

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on Authorizing SAFE Branches to Deal with the Share Transfer, Liquidation,
and Other Foreign Exchange Business for Enterprises with Foreign Investment

Huifa [1999] No.397

December 22, 1999

The “Circular Concerning Relevant Issues on Strengthening the Administration of Foreign Exchange under Capital Accounts” (Huifa [1998]
No.21) was issued by State Administration of Foreign Exchange in September 1998 to normalize the illegal capital transactions and
to adapt to the current domestic circumstances. According to the Article 3 , Section 9 of this Circular, approval of SAFE is required
when domestic institutions change into foreign exchange and transfer abroad their proceeds obtained from share transfers or liquidation
of investment.

Since illegal practices in this field have been corrected, we hereby issue this Circular as follows in order to improve the investment
environment for foreign funds and to improve the working efficiency by shortening the examination and approval procedures.

1.

SAFE branches in all provinces, autonomous regions, municipalities under the direct jurisdiction of the State Council, Beijing and
Chongqing foreign exchange administration departments, and Dalian, Qingdao, Ningbo, Xiamen and Shenzhen branches, are authorized
to examine and approve foreign investors’ application for changing into foreign exchange and transferring their proceeds obtained
from share transfers or liquidation of investment. SAFE branches shall report for file their approvals with the capital account administrative
department of the head office of SAFE case by case.

2.

A domestic enterprise, when applying for purchasing foreign exchange to buy shares from foreign shareholders, shall present following
documents to local SAFE branch:

(1)

Written application;

(2)

Registration Certificate of Foreign Exchange;

(3)

Share transfer agreement;

(4)

Documents issued by MOFTEC approving the changes in enterprises with foreign investment’s shareholding structures;

(5)

New business license, approval certificate granted by MOFTEC, approved joint venture contract and constitution;

(6)

The latest capital verification, auditing report, or valid asset appraisal report of the former enterprise with foreign investment;

(7)

Statements of foreign exchange accounts held by the domestic enterprise on the day of the application;

(8)

Tax certificate proving the prepayment of income tax, submitted by the domestic enterprise, in the case that the foreign party has
obtained benefits from the share transfer;

(9)

Other documents required to be complemented.

3.

When applying for purchasing foreign exchange to pay the foreign party for liquidation, an enterprise with foreign investment shall
submit to local SAFE branch the following materials for examination:

(1)

Written application;

(2)

Original copy of the Registration Certificate of Foreign Exchange;

(3)

Documents issued by MOFTEC or its branches approving the liquidation;

(4)

Liquidation agreement reached by the liquidation committee;

(5)

Verification certificate of the capital contribution;

(6)

Liquidation report provided by a CPA;

(7)

All notices on the opening of existing foreign exchange accounts;

(8)

Statements for foreign exchange accounts on the day of finalizing the liquidation;

(9)

Evidence for the cancellation of tax registration;

(10)

Other documents required to be complemented.

4.

Article 3 , Section 9 of the document Huifa [1999] No.21 is repealed.

The notice is specially notified.



 
The State Administration of Foreign Exchange
1999-12-22

 






PERSONAL INCOME TAX LAW OF THE PEOPLE’S REPUBLIC OF CHINA

CIRCULAR OF THE GENERAL ADMINISTRATION OF CUSTOMS ON RELEASING THE MEASURES OF THE CUSTOMS OF THE PEOPLE’S REPUBLIC OF CHINA FOR THE ADMINISTRATION OF THIRD PLACE PROCESSING TRADE

The General Administration of Customs

Circular of the General Administration of Customs on Releasing the Measures of the Customs of the People’s Republic of China for the
Administration of Third Place Processing Trade

ShuShui [1999] No.648

September 22, 1999

Guangdong Customs Bureau and all customs bureaus directly under the General Administration of Customs:

In order to implement the Circular of the General Office of the State Council on Transmitting the Comments by the State Economic and
Trade Commission and Other Relevant Governmental Agencies on Further Improving the Deposit Account System for Processing Trade (GuoBanFa
[1999] No.35), the General Administration of Customs has drawn up the Measures of the Customs of the People’s Republic of China for
the Administration of Third Place Processing Trade, which, as released hereby, shall be promulgated as Decree No.74 of the General
Administration of Customs of the People’s Republic of China. Some relevant issues are clarified as follows:

I.

For third party processing trade, the customs authority administers the two parties involved differently. Once there occurs an adjustment
of the administrative mode of either party, the competent customs bureau shall, in accordance with the Circular of the General Administration
of Customs on Printing and Distributing the Detailed Rules of the Customs of the People’s Republic of China for the Implementation
of Classified Administration of Enterprises (ShuJian [1999] No. 345), make timely notification to its foreign counterpart on relevant
stipulations so that appropriate supervisory measures can be taken.

II.

The competent customs bureau of the processing party should consolidate the follow-up supervision over the filed contract, and shall,
within one month calculated from the date of the cancel upon verification and settlement of the contract, inform the competent customs
bureau of the processing party of the execution of the contract in the form of a Receipt of the Customs of People’s Republic of China
Concerning Third Place Processing Trade (hereinafter referred to as the Receipt).

III.

If it observes anything unusual in the course of the execution of the contract, the competent customs bureau of the processing party
shall relate the information to the competent customs bureau of the trading party in the form of a Receipt within seven working days
calculated from the date of discovery.

IV.

Before transmission of the Application to the Customs of the People’s Republic of China for Conducting Third Place Processing Trade
(hereinafter referred to as the Application) or the Receipt to the other location through network, the competent customs shall envelop
the Application or the Receipt and present it to its counterpart at the third place. After the transmission, the competent Customs
shall transmit the relevant content of the Application or the Receipt to its counterpart at the third place through network.

V.

The document ShuShui [1999] No.382 issued on May 25, 1999 by the General Administration of Customs is nullified thereupon.

VI.

The Application to the Customs of the People’s Republic of China for Conducting Third Party Processing Trade and the Receipt of the
Customs of the People’s Republic of China Concerning Processing Trade shall be printed by each individual customs of their own.

The Circular shall be observed and implemented accordingly.



 
The General Administration of Customs
1999-09-22

 






CIRCULAR OF THE STATE COUNCIL ON EXPANDING THE SCOPE OF APPLICATION OF THE REGULATIONS ON TAXATION PREFERENTIAL TERMS FOR FOREIGN-FUNDED ENTERPRISES ENGAGED IN ENERGY AND TRANSPORTATION INFRASTRUCTURE PROJECTS

Category  TAXATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1999-07-02 Effective Date  1999-01-01  


Circular of the State Council on Expanding the Scope of Application of the Regulations on Taxation Preferential Terms for Foreign-funded
Enterprises Engaged in Energy and Transportation Infrastructure Projects

(Issued by the State Council on July 2, 1999)

    In order to encourage foreign-funded enterprises to engage in energy and transportation infrastructure projects,
and to promote economic development of the middle and western regions, the State Council, in accordance with the relevant provisions of the Income tax Law of the People’s
Republic of China for Foreign-funded Enterprises and Foreign Enterprises, has decided to expand the scope of application of the regulations
on taxation preferential terms for foreign-funded enterprises engaged in energy and transportation infrastructure projects. The circular
is made as follows:

    From January 1, 1999 on, the provisions, as stipulated in Item 3 of Article 73(1)(1) of the Detailed Rules
for Implementing the Income tax Law of the People’s Republic of China for Foreign-funded Enterprises and Foreign Enterprises, on
production-oriented foreign-funded enterprises engaged in energy and transportation infrastructure projects may have its enterprise
income tax levied at a reduced tax rate of 15% after the approval of the State General Administration of Taxation, should be expanded
to all over the country for implementation.





DECISION OF THE PREPARATORY COMMITTEE FOR THE MACAO SPECIAL ADMINISTRATIVE REGION OF THE NATIONAL PEOPLE’S CONGRESS ON THE ISSUE OF THE STRUCTURE FOR MACAO MUNICIPAL ADMINISTRATION

Category  SPECIAL ADMINISTRATIVE REGION Organ of Promulgation  The Preparatory Committee for the Macao Special Administrative Region of Status of Effect  In Force
Date of Promulgation  1999-08-29 Effective Date  1999-08-29  


Decision of the Preparatory Committee for the Macao Special Administrative Region of the National People’s Congress on the issue
of the structure for Macao municipal administration



the National People’s Congress

(Adopted at the 10th Plenary Session of the Preparatory Committee for the

Macao Special Administrative Region of the National People’s Congress on
August 29, 1999)

    In accordance with the relevant provisions of Special Administrative Region of the People’s Republic of China > and the
reality condition of Macao, the Preparatory Committee for the Macao Special
Administrative Region of the National People’s Congress decide:

    1. Macao Special Administrative Region may set up a municipal
administrative structure with non-political power. The municipal structure
provide service in respects of culture, happy and peaceful, environmental
sanitation etc for residents with entrustment by the government of the
Special Administrative Region and offer consulting opinions concerning with
above affairs to the government of the Special Administrative Region. The law
of Special Administrative Region shall prescribe the functions, power and
composition of the municipal structure.

    2. Before establishment of above municipal structure of the Macao Special
Administrative Region the original municipal structure of Macao shall be
reorganized to the interim municipal structure of the Special Administrative
Region. The term of office of the interim municipal structure shall be up to
establishment of a new municipal structure and not over December 31, 2001.

    3. In the original municipal structure, the members of municipal
administrative parliament and the members of municipal administrative
executive committee who were to be elected may turn into the members of
corresponding structure in the interim municipal structure of Macao Special
Administrative Region if he is willing. If there is any vacancy of them it
shall be complemented according to law. Members of the municipal
administrative parliament and executive committee who produced by
appointment, shall be appointed by the Chief Executive according to the
corresponding number of members.

    4. The laws and system of the original municipal structure of Macao, the
contents of which don’t conflict with the Basic Law, may continue to retain
except the Standing Committee of the National People’s Congress have another
decision.

    5. The Emblem, Seal and Flag of the original municipal structure of Macao
shall stop using from December 20,1999. If the municipal structure of the
Macao Special Administrative Region have to use Emblem, Seal and Flag, they
shall be decided by Special Administrative Region on its own.

    6. The Chief of Executive of the Macao Special Administrative Region
shall be responsible for implement of this Decision.





URGENT CIRCULAR OF THE PEOPLE’S BANK OF CHINA AND THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON THE PROHIBITION OF PURCHASE OF FOREIGN EXCHANGE FOR ADVANCE REDEMPTION OF LOAN

The People’s Bank of China, the State Administration of Foreign Exchange

Urgent Circular of the People’s Bank of China and the State Administration of Foreign Exchange on the Prohibition of Purchase of Foreign
Exchange for Advance Redemption of Loan

YinChuan [1998] No.53

August 31,1998

Branches the People’s Bank of China in all provinces, autonomous regions, and municipalities directly under the Central Government,
and in Shenzhen Economic Zone; Branches of the State Administration of Foreign Exchange in all provinces, autonomous regions, and
municipalities directly under the Central Government, and in Shenzhen Economic Zone; Industrial and Commercial Bank of China,Agricultural
Bank of China,China Construction Bank,China investment Bank, Bank of Communication,CITIC Industrial Bank,China Everbright Bank,China
Huaxia Bank,China Minsheng Banking Corp., Guangdong Development Bank, Shenzhen Development Bank,China Merchants Bank, Fujian Xinye
Bank, Shanghai Pudong Development Bank:

Since this year, some enterprises are found to have illegally applied for extension of Renminbi loan through various means to purchase
foreign exchange for advance redemption of debts in foreign currencies. Such actions violated the provisions governing the control
over the credit and capital account, intensified the pressure on balance of the payments, endangered the national financial security,
so they must be prohibited strictly. For this purpose, on August 20, People’s The bank of China and State Administration of Foreign
exchange have jointly issued the Circular on Relevant Issues Governing the Prohibition of Purchase of Foreign Exchange for Advance
Redemption of Loan. It is hoped that every commercial the banks, enterprises and concerned parties shall implement it earnestly.

In order to carry out this work satisfactorily, we make the following notice again:

I.

Commercial the bank shall strengthen their control over the credit.

Each commercial the bank shall improve its financial services and extend timely loan in Renminbi based on the principle of credit
to actively and positively support enterprises’ production, marketing and construction, and the export and import trade; at the same
time it shall strengthen its credit management. First, they shall recall the due principal and interest of loan in Renminbi according
to the laws and strictly prohibit the borrowing enterprises to purchase foreign exchange with Renminbi to make advance redemption
of debts in foreign currencies while defaulting the principal and interest of due loan. Secondly, the newly extended loan shall be
strictly sticked to the terms of loan and be confined to the production and construction. Thirdly, the bank of deposit have the right
to check, investigate and stop enterprises defaulting the principal and interest of due loan in Renminbi and peculating the fund
for production and construction to purchase foreign exchange for advance redemption of debts in foreign currencies.

II.

SAFE shall strengthen their control over the payments of foreign exchange under the capital account.

All foreign exchange payments under capital account shall be approved by SAFE. In case of foreign exchange payments under capital
account, own foreign exchange shall be firstly used and foreign exchange can be purchased for the insufficient part.

SAFE should control restrictly the redemption of foreign loans, the change of foreign loans into loans and the own-operated loan of
foreign exchange in advance. In the event that there is no clause of advance redemption of foreign debts in the borrowing contract,
the advance the payments is not allowed; if there is the clause of advance repayment, it shall first be repaid with their own foreign
exchange after the examination and approval by SAFE and the debtor can’t purchase foreign exchange to pay the debts.

SAFE shall not grant permission for intercity purchase of foreign exchange for repayment of debts, the permission for the purchase
of foreign exchange for abroad investment in equity or in credit and that for the purchase of foreign exchange for the repurchase
of shares and bonds in foreign currencies. Before December 31 1998, SAFE shall not allow the purchase of foreign exchange with Renminbi
to pay the domestic foreign exchange loan. The repurchase with other foreign exchange must be approved by SAFE.

III.

Designated foreign exchange the banks shall strengthen their business control over the capital account transaction.

Every designated foreign exchange the bank must handle such transactions as the purchase, the sale and the payments of foreign exchange
under capital account, the domestic appropriation and transfer of account and the opening of the special account with the presence
of the approval or authorized documents by SAFE.

Every designated foreign exchange the bank can not handle the sale of foreign exchange for the advance redemption of foreign debts,
that of entrusting loan(s) in foreign exchange and that of proprietary loan(s) in foreign exchange without authorization; or handle
the intercity sale of foreign exchange for repayment of loan unauthorizedly.

IV.

Risk control over the foreign exchange business under capital account shall be strengthened by financial institutions.

Sub-branches or more subordinate branches of every designated foreign exchange the bank shall not handle the purchase, the sale and
the payments of foreign exchange, the domestic appropriation and transfer of account and the opening, the purchase and the payments
of special account under capital account any more. If the above-mentioned businesses have been operated, they shall be passed over
to next higher institutions in charge before September 30 1998.

Non-the bank financial institutions shall not engage in settlement of foreign trade without exception.

The registration of foreign debts for non-the bank financial institutions and leasing company with foreign investment is changed.
Periodic registration is changed to transaction by transaction register and the repayment of principal and interest of loan shall
be examined and approved by SAFE transaction by transaction.

In extending loan in foreign exchange, each financial institution shall include the clause of “Registration of foreign exchange loan
in foreign exchange must be finished within 15 days since the signing of the contract” in the loan contract. And the repayment of
principal and interest shall be approved by SAFE.

V.

Make a comprehensive check over the advance redemption with purchased foreign exchange and handle severely the violating personnel.

Every head office of commercial the banks shall strengthen its control over credit, prohibit to extend loan in Renminbi for enterprises
to purchase foreign exchange for advance redemption of debts. It shall raise detailed requirements and organize concerned personnel
to carry out the check over the implementation by every branch.

The branches of State Administration of Foreign exchange shall recheck the approvals and all the foreign the payments under capital
account transaction by transaction.

The provincial (autonomous regional, municipal) branches and city branches of the People’s bank of China shall select some enterprises
with relatively big amount of foreign exchange payments under capital account to check their source of Renminbi for purchase of foreign
exchange, the approval of foreign exchange payments and the sale of foreign exchange under capital account. After August 20, if any
cases of extending loans for enterprises to purchase foreign exchange for advance redemption, any cases of giving approval to enterprises
to make advance redemption or any cases of and selling foreign exchange to enterprises in violation of relevant regulations occur,
they must be quickly checked and verified and the leader in direct charge of the affair shall be dismissed from post and the acting
personnel shall be penalized seriously; if violating criminal law, they shall be punished according to the laws.

Branches the People’s Bank of China in all provinces, branches of the State Administration of Foreign Exchange and the General Banks
of various commercial banks shuold delieved the circular to the leader of every level and the related persons right now, the issue
on carring out should be replied to the People’s Bank of China and the State Administration of Foreign Exchange before the date of
September 15.



 
The People’s Bank of China, the State Administration of Foreign Exchange
1998-08-31

 






SEVERAL ISSUES OF THE SUPREME PEOPLE’S COURT THAT SHALL BE TAKEN INTO CONSIDERATION IN CURRENT ECONOMIC TRIALS




The Supreme People’s Court

Several Issues of the Supreme People’s Court that shall be Taken into Consideration in Current Economic Trials

Under the new situations, with a view to assuring that the economic trials are carried out surrounding the central target and the
overall situation of the Party and the state, and sticking to the guiding thoughts of providing service for economic construction
and providing judicial guard and service for the construction of socialist economic system, at present, the following issues shall
be taken into consideration in the economic trial in the People’s Court:

(1)

Issues concerning provision of legal guard and service for the transformation of state-owned enterprises

Along with the further deepening of the transformation of state-owned enterprises, cases of various kinds of disputes arising from
the transformation of state-owned enterprise such as reorganization, unite, merge, lease, contract, transfer and adoption of stock
system and stock cooperation system are increasing. But the laws and regulations concerning the transformation of enterprises are
relatively lagged behind; the policy and methods vary from region to region. The transformation of enterprises in some places do
not conform with provisions and violate the basic principles of the laws, which makes more difficulties in the trial of cases. In
dealing with this kind of cases, following issues shall be specified:

1.

Sticking to the active and prudent principle. The courts at all levels shall understand completely that the transformation of state-owned
enterprise is an important strategic decision of the Party and the country in constructing the socialist market economic system and
stabilizing the socialist economic system, and shall be in an active attitude, exercise the function of trial to provide effective
judicial guard and excellent judicial service to the transformation of state-owned enterprise, and shall start from the overall interest
of the state to handle each cases involving the transformation of state-owned enterprise carefully and prudently.

2.

Sticking to the principle that the legal principle and the transformation policy of the state are connected with each other. Sticking
to legal principle means to deal with cases in accordance with the Constitution, the General Principles of Civil Law, the Law of
State-owned Industrial Enterprise, the Corporation Law and related administrative regulations. Where there are explicit provisions
in law, the case shall be handled in accordance with law; where there is no explicit provision in law, the case shall be handled
in accordance with policy; and where there is no explicit provision in both the law and policy, the case shall, sticking to starting
from reality and weighing, be handled according to the criteria of “three favorables”. Where the provisions provided for by local
government governing the transform of enterprises are in conflict with the central guideline, policy and existing laws, the government
shall be advised to sort out and amend related documents so that the relevant documents promulgated by local governments are legal,
fair and reasonable. With respect to the transformation documents made by local governments that violate the central guideline, policy
and existing laws, an account shall be made timely to relevant authorities and these documents cannot be the proof in dealing with
cases.

3.

Issues concerning the bearing of liabilities after the transformation of enterprise shall be dealt with carefully. In hearing cases
involving the transformation of enterprise, the transformation of enterprise shall be supported firmly and the activities to infringing
on the national interest and the legal rights and interests of creditor by using the transformation shall be punished according to
law. At present, the occurrence that the debt assumer is changed without the acknowledgement of the creditor is relatively predominant.
This kind of illegal act has brought harms to the state and other creditors’ interests, to which great importance shall be attached.
With regard to the problem on assumption of the former debts after transformation of enterprise, it shall be solved according to
different circumstances: where a new assumer is confirmed for the debts of the transformed enterprise before transformation and has
the creditor’s consent, the validity shall be determined; where the new confirmed assumer, even without the consent of the creditor,
has adequate capability to discharge the debts, and the creditor’ interests are little affected, the new debtor may be determined
to assume the liabilities in the light of actual circumstances; With respect to the acts that infringe the national interest of the
rights and interest of the creditor such as changing the debtor without authorization, turning banks into figureheads, evading and
avoiding debts by the chance of restructuring of enterprise, the invalidity shall be determined in accordance with the provisions
of the General Principles of the Civil Law and the Corporation Law; Where only the asset of the transformed enterprise rather than
the debt of the transformed enterprise has been dealt with, in accordance with the relevant provisions set forth in the General Provisions
of Civil Law, the debt before transformation shall in general be born by the enterprise after transformation within the extent equivalent
to the assets thus received.

4.

Attaching importance to well organizing asset evaluation. The problems of the unconformity with standard in the asset evaluation in
the transformation of enterprise are predominant and there are many disputes and hidden trouble. Some enterprises did not employ
competent institute to conduct asset evaluation in the transformation; some did evaluation, though, it is of great arbitrariness
of undervaluation or overvaluation. Asset evaluation is the objective requirement in determining the actual value of tangible and
intangible assets of enterprise and also an effective method to prevent the loss of state-owned assets. The people’s court shall
advise the relevant governmental departments in charge of the transformation to attach importance to this work and supervise and
urge relevant evaluation institutions to conduct legally the evaluation according to the legal, factual, scientific, fair and reasonable
evaluation principle. In accordance with the administrative measures and the rules of implementation of the evaluation of state-owned
assets, the evaluation of the assets of state-owned enterprises shall be conducted by the institution legally eligible.

5.

Issues of carefully dealing with the preservation of the fund of state-owned enterprise. The technology reform fund, difficulty solving
fund and grain purchasing fund granted by the People’s Bank of China in accordance with the directions of the leaders in the State
Council are closed-end fund controlled by the state and have great importance in the implementation of structure adjustment and the
going on wheels of reform of state-owned enterprise. The local courts shall not adopt preservation measures such as fund freezing
to this part of closed-end fund, let alone the executive measures such as enforced appropriation.

(2)

Issues concerning the standardizing in accordance with law the trial of bankruptcy case

After the seminar on the trial of bankruptcy case of the courts around the country in March this year, all courts earnestly implement
the spirit of the seminar and take effective measures to standardize in accordance with law the trial of enterprise’s bankruptcy
case, which has gained obvious achievements. But recently, still there are some problems in the trial of enterprise’s bankruptcy
case in some courts; the main problem thereof is that in some pilot cities, the bankruptcy of enterprise does not abide by relevant
provisions of the State Council to convert the asset into money and close the enterprise; there are cases of transferring all asset
in disguised form; and that the bankruptcy of state-owned enterprise in non-pilot cities adopt the special policies of the State
Council. With respect to this, certain issues are hereby reaffirmed:

1.

Strictly follow the scope of the application of relevant documents of the State Council. The courts at all levels, in hearing the
enterprise’s bankruptcy case, shall not expand the applicable scope of the documents, Guo Fa (1994) No.59 and Guo Fa (1997) No. 10.
The bankruptcy of the state-owned enterprise in pilot cities, if the above-mentioned documents are applicable, shall be listed in
the State Enterprise Merger & Bankruptcy and Reemployment Plan.

2.

Strictly forbidding the bankruptcy of the enterprise in non-pilot cities to take the ride to apply special policies. The bankruptcy
of the state-owned enterprise outside the pilot area and the bankruptcy of non-state-owned enterprise in pilot cities and non-pilot
cities shall be implemented in accordance with the provisions concerning the bankruptcy and debt repayment procedures of legal persons
in the Bankruptcy Law of Enterprise of the People’s Republic of China (Trial) and the Civil Procedure Law of the People’s Republic
of China. The application by free riding of the special policies as prescribed in the documents of the State Council is strictly
forbidden.

3.

To hold pass in each stage of the enterprise’s bankruptcy case. The stages as in file registration, asset liquidate, asset evaluation
shall be carefully carried out in accordance with the requirements of the Supreme People’s Court; the guidance and supervision of
the liquidation team shall be especially strengthened. The transference of the whole enterprise under disguised form shall be strictly
prevented; it shall take endeavors to realize the asset of the bankrupted enterprise and to close the bankrupted enterprise. The
court shall make full reliance of the leadership of the Party’s committee to strengthen the contact and harmonization with related
governmental authorities and shall actively coordinate related governmental authorities to arrange the employees of the bankrupted
enterprise to maintain the social stability.

(3)

Issues concerning the dealing in accordance with law of the case involving the rectification of finance orders

During the process of rectifying the finance order, cleaning up the “three arbitraries in finance” and closing the financial institutions
whose assets can’t offset the debts, the people’s court shall pay attention to following matters:

1.

It is necessary to build up the awareness of overall situation. The rectification of finance order and dissolve financial risks are
the important measures adopted by the central authorities to assure the continuing and stable development of the national economy
of our country. The people’s court shall build up the awareness of overall situation, exercising the function of trial to assure
firmly the the work go on wheels. The arrangement and requirements in the circular of the Supreme People’s Court on the trial of
finance cases in February this year shall be further implemented and realized, starting from the overall situation of preventing
and dissolving financial risks to mediate and deal with cases of financial disputes in strict accordance with financial laws and
regulations, provisions of relevant documents of the State Council and the spirit of relevant documents of the Supreme People’s Court.
It is not allowed that each one goes his own way for regional or partial profit so as to hinder or influence the progress of this
work.

2.

Issues concerning the case of some closed financial institutions. In recent years, the State Council closed some non-bank financial
institutions and a few commercial banks and designated some financial institutions to take the trusteeship of their credits and debts.
The Supreme People’s Court issued respective circulars on how to deal with the case of these closed institutions. Because these closed
institutions have many branches involved in an extended financial business and many public deposits and overseas deposits, under
the present situation, that the state adopted administrative measures to close and rectify is beneficial in overall situation to
maintain the social stability, the image of the state and protect the rights and interests of the creditors. The dealing with such
kind of problem afterwards shall still implement the requirements as put forward by Xiao Yang, the president of the Supreme People’s
Court, in the symposia of the presidents of higher courts on 2 July this year, i.e. “with respect to the economic dispute cases of
the commercial banks and other financial institutions closed by the State Council, those that have not instituted an act shall no
be accepted; those that have been accepted shall discontinue the action; those that the verdict has come into effect shall suspend
the execution. The trial and execution will be resumed after the circular from the Supreme People’s Court”.

3.

Issues concerning the case of cooperation funds of farmers. In accordance with the provisions of the document Zhong Fa (1997) No.
19, the rectification of the cooperation funds of farmers shall be led, organized and harmonized by local governments in accordance
with policies. The people’s court shall be prudent in dealing with cases of the dispute arising from cooperation funds of farmers.
The dispute arising from the cooperation fund of farmers as the debtor and the dispute between the funds and farmers shall be dealt
with by the rectification authorities in accordance with the policies of the State Council, except the necessary assistance to the
cooperation funds of farmer to liquidate and collect debt as required by the authorities in charge of the rectification.

4.

Issues concerning the case of arbitrary funds raising. At present, all regions and departments are all conducting the rectification
of the “three arbitraries in finance”, i.e. arbitrary funds raising, arbitrary approval of financial institutions and arbitrary operation
of financial business, under the unified arrangement of the Central Committee of the Party and the State Council. In accordance with
the provisions of the document Guo Ban Fa (1998) No. 126 of the Office of the State Council, the principle in rectifying the “three
arbitrary in finance” is “The one that is in charge shall rectify, the one that approves shall take responsible, the one that uses
money shall pay the debt, the one that provides guaranty shall bear respective liability”. So, the dispute arising from the arbitrary
funds raising from random object without being legally approved, especially the disputes arising from the illegal funds raising shall
be dealt with by related authorities.

5.

Issues concerning the freezing of the account of securities institutions and the fund appropriation wherefrom. The freeze and appropriation
of deposit of the stockholders kept in the account of securities institutions will affect the transaction of the stockholders, which
easily causes disputes and leads to instability of the stock market and the society. Thus all courts shall be prudent in appropriating
fund from the frozen account of securities. The nature of the account and the fund shall be checked before measures are adopted.
Under the circumstances that the proprietary account of the securities institutions is not separated from the agency account, only
the fund that has been found out to be the fund of the securities institutions may be frozen and appropriated. The Supreme People’s
Court has issued two circulars on this matter, all courts shall pay full attention to this issue.

(4)

Issues concerning the case involving rural areas

To assure the implementation of the basic policies of the Party concerning rural areas is the basic guiding ideology for the people’s
court in dealing with cases involving rural areas. At present, the maintenance of the stability of the overall situation of the rural
areas and the long-term stability of the policies of the Party concerning rural areas shall be emphasized. The unification of the
protection of the rights and interests of the collective economy in rural areas and the protection of the rights and interests of
farmers shall be stuck to and the unification of the legal effects of trial and the social effect thereof shall be stuck to.

1.

To do a good job in the trial of the case of the disputes arising from the land contract in rural areas. The stabilizing of the land
contract policies and extending the land contract term directly concern the enthusiasm of farmers and the development and stability
of rural areas. It shall be specified that the household contract operation is a layer within the collective economic organization,
and is the base of this kind of dual operation system when compared with another layer, the collective unified operation. The Decision
of the Central Communist Party on Certain Material Problems in the Work in Agriculture and Rural Areas as passed in Third Plenary
Session of the Fifteenth Central Committee of the Communist Party pointed out that: “The key point in stabilizing and perfecting
the dual operation system is to stabilize and perfect the land contract relationship. The policy to prolong 30 years of the land
contract term shall be firmly stuck to and the laws and regulations that can assure the long-term stability of the land contract
relationship in rural areas shall be promulgated without delay to grant a long-term and protected land use right to farmers”. In
the trial of the case of land contract, this Central policy shall be carefully implemented and the land contract right and production
self-determination rights and rights to gain proceeds from operation shall be protected by practical measures. The illegal activities
such as arbitrarily increase the land contract fees, tearing up the contract, more than one contract in one land, taking back the
land for high price contract, shortening the contract term shall be corrected strictly in accordance with laws.

2.

Doing a good job in the trial of the dispute arising from the contract for sale and purchase of agriculture products and byproducts.
It is an important policy of the Party’s adherence to market orientation in the reform of rural areas to reform the sale and purchase
system of agriculture products, encourage the farmers to come into the circulation zone and to foster the market of agriculture products
and the market of productive elements so that the rural economy throws away the limitation of natural economy and the fetter of planned
economy. Under the new circumstances that the marketization extend are increasing in all stages of the sale and purchase of agriculture
production, the strict performance of all kinds of sale and purchase contracts for agriculture products and byproducts is very important
to the promotion of the reform in rural areas and the stable development of agriculture. In the trial of the cases of this kind of
dispute, it shall start from the maintenance of the legal effect of the contract, to punish in accordance with law the activities
that violate contracts, rescind contracts and other activities that infringe on the legal rights and interests of farmers. At present,
in the trial of cases of the circulation of foodstuffs, the three policies that the open purchase of extra foodstuff by protecting
price, the foodstuff collection and reservation enterprises shall sell with a profitable price, and foodstuff purchase fund operate
in a closed cycle shall be firmly implemented, and such violating activities as the low price sale of foodstuffs by foodstuff dealers
shall be punished in accordance with laws to assure the smooth going of the reform of the circulation system of foodstuffs.

3.

The cases of farmers harmed by production and sale of counterfeited and inferior seeds, fertilize and pesticide shall be tried timely.
The activities to produce and sell counterfeited and inferior seeds, fertilize and pesticide cause great harms to agriculture production
and impair greatly the interest of farmers. This kind of cases shall be tried timely and proper measures shall be taken to reduce
loss and actually protect the rights and interest of farmers. It shall be guarded against to hear a case just for the sake of this
case. The punishment of the producer and seller involved shall be attached importance to and the criminal clues thus found shall
be referred to other competent authorities.

(5)

Issues concerning the trial of cases involving foreign elements and cases involving Hong Kong and Macao interests

In recent years, the economic disputes cases involving foreign elements and cases involving Hong Kong and Macao interests increase
largely; the people’s courts shall pay especial attention to the following issues at the time of trials:

1.

Paying adequate attention to the influence of Asian financial crisis to the trial of the cases involving foreign elements. Attention
shall be paid at any moment to the new instances resulting from Asian financial crisis in the cases of disputes arising from Chinese-foreign
joint venture investment, the equity transfer of Chinese-foreign joint venture enterprise, contracts for international sales of goods
and other international economic and trade, to the study of new problems thereof and put forward corresponding countermeasures. At
the same time, attentions shall be paid to the influence of the return of Hong Kong and Macao SAR to the motherland and the steps
and measures taken in the process of joining the World Trade Organization to the import and export trade, foreign trade system and
the reform of foreign trade operation mechanism and to the new problems that have come out or are about to come out in the economic
trial.

2.

The issues concerning jurisdiction shall be dealt with prudence. In the trial of cases involving foreign element, the state sovereignty
principles shall be stuck to. The case that shall be accepted by the court of our country in accordance with law shall be accepted
firmly in accordance with law. In accepting cases, special attention shall be paid to the provisions of the Civil Procedure Law,
strictly examining the connecting factors of the facts of the case so that the jurisdiction can be precisely determined. Where both
parties are not the enterprises of our country and there is no actual relation between the disputes and our country and the investigation,
evidence obtaining and execution are of real difficulties, the parties may be informed to institute litigation in the courts of other
countries.

3.

Issues concerning the exit prohibition shall be prudently handled. In the trial of cases involving foreign elements or Hong Kong or
Macao interests, the measures to prohibit the concerned party to leave the boundary may only be applied to such circumstances that
the party has involved in un-concluded economic litigation that can’t be tried or executed if the party concerned leaves the boundary.
Where the overseas legal person is involved in the un-concluded economic litigation within the territory, the legal representative
and the manager in charge of business may be prohibited to leave the boundary. Where the foreign-funded enterprise whose assets can’t
offset its debt, it shall be dealt with in accordance with the Corporation Law and the Law of the People’s Republic of China on Chinese-foreign
Equity Joint Ventures; the representatives and investors of the foreign party shall not be prohibited to leave the boundary. Only
where the foreign shareholder has deliberated fraudulence in the investment may the legal representative of the foreign shareholder
be prohibited to leave the boundary. Where it is really necessary to prohibit the foreign party to leave the boundary, it shall be
carried out in accordance with the provisions of Law of the People’s Republic of China on Control of the Entry and Exit of Aliens.
Special attention shall be paid to the rules that the implementation shall be with good reason, with advantage and with restraint
and that prohibition the concerned foreign party to leave the boundary does not mean to limit the personal freedom of the party.
Any limit of the personal freedom of the party shall be refrained strictly in accordance with law.

4.

Issues concerning the stop of payment of the fund under credit letter. Credit letter is a main payment method of international settlement.
Disputes arising from credit letter are increasing along with the continued expansion of opening-up and increasing of foreign trade.
In recent years, the freeze taken by the courts of our country on the fund under credit letter has attracted great attentions of
the international legal world and the finance world and some improper freeze of the courts of our country has caused losses of international
credit and property to the banks of our country. So we drafted the Provisions on Certain Issues of the Determination to Stop the
Payment of Fund under Credit Letter (draft) for discuss. In dealing with these issues, one is to stick to the independent principle
of credit letter and not to stop the payment of the fund under the credit letter due to the disputed arising from the contract for
international sale of goods and other basic contracts; two is that the payment can only be stopped, as required by the applicant
and with the guaranty of the applicants, where there is adequate evidence that the seller (the beneficiary) is conducting fraudulency
under credit letter or providing fake bills. Three is that even it is under the second circumstances as mentioned above, but the
credit letter has been accepted and transferred, or the credit letter has been negotiated, the payment shall not be stopped by determination.
Because in such case, the fraudulence can’t be stopped and by contrary, the rights and interests of the bona fide third party will
be impaired and the issuing bank will be sued outside our country and may lose the suit. Some courts violate the above principles
to abuse the payment stop measures, which not only can’t recover loss, but also deteriorate the loss. Thus all courts shall hold
the pass strictly and require the applicant to bear, in accordance with the law, the losses due to the freeze after mistake application.

5.

Issues concerning the support and supervision of international commercial arbitration. Arbitration and action are closely related
as two methods of solving international economic and trade disputes. The court shall support the arbitration institutions in foreign
business to exercise jurisdiction in accordance with law, and after receiving the request transferred by the arbitration institutions
or the application made by concerned parties, shall not only take property preservation measures in accordance with laws or conduct
implementation in accordance with law, but also pay attention to the exercise of the supervision powers as granted by laws to deny
the execution of or revoke the awards of the arbitration institutions. The dealing with the arbitration with foreign elements or
foreign arbitration by the courts of our country not only concerns the rights and interests of the parties but also has great influence
to the international commercial arbitration and relates to the international fames of the courts of our country so that all courts
shall pay much attention to it. In the process of specific trial of these issues, one is that the validity of the arbitration agreement
shall be examined; where there is arbitration agreement between parties, the court shall respect the validity of the agreement and
shall not accept the action instituted by the parties; two is the recognition of the validity of the arbitration agreement involving
foreign elements shall apply correct laws and in general shall apply the laws of the country where the arbitration is agreed to occur;
and refer to international usage for recognition. Only under the circumstances that Chinese laws are specified to be applied may
the validity be recognized in accordance with article 17 and 18 of the Arbitration Law, Three is that the issues concerning the
revoke of the awards of the arbitration involving foreign elements shall be examined strictly in accordance with article 71 of the
Arbitration Law and Paragraph 1, article 260 of the Civil Procedure Law. The examination scope can’t be extended arbitrarily. The
confirmation of some issues in the arbitration procedures may look up in the materials and files of the arbitration trial. Four is
that the convention on the recognition and enforcement of foreign arbitral awards shall be strictly abided by in the dealing with
the recognition and enforcement of foreign arbitral awards as applied by the concerned parties. The deny of the validity of the arbitration
awards with foreign elements, revoke of the arbitration awards with foreign elements, denial to recognize and enforce of foreign
arbitral awards shall be approved by the Supreme People’s Court in advance in accordance with relevant provisions. The fees and examination
time limits of the recognition and enforcement of foreign arbitral awards shall subject to the Provisions on the Fees and Examination
Time Limits of the Recognition and Enforcement of Foreign Arbitral Awards issued recently by the People’s Supreme Court.

(6)

Certain Important Issues Concerning the Application of Guaranty Law

The Guaranty Law is an important law in the social and economic life in our country and has great importance to the promotion of fund
finance and commodity circulation, to the assurance of the realization of creditor’s rights and to the development of socialist market
economy. Courts at all levels met a lot of law application problems in the trial practice within these 3 years since the implementation
of the Guaranty Law. The Supreme People’s Court based on the collection of the problems met in the trial practice and summary of
the trail experience in all places, are carrying on the draft of the judicial interpretation of the Guaranty Law without delay. Because
this law involves a lot of aspects, concerns every aspects of the social and economic life and relates to the basic theories of creditor’s
right law and law relating to rights over things, there are many issues require for further research though the judicial interpretation
has requested the opinions of many. I just talk about certain issues here for discussion:

1.

Issues concerning the failure to make clear agreement on the guaranty terms. The guaranty term is an important issue of the Guaranty
law. At present, the transactions in the market mainly adopt credit guaranty and the parties do not have standardized agreement on
the guaranty term. There are serious disputes between the parties while in trial of related cases; even the adjudicatory personnel
do not share the same opinion. The main problem arises from the circumstance that the parties fails to have a clear agreement on
the guaranty term, for example, the agreement that “the guaranty liability lasts till the repayment of principal and interest” does
not have an agreed specific expiring date of the guaranty term, then should it be deemed to be half an year as in reference to the
“no agreement” as prescribed in the Guaranty Law or to be two years as in reference to the provisions of limitation of action. We
hold that: anyway this circumstance does not equal to that the parties do not have an agreement, it is only no specified date in
the agreement and it is improper to be dealt with as in accordance with the provisions of no agreement. So, it will be more proper
to be two years as in reference to the provisions of limitation of action. But what shall be specified is that this period of time
is guaranty term and has a different nature with the limitation of action and so it does not have the suspension and interruption
as does in

LAW ON THE EXCLUSIVE ECONOMIC ZONE AND THE CONTINENTAL SHELF OF THE PEOPLE’S REPUBLIC OF CHINA

Law on the Exclusive Economic Zone and the Continental Shelf of the People’s Republic of China

(Adopted at the 3rd Meeting of the Standing Committee of the Ninth National People’s Congress on June 26, 1998 and
promulgated by Order No. 6 of the President of the People’s Republic of China on June 26, 1998) 

Article 1  This Law is enacted to ensure that the People’s Republic of China exercises its sovereign rights and jurisdiction
over its exclusive economic zone and its continental shelf and to safeguard its national maritime rights and interests. 

Article 2  The exclusive economic zone of the People’s Republic of China covers the area beyond and adjacent to the territorial
sea of the People’s Republic of China, extending to 200 nautical miles from the baselines from which the breadth of the territorial
sea is measured. 

The continental shelf of the People’s Republic of China comprises the sea-bed and subsoil of the submarine areas that extend beyond
its territorial sea throughout the natural prolongation of its land territory to the outer edge of the continental margin, or to
a distance of 200 nautical miles from the baselines from which the breadth of the territorial sea is measured where the outer edge
of the continental margin does not extend up to that distance. 

The People’s Republic of China shall determine the delimitation of its exclusive economic zone and continental shelf in respect of
the overlapping claims by agreement with the states with opposite or adjacent coasts, in accordance with the equitable principle
and on the basis of international law. 

Article 3  The People’s Republic of China exercises its sovereign rights over the exclusive economic zone for the purpose of
exploring, exploiting, conserving and managing the natural resources of the waters superjacent to the sea-bed and of the sea-bed
and its subsoil, and in its other activities for economic exploitation and exploration of the zone, such as production of energy
from water, currents and winds. 

The People’s Republic of China exercises jurisdiction over the establishment and use of artificial islands, installations and structures,
marine scientific research, and the protection and preservation of the marine environment in the exclusive economic zone. 

The natural resources in the exclusive economic zone referred to in this Law consist of living and non-living resources. 

Article 4  The People’s Republic of China exercises its sovereign rights over the continental shelf for the purpose of exploring
it and exploiting its natural resources.  

The People’s Republic of China exercises jurisdiction over the establishment and use of artificial islands, installations and structures,
marine scientific research, and the protection and preservation of the marine environment on the continental shelf. 

The People’s Republic of China has the exclusive right to authorize and regulate drilling on the continental shelf for all purposes. 

The natural resources of the continental shelf referred to in this Law consist of the mineral and other non-living resources of the
sea-bed and subsoil, and the living organisms that belong to sedentary species— organisms which, at the harvestable stage, either
are immobile on or under the sea-bed or are unable to move except in constant physical contact with the sea-bed or the subsoil. 

Article 5  All international organizations, foreign organizations or individuals that wish to enter the exclusive economic zone
of the People’s Republic of China for fishing shall be subject to approval of the competent authorities of the People’s Republic
of China and shall comply with its laws and regulations as well as the accords and agreements it has signed with the states concerned. 

The competent authorities of the People’s Republic of China shall have the right to take all necessary conservation and management
measures to ensure that the living resources in the exclusive economic zone are protected from the danger of over-exploitation. 

Article 6  The competent authorities of the People’s Republic of China shall have the right to conserve and manage straddling
species, highly migratory species, marine mammals, anadromous stocks that originate in the rivers of the People’s Republic of China,
and catadromous species that spend the greater part of their life cycle in the waters of the People’s Republic of China. 

The People’s Republic of China enjoys the primary interests in the  anadromous stocks that originate in its rivers. Article
7  All international organizations, foreign organizations or individuals that wish to explore the exclusive economic zone of
the People’s Republic of China or exploit the natural resources on its continental shelf or for any purpose to drill on the continental
shelf shall be subject to approval of the competent authorities of the People’s Republic of China and shall comply with the laws
and regulations of the People’s Republic of China. 

Article 8  The People’s Republic of China has the exclusive right to construct and to authorize and regulate the construction,
operation and use of the artificial islands, installations and structures in its exclusive economic zone and on its continental shelf. 

The People’s Republic of China exercises exclusive jurisdiction over the artificial islands, installations and structures in its
exclusive economic zone and on its continental shelf, including jurisdiction with regard to customs, fiscal, health and safety laws
and regulations, and laws and regulations governing entry into and exit from the territory of the People’s Republic of China. 

The competent authorities of the People’s Republic of China shall have the right to establish safety belts around the artificial
islands, installations and structures in the exclusive economic zone and on the continental shelf and may take appropriate measures
in these belts to ensure safety both of navigation and of the artificial islands, installations and structures. 

Article 9  All international organizations, foreign organizations or individuals that wish to conduct marine scientific research
in the exclusive economic zone or on the continental shelf of the People’s Republic of China shall be subject to approval of the
competent authorities of the People’s Republic of China and shall comply with the laws and regulations of the People’s Republic of
China. 

Article 10  The competent authorities of the People’s Republic of China shall have the right to take all necessary measures
to prevent, reduce and control pollution of the marine environment for the protection and preservation of the marine environment
in the exclusive economic zone and on the continental shelf. 

Article 11  All states shall, on the premise that they comply with international law and the laws and regulations of the People’s
Republic of China, enjoy the freedom of navigation in and flight over its exclusive economic zone, the freedom to lay submarine cables
and pipelines and the convenience of other lawful uses of the sea related to the freedoms mentioned above in the exclusive economic
zone and on the continental shelf of the People’s Republic of China. The routes for the submarine cables and pipelines shall be subject
to consent of the competent authorities of the People’s Republic of China. 

Article 12  The People’s Republic of China may, in the exercise of its sovereign rights to explore its exclusive economic zone
and to exploit, conserve and manage the living resources there, take such necessary measures as visit, inspection, arrest, detention
and judicial proceedings in order to ensure that the laws and regulations of the People’s Republic of China are complied with. 

The People’s Republic of China has the right to take necessary measures against violations of its laws and regulations in its exclusive
economic zone and on its continental shelf and to investigate for legal responsibility according to law, and may exercise the right
of hot pursuit. 

Article 13  The People’s Republic of China exercises, in accordance with international law and other relevant laws and regulations
of the People’s Republic of China, the rights in its exclusive economic zone and on its continental shelf that are not provided for
in this Law. 

Article 14  The provisions in this Law shall not affect the rights that the People’s Republic of China has been enjoying ever
since the days of  the past. 

Article 15  The Government of the People’s Republic of China may formulate relevant regulations on the basis of this Law. Article
16  This Law shall go into effect as of the date of promulgation.

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



CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL CONCERNING TRANSMITTING SUGGESTIONS SUBMITTED BY THE MINISTRY OF CIVIL AFFAIRS ON FURTHER STRENGTHENING THE MANAGEMENT OF CEMETERIES

Category  CIVIL ADMINISTRATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1998-05-19 Effective Date  1998-05-19  


Circular of the General Office of the State Council Concerning Transmitting Suggestions Submitted by the Ministry of Civil Affairs
on Further Strengthening the Management of Cemeteries


APPENDIX: SUGGESTIONS ON FURTHER STRENGTHENING THE MANAGEMENT OF

(May 19, 1998)

    Reform in the funeral system is to carry out a social reform changing
customs and traditions as a component part in the construction of socialist
spiritual civilization. The management of cemeteries is the important content
of the reform of the funeral system. For over 40 years since the founding of
our People’s Republic, gratifying achievements have been made in our country’s
reform of the funeral system. However, there are still some problems we cannot
ignore in the construction and management of cemeteries. For instance, some
localities approve the construction of cemeteries without planning, resulting
in the waste of land resources, the deterioration of ecological environment
and the prevalence of feudal superstition on the excuse of making funeral
arrangements; some units operating cemeteries (or pagoda cemeteries) conduct
illegal marketing activities such as pyramid sales of and speculation in
graves and cells for the storage of ashes, which have infringed on the
interests of the masses and produced some factors of insecurity. These
problems gravely affect the reform of the funeral system and the construction
of socialist material and spiritual civilization. Local people’s governments
at various levels and units concerned should make full understanding of the
importance of the construction and management of cemeteries, conscientiously
strengthen the leadership and take resolute and effective measures to
intensify the management of cemeteries and do a good job in the reform of the
funeral system.

    With the approval of the State Council, we hereby transmit to you the
Suggestions Submitted by the Ministry of Civil Affairs on Further
Strengthening the Management of Cemeteries. You are required to implement them
seriously in the light of actual situations.

APPENDIX: SUGGESTIONS ON FURTHER STRENGTHENING THE MANAGEMENT OF
CEMETERIES (Submitted by the Ministry of Civil Affairs on January 6, 1998)

    In recent years, local departments of civil affairs at various levels have
made some achievements in strengthening the management of cemeteries
(including facilities for the storage of ashes such as pagoda cemeteries, the
same below) in accordance with the Report Submitted by the Ministry of Civil
Affairs on Strengthening the Management of Cemeteries and the Provisional
Measures of the Ministry of Civil Affairs for the Management of Cemeteries,
approved and transmitted by the State Council, and have made positive
contributions to promoting the reform of the funeral system. However, there
are still some problems at present we cannot ignore in the construction and
management of cemeteries. Some departments, units or individuals, in defiance
of the provisions of the state on the management of cemeteries, approve the
construction of cemeteries without planning, resulting in the waste of land
resources and the deterioration of ecological environment, and consequently, a
large quantity of activities of feudal superstition have reappeared and
funeral arrangements become more extravagant following outmoded conventions.
Some units operating cemeteries, for the purpose of seeking illegitimate
profits, confuse cells for the storage of ashes with general commodities, use
appreciation as bait, deceive the masses into scrambling for the cells by
purchase, unscrupulously conduct illegal marketing activities of pyramid sales
and speculation, which have infringed on the interests of the masses and
produced some factors of insecurity. These problems gravely affect the reform
of the funeral system and the construction of socialist material and spiritual
civilization. In order to conscientiously implement the Regulations on the
Administration of Funeral Activities promulgated by the State Council, protect
land resources, promote the construction of material and spiritual
civilization and maintain social stability, actual and effective measures must
be taken to further strengthen the management of cemeteries. Accordingly, we
hereby offer the following suggestions.

    1. To Conscientiously Develop a Programme for Making Rectifications in the
Management of Cemeteries

    People’s governments of provinces, autonomous regions and municipalities
directly under the Central Government shall organize departments of civil
affairs, public security, land administration, industry and commerce
administration and other relevant departments in concentrating their work on
developing a programme for making rectifications in the management of
cemeteries during a period of time.

    (1) Scope of Rectification

    a. Illegal cemeteries, referring to those constructed without the approval
of departments (or bureaux) of civil affairs under provinces, autonomous
regions or municipalities directly under the Central Government, as well as
those constructed in cooperation with overseas investors by absorbing overseas
investments (including from Hong Kong, Macau and Taiwan) without the approval
of the Ministry of Civil Affairs and the State Planning Commission.

    b. Units operating cemeteries, though established with approval, building
facilities for feudal superstition in cemeteries, conducting illegal marketing
activities or putting cemeteries into operation without the acceptance
procedures upon completion of the construction projects.

    c. Non-profit-making cemeteries selling graves and cells for the storage
of ashes, engaging in marketing activities.

    (2) Measures of Rectification

    a. Illegal cemeteries constructed within the areas in which the
construction of cemeteries is prohibited by the state must be banned and the
land occupied shall be handled by departments of land administration according
to law. Local people’s governments shall, in the light of specific conditions,
work out actual and feasible measures to properly solve problems involved.

    b. With regard to illegal cemeteries constructed in barren hills or
wasteland and with a small amount of tombs, local governments shall order
units constructing these cemeteries to move tombs to legal cemeteries; if the
amount of tombs is so large that it is difficult to move them for the time
being, sale of graves shall be stopped and units constructing these cemeteries
shall plant trees to beautify the environment within a time limit and subject
themselves to supervision of the government department in charge of funeral
activities, or shall pay fees for maintaining cemeteries and fees for planting
trees and transfer cemeteries to the government department in charge of
funeral activities for management. Upon expiration of the period for use of
graves, tombs must be moved and the land be restored to its original state.

    With regard to illegal cemeteries really needed in localities and not
contravening the planning for the construction of cemeteries, units
constructing cemeteries shall go through the examination and approval
procedures and subject themselves to supervision of the government department
in charge of funeral activities.

    c. Those who build facilities for feudal superstition or conduct
activities of feudal superstition in cemeteries shall be ordered to stop
activities of feudal superstition and demolish facilities for feudal
superstition within a time limit. Anyone who disturbs the social order in
disregard of dissuasion shall be penalized in accordance with the Regulations
on Administrative Penalties for Public Security.

    d. Illegal marketing activities such as pyramid sales of and speculation
in graves and cells for the storage of ashes shall be banned resolutely by
taking some measures and shall be penalized according to relevant provisions.

    e. Non-profit-making cemeteries selling graves and cells for the storage
of ashes in violation of provisions shall be ordered to stop the marketing
activities. Sales of graves and cells for the storage of ashes shall be
treated as illegal acts of transfer.

    f. Illegal cemeteries constructed without approval after the promulgation
of the Regulations on the Administration of Funeral Activities shall be
handled in accordance with the provisions of Article 18 of these Regulations.

    2. To Further Strengthen the Management of Cemeteries and Take Tight
Control of the Development of Cemeteries

    (1) To take tight control of the development of cemeteries. Departments of
civil affairs in provinces, autonomous regions and municipalities directly
under the Central Government shall, in accordance with the provisions of the
Regulations on the Administration of Funeral Activities and in the light of
actual situations, work out the planning for the construction of cemeteries as
soon as possible and, upon examination and approval of the people’s government
at the corresponding level, submit it to the Ministry of Civil Affairs for the
record. Construction of new cemeteries shall be suspended before acceptance of
the record by the Ministry of Civil Affairs. Efforts shall be made to
introduce the modes of handling ashes such as ashes storage, planting trees
with ashes and ashes scattering, in which no land or less land will be
occupied. The construction of facilities for the storage of ashes shall be
planned rationally in the light of the population and its distribution in a
locality. In areas having not the conditions to practise cremation, cemeteries
for remains must be planned in a scientific manner by selecting sites of
cemeteries in barren hills and wasteland, banning the occupation of cultivated
land and forest land and advocating deep burials without grave mounds left.
Restrictions shall be placed on the development of cemeteries in areas
practising cremation because cemeteries there shall be deemed as a way of
transition to handle ashes at the present stage and not the aim of our reform
in the funeral system. Departments of civil affairs in all localities must
comply with the provisions of the Regulations on the Administration of Funeral
Activities and the planning for the construction of cemeteries and shall be
stricter from now on in examining and approving the construction of cemeteries.

    (2) To place strict restrictions on the land areas and periods for use of
graves. From now on, any tomb for burying ashes of one or two persons shall
not cover an area of above one square metre; any tomb for burying remains of a
single person not above four square metres and any tomb for burying remains of
two persons not above six square metres. From now on, 20 years shall not be
exceeded in principle as the period for use of graves and cells for the
storage of ashes.

    (3) To conscientiously strengthen the internal management of units
operating cemeteries. Attention shall be paid to plant trees and beautify
cemeteries, advocate small-size and diversified gravestones and give more
cultural and artistic flavours. Units operating cemeteries shall strengthen
the collection and administration of fees for maintenance of cemeteries and
fees for planting trees in cemeteries, set up a special account, use the fees
for specified purposes and subject themselves to supervision of the department
of civil affairs at the next higher level. Within cemeteries constructing
facilities for feudal superstition and engaging in activities of feudal
superstition shall be strictly prohibited. Constructing cemeteries for
clansmen and cemeteries for persons alive shall be strictly prohibited.

    (4) In principle all units operating cemeteries shall not establish
trans-provincial sales agencies. If it is necessary to establish such agencies
due to special circumstances, approval shall be obtained from departments of
civil affairs at the provincial level in two places where the unit operating a
cemetery is located and where the sales agency is to be located. The
department for administration of industry and commerce shall handle the
registration procedure according to relevant provisions and documents of
approval from departments of civil affairs at the provincial levels in two
places.

    (5) Pyramid sales of and speculation in graves and cells for the storage
of ashes shall be strictly prohibited. Prices of graves and cells for the
storage of ashes shall be fixed reasonably and marked clearly. For supply or
sale of graves and cells for the storage of ashes, subscribers shall be
required to present the certification of cremation (in areas practising
cremation) or the certification of death (in reformed areas practising burials
in the ground) and measures shall be taken, such as using standardized burial
and arrangement certificates and establishing a strict system for sales and
registration, in order to prohibit pyramid sales and speculation and protect
the legitimate interests of the masses.

    (6) Departments of civil affairs in provinces, autonomous regions and
municipalities directly under the Central Government shall strengthen the
management of cemeteries within their respective administrative regions. An
annual inspection system for cemeteries shall be established and perfected, by
which annual inspections of cemeteries (including ones constructed in
cooperation with overseas investors) shall be conducted seriously in
conjunction with other relevant departments. Cemeteries having passed annual
inspections may be allowed to continue their business, and those who fail in
annual inspections shall be ordered to make corrections within a fixed time
limit and, if they refuse to do so within the time limit, shall be ordered
jointly by other relevant departments to suspend the business for
rectifications. The results of annual inspections shall be made public for
supervision.

    3. Local People’s Governments at All Levels Should Strengthen Leadership
and Relevant Departments Should Support and Closely Cooperate with Each Other.

    Local people’s governments at all levels and all relevant departments
should proceed from the considerations of the whole country’s interests,
deepen their understanding of the significance of strengthening the management
of cemeteries, conscientiously strengthen leadership and place the
rectifications programme in cemeteries on the top of their agenda. The
rectifications programme involves a wide range of subjects and is difficult to
develop. Therefore, people’s governments of provinces, autonomous regions and
municipalities directly under the Central Government should, in the light of
actual situations of localities and in accordance with the Regulations on the
Administration of Funeral Activities and other relevant provisions, work out
detailed measures for the rectifications programme in cemeteries and should
coordinate their actions well and take actual and effective steps of
implementation. Meanwhile, attention should be paid to publicity and education
in order to gain the understanding and support from the broad masses of the
people, develop the rectifications programme vigorously and steadily, really
remove obstacles and resolve problems in the work and ensure the smooth
progress in rectifications. Departments of civil affairs at all levels should
play their roles as competent authorities, perform their functions in real
earnest, report problems emerging in the rectifications in time to the local
people’s government, offer suggestions for resolving these problems and act
as capable advisers and assistants. Considerations shall be given to
departments of civil affairs at the grass-roots level and agencies for the
administration of funeral activities by bringing into full plan their roles to
promote the smooth progress in rectifications. Departments for public
security, industry and commerce administration and land administration and
other relevant departments should firmly support and closely cooperate with
each other and, under the unified leadership of the local government, develop
the programme for rectifications in cemeteries. People’s governments at the
grass-roots level or relevant departments that have approved the construction
of cemeteries beyond their respective terms of reference should take vigorous
actions to assist departments of civil affairs in making rectifications in
cemeteries to which they granted approval.

    Departments (or bureaux) of civil affairs in provinces, autonomous regions
and municipalities directly under the Central Government should report in time
the progress in making rectifications in cemeteries to local people’s
governments and the Ministry of Civil Affairs.





REGULATIONS ON THE PROTECTION OF POWER FACILITIES

Regulations on the Protection of Power Facilities

     (Promulgated by the State Council on September 15, 1987 and revised according to the January 7, 1998 decision on Power Facility Protection
Regulations)

CHAPTER ONE GENERAL PROVISIONS

CHAPTER TWO SCOPE OF POWER FACILITIES AND PROTECTION ZONES TO BE

PROTECTED

CHAPTER THREE PROTECTIONS TO POWER FACILITIES

CHAPTER FOUR MOVES TO REMOVE OF HAMPERINGS BETWEEN POWER FACILITIES

AND OTHER FACILITIES

CHAPTER FIVE REWARDS AND PUNISHMENTS

CHAPTER SIX SUPPLEMENTARY PROVISIONS

   Article 1 This set of regulations is formulated with a view to ensuring the smooth-going of power production and construction and a sure protection
to public security.

   Article 2 The regulations are eligible to be applied to all power facilities including power generating equipment, power transforming equipment
and power transmission lines and their related ancillary equipment (the same below).

   Article 3 Power facilities shall be protected by concerted efforts of power administrative departments, public security organs, power enterprises
and the common people.

   Article 4 Power facilities are protected by law from any harm brought about by units or individuals whatsoever. Any unit or individual is obliged
to protect power facilities and has the right to stop or report to power administrative departments or public security organs acts
that threaten or sabotage power facilities.

Power enterprises should strengthen the protection of power facilities. Proper measures should be adopted to stop acts that jeopardize
power facilities.

   Article 5 The power administrative department under the State Council shall exercise supervision, examination, guidance and coordination with
regard to the protection of power facilities.

   Article 6 The functions and responsibilities of protecting power facilities exercised by power administrative departments at and above the
county level are:

1. To supervise and examine the implementation of this set of regulations and detailed rules formulated in compliance with this set
of regulations.

2. To publicize and promote works of power facilities protection.

3. To set up power line protection organizations in cooperation with related departments and units along the power transmission lines
and improve the responsibility system for the protection.

4. To be responsible for the safety and protection of the power facilities within their jurisdiction areas in cooperation with local
public security departments.

   Article 7 Public security organs at all levels are responsible for uncovering and punishing acts and cases that sabotage power facilities or
mob-rob or steal power facilities and supplies.

CHAPTER TWO SCOPE OF POWER FACILITIES AND PROTECTION ZONES TO BE

   Article 8 Protection should be effected to the following power facilities and power transforming equipment:

1. Facilities inside power plants, power transformation stations, current exchange stations and switching stations.

2. All kinds of special pipes and conduits (ditches), ash storage sites, wells, pumping stations, water cooling towers, oil depots,
dikes and dams, railways, roads, bridges, docks, fuel loading and unloading equipment, lightening arresters, fire-fighting equipment
and other related ancillary equipment outside power plants and power transformation stations.

3. Reservoirs, dams, water inlet, water diversion tunnels (including branch tunnels, water diversion canals, voltage adjustment wells
(towers), open-air high-voltage conduits, premises, water discharge canals, communications facilities between premises and dams and
other related ancillary equipment used by hydropower stations.

   Article 9 Scope of power transmission lines and facilities to be protected:

1. Overhead power lines: poles and towers, basements, wires, gounding devices, conducting wires, lightening arresting wires, metal
tools, insulators, pole or tower climbing ladders and foot-grapnels, cross- navigation channel wire protection facilities, line patrol
(protection) stations, patrol and overhaul special roads, ships and bridges, marks and other related ancillary equipment.

2. Power cable lines: overhead, underground and underwater power cables and cable connection devices, cable conduits, cable tunnels,
cable ditches, cable bridges, cable wells, lids, man-holes, stone mark, water mark plates and other related ancillary equipment.

3. Transformers, capacitors, resistors, circuit breakers, isolation switches, lightening arresters, mutual inductors, fuses, measuring
instruments and meters, power distribution rooms, box-type sub-stations and other related ancillary equipment on the power lines.

4. Power dispatch facilities: power dispatching stations, power dispatch communications facilities, power grid dispatch automatic
devices and power grid operation control facilities.

   Article 10 Power line protection zones:

1. Overhead power line protection zones: zones within the two plane areas fromed by the horizontal extension line from the outside
conductor lines and the line vertical to the ground. In usual circumstances, the outer extension distances for all voltage conducting
lines are:

5 meters for 1 – 10 kv 10 meters for 35 – 110 kv 15 meters for 154 – 330 kv 20 meters for 500 kv

In densely populated mining and urban areas, the protection zones for overhead power line may be smaller than what is prescribed above.
But the outer extension distances for all voltage conducting lines should not be smaller than the total distance between the horizontal
distance after the maximum circular sag and maximum windage yaw are computed and the safe distance from buildings, deducting windage
yaw.

2. Power cable route protection zone: the areas between two parallel lines formed by 0.75 meters on both sides of the ground mark
of underground cable route; for sea-bottom cables, the zones should be the water surface between the two parallel lines formed by
two nautical miles on both sides of the line (100 on both sides of the line in port) and no less than 100 meters on both sides of
the line in rivers (not less than 50 meters for mid-sized and small rivers).

CHAPTER THREE PROTECTIONS TO POWER FACILITIES

   Article 11 Power administrative departments at and above the county level shall take following measures to protect power facilities:

1. To put up marks on the boundaries of overhead power line protection zones, specifying the width of the protection zone and the
rules for protection.

2. To put up marks in major roads or navigation sections where power lines cross, specifying the safe distance between the conducting
wires and the objects to cross.

3. To put up permanent marks for underground cables after their completion and notify related departments in writing of the position
of the underground cables.

4. To put up permanent marks for under-water cables after their completion and notify related departments in writing of the positions
of the under-water cables.

   Article 12 Any unit or individual should ensure the safety of power facilities according to related regulations by the State when conducting
explosion operations around power facilities.

   Article 13 No unit or individual is allowed to commit the following acts that would endanger power facilities and power transformation facilities:

1. To gate-crash into power plants or power transformation stations to disrupt production and work order, move or damage marks.

2. To threaten the safe operation of water, oil and heat supply and ash discharge pipelines (ditches).

3. To hamper the use of special feeder railways, roads, bridges and docks.

4. To enter into areas 300 meters from the hydraulic structures in reservoirs used for power generation to engage in fishing by using
explosives, fish nets, swimming, boating or other acts that would threaten the safety of hydraulic structures.

5. Other acts that would endanger power and power transformation facilities.

   Article 14 No unit or individual is allowed to engage in the following acts that would endanger power transmission lines and facilities:

1. To shoot at power lines and related facilities.

2. To throw objects at conducting lines.

3. To fly kite(s) in areas 300 meters from power lines on both sides.

4. To connect electric equipment to conducting wires without authorization.

5. To climb, without authorization, electric poles or towers to lay wires, communications lines, broadcasting lines or install loudspeakers.

6. To use electric poles or towers as anchoring point for lifting or tracting objects.

7. To tie animals, hang up objects or wind crops to electric poles, towers and bracing wires.

8. To fetch soil and do pole stamping, drilling or digging or dump acids, alkaline, salt and other harmful chemicals within the prescribed
scope covered by the base of electric poles or towers and bracing wires.

9. To build roads within the electric line towers (not including areas between poles or towers) or in between electric poles or towers
and bracing wires.

10. To remove devices or supplies from electric poles or towers or bracing wires, remove or damage permanent marks or marking plates.

11. Other acts that would endanger electric line facilities.

   Article 15 Any unit or individual should observe the following rules in the overhead power line protection zones:

1. It is not allowed to pile up crops, grass, garbage, slags, inflammables, explosion-prone objects and other objects that would
affect safe power supply.

2. It is not allowed to operate kilns or slash and burn for growing crops.

3. It is not allowed to put up buildings or structures.

4. It is not allowed to grow plants that would endanger the safety of power facilities.

   Article 16 Any unit or individual should observe the following rules within the power cable line protection zones:

1. It is not allowed to pile up garbage, slages, inflammables, explosion-prone objects, dump acids, soda, salt or other harmful chemicals,
or put up buildings or structures or plant trees or bamboo.

2. It is not allowed to lay in anchor or drag anchor within the sea- bottom cable protection zones.

3. It is not allowed to lay in anchor or drag anchor, catch fish by using explosives or dig sand in river cable protection zones.

   Article 17 Any unit or individual should get the approval of power administrative departments at and above the county level and take safety
measures before carrying out the following operations or activities:

1. To engage in farmland water conservancy capital construction projects or such operations as stamping, drilling and digging.

2. To conduct engineering by putting any part of lifting machinery into the overhead power line protection zones.

3. To go through the power line protection zone at a distance smaller than the safety distance between conducting wires and the objects
to run through.

4. To operate within the power cable line protection zones.

   Article 18 No unit or individual is allowed to conduct the following acts that would endanger the construction of power facilities:

1. To occupy illegally the land requisitioned for the building of power facilities.

2. To alter, remove, damage or pull out measuring poles or marks used by power facility projects.

3. To sabotage or block roads for construction, cut off water sources or power sources used by power facility projects.

   Article 19 No unit or individual is allowed to purchase power facilities and supplies without approval according to the relevant regulations
of the State.

CHAPTER FOUR MOVES TO REMOVE OF HAMPERINGS BETWEEN POWER FACILITIES AND

   Article 20 In construction and protection of power facilities, considerations should be made to avoid or reduce as far as possible losses that
would be brought up to the State, collectives and individuals.

   Article 21 New overhead power line should not be put acrossing areas where there are warehouses holding inflammables or explosion-prone objects.
In usual circumstances, they should not be put across houses and, whereas the houses have to be crossed in special circumstances,
power construction enterprises should adopt safety measures and reach agreement with related units beforehand.

   Article 22 Whereas the presence of hamperings between newly built, rebuilt or expanding public utilities, urban greening area and other projects
that would obstruct existing, newly built, rebuilding or expanding power facilities, related units of the two sides should consult
with one another according to the provisions of this set of regulations and related rules of the State and reach agreements concerning
removal or necessary protective measures, necessary compensations and other matters before engineering can be started.

   Article 23 Power administrative departments shall notify urban construction planning departments of the plan for building, rebuilding or expanding
powe projects approved by the authorities and have the protection zones demarcated.

Urban construction planning departments shall incorporate the plan for building, rebuilding or expanding power facilities into their
urban construction plans.

   Article 24 Whereas the building, rebuilding or expansion of power facility projects should damage farm crops, fell trees, bamboo or require
the removal of buildings or other structures, the power construction enterprises shall give a lump-sum compensation according to
the prescribed provisions by the State.

Power enterprises should trim or cut planted or natural trees or bamboo in the legally demarcated power facility protection zones
that would endanger the safety of power facilities.

CHAPTER FIVE REWARDS AND PUNISHMENTS

   Article 25 A unit or individual should be commended or given a lump-sum reward for one of the following acts:

1. To report or expose acts that sabotage power facilities or mob-rob or steal power facilities.

2. To struggle against acts that sabotage power facilities or against mob-rob or stealing of power facilities and effectively check
the incidents.

3. To perform outstanding deeds in fighting against natural disasters for the protection of power facilities.

4. To perform outstandingly in protecting the safety of power facilities.

   Article 26 For carrying out explosion or other operations around power facilities or within the legally damarcated power facility protection
zones without approval or without adopting safety measures thus endangering the safety of power facilities in violation of the provisions
of this set of regulations, power administrative departments shall order the operators to stop operation, restore to the normal state
and compensate for the losses.

   Article 27 For cases that would endanger power plant equipment, power transformation facilities and power transmission lines in violation of
the provision of this set of regulations, the power administrative departments shall order the violators to correct. Failure to correct
shall be fined for less than RMB10,000.

   Article 28 For cases of opening kilns, burning wasteland for growing crops, lay anchor, drag anchor, fishing by using explosives or dig sand
in the legally demarcated power facility protection zone thus endangering the safety of power facilities in violation of the provisions
of this set of regulations, the power administrative departments shall order the violators to stop operation, restore to the original
and compensate for the losses.

   Article 29 For cases that have violated the provisions of this set of regulations and would endanger the construction of power facilities, the
power administration departments shall order the violators to correct, restore to the original and compensate for the losses.

   Article 30 If a unit or an individual has violated the provisions of this set of regulations and constituted an act that violate the public
security regulations, the public security organ shall punish the case according to the Regulations of the People’s Republic of China
on the Administration and Punishment Concerning Public Security Cases. If a case is serious enough to constitute a crime, the law-enforcement
organ shall fix criminal responsibilities.

CHAPTER SIX SUPPLEMENTARY PROVISIONS

   Article 31 Power administrative department under the State Council may work out datailed rules for the implementation of this set of regulations
in cooperation with related departments of the State Council.

   Article 32 This set of regulations shall be implemented starting from the date of promulgation.

    

Source:MOFTEC





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CONSTITUTION ACT, 1982 – page 22

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

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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