REGULATIONS ON THE FOREIGN EXCHANGE SYSTEM OF THE PEOPLE’S REPUBLIC OF CHINA

Regulations on the Foreign Exchange System of the People’s RepubLic of China

Issued on April 4, 1996, modified on January 14, 1997)

Whole document

Chapter I General provisions

Article 1

These regulations are formulated with a view to improving the

management of the exchange system, maintaining an equilibrium in the

balance of payments and promoting sound economic growth.

Article 2

The government agencies of the State Council in charge of the

administration of the exchange system and their local offices (hereafter

the exchange administration agencies for both) shall exercise exchange

management in accordance with the law and assume the responsibility for

the implementation of the regulations.

Article 3

Foreign exchange as referred to in the regulations includes means of

payments and assets denominated in foreign currency for international

settlement as the following:

1. foreign currencies, including bank notes and coins;

2. payment instruments denominated in foreign currency, including

bills, bank certificate of deposit and certificate of postal deposit etc.

3. securities denominated in foreign currency, including government

bonds, corporate debentures and stocks etc.;

4. Special Drawing Rights and European Currency Units; and

5. other assets denominated in foreign currency.

Article 4

The payment in and transfer of foreign exchange for current

international transactions shall not be subject to the government control or restriction.

Article 5

The regulations shall govern all activities related to the receipts

and payments of foreign exchange as well as foreign exchange operations ofdomestic entities, individuals, foreign establishments,
and foreign

nationals in China.

Article 6

The government adopts a reporting system for balance of payments

statistics. All entities and individuals involved in balance of payments

transactions shall fulfill their obligations for reporting balance of

payments statistics.

Article 7

Foreign currency is prohibited for circulation and shall not be quoted

for pricing or settlement in the territory of the People’s Republic of

China.

Article 8

All entities and individuals shall have the right to reveal or expose

any activities in violation of the regulations on exchange management.

All entities and individuals who reveal, expose or assist in stopping

various activities in violation of exchange regulations on exchange

management shall be rewarded and the confidentiality of their identity

shall be ensured.

Chapter II Foreign exchange for current account transactions

Article 9

All foreign exchange receipts of domestic entities for current account

transactions shall be repatriated and shall not be deposited abroad in

violation of the relevant government regulations without authorization.

Article 10

All foreign exchange receipts for current account transactions shall

be sold to the designated foreign exchange banks in accordance with the

regulations issued by the State Council on the sale and purchase of

foreign exchange and making payments in foreign exchange, and such

receipts may also be upon approval, deposited in the foreign exchange

account at the designated banks for foreign exchange operations.

Article 11

Purchase of foreign exchange for current account transactions shall be

conducted with the designated foreign exchange banks, in accordance with

the regulations issued by the State Council on the sale and purchase of

foreign exchange and making payments in foreign exchange, upon the

presentation of valid documents and commercial bills.

Article 12

The collection of export proceeds and the payments for imports in

foreign exchange by domestic entities shall be processed in accordance

with the relevant government regulations governing the verification

procedures for export proceeds and import payments.

Article 13

Foreign exchange owned by individuals can be held at their own

discretion, deposited in banks or sold to the designated foreign exchange

banks.

Individuals’ foreign exchange savings deposit shall be placed with

banks on a voluntary basis, withdrawn freely and bear interest with

confidentiality for depositors’ identity ensured.

Article 14

The purchase of foreign exchange for personal travel abroad and other

miscellaneous expenses shall be granted within the specified limit.

Individuals may apply for the purchase of foreign exchange over and above the limit at the government agencies in charge of foreign
exchange. And the request for such purchase shall be approved if it proves to be for bona fide transactions.

Individuals carrying foreign exchange into or out of China shall

declare their foreign exchange in the customs office. Individuals shall

present to the customs office valid documents for carrying a large sum of foreign exchange exceeding the specified limit.

Article 15

The remittance and/or carrying of foreign exchange abroad for such

income derived from the possession of assets in China shall be granted

upon the presentation of the specific certifying documents at the

designated foreign exchange banks.

Article 16

Foreign assets held by Chinese citizens residing in China in the form

of payment instruments and securities denominated in foreign currency etc.

shall not be taken or sent abroad without authorization of the exchange

administration agencies.

Article 17

The purchase of and payment in foreign exchange abroad for the

legitimate income in Renminbi for foreign establishments and foreign

nationals in China shall be granted upon the presentation of the

supporting documents and statement of charges at the designated foreign

exchange banks.

Article 18

Foreign exchange sent or carried in by foreign establishments and

foreign nationals in China can be held at their own discretion, deposited

in designated banks or sold to the designated foreign exchange banks. Such

foreign exchange can also be remitted or taken abroad upon the

presentation of valid documents.

Chapter III Foreign exchange for capital account transactions

Article 19

Unless otherwise specified by the State Council, all foreign exchange

receipts for capital account transactions shall be repatriated.

Article 20

All foreign exchange receipts for capital account transactions shall

be placed in the foreign exchange account at the designated foreign

exchange banks in accordance with the relevant government regulations;

such receipts can be also sold to the designated foreign exchange banks

upon the approval by the exchange administration agencies.

Article 21

The source of foreign exchange for overseas investment by domestic

entities shall be reviewed by the exchange administration agencies before

the application for such investments is filed for approval by the relevant

government agencies. If approval is granted, remittance of funds shall

then take place in accordance with the regulations on overseas investment

issued by the State Council.

Article 22

External borrowing in loans shall be undertaken in accordance with the

relevant regulations by the government agencies designated by the State

Council, financial institutions and other enterprises duly authorized by

government agencies of the State Council in charge of exchange

administration.

External borrowing in loans by foreign-funded enterprises shall be

filed with the exchange administration agencies for records.

Article 23

The issue of bonds abroad denominated in foreign currency by financial

institutions requires the approval by the government agencies of the State

Council in charge of exchange administration before the issue proceeds in

accordance with the relevant government regulations.

Article 24

External guarantee shall only be offered by qualified financial

institutions and enterprises meeting the government requirements and

subject to the approval by the exchange administration agencies.

Article 25

The government adopts a registration system for external debt. All

domestic entities shall register external debt in accordance with the

regulations formulated by the State Council on monitoring statistics of

external debt.

The government agencies of the State Council in charge of exchange

administration shall take the responsibility for collecting and monitoring

statistics of external debt and publish these statistics on a regular

basis.

Article 26

The currency holding denominated in Renminbi belonging to the foreign

counterparts of foreign-funded enterprises, having been terminated in

accordance with the law, can be converted into foreign exchange at the

designated foreign exchange banks and then sent or taken abroad after the

liquidation and tax payments. All the foreign exchange belonging to the

Chinese counterpart investors shall be sold to the designated foreign

exchange banks.

Chapter IV Foreign exchange operations for financial institutions

Article 27

Financial institutions shall have the approval by the exchange

administration agencies for conducting foreign exchange transactions, and

a license for such operations is also required.

No entities or individuals are allowed to undertake foreign exchange

operations without the approval by the exchange administration agencies.

Financial institutions duly authorized for foreign exchange operations

shall never operate beyond the approved business scope.

Article 28

Financial institutions duly authorized for foreign exchange operations

shall open foreign exchange accounts for their clients and conduct

business operations in accordance with the relevant government

regulations.

Article 29

Financial institutions undertaking foreign exchange operations shall

be subject to the reserve requirement for foreign exchange in accordance

with the relevant government regulations, comply with the regulations on asset and liability ratios concerning their foreign exchange
operations

and set aside provisioning reserves.

Article 30

Designated foreign exchange banks shall use their own-funds in

Renminbi to purchase foreign exchange.

The foreign exchange revolving funds used by designated foreign

exchange banks for settlement shall be within a specified limit, the

magnitude of which shall be decided upon by the People’s Bank of China in consideration of the actual circumstances.

Article 31

The foreign exchange operations by financial institutions are subject

to inspection and supervision by the exchange administration agencies.

Financial institutions undertaking foreign exchange operations shall

submit to the exchange administration agencies the balance sheet, income

statement, other financial reports and information for foreign exchange

operations.

Article 32

Financial institutions shall file with the exchange administration

agencies for the termination of foreign exchange operations. Once the

termination of foreign exchange operations is approved, these financial

institutions shall settle their claims and liabilities in foreign

currencies and have their license for foreign exchange operations revoked.

Chapter V Renminbi exchange rate and foreign exchange market

Article 33

The exchange rate for Renminbi is a single, managed floating exchange

rate based on market demand and supply.

The People’s Bank of China announces the exchange rate of Renminbi

against major currencies on the basis of the prevailing exchange rates in

the inter-bank foreign exchange market.

Article 34

The trading of foreign exchange in the market shall comply with the

principle that advocates transparency, openness, fairness, and honesty.

Article 35

The number of currencies traded in the market and the trading methods

are decided upon and reviewed by the government agencies of the State

Council in charge of the administration of the exchange system.

Article 36

Designated foreign exchange banks and other financial institutions

involved in foreign exchange operations are dealers in the inter-bank

foreign exchange market.

Based on the exchange rates announced by the Peoples Bank of China and

the specified margins, designated foreign exchange banks and other

financial institutions undertaking foreign exchange operations can quote

the buying rate and selling rate for their clients and conduct the trading of foreign exchange accordingly.

Article 37

The government the agencies of the State Council in charge of the

administration of exchange system shall supervise the foreign exchange

market cross the country in accordance with the law.

Article 38

In light of the orientation of monetary policy and the developments in

foreign exchange market, the People’s Bank of China shall regulate foreign exchange market in accordance with the law.

Chapter VI Legal responsibilities

Article 39

To penalize the evasion scheme listed as follows, the exchange

administration agencies shall order the foreign exchange in question to be repatriated, impose its conversion and place a penalty
fine in the range of more than 30 percent and less then 5 times the amount of foreign exchange under the evasion scheme. In case
of criminal offense, a criminal suit shall proceed:

1. to place foreign exchange deposit abroad without authorization and

in violation of government regulations;

2. to act in defiance of the government regulations on the sale of

foreign exchange to the designated foreign exchange banks;

3. to remit or take foreign exchange abroad in violation of the

government regulations;

4. to take or mail abroad through postal services certificates of

foreign exchange deposit and securities denominated in foreign currencies

without authorization of the exchange administration agencies; and

5. other types of exchange evasion scheme.

Article 40

to penalize the illegal exchange arbitrage listed as follows, the

exchange administration agencies shall serve a warning, impose the

conversion of foreign exchange and place a penalty fine in the range of

more than 30 percent and less then 5 times the amount of foreign exchange

under the arbitrage scheme. In case of criminal offense, a criminal suit

shall proceed:

1. to pay, in violation of the government regulations, in Renminbi or

in kind for imports that require payment in foreign exchange or for other

similar types of expenses;

2. to pay in Renminbi for local expenses on behalf others and get paid

back in turn in foreign exchange;

3. to invest in China on the part of overseas investors in Renminbi or

with goods purchased locally without authorization of the exchange

administration agencies;

4. to purchase foreign exchange from designated foreign exchange banks

with invalid documents, contracts and bills; and

5. other types of illegal arbitrage activities.

Article 41

The exchange administration agencies shall confiscate the illegal

income generated from unauthorized foreign exchange operations undertaking without approval by the exchange administration agencies
and order the stop of such operations. In case of criminal offense, a criminal suit shall proceed.

The exchange administration agencies shall order the financial

institutions that conduct any activities without authorization beyond the prescribed business scope for foreign exchange operations
to redress the case, confiscate the illegal income, if any, and impose a penalty fine in the range of one to five times the amount
of the illegal foreign exchange income; if no illegal income is involved, a penalty fine of 100, 000 to 500, 000 Yuan shall be
imposed.

In case of serious offense or failure to redress the case in time,

the exchange administration agencies shall order these institutions to

rectify their business or revoke their license for foreign exchange

operations. In case of criminal offense, a criminal suit shall proceed.

Article 42

In case that designated foreign exchange banks fail to comply with the

government regulations on the sale and purchase of foreign exchange, the

exchange administration agencies shall order the banks to redress the

case, issue a public reprimand, confiscate the illegal income and impose a penalty fine in the range of 100, 000 to 500, 000 Yuan.
In case of serious offense, operations for the sale and purchase of foreign exchange

shall be suspended.

Article 43

In case that financial institutions act in violation of the

regulations governing exchange rate, deposit and lending rates for foreign

exchange and operations in foreign exchange market, the exchange

administration agencies shall order the institutions to redress the case,

issue a public reprimand, confiscate the illegal income and impose a

penalty fine in range of one to five times the amount of the illegal

income in question. If no illegal income is involved, a penalty fine in

the range of 100, 000 to 500, 000 Yuan shall be imposed. In case of

serious offense, the exchange administration agencies shall order the

institutions to rectify their business or revoke their license for foreign

exchange operations.

Article 44

To penalized any activity listed as follows undertaken by domestic

entities in violation of the regulations governing external debt, the

exchange administration agencies shall serve a warning, issue a public

reprimand and impose a penalty fine in the range of 100, 000 to 500, 000

Yuan. In case of criminal offense, a criminal suit shall proceed:

1. to process external borrowing without authorization;

2. to issue bonds denominated in foreign currency abroad without

authorization and in violation of the relevant government regulations;

3. to provide guarantee for external obligations without authorization

and in violation of the relevant government regulations; and

4. other activities in violation of the regulations on external debt.

Article 45

In case that the domestic entities undertake any activity involving

illicit use of foreign exchange listed as follows, the exchange

administration agencies shall order these entities to redress the case,

impose the conversion of foreign exchange, confiscate the illegal income

and impose a penalty fine no more than the equivalent amount of foreign

exchange in question. In case of criminal offense, a criminal suit shall

proceed:

1. to use foreign exchange in China for pricing or settlement;

2. to pledge foreign exchange in lien without authorization; and

3. to change the designated use of foreign exchange without

authorization; and

4. other types of illicit use of foreign exchange.

Article 46

To penalize unauthorized trading, disguised trading and illicit

merchanting of foreign exchange, the exchange administration agencies

shall serve a warning, impose the conversion of foreign exchange, and

place a penalty fine in the range of more than 30 percent of and less than

3 times the amount of the foreign exchange in question. In case of

criminal offense, a criminal suit shall proceed.

Article 47

In case that domestic entities open foreign exchange accounts in China

or abroad without authorization, rent, transfer of arbitrage foreign

exchange accounts in violation or the regulations governing foreign

exchange account or use the foreign exchange beyond the designated purpose

without authorization, the exchange administration agencies shall order

these entities to redress the case, close the foreign exchange accounts,

issue a public reprimand and impose a penalty fine in range of 50, 000 to

3000, 000 Yuan.

Article 48

In case that domestic entities forge, alter, rent, transfer or make a

multiple use of the verification certificate for import payment and export

proceeds in violation of the regulations governing the verification

procedures for foreign exchange, or fail to comply with verification

procedures prescribed by the relevant regulations, the exchange

administration agencies shall serve a warning, issue a public reprimand,

confiscate the illegal income and impose a penalty fine in the range of

50, 000 to 300, 000 Yuan. In case of criminal offense, a criminal suit

shall proceed.

Article 49

In case that financial institutions, duly authorized to undertake

foreign exchange operations, act in violation of the Article 29 and 31,

the exchange administration agencies shall order these institutions to

redress the case, issue a public reprimand and impose a penalty fine in

the range of 50, 000 to 300, 000 Yuan.

Article 50

If the party penalized for violation contests the verdict and the

penalty imposed by the exchange administration agencies, the party may

appeal to the exchange administration agencies at the immediate higher

level to review the case within 15 days after receiving the penalty

notice; the exchange administration agencies at the immediate higher level

shall decide on the review within two months after receiving the appeal

for review. If the party contests the review decision, the party may

appeal to the People’s Court in accordance with the law.

Article 51

Domestic entities acting in violation of the regulations on exchange

management shall be penalized in accordance with these regulations; and

the management and those directly responsible for the violation shall be

disciplined. In case of criminal offense, a criminal suit shall proceed.

Chapter VII Ancillary provisions

Article 52

The definitions of the terms in these regulations are as follows:

1. “domestic entities” refer to enterprises and pubic institutions,

government agencies, social organizations and armed forces etc., including

foreign-funded enterprises.

2. “designated foreign exchange banks” refer to banks duly authorized

by the exchange administration agencies to undertake the sale and purchase

of foreign exchange.

3. “individuals” refer to Chinese citizens and foreign nationals

staying in China for more than one year.

4. “foreign establishments” in China refer to foreign diplomatic

agencies in China, consulates, resident representative offices in China

and offices of foreign non-government organizations in China etc..

5. “foreign nationals” in China refer to resident staff members of

foreign establishments in China, foreigners working for domestic entities

in China and overseas foreign students etc. .

6. “current account transactions” refer to those components in the

current account of the balance of payments, such as goods, services and

unilateral transference..

7. “capital account transactions” refer to the increase and decrease

of assets and liabilities in the balance of payments as a result of the

inflow and outflow of capital, including direct investment, loans and

portfolio investment’ etc..

Article 53

The exchange regulations governing bonded areas shall be formulated

separately by the exchange administration agencies of the State Council.

Article 54

The exchange regulations governing border trade and counter-trade of

border residents shall be formulated separately by the exchange

administration agencies of the State Council on the basis of these

regulations.

Article 55

These regulations shall take effect April 1, 1996. The Regulations on

the Exchange System of the People’s Republic of China issued by the State

Council on December 18, 1980 and the related detailed rules shall be

repealed at the same time.

legalinfo.gov

EDITOR:Victor

LAW OF THE PEOPLE’S REPUBLIC OF CHINA ON PREVENTION OF ENVIRONMENTAL POLLUTION CAUSED BY SOLID WASTE

The Standing Committee of the National People’s Congress

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

No.58

The Law of the People’s Republic of China on Prevention of Environmental Pollution Caused by Solid Waste, adopted by the 16th Meeting
of the Standing Committee of the Eighth National People’s Congress on October 30, 1995, is promulgated now and shall enter into force
as of April 1, 1996.

President of the People’s Republic of China: Jiang Zenmin

October 30, 1995

Law of the People’s Republic of China on Prevention of Environmental Pollution Caused by Solid Waste ContentsChapter I General Principles

Chapter II Supervision and Control over Prevention of Environmental

Pollution Caused by Solid Waste

Chapter III Prevention of Environmental Pollution Caused by Solid Waste

Section 1 General Stipulations

Section 2 Prevention of Environmental Pollution Caused by Industrial

Solid Waste

Section 3 Prevention of Environmental Pollution Caused by Urban Residential Refuse

Chapter IV Special Stipulations on the Prevention of Environmental Pollution Caused by Dangerous Waste

Chapter V Legal Responsibilities

Chapter VI Supplementary Articles

Chapter I General Principles

Article 1

To prevent the pollution of the environment by solid waste, ensure the good health of the public, and promote the development of socialist
modernization, the following law is hereby established.

Article 2

This law applies to the prevention of environmental pollution caused by solid waste within the boundaries of the People’s Republic
of China.

It does not apply to the prevention of marine environmental pollution caused by solid waste or of environmental pollution caused by
radioactive solid waste.

Article 3

To prevent pollution of the environment by solid waste, the state shall carry out a principle of reducing the production of solid
waste, making full and rational use of solid waste, and safely disposing of solid waste.

Article 4

The state shall encourage and support clean production to reduce the creation of solid waste.

The state shall encourage and support the comprehensive utilization of resources, the full recovery and rational usage of solid waste,
and the adoption of economic and technological policies and measures conducive to making comprehensive use of solid waste.

Article 5

The state shall encourage and support measures for the centralized disposal of solid waste that are conducive to environmental protection.

Article 6

The people’s governments at the county level or above shall coordinate the prevention of environmental pollution caused by solid waste
with environmental protection plans and shall adopt economic and technological policies and measures conducive to the prevention
of environmental pollution caused by solid waste.

Article 7

The state shall encourage and support scientific research and technological development for the prevention of environmental pollution
caused by solid waste, the promotion of advanced technologies for prevention, as well as the popularization of scientific knowledge
for the prevention of environmental pollution caused by solid waste.

Article 8

The people’s governments at different levels shall give awards to those units or individuals that make remarkable contributions to
the prevention of environmental pollution caused by solid waste as well as in the related activities of making comprehensive use
of solid waste.

Article 9

Every unit or individual has an obligation to protect the environment and has the right to report or bring charges against those units
or individuals that are responsible for environmental pollution caused by solid waste.

Article 10

The administrative department under the State Council in charge of environmental protection shall exercise unified supervision and
administration throughout the whole country over the prevention of environmental pollution caused by solid waste. The relevant departments
under the State Council shall be in charge of the supervision and administration of the prevention of environmental pollution caused
by solid waste within the limits of their own responsibilities.

The administrative departments under the local people’s governments at the county level or above shall exercise unified supervision
and administration over the prevention of environmental pollution caused by solid waste within the boundaries of the corresponding
administrative division. The departments concerned under the people’s governments at the county level or above shall be in charge
of the supervision and administration of the prevention of environmental pollution caused by solid waste within the limits of their
own responsibilities.

The administrative department under the State Council in charge of construction and the administrative departments in charge of the
environment and public health under the local people’s governments at the county level or above shall be in charge of the supervision
and administration of the cleaning, collection, storage, transportation, and disposal of urban residential refuse.

Chapter II Supervision and Administration of Prevention of Environmental Pollution Caused by Solid Waste

Article 11

The administrative department under the State Council in charge of environmental protection shall establish a monitoring system for
environmental pollution caused by solid waste, formulate unified monitoring standards, and organize a monitoring network in conjunction
with other relevant departments.

Article 12

In constructing those projects that may produce industrial solid waste as well as those for storage and disposal of solid waste, the
state administrative regulations for environmental protection in construction projects must be abided by.

Reports on the effects of a construction project on the environment shall include an estimation of the pollution and other effects
on the environment caused by the solid waste that is produced by the construction project, as well as the stipulation of measures
for the prevention of environmental pollution, and shall be submitted to the administrative department in charge of environmental
protection for approval in accordance with the procedures that are stipulated by the state. After the report on the environmental
effects is ratified, the department in charge of examining and approving construction projects shall approve a feasibility study
report or a design responsibility report for the project.

Article 13

A report on the effects of a construction project on the environment shall stipulate that the necessary facilities for the prevention
of environmental pollution caused by solid waste must be designed, constructed, and put into operation in coordination with the principal
part of the project. A construction project shall begin operation or use only after the facilities for the prevention of environmental
pollution caused by solid waste are inspected and approved by the same department that examined and approved the report on the environmental
effects. The facilities for the prevention of environmental pollution caused by solid waste shall be inspected and approved together
with the principal part of the project.

Article 14

The administrative departments under the people’s governments at the county level or above in charge of environmental protection and
other supervisory and administrative departments in charge of the prevention of environmental pollution caused by solid waste shall
have the right to conduct on-the-spot inspections of the units concerned with the prevention of environmental pollution caused by
solid waste within their jurisdiction in accordance with their own responsibilities. The inspected units shall report the situation
accurately and shall provide any necessary materials. The inspecting institutions shall maintain the technological and operational
secrecy of the inspected units.

The inspecting personnel shall show their credentials while conducting on-the-spot inspections.

Chapter III Prevention of Environmental Pollution Caused by Solid Waste

Section 1 General Stipulations

Article 15

The units and individuals that produce solid waste shall take measures to prevent or reduce the environmental pollution caused by
solid waste.

Article 16

The units and individuals that collect, store, transport, utilize, or dispose of solid waste shall take precautions against the spread,
loss, and leakage of the solid waste as well as other measures for preventing the solid waste from polluting the environment.

The abandonment or spread of solid waste during transportation is forbidden.

Article 17

Products shall use packing materials which are easily recycled, disposed of, or assimilated by the environment.

The product manufacturer, retailer, or consumer shall recycle those product packages and containers that can be recycled in accordance
with the relative regulations of the state.

Article 18

The state shall encourage scientific research institutions and production units to study and produce thin films for agricultural use
that are easily recycled, disposed of, or assimilated by the environment.

Those units and individuals that utilize thin films for agricultural use shall take measures such as recycling to prevent or reduce
environmental pollution caused by the thin films.

Article 19

The administration and maintenance of the facilities, equipment, and sites for the collection, storage, transportation and disposal
of solid waste shall be strengthened in order to guarantee their normal operation and use.

Article 20

It is forbidden to close, disuse, or dismantle without authorization the facilities and sites for preventing environmental pollution
caused by industrial solid waste. Those facilities and sites that require closure, disuse, or dismantling must be examined and approved
by the administrative departments in charge of environmental protection under the local people’s governments at the county level
or above, and measures shall be taken to prevent environmental pollution.

Article 21

Those enterprises and institutions that produce solid waste which causes serious environmental pollution shall be ordered to bring
their pollution under control within a specified period of time. Those subject to such an order shall accomplish the task on schedule.
The order shall be made by the people’s government at the county level or above according to the authority granted them by the State
Council.

Article 22

It shall be forbidden to construct facilities or sites for the centralized storage and disposal of industrial solid waste or burial
sites for residential refuse in nature preserves, scenic spots, historic sites, drinking water sources, and other places of special
protection designated by the State Council and the people’s governments at the provincial, municipal, or autonomous regional levels.

Article 23

In the event that solid waste is transferred to other provinces, municipalities, or autonomous regions for storage or disposal, a
report must be submitted to the administrative department in charge of environmental protection under the people’s government of
the province from which the solid waste will be transferred, and approval must be granted by the administrative department in charge
of environmental protection under the people’s government of the province to which the solid waste will be transferred.

Article 24

Within the territory of the People’s Republic of China, it is forbidden to dump, pile, or dispose of solid waste from outside the
People’s Republic of China.

Article 25

The state shall forbid the import of solid waste which cannot be used as a raw material and shall restrict the import of solid waste
that can be used as raw material.

The administrative department in charge of environmental protection, together with the department in charge of foreign trade and economic
cooperation under the State Council shall stipulate, adjust, and announce the list of solid wastes which can be imported for use
as raw materials; the import of those kinds of solid waste that are not listed shall be forbidden.

Those that require the import of solid wastes listed in the list stipulated in the preceding paragraph for use as raw materials must
acquire approval through examination by the administrative department in charge of environmental protection and the department in
charge of foreign trade and economic cooperation under the State Council.

Specific measures shall be formulated by the State Council.

Section 2 Prevention of Environmental Pollution Caused by Industrial Solid Waste

Article 26

The administrative department in charge of environmental protection together with the department in charge of comprehensive economic
affairs under the State Council and other departments concerned shall designate the environmental pollution caused by industrial
solid waste, formulate policies on technologies for the prevention of environmental pollution caused by industrial solid waste, and
organize the spread of advanced production technologies and equipment for the prevention of environmental pollution caused by industrial
solid waste.

Article 27

The department in charge of comprehensive economic affairs together with other departments concerned under the State Council shall
organize the research, development, and popularization of production technologies and equipment for reducing the amount of industrial
solid waste, and shall promulgate a catalogue of backward production technologies and equipment that are responsible for industrial
solid waste resulting in serious environmental pollution and that are to be eliminated within a specified time.

The manufacturer, retailer, importer, or consumer must stop respectively producing, marketing, importing, or utilizing the equipment
listed in the catalogue stipulated in the preceding paragraph within the specified time granted by the department in charge of comprehensive
economic affairs and other departments concerned under the State Council. The applier of production technologies must cease use of
those technologies listed in the catalogue stipulated in the preceding paragraph within the specified time granted by the department
in charge of comprehensive economic affairs and other departments concerned under the State Council.

Any equipment required to be eliminated in accordance with the stipulations in the two preceding paragraphs shall not be transferred
to others for use.

Article 28

The departments concerned under the people’s governments at the county level or above shall formulate a plan for the prevention of
environmental pollution caused by industrial solid waste, the popularization of advanced production technologies and equipment for
reducing the amount of industrial solid waste, and the promotion of work on the prevention of environmental pollution caused by industrial
solid waste.

Article 29

Those units that produce industrial solid waste shall establish and amplify a responsibility system for the prevention of environmental
pollution and take measures for preventing environmental pollution caused by industrial solid waste.

Article 30

Enterprises and institutions shall rationally choose and utilize raw materials, energy and other resources, apply advanced production
technologies and equipment, and reduce the amount of industrial solid waste.

Article 31

The state shall implement a reporting and registration system for industrial solid waste.

Those units which produce industrial solid waste shall present data concerning the volume of waste they produce, its direction of
flow, and the methods of storage and disposal to the administrative departments in charge of environmental protection under the people’s
governments at the county level or above in that locality, in accordance with the regulations of the administrative department in
charge of environmental protection under the State Council.

Article 32

All enterprises or institutions which produce industrial solid waste that cannot be utilized, whether at all or temporarily, must,
in accordance with the regulations of the administrative departments in charge of environmental protection under the State Council,
construct facilities or sites for its storage or disposal.

Article 33

Those who store smelting residue, chemical residue, coal ash residue, discarded ore, tail ore, or other industrial solid waste out-of-doors
shall construct special facilities or sites for its storage.

Article 34

Construction of the facilities and sites for the storage and disposal of industrial solid waste shall be in accordance with the environmental
protection standards that have been stipulated by the administrative department in charge of environmental protection under the State
Council.

As to those units which produce industrial solid waste before this Law is implemented, if they fail to construct facilities or sites
for the storage or disposal of industrial solid waste in accordance with the regulations of Article 32 of this Law, or if the facilities
or sites they have already constructed do not conform to environmental protection standards, they shall carry out such construction
or reconstruction within a specified period of time. During this time period, waste-discharge fees or other measures shall be implemented
for any newly-produced industrial solid waste from the above-mentioned units which pollutes the environment. Those units which complete
within the specified time period construction of the facilities or sites for storage or disposal of industrial solid waste, or make
them conform with the environmental protection standards through reconstruction, may cease payment of waste-discharge fees from the
day when the construction or reconstruction is completed. Those units which fail to complete construction before the deadline or
which still cannot meet the standards after reconstruction shall continue to pay waste-discharge fees until the construction is completed
or the standards are met through reconstruction. The relevant specific means shall be stipulated by the State Council. The waste-discharge
fees shall be reserved for the prevention and amelioration of environmental pollution and shall not be appropriated for any other
use.

Section 3 Prevention of Environmental Pollution Caused by Urban Residential Refuse

Article 35

All units and individuals shall obey the regulations of the administrative departments in charge of environment under urban people’s
governments by emptying and piling urban residential refuse at designated places. Throwing or piling rubbish outside these designated
places is forbidden.

Article 36

The storage, transport, and disposal of urban residential refuse shall, with the purpose of preventing environmental pollution, comply
with the regulations of the state concerning environmental protection and urban environment.

Article 37

Urban residential refuse shall be cleared and carried away without delay. Reasonable utilization and neutralization shall be actively
conducted.

The separate collection, storage, transport, and disposal of urban residential refuse of different classifications shall be gradually
implemented.

Article 38

The urban people’s governments shall make plans for improving the fuel structure and developing urban coal gas, natural gas, liquefied
petroleum gas, and other clean energy resources.

The relevant departments under the urban people’s governments shall arrange for clean vegetables to enter cities to reduce urban residential
refuse.

The relevant departments under the urban people’s governments shall make comprehensive plans to reasonably arrange a purchasing network
and promote the recycling of waste.

Article 39

The urban people’s governments shall construct supporting facilities for the cleaning, collection, storage, transport, and disposal
of urban residential refuse.

Article 40

The construction of the facilities and sites for the disposal of urban residential refuse shall be in accordance with the standards
of environmental protection and urban environment stipulated by the administrative department in charge of environmental protection
and the department in charge of construction under the State Council.

Unauthorized closure, disuse, or dismantling of the facilities or sites for the disposal of urban residential refuse is forbidden;
for those that require closure, disuse, or dismantling, inspection and approval must be made by the administrative department in
charge of environmental sanitation as well as the department in charge of environmental protection under the people’s governments
at the county level or above in that locality; meanwhile, other measures shall be adopted to prevent environmental pollution.

Article 41

Those units carrying out construction shall, without delay, remove and dispose of refuse and shall adopt some measures to prevent
environmental pollution.

Chapter IV Special Stipulations on the Prevention of Environmental Pollution Caused by Dangerous Waste

Article 42

The regulations in this Chapter apply to the prevention and cure of environmental pollution caused by dangerous waste. Those not mentioned
in this Chapter shall accord with the other regulations of this Law.

Article 43

The administrative department in charge of environmental protection under the State Council shall draw up a national list of dangerous
waste in conjunction with relevant departments under the State Council, and stipulate unified differentiating standards, methods,
and identification marks for dangerous waste.

Article 44

Identification marks shall be placed on the containers and packing materials for dangerous waste and posted at the facilities and
sites for the collection, storage, transport, and disposal of dangerous waste.

Article 45

Those units which produce dangerous waste shall report and register in accordance with the relevant regulations of the state.

Article 46

Those units which produce dangerous waste shall dispose of them in accordance with the relevant regulations of the state. Those who
fail to properly dispose of the waste will be required to make rectifications within a specified time period by the administrative
department in charge of environmental protection under the people’s governments at the county level or above in that locality; as
to those units which fail to dispose of the waste before the deadline or which do not carry out disposal in accordance with the relevant
regulations of the state, designated units of the administrative department in charge of environmental protection under the people’s
government at the county level or above in that locality shall undertake to dispose of the waste for them, and all expenses for disposal
shall be born by those units which have produced the dangerous waste.

Article 47

The urban people’s governments shall organize the construction of the facilities for the centralized disposal of dangerous waste.

Article 48

Those who adopt the disposal method of burying dangerous waste but fail to conform to the regulations of the administrative department
in charge of environmental protection under the State Council shall pay waste-discharge fees for dangerous waste. The specific means
for levying the discharge fees for dangerous waste shall be stipulated by the State Council.

The discharge fees for dangerous waste shall be reserved for the prevention and amelioration of environmental pollution caused by
dangerous waste and shall not be appropriated for any other use.

Article 49

Those units which engage in operational activities concerning the collection, storage, and disposal of dangerous waste shall submit
applications for operational licenses to the administrative department in charge of environmental protection under the people’s government
at the county level or above. The specific means for doing this shall be stipulated by the State Council.

No unit may engage in operational activities concerning collection, storage, and disposal of dangerous waste without a operational
license or fail to be in accordance with the regulations of the license.

No unit may supply or consign dangerous waste to those units without operational licenses to engage in any operational activities
concerning collecting, storage, and disposal of dangerous waste.

Article 50

Dangerous waste of different classifications shall be collected and stored separately according to their properties. Mixed collection,
storage, transport, and disposal shall be forbidden for different dangerous waste materials which are not compatible and which have
not undergone safety processing.

Mixed storage of dangerous waste with non-dangerous waste is forbidden.

Article 51

Those who require the transfer of dangerous waste shall fill in forms for the transference of dangerous waste in accordance with relevant
state regulations and shall report to the administrative departments in charge of environmental protection under the local people’s
governments at the county level or above in the area from which the waste is being transferred and in the area which is receiving
the waste.

Article 52

Measures for the prevention of environmental pollution shall be adopted during transport of dangerous waste; meanwhile, the state
regulations concerning management of the transport of dangerous waste shall be obeyed.

Transport of dangerous waste in a passenger vehicle is forbidden.

Article 53

The sites, facilities, equipment, containers, packagings, and other items used for the collection, storage, transport, or disposal
of dangerous waste shall be treated to eliminate pollution before they are diverted for other use.

Article 54

Those workers who will engage in the collection, storage, transport, recycling, and disposal of dangerous waste shall undergo professional
training and testing before being assigned such posts.

Article 55

Those units which produce, collect, store, transport, recycle, and dispose of dangerous waste shall draw up emergency measures and
preventive measures in the event of accidents, and shall report to the administrative department in charge of environmental protection
under the people’s governments at the county level or above in that locality, for a relevant examination to be conducted by that
department.

Article 56

Those units that cause serious environmental pollution due to accidents or emergencies involving dangerous waste shall without delay
take measures to eliminate or decrease the environmental pollution, inform the units or residents that may suffer from the pollution,
and report to the administrative department in charge of environmental protection and other relevant departments under the people’s
governments at the county level or above in that locality and await investigation and handling.

Article 57

The administrative departments in charge of environmental protection under the local people’s governments at the county level or above
shall report without delay to the people’s governments at their own level in the event that dangerous waste seriously pollutes the
environment or imperils the security of residents’ lives or property. The people’s governments shall adopt effective measures to
eliminate or decrease the harm.

Article 58

Transit of dangerous waste passing through the territory of the People’s Republic of China is forbidden.

Chapter V Legal Responsibilities

Article 59

Those who violate the regulations of this Law by engaging in any one of the following actions shall be required to make rectifications
within a specified period of time by the administrative department in charge of environmental protection under the local people’s
governments at the county level or above and shall be subject to a fine.

(1)

failure to report and register industrial solid waste or dangerous waste in accordance with state regulations, or guilt of fraud in
reporting or registration;

(2)

refusing an on-the-spot inspection by the administrative department in charge of environmental protection, or guilt of fraud in the
course of inspection;

(3)

failure to pay waste-discharge fees in accordance with state regulations;

(4)

transferring to others equipment which has been included in the list of equipment to be eliminated within a definite time;

(5)

unauthorized closure, disuse, or dismantling of the facilities or sites for prevention and amelioration of environmental pollution
caused by solid waste;

(6)

constructing facilities or sites for the centralized storage or disposal of industrial solid waste or the burial sites for residential
refuse in nature preserves, scenic spots, historic sites, drinking water sources, or other places which require special protection;
or

(7)

unauthorized transference of solid waste for storage and disposal out of the administrative territories of their own provinces, autonomous
regions, or municipalities directly under the Central Government.

Those who engage in actions mentioned in Items 1 or 2 of the preceding paragraph shall be subject to a fine of up to 10,000 yuan;
those engaging in actions mentioned in Item 3 of the preceding paragraph shall be subject to a fine of up to 50 percent of the amount
of the waste-discharge fees paid; those engaging in actions mentioned in Items 4, 5, 6, or 7 of the preceding paragraph shall be
subject to a fine of up to 50,000 yuan.

Article 60

Those who violate the regulations in this Law by producing, selling, importing, or using outmoded equitment or by applying outmoded
productive technology shall be required to make rectifications by the department in charge of comprehensive economic affairs under
the people’s government at the county level or above; if the case is serious, the said department shall submit an opinion to the
people’s government at the same level and order to terminate business or shut down according to the powers granted by the State Council.

Article 61

For construction projects needing supplementary construction for the prevention and amelioration of solid waste pollution, if the
supplementary construction is put into operation or use before being completed or before passing the acceptance inspection, the administrative
department in charge of environmental protection which examined the report of the effects of said construction project on the environment
shall order production or operation to cease, and may levy a fine of up to 10,000 yuan.

Article 62

If those enterprises and institutions which have been ordered to bring their pollution under control within a specified period of
time, do not accomplish the task within the time limit, they shall be subject to a fine of up to 100,000 yuan, to be determined according
to the detrimental effects they have caused; or they shall be ordered to terminate business or shut down.

The fine in the preceding paragraph shall be determined by the administrative department in charge of environmental protection, and
the order to terminate business and shut down shall be made by the people’s government at the county level or above according to
the authority granted them by the State Council.

Article 63

Those who violate the regulations of this Law during the storage, transport, or disposal of urban residential refuse shall be penalized
according to the State Council’s regulations on environmental protection and urban sanitation.

Article 64

Those who violate the regulations in this Law concerning the prevention of dangerous waste pollution, if engaged in any one of the
following actions, the administrative department in charge of environmental protection under the people’s government at the county
level or above shall order to cease said actions and make rectifications within a limited time, and a fine of up to 50,000 yuan s

RULES FOR THE IMPLEMENTATION OF THE CHINESE-FOREIGN CONTRACTUAL JOINT VENTURES

Category	FOREIGN ECONOMIC RELATIONS AND TECHNOLOGICAL COOPERATION	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1995-09-04	Effective Date	1995-09-04

Rules for the Implementation of the Law of the People’s Republic of China on Chinese-foreign Contractual Joint Ventures

Chapter I  General Provisions
Chapter II  Establishment of Contractual Joint Ventures
Chapter III  Organizational Forms and Registered Capital
Chapter IV  Investment or Conditions for Cooperation
Chapter V  Organizational Structure
Chapter VI  Buying Goods and Materials and Selling Products
Chapter VII  Distribution of Earnings and Recovery of Investments
Chapter VIII  Period of Operation and Dissolution
Chapter IX  Special Provisions for Contractual Joint Ventures which have
Chapter X  Supplementary Provisions

(Approved by the State Council on August 7, 1995, promulgated by Decree

No.6 of the Ministry of Foreign Trade and Economic Cooperation on September
4, 1995)
Chapter I  General Provisions

Article 1 These Rules are enacted in accordance with the Law of the
People’s Republic of China on Chinese-Foreign Contractual Joint Ventures.

Article 2 The establishment of Chinese-foreign contractual joint ventures
(hereinafter referred to as contractual joint ventures) within the territory
of China shall meet the development policies and industrial policies of the
state and shall abide by the state provisions on the direction of investment
of foreign funded enterprises.

Article 3 Contractual joint ventures shall develop their own business
freely in accordance with the law and conduct operational and managerial
activities within the scope of the approved agreements, contracts and articles
of association of the contractual joint ventures without any interference from
any organizations or individuals.

Article 4 Contractual joint ventures include those having attained the
status of Chinese legal persons and those not having attained the status of
Chinese legal persons in accordance with the law.

Where special provisions are provided for in Chapter IX of these Rules,
such provisions shall apply to the contractual joint ventures which do not
have the status of legal persons.

Article 5 The competent department of the Chinese party of the
contractual joint venture is also that of the contractual joint venture. Where
there are two or more Chinese parties, the authority for examination and
approval shall consult with the relevant departments to determine one
department to be the competent one, with the exceptions of those provided for
by law or administrative regulations.

The department responsible for the contractual joint venture shall
coordinate the relevant matters concerning the contractual joint venture and
provide assistance in accordance with law.
Chapter II Establishment of Contractual Joint Ventures

Article 6 The establishment of contractual joint ventures shall be
examined and approved either by the Ministry of Foreign Trade and Economic
Cooperation or by the department or local people’s government authorized by
the State Council.

Where a contractual joint venture is established under one of the
following circumstances, the contractual joint venture shall be examined and
approved by the department or the local people’s government authorized by the
State Council:

(1) Where the total investment amount is within the limit of the amount
stipulated by the State Council which can be examined and approved by the
department or the local people’s government authorized by the State Council;

(2) Where the capital is raised by the contractual joint venture, and the
construction or production conditions are not required to be balanced by the
state;

(3) Where the export of products does not require to receive the export
quota or permit as granted by the relevant state departments responsible, or
although such a quota or permit is required, the relevant state departments
responsible have agreed to grant them before the project proposal is submitted;

(4) Where there are other cases examined and approved by the department
or the local people’s government authorized by the State Council as stipulated
by law or by administrative regulations.

Article 7 Where a contractual joint venture is established, the following
documents must be submitted to the examination and approval authority by the
Chinese party:

(1) The project proposal for establishing a contractual joint venture,
together with any documents which have been examined and approved by the
department responsible;

(2) The feasibility study report jointly conducted by all parties to the
contractual joint venture, together with any documents which have been
examined and approved by the department responsible;

(3) The agreement, contract and articles of association of the contractual
joint venture signed by the legal representatives or authorized
representatives of the parties to the contractual joint venture;

(4) The business licenses or registration certificates of the
parties to the contractual joint venture, and their credit certificates and
the valid documents of their legal representatives; where the foreign party
is a natural person, valid certifying documents showing his or her identity,
his or her personal details and credit information should be provided;

(5) The name list of the chairman, vice-chairman and directors of the
board of directors or the director, vice-director and members of the joint
management committee as decided in consultation by the parties to the
contractual joint venture;

(6) Other documents whose submission is required by the examination and
approval authority.

The documents listed in the preceding paragraph shall be submitted in
Chinese with the exception of the documents listed in Item (4) provided by the
foreign party; the documents listed in Items (2), (3) and (5) may be
simultaneously submitted in a foreign language, as decided in consultation by
the parties to the contractual joint venture.

The examination and approval authority shall decide whether to grant
approval within 45 days of receiving all the documents stipulated; in cases
where the examination and approval authority thinks that the documents
submitted are incomplete or unsuitable, it has the right to demand the parties
to the contractual joint venture to complete or amend them within the
appointed time limit.

Article 8 The Ministry of Foreign Trade and Economic Cooperation shall
issue certificate of approval to a contractual joint venture whose
establishment has been approved by the Ministry of Foreign Trade and Economic
Cooperation and the department authorized by the State Council.

The local people’s government shall issue certificate of approval to a
contractual joint venture whose establishment has been approved by the
relevant local people’s government as authorized by the State Council, and
these documents of approval shall within 30 days as from the date of approval
be submitted to the Ministry of Foreign Trade and Economic Cooperation for the
record.

A contractual joint venture whose establishment has been approved shall
apply to the authority for the administration of industry and commerce for
registration and to obtain a business licence in accordance with the law.

Article 9 Under any of the following circumstances, approval will not be
granted to an applicant for establishment of a contractual joint venture:

(1) Harming state sovereignty or social public interests;

(2) Endangering state safety;

(3) Causing pollution to the environment;

(4) Other circumstances which violate the law, administrative regulations
or state industrial policies.

Article 10 The term “agreement of the contractual joint venture” as
stipulated in these Rules refers to the written document drawn up by the
parties to the contractual joint venture after they have come to an agreement
on the principles for establishing the venture and major projects.

The term “contract of the contractual joint venture” as stipulated in
these Rules refers to the written document drawn up by the parties to the
contractual joint venture after they have come to an agreement upon the rights
and obligations of the parties for the establishment of the venture.

The term “articles of association of the contractual joint venture” as
stipulated in these Rules refers to the written document drawn up by the
parties to the contractual joint venture according to the agreements made in
the contract of the contractual joint venture and agreed upon by all parties
to the contractual joint venture, agreeing on such matters as the
organizational principles and the methods of management and operation.

In cases where discrepancies exist between the agreement or articles of
association of the contractual joint venture and the contract of the
contractual joint venture, the contract of the contractual joint venture
shall prevail.

The parties to the contractual joint venture also have the right not to
conclude the agreement of the contractual joint venture.

Article 11 The agreement, the contract and the articles of association of
the contractual joint venture shall enter into force as of the day when the
certificate of approval is issued by the examination and approval authority.
During the period of cooperation, any major changes to the agreement, the
contract or articles of association of the contractual joint venture must be
approved by the examination and approval authority.

Article 12 The contract of the contractual joint venture shall clearly
state the following:

(1) The name, place of registration, domicile of and the name, position
and nationality of the legal representatives of each party to the contractual
joint venture (where the foreign party is a natural person, his or her name,
nationality, and domicile);

(2) The name, domicile and scope of business of the contractual joint
venture;

(3) The total investment sum and the registered capital of the contractual
joint venture, the manner and time limit of the investment or conditions for
cooperation provided by each party to the contractual joint venture;

(4) The transfer of investments or conditions provided by the parties to
the contractual joint venture;

(5) The distribution of earnings or products and the sharing of risks and
losses among each party to the contractual joint venture;

(6) The composition of the board of directors or the joint management
committee of the contractual joint venture and the number of people assigned
to be directors or committee members, the powers, and the measures for the
appointment and dismissal of the general manager and other high-ranking
managers;

(7) The major equipment used for production, the productive technology and
their source;

(8) Marketing arrangements for products sold inside and outside Chinese
territory;

(9) Plans for revenue and expenditure regarding foreign currency;

(10) The period of operation, dissolution and liquidation of the
contractual joint venture;

(11) Other obligations of the parties to the contractual joint venture and
responsibilities for breach of the contract;

(12) The operational principles for finance, accounting and auditing;

(13) The settlement of disputes between the parties to the contractual
joint venture;

(14) The procedures for amending the contract of the contractual joint
venture.

Article 13 The articles of association of the contractual joint venture
shall clearly state the following:

(1) The name and domicile of the contractual joint venture;

(2) The business scope and the period of cooperation of the contractual
joint venture;

(3) The name, place of registration, domicile of and the name, position
and nationality of the legal representatives of each party to the contractual
joint venture (where the foreign party is a natural person, his or her name,
nationality and domicile);

(4) The total investment sum and the registered capital of the contractual
joint venture, the manner and time limit of the investment or the conditions
for cooperation provided by each party to the contractual joint venture;

(5) The distribution of earnings or products and the sharing of risks and
losses among each party of the contractual joint venture;

(6) The composition, powers and rules of procedure of the board of
directors or the joint management committee, the terms of office of directors
of the board of directors or members of the joint management committee, the
powers of the chairman and vice-chairman of the board of directors, and the
director and vice-director of the joint management committee;

(7) The establishment, powers and working procedures of management
organs, the powers, the measures for appointment and dismissal of the
general manager and other high-ranking managers;

(8) Provisions relating to such labour management as recruitment,
training, work contracts, wages, social insurance, welfare, on-the-job safety
and hygiene of the staff members;

(9) Systems of finance, accounting and auditing of the contractual joint
venture;

(10) The procedures for the dissolution and liquidation of the contractual
joint venture;

(11) The procedures for amending the articles of association of the
contractual joint venture.
Chapter III Organizational Forms and Registered Capital

Article 14 A contractual joint venture which has attained the status in
accordance with the law shall be a limited liability company. The parties to
the venture shall be liable to the contractual joint venture within the extent
of their investment or within their extent of the conditions for cooperation
contributed, with the exception of those cases otherwise agreed in the
contract.

The contractual joint venture is liable for covering the debts of the
venture with all its assets.

Article 15 The total investment sum in the contractual joint venture
means the investment total which need be contributed according to the scale of
production and management as stipulated in the contract and the articles of
association of the contractual joint venture.

Article 16 The registered capital of the contractual joint venture means
the total capital contributed by the parties to the contractual joint venture
as registered in the administrative organs for industry and commerce for the
purpose of establishing the contractual joint venture. The registered capital
may be expressed in Renminbi Yuan or in another convertible foreign currency
as agreed by the parties to the contractual joint venture.

The registered capital of the contractual joint venture may not decrease
in the period of cooperation. However, in cases where changes occurring in
the total investment sum and the scale of production or operation mean that
there is a real need to reduce the registered capital, approval must be
granted by the authority for examination and approval.
Chapter IV Investment or Conditions for Cooperation

Article 17 The parties to the contractual joint venture shall provide
investment for the venture or conditions for cooperation in accordance with
the provisions of the relevant laws or administrative regulations and the
agreement in the contract of the contractual joint venture.

Article 18 The investment or conditions for cooperation contributed by
the parties to the contractual joint venture may be provided in cash or in
kind, including industrial property rights, specialized technology, the right
to the use of land or other property rights.

In cases where the investment or conditions for cooperation contributed by
the Chinese parties are part of the state assets, they shall be valued
according to the provisions of the relevant laws and administrative
regulations.

In cases where the contractual joint venture has attained the status of
Chinese legal person in accordance with the law, the investment contributed by
foreign parties shall usually not be less than 25% of the registered capital
of the contractual joint venture. In cases where the contractual joint venture
has not attained the status of Chinese legal person, the specific requirements
as to the investment or conditions contributed by the parties to the
contractual joint venture shall be stipulated by the Ministry of Foreign Trade
and Economic Cooperation.

Article 19 The parties to the contractual joint venture may contribute
their own property or property rights as investment or conditions for
cooperation, and may not raise mortgages or other forms of guarantee on the
contributed investment or conditions for cooperation.

Article 20 The parties to the contractual joint venture shall, according
to the production and management needs of the contractual joint venture and in
accordance with the provisions of the relevant laws or administrative
regulations, agree upon within the contract of the contractual joint venture a
deadline before which each party shall provide investment or conditions for
cooperation in the contractual joint venture.

In cases where each party to the contractual joint venture has not
provided the investment or conditions for cooperation in the agreement in the
contractual joint venture’s contract, the administrative authority for
industry and commerce shall prescribe a time limit for him to provide; in
cases where investment has not been made before the time limit, the authority
for examination and approval shall revoke the certificate of approval of the
contractual joint venture, and the administrative authority for industry and
commerce shall revoke the business licence of the contractual joint venture
and shall publicly announce this decision.

Article 21 In cases where one party to the contractual joint venture has
not provided investment or conditions for cooperation in accordance with the
contract of the contractual joint venture, he shall be liable for violating
the contract to the other party who has provided investment and conditions for
cooperation in accordance with the contract of the contractual joint venture.

Article 22 The investments or conditions for cooperation provided by the
parties to the contractual joint venture shall be verified by a Chinese
certified public accountant who shall provide a verification report. The
contractual joint venture shall issue certificates of investment to the
parties to the venture on the basis of the report. The certificates of
investment shall clearly state the following:

(1) The name of the contractual joint venture;

(2) The date of establishment of the contractual joint venture;

(3) The designation or name of each party to the contractual joint venture;

(4) The contents of the investment or conditions for cooperation
contributed by the parties to the contractual joint venture;

(5) The date on which the parties to the contractual joint venture
provided the investment or conditions for cooperation;

(6) The serial number and the date of issue of the investment certificate.

Copies of the investment certificate shall be submitted to the
examination and approval authority and the administrative authority for
industry and commerce.

Article 23 If the parties to the contractual joint venture transfer all
or some of the rights stipulated in the contract of the contractual joint
venture to each other, or if one party to the venture transfers all or some of
the rights stipulated in the contract to a party other than the other party to
the venture, the written consent of the other party must be obtained and
submitted to the examination and approval authority for approval.

The examination and approval authority shall decide whether or not to
grant approval within 30 days of receiving the document regarding the transfer.
Chapter V Organizational Structure

Article 24 The contractual joint venture shall establish a board of
directors or a joint management committee. The board of directors or the joint
management committee is the authoritative organization of the contractual
joint venture, deciding the major issues of the contractual joint venture
according to the provisions of the articles of association of the contractual
joint venture.

Article 25 The board of directors or the joint management committee shall
be composed of not less than three members, and their distribution shall be
determined through consultation by the Chinese and foreign parties with
reference to the investment or conditions for cooperation contributed by each
party.

Article 26 The members of the board of directors or the joint management
committee shall be appointed or dismissed by the Chinese and the foreign party
respectively. The method of the selection of the chairman and vice-chairman of
the board of directors or the director and vice-director of the joint
management committee shall be stipulated in the articles of association of the
contractual joint venture. Where the Chinese or the foreign party assumes the
chairmanship of the board of directors or the directorship of the joint
management committee, the other party shall assume the vice-chairmanship or
the vice-directorship.

Article 27 The term of office of the members of the board of directors or
the joint management committee shall be specified in the articles of
association of the contractual joint venture; however, each term may not be
longer than three years. At the expiration of a director’s or a committee
member’s term, he may serve another term if re-appointed.

Article 28 Meetings of the board of directors or the joint management
committee shall be convened at least once a year and shall be convened and
presided over by the chairman or the director. When the chairman or the
director is unable to perform his duties due to special reasons, the
vice-chairman, the vice-director or another board or committee member as
designated by the chairman or the director shall convene and presided over the
meeting. A meeting of the board of directors or the joint management committee
may be convened upon proposal made by one-third or more of the directors or
committee members.

Meetings of the board of directors or the joint management committee may
be held only if two-thirds or more of the directors or committee members are
present. Directors or committee members who are unable to attend the meetings
of the board of directors or the joint management committee shall entrust a
representative in writing to attend and to vote. A resolution made at a
meeting of the board of directors or joint management committee requires the
approval of half or more of all the directors or committee members before it
passes. A director or a committee member who does not attend the meeting of
the board of directors or the joint management committee without any just
cause, and does not entrust a representative to attend on his behalf is deemed
to have been present at the meeting of the board of directors or joint
management committee and to have abstained from voting.

All directors or committee members shall be notified ten days before a
meeting of the board of directors or joint management committee is convened.

The meetings of the board of directors or the joint management committee
may use means of communication to pass a resolution.

Article 29 A resolution on the following matters must be adopted
unanimously by all directors or committee members attending the meeting of the
board of the directors or the joint management committee:

(1) An amendment of the articles of association of the contractual joint
venture;

(2) An increase or decrease in the registered capital of the contractual
joint venture;

(3) The dissolution of the contractual joint venture;

(4) The mortgage of the assets of the contractual joint venture;

(5) A merger, division or change in the corporate form of the contractual
joint venture;

(6) Other matters agreed by the parties to the contractual joint venture
which must be adopted unanimously by all directors or committee members
present at the meeting of the board of the directors or joint management
committee.

Article 30 Except as otherwise stipulated in these Rules, the methods of
discussion and voting procedures used in the meetings of the board of
directors or the joint management committee shall be stipulated in the
articles of association of the contractual joint venture.

Article 31 The chairman or the director is the legal representative of
the contractual joint venture. In cases when the chairman or the director is
unable to perform his duties due to special reasons, he must authorize the
vice-chairman, the vice-director or another director or committee member to
represent the contractual joint venture in its external relations.

Article 32 The contractual joint venture shall have one general manager
who shall be responsible for the day-to-day operation and management of the
contractual joint venture and shall be responsible to the board of directors
or the joint management committee.

The general manager of the contractual joint venture shall be appointed
and dismissed by the board of directors or the joint management committee.

Article 33 The general manager and the other high-ranking managers may
be either Chinese or foreign citizens.

Directors or committee members, as appointed by the board of directors or
the joint management committee, may concurrently hold the position of general
manager or other high-ranking managers of the contractual joint venture.

Article 34 When the general manager or other high-ranking managers are
not competent at their jobs, neglect their duties seriously or engage in
fraudulent practices or embezzlement, they may be dismissed through a
resolution adopted by the board of directors or the joint management
committee; in cases where damage is done to the contractual joint venture, the
liability for the damages shall be awarded in accordance with law.

Article 35 When a contractual joint venture, after its establishment,
entrusts a third party with its operation and management, unanimous consent
must be obtained from the board of the directors or the joint management
committee, and a contract entrusting the operation and management shall be
signed with the person thus entrusted.

The contractual joint venture shall submit such documents as the
resolution of the board of directors or joint management committee, the signed
contract entrusting the operation and management and the credit certificate of
the person thus entrusted to the examination and approval authority for
approval. The examination and approval authority shall decide whether or not
to grant approval within 30 days of receiving the relevant documents.
Chapter VI Buying Goods and Materials a

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China Laws

DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS CONCERNING THE SUPPRESSION OF THE FALSIFICATION, COUNTERFEITING, AND ILLEGAL...

CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL CONCERNING HALTING THE DEVELOPMENT OF PYRAMID RETAILING

CRIMINAL LAW

DECISION OF THE STATE COUNCIL ON AMENDING THE REGULATIONS ON FOREIGN EXCHANGE CONTROL

REGULATIONS FOR THE IMPLEMENTATION OF THE THE ENTRY AND EXIT ANIMAL AND PLANT QUARANTINE

CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL ON THE TRANSMISSION OF THE SUGGESTIONS SUBMITTED BY THE PRESS AND PUBLICATION ADMINISTRATION AND THE STATE SCIENCE AND TECHNOLOGY COMMISSION CONCERNING THE STRENGTHENING OF THE WORK OF SCIENCE AND TECHNOLOGY PUBLICATION

REGULATIONS ON THE FOREIGN EXCHANGE SYSTEM OF THE PEOPLE’S REPUBLIC OF CHINA

CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL CONCERNING THE TRANSMISSION OF THE SUGGESTIONS OF THE STATE COMMISSION FOR STRUCTURAL REFORM AND THREE OTHER MINISTRIES REGARDING THE EXTENSION OF THE SCOPE OF EXPERIMENT OF THE REFORM OF THE MEDICARE SYSTEM FOR WORKERS AND STAFF MEMBERS

DECISION OF THE NATIONAL PEOPLE’S CONGRESS ON AMENDMENTS OF THE CRIMINAL PROCEDURE LAW

LAW OF THE PEOPLE’S REPUBLIC OF CHINA ON PREVENTION OF ENVIRONMENTAL POLLUTION CAUSED BY SOLID WASTE

RULES FOR THE IMPLEMENTATION OF THE CHINESE-FOREIGN CONTRACTUAL JOINT VENTURES

CONSTITUTION ACT, 1982 – page 22

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

CONSTITUTION ACT, 1982 – page 17

CONSTITUTION ACT, 1982 – page 16

CONSTITUTION ACT, 1982 – page 12

CONSTITUTION ACT, 1982 – page 11

CONSTITUTION ACT, 1982 – page 10

CONSTITUTION ACT, 1982 – page 9

CONSTITUTION ACT, 1982 – page 8

CONSTITUTION ACT, 1982 – page 7

Category	BANKING	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1997-01-14	Effective Date	1997-01-14

Category	AGRICULTURE, FORESTRY AND METEOROLOGY	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1996-12-02	Effective Date	1997-01-01

Category	CULTURE	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1996-10-03	Effective Date	1996-10-03

Category	PUBLIC HEALTH AND MEDICINE	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1996-05-05	Effective Date	1996-05-05

Category	LITIGATION	Organ of Promulgation	The National People’s Congress	Status of Effect	In Force
Date of Promulgation	1996-03-17	Effective Date	1997-01-01