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INTERIM REGULATIONS ON LICENSING SYSTEM OF IMPORT COMMODITIES

Interim Regulations on Licensing System of Import Commodities of the PRC

    

(Effective Date 1984.01.10)

   Article 1. These regulations are formulated with the purpose of strengthening the planned control of import trade, enhancing the economic results
and better serving the construction of socialist modernization.

   Article 2. The People’s Republic of China practices the Licensing System of import commodities. For all commodities imported on the strength
of licenses as stipulated in these regulations unless otherwise stipulated by the State, an application shall be filed and the licence
of import commodities obtained in advance, and an order or orders for import should be placed through the corporations approved by
the State to engage in the business of importing such commodities. The Customs offices may give clearance after examination upon
the strength of licence of import commodities and other documents concerned.

   Article 3. The Ministry of Foreign Economic Relations and Trade unifies the issuance of licences of import commodities on behalf of the State.

The administrative departments of foreign economic relations and trade at the provincial level may, within the scope of power stipulated
by the Ministry of Foreign Economic Relations and Trade, issue licences of import commodities for their respective province, municipality
under the State Council and autonomous region.

The Ministry of Foreign Economic Relations and Trade may also empower the special commissioners offices residing at the main ports
to issue licences of import commodities within the scope of power stipulated.

   Article 4. Various corporations approved by the State to engage in the business of import shall conduct the import business strictly in accordance
with the scope of operation and the list of import commodities approved.

Commodities to be imported by the head offices of foreign trade corporation specializing in import and export among the corporations
mentioned in the preceding paragraph, or by import and export corporations under various Ministries and import and export corporations
under the People’s Governments at the provincial level are, except those commodities whose import is restricted by the State, exempted
from obtaining licences of import commodities, and the Customs Offices shall give clearance after examination on the strength of
the relevant documents. All Commodities to be imported by other corporations shall apply for and obtain licences of import commodities,
and the Customs offices shall give clearance after examination on the strength of the licences of import commodities and the relevant
documents.

The departments and enterprises which are not approved by the State to engage in import business are prohibited to import commodities
without authorization.

   Article 5. Being in compliance with the stipulations of the State and approved by the relevant commissions and ministries under the State Council
or the People’s Governments of the provinces, municipalities under the State Council and autonomous regions, the commodities to be
imported under the agreements and contracts concluded with foreign parties as regards processing with materials and assembling with
components provided by foreign parties, compensation trade and contracting projects, which are not exceeding the scope of the approved
items, are exempted from obtaining licences of import commodities. But all the imported commodities controlled by the State under
the items of compensation trade and contracting projects, materials and components to be imported or the processed products under
the items of processing with materials and assembling with components provided by foreign parties, which are to be turned into domestic
sales, shall apply for and obtain licences of import commodities.

   Article 6. All Commodities whose import is restricted by the State, irrespective of their mades of imports, the sources of foreign exchanges
and the channels of imports must, in accordance with the power of approval stipulated by the State, be examined and approved by the
competent departments and departments unifying the examination, and the licences of import commodities must be applied and obtained
by the purchasing units on the strength of the documents of approval.

The items of import commodities restricted by the state shall be made public and readjusted in a unified way by the Ministry of Foreign
Economic Relations and Trade pursuant to the regulations of the State.

   Article 7. The following imports, which do not fall into the scope of items of paragraph 2 of the preceding Article, are exempted from obtaining
licences of import commodities:

(1) In import and export trade, samples provided by foreign parties free of charge or samples bought by various corporations which
may engage in import and export business in compliance with the approval of the State;

(2) Urgently needed articles for professional usages bought abroad at a price less than 5,000 US dollars on the international market
by the departments of scientific research, education, culture, sports, medicine and public health themselves in accordance with the
approval of the Ministry of Foreign Economic Relations and Trade, foreign trade administrative departments at the provincial level
or the commissioners offices of the Ministry of Foreign Economic Relations and Trade stationed at various ports;

(3) Urgently needed parts and accessories of machinery, electrical appliances and precision instruments for production bought abroad
at a price less than 5,000 US dollars on the international market by enterprises of factories and mining industry themselves in conformity
with the approval of the Ministry of Foreign Economic Relations and Trade, the foreign trade administrative departments at the provincial
level or the commissioners offices of the Ministry of Foreign Economic Relations and Trade stationed at various ports;

(4) Commodities imported with special approval by the State.

The Customs offices shall examine and clear the imported commodities mentioned in items 2, 3 and 4 of the first paragraph of this
Article on the strength of the certificates approved.

   Article 8. For commodities bought of one’s own as stipulated by items 2 and 3 of the first paragraph of the preceding Article, whose price on
the international market exceeds the fixed limits an application must be filed and the licence of import commodities obtained.

For urgently needed import commodities bought abroad directly by organs and associations other than those mentioned in paragraph 2
and 3 of the preceding article an application must also be filed and the licence of import commodities obtained.

   Article 9. Goods needed for production by Chinese-foreign joint ventures which can not be supplied in China, may be purchased abroad themselves
by entrusting the relevant Chinese foreign trade corporations or imported within the scope of business of the said ventures.

The scope and procedures of applying and obtaining licences of import commodities shall be dealt with in accordance with Article 63
of the “Regulations for the Implementation of the Law of the People’s Republic of China on Joint Ventures Using Chinese and Foreign
Investment”.

   Article 10. Under the following circumstances, the Ministry of Economic Relations and Trade may not issue licences of import commodities or
may cancel those already issued:

(1) Commodities, where import is banned, or temporarily suspended by decision of the State;

(2) Import commodities that are not consistent with the foreign policy of the State;

(3) Import commodities that are not consistent with the contents of the relevant bilateral trade agreements and payment agreements;

(4) Import Commodities that are not consistent with the standards of hygiene and quarantine of medicine, foodstuffs, animals, plants,
agricultural products, animal by-products and aquatic products as stipulated by the departments of public health, Agriculture, Animal
Husbandry and fishery of the State.

(5) Other import commodities that are detrimental to the interests of the State or procured through illegal dealings.

   Article 11. Official letters of the units at or above the provincial departments or bureau level shall be produced, and import certificates
approved by the competent departments and the departments unifying the examination be submitted when applying for the obtaining licences
of import commodities. The particulars of an application should include the name of the import commodities, specifications, quantity,
value, usages, countries from which the commodities imported, sources of foreign exchanges, units conducting transactions with foreign
parties and similar items.

The licences of import commodities shall be issued after verifying by the licence-issuing authorities, if the said particulars are
consistent with the regulations.

In obtaining the licences of import commodities, the applying units shall apply in conformity with the facts strictly, and shall not
resort to fraud and forgery violations shall be held responsible.

   Article 12. The period of validity of an import licence is one year. In case of failure to import the commodities within the period of validity,
the licence-obtaining units may apply for an extension to the licence-issuing authority, which may extend correspondingly the period
of validity of the licence in accordance with the stipulations of the contract.

   Article 13. The Customs offices may confiscate the commodities or instruct that they be shipped back in case they are imported without authorization
for not applying and obtaining the licences beforehand in defiance of these regulations; as regards the commodities imported with
licences issued retroactively by the licence-issuing authority, the customs offices may exercise discretion in light of the circumstances
to give clearance after imposing a fine. The Customs offices shall, in accordance with the relevant provision of the laws and regulations
of China’s Customs, dispose of those who have forged, smeared and altered or transferred the licences of import commodities.

   Article 14. Commodities imported by the Special Economic Zone for the use inside the zone shall be dealt with according to the special regulations
of the Special Economic Zone; All imported commodities and products of the Special Economic Zone, which are transported from the
Special Economic Zone to the hinterland, shall be dealt with in the light of the stipulations of these regulations.

   Article 15. The Ministry of Foreign Economic Relations and Trade shall be responsible for the interpretation of these regulations rules for
the implementation of these Regulations shall be formulated by the Ministry of Foreign Economic Relations and Trade together with
the Customs General Administration.

   Article 16. These regulations shall come into force from the day of the promulgation.

    





PROCEDURES FOR THE IMPLEMENTATION OF THE REGULATIONS ON LABOUR MANAGEMENT IN JOINT VENTURES USING CHINESE AND FOREIGN INVESTMENT

SUPPLEMENTARY PROVISIONS OF THE MINISTRY OF FINANCE ON ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS BY CHINESE-FOREIGN EQUITY JOINT VENTURES

19970908

The Ministry of Finance

Supplementary Provisions of the Ministry of Finance on Accounting for Foreign Currency Transactions by Chinese-foreign Equity Joint
Ventures

the Ministry of Finance

December 31, 1987

1.

Fixed assets, intangible assets, other assets and raw materials acquired by and the costs and expenses thereof paid for by the joint
venture with funds contributed by the parties to the joint venture as investment subscribed and denominated in a currency other than
the Renminbi (including investment subscribed and paid during the start-up period and investment subscribed and paid after operations
have been started) may be recorded in Renminbi at the book exchange rate. The same applies to fixed assets, intangible assets, other
assets and raw materials acquired by the costs and expenses thereof paid for by the joint venture with funds from foreign currency
loans.

2.

A joint venture may adjust the adjust the year-end balances of all its foreign currency savings in banks and foreign currency receivables
and payables with respect to changes of the exchange rates after agreement has been obtained from the local financial departments
and tax authorities. The exchange gains and losses balance due to differences of the book exchange rate and the prevailing exchange
rate shall be recorded in a new account called the “Exchange Gains and Losses Amortization” account. Amortization shall start from
the current year over a period to be agreed upon by the local financial departments and tax authorities, normally between one to
five years. The balance of the “Exchange Gains and Losses Amortization” account shall be presented as a separate item under the “Deferred
Charges” in the current assets side or the “Accrued Expenses” in the current liabilities side of the balance sheet.

3.

Joint ventures engaged in foreign currency credit business shall record their foreign currency receipts and payments in separate accounts
according to their currency denominations. While preparing the period-end fiscal reports (accounting statements), the joint ventures
shall record the period-end balances of all their foreign currency savings in banks and foreign currency receivable and payable accounts
in Renminbi using the prevailing exchange rates.

The exchange gains and losses balance accrued from currency exchange transactions and transfer among various foreign exchange accounts
within the current year shall be presented under the “Current Period Exchange Gains and Losses” item.

4.

A joint venture shall record the Renminbi exchange gain as result of its sale of foreign exchange at an adjustment (swap) rate which
is higher than the book exchange rate under the “Current Period Exchange Gains” item. Only the adjustment rate shall be used in recording
purchase of foreign exchange at adjustment rate and the record shall be made separately. If the purchased foreign exchange is used
to acquire fixed assets, intangible assets, other assets, and raw materials and to pay for the costs and expenses thereof, the acquisition
and payments shall be recorded in Renminbi at the book adjustment exchange rate. If the purchased foreign exchange is used to pay
for foreign currency debts and the adjustment rate is higher than the book exchange rate of the foreign currency debts, the joint
venture shall record the Renminbi exchange loss under the “Current Period Exchange Losses” item.

5.

A joint venture already in operation may present its “Exchange Gains and Losses” item separately in its income statement instead of
putting under the “General and Administrative Expenses” item. A joint venture in its start-up period may present a separate “Exchange
Gains and Losses During Start-up Period” item under the “Organising Expenses” item in its balance sheet; however, amortization shall
be made on the “Exchange Gains and Losses During Start-up Period” item over a certain period after the joint venture has started
operation and the amortization schedule shall be the same as that for the “Organising Expenses” item.

6.

A joint venture that adopts a foreign currency as its standard currency for bookkeeping may account for its transactions in Renminbi
or other currencies which are not the standard currency for bookkeeping in ways similar to those stipulated in the above provisions.



 
The Ministry of Finance
1987-12-31

 






SEVERAL PROVISIONS CONCERNING THE INVESTMENTS MADE BY THE VARIOUS PARTIES TO CHINESE-FOREIGN EQUITY JOINT VENTURES

Category  FOREIGN ECONOMIC RELATIONS AND TECHNOLOGICAL COOPERATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1988-01-01 Effective Date  1988-03-01  


Several Provisions Concerning the Investments Made by the Various Parties to Chinese-foreign Equity Joint Ventures



(Approved by the State Council on December 30, 1987, and promulgated by

the Ministry of Foreign Economic Relations and Trade and the State
Administration for Industry and Commerce on January 1, 1988) (Editor’s note:
Supplementary provisions have been added to these Provisions. For the details,
see the Supplementary Provisions to Several Provisions Concerning the
Investments Made by the Various Parties to Chinese-Foreign Equity Joint
Ventures, approved by the State Council on September 2, 1997 and promulgated
by the Ministry of Foreign Trade and Economic Cooperation and the State
Administration for Industry and Commerce on September 29, 1997)

    Article 1  These Provisions are formulated in accordance with the
Law of the People’s Republic of China on Chinese-Foreign Equity Joint
Ventures and other pertinent laws and regulations in order to protect the
lawful rights and interests of the various parties to Chinese-foreign equity
joint ventures (hereinafter referred to as the “joint ventures”), and to
maintain the social economic order.

    Article 2  The investments contributed by the various parties to a
joint venture in accordance with the stipulations of the contract of the said
joint venture must be the cash owned by the parties themselves as well as the
physical goods, the industrial property rights, the proprietary technology and
etc. that are owned by the parties themselves and have not been used to
establish any security interests.

    In cases where physical goods, industrial property rights and proprietary
technology are used as investments at the evaluated price, the investor shall
present valid documents attesting their proprietary rights and their right of
disposal.

    Article 3  No party to a joint venture may use the loans, rented equipment
or other assets it has obtained in the name of the joint venture, or the
assets of persons other than the parties as its own investment contribution to
the joint venture; nor may it use the assets or rights and interests of the
joint venture, or the assets or rights and interests of the other parties
to the joint venture as the warranty for its investment contribution to the
joint venture.

    Article 4  The various parties to a joint venture shall set the time
limit in their joint venture contract for paying up their respective
investment contributions to the joint venture, and they shall pay fully their
respective investment contributions within the time limit stipulated in the
joint venture contract. The investment contribution certificates issued by the
joint venture in accordance with the pertinent stipulations shall be submitted
to the original examining and approving authorities and the relevant
administrative department for industry and commerce for the record.

    If the joint venture contract stipulates that investment contributions
shall be paid up in one lump, the various parties to the said joint venture
shall make the full payment of their respective investment contributions
within six months from the date the business licence is signed and issued.

    If the joint venture contract stipulates that investments shall be paid
by instalments, the first instalment paid by the various parties shall not be
less than 15% of the total amount of their respective investment contributions
and be paid within three months as of the date the business licence is signed
and issued.

    Article 5  In the event that the various parties to a joint venture fail
to make the full payment of their respective investment contributions within
the time limit prescribed in Article 4, the joint venture shall be considered
to be dissolved of its own accord, and the approval certificate for the joint
venture shall automatically cease to be effective. The joint venture shall go
through the procedures for cancellation of registration with the
administrative department for industry and commerce, and hand in its business
licence for cancellation; if a joint venture fails to go through the
procedures for cancellation of registration or to hand in its business licence
for cancellation, the administrative department for industry and commerce
shall revoke its business licence and announce this publicly.

    Article 6  After the various parties to a joint venture have paid the
first instalment of their respective investment contributions, if they fail to
pay or to pay fully any of the remaining instalments three months beyond the
deadline as stipulated in the joint venture contract, the administrative
department for industry and commerce shall, in conjunction with the original
examining and approving authorities, issue a notice to the various parties to
the said joint venture, enjoining them to pay the full amount due within one
month.

    In the event that the various parties to the said joint venture still fail
to make the full payment of their respective investment contributions in
accordance with the time limit prescribed in the notice mentioned in the
preceding paragraph, the original examining and approving authorities have the
right to revoke the approval certificate for the said joint venture. After the
approval certificate has been revoked, the said joint venture shall go through
the procedures for cancellation of registration with the administrative
department for industry and commerce, hand in its business licence for
cancellation, and settle claims and debts. If it fails to go through the
procedures for cancellation of registration or to hand in its business licence
for cancellation, the administrative department for industry and commerce has
the right to revoke its business licence and to announce this publicly.

    Article 7  The failure of one of the parties to a joint venture to make
the payment, or the full payment, of its investment contribution on time in
accordance with the stipulations of the joint venture contract constitutes a
breach of the contract. The observant party (parties) shall urge the
defaulting party to make the payment, or the full payment, of its investment
contribution within one month. If the defaulting party still fails to do so
before the deadline, this shall be considered as the abandonment by the
defaulting party of all its rights as stipulated in the joint venture contract
and its withdrawal from the joint venture of its own accord. The observant
party (parties) shall, within one month from the date when the defaulting
party’s prescribed payment is overdue, make an application to the original
examining and approving authorities for the approval to dissolve the said
joint venture, or for the approval to find another joint venture party to
assume the defaulting party’s rights and obligations as stipulated in the
joint venture contract. The observant party (parties) may, according to law,
claim compensation from the defaulting party for the economic losses caused by
the latter’s failure to make the payment, or the full payment, of its
investment contribution.

    If the defaulting party mentioned in the preceding paragraph has paid
part of its prescribed investment contribution, this part of investment
payment shall be liquidated by the joint venture.

    In the event that the observant party (parties) fails (fail) to make an
application to the original examining and approving authorities, in accordance
with the provisions of the first paragraph of this Article, for the approval
to dissolve the joint venture, or for the approval to find another joint
venture party, the examining and approving authorities have the right to
revoke the approval certificate issued to that joint venture. After the
approval certificate has been revoked, the said joint venture shall go through
the procedures for cancellation of registration with the administrative
department for industry and commerce, and hand in its business licence for
cancellation; if it fails to go through the procedures for registration
cancellation or to hand in its business licence for cancellation, the
administrative department for industry and commerce has the right to revoke
its business licence and to announce this publicly.

    Article 8  With respect to any joint venture which obtained its business
licence before the date these Provisions become effective, if the various
parties or any one of these parties have (has) failed to make the payment of
the respective investment contributions in accordance with the time limits
stipulated in the joint venture contract, they (it) shall, within two months
as of the date these Provisions become effective, make the full payment of the
prescribed investment contributions in accordance with the provisions of the
contract.

    In the event that the various parties or any one of the parties still
fail(s) to make the full payment of the respective investment contributions
within the time limit prescribed in the preceding paragraph, the case may be
handled in accordance with the provisions in Article 5 through Article 7 of
these Provisions.

    Article 9  With respect to any joint venture which obtained its business
licence before the date these Provisions become effective, if the various
parties to that joint venture have not stipulated in their joint venture
contract the respective time limits for making their respective investment
contributions, and they have not made the full payment, the various parties
shall, within two months as of the date these Provisions become effective and
in accordance with these Provisions, conclude and sign a supplementary
agreement to their joint venture contract prescribing the time limits for the
various parties to the joint venture to make the payment of their respective
investment contributions, and submit this supplementary agreement to the
original examining and approving authorities for examination and approval;
after they have obtained the approval, they shall submit their case to the
administrative department for industry and commerce for the record.

    In the event that a joint venture mentioned in the preceding paragraph
fails to establish itself or to start its operations after six full months
since the date of the issuance of its business licence owing to the failure of
its various parties to conclude and sign a supplementary agreement to their
joint venture contract within two month prescribed in the preceding paragraph,
prescribing the time limits for making their respective investment
payments, and the failure to pay full their respective investment
contributions, the original examining and approving authorities have the right
to revoke the approval certificate issued to that joint venture. After the
approval certificate has been revoked, the said joint venture shall go through
the procedures for cancellation of registration with the administrative
department for industry and commerce, and hand in its business licence for
cancellation. If the said joint venture fails to go through the procedures for
cancellation of registration or to hand in its business licence for
cancellation, the administrative department for industry and commerce has the
right to revoke its business licence and to announce this publicly.

    Article 10  The investment payment made by the various parties to a
Chinese-foreign contractual joint venture shall be handled with reference to
these Provisions.

    Article 11  These Provisions shall go into effect as of March 1, 1988.





AMENDMENT TO THE CONSTITUTION OF THE PEOPLE’S REPUBLIC OF CHINA 1988

Amendment to the Constitution of the People’s Republic of China

(Adopted at the First Session of the Seventh National People’s Congress and promulgated for implementation by the
Announcement of the National People’s Congress on April 12, 1988) 

Article 1  In Article 11 of the Constitution is added a new paragraph, which reads, “The State permits the private sector of
the economy to exist and develop within the limits prescribed by law. The private sector of the economy is a complement to the socialist
public economy. The State protects the lawful rights and interests of the private sector of the economy, and exercises guidance,
supervision and control over the private sector of the economy.” 

Article 2  The fourth paragraph of Article 10 of the Constitution, which reads, “No organization or individual may appropriate,
buy, sell or lease land or otherwise engage in the transfer of land by unlawful means”, is revised to read, “No organization or individual
may appropriate, buy, sell or otherwise engage in the transfer of land by unlawful means. The right to the use of land may be transferred
according to law.”

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






THE STATE COUNCIL’S OFFICIAL REPLY CONCERNING THE RENAMING OF THE MARITIME ARBITRATION COMMISSION AS THE CHINA MARITIME ARBITRATION COMMISSION AND THE AMENDMENT OF ITS ARBITRATION RULES

THE INTERIM REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA GOVERNING LAND USE TAX ON CITIES AND TOWNS

State Council

Order of the State Council of the People’s Republic of China

No. 17

The Interim Regulations of the People’s Republic of China Governing Land Use Tax on Cities and Towns, which was adopted at the twelfth
executive meeting of the State Council on July 12, 1988, are hereby promulgated and shall be implemented as of November 1, 1988.

Premier, Li Peng

September 27, 1988

The Interim Regulations of the People’s Republic of China Governing Land Use Tax on Cities and Towns

Article 1 .

These Regulations are formulated with the view to rationalizing the use of land in cities and towns, to regulating the income from
grades difference of the land, to improving efficiency and profit by use of the land and to strengthening the land management.

Article 2 .

Units and individuals which use land within the boundaries of cities, county towns, towns/bases operated under an organizational system
and industrial and mining districts shall be the obligatory payers of tax (hereinafter referred to as taxpayers) for land used within
cities and towns (hereinafter referred to as land use tax) and shall pay land use tax in accordance with provisions of these Regulations.

Article 3 .

Calculation of land use tax shall be based on the actual area of land took up by the taxpayer and shall be levied in accordance with
the stipulated tax rate.

The work of organizing and measuring the taking up area of land as referred to above shall be determined by the people’s government
of province , autonomous region or municipalities directly under the Central Government in accordance with the actual circumstances.

Article 4 .

The annual tax rates of land use tax for per square meter shall be as follows:

(1)

RMB 0.5 yuan to 10 yuan in large cities;

(2)

RMB 0.4 yuan to 8 yuan in medium cities;

(3)

RMB 0.3 yuan to 6 yuan in small cities;

(4)

RMB 0.2 yuan to 4 yuan in county towns, towns/bases operated under an organizational system and industrial and mining districts.

Article 5 .

Based on conditions such as the circumstance of municipal construction and the degree of economic prosperity and etc., the people’s
governments of provinces , autonomous regions and municipalities directly under the Central Government shall determine the appropriate
tax rate ranges for the districts under their jurisdiction within the range of tax rates listed above.

The people’s governments of cities and counties shall divide the land in their district into certain grades based on the actual
circumstances and shall, within the tax rate ranges determined by the people’s governments of provinces , autonomous regions and
municipalities directly under the Central Government , formulate corresponding appropriate tax rate standards, and submit to the
people’s government of provinces , autonomous regions or municipalities directly under the Central Government for approval and
implementation.

Subject to approval by the people’s governments of provinces , autonomous regions or municipalities directly under the Central Government
, the land use tax rate standard levied in economically backward districts may be reduced appropriated, but shall not be lowered
to exceed 30% of the minimum tax rate stipulated in Article 4 of these Regulations. The land use tax rate standard levied in economically
developed districts may be raised appropriately, but the amount shall first be approved by the Ministry of Finance.

Article 6 .

Land use tax shall be exempted on the following types of land:

(1)

the land for self use by State organs, people’s organizations and the armed forces;

(2)

the land for self use by units which their expenditures are allocated and funded by the State’s finance departments;

(3)

the land for self use by religious temples and shrines, parks and places of historic interest and scenic spots ;

(4)

the land for public use , such as municipal streets, public squares and areas of greenery and etc.;

(5)

the land for production use directly used in the agricultural, forestry, pastoral and fishery industries;

(6)

in the case of land whose reclamation from the sea or transformation from wasteland was approved, land use tax shall be exempted for
5 to 10 years from the month beginning to use;

(7)

the land used for facilities on energy resources, transportation, and water conservancy, and other uses which the Ministry of Finance
has exempted from tax in other provisions. .

Article 7 .

In addition to cases provided for under the provisions of Article 6 of these Regulations, a taxpayer who has genuine difficulty paying
the prescribed land use tax may request a reduction of or exemption from the tax on a periodic basis After the tax organ of provinces,
autonomous regions or municipalities directly under the Central Government has examined and verified the circumstances of the case,
the details shall be submitted to the State Taxation Bureau for approval.

Article 8 .

Land use tax shall be calculated annually and paid by installments. The time limit for payments shall be determined by the people’s
governments of provinces , autonomous regions or municipalities directly under the Central Government. .

Article 9 .

For newly requisitioned land, the land use tax shall be paid in accordance with the following provisions:

(1)

if cultivated land is requisitioned, the land use tax shall be levied one year after the date on which approval to expropriate the
land is given.

(2)

if non-cultivated land is requisitioned, land use tax shall be levied from the month after approval to expropriate the land is given.

Article 10 .

Land use tax shall be collected by the local tax organ in the area where the land is located. Land management organs shall provide
the information of land use rights to the local tax organs where the land is located.

Article 11 .

Administration of the levying of land use tax shall be handled in accordance with the provisions of the Interim Regulations of the
People’s Republic of China governing Administration of the Levying and Collection of Taxes.

Article 12 .

Income from the land use tax shall bring into financial budget administration.

Article 13 .

The Ministry of Finance shall be responsible for interpreting these Regulations. Implementing measures shall be formulated by the
people’s governments of provinces, autonomous regions and municipalities directly under the central government and the details shall
be submitted to the Ministry of Finance for archival file.

Article 14 .

These Regulations shall take effect from November 1,1988 and the land use fee measures formulated by all localities shall be suspended
simultaneously.



 
State Council
1988-09-27

 






CIRCULAR OF THE STATE COUNCIL CONCERNING THE APPROVAL AND TRANSMISSION OF THE SUGGESTIONS OF THE MINISTRY OF COMMERCE, THE MINISTRY OF FOREIGN ECONOMIC RELATIONS AND TRADE, AND THE MINISTRY OF MATERIAL SUPPLIES REGARDING THE FURTHER CHECKING UP AND RECTIFICATION OF VARIOUS TYPES OF COMMERCIAL WHOLESALE COMPANIES, FOREIGN ECONOMIC RELATIONS AND TRADE COMPANIES, AND MATERIAL SUPPLY COMPANIES

Category  FOREIGN TRADE Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1989-10-18 Effective Date  1989-10-18  


Circular of the State Council Concerning the Approval and Transmission of the Suggestions of the Ministry of Commerce, the Ministry
of Foreign Economic Relations and Trade, and the Ministry of Material Supplies Regarding the Further Checking up and Rectification
of Various Types of Commercial Wholesale Companies, Foreign Economic Relations and Trade Companies, and Material Supply Companies

Circular
SUGGESTIONS OF THE MINISTRY OF COMMERCE CONCERNING THE FURTHER CHECKING UP
SUGGESTIONS OF THE MINISTRY OF FOREIGN ECONOMIC RELATIONS AND TRADE
SUGGESTIONS OF THE MINISTRY OF MATERIAL SUPPLIES CONCERNING THE FURTHER

(October 18, 1989)

Circular

    In accordance with the requirements of the “Decision Concerning the Further
Checking Up and Rectification of Companies” of the Central Committee of the
Communist Party of China and the State Council, the suggestions of the Ministry
of Commerce, the Ministry of Foreign Economic Relations and Trade, and the
Ministry of Material Supplies Regarding the Further Checking Up and
Rectification of Various Types of Wholesale Commercial Companies, Foreign
Economic Relations and Trade Companies, and Material Supply Companies, are
hereby transmitted to you, and you are requested to implement accordingly.
SUGGESTIONS OF THE MINISTRY OF COMMERCE CONCERNING THE FURTHER CHECKING UP
AND RECTIFICATION OF VARIOUS TYPES OF WHOLESALE COMMERCIAL COMPANIES (Omitted)
SUGGESTIONS OF THE MINISTRY OF FOREIGN ECONOMIC RELATIONS AND TRADE
CONCERNING THE FURTHER CHECKING UP AND RECTIFICATION OF VARIOUS TYPES OF
FOREIGN ECONOMIC RELATIONS AND TRADE COMPANIES

    In accordance with the “Decision of the Central Committee of the Communist
Party of China and the State Council Concerning the Further Checking Up and
Rectification of Companies”, and on the basis of the “Circular of the State
Council Concerning the Further Checking Up and Rectification of Various Foreign
Economic Relations and Trade Companies”, suggestions are hereby put forward
concerning the further checking up and rectification of various foreign
economic relations and trade companies (hereinafter referred to as “the foreign
trade companies”):

    1. Foreign trade companies at various levels and of various types attached
to the provinces, autonomous regions, municipalities directly under the Central
Government, and municipalities under separate planning (hereinafter referred
to as “the various localities), as well as those attached to the various
departments under the Central Government, must all conduct the checking up and
rectification strictly. Those foreign trade companies at various levels and of
various types that are not in conformity with the prescribed requirements shall
resolutely be abolished or merged, or their right to handle import and export
trade shall be revoked, strictly in accordance with the provisios of “the
Suggestions Concerning the Abolition or Merger of Companies Attached to the
Various Departments Under the Central Government” put forward by the National
Leading Group for the Checking up and Rectification of Companies. The emphasis
of the checking up and rectification is laid on the foreign trade companies at
various levels and of various types that have been established since 1988;
after the checking up and rectification, if it is really necessary to retain
one or two of them, the case shall be submitted to the Ministry of Foreign
Economic Relations and Trade for re-examination and confirmation strictly in
accordance with the six prerequisites for the establishment of foreign trade
enterprises, as prescribed by the aforesaid Ministry.

    2. Foreign trade companies that fall under one of the following
circumstances shall resolutely be abolished or merged, or their right to handle
import and export trade shall be revoked:

    (1) companies that do not settle their foreign exchange with the Bank of
China or with other banks designated by the State Administration for Foreign
Exchange Control, and have evaded foreign exchange control seriously;

    (2) companies that have colluded with external businessmen and helped them
purchase export goods directly from the inland or handle export business,
thereby helping them evade foreign exchange control;

    (3) companies that have been established in the same department or in the
same region, handling the same or similar business, so they are just
reduplicate setups;

    (4) companies that do not have the necessary conditions for handling
foreign trade, or lack external marketing channels for handling export trade
but do so chiefly by entrusting other companies;

    (5) the branch offices set up by local foreign trade companies outside the
provinces (autonomous regions, or municipalities directly under the Central
Government) for handling import and export business.

    (6) subcompanies of the second or third rank with the right to handle
import and export trade, established by comprehensive foreign trade companies
attached to various local governments.

    3. After the completion of the strict checking up and rectification,
foreign trade companies at various levels and of various types shall be
established in accordance with the following provisions:

    (1) With the exception or the Ministry of Foreign Economic Relations and
Trade, from among the foreign trade companies attached to the various
departments under the Central Government, one company for each of the aforesaid
departments may be retained, depending on their respective needs; where one or
two departments really need(s) to set up companies for specialized products,
the case shall be examined and confirmed by the Ministry of Foreign Economic
Relations and Trade separately; as to the other companies, they shall all be
abolished or merged, or their right to handle import and export business shall
be revoked.

    (2) From among the comprehensive foreign trade companies attached to
provinces (autonomous regions, or municipalities directly under the Central
Government), only one or two shall be retained; as to the other companies, they
shall all be abolished or merged, or their right to handle import and export
business shall be revoked.

    (3) For those localities (including the municipalities at the prefectural
level, the same below) that have already been vested with the right to handle
import and export business, only one or two companies shall be retained with
their right to handle import and export, on condition that they meet the actual
needs and the prescribed requirements; as to the other companies, they shall
all be abolished or merged, or their right to handle import and export business
shall be revoked (with the exception of those companies in Guangdong and
Fujian Provinces which were established before the end of 1987).

    (4) For those economic and technological development zones that have been
approved by the State Council, only one foreign trade company with the right to
handle import and export business shall be retained; as to the other
companies, they shall all be abolished or merged, or their right to handle
import and export business shall be revoked.

    (5) The right to handle import and export trade of those foreign trade
companies attached to the counties (including municipalities at the county
level, the same below) shall be revoked (with the exception of those companies
in Guangdong and Fujian Provinces which were established before the end of
1987). As to one or two special cases where the foreign trade companies meet
the prescribed requirements and handle only the local specialties of their
counties, that is, the third category of export commodities promising a bright
prospect of export sales, and thus it is necessary to retain their right to
handle import and export business, such cases shall be submitted to the
Ministry of Foreign Economic Relations and Trade for approval.

    (6) From among the foreign trade companies, attached to various provinces,
autonomous regions, municipalities directly under the Central Government,
municipalities under separate planning, and special economic zones that handle
barter transactions with the Soviet Union and the East European countries, only
one or two companies shall be retained; as to the other companies, they shall
all be abolished or merged, or their right to handle import or export business
shall be revoked.

    (7) From among the trading companies, attached to counties adjacent to
border ports which are established with the approval of the State Council and
handle petty barter trade in the border areas, only one company shall be
retained for each of the aforesaid counties; where a port county does not meet
the prescribed requirements, a tradeing company at the region (or prefecture,
municipality) level, over the port may be retained; as to the other companies,
they shall all be abolished or merged, or their right to handle petty barter
trade in the border areas shall be revoked.

    4. All international economic and technological cooperation companies
established without the approval by the State Council or by the Ministry of
Foreign Economic Relations and Trade shall all be abolished. With respect to
those international economic and technological cooperation companies (including
those companies which handle economic and technological cooperation business
with the Soviet Union and the East European countries that have been approved
by the State Council or by the Ministry of Foreign Economic Relations and
Trade, and those international economic and technological cooperation companies
that engage in the expansion of business contacts for external economic and
technological cooperation or in the trial management of the exportation of
export commodities of the third category, all the localities and departments
shall, in accordance with the seven prerequisites for the establishment of
companies of the aforesaid type as formulated by the Ministry of Foreign
Economic Relations and Trade, carry out a strict checking up and rectification
on the aforesaid companies, and then submit the cases to the Ministry of
Foreign Economic Relations and Trade for re-examination and confirmation.

    5. It is necessary to re-verify and confirm the business scope of foreign
trade companies at various levels and of various types.

    The first category or exptort commodities, as prescribed by the State,
shall be handled by the national foreign trade corporations, or the national
industry and trade import and export corporations as well as by their branch
offices and subsidiaries in accordance with the approved business scope, and
the aforesaid corporations shall also undertake to fulfil the export plan
transmitted by the State, and the tasks to turn over a definite amount of
foreign exchange earnings to the Central Government. All the other foreign
trade companies are not permitted to handle export commodities of the first
category; where the aforesaid provisions are violated, the foreign exchange
earnings obtained shall all be confiscated and be turned over to the Central
Government, and the responsibilities of the persons in charge shall be
investigated. A strict control should be exercised over the business scope of
foreign trade companies for handling export commodities of the second category.
The foreign trade companies attached to various departments under the Central
Government shall handle products of their own industries in accordance with the
business scope approved by the Ministry of Foreign Economic Relations and
Trade, or handle export commodities of the second or third category in
accordance with the approved business scope; the specialized foreign trade
companies attached to provinces (autonomous regions, municipalities directly
under the Central Government) shall handle export commodities of the second or
third category in accordance with the appraised and confirmed business scope;
as to those comprehensive foreign trade companies attached to provinces
(autonomous regions, or municipalities directly under the Central Government),
the foreign trade companies that are attached to prefectures and have retained
their right to handle import and export business, and the foreign trade
companies in the economic and technological development zones, they shall be
permitted to handle only export commodities of the third category. The various
categories of foreign trade companies that handle export commodities of the
second and third categories shall all undertake to fulfil the export plans and
the tasks to turn over a definite amount of foreign exchange earnings to the
Central Government or to the local governments.

    The import business of foreign trade companies at various levels and of
various types shall be handled in accordance with the business scope of import
commodities approved by the Ministry of Foreign Economic Relations and Trade
and also with the existing pertinent provisions.

    6. The foreign trade companies with their business scope, which are
attached to various localities and various government organs and have been
retained after the checking up and rectification, shall be submitted to the
Ministry of Foreign Economic Relations and Trade for examination and approval;
with respect to the foreign trade companies at various levels and of various
types in Guangdong and Fuiian Provinces that were established after examination
and approval, the framework for the abolishment and merger of these companies
formulated in the process of the checking up and rectification shall also be
submitted to the Ministry of Foreign Economic Relations and Trade for
examination and approval. The foreign trade companies that have been retained
after verification and confirmation shall present the examination and
confirmation certificate issued by the Ministry Foreign Economic Relations and
Trade to the administrative departments for industry and commerce for
examination and approval, and then go through the procedures for registration.

    The foreign trade companies at various levels and of various types located
in Hainan Province and in the special economic zones shall be checked up and
rectified in accordance with the pertinent provisions and the unified
arrangement. The foreign trade companies at various levels and of various types
have been retained after the checking up and rectification shall be submitted
by their respective competent departments for foreign economic relations and
trade to the Ministry of Foreign Economic Relations and Trade for the record.

    In the event that a company has been discovered not in conformity with the
aforesaid provisions, the Ministry of Foreign Relations and Trade has the right
to abolish it, or revoke its right to handle external business, or to readjust
its business scope.

    7. In accordance with the decision of the Central Committee of the
Communist Party of China and the State Council that henceforth government
organs from the State Council down to the people’s governments at various
levels shall, in principle, not directly manage any companies, foreign trade
companies at various levels and of various types as well as companies that
chiefly handle import and export business shall all be placed under the
leadership and administration, in their line of industry and business
operations, by the Ministry of Foreign Economic Relations and Trade and by the
local competent departments for foreign economic relations and trade in
accordance with the unified policies formulated by the State.

    8. After the completion of the checking up and rectification, the import
and export business related to their own products, as conducted by large and
medium-sized technology-intensive production enterprises and conglomerates of
the closely-knit type, shall be examined and approved by the local competent
departments for foreign economic relations and trade, and then submitted to the
Ministry of Foreign Economic Relations and Trade for the record; in the event
that a production enterprise or conglomerate is discovered to be short of the
prescribed qualifications for handling import and export business, the Ministry
of Foreign Economic Relations and Trade has the right to overrule it. An
application, which is filed by a national or transprovincial conglomerate for
handling import and export business, shall be examined and approved by the
Ministry of Foreign Economic Relations and Trade.
SUGGESTIONS OF THE MINISTRY OF MATERIAL SUPPLIES CONCERNING THE FURTHER
CHECKING UP AND RECTIFICATION OF VARIOUS TYPES OF MATERIAL SUPPLY
COMPANIES (Omitted)?






MEASURES FOR THE ADMINISTRATION OF FOREIGN-CAPITAL FINANCIAL INSTITUTIONS AND CHINESE-FOREIGN EQUITY JOINT FINANCIAL INSTITUTIONS IN THE SHANGHAI MUNICIPALITY

Category  BANKING Organ of Promulgation  The State Council Status of Effect  Invalidated
Date of Promulgation  1990-09-08 Effective Date  1990-09-08 Date of Invalidation  1994-04-01


Measures for the Administration of Foreign-capital Financial Institutions and Chinese-foreign Equity Joint Financial Institutions
in the Shanghai Municipality

Chapter I  General Provisions
Chapter III  Registered Capital and Operating Funds
Chapter IV  Business Scope
Chapter V  Management of Business
Chapter VI  Supervision and Inspection
Chapter VII  Dissolution and Liquidation
Chapter VIII  Provisions of Penalties
Chapter IX  Supplementary Provisions

(Approved by the State Council on September 7, 1990 and promulgated by

Decree No. 2 of the People’s Bank of China on September 8, 1990) (Editor’s
Note: The Measures have been annulled by the Regulations of the People’s
Republic of China on Administration of Foreign-Capital Financoal Institutions
promulgated on February 25, 1994 and effective as of April 1, 1994)
Chapter I  General Provisions

    Article 1  These Measures are formulated for the purpose of meeting the
needs of opening to the outside world and the economic development of the
Shanghai Municipality, strengthening and perfecting the administration of
foreign-capital financial institutions and Chinese-foreign equity joint
financial institutions.

    Article 2  The term “foreign-capital financial institutions and
Chinese-foreign equity joint financial institutions”, referred to in these
Measures, denotes the following institutions which are established with
approval and registered to engage in business operations in accordance with
these Measures and with the pertinent provisions of other laws and regulations
of the People’s Republic of China:

    1) foreign-capital banks with their head offices established in the
Shanghai Municipality (hereinafter referred to as “foreign bank”);

    2) branches of foreign banks established in the Shanghai Municipality
(hereinafter referred to as foreign branch bank”);

    3) banks established in the Shanghai Municipality with joint capital and
operation by foreign financial institutions and Chinese financial institutions
(hereinafter referred to as “joint bank”); and

    4) financial companies established in the Shanghai Municipality with
joint capital and operation by foreign financial institutions and Chinese
financial institutions (hereinafter referred to as “joint financial company”).

    Article 3  Foreign-capital financial institutions and Chinese-foreign
equity joint financial institutions shall abide by the laws and regulations of
the People’s Republic of China and their legitimate business activities and
lawful rights and interests shall be protected by Chinese laws.

    Article 4  The People’s Bank of China is the competent authority in charge
of examining and approving, administering, and supervising foreign-capital
financial institutions and Chinese-foreign equity joint financial institutions.
The People’s Bank of China authorizes its Shanghai Branch to exercise
day-to-day administration and supervision of foreign capital financial
institutions and Chinese-foreign equity joint financial institutions.

    Chapter II  Establishment and Registration

    Article 5  Any party applying for the approval to set up a foreign bank
shall satisfy the following requirements:

    1) the investor is a financial institution;

    2) the applicant has a representative office of more than three years’
standing inside China; and

    3) the applicant possesses total assets of more than US$ 10 billion at
the end of the year prior to the submission of such an application.

    Article 6  Any party applying for the approval to set up a foreign branch
bank shall satisfy the following requirements:

    1) the applicant has a representative office of more than three years’
standing inside China;

    2) the applicant possesses total assets of more than US$ 20 billion at
the end of the year prior to the submission of such an application; and

    3) in the home country or region of the applicant, there is a sound system
for financial administration and supervision.

    Article 7  Parties applying for the approval to set up a joint bank or a
joint financial company shall satisfy the following requirements:

    1) each investing party to a joint bank or joint financial company is a
financial institution; and

    2) the foreign investor has a representative office inside China.

    Article 8  For a foreign bank to be set up, the foreign investor shall
apply to the people’s Bank of China and submit the following documents and
data:

    1) an application for the establishment thereof, which shall include the
name of the intended bank, the registered capital and the amount of the
paid-in capital, and the types of business operations the bank intends to
engage in;

    2) a feasibility study report;

    3) the statements of assets and liabilities of the investor during the
three successive years prior to the submission of such an application,
together with the relevant certifying documents;

    4) the draft articles of association of the intended bank;

    5) a copy of the business licence of the investor approved and issued by
the competent authority concerned in the home country or region of the
investor and;

    6) other documents and data as required by the People’s Bank of China.

    Article 9  For a foreign branch bank to be set up, the head office of the
foreign bank concerned shall apply to the People’s Bank of China and submit
the following documents and data:

    1) an application duly signed by the chairman of the board of directors
or the general manager of the bank, which shall include the name of the
intended branch bank, the amount of operating funds approved and allocated
by the head office, and the types of business operations the branch bank
intends to engage in;

    2) annual reports for the three successive years prior to the submission
of such an application;

    3) a copy of the business licence of the applying bank approved and
issued by the competent authorities of the home country or region of the
applying bank; and

    4) other documents and data as required by the People’s Bank of China.

    Article 10  For a joint bank or a joint financial company to be set up,
all the parties thereto shall jointly apply to the People’s Bank of China
and submit the following documents and data:

    1) an application for the establishment thereof, which shall include the
name of the intended joint financial institution, the name of each investing
party thereto, the registered capital and the amount of the paid-in capital,
the respective percentage of contributions by the parties, and the types of
business operations the joint financial institution intends to engage in;

    2) a feasibility study report jointly prepared by the parties thereto;

    3) the agreement, the contract and the draft articles of association of
the joint financial institution initialled by the authorized representative
of each of the parties thereto;

    4) the statements of assets and liabilities of each of the parties
thereto during the three successive years prior to the submission of such
an application, together with relevant supporting documents;

    5) copies of the respective business licences of all the parties thereto
approved and issued by the competent authorities concerned of the home
country of region of each of the parties; and

    6) other documents and data as required by the People’s Bank of China.

    Article 11  Any of the documents and data prescribed in Articles 8,9 and
10 of these Measures, with the exception of the annual reports, if written
in a foreign language, shall be submitted together with a Chinese translation
thereof.

    Article 12  After the application for the approval of such establishment
has been examined and approved by the People’s Bank of China, an official
application form shall be issued to the applicant(s).

    The applicant(s) shall, after filling in the official application form,
formally apply to the People’s Bank of China and shall submit the following
documents for the application:

    1) the official application form duly signed by the legal
representative(s) of the applicant(s) or the representative(s) authorized by
the applicant(s) (which shall be submitted in triplicate);

    2) a list of the principal persons in charge of the institution to be set
up and their respective curriculum vitae;

    3) power(s) of attorney for the principal persons in charge of the
institution;

    4) where a foreign branch bank is to be set up, letters of undertaking
issued by the head office assuming for its branch office the obligations for
tax payment and debt repayment; and

    5) other relevant data.

    Article 13  A foreign-capital financial institution or a Chinese-foreign
equity joint financial institution shall, within 30 days of receipt of the
certificate of approval issued by the People’s Bank of China, undertake the
procedures of registration for the issuance of business licence with the
administrative department for industry and commerce in accordance with the
pertinent laws and regulations of the People’s Republic of China and shall,
within 30 days of commencement of business operations, undertake the
procedures for tax registration with the tax authorities in accordance with
the law.

    Article 14  A foreign-capital financial institution or a Chinese-foreign
equity joint financial institution whose establishment has been approved
shall, after obtaining the business licence, apply to the State Administration
of Foreign Exchange Control for the approval and issuance of a Licence for
Business Operations in Foreign Exchange.

    Article 15  In the event that a foreign-capital financial institution or
a Chinese-foreign equity joint financial institution should fail to commence
its business operations within 12 months of receipt of the certificate of
approval issued by the People’s Bank of China, the certificate of approval
shall automatically become null and void.

    Article 16  A foreign-capital financial institution or a Chinese-foreign
equity joint financial institution shall apply to the People’s Bank of China
for verification and approval in respect of any one of the following items:

    1) adjustment and transfer of the investment capital stock;

    2) change of the business site;

    3) change of the chairman (or the vice-chairman) of the board of
directors, or the president (or the vice-president), the general manager
(or the deputy general manager), or the president (or vice-president) of a
branch office; and

    4) establishment of a branch office outside China.
Chapter III  Registered Capital and Operating Funds

    Article 17  The minimum amount of the registered capital of a foreign
bank or a joint bank shall be freely convertible currencies equivalent to
US$ 30 million. The minimum amount of the registered capital of a joint
financial company shall be freely convertible currencies equivalent to US$ 20
million. Their respective paid-in capital shall be no less than 50 percent of
their respective registered capital.

    A foreign branch bank shall be allocated as its operating funds by its
head office a sum of freely convertible currencies equivalent to not less
than US$ 30 million.

    Article 18  A foreign-capital financial institution or a Chinese-foreign
equity joint financial institution shall, within 30 days of receipt of the
certificate of approval issued by the People’s Bank of China, raise in full
the paid-in capital operating funds, which shall be verified by a Chinese
registered accountant, who shall, upon verification, issue a certificate to
that effect.

    Article 19  Each year, a foreign bank, a joint bank, or a joint financial
company shall allocate 25 percent of its after-tax net profit as supplementary
capital until the total amount of the paid-in capital and reserve funds is
twice that of the registered capital.

    Each year, a foreign branch bank shall keep 25 percent of its after-tax
net profit inside China to supplement its operating funds until the kept
profit is equal to its operating funds.
Chapter IV  Business Scope

    Article 20  The People’s Bank of China shall, based on the application
submitted to it, grant permission to a foreign bank, a joint bank, or a
foreign branch bank to engage in part or all of the following business
operations:

    1) deposits in foreign currencies;

    2) loans in foreign currencies;

    3) discounts of negotiable instruments in foreign currencies;

    4) investments in foreign currencies;

    5) remittances in foreign currencies;

    6) guarantees of foreign exchange;

    7) import and export settlement;

    8) buying and selling of foreign exchange on its own account or on
customers’ account;

    9) buying and selling of securities in foreign currencies;

    10) acting as an agent for the exchange of foreign currencies and for
the cashing of negotiable instruments in foreign currencies;

    11) acting as an agent for payments against credit cards in foreign
currencies;

    12) custody and safe deposit box services;

    13) credit and financial standing investigation and consultancy services;
and

    14) other services approved.

    Article 21  The People’s Bank of China shall, based on the application
submitted to it, grant permission to a joint financial company to engage in
part or all of the following business operations:

    1) loans in foreign currencies;

    2) discounts of negotiable instruments in foreign currencies;

    3) investments in foreign currencies;

    4) guarantees of foreign exchange;

    5) buying and selling of securities in foreign currencies;

    6) credit and financial standing investigations and consultancy services;

    7) trust in foreign currencies;

    8) deposits in foreign currencies with each deposit amounting to not
less than US$ 100,000 for period of no less than three months; and

    9) other services approved.

    Article 22  The terms “deposits in foreign currencies” referred to in
this Chapter denotes the following deposits denominated in foreign currencies:

    1) interbank deposits inside and outside China;

    2) non-interbank deposits outside China;

    3) deposits by foreigners inside China;

    4) deposits by overseas Chinese and by compatriots from Hong Kong, Macao
and Taiwan;

    5) deposits by enterprises with foreign investment;

    6) deposits of loans granted by foreign-capital financial institutions
or Chinese-foreign equity joint financial institutions to enterprises other
than those with foreign investment; and

    7) other kinds of deposits approved.

    Article 23  In handling import and export settlement, foreign banks,
joint banks or foreign branch banks shall offer services only to enterprises
with foreign investment and those enterprises other than those with foreign
investment which are authorized to engage in import and export operations.
But with respect to import settlement with enterprises other than those with
foreign investment, the funds needed for the import in question shall have
come from the loans of the bank which is handling the settlement.
Chapter V  Management of Business

    Article 24  A foreign-capital institution or a Chinese-foreign equity
joint financial institution which engages in deposit business operations
shall place deposit reserves with the Shanghai Branch of the People’s Bank
of China. The ratios of the reserves as against various deposits shall be
determined by the People’s Bank of China and shall be adjusted in accordance
with the actual needs. Such deposit reserves shall be interest-free.

    Article 25  The total amount of loans which a foreign-capital financial
institution or a Chinese-foreign equity joint financial institution grants
to any one enterprise and its associated enterprises may not exceed 30
percent of the sum total of its paid-in capital and its total reserves, with
the exception of loans specially approved by the People’s Bank of China.

    Article 26  The total amount of investments by a foreign-capital financial
institution or by a Chinese-foreign equity joint financial institution may
not exceed 30 percent of the sum total of its paid-in capital and its total
reserves, with the exception of investments in financial enterprises approved
by the People’s Bank of China.

    Article 27  The total assets of a foreign-capital financial institution
or of a Chinese-foreign equity joint financial institution may not exceed 20
times the sum total of its paid-in capital and its total reserves.

    Article 28  30 percent of the operating funds of a foreign branch bank
shall be put by in the form of interest-bearing assets as prescribed by the
People’s Bank of China, which shall include depositing the said funds in a
bank or banks designated by the People’s Republic of China.

    Article 29  Real estate owned by a foreign-capital financial institution
or by a Chinese-foreign equity joint financial institution may not exceed
25 percent of the sum total of its paid-in capital and its total reserves;
its other assets may not exceed 15 percent thereof.

    Article 30  A foreign-capital financial institution or a Chinese-foreign
equity joint financial institution shall ensure the mobility of its assets.

    Article 31  The total amount of deposits by sources inside China in a
foreign-capital financial institution or in a Chinese-foreign equity joint
financial institution may not exceed 40 percent of its total assets inside
China.

    Article 32  A foreign-capital financial institution or a Chinese-foreign
equity joint financial institution shall maintain proper reserves for bad
debts in accordance with the relevant provisions.

    Article 33  The interest rates of deposits and loans of a foreign-capital
financial institution or of a Chinese-foreign equity joint financial
institution and the various service charges shall be determined by the
Bankers’ Association through consultation or be fixed in the light of the
international market and shall be submitted to the Shanghai Branch of the
People’s Bank of China for approval.

    Article 34  A foreign-capital financial institution or a Chinese-foreign
equity joint financial institution shall, in accordance with the relevant
provisions, draw the reserve fund, the staff bonus fund, the welfare fund
and the enterprise development fund from the profit after tax paid in
accordance with the law.

    Article 35  A foreign-capital financial institution or a Chinese-foreign
equity joint financial institution shall engage at least one Chinese citizen
as member of its senior managerial body.

    The senior managerial personnel of a foreign-capital financial institution
or of a Chinese-foreign equity joint financial institution may not
concurrently hold important positions in any other economic organizations.

    Article 36  A foreign-capital financial institution or a Chinese-foreign
equity joint financial institution shall invariably appoint a Chinese
registered accountant and such an appointment is subject to confirmation by
the Shanghai Branch of the People’s Bank of China.
Chapter VI  Supervision and Inspection

    Article 37  A foreign-capital financial institution or a Chinese-foreign
equity joint financial institution shall set up a sound internal auditing
system and enhance its own ability of self-restraint.

    Article 38  A foreign-capital financial institution or a Chinese-foreign
equity joint financial institution shall submit its financial and business
statements to the People’s Bank of China in accordance with the relevant
provisions.

    Article 39  The People’s Bank of China and its Shanghai Branch shall
have the right to examine and audit the business and financial status of a
foreign-capital financial institution or of a Chinese-foreign equity joint
financial institution.
Chapter VII  Dissolution and Liquidation

    Article 40  If a foreign-capital financial institution or a
Chinese-foreign equity joint financial institution is to terminate voluntarily
its business activities, it shall, 30 days prior to the date of termination
thereof, submit an application in writing to the People’s Bank of China and
shall, after such termination is approved by the People’s Bank of China,
effect its dissolution and liquidation.

    Article 41  In the event that a foreign-capital financial institution or
a Chinese-foreign equity joint financial institution should become insolvent,
the People’s Bank of China shall order it to suspend its business and shall
set a deadline for it to clear its liabilities. If such an institution wishes
to resume its business after recovering its solvency within the prescribed
period of time for the clearing of its liabilities, it shall apply to the
People’s Bank of China for approval.

    Article 42  With respect to a foreign-capital financial institution or a
Chinese-foreign equity joint financial institution which is to terminate
voluntarily its business activities or which has been ordered to suspend its
business in accordance with the law, its dissolution and liquidation shall
be effected in accordance with the relevant provisions of the People’s
Republic of China.

    Article 43  A foreign-capital financial institution or a Chinese-foreign
equity joint financial institution which is still in the process of clearing
its liabilities may redeem the capital stock and pay dividends only after
it has paid in full all the taxes and liabilities.

    Article 44  Upon completion of liquidation, a foreign-capital financial
institution or a Chinese-foreign equity joint financial institution shall,
within the prescribed period of time, undertake the procedures with the
original registration authority to nullify its registration.
Chapter VIII  Provisions of Penalties

    Article 45  If, in violation of the provisions in Chapter II of these
Measures, a foreign-capital financial institution or a Chinese-foreign equity
joint financial institution is set up without authorization, the People’s
Bank of China shall have the right to order it to suspend its business,
confiscate its illegal earnings, and impose a fine in foreign exchange
equivalent to 50,000 to 100,000 Renminbi yuan.

    Article 46  If, in violation of the provisions in Chapter IV of these
Measures, a foreign-capital financial institution or a Chinese-foreign equity
joint financial institution engages in business operations beyond the
authorized scope, the People’s Bank of China and its Shanghai Branch shall
have the right to order it to suspend these unauthorized business activities,
confiscate in accordance with the law the illegal earnings derived thereform,
and impose a fine in foreign exchange equivalent to 10,000 to 50,000 Renminbi
yuan.

    Article 47  If a foreign-capital financial institution or a
Chinese-foreign equity joint financial institution violates the provisions
in Chapter V of these Measures, the People’s Bank of China and its Shanghai
Branch shall have the right to order it to make corrections and adjustments
or make up the deficiency and shall, in accordance with the seriousness of
the case, impose a fine in foreign exchange equivalent to 5,000 to 30,000
Renminbi yuan.

    Article 48  If, in violation of the provisions in Chapter VI of these
Measures, a foreign-capital financial institution or a Chinese-foreign equity
joint financial institution fails to submit the statements required within
the prescribed period of time or defies supervision and examination, the
People’s Bank of China and its Shanghai Branch shall, in accordance with the
seriousness of the case, give a warning, circulate a notice of reprimand,
or impose a fine in foreign exchange equivalent to 3,000 to 10,000 Renminbi
yuan.

    Article 49  If a foreign-capital financial institution or a
Chinese-foreign equity joint financial institution violates these Measures,
to a serious extent, the People’s Bank of China shall order it to suspend
its business activities and shall, in an extreme case, order it to disband.
Chapter IX  Supplementary Provisions

    Article 50  Financial institution with overseas-Chinese capital and
financial institutions with capital from the regions encompassing Hong Kong,
Macao and Taiwan shall be governed with reference to these Measures.

    Article 51  Any foreign branch bank already established in the Shanghai
Municipality prior to the promulgation of these Measures shall, in accordance
with these Measures, make up for the establishment and registration
procedures. With respect to a foreign branch bank which fails to conform to
the relevant provisions of these Measures, the Shanghai Branch of the People’s
Bank of China shall set a deadline for it to make adjustments.

    Article 52  The People’s Bank of China shall be responsible for the
interpretation of these Measures and shall formulate specific provisions in
accordance with these Measures.

    Article 53  These Measures shall go into effect as of the date of
promulgation.





RESOLUTION ON THE NATIONAL DAY

Category  NATIONAL FLAG, NATIONAL EMBLEM, CAPITAL, NATIONAL ANTHEM AND NATIONAL DAY Organ of Promulgation  The Central People’s Government Status of Effect  In Force
Date of Promulgation  1949-12-02 Effective Date  1949-12-02  


Resolution on the National Day of the People’s Republic of China

(Adopted at the 4th Meeting of the Central People’s Government Council

at December 2, 1949)

    The “Suggestion to the Government for Taking the First of October as the
National Day of the People’s Republic of China, in Stead of the Tenth of
October as the Old National Day”, which was adopted by the First Session of
the First National Committee of the Chinese People’s Political Consultative
Conference(CPPCC) at October 9, 1949, has been submitted to the Central
People’s Government for decision and implementation.

    The Central People’s Government Council decides to adopt the Suggestion
by the First National Committee of the CPPCC, considering that it tallies
with the actual history and represents the people’s will.

    It is hereby announced by the Central People’s Government Council:
Starting with 1950, the first of October, the great date on which the
People’s Republic of China announced its establishment, shall be the National
Day of the People’s Republic of China.





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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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