(Adopted at the 11th Meeting of the Standing Committee of the Eighth National People’s Congress on December 29, 1994
and promulgated by Order No.35 of the President of the People’s Republic of China on December 29, 1994)
Contents
Chapter I General Provisions
Chapter II Prison
Chapter III Execution of Criminal Punishments
Section 1 Putting in Prison
Section 2 Handling of Petitions, Complaints and Accusations Made by Prisoners
Section 3 Execution Outside Prison
Section 4 Commutation of Punishment and Release on Parole
Section 5 Release and Resettlement
Chapter IV Prison Administration
Section 1 Separate Custody and Separate Control
Section 2 Guard
Section 3 Use of Restraint Implements and Weapons
Section 4 Correspondence and Meeting with Visitors
Section 5 Life and Health
Section 6 Rewards and Punishments
Section 7 Handling of Crimes Committed by Prisoners During the Term of Imprisonment
Chapter V Education and Reform of Prisoners
Chapter VI Education and Reform of Juvenile Delinquents
Chapter VII Supplementary Provisions
Chapter I
General Provisions
Article 1 This Law is formulated in accordance with the Constitution for the purpose of correctly executing criminal punishments,
punishing and reforming prisoners, preventing and reducing crimes.
Article 2 A prison is an organ of the State for executing criminal punishments.
Criminal punishments of prisoners sentenced to death penalty with a two-year suspension of execution, life imprisonment, or fixed-term
imprisonment shall be executed in prisons under the Criminal Law and the Criminal Procedure Law.
Article 3 A prison shall, with regard to prisoners, implement the principle of combining punishment with reform and combining
education with labour, in order to transform them into law-abiding citizens.
Article 4 A prison shall exercise supervision and control over prisoners according to law, and shall, in accordance with the
needs of reforming prisoners, organize prisoners to engage in productive labour and conduct ideological, cultural and technical education
among prisoners.
Article 5 Activities in prison administration, execution of criminal punishments, and education and reform of prisoners
conducted according to law by the people’s police of a prison shall be protected by law.
Article 6 A people’s procuratorate shall exercise supervision in accordance with the law over the legality of activities
conducted by prisons in execution of criminal punishments.
Article 7 Human dignity of a prisoner shall not be humiliated, and his personal safety, lawful properties, and rights to defence,
petition, complaint and accusation as well as other rights which have not been deprived of or restricted according to law shall not
be violated.
A prisoner must strictly observe laws, regulations, and rules and discipline of the prison, subject himself to control, accept
education and take part in labour.
Article 8 The State shall ensure the expenditures of a prison for the reform of prisoners. The prisons’ expenditures for the
people’s police, for the reform of prisoners, for the living expenses of prisoners, for the administration and installations
of the prison, and other special expenses shall be included into the State budget.
The State shall provide production facilities and production expenses necessary for prisoners to do labour.
Article 9 Lands, mineral resources and other natural resources used by a prison according to law as well as properties of a
prison shall be protected by law; no organizations or individuals shall seize or undermine them.
Article 10 The department of judicial administration under the State Council shall be in charge of the work of prisons in the
whole country.
Chapter II
Prison Article 11 The establishment, abolition or move of a prison shall be subject to the approval of the department of judicial
administration under the State Council.
Article 12 A prison shall install one warden, several deputy wardens, and, in light of the actual needs, set up necessary working
organs and provide other administrative personnel.
The administrative personnel in a prison are the people’s police.
Article 13 The people’s police of a prison shall strictly abide by the Constitution and the law, be loyal to their duties,
enforce the law impartially, strictly observe discipline and be honest and upright.
Article 14 The people’s police of a prison shall not commit any of the following acts:
(1) to demand, accept or seize money or goods from prisoners or their relatives;
(2) to release a prisoner without authorization or through dereliction of duty to cause a prisoner to flee from the prison ;
(3) to use torture to coerce a confession, or to use corporal punishment, or to maltreat a prisoner;
(4) to humiliate the human dignity of a prisoner;
(5) to beat or connive at others to beat a prisoner;
(6) to utilize a prisoner to provide labour services for personal gains;
(7) to privately deliver a letter or an article for a prisoner in violation of regulations;
(8) to illegally surrender the functions and powers to supervise and control prisoners to another person; or
(9) other law-breaking acts.
If the people’s police of a prison commit any act specified in the preceding paragraph and the case constitutes a crime, the offenders
shall be investigated for criminal responsibility; if the case does not constitute a crime, the offenders shall be given administrative
sanctions.
Chapter III
Execution of Criminal Punishments
Section 1
Putting in Prison
Article 15 With respect to a criminal who is sentenced to death penalty with a two-year suspension of execution, life imprisonment
or fixed-term imprisonment, the people’s court shall serve the notice of execution of the sentence and the written judgment on the
public security organ where the criminal is in custody. The public security organ shall hand the criminals over to a prison for execution
of the punishment within one month from the date of receiving the notice of execution of the sentence and the written judgment.
Before a criminal is handed over for execution of the criminal punishment, if the remaining term of his sentence is not
more than one year, the criminal punishment shall be executed by the detention house instead.
Article 16 A people’s court shall, in handing over a criminal for execution of the criminal punishment, serve on
the prison a copy of the bill of prosecution from the people’s procuratorate together with the written judgment, the notice of
execution and the registration form of closing the case from the people’s court. The prison shall not put the criminal in prison
without receiving the above-mentioned documents; if such documents are incomplete or have errors in the records, the people’s court
which passed the effective judgment shall, without delay, make them complete or correct; if any of the above-mentioned circumstances
may lead to wrongful imprisonment of a person, the prison shall not accept him.
Article 17 A prison shall give physical examination to the criminals who are handed over for execution of their
criminal punishments. A criminal sentenced to life imprisonment or fixed-term imprisonment may, after physical examination, temporarily
not be put in prison under either of the following circumstances:
(1) if a criminal is seriously ill and needs to be released on parole for medical treatment; or
(2) if a criminal is a pregnant woman or a woman who is breast-feeding her own baby.
With respect to a criminal temporarily not to be put in prison as provided in the preceding paragraph, the decision on temporary
execution outside prison shall be made by the people’s court which handed the criminal over for the execution. With respect to any
such criminal whose temporary execution of the sentence outside prison constitutes a danger to the society, he shall be put in prison.
If a criminal temporarily serves his sentence outside prison, the public security organ in the place of the criminal’s residence
shall execute the criminal punishment. After the circumstances specified in the preceding paragraph under which a criminal is temporarily
not put in prison disappeared, the criminal who has not completed the execution of his original term of sentence shall be handed
over to a prison for imprisonment by the public security organ.
Article 18 When a criminal is put in prison, his or her body and the articles brought with him or her shall strictly be checked.
The non-daily necessities shall be taken care of by the prison for the criminal or with the agreement of the criminal be returned
to his or her families, and contraband goods shall be confiscated.
A female criminal shall be checked by a people’s policewoman.
Article 19 A criminal may not bring his or her child with him or her to serve sentence in prison.
Article 20 After a criminal is put in prison, the prison shall inform the criminal’s family members. A written notice shall
be sent out within five days from the date when the criminal is put in prison.
Section 2
Handling of Petitions, Complaints and
Accusations Made by Prisoners
Article 21 If a prisoner is not satisfied with the effective judgment, he may file a petition.
A people’s procuratorate or a people’s court shall without delay handle the petitions filed by prisoners.
Article 22 A prison shall without delay handle the complaints or accusations made by prisoners, or transfer the above material
to a public security organ or a people’s procuratorate for handling. The public security organ or the people’s procuratorate shall
inform the prison of the result of its handling.
Article 23 A prison shall transfer without delay the petitions, complaints and accusations made by prisoners and shall not
withhold them.
Article 24 In the course of execution of the criminal punishment, if a prison believes on the basis of a prisoner’s petition
that the judgment may be wrongfully made, it shall refer the matter to a people’s procuratorate or a people’s court for handling.
The people’s procuratorate or the people’s court shall notify the prison of the result of its handling within six months from the
date of receiving the prison’s written recommendation for handling.
Section 3
Execution Outside Prison
Article 25 If a prisoner sentenced to life imprisonment or fixed-term imprisonment serving his sentence in prison complies
with the conditions for execution outside prison as provided by the Criminal Procedure Law, he may be permitted to temporarily serve
his sentence outside prison.
Article 26 For temporary execution outside prison, a written recommendation shall be made by a prison and submitted for approval
to the administrative organ of prisons of the province, autonomous region or municipality directly under the Central Government.
The organ granting the approval shall notify the public security organ and the people’s court making the original judgment of the
decision on the approval of the temporary execution outside prison, and send a duplicate of its decision to the people’s procuratorate.
If a people’s procuratorate considers that it is improper to apply temporary execution outside prison to the prisoner, the
people’s procuratorate shall send its written opinions within one month from the date of receiving the notice to the organ that approved
the temporary execution outside prison. The said organ shall, upon receiving the written opinions from the people’s procuratorate,
conduct forthwith reexamination and re-verification of its decision.
Article 27 If a prisoner temporarily serves his sentence outside prison, the public security organ in the place of the prisoner’s
residence shall execute his sentence. The prison that originally held the prisoner in custody shall promptly inform such public security
organ of the prisoner’s performances of reform in prison.
Article 28 After the circumstances causing temporary execution outside prison disappeared, if the prisoner has not completed
his term of sentence, the public security organ in charge of the execution shall without delay inform the prison to put the prisoner
back into prison; if a prisoner has completed his term of sentence, the prison that originally held the prisoner in custody shall
handle the formalities for the release. If a prisoner died during the period of temporary execution outside prison, the public security
organ shall, without delay, inform the prison that originally held the prisoner in custody about the death.
Section 4
Commutation of Punishment and Release on Parole
Article 29 If a prisoner sentenced to life imprisonment or fixed-term imprisonment has shown true repentance or rendered meritorious
service during the term of imprisonment, his sentence may be commuted on the basis of the result of the assessment made by the prison.
If a prisoner has rendered one of the following major meritorious services, his sentence shall be commuted:
(1) having stopped a grave criminal activity of another person;
(2) having reported a grave criminal activity inside or outside prison which has been ascertained to be true;
(3) having made an invention or a major technical innovation;
(4) having risked his or her life to save others in daily production or life;
(5) having made remarkable performances in fighting against natural calamities or in avoiding or removing grave accidents; or
(6) having made other major contributions to the State or the society.
Article 30 A recommendation for commutation of a sentence shall be made by a prison to a people’s court. The people’s
court shall within one month from the date of receiving the written recommendation examine it and make a ruling thereon; if the case
is complicated or the circumstances are special, the said period may be extended by one month. A duplicate of the ruling on commutation
of a sentence shall be sent to the people’s procuratorate.
Article 31 Where a prisoner sentenced to death penalty with a two-year suspension of execution conforms with the conditions
for commutation to life imprisonment or fixed-term imprisonment as provided by the law during the period of suspension of execution
of his death penalty, the prison holding the prisoner in custody shall make a timely recommendation for commutation upon
expiration of the two-year suspension of execution and report it first to the administrative organ of prisons of the province, autonomous
region or the municipality directly under the Central Government for examination and verification, and then submit the matter to
the higher people’s court for a ruling.
Article 32 Where a prisoner sentenced to life imprisonment or fixed-term imprisonment conforms to the conditions for release
on parole as provided by the law, the prison shall, on the basis of the result of its assessment, make a recommendation for release
on parole to the people’s court. The people’s court shall, within one month from the date of receiving the written recommendation,
examine it and make a ruling thereon; if the case is complicated or the circumstances are special, the said period may be extended
by one month. A duplicate of the ruling on parole shall be sent to the people’s procuratorate.
Article 33 Where a people’s court has made a ruling on parole, the prison shall parole the prisoner as scheduled and issue him a
certificate of parole.
A parolee shall be supervised by a public security organ. Where a parolee during the period of parole commits any acts in violation
of laws, administrative rules and regulations or the regulations of the public security department under the State Council on the
supervision and control of parolees, if such acts do not constitute a new crime, the public security organ may make a written recommendation
for the cancellation of parole to the people’s court. The people’s court shall within one month from the date of receiving
the written recommendation examine it and make a ruling thereon. Where the people’s court has ruled to cancel the parole, the parolee
shall be handed over to the prison for custody by the public security organ.
Article 34 If a prisoner does not satisfy the conditions for commutation or parole as provided by the law, the prisoner shall
not be commuted or paroled on any ground.
If a people’s procuratorate considers that a ruling on commutation or parole made by a people’s court is improper,
it may lodge a protest within the time limit specified by the Criminal Procedure Law. With respect to the case protested by the people’s
procuratorate, the people’s court shall try it anew.
Section 5
Release and Resettlement
Article 35 If a prisoner has completed service of his sentence, the prison shall release him as scheduled and issue him
a certificate of release.
Article 36 After a prisoner is released, the public security organ shall make residence registration for him on the strength
of his certificate of release.
Article 37 With respect to a person released after serving his sentence, the local people’s government shall assist him in
resettling down.
If a person released after serving his sentence has lost his ability to do labour, and has no statutory supporters or basic source
of income, the local people’s government shall offer him relief.
Article 38 A person released after serving his sentence shall enjoy equal rights with other citizens in accordance with
the law.
Chapter IV
Prison Administration
Section 1
Separate Custody and Separate Control
Article 39 A prison shall practise separate custody and separate control with respect to male adult prisoners, female adult
prisoners and juvenile delinquents. In respect of the reform of juvenile delinquents and female prisoners, special consideration
shall be given to their physiological and psychological characteristics.
A prison shall, with respect to prisoners, carry out separate custody and varied control on the basis of their types of crimes and
punishments, terms of sentences and performances of reform.
Article 40 Female prisoners shall be under the direct control of people’s policewomen.
Section 2
Guard
Article 41 The people’s armed police forces shall be in charge of the armed guard of prisons. The specific measures shall be
prescribed by the State Council and the Central Military Commission.
Article 42 If a prison discovers that a prisoner in custody has escaped, the prison shall capture him as soon as possible.
If the prison can not immediately capture the escaped prisoner, it shall notify the public security organ without delay. The public
security organ shall be responsible for the pursuit and capture of the escaped prisoner, and the prison shall closely coordinate
with the public security organ.
Article 43 A prison shall set up guard installations in accordance with the needs of supervision and control. The guard segregation
zone around a prison shall be delimited. No one shall, without permission, enter into such zone.
Article 44 State organs, public organizations, enterprises, institutions and grass-roots organizations in the neighbourhood
of a prison or its operation areas shall assist the prison in its security work.
Section 3
Use of Restraint Implements and Weapons
Article 45 Under any of the following circumstances, a prison may use restraint implements:
(1) if a prisoner commits any acts of escape;
(2) if a prisoner commits any acts of violence;
(3) if a prisoner is on the way of escort; or
(4) if a prisoner commits other dangerous acts against which it is necessary to take precautions.
After the circumstances specified in the preceding paragraph disappeared, restraint implements shall not be used.
Article 46 Personnel on duty of the people’s police or the people’s armed police forces may, under any of the following circumstances,
which can not be checked without the use of weapons, use weapons in accordance with the relevant regulations of the State:
(1) if any prisoner is assembling a crowd to make a riot or rebellion;
(2) if any prisoner is escaping or resisting arrest;
(3) if any prisoner is committing physical assault or destruction with a lethal weapon or other dangerous articles to endanger the
safety of another person’s life or property;
(4) if any prisoner is being seized and rescued by force; or
(5) if any prisoner is seizing a weapon by force.
Personnel who have used weapons shall report the situations in accordance with the relevant regulations of the State.
Section 4
Correspondence and Meeting with Visitors
Article 47 A prisoner may, during the service of his sentence, correspond with others, but their correspondence shall
be examined by the prison. If the prison discovers that the contents of a letter present a hindrance to the reform of the prisoner,
the prison may detain the letter. Letters from a prisoner to the higher authorities of the prison or to the judicial organs shall
be free from examination.
Article 48 A prisoner may, in accordance with the relevant regulations, meet with his relatives and guardians during the service
of his sentence.
Article 49 Goods or money to be received by a prisoner shall be subject to
the approval and examination of the prison.
Section 5
Life and Health Article 50 The living standard of prisoners shall be measured by the quantity of material objects, and it shall
be set by the State.
Article 51 The beddings and clothing of prisoners shall be uniformly rationed and provided by the prison.
Article 52 Considerations shall be given to the special habits and customs of prisoners of minority ethnic groups.
Article 53 Wards of a prison shall be firm, ventilated, possible for the natural light to come in, clean and warm.
Article 54 A prison shall set up medical organs and living and sanitary facilities, and institute regulations on the life and
sanitation of prisoners. Medical and health care of prisoners shall be put into the public health and epidemic prevention programme
of the area in which the prison is located.
Article 55 If a prisoner dies during imprisonment, the prison shall immediately inform the prisoner’s family members, the people’s
procuratorate and the people’s court. If a prisoner dies from a disease, the prison shall make a medical appraisal. If the people’s
procuratorate suspects the prison’s medical appraisal, it may make an appraisal anew on the cause of the death. If the family members
of the prisoner suspect the prison’s medical appraisal, they may raise their suspicion to the people’s procuratorate. If a prisoner
dies an abnormal death, the people’s procuratorate shall immediately conduct examinations and make an appraisal on the cause of the
death.
Section 6
Rewards and Punishments
Article 56 A prison shall establish a routine check-up system for prisoners. The result of such check-ups shall be taken as
the basis for awarding or punishing prisoners.
Article 57 If a prisoner is under one of the following circumstances, the prison may commend or award him, or record a merit
for him:
(1) if a prisoner observes the rules and discipline of the prison, studies hard, takes an active part in labour and shows admission
of guilt and acceptance of the judgement;
(2) if a prisoner has stopped any law-breaking or criminal activities;
(3) if a prisoner has overfulfilled his production task;
(4) if a prisoner has made achievements in saving on raw materials or caring for public property;
(5) if a prisoner has achieved certain success in technical renovation or passing on his production skill;
(6) if a prisoner has made contributions in preventing or removing a disastrous accident; or
(7) if a prisoner has made other contributions to the State and the society.
Where a prisoner sentenced to fixed-term imprisonment is under one of the circumstances specified in the preceding paragraph, if
he has served more than a half of the original term of his sentence, and has always shown good performances during imprisonment and
if his leaving from the prison will no longer endanger the society, the prison may, in light of the circumstances, permit him to
leave the prison for the purpose of visiting his family members or relatives.
Article 58 If a prisoner has committed one of the following acts obstructing the order of supervision and control, the
prison may give him a warning, demerit-recording or solitary confinement:
(1) assembling a crowd to make a stir and to disturb the order of the prison;
(2) abusing or beating the people’s police;
(3) bullying other prisoners;
(4) stealing, gambling, coming to blows, or stirring up fights and causing troubles;
(5) refusing to do labour though he has the ability to work or being slack in work and refusing to mend his ways even after education;
(6) escaping from doing labour by means of self-injury or self-mutilation;
(7) intentionally violating the operation rules in productive labour or intentionally destroying tools of production; or
(8) other acts violating the rules and discipline of the prison.
The term of solitary confinement imposed on a prisoner as stipulated by the preceding paragraph shall be from seven to fifteen days.
If a prisoner has committed an act specified in the first paragraph during the service of his sentence, and if the case constitutes
a crime, he shall be investigated for criminal responsibility according to law.
Section 7
Handling of Crimes Committed by Prisoners
During the Term of Imprisonment
Article 59 If a prisoner intentionally commits a crime during the service of his sentence, he shall be given a heavier punishment
according to law.
Article 60 A criminal case committed by a prisoner in the prison shall be investigated by the prison. On the conclusion of
the investigation, a recommendation for prosecution or a recommendation for exemption from prosecution written by the prison together
with the case file and the evidence shall be handed over to a people’s procuratorate .
Chapter V
Education and Reform of Prisoners
Article 61 In the education and reform of prisoners, the principle of suiting education to different persons and cases and
persuading prisoners through reasoning shall be implemented and the method of combining collective education with individual education
and combining education by the prison with education by the society adopted.
Article 62 A prison shall carry out ideological education among prisoners in legality, morality, current situations, policies
and outlook on their futures.
Article 63 A prison shall, in light of different conditions of prisoners, carry out literacy education, primary education and
junior secondary education. If a prisoner has passed due examinations, the educational department shall issue him the corresponding
certificate of education.
Article 64 A prison shall carry out occupational and technical education among prisoners in accordance with the needs of production
in the prison and of employment after their release. If a prisoner has passed due examination and verification, the labour department
shall issue him the corresponding certificate of technical grade.
Article 65 A prison shall encourage prisoners to study on their own. If a prisoner has passed due examinations, the relevant
department shall issue him the corresponding certificate.
Article 66 The cultural, occupational and technical education of prisoners shall be included into the educational plan
of the area where the prison is located. A prison shall have necessary educational facilities such as class-rooms and reading-rooms.
Article 67 A prison shall organize prisoners to conduct proper sport activities and cultural recreations.
Article 68 State organs, public organizations, units of armed forces, enterprises, institutions, personage of various circles
and family members or relatives of prisoners shall assist prisons in doing a good job in the education and reform of prisoners.
Article 69 An able-bodied prisoner must do labour.
Article 70 A prison shall, in the light of the individual conditions of prisoners, rationally organize them to do labour so
as to correct their bad habits, to cultivate their habits of working, to acquire production skills and to create conditions for
employment after their release.
Article 71 With regard to the working hours of prisoners, a prison shall make reference to the State’s relevant regulations
on working hours; under special circumstances such as seasonal pro
Formal Policy on Development of Automotive Industry
(Effective Date:1994.02.19–Ineffective Date:)
CHAPTER I THE GOAL OF THE POLICY AND KEY DEVELOPMENT PRODUCTS CHAPTER II VERIFICATION AND AUTHORIZATION OF PRODUCTS CHAPTER III STRUCTURE
OF THE INDUSTRY CHAPTER IV TECHNICAL POLICY OF THE INDUSTRY CHAPTER V INVESTMENT AND FINANCITY POLICY CHAPTER VI POLICY FOR USING
FOREIGN FUNDS CHAPTER VII IMPORT CONTROL POLICY CHAPTER VIII EXPORT CONTROL POLICY CHAPTER IV LOCALIZATION POLICY CHAPTER X CONSUMPTION
AND PRICING POLICY CHAPTER XI RELEVANT INDUSTRIAL AND SOCIAL SECURITY POLICY CHAPTER XII INDUSTRIAL POLICIES, PROGRAM AND PROJECT
MANAGEMENT CHAPTER XIII OTHERS
The policy is aiming at building China’s automotive industry (including motorcycle sector) into a pillar industry of the national
economy by changing the current scattered investment, small-scale production and backward products in the industry to raise the development
capacity of the producer as well as upgrade their product quality and technology and equipment level in a bit of achieving a reasonable
streamline industrial structure and economic scale of production in the industry. With implementation of the policy, China’s automotive
industry will lay down a sound foundation by the turn of the century and become a pillar industry of the national economy after two
more Five-Year Plans Periods, that is by 2010, to bring up the rapid development of the relevant industries.
CHAPTER I THE GOAL OF THE POLICY AND KEY DEVELOPMENT PRODUCTS
Article 1 The State is to guide the automobile enterprises to make good use of both domestic and overseas funds and open up and expand domestic
and international market under a diversified and economic scale of production to meet over 90 percent of domestic demand by 2000
with output of sedans accounting for more than a half of the total output and basically meeting the household demand, and motorcycles
basically meeting the domestic needs and exporting a certain amount.
Article 2 The State is to encourage a gathering of investment and an industrial restructuring in the industry so as to avoid the excessive
number of manufacturing factories, scattered investment, disorder in examination and approval of automobile projects, duplicated
import of low-level products and the low speed in construction of State-designated key factories and localization of products. The
goals in stages are: in the Eight Five-Year Plan period, the stresses will be put on prompting the State approved assembly and auto
part manufacturing projects to go into operation as soon as possible and creating conditions for accelerated development of China’s
automotive industry; by the turn of this century, through support by the State, 2-3 automotive manufacturers (or enterprise groups)
will be developed into large producers of a considerable strength, 6-7 automotive manufacturers (or enterprise groups) will be developed
into domestic backbone enterprises of the industry, and 8-10 motorcycle manufacturers will be built into key enterprises to both
meet domestic and international market demands so as to achieve of a new system of decreasing number of producers, mass production
and orderly competition among a small number of large enterprises on the market with the domestic three top sellers of a same kind
of cars (according to the classification of the QC/T59-93 industrial standards) accounting for over 70 percent of the automobile
market, and before 2010, under the guidance of the State, the large and backbone enterprises will be integrated into 3-4 large automobile
as well as 3-4 large motorcycle conglomerates to join in international competition under own efforts of development, production and
marketing:
Article 3 Key development products:
1. Auto parts and components: key parts and components of sedans
2. Passenger automobiles (Class M): economic sedans and special chassis for large and middle-sized passenger coaches
3. Trucks (Class N): special motor vehicles and new engines
4. Motorcycles (Class L): engines
5. Equipment: die sets
6. Basic components: casting and forging blank components
CHAPTER II VERIFICATION AND AUTHORIZATION OF PRODUCTS
Article 4 The State will effect control on the safety, pollution control and energy saving of automobile products (including motorcycles) according
to the law.
Article 5 The State will adopt the international conventional verification of up to standards on automotive products (including motorcycles)
the products without verification of up to standards shall not be allowed to be marketed, imported and used.
Article 6 The automobile enterprises should apply for verification and authorization in accordance with the requirements of “verification and
authorization system for models of automobile products.” The authorities responsible for verification of automobile products shall
issue certificates and labels to the qualified products and publish the catalogue and the public security departments shall handle
registration of new motor vehicles in accordance with the certificates and catalogues mentioned above.
Article 7 Automobile manufacturers are still responsible for all problems in designing and manufacturing after their products are qualified
after the verification.
CHAPTER III STRUCTURE OF THE INDUSTRY
Article 8 The restructure of automotive industry is to promote conglomeration of automobile enterprises, serialization of products and specialization
of production procedures; so as to make effective use of the automobile production bases in the country and bring into full play
the initiatives of the central authorities, localities and enterprises, to avoid low-efficiency and blind competition and optimize
structure of industrial organizations.
Article 9 The State encourages automobile enterprises to develop inter- department and inter-regional enterprise groups through assets merge,
annexation and joint-stock system and accelerate reform of the corporate system based on reform of the property right system of the
State-owned enterprises in a bit to establish a modern enterprises system.
Article 10 The State will select a number of automobile, motorcycle and auto part manufacturing enterprises or enterprise groups which have
independent product and technology development capacity, a certain scale of production and a market share for special support; the
enterprises or enterprise groups which will enjoy such support shall have the conditions and development goals before the end of
1995 as:
1. For an, enterprise which has an annual capacity of producing over 300,000 units of automobiles and selling over 200,000 units and
spends at least three percent of its sales value on technological development, The state will support it to acquire an annual production
capacity of over 600,000 units.
2. For an enterprise which has an annual capacity of producing over 150,000 automobiles and selling over 100,000 units and spends
at least 2.5 percent of its sales value on technological development, the State supports it to develop an annual production capacity
of over 300,000 units.
3. For an enterprise which has an annual capacity of producing over 100,000 units of automobiles and selling over 800,000 units and
spends at least two percent of its sales value on technological development, the State supports it to acquire an annual production
capacity of over 200,000 units.
4. For an enterprise which has an annual capacity of producing over 20,000 units of heavy-duty trucks and selling over 15,000 units
and spends at least two percent of its sales value on technological development, the State supports it to update its products and
acquire a proper scale of mass production.
5. For an enterprise which has an annual capacity of producing over 1,500 units of large or medium-sized motor coaches or the chassis
of motor coaches and selling over 1,000 units and spends at least two percent of its sales value on technological development, the
State supports it to develop a certain scale of mass production.
6. For an enterprise whose products of key parts or components of sedans accounts for at least 25 percent of the domestic market or
belong to niche or urgently needed products in the country (the catalogue is not determined yet), the State supports it to develop
toward the goal of economic scale of production.
. For a motorcycle enterprise whose products account for over 10 percent of the sales volume of the domestic market, the State supports
it to further expand output and increase varieties:
Article 11 The production capacity and the sales volume of an enterprise or enterprise group means the amount of the serial products, which
include that of the parent company and its solely owned subsidiaries, holding companies and its subsidiary Chinese-foreign joint
ventures.
Article 12 For an enterprise which meets the requirements listed in Article 10 of the present policy, it will enjoy the following treatments
after approval by the State when developing the products listed in Article 3 of this policy from 1996 through construction, renovation
and expansion of facilities:
1. Zero rate of orientation regulation tax for its investment in fixed assets;
2. Priority for it to issue and list its shares and debentures;
3. Active support in bank loans;
4. Priority for its use of overseas fund in the foreign funds use plan;
5. Policy-based loans will be arranged for projects of economic cars, auto parts and components, die sets and casting and forging
mills; and
6. The financial company within an enterprise group may expand its business scale after approval of relevant State departments.
Article 13 Automobile and engine projects (including Chinese-foreign joint ventures and cooperative firms) newly approved by the State shall
be built, in principle, according to the following scales:
1. The sedan project with engine displacement capacity up to 1600 cc shall have an annual production capacity of 150,000 units at
least;
2. The light-duty truck project shall have an annual production capacity of 100,000 units at least;
3. The light-duty bus project shall have an annual production capacity of 50,000 units at least;
4. The heavy-duty truck project shall have an annual production capacity of 10,000 units at least;
5. The motorcycle project with engine displacement up to 1500h cc shall have an annual production capacity of 150,000 units at least;
6. The auto gasoline engine project with displacement up to 2500 cc shall have an annual production capacity of 150,000 units at least;
and
7. The auto diesel engine project with displacement up to 3500 cc shall have an annual production capacity of 100,000 units at least.
CHAPTER IV TECHNICAL POLICY OF THE INDUSTRY
Article 14 The State encourages and supports automobile enterprises to set up their own product research and development institutes and build
up independent product development capacity through assemiliation of foreign technology. The State supports joint development of
key research projects among enterprise groups with research and development funds.
Article 15 The State encourages dissemination and use of electronic technology, new technology and new materials in auto production, production
of energy-saving and low-pollution automobiles and research and development of new fuel and new power driven automobiles.
Article 16 Construction of the new automobile enterprises must ensure the advanced level of their products; upgrading of the existing products
and the self-developed products must reach the advanced international level in the early 1990s and the products manufactured with
imported technology must reach the contemporary advanced international level in the 1990s.
Article 17 The passenger motor coaches and trucks not up to 3.5 tonnes shall use 90 gasoline as the fuel step by step before 2000; the passenger
motor coaches not up to 2 tonnes shall use lead-free gasoline; and the passenger motor coaches and trucks exceeding 5 tonnes shall
mainly use diesel as the fuel after 2000.
Article 18 The State supports establishment of national research, experiment and testing institutes of automobiles, motorcycles and key components
of undertake formulation of standards, product authentication and inspection of import and export commodities.
Article 19 The State encourages automobile enterprise to establish Chinese-foreign joint venture or cooperative technological research and development
companies.
Article 20 The State encourages automobile enterprises to adopt modern electronic technology and flexible processing equipment, on-line automatic
testing equipment, purposely select automation equipment to raise the per capita equipment volume and equipment technology level.
CHAPTER V INVESTMENT AND FINANCITY POLICY
Article 21 The State encourages automobile enterprises to pool up development fund through multiple channels.
Article 22 The State guides the enterprises or enterprise groups possessing technological and management advantages to coop with localities
which have a good investment environment and amply supply of fund to develop key products of automotive industry in accordance with
the overall State plan.
Article 23 Projects of key automobile products, may raise funds by issuing stocks under approval of the State Council.
Article 24 The State will formulate the corresponding policy to encourage inter-regional or inter-department flow of investment and protect
legal rights and interests of investors.
Article 25 When conditions permit, non-banking financial institutions for automotive industry may be established under approval of the relevant
State departments.
Article 26 Under approval of the State Council, automobile enterprises may apply for pilot capitalization of the State debts.
CHAPTER VI POLICY FOR USING FOREIGN FUNDS
Article 27 The State encourages automobile enterprises to develop China’s automotive industry with foreign funds.
Article 28 When using foreign funds, the automobile enterprises shall select the overseas firms with the following conditions as their joint
equity or coop venture partners:
1. holding their own product patents and trademarks;
2. owning product development technology and manufacturing technology and their product and technological indices complying with the
existing laws and statutes of their residential country or region;
3. possessing independent international marketing channels (or networks); and
4. maintaining sufficient financing capacity.
Article 29 An overseas firm shall not establish more than two joint equity or cooperative ventures in China to assemble a same model of motor
vehicles.
Article 30 The State supports automobile enterprises with advanced product technology and manufacturing technology to develop themselves through
a direct use of overseas financial capital or an indirect use of foreign funds.
Article 31 A Chinese-foreign joint equity or cooperative automobile enterprise must meet the following conditions before it can be incorporated:
1. An internal technological research and development institute has been established in the enterprise with capacity to develop new
generation products.
2. The products therein reach the advanced international level of the 1990;
3. The joint venture established shall have the capacity to balance its own foreign exchange with export of its own products as the
main approach; and
4. When the joint venture wants to buy parts and components, the same parts and components made in China should be given priority.
Article 32 In a Sino-foreign joint equity or cooperative venture which makes whole automobiles, motorcycles or engines, the share of the Chinese
side shall not be lower than 50 percent.
Article 33 Stop examination and approval of the projects which engaged in renewal or scraping of imported old automobiles or motorcycles in
any form. The approved contracts shall not be extended and strict supervision measures shall be established to ensure export of all
the renewal automobiles and motorcycles and the parts and components scraped down.
CHAPTER VII IMPORT CONTROL POLICY
Article 34 Whenever China’s automotive industry has not acquired the capacity for international competition, the State adopts necessary control
measures on import of automobiles, motorcycles or key unit assemblages.
Article 35 In accordance with the development of China’s automotive industry, the tariffs on import of automobiles and motorcycles shall be
lowered timely and the tariff structure of independently listed products shall be readjusted.
Article 36 The State has designated Dalian Xingang Port, Tianjin Xingang Port, Shanghai Port and Huangpu Port and Manzhouli and Shenzhen (Huanggang)
land ports as the ports for import of complete automobiles, which may set up special terminals for import of complete automobiles
or bonded warehouses of import automobiles. Other ports shall not set up special terminals for import of complete automobiles or
bonded warehouses of import automobiles.
Article 37 All import automobiles and motorcycles, except those stipulated by the diplomatic and governmental bilateral agreements and Article
44 of the present policy, shall pay tax according to the regulations.
Article 38 According to the market demand, the amount and variety of automobiles imported each year must be in great conformance with the State
automobile production plan and the import must be under approval of the State Council. The State bans import of old automobiles and
old motorcycles through trade or donation.
CHAPTER VIII EXPORT CONTROL POLICY
Article 39 The State encourages automobile enterprises to expand export and participate in international competition. The automobile enterprises
should take expanding export and participating in international competition as their development goal.
Article 40 The State encourages automobile enterprises, when conditions permit, to set up joint equity or coop venture or solely owned manufacturing
enterprises and after-sale service centres abroad. Article 41 When enterprises satisfy the following conditions, the State encourages
them to expand export and give them priority in arrangement of loans and use of foreign funds:
1. An automobile enterprise reaches the following indices in terms of the proportion of export amount of complete automobiles among
its sales volume:
Passenger automobiles: M1 three percent
Trucks: N1 five percent
Motorcycles: L ten percent
2. The export of an automobile (motorcycle) parts and components manufacture reaches 10 percent of its annual sales value.
Article 42 After introduction of a manufacturing technology from overseas, an automobile enterprise must start its effort to localize the products
therewith. The State takes the progress of localization of the import technology products as one of the conditions to support the
enterprise to develop the second model.
Article 43 An automobile enterprise shall not engage in assembly through import of semi-knock-downs (SKD) or completely knock-downs (CKD).
Article 44 The State formulates preferential import tariff rates in accordance with the localization rate of automobile products. Those firms
that reach the following localization standards may enjoy the different preferential tariff rates.
1. The localization rate reaches 40 percent, 60 percent or 80 percent in the products manufactured with the import technology for
complete automobiles in Class M;
2. The localization rate reaches 50 percent, 70 percent or 90 percent in the products manufactured with the import technology for
complete automobiles and motorcycles in Classes N and L; and
3. The localization rate reaches 50 percent, 70 percent or 90 percent in the products manufactured with import technology for unit
assemblages or key parts and components.
CHAPTER X CONSUMPTION AND PRICING POLICY
Article 45 The State encourages the use of energy saving and low- pollution automobiles.
Article 46 It is necessary to change gradually the consumption pattern of the administrative departments, organizations, institutions and State-owned
enterprises being the main purchasers and users of sedans.
Article 47 The State encourages individuals to purchase automobiles and will formulate specific policies in accordance with the development
of the automotive industry and the change of the market consumption pattern.
Article 48 Neither locality nor department shall interfere, with administration and economic means, in individuals, purchase and use of automobiles
from legal source. It is necessary to adopt active measures to provide support and guarantee in facilities and system such as license
management, parking lots, filling stations and driver training schools.
Article 49 The automobile enterprises shall determine the price of their civil automobiles independently in accordance with the market demand.
But, the State-guided pricing will be adopted on sedans for the time being.
Article 50 The automobile enterprises are encouraged to establish their own marketing systems and after-sale service systems in accordance with
the international conventional principles and models.
CHAPTER XI RELEVANT INDUSTRIAL AND SOCIAL SECURITY POLICY
Article 51 In accordance with the demand of the 2000 development program of the automotive industry, the metallurgical, petrochemical, machine-
building, electronic, light industrial, textile and building materials departments shall work out overall plans in full supply of
metal materials, machinery and equipment, auto electronics, rubber, engineering plastics, textiles and glass to support development
of the automotive industry.
Article 52 Railways, transport, posts and telecommunications, power and environment protection departments shall adopt effective measures to
keep close ties with automobile enterprises in a bit to provide them with auxiliary services to support development of the pillar
automotive industry.
Article 53 Provision of sufficient parking lots must be considered in plans for construction and redevelopment of residential quarters, commercial
blocks, hotels, office buildings, public facilities and cultural and recreational places.
Article 54 It is necessary to plan the layout of filling stations and build them gradually in accordance with the local growth trend of automobiles;
the renovation and expansion of urban roads should be taken as an important task in the urban planning and implemented timely.
Article 55 From 1995 school year, primary schools shall list education in traffic knowledge in their teaching programs and enhance the traffic
sense.
CHAPTER XII INDUSTRIAL POLICIES, PROGRAM AND PROJECT MANAGEMENT
Article 56 The State guides development of the automotive industry through the automotive industry policy and program. All the localities and
departments should support development of the automotive industry in accordance with the automotive industry policy and program promulgated
by the State Council.
Article 57 The automotive industry policy and development program are formulated and revised by the State Planning Commission, the State Economic
and Trade Commission, the Ministry of Machine-Building Industry and other relevant departments and implemented after approval of
the State Council.
Article 58 The firms undertaking construction, expansion, renovation of, and Sino foreign joint equity or cooperative ventures and import technology
projects of sedans, light-duty automobiles and engines must be the State supported enterprises meeting the requirements of Article
10 of the present policy. Any project in this sector, either under or above the limitations, shall be examined and approved by the
State before it is established. Other complete automobile and engine projects shall be examined and approved in accordance with the
procedures stipulated by the relevant State provisions on the examination and approval limitations. All the projects examined and
approved by localities and departments shall be reported to the State Planning Commission, the State Economic and Trade Commission
and the Ministry of Machine-Building Industry for record. Before the end of 1995, the State will not approve new sedan and light-duty
automobile assembly projects.
Article 59 The auto part projects complying with the State industrial policies and program, when they can ascertain sales market and construction
funds independently and balance production conditions by themselves, may be examined and approved by localities and departments and
reported to the State Planning Commission, the State Economic and Trade Commission and the Ministry of Machine-Building Industry
for record.
Article 60 The automotive industry management department, following the requirements of the present policy shall cooperate with relevant departments
to formulate the relevant technical regulations, management decrees and system governing safety of automobile products, pollution
control and energy saving so as to promote implementation of these industrial policies.
Article 61 The context of the present policy shall come into effect on the day of its promulgation and the right of its interpretation resides
in the State Planning Commission.
Notes: 1. According to the State motor vehicle classification standards [QC/T59-93] promulgated by the State Bureau of Technological
Supervision, Class M means passenger automobiles, Class N means trucks and Class L means motorcycles.
2. “Localization” here means the making of products within the People’s Republic of China.
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