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TRADE UNION LAW

Category  SOCIAL ORGANIZATION Organ of Promulgation  The National People’s Congress Status of Effect  In Force
Date of Promulgation  1992-04-03 Effective Date  1992-04-03  


Trade Union Law of the People’s Republic of China

Contents
Chapter I  General Provisions
Chapter II  Trade Union Organizations
Chapter III  Rights and Obligations of Trade Unions
Chapter IV  Basic-level Trade Union Organizations
Chapter V  Trade Union Fund and Property
Chapter VI  Supplementary Provisions

(Adopted at the Fifth Session of the Seventh National People’s Congress

on April 3, 1992, promulgated by Order No.57 of the President of the People’s
Republic of China on April 3, 1992 and effective as of the same date)
Contents

    Chapter I    General Provisions

    Chapter II   Trade Union Organizations

    Chapter III  Rights and Obligations of Trade Unions

    Chapter IV   Basic-level Trade Union Organizations

    Chapter V    Trade Union Fund and Property

    Chapter VI   Supplementary Provisions
Chapter I  General Provisions

    Article 1  This Law is formulated in accordance with the Constitution of
the People’s Republic of China with a view to ensuring the status of
trade unions in the political, economic and social life of the State,
defining their rights and obligations and bringing into play their role in
the cause of socialist modernization.

    Article 2  Trade unions are mass organizations of the working class
formed by the workers and staff members on a voluntary basis.

    Article 3  All manual or mental workers in enterprises, institutions
or State organs within the territory of China who rely on wages or salaries
as their main source of income, irrespective of their nationality, race, sex,
occupation, religious belief or educational background, have the right to
organize and join trade unions according to law.

    Article 4  Trade unions shall observe and safeguard the Constitution,
take it as the fundamental criterion for their activities and conduct
their work in an independent and autonomous way in accordance with the
Constitution of Trade Unions of the People’s Republic of China.

    The National Congress of Trade Unions formulates or amends the
Constitution of Trade Unions of the People’s Republic of China which
shall not contravene the Constitution of the People’s Republic of China
and Other laws.

    The State protects the legitimate rights and interests of trade unions
from violation.

    Article 5  Trade Unions shall organize and educate the workers and
staff members to exercise their democratic rights in accordance with the
provisions of the Constitution of the People’s Republic of China and other
laws, to give play to their role as masters of the country and to participate
in various ways and forms in the administration of State affairs, management
of economic and cultural undertakings and handling of social affairs; trade
unions shall assist the people’s governments in their work and safeguard
the socialist State power of the people’s democratic dictatorship led
by the working class and based on the alliance of workers and peasants.

    Article 6  While protecting the overall interests of the entire Chinese
people, trade unions shall safeguard the legitimate rights and interests of
the workers and staff members.

    Trade unions must maintain close ties with the workers and staff
members, solicit and voice their opinions and demands, show concern for
their life, help them solve difficulties and serve them wholeheartedly.

    Article 7  Trade unions in enterprises and institutions owned by the
whole people or by the collective shall organize the workers and staff
members to participate in the democratic management of and democratic
supervision over their own work units according to provisions of the law.

    Article 8  Trade unions shall mobilize and educate the workers and
staff members to approach their work with the attitude of masters of the
country, to safeguard the property of the State and the enterprise and to
observe labour discipline; they shall call on and organize the workers and
staff members to strive to fulfil their production targets and work.

    Trade unions shall organize the workers and staff members in launching
socialist labour emulation drive, encouraging mass rationalization proposals,
and promoting technological innovations and technical cooperation, so as
to raise labour productivity and economic returns and develop the social
productive forces.

    Article 9  Trade unions shall educate the workers and staff members
in patriotism, collectivism and socialism, in democracy, legal system and
labour discipline, and in science, culture and technology and raise their
qualities in all aspects: ideological and ethical as well as scientific,
cultural, technical and professional, so as to turn them into well-educated
and self-disciplined labourers with lofty ideals and moral integrity.

    Article 10  The All-China Federation of Trade Unions shall strengthen
friendly and cooperative relations with trade union organizations of
other countries on the basis of the principle of independence, equality,
mutual respect and non-interference in each other’s internal affairs.
Chapter II  Trade Union Organizations

    Article 11  Trade union organizations at various levels shall be
established according to the principle of democratic centralism.

    Trade union committees at various levels shall be democratically
elected at members’ assemblies or members’ congresses.

    Trade union committees at various levels shall be responsible, and
report their work, to the members’ assemblies or members, congresses at
their respective levels and be subjected to their supervision as well.

    Trade union members, assemblies or congresses have the right to remove
or recall the representatives or members of trade union committees they
elected.

    A trade union organization at a higher level shall exercise leadership
over a trade union organization at a lower level.

    Article 12  A basic-level trade union committee may be set up in an
enterprise, an institution or a State organ with a membership of twenty-five
or more. Where the membership is less than twenty-five, an organizer may
be elected to organize the members in various activities.

    Trade union federations shall be established at or above the county level.

    Industrial trade unions may be formed, when needed, at national or
local levels for a single industry or several industries of a similar nature.

    The All-China Federation of Trade Unions shall be established as the
unified national organization.

    Article 13  The establishment of basic-level trade union organizations,
local trade union federations, and national or local industrial trade union
organizations shall be submitted to a higher-level trade union organization
for approval.

    A basic-level trade union organization shall be dissolved accordingly
when the enterprise or institution or State organ to which it belongs
terminates or is dissolved.

    Article 14  The All-China Federation of Trade Unions. a local trade
union federation or an industrial trade union enjoys the status of a
legal person in the capacity of a social organization.

    A basic-level trade union organization, which has acquired the
qualifications of a legal person as prescribed in the General Principles of
the Civil Law, shall be granted according to law the status of a legal
person as a social organization.

    Article 15  A trade union chairman or vice chairman shall not be
arbitrarily transferred to another unit before the expiration of his tenure of
office. When such a transfer is prompted by work necessity, approval shall
be sought from the trade union committee at the corresponding level and
the trade union at a higher level.
Chapter III  Rights and Obligations of Trade Unions

    Article 16  If an enterprise or institution owned by the whole people
or by the collective acts in contravention to the system of the congress of
workers and staff members or other systems of democratic management,
the trade union has the right to advance its opinions so as to ensure the
workers and staff members the exercise of their right in democratic
management as prescribed by law.

    Trade unions may send representatives to investigate into any infringement
of the lawful rights and interests of the workers and staff members by
enterprises, institutions or State organs to which their affiliated trade
union organizations belong, and the relevant units shall render them
necessary assistance.

    Article 17  If an enterprise or institution violates labour laws or
regulations and encroaches upon the lawful rights and interests of the
workers and staff members, the trade union has the right to demand that the
management or the relevant department seriously handle the case.

    If an enterprise or institution violates regulations of the State
concerning labour (work) hours, the trade union has the right to demand a
rectification by the management of the enterprise or institution.

    If an enterprise or institution violates laws or regulations concerning
the protection of the special rights and interests of female workers and staff
members, the trade union and its female workers’ organization have the
right to demand a rectification by the management.

    Article 18  Trade unions shall help and guide the workers and staff
members to sign labour contracts with the management of enterprises or
institutions.

    Trade unions may, on behalf of the workers and staff members, sign
collective contracts with the management of enterprises or institutions. The
draft collective contracts shall be submitted to the congresses of workers
and staff members or all the workers and staff members for deliberation
and approval.

    Article 19  If an enterprise dismisses or punishes a worker or staff
member in a manner that the trade union considers improper, the trade
union has the right to advance its opinion.

    An enterprise owned by the whole people or by the collective shall,
when deciding to expel a worker or staff member or remove his name from
the rolls, inform in advance the trade union of the reason for its decision;
and, if the management of an enterprise violates laws, regulations or relevant
contracts, the trade union has the right to demand a reconsideration of the
decision.

    If the worker or staff member in question does not accept the decision
of the enterprise management to dismiss or expel him or remove his name
from the rolls, he may request that his case be dealt with according to
regulations of the State on handling labour disputes.

    Article 20  Trade unions shall participate in the conciliation of labour
disputes in enterprises. Local labour dispute arbitration bodies shall
include representatives of trade unions at the corresponding levels.

    Article 21  Trade unions may advance their opinions for the conciliation
and settlement of labour disputes arising out of infringement of the rights
and interests of the workers and staff members by enterprises. Trade unions
shall give support and assistance where the workers and staff members bring
a case before a people’s court.

    Article 22  Trade union federations at or above the county level may
provide legal advice for their affiliated trade unions and the workers and
Staff members.

    Article 23  Trade unions have the right to advance their opinions on
the working conditions and safety and health facilities in newly-built or
extended enterprises and in technological transformation projects, in
accordance with regulations of the State. The enterprises or the departments
in charge shall treat these opinions seriously.

    Article 24  Where the management of an enterprise gives a command
contrary to the established rules and compels workers to operate under
unsafe conditions, or, major hidden dangers and occupational hazards are
found in the course of production, the trade union has the right to put
forward proposals for a solution; where the very life of the workers and
staff members is in danger, the trade union has the right to make a
proposal to the management that a withdrawal of the workers and staff
members from the dangerous site be organized, and the management must
make a decision without delay.

    Trade unions have the right to participate in investigations into
accidents causing death or bodily injury and into other matters seriously
endangering the health of the workers and staff members, and to make
proposals on solutions to the departments concerned, and they also have the
right to demand that the directly responsible administrative leaders and
other persons who are held responsible be investigated for their
responsibilities.

    Article 25  In case of work-stoppage or slow-down strike in an
enterprise, the trade union shall, together with the management or the
parties concerned, strive for a settlement through consultation of any
demands, made by the workers and staff members, that are rational and can be
met, so as to restore the normal order of production as soon as possible.

    Article 26  Trade unions shall assist the management of enterprises,
institutions and State organs in providing adequate collective welfare
services for the workers and staff members and in properly dealing with
matters concerning wages, labour protection and labour insurance.

    Article 27  Trade unions shall join the management in organizing
the workers and staff members in sparetime cultural and technical studies
and vocational training so as to improve their educational level and
professional qualifications, and also in organizing them in recreational and
sports activities.

    Article 28  When the people’s governments at or above the county
level work out plans for national economic and social development, and
when the people’s governments of cities where the people’s governments
of provinces or autonomous regions are located as well as the people’s
governments at or above the level of big cities, as approved by the State
Council, study and draft laws, regulations or rules, opinions of the trade
unions at the corresponding levels on major problems concerning the
interests of the workers and staff members shall be listened to.

    When the people’s governments and their relevant departments at or
above the county level study and formulate important policies and
measures on wages, prices, safety in production, as well as labour
protection and labour insurance, the trade unions at the corresponding
levels shall be invited to take part in the study and their opinions shall be
listened to.

    Article 29  The people’s governments at or above the county level
may through appropriate ways inform trade unions at the corresponding
levels of their important work programmes and administrative measures
related to trade union work, study and settle the problems as reflected in
the opinions and aspirations of the masses of workers and staff members
conveyed by the trade unions.
Chapter IV  Basic-level Trade Union Organizations

    Article 30  In an enterprise owned by the whole people, the congress
of workers and statf members shall, as the basic form of democratic
management of the enterprise and the organ by which the workers and
staff members exercise their right to democratic management, discharge its
functions and powers in accordance with the stipulations of the Law of the
People’s Republic of China on Industrial Enterprises Owned by the Whole
People.

    The trade union committee of an enterprise owned by the whole people
is the working body of the congress of workers and staff members and
shall take care of the day-to-day work of the congress, check and
supervise the implementation of its decisions.

    Article 31  The trade union committee of a collectively-owned
enterprise shall support and organize the participation of the workers and
staff members in democratic management and democratic supervision, and
defend their rights in electing, removing managerial personnel and deciding
on major problems concerning operation and management.

    Article 32  The trade union in an enterprise owned by the whole
people shall be represented in the administrative committee of the enterprise.

    The trade union in an enterprise owned by the whole people shall have
its representative(s) attending any meetings held by the enterprise to
discuss matters on wages, welfare, safety in production, labour protection and
labour insurance and other problems related to the vital interests of the
workers and staff members.

    The director (manager) of an enterprise owned by the whole people
shall support the trade union committee in carrying out its activities
according to law, and the trade union committee shall support the director
(manager) in exercising his functions and powers in accordance with the law.

    Article 33  Chinese-foreign equity joint ventures and Chinese-foreign
contractual joint ventures, while making studies and decisions on issues
of wages, welfare, safety in production, labour protection and labour
insurance which affect the vital interests of the workers and staff members,
shall listen to opinions of the trade unions.

    The trade unions in foreign-capital enterprises may advance suggestions
on problems affecting the workers’ wages, welfare, safety in production,
labour protection and labour insurance, and settle such problems with the
management through consultation.

    Article 34  Basic-level trade union committees shall hold meetings or
organize activities for the workers and staff members outside production-
or work-hours; they shall seek prior consent from the management, where such
meetings or activities are to take up production- or work-hours.

    Trade union committee members, who are not released from production
or regular work, in enterprises owned by the whole people or by the
collective shall receive their normal wages if their meetings or activities
organized by the trade unions take up production- or work-hours, and their
other treatments shall remain unaffected.

    Article 35  Full-time functionaries of trade union committees in
enterprises and institutions owned by the whole people or by the collective
and those in State organs shall have their wages, bonuses and subsidies
paid by the management of their units. They shall enjoy the same treatment
as other workers and staff members of their units as to labour insurance
and other welfare.
Chapter V  Trade Union Fund and Property

    Article 36  The sources of trade union funds are as follows:

    (1) membership dues paid by union members;

    (2) a contribution, equivalent to two percent of the workers’ monthly
payroll, paid by the enterprise or institution owned by the whole people or
by the collective or paid by the State organ where the trade union is
established;

    (3) incomes derived from enterprises and undertakings run by trade unions;

    (4) subsidies provided by the people’s governments; and

    (5) other incomes.

    Chinese-foreign equity joint ventures, Chinese-foreign contractual
joint ventures and foreign-capital enterprises where trade unions have
been set up shall make contributions to the funds of the trade unions in
accordance with regulations of the State.

    Trade union funds shall mainly be used to finance education and other
activities for the workers and staff members at the grassroots level
sponsored by trade unions. Measures for the use of trade union funds shall be
drawn up by the All-China Federation of Trade Unions.

    Article 37  Trade unions shall establish budgets, final accounts and
auditing and supervisory systems based on the principle of financial
autonomy.

    For trade unions at various levels, auditing commissions shall be set up.

    Trade unions at various levels shall subject their incomes and
expenditures to the examination by the auditing commissions at the
corresponding levels, report them regularly to the members’ assemblies or
congresses and receive their supervision. The trade union members’ assemblies
or congresses have the right to express their opinions on the use of funds.

    Article 38  The people’s governments at various levels and the
enterprises, institutions and State organs shall make available such necessary
material means as facilities and places for trade unions to function and
develop their activities.

    Article 39  Trade unions’ property, funds and immovable property
allocated by the State may not be encroached upon, diverted to other uses
or arbitrarily disposed of, by any organization or individual.

    Article 40  Enterprises and institutions run by trade unions to serve
the workers and staff members may not have their affiliation changed
arbitrarily.

    Article 41  Retired trade union functionaries at or above the county
level shall enjoy the same treatment as retired functionaries of State organs.
Chapter VI  Supplementary Provisions

    Article 42  This Law shall come into force as of the date of promulgation.
The Trade Union Law of the People’s Republic of China, promulgated by the
Central People’s Government on June 29, 1950, shall be nullified on the
same date.

                                                                







OFFICIAL REPLY OF THE GENERAL ADMINISTRATION OF CUSTOMS AND THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION CONCERNING THE RECOGNITION OF CAPITAL CONTRIBUTION OF ENTERPRISES INVESTED BY OVERSEA CHINESE AND COMPATRIOTS FROM HONG KONG, MACAO AND TAIWAN

The General Administration of Customs, the Ministry of Foreign Trade and Economic Cooperation

Official Reply of the General Administration of Customs and the Ministry of Foreign Trade and Economic Cooperation Concerning the
Recognition of Capital Contribution of Enterprises Invested by Oversea Chinese and Compatriots from Hong Kong, Macao and Taiwan

ShuJianYi [1991] No.786

July 19, 1991

Guangzhou Customs:

Your telegraph dated June 13 has been received. We have studied the request of Zhaoqing Hengjin Electronic Limited Company for preferential
treatments stated in the Decree No.64 of the State Council and conclude that, in accordance with Article 4 of the Law on Chinese-foreign
Equity Joint Ventures, the proportion of foreign investment in a Chinese-foreign equity joint venture is generally not lower than
25%. According to this principle, overseas Chinese investors and compatriot investors from Hong Kong, Macao and Taiwan should contribute
no less than 25% of the registered capital of the joint ventures they invest in so as to classify these joint ventures as those invested
by overseas Chinese and compatriots from Hong Kong, Macao and Taiwan. Therefore, the request of Zhaoqing Hengjin Electronic Limited
Company should be handled in line with the related provisions of the country on enterprises with foreign investment.

That is hereby the reply.



 
The General Administration of Customs, the Ministry of Foreign Trade and Economic Cooperation
1991-07-19

 







INTERIM PROVISIONS ON FIXED ASSETS INVESTMENT DIRECTION REGULATING TAX

Category  TAXATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1991-04-16 Effective Date  1991-01-01  


Interim Provisions of the People’s Republic of China on Fixed Assets Investment Direction Regulating Tax


Appendix I  FAID Regulating Tax Schedule of Taxable Items and Tax Rates
APPENDIX II  Schedule of Development Projects Banned by the State

(Promulgated by Decree No. 82 of the State Council of the People’s

Republic of China on April 16, 1991)

    Article 1  With a view to carrying out state industrial policies,
controlling investment scope, guiding investment direction, regulating
investment structure, strengthening key constructions, and promoting
sustained, stable and coordinated development of national economy, the present
Provisions are formulated.

    Article 2  All units and individuals who are engaged in investment in
fixed assets within the territory of the People’s Republic of China are
obligated taxpayers (hereinafter referred to as taxpayers) of fixed assets
investment direction regulating tax (hereinafter abbreviated to FAID
regulating tax) and shall pay FAID regulating tax in accordance with
stipulations of the present Provisions.

    Article 3  Different tax rates shall be applied to FAID regulating tax
according to state industrial policy and economic scale of project. Fixed
assets investment projects shall have applicable tax rates determined in the
light of scale of project unit. Taxable items and tax rates shall be applied
according to the FAID Regulating Tax Schedule of Taxable Items and Tax Rates
attached to the present Provisions.

    Fixed assets investment (except investment in replacements and technical
innovations) that are not listed in the Schedule of Taxable Items and Tax
Rates shall be subject to a tax rate of 15%.

    Investment in replacements and technical innovations other than those
listed within the category of 0% according to the Schedule of Taxable Items
and Tax Rates shall be subject to a tax rate of 10%.

    FAID Regulating Tax Schedule of Taxable Items and Tax Rates may be revised
by the State Council when it so decides.

    Article 4  Calculation of payable FAID regulating tax shall be based on
actually realized amount of investment in a fixed assets investment project
and in case of replacements and technical innovation projects the
calculation shall be based on actually realized amount of investment in
construction project.

    Article 5  FAID regulating tax upon a fixed assets investment project
shall be paid in a year’s advance based on annual investment budget for
each project unit. At the end of the year, tax accounts shall be squared on
the basis of actually realized investment amount with excessive payment of
tax refunded or tax due repaid. Upon completion of the whole project, the
tax accounts shall be cleared on the basis of actually realized total
investment amount with excessive payment of tax refunded or tax due repaid.

    Any taxpayer who really has difficulty in fully paying in advance tax upon
the whole year’s budgeted investment may, subject to examination and
approval of the tax authority, pay by installments the total amount by the end
of September of the very year.

    Article 6  When a taxpayer applies for approval of a fixed assets
investment project the taxpayer shall make sure that payment for FAID
regulating tax has been effectively arranged for. FAID regulating tax shall
be included in total investment budget and covered by economic and financial
assessment of the project. But tax payment may not be taken into account
when payment for design, construction or other fees are charged.

    Article 7  FAID regulating tax may not be reduced or exempted except
otherwise prescribed by the State Council.

    Article 8  FAID regulating tax shall be collected and administered by the
tax authority. Taxpayers shall go through procedures of tax
registration, tax authentication and tax declaration with the tax bureau of
the locality where the project is sited.

    Article 9  Collection of FAID regulating tax shall be brought under a
source control mechanism that combines planned unified management with
an investment license system as is detailed in the following:

    (1) Planning commissions or planning and economic commissions of
different provinces, autonomous regions, municipalities under the direct
leadership of the Central Government and of separate-planning municipalities
shall get together written project programmes on fixed assets investments
in respective locality and transmit to lower levels taxable items, tax rates
and tax amount to be applied to different fixed assets investment projects
subject to examination and decision of the tax authority at the same level.

    (2) Taxpayers shall go to the tax bureau of the locality where the
project is sited to go through procedures of tax registration and declaration
etc. before they begin injecting annual investment. Banks and other financial
institutions shall transfer the amount of tax upon presentation of the special
tax payment notice paper issued by the tax authority.

    (3) Planning commissions or planning and economic commissions shall issue
the investment permit upon presentation of the receipt of tax payment. Banks
and other financial institutions shall proceed with allotment of funds or
loans to fixed assets investment projects upon presentation of the investment
permit.

    Article 10  Payment for FAID regulating tax shall be withheld and
transferred by the Chinese People’s Construction Bank, the China Industrial
and Commercial Bank, the China Agricultural Bank, the Bank of China, the
Transportation Bank and other financial institutions or relevant units.

    Article 11  For fixed assets investment projects beyond planning, the
taxpayers may, in addition to payment of tax at applicable tax rates, be
imposed on by the tax authority a fine as much as less than five times amount
of tax that should be paid. But fixed assets investments beyond planning that
are listed within the category of 0% tax rate shall be handled by relevant
planning departments according to correspondent stipulations.

    Investments in capital construction conducted under the pretext of
replacements and renovations projects shall be imposed upon double amount of
tax payable according to taxable items and tax rates applied to capital
construction investments. But capital construction investments that are listed
within the category of 0% tax rate shall be handled by relevant planning
departments according to corresponding stipulations.

    Article 12  In case a taxpayer fails to pay tax according to the present
Provisions, planning commissions or planning and economic commissions shall
cancel establishment of the project if it is at preparatory stage, or shall
withhold arrangement for construction of the project if it has just been
ready for construction, or shall cancel the annual investment budget if it
is at the stage of continued construction and, additionally, shall revoke
the investment permit. Banks and other financial institutions shall
withhold from loaning or allotting funds to such project.

    In case planning departments or banks violate the present Provisions to
the consequence of tax evasion, relevant authorities at higher level shall
investigate into responsibilities of concerned offenders.

    Article 13  Other matters over management of collection of FAID
regulating tax shall be handled according to stipulations of the Interim
Provisions of the People’s Republic of China on Management of Tax Collection.

    Article 14  The present Provisions are not applicable to investments in
fixed assets by Sino-foreign equity joint ventures, Sino-foreign
cooperative enterprises or solely foreign funded enterprises.

    The present Provisions are not applicable to investments in development
items banned by the state. Such investments cases shall be separately
handled by planning departments according to corresponding state laws,
regulations, guidelines and policies. Schedule of State Banned Development
Items may be revised by the State Council when it so decides.

    Article 15  Preferential treatment with FAID regulating tax to be applied
to regions of minor nationalities shall be provided for separately.

    Procedures on collection, reduction and exemption of FAID regulating tax
upon fixed assets investments with less than 50,000 yuan that, according to
state regulations, fall beyond planned management, shall be decided by
people’s governments of provinces, autonomous regions and municipalities
under the direct leadership of the Central Government.

    Article 16  Fixed assets investment permits shall be issued and managed
in a unified manner by planning departments. Rules on permit management
shall be formulated by the State Planning Commission.

    Article 17  Interpretation of the present Provision shall be in the
responsibility of the State Tax Bureau. Detailed rules for implementation
may be formulated by the State Tax Bureau.

    Article 18  The present Provisions shall come into effect as of the
year 1991. The Interim Provisions of the People’s Republic of China on
Construction Tax which was promulgated by the State Council on June 25, 1987
shall be annulled ever since the same year.

Appendix I  FAID Regulating Tax Schedule of Taxable Items and Tax Rates



Categories                      Taxable
Items                      
Tax Rates

                            
(Investment projects)

1. Agriculture,      Projects for control of big and small rivers     0%
Forestry and           including flood prevention project, dam,
Water Conservancy      floodgate, flood storage and control

                      
reservoir, flood-control dam,

                      
flood-diversion project, river realignment,

                      
danger reservoir reinforcement,

                      
flood-control communication equipment;

                    

                     Projects
for irrigation and drainage including   0%

                      
water storage, water diversion, water

                      
up-pumping, water discharge, water allotment,

                      
water saving, water drainage and

                      
flood-discharge;

                    

                     Farmland
and water conservancy, water and soil   0%

                      
conservancy;

                                          

                     Improvement
of medium- and high-yield            0%

                      
cultivated land;

                    

                     Development
of beaches and wasteland;            0%

                    

                     Breeding
of fine seeds and varieties;            0%

                    

                     Stations
of technical services in animal         0%

                      
husbandry, livestock medical science,

                      
acquatic products, agricultural machines and

                      
water conservancy;

                    

                     Poultry and
livestock farm;                      0%

                      

                     Construction
of fishing port and fishery base    0%

                      
(except for those that occupy arable land);

                    

                     Deep-sea
fishery and purchase of fishing boat;   0%

                    

                     Acquaculture
(except for where arable land is    0%

                      
occupied);

                    

                     Spreading
of agricultural, forestry and water    0%

                      
conservancy technologies;

                    

                     Commodity
base of grain, cotton and edible oil;  0%

                    

                     Monitor,
authentication and technical            0%

                      
supervision of agricultural machinery;

                    

                     Supplementary
and compound forages;              0%

                    

                     Base of fine
agricultural and side-line          0%

                      
products;

                    

                     Forage monitoring
and testing station;           0%

                    

                     Fertilizer,
chemicals and animal medicines       0%

                      
monitoring and testing station;

                    

                     Shelter-forest
project;                          0%

                    

                     Construction
of nature preserves;                0%

                    

                     Forestry
protection;                            
0%

                    

                     Construction
of quick-grown high-yield forest;   0%

                    

                     Construction
of bases for protection and         0%

                      
raising of wild animals;

                    

                     Well-known,
excellent and special economic       0%

                      
forests;

                    

                     Plantation
of Chinese medical herbs;             0%

                    

                     Cultivation
of forests of middle age and         0%

                      
young growth;

                    

                     Cultivation
of forestry seedlings;               0%

                    

                     Afforestation
and forestry resource reclamation  0%

                      
projects;

                    

                     Animal and
plant quarantine;                    
0%

                    

                     Construction
of grazing land;                    0%

                    

                     Construction
of meteorological and hydrological  0%

                      
installments;

                    

                     Water diversion
and water supply projects;       0%

                    

                     Protection
of water resources and resettlements  0%

                      
of residents in the zone of reservoir.

                    
2. Energy Industry

                      

   Coal              Coal mining (except for small
coalpits without   0%

                      
construction license);

                    

                     Exploitation
of coal gas;                        0%

                    

                     Exploitation
and utilization of low calorie      0%

                      
fuels;

                    

                     Mechanized
exploitation and dressing of coking   0%

                      
coal with a capacity of 200,000 tons and

                      
above;

                      

                     Mechanized
exploitation of coking coal with      30%

                      
a capacity of lower than 200,000 tons.

                    

   Electricity       Thermal power generating unit, nuclear power,    0%

                      
projects of big, medium and small hydropower

                      
station, thermoelectric joint-generating and

                      
energy-saving set, power transmission and

                      
transformation projects with a capacity of

                      
100,000 kilowatts and above;

                    

                     Thermal power
or steam-condensing generating     5%

                      
set with a capacity ranging from 25,000

                      
kilowatts to 100,000 kilowatts within a

       &

CIRCULAR OF THE MINISTRY OF FOREIGN ECONOMIC RELATIONS AND TRADE ON ISSUING THE INTERIM PROVISIONS CONCERNING CONTRACT PERIOD OF CHINESE-FOREIGN EQUITY JOINT VENTURES

19900930the State Council

The Ministry of Foreign Economic Relations and Trade

Circular of the Ministry of Foreign Economic Relations and Trade on Issuing the Interim Provisions Concerning Contract Period of Chinese-foreign
Equity Joint Ventures

WaiJingMaoFaZi [1990] No.56

October 22, 1990

(Adopted by the State Council on September 30, 1990 , Promulgated by WaiJingMaoFaZi [1990] No.56 of the Ministry of Foreign Economic
Relations and Trade on October 22, 1990)

Article 1

These Provisions are formulated in accordance with the provisions of Article 12 of the Law of the People’s Republic of China on Chinese-foreign
Equity Joint Ventures (Amended at the Third Session of the Seventh National People’s Congress on April 4, 1990).

Article 2

As regards the establishment of Chinese-foreign equity joint ventures (hereinafter referred to as joint ventures), the parties to
a joint venture which is engaged in investment projects encouraged and permitted by the Chinese government, except as stipulated
in Article 3 of these Provisions, may decide, through consultation, to or not to prescribe a contract period in the contract.

Article 3

As regards the establishment of joint ventures, the parties to a joint venture, which falls under one of the following lines of business
or one of the following circumstances, shall prescribe in their contract, through consultation, a contract period in accordance with
the provisions of the relevant laws and regulations of the state:

(1)

service trades, such as hotels, apartments, office buildings, recreation and entertainment, catering trade, taxi service, development
and printing of colour films and photos, maintenance, business consultancy, etc.;

(2)

joint ventures engaged in land development and real estate;

(3)

joint ventures engaged in the prospecting and development of natural resources;

(4)

joint ventures engaged in projects subject to investment restriction as stipulated by the state;

(5)

joint ventures for which a contract period shall be decided, through consultation, as prescribed by other laws and regulations of
the state.

Article 4

Joint ventures, the parties to which decide, through consultation, not to prescribe a contract period in their contract, shall be
examined and approved in accordance with the state regulations concerning the limits of powers and procedures for examination and
approval. With the exception of those joint ventures to be directly examined and approved by the Ministry of Foreign Trade and Economic
Cooperation, other examining and approving authorities shall, report within 30 days, any such applications they have examined and
approved to the Ministry of Foreign Trade and Economic Cooperation for the record.

Article 5

Joint ventures, the parties to which decide, through consultation, not to prescribe a contract period in their contract, may enjoy
the preferential treatment of reduction of or exemption from taxes in accordance with the state provisions concerning taxation and
with the approval of the tax authorities. In cases where the actual term of operation of these joint ventures fails to reach the
number of years set by the state for enjoying the preferential treatment of taxation, the joint ventures concerned shall, according
to law, pay the taxes which have been exempted or reduced.

Article 6

Joint ventures, whose establishment was approved before these provisions become effective, shall operate in accordance with the approved
contract period stipulated in the contract. However, as regards a joint venture which does not come under one of the circumstances
specified in Article 3 of these Provisions, in the event that the parties to the joint venture agree unanimously to modify the stipulation
in the contract concerning the contract period, and to restipulate the joint venture as one without contract period, the parties
to the joint venture shall submit a report to justify such a modification, sign an agreement of the modification of the contract,
and apply to the original examining and approving authorities for examination and approval. The original examining and approving
authorities shall, within 90 days as of the date of receipt of the said application, decide to approve or disapprove it. After obtaining
the approval, the joint venture shall, in accordance with the stipulations of Article 4 of these Provisions, go through the procedures
for the record.

Article 7

These Provisions shall enter into force as of the date of promulgation.



 
The Ministry of Foreign Economic Relations and Trade
1990-10-22

 







THE BASIC LAW OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE’S REPUBLIC OF CHINA

PROVISION FOR THE ISSUANCE OF THE IMPORT DRUG PERMITS

REGULATIONS GOVERNING FOREIGN BANKS AND JOINT CHINESE-FOREIGN BANKS IN SPECIAL ECONOMIC ZONES

Regulations Governing Foreign Banks and Joint Chinese-Foreign Banks in Special Economic Zones of the PRC

    

(Promulgated by the State Council on April 2, 1985)

   Article 1. These Regulations are formulated with a view to expanding international economic and financial cooperation so as to be conducive
to the bringing in of foreign capital and technology to promote the growth of the special economic zones.

   Article 2. In these Regulations, “foreign banks” means the branches set up in the special economic zones by banks the head offices of which
are located in foreign countries or the Xianggang (Hong Kong) and Aomen (Macao) regions and which have been registered in accordance
with local laws, and also banks with foreign capital the head offices of which are located in the special economic zones and which
have been registered in accordance with the laws of the People’s Republic of China.

In these Regulations, “joint Chinese-foreign banks” means banks operated in the special economic zones by banks or financial institutions
with foreign capital jointly with banks or financial institutions with Chinese capital.

   Article 3. Foreign and joint Chinese-foreign banks shall abide by the laws and regulations of the People’s Republic of China; their legitimate
business operations and legal rights shall be protected by the laws of the People’s Republic of China.

   Article 4. For the establishment of a foreign or joint Chinese-foreign bank in a special economic zone, an application shall be filed with
the People’s Bank of China, which shall examine and consider the application in the light of the needs of the economic growth of
the special economic zone concerned and on the principle of equality and mutual benefit.

The branches of the People’s Bank of China in the special economic zones shall exercise control and supervision over foreign and joint
Chinese-foreign banks.

The State Administration of Exchange Control issues licences for foreign exchange operations to foreign and joint Chinese-foreign
banks.

   Article 5. An application for the establishment of a foreign and joint Chinese-foreign bank shall be made in accordance with the following
provisions:

(I) A bank with foreign capital that wishes to set up a branch in a special economic zone shall file an application through its head
office and furnish the following documents and date:

1. A written application signed by the chairman or general manager of the bank with the authorisation of its board of directors and
certified by a notary public, embodying the name of the branch to be set up, the amount of operating funds allocated to it by the
head office, a brief personal history and a letter of authorisation in regard to each of the chief responsible officers and the kinds
of business applied for;

2. Articles of association, a list of the members of the board of directors, and the balance sheets, profit and loss statements and
business reports for the three years preceding the application;

3. A copy of the business licence issued by the competent authorities of the county or region where the bank is located; and

4. A written guarantee from its head office committing itself to be responsible for taxes and liabilities.

(II) An application for the establishment of the head office of a foreign bank in a special economic zone shall be filed by the foreign
investors, along with the following documents and data:

1. A written application for the establishment of a foreign bank which shall include the name of the head office to be set up, registered
capital and paid-in capital,a list of the chief responsible officers and the kinds of business applied for;

2. Articles of association;

3. A list of the chairman, vice-chairmen and members of the board of directors nominated by the investors; and

4. A statement of the investors’ assets and liabilities, along with the certification of a notary public.

(III) An application for the establishment of a joint Chinese-foreign bank in a special economic zone shall be filed jointly by the
investing parties, along with the following documents and data:

1. A written application for the establishment of the joint bank, including the name of the joint bank to be set up, the names of
the joint parties, registered capital and paid-in capital, the proportions of equity capital contributed by the joint parties, a
list of the chief responsible officers nominated, and the kinds of the business applied for;

2. A feasibility report jointly prepared by the joint parties;

3. The drafts of the agreement, contract and articles of association relating to the joint parties; and

4. A list of the chairman, vice-chairmen and members of the board of directors of the joint bank nominated by the joint parties.

(IV) Foreign and joint Chinese-foreign banks in a special economic zone that intend to set up additional branches within the same
zone shall apply to the branch of the People’s Bank of China in the same zone for approval.

A Chinese version shall be attached where the documents and data indicated in section (I) of this Article are in a foreign language.

   Article 6. Based on an application submitted, the People’s Bank of China may grant its approval to foreign and joint Chinese-foreign banks
to engage in part or all of the following business operations:

1. Granting loans in local and foreign currencies and discounting bills;

2. Inward remittances from foreign countries and the Xianggang (Hong Kong) and Aomen (Macao) regions, and foreign exchange collections;

3. Settlement of export transactions and outward documentary bills;

4. Exchange in foreign currencies and foreign currency bills;

5. Local and foreign currency investments;

6. Local and foreign currency guarantees;

7. Buying and selling of stocks and securities;

8. Trust, safe deposit box, credit investigation and consultation services;

9. Outward remittances by overseas Chinese enterprises, foreign enterprises, Chinese-foreign joint ventures and Chinese-foreign cooperative
enterprises, settlement of import transactions and inward documentary bills;

10. Local and foreign currency deposits and overdrafts by overseas Chinese enterprises, foreign enterprises, Chinese-foreign joint
ventures and Chinese-foreign cooperative enterprises; and local and foreign currency deposits and overdrafts by foreign nationals,
overseas Chinese and Chinese compatriots in Xianggang (Hong Kong) and Aomen (Macao);

11. Handling foreign exchange deposits and loans in foreign countries and the Xianggang (Hong Kong) and Aomen (Macao) regions; and

12. Other business operations.

   Article 7. A foreign bank head office or a joint Chinese-foreign bank in a special economic zone shall have a registered capital in foreign
exchange no less than the equivalent of RMB$80 million and a paid-in capital no less than 50 per cent of the registered capital;
the branch office of a foreign bank in a special economic zone shall hold operating funds allocated to it by its head office in an
amount of foreign exchange no less than the equivalent of RMB$40 million.

The paid-in capital or the operating funds of a foreign or joint Chinese-foreign bank shall be fully in hand within 30 days from the
date its establishment is approved, and this shall be certified by an accountant registered in the People’s Republic of China.

   Article 8. A foreign or joint Chinese-foreign bank shall, within 30 days from the date of its being approved, register with the Administration
for Industry and Commerce and obtain from it a business licence; it shall also register with the local tax authorities for tax purposes
within 30 days from the date of its operation.

Where a foreign or joint Chinese-foreign bank fails to open business within twelve months after the date of its being approved, the
original certificate of approval shall automatically become null and void.

   Article 9. The loans granted by a foreign bank head office or a joint Chinese-foreign bank in a special economic zone to any enterprise in
the same zone shall not exceed 30 per cent of the aggregate of the bank’s paid-in capital and reserve funds; and its total investment
in the special economic zone shall not exceed 30 per cent of the aggregate of its paid-in capital and reserve funds.

   Article 10. The exchange and settlement between the local currency and foreign currencies by a foreign and joint Chinese-foreign bank shall
be effected in accordance with the exchange rates quoted by the State Administration of Exchange Control and in pursuance of the
pertinent regulations.

The interest rates applied by a foreign and joint Chinese-foreign bank to local or foreign currency deposits, loans, overdrafts and
bill discounts within a special economic zone shall be fixed by reference to those prescribed by the branch of the People’s Bank
of China in the same zone.

   Article 11. A foreign or joint Chinese-foreign bank accepting local or foreign currency deposits within a special economic zone shall keep on
deposit with the branch of the People’s Bank of China in the same zone a reserve fund against its deposits.

   Article 12. A foreign or joint Chinese-foreign bank shall submit to the branch of the People’s Bank of China in the special economic zone concerned
the following business reports:

(1) A balance sheet as at the end of the previous month, to be submitted before the tenth of each month;

(2) An analytical statement of deposit and loans, an analytical statement of outward and inward remittances and settlement of import
and export transactions, and an analytical statement of investment items for the previous quarter; and

(3) The balance sheet, profit and loss statement, and statement of the balances of accounting items for the previous year, along with
an audit report by an accountant registered in the People’s Republic of China, to be submitted before the end of March in each year.

   Article 13. The branches of the People’s Bank of China in the special economic zones shall have the right to examine the business and financial
conditions of foreign and joint Chinese-foreign banks, request them to submit or furnish the related information and data, and send
officers to examine their books, records, etc.

   Article 14. The profit that a branch of a foreign bank makes after paying taxes in accordance with the law may be remitted abroad.

For the profit that a foreign bank head office or a joint Chinese-foreign bank in a special economic zone makes after deduction for
taxes, the reserve fund, workers’ bonuses, welfare fund and enterprise development fund in accordance with the pertinent regulations,
the portion distributed to investors outside China may be remitted abroad.

The foreign staff and workers and the Hong Kong and Macao staff and workers of a foreign and joint Chinese-foreign bank may remit
abroad their wages, salaries and other legitimate earnings after paying taxes in accordance with the law.

   Article 15. A foreign or joint Chinese-foreign bank that intends to terminate its business operations shall submit a written report for approval
to the People’s Bank of China 30 days prior to their termination.

A foreign or joint Chinese-foreign bank that winds up business in accordance with the law shall be liquidated under the supervision
of the branch of the People’s Bank of China in the special economic zone concerned and other competent authorities in accordance
with the regulations of the People’s Republic of China governing the dissolution and liquidation of foreign enterprises and Chinese-foreign
joint ventures, and after the satisfaction of all taxes and liabilities, the funds of the foreign bank or the funds owned by or distributed
to overseas investors of the joint Chinese-foreign bank may be remitted abroad.

After liquidation, the foreign or joint Chinese-foreign bank mentioned in the previous section shall approach the department that
originally issued the registration certificate to have its registration cancelled.

   Article 16. The branches of the People’s Bank of China in the special economic zones are empowered to issue a warning or impose a fine on any
foreign or joint Chinese-foreign bank acting in contravention of these Regulations or other financial regulations according to the
seriousness of each case; if there is objection to the measure meted out, an appeal may be made to the People’s Bank of China for
its decision.

In particularly serious cases, the foreign or joint Chinese-foreign bank may be ordered to stop its business operations or even to
dissolve its institution.

   Article 17. These Regulations shall also apply to banks or financial institutions with overseas Chinese capital, Xianggang (Hong Kong) capital
or Aomen (Macao) capital.

   Article 18. The People’s Bank of China shall be responsible for the interpretation of these Regulations.

   Article 19. The implementation of these Regulations shall commence on the date of their promulgation.

    






PHARMACEUTICAL ADMINISTRATION LAW

Pharmaceutical Administration Law of the People’s Republic of China

     Important Notice: This English document is coming from the “LAWS AND REGULATIONS OF THEPEOPLE’S REPUBLIC OF CHINA GOVERNING
FOREIGN-RELATED MATTERS” (1991.7)which is compiled by the Brueau of Legislative Affairs of the StateCouncil of the People’s
Republic of China, and is published by the ChinaLegal System Publishing House.In case of discrepancy, the original version in Chinese
shall prevail.

Whole Document PHARMACEUTICAL ADMINISTRATION LAW OF THE PEOPLE’S REPUBLIC OFCHINA(Adopted at the Seventh Meeting of
the Standing Committee of theSixth National People’s Congress, promulgated by Order No. 18 of thePresident of the People’s
Republic of China on September 20, 1984, andeffective as of July 1, 1985)

ContentsChapter I General ProvisionsChapter II Administration of Pharmaceutical Producing EnterprisesChapter III
Administration of Pharmaceutical Trading EnterprisesChapter IV Administration of Pharmaceuticals at Medical UnitsChapter V
Pharmaceutical AdministrationChapter VI Packaging and Repackaging of PharmaceuticalsChapter VII Pharmaceuticals Under Special
ControlChapter VIII Administration of Trademarks and Advertisements of

PharmaceuticalsChapter IX Supervision over PharmaceuticalsChapter X Legal ResponsibilityChapter XI Supplementary
Provisions

Chapter I General ProvisionsArticle 1This Law is formulated with a view to enhancing the supervision andcontrol
of pharmaceuticals, ensuring their quality, improving theircurative effects, guaranteeing safety in medication and safeguarding
thehealth of the people.Article 2The administrative department of health under the State Council shall beresponsible for the supervision
and control of pharmaceuticals throughoutthe country.Article 3The state shall develop both modern and traditional medicines and
givefull play to their role in the prevention and treatment of diseases and inhealth care. The state shall protect the resources
of wild medicinalmaterials and encourage the domestic cultivation of Chinese traditionalmedicinal crops.

Chapter II Administration of Pharmaceutical Producing EnterprisesArticle 4The establishment of a pharmaceutical producing
enterprise must besanctioned by the competent authorities for the production and trading ofpharmaceuticals of the province,
autonomous region, or municipalitydirectly under the Central Government in which the enterprise is located,and approved by the
administrative department of health of the sameprovince, autonomous region or municipality, which will issue aPharmaceuticals
Producer Licence. The administrative authorities forindustry and commerce shall not issue business licences to any enterprisesproducing
pharmaceuticals without the Pharmaceutical Producer Licence.The Pharmaceutical Producer Licence shall have a period of validity,
uponexpiration of which a new licence shall be issued after an examination forits renewal. Detailed measures for the renewal of
such licences shall bestipulated by the administrative department of health under the StateCouncil.Article 5To establish
a pharmaceutical producing enterprise, the followingrequirements must be met:(1) It shall be staffed with the necessary
personnel required forproducing the medicines concerned, that is, pharmacists or technicalpersonnel with a qualification
equivalent to or higher than assistantengineer as well as skilled workers. If an enterprise processing Chinesetraditional
medicines into ready-to-use mixture and powder forms does nothave pharmacists or technical personnel with a qualification equivalent
toor higher than assistant engineer, it shall be staffed instead withskilled pharmaceutical workers who are familiar with
the properties of themedicines processed and are registered with the administrative departmentof health at or above the county level.(2)
It shall have factory premises, facilities and a sanitary environmentsuitable for the medicines produced.(3) It shall have a unit
or competent personnel capable of inspecting thequality of the medicines produced, as well as necessary instruments andequipment.Article
6Pharmaceuticals must be produced in accordance with the technologicalprocedure, and the record of production must be complete
and accurate.The process for preparing traditional Chinese medicines in ready-to-useforms must conform to the Pharmacopoeia of
the People’s Republic of Chinaor the Processing Norms stipulated by the administrative departments ofhealth of the provinces,
autonomous regions, or municipalities directlyunder the Central Government.Article 7The raw and supplementary materials used
for the production ofpharmaceuticals and containers and packaging materials in direct contactwith pharmaceuticals must conform
to the requirements for medicinal use.Article 8Pharmaceuticals must go through quality inspection before they leave thefactory;
products which do not meet the standards shall not leave thefactory.Article 9Pharmaceutical producing enterprises must draw
up and carry out rules andregulations and sanitary requirements for ensuring the quality ofpharmaceuticals in accordance
with the Standards for Quality Control ofPharmaceutical Production stipulated by the administrative department ofhealth under
the State Council.

Chapter III Administration of Pharmaceutical Trading EnterprisesArticle 10The establishment of a pharmaceutical trading
enterprise must besanctioned by the local competent authorities for the production andtrading of pharmaceuticals and approved
by the administrative departmentof health at or above the county level, which will issue a PharmaceuticalTrading Enterprise Licence.
The administrative authorities for industryand commerce shall not issue business licences to any enterprises withoutthe Pharmaceutical
Trading Enterprise Licence.The Pharmaceutical Trading Enterprise Licence shall have a period ofvalidity, upon expiration of
which a new licence shall be issued after anexamination for its renewal. Detailed measures for the renewal of suchlicences shall
be stipulated by the administrative department of healthunder the State Council.Article 11To establish a pharmaceutical trading
enterprise, the followingrequirements must be met:(1) It shall be staffed with pharmaceutical technicians qualified for thehandling
of the pharmaceuticals.If an enterprise trading in Chinese traditional medicines or an enterpriseconcurrently trading in medicines
does not have pharmaceuticaltechnicians, it shall be staffed instead with pharmaceutical workers whoare familiar with the
properties of the medicines it trades in and areregistered with the administrative department of health at or above thecounty
level.(2) It shall have business premises, equipment, storage facilities and asanitary environment suitable for the pharmaceuticals
in which it trades.Article 12The quality of pharmaceuticals must be inspected on purchasing.Pharmaceuticals that do not meet the
required standards must not bepurchased.Article 13It is imperative, in the sale of pharmaceuticals, to be accurate and freeof
mistakes, and to provide correct directions for use, dosage andprecautions. Prescriptions being dispensed must be checked.Pharmaceuticals
listed in prescriptions must not be presumptuously changedor substituted. Prescriptions containing incompatible substances
orexcessive dosages shall be rejected by the dispensary. If necessary, suchprescriptions can be dispensed after they have been
corrected or resignedby the doctors who wrote them out.When famous traditional Chinese medicinal materials are offered for sale,their
origin must be indicated.Article 14Rules for storage of pharmaceuticals shall be formulated and implementedby pharmaceutical warehouses,
which must adopt necessary measures tofacilitate cold storage and protection against moisture, insects androdents.An
inspection system shall be carried out for pharmaceuticals entering orleaving warehouses.Article 15Unless otherwise stipulated by
the state, traditional Chinese medicinalmaterials may be marketed at urban or rural fairs.Pharmaceuticals other than traditional
Chinese medicinal materials may notbe sold at urban or rural fairs, except by those who have PharmaceuticalsTrading Enterprise Licences.

Chapter IV Administration of Pharmaceuticals at Medical UnitsArticle 16Medical units must be staffed with pharmaceutical
technical personnelcommensurate with their medical functions. Non-pharmaceutical technicalpersonnel may not engage directly
in pharmaceutical technical work.Article 17To make medicinal preparations, a medical unit must be examined, approvedand issued a
Dispensing Permit by the administrative department of healthof the province, autonomous region, or municipality directly under
theCentral Government in which the units is located.The Dispensing Permit shall have a period of validity, upon expiration ofwhich
a new permit shall be issued after an examination for its renewal.Detailed measures for the renewal of such permits shall be stipulated
bythe administrative department of health under the State Council.Article 18Medical units making medicinal preparations must
be equipped withfacilities, inspection instruments and sanitary conditions capable ofensuring the quality of the preparations.Article
19The quality of the medicinal preparations made by medical units must beinspected in accordance with relevant regulations and
clinical needs.Those up to standard can be used as the doctor prescribes.Medicinal preparations made by medical units may not
be sold on themarket.Article 20Medical units must implement a system of quality inspection whenpurchasing pharmaceuticals.

Chapter V Pharmaceutical AdministrationArticle 21The state encourages research on and development of new medicines.When
working on a new medicine, it is necessary to submit, as required,the methods of production, quality indices, pharmacological
andtoxicological testing results, and other related materials and samples tothe administrative department of health under the
State Council or to theadministrative department of health of the relevant province, autonomousregion, or municipality directly
under the Central Government. Clinicaltests or clinical verifications can be carried out only after approval.A new medicine
which has completed its clinical tests or clinicalverifications and been approved after appraisal shall be issued
acertificate by the administrative department of health under the StateCouncil.Article 22A new medicine can be put into production
only after the administrativedepartment of health under the State Council has approved it and issued aregistered document of
approval. However, this does not apply to theproduction of traditional Chinese medicines prepared in ready-to-useforms.A
medicine standardized by the state or by a province, an autonomousregion, or a municipality directly under the Central Government
shall beput into production only after the administrative department of health ofthe relevant province, autonomous region, or
municipality directly underthe Central Government has made an examination of the medicine, given itapproval and issued a registered
document of approval, seeking beforehandthe opinions of the authorities at the same level in charge of theproduction and
trading of medicines. However, this does not apply to theproduction of traditional Chinese medicines prepared in ready-to-useforms.Article
23Pharmaceuticals must meet the pharmaceutical standards of the state orthose of the relevant province, autonomous region,
or municipalitydirectly under the Central Government.The Pharmacopoeia of the People’s Republic of China and the pharmaceuticalstandards
promulgated by the administrative department of health under theState Council shall be the state pharmaceutical standards.The Pharmacopoeia
Committee of the administrative department of healthunder the State Council shall be responsible for organizing theformulation
and revision of the state pharmaceutical standards.Article 24The administrative department of health under the State Council
andadministrative departments of health of provinces, autonomous regions, andmunicipalities directly under the Central Government
may establishpharmaceutical examination and evaluation committees to carry outexamination and evaluation of new medicines
and to reevaluate medicinesalready put into production.Article 25The administrative department of health under the State Council
shallorganize investigations of medicines which have been approved forproduction. It shall revoke the registered documents
of approval if itdiscovers that the medicines’ curative effects are uncertain or poor, orthat they produce serious adverse
reactions or for other reasons areharmful to people’s health.Production and sale of medicines whose registered documents
of approvalhave been revoked shall not be allowed to continue; those which havealready been produced shall be destroyed
or disposed of under thesupervision of the local administrative department of health.Article 26Import of medicines whose curative
effects are uncertain or poor, or whichproduce adverse reactions or have other harmful effects on people’s healthshall be prohibited.Article
27For any medicine which is to be imported for the first time, the importermust submit the manuals, quality standards, methods
of inspection andother related information and samples, as well as the exporting country’s(region’s) certification documents
approving its production, to theadministrative department of health under the State Council, and importcontracts may be
signed only with the prior approval of the saiddepartment.Article 28Imported medicines must be inspected by the pharmaceutical
inspectioninstitutions authorized by the administrative department of public healthunder the State Council; those having passed
the inspection shall beallowed to be imported. Medicines to be imported in small quantities forurgent clinical needs by medical
units or for personal use shall behandled according to customs regulations.Article 29The administrative department of health
under the State Council shall havethe power to restrict or prohibit the export of traditional Chinesemedicinal materials and
prepared Chinese medicines which are in shortsupply in the domestic market.Article 30Import Licences or Export Licences issued
by the administrative departmentof health under the State Council are required for the import or export ofnarcotics and psychotropic
substances falling within the restricted scopeprescribed by the administrative department of health under the StateCouncil.Article
31Newly discovered domestic medicinal plants or medicinal plants introducedfrom abroad may be sold only after they have been examined
and approved bythe administrative department of health of the relevant province,autonomous region, or municipality directly
under the Central Government.Article 32Measures for controlling medicinal materials traditionally used by localpeople in certain
regions shall be formulated by the administrativedepartment of health under the State Council.Article 33The production and
sale of fake medicines are prohibited. A fake medicinehas either of the following characteristics:(1) the names of its components
are different from those prescribed for itby state pharmaceutical standards or pharmaceutical standards of therelevant province,
autonomous region, or municipality directly under theCentral Government;(2) a non-medical substance is passed off as a medicine,
or one medicineis passed off as another.A medicine shall be handled as fake medicine in any of the followingcases:(1) where
the use of the medicine has been prohibited by theadministrative department of health under the State Council;(2) where
the medicine has been produced without being assigned aregistration number;(3) where the medicine has deteriorated and cannot
be used as such; or(4) where the medicine has been contaminated and cannot be used as such.Article 34The production and sale of
medicines of inferior quality shall beprohibited. A medicine of inferior quality has any of the followingcharacteristics:(1)
the components of the medicine do not conform in quantity to thatrequired by state pharmaceutical standards or pharmaceutical
standards ofthe relevant province, autonomous region, or municipality directly underthe Central Government;(2) the medicine has
passed its expiry date; or(3) the medicine fails to meet the prescribed standards in other respects.Article 35Personnel in pharmaceutical
producing or trading enterprises and inmedical units who have direct contact with medicines must undergo anannual medical
examination. Persons who have contracted contagiousdiseases or any other disease which may contaminate the medicines shallnot
be allowed to engage in any work which has direct contact withpharmaceuticals.

Chapter VI Packaging and Repackaging of PharmaceuticalsArticle 36Packaging must meet the specific quality requirements
of thepharmaceuticals and facilitate their storage, transportation and medicaluse. If a medicine has a period of validity,
it must be clearly indicatedon the package.Traditional Chinese medicinal materials must be packaged beforetransportation.
There must appear on the package the name of the medicine,place of production, date, name of the consignor, and an indication thatthe
quality of the medicine is up to standard.Article 37Packages of pharmaceuticals must, in accordance with the regulations, belabeled
and include directions for use.The label or directions must indicate the name of the medicine,specifications, the producer,
registration number, batch number of theproduct, principal components, indications, directions for use dosage,contraindications,
adverse reactions and precautions.Special indications must be printed as required on the labels ofnarcotics, psychotropic
substances, toxic drugs, radioactive drugs andmedicines for external use.Article 38A pharmaceuticals trading enterprise engaged
in the repackaging ofmedicines must possess the necessary facilities and sanitary conditionssuitable for the purpose, and
pharmaceutical technicians must be placed incharge of this work. The repackaging records must be complete andaccurate.The
repackaged medicine must enclose directions for use, and on thepackage must be indicated the name of the medicine, specifications,
theproducer, the batch number of the product, the repackaging unit and thelot number of the repackaged product. If the medicine
has a period ofvalidity, it must also be indicated on the new package.

Chapter VII Pharmaceuticals Under Special ControlArticle 39The state adopts special measures for the control of
narcotics,psychotropic substances, toxic drugs and radioactive drugs. Regulationsfor the control of these drugs shall be formulated
by the State Council.Article 40Narcotics, including their mother plants, must be produced only by unitsjointly designated by the
administrative department of health under theState Council and other departments concerned, and must be supplied byunits jointly
designated by the administrative department of health ofprovinces, autonomous regions, and municipalities directly under
theCentral Government and other departments concerned.

Chapter VIII Administration of Trademarks and Advertisements of PharmaceuticalsArticle 41Registered trademarks must
be used for all pharmaceuticals with theexception of traditional Chinese medicinal materials and theirpreparations
in ready-to-use forms. The sale of pharmaceuticals withoutcompleting trademark registration shall be prohibited.The registered
trademark must appear on the package and the label of themedicine.Article 42Advertisements of pharmaceuticals must be examined
and approved by theadministrative department of health of the relevant province, autonomousregion, or municipality directly
under the Central Government. In theabsence of such approval, advertisement of any medicine may not bepublished, broadcast,
handed out or posted on walls.Article 43Foreign enterprises which apply to advertise pharmaceuticals in China mustsubmit relevant
documents of approval by the country (region) in which thepharmaceuticals are produced, directions for use and other relevantmaterials.Article
44Advertisements of pharmaceuticals must be based on the directions for useapproved by the administrative department of health
under the StateCouncil or the administrative departments of health of provinces,autonomous regions, or municipalities
directly under the CentralGovernment.

Chapter IX Supervision over PharmaceuticalsArticle 45The administrative departments of health at or above the county
levelshall exercise supervisory power over pharmaceuticals.The administrative departments of health at or above the county level
mayset up organs for the administration of pharmaceuticals and organs for theinspection of pharmaceuticals.Article 46There shall
be pharmaceutical inspectors in the administrative departmentsof health at or above the county level. Pharmaceutical inspectors shall
beappointed from among pharmacological technical personnel and issuedcertificates by the people’s governments at the same
level.Article 47Pharmaceutical inspectors are authorized to exercise, in accordance withthe regulations, supervision, inspection
and sampling as regards thequality of pharmaceuticals in the producing enterprises, tradingenterprises and medical
units within their jurisdiction, and whennecessary may pick samples at random and ask for relevant data inaccordance
with regulations. The enterprises and units concerned may notrefuse such requests or withhold relevant data. Pharmaceutical inspectorsare
duty-bound to keep confidential the technical information provided bypharmaceutical producing enterprises and scientific research
institutions.Article 48Pharmaceutical producing enterprises, pharmaceutical trading enterprisesand medical institutions shall conduct
regular surveys of the quality,curative effects and adverse reactions of the pharmaceuticals they haveproduced, traded in
or used. When drug poisoning is discovered, themedical institution concerned must promptly report the matter to the localadministrative
department of health.Article 49The organs or personnel in charge of pharmaceutical inspection inpharmaceutical producing
enterprises and pharmaceutical tradingenterprises shall receive operational guidance from the localpharmaceutical
inspection organs.

Chapter X Legal ResponsibilityArticle 50Whoever produces or sells fake medicines shall have his fake medicines andunlawful
income confiscated and may concurrently be fined; in addition, hemay be ordered to suspend production or business operations
pendingrectification, or have his Pharmaceutical Producer Licence, PharmaceuticalTrading Enterprise Licence or Dispensing Permit
revoked.An individual who produces or sells fake medicines, or the person directlyresponsible for a unit which commits this offence,
and thereby endangerspeople’s health, shall be investigated for criminal liability underArticle 164 of the Criminal Law.Article
51Whoever produces or sells medicines of inferior quality shall have hismedicines of inferior quality and unlawful income confiscated
and may befined as well. If the circumstances are serious, the unit concerned shallbe ordered to suspend production or
business operations pendingrectification, or have its Pharmaceutical Producer Licence, PharmaceuticalTrading Enterprise Licence
or Dispensing Permit revoked. An individualwho produces or sells medicines of inferior quality or the person directlyresponsible
for a unit which commits this offence, and thereby endangerspeople’s health and causes serious consequences, shall be investigated
forcriminal liability in reference to the provisions of Article 164 of theCriminal Law.Article 52Any unit engaged in the production,
trading or preparation of medicineswithout obtaining the Pharmaceutical Producer Licence, PharmaceuticalTrading Enterprise
Licence or Dispensing Permit shall be ordered tosuspend production, business operations or preparation of such medicines.The
medicines and unlawful income shall all be confiscated and a fine mayalso be imposed.Article 53Whoever violates any other provision
of this Law on the administration ofpharmaceutical production and pharmaceutical trading shall be served awarning or be fined.Article
54The decision to mete out administrative sanctions stipulated in this Lawshall be made by the administrative departments of health
at or above thecounty level. The decision to mete out administrative sanctions forviolations of the provisions of Article
15 or of Chapter VIII onadministration of advertisements of this Law shall be made by theadministrative departments
for industry and commerce.Punishment by suspension of production or business operations pendingrectification for seven days
or more, or revocation of the PharmaceuticalProducer Licence or Pharmaceutical Trading Enterprise Licence to be metedout to pharmaceutical
producing enterprises or pharmaceutical tradingenterprises directly under the jurisdiction of the Central Government orof
the people’s governments of provinces, autonomous regions, ormunicipalities directly under the Central Government, shall
be submittedby the administrative department of health of the relevant province,autonomous region, or municipality directly
under the Central Governmentto the people’s government at the same level for final decision.Punishment by suspension of production
or business operations for sevendays or more, or revocation of the Pharmaceutical Producer Licence orPharmaceutical Trading
Enterprise Licence, to be meted out topharmaceutical producing enterprises or pharmaceutical trading enterprisesunder
the jurisdiction of people’s governments at or below the city orcounty level, shall be submitted by the administrative department
ofhealth of the people’s governments at or below the city or county level tothe people’s governments at the same level for
final decision. Theconfiscated pharmaceuticals shall be disposed of under the supervision ofthe administrative departments of
health.Article 55If the party concerned does not accept the administrative sanction decidedon, it may file suit in the people’s court
within 15 days after receivingnotification of the sanction. However, the said party must immediatelycarry out the decision on
the control of pharmaceuticals made by theadministrative department of health. If the party neither complies withthe sanction
nor files suit within the time limit, the organ which madethe decision on the administrative sanction shall apply to the people’scourt
for compulsory execution.Article 56If any individual or unit, in violation of this Law, causes drugpoisoning, he or it
shall be liable for the damage. The victims mayrequest the administrative department of health at or above the countylevel
to handle the matter; if a party does not accept the decision, itmay file suit in the people’s court. The victims, too, may directly
takethe case to the people’s court.The claim for compensation must be made within a year from the day onwhich the victim or
his representative was aware or should have been awareof the damage done. No claim for compensation shall be entertained beyondthe
time limit.

Chapter XI Supplementary ProvisionsArticle 57For the purpose of this Law, the definitions of the following terms are:”Pharmaceuticals”
means articles intended for use in the prevention,treatment or diagnosis of human diseases, or intended to effect thepurposive
regulation of human physiological functions, for whichindications, usage and dosage are prescribed, including raw traditionalChinese
medicinal materials, traditional medicines prepared in ready-to-use forms and other prepared Chinese medicines, medicinal chemicals
andtheir preparations, antibiotics, biochemical medicines, radioactive drugs,serums, vaccines, blood products, diagnostic aids,
etc.”New medicines” means medicines which have not been produced in thiscountry before. “Supplementary materials” means
the excipients andadditives used for the production and dispensing of pharmaceuticals.”Pharmaceutical producing enterprise” means
an enterprise exclusively orpartly engaged in the production of pharmaceuticals.”Pharmaceutical trading enterprise” means an
enterprise exclusively orpartly engaged in the trading of pharmaceuticals.Article 58The production of pharmaceuticals referred
to in this Law does not includethe cultivation, collection and breeding of all categories of medicinalmaterials used in traditional
Chinese medicine.Article 59The administrative department of health under the State Council shall,pursuant to this Law, draw up
measures for its implementation, which shallenter into force after being submitted to and approved by the StateCouncil.Measures
for the control of pharmaceuticals specially needed by theChinese People’s Army shall be formulated by the competent
militarydepartment of the state.Article 60This Law shall enter into force as of July 1, 1985.

    






PROVISIONS OF THE GENERAL CUSTOMS ADMINISTRATION ON CONTROL OVER GOODS, MEANS OF CONVEYANCE, LUGGAGE AND POSTAL ARTICLES ENTERING OR LEAVING THE SPECIAL ECONOMIC ZONES

Category  CUSTOMS Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1986-03-25 Effective Date  1986-04-01  


Provisions of the General Customs Administration of the People’s Republic of China on Control Over Goods, Means of Conveyance, Luggage
and Postal Articles Entering or Leaving the Special Economic Zones

Chapter I  General Provisions
Chapter II  Control over Goods Entering or Leaving SEZ
Chapter III  Control over Means of Conveyance Entering or Leaving SEZ
Chapter IV  Control over Luggage and Postal Articles Entering and Leaving
Chapter V  Supplementary Provisions
Notes:

(Approved by the State Council on March 21, 1986, promulgated by the

General Customs Administration on March 25, 1986)
Chapter I  General Provisions

    Article 1  These Provisions are formulated with a view to promoting the
development of Special Economic Zones, safeguarding national interests and
ensuring the smooth progress of socialist construction.

    Article 2  These Provisions shall apply to the four Special Economic
Zones: Shenzhen, Zhuhai, Shantou and Xiamen (hereinafter referred to as “SEZ”).

    Article 3  Goods, means of conveyance, luggage and postal articles
entering or leaving SEZ shall go through the railway stations, road passes,
sea ports, aerodromes or post offices where there are Customs establishments
and shall be subject to declaration to the Customs and to its supervision and
control.

    Article 4  All foreign trade enterprises or production enterprises within
SEZ engaged in import or export business shall complete the formalities of
registration at the Customs against the documents of approval issued by the
foreign economic and trade administrations at the provincial level or above,
or by SEZ people’s governments.

    If it is necessary, Customs officers may be sent to the aforesaid
production enterprises and stationed there for the performance of supervision
and control and the conduct of Customs procedures. All such enterprises shall
provide necessary offices and accommodations free of charge.

    Regular written reports on the end-use, sales and inventory of the
imported goods shall be submitted to the Customs by the enterprises mentioned
in Paragraph 1 of this Article for inspection and verification.

    Article 5  Smuggling and other illegal activities carried out by taking
advantage of the preferential treatments granted to SEZ by the State are
strictly prohibited. The Customs is empowered to inspect, in accordance with
the Interim Customs Law (Note 1.) any premises in SEZ which are suspected of
concealing smuggled goods.

    Article 6  Goods, means of conveyance, passengers’ luggage and personal
effects and mail destined to or originated from the non-SEZ areas of China,
on their way, from or to foreign countries or regions of Hong Kong and Macao
via SEZ, shall be handled in accordance with relevant State regulations on
the control of imports and exports.

    Article 7  The Customs establishments in SEZ shall register the statistics
of the goods, means of conveyance, passengers’ luggage and personal effects,
and mails entering and leaving SEZ according to the categories of import,
export or transport between SEZ and the non-SEZ areas.
Chapter II  Control over Goods Entering or Leaving SEZ

    Article 8  The consigner or the consignee or his agent shall fill in the
Customs declaration forms declaring the goods entering or leaving SEZ and
submit the relevant licenses and other documents to the Customs for
examination in accordance with pertinent regulations.

    Article 9  The Customs duties and consolidated industrial and commercial
taxes (products tax and value added tax) on goods imported by the
administrative organs, institutions and enterprises in SEZ for use within SEZ,
upon approval of the competent authorities specified by State regulations,
shall be dealt with in the following ways:

    (1) No duty and tax shall be levied on the machines, equipment, spare
parts, components, materials, fuel and transport vehicles imported for
construction and production in SEZ, nor on foodstuffs for the tourism and
catering trade and office equipment and means of transport imported in
reasonable quantities by enterprise, institutions and administrative organs
for their own use.

    (2) Duties and taxes shall be levied at specified rates on goods, spare
parts, and components which are subject to import restrictions set by the
State, except those imported by enterprises for their own use in production
and business operations or by administrative organs and institutions for
their own use.

    (3) The departments authorized by the State shall review and determine
annual import quotas for goods other than those listed in Items (1) and (2)
of this Article, and duties and taxes shall be computed and collected on the
goods imported within the set quotas at half of the specified rates, and
full-rate duties and taxes shall, according to relevant regulations, be
levied on the goods imported beyond the set quotas.

    Article 10  Exemption from export duties shall be granted to export goods
produced by enterprises in SEZ.

    Article 11  When the finished products manufactured in SEZ are transferred
to non-SEZ areas upon approval according to the relevant State regulations,
the consigner or his agent shall declare to the Customs by filling out a
declaration form for the transference of goods to other areas from SEZ and
submit it together with the approval document and other relevant papers to the
Customs in conformity with the regulations. The aforesaid products shall be
released by the Customs after checking.

    Goods imported into SEZ are strictly prohibited from being transferred
to other areas for sale unless otherwise stipulated by the State.

    Article 12  Finished products processed or assembled by enterprises in
SEZ with raw materials, spare parts, components (hereinafter referred to as
materials and parts) imported duty free shall be re-exported.

    Where the finished products mentioned above are transshipped, upon
approval, to other areas, payment of duties and taxes shall be calculated
on the basis of the imported materials and parts employed in the products.
Where the products are sold within SEZ, exemption from or payment of duties
and taxes on the imported material and parts shall be handled according to
the stipulations in Article 9 of these Provisions. In a case where the
consigner or his agent fails to clarify the description, quantities and value
of imported materials and parts employed in the products, payment of duties
and taxes shall be calculated at such a rate as if the finished products as a
whole had been imported.

    Article 13  The consignee or his agent shall declare to the Customs on
goods introduced into SEZ from other areas and the Customs shall release such
goods after checking.
Chapter III  Control over Means of Conveyance Entering or Leaving SEZ

    Article 14  All ships, trains, vehicles and aircraft entering or leaving
SEZ shall be declared to the Customs by the persons in charge, the owners or
owners’ agents for inspection.

    Article 15  All vehicles and vessels engaged in freight or passenger
service or those owned by enterprises or individuals in SEZ for transportation
shall be registered for the record at the Customs by the owners of the
vehicles and vessels with the approval documents issued by the relevant
competent authorities of SEZ together with a list stating the total number of
vehicles or vessels, licence numbers, their designations names of the drivers
or of the crew.
Chapter IV  Control over Luggage and Postal Articles Entering and Leaving
SEZ

    Article 16  Luggage carried by passengers entering SEZ from abroad or
leaving SEZ for abroad and personal articles sent by post from abroad into SEZ
or sent abroad by post from SEZ shall all be dealt with according to the
Customs rules on the control over the luggage and articles carried by the
passengers or postal articles entering or leaving Chinese territories.

    Article 17  Articles intended for the establishment of the persons from
abroad who have bought residential houses or have decided to reside in SEZ
for a long time shall be declared to the Customs with the certification papers
issued by the relevant competent authorities of SEZ. The articles shall be
released duty free after Customs inspection in they arc verified to be for
personal use and within reasonable quantities.

    Article 18  Luggage carried by passengers travelling between SEZ and
other areas shall be restricted to reasonable quantities and be released by
the Customs after checking.

    Article 19  Personal articles sent by post between SEZ and other areas
in both directions shall be reasonable quantities.
Chapter V  Supplementary Provisions

    Article 20  Smuggling and other infringements upon these Provisions shall
be dealt with by the Customs according to the Interim Customs Law (Note 2.)
and other relevant regulations. The judicial organs shall investigate the
criminal responsibilities of those who violate the criminal law.

    Article 21  The right to interpret these Provisions resides in the General
Customs Administrations; the Customs establishments in SEZ may, in accordance
with these Provisions, formulate specific rules for implementation, which shall
be enforced after approval by the General Customs Administration.

    Article 22  These Provisions shall be effective as of April 1, 1986.

Notes:

    Note 1., 2.  The interim Customs Law has been superseded by the Customs
of Law of Law of the People’s Republic of China, which was adopted at the
19th Meeting of the Standing Committee of the Sixth National People’s Congress
of the People’s Republic of China on January 22, 1987 — The Editor






REGULATIONS GOVERNING SUPERVISION AND CONTROL OVER IMPORT AND EXPORT OF BOILERS AND PRESSURE CONTAINERS (FOR TRIAL IMPLEMENTATION)