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SUPPLEMENTARY PROVISIONS ON THE MEASURES FOR THE ADMINISTRATION OF FOREIGN-INVESTED DISTRIBUTION ENTERPRISES OF BOOKS, NEWSPAPERS, AND PERIODICALS

Decree No. 33 of the General Administration of Press and Publication and the Ministry of Commerce

No. 33

The Supplementary Provisions on the Measures for the Administration of Foreign-invested Distribution Enterprises of Books, Newspapers,
and Periodicals have been adopted at the executive meeting of the General Administration of Press and Publication and by the Ministry
of Commerce on November 29, 2006. They are hereby promulgated for entry into force as of May 1, 2007.

Long Xinmin, Director of the General Administration of Press and Publication

Bo Xilai, Minister of the Ministry of Commerce

April 2, 2007

Supplementary Provisions on the Measures for the Administration of Foreign-invested Distribution Enterprises of Books, Newspapers,
and Periodicals

For the purpose of establishing a Hong Kong/Macao Closer Economic Partnership with the Mainland, the following supplementary provisions
are hereby constituted to the Measures for the Administration of Foreign-invested Distribution Enterprises of Books, Newspapers,
and Periodicals in accordance with Supplementary Agreement No. 3 on Hong Kong/Mainland Closer Economic Partnership Arrangement and
Supplementary Agreement No. 3 on Macao/Mainland Closer Economic Partnership Arrangement:

Where a Hong Kong or Macao service supplier has accumulatively set up over 30 stores in the Mainland, if it is engaged in the business
of books, newspapers or periodicals, etc. which have different trademarks and are provided by different suppliers, it is allowed
to hold a controlling share with a limitation of no more than 65%.



 
General Administration of Press and Publication, Ministry of Commerce
2007-04-02

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION CONCERNING INTENSIFYING THE ADMINISTRATION OF THE TRIAL IMPLEMENTATION OF TAX EXEMPTION, OFFSET AND REFUND FOR THE EXPORT OF PURCHASED PRODUCTS BY SPECIFIED PRODUCING ENTERPRISES






Circular of the State Administration of Taxation concerning Intensifying the Administration of the Trial Implementation of Tax Exemption,
Offset and Refund for the Export of Purchased Products by Specified Producing Enterprises

Guo Shui Han [2007] No.468

All state taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically
designated in the state plan:

By the end of 2006, in light of the actual situation of the previous period of the trial implementation of tax exemption, offset and
refund for the export of purchased products by specified producing enterprises, the State Administration of Taxation, after consulting
with the Ministry of Finance, issued the Circular of the State Administration of Taxation on the Adjustment of the List of Enterprises
Selected for the Trial Implementation of Tax Exemption, Offset and Refund for the Export of Purchased Products (Guo Shui Han [2006]No.945),
made some adjustments on the list of selected enterprises and advanced new requirements for doing a good job. With a view to guaranteeing
the smooth operation of the trial work of tax exemption, offset and refund for the export of purchased products by producing enterprises
and intensify the administration of tax collection, a circular on relevant issues is hereby rendered as follows:

1.

In each locality, the trial work of tax exemption, offset and refund for the export of purchased products by producing enterprises
shall be paid high attention, the examination and approval of applications of specified enterprises for tax exemption, offset and
refund for the export of purchased products shall be done in strict accordance with Document Guo Shui Han [2006] No.945, the authenticity
of the relevant vouchers and electronic information on tax refund (exemption) shall be guaranteed, and the features and changes of
the export of purchased products by producing enterprises shall be under close watch.

2.

Specific administrative measures shall be formulated. In each region, effective and feasible administrative measures shall be formulated
in light of the actual situation so as to ensure the implementation of policies on the trial work of tax exemption, offset and refund
for the export of purchased products by producing enterprises and guarantee the trial work is pertinent, the administration is effective
and the measures are effectively implemented.

3.

The summarizing and reporting work shall be well done. The summarizing work shall be well done so as to find out problems in the trial
implementation in time and put forward suggestions in respect of solving these problems. Each region shall upload electronic documents
indicating the semiannual and annual trial implementation, suggestions and the Statistical Table of the Export of Purchased Cargos
by Specified Producing Enterprises (see Appendix) to “upload by local bureaus/work arrangement of SAT” on the communication server
of the Import and Export Department of the State Administration of Taxation before July 10, 2007 and January 10, respectively, 2008.

Appendix: Statistical Table of the Export of Purchased Commodities by Specified Producing Enterprises

State Administration of Taxation

April 30, 2007




Appendix

￿￿

Appendix:

Statistical Form of the Export of Purchased
Commodities by Specified Producing Enterprises

￿￿

Reported by:￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿ Period:                                        

Unit:                                             

10,000 yuan/ USD 10,000

Enterprise Name

Customs Code

Total Sales Amount

Purchased Commodities

Tax Amount to Be Exempted, Offset and Refunded

Category of Self-made Products

Category of Purchased Commodities

Total Sales
(RMB)

Total
Export(USD)

Export Proportion

Amount of
Export(USD)

Proportion

Total Amount

Self-made Products

Purchased Products

1

2

3

4

5=￿￿4￿~exchange rate￿￿/3

6

7=6/4

8=9+10

9

10

11

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tabulator:￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿  Principal:￿￿￿￿￿￿￿￿￿￿￿￿￿￿
￿￿￿￿￿￿￿￿￿￿￿￿  Date:￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿ 

￿￿￿￿Notes:

￿￿￿￿1. The first six digits of the customs tariff
number of the category concerned shall be filled out in Columns No.11 and No.12.

Where more than one category are involved, they shall be arranged in the
sequence of customs tariff numbers.

     
2. The span of difference between the categories
of purchased commodities and those of self-made
products and between the
different categories of purchased commodities shall be paid attention to in all
regions.
      3. The data filled out in Columns 3 through 10
shall be the related data of the enterprise from
January 2007 to June 2007 for
the first report made by the enterprise and the data of the enterprise of the
whole year for the
following reports.



MEASURES FOR THE ADMINISTRATION OF FINANCIAL INSTITUTIONS’ REPORT OF TRANSACTIONS SUSPICIOUS OF FINANCING FOR TERRORIST PURPOSES

Decree No.1, 2007 of the People’s Bank of China

[2007]No.1

Under the Anti-Money Laundering Law of the People’s Republic of China, the Law of the People’s Republic of China on the People’s Bank
of China and other laws and regulations, the People’s Bank of China constituted the Measures for the Administration of Financial
Institutions’ Report of Transactions Suspicious of Financing for Terrorist Purposes have been adopted at the 13th executive meeting
on June 8th, 2007. They are hereby promulgated and shall enter into force as of the promulgation date.

President Zhou Xiaochuan

June 11, 2007

Measures for the Administration of Financial Institutions’ Report of Transactions Suspicious of Financing for Terrorist Purposes

Article 1

In order to monitor the activities of financing for terrorist purposes, prevent terrorism-oriented financing by means of financial
institutions and regulate financial institutions’ report of transactions suspicious of financing for terrorist purposes, the present
Measures are constituted under the Anti-Money Laundering Law of the People’s Republic of China, the Law of the People’s Republic
of China on the People’s Bank of China and other laws and regulations.

Article 2

The term “financing for terrorist purposes” as mentioned in the present Measures refers to the following behaviors:

1.

to raise, possess or use funds or other forms of property by terrorist organizations or terrorists;

2.

to assist terrorist organizations, terrorists, terrorism or terrorist criminal activities with funds or other forms of property;

3.

to possess, use or raise funds or other forms of property for terrorist purposes or terrorist criminal activities;

4.

to possess, use or raise funds or other forms of property for terrorist organizations or terrorists.

Article 3

The present Measures are applicable to the following financial institutions established within the territory of the People’s Republic
of China under law:

1.

policy banks, commercial banks, rural cooperative banks, urban credit cooperatives and rural credit cooperatives;

2.

securities companies, futures companies and fund management companies;

3.

insurance companies and insurance assets management companies;

4.

trust and investment companies, financial assets management companies, finance companies, financial lease companies, auto finance
companies and currency brokerage companies;

5.

other financial institutions as determined and announced by the People’s Bank of China.

The present Measures are applicable to the report of transactions suspicious of financing for terrorist purposes by institutions conducting
remittance, payment and clearing business, fund sale business and insurance brokerage.

Article 4

The People’s Bank of China and the branches thereof shall conduct supervision and check over financial institutions’ report of transactions
suspicious of financing for terrorist purposes.

Article 5

The anti-money laundering monitoring and analysis center set up by the People’s Bank of China takes charge of accepting and analyzing
the report of transactions suspicious of financing for terrorist purposes.

If the anti-money laundering monitoring and analysis center finds out that the report of transactions suspicious of financing for
terrorist purposes submitted by a financial institution is incomplete or erroneous, it may send a notice of supplement or correction
to the financial institution, which shall make a supplement or correction within five workdays after accepting the notice.

Article 6

The report of transactions suspicious of financing for terrorist purposes sent by financial institutions their working personnel
for the purpose of fulfilling the obligation of combating financing for terrorist purposes and under law shall be protected by law.

Article 7

A financial institution shall submit to its headquarters the report of transactions suspicious of terrorist-oriented financing, which
shall submit the electronic form of the report to the anti-money laundering monitoring and analysis center within 10 days upon the
occurrence of the related incident or appoint another institution to do so. If a financial institution has no headquarters or it
is impossible for it to report suspicious transactions to the anti-money laundering monitoring and analysis center via its headquarters
or any other institution appointed by its headquarters, the reporting method shall be separately determined by the People’s Bank
of China.

Article 8

In suspicion of any client, fund, transaction or potential transaction involved in any terrorism, terrorist criminal activities,
terrorist organization, or of any person conducting financing activities for terrorist purposes, a financial institution shall submit
a report of transactions suspicious of financing for terrorist purposes, irrespective of whether the amount of funds or the value
of the property involved is huge. A report of suspicious transactions shall be submitted under, but not limited to, any of circumstances
as follows:

1.

any client suspicious of raising or attempting to raise funds or property of other forms for any terrorist organization, terrorist
or crime of terrorist activities;

2.

any client suspicious of providing or attempting to provide funds or other forms of property for any terrorist organization, terrorist,
person conducting financing activities for terrorist purposes or terrorist criminal activities;

3.

any client suspicious of preserving, managing, operating funds or other forms of property for any terrorist organization or terrorists,
or attempting to do so;

4.

any client or his/its trading counterpart suspicious of being a terrorist organization, terrorist or person conducting financing activities
for terrorist purposes;

5.

any fund or any other form of property suspicious of being sourced from or being about to source from any terrorist organization,
terrorist or person conducting financing activities for terrorist purposes;

6.

any fund or property of other forms suspicious of being used or being about to be used for financing for terrorist purposes, crime
of terrorist activities or any other terrorist purposes, or being used by any terrorist organization, terrorist or person conducting
financing activities for terrorist purposes;

7.

other circumstances under which the financial institution and its working personnel have good reasons to suspect that any fund, property
of other forms, transaction or client is involved in terrorism, terrorist criminal activities, terrorist organization, terrorist
or personnel conducting financing activities for terrorist purposes.

Article 9

If any financial institution discovers or has good reasons to suspect that any client or his/its trading counterpart is in relation
to any of the following lists, it shall promptly file a report of suspicious transactions with China Anti-money Laundering Monitoring
and Analysis Center and the local branch of the People’s Bank of China, and take measures under law as required by the related competent
department:

1.

list of terrorist organizations or terrorists as announced by the related department or institution of the State Council;

2.

list of terrorist organizations or terrorists as announced by judicial authorities;

3.

list of terrorist organizations or terrorists as listed in any decision of the Security Council of the United Nations; or

4.

list of other terrorist organization suspects or terrorist suspects that must be paid attention to as required by the People’s Bank
of China.

If there is any other provision on the monitoring of above-mentioned lists in any law or administrative regulations, such provision
shall prevail.

Article 10

Financial institutions may refer to the Measures for the Administration of the Financial Institutions’ Report of Large-sum Transactions
and Suspicious Transactions (Decree No.2, 2006 of the People’s Bank of China) and other related provisions for the specific report
elements, report form and requirements for filling in such reports.

Article 11

If any financial institution violates the present Measures, it shall be imposed upon a punishment by the People’s Bank of China under
the provisions of Article 31 and Article 32 of the Anti-Money Laundering Law of the People’s Republic of China. And the People’s
Bank of China shall make suggestions to China Banking Regulatory Commission, China Securities Regulatory Commission or China Insurance
Regulatory Commission to take any of the following measures in light of different circumstances:

1.

to order the financial institution to stop its business for internal rectification or revoking its business license;

2.

to disqualify the directly liable directors, senior managers and other persons of the financial institution from their posts or to
forbid them to work in the financial industry;

3.

to order the financial institution to impose disciplinary punishment upon the directly liable directors, senior managers and other
persons.

If any branch of the People’s Bank of China at the county (municipal) level finds out any financial institution in violation of the
present Measures, it shall report to the branch of the People’s Bank of China at the next higher level, which shall give a punishment
or make a suggestion under the provision of the preceding paragraph.

Article 12

The Provisions of the People’s Bank of China on the Procedure of Administrative Punishment (Decree No.3, 2001 of the People’s Bank
of China) shall be abided by the People’s Bank of China or any of its branches at or above the county (municipal) level when imposing
any administrative punishment upon any financial institution.

Article 13

When implementing work of preventing and combating financing for terrorist purposes and fulfilling such obligations as establishing
and perfecting inner control system, identifying clients’ identity, keeping clients’ identity-related materials and confidentiality,
etc., financial institutions shall be governed by the related provisions on anti-money laundering

Article 14

The present Measures shall enter into force as of the promulgation date.

 
People’s Bank of China
2007-06-11

 



CIRCULAR OF MINISTRY OF COMMERCE ON PRINTING AND ISSUING THE “11TH FIVE-YEAR” DEVELOPMENT PROGRAM OF CONSTRUCTION OF PUBLIC BUSINESS INFORMATION SERVICE SYSTEM

Circular of Ministry of Commerce on Printing and Issuing the “11th Five-year” Development Program of Construction of Public Business
Information Service System

Departments of commercial administration of all provinces, autonomous regions, municipalities and cities special designated in the
state plan, units directly under administration of Ministry of Commerce, all chamber of commerce, associations, academies and all
economic and business institutions in foreign countries:

As an important special program stipulated in accordance with the “11th Five-year” Program Outline of Commerce Development, the “11th
Five-year” Development Program of Construction of Public Business Information Service System (hereinafter referred to as Program)
generally reviews the historical development and major achievements of construction of China’s public business information service
system during the “10th Five-year” program, analyzes the current problem and the posture in front, and puts forward the guiding ideology,
development goal, major measures and key project of construction of public business information service system during the “11th Five-year”
program. It is an important guiding document to well finish the work of public business information service system.

For purposes of releasing goal and task of the Program, here print and issue the Program to you all for implementation in line with
practical situation.

The Ministry of Commerce

January 5, 2007



 
The Ministry of Commerce
2007-01-05

 






MEASURES FOR ADMINISTRATION OF FOOD SAFETY IN CIRCULATING FIELD

Decree No.1, 2007 of Ministry of Commerce

The 10th ministerial meeting of Ministry of Commerce has approved the Measures for Administration of Food Safety in Circulating Field
on Dec 30, 2006, which is now promulgated and shall take effect as from May 1, 2007.
Minister: Bo Xilai

January 19, 2007

Measures for Administration of Food Safety in Circulating Field

Article 1

For purposes of regulating food safety in circulating field, enhancing industrial administration on food circulation, ruling food
operation and safeguarding security of food consumption, these Measures are formulated in accordance with relevant state laws and
regulations.

Article 2

The term “markets” as mentioned herein refers to wholesale markets and retail markets (including fairs, supermarkets, department
stores, warehouse-type member shops, convenient stores, grocery stores, etc) that are engaged in food trade activity.

The term “franchiser” as mentioned herein refers to organizations and individuals engaging in business of food wholesale, retail and
field fabrication sales.

Article 3

All food circulation activities within the territory of the People’s Republic of China shall be governed in accordance with these
Measures.

Article 4

The Ministry of Commerce is in charge of industrial administration on food safety in circulating field.

Departments of commercial administration above county-level are responsible for industrial administration on food safety in circulating
field, guiding and supervising markets to set up management system on food circulating safety.

Article 5

Markets and operators shall obtain relevant certificate of food business such as business license required by laws and regulations.
Food business environment shall comply with relevant laws and regulations and standards of national food safety and sanitation.

Article 6

Market shall set up management departments in charge of food safety or have executive personnel of food safety, so as to supervise
food safety status of markets.

Article 7

Market shall set up the following managerial systems:

(1)

Agreement access system. Markets shall sign agreement of food safety guarantee with market operators, clarifying safety responsibilities
of food operation.

Markets are encouraged to set up direct supply relations directly with food producing base and food processing factories.

(2)

Operations management system. Markets shall establish operation management files for operators, such as dynamic information of identity
of operators, contact, products, and credit as well. The information above shall be kept for at least 2 years since the operator
quit from the market.

Forgery of operator files is forbidden.

(3)

Certificate and license asking system. Markets shall ask food operators for certificate and invoice, investigate effective certification
of food supplies and food safety, and keep copies of relevant certificates and licenses.

(4)

Purchase and sale machine account system. Markets shall establish or require operators to establish system of purchase and sale machine
account, recording contents like producers, name, stock time, origin, specifications, quality grade, and quantity. Those undertaking
wholesale business shall record buyers and their contact, time, specification and quantity.

Where any hidden danger is found in food for sale in the markets, markets shall terminate the sale of the food immediately upon confirmation
of qualified investing authority and report to relevant departments for disposal according to law.

Article 8

Markets are encouraged to apply for green market attestation and use relevant certificate symbols.

Plagiarisms of above attestation symbols are forbidden.

Article 9

Relevant food safety facilities and conditions are required for sales of food of field fabrication sales, bulk sales and frozen and
fresh food. These foods shall be away form contaminant and comply with national safety standards of relevant foods.

Making of foods of field fabrication are encouraged to be visible to consumers.

Fresh and cooked food shall be shelved in different division to prevent crossing contamination.

Article 10

Departments of commercial administration shall establish market inspection system, inspecting and supervising establishment of food
safety management system and implementing status.

Article 11

Departments of commercial administration shall enhance management on credit files of food safety in circulating field, and improve
market credit supervision and penalty mechanism of loosing credit.

Article 12

Departments of commercial administration shall set up coordination and cooperation mechanism with intermediary agent organizations
of food circulating industries, and let the industrial organizations play role of self discipline.

Article 13

News agencies are encouraged to carry out supervision of public opinion on those against these Measures.

Units and individuals may inform local departments of commercial administrations of violation of these Measures, and write to state
or request.

Article 14

Where markets are in violation of Articles 6 and 7 and Item (2) of Article 8 of these Measures, departments of commercial administration
shall warn and order them to correct in time limit. Those fail to do so shall be fined 1000 to 5000 yuan; where the circumstance
is serious, they shall be fined 5000 to 30, 000 yuan and announced to the public.

Article 15

Staff of departments of commercial administration committing an act of dereliction of duty or misuse of powers shall be imposed administrative
disciplinary measures.

Article 16

These Measures shall be subject to the interpretation of the Ministry of Commerce.

Article 17

These Measures shall enter into force as of May 1, 2007.



 
The Ministry of Commerce
2007-01-19

 






ANNOUNCEMENT NO.2, 2007 OF THE GENERAL ADMINISTRATION OF CUSTOMS OF THE PEOPLE’S REPUBLIC OF CHINA

Announcement No.2, 2007 of the General Administration of Customs of the People’s Republic of China

[2007] No.2

In accordance with the regulations of Anti-dumping Regulations of People’s Republic of China and the results of the anti-dumping investigation
on imported Sulfamethoxazole originated from India (hereinafter referred to as the investigated products), Ministry of Commerce made
the preliminary arbitration to implement temporary anti-dumping measures on the investigated products.

Matters concerning the above-mentioned measures are notified as follows:

1.

As of February 1st, 2007, the investigated products shall be charged with deposit in security. Anti-dumping deposit = (price after
customs duty * rate of anti-dumping deposit)*(1+ rate of value-added tax of import)

2.

Any unit applying for importing Sulfamethoxazole shall submit certificate of place of origin to the Customs. If the place of origin
is India, invoice of the original manufacturer shall be provided.

3.

Issues concerned imposition of anti-dumping deposit shall be conducted in accordance with Announcement No. 9, 2001 of the General
Administration of Customs of the People’s Republic of China and Decree No. 111 of the General Administration of Customs of the People’s
Republic of China.

4.

The Customs shall notify later about the transaction of the imposed anti-dumping deposit.

5.

Any similar product for import could apply to Ministry of Commerce for the arbitration on whether it is under the temporary anti-dumping
measures. The Customs shall act accordingly.

Appendix:

1.

Announcement No. 2, 2007 of Ministry of Commerce

2.

Anti-dumping Deposit Ratio Table for Sulfamethoxazole

General Administration of Customs

January 31, 2007



 
General Administration of Customs
2007-01-31

 






CIRCULAR OF THE MINISTRY OF COMMERCE ON ENTRUSTING GUANGZHOU ECONOMIC-TECHNOLOGICAL AREA TO EXAMINE, APPROVE AND ADMINISTER THE RELEVANT WORK ON FOREIGN-INVESTED ENTERPRISES IN SOME SERVICE TRADE SECTORS

Circular of the Ministry of Commerce on Entrusting Guangzhou Economic-Technological Area to Examine, Approve and Administer the Relevant
Work on Foreign-invested Enterprises in Some Service Trade Sectors

Shang Zi Han [2007] No. 11

Guangzhou Municipal People’s Government and Guangzhou Economic-Technological Area,

Pursuant to Some Opinions on Further Promoting the Development Level of National Economic and Technical Development Zones (Guo Ban
Fa [2005] No. 15) as forwarded by the General Office of the State Council to the Ministry of Commerce, the Ministry of Land and Resources
and the Ministry of Construction as well as the provisions of the Ministry of Commerce on the authorized examination, approval and
administration of foreign-funded enterprises, the Ministry of Commerce has finished the archival filing, examination and approval
of the management systems of all the national economic and technological development zones and the connected network for examination
and approval of foreign capital. The related matters are hereby notified as follows:

1.

Upon research, we hereby authorize the Management Committee of Guangzhou Economic-Technological Area to be responsible for examining,
approving and administrating the foreign-funded enterprises in related service trade sectors set up inside its zone for the purpose
of encouraging and supporting the national economic and technological development zones to vigorously develop the high value-added
service industries.

2.

The Management Committee of Guangzhou Economic-Technological Area shall, in strict accordance with the laws and regulations on foreign
investments as well as the related provisions on foreign-funded enterprises of non-vessel shipping, construction, printing, construction
engineering design, road transport, commerce and international freight forwarding (see appendix), carefully examine and approve the
related foreign-funded enterprises set up within its zone, and report the related problems found in the work to the Ministry of Commerce
in a timely manner. The Ministry of Commerce shall implement the inspection of the aforesaid examination, approval and administration,
and cancel the authorization to a national economic and technological development zone which commits illegal examination and approval
during the course of authorization.

3.

The Management Committee of Guangzhou Economic-Technological Area shall conduct a good job in examination and approval, archival filing
and statistical work in strict accordance with the requirements of the Ministry of Commerce for networking and online joint annual
inspection and by taking advantage of the networking certification system for foreign-funded enterprises. The related statistical
data shall be in line with the requirements so that the Ministry of Commerce can keep informed of the situation and strengthen supervision.

4.

Guangzhou Economic-Technological Area, the management system of which needs to be improved, has not set up an independent finance
department yet. Guangzhou Economic-Technological Area shall keep a close eye on and further resolve the problems in the management
system, keep a concise and efficient management system, and improve the level for examining, approving and administrating the foreign-funded
enterprises. Where any management system problem that may affect the work on examining, approving and administrating the foreign-funded
enterprises is found, this Ministry will withdraw the authorized power of examination, approval and administration immediately.

5.

This circular shall enter into force as of the promulgation date.

Ministry of Commerce

February 12, 2007
Appendix:
Related documents on entrusting the competent provincial departments of commerce to examine, approve and Administer foreign-funded
service trade Enterprises

1.

Circular of the Ministry of Commerce on Entrusting the Competent Provincial Departments of Commerce to Examine and Manage Foreign-funded
Non-vessel Shipping Enterprises (Shang Zi Han [2005] No. 89)

2.

Circular of the Ministry of Commerce on Entrusting the Provincial Administrative Departments of Commerce to Examine, Approve and Administer
the foreign-funded Construction Enterprises (Shang Zi Han [2005] No. 90)

3.

Circular of the Ministry of Commerce on Entrusting the Administrative Departments of Commerce at the Provincial Level to Examine and
Administer the Foreign-funded Printing Enterprises (Shang Zi Han [2005] No. 91)

4.

Circular of the Ministry of Commerce on Entrusting the Administrative Departments of Commerce at the Provincial Level to Examine and
Administer the Foreign-funded Designing Enterprises for Engineering Projects (Shang Zi Han [2005] No. 92)

5.

Circular of the Ministry of Commerce on Entrusting the Competent Provincial Departments of Commerce to Examine and Manage Some Foreign-funded
Road Transport Enterprises (Shang Zi Han [2005] No. 93)

6.

Circular of the Ministry of Commerce on Entrusting Local Departments to Check Foreign-funded Commercial Enterprises (Shang Zi Han
[2005] No. 94)

7.

Circular of the Ministry of Commerce about the related Issues on Entrusting National Economic and Technical Development Zones to Examine
and Approve foreign-funded Commercial Enterprises and International Freight Forwarding Enterprises (Shang Zi Han [2005] No. 102)

8.

Measures for the Administration of Foreign-funded International Freight Forwarding Enterprises (Decree No. 19, 2005 of the Ministry
of Commerce)



 
Ministry of Commerce
2007-02-12

 






REGULATION ON THE NATIONAL NATURAL SCIENCE FUNDS

Decree of the State Council

No. 487

The Regulation on the National Natural Science Funds has been adopted at the 169th executive meeting of the State Council on February
14, 2007. It is hereby promulgated and shall enter into force as of April 1, 2007.
Premier Wen Jiabao

February 24, 2007

Regulation on the National Natural Science Funds
Chapter I General Rules

Article 1

In order to regulate the use and management of National Natural Science Funds, advance the efficiency in the use of National Natural
Science Funds, promote the basic research, cultivate science and technology talents, and intensify the independent innovation ability,
this Regulation is formulated in accordance with the Law of the People’s Republic of China on Scientific and Technological Progress.

Article 2

The state establishes the National Natural Science Funds, in order to subsidize the basic research as prescribed in the Law of the
People’s Republic of China on Scientific and Technological Progress.

Article 3

The National Natural Science Foundation is mainly funded by the allocations of the central treasury, and any donation from natural
persons, legal persons and other organizations is encouraged by the National Natural Science Foundation.

The central treasury will incorporate the national natural science funds into the budget thereof.

Article 4

The grants made by the National Natural Science Foundation shall comply with the principles of openness, justice and impartiality,
as well as the guidelines of respecting science, developing democracy, advocating competition, improving cooperation, prompting innovations
and guiding the future.

Article 5

When deciding the projects to be subsidized by National Natural Science Funds (hereinafter referred to as funded projects), the professionals
shall be brought into full play, and the mechanism of macro guidance, automatic application, equal competition, evaluation by the
experts working in the same field and selecting the best for support shall be adopted.

Article 6

The natural science fund management organ of the State Council (hereinafter referred to as fund management organ) shall have the
responsibilities of managing the National Natural Science Funds and surveilling the implementation of funded projects.

The science and technology competent authority of the State Council shall have the responsibilities of the macro administration and
overall coordination of the work concerning National Natural Science Funds. The finance competent authority of the State Council
shall administrate and surveil the budget and finance of National Natural Science Funds. And the audit department shall surveil the
use and management of National Natural Science Funds.

Chapter II Organization and Planning

Article 7

A fund development plan and the annual directory of funded projects shall be formulated by the fund management organ in light of
the plan for national economic and social development, the plan for scientific and technological development as well as the circumstance
of scientific and technological development. The fund development plan shall detail the fields to be developed with precedence, and
the annual directory of funded projects shall indicate the scope of projects to be supported with precedence. Exclusive funds shall
be set up under National Natural Science Funds for cultivating young science and technology talents.

The formulation of a fund development plan and the annual directory of funded projects by the Funds management organ shall widely
heed the opinions from the higher education institutions, scientific research institutions, academic groups, as well as related state
organs and enterprises, and organize related experts for scientific demonstrations. The annual directory of funded projects shall
be announced 30 days before the receipt of the applications for funded projects.

Article 8

The higher education institutions, scientific research institutions or any other public welfare institution that has the independent
legal person qualification and develops basic research within the territory of the People’s Republic of China may make registration
at the fund management organ as supporting institutions.

Where a supporting institution that has existed before the implementation of this Regulation requires to be registered as a supporting
institution, the registration shall be made by the fund management organ.

The fund management organ shall announce the names of registered supporting institutions.

Article 9

In the management work of fund granting, a supporting institution shall perform the duties as follows:

(1)

It shall organize applicants to apply for the subsides of National Natural Science Funds;

(2)

It shall examine the genuineness of the materials as submitted by applicants or project principals;

(3)

It shall provide the requirements for implementing the funded projects, and safeguard the time for project principals and participants
to carry out funded projects;

(4)

It shall follow up the implementation of funded projects, and surveil the use of Fund subsides; and

(5)

It shall cooperate with the fund management organ in surveilling and examining the implementation of funded projects.

The fund management organ shall guide and surveil the management work of supporting institutions relating to the granting of funds.

Chapter III Application and Evaluation

Article 10

Any science and technology talent in a supporting institution that satisfies the following requirements may apply for the National
Natural Science Funds:

(1)

He has the experiences of assuming the basic research topic or other basic research; and

(2)

He has a senior academic rank (post_title) or a doctoral degree, or has a recommendation from two science and technology persons who are
working in the same research field and have a senior academic rank (post_title).

Where a science and technology personnel that engages in basic research satisfies the requirements as prescribed in the preceding
paragraph, has no job or works for an entity that is not a supporting institution, if he has obtained the consent of a supporting
institution as registered at the fund management organ after negotiations, he may apply for the National Natural Science Funds under
this Regulation. The supporting institution shall deem him as a science and technology personnel of its own, and perform effective
management to him in accordance with this Regulation.

An applicant shall be the person in charge of an application for funded projects.

Article 11

An applicant that applies for the National Natural Science Funds shall determine the research project upon the annual directory of
funded projects, and submit an application in written form to the fund management organ through the supporting institution within
the time limit as prescribed.

An applicant that applies for the National Natural Science Funds shall submit the materials that may prove he has satisfied the requirements
as prescribed in Article 10 of this Regulation; in case of any special requirement in the annual directory of funded projects, the
applicant shall also submit the certification materials that prove he has satisfied the said requirements.

Where an applicant has obtained other subsides for the project research for which he is applying for the Funds subsides, the information
on the said subsidies shall be explained in the application materials. An applicant shall have the responsibilities of the genuineness
of the application materials he submits.

Article 12

The fund management organ shall complete the preliminary examination of application materials within 45 days as of the expiration
of the term for applying for funded projects. As regards an application that complies with this Regulation the fund management organ
shall accept it, and shall publicize the basic information on the applicant, the name of the supporting institution as well as the
name of the project for which the application for funded projects has been filed. In case of any of the following circumstances occurs
to an application, the fund management organ may not accept it, and shall inform the applicant through the supporting institution
in written form, and shall explain the reasons:

(1)

The applicant fails to satisfy the requirements as prescribed in this Regulation;

(2)

The application materials fails to comply with the requirements as mentioned in the annual directory of funded projects; or

(3)

The number of funded projects as applied for by the applicants is in excess of that as prescribed by the fund management organ.

Article 13

The fund management organ shall employ the experts that have a fairly high academic level and good professional ethics in the same
field to evaluate the applications for funded projects. The fund management organ shall formulate the specific measures for employing
evaluation experts.

Article 14

As regards the applications for funded projects that have been accepted, the fund management organ shall randomly choose three or
more experts from the database of experts working in the same field for a communication-based evaluation, and then organize the experts
for a meeting-based evaluation; and with respect to the applications for funded projects that are temporarily brought forward because
of specific demands of national economic and social development or other specific circumstances, the fund management organ shall
carry out only a communication-based evaluation or meeting-based evaluation.

An evaluation expert that finds it difficult to render an academic judgment or is too busy to make an evaluation for the applications
for funded projects shall timely inform the fund management organ, and the fund management organ shall choose another evaluation
expert for evaluation as required by this Regulation.

Article 15

With respect to an application for funded projects, an evaluation expert shall render an independent judgment and evaluation in terms
of scientific value, innovation, social influences as well as the possibility of research schemes, and bring forward the evaluation
opinions thereof.

When giving the evaluation opinions about the applications for funded projects, an evaluation expert shall also consider the research
experiences of the applicants and participants, the rationality of the plan for using the funds, the information on other grants
for research topics, the information on the implementation of the funded projects by the applicants as well as the necessity for
continuous subsidies.

The evaluation opinions as brought forward through the meeting-based evaluation shall be determined by voting.

Article 16

As regards an application for a funded project on which most of evaluation experts in the communication-based evaluation believe
that the fund may not be granted, but this project involves many innovations, and a meeting-based evaluation may be performed if
two evaluation experts that participate in the meeting-based evaluation have signed recommendation for it, unless it is an application
for a funded project that is temporarily submitted because of special demands or circumstances as prescribed in Article 14 of this
Regulation.

The fund management organ shall publicize the recommendation opinions that are brought forward by evaluation experts.

Article 17

The fund management organ shall determine the research projects to be funded in accordance with this Regulation and the evaluation
opinions brought forward by experts, and may not deny the evaluation opinions brought forward by experts on the ground that it has
different academic viewpoints from those of evaluation experts.

Where the fund management organ determined to grant a fund, it shall timely inform the applicant and the supporting institution in
written form, and publicize the basic information on the applicant, the name of the supporting institution, the name of the project
for which an application for funded projects has been submitted, and the amount of the fund to be granted; in case it determined
not to grant a fund, it shall timely inform the applicant and the supporting institution in written form, and explain the reasons.

The fund management organ shall sort out the evaluation opinions of experts and provide them to the applicant.

Article 18

Where an applicant does not satisfy with the decision on refusal to accept his application or to fund his project as made by the
fund management organ, he may submit a request for reexamination to the fund management organ in written form within 15 days upon
receipt of the circular. The different opinions on the academic judgment of evaluation experts as held by an applicant may not be
deemed as the reasons for requesting the reexamination.

The fund management organ shall complete the reexamination within 60 days as of receipt of a reexamination request as submitted by
an applicant. Where the fund management organ deems that the former decision is consist with this Regulation, it shall maintain the
former decision and inform the applicant in written form. Where the fund management organ deems that the former decision is not consist
with this Regulation, it shall annul the former decision, organize evaluation experts to evaluate the application for the funded
project as submitted by the applicant again, make a decision, and inform the result to the applicant and the supporting institution
in written form.

Article 19

In the evaluation of funded projects, a personnel of the fund management organ or an evaluation expert shall apply for withdrawal
in case of any circumstance as follows:

(1)

The personnel of the fund management organ or the evaluation expert is a close family member of the applicant or participant or has
any other relation which may affect the fair evaluation;

(2)

The funded project as submitted by an evaluation expert himself is identical with the one as submitted by the applicant or is close
to it; or

(3)

The evaluation expert and the applicant or participant work for a same legal person entity.

The fund management organ shall, according to the application, make a decision on whether to withdraw or not upon examination, or
may directly make such a decision without an application.

An applicant for funded projects may provide a name list of three or less evaluation experts that are not suitable for evaluation,
and the fund management organ shall the said name list upon the actual circumstance when selecting evaluation experts.

Article 20

Any personnel of the fund management organ may neither apply for or participate in the application for the National Natural Science
Funds, nor may he interfere the evaluation of evaluation experts.

Any personnel of the fund management organ or evaluation expert may neither reveal the basic information with respect to evaluation
experts, evaluation opinions, evaluation results or other information on the evaluation that has not been revealed.

Chapter IV Grant of Funds and Implementation

Article 21

A supporting institution and a project principal shall fill in a project plan in light of the evaluation opinions of evaluation experts
and the amount of fund as determined by the fund management organ within 20 days as of the receipt of a circular on the grant of
fund as issued by the fund management organ, and submit it to the fund management organ for examination and approval.

When filling in a project plan, a supporting institution and a project principal may not alter other contents in the application form
except that they do so under the evaluation opinions of evaluation experts or the amount of fund as determined by the fund management
organ.

Article 22

As regards the research projects to be funded in this year, the fund management organ shall apply to the finance competent authority
of the State Council for budgetary allotments to funded projects in a timely manner in accordance with the Budget Law of the People’s
Republic of Chin and other related provisions of the state, unless for those funded projects that are temporarily brought forward
because the specific demands or other specific circumstances as prescribed in Article 14 of this Regulation.

A supporting institution shall inform the fund management organ and the project principal thereof within seven days as of the receipt
of fund.

A project principal shall use the funds as required in the project plan, and a supporting institution shall surveil the project principal’s
use of the funds. No project principal or supporting institution may infringe or misappropriate the funds by any means. The specific
measures for the use and management of funds subsides shall be formulated by the finance competent authority of the State Council
and the fund management organ.

Article 23

A project principal shall organize and implement the research work in light of the project scheme, make original records on the implementation
of the funded project, and submit an annual progress report concerning the project to the fund management organ.

A supporting institution shall inspect the annual progress reports concerning the funded projects, check the original records on the
implementation of the funded projects, and file the annual reports concerning the management on funded projects to the fund management
organ.

The fund management organ shall inspect the annual progress reports on the projects and the annual reports concerning the management
on funded projects.

Article 24

The supporting institution may not change the project principal without approval while a funded project is implemented.

In case of any of the following circumstances occurs to a project principal, the supporting institution shall submit an application
for altering this project principal or terminating the implementation of the funded project in a timely manner, and report it to
the fund management organ for approval; and the fund management organ may directly make a decision concerning terminating the implementation
of the funded project:

(1)

He is a science and technology personnel of the supporting institution no more;

(2)

He can not implement the research work continuously; or

(3)

He steals the scientific research achievements of someone else or resorts to fraud in scientific research.

Where a project principal shifts his post to another supporting institution, the former supporting institution may submit an application
for altering the supporting institution to the fund management organ for approval upon negotiations between the new supporting institution
and the former supporting institution. If it fails to reach unanimity between the new supporting institution and the former supporting
institution upon negotiations, the fund management organ shall make a decision on terminating the implementation of the funded project
under the charge of the said project principal.

Article 25

Where it is necessary to make some major adjustments to the research contents or research plans during the process of implementation
of a funded project, the project principal shall timely submit an application, and apply to the fund management organ for approval
upon examination of the supporting institution.

Article 26

A project principal shall submit a concluding report to the fund management organ through the supporting institution within 60 days
as of the expiration of the funded project; and as regards a funded project that obtains the research achievements, a research achievement
report shall be submitted at the same time.

A supporting institution shall verify the concluding report and establish the archives on funded projects. When examining a concluding
report, a supporting institution shall check the original records on the implementation of the funded project.

Article 27

The fund management organ shall examine the concluding reports in a timely manner. As regards a concluding report the finalizing
topics of which fails to satisfy the requirements, the fund management organ shall give its opinions and notify them to the supporting
institution and the project principal in written form.

The fund management organ shall announce the abstracts of the concluding reports, research achievement reports and applications for
funded projects, and solicit the comments and opinions of the general public.

Article 28

Where any funded project obtains the research achievements, it shall indicate that it is funded by the National Natural Science Foundation
when it is publicized.

Chapter V Surveillance and Administration

Article 29

The fund management organ shall take a sample survey on the implementation of the funded projects and the performance of duties by
the supporting institutions, and shall check the original records on the implementation of the funded projects at the time of survey.
The results of sample survey shall be recorded and publicized, and can be consulted by the general public.

The fund management organ shall set up archives on the credits of project principals and supporting institutions.

Article 30

The fund management organ shall regularly assess the performance of appraising duties by evaluation experts, and set up archives
on the credits of evaluation experts according to the evaluation results; and may not employ those who have stolen scientific research
achievements of others or resorted to fraud in scientific research.

Article 31

At the end of each accounting year, the fund management organ shall publish the funded projects, the allotment of funds and the punishments
to those acts against this Regulation, etc. in this year.

The fund management organ shall assess the work on the grant of funds at regular intervals, publish the evaluation reports, and regard
the evaluation reports as the evidence for formulating the fund development plan and the annual directory of funded projects.

Article 32

The applicant may show his opinions to the fund management organ concerning the evaluation work of evaluation experts after the evaluation
experts have brought forward their evaluation opinions on an application for a funded project as submitted by an applicant; and the
fund management organ shall consider the opinions of this applicant when evaluating the performance of appraising duties by evaluation
experts.

Any entity or individual may tip off or accuse any act in violation of this Regulation as committed by the fund management organ or
any of the personnel thereof, any evaluation expert, supporting institution, person in charge of the management of funded projects,
applicant or project principal.

The fund management organ shall publicize its contact phone numbers, address and e-mail address.

Article 33

The related information as publicized by the fund management organ as prescribed by this Regulation shall be identical with the confidentiality
provisions of the state.

Chapter VI Legal Liabilities

Article 34

Where an applicant or participant forges or changes any application materials, he shall be given a warning by the fund management
organ; and if the application for fund thereof has been determined to be granted, the original decision on fund granting shall be
annulled, and the allotted funds shall be recovered; in case of any serious circumstance, the applicant or participant may not apply
for the National Natural Science Funds or be concerned with the application for the Funds for 3 up to 5 years, nor may he be promoted
to a higher academic technical rank (post_title).

Article 35

In case of any of the following acts in violation of this Regulation as committed by a project principal or participant, a warning
shall be given, the allotment of Funds subsides shall be suspended, and he shall be ordered to make correction within a time limit;
if he fails to make correction within the time limit, the original decision on fund granting shall be annulled, and the allotted
funds shall be revoked; in case of any serious circumstance, the applicant or participant may not apply for the National Natural
Science Funds or participate in the application for the Funds for 5 up to 7 years:

(1)

He fails to perform research in light of the project plan;

(2)

He alters the research contents or plans without approval;

(3)

He fails to submit an annual progress report, concluding report or research achievement report on the project in accordance with this
Regulation;

(4)

He submits any false or invented report, original records or related materials; or

(5)

He occupies or misappropriates the funds.

The project principal or participant that commits any act referred to in Subparagraph (4) or (5) of the preceding paragraph may not
be promoted to a higher academic rank (post_title) for 5 up to 7 years under any serious circumstance.

Article 36

In case of any following circumstance occurs to a supporting institution, the fund management organ shall give it a warning and order
it to make correction within a time limit; in case of any serious circumstance, a circular of criticism shall be publicized and the
said institution may not be taken as the supporting institution for 3 up to 5 years:

(1)

It fails to perform the duty of guaranteeing the research conditions for the funded project;

(2)

It fails to examine the genuineness of the materials or reports as submitted by applicants or project principals;

(3)

It fails to submit an annual progress report, concluding report or research achievement report on the projects in accordance with
this Regulation;

(4)

It connives and harbors any applicant or project principal in their fraudulent activities;

(5)

It changes the project principals without approval;

(6)

It refuses to cooperate the fund management organ to surveil and inspect the implementation of the funded projects; or

(7)

It retains or misappropriates any of the funds.

Article 37

In case of any of the following acts committed by an evaluation expert, the fund management organ shall give him a warning and order
him to make correction within a time limit; in case of any serious circumstance, a circular of criticism shall be publicized and
the fund management organ may not employ him as an evaluation expert:

(1)

He fails to perform the appraising duties as prescribed by the fund management organ;

(2)

He fails to apply for withdrawal in accordance with this Regulation;

(3)

He reveals the information on the evaluation that has not been publicized;

(4)

He makes unfair evaluation of the applications for funded projects; or

(5)

He seeks unjustifiable interests by taking advantage of such work.

Article 38

In case of any of the following acts committed by a personnel of the fund management organ, he shall be punished:

(1)

He fails to apply for withdrawal in accordance with this Regulation;

(2)

He reveals the information on the evaluation that has not been publicized;

(3)

He interferes the evaluation work of evaluation experts; or

(4)

He seeks unjustifiable interests by taking advantage of such work.

Article 39

In case of any of the following acts in violation of this Regulation committed by any entity or individual, and if a crime is constituted,
he shall be subject to criminal liabilities:

(1)

He embezzles or misappropriates any of the funds;

(2)

Any personnel of the fund management organ or an evaluation expert exacts or illegally accepts the properties of others or seeks for
other unjustifiable interests when performing the duty as prescribed in this Regulation;

(3)

An applicant, a project principal or participant forges or changes the official documents, certificates or seals of state organs;

(4)

An applicant, a project principal or participant, a supporting institution or any of its staff members in charge of the management
of funded projects provides any property or money to any personnel of the fund management organ in order to seek for unjustifiable
interests, or

(5)

He divulges state secrets.

Where an applicant, a project principal or participant has been subjected to criminal liabilities due to his committing any act as
prescribed in the preceding paragraph, he may not apply for the application for the National Natural Science Funds or be concerned
with the Funds for life.

Article 40

Anyone that is in violation of the related laws or administrative regulations on finance shall be punished and sanctioned in accordance
with related laws or administrative regulations.

Chapter VII Supplementary Rules

Article 41

As regards the research projects that the subsides have been granted upon decision before the implementation of this Regulation,
it shall be implemented in accordance with the related provisions of the state that were in force when the decision was made.

Article 42

As regards the work on the grant of funds relating to the use and management of the organization and implementation fees for projects
or the subsidies for academic exchanges on basic research and for basic research environment construction, the fund management organ
shall implement the related provisions of the finance competent authority of the State Council.

Article 43

This Regulation shall enter into force as of April 1, 2007.



 
State Council
2007-02-24

 






REPLY OF THE STATE ADMINISTRATION OF TAXATION CONCERNING THE TAX EXEMPTION OF HONG KONG OCEAN PARK, GUANGZHOU REPRESENTATIVE OFFICE

Reply of the State Administration of Taxation Concerning the Tax Exemption of Hong Kong Ocean Park, Guangzhou Representative Office

Guo Shui Han [2007] No.273

The State Taxation Bureau of Guangdong:

We have received your Request for Instructions upon Matters about the Tax Exemption of Hong Kong Ocean Park, Guangzhou Representative
Office (Yue Guo Shui Fa [2006] No.260), and make a reply as follows:

The Guangzhou Representative Office of Hong Kong Ocean Park was set up in 2006, and mainly undertakes the liaison and consultation
work on the head office’s related e business. A certificate produced by the Hong Kong Tax Authority proves that the head office,
Hong Kong Ocean Park, is a non-profitable institution. In accordance with the provisions of the Circular of the State Administration
of Taxation Concerning the Related Matters about Reinforcing the Collection and Administration of Taxes on the Permanent Establishments
of Foreign Enterprises (Guo Shui Fa [1996] No.165) and the Circular of the State Administration of Taxation Concerning the Related
Matters about the Tax Administration of the Permanent Establishments of Foreign Enterprises (Guo Shui Fa [2003] No.28), as regards
the business activities conducted by Hong Kong Ocean Park, Guangzhou Representative Office, business tax and enterprise income tax
shall be exempted as long as they fall within the scope as prescribed in Item (2), Paragraph 2 of Article 1 of the Document (Guo
Shui Fa [1999] No.165).

The State Administration of Taxation

March 6, 2007



 
The State Administration of Taxation
2007-03-06

 






CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON ISSUES CONCERNING FOREIGN EXCHANGE CONTROL RELATING TO THE RESTRUCTURING OF FOREIGN-FUNDED BANKS

Circular of the State Administration of Foreign Exchange on Issues concerning Foreign Exchange Control Relating to the Restructuring
of Foreign-funded Banks

Hui Fa [2007] No.15

The branches and foreign exchange departments of the State Administration of Foreign Exchange in each province, autonomous region
and municipality directly under the Central Government, as well as the municipal branches of the State Administration of Foreign
Exchange in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo:

According to the Regulation of the People’s Republic of China on the Administration of Foreign-funded Banks as promulgated by the
State Council on November 11, 2006, the related issues concerning foreign exchange control relating to the restructuring of the branches
of foreign banks are hereby notified as follows:

1.

Business qualification

A restructured solely foreign-funded bank shall succeed to the qualification of the original foreign bank branch that has been approved
for developing spot foreign exchange settlement and sale, forward foreign exchange settlement and sale, RMB and foreign currency
swap as well as other derivative business between RMB and foreign currencies, etc., and shall go through the registration alteration
formalities at the branch of the State Administration of Foreign Exchange (including foreign exchange department, hereinafter referred
to as foreign exchange branch) at the place where it is located. A branch of the solely foreign-funded bank shall succeed to its
own qualification for developing the related settlement and sale business as well as the derivative business between RMB and foreign
currencies as approved before the restructuring of bank, and shall go through the registration alteration formalities at the foreign
exchange branch of the place where it is located.

A restructured solely foreign-funded bank shall assume the membership of the original foreign bank branch in the foreign exchange
market. A solely foreign-funded bank that assumes the membership in the inter-bank spot foreign exchange market shall go through
the registration alteration formalities at China Foreign Exchange Trading Center; a solely foreign-funded bank that assumes the forward
foreign exchange trading qualification or the inter-bank RMB and foreign currency swap trading qualification shall go through the
registration alteration formalities at the State Administration of Foreign Exchange after reporting the alteration information to
China Foreign Exchange Trading Center for preliminary examination; a solely foreign-funded bank that assumes the qualification of
market maker for the transactions between RMB and foreign currencies in the inter-bank foreign exchange market shall submit the information
about alteration to the State Administration of Foreign Exchange for archival filing.

With respect to the restructuring of a foreign bank branch that has obtained the custodian qualification for QFII, the successor of
the custodial qualification shall be applied for approval to the State Administration of Foreign Exchange. If the successor is a
solely foreign-funded bank, it shall go through the registration alteration formalities at the State Administration of Foreign Exchange;
if the successor is a foreign bank branch reserved for developing the wholesale business of foreign exchange (hereinafter referred
to as book-keeping bank), it shall apply to the State Administration of Foreign Exchange for archival filing.

Where a solely foreign-funded bank is restructured from a foreign bank branch with QDII business qualification, it may directly succeed
to the QDII quota.

2.

Administration of Synthetic Positions in Foreign Exchange Settlement and Sale

The State Administration of Foreign Exchange and the branches thereof shall manage the synthetic positions in the foreign exchange
settlement and sale of solely foreign-funded banks by following the current management style. A solely foreign-funded bank may assume
the limit of synthetic position in foreign exchange settlement and sale of the original foreign bank branch. In case of any adjustment
to the limit of synthetic position in foreign exchange settlement and sale by any solely foreign-funded bank, it shall, according
to its own capital status, send an application to the foreign exchange branch of the place where it is located subject to the Circular
of the State Administration of Foreign Exchange on the Measures for Adjusting the Administration of Synthetic Positions in the Foreign
Exchange Settlement and Sale of Banks (Hui Fa [2005] No. 69), Circular of the Comprehensive Department of State Administration of
Foreign Exchange on Related Issues concerning the Verification of the Limit of Synthetic Positions in the Foreign Exchange Settlement
and Sale of Banks (Hui Zong Fa [2005] No.118) and other related provisions.

With respect to a book-keeping bank that did not practice uniform management on synthetic positions in foreign exchange settlement
and sale prior to the restructuring, it may assume the limit of synthetic position in foreign exchange settlement and sale of the
original foreign bank branch. As for a book-keeping bank that has practiced uniform management on synthetic position in foreign exchange
settlement and sale before the restructuring, it shall apply to the foreign exchange branch of the place where it is located for
re-examining the limit of synthetic position in foreign exchange settlement and sale along with the related materials.

3.

Transfer of foreign exchange capital and swap between RMB and foreign currencies

The transfer of foreign exchange working capital between a restructured solely foreign-funded bank and the branches thereof may be
handled by the bank independently. As for the swap of the (working) capital of a solely foreign-funded bank between RMB and foreign
currencies, it shall apply for approval to the foreign exchange branch of the place where it is located in advance pursuant to the
Circular of the State Administration of Foreign Exchange on the Banks’ Own Capital and the Principles and Procedure for the Examination
and Approval of Foreign Exchange Settlement and Sale of Financial Projects (Hui Fa [2004] No.61) and other related provisions. With
respect to any bank that has annually accumulated (working) capital swapped between RMB and foreign currencies in excess of the equivalent
amount of 500 million yuan (including 500 million yuan) shall apply to the foreign exchange branch for preliminary examination, and
then it shall be submitted to the State Administration of Foreign Exchange for approval.

4.

Accounting items for foreign exchange settlement and sale

In accordance with the Interim Measures for the Administration of Foreign Exchange Settlement and Sale Operations by Designated Foreign
Exchange Banks (Decree No. 4, 2002 of the People’s Bank of China), a restructured solely foreign-funded bank shall establish independent
accounting items for foreign exchange settlement and foreign exchange sale, it shall respectively treat foreign exchange settlement
and sale for the clients, foreign exchange settlement and sale for self-purpose, sale of exceeding foreign exchange settlement and
sale position within the system, as well as sale of exceeding foreign exchange settlement and sale position in the market, and carry
out accounting treatment under the accounting item for foreign exchange settlement and that for foreign exchange sale separately.
A solely foreign-funded bank that fails to meet the aforesaid requirements by the end of the preparatory work of restructuring shall
comply with the requirements within two years as of its opening as approved by China Banking Regulatory Commission.

5.

Management on surplus quotas for short-term external debts and overseas guarantee

A restructured solely foreign-funded bank shall inherit the original foreign bank branch’s quotas for short-term external debts and
the quotas for offering financing guarantee for Chinese-invested enterprises outside the territory of China, and shall apply for
archival filing to the State Administration of Foreign Exchange and the foreign exchange branch of the place where it is located.
The registration of creditor’s rights, debts and overseas guarantees handled by the original foreign bank branch shall be altered
to be under the name of the solely foreign-funded bank accordingly. The bank shall apply for handling the registration alteration
of overseas debts to the State Administration of Foreign Exchange once and for all. With respect to the registration alteration of
overseas guarantee and domestic foreign exchange loans, the guarantor or the creditor bank shall apply for handling the alteration
to the foreign exchange branch of the place where it is located once and for all.

Where an bank outside the territory of China sets up an solely foreign-funded bank and a book-keeping bank within the territory of
China simultaneously, the surplus quotas that is for short-term external debts and for providing financing guarantee for Chinese-invested
enterprises outside the territory of China may be used by both the solely foreign-funded bank and the book-keeping bank, and the
solely foreign-funded bank shall assume the management duties accordingly.

When going through the registration alteration or filing of all the aforesaid businesses, an applicant shall submit a application
in written form, document as approved for the opening thereof by China Banking Regulatory Commission, the related documents as approved
for its qualification for carrying out such business by the State Administration for Foreign Exchange and other documents as required
by the State Administration for Foreign Exchange. All foreign exchange branches shall simplify the procedures for approving the registration
alteration.

As of the receipt of this Circular, all foreign exchange branches shall transmit it to the sub-bureaus and foreign-funded banks within
their respective jurisdictions. In case of any problem in the implementation of this Circular, please timely feed it back to the
State Administration of Foreign Exchange.

Tel:

Department of Balance of Payments: 010￿￿68402464, 68402311;

Fax: 010￿￿68402315, 68402303

Capital Account Management Department: 010￿￿68402247, 68402348;

Fax: 010￿￿68402208, 68402349

The State Administration of Foreign Exchange

March 20, 2007



 
The State Administration of Foreign Exchange
2007-03-20

 






1...789...16Page 8 of 16

CONSTITUTION ACT, 1982 – page 22

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

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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