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ANNOUNCEMENT NO. 23, 2007 OF MINISTRY OF COMMERCE

Announcement No. 23, 2007 of Ministry of Commerce

[2007] No. 23

Mixture mentioned in the Article 7 of Provisions on the Administration of the Import and Export of Precursors and Chemicals Used
in Production of Narcotic Drugs and Psychotropic Substances (hereinafter referred to as “the Provisions”) means:

1.

Commodity that contains one of the four precursors and chemicals used in production of narcotic drugs and psychotropic substances,
namely toluene, acetone, butanone, sulphuric acid, with a proportion of more than 40% (excluded) and commodity with a hydrochloric
acid proportion of more than 10%(excluded).

2.

Commodity that contains other precursors and chemicals used in production of narcotic drugs and psychotropic substances, other than
the above-mentioned 5 categories, listed in the Provisions on the Administration of the Import and Export of Precursors and Chemicals
Used in Production of Narcotic Drugs and Psychotropic Substances.

Compound medicine formulation with the precursors and chemicals used in production of narcotic drugs and psychotropic substances are
not included.

When importing or exporting the above-mentioned mixture, the operators shall apply the permission in accordance with the Provisions.

Commodity that contains one of the five precursors and chemicals used in production of narcotic drugs and psychotropic substances,
namely toluene, acetone, butanone, sulphuric acid, hydrochloric acid with a proportion of no more than the above-mentioned regulations
shall not be considered as the “mixture” mentioned in the Article 7 . And the operators could apply permission without the Provisions
while importing or exporting the commodity.

Ministry of Commerce

May 16, 2007



 
Ministry of Commerce
2007-05-16

 






RENEWABLE ENERGY LAW

Renewable Energy Law of the People’s Republic of China

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

No.33 

The Renewable Energy Law of the People’s Republic of China, adopted at the 14th Meeting of the Standing Committee of the Tenth
National People’s Congress of the People’s Republic of China on February 28, 2005, is hereby promulgated and shall go into effect
as of January 1, 2006. 

Hu Jintao 

President of the People’s Republic of China 

February 28, 2005 

 

(Adopted at the 14th Meeting of the Standing Committee of the Tenth National People’s Congress on February 28, 2005) 

Contents 

Chapter I　General Provisions 

Chapter II　Resources Surveys and Development Plans 

Chapter III　Guidance for the Industry and Technical Support 

Chapter IV　Promotion and Application 

Chapter V　Price Control and Expenses Sharing 

Chapter VI　Economic Incentives and Supervisory Measures 

Chapter VII　Legal Responsibility 

Chapter VIII　Supplementary Provisions 

Chapter I　General Provisions 

Article 1 The Law is enacted in order to promote the exploitation of renewable energy, increase energy supply, improve the energy
structure, ensure energy safety, protect the environment, and attain the sustainable development of the economy and society. 

Article 2 For the purposes of this Law, renewable energy means non-fossil energy, including wind energy, solar energy, water energy,
biomass energy, geothermal energy and ocean energy. 

Application of this Law to hydropower generation shall be subject to regulation by energy administration department under the State
Council and approval by the State Council. 

This Law is not applicable to utilization of straw, firewood, excrement, etc. through direct burning in low-efficiency stove. 

Article 3 This Law is applicable in the territory of the People’s Republic of China and the sea areas under its jurisdiction. 

Article 4 In energy development, the State gives first priority to the exploitation of renewable energy and promotes the establishment
and expansion of the market for renewable energy by setting objectives for the total volumes of the renewable energy to be exploited
and taking appropriate measures. 

The State encourages economic entities of various ownerships to participate in the exploitation of renewable energy and protects
the lawful rights and interests of the exploiters of renewable energy in accordance with law. 

Article 5 The energy administration department under the State Council exercises unified control over the exploitation of renewable
energy nationwide. The relevant departments under the State Council are responsible for administration of the work related to the
exploitation of renewable energy within the limits of their respective duties. 

The energy administration departments of the local people’s governments at or above the county level are responsible for the administration
of exploitation of renewable energy within their respective administrative areas. The relevant departments of the local people’s
governments at or above the county level are responsible for administration of the work related to the exploitation of renewable
energy within the limits of their respective duties. 

Chapter II　Resources Surveys and Development Plans 

Article 6 The energy administration department under the State Council is responsible for organizing and coordinating surveys of
renewable energy resources throughout the country, and work with the related departments under the State Council to lay down technical
specifications for resources surveys. 

The relevant departments under the State Council are responsible for related resources surveys of renewable energy within the limits
of their respective duties and submit the results of the surveys to the energy administration department under the State Council. 

The results of the surveys of renewable energy shall be released to the public, with the exception of the contents which should be
kept confidential according to State regulations. 

Article 7 The energy administration department under the State Council shall, on the basis of the demand for energy and the actual
conditions of the renewable energy resources throughout the country, set medium-to-long term objectives for the total volumes of
the renewable energy to be exploited nationwide, which shall be embarked on and released to the pubic upon approval by the State
Council. 

The energy administration department under the State Council shall, on the basis of the objectives for total volumes mentioned in
the preceding paragraph and the economic development and the actual conditions of the renewable energy resources of the provinces,
autonomous regions, and municipalities directly under the Central Government, work with the people’s governments of the provinces,
autonomous regions, and municipalities directly under the Central Government to set medium-to-long term objectives for the exploitation
of renewable energy in the different administrative areas and release the objectives to the public. 

Article 8 The energy administration department under the State Council shall, on the basis of the medium-to-long term objectives
for the total volumes of renewable energy to be exploited throughout the country, work with the relevant departments under the State
Council to draw up a national plan for exploitation of renewable energy which shall be carried out upon approval by the State Council. 

The energy administration departments of the people’s governments of provinces, autonomous regions, and municipalities directly
under the Central Government shall, on the basis of the medium-to-long term objectives for the exploitation of renewable energy in
their own administrative areas, work with the relevant departments of the people’s governments at the corresponding level to draw
up plans for the exploitation of renewable energy in their own administrative areas, which shall be carried out upon approval by
the people’s governments at the corresponding levels. 

The approved plans shall be released to the public, with the exception of the contents which should be kept confidential according
to State regulations. 

Where an approved plan needs to be modified, the matter shall be subject to approval by the original approving authorities. 

Article 9 For drawing up a plan for exploitation of renewable energy, opinions of the relevant units, specialists and the public
shall be solicited, and scientific demonstration is necessary. 

Chapter III　Guidance for the Industry and Technical Support 

Article 10 The energy administration department under the State Council shall, in accordance with the national plan for exploitation
of renewable energy, compile and publish a development guidance catalogue of the renewable energy industry. 

Article 11 The administrative department for standardization under the State Council shall set and publish the technical standards
of the State for grid- connected power generation with renewable energy and other standards of the State for the technology and products
related to renewable energy, for which the technical requirements need to be uniform throughout the country. 

With regard to those technical requirements which are not covered by the standards of the State as mentioned in the preceding paragraph,
the relevant departments under the State Council may establish relevant industrial standards, which shall be submitted to the administrative
department for standardization under the State Council for the record. 

Article 12 In scientific and technological development and in the department of the hi-tech industries, the State gives first priority
to scientific and technical research in, and the industrialized development of, exploitation of renewable energy, includes such research
and development in the national plan for scientific and technological development and the development of the hi-tech industries,
and allocates funds for scientific and technical research in, and application, demonstration and industrialized development of, the
exploitation of renewable energy, so as to promote technical advancement in the exploitation of the same, reduce the production cost
of renewable energy products and improve product quality. 

The administrative department for education under the State Council shall include knowledge and technology of renewable energy into
the curriculum of general and vocational education. 

Chapter IV　Promotion and Application 

Article 13 The State encourages and supports grid-connected power generation with renewable energy. 

For construction of projects for grid-connected power generation with renewable energy, administrative license shall be obtained,
or the matter shall be submitted for the record, in accordance with law and the regulations of the State Council. 

Where there are more than one person that apply for construction of the same project for grid-connected power generation with renewable
energy, for which administrative license need be obtained, the licensee shall be determined through bid invitation according to law. 

Article 14 The power grid enterprise shall sign a grid-connection agreement with the enterprise of power generation with renewable
energy that has legally obtained an administrative license or has submitted the project to be constructed for the record, and buy
the entire quantity of the grid-connected power generated with renewable energy within the coverage of their power grids, and provide
grid-connection services for the generation of power with renewable energy. 

Article 15 The State supports construction of independent system of power generated with renewable energy in areas not covered by
power grids, so that power services shall be provided for local production and people’s daily needs. 

Article 16 The State encourages clean and efficient exploitation of biological fuel and the development of energy crops. 

Where gas and heat produced with biological resources conform to the technical standards for connection with urban gas pipeline networks
or heat pipeline networks, the enterprises operating gas pipeline networks and heat pipeline networks shall accept them into the
networks. 

The State encourages production and utilization of biological liquid fuel. Petroleum sales enterprises shall, in compliance with
the regulations of energy administration department under the State Council or people’s governments at the provincial level, include
biological liquid fuel that conforms to State standards in their fuel-selling system. 

Article 17 The State encourages units and individuals to install and use solar energy utilization systems, such as solar water-heating
system, solar heating and cooling system and solar photovoltaic system. 

The administrative department for construction under the State Council shall work with the relevant departments under the State Council
to formulate technical and economic policies and technical specifications for combination of solar energy utilization system with
buildings. 

In the design and construction of buildings, real estate development enterprises shall, in compliance with the technical specifications
mentioned in the preceding paragraph, provide the necessary conditions for the utilization of solar energy. 

For the existing buildings, the residents may, on condition that the quality and safety of the buildings are not affected, install
solar energy utilization system that conforms to the technical specifications and product standards, unless the parties have agreed
otherwise. 

Article 18 The State encourages and supports exploitation of renewable energy in rural areas. 

The energy administration departments of local people’s governments at or above the county level shall, in light of local economic
and social development, the need for comprehensive improvement of ecological protection and public health and other actual conditions,
work with the relevant departments to draw up plans for development of renewable energy in rural areas, in order to promote the wide
use of the technologies for conversion of biomass energy like marsh gas, for household solar energy, small-scale wind energy and
small-scale hydraulic energy. 

People’s governments at or above the county level shall provide financial support for renewable energy utilization projects in
rural areas. 

Chapter V　Price Control and Expenses Sharing 

Article 19 Grid-connected power price of renewable energy power generation projects shall be determined by the price administration
department under the State Council in light of the characteristics of power generated with different types of renewable energy and
the conditions of different areas and on the principle that it is beneficial to the promotion of exploitation of renewable energy
and that it is economically reasonable, and timely readjustment shall be made along with the development of technology for exploitation
of renewable energy. The price for grid-connected power shall be made known to the public. 

The price of grid-connected power generated by renewable energy power projects decided on through bid invitation as stipulated in
the third paragraph of Article 13 of this Law shall be the bid-winning price; however, it shall not exceed the price level of grid-connected
power of similar renewable energy power generation projects determined in accordance with the provisions of the preceding paragraph. 

Article 20 Where the expenses incurred by a power grid enterprise in the purchase of grid-connected power generated with renewable
energy at the price as determined in accordance with the provisions of Article 19 of this Law are in excess of the expenses for the
purchase of grid-connected power generated with conventional energy, calculated at the average price, the difference shall be added
to the selling price by way of sharing. The specific measures in this regard shall be formulated by the price administration department
under the State Council. 

Article 21 The reasonable grid connection expenses paid by power grid enterprises for the purchase of power generated with renewable
energy and other reasonable expenses involved may be included in the power transmission cost of the enterprise and recovered from
the selling price. 

Article 22 For the selling price of power for public use generated from independent renewable energy power system invested or subsidized
by the State, classified selling price of the same area shall be adopted, and the part of the expenses for rational operation and
management that is in excess of the selling price shall be shared in accordance with the provisions in Article 20 of this Law. 

Article 23 The price of heat and gas from renewable energy that enter the urban pipeline networks shall be determined within the
limits of the power of price control and on the principle that it is beneficial to the promotion of exploitation of renewable energy
and that it is economically reasonable. 

Chapter VI　Economic Incentives and Supervisory Measures 

Article 24 The State establishes a special fund for the development of renewable energy in support of the following: 

(1) scientific and technological research, formulation of standards and demonstration engineering for the exploitation of renewable
energy; 

(2) projects for the use of renewable energy in people’s daily lives in rural and pasturing areas; 

(3) construction of independent systems of power generated with renewable energy in outlying areas and on islands; 

(4) surveys, assessments of renewable energy resources, and　　　construction of relevant information systems; and 

(5) promotion of localized production of equipment for exploitation of renewable energy. 

Article 25 Financial institutions may offer preferential loans with financial interest subsidy to projects for exploitation of renewable
energy that are listed in the national development guidance catalogue of the renewable energy industry and meet the requirements
for granting loans. 

Article 26 The State grants preferential taxation to projects listed in the development guidance catalogue of the renewable energy
industry. The specific measures in this regard shall be formulated by the State Council. 

Article 27 Power enterprises shall truthfully and completely record and keep the data regarding the generation of power with renewable
energy and shall accept inspection and supervision by power regulatory institutions. 

Power regulatory institutions shall conduct inspection in accordance with specified procedures and shall keep business and other
secrets for the inspected units. 

Chapter VII　Legal Responsibility 

Article 28 Where, when exercising supervision over the exploitation of renewable energy, the energy administration department under
the State Council, the energy administration department of a people’s government at or above the county level, or any other relevant
department commits one of the following acts in violation of the provisions of this Law, it shall be ordered by the people’s government
at the corresponding level or the relevant department of the people’s government at the next higher level to rectify, and the persons
in charge who are responsible and the other persons who are directly responsible shall be given administrative sanctions according
to law; and if a crime is constituted, criminal responsibility shall be investigated according to law: 

(1) failure to make decisions on granting administrative license according to law; 

(2) failure to investigate illegal activities discovered; and 

(3)other failures in performing regulatory duties according to law. 

Article 29 Where in violation of the provisions in Article 14 of this Law, a power grid enterprise fails to purchase the entire quantity
of power generated with renewable energy, thus causing economic losses to the enterprise of power generated with such energy, it
shall bear the responsibility for compensation, and the power regulatory institution of the State shall order it to rectify within
a time limit; if it refuses to comply, it shall be fined not more than the amount of the economic losses suffered by the enterprise
of power generated with renewable energy. 

Article 30 Where in violation of the provisions of the second paragraph of Article 16 of this Law, an enterprise of gas pipeline
network or heat pipeline network refuses to accept into the network gas or heat that conforms to the technical standards for grid
connection, thus causing economic losses to the gas or heat production enterprise, it shall bear the responsibility for compensation,
and the energy administration department of the people’s government at the provincial level shall order it to rectify within a
time limit; if it refuses to comply, it shall be fined not more than the amount of the economic losses suffered by the gas or heat
production enterprise. 

Article 31Where in violation of the provisions of the third paragraph of Article 16 of this Law, a petroleum sales enterprise fails
to include biological liquid fuel that conforms to State standards in its fuel-selling system, thus causing economic losses to the
biological liquid fuel production enterprise, it shall bear the responsibility for compensation, and the energy administration department
under the State Council or the energy administration department of the people’s government at the provincial level shall order
it to rectify within a time limit; if it refuses to comply, it shall be fined not more than the amount of the economic losses suffered
by the biological liquid fuel production enterprise. 

Chapter VIII　Supplementary Provisions 

Article 32 The meanings of the following terms used in this Law are: 

(1) Biomass energy means energy converted from natural plants, excrement as well as urban and rural organic waste. 

(2) An independent system of power generated with renewable energy means the system of power generated with renewable energy that
is not connected to power grids and that operates independently. 

(3) Energy crops mean herbal and woody plants specially planted and used as raw materials of energy. 

(4) Biological liquid fuels include methanol, ethanol, bio-diesel and other liquid fuels derived from biomass resources. 

Article 33 This Law shall go into effect as of January 1, 2006.

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






DETAILED RULES FOR THE IMPLEMENTATION OF QUALIFICATION EVALUATION OF AUTOMOBILE DISTRIBUTOR AND BRAND DISTRIBUTOR

General Office of Ministry of Commerce

Circular of the General Office of Ministry of Commerce on Printing and Distributing the Detailed Rules for the Implementation of Qualification
Evaluation of Automobile Distributor and Brand Distributor

Shang Jian Zi [2006] No. 4

All the automobile industry association

In accordance with Measures for the Implementation of Management of Automobile Brand Sales for the purposes of evaluating qualifications
of automobile distributor and brand distributor, regulating evaluation activities, the Detailed Rules for the Implementation of Qualification
Evaluation of Automobile Distributor and Brand Distributor is hereby printed and distributed to you, and shall be implemented accordingly.

General Office of Ministry of Commerce

January 12, 2006

Detailed Rules for the Implementation of Qualification Evaluation of Automobile Distributor and Brand Distributor

Article 1

These detailed rules are formulated in accordance with Measures for the Implementation of Management of Automobile Brand Sales for
the purposes of evaluating qualifications of automobile distributor and brand distributor, regulating evaluation activities, ensuring
the evaluation going fairly, justly and orderly.

Article 2

These detailed rules apply to the evaluation of qualification of automobile distributor and brand distributor.

Article 3

The competent commercial authority of the State Council guides and authorizes automobile industry associations to build Expert Database
for Automobile Brand Sales (“Export Database” in short below).

Article 4

Experts in Expert Database are consist of the experts of automobile production, sales and service, economy, law and management.

Article 5

The experts in Expert Database should meet following requirements:

1.

enjoy good health, usually younger than 65 years old;

2.

have senior professional post_titles or be a university graduate or higher;

3.

have fine professional quality and work ethic, no bad record;

4.

Understand national policies and related laws and regulations about automobile development, keep abreast of the status of domestic
automobile production, sales and service, and development of corresponding industry in foreign countries; be equal to the qualification
evaluation of automobile distributor or brand distributor;

5.

the experts of automobile production, sales and service have worked in automobile industry for more than 5 years.

Article 6

The authorized automobile industry associations engages the experts in Expert Database from the society in light of the need of the
evaluation works.

Article 7

Evaluation procedures for recommending experts in Expert Database

1.

the experts in Expert Database are recommended by their units. The recommendation units should submit the recommended name list and
corresponding materials to the authorized automobile industry associations according to the requirements of Expert Recommendation
Form for evaluation of automobile brand sales (see Appendix);

2.

the authorized automobile industry associations should notify the recommendation unit of the examination result and issue Letter of
Appointment to the experts who have passed the examination within 20 days at receipt of the recommendation materials.

Article 8

If any false content are found in expert recommendation materials, the authorized automobile industry associations will not accept
and handle all the recommendation materials of the recommendation unit.

Article 9

The experts in Expert Database are employed for a term of 4 years. At the end of the term, after reviewing of the authorized automobile
industry associations, the experts who meet the requirements may remain in Expert Database.

Article 10

If any expert transfers or retires from his unit, his original unit and himself should notify in time the authorized automobile industry
associations in writing.

Article 11

The total number of the experts in Expert Database is usually 40 to 50 every year.

The authorized automobile industry association should report the name list of the experts in Expert Database to the competent commercial
authority of the State Council for record.

Article 12

When relative experts withdraw from the Expert Database, the authorized automobile industry associations should augment experts in
time according to relative regulations.

Article 13

The experts in Expert Database should abide by national laws and regulations, strictly observe work ethics, fairly engaged in qualification
evaluation of automobile distributor or brand distributor, should not provide the application materials, evaluation content and other
relative materials of the evaluated party to any other unit or individuals. During the qualification evaluation of automobile distributor
or brand distributor, they should not get in touch secretly with corresponding automobile supplier, brand distributor and other interested
parties.

Article 14

The experts in Expert Database should sign confidentiality agreement and take part in the evaluation works according to the requirements.

Article 15

The authorized automobile industry associations should notify relative experts in writing to withdraw from the Expert Database and
inform their units in one of following circumstances:

1.

not equal to qualification evaluation of automobile distributor or brand distributor because of physical problem;

2.

have no complete civil disposing capacity;

3.

have been given criminal sanction;

4.

violate the content stipulated in confidentiality agreement;

5.

violate the provision of Article 13 of these measures and the case is serious.

Article 16

While accepting and handling the application of automobile distributors or brand distributors, the competent commercial authority
of the State Council may authorizes automobile industry associations to organize expert committee to make evaluation on their qualifications
if it doubts that.

Article 17

The authorized automobile industry associations should select experts from Expert Database and form the expert committee according
to the authorization of the competent commercial authority of the State Council and the need of evaluation.

Article 18

Selecting the experts of automobile industry expert committee should be compliance with the following principles:

1.

principle of combination of random selecting and professional structure. The expert committee should make random selecting from the
Expert Database according to the need of evaluation and give expression to the representativeness of different professions;

2.

avoidance principle. The experts who have direct interest relationship with the evaluated party should not take part in the evaluation.
If any one has already been selected, the expert himself should make public and avoid initiatively;

3.

principle of change. The members of expert committee should be changed in proportion, generally speaking, one expert should not take
part in the evaluation consecutively for more than twice.

Article 19

The number of expert committee should be 5 or 7.

Article 20

Major content of qualification evaluation of automobile distributor:

1.

The information of written authorization of automobile production enterprises, including legal validity of authorization materials,
brand name of sold automobile by authorization, the name, trademark and sign of the shops used by authorization;

2.

the ability of automobile marketing, including explanation materials about the concrete content, organizational structure, professionals
and their structure in market investigation and study, marketing and planning, advertisement and promotion, network construction
and guidance, product service and technical training and consultation, fitting supply and logistics management, among them, the network
layout, scale and process should be made clear in the content of network construction;

3.

whether or not the content of automobile brand sales in the business scale accord with the content authorized by automobile production
enterprises;

Article 21

Major content of evaluating the qualifications of automobile brand distributor:

1.

The written authorization of automobile supplier, including legal validity of authorized materials, brand name, selling areas of automobile
sold by authorization, name, trademark or sign of the shop used by authorization;

2.

whether or not the content of automobile brand sales in business scale is consistent with the content authorized by automobile supplier,
and whether or not the name, sign and trademark of the shop to be used are consistent with the ones authorized by the automobile
supplier;

3.

whether or not the business place, facilities and professional service staffs meet the requirements of the business range or scale.

Article 22

The automobile industry associations organize expert committee to hold evaluation meetings according to the evaluation trust. The
expert evaluation meeting is held by expert joint checkup. It may be held in the forms of “check and approve separately, discuss
together” or “check and approve together, discuss together”.

Article 23

The members of expert committee should attend the meeting as experts and take part in the evaluation objectively and fairly.

Article 24

The check and approval comments adopted by the expert committee should be agreed and signed by more than half of the members in expert
committee. The authorized automobile industry associations should provide a report according to the check and approval comments of
the expert committee.

Article 25

If thinking the evaluated party has some problems to be investigated or the application materials are not completed, the expert committee
may put off the evaluation comments with the agreement of more than half members attending the meeting.

The authorized automobile industry associations should report in time their opinion on putting off the evaluation comments and corresponding
information to the competent commercial authority of the State Council.

Article 26

The automobile industry associations accepting evaluation trust should establish an expert committee, finish evaluation and provide
evaluation report to the competent commercial authority of the State Council within 15 working days at receipt of the applicant￿￿s
application materials of the automobile distributor and brand distributor provided by the competent commercial authority of the State
Council.

Article 27

The qualification evaluation of automobile distributor or brand distributor should accept the supervision of the competent commercial
authority of the State Council and the society.

Appendix: Expert Recommendation Form for Evaluation of Automobile Brand Sales (omitted)



 
General Office of Ministry of Commerce
2006-01-12

 






CIRCULAR OF THE MINISTRY OF COMMERCE ON ENTRUSTING THE COMPETENT DEPARTMENTS OF COMMERCE AT PROVINCIAL LEVEL TO EXAMINE AND MANAGE FOREIGN-FUNDED NON-VESSEL SHIPPING ENTERPRISES

Ministry of Commerce

Circular of the Ministry of Commerce on Entrusting the Competent Departments of Commerce at Provincial Level to Examine and Manage
Foreign-funded Non-vessel Shipping Enterprises

Shang Zi Han [2005] No. 89

January 22, 2006

The competent departments of commerce at all the provinces, autonomous regions, municipalities directly under the Central Government,
and cities specifically designated in the state plan, as well as that of the Xinjiang Production and Construction Corp.,

According to the request of the State Council for simplifying the system of administrative examination and approval, and for the
purpose of simplifying the procedures for the examination of the contracts and articles of association of foreign-funded enterprises,
improving efficiency, and speeding up the work for absorbing foreign investment in service trade fields, we hereby make the following
notice on relevant issues concerning entrusting the competent departments of commerce at all the provinces, autonomous regions, municipalities
directly under the Central Government, and cities under separate state planning, as well as that of the Xinjiang Production and
Construction Corp. (hereinafter referred to as the provincial competent departments of commerce) and the state level management commissions
of economic and technological development zones to make examination and management on some foreign-funded non-vessel shipping enterprises:

I.

The provincial competent departments of commerce and the state level management commissions of economic and technological development
zones shall be entrusted to responsible for the work of examination and management of foreign-funded non-vessel shipping enterprises.

II.

Each entrusted department and institution shall, in accordance with the Provisions on the Administration of Foreign Investment in
International Maritime Transportation (No.1 [2004] of the Ministry of Communications and the Ministry of Commerce) and other laws
and regulations on foreign investment, strictly control the qualifications of foreign-funded non-vessel shipping enterprises, and
make careful examination on the applications of foreign-funded non-vessel shipping enterprises for their establishment and alteration,
and handle the applications after requesting the applicants to make report to the competent departments of communications for approval
in accordance with the procedures and conditions as prescribed in the aforesaid provisions. The entrusted departments and institutions
shall report any problem arising from the examination process to the Ministry of Commerce in a timely manner. If there is any act
of examination and approval that is in violation of regulations during the entrustment period, the Ministry of Commerce shall circulate
a notice on it in light of the circumstances or even takes back the entrustment.

III.

Each entrusted department and institution shall have the conditions for issuing the documents of approval for foreign-funded enterprises
by networking with the Ministry of Commerce and for online joint annual inspection, and do a good job for putting the examination
and approval on archives and making statistics by making use of the network license issuing system for foreign-funded enterprises.
The relevant statistical data shall comply with the requirements, so that it may be convenient for the Ministry of Commerce to know
the information and strengthen supervision. The Ministry of Commerce will carry out training on the local competent departments of
commerce and the state level management commissions of economic and technological development zones, so as to clarify the concrete
issues in the process of examination.

IV.

The entrusted state level management commissions of economic and technological development zones shall, in accordance with the Notice
of the General Office of the State Council on Transferring the Several Opinions of the Ministry of Commerce and Other Departments
concerning Promoting the State Level Economic and Technological Development Zones to Improve Development Level (No.15 [2005] of the
General Office of the State Council), implement the management system of simplification and high efficiency. After the state level
economic and technological development zones have put the management systems on archives, carried out personnel training, and passed
checking and acceptance for networking, the Ministry of Commerce shall handle the corresponding entrustment formalities by batch
separately.

V.

The present entrustment shall take effect as of March 31, 2006.



 
Ministry of Commerce
2006-01-22

 






THE MEASURES GOVERNING ELECTRONIC BANKING






China Banking Regulatory Commission

Order of China Banking Regulatory Commission

No. 5

The “Measures Governing Electronic Banking”, which were adopted at the 40th chairman’s meeting of China Banking Regulatory Commission
on November 10, 2005, are hereby promulgated, and shall come into force on March 1, 2006.

Chairman Liu Mingkang

January 26, 2006

The Measures Governing Electronic Banking

Chapter I General Provisions

Article 1

The present Measures are formulated in accordance with the “Banking Supervision Law of the People’s Republic of China”, the “Law of
the People’s Republic of China on Commercial Banks”, the “Regulation of the People’s Republic of China on the Administration of
Foreign- funded Financial Institutions”, as well as other laws and regulations for the purposes of strengthening the risk management
of electronic banking, safeguarding the lawful rights and interests of customers and banks, and promoting the healthy and orderly
development of electronic banking.

Article 2

The term “electronic banking” as mentioned in the present Measures shall refer to the banking services provided to customers by commercial
banks or other financial institutions in the banking sector via the use of communication channels open to the general public or
the open public network, and the special networks built up by banks for certain self-service facilities or customers.

Electronic banking business includes: the banking business via the use of the computer or Internet (hereinafter referred to as online
banking business), the banking business via the use of audio equipment such as telephone or telecommunication network (hereinafter
referred to as telephone banking business), the banking business via the use of the mobile phone or wireless network (hereinafter
referred to as mobile banking business), and other banking business via the use of electronic service equipment and network, in
which customers complete their financial transactions by self-service means.

Article 3

Financial institutions in the banking sector and foreign- funded financial institutions established in accordance with the “Regulation
of the People’s Republic of China on the Administration of Foreign- funded Financial Institutions (hereinafter uniformly referred
to as financial institutions) shall develop the electronic banking business in accordance with the present Measures.

The financial asset management companies, trust and investment companies, finance companies, financial lease companies, which are
established inside the territory of the People’s Republic of China, and other financial institutions established upon approval of
China Banking Regulatory Commission (hereinafter referred to as CBRC) shall, when initiating electronic finance business of the electronic
banking nature, be governed by the relevant provisions on financial institutions to provide electronic banking business in the present
Measures.

Article 4

Upon the approval of CBRC, a financial institution may initiate its electronic banking business inside the territory of the People’s
Republic of China, to provide electronic banking services to enterprises, residents and other customers inside the territory of the
People’s Republic of China, or to develop the trans- territory electronic banking services in accordance with the relevant provisions
of the present Measures.

Article 5

A financial institution shall comply with the principles of rational planning, uniform administration and guaranteeing safe operation
of the system when developing the electronic banking services, and shall guarantee the healthy and orderly development of electronic
banking business.

Article 6

A financial institution shall, according to the feature of electronic banking business, establish and perfect the risk management
system and the internal control system for the electronic banking business, set up corresponding management departments, clarify
the duties of electronic banking business management, and identify, evaluate, monitor and control the risks of the electronic banking
business effectively.

Article 7

CBRC shall take charge of supervising and administering for electronic banking business.

Chapter II Application and Modification

Article 8

A financial institution shall, when initiating electronic banking business inside the territory of the People’s Republic of China,
file an application or make a report to CBRC in accordance with the relevant provisions of the present Measures.

Article 9

A financial institution that intends to initiate electronic banking business shall meet the following conditions:

(1)

Its business operation is in normal state, a sound risk management system and a sound internal control rules has been established,
and its main information management system and business handling system meet with no major breakdown within one year before it applies
for initiating electronic banking business;

(2)

It has constituted the overall development strategy, development planning, and electronic banking safety strategy for its electronic
banking business, and has established the organizational system and institutional system for risk management of the electronic banking
business;

(3)

It has, according to the development planning and safety strategy for electronic banking business, built up the basic facilities and
system for operation of electronic banking business, and has made necessary safety checking and business testing on relevant facilities
and systems;

(4)

It has made safety evaluation which meets the supervisory requirements on circumstance of risk management , work operation facilities
and system, and etc. of the electronic banking business.

(5)

It has set up a specific electronic banking business management department, and has staffed qualified managers and technicians for
it; and

(6)

Other conditions required by CBRC.

Article 10

A financial institution that initiates electronic banking business in the form of online banking operation or mobile banking operation,
etc. by using Internet as the medium shall, in addition to meeting the conditions listed in Article 9 , meet the following conditions:

(1)

Its basic facilities and equipment of electronic banking can guarantee the normal operations of electronic banking;

(2)

Its electronic banking system has the necessary business processing capacity, and can satisfy the customer’s demand for business processing
timely;

(3)

It has established an effective external attack detection mechanisms;

(4)

If it is a Chinese- funded financial institution in the banking sector, its electronic banking operation system and business processing
server should be established inside the territory of the People’s Republic of China; or

(5)

If it is a foreign- funded financial institution, its electronic banking operation system and business processing server may be established
either inside or outside the territory of the People’s Republic of China. When they are established outside the territory, the said
institution shall establish facilities and equipment inside the territory of the People’s Republic of China for recording and preserving
the transaction data, be able to meet the requirements of the financial regulatory department on on-site inspection, and be able
to, in case of any legal dispute, meet the requirements of Chinese judicial institutions on investigation and evidence collection.

Article 11

A foreign- funded financial institution that initiates electronic banking business shall, in addition to meeting the conditions as
listed in Article 9 and Article 10 , establish a business office inside the territory of the People’s Republic of China in accordance
with the relevant laws and administrative regulations, while the regulatory authorities of its home country (region) shall have
the legal framework and the supervisory capacity for the supervision of electronic banking business.

Article 12

When a financial institution applies for initiating electronic banking business, the approval system and report system shall be applied
separately on the basis of different types of electronic banking business.

(1)

For the electronic banking business initiated with Internet or other open network or wireless network, including online bank, mobile
bank, and the electronic banking initiated with PDA such as palm computer, the approval system shall be applied ;

(2)

For the electronic banking business initiated with domestic or regional telecommunication network or cable network, etc., the report
system shall be applied ; and

(3)

For the electronic banking business initiated with the special network built up by the bank for certain self-service facilities or
with the customer, the separate provisions in the laws, regulations or administrative rules, if any, shall be complied with, or the
report system shall be applied when there are no such provisions.

After a financial institution initiates electronic banking business, the relevant services it provides through the direct network
connections with its certain customer shall belong to the normal daily electronic banking services, not belong to the type of initiation
application for the electronic banking business.

Article 13

A financial institution shall, before applying for initiating the electronic banking business in need of examination and approval,
communicate with CBRC first regarding the business in application, stating the scheme on the design and construction of the system
and basic facilities, as well as the basic operational mode, etc. of the applied electronic banking business, It shall also, according
to the communication result , adjust the relevant scheme.

After the communication for supervision is conducted, the financial institution shall carry out the electronic banking system construction
according to the adjusted and improved scheme, and shall finish the internal testing work of the relevant system before filing the
application.

The objects of internal testing shall be limited to the insiders of the financial institution, the relevant working staff of the contracted
out institution, and the working staff of the relevant institution, but shall not extend to the ordinary customers.

Article 14

A financial institution may, when applying for initiating electronic banking business, simultaneously apply for different types of
electronic banking services in a same application report, but shall indicate the types of electronic banking business in the application.

Article 15

A financial institution shall, when applying to CBRC or its dispatched office for initiating electronic banking business, submit the
following documents and information (in triplets):

(1)

the application report for initiating electronic banking business, which was signed by the legal representative of the financial institution;

(2)

the type of electronic banking business to be applied for , and the kinds of business to be carried out;

(3)

the development planning on the electronic banking business;

(4)

the introduction on the operation facilities and technical system of the electronic banking business;

(5)

a testing report on the electronic banking business system;

(6)

a safety evaluation report on the electronic banking;

(7)

the operational emergency responding plan and business continuity plan on the electronic banking business;

(8)

the risk management system and corresponding rules on the electronic banking business;

(9)

the management department and management duties of the electronic banking business, as well as the introduction on the principal person-in-charge;

(10)

the name, telephone, fax, and e-mail box, etc. of contact person of the applicant institution, ; and

(11)

other documents and information to be submitted as required by CBRC.

Article 16

CBRC or its dispatched office shall, after receipt of the financial institution’s application materials, inform the financial institution
of the relevant requirements once and for all when requiring a commercial bank to supplement materials in light of the regulatory
requirements.

The financial institution shall work out and bind up the application materials anew in light of the requirements of CBRC or its dispatched
office, and correct the date of submission, as well.

Article 17

CBRC or its dispatched office shall, within 3 months as of receipt of the complete set of application materials for approval by a
financial institution for initiating the electronic banking business, make a written decision on approval or disapproval. If it decides
to disapprove the application, it shall explain the reason therefor.

Article 18

Where a financial institution applies an application report with more than one type of electronic banking business, CBRC or its dispatched
office may approve all or parts of the electronic banking services according to the relevant provisions and requirements.

With respect to the types of electronic banking business which are not approved by CBRC or its dispatched office, the financial institution
may file the application anew in accordance with the relevant provisions.

Article 19

A financial institution does not have to file an application if initiating the electronic banking services are applied by the report
system, but it shall, with reference to the relevant provisions in Article 15 , submit relevant materials to CBRC or its dispatched
office one month before initiating the electronic banking business.

Article 20

A financial institution may, after initiating electronic banking business, make use of the electronic banking platform to advertise
and sell traditional bank products and services, or develop new types of business according to the features of electronic banking
business.

A financial institution shall, when making use of the electronic banking platform to advertise relevant bank products or services,
abide by the relevant laws, regulations and business management rules. It shall, when making use of the electronic banking platform
to sell relevant bank products or services, carefully analyze and choose the products suitable to be sold by way of electronic banking,
instead of making use of electronic banking to sell banking products which may not be sold until the customer has been evaluated
or has confirmed the products face to face, unless there are otherwise different provisions in any law, regulation or administrative
rule.

Article 21

Where a financial institution adds or modifies the types of electronic banking business when required by its business development,
the approval system or report system shall be applied to .

Article 22

Where a financial institution adds or modifies any of the following types of electronic banking services, the approval system shall
be applied to :

(1)

the services as required by any relevant law, regulation or administrative rule to be subject to examination and approval, but which
the financial institution has not applied for, and prepares to initiate by making use of electronic banking;

(2)

the services which may not be carried out until is directly connected with the securities sector or insurance sector, etc. for real-time
data exchange when the financial institution applying the approved business to electronic banking;

(3)

the services to be carried out between financial institutions through the connected electronic banking platform; and

(4)

the services by trans- territory electronic banking .

Article 23

Where a financial institution adds or modifies any type of electronic banking service that is subject to examination and approval,
it shall submit the following documents and information (in triplets) to CBRC or its dispatched office:

(1)

the application for adding or modifying the type of business, which is signed by the legal representative of the financial institution;

(2)

definition and operational flow of the types of business services to be added or modified;

(3)

features of risks of the types of business services to be added or modified, and the prevention measures;

(4)

relevant management rules;

(5)

the name, telephone, fax, and e-mail box, etc. of the entity applicant’s contact person; and

(6)

other documents and information to be submitted as required by CBRC.

Article 24

A financial institution in the banking sector whose business activities are not restricted by region (hereinafter referred to as national
financial institution) shall, when applying for initiating electronic banking business or for adding or modifying any type of electronic
banking service which are subject to examination and approval, file the application via its head office (company) to CBRC.

A financial institution in the banking sector that is required by the relevant provisions to carry out business activities only in
a certain city or region (hereinafter referred to as regional financial institution) shall, when applying for initiating electronic
banking business or for adding or modifying any type of electronic banking services that are subject to examination and approval,
file the application via its legal entity to the local dispatched office of CBRC.

A foreign- funded financial institution shall, when applying for initiating electronic banking business or for adding or modifying
a type of electronic banking in need of examination and approval, file the application via its head office (company) or its principal
reporting bank inside the territory of the People’s Republic of China to CBRC.

Article 25

CBRC or its dispatched office shall, within 3 months as of receipt of a financial institution’s complete set of application materials
for adding or modifying a type of electronic banking business in need of examination and approval, make a written decision on approval
or disapproval. If it decides to disapprove the application, it shall explain the reason therefor.

Article 26

In case of any other type of electronic banking service, the report system shall be applied to , and the financial institution does
not have to file an application when adding or modifying it, but shall, within one month before initiating this type of business,
submit relevant materials to CBRC or its dispatched office with reference to Article 23 of the relevant provisions.

Article 27

A financial institution in the banking sector that has realized the centralized data processing and system integration (hereinafter
referred to as centralized data processing) may, after being approved to initiate electronic banking business, authorize its branch
to provide partial or all electronic banking services. Its branch shall, before initiating relevant business, report to the local
dispatched office of CBRC.

For a financial institution in the banking sector that has not realized centralized data processing, if the electronic banking processing
system of its branch is independent from that of the headquarters, and the branch is managed as a regional financial institution
when initiating electronic banking business, such a branch shall bring the head office’s authorization document to apply or report
to the local dispatched office of CBRC in accordance with the relevant provisions. Any other branch that does not fall under the
foregoing circumstance needs only to bring the head office’s authorization document to report to the local dispatched office of CBRC
before initiating the relevant business.

After a foreign- funded financial institution is approved to initiate electronic banking business, its branch inside the territory
shall, if intending to initiate electronic banking business, bring the head office’s (company’s) authorization document to report
to the local dispatched office of CBRC.

Article 28

A financial institution that has initiated electronic banking business shall, if deciding to terminate all the electronic banking
services or some types of electronic banking services according to the plan, report to CBRC 3 months in advance regarding the reason
for terminating the electronic banking services and the solution to relevant problems, etc., and meanwhile make an announcement.

A financial institution shall, if deciding to terminate part of the electronic banking service according to the plan, report to CBRC
in advance of one month before terminating the business, and make an announcement.

A financial institution must, if terminating its electronic banking services or part of business types, take effective measures to
protect the lawful rights and interests of customers, and make an effective solution regarding the problems that may arise.

Article 29

A financial institution shall, when need to initiate electronic banking business anew or carry out the terminated types of business
anew after terminating its electronic banking services or part of services types, file the application or go through the procedures
anew in accordance with the relevant provisions.

Article 30

Where a financial institution needs to pause its electronic banking services according to the plan due to upgrading or adjustment,
etc. of the electronic banking system, it shall choose a proper time to do so, try to minimize the impacts to the customers, and
make an announcement on its web site 3 days in advance.

Where a financial institution pause the work of electronic banking services unplanned for more than 4 hours within normal working
hours or for more than 8 hours beyond normal working hours caused by any emergency or any incidental factor, it shall, within 24
hours after pause of the services, report the relevant information to CBRC, and shall, within 3 days after the accident has been
basically settled, report the causes, influences, remedial measures and settlement, etc. of the accident to CBRC.

Chapter III Risk Management

Article 31

A financial institution shall include the risk management of the electronic banking services into its overall framework of risk management,
and shall, according to the operational features of the electronic banking services, establish and improve its risk management system
for electronic banking, and the internal control system for the safety and stable operation of electronic banking.

Article 32

A financial institution’s risk management system and internal control system for electronic banking shall include clear management
framework, sound rules and strict internal authorization control mechanism, and shall be able to effectively identify, evaluate,
monitor and control the strategic risks, operational risks, legal risks, prestigious risks, credit risks, and market risks, etc.
that the electronic banking business faces.

Article 33

The prudential risk management principles and measures, etc. made by a financial institution regarding traditional business risks
shall be also applicable to electronic banking business, nevertheless, the financial institution shall make necessary and proper
amendments of the original risk management rules and procedures according to the changes of the environment and the operational
method of the electronic banking business.

Article 34

A financial institution’s board of directors and senior management team shall, according to its overall development strategy and actual
management situation, make the development strategy and feasible management and investment strategy for electronic banking, make
continuous comprehensive benefit analysis on the management of electronic banking, and scientifically evaluate the influences of
electronic banking business to its overall risks.

Article 35

A financial institution shall, when formulating a development strategy of electronic banking, strengthen the protection of intellectual
property rights on electronic banking business.

Article 36

A financial institution shall conduct the evaluation and classification to the importance of the different systems, risk facilities,
information and other resources of electronic banking and their influences to the safety of electronic banking business, formulate
a proper safety strategy, establish and improve the risk control procedures and safe operation rules, and take corresponding safe
management measures.

A financial institution shall check and test various safety control measures at regular intervals, adjust them at proper times when
required by the actual situation, and guarantee the sustainable, effective and timely updating of the safety measures.

Article 37

A financial institution shall guarantee the safety of the operational facilities , equipment, and the safety control facilities and
equipment for electronic banking. With respect to the important facilities, equipment and data of electronic banking, it shall take
proper protective measures.

(1)

The physical safety control of a tangible site must meet the requirements in the relevant laws, regulations and safety standards of
the state, and for the safety control of a tangible site without uniform safety standards, the financial institution shall guarantee
that the safety rules it has formulated could effectively cover the possible main risks it shall face;

(2)

An electronic banking system with an open network as the medium shall reasonably establish and use firewall, anti-virus software and
other safe products and technologies to guarantee the electronic banking to have enough anti-attack capacity, anti-virus capacity,
and intrusion prevention capacity;

(3)

For the access to, check of, maintenance of, and emergency response to important facilities and equipment, the financial institution
shall have a clear delimitation of powers, division of duties and operation flow, establish log file management rules, and truthfully
record and keep appropriate custody of relevant records;

(4)

The financial institution shall strictly control the power to access important technical parameters, establish a corresponding technical
parameter adjustment and modification mechanism, and guarantee that the mechanism can effectively prevent divulgence of relevant
technical parameters after the key staff members are replaced;

(5)

With respect to the key positions and staff members to manage the electronic banking, the financial institution shall adopt the post-shifting
and compulsory holiday rules, as well as establish strict internal supervision and management rules.

Article 38

A financial institution shall adopt proper encryption technologies and measures to guarantee the safety and confidentiality of transmission
of electronic transaction data, as well as the entirety, authenticity and undeniability of the transmitted transaction data.

The data encryption technology adopted by a financial institution shall conform to the relevant provisions of the state. The financial
institution shall, when required by the safety of electronic banking and on the basis of the development of scientific information
technology, check and evaluate the intensity of the adopted encryption technology and algorithm at regular intervals, and adjust
the encryption method at proper times, as well.

Article 39

A financial institution shall conclude an electronic banking service agreement or contract with customer, specifying the rights and
obligations of both parties.

In the electronic banking service agreement, a financial institution shall fully disclose to customer the risks it might face when
using electronic banking to make transactions, the risk control measures the financial institution has taken, the risk control measures
that the customer ought to take, and the assumption of liabilities for relevant risks.

Article 40

A financial institution shall adopt proper measures and technologies to identify and verify the authentic and effective identities
of the customers of electronic banking services, and shall, pursuant to the relevant agreement concluded with each certain customer,
effectively manage the customer’s working powers, fund transfer or transaction amount limit, etc.

Article 41

A financial institution shall establish a corresponding mechanism, search, monitor and settle the activities of defrauding customer’s
information by imitating or intentionally establishing telephone, web site, short message number, etc. similar to those of the financial
institution.

A financial institution shall, after finding any illegal activity of imitating electronic banking, report the offence to the public
security department, and report to CBRC. Meanwhile, the financial institution shall timely remind its customers through its web site,
telephone voice prompt system or short message platform.

Article 42

A financial institution shall use uniform telephone numbers, domain names and short message numbers, etc. of electronic banking services
as much as possible, and shall specify the lawful avenues for the customer to start up electronic banking, the way of responding
to unexpected incidents, and the method of contact, etc. in the agreement with the customer

When a financial institution in the banking sector that has realized centralized data processing carries out online bank business,
its head office (company) and the branches shall use a uniform domain name; when a financial institution in the banking sector that
has not realized centralized data processing carries out online bank business, its head office (company) shall establish a uniform
access website, and establish links to its branches’ web sites on its homepage.

Article 43

A financial institution shall establish an intrusion detection system and an intrusion protection system for electronic banking, monitor
and control the operation of electronic banking in real time, scan loopholes of the electronic banking system at regular intervals,
and establish a mechanism of distinguishing, handling and reporting illegal intrusions.

Article 44

A financial institution shall, when using the electronic signature or electronic certification, on customer information or transaction
information for its electronic banking, comply with the relevant laws and regulations of the state.

A financial institution shall, when using a third party certification system, evaluate the third party certification institution at
regular intervals, guarantee the safety, reliability and public credibility of the relevant certification.

Article 45

A financial institution shall, at regular intervals, evaluate the sufficiency of electronic banking resources that customers may use,
and take necessary measures to guarantee smooth connection of circuits, and the usability of the electronic banking services to customers.

Article 46

A financial institution shall make a plan on continuity of electronic banking, and guarantee the continuous normal operation of electronic
banking business.

The financial institution shall, when making the continuity plan of electronic banking business, fully consider the influences of
the third party service provider to the continuity of the business, and shall take proper precautionary measures.

NOTICE OF THE MINISTRY OF COMMERCE ON ISSUES CONCERNING ENTRUSTING STATE-LEVEL ECONOMIC AND TECHNOLOGICAL DEVELOPMENT TO EXAMINE AND APPROVE FOREIGN INVESTMENT COMMERCIAL ENTERPRISES AND AGENT ENTERPRISES OF INTERNATIONAL FREIGHT FORWARDING

The Ministry of Commerce

Notice of the Ministry of Commerce on Issues concerning Entrusting State-level Economic and Technological Development to Examine and
Approve Foreign Investment Commercial Enterprises and Agent Enterprises of International Freight Forwarding

Shang Zi Han [2005] No.102

February 9, 2006

To the departments responsible for commerce of all provinces, autonomous region, municipalities under the central government, cities
directly under State planning and Xinjiang Production and Construction Corps, all state-level economic and technological development
zones, Xiamen Haicang Taiwanese Investment. Zone, Shanghai Jinqiao Export Processing Zone, Hainan Yangpu Economic Development Zone,
Ningbo Daxie Development Zone, Suzhou Industrial Park:

In order to implement Notice of the General Office of the State Council on Forwarding the Opinions on Promoting the Further Development
of State-level Economic and Development Zones (Guo Ban Fa [2005] No.15), to further promote the effective absorption of foreign capital
by state-level economic and technological development zone, to further streamline the approval procedure and improve its efficiency
in line with the requirement of the State Council on streamlining executive approval, in accordance with the relevant spirit of Circular
of the Ministry of Commerce of the People’s Republic of China, on Issues of Relegating the Department Concerned Examining and Approving
of Foreign-funded Commercial Enterprises to Local Government(Shang Zi Han[2005]No.94) and Decree No. 19, 2005 of the Ministry of
Commerce of the People’s Republic of China, Promulgating the Revised Measures for Administration of Foreign-funded International
Forwarding Agent, the notice concerning Entrusting State-level Economic and Technological Development to Examine and Approve Foreign
Investment Commercial Enterprises and Agent Enterprises of International Freight Forwarding is, after research and decision, hereby
given as follows:

First, the management committee state-level economic and technological development zone shall, in accordance with the requirement
in Circular of the Ministry of Commerce of the People’s Republic of China, on Issues of Relegating the Department Concerned Examining
and Approving of Foreign-funded Commercial Enterprises to Local Government as well as relevant laws, regulations, and rules concerning
foreign investment, be entrusted to examine and approve the establishment and alteration of foreign enterprises, issue approval certificates
and submit them the Ministry of Commerce for record and submit the copies hereof to provincial commercial departments for record.
The management committee of state-level economic and technological development zone shall, as for the commercial enterprise website
beyond its examination and approval, solicit the relevant commercial departments where the website locates for their opinion upon
the examination and approval of the website programming.

Second, the international agent enterprises of international express delivery operated by foreign investors shall be subject to the
examination, approval and administration of the Ministry of Commerce. The establishment, alteration, issuing of approval certificate
of otherwise international freight agent enterprises operated by foreign investors shall be entrusted to the management committee
of state-level economic and technological development zone to be responsible for its examination, approval and submit to the Ministry
of Commerce for record in accordance with the relevant requirement of Decree No. 19, 2005 of the Ministry of Commerce of the People’s
Republic of China, Promulgating the Revised Measures for Administration of Foreign-funded International Forwarding Agent, as well
as laws, regulations and rules concerning foreign investment.

Third, the other businesses of aforesaid industries shall, except those subject to entrustment of the Ministry of Commerce for examination
and approval, be conducted in accordance with Measures for the Administration on Foreign Investment in Commercial Fields, and Measures
for the Administration of Foreign-funded International Freight Forwarding Enterprises.

Fourth, the management committee of state-level economic and technological development zone shall, entrusted by the Ministry of Commerce
to be engaged in foreign investment commerce, international freight forwarding agent enterprises, meet the following conditions:

(1)

It shall implement streamlined and efficient administrative system in accordance with Notice of the General Office of the State Council
on Forwarding the Opinions on Promoting the Further Development of State-level Economic and Development Zones (Guo Ban Fa [2005]
No.15).

(2)

It shall link its website with that of the Ministry of Commerce to issue approval certificate for foreign-funded enterprises via foreign
investment statistics system and inform promptly the Ministry of Commerce its implementation of examination and approval of foreign
investment commerce, international freight forwarding agent enterprise via Internet.

Fifth, after state-level economic and technological development zone has completed management system record, personnel training and
approved its qualification after acceptance via internet, the Ministry of Commerce shall separately undertake the corresponding entrustment
procedures in batches

 
The Ministry of Commerce
2006-02-09

 



ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES NO.1 – INVENTORIES

Ministry of Finance

Accounting Standards for Business Enterprises No.1 – Inventories

Cai Kuai [2006] No.3

February 15, 2006

Chapter I General Provisions

Article 1

These Standards are formulated in accordance with the Accounting Standards for Enterprises – Basic Standards for the purpose of regulating
the recognition of the inventories, measurement and disclosure of related information. .

Article 2

Other relevant accounting standards shall apply to such items as follows:

(1)

The Accounting Standard for Business Enterprises No. 5 – Biological Assets shall apply to the consumptive biological assets.

(2)

The Accounting Standard for Business Enterprises No. 15 – Construction Contracts shall apply to the costs of the inventories together
through construction contracts.

Chapter II Recognition

Article 3

The term “inventories” refers to finished products or merchandise possessed by an enterprise for sale in the daily of business, or
work in progress in the process of production, or materials and supplies to be consumed in the process of production or offering
labor service.

Article 4

The inventories shall not be recognized unless they satisfy such conditions simultaneously as follows:

(1)

The economic benefits pertinent to the inventories are likely to flow into the enterprise; and

(2)

The cost of the inventories can be measured reliably.

Chapter III Measurement

Article 5

The inventories shall be initially measured in light of their cost. The cost of inventory consists of purchase costs, processing costs
and other costs.

Article 6

The purchase costs of inventories consists of the purchase price, relevant taxes, transport fees, loading and unloading fees, insurance
premiums and other expenses that may be relegated to the purchase costs of inventories.

Article 7

The processing costs of inventories consist of the direct labor and production overheads allocated according to a particular method.

The “production overheads” refers to all indirect expenses happened in the process of manufacturing products and providing labor services
by an enterprise. An enterprise shall, according to the nature of the production overheads, choose the reasonable method for the
allocation of production overheads.

If two or more kinds of products are manufactured in the same production process, and the processing cost for each product is unable
to be separated from that of others directly, the processing costs shall be allocated among the products in a reasonable way.

Article 8

“Other costs of inventories” refers to those costs, other than purchase costs and processing costs, happened in bringing the inventories
to their present location and condition.

Article 9

The following expenses shall be recognized as current profits and losses as they are happened, which shall not be included in the
cost of inventories:

(1)

The direct materials, direct labor and production overheads that are abnormally consumed;

(2)

The storage expenses (excluding the expenses which are necessary in the production process for reach the next production stage); and

(3)

Other expenses that cannot be included in the costs happened in bringing the inventories to their present location and condition.

Article 10

The borrowing costs, which shall be included in the cost of inventories, shall be disposed in accordance with the Accounting Standard
for Enterprises No. 17 – Borrowing costs.

Article 11

The cost of inventories invested by an investor shall be ascertained in accordance with the value as stipulated in the investment
contract or agreement, unless it is not stipulated fair in the contract or agreement.

Article 12

The cost of agricultural products in the harvest, and the cost of inventories obtained by the exchange of non-monetary assets, recombination
of liabilities and merger of enterprises shall be ascertained in accordance with the Accounting Standard for Business Enterprises
No. 5 – Biological Assets, Accounting Standard for Business Enterprises No. 7 – Exchange of Non-monetary Assets, Accounting Standard
for Business Enterprises No. 12 – Debt Restructurings and Accounting Standard for Business Enterprises No. 20 -Business Combinations,
respectively.

Article 13

Where an enterprise provides labor service, the direct labor expenses, other direct expenses as well as the indirect expenses included
thereto shall be included in the cost of inventories.

Article 14

An enterprise shall confirm the actual cost of sending out inventories by employing the first-in-first-out method, the weighted average
method or the specific identification method.

The cost of sending out inventories of items with similar nature and purpose shall be confirmed by employing the same cost calculation
method.

Generally, the cost of non-substitutable inventories, and goods purchased and produced as well as the labor services offered for specific
projects, the cost of sending out shall be confirmed by employing the specific identification method.

As to the inventories, which have been already sold, their costs shall be carried forward as the current profits and losses and the
relevant provision for the loss on decline in value of inventories shall also be carried forward.

Article 15

On the date of balance sheet, the inventories shall be measured whichever is lower in accordance with the cost and the net realizable
value.

If the cost of inventories is higher than the net realizable value, the provision for the loss on decline in value of inventories
shall be made and be included in the current profits and losses.

The net realizable value refers to in the daily business activity the amount after deducting the estimated cost of completion, estimated
sale expense and relevant taxes from the estimated sale price of inventories.

Article 16

An enterprise shall confirm the net realizable value of inventories on the ground of reliable evidence obtained, taking into consideration
of the purpose for holding inventories and the effects of events occurring after the date of the balance sheet.

The materials held for production shall be measured at cost if the net realizable value of the finished products is higher than the
cost. If a decline of the value of materials shows that the net realizable value of the finished products is lower than the cost,
the materials shall be measured at the net realizable value.

Article 17

The net realizable value of inventories held for the execution of sales contracts or labor contracts shall be calculated on the ground
of the contract price.

If an enterprise holds more inventories than the quantities subscribed in the sales contract, the net realizable value of the excessive
part of the inventories shall be calculated on the ground of the general sales price.

Article 18

Ordinarily an enterprise shall make provision for loss on decline in value of inventories on the ground of each item of inventories.

For inventories with large quantity and relatively low unit prices, the provision for loss on decline in value of inventories shall
be made on the ground of the categories of inventories.

For the inventories related to the series of products manufactured and sold in the same area, and of which the final use or purpose
is identical or similar thereto, and if it is difficult to measure them by separating them from other items, the provision for loss
on decline in value of inventories shall be made on a combination basis.

Article 19

An enterprise shall confirm the net realizable value of inventories on the balance sheet date. If the factors causing any write-down
of the inventories have disappeared, the amount of write-down shall be resumed and be reversed from the provision for the loss on
decline in value of inventories that has been made. The reversed amount shall be included in the current profits and losses.

Article 20

An enterprise shall amortize the easily consumed products of low value and packing articles and supplies by employing the one-off
write-off method or equal-split amortization method and bring it in the cost of the relevant assets or in the current profits and
losses.

Article 21

For any damage to the inventories of an enterprise, the enterprise shall include the amount after deducting the book value and relevant
taxes from the disposal income in the current profits and losses. The book value of inventories shall refer to the amount after deducting
the accumulative provision for loss on decline in value of inventories from the cost of inventories.

The loss of inventories shall be included in the current profits and losses.

Chapter IV Disclosure

Article 22

An enterprise shall, in the notes, disclose the information concerning to inventories as follows:

(1)

The book value of all inventories at the beginning and end of the period;

(2)

The methods to confirm the cost of sending out inventories;

(3)

The basis for confirming the net realizable value of inventories, the methods to make provision for the loss on decline in value of
inventories, the amount of the provision for loss on decline in value of inventories to be reversed in the current period, as well
as the relevant information about the making and reversion of the provision for loss on decline in value of inventories.

(4)

The book value of inventories used for a guaranty.



 
Ministry of Finance
2006-02-15

 






ACCOUNTING STANDARDS FOR ENTERPRISES NO. 25 – ORIGINAL INSURANCE CONTRACTS

the Ministry of Finance

Accounting Standards for Enterprises No. 25 – Original Insurance Contracts

No. [2006] of the Ministry of Finance

February 15, 2006

Chapter I General Provisions

Article 1

With a view to regulating the recognition, measurement of the original insurance contracts concluded by insurants and the presentation
of relevant information, the present Standards are formulated according to the Accounting Standards for Enterprises – Basic Standards.

Article 2

The term “insurance contract” refers to an agreement under which the insurer and the insured stipulate the insurance rights and obligations
and the insurer undertakes the insurance risks sourced from the insured. Insurance contracts are classified into original insurance
contracts and re-insurance contracts.

The term “original insurance contract” refers to an insurance contract under which the insurer charges the insurance premium and undertakes
the liability to pay the insurance money for the property losses resulted from the prescribed possible accident(s), or undertakes
the liability to pay the insurance money when the insured dies, or is injured, disabled or sick, or attains to the stipulated age
or time period.

Article 3

The following items shall be subject to other relevant accounting standards:

(1)

The impairment of assets such as the post-loss goods produced by an original insurance contract issued by an insurer shall be subject
to the Accounting Standards for Enterprises No. 1- Inventories.

(2)

A contract issued by an insurer to the insured on a risk other than the insurance risks shall be subject to the Accounting Standards
for Enterprises No. 22 – Recognition and Measurement of Financial Instruments and the Accounting Standards for Enterprises No. 37
– Presentation of Financial Instruments.

(3)

A reinsurance contract issued or held by an insurer shall be subject to the Accounting Standard for Enterprises – Reinsurance Contracts.

Chapter II Determination of Original Insurance Contracts

Article 4

No matter whether a contract concluded by an insurer and an insured is an original insurance contract or not, that whether or not
the insurer has undertaken the insurance risks shall, on the basis of a single-item contract, be judged according to the contract
terms.

Where the occurrence of an insurance accident is likely to cause the insurer to undertake the liability to pay the insurance money,
it shall be determined that the insurer has undertaken the insurance risks.

The term “insurance accident” refers to accidents which are prescribed in an insurance contract and fall within the scope of insurance
liabilities.

Article 5

Where a contract concluded by an insurer and an insured puts the insurer in a position of not only undertaking the insurance risks
but also other risks, it shall be respectively treated according to the following circumstances:

(1)

Where the insurance risks can be distinguished from other risks and can be measured separately, the insurance risks may be separated
from other risks. The part of insurance risks shall be determined as an original insurance contract. And the part of other risks
may not be determined as an original insurance contract.

(2)

Where the insurance risks cannot be distinguished from other risks, or where the insurance risks can be distinguished from other risks
but can not be measured separately, the entire contract shall be determined as an original insurance contract.

Article 6

The insurer shall, in light of whether or not it undertakes the liability to pay the insurance money during the extension period of
the original insurance contracts, classify the original insurance contracts into original life insurance contracts and original non-life
insurance contracts.

Where the insurer undertakes the liability to pay the insurance money during the extension period of an original insurance contract,
it shall determine it as an original life insurance contract. Where it does not undertake the liability to pay insurance money during
the extension period of an original insurance contract, it shall determine it as an original non-life insurance contract.

The “extension period of an original insurance contract” refers to the period during which the insured does not pay premium from the
maturity date of the previous period, but the insurer still undertake the liability to pay the insurance money.

Chapter III The Income from Original Insurance Contracts

Article 7

The premium income, which can meet the following requirements simultaneously, may be recognized:

(1)

An original insurance contract has been established and corresponding insurance liabilities have been undertaken;

(2)

The economic benefits related to the original insurance contract are highly probable to flow in;

(3)

The income related to the original insurance contract can be measured reliably.

Article 8

An insurer shall, according to the following provisions, calculate and determine the amount of insurance income:

(1)

As for an original non-life insurance contract, the amount of insurance income shall be determined according to the total premium
as stipulated in the original insurance contract.

(2)

As for an original life insurance contract, if the insurance premium as charged by installments, the amount of insurance income shall
be the premium charged in the current period. If the premium is charged in a lump sum, the insurance income shall be determined according
to the premium which shall be charged in a lump sum.

Article 9

Where an original insurance is cancelled prior to the expiration date, the insurer shall, according to the stipulations of the original
insurance contract, calculate and determine the refund to the insured as the refund premium, and record it in the profits and losses
of the current period.

Chapter IV Reserves for Original Insurance Contracts

Article 10

The reserves for original insurance contracts shall include unearned premium reserves, reserves for outstanding claims, reserves for
life insurance liabilities and reserves for long-term health insurance liabilities.

The term “unearned premium reserves” refers to the reserves drawn by an insurer for unexpired non-life insurance liabilities.

The term “reserve for outstanding claims” refers the reserves drawn by an insurer for the non-life insurance accidents which have
already occurred but have not been settled.

The term “reserves for life insurance liabilities” refers to the reserves drawn by an insurer for unexpired life insurance liabilities.

The term “reserves for long-term health insurance liabilities” refers to the reserves calculated and drawn by an insurer for unexpired
long-term health insurance liabilities.

Article 11

An insurer shall, in the current period of recognition of the income from non-life insurances, calculate and draw unearned premium
reserve as an adjustment to the premium income of the current period in light of the actuarial amount, and recognize the unearned
premium reserves as a liability.

An insurer shall, on the balance sheet date, recalculate the balance between the recognized amount of the unearned premium reserves
and the drawn amount of the unearned premium reserves in light of the actuarial amount, and shall make an adjustment to the unearned
premium reserves.

Article 12

An insurer shall, in the current period when the non-life insurance accident happens, draw the reserve for outstanding claims in light
of the actuarial amount, and shall recognize the reserve for outstanding claims as a liability.

The reserve for outstanding claims includes the reserve for outstanding claims that are incurred and reported, the reserve for outstanding
claims that are incurred but not reported as well as the reserve for the expenses of settlement of claims.

The “reserve for outstanding claims that are incurred and reported” refers to the reserve made by an insurer for the compensation
cases, in which non-life insurance accidents have occurred and claims are made to the insurer, but are not settled yet.

The “reserve for outstanding claims that are incurred but not reported” refers to the reserve made by an insurer for the compensation
cases, in which non-life insurance accidents have occurred but no claim is made to the insurer yet.

The “reserve for the expenses of settlement of claims” refers to the reserve made by an insurer for the attorney fees, litigation
fees, loss inspection fees, wages and salaries of the personnel for the settlement of claims and other expenses which are likely
to incur in compensation cases, in which non-life insurance accidents have occurred but which have not been settled yet.

Article 13

An insurer shall, in the current period of recognition of life insurance premiums, draw reserves for life insurance liabilities and
long-term health insurance liabilities in light of the actuarial amounts, and shall recognize the reserves for life insurance liabilities
and those for long-term health insurance liabilities as liabilities.

Article 14

An insurer shall, at least by the end of each year, test the abundance of the reserves for outstanding claims, life insurance liabilities,
and long-term health insurance liabilities.

Where the amount of relevant reserves which are recalculated and determined by the insurer in light of the actuarial amount exceeds
the drawn amount of the relevant reserves on the abundance test date, the relevant reserves shall be replenished on the basis of
the difference. If the amount of relevant reserves which are recalculated and determined by the insurer in light of the actuarial
amount is less than the residual amount of the relevant reserves on the abundance test date, no adjustment shall be made to the relevant
reserves.

Article 15

Where an original insurance contract is cancelled prior to its expiration date, the insurer shall write off the residue amounts of
the relevant reserves for unearned premiums, life insurance liabilities and long-term health insurance liabilities, and recorded
them into the profits and losses of the current period.

Chapter V Cost of Original Insurance Contracts

Article 16

The cost of an original insurance contract refers to the total outflow of economic benefits, which is incurred by the original insurance
contract, will result in the decrease of the owner￿￿s equities and is irrelevant to the distribution of profits to the owners.

The cost of an original insurance contract mainly includes the handling charges or commission, compensation cost, as well as the reserves
for outstanding claims, life insurance liabilities and long-term health insurance liabilities.

The compensation cost includes the indemnity or payment made by the insurer, and the expenses for the attorney fees, litigation fees,
loss inspection fees, wages and salaries of the personnel for the settlement of claims which are incurred during the settlement of
the claims.

Article 17

The handling fees and commissions, which are incurred to the insurer during the course of obtaining the original insurance contracts,
shall be recorded into the profits and losses of the current period.

Article 18

The reserves for outstanding claims, life insurance liabilities, and long-term health insurance liabilities, which are drawn by an
insurer in light of the actuarial amounts shall be recorded into the profits and losses of the current period.

An insurer shall, in the current period of determination of the amount of compensation, record into the profits and losses of the
current period the amount of compensation determined to make. Meanwhile, it shall offset the residual amount of the corresponding
reserves for outstanding claims, reserves for life insurance liabilities or for long-term health insurance liabilities.

Article 19

The reserves for outstanding claims, life insurance liabilities or long-term health insurance liabilities, which are replenished by
an insurer according to the abundance test, shall be recorded into the profits and losses of the current period.

Article 20

Any post-loss goods obtained by an insurer due to undertaking the liability to pay the insurance money shall be recognized as an asset
calculated at the market price of the same class of or similar asset, and shall be used to offset the compensation cost of the current
period.

When disposing of any post-loss goods, the insurer shall adjust the compensation cost of the current period according to the balance
between the amount received and the carrying amount of the post-loss goods.

Article 21

Where the subrogation recourse fee to be charged by an insurer for undertaking the liability to pay the insurance money meets the
following requirements simultaneously, it shall be recognized as the receivable subrogation recourse fee and shall be used to offset
the compensation cost of the current period:

(1)

The economic benefits related to this subrogation recourse fee is likely to flow in; and

(2)

The amount of the subrogation recourse fee can be measured reliably.

When an insurer receives the receivable subrogation recourse fee, it shall, pursuant to the balance between the received amount and
the carrying amount of the relevant receivable subrogation recourse fee, adjust the compensation cot of the current period.

Chapter VI Presentation

Article 22

An insurer shall, in the balance sheet, separately present the following items related to the original insurance contract:

(1)

the unearned premium reserve;

(2)

the reserve for outstanding claims;

(3)

the reserve for life insurance liabilities; and

(4)

the reserve for long-term health insurance liabilities.

Article 23

An insurer shall, in the profit statement, present separately the following items related to the original insurance contract:

(1)

the income from premiums;

(2)

the refunded premiums;

(3)

the drawing of unearned premium reserve;

(4)

the premiums earned;

(5)

the disbursement of handling fee;

(6)

the compensation cost;

(7)

the reserve for outstanding claims;

(8)

the reserve for life insurance liabilities; and

(9)

the reserve for long-term health insurance liabilities.

Article 24

An insurer shall, in its annotations, disclose the following information related to the original insurance contract:

(1)

the relevant information on the subrogation recourse fee;

(2)

the relevant information on the post-loss goods;

(3)

the increase and decrease of each reserve; and

(4)

the main actuarial assumptions and methods for drawing these reserves and testing the abundance of the reserves.



 
the Ministry of Finance
2006-02-15

 






ANNOUNCEMENT NO.9, 2006 OF THE GENERAL ADMINISTRATION OF CUSTOMS OF THE PEOPLE’S REPUBLIC OF CHINA

General Administration of Customs

Announcement No.9, 2006 of the General Administration of Customs of the People’s Republic of China

[2006] No.9

In accordance with Tariff Committee of State Council’s decision on cease anti-dumping duties to the imported unbleached Kraft liner/linerboard
originated from the U.S, Thailand, the Republic of Korea and Taiwan region, Ministry of Commerce released Announcement No.8, 2006
(hereinafter referred to as Ministry of Commerce Announcement No.8, 2006, please refer to Appendix for details). Related matters
are now announced as follows:

In accordance with Ministry of Commerce Announcement No.8, 2006, Customs ceased General Administration of Customs Announcement No.50,
2005 and anti-dumping duties on unbleached Kraft liner/linerboard originated from the U.S, Thailand, the Republic of Korea and Taiwan
region. The imposed anti-dumping duties on unbleached Kraft liner/linerboard originated from the said counties and regions before
release of this announcement will be returned. Related units may apply for refund of the said anti-dumping duties to Customs within
6 months as from release of this announcement, and go through related formalities.

Appendix: Ministry of Commerce Announcement No.8, 2006 (please refer to China Foreign Trade and Economic Cooperation Gazette [Issue
No.14 2006]) (Omitted)

General Administration of Customs

Feb 16, 2006



 
General Administration of Customs
2006-02-16

 






NOTICE OF THE STATE ADMINISTRATION OF TAXATION ON THE EFFECTIVENESS AND IMPLEMENTATION OF THE AGREEMENT ON AVOIDING DOUBLE TAXATION BETWEEN CHINA AND AZERBAIJAN

the State Administration of Taxation

Notice of the State Administration of Taxation on the Effectiveness and Implementation of the Agreement on Avoiding Double Taxation
between China and Azerbaijan

Guo Shui Fa [2006] No. 27

The state taxation bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central
Government and cities under separate state planning, Yangzhou Institute of Taxation, and all entities within the taxation departments:

As to the agreement concluded between China and Azerbaijan on avoiding double taxation and preventing tax evasion on March 17, 2005
in Beijing, the foreign affairs departments of China and Azerbaijian have exchanged notes respectively on July 25, 2005 and August
17, 2005, to confirm that relevant statutory legal procedures have been concluded for its effectiveness. In accordance with the provisions
of Article 27 of the Agreement, it shall go into effect as of August 17, 2005 and shall be implemented as of January 1, 2006. The
State Administration of Taxation has printed and issued to you the text of the aforesaid Agreement by No. 282 [2005] on April 4,
2005. Please carry it out accordingly.

the State Administration of Taxation

February 21, 2006



 
the State Administration of Taxation
2006-02-21

 






1...424344...83Page 43 of 83

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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