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CIRCULAR OF THE MINISTRY OF FINANCE ON PRINTING AND DISTRIBUTING THE MEASURE FOR THE ADMINISTRATION OF PROJECTS (SUB-PROJECTS) WITH THE WORLD BANK’S TECHNICAL ASSISTANCE

Ministry of Finance

Circular of the Ministry of Finance on Printing and Distributing the “Measure for the Administration of Projects (Sub-Projects) with
the World Bank’s Technical Assistance”

Caiji [2003] No. 108

December 25, 2003

The relevant ministries, commissions and institutions directly under the State Council, and the departments (bureaus) in all provinces,
autonomous regions, municipalities directly under the Central Government and cities directly under the State planning:

For further standardizing the administration of the projects with the World Bank’s technical assistance, improving the quality of
managing the projects and the efficiency of using the fund, this Measure for the Administration has been formulated and is hereby
printed and distributed to your organization. Please observe and implement them.

Annex: Measures for the Administration of Projects (Sub-Projects) with the World Bank’s Technical Assistance Annex:Measures for the Administration of Projects (Sub-Projects) with the World Bank’s Technical Assistance

Chapter I General Provisions

Article 1

The present Measures are formulated with a view to further standardizing the administration of projects (sub-projects) with the World
Bank technical assistance, improving the quality of managing the projects and the efficiency of using the fund, and ensuring the
smooth attainment of the projects’ targets.

Article 2

“Projects (sub-projects) with the World Bank’s technical assistance” in this Law refer to projects (sub-projects) that use the World
Bank’s grants or technical cooperation loans.

Chapter II Administration of the World Bank’s Grants

Article 3

Relevant central and local agencies shall, in accordance with the relevant provisions of the Ministry of Finance, apply for the grants.
After verified and approved by the Ministry of Finance, the entity will become the grant project entity and be responsible for the
specifics of implementing the grant projects.

Article 4

The relevant central and local agencies that apply for the grants shall submit their applications to the Ministry of Finance along
with the materials as follow:

(1)

Proposal of the projects (sub-projects);

(2)

Commitment Letter of Grant Use

The above materials shall satisfy the relevant requirements of the Ministry of Finance and the World Bank.

Article 5

Applications of the relevant central agencies may be submit to the International Department of the Ministry of Finance in the name
of the competent authorities (Department level) of the entities; Applications of the relevant local agencies must be submit to the
International Department of the Ministry of Finance through the finance authorities of their provinces.

Article 6

Where the grant project entity is a central agency, with the Ministry of Finance’s approval, the grant may be managed and used by
its own, and the entity shall open and manage a special account for the projects in accordance with relevant provisions. For those
are not qualified for managing fund and finance or be under special circumstance, the grants shall be managed (including account
opening and management) by the International Department of the Ministry of Finance or the entity designated by the International
Department of the Ministry of Finance.

Article 7

Where the grant project entity is a local agency, with the Ministry of Finance’s approval, the grant shall be managed (including account
opening and management) through the finance authority of its province. Where there are special cases as the project involves several
localities and the account can not be divided, the account and the grant shall be managed by the International Department of the
Ministry of Finance or the entity designated by the International Department of the Ministry of Finance.

Article 8

Every grant project (sub-project) entity shall, in accordance with relevant provisions of the Ministry of Finance, pay adequately
and timely the charge for the use of the grant prior to the first withdrawal and account report.

Article 9

Every grant project (sub-project) entity shall implement the grant project in accordance with the Grants Agreement, relevant provisions
of the World Bank and the Ministry of Finance and the commitments in the Commitment Letter of Grant Use, and receive supervision
on procurement and audit from the World Bank, relevant finance authorities and auditing authorities.

Chapter III Administration of the World Bank’s Technical Cooperation Loans

Article 10

Relevant central and local agencies that need the World Bank’s technical cooperation loans shall apply in accordance with the project
management regulations stipulated by the Ministry of Finance for every technical cooperation project. After being verified and approved
by the Ministry of Finance, the entity will become the sub-project entity and be responsible for the specifics of implementing the
sub-projects.

Article 11

The applications submitted by the central and local agencies include the Sub-project Proposal that is required by the Projects Overall
Objective stipulated in the Loan Agreement (Development Credit Agreement). The Sub-project Proposal shall be made in accordance with
the standard format required by the Project Management Regulations.

Article 12

The applications of relevant central agencies that plan to use the central uniformly repay fund￿￿shall apply directly to the Ministry
of Finance by it own name. Other relevant central agencies’ applications may be submitted to the International Department of the
Ministry of Finance in the name of the competent authorities (Department level) of their respective agencies. The applications of
the relevant local agencies must be submitted to the International Department of the Ministry of Finance through finance authorities
of their provinces.

Article 13

When it is a central agency and has been approved to use the central uniformly repay fund, the sub-project entity shall directly sign
the Sub-project Agreement with the Ministry of Finance. When it is a central agency but has not been approved to use the central
uniformly repay fund, the sub-project entity shall directly sign the Agreement on Sub-project Loan Transfer with the Ministry of
Finance. When it is a local agency, the sub-project entity shall sign the Agreement on Sub-project Loan Transfer with the Ministry
of Finance through finance authority of its province.

Article 14

The special account of the technical cooperation projects, withdrawals and account reporting to the World Bank shall be uniformly
managed by the International Department of the Ministry of Finance or the entity designated by the International Department of the
Ministry of Finance. The relevant projects entities and finance authorities shall complete the procedure of withdrawals and submitting
expense accounts with the Ministry of Finance.

Article 15

Every sub-project entity shall, in accordance with the relevant provisions of the Ministry of Finance, pay adequately and timely the
charge for loan administration prior to the first withdrawal and account report.

Article 16

Every sub-project entity shall, in accordance with the Loan Agreement, the Project Management Regulations, the Sub-project Implementation
Agreement or the Agreement on Sub-project Loan Transfer and the relevant provisions of the World Bank and the Ministry of Finance,
implement the branch projects and receive supervision on procurement and auditing from the World Bank, relevant finance authorities
and auditing authorities.

Chapter IV Supplementary Provisions

Article 17

Any violation of this Measure will be seriously punished by the Ministry of Finance in accordance with the relevant laws, regulations,
and the relevant rules of the Ministry of Finance as well as the relevant requirements of the World Bank.

Article 18

The Ministry of Finance shall be responsible for the interpretation of this Measure.

Article 19

This Measure shall enter into force as of January 1, 2004.



 
Ministry of Finance
2003-12-25

 






DECISION OF THE STATE COUNCIL ON FURTHER STRENGTHENING THE WORK OF INTELLECTUAL PROPERTY PROTECTION

Decision of the State Council of the PRC on Further Strengthening the Work of Intellectual Property Protection

     The protection of intellectual property is a component part of the policy of reform and openness of China and an important system
for promoting the prosperity and development of scientific, technological and cultural undertaking and ensuring the normal operation
of the socialist market economy. In order to adapt to the international trend of integration of science, technology and economy and
to the objective requirement for the early restoration of China’s status as contracting State of GATT, China has in recent years
speeded up its intellectual property legislation and successively promulgated such laws as the Trademark Law of the People’s Republic
of China, the Patent Law of the People’s Republic of China, the Law of the People’s Republic of China on Technology Contracts, the
Copyright Law of the People’s Republic of China and the Law of the People’s Republic of China for Countering Unfair Competition,
which have begun to link up with international standards and have played a positive role in promoting reform and openness as well
as the construction of modernization in China. As it is only recently that China has established its intellectual property system,
and the sense of intellectual property of society as a whole is still rather hazy, there is still lacking, in certain regions and
departments, a sufficient understanding of the importance of protecting intellectual property. A number of aggravated acts of infringement
have not only damaged the lawful rights and interests of intellectual property right owners but also the dignity of law. In order
to strengthen conscientiously the work of intellectual property protection and ensure the enforcement of the laws, the following
decision is made.

1. Perfecting the intellectual property system and strengthening conscientiously the work of intellectual property protection, are
currently important contents of deepening the complementary reforms in the scientific, technological and economic fields and expanding
the scope of opening to the outside world, and also the basic requirements in our efforts to speed up the establishment of a system
of socialist market economy and realize the link-up with the world economy. The People’s Governments at the various levels have to
understand fully the importance of the intellectual property system in giving impetus to scientific and technical progress and economic
development, to handle correctly the relationship between local interests and overall interests, between immediate interests and
long-term interests, place the strengthening of intellectual property protection on the agenda of scientific, technical, economic
and cultural work as an important matter, utilize comprehensively legal, economic and administrative means to induce enterprises,
scientific research institutes and institutions of higher learning (referred to below as enterprises and institutions) to adopt effective
measures to protect their intellectual property while fully respect the intellectual property of others, urge society as a whole
to foster the good habit of respecting and protecting intellectual property so as to create a favourable environment and conditions
for the producing, by citizens, enterprises and institutions, of inventions, creations, and literary/artistic works as well as for
the scientific, technical, economic and cultural cooperation and exchange with foreign countries.

2. The protection of intellectual property is a comprehensive task involving many aspects such as legislation, judicature, law enforcement,
and administration, and the various relevant departments should support each other and cooperate closely so as to form a unified
and harmonious system of intellectual property protection.

Recently, the Standing Committee of the National People’s Congress has examined and approved the decision on punishing crimes of infringing
on copyright, so as to increase the force of the law for stopping and punishing acts of intellectual property infringement.

The State Council will pay close attention to the study and formulation of administrative regulations for carrying out border measures
in respect of intellectual property protection.

The administrative authorities and enforcing agencies for intellectual property at the various levels shall strengthen their functions,
maintain their staff at full strength and increase efficiency. At present, it is necessary to focus on reinforcing the staff of copyright
administrative and enforcing agencies at various levels to ensure the effective implementation of the Copyright Law of the People’s
Republic of China. In the process of performing their duties, the intellectual property administrative and enforcing agencies will
need the cooperation of other enforcement agencies and administrative departments, and the relevant agencies and departments should
lend their support unstintingly. In respect of major cases producing a great impact, the administrative authorities and enforcement
agencies for intellectual property affairs may investigate and deal with them jointly with the departments in charge of scientific,
technological, economic, cultural, press, publishing, broadcasting, cinematic, television and public security affairs.

Support should be given to the hearing of intellectual property cases by the People’s Courts according to law and to the setting up
of intellectual property adjudication divisions by the relevant People’s Courts where they are needed. The ranks of judges should
be expanded in earnest so as to ensure that various categories of intellectual property cases will be dealt with justly and promptly.

In judicial and administrative enforcement, the barriers of local protectionism and of departmentalism should be broken down and various
acts of intellectual property infringement should be investigated and punished by following the principles of “There should be laws
to abide by. Where there are laws, they must be abided by. Where laws are enforced, they must be enforced strictly. Where laws are
broken, the law-breakers must be investigated and dealt with.” and by the strict enforcement of laws and regulations. Where the circumstances
of the infringing acts are so serious as to constitute crimes, the relevant persons should be prosecuted for their criminal liability
according to law so as to safeguard conscientiously the lawful rights and interests of owners of intellectual property rights as
well as the unity and dignity of the socialist legal system.

In order to further amplify and perfect the intellectual property administration system of the country and strengthen the macro-management
and coordination of intellectual property, the State Council has decided to institute the system of holding regular meetings at the
State Council to deal with intellectual property matters. The various departments concerned should strengthen their administration
organizations for intellectual property affairs in the organizational reform and sort out interdepartmental relations, build up in
China a framework in which the system of executive administration and the system of judicial protection operate in parallel so as
to increase the force of intellectual property protection.

3. It is necessary to strengthen energetically the supervision and inspection of the implementation of intellectual property laws
and develop a mechanism combining routine supervision with inspection of key sectors. The State Council will nonperiodically organize
the various administrative authorities and enforcement agencies for intellectual property affairs, together with the departments
concerned with scientific, technological, economic, cultural, press, publishing, broadcasting, cinematic, television and public security
matters, to carry out joint inspections of the situation in various regions and departments regarding the implementation of intellectual
property laws, with the stress on investigating and dealing with a number of major cases of intellectual property infringement which
are significant and make a great impact, and to supervise local authorities in combating such phenomena as laxity in law enforcement
and leniency in punishing infringing acts. This is to be shaped gradually into a system to ensure the effective implementation of
the intellectual property laws.

At present, the focal point of supervision and inspection is to put the audio-visual product and computer software market in order.
The administrative authorities for copyright and for industry and commerce at various levels should cooperate closely, intensify
their inspections and deal seriously with piratical acts of illegally copying audio-visual products and computer soft-ware.

4. In order to carry out the relevant provisions in the Paris Convention for the Protection of Industrial Property and the Berne Convention
for the Protection of Literary and Artistic Works, acceded to by China, and to strengthen intellectual property protection in foreign
economic relations and trade, it is necessary to enhance the functions of the customs authorities in protecting intellectual property
and stopping the import and export of infringing products, and to adopt necessary border measures to stop the import and export of
infringing products effectively. The customs authorities should strengthen the liaison and cooperation with the relevant departments
and strictly carry out the border measures concerning intellectual property according to law.

5. It is necessary to strengthen the work of protecting intellectual property in the import and export of new technologies and new
products. Where an item of technology or a product is imported from abroad, a comprehensive investigation should be carried out of
the status of the relevant technology or product in respect of intellectual property in order to avoid infringement disputes or other
losses. Where an item of new technology or a new product is exported, proper inquiries should also be made with respect to intellectual
property so that after the technology or product is exported it may not be copied by others or infringe the intellectual property
of others.

It is necessary to strengthen the examination, approval and administration of the processing of brand-name audio-visual product using
materials which are supplied by clients or are imported and the manufacturing and distributing of such products in the form of joint
ventures. Where an enterprise is entrusted by a foreign firm with such activities, it should find out through the relevant intellectual
property administrative authority or service agency whether the foreign firm is the lawful proprietor of the particular item of intellectual
property and has the right to its use, and it should be stipulated in the contract the liability for making defence where the enterprise
is accused by a third party of infringement for carrying out the activities of processing name-brand audio-visual products or manufacturing
and distributing such products while performing the contract, and the liability for making compensation where the accusation is found
tenable.

6. The various trades and professions should each take the strengthening of intellectual property work as an important measure for
promoting the scientific-technological progress and economic development within the trade. Each should, according to the actual state
of scientific, technological and economic development in the trade, actively carry out studies on its own intellectual property strategy
and management in order to lend guidance to the adjustment of the product mix, scientific research and production throughout the
trade. In respect of those trades with little capability of autonomous research and development, such as the pharmaceutical, chemical
and computer software trades, a preferential policy should be adopted to increase the input of funds for research and development
and raise the capability and level of autonomous research and development.

7. The departments responsible for various plans of scientific- technological development should take intellectual property work as
an important link in the management of their plans and formulate a unified intellectual property strategy in the light of the execution
and development of the plans, and should in particular strengthen the investigation and analysis of intellectual property in the
fields related to the plans and the corresponding study of countermeasures, so that the intellectual property work will run through
the entire process of putting the projects in the plans on record, the legal protection of the results and their commercialization,
industrialization and internationalization.

8. Enterprises and institutions should take the protection of intellectual property as an important content of establishing a modern
system of enterprises and a modern system of scientific research institutes, heighten their consciousness of intellectual property,
abide by the intellectual property laws and regulations, channel the strengthening of intellectual property protection into line
with their own work in research, development, production, operation and internal management, and shaping these into corresponding
systems.

The research and development of new techniques, new technology, and new products as well as the technical transformation of enterprises
and institutions should be closely combined with intellectual property work. They should make use of information on intellectual
property to formulate correct strategies of research, development, production and operation and decide on an appropriate direction
of research and technical line, raise the starting point, level and efficiency of research and development and avoid the emergence
of unnecessary repetitive developments or the arising of infringement disputes in scientific research and in production.

9. The various categories of trade associations in the scientific, technical, economic and cultural fields, together with specialized
public organizations concerning intellectual property and socialized service organizations, are an important force in promoting the
implementation of intellectual property laws and strengthening the work in intellectual property protection. It is necessary to encourage
and support the development of these organization, steer them towards utilizing their flexible mechanisms and, geared to the needs
of society, provide all manners of intellectual property law consulting and other services. A number of legal service organizations
concerning intellectual property should be set up to assist interested parties in the investigation of infringing acts and the gathering
of evidence so that the relevant disputes may be resolved through legal channels. The departments concerned of the government should
fully bring into play the initiative of these organizations so that they may become capable assistants of the administrative authorities
in protecting intellectual property.

10. At present, it is necessary to vigorously strengthen the training of specialists in the field of intellectual property and the
work of popularizing knowledge on intellectual property protection among the vast numbers of leading cadres and the masses. The administrative
authorities for intellectual property and departments in charge of scientific, technological, economic and cultural affairs should
carry out in-depth propaganda about intellectual property in combination with the Second Five Year Plan for the Popularization of
Legal Knowledge and strengthen education in respect of the legal system concerning intellectual property. The media should intensify
the reporting on intellectual protection and fulfil satisfactorily the tasks of propagation, education, and supervision through public
opinion. Enterprise and institutions should bring intellectual property law into line with their educational plans for popularization
of legal knowledge. It is necessary to gradually heighten the consciousness of intellectual property protection and the related sense
of legality in society as a whole through in-depth, sustained propaganda and education, so as to create a salutary social environment
favourable to the protection of intellectual property.

11. The departments concerned of the State Council may formulate, on the basis of this Decision, specific procedures for strengthening
the intellectual property work in enterprises and institutions.

    





REGULATIONS ON MANAGEMENT OF INTERNATIONAL FREIGHT FORWARDERS

Regulations of the PRC on Management of International Freight Forwarders

     CHAPTER I GENERAL PROVISIONS CHAPTER II CONDITIONS FOR THE ESTABLISHMENT CHAPTER III PROCEDURES OF EXAMINATION AND APPROVAL CHAPTER
IV BUSINESS SCOPE CHAPTER V PENALTIES CHAPTER VI SUPPLEMENTARY PROVISIONS

   Article 1 These regulations are formulated to govern behaviors of international freight forwarders to safeguard the lawful rights and benefits
of consignors and consignees of exports and imports, and international freight forwarders and to promote the development of foreign
trade.

   Article 2 The international freight forwarders referred to in the regulations mean those trades entrusted by consignors and consignees of exports
and imports conduct international freight forward and related businesses for their clients and collect enumerations for their services
in their own names or in the name of their consignors.

   Article 3 International freight forwarders must obtain the status of a legal body as an enterprise of the People’s Republic of China according
to law.

   Article 4 The Competent Departments of foreign trade and economic cooperation under the State Council are responsible for supervision and management
of international freight forwarders throughout the country.

The competent departments of trade and economic relations with other countries of people’s governments of various provinces, autonomous
regions and municipalities as well as special economic zones (shortened below as local competent departments of trade and economic
relations with other countries) are responsible for supervision and management of international freight forwarders in their administrative
areas in accordance with the regulations and with in the scope of power authorized by the competent departments of foreign trade
and economic cooperation under the State Council.

   Article 5 The supervision and management of international freight forwarders should abide by the following principles:

1. To meet the demands of development of foreign trade and promote the rational distribution of international freight forwarding agencies.

2. To protect fair competition and promote the improvement of services of international freight forwarders.

   Article 6 Enterprises engaged in international freight forwarding should observe the laws and administrative rules and regulations of the People’s
Republic of China and be subject to the supervision and management carried out by related competent institutions of their trade in
keeping with relevant laws and administrative rules and regulations.

CHAPTER II CONDITIONS FOR THE ESTABLISHMENT

   Article 7 According to the characteristics of the trade the establishment of an international freight forwarder must acquire the following
conditions:

1. It has competent professional to engage in international freight forwarding.

2. It has a fixed site for business and necessary facilities.

3. It has stable sources of and markets for exports and imports.

   Article 8 The minimum amount of registered capital of an international freight forwarder must meet the following demands:

1. The minimum amount of registered capital of an international freight forwarder by sea should be 5 million yuan.

2. The minimum amount of registered capital of an international freight forwarder by air should 3 million yuan.

3. The minimum amount of registered capital of an international freight forwarder by land or and international express deliverer should
be 2 million yuan.

For an enterprise engaged in two or more than two items of businesses mentioned above its minimum amount of registered capital should
be that of the item with the highest amount of registered capital.

In sitting up a branch an international freight forwarder should add a registered capital of 500,000 yuan.

CHAPTER III PROCEDURES OF EXAMINATION AND APPROVAL

   Article 9 To apply for the establishment of an international freight forwarding agency the applicant should submit an application to the competent
department of trade and economic relations with other countries of the locality when the agency is to be set up and, with opinions
put forward by the department, should forward the applications to the competent department of foreign trade and economic cooperation
under the State Council for approval and ratification.

   Article 10 To apply for the establishment of an international freight forwarding agency. The following documents should be submitted.

1. Application.

2. Draft Constitution of the enterprise.

3. The names, posts and identification paper of leading members and chief staff members.

4. Certificates of credit standing and conditions of operational facilities.

5. Other documents as stipulated by the competent departments of foreign trade and economic s/cooperation under the State Council.

   Article 11 The local competent department of trade and economic relations with other countries should put forward its opinions within 45 days
farm the day it receives the application and other documents and then forwards them to the competent department of foreign trade
and economic cooperation under the State Council.

The competent department of foreign trade and economic cooperation under the State Council should decide on approval or disapproval
within 45 days from the day it receives the application for the establishment of an international freight forwarding agency and other
documents, and should issue a certificate of ratification to the approved international freight forwarding agency.

   Article 12 With the certificate of ratification issued by the competent department of trade and economic corporation with other countries the
he international freight forwarding agency should go through the procedures of enterprise and taxation registration according to
relevant stipulations of laws, administrative rules and regulations.

   Article 13 The competent department of trade and economic cooperation under the State Council should cancel the certificate of ratification
if the applicant does not open business without proper reasons within 180 days from the day it receives the certificate of ratification.

   Article 14 The certificate of ratification is valid for 3 years.

When the certificate of ratification expires and the agency wants to continue its business the international freight forwarding agency
should apply to the competent department of foreign trade and economic cooperation under the State Council for another certificate
of ratification 30 days before the expire.

If the international freight forwarding agency does not apply for another certificate of ratification according to stipulations in
the previous clause, it will automatically lose its qualification to engage in international freight forwarder.

   Article 15 When the international freight forwarding agency terminates its business it should report to the local competent department of trade
and economic relations with other countries or to the competent department of foreign trade and economic cooperation under the State
Council according to the procedures of application for its establishment as stipulated in Article 9 and hand in its ratification
certificate for cancellation.

   Article 16 To apply for setting up a branch the international freight forwarding agency should go through the necessary procedures stipulated
in the regulations.

   Article 17 An international freight forwarding agency may accept a commission to operate part or all of the following business:

1. To book ship’s holds and warehouses.

2. Supervision of freight loading and unloading and assembling and dismantling of containers.

3. Multi-forms of international through transportation.

4. International express delivery excluding private letters.

5. To make customs declaration, undergo customs quarantine and inspection and to insure,

6. To prepare related bills and certificates, pay transport charges, settle accounts and pay miscellaneous fees.

7. Other businesses of international forwarder.

An international freight forwarding agency should conduct its business within the ratified scope. To engage in above-mentioned businesses
an international freight forwarding agency should register with relevant competent departments as required by related laws and administrative
rules and regulations.

International freight forwarding agencies can be mutually entrusted to conduct business stipulated in this articles.

   Article 18 International freight forwarding agencies should pursue and operational policy of safety, high speed, accuracy, economy and convenience
in serving consignors and consignees of exports and imports.

   Article 19 An international freight forwarding agency must set the standards of charges to be collected according to relevant state stipulations
and publicize them at the business site.

   Article 20 An international freight forwarding agency must use invoices checked and approved by taxation departments in its business,

   Article 21 An international freight forwarding agency should hand in a report on its business performance of the previous year to the competent
department of trade and economic relations with other countries of its locality before the end of March every year.

   Article 22 An international freight forwarding agency is not allowed to do the following things:

1.To conduct its business through using unfair competition method.

2. To lend, lease or transfer to others its certificate of ratification and other papers concerning international freight forwarder.

   Article 23 When and international freight forwarding agency violates the stipulations of Articles 19 and 21 of the regulations, the competent
department of foreign trade and economic operation under the State Council should serve if a warning and order it to amend with a
time limit. If not, the department should cancel its certificate of ratification.

   Article 24 When an international freight forwarding agency violates the 2nd stipulation of Article 17 and stipulations of Articles 20 and 22,
the competent department of foreign trade and economic cooperation under the State Council should serve it a warning and order it
to suspend business for rectification up to canceling its certificate of ratification. Related competent departments of industrial
and commercial administration, customs and taxation should give punishments according to relevant laws and administrative rules and
regulations.

   Article 25 To engage in international freight forwarder as prescribed in Article 17 without authorization in violation of the stipulations of
the regulations the competent departments of foreign trade and economic cooperation under the State Council should be these illegal
business activities and the administration institutions of industry and commerce should give punishments according to laws, and administrative
rules and regulations.

   Article 26 If violations of the regulations constitute a crime the violator should be given criminal sanctions according to law.

CHAPTER VI SUPPLEMENTARY PROVISIONS

   Article 27 International freight forwarders may set up an association of international freight forwarders which can give guidance and provide
services to its members according to its charter.

    





PROVISIONS CONCERNING THE ADMINISTRATION OF FOREIGN-FUNDED BUSINESS-STARTING INVESTMENT ENTERPRISES






The Ministry of Foreign Trade and Economic Cooperation, the Ministry of Science and Technology, the State Administration for Industry
and Commerce, the State Administration of Taxation, the State Administration of Foreign Exchange

Decree of the Ministry of Foreign Trade and Economic Cooperation, the Ministry of Science and Technology, the State Administration
for Industry and Commerce, the State Administration of Taxation and the State Administration of Foreign Exchange

No.2

The Provisions Concerning the Administration of Foreign-funded Business-starting Investment Enterprises were adopted at the 11th ministerial
meeting of the Ministry of Foreign Trade and Economic Cooperation. It is hereby promulgated and shall be implemented as of March
1, 2003.

Minister of the Ministry of Foreign Trade and Economic Cooperation Shi Guangsheng

Minister of the Ministry of Science and Technology Xu Guanhua

Director general of the State Administration for Industry and Commerce Wang Zongfu

Director general of the State Administration of Taxation Jin Renqing

Director general of the State Administration of Foreign Exchange Guo Shuqing

January 30, 2003

Provisions Concerning the Administration of Foreign-funded Business-starting Investment Enterprises

Chapter I General Provisions

Article 1

The present Provisions are formulated to encourage foreign-funded companies, enterprises and other economic organizations or individuals
(hereinafter referred to as foreign investors) to come to China to engage in business-starting investments, and to establish and
perfect the mechanism of business-starting investments in China in accordance with the Law of the People’s Republic of China on Chinese-foreign
Contractual Joint Ventures, the Law of the People’s Republic of China on Chinese-foreign Equity Joint Ventures, the Law of the People’s
Republic of China on Foreign-capital Enterprises, the Company Law of the People’s Republic of China and other related laws and regulations.

Article 2

The term “foreign-funded business-starting investment enterprise ” (hereinafter referred to as FBIE” refers to the foreign-funded
investment enterprises established by foreign investors or by foreign investors jointly with companies, enterprises or other economic
organizations established and registered in China in accordance with the Chinese law (hereinafter referred to as Chinese investors).
To establish an FBIE shall be in conformity with the present Provisions. It shall mainly engage in business-starting investments.

Article 3

The term “business-starting investment” means making principal equity investments to high and new tech enterprises that haven’t been
listed in the stock market (hereinafter referred to as invested enterprises), and providing management services to them for the prospective
capital gains.

Article 4

An FBIE is allowed to take the form of the non-legal-person organization or the corporate organization.

As to a non-legal-person organization, the investors shall bear joint liabilities for its debts. The investors may also specify in
the contract of the FBIE that: When the assets of an FBIE are not enough to clear the debts of this enterprise, the indispensable
investors as stated in Article 7 shall bear joint liabilities and the other investors shall bear the liabilities to the company
within the limit of contributions made by each of them.

For a corporate-form FBIE, the investors shall bear the liabilities to the company within the limit of the amount of investment made
by each of them.

Article 5

The FBIEs shall abide by relevant laws and regulations of China, shall be in conformity with the policies of foreign investment industries
and shall not damage the public interests of China. The legitimate businesses and lawful rights and interests of the FBIE within
the borders of China shall be subject to the protection of Chinese law.

Chapter II Establishment and Registration

Article 6

To establish an FBIE, the following requirements shall be met:

(1)

There are more than 2 but less than 50 investors, and at least one shall be an indispensable investor as stated in Article 7 ;

(2)

The investors of a non-legal-person organization shall subscribe to a minimum total contribution in the sum of 10, 000, 000 U.S. $.
The investors of an incorporated FBIE shall subscribe to a minimum total capital in the sum of 5, 000, 000 U.S. $. Except for the
indispensable investors as provided in Article 7 , each of the other investors shall subscribe to a minimum capital contribution
no less than 1, 000, 000 yuan. Foreign investors may contribute their investments in convertible currencies and Chinese investors
may contribute their investments in Renminbi.

(3)

It shall have definite organization form;

(4)

It shall have a definite and legitimate investment direction;

(5)

Except that the operations of such an enterprise are subject to the management of a business-starting investment management company
under authorization, an FBIE shall have at least 3 professional managerial persons who have practical experience in business-starting
investment;

(6)

It shall meet the other requirements as provided in laws and administrative regulations.

Article 7

An indispensable investor shall meet the following requirements:

(1)

Business-starting investment is its main business;

(2)

The accumulative total capital managed by it in the three years before the application is not less than 100, 000, 000 U.S. dollars,
and of which no less than 50, 000, 000 U.S. dollars have been used in business-starting investment If the indispensable investor
is a Chinese investor, the accumulative total capital managed thereby in the three years before the application is submitted is not
less than 100, 000, 000 Yuan, and of which no less than 50, 000, 000 yuan have been used in business-starting investment;

(3)

It shall have at least 3 professional managerial persons who have practical experience in business-starting investment;

(4)

If the affiliated entity of an investor meets the above-mentioned requirements, the investor may apply for the status of an indispensable
investor. The term “affiliated entity” in this paragraph refers to an entity controlled by the investor, or an entity that controls
the investor, or another entity that subject to the control of the same entity that controls the investor. The term “control” in
this paragraph means that the controlling party has a voting power of more than 50 % over the controlled party.

(5)

Neither the above-mentioned indispensable investor nor its affiliated entity shall have any record of being prohibited from engaging
in business-starting investment or business of investment consultancy, or being punished for the reason of cheat, by the judicial
departments and other relevant agencies of the country where it is located;

(6)

An indispensable investor of a non-legal-person enterprise shall subscribe to and actually pay not less than 1 % of the subscribed
contributions and the actual total contributions respectively, and it shall bear joint liabilities for the debts of this enterprise.
An indispensable investor of an incorporated FBIE shall subscribe to and actually pay not less than 30% of the subscribed contributions
and the actual total contributions respectively.

Article 8

The following procedures shall be observed in the establishment of an FBIE:

(1)

The investors shall submit the establishment application and relevant documents to the administrative departments in charge of foreign
trade and economic cooperation at the provincial level of the place where the FBIE is to be established.

(2)

The administrative departments in charge of foreign trade and economic cooperation at the provincial level shall complete the original
examination and report to the Ministry of Foreign Trade and Economic Cooperation (hereinafter referred to as the MOFTEC) within 15
days as of the acceptance of the above-mentioned materials.

(3)

The MOFTEC shall, with the consent of the Ministry of Science & Technology￿￿make a written decision on approval or disapproval within
45 days as of the acceptance of all the above-mentioned materials. And it shall issue a Certificate of Approval for Foreign-invested
Enterprises to the approved enterprises.

(4)

With the approved of establishing an FBIE, the applicant shall file an application for registration at the State Administration of
Industry and Commerce or at local bureaus with its authorization by presenting the Certificate of Approval for Foreign-invested Enterprise
within one month as of the acceptance of the Certificate of Approval for Foreign-invested Enterprise.

Article 9

The following documents shall be submitted to the MOFTEC when applying for the establishment of an FBIE:

(1)

an establishment application signed by the indispensable investors;

(2)

contracts and articles of association of the FBIE signed by all the investors;

(3)

a written declaration made by the indispensable investors (covering: a. the investors meet the requirements as provided in Article
7 ; b. all the materials submitted are genuine; and c. the investors will strictly abide by the present provisions and other relevant
Chinese laws and regulations);

(4)

a letter of legal advice issued by a law firm affirms that the legal indispensable investors exist and the above-mentioned declaration
has got valid authorization and has been signed;

(5)

explanations of the business-starting operations of the foreign investors, explanations of the capital managed by them of the three
years before the application is submitted, explanations of the investment made among the capital managed by them of the three years
before the application is submitted, resumes of its professional managerial persons of business-starting investment;

(6)

the registration certificate of the investors (photocopy) and the certificate of the legal representative (photocopy);

(7)

the notice of pre-approval of the name of the FBIE issued by the name registration organ;

(8)

If the qualifications of the indispensable investors are based on the requirements as provided in paragraph (4) of Article 7 , they
shall submit relevant materials of the affiliated entity that meets the requirements;

(9)

other documents related to the establishment application as required by the examination and approval authority.

Article 10

The FBIEs shall give a clear indication of “Business-starting Investment” in its name. Except for business-starting investment enterprises,
none of the other foreign investment enterprises may use the aforesaid words in their name.

Article 11

In applying for establishing an FBIE, the following documents shall be submitted to the registration organ and shall be responsible
for their authenticity and effectiveness:

(1)

registration application signed by the chairman of the board of directors or by the person-in-charge of the joint management committee;

(2)

contracts, articles of association, the documents and certificate of approval issued by the approving authorities;

(3)

legal license to do business or the certification of the ID of the investor;

(4)

credit certification of the investor;

(5)

appointment documents and the certification of the ID of the legal representative and archival documents of the directors and managers
of this enterprise;

(6)

notice of pre-approval of its name;

(7)

the certification of the address of the enterprise and the certification of its business offices.

In the case of applying for establishing a non-legal-person organization, the applicant shall submit the articles or agreement of
overseas indispensable investors besides the aforesaid materials. Where an enterprise includes investors as provided in Article 7
(4) of the present Provisions, the applicant shall submit the letter of undertaking issued by its affiliated entity, which is to
bear the joint liabilities of investments. All of the aforesaid documents should be written in Chinese. Those written in foreign
languages other than Chinese shall be accompanied by good Chinese translations.

An FBIE should apply to the original registration organ for the modification registration of its modified registration matters.

Article 12

Upon the approval of the registration organ, the incorporated FBIEs shall be issued the business license of legal entity, and the
non-legal-person FBIEs shall be issued a business license.

A business license shall clearly states the total registered capital of the investors and the names of the dispensable investors.

Chapter III Capital Contributions and Relevant Modifications

Article 13

The capital contributions made by the investors of a business-starting enterprise without qualifications of legal entity and the relevant
modifications shall be in conformity with the following:

(1)

The investors may pay the their subscribed capital by installments according to the proceedings of the business-starting investment,
but the longest term shall be no more than 5 years. The amount of capital to be invested at each stage shall be decided by the FBIE
itself according to the contract of the enterprise and the agreement concluded by it and its invested enterprise. In the contract,
the investors shall stipulate liabilities of the investors who do not pay the subscribed capital contributions and relevant measures.

(2)

During the period of the continuous existence of the FBIE, the investors generally shall not reduce their subscribed amount of capital.
Upon approval of the examination and approval organ, an investor may reduce its subscribed amount of capital if the said amount exceeds
50 % of the total provided that it has obtained the consent of the indispensable investors and the business-starting FBIE isn’t in
violation of the requirement of minimum registered capital of 1, 000, 000 U.S. $ (The present provision shall not be applicable to
a case where an investor reduces its invested amount of capital in accordance with item (5) of this Article or the FBIE reduces the
untapped capital when its term of investment expires). In this case, the investors shall stipulate the conditions, procedure and
methods for reducing the subscribed amount of capital in the contract of the FBIE;

(3)

Indispensable investors shall not withdraw from the FBIE during the period of its continuous existence. A necessary withdrawal under
a special circumstance shall be upon the consent of the investor whose investment amount exceeds 50% of the total amount, and the
relevant rights and interests shall be assigned to the new investor who satisfies the conditions as provided in Article 7 . The contract
and the articles of association of this enterprise shall be modified and shall be reported to the check and approving authority for
approval.

The transference of the other investors’ subscribed amount of capital or invested amount of capital shall be done in compliance with
the contract of the FBIE and the assignee shall meet the requirements as provided in Article 6 . All investors shall make relevant
modifications in the contract and the articles of association of the FBIE and report to the examination and approval organ for archival
purposes.

(4)

After an FBIE has been established, the investment application of new investors shall be in conformity with the present Provisions
and the stipulations in the contract, and shall be consented by the indispensable investors. Relevant modifications shall be made
in the contract and the articles of association of the FBIE and shall be reported to the examination and approval organ for archival
purposes.

(5)

Among the incomes of an FBIE arising from selling or disposing of the interests of its invested enterprise by other means, the part
equivalent to its original amount of investment may be directly allocated to all the investors. Such allocation constitutes a reduction
of the invested amount of the investors. An FBIE shall stipulate concrete methods of allocation in its contract, and at least 30
days before it makes such allocation, it shall submit an archival statement on the request of reducing the relevant invested amount
of the investors. In the said statement, it shall prove that the amount of the investments to be made by the investors and the other
capital it has at that time is at least in conformity with the investment obligations that the FBIE shall undertake at that time.
However, such allocation shall not be a plea to the litigation resulted from its violation of any of the investment obligations.

Article 14

When a non-legal-person organization files an application to the registration authority for modifying its registration, the archival
evidential documents issued by the above-mentioned examination and approval organ may replace relevant documents for examination
and approval.

Article 15

Having made investments according to the proceedings of business-starting investments and upon relevant capital verification report,
the investors of the FBIE shall file an application to the original registration organ for handling the archival procedures for their
investments. The registration organ shall fill up the number of its actual amount of capital behind the item of “Capital Amount”
on its Business License.

Where an FBIE makes no investment or fails to make the total investment, it shall be subject to penalties imposed by the registration
organ in accordance with the existing regulations.

Article 16

The investors of an FBIE shall make investments and relevant modifications in accordance with the existing regulations.

Chapter IV Institutional Structure

Article 17

An FBIE in the form of non-legal-person organization shall establish a joint management committee. An FBIE in the form of company
shall establish a board of directors. The investors shall stipulate on how to organize the joint management committee or the board
of directors in the contract and in the articles of association of the FBIE. The joint management committee and the board of directors
shall manage the enterprise on behalf of its investors.

Article 18

The subordinate administrative departments of the joint management committee and the board of directors shall, in accordance with
the power as specified in the contract and the articles of association of the FBIE, take charge of the routine managerial work and
execute the investment decisions made by the joint management committee and the board of directors.

Article 19

The person-in-charge of an administrative department shall satisfy the following conditions:

(1)

shall have full capacity for civil conduct;

(2)

shall have no record of criminal offence;

(3)

shall have no record of bad operations;

(4)

shall be experienced in business-starting investments and have no record of illegal practices.

(5)

shall meet the other requirements of the examination and approval organ.

Article 20

The administrative departments shall regularly report the following to the joint management committee and the board of directors:

(1)

significant investments under authorization;

(2)

metaphase & annual performance reports and financial statements;

(3)

other matters as provided in laws and regulations;

(4)

relevant matters as stipulated in the contract and in the articles of association of the FBIE.

Article 21

The joint management committee and the board of directors may grant the power of routine administration to a business-investment management
enterprise or another FBIE rather than establish administrative departments. The business-investment management enterprise may be
a domestically-funded business-starting investment enterprise or a foreign-funded one or an overseas enterprise. In this case, the
business-starting investment enterprise and the business-starting investment management enterprise shall conclude a managerial contract,
stipulating respective rights and interests. Such a contract shall not come into effect until it has been agreed by all the investors
and has been approved by the examination and approval organ.

Article 22

The investors of an FBIE may, by reference to the international practices, stipulate interior system for income allocations and incentive
mechanism in the business-starting investment contract.

Chapter V Business-Starting Investment Management Enterprise

Article 23

An entrusted business-starting investment management enterprise shall meet the following conditions:

(1)

To accept the entrustment of the FBIEs and to manage the investments made by them shall be its main business;

(2)

It shall have at least 3 professional managerial persons who have at least three years of practical experience in business-starting
investment;

(3)

Its registered capital or its total investments shall not be less than 1, 000, 000 yuan or equivalent foreign exchange;

(4)

It shall have a perfect interior control system.

Article 24

A business-starting investment management enterprise is allowed to take the form of the corporate organization or the partnership
organization.

Article 25

A business-starting investment management enterprise may be entrusted to manage different FBIEs.

Article 26

A business-starting investment management enterprise shall report the matters as listed in Article 20 to the joint management committee
and the board of directors of the entrusting party.

Article 27

The establishment of a foreign-funded business-starting investment management enterprise shall be in conformity with the conditions
as provided in Article 23 and shall be reported to the examination and approval organ for approval via the administrative departments
of foreign trade and economic cooperation at the provincial level where the company to be established is located. The examination
and approval organ shall make a written decision on whether to approve or not within 45 days as of the acceptance of the complete
set of the above-mentioned documents. It shall issue a Certificate of Approval for Foreign-invested Enterprises to the approved enterprises,
which shall file an application to the registration organ by holding the Certificate within a month as of their acceptance of the
Certificate.

Article 28

The following documents shall be submitted to the examination and approval organ in applying for the establishment of a foreign-invested
business-starting investment management company:

(1)

establishment application;

(2)

contract and articles of association of foreign-funded business-starting investment management company;

(3)

the investors’ registration certificate (photocopy) and the certificate of the legal representative (photocopy);

(4)

relevant documents required by the examination and approval organ;

Article 29

A foreign-invested business-starting investment management enterprise shall give a clear indication of “INVESTMENT MANAGEMENT” in
its name. Except for the foreign-invested business-starting investment management enterprises any other foreign-funded enterprises
shall not do so.

Article 30

An overseas business-starting investment management enterprise, which has acquired the approval of engaging in business-starting investment
management under the authorization of FBIEs, shall file an application to the registration organ to handle the business registration
procedures within 30 days as of the approval day of the management contract.

An applicant shall submit the following documents to the business registration organ and shall be responsible for their authenticity
and effectiveness:

(1)

an application for registration signed by the chairman of the board of directors of the overseas business-starting investment management
enterprise, or by a competent person;

(2)

a management contract and the approval documents of the examination and approval organ;

(3)

articles of association or partnership agreement of the overseas business-starting investment management enterprise;

(4)

the overseas business-starting investment management enterprise’ legal license to do business;

(5)

the credit certification of the overseas business-starting investment management enterprise;

(6)

the power of attorney, resume and the certification of the identification of the person-in-charge of the Chinese project appointed
by the overseas business-starting investment management enterprise;

(7)

the certification of its business offices in China; All of the aforesaid documents should be written in Chinese, those written in
foreign languages other than Chinese shall be accompanied by good Chinese translations

Chapter VI Business Management

Article 31

An FBIE may engage in the following businesses:

(1)

It may make equity investments with all of its own capital through establishing new enterprises, or investing into an established
enterprise, or accepting the stock equities transferred by the investors of an established enterprise, or through other means as
permitted in the laws and regulations of the state;

(2)

It may offer business-starting investment consultancy services;

(3)

It may offer management consultancy to the invested enterprises;

(4)

It may engage in other businesses as approved by the examination and approval organ. The capital of an FBIE may be largely used to
make equity investments into its invested enterprise.

Article 32

A business-starting enterprise shall not engage in the following activities:

(1)

It shall not make investments into the areas in which foreign investments are prohibited by the state;

(2)

It shall not make direct or indirect investments into the listed securities and bonds of an enterprise, but after the invested enterprise
is listed, the shares held by the FBIE shall be an exception.

(3)

It shall not make direct or indirect investments into real property not for its own use;

(4)

It shall not make investments by way of loans;

(5)

It shall not make investments by embezzling the capital not in its ownership;

(6)

It shall not provide a loan or guaranty to others, but the bonds with a term of more than 1 year issued by its invested enterprise
and the investments in the nature of bonds that may be converted into equity investments to the invested enterprise shall be excluded
(this paragraph doesn’t concern whether the invested enterprise is enpost_titled to issue such bonds or not);

(7)

It shall not engage in other activities as prohibited in the law and regulations and the contract of the FBIE.

Article 33

The investors shall stipulate a term for foreign investments in the contract of the FBIE.

Article 34

The incomes of an FBIE shall be generated largely from selling the stock equities it holds in the invested enterprise or from disposing
of the stock equities by other means. When an FBIE sell the stock equities it holds in the invested enterprise or dispose of the
stock equities by other means, it may, in accordance with the law, choose one of the following available methods of withdrawing:

(1)

It may transfer part of or all of the stock equities it holds to other investors;

(2)

It may sign an agreement of stock equity counter-purchase with the invested enterprise, which may counter-purchase the stock equities
held by the business-starting investment enterprise under certain circumstances;

(3)

Where the invested enterprise satisfies the conditions of listing as provided by laws and administrative regulations, it may apply
for listing in the securities markets of home and abroad. In accordance with the law, the FBIE may transfer the shares it holds in
the invested enterprise through the securities markets;

(4)

The other methods that are allowed by the laws and administrative regulations of China. The concrete regulatory measures concerning
the invested enterprise’ counter-purchase of the stock equities held by the FBIE shall be separately formulated by the examination
organ jointly with the registration organ.

Article 35

An FBIE shall make tax declaration in accordance with the tax laws of the state. As to a non-legal-person organization, in accordance
with the law, it may request all the investing parties to file returns for enterprise income taxes on their own, or file an application
by itself, after the application has been approved, it shall, in accordance with the law, calculate and pay the enterprise income
tax in a consolidated way.

The concrete regulatory measures concerning the levy of enterprise income tax upon the non-legal-person FBIEs shall be promulgated
separately by the State Administration of Taxation.

Article 36

Where the profit or other income obtained by a foreign investor from an FBIE is to be remitted abroad, it shall be paid from the foreign
currency account of the FBIE, or shall be remitted through an entrusted bank with the foreign currencies purchased from the bank.
Such payment or remittance shall be made on the basis of the allocation decision made by the joint management committee or the board
of directors, the audit report issued by an accountant office, the certification of inflow of foreign investments and the report
on the verification of capital, the certification of tax payment and the tax return (where an enterprise enjoys tax concession, it
shall present the evidential documents of tax concession issued by the tax authorities).

In accordance with the law, a foreign investor may request to purchase foreign currencies to remit the investments withdrawn from
the FBIE. As to an FBIE in the form of company, the opening and access of foreign currency account, changes of capital and other
matters involving the incomes and expenses of foreign currencies shall be handled pursuant to the existing regulations concerning
the administration of foreign exchange. But relevant regulations on the non-legal-person FBIEs shall be formulated separately by
the State Administration of Foreign Exchange.

Article 37

The investors shall stipulate the business term of the FBIE i

CIRCULAR ON INVESTIGATING ADOPTION OF THE ENTERPRISE ACCOUNTING SYSTEM BY ENTERPRISES WITH FOREIGN INVESTMENT

The Ministry of Finance

Circular on Investigating Adoption of the Enterprise Accounting System by Enterprises with Foreign Investment

CaiBanKuai [2003] No. 8

March 6, 2003

Financial Departments (Bureaus) of provinces, autonomous regions, municipalities directly under the Central Government and municipalities
separately listed on the state plan:

Enterprises with Foreign Investment have started adoption the Enterprise Accounting System as of January 11, 2002 and in order to
further understand the implementation of the Enterprise Accounting System by enterprises with foreign investment, please arrange
for the local certified public accountants firms engaged in auditing enterprises with foreign investment to fill in the attached
Questionnaires (Attachment 1). The certified public accountants firms shall provide opinions and materials on the following issues
according to the actual circumstances:

I.

For enterprises with foreign investment that have adopted the Enterprise Accounting System, what problems exist in account reconciliation
and actual execution? What are the main reasons?

II.

For enterprises with foreign investment that have not adopted the Enterprise Accounting System, what are the main reasons for not
adopting the Enterprise Accounting System? What are the accounting standards that have been adopted by the certified public accountants
firms in auditing the annual reports of the enterprises with foreign investment? What type of auditing opinions has the certified
public accountants firms issued? In case the certified public accountants have issued non-standard auditing opinion, what are the
opinions from the relevant departments of the administration for industry and commerce and taxation?

III.

What are the opinions and suggestions of the certified public accountants firms on the implementation of the Enterprise Accounting
System by the enterprises with foreign investment? What are the opinions and suggestions of the enterprise with foreign investment
on execution of the Enterprise Accounting System?

The local accounting administration of financial department are required to summarize the questionnaires and the relevant materials
filled in by the certified public accountants firms, prepare a written report, which should be sent to the Accounting Department
of the Ministry of Finance together with the materials (original or copy) provided by the certified public accountants firms by May
30, 2003.

 
The Ministry of Finance
2003-03-06

 



CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON THE TRANSITIONAL POLICY AND MEASURES AFTER CANCELING ADMINISTRATIVE EXAMINATION AND APPROVAL OF FOREIGN EXCHANGE ADMINISTRATION OF SOME CAPITAL PROJECTS

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on the Transitional Policy and Measures after Canceling Administrative Examination
and Approval of Foreign Exchange Administration of Some Capital Projects

HuiFa [2003] No.50

April 3, 2003

Branches and foreign exchange administration departments under the State Administration of Foreign Exchange in provinces, autonomous
regions and municipalities directly under the Central Government, and branch administrations of Shenzhen, Dalian, Qingdao, Xiamen,
Ningbo:

Decisions of the State Council on Canceling the First Batch of Administration Examination and Approval Projects (GuoFa [2002] No.24)
and the Decisions of the State Council on Canceling the Second Batch of Administration Examination and Approval Projects and Altering
the Administrative Methods for Some Administration Examination and Approval Projects (GuoFa [2003] No.5) have been promulgated. In
order to ensure the smooth linking of the administration of capital projects and avoid disjoint after cancellation of relevant administration
examination and approval projects, relevant policy and measures for the transitional period are hereby made as follows:

I.

Cancellation of examinations and approvals on the financing conditions of long-and-medium-term foreign debts of domestic Chinese-capital
organizations, on the financial conditions of financing and leasing of domestic Chinese-capital organizations, on the time selection
and financing conditions for issuing debts abroad, and on the financial conditions for project financing.

After cancellation of relevant examinations and approvals, in borrowing medium-long term foreign debts, issuing medium-long term bonds
denominated in foreign exchange, conducting aircraft financial leasing and project financing, Chinese-capital organizations shall
no longer be required to go through examination and approval formalities with administration of foreign exchange on terms of relevant
financing as they shall only be obliged to handle procedures on registration of foreign debts on a case by case basis after conclusion
of borrowing contracts.

During the course of the Chinese-capital organizations going through formalities of registration of foreign debts for above items
and during the course of enterprises with foreign investment going through formalities of registration of foreign debts for project
financing, capital raising and aircraft financial leasing, the branches and sub-branches of administration of foreign exchange shall
handle the registration in accordance with following procedures:

(I)

All branches and sub-branches of the administrations of foreign exchange shall verify borrowing qualifications of borrowers according
to operational procedures on borrowing qualifications concerning medium-long term international commercial loans, project financing,
aircraft financial leasing, issuance of bonds denominated in foreign exchange(see Attachment 1, Attachment 2, Attachment 3, Attachment
4). Qualification verifications for aircraft financial leasing, project financing and issuance of bonds denominated in foreign exchange
shall be conducted according to corresponding operational procedures for borrowing qualifications while checks on other forms of
medium-long term overseas borrowing (except for those made by enterprises with foreign investment) shall be conducted according to
operational procedures for borrowing qualifications concerning medium-long term international commercial loans.

(II)

Where the borrower meets the above verification requirements on borrowing qualifications, the branches and sub-branches of administration
of foreign exchange shall handle procedures of registration of conclusion of foreign debt contracts and of payment withdrawal, establishment
of special foreign debt account and settlement of foreign exchange and repayment of principals and interests and shall not require
the debtor to present prior approval documents issued by administrations of foreign exchanges.

(III)

Where the borrower does not meet the verification requirements on borrowing qualifications or where registration procedures does not
conform with requirements or where relevant articles in overseas borrowing arrangements do not conform with prevailing provisions
on administration of foreign exchange (such as account arrangement, guarantee arrangement, value preserving clause, etc.), the borrower
shall obtain written approval from the State Administration of Foreign Exchange in advance. The branches and sub-branches of administrations
of foreign exchange shall not handle registration procedures for the borrower without the written approval from the State Administration
of Foreign Exchange.

(IV)

Debtors shall handle withdrawal of payment after they have obtained certificates of registration of foreign debt issued by administration
of foreign exchange.

(V)

The branches and sub-branches shall handle registration of foreign debts of medium-long term overseas borrowings by Chinese-capital
organizations within the following time limits from the date on which all materials required by administration of foreign exchange
are presented by enterprises: 1. The branches and sub-branches shall grant the registration within 10 working days if no report to
and approval from the State Administration of Foreign Exchange is required. 2. The branches and sub-branches shall grant the registration
within 30 working days if no report to and approval from The State Administration of Foreign Exchange is required (which shall include
10 working days for The State Administration of Foreign Exchange to handle procedures).

II.

Cancellation of examination and approval on large amount financing by overseas branches of domestic Chinese-capital financial institutions

After cancellation of examination and approval on large amount financing by overseas branches of domestic Chinese-capital financial
institutions, the institutions shall not be required to handle prior examination and approval procedures with administration of foreign
exchange provided that they shall report the financing to administration of foreign exchange for the record in advance, which means
where a overseas branch of a domestic Chinese-capital financial institution raises commercial loans in a sum of 50,000,000 United
States dollars (inclusive) equivalent in one time, it shall report to the State Administration of Foreign Exchange for the record
10 working days in advance by its head office.

III.

Cancellation of examination and approval on establishment, alteration and cancellation of B share’s margin account opened with domestic
foreign-capital banks by securities companies

After cancellation of the examination and approval, the ways of management of administration of foreign exchange on establishment,
alteration and cancellation of B share’s settlement account (now referred to as the “clients transaction settlement account”) by
securities companies shall be as follows:

(I)

A securities company authorized to conduct foreign exchange business shall open domestic investor’s B share’s settlement account and
foreign investor’s B share’s settlement account separately with banks at its locality by presenting valid License for Conducting
Foreign Exchange Business in Securities Transactions and evidencing documents granting authorizations to conduct relevant businesses
issued by the CSRC etc.

A business department of a securities company authorized to conduct foreign exchange business shall open domestic investor’s B share’s
settlement account and foreign investor’s B share’s settlement account with banks at its locality by presenting power of attorney
of its head office, duplicate of License for Conducting Foreign Exchange Business in Securities Transactions of the securities company,
duplicates of evidencing documents granting authorization to conduct relevant businesses issued by the CSRC etc.

(II)

Within 3 days of establishment, alteration or cancellation of domestic investors’ B share’s settlement account and foreign investors’
B share’s settlement account, the securities companies or their business departments shall report to administration of foreign exchange
for the record.

(III)

The scope of receipt of a domestic investor’s B share’s settlement account shall be the foreign exchange funds transferred from its
domestic foreign exchange non-cash savings account or cash savings account and foreign exchange proceeds from foreign exchange securities
transactions. Its scope of payment shall be the foreign exchange needed in its foreign exchange securities transactions and transfers
therefrom to foreign exchange cash accounts opened with domestic commercial banks. No payment shall be remitted abroad.

The scope of receipt of a foreign investor’s B share’s settlement account shall be foreign exchange funds remitted from aboard by
the foreign investor or transferred from its domestic foreign exchange non-cash savings account and foreign exchange proceeds from
its foreign exchange securities transactions. Its scope of payment shall be the foreign exchange needed in its foreign exchange securities
transactions, transfers therefrom to foreign exchange non-cash accounts opened with domestic commercial banks and foreign exchange
funds to be remitted abroad.

IV.

Cancellation of examination on foreign exchange risks in making investment abroad by domestic institutions

Administration of foreign exchange shall no longer conduct examination on foreign exchange risks in making investment abroad and shall
simultaneously simplify examination procedures on source of foreign exchange capital for making investment abroad. For detailed rules
of operation please refer to the Circular of the State Administration of Foreign Exchange on Simplifying the Examination of Foreign
Exchange Capital Source of Investment Abroad (HuiFa [2003] No.43)

All Branches of the administrations of foreign exchange shall promptly transmit this Circular to designated banks of foreign exchange
at their locality and shall handle relevant business strictly according to requirements of the Circular.

This is hereby the notification.

Attachments:

1. Examination on the Qualifications of Chinese-capital Organizations for Borrowing Medium-long Term International Commercial Loans
(omitted)

2. Examination on the Qualifications for Borrowing under Project Financing (omitted)

3. Examination on the Qualifications for Borrowing under Aircraft Financial Leasing (omitted)

4. Examination on the Qualifications for Borrowing under Issuing Bonds Overseas (omitted)



 
The State Administration of Foreign Exchange
2003-04-03

 






MEASURES FOR THE QUARANTINE AND ADMINISTRATION OF HEREDITARY SUBSTANCE OF ENTRY ANIMALS






The State Administration of Quality Supervision, Inspection and Quarantine

Decree of the State Administration of Quality Supervision, Inspection and Quarantine

No. 47

The Measures for the Quarantine and Administration of Hereditary Substance of Entry Animals, which were examined and adopted at the
administration affairs meeting of the State Administration of Quality Supervision, Inspection and Quarantine on April 3, 2003, are
hereby promulgated, and shall come into force on July 1, 2003.

Director General Li Changjiang

May 14, 2003

Measures for the Quarantine and Administration of Hereditary Substance of Entry Animals

Chapter I General Provisions

Article 1

The present Measures are formulated in accordance with the Law of the People￿￿s Republic of China on Quarantine of Entry and Exit
Animals and Plants and the Regulation for the Implementation thereof as well as other laws and regulations with a view to regulating
the quarantine, supervision and administration of hereditary substance of entry animals, and protecting the production safety of
the animal husbandry in China.

Article 2

The present Measures shall be applicable to the quarantine, supervision and administration of hereditary substances of entry animals.

Article 3

Hereditary substances of animals mentioned in the present Measures means the semen, embryos and egg cells of mammals.

Article 4

The State Administration of Quality Supervision, Inspection and Quarantine (hereinafter referred to as the SAQSIQ) shall be uniformly
responsible for the quarantine, supervision and administration of hereditary substance of entry animals nationwide.

The entry and exit inspection and quarantine institutions set up by the SAQSIQ in all places (hereinafter referred to as the inspection
and quarantine institutions) shall be responsible for the quarantine, supervision and administration of hereditary substance of entry
animals within their respective jurisdictions.

Article 5

The SAQSIQ shall apply risk analysis administration to the hereditary substance of entry animals. On the basis of the result from
risk analysis, the SAQSIQ may conclude a bilateral quarantine agreement (including agreement, protocol, or memorandum, etc.) with
the relevant competent institution of the government of the country or region from which the hereditary substance of animals is to
be exported to China.

Chapter II Quarantine Examination and Approval

Article 6

Whoever intends to import hereditary substance of animals must go through the formalities of quarantine approval in advance, obtain
the Permit of the People Republic of China on Quarantine of Entry Animals and Plants (hereinafter referred to as the Quarantine Permit,
and stipulate in the trade contract or the relevant agreement the quarantine requirements of China.

Article 7

Whoever intends to apply for the examination and approval of quarantine of hereditary substance of animals shall submit the following
materials to the local inspection and quarantine administration directly under the SAQSIQ:

(1)

The Application Form for the Permit of the People Republic of China on Quarantine of Entry Animals and Plants;

(2)

For hereditary substance of animals imported by agency, a photocopy of the contract or agreement with the consignor for import by
agency shall be provided.

Article 8

The inspection and quarantine administration directly under the SAQSIQ shall finish the preliminary examination within the time prescribed
by the SAQSIQ. If the hereditary substance of animals is preliminarily examined as qualified, it shall be submitted to the SAQSIQ
for verification, and the SAQSIQ shall finish the verification within the prescribed time. If it is verified as qualified, the Quarantine
Permit shall be issued; if it is verified as unqualified, the Notice on Failure of the Application to be approved for the Permit
of the People Republic of China on Quarantine of Entry Animals and Plants shall be issued.

Chapter III Entry Quarantine

Article 9

Before the hereditary substance of animals is imported, the SAQSIQ may, on the basis of the needs in quarantine, send quarantine officers
to go to the exporting country or region to carry out pre-inspection of the place of origin of the hereditary substance of animals.

Article 10

The SAQSIQ shall apply quarantine registration to the foreign producers which export hereditary substance of animals to China, and
shall send quarantine officers either regularly or irregularly to appraise the registered foreign producers.

Article 11

Imported hereditary substances of animals shall enter the territory via the port designated by the Quarantine Permit.

Article 12

The consignor of hereditary substance of animals or his agent shall bring the Quarantine Permit, the trade contract or agreement,
the letter of credit, the invoices and other effective documents to report to the inspection and quarantine institution at the port
of entry for inspection before the hereditary substance of animals enters the territory; and shall, when the hereditary substance
of animals enters the territory, submit to the inspection and quarantine institution at the port of entry the original of the quarantine
certificate issued by the governmental quarantine institution of the exporting country or region.

Article 13

If, with respect to some certain hereditary substance of entry animals, there is no effective quarantine certificate issued by the
governmental quarantine institution of the exporting country or region, or the formalities for quarantine approval have not been
gone through, the inspection and quarantine institution at the port of entry may, in light of the specific situation, return or destroy
the said substance.

Article 14

When the imported hereditary substance of animals is carried to the port, the quarantine officers shall carry out the on-the-spot
quarantine:

(1)

Inspecting whether the quarantine certificate conforms to the Quarantine Permit and the requirements in the bilateral quarantine agreement
between China and the exporting country or region;

(2)

Checking whether the goods and the certificate are in conformity with each other;

(3)

Inspecting the packing and preservation of the goods.

Article 15

If the hereditary substance of animals is quarantined on the spot as qualified, the inspection and quarantine institution at the port
of entry shall issue the List for Customs Release of Entry Goods, and transfer the said substance to the place designated by the
Quarantine Permit carry out quarantine.

Article 16

If the hereditary substance of animals needs to be taken away from the port of entry, the consignor or his agent shall declare to
the inspection and quarantine institution at the destination, and provide the photocopies of the documents prescribed in Article
12 of the present Measures and the List for Customs Release of Entry Goods?￿￿issued by the inspection and quarantine institution
at the port of entry.

Article 17

The inspection and quarantine institution shall make quarantine as required by the Quarantine Permit. The hereditary substance of
animals quarantined as qualified shall be under the lawful quarantine supervision and administration of the inspection and quarantine
institution; while the one quarantined as unqualified shall be returned or destroyed under the supervision of the inspection and
quarantine institution.

Chapter IV Supervision of Quarantine

Article 18

The inspection and quarantine institution shall conduct quarantine supervision and administration on the processing, deposition and
use of the hereditary substance of entry animals (hereinafter uniformly referred to as use); and shall record the first generation
of descendents of the hereditary substance of animals.

Article 19

The entity using the hereditary substance of entry animals shall go to the inspection and quarantine administration directly under
the SAQSIQ at its locality to make the record

Article 20

The using entity shall fill out the Form on Record of the Entity Using Hereditary Substance of Entry Animals (Attachment 1), and provide
the following statement documents:

(1)

A photocopy of the document on proof of the entity status as a legal person;

(2)

Document stating that it has professionals familiar with the preservation, transport and use of the hereditary substance of animals;

(3)

Document stating that it has special depositary of hereditary substance of entry animals and other necessary facilities;

(4)

The relevant systems on administering the use of hereditary substance of entry animals.

Article 21

The inspection and quarantine administration directly under the SAQSIQ shall report to the SAQSIQ the using entities that have made
the record.

Article 22

The using entity shall fill out the File on Quarantine and Supervision of Hereditary Substance of Entry Animals (Attachment 2), and
accept the supervision of the inspection and quarantine institution; and shall, after the end of use of each batch of hereditary
substance of entry animals, submit the File on Quarantine and Supervision of Hereditary Substance of Entry Animals to the inspection
and quarantine institution for record.

Article 23

The inspection and quarantine institution may, when necessary, monitor the health of the descendents of the hereditary substance of
entry animals, and the relevant entities shall cooperate with the institution.

Chapter V Supplementary Provisions

Article 24

Whoever violates the present Measures shall be punished by the inspection and quarantine institution in accordance with the relevant
laws and regulations.

Article 25

The responsibility to interpret the present Measures shall remain with the SAQSIQ.

Article 26

The present Measures shall come into force on July 1, 2003.

htm/e03153.htmAttachment 1

￿￿

￿￿

Attachment 1:

Form on Filing of the Entity Using Hereditary Substance of Entry Animals

￿￿

Applying unit

 

Address:

  

Legal representative

  

Legal person code

  

  

  

Tel:

  

Fax:

  

Email:

  

Nature of the unit

￿￿sp;          State-owned enterprise ￿￿titutional unit ￿￿nt venture 

￿￿sp;Foreign-invested enterprise ￿￿vate enterprise ￿￿ers 

According to the Measures for the Quarantine and Administration of Hereditary Substance of Entry Animals, our unit
is here to apply to use hereditary substances of entry animals. Our unit will in strict accordance with the Law of
Entry and Exit Quarantine of Animals and Plants and the Regulation for the Implementation thereof as well as other laws and
regulations accept supervision and instruction of the inspection and quarantine institutions, thus performing duties
as stipulated in Measures for the Quarantine and Administration of Hereditary Substance of Entry Animals.

￿￿

￿￿

                        
Applying unit￿￿seal￿￿

                                                          
Legal representative (signature)￿￿

                                    
Date:

Review opinions of the inspection and quarantine institutions:￿￿

￿￿

                                   
Responsible person￿￿signature￿￿￿￿

                   Date:

Formulated under supervision of the Administration of the People￿￿s Republic of China on Inspection and Quarantine of Entry and Exit.

￿￿

Attachment 2:

File on Quarantine and Supervision of Hereditary Substance of Entry Animals

￿￿

Filled by:

Filling date￿￿From  to 

Formulated under supervision of the Administration of the People￿￿s Republic of China on Inspection and Quarantine of Entry and Exit.

￿￿

Basic Situation of Hereditary Substance of Entry Animals

Used by

 

Contact person and telephone

 

Address

  

Legal representative and telephone

 

License of inspection and quarantine

  

Variety of hereditary substance

 

Exporting country

  

Import  quality

  

Entry date

 

Entry port

 

Hereditary substance logo/quality

￿￿

￿￿

￿￿

￿￿

Service Condition of Hereditary Substance of Entry Animals






Used by (individual)

 

Address

 

Legal representative 

 

Legal person code
(ID card)

 

Contact telephone

 

Service Condition

Hereditary substance logo

Time of use

Receptor logo

Effect of use

Birth date of descendant

Descendant logo

Descendant gender

 

 

 

 

 

 

CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE AND CHINA INSURANCE REGULATORY COMMISSION ON THE RELEVANT ISSUES CONCERNING THE ADMINISTRATION OF SALE AND PAYMENT OF FOREIGN EXCHANGE IN OVERSEAS REINSURANCE CEDING

The State Administration of Foreign Exchange, China Insurance Regulatory Commission

Circular of the State Administration of Foreign Exchange and China Insurance Regulatory Commission on the Relevant Issues Concerning
the Administration of Sale and Payment of Foreign Exchange in Overseas Reinsurance Ceding

HuiFa [2003] No.75

June 20, 2003

The branches and departments of foreign exchange administration of the State Administration of Foreign Exchange (SAFE) in the provinces,
autonomous regions, and municipalities directly under the Central Government, the branches in Shenzhen, Dalian, Qingdao, Xiamen,
and Ningbo; the designated foreign exchange banks; and the insurance companies:

In order to implement the Interim Provisions on the Foreign Exchange Administration of Insurance Services, to regulate the reinsurance
made in foreign exchange, and to effectively disperse insurance risks, the following circular is hereby made concerning the relevant
matters of the administration of sale and payment of foreign exchange in overseas reinsurance ceding:

1.

The domestic Chinese-invested insurance companies, Sino-foreign equity joint insurance companies, and branches of foreign insurance
companies in China (hereinafter referred as domestic insurance companies) that engage in overseas reinsurance ceding upon ratification
by the SAFE may, pursuant to the relevant provisions of China Insurance Regulatory Commission (CIRC), undertake overseas reinsurance
ceding of domestic insurances, and go through the formalities for purchase and payment of foreign exchange under overseas reinsurance
ceding pursuant to the provisions hereof. Branches of domestic insurance companies may not go through the formalities for purchase
and payment of foreign exchange under overseas reinsurance ceding.

2.

Where a domestic insurance company reinsured overseas any domestic insurance made in foreign exchange, that company shall, by taking
with it the valid proofs, such as reinsurance bill or reinsurance payment list, etc., make the reinsurance payments from its foreign
exchange operation account with a domestic commercial bank, and may not purchase any foreign exchange to make the payment.

3.

Where a domestic insurance company reinsured overseas any insurance made in RMB, it may, by taking with it the valid proofs, such
as the reinsurance bill or reinsurance payment list, etc., make the reinsurance payment from its foreign exchange operation account
with a domestic commercial bank; either may it, pursuant to Articles 4 through 7 hereof, apply to SAFE, and purchase foreign exchange
to make the reinsurance payment with a designated foreign exchange bank on the strength of the ratification document of the SAFE.

4.

Where a domestic insurance company makes overseas excess of loss ratio reinsurance of any of its insurance made in RMB, it may apply
for purchasing foreign exchange to make the reinsurance payment according to the actual business needs.

5.

Where a domestic insurance company make overseas reinsurance through contract or temporarily of the enterprise property insurance,
freight insurance, ship insurance, aviation insurance, space insurance, oil insurance, energy insurance, construction and installment
project insurance, liability insurance, nuclear station insurance, or any other type of insurance ratified by the CIRC that are made
in RMB, that insurance company may apply to the SAFE for purchasing foreign exchange to make the reinsurance payment if either of
the following conditions is satisfied:

(1)

The maximum insurance liability for a single insurance contract exceeds RMB50m;

(2)

The accumulative RMB premium income for a single insurance type exceeds the sum of the capital and the accumulation fund of that company.

6.

Where a domestic insurance company meets the conditions for purchasing foreign exchange under overseas reinsurance specified in Articles
4 and 5, that company shall file the application with SAFE on a quarterly basis by taking with it the relevant documents, such as
the application for purchase of foreign exchange, the relevant insurance contracts or insurance data statistics, the audited balance
sheet and profit statement of the company of the previous year, the copy of the License for Foreign Exchange Services, etc. A once-and-only
application shall be filed with the SAFE with respect to any reinsurance contract for which the payment is made by installments.
In the application for purchase of foreign exchange, the insurance company shall respectively specify the amount of foreign exchange
purchased for excess of loss ratio reinsurances and contracts, and for temporary reinsurances.

7.

Where the application for purchase of foreign exchange under overseas reinsurance has been ratified by the SAFE, the domestic insurance
company shall, when paying for the overseas reinsurance to overseas, make the payment with the designated foreign exchange bank through
purchase of foreign exchange on the strength of the valid proofs, such as the ratification document of SAFE, and the reinsurance
bill or reinsurance payment list, etc.

8.

A domestic insurance company shall fill out the “Quarterly Statements of Foreign Exchange Services of Insurance Company” in an accurate
and timely manner (see HuiFa [2003] No.27), and shall indicate in the “Remarks” the overseas reinsurance operations of the previous
quarter; in the case of payment by purchase of foreign exchange, the amount of foreign exchange purchased, the time of purchase and
the bank for purchase, etc., shall be specified.

9.

This Circular shall enter into force as of July 1, 2003.

Upon receipt of this Circular, the branches shall transmit it as soon as possible to the insurance companies and designated foreign
exchange banks within their respective jurisdictions; and the Chinese-funded designated foreign exchange banks shall transmit it
as soon as possible to their respective branches and sub-branches. Please promptly report any problem encountered in the execution
to the SAFE and the CIRC.

 
The State Administration of Foreign Exchange, China Insurance Regulatory Commission
2003-06-20

 



MEASURES FOR THE CLASSIFIED ADMINISTRATION OF ENTERPRISES MANUFACTURING EXPORT INDUSTRIAL PRODUCTS

The General Administration of Quality Supervision, Inspection and Quarantine

Decree of the General Administration of Quality Supervision, Inspection and Quarantine

No. 51

The Measures for the Classified Administration of Enterprises Manufacturing Export Industrial Products was adopted upon discussion
at the executive meeting of the General Administration of Quality Supervision, Inspection and Quarantine on June 19, 2003 and are
hereby promulgated. They shall come into force on October 1, 2003.

Li Changjiang, Minister

July 18, 2003

Measures for the Classified Administration of Enterprises Manufacturing Export Industrial Products

Chapter I General Provisions

Article 1

The Measures are formulated according to provisions stipulated in the Law of the People’s Republic of China on Import and Export Commodity
Inspection (hereinafter referred to as the Law of Commodity Inspection) and in its Regulations for Implementation, and for the purpose
of facilitating foreign trade, encouraging enterprises manufacturing export industrial products to improve their management level
and product quality, and of standardizing inspection and administration activities thereof.

Article 2

The Measures shall apply to the inspection, supervision and administration of enterprises manufacturing those export industrial products
as listed in the Catalogue of Import and Export Commodities Subject to Inspection and Quarantine by the Import and Export Inspection
and Quarantine Authorities.

The Measures shall not apply to administration of enterprises manufacturing dangerous products and package thereof, products with
unsteady quality or products that need to be transported in bulk.

Article 3

The term “classified administration” in the Measures refers to an inspection administration method through which different inspection
supervision and management modes be applied to different enterprises manufacturing export industrial products, according to their
manufacturing conditions, management level, inspecting efficiency, product quality and the product risk degree and with a view to
reaching the goal of scientific management and effective supervision, and to promoting the export industry of China.

Article 4

General Administration of Quality Supervision, Inspection and Quarantine (hereinafter referred to as the AQSIQ) shall be responsible
for the unified management of classified administration of enterprises manufacturing export industrial products across the country.

Local entry-exit inspection and quarantine bureaus established by and directly under the General Administration of Quality Supervision,
Inspection and Quarantine (hereinafter referred to as the inspection and quarantine bureaus directly under the AQSIQ) shall be responsible
for the supervision and management of classified administration of enterprises manufacturing export industrial products within areas
under their jurisdiction.

Local entry-exit inspection and quarantine authorities established by the General Administration of Quality Supervision, Inspection
and Quarantine (hereinafter referred to as the inspection and quarantine authorities) shall be responsible for the application acceptance,
examination and daily inspection, supervision and management of the classified administration of enterprises manufacturing export
industrial products within areas under their jurisdiction.

Article 5

The inspection and quarantine authorities shall classify enterprises manufacturing export industrial products into three classes,
the first class, the second class and the third class, according to relevant regulations and shall exercise corresponding inspection
supervision and management.

Chapter II Enterprise Classification

Article 6

The first-class enterprise shall meet the following conditions:

(1)

It sticks to the Law of Commodity Inspection as well as its Regulations for Implementation, and to other relevant rules stipulated
by the AQSIQ;

(2)

It has sound quality management system, and has passed the ISO 9000 Quality Management System Certification or is equally competent
to effectively guarantee the product quality;

(3)

It has obtained relevant certificates if the export products it manufactures are subject to Safety License System or Compulsory Product
Certification System;

(4)

It has a certain large scale of export volume with steady product quality;

(5)

Its products have passed random safety, healthy and environment protection inspection or testing and are proved to have met relevant
requirements. For those export products subject to yearly safety and quality type of test by a designated laboratory according to
rules stipulated by the AQSIQ, and it must pass such a type of test;

(6)

It has established relevant export inspection systems and bodies, and has sound testing equipments and competent checkers who have
received relevant training and been registered by the inspection and quarantine authority;

(7)

The pass rate of the yearly block inspection by the inspection and quarantine authority is no lower than 98%;

(8)

The enterprise has a high reputation for its good product quality, and no rejected goods, counterclaim or other accidents for the
sake of product quality has occurred within the recent two years.

Article 7

The second-class enterprise shall meet the following conditions:

(1)

It sticks to the Law of Commodity Inspection as well as its Regulations for Implementation, and other relevant rules stipulated by
the AQSIQ;

(2)

It has sound and effective quality management system;

(3)

It has obtained relevant certificates if the export products it manufactures are subject to Safety License System or Compulsory Product
Certification System;

(4)

It has a certain large scale of export volume;

(5)

Its products have passed random safety, healthy and environment protection inspection or testing and are proved to have met relevant
requirements. For those export products subject to yearly safety and quality test by a designated laboratory according to rules stipulated
by the AQSIQ, they shall pass such type of test;

(6)

It has necessary testing equipments and competent checkers who have received relevant training and been registered by the inspection
and quarantine authority;

(7)

The pass rate of the yearly block inspection by the inspection and quarantine authority is not less than 95%;

(8)

The products have good quality, and no rejected goods, counterclaim or other accidents due to the quality of the products occurred
within the late one year.

Article 8

Those enterprises which have not been listed into the first or second class, and which have engaged in export manufacture for less
than one year shall be classified as third-class enterprises.

Article 9

Export products manufactured by one enterprise but fall into different types or subject to different technical requirements may be
classified into different classes and be controlled respectively according to differences between their manufacturing conditions
and product quality.

Chapter III Application and Examination

Article 10

The enterprise manufacturing export industrial products which apply for the first or second class enterprise (hereinafter referred
to as the application enterprise) shall apply to the inspection and quarantine authority at its locality, and shall submit the following
materials:

(1)

a written application which includes the class to be applied, the name of the enterprise, the specification and type of the export
products, etc;

(2)

the qualified certificate of safety and quality test conducted according to rules stipulated by the AQSIQ;

(3)

certificates for quality management system certification and documents of quality management system;

(4)

certificates for the pass rate of yearly block inspection of the previous year produced by the inspection and quarantine authority
at its locality;

(5)

other relevant certificates if the enterprise and its export products are subject to Safety License System or Compulsory Product Certification
System.

Article 11

The inspection and quarantine authority shall organize examination to the application enterprise without undue delay.

The first-class-enterprise application shall be subject to the examination of the inspection and quarantine bureau directly under
the AQSIQ. If the applicant is qualified, the bureau shall report to the AQSIQ its initial examination conclusion and relevant materials.
The second-class-enterprise application shall be subject to the examination of the inspection and quarantine authority at its locality.
If the applicant is qualified, the authority shall report its initial examination conclusion and relevant materials to the inspection
and quarantine bureau directly under the AQSIQ.

Article 12

The inspection and quarantine authority shall, sticking to the relevant requirements and in light of the actual local situation, conduct
examination to the applicant’s product quality, quality management system, personnel, manufacturing and testing equipment and so
on.

The inspection and quarantine authority shall not conduct overlapped test or examination to any item of one enterprise during a same
year.

Article 13

the AQSIQ shall review the qualified first-class application and publicize the list of final approved enterprises.

The inspection and quarantine bureau directly under the AQSIQ shall review the qualified second-class applications and publicize the
list of final approved enterprises.

Chapter IV Inspection Supervision and Management

Article 14

The inspection and quarantine authority shall conduct random block inspection or inspection for each batch of industrial products
to be exported and manufactured by enterprises subject to classified administration according to their different classes.

(1)

The first-class enterprises: yearly random block inspection rate shall be 5% to 15%;

(2)

The second-class enterprises: yearly random block inspection rate shall be 30% to 45%;

(3)

The third-class enterprises: yearly random block inspection rate shall be 60% to 100%.

Article 15

The inspection and quarantine authorities shall have strict control on the yearly random block inspection rate, and shall work out
a suitable inspection supervision and management plan and keep relevant inspection records.

Article 16

The inspection and quarantine authority may, according to the actual circumstances, degrade an enterprise subject to classified administration
to a lower class if the enterprise commits any of the following wrongdoings:

(1)

the pass rate of yearly block inspection by the inspection and quarantine authority does not meet the requirements;

(2)

a foreign counterclaim arises due to serious quality problem;

(3)

unqualified products are incessantly found in the random inspections by the inspection and quarantine authority;

(4)

the enterprise’s checker makes false statements in the inspection;

(5)

other wrongdoings violating laws and regulations.

The degraded enterprise shall not apply for recovering its former class until 6 months later, and the application must be subject
to examination, review and publicity again.

Article 17

The enterprise manufacturing export industrial products subject to the classified administration shall submit its product quality
control and analysis report to the inspection and quarantine authority each year.

Article 18

The inspection and quarantine authority may choose different inspection supervision and management mode and apply it to the enterprise
manufacturing industrial products to supervise its product quality before they are marketed, according to the enterprise’s class,
the nature and risk degree of its products and in terms of relevant provisions.

Article 19

The period of validity of the classified administration to the enterprises manufacturing industrial products is two years, which shall
be counted as of the day of publication by the inspection and quarantine authority. If an enterprise wishes to continue the classified
administration, it shall, in terms of provisions in Article 10 of the Measures, go through the application procedure again 60 days
before the period of validity expires.

Article 20

As for the enterprise reapplying for classified administration, the inspection and quarantine authority shall streamline examination
procedures upon consideration of the ordinary supervision and management results, and if the enterprise is qualified, the authority
shall publicize the case after review and approval.

Article 21

If any important change occurs to the product designs, manufacturing techniques, technical conditions, and so on, of the enterprise
manufacturing export industrial products, the enterprise shall report it without delay to the inspection and quarantine authority,
and the authority shall newly recognize its class.

Chapter V Supplementary Provisions

Article 22

The inspection and quarantine bureaus directly under the AQSIQ shall formulate the implementation regulations for the Measures, according
to principles stipulated in the Measures and taking the actual local situations of their own areas into consideration, and shall
exercise the regulations after reporting it to the AQSIQ for record.

Article 23

The inspection and quarantine authority shall carry out annual reviews on the classified administration activities, and the inspection
and quarantine bureaus directly under the AQSIQ shall collect relevant materials and report them to the AQSIQ before the end of February
of the next year.

Article 24

The right to interpret the Measures shall remain with the AQSIQ.

Article 25

The Measures shall come into force on October 1, 2003.

 
The General Administration of Quality Supervision, Inspection and Quarantine
2003-07-18

 



INTERIM PROVISIONS CONCERNING THE MANAGEMENT OF CHINESE-FOREIGN JOINT JOB INTERMEDIARIES

Ministry of Personnel, Ministry of Commerce, State Administration for Industry and Commerce

Order of the Ministry of Personnel, Ministry of Commerce and the State Administration of Industry and Commerce

No.2

The Interim Provisions Concerning the Management of Chinese-foreign Joint Job Intermediaries, which has been examined and approved
by the executive meetings of the Ministry of Personnel, the Ministry of Commerce and the State Administration for Industry and Commerce,
is hereby issued and shall be put into effect as of November 1, 2003.

Zhang Bailin, Minister of the Ministry of Personnel

Lv Fuyuan, Minister of the Ministry of Commerce

Wang Zhongfu, Director of the State Administration for Industry and Commerce

September 4, 2003

Interim Provisions Concerning the Management of Chinese-foreign Joint Job Intermediaries

Chapter I General Provisions

Article 1

The present Provisions are developed in accordance with the Law of the People’s Republic of China on Chinese-foreign Joint Ventures
and other relevant laws and regulations, with an aim to strengthen the management of Chinese-foreign joint job Intermediaries, to
secure the order and to facilitate the healthy development of the employment market.

Article 2

The term “Chinese-foreign Joint Job Intermediaries” in the present Provisions refers to job intermediaries jointly established in
China by any foreign company, enterprise or other economic organization providing job intermediary services and any Chinese company,
enterprise or other economic organization providing job intermediary services.

Article 3

Any foreign company, enterprise or other economic organization providing job intermediary services that wants to set foot in job intermediary
services in China must operate jointly with a Chinese company, enterprise or other economic organization for offering job intermediary
services through a jointly-established intermediaries.

No wholly foreign-owned job intermediaries are permitted to found. Such organizations as foreign enterprises’ resident representative
office in China, or chambers of commerce established in China by any foreign enterprise are permitted to provide job intermediary
services in China.

Article 4

All Chinese-foreign joint job intermediaries shall comply with the laws and regulations of the People’s Republic of China and may
not do anything detrimental to the public interests or national security of the People’s Republic of China.

The legitimate business activities and legal rights and interests of Chinese-foreign joint job intermediary agencies shall be protected
by the law of the People’s Republic of China.

Article 5

The administrative department of personnel, administrative department of Commerce and the administrative department of industry and
commerce of the people’s governments at the level of province, autonomous region or municipality directly under the jurisdiction
of the central government shall, in accordance with the division of functions and roles take charge of the examination and approval,
registration, management and supervision of Chinese-foreign joint job intermediaries in their administrative region.

Chapter II Incorporation and Registration

Article 6

The incorporation of any Chinese-foreign joint job intermediaries shall meet the following requirements:

(1)

The Chinese investor who applies to be incorporated into Chinese-foreign joint job intermediaries must be a job intermediary existed
for not less than three years. On the other hand, the foreign investor must be a foreign company, enterprise or other economic organization
having been offering job intermediary services for not less than three years, and both of the two investors must have good reputations;

(2)

The intermediary to be incorporated shall have a sound organization structure, have personnel who are familiar with the management
of human resources, including five or more full-time employees who are graduates of junior college or above and have a qualification
certificate for job intermediary services;

(3)

The intermediary to be incorporated shall have an appropriate permanent office, adequate funds and office facilities necessary for
the business it applies, with a registered capital of 300,000 US dollars or more, of which the contribution made by the foreign investor
shall be at least 25% and the share of the Chinese investor shall be over 51%;

(4)

The intermediary to be incorporated shall have sound and practical articles of association, management system, working rules and definite
scope of business;

(5)

The intermediary to be incorporated shall have independent civil rights and obligations; and

(6)

Other requirements as prescribed by laws or regulations.

Article 7

Any application for incorporating a Chinese-foreign joint job intermediary shall be submitted to be examined and approved by the administrative
department of personnel of the people’s government of the province, autonomous region or municipality directly under the jurisdiction
of the central government where the agency is to be located, and the related records shall be submitted to the administrative department
of personnel of the State Council.

Article 8

One that wants to apply for the incorporation of any Chinese-foreign joint job intermediary must submit the following materials to
the administrative department of personnel of the local government of the province, autonomous region or municipality directly under
the jurisdiction of the central government:

(1)

a written application and a feasibility study report;

(2)

an agreement and a statute with signature of all investors;

(3)

qualification certificates showing that all of the investors have been providing job intermediary services for not less than three
years;

(4)

the Notice of Advance Approval of Enterprise Name issued by the administrative department of industry and commerce; and

(5)

other materials required by laws, regulations or the administrative department of personnel of provincial government, autonomous region
or municipality directly under the jurisdiction of the Central Government.

If any of the materials stated above is written in any foreign language, the Chinese version of that material shall be attached thereto.

Article 9

The administrative department of personnel of the provincial government, autonomous region or municipality directly under the jurisdiction
of the Central Government shall accomplish the examination and approval procedures within 30 working days from receipt of the application
for the incorporation of any Chinese-foreign joint job intermediary. A License for Job Intermediary Service (hereinafter referred
to as “license”) shall be issued if the application has been approved, and a related report shall be submitted to the administrative
department of personnel of the State Council to be kept in archives; If the application has been rejected, a written notice shall
be sent to the applicant explaining the reasons for such disapproval.

Article 10

According to regulations the applicant shall carry out the approval formalities with the administrative department of Commerce within
30 days from receipt of the license, and shall carry out the registration formalities with the administrative department of industry
and commerce within 30 days from the issuance of the approval certificate.

Chapter III Scope of Business and Management

Article 11

The administrative department of personnel of provincial government, autonomous region or municipality directly under the jurisdiction
of the Central Government shall, in the light of the capital, personnel and management level of the Chinese-foreign joint job intermediary,
approve it to enter one or more of the businesses listed below:

(1)

Collection, classification, storage and publication of information about the employment market and related advisory services;

(2)

Talent recommendation;

(3)

Talent recruitment;

(4)

Career test and appraisal;

(5)

Career training within China; and

(6)

Other relevant businesses ordained by laws and regulations.

Article 12

Any Chinese-foreign joint job intermediaries must comply with the principles of voluntary participation, impartiality and good credit,
as well as professional ethics, conduct business activities within the approved scope of business, and may not commit any act of
unfair competition.

Article 13

Any Chinese-foreign joint job intermediary that recruit talents to be employed outside China shall carry out formalities in accordance
with the relevant ordains of the Chinese government. None of the following persons may be recruited for jobs outside China if he:

(1)

is a technician or administrative person who is charged with key engineering or scientific research projects at the national or provincial
level, and if such employment outside China is not permitted by the entity he belongs to or by the competent administrative department;

(2)

is a civil servant in active service;

(3)

is assigned by the government to support the development of the Western Region of China and whose period of service in the west region
has not expired;

(4)

is involved in any confidential work, whether he is in service or out of service but still within the confidential period;

(5)

is suspected of any illegal commitment and is under investigations; or

(6)

is anyone at a special post who, according the relevant ordains of laws or regulations, is forbidden to flow for the time being, or
anyone whose exit is subject to approval according to the relevant ordains of any law or regulations.

Article 14

The foundation of a branch office, increase or decrease of registered capital, transfer of shares, and change of shareholders of a
Chinese-foreign joint job intermediary shall be subject to the approval of the initial examination and approval authorities and the
modification registration with the administrative department of industry and commerce is required.

Any Chinese-foreign joint job intermediary that changes its name, legal representative or location of its office shall, within 30
days after the registration of amendment with the administrative department of industry and commerce, carry out the relevant formalities
of modification for archival purposes with the initial examination and approval authorities.

Article 15

The administrative department of personnel of the State Council and of the people’s governments at the level of province, autonomous
region, and municipality directly under the jurisdiction of the Central Government shall, according to law, direct, examine and supervise
the daily management and business development of Chinese-foreign joint job intermediaries.

Each year the administrative department of personnel of the people’s governments at the level of province, autonomous region, and
municipality directly under the jurisdiction of the Central Government shall make examination of the licenses of Chinese-foreign
joint job intermediaries. The measures to be taken in such annual examinations shall be developed by the administrative department
of personnel of the people’s government of the province, autonomous region or municipality directly under the jurisdiction of the
Central Government. The result of such annual examination shall be submitted to the administrative department of personnel of the
State Council by the administrative department of personnel of the people’s governments at the level of province, autonomous region,
and municipality directly under the jurisdiction of the Central Government.

Chapter IV Penalty Provisions

Article 16

Any Chinese-foreign joint job intermediary who fails to duly undertake annual examination of the license, provides untrue information
or deceive the employers or people who are doing job hunting by any other means shall be given a warning or be punished with a fine
not exceeding 10,000 Yuan or both which depend on the severity of the activities; If the case is very serious, the amount of the
fine shall not exceed three times of the illegal income but in any event not exceeding 30,000 Yuan. The Penalty shall be enforced
by the administrative department of personnel of the people’s government of the province, autonomous region or municipality directly
under the jurisdiction of the Central Government combined with the administrative department of industry and commerce of the same
level.

Article 17

Anyone who violates the present Provisions and founds any Chinese-foreign joint job intermediary without the approval or anyone who
undertakes business activities beyond the approved and registered scope of business shall be punished in accordance with the Regulations
on the Management of Company Registration, Measures for Dealing with and Banning Licenseless Business Activities and other relevant
provisions. Anyone who commits any act of unfair competition shall be punished in accordance with the Law Against Unfair Competition.

Article 18

Anyone who serves in the government and neglects his duties, commits any embezzlement or malpractice and infringes on any legal rights
and interests of any entity, individual or investor shall be given a disciplinary penalty by the relevant authorities according to
the relevant competence or, if any crime is committed, be subject to criminal liabilities.

Chapter V Supplementary Provisions

Article 19

Any company, enterprise or other economic organization of Hong Kong Special Administrative Region, Macao Special Administrative Region
or Taiwan who establishes job intermediary in the mainland, shall be dealt by referring to the present Provisions.

Article 20

Business activities involving foreign citizens conducted in China by any Chinese-foreign joint job intermediary shall be handled in
accordance with relevant provisions.

Article 21

The power to interpret the present Provisions shall remain with the Ministry of Personnel, Ministry of Commerce and the State Administration
of Industry and Commerce.

Article 22

The present Provisions shall come into force as of November 1, 2003.



 
Ministry of Personnel, Ministry of Commerce, State Administration for Industry and Commerce
2003-09-04

 






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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

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CONSTITUTION ACT, 1982 – page 18

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