Constitution

SUPPLEMENTARY PROVISIONS OF THE PROVISIONS ON THE ADMINISTRATION OF FOREIGN-FUNDED CONSTRUCTION ENTERPRISES

e02885

Ministry of Construction, Ministry of Commerce

Decree of the Ministry of Construction and the Ministry of Commerce

No. 121

The Supplementary Provisions of the Provisions on the Administration of Foreign-funded Construction Enterprises were deliberated and
adopted on December 9th, 2003 at the 24th executive meeting of the Ministry of Construction and the Ministry of Commerce, which are
hereby promulgated and shall come into force as of January 1st, 2004.

Wang Guangtao, Minister of the Ministry of Construction

Lv Fuyuan, Minister of the Ministry of Commerce

December 19, 2003

Supplementary Provisions of the Provisions on the Administration of Foreign-funded Construction Enterprises

With a view to promoting the development of the economic & trade relations between the Mainland and Hong Kong/Macao and to encouraging
service providers from Hong Kong and Macao to establish construction enterprises in the Mainland, the following supplementary provisions
are formulated in accordance with the Mainland and Hong Kong Closer Economic Partnership Arrangement and the Mainland and Macao Closer
Economic Partnership Arrangement approved by the State Council, and the Provisions on the Administration of the Foreign-funded Construction
Enterprises (Decree No. 113 of the Ministry of Construction and the Ministry of Foreign Trade and Economic Cooperation):

1.

When a service provider from Hong Kong or Macao files an application for establishing a construction enterprise, its performance records
in Hong Kong, Macao and the Mainland shall all be taken into consideration for the purpose of assessing its qualifications for establishing
such an enterprise in the Mainland. The number of its managerial and technical personnel shall be based on the actual number of personnel
in the construction enterprise established in the Mainland for its qualifications assessment.

2.

A service provider from Hong Kong or Macao is permitted to wholly purchase a Mainland construction enterprise.

3.

Where a construction enterprise established by a service provider from Hong Kong or Macao in the Mainland undertakes Sino-foreign
construction projects, it shall not be subject to the restrictions on Chinese and foreign investment percentages.

4.

Where a construction enterprise invested in the Mainland by a Hong Kong provider or Macao service provider applies for a qualification
certificate, the relevant regulations of the Mainland shall be followed. If it has acquired the qualifications of a construction
enterprise, it may participate in the nationwide project tenders in pursuance of law.

5.

Where a service provider from Hong Kong or Macao invests in establishing a construction enterprise in the Mainland and applies for
the corresponding qualifications, the Provisions on the Administration of Foreign-funded Enterprises and the relevant provisions
on the administration of the qualifications of construction enterprises shall be followed.

6.

The terms of “Hong Kong service providers” and “Macao service providers” as mentioned in the present Supplementary Provisions shall
be in conformity with the definitions and meet the relevant requirements as respectively provided in the Mainland and Hong Kong Closer
Economic and Trade Partnership Arrangement and the Mainland-Macao Closer Economic and Trade Partnership Arrangement.

7.

The responsibility to interpret the present Supplementary Provisions shall remain with the Ministry of Construction and the Ministry
of Commerce according to their respective functions.

8.

The present Supplementary Provisions shall come into force as of January 1st, 2004.



 
Ministry of Construction, Ministry of Commerce
2003-12-19

 







SUPPLEMENTARY PROVISIONS ON THE ADMINISTRATION OF FOREIGN INVESTMENT IN ROAD TRANSPORT SECTOR

Ministry of Communications, Ministry of Commerce

Decree of the Ministry of Communications and the Ministry of Commerce

No.12

Supplementary Provisions on the Administration of Foreign Investment in Road Transport Sector are hereby promulgated and shall be
implemented as of January 1st, 2004.

Zhang Chunxian, Minister of the Ministry of Communications

Lv Fuyuan, Minister of the Ministry of Commerce

December 31st, 2003

Supplementary Provisions on the Administration of Foreign Investment in Road Transport Sector

With a view to promoting the establishment of a closer economic partnership between Hong Kong, Macao and the Mainland of China, and
to encouraging Hong Kong service providers and Macao service providers to set up enterprises engaging in road services in the Mainland
of China, the following supplementary provisions are hereby promulgated with respect to the Provisions on the Administration of Foreign
Investment in the Road Transport Sector, and in accordance with the Mainland-Hong Kong Closer Economic and Trade Partnership Arrangement
and Mainland-Macao Closer Economic and Trade Partnership Arrangement approved by the State Council:

1.

As of January 1st, 2004, service providers from Hong Kong or Macao shall be allowed to set up solely funded enterprises to provide
road passenger transport services in the western areas of the Mainland of China.

2.

As of January 1st, 2004, service providers from Hong Kong or Macao shall be allowed to set up solely funded enterprises to provide
road cargo transport services in the Mainland of China.

3.

As of January 1st, 2004, service providers from Hong Kong or Macao shall be allowed to provide “non-stop” cargo transport services
from Hong Kong, Macao to the provinces, municipalities, and autonomous regions of the Mainland of China.

4.

To provide “non-stop” freight services in the Mainland of China, service providers from Hong Kong or Macao must set up solely-funded,
joint-venture or cooperative enterprises in the Mainland and must obtain the license for road transport.

5.

The “Hong Kong service providers” and “Macao service providers” as mentioned herein shall respectively meet the definition of “service
providers” and the relevant provisions in the Mainland-Hong Kong Closer Economic and Trade Partnership Arrangement and the Mainland-Macao
Closer Economic Partnership Arrangement.

6.

Except the above-mentioned clauses, other matters shall be implemented in accordance with the Provisions on the Administration of
Foreign Investment in the Road Transport Sector.

7.

The responsibility to interpret the present Supplementary Provisions shall remain with the Ministry of Communications and the Ministry
of Commerce.

8.

The present Supplementary Provisions shall be implemented as of January 1st, 2004.



 
Ministry of Communications, Ministry of Commerce
2003-12-31

 







PROVISIONS ON THE ADMINISTRATION OF THE DEVELOPMENT AND OPERATION OF URBAN REAL ESTATE

Provisions on the Administration of the Development and Operation of Urban Real Estate

     CHAPTER ONE GENERAL PROVISIONS CHAPTER TWO REAL ESTATE DEVELOPERS CHAPTER THREE REAL ESTATE DEVELOPMENT AND CONSTRUCTION CHAPTER FOUR
REAL ESTATE OPERATION CHAPTER FIVE LEGAL RESPONSIBILITIES CHAPTER SIX SUPPLEMENTARY PROVISIONS

Article One In order to standardize the real estate development and operation behaviors, strengthen the supervision and administration
of urban real estate development and operation activities and promote and safeguard the healthy development of the real estate sector,
these articles are hereby formulated in accordance with the Urban Real Estate Administrative Law of the People’s Republic of China.

Article Two Real estate development and operation referred to in these articles shall mean the behaviors of real estate developers
who carry out infrastructural facilities construction, housing construction and transfer real estate development projects or sell
or lease commercial housing on the state-owned land within an urban planning zone.

Article Three Real estate developers and operators shall, in line with the principle of combining economic, social and environmental
returns, develop an overall plan, have a rational layout, conduct comprehensive development and construct supporting facilities.

Article Four The competent construction administrative authorities under the State Council shall be responsible for the work of supervising
and administering the real estate development and operation activities throughout the country.

The competent real estate development authorities of local people’s governments above the county level shall be responsible for the
work of supervising and administering the real estate development and operation activities within their respective administrative
jurisdiction.

The competent land administration authorities of the people’s government above the county level shall be responsible for the work
of land administration related to real estate development and operation in conformity with relevant laws and administrative regulations.

CHAPTER TWO REAL ESTATE DEVELOPERS

Article Five To set up a real estate developer, in addition to the need to comply with the conditions for the establishment of an
enterprise as stipulated in relevant laws and administrative regulations, the following conditions shall be met:

(1) The registered capital shall exceed RMB 1 million yuan;

(2) There shall be more than four full-time technical personnel with qualification certificates in the real estate major or the construction
engineering major and more than two full-time accountants with qualification certificates;

The people’s government at the provincial, autonomous and directly administered municipality level may, in line with local realities,
formulate provisions that exceed the conditions contained in the above paragraph regarding the registered capital and technical professionals
for the establishment of a real estate developer.

Article Six To set up a real estate developer involving foreign investment, in addition to the need to comply with the provisions
of Article Five of these rules, it shall also be imperative to go through relevant examination and approval formalities according
to the provisions of laws and administrative regulations governing foreign- invested enterprises.

Article Seven To set up a real estate developer, an application for registration shall be filed with the administrative authorities
for industry and commerce of the people’s government above the county level. The administrative authorities for industry and commerce
shall, within 30 days upon receipt of the application, grant registration if the conditions as stipulated in Article Five of these
rules are met; reasons for the refusal of registration shall be explained if such conditions are not met.

When the administrative authorities for industry and commerce examine the application for registration for the establishment of a
real estate developer, they shall solicit the opinion of the real estate development authorities at the same level.

Article Eight Within 30 days upon obtaining the business license, a real estate developer shall present the following documentation
for recordation purposes to the real estate development authorities where the registration authorities are located:

(1) A copy of the business license;

(2) The articles of association of the enterprise;

(3) The certificate of investment verification;

(4) The identity certificate of the legal representative of the enterprise;

(5) The qualification certificates and employment contracts of its technical professionals.

Article Nine The real estate development authorities shall, based upon the assets, technical professionals and development and operation
performance of a real estate developer, verify and determine the grade of qualification and quality of a recorded real estate developer.
The real estate developer shall, in line with the verified and determined grade of qualification and quality, undertake corresponding
real estate development projects. The specific methods shall be formulated by the construction administrative authorities under the
State Council.

CHAPTER THREE REAL ESTATE DEVELOPMENT AND CONSTRUCTION

Article Ten In determining a real estate development project, it shall be imperative to comply with the requirements as contained
in the overall plan for land use, the annual plan for land for construction and the annual plan for urban planning and real estate
development. If, in compliance with the State’s relevant provisions, the approval of the planning authorities is required, it shall
be imperative to make a submission for the approval of the planning authorities and incorporate the project into the annual fixed
assets investment plan.

Article Eleven In determining a real estate development project, it shall be imperative to persist in the principle of combining renovation
of existing areas with construction of new areas, attach importance to the development of sections where the infrastructural facilities
are weak, traffic is jammed, environmental pollution is serious and dilapidated housing is centered, protect and improve the urban
ecological environment, and protect historical and cultural legacy.

Article Twelve The land used for real estate development shall be obtained by transfer, with the exception of cases whereby the provisions
of laws and the State Council permit the adoption of the allocation approach.

Prior to the transfer or allocation of the land use right, the urban planning administrative authorities and the real estate development
authorities of the local people’s government above the county level shall present their written opinions regarding the following
items and form one of the basis for the transfer or allocation of the land use right:

(1) The nature, scale and development tenure of the real estate development project;

(2) The designing conditions for urban planning;

(3) The requirements for the construction of infrastructural and public facilities;

(4) Definition of the property right of infrastructural facilities after completion; and

(5) The requirements for relocation compensation and resettlement of the project.

Article Thirteen For a real estate development project, the equity fund system shall be established; the equity fund shall account
for no less than 20% of the total project investment.

Article Fourteen Development and construction of a real estate development project shall be accompanied by an overall plan for supporting
infrastructural facilities and such a plan shall be implemented based on the principle of the underground portion having priority
over the ground portion.

Article Fifteen The real estate developer shall develop and construct a project in compliance with the purpose of land use and the
time limit for development startup as agreed upon in the contract on the transfer of the land use right. Failure to start up the
project development one full year after the expiry of the time limit agreed upon in the transfer contract may lead to the imposition
of a land idling fee amounting to less than 20% of the payment for the transfer of the land use right; if development fails to start
two full years after expiry, the land use right may be taken back without compensation, with the exception, however, of the situations
in which delays are caused by force majeure, action of the government or relevant government authorities, or early stage work necessary
for starting the development process.

Article Sixteen The real estate project, developed and constructed by a real estate developer, shall conform to the provisions of
relevant laws and regulations, technical standards for construction engineering quality, safety standards, construction engineering
prospecting, designing and execution, and contractual stipulations.

The real estate developer shall be responsible for the quality of a real estate project that it develops and constructs.

Prospecting, designing, executing and supervising agencies shall undertaken corresponding responsibilities on the basis of the provisions
of relevant laws and regulations or contractual stipulations.

Article Seventeen A completed real estate development project can be delivered for use only after passing the acceptance test; no
delivery for use shall be made without the acceptance test or without having passed the acceptance test.

Upon completion of a real estate development project, the real estate developer shall file an application for the acceptance test
with the real estate development authorities of the local people’s government above the county level where the project is located.
The real estate development authorities shall, within 30 days after receipt of the application for the acceptance test, organize
such relevant authorities or agencies as engineering quality supervision, planning, fire prevention and civil air defense to conduct
the acceptance test regarding contents involving public safety.

Article Eighteen Upon completion of a cluster real estate development project like a small residential section, a comprehensive acceptance
test shall be conducted in line with the provisions of the Article Seventeen of these rules and the following requirements:

(1) The situation regarding the implementation of the urban planning and designing conditions;

(2) The situation regarding the supporting infrastructural and public facilities as required by urban planning;

(3) The situation regarding the acceptance test of the engineering quality of individual engineering projects;

(4) The situation regarding the implementation of the relocation and resettlement; and

(5) The situation regarding property management.

If cluster real estate development projects like a small residential section are developed in phases, the acceptance test may be conducted
in phases.

Article Nineteen The real estate developer shall record the main events in the course of construction of a real estate development
project in the real estate development project manual and submit it on a regular basis to the real estate development authorities
for recordation purposes.

CHAPTER FOUR REAL ESTATE OPERATION

Article Twenty To transfer a real estate development project, the conditions as contained in Articles Thirty-eight and Thirty-nine
of the Urban Real Estate Administrative Law of the People’s Republic of China shall be met.

Article Twenty-one To transfer a real estate development project, the transferor and the transferee shall, within 30 days after the
completion of the formalities for the change in registration of the land use right, present the contract on the transfer of the real
estate development project to the real estate authorities for recordation.

Article Twenty-two When a real estate developer transfers a real estate development project, if the relocation compensation and resettlement
have not been finished, the rights and obligations in the original relocation compensation and resettlement contract shall accordingly
be transferred to the transferee. The project transferor shall notify the relocated person in written form.

Article Twenty-three A real estate developer pre-sells commercial housing shall comply with the following conditions:

(1) It has paid all the fee for the transfer of the land use right and obtained the certificate of the land use right;

(2) It has the construction engineering planning license and the execution license;

(3) Calculated according to the pre-sold commercial housing made available, it has inputted over 25% of the total investment for construction
of the project and determined the execution schedule and the date for completion and delivery; and

(4) It has gone through formalities for pre-sale registration and obtained the commercial housing pre-sale permit.

Article Twenty-four When applying for commercial housing pre-sale, a real estate developer shall submit the following documentation:

(1) The certificates as stipulated in Sections (1) through (3) of Article Twenty-three of these rules;

(2) The business license and the certificate of qualification and quality;

(3) The engineering execution contract;

(4) The floor-by-floor plane map of the commercial housing to be presold; and

(5) The program for the pre-sale of commercial housing.

Article Twenty-five The real estate development authorities shall, within 10 days upon receipt of the application for commercial housing
pre-sale, make a reply agreeing or disagreeing to the pre-sale. In case of agreement to presale, a commercial housing pre-sale permit
shall be issued; and in case of disagreement to pre-sale, reasons shall be explained.

Article Twenty-six The real estate developer shall not make any untruthful advertisement; in the commercial housing pre-sale advertisement,
the document number of the commercial housing pre-sale permit.

Article Twenty-seven In the course of commercial housing pre-sales, the real estate developer shall show the commercial housing pre-sale
permit.

The real estate developer shall, within 30 days upon the signing of a commercial housing pre-sale contract, go to the real estate
development authorities and the land administrative authorities of the people’s government above the county level where the commercial
housing is located.

Article Twenty-eight For commercial housing sales, both parties shall sign a written contract. The contract shall stipulate the floor
space, usable floor area, price, delivery date, quality requirements, property management method and default responsibilities for
the commercial housing.

Article Twenty-nine Should the real estate developer entrust an intermediary to act as agent for commercial housing sales, it shall
issue an entrustment certificate to the intermediary. When the intermediary sells the commercial housing, it shall show to purchaser
of commercial housing the relevant certificates for the commercial housing and the entrustment certificate for the commercial housing
sales.

Article Thirty The price for the transfer of the real estate development project and for the sales of commercial housing shall be
negotiated through consultation between the parties concerned; however, the price for residential housing enpost_titled to the State’s
preferential policies shall be the government’s guidance price or the government-set price.

Article Thirty-one The real estate developer shall, when the commercial housing is delivered for use, present the purchaser with the
residential quality assurance certificate and the residential use instruction book.

The residential quality assurance certificate shall clearly list the quality grade verified by the engineering quality supervisory
agency, scope of warranty, period of warranty and the warranty agency. The real estate developer shall undertake the commercial housing
warranty responsibilities in line with the provisions contained in the residential quality assurance certificate.

Within the warranty period, if the original use functions are affected and losses are incurred to the purchaser due to the warranty
of the commercial housing conducted by the real estate developer, the developer shall undertake compensation responsibilities according
to law.

Article Thirty-two After commercial housing is delivered for use, if the purchaser thinks that the quality of the major structure
is sub- standard, an application may be filed with the engineering quality supervisory agency for re-verification. If verification
proves that the quality of the major structure is indeed sub-standard, the purchaser has the right to ask for refunding; if losses
have been incurred to the purchaser, the real estate developer shall under compensation responsibilities according to law.

Article Thirty-three The purchaser of pre-sold commercial housing shall, within 90 days upon delivery for use of the commercial housing,
go through the formalities for change in the land use right and the registration of house ownership; the purchaser of spot commercial
housing shall, within 90 days upon signing of the sales contract, go through the formalities for change in the land use right and
the registration of house ownership. The real estate developer shall assist the purchaser of the commercial housing in going through
the formalities for change in the land use right and the registration of house ownership and provide necessary certificates.

CHAPTER FIVE LEGAL RESPONSIBILITIES

Article Thirty-four In case of unauthorized engagement in real estate development and operation in violation of the provisions of
these rules and without the business license, the administrative authorities for industry and commerce of the people’s government
above the county level shall order the termination of real estate development and operation activities, confiscate the illegal gains,
and decide at its discretion to impose a fine amounting to less than five times the illegal gains.

Article Thirty-five In case of unauthorized engagement in real estate development and operation in violation of the provisions of
these rules and without the certificate of qualification and quality or in excess of the certificate of qualification and quality,
the real estate development authorities of the people’s government above the county shall order a time limit for corrective measures
and impose a fine amounting to between RMB 50,000 yuan and RMB 100,000 yuan; if no corrective measures are taken after the deadline,
the administrative authorities for industry and commerce shall revoke its business license.

Article Thirty-six In case of delivery for use of housing which has not gone through the acceptance test in violation of these rules,
the real estate development authorities of the people’s government above the county shall order a deadline for the developer to go
through the formalities for the acceptance test; if such formalities are not gone through after the deadline, the real estate development
authorities of the people’s government above the county shall organize relevant authorities and agency to conduct the acceptance
test and impose a fine amounting to between RMB 100,000 yuan and RMB 300,000 yuan. If the acceptance test is not passed, punitive
measures shall be taken according to the stipulations of Article Thirty-seven of these rules.

Article Thirty-seven In case of delivery for use of housing which has not passed the acceptance test in violation of these rules,
the real estate development authorities of the people’s government above the county shall order repairs within a deadline and impose
a fine amounting to less than 2% of the total building cost of the housing delivered for use; if the act is serious in nature, the
administrative authorities shall revoke the license; if losses are incurred to the purchaser, compensation responsibilities shall
be undertaken; and, if serious casualties, accidents or other serious consequences have been caused and criminal offices committed,
the criminal liabilities shall be investigated and dealt with according to law.

Article Thirty-eight In case of unauthorized transfer of a real estate development project in violation of the stipulations of these
rules, the land administration authorities of the people’s government above the county shall order a termination of the law-breaking
activities, confiscate illegal gains and decide at its discretion to impose a fine amounting to less than five times the legal gains.

Article Thirty-nine In case of unauthorized pre-sale of the commercial housing in violation of the stipulations of these rules, the
real estate development authorities of the people’s government above the county shall order a termination of the law-breaking activities,
confiscate illegal gains and decide at its discretion to impose a fine amounting to less than 1% of the already collected pre-payments.

Article Forty When any State authorities employee neglect his duties, play favoritism and commit irregularities and abuse his powers,
if criminal offenses are committed, the criminal liabilities shall be investigated and dealt with according to law; if such acts
do not constitute criminal offenses, administrative punishments shall be meted out according to law.

CHAPTER SIX SUPPLEMENTARY PROVISIONS

Article Forty-one In terms of real estate development and operation on the state-owned land inside the urban planning zone and in
terms of the exercise of supervision and administration of real estate development and operation, these rules shall be used as references.

Article Forty-two The collectively-owned land within the urban planning zone can only be used for real estate development and operation
after such land has been appropriated and converted into state-owned land according to law.

Article Forty-three These rules shall go into effect as from the date of promulgation.

    






IMPLEMENTING RULES OF THE REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON INTERNATIONAL MARITIME TRANSPORTATION






The Ministry of Communication

Order of the Ministry of Communication of the People’s Republic of china

No.1

The Implementing Rules of the Regulations of the People’s Republic of china on International Maritime Transportation which were adopted
at the 14th Ministerial Executive Meeting of the Ministry of Communications on December 25, 2002 are promulgated hereby, and shall
be effective as of March 1, 2003.

Minister of the Ministry of Communication Zhang Chunxian

January 20, 2003

Implementing Rules of the Regulations of the People’s Republic of china on International Maritime Transportation

Chapter I General Provisions

Article 1

These Rules are formulated in accordance with the provisions of the Regulations of the People’s Republic of China on International
Maritime Transportation ( hereinafter referred to as the Maritime Transportation Regulations).

Article 2

The Ministry of Communications and the relevant competent communications department of the people’s government in the province, autonomous
region or municipality directly under the Central Government shall, in accordance with the provisions of the Maritime Transportation
Regulations and these Rules administer the international maritime transportation business operations as well as the auxiliary business
operations relating to international maritime transportation under the principles of fairness, high efficiency and facilitation with
the purpose of encouraging fair competition and preventing illegitimate competition.

Article 3

For the purpose of the Maritime Transportation Regulations and these Rules, the definitions of the terms are as follows:

(1)

“International shipping services” shall mean the services provided by the operators of international shipping services relating to
international maritime cargo and/or passenger transportation, and/or the activities conducted relating to such operators’ vessels,
passengers or cargo for the purpose of completing such international maritime cargo and/or passenger transportation by using their
owned or operated vessels or space on board the vessels. Such services shall include the signing of the relevant agreements, accepting
of space-booking, discussing and collecting freights, issuing of bill of lading and other related transportation documents, arranging
cargo-handling and the care of the cargo, taking delivery of cargo or delivering cargo, arranging the transshipment of cargo and
the entry into and departure from ports by vessels etc.

(2)

“Operators of international shipping services” shall include the Chinese enterprise legal persons who have acquired the Permits for
Operation of International Shipping Services for operating the international shipping services according to the Maritime Transportation
Regulations, or foreign enterprises established in accordance with foreign laws who operate the international shipping services to
and from Chinese ports.

(3)

“International liner services” shall mean the regular international maritime cargo/or passenger transportation services provided between
the fixed ports by means of using the owned or operated vessels or by means of the cases specified in paragraph 3, Article 16 of
the Maritime Transportation Regulations.

(4)

“Non-vessel-operating services” shall mean the services provided in paragraph 2, Article 7 of the Maritime Transportation Regulations,
including the following activities conducted relating to the cargo transported for the purpose of completing such services :

a.

concluding international cargo transportation contracts with the shippers in the name of carriers;

b.

taking delivery of cargo and delivering cargo in the name of carriers;

c.

issuing bills of lading or other transportation documents;

d.

collecting freight and other service charges;

e.

booking space from operators of international shipping services or contracting with operators of other means of transportation for
cargo transportation;

f.

paying the freight of port to port transportation or other transportation charges;

g.

unstuffing and/or cargo container consolidation;

h.

other related activities.

(5)

“A non-vessel-operating common carrier” shall include a Chinese enterprise legal person who has acquired the license for the non-vessel-operating
services in accordance with the Maritime Transportation Regulations and these Rules, and a foreign enterprise established in accordance
with foreign laws or regulations who has acquired the qualification in accordance with the Maritime Transportation Regulations and
these Rules for non-vessel-operating services for cargo to and from Chinese ports.

(6)

“An international shipping agent” shall mean a Chinese enterprise legal person established in accordance with Chinese laws who provides
the services as specified in Article 29 of the Maritime Transportation Regulations.

(7)

“An international ship management operator” shall mean a Chinese enterprise legal person established in accordance with Chinese laws
who provides the services as specified in Article 30 of the Maritime Transportation Regulations.

(8)

“An operator of the business relating to storage and warehousing of international shipments” shall mean a Chinese enterprise legal
person established in accordance with Chinese laws who provides the services of cargo storage and custody in warehouses, cargo inventory
management, as well as sorting and packing, repacking and distributing of cargo etc.

(9)

“An operator of international maritime container freight station and container yard services” shall mean a Chinese enterprise legal
person established in accordance with Chinese laws who provides the storage, custody, cleaning, repairing of containers as well as
the storage, consolidation, distribution of container cargo.

(10)

“A foreign-invested enterprise shall mean a Chinese-foreign equity joint venture, a Chinese-foreign contractual joint venture or a
wholly foreign capital enterprise established in accordance with Chinese laws.

(11)

“A foreign-invested representative office” shall mean a non-commercial organization established according to laws within Chinese territory
by a foreign enterprise or another economic organization which conducts introduction of business, sales promotion, business consultation
and the liaison services for such a foreign enterprise or economic organization.

(12)

“Business registration documents of an enterprise” shall mean the business license or the documents certifying the registration of
an enterprise issued by the enterprises registration authority or the relevant authority of the country where the enterprise was
registered. Where the photocopies of such business registration documents are submitted, a confirmation on such photo-copies about
the truthfulness of such photocopies by the registration authority or notary documents certifying the identity between the photocopies
and the originals shall be provided at the same time.

(13)

“A special-purpose invoice” shall mean the bills approved and uniformly printed by the State Administration of Taxation. It is a receipt
which certifies the payment of the freights or other related charges by the payer to the operator of international shipping services
or its agents, or to the non-vessel-operating carrier or its agents. Such an invoice shall include the Special Invoice for International
Shipping and the Special Invoice for International Shipping Agency.

(14)

“An agreement of liner conference” shall mean the kind of agreement concluded between members of a liner conference or between liner
conferences, which is defined in the UN Convention on A Code of Conduct for Liner Conferences, 1974.

(15)

“An operational agreement” shall mean an agreement relating to the increase or decrease of shipping capacity in one or more shipping
routes concluded between two or more than two international operators of international liner services for the purpose of stabilizing
or controlling the freight rates, or other agreement coordination the joint efforts of operators of international liner ser-vices.
Such an agreement includes the agreed minutes with the natures of the above-mentioned agreement. Such an agreement shall also mean
the agreement relating to the joint operation of the vessels, joint usage of the port facilities and other cooperative operation
agreement and various kinds of alliance or consortia agreements concluded between two or more than two operators of international
liner services for the purpose of improving the operational efficiency.

(16)

“A freight rate agreement” shall mean an agreement relating to the kinds of charges to be collected, the rates thereof, the freight
rates or surcharges etc. which is concluded between two or more than two operators of international liner services. Such an agreement
shall also include the agreed minutes with the natures of the above-mentioned agreement.

(17)

“Tariff rates” refer to the freight rates provided in the tariff book of international liner services operators and non-vessel-operating
common carriers. Such rates include the freight rates, the rules related to the freight rates and the rules which shall be complied
with both by carriers and shippers.

(18)

“Negotiated rates” refer to the freight rates agreed upon between international liner services operators and shippers or non-vessel-operating
common carriers. Such rates shall include the freight rates and the related elements. Negotiated rates shall be concluded in the
form of written contracts or agreements.

(19)

“Documents certifying the business experience” refer to the curriculum vitae certifying that the person to be certified has more than
three years’ experience in the international shipping services and the auxiliary businesses thereof. The curriculum vitae shall be
notarized by a notary office.

Chapter II Operators of International Shipping Services and Auxiliary Businesses thereof

Article 4

The criteria specified in Article 5 in the Maritime Transportation Regulations shall be satisfied and the policies of the State for
the development of international shipping industry and the actual competition situations in international shipping market issued
by the Ministry of Communications shall be considered before an enterprise can be set up within the Chinese territory to operate
the international shipping services or before a Chinese enterprise legal person can apply to operate the international shipping services.

The Ministry of Communications shall publish the policies of the State for the development of international shipping industry and
the actual competition situations in international shipping market at its official website and the other appropriate media. Where
the above-mentioned policies or situations fail to be published, they shall not be used as the reasons for the refusal of applications.

Article 5

The applicant shall make an application and submit the relevant documents to the Ministry of Communications for applying to set up
an enterprise within the Chinese territory to operate international shipping services, or, for applying to operate international
shipping services when such an applicant is a Chinese enterprise legal person. A duplicate of the same documents shall be sent to
the competent communications department of the people’s government of the province, autonomous region or municipality directly under
the Central Government where the enterprise is or is to be registered, as the case may be. The following application documents shall
be included:

(1)

the letter of application;

(2)

the feasibility study report and the agreement of investment;

(3)

the business registration document of the applicant (if applying to set up an enterprise, the main investor’s business registration
document or, as the case may be, the identity document) ;

(4)

the duplicate or photocopy of the vessel’s ownership document, nationality document or inspection document;

(5)

the sample of bill of lading, passage ticket or multi-modal transport documents; and

(6)

the documents certifying the business experience of the senior executives who satisfy the requirements of the Ministry of Communications.

The competent communications department of the people’s government of the province, autonomous region or municipality directly under
the Central Government shall give its comments thereon upon the acceptance of the documents and submit its comments to the Ministry
of Communications within 10 working days from the date of acceptance of the application.

The Ministry of Communications shall, within 30 working days from the date when the application documents are complete and authentic,
complete the examination and verification and make a decision of granting or not granting permission in accordance with Article 5
and 6 of the Maritime Transportation Regulations. If the permission is granted, a Permit for Operation of International Shipping
Services shall be issued to the applicant, or, if no permission is granted, the applicant shall be notified in writing and given
the reasons therefor.

Article 6

If a Chinese operator of international shipping services applies to set up a branch within Chinese territory, the provisions relating
to the procedures as specified in Article 5 of these Rules shall apply. The following application documents shall be included:

(1)

the letter of application;

(2)

the feasibility study report;

(3)

the business registration document of the parent company;

(4)

the photocopy of the Permit for Operation of International Shipping Services of the parent company;

(5)

the letter of confirmation by the parent company of the business scope of the branch; and

(6)

the documents certifying the business experience of the senior executives who satisfy the requirement of the Ministry of Communications.

The branches of the Chinese operators of international shipping services may provide the services to the vessels of the parent company
with regard to port entry and departure, arranging for the port handling, accepting of space booking, issuing of bill of lading and
collecting of freight etc.

Article 7

If applying to set up of an enterprise legal person within Chinese territory to operate international shipping agency services or
to operate international shipping agency services, an application shall be submitted to the Ministry of Communications, and the relevant
documents shall be attached thereto. The same documents shall be submitted to the competent communications department of the people’s
government of the province, autonomous region or municipality directly under the Central Government where the enterprise is or is
to be registered, as the case may be. The application documents shall include the following:

(1)

the letter of application;

(2)

the feasibility study report and the agreement of investment;

(3)

the business registration document of the applicant (if applying to set up an enterprise, the main investor’s business registration
document or, as the case may be, the identity document) ;

(4)

the document certifying that there is a fixed place of business;

(5)

the documents certifying the business experience of the senior executives as specified in subparagraph 1 of Article 9 of the Maritime
Transportation Regulations; and

(6)

the agreement of having EDI with the ports and customs etc. If there is no such EDI arrangement, the certifying document issued by
the relevant port or customs shall be provided.

The competent communications department of the people’s government of the province, autonomous region or municipality directly under
the Central Government shall give its comments thereon upon the acceptance of the documents and submit its comments to the Ministry
of Communications within 7 working days from the date of acceptance of the application.

The Ministry of Communications shall, within 15 working days from the date when the application documents are complete and authentic,
complete the examination and verification in accordance with Article 9 of the Maritime Transportation Regulations. If the application
documents are examined and verified as qualified, the registration shall be granted and a Registration for Operation of International
Shipping Agency Services shall be issued to the applicant. If the application documents are examined and verified as unqualified,
the applicant shall be notified in writing and given the reasons therefor. The applicant shall, go through the enterprise registration
procedures at the enterprise registration authority by holding the Registration for Operation of International Shipping Agency Services
issued by the Ministry of Communications and the relevant procedures at the customs, taxation and foreign exchange administration
authorities.

Article 8

If a Chinese enterprise legal person applies to operate international ship management services or to set up an enterprise within Chinese
territory to operate international ship management services, an application shall be submitted to the competent communications department
of the people’s government of the province, autonomous region or municipality directly under the Central Government. The following
application documents shall be included:

(1)

the letter of application;

(2)

the feasibility study report and the agreement of investment;

(3)

the business registration document of the applicant (in case of applying to set up an enterprise, the main investor’s business registration
document or, as the case may be, the identity document) ;

(4)

the document certifying that there is a fixed place of business;

(5)

the documents certifying the business experience of the senior executives as specified in subparagraph 1 of Article 11 of the Maritime
Transportation Regulations; and

(6)

the photocopies of the master, the chief engineer’s documents of competence as specified in subparagraph 2 of Article 11 of the Maritime
Transportation Regulations.

The competent communications department of the people’s government of the province, autonomous region or municipality directly under
the Central Government shall, within 15 working days from the date when the application documents are complete and authentic, complete
the examination and verification. If the application documents are examined as authentic and satisfy the provisions in Article 11
of the Maritime Transportation Regulations, the registration shall be granted and a Registration for Operation of Auxiliary Businesses
Relating to International Maritime Transportation shall be issued to the applicant. If the application documents are examined and
verified as inauthentic or if the application fails to satisfy the conditions specified in Article 11 of the Maritime Transportation
Regulations, no registration shall be granted and the applicant shall be notified in writing and given the reasons therefor. The
applicant shall, go through the enterprise registration procedure at the enterprise registration authority, the relevant procedures
at the taxation authority and the banks designated by the foreign exchange administration authority with the Registration for Operation
of Auxiliary Businesses Relating to International Maritime Transportation.

Article 9

If the branches set up by the operators of international shipping agency services and international ship management services within
Chinese territory to operate the relevant services, the criteria specified in Article 9 and 11 of the Maritime Transportation Regulations
shall be satisfied and registration shall be conducted in accordance with the provisions in Article 10 and 12 of the Maritime Transportation
Regulations, Article 7 and 8 of these Rules. The following documents for registration shall be included :

(1)

the letter of application;

(2)

the feasibility study report;

(3)

the business registration document of the parent company;

(4)

the photocopies of Registration for Operation of International Shipping Agency Services or Registration for Operation of Auxiliary
Businesses Relating to International Maritime Transportation of the parent company;

(5)

the letter of confirmation by the parent company of the business scope of the branch;

(6)

the document certifying that there is a fixed place of business;

(7)

the documents certifying the business experience of staff as specified Article 9 and 11 of the Maritime Transportation Regulations;
and

(8)

the EDI agreement with the port and the customs authorities in case of setting up branches by an operator of international shipping
agency services. If there is no EDI capability, the relevant certifying document issued by the port or the customs authority shall
be submitted.

Article 10

An application and the documents specified in Article 17 of the Maritime Transportation Regulations shall be submitted to the Ministry
of Communications when an operator of international shipping services applies to engage in the international liner services to and
from Chinese ports. The Ministry of Communications shall carry out the examination and verification as specified in Article 17 of
the Maritime Transportation Regulations. If a registration is granted, a Registration of International liner Services Qualification
shall be issued. If no registration is granted when the application documents are inauthentic and incomplete, the applicant shall
be notified in writing and given the reasons therefor.

The Ministry of Communications will list the name of the operator of the international liner services and the bill of lading thereof
at its official website after the operator of international shipping services has acquired the qualification for engagement of the
international liner services to and from Chinese ports.

Article 11

An application and the relevant documents shall be submitted to the Ministry of Communications in case of applying for the registration
of a non-vessel-operating common carrier’s bill of lading. A duplicate of the above-mentioned documents shall be submitted at the
same time to the competent communications department of the people’s government of the province, autonomous region, municipality
directly under the Central Government where the non-vessel-operating common carrier is registered, or, in case of application for
registration of a bill of lading by a foreign non-vessel-operating common carrier, to the competent communications department of
the people’s government of the province, autonomous region or municipality directly under the Central Government where the liaison
office appointed by such non-vessel-operating common carrier is registered. The following application documents shall be included:

(1)

the letter of application;

(2)

the feasibility study report;

(3)

the business registration document;

(4)

the sample of bill of lading;

(5)

the photocopy of the receipt certifying that the surety bond has been deposited at the bank.

If the applicant is a foreign non-vessel-operating common carrier, the relevant documents specified in Article 25 of these Rules
which relate to its appointed liaison office shall be submitted as well.

The competent communications department of the people’s government of the province, autonomous region or municipality directly under
the Central Government shall complete the examination, verification and give its comments on the application documents after the
acceptance of the above-mentioned duplicate. Such communications department shall report its comments to the Ministry of Communications
within 7 working days after the acceptance of the application documents.

The Ministry of Communications shall complete the examination and verification specified in Article 7 and 8 in the Maritime Transportation
Regulations within 15 working days after the acceptance of the complete application documents. If the application documents are authentic
and complete, the registration of the bill of lading shall be granted and a Registration of Non-Vessel-Operating Services Qualification
shall be issued. If the application documents are inauthentic and incomplete, the applicant shall be notified in writing that no
registration is granted and the reasons therefor shall be given.

After acquiring a Registration of Non-Vessel-Operating Services Qualification, a Chinese applicant shall go through the registration
procedure at the enterprise registration authority where it is registered before starting the non-vessel-operating services.

Article 12

If a foreign non-vessel-operating common carrier has acquired the qualification for the non-vessel-operating services in accordance
with foreign laws and has obtained a legal financial liability guaranty, it does not need to deposit the surety bond at the bank
within Chinese territory when it applies to engage in the non-vessel-operating services to and from Chinese ports in accordance with
the Maritime Transportation Regulations and these Rules. However, in order to ensure that the debt to be paid which is incurred from
the foreign non-vessel-operating common carrier’s non-performance or improper performance of the carrier’s responsibility, or, in
order to ensure that the fine to be paid which is incurred from such non-vessel-operating common carrier’s non-performance or improper
performance satisfy the provisions in paragraph 3 of Article 8 of the Maritime Transportation Regulations, the competent authority
of such a foreign non-vessel-operating common carrier shall sign an agreement relating to the ways or means of realizing the financial
liability guaranty with the Chinese governmental transport authority.

Article 13

When the cargo is solicited, the bill of lading or other transport document is issued, or the freight is collected within Chinese
territory, although there is no direct international liner services to and from Chinese ports, the qualification of the non-vessel-operating
services shall be obtained in accordance with the relevant provisions of these Rules if the international cargo transportation services
to and from Chinese ports is provided by way of chartering space from vessels of operators of international liner services, or, if
cargo is shipped at Chinese ports for transshipment at foreign ports by using the feeder service provided by operators of international
liner services, with the exception of the cases specified in paragraph 3 of Article 16 of the Maritime Transportation Regulations.

Article 14

If a Chinese non-vessel-operating common carrier applies to set up a branch within Chinese territory, the surety bond shall be deposited
in accordance with paragraph 2 of Article 8 of the Maritime Transportation Regulations and the registration shall be obtained in
accordance with Article 11 of these Rules by acquiring the Registration of Non-Vessel-Operating Services Qualification. The following
documents shall be submitted for applying for the registration:

(1)

the letter of application;

(2)

the business registration document of the parent company;

(3)

the photocopy of the Registration of Non-Vessel-Operating Services Qualification of the parent company;

(4)

the document confirming the business scope of the branch by the parent company;

(5)

the photocopy of the receipt certifying that the surety bond has be deposited at the bank.

Article 15

When the non-vessel-operating common carrier applies for the registration of the bill of lading, the name listed at the post_title of the
bill of lading shall be the same as that of the applicant.

If the name listed in the post_title of the bill of lading is different from that of the applicant, the applicant shall provide the documents
certifying that such a bill of lading is printed and used by itself as well as a declaration in writing that it will bear the carrier’s
responsibility of issuing such a bill of lading.

Article 16

If a non-vessel-operating common carrier has two or more bills of lading, each of the bills of lading shall be registered.

If the bill of lading registered by an operator of international liner services or non-vessel-operating common carrier is changed,
the sample of the new bill of lading shall be filed with the Ministry of Communications 15 days before the date of usage of such
a new bill of lading.

Article 17

After the non-vessel-operating common carrier acquires according to law the qualification for the non-vessel-operating services by
depositing the surety bond and registering the bill of lading, the Ministry of Communications shall list the name of the non-vessel-operating
common carrier and the sample of its bill of lading at its official website.

Article 18

A non-vessel-operating common carrier shall deposit according to law the surety bond at the non-vessel-operating common carrier’s
bank account at the commercial bank designated by the Ministry of Communications. The interest of the surety bond shall be calculated
on the basis of the interest rate of the current deposit published by the People’s Bank of China.

Article 19

The surety bond deposited by the non-vessel-operating common carrier is protected by the State laws. The surety bond shall not be
used unless for the following cases:

(1)

bearing the liability for compensation due to the non-vessel-operating common carrier’s non-performance or improper performance of
carrier’s responsibility according to a judgement in force by a judicial organ or an arbitration institution’s arbitration award
ruled by a judicial organ to be enforced;

(2)

being fined by the communications authorities.

If the surety bond shall be transferred due to the cases referred to in subparagraph 1 and 2 of the previous paragraph, it shall be
carried out according to laws.

If the amount of surety bond of the non-vessel-operating common carrier falls short of the amount specified in the Maritime Transportation
Regulations, the Ministry of Communication shall inform the non-vessel-operating common carrier to make up the amount in short. If
the non-vessel-operating common carrier fails to make up the amount in short within 30 days from the date of service of the notice
in writing from the Ministry of Communications, the Ministry of Communication shall revoke its qualification of the non-vessel-ope

CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON DOMESTIC INSTITUTIONS USING RENMINBI AS PRICING CURRENCY IN FOREIGN TRADES

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on Domestic Institutions Using Renminbi as Pricing Currency in Foreign Trades

HuiFa [2003] No.29

March 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; and Chinese-capital designated banks of foreign exchange:

In response to requests from some domestic institutions to use Renminbi as pricing currency in foreign trade agreements and with a
view to promoting smooth development of foreign trade and to further strengthening capacity of international competition of domestic
institutions by adopting more flexible method of settlement in foreign trade transactions, the Circular on relevant provisions is
hereby issued after consideration:

I.

The domestic institutions may use Renminbi as pricing currency in signing import/export contracts.

II.

Where domestic institutions use Renminbi as pricing currency in export contracts, the foreign exchange shall be duly collected in
whole at the exchange rate quoted by the bank on the date of settlement in the course of handling procedures of collecting export
foreign exchange earnings.

III.

Where domestic institutions use Renminbi as pricing currency in import contracts, the payment to foreign party shall be made in foreign
exchange in any of the currency listed by domestic banks after converting the amount of Renminbi stipulated in the contract at the
exchange rate quoted by the bank on the date of settlement in the course of handling procedures of payment to foreign parties under
the import business.

IV.

Where domestic institutions use Renminbi as pricing currency in contracts and in making Customs declarations, they shall handle verification
procedures for export collection and import payment of foreign exchange in accordance with relevant regulations.

V.

The Circular shall enter into force as of the date of its promulgation.

Upon receipt, all branches shall promptly transmit the Circular to their respective subordinate sub-branches and concerned units while
all Chinese-capital designated banks of foreign exchange shall promptly transmit it to their branches and sub-branches. Please feedback
timely to the State Administration of Foreign Exchange any problems encountered in the course of implementation of the Circular.

 
The State Administration of Foreign Exchange
2003-03-03

 




SUPPLEMENTARY CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION CONCERNING THE PREFERENTIAL POLICY OF ENTERPRISE INCOME TAX FOR ENTERPRISES WITH FOREIGN INVESTMENT WITH ADDITIONAL INVESTMENT

The State Administration of Taxation

Supplementary Circular of the State Administration of Taxation Concerning the Preferential Policy of Enterprise Income Tax for Enterprises
with Foreign Investment with Additional Investment

GuoShuiHan [2003] No.368

March 28, 2003

For the purpose of implementing the Circular of the State Administration of Taxation and Ministry of Finance Concerning the Preferential
Policy of Enterprise Income Tax for Enterprise with Foreign Investment with Additional Investments (CaiShuiZi [2002] No.56), some
related issues are hereby further specified:

I.

About the scope of hortative items

According to the provisions of the Circular of the State Administration of Taxation on Implementation of New Guidance Catalogue for
Foreign-invested Industries, the hortative items stipulated in the CaiShuiZi [2002] No.56 refer to the foreign investment items with
additional investments approved before April 1, 2002, which are regarded as the hortative items and Limited-type B listed in the
Guidance Catalogue for Foreign-Invested Industries promulgated by the former State Development and Plan Commission and other relative
departments in 1997. The foreign-invested items with additional investments that are approved after April 1, 2002 are regarded as
the hortative items specified in the Guidance Catalogue for Foreign-invested Industries promulgated by the former National Development
and Plan Commission and other relative departments in 2002.

II.

About calculation of the incremental registered capitals after multiple additional investments

All the production items formed through multiple additional investments after initial investment of an enterprise with foreign ivestment,
which have not enjoyed any preferential treatment of fixed-term abatement or exemption of taxes (except for the additional investments
that have not formed production items) may be merged into one item for calculating the its new incremental registered capital. If
this new incremental registered capital meets with the requirements specified in Article 1 of CaiShuiZi [2002] No.56, it may enjoy
preferential treatment of fixed-term abatement or exemption of taxes for the independent item after the merge.

III.

About calculation of original registered capital

The “original registered capital” specified in CaiShuiZi [2002] No.56 refers to the registered capital formed before the enterprise
with foreign ivestment inputs additional investments on the new production items or on the merged items specified in Article 2 of
this Circular.

IV.

About calculation of preferential periods of abatement or exemption of taxes for the additional investments

For the production item formed from merging multiple additional investments of an enterprise with foreign ivestment, which enjoys
a preferential treatment of fixed-term of tax abatement or exemption according to Article 2 of this Circular, the preferential period
shall be calculated from the year in which the enterprise begins to obtains profits from the production item formed since the first
additional investment. The enterprise shall begins to enjoy the residual preferential treatments in the preferential period of tax
abatement or exemption from the year in which the additional investments reach the requirements specified in CaiShuiZi [2002] No.56.



 
The State Administration of Taxation
2003-03-28

 







REGULATIONS ON THE MANAGEMENT OF FOREIGN-FUNDED URBAN PLANNING SERVICE ENTERPRISES

Regulations on the Management of Foreign-funded Urban Planning Service Enterprises

     Decree of the Ministry of Construction and the Ministry of Foreign Trade and Economic Cooperation,

No 116

The Regulations on the Management of Foreign-funded Urban Planning Service Enterprises, deliberated and ratified at the 65th executive
meeting of the Ministry of Construction on December 13th, 2002 and the 2nd working meeting of the minister of Foreign Trade and Economic
Cooperation on January 30th, 2003, is hereby promulgated for implementation as of May 1st, 2003.

Wang Guangtao, Minister of Construction

Shi Guangsheng, Minister of Foreign Trade and Economic Cooperation

February 13th, 2003

Regulations on the Management of

Foreign-funded Urban Planning Service Enterprises

   Article 1 Pursuant to the Law of the People’s Republic of China on Foreign-funded Enterprises , the Law of the People’s Republic of
China on Sino-foreign Equity Joint Ventures , the Law of the People’s Republic of China on Sino-foreign cooperative Joint Ventures
, and the Law of the People’s Republic of China on Urban Planning , the current Regulations is hereby formulated to expand the
scope of opening to the outside; regulate foreign companies, enterprises and other economic entities or individuals investing in
enterprises providing services to urban planning; and strengthen management of the activities of urban planning services provided
by foreign-funded urban planning service enterprises.

   Article 2 The Regulations applies to those setting up foreign-funded urban planning service enterprises within the boundary of the People’s
Republic of China and applying for the Certificate of Qualification of Foreign-funded Enterprises for Urban Planning Services
, and to the supervision and management of foreign-funded urban planning service enterprises.

   Article 3 The foreign-funded urban planning service enterprises as referred to in the current Regulations include Sino-foreign equity joint
ventures, Sino-foreign cooperative joint ventures, and ventures with exclusive foreign investment that are set up in the People’s
Republic of China in accordance with law to provide services to urban planning.

The term ‘urban planning service’ as used in the current Regulations refers to provide drawing and consulting services to urban
development plans other than general planning.

   Article 4 All foreign companies, enterprises, other economic entities or individuals engaged in urban planning services in China shall set
up Sino-foreign equity joint ventures, Sino-foreign cooperative joint ventures, or ventures with exclusive foreign investment and
apply for the Certificate of Qualification of Foreign-funded Enterprises for Urban Planning Services .

Those have not been granted the Certificate of Qualification of Foreign-funded Enterprises for Urban Planning Services shall
not take up the business of urban planning services.

   Article 5 The department responsible for the management of foreign trade and economic cooperation under the State Council shall take charge
of management of establishment of foreign-funded urban planning service enterprises, while the department responsible for construction
under the State Council shall take charge of management of qualification of foreign-funded urban planning service enterprises.

The departments responsible for foreign trade and economic cooperation under the people’s governments at the provincial, autonomous
regional and municipal governments under the direct leadership of the central government shall take charge of preliminary examination
of establishment of foreign-funded urban planning service enterprises in their respective administrative areas, and departments responsible
for urban planning under people’s governments at and above the county level shall take charge of supervision and management of the
urban planning service activities carried out by foreign-funded urban planning service enterprises in their respective administrative
areas.

   Article 6 Apart from meeting requirements set in relevant Chinese laws and regulations on foreign-funded enterprises, the following requirements
shall be met for the establishment of foreign-funded urban planning service enterprises:

1. The foreign party shall be an enterprise or professional specializing in urban planning services in its resident country
or region.

2. The applicant shall own more than 20 employees specializing in urban planning, architecture, road transportation, gardening
and related disciplines, with foreign specialists accounting for no less than 25 percent of the total, and have at least one foreign
technician specializing in urban planning, architecture, road transportation, and gardening respectively.

3. The applicant shall have technical apparatus and fixed working site as stipulated by the State.

   Article 7 Those applying for establishing foreign-funded urban planning service enterprises shall apply, in accordance with law, to the
State Administration of Industry and Commerce or local administrations of industry and commerce with authorization from the State
Administration of Industry and Commerce for examination and approving the post_titles of the foreign-funded enterprises they plan to set
up.

   Article 8 After passing examination and receiving approval of the post_titles of the foreign-funded enterprises it plans to set up, the applicant
shall apply to the departments of the provincial, autonomous regional or people’s municipal government under the direct leadership
of the central government in charge of foreign trade and economic cooperation in the region where the enterprise is to be located
for the establishment. it shall submit the following documents:

1. The application for the establishment of a foreign-funded enterprise signed by the legal representative of the investing
party.

2. The feasibility study report, project proposal and plan on the establishment of the enterprise (including staffing of specialists,
plan on technical equipment, and area of the working site) produced or approved by the investing party.

3. The contract and rules of the foreign-funded enterprise signed by the legal representative of the investing party (or rules
only, in the case of an enterprise with exclusive foreign investment).

4. Notice of pre-approval on the post_title of the enterprise to be set up.

5. Certificate of legal person registration of the investing party and certificate of the credit provided by the bank of the
investing party.

6. Documents and certificates of appointment of the chairman, board members, managers, and leading engineers or technicians
to be appointed by the investing party.

7. The balance sheets and statements of loss and gain of the investing party during the latest three years as audited by a
chartered accountant or an accountant firm.

8. Certificate of registration and certificate of bank credit of the urban planning service enterprise(s) run by the foreign
investing party in its country or region.

9. Certificates of experiences and achievements of the foreign investing party in urban planning services produced by responsible
government departments or associations, societies, or notary organs in the residential country or region of the said party.

   Article 9 The department under provincial, autonomous regional or people’s municipal governments under the direct leadership of central
government in charge of foreign trade and economic cooperation shall complete preliminary examination within 30 days after receiving
an application and submit its approval to the State Council department in charge of foreign trade and economic cooperation.

   Article 10 The State Council department in charge of foreign trade and economic cooperation shall submit the application documents that have
passed preliminary examination and approval to the State Council department in charge of construction for soliciting the comments
within 10 days. The State Council department in charge of construction shall put forward its opinion within 30 days after receiving
the application documents. Within 30 days after receiving the written opinion of the State Council department in charge of construction,
the State Council department in charge of foreign trade and economic cooperation shall make a decision of approval or disapproval.
In the case of approval, a certificate of approval shall be issued; and in the case of disapproval, a written explanation shall be
given.

   Article 11 After receiving the Certificate of Approval of Foreign-funded Enterprise, the applicant shall register with an administration
of industry and commerce in accordance with law to get a business license.

   Article 12 After receiving a legal person business license, the applicant shall apply to the State Council department in charge of construction
for the Certificate of Qualification for Urban Planning Services for Foreign-funded Enterprises .

   Article 13 The following documents shall be supplied for application for the Certificate of Qualification for Urban Planning Services for
Foreign-funded Enterprises :

1. Form of Application for the Certificate of Qualification for Urban Planning Services for Foreign-funded Enterprises ;

2. Certificate of Approval of Foreign-funded Enterprise;

3. Business license for enterprise legal person;

4. Contract of employment of technicians and specialists and certificates of technical qualifications of these people put on
file in labour and personnel departments;

5. Documents about the technical equipment of the enterprise.

   Article 14 The foreign-funded urban planning service enterprise shall report, within 30 days after receiving the Certificate of Qualification
for Urban Planning Services for Foreign-funded Enterprises , to the urban planning administration in the city or county of its registered
for the record.

   Article 15 The foreign-funded urban planning service enterprise that contracts for urban planning services in areas other than that of its
registration shall report to the urban planning administrations of these areas for the record.

   Article 16 All the documents submitted by the applicant shall be written in Chinese. If any document of certification is written in a foreign
language, a Chinese version shall be supplied.

   Article 17 Foreign-funded urban planning service enterprises shall abide themselves by pertinent Chinese laws, regulations, and technical
standards and norms when providing urban planning services.

   Article 18 The foreign technicians employed by foreign-funded urban planning service enterprises shall stay in China for a total length of
no less than 6 months per person a year.

   Article 19 The State Council department in charge of construction shall carry out annual checks to the foreign-funded urban planning service
enterprises that have received the Certificate of Qualification for Urban Planning Services for Foreign-funded Enterprises . Those
found unqualified shall have their Certificate of Qualification for Urban Planning Services for Foreign-funded Enterprises revoked.

   Article 20 Chinese units that have received the Certificate of Qualification for Compilation of Urban Planning shall hand in the Certificate
when they are restructured into Sino-foreign equity or cooperative joint ventures specializing in urban planning services.

   Article 21 Foreign-funded urban planning service enterprises shall hand in their Certificate of Qualification for Urban Planning Services
for Foreign-funded Enterprises when they stop operations or are disbanded or terminated.

   Article 22 It is strictly forbidden to entrust any businesses of urban planning services to foreign-funded enterprises that have not granted
the Certificate of Qualification for Urban Planning Services for Foreign-funded Enterprises .

It is strictly forbidden to entrust any businesses of service to general urban planning to foreign-funded enterprises.

   Article 23 Those that contract for urban planning services without the Certificate of Qualification for Urban Planning Services for Foreign-funded
Enterprises shall be ordered by the construction administrations of people’s governments at or above the county level to stop their
illegal activities, together with a penalty above RMB10,000 yuan and below RMB30,000 yuan. Their achievements shall not be acknowledged
by any department.

   Article 24 Those foreign-funded urban planning service enterprises that provide services to compilation of general urban planning in violation
of the current Regulations shall be ordered by the construction administrations of people’s government at or above the county level
to mend themselves. Those involved in severe cases shall have their Certificate of Qualification for Urban Planning Services for
Foreign-funded Enterprises withdrawn by the original issuer.

Those foreign-funded urban planning service enterprises that obtain the Certificate of Qualification for Urban Planning Services
for Foreign-funded Enterprises through fraud and deception shall have their Certificate withdrawn by the issuer.

After withdrawing a Certificate, the issuer shall inform the registration department concerned of the case. The enterprise whose
certificate has been withdrawn shall apply to the original department of registration for cancellation of its registration. Those
that refuse to go through cancellation formalities shall be handled by registration departments in accordance with law.

   Article 25 Those that entrust urban planning services or general urban planning services to foreign-funded enterprises that have not got
the Certificate of Qualification for Urban Planning Services for Foreign-funded Enterprises in violation of the current Regulations
shall be corrected by their senior departments, with administrative responsibilities to be affixed upon the person responsible in
accordance with law. If a crime is committed, criminal responsibilities shall be found out in accordance with law.

   Article 26 The current Regulations shall be interpreted by the State Council department in charge of construction and the State Council department
in charge of foreign trade and economic cooperation according to their respective functions.

   Article 27 Investors from the Hong Kong Special Administrative Zone, the Macao Special Administrative Zone, and Taiwan area coming to run
urban planning service enterprises on the mainland shall be handled with reference to the current Regulations.

   Article 28 The current Regulations shall take effect as of May 1, 2003.

To be sent to: The Law Committee of the National People’s Congress, the Law Office of the State Council, the Editorial Office
of the Gazette of the State Council, the construction commissions and bureaus of foreign trade and economic cooperation of people’s
governments at the provincial, autonomous regional and municipal level, the construction commission of cities as independent entries
in State plans and budgets, ministries and commissions of the State Council, and leaders, bureaus, and subsidiary institutions of
the Ministry of Construction.

Secretariat of the General Office of the Ministry of Construction

Printed and issued on February 20th, 2003

    






INTERIM PROVISION ON THE ESTABLISHMENT OF FOREIGN HOLDING AND WHOLLY FOREIGN-OWNED TRAVEL AGENCIES

The State Administration of Tourism, the Ministry of Commerce

Decree of the State Administration of Tourism of the People’s Republic of China and the Ministry of Commerce of the People’s Republic
of China

No.19

The Interim Provisions on the Establishment of Foreign Holding and Wholly Foreign-owned Travel Agencies are hereby promulgated upon
review and adoption at the director-general work meeting of the State Administration of Tourism of the PRC on May 19, 2003 and at
the second ministerial executive meeting of the Ministry of Commerce of the P.RC on June 10, 2003.

Director-General of the State Administration of Tourism He Guangwei

Minister of the Ministry of Commerce Lu Fuyuan

June 12, 2003

Interim Provision on the Establishment of Foreign Holding and Wholly Foreign-owned Travel Agencies

Article 1

In order to adapt to new situation upon China’s accession to the WTO and further open tourism to the outside world and promote the
development of travel agency industry, the Provision is formulated in accordance with the relevant laws and regulations of China
on foreign-invested enterprises, the Regulation on Travel Agency Management and the relevant provisions.

Article 2

The Provision is applicable to the foreign holding and wholly foreign-owned travel agencies established in China during transition
period prior to the scheduled term committed by China upon its accession to the WTO.

Article 3

The foreign investor for establishing a foreign holding agency shall be eligible for the following conditions:

(1)

Being a travel agency or an enterprise mainly undertaking tourism;

(2)

With total annual amount of tourism more than USD40m;

(3)

Being a member of the national (regional) association of tourism;

(4)

Being in good international credit with advanced management experience of travel agency;

(5)

Abiding by Chinese laws and the relevant Chinese regulations of tourism.

Article 4

For the foreign investor of wholly foreign-owned travel agency, besides meeting the conditions prescribed in Article 3 (1), (3),
(4) and (5) of the Provision, the annual total amount of tourism prescribed in (2) should be more than USD500m.

Article 5

The Chinese investor of a foreign holding agency shall meet the conditions prescribed in Article 29 of the Regulation of Travel Agency
Management.

Article 6

The foreign holding and wholly foreign-owned travel agency to be established shall meet the following conditions:

(1)

In compliance with development planning of tourism;

(2)

In compliance with the requirements of tourist market;

(3)

With investors meeting the conditions prescribed in Articles 3, 4 and 5 of the Provision; and

(4)

With registered capital no less than RMB4m.

Article 7

The eligible foreign investor can establish a foreign holding and wholly foreign-owned travel agency in the national tourist and holiday
area approved by the State Council and 5 cities, including Beijing, Shanghai, Guangzhou, Shenzhen and Xi’an.

Article 8

In general, for an investor applying for establishing foreign holding and wholly foreign-owned travel agencies, only one agency will
be approved.

Article 9

The Application for establishing foreign holding and wholly foreign-owned travel agencies shall be processed by reference with the
procedure for examining and approving of foreign-invested travel agencies as specified in the Regulation of Travel Agency Management.

Article 10

The foreign holding and wholly foreign-owned travel agencies may not directly or in disguise engage in tourism businesses relating
to going abroad of Chinese citizen or Chinese people in other regions going to Hong Kong, Macao, and Taiwan regions.

Article 11

The responsibility for interpretation of the Provision shall be vested with the State Administration of Tourism and the Ministry of
Commerce.

Article 12

The Provision shall come into force 30 days after their promulgation.



 
The State Administration of Tourism, the Ministry of Commerce
2003-06-12

 







CIRCULAR ON THE RELEVANT ISSUES CONCERNING THE REFUND OF THE SECURITY DEPOSIT FOR REMITTED-BACK OVERSEAS INVESTMENT PROFITS

The State Administration of Foreign Exchange

Circular on the Relevant Issues Concerning the Refund of the Security Deposit for Remitted-Back Overseas Investment Profits

HuiFa [2003] No.81

July 8, 2003

The branches and the departments of foreign exchange administration (hereinafter referred to as departments) of the State Administration
of Foreign Exchange (SAFE) in the provinces, autonomous regions, and municipalities directly under the Central Government, and the
branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo:

In order to carry out the development strategy of “going out”, and to implement the relevant spirits of the Decision of the State
Council on Repealing the First Batch of Administrative Examination and Approval Items (GuiFa No.24 [2002]), SAFE has abolished the
system of security deposit for remitted back overseas investment profits (hereinafter referred to as security deposit), and has decided
to refund to the investing subjects the security deposit already collected. In order to ensure the smooth progress of this work,
the following circular is hereby made concerning the relevant issues:

1.

The branches and departments shall pay high attention to and earnestly take care of the work of refund of security deposit. In order
to ensure the smooth progress of the work, the branches and departments shall form work groups of security deposit refund, which
shall be led by the directors or deputy directors in charge, and the section of capital account check shall have the participation
of at least two cadres at the division level and two handling persons.

2.

During the period between the day of issuance of the present Circular to March 31, 2004, the branches and departments may process
the formalities for refund of security deposit to the investing subjects in a concentrated way. Where an investing subject fails
to go through the said formalities within the said period, that subject shall be regarded as automatically waiving the relevant rights
and interests it has in the security deposit. The branches and departments shall, as a general principle, notify the investing subjects
one by one that surrendered the security deposit, and shall urge them to go through the refund formalities as soon as possible.

3.

An investing subject shall submit the following materials when applying for refund of security deposit with the local branch or department:

(1)

The investing subject’s business license which has passed the annual industrial and commercial examination (original and duplicate),
the original will be returned to the investing subject after the examination, and the duplication shall be kept on file.

If the original investing subject is altered, then the new investing subject applying for refund of security deposit shall submit,
in addition to the original and duplicate of its business license passing the annual industrial and commercial examination, the relevant
documents evidencing its beneficial right to the security deposit. The relevant documents refer to: in case of alteration of the
name of the original investing subject, the new investing subject shall submit the document of approval of the relevant authority
for the name alteration; in case of merger of the original investing subject and other entities, the security deposit shall be refunded
to the new investing subject formed after the merger, however, the document of approval of the relevant authority for the merger
and the merger agreement shall be submitted, and the merger agreement shall expressly stipulate that the new investing subject will
continue enjoying the relevant rights and interests in the overseas investment; in case of splitting of the original investing subject
into several new entities, the security deposit shall be refunded only to the new investing subject(s) that will enjoy the relevant
rights and interests in the overseas investment after the splitting, however, the document of approval of the relevant authority
for the splitting and the splitting agreement shall be submitted, and the splitting agreement shall expressly stipulate that the
new investing subject(s) will continue enjoying the relevant rights and interests in the overseas investment; in case of bankruptcy,
dissolution, and liquidation of the investing subject, the security deposit already surrendered to the foreign exchange bureau will
no longer be returned.

(2)

Deposit proof or remittance proof of the surrendered security deposit (original and duplicate), the original will be returned to the
investing subject, and the duplicate will be put on file.

(3)

Letter of introduction issued by the investing subject to its handling persons.

(4)

Opening bank, account name, and account number of the account designated by the investing subject, among which, the account name shall
be strictly consistent with the name of the investing subject.

4.

The principal of the security deposit shall be returned to the investing subject in full, and the interest on the security deposit
occurring during the period of surrender shall be returned to the investing subject according to the following standards:

(1)

Where a general account is opened in the name of the foreign exchange bureau, and separate subsidiary accounts are opened for the
investing subjects hereunder (hereinafter referred to as an enterprise subsidiary account), or security deposit accounts are opened
directly in the name of the investing subjects (hereinafter referred to as enterprise accounts), the capital (principal and interest)
in the enterprise subsidiary accounts and the enterprise accounts shall all be refunded to the investing subjects, and those accounts
shall be written off.

(2)

Where a security deposit account in opened in the name of the foreign exchange bureau (hereinafter referred as bureau account), the
interest on the security deposit shall be calculated at the following fixed rates in a uniform way and be refunded to the investing
subjects, that is: security deposit in RMB: annual rate of 0.72%; security deposit in US dollar: annual rate of 0.1250%; security
deposit in Euro, annual rate of 0.2000%; security deposit in Yen: annual rate of 0.0001%; security deposit in HK dollar: annual rate
of 0.1250%.

5.

The branches and departments shall carefully examine the relevant materials in light of their own administrative accounts of security
deposit. Where the identity of an investing subject is inerrable and the security deposit surrendered by that subject are not refunded
indeed, the handling person of the work group of security deposit refund shall write down the handling opinions, and the application
shall, after being rechecked by the division director, submitted to the leader of the branch or department for examination and approval.
Instructions for payment may be issued to the bank only upon approval of the leader of the branch or department. Double signatures
shall be applied both in the handling and recheck.

6.

The branches and departments shall keep intact the business archives for security deposit refund. And after the end of the refund
work, the branches and departments shall submit work reports to SAFE, summing up and reporting the implementation of the work.

7.

After the end of the refund work, the branches and departments shall, prior to April 30, 2004, surrender the residual principal and
interest of the security deposit to SAFE for unified handling.

Remittance instruction for security deposit in RMB: Account: State Administration of Foreign Exchanges. Opening Bank: Beijing City
Commercial Bank Fu Yu Branch. Account Number: 03731001201110156￿￿92.

Remittance instruction for security deposit in foreign currencies: Account: State Administration of Foreign Exchanges. Opening Bank:
Shenzhen Development Bank Beijing An Hua Branch. Account Number: 11000253308402.

All the money orders shall be indicated with “balance after clearing of the security deposit for remitted back profits by ￿a￿branch
(department)”.

8.

In case of any problem encountered during the execution of the present Circular, please contact with the Department of Capital Account
Administration of SAFE. Contact persons: Zhao Jun, Ma Shaobo, Feng Yanqiu; Telephone: (010) 68402251, 68402252, 68519138; Fax: (010)
68402253.



 
The State Administration of Foreign Exchange
2003-07-08

 







PROMOTION OF PRIVATELY-RUN SCHOOLS LAW

Law of the People’s Republic of China on the Promotion of Privately-run Schools

(Adopted at the 31st Meeting of the Standing Committee of the Ninth National People’s Congress on December 28, 2002
and promulgated by Order No. 80 of the President of the People’s Republic of China on December 28, 2002) 

Contents 

Chapter I    General Provisions 

Chapter II   Establishment 

Chapter III  Organization and Activities of Schools 

Chapter IV   Teachers and Educatees 

Chapter V    School Assets and Financial Management 

Chapter VI   Administration and Supervision 

Chapter VII  Support and Reward 

Chapter VIII Alteration and Termination 

Chapter IX   Legal Responsibility 

Chapter X    Supplementary Provisions 

Chapter I 

General Provisions 

Article 1  This Law is enacted in accordance with the Constitution and the Education Law with a view to implementing the strategy
of invigorating the country through science, technology and education, promoting the sound development of privately-run schools,
and safeguarding the lawful rights and interests of the privately-run schools and the educatees. 

Article 2  This Law shall be applicable to activities conducted by public organizations or individuals, other than State organs,
to establish and run schools and other institutions of education with non-governmental financial funds, which are geared to the need
of society. In cases to which no provisions of this Law are applicable, the provisions in the Education Law and other laws concerning
education shall apply. 

Article 3  Privately-run schools belong to public welfare undertakings and constitute a component part of the cause of socialist
education. 

With regard to privately-run schools, the State applies the principles of enthusiastic encouragement, vigorous support, correct guidance,
and administration according to law. 

People’s governments at all levels shall incorporate the undertakings of the privately-run schools into their plans of national economic
and social development. 

Article 4  Privately-run policy schools shall abide by laws and regulations, implement the education of the State, guarantee
the educational quality and devote their efforts to the training of various types of people for the cause of socialist development. 

Privately-run schools shall implement the principle of separating education from religion. No organizations or individuals may make
use of religion to conduct activities designed to interfere with the educational system of the State. 

Article 5  Privately-run schools and government-run schools shall share equal legal status, and the State safeguards the autonomy
of the privately-run schools. 

The State protects the lawful rights and interests of the sponsors, principals, teachers and staff members and educatees of privately-run
schools. 

Article 6  The State encourages donations made for establishing and running schools. 

The State rewards and commends organizations and individuals that have made outstanding contributions to the development of the undertakings
of privately-run schools. 

Article 7  The administrative department for education under the State Council shall be in charge of the overall planning, comprehensive
coordination and macro-administration of the work relating to privately-run schools nationwide. 

The administrative department for labor and social security and the relevant departments under the State Council shall respectively
be in charge of the work relating to the privately-run schools within the scope of their duties as defined by the State Council. 

Article 8  The administrative departments for education under the local people’s governments at or above the county level shall
be responsible for the work relating to privately-run schools in their own administrative regions. 

The administrative departments for labor and social security and the relevant departments under the local people’s governments at
or above the county level shall respectively be responsible for the work relating to privately-run schools within the scope of their
duties. 

Chapter II 

Establishment 

Article 9  Public organizations that establish privately-run schools shall possess the qualifications of a legal person. 

Individuals that establish privately-run schools shall possess political rights and full capacity for civil conduct. 

A privately-run school shall have the qualifications of a legal person. 

Article 10 The establishment of a privately-run school shall meet the local need for educational development and the requirements
provided for by the education Law and relevant laws and regulations. 

The standards for the establishment of privately-run schools shall, mutatis mutandis, conform to those for the establishment of government-run
schools of the same grade and category. 

Article 11 The establishment of privately-run schools that provide education for academic credentials, pre-school education, training
for preparing self-study examinations and other cultural education shall be subject to examination and approval by the administrative
departments for education under the people’s governments at or above the county level within the limits of their powers defined by
the State; the establishment of a privately-run school that mainly provides training for vocational skills, including training for
vocational qualification, shall be subject to examination and approval by the administrative department for labor and social security
under the people’s government at or above the county level within the limits of its powers defined by the State, which shall send
a duplicate of the approval document to the administrative department for education at the same level for the record. 

Article 12 To apply for preparing to establish a privately-run school, the sponsor shall submit to the examination and approval authority
the following materials: 

(1) an application, the contents of which mainly include: the sponsor, the aims of education, size of the student body, level of
the school, forms of education, conditions for establishing and running the school, internal management system, raising of funds
and their management and use, etc.; 

(2) name of the sponsors and their addresses or the post_title of the sponsor and its address; 

(3) source of the assets, amount of the funds and their effective certificates, in which the property rights are clearly stated;
and 

(4) where the assets of the school are donated, an agreement on the donations, in which the names of the donators, the amount of
the assets donated, their use and management, and the relevant effective certificates are clearly stated. 

Article 13 The examination and approval authority shall, within 30 days from the date it receives the application for preparing to
establish a privately-run school, make a decision in writing on whether to approve it or not. 

If it approves the application, it shall issue a written approval for preparing to establish the school; and if it does not approve
the application, it shall explain the reasons. 

The period of preparation for establishment of such a school shall not exceed three years; and if it exceeds three years, the sponsor
shall renew its application. 

Article 14  To apply for official establishment of a privately-run school, the sponsor shall submit the following materials
to the examination and approval authority: 

(1) the written approval for preparing to establish the school; 

(2) a report on the preparations made for the establishment; 

(3) articles of association of the school and the name lists of the component members of the first executive council, board of directors
or other decision-making bodies of the school; 

(4) effective certificates of the assets of the school; and 

(5) qualification certificates of the principal, teachers, and book-keepers and accountants. 

Article 15 Where conditions for the establishment of a school are satisfied and the standards for establishment are reached, an application
may directly be made for its official establishment, and the materials specified in Article 12 and subparagraphs (3), (4) and (5)
of Article 14 of this Law shall be submitted. 

Article 16  Where an application for official establishment of a privately-run school is made, the examination and approval
authority shall, within three months from the date it receives the application, make a decision in writing on whether to approve
it or not, and sere the decision on the applicant; and where, in this regard, an application is made for the official establishment
of a privately-run institution of higher education, the examination and approval authority may, within six months from the date it
receives the application, likewise make a decision in writing on whether to approve it or not and serve the decision on the applicant. 

Article 17  The examination and approval authority shall issue a license for establishment of a school to the privately-run
school for the official establishment of which it gives approval. 

Where the examination and approval authority does not approve the official establishment of a school, it shall explain the reasons. 

Article 18  Where a privately-run school obtains the license for establishment and, in accordance with the provisions of relevant
laws and administrative regulations, registers with the registration authority, the latter shall immediately handle the matter in
accordance with relevant regulations. 

Chapter III 

Organizations and Activities of Schools 

Article 19 A privately-run school shall set up an executive council, a board of directors or other forms of decision-making bodies
of the school. 

Article 20 The executive council or the board of directors of the school shall be composed of the sponsors or their representatives,
the principal, and the representatives of the teachers and staff members. More than one-third of the council members or directors
shall, at least, have five years’ education or teaching experience each. 

The executive council or the board of directors of the school shall be composed of not less than five persons, with one of them serving
as chairman of the council or board. The name list of the chairman and members of the council or the chairman of the board and directors
shall be submitted to the examination and approval authority for the record. 

Article 21  The executive council or the board of directors of a school shall exercise the following functions and powers: 

(1) to appoint and dismiss the principal; 

(2) to amend the articles of association of the school and formulate rules and regulations of the school; 

(3) to make development plans and approve annual work plans; 

(4) to raise funds for running the school, and examine and verify the budgets and final accounts; 

(5) to decide on the size and the wage standards of the  teachers and staff members; 

(6) to decide on the division, merging and termination of the school; and 

(7) to decide on other important matters. 

The functions and powers of other forms of decision-making bodies shall be defined in reference to the provisions of this Article. 

Article 22  The chairman of the executive council or the board of directors or the principal of a privately-run school shall
serve as the legal representative of the school. 

Article 23  A privately-run school shall, in reference to the qualifications for the principal of a government-run school of
the same grade and category, appoint its principal, and the age limit may appropriately be extended both ways, and the appointment
shall be reported to the examination and approval authority for verification and approval. 

Article 24  The principal of a privately-run school shall be in charge of education, teaching and administration of the school,
and exercise the following functions and powers: 

(1) to carry out the decisions made by the executive council, board of directors or any other form of decision-making body; 

(2) to put into execution the development plans, draw up the annual work plans and financial budgets, and formulate the rules and
regulations of the school; 

(3) to appoint and dismiss staff members of the school, and give rewards and impose punishments; 

(4) to make arrangements for education, teaching and scientific research, and ensure the quality of education and teaching; 

(5) to be responsible for the daily work of school administration; and 

(6) other powers delegated by the executive council, the board of directors or any other form of decision-making body of the school. 

Article 25  A privately-run school may, on the basis of their classifications, the length of schooling and their academic performance
and in accordance with the relevant regulations of the State, issue academic credentials, certificates for completing a course or
qualification certificates of training to the students it enrolled. 

Students who receive training in vocational skills may be awarded vocational qualification certificates of the State when they are
considered qualified by the vocational skills appraisal authority approved by the State. 

Article 26  A privately-run school shall, in accordance with law, ensure that the teachers and staff members participate in
democratic management and supervision through the representative assembly of the teachers and staff members with the teachers as
the main body, or through other forms. 

Teachers and staff members of a privately-run school shall, in accordance with the Trade Union Law, have the right to form trade
union organizations to protect their lawful rights and interests. 

Chapter IV 

Teachers and Educatees 

Article 27  Teachers and educatees of privately-run schools shall enjoy equal legal status as the teachers and educatees of
government-run schools shall. 

Article 28  Teachers appointed by privately-run schools shall possess the qualifications for teaching specified by the State. 

Article 29  Privately-run schools shall conduct ideological and moral education and professional training among teachers. 

Article 30  Privately-run schools shall guarantee the wages and welfare benefits for teachers and staff members according to
law, and pay social insurance premiums for them. 

Article 31  The teachers and staff members of privately-run schools shall, in accordance with law, share equal rights with those
of government-run schools in respect of professional training, appointment of posts, calculation of the length of service as a teacher
or staff member, commendation and reward, and social activities. 

Article 32  Privately-run schools shall, in accordance with law, safeguard the lawful rights and interests of educatees. 

Privately-run schools shall, in accordance with the regulations of the State, establish the system for administration of students’
records and give rewards and sanctions to educatees. 

Article 33  Educatees of privately-run schools shall enjoy equal rights as those of government-run schools of the same grade
and category in respect of admission into schools of a higher grade, employment, preferential treatment and being elected as advanced
students. 

Chapter V 

School Assets and Financial Management 

Article 34  Privately-run schools shall, in accordance with law, establish financial and accounting systems and assets management
system, and keep account books in accordance with the relevant regulations of the State. 

Article 35  Privately-run schools shall enjoy property rights of the legal persons in respect of the assets provided by sponsors
to privately-run schools, State-owned assets, donated property and school accumulation. 

Article 36  During the period of existence of privately-run schools, all the assets shall, in accordance with law, be managed
and used by the schools, and no organization or individual may take illegal possession of them. 

No organization or individuals may, in violation of laws or regulations, collect any fees from privately-run institutions of education. 

Article 37  The items and rates of fees to be collected by privately-run schools from educatees who receive education from academic
credentials shall be worked out by the schools, submitted to relevant departments for approval and made public; and the items and
rates of fees to be collected from other educatees shall be worked out by the schools concerned, submitted to relevant departments
for the record and made public. 

The fees collected by privately-run schools shall be used mainly for educational and teaching activities and the improvement of schools
conditions. 

Article 38  The use and the financial management of the assets for privately-run schools shall be subject to supervision by
the examination and approval authority and relevant departments. 

Privately-run schools shall prepare their financial and accounting statements towards the end of each fiscal year, entrust public
accounting firms to audit the statements according to law, and publish the audit results. 

Chapter VI 

Administration and Supervision 

Article 39  Administrative Departments for education and the relevant departments shall provide guidance to privately-run schools
in respect of education and teaching and training among teachers. 

Article 40  Administrative departments for education and the relevant departments shall, in accordance with law, exercise supervision
over and provide guidance to privately-run schools, in order to promote the enhancement of the quality of such schools; and they
shall make arrangements or entrust public intermediary bodies with the arrangements for assessing the level and the quality of education
of such schools, and make the results of the assessment known to the general public. 

Article 41  The general regulations and advertisements for student enrollment of privately-run schools shall be submitted to
the examination and approval authority for the record. 

Article 42  Where a privately-run school infringes upon the lawful rights and interests of educatees, the educatees and their
relatives shall have the right to make petition to the administrative department for education and any relevant department, and the
said department shall handle it without delay. 

Article 43  The State supports and encourages public intermediary bodies to provide services to privately-run schools. 

Chapter VII 

Support and Reward 

Article 44 People’s governments at or above the county level may set up special funds for financing the development of privately-run
schools and for rewarding and commending the collectives and individuals that have made outstanding contributions. 

Article 45 People’s governments at or above the county level may take such measures as financial aid and the lease or transfer of
idle State-owned assets in support of privately-run schools. 

Article 46 Privately-run schools shall enjoy preferential taxation policy formulated by the State. 

Article 47 Civilian-run schools may, in accordance with the relevant laws and regulations of the State, accept donations afforded
by citizens, legal persons or other organizations. 

The State, in accordance with relevant regulations, applies preferential taxation policy to citizens, legal persons or other organizations
that donate property to privately-run schools, and bestows commendations on them. 

Article 48  The State encourages financial institutions to support the development of privately-run schools by means of credit. 

Article 49  Where a people’s government entrusts a privately-run school with the task of compulsory education, it shall, in
accordance with the agreement of entrustment, appropriate the necessary amount of funds for education. 

Article 50  Where a privately-run school is constructed or expanded, the people’s government concerned shall give it preferential
treatment in accordance with the regulations on the use of land for, and the construction of, public welfare undertakings. No land
to be used for education may be used for other purposes. 

Article 51  After the cost of a privately-run school is deducted, the funds for its development are withheld and the sum of
money for other necessary expenses is drawn in accordance with the relevant regulations of the State, the fund providers may obtain
a reasonable amount of requital from the cash surplus of the school. Specific measures for obtaining reasonable amounts of requital
shall be formulated by the State Council. 

Article 52  The State takes measures to support and encourage public organizations and individuals to establish and run privately-run
schools for the development of education in minority nationality areas and in out-lying and poverty-stricken areas. 

Chapter VIII 

Alteration and Termination 

Article 53  The executive council or the board of directors of a privately-run school to be divided or merged into other schools
shall, after financial settlement, apply to the examination and approval authority for approval. 

Where a privately-run school applies for division or merging, the examination and approval authority shall, within three months form
the date it receives the application, give a reply in writing; and where the application is made for the division or merging of a
privately-run institution of higher education, the examination and approval authority may, within six months from the date it receives
the application, likewise give a reply in writing. 

Article 54  For alteration of the sponsor of a privately-run school, the matter shall be put forth by the sponsor and, after
financial settlement and upon agreement by the executive council or the board of directors of the school, submitted to the examination
and approval authority for verification and approval. 

Article 55  For alteration of the name, level, or category of a privately-run school, the matter shall be submitted by the executive
council or the board of directors of the school to the examination and approval authority for approval. 

Where an application is made for the alteration of a privately-run school from one type to another, the examination and approval
authority shall, within three months from the date it receives the application, give a reply in writing; and where the application
is made for alteration to a privately-run institution of higher education, the examination and approval authority may, within six
months from the date it receives the application, likewise give a reply in writing. 

Article 56  Where a privately-run school is found in one of the following circumstances, it shall be terminated: 

(1) it is required to be terminated according to the provisions of the articles of association of the school, and the termination
is approved by the examination and approval authority; 

(2) the license for running the school is revoked; or 

(3) it cannot continue due to insolvency. 

Article 57  When a privately-run school is to be terminated, it shall make proper arrangements for the students in school. When
a privately-run school providing compulsory education is to be terminated, the examination and approval authority shall assist the
school to make arrangements for the students to continue their studies. 

Article 58  When a privately-run school is to be terminated, it shall make financial settlement according to law. 

Where a privately-run school requests termination itself, it shall make arrangements for the settlement; where it is abolished by
the examination and approval authority according to law, the settlement shall be arranged by the authority; and where it is terminated
because it cannot continue due to insolvency, the settlement shall be arranged by the People’s Court. 

Article 59  Property of a privately-run school shall be liquidated in the following order: 

(1) tuition fees and extras and other expenses paid by educatees that should be returned; 

(2) wages payable to the teachers and staff members and the social insurance premiums that should be paid; and 

(3) other debts that should be cleared off. 

The remaining property of a privately-run school after the debts mentioned above are cleared off shall be disposed of in accordance
with the provisions of relevant laws and administrative regulations. 

Article 60  When a privately-run school is terminated, the license for running the school shall be taken back, its seals destroyed
and its registration cancelled by the examination and approval authority. 

Chapter IX 

Legal Responsibility 

Article 61  Where, in conducting education activities, a privately-run school violates the provisions of the Education Law or
the Teachers Law, it shall be punished in accordance with the relevant provisions of the Education Law or the Teachers Law. 

Article 62  Where a privately-run school commits one of the following acts, the examination and approval authority or the relevant
department shall order it to rectify within a time limit and give it a disciplinary warning; if there are unlawful gains derived
therefrom, they shall be confiscated after returning the fees collected; if the circumstances are serious, it shall be ordered to
stop enrolling students and its license for running the school shall be revoked; and if a crime is constituted, it shall be investigated
for criminal responsibility according to law: 

(1) dividing or merging the privately-run school without authorization; 

(2) altering the name, level, category and sponsor of the privately-run school without authorization; 

(3) publishing false general regulations of enrollment or advertisements for the purpose of defrauding money; 

(4) unlawfully issuing or forging academic credential, certificates of courses completed, certificates of training or vocational
qualification certificates; 

(5) seriously affecting education and teaching due to haphazard administration, which exerts a bad influence on society; 

(6) obtaining the license for running the school by submitting false supporting documents or concealing important facts by other
deceptive means; 

(7) forging, counterfeiting, dealing in, renting or lending its license for running the school; or 

(8) terminating the school in bad faith, illegally withdrawing its funds or misappropriating the funds for running the school. 

Article 63  Where the examination and approval authority or the relevant department commits one of the following acts, it shall
be ordered by the authority at the higher level to rectify; if the circumstances are serious, the persons directly in charge and
the other persons directly responsible shall be given administrative sanctions according to law; if economic losses are caused, it
shall bear the responsibility to pay compensation according to law; and if a crime is constituted, it shall be investigated for criminal
responsibility according to law: 

(1) failing to give a reply within the prescribed time limit to an accepted application for the establishment of a privately-run
school; 

(2) giving approval to an application which does not conform to the conditions provided for in this Law; 

(3) causing serious consequences due to careless administration; 

(4) collecting fees in violation of the relevant regulations of the State; 

(5) infringing upon the lawful rights and interests of a privately-run school; or 

(6) abusing its powers or engaging in malpractices in other ways. 

Article 64  Where a public organization or individual establishes or runs a private school without authorization, it/he shall
be ordered by the relevant administrative department of the people’s government at or above the county level to rectify within a
time limit; if the school conforms to the conditions provided for in this Law or relevant laws regarding privately-run schools, it
may go through the formalities of examination and approval; if fails to meet the conditions at the expiration of a prescribed time
limit, it shall be ordered to stop running the school, and if economic losses are caused, it shall bear the responsibility to pay
compensation. 

Chapter X 

Supplementary Provisions 

Article 65  The privately-run schools mentioned in this Law include other privately-run institutions of education established
according to law. 

The principals mentioned in this Law include the principal administrative persons in charge of other privately-run institutions of
education. 

Article 66  Measures for administration of profit-making privately-run training institutions registered with the administrative
department for industry and commerce shall be separately formulated by the State Council. 

Article 67  Measures for schools established and run cooperatively by overseas organizations or individuals within the territory
of the People’s Republic of China shall be formulated by the State Council. 

Article 68  This Law shall go into effect as of September 1, 2003. The Regulations on Schools Run by Different Sectors of Society
issued by the State Council on July 31, 1997 shall be abolished at the same time.

Notice: All Rights Reserved to the Legislative Affairs Commission of

CONSTITUTION ACT, 1982 – page 22

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