Circular Concerning the Administration of Insurance Companies with Foreign Investment

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Decree [2001] No.336 of the State Council The Regulation of the People's Republic of China on the Administration of Insurance Companies with Foreign Investment has been passed at the 49th executive meeting of the State Council on December 5, 2001 and is hereby promulgated for implementation as of February 1, 2002.Premier of the State Council: Zhu Rongji December 12, 2001(11-26 10:47)

Chapter I General Provisions


HuiFa [2003] No.44
March 29, 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:
For the purpose of regulating the administration on foreign exchange of fund management
companies with foreign shares, this Circular is hereby issued to you concerning administration of
foreign exchange of the fund management companies with foreign shares:

I. "Fund management companies with foreign shares" mentioned in this Circular shall include the
fund management companies which corporate form are changed through acquirement by transfer of
or through subscribing stock equity of a domestic fund management company by foreign
shareholders, or the fund management companies established through joint capital contribution by
foreign shareholders and domestic shareholders.

II. No fund management company with foreign shares shall open foreign exchange account before
obtaining approval from the China Securities Regulatory Commission (hereinafter referred to as the
"CSRC") for granting commencement of its business.
(I) Where the CSRC has granted approval for commencement of business to a fund management
company established through joint capital contribution by domestic shareholders and foreign
shareholders, the company may apply to local administration of foreign exchange for opening
foreign exchange capital account at a domestic designated bank of foreign exchange by presenting
the following documents and materials:
1. A written application to open account;
2. Joint venture agreement/contract;
3. The approval document from the CSRC for granting commencement of its business.
4. The Approval Certificate of Foreign Investment Enterprise issued by the foreign economic and
trade department;
5. The Notice for Advance Examination and Approval of an Enterprise Name issued by the
administration of industry and commerce of the State; and
6. Other documents and materials required by the Administration of Foreign Exchange.
(II) A fund management company with foreign shares which corporate nature has been changed
through subscribing the stock equity of an already established domestic fund management company
by foreign shareholders may apply to local administration of foreign exchange to open foreign
exchange capital account at a domestic-designated foreign exchange bank by presenting the
necessary documents including subscription agreement/contract, approval documents of CSRC and
approval certificate of foreign economic and trade department.

III. Verification on input of capital fund from foreign shareholders into a fund management
company with foreign shares shall be conducted in accordance with this Circular of Ministry of
Finance and the State Administration of Foreign Exchange on Further Strengthening Capital
Verifications on Enterprises with Foreign Investment and on Improving the System of Foreign
Investment and Foreign Exchange Registration (CaiKuai [2002] No.1017).

IV. The scope of income for a foreign exchange capital account of the fund management company
with foreign shares shall be the capital contribution remitted by foreign shareholders. The scope of
expenditure shall be payment under current account and other foreign exchange payments approved
by the administration of foreign exchange.

V. In case a fund management company with foreign shares needs to settle the exchange at the
foreign exchange capital account, it shall make application to the local administration of foreign
exchange by presenting the following documents and materials, and handle settlement procedures at
a designated foreign exchange bank based on approval documents of the administration of foreign
exchange:
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(I) A written application for settlement;
(II) Vouchers representing usage of the settled fund or description of the same;
(III) Bank statements of the foreign exchange capital account in current period of the company;
and
(IV) Other documents required by the administration of foreign exchange.

VI. In the case a fund management with foreign shares needs to pay profits to foreign shareholders, it
shall make applications to the administration of foreign exchange at its locality by presenting the
following documents and materials, and handle purchase and payment of exchange procedures at
designated foreign exchange bank on basis of approval documents of the administration of foreign
exchange:
(I) A written application for purchase and payment of exchange;
(II) Tax payment receipt and tax declarations form;
(III) Auditing report issued by an accounting firm on profits and profits distribution at the year of
realization of profit of the company;
(IV) Resolution passed by the board of directors of the company on profit distribution;
(V) Bank statements of the foreign exchange capital account in current period of the company.
(VI) Other materials required by the administration of foreign exchange.
Within four months after the expiry of each fiscal year, the fund management with foreign
shares that fails to purchase and remit outside country the exchanges to pay profits to foreign
shareholders due in that year shall report to the administration of foreign exchange for record. The
record documents of the administration of foreign exchange shall be the necessary document for
purchase or remittance of profits to foreign shareholders thereafter.

VII. Where the corporate nature is changed through stock transfer from a domestic fund management
company to foreign shareholders, such fund management company shall report to the administration
of foreign exchange for record at its locality within five working days after obtaining formal
approval documents from the CSRC. Where the transferor is a domestic organization, it shall make
application to the administration of foreign exchange at its locality, within five working days after
receiving the foreign exchanges from the transferee, and present the documents including written
application, transfer agreement, approval document of the CSRC and approval certificate of foreign
economic and trade department.

VIII. Where transfer of stock equity of a fund management company with foreign shares is approved
by CSRC and foreign economic and trade department, it shall report to the administration of foreign
exchange at its locality record within five working days of obtaining approval documents from the
foreign economic and trade department. Where stock equity is transferred from foreign shareholders
to domestic organizations and the transferee needs to pay to the foreign investor for the transfer, it
shall apply to the administration of foreign exchange at its locality for approval of purchase and
payment of exchange by presenting the following documents and materials:
(I) A written application for purchase and payment of exchange;
(II) The stock equity transfer agreement;
(III) Approval documents from the CSRC and foreign economic and trade department granting
approval to the transfer;
(IV) Bank statements on all foreign exchange account of the transferee;
(V) If proceeds are accrued by the transfer on part of the foreign party, the transferee shall present
tax payment receipt on withholding income tax.
(VI) Other materials required by the administration of foreign exchange.

IX. Where the foreign shareholder of a fund management company with foreign shares has obtained
approval from the CSRC and foreign economic and trade department to reduce or withdraw its
investment therein, the company shall apply to the administration of foreign exchange at its locality
for approval of purchase and payment of exchange by presenting the following documents and
materials:
(I) A written application for purchase of exchange;
(II) Resolution passed by the board of directors of the company on reduction (withdrawal) of
investment by foreign party;
(III) Approval documents from the CSRC and foreign economic and trade department granting
approval to the reduction (withdrawal) of investment;
(IV) Latest capital verification report and auditing report of the company issued by an accounting
firm;
(V) Bank statement of foreign exchange capital account of the company;
(VI) If proceeds are accrued by the reduction (withdrawal) of investment on part of the foreign
party, tax payment receipt on withholding income tax shall be presented.
(VII) Other materials required by the administration of foreign exchange.

X. Fund management companies with foreign shares shall only conduct businesses specified by
CSRC. Without approval of the State Administration of Foreign Exchange, they shall not conduct
any foreign exchange business under capital items such as financing from abroad or providing
guarantees to foreign parties etc.

XI. The State Administration of Foreign Exchange and its branches shall have the power to make onsite
investigations to the foreign exchange capital account of fund management companies with
foreign shares and to their settlement and payment of exchange. Fund management companies with
foreign shares shall actively render assistance to relevant investigations and shall not provide false
information.

XII. Where a fund management company with foreign shares acts in breach of this Circular and
other regulations on administration of foreign exchange, the State Administration of Foreign
Exchange and its branches may impose sanctions on it in accordance with the Regulations of the
People's Republic of China on Administration of Foreign Exchange and other regulations on foreign
exchange control.

XIII. This Circular shall enter into force as of May 1, 2003. The State Administration of Foreign
Exchange shall be responsible for the interpretation of this Circular.

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

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

Chapter I General Provisions


Article 1
The present Provisions are formulated to encourage foreign-funded companies, enterprises and other economic organizations or individuals (hereinafter referred to as foreign investors) to come to China to engage in business-starting investments, and to establish and perfect the mechanism of business-starting investments in China in accordance with the Law of the People's Republic of China on Chinese-foreign Contractual Joint Ventures, the Law of the People's Republic of China on Chinese-foreign Equity Joint Ventures, the Law of the People's Republic of China on Foreign-capital Enterprises, the Company Law of the People's Republic of China and other related laws and regulations.
Article 2
The term "foreign-funded business-starting investment enterprise " (hereinafter referred to as FBIE" refers to the foreign-funded investment enterprises established by foreign investors or by foreign investors jointly with companies, enterprises or other economic organizations established and registered in China in accordance with the Chinese law (hereinafter referred to as Chinese investors). To establish an FBIE shall be in conformity with the present Provisions. It shall mainly engage in business-starting investments.

Article 3
The term "business-starting investment" means making principal equity investments to high and new tech enterprises that haven't been listed in the stock market (hereinafter referred to as invested enterprises), and providing management services to them for the prospective capital gains.

Article 4
An FBIE is allowed to take the form of the non-legal-person organization or the corporate organization.
As to a non-legal-person organization, the investors shall bear joint liabilities for its debts.
The investors may also specify in the contract of the FBIE that: When the assets of an FBIE are not enough to clear the debts of this enterprise, the indispensable investors as stated in Article 7 shall bear joint liabilities and the other investors shall bear the liabilities to the company within the limit of contributions made by each of them.
For a corporate-form FBIE, the investors shall bear the liabilities to the company within the limit of the amount of investment made by each of them.

Article 5
The FBIEs shall abide by relevant laws and regulations of China, shall be in conformity with the policies of foreign investment industries and shall not damage the public interests of China.
The legitimate businesses and lawful rights and interests of the FBIE within the borders of China shall be subject to the protection of Chinese law.

Chapter II Establishment and Registration

Article 6
To establish an FBIE, the following requirements shall be met:
(1) There are more than 2 but less than 50 investors, and at least one shall be an indispensable
investor as stated in Article 7;
(2) The investors of a non-legal-person organization shall subscribe to a minimum total contribution in the sum of 10, 000, 000 U.S. $. The investors of an incorporated FBIE shall subscribe to a minimum total capital in the sum of 5, 000, 000 U.S. $. Except for the indispensable investors as provided in Article 7, each of the other investors shall subscribe to a minimum capital contribution no less than 1, 000, 000 yuan. Foreign investors may contribute their investments in convertible currencies and Chinese investors may contribute their investments in Renminbi.
(3) It shall have definite organization form;
(4) It shall have a definite and legitimate investment direction;
(5) Except that the operations of such an enterprise are subject to the management of a businessstarting
investment management company under authorization, an FBIE shall have at least 3
professional managerial persons who have practical experience in business-starting investment;
(6) It shall meet the other requirements as provided in laws and administrative regulations.

Article 7
An indispensable investor shall meet the following requirements:
(1) Business-starting investment is its main business;
(2) The accumulative total capital managed by it in the three years before the application is not less than 100, 000, 000 U.S. dollars, and of which no less than 50, 000, 000 U.S. dollars have been used in business-starting investment If the indispensable investor is a Chinese investor, the accumulative total capital managed thereby in the three years before the application is submitted is not less than 100, 000, 000 Yuan, and of which no less than 50, 000, 000 yuan have been used in business-starting investment; (3) It shall have at least 3 professional managerial persons who have practical experience in business-starting investment;
(4) If the affiliated entity of an investor meets the above-mentioned requirements, the investor may apply for the status of an indispensable investor. The term "affiliated entity" in this paragraph refers to an entity controlled by the investor, or an entity that controls the investor, or another entity that subject to the control of the same entity that controls the investor. The term "control" in this paragraph means that the controlling party has a voting power of more than 50 % over the controlled party.
(5) Neither the above-mentioned indispensable investor nor its affiliated entity shall have any record of being prohibited from engaging in business-starting investment or business of investment consultancy, or being punished for the reason of cheat, by the judicial departments and other relevant agencies of the country where it is located;
(6) An indispensable investor of a non-legal-person enterprise shall subscribe to and actually pay not less than 1 % of the subscribed contributions and the actual total contributions respectively, and it shall bear joint liabilities for the debts of this enterprise. An indispensable investor of an incorporated FBIE shall subscribe to and actually pay not less than 30% of the subscribed contributions and the actual total contributions respectively.

Article 8
The following procedures shall be observed in the establishment of an FBIE:
(1) The investors shall submit the establishment application and relevant documents to the administrative departments in charge of foreign trade and economic cooperation at the provincial level of the place where the FBIE is to be established.
(2) The administrative departments in charge of foreign trade and economic cooperation at the provincial level shall complete the original examination and report to the Ministry of Foreign Trade and Economic Cooperation (hereinafter referred to as the MOFTEC) within 15 days as of the acceptance of the above-mentioned materials.
(3) The MOFTEC shall, with the consent of the Ministry of Science & Technology£¬make a written decision on approval or disapproval within 45 days as of the acceptance of all the abovementioned materials. And it shall issue a Certificate of Approval for Foreign-invested Enterprises to the approved enterprises.
(4) With the approved of establishing an FBIE, the applicant shall file an application for registration at the State Administration of Industry and Commerce or at local bureaus with its authorization by presenting the Certificate of Approval for Foreign-invested Enterprise within one month as of the acceptance of the Certificate of Approval for Foreign-invested Enterprise.

Article 9
The following documents shall be submitted to the MOFTEC when applying for the establishment of an FBIE:
(1) an establishment application signed by the indispensable investors;
(2) contracts and articles of association of the FBIE signed by all the investors;
(3) a written declaration made by the indispensable investors (covering: a. the investors meet the equirements as provided in Article 7; b. all the materials submitted are genuine; and c. the investors
will strictly abide by the present provisions and other relevant Chinese laws and regulations);
(4) a letter of legal advice issued by a law firm affirms that the legal indispensable investors exist and the above-mentioned declaration has got valid authorization and has been signed;
(5) explanations of the business-starting operations of the foreign investors, explanations of the capital managed by them of the three years before the application is submitted, explanations of the investment made among the capital managed by them of the three years before the application is submitted, resumes of its professional managerial persons of business-starting investment;
(6) the registration certificate of the investors (photocopy) and the certificate of the legal representative (photocopy);
(7) the notice of pre-approval of the name of the FBIE issued by the name registration organ;
(8) If the qualifications of the indispensable investors are based on the requirements as provided
in paragraph (4) of Article 7, they shall submit relevant materials of the affiliated entity that meets the requirements;
(9) other documents related to the establishment application as required by the examination and approval authority.

Article 10
The FBIEs shall give a clear indication of "Business-starting Investment" in its name.
Except for business-starting investment enterprises, none of the other foreign investment enterprises
may use the aforesaid words in their name.

Article 11
In applying for establishing an FBIE, the following documents shall be submitted to the
registration organ and shall be responsible for their authenticity and effectiveness:
(1) registration application signed by the chairman of the board of directors or by the person-incharge
of the joint management committee;
(2) contracts, articles of association, the documents and certificate of approval issued by the
approving authorities;
(3) legal license to do business or the certification of the ID of the investor;
(4) credit certification of the investor;
(5) appointment documents and the certification of the ID of the legal representative and archival
documents of the directors and managers of this enterprise;
(6) notice of pre-approval of its name;
(7) the certification of the address of the enterprise and the certification of its business offices.
In the case of applying for establishing a non-legal-person organization, the applicant shall
submit the articles or agreement of overseas indispensable investors besides the aforesaid materials.
Where an enterprise includes investors as provided in Article 7 (4) of the present Provisions, the
applicant shall submit the letter of undertaking issued by its affiliated entity, which is to bear the
joint liabilities of investments. All of the aforesaid documents should be written in Chinese. Those
written in foreign languages other than Chinese shall be accompanied by good Chinese translations.
An FBIE should apply to the original registration organ for the modification registration of its
modified registration matters.

Article 12
Upon the approval of the registration organ, the incorporated FBIEs shall be issued the
business license of legal entity, and the non-legal-person FBIEs shall be issued a business license.
A business license shall clearly states the total registered capital of the investors and the names
of the dispensable investors.

Chapter III Capital Contributions and Relevant Modifications

Article 13
The capital contributions made by the investors of a business-starting enterprise without
qualifications of legal entity and the relevant modifications shall be in conformity with the
following:
(1) The investors may pay the their subscribed capital by installments according to the
proceedings of the business-starting investment, but the longest term shall be no more than 5 years.
The amount of capital to be invested at each stage shall be decided by the FBIE itself according to
the contract of the enterprise and the agreement concluded by it and its invested enterprise. In the
contract, the investors shall stipulate liabilities of the investors who do not pay the subscribed capital
contributions and relevant measures.
(2) During the period of the continuous existence of the FBIE, the investors generally shall not
reduce their subscribed amount of capital. Upon approval of the examination and approval organ, an
investor may reduce its subscribed amount of capital if the said amount exceeds 50 % of the total
provided that it has obtained the consent of the indispensable investors and the business-starting
FBIE isn't in violation of the requirement of minimum registered capital of 1, 000, 000 U.S. $ (The
present provision shall not be applicable to a case where an investor reduces its invested amount of
capital in accordance with item (5) of this Article or the FBIE reduces the untapped capital when its
term of investment expires). In this case, the investors shall stipulate the conditions, procedure and
methods for reducing the subscribed amount of capital in the contract of the FBIE;
(3) Indispensable investors shall not withdraw from the FBIE during the period of its continuous
existence. A necessary withdrawal under a special circumstance shall be upon the consent of the
investor whose investment amount exceeds 50% of the total amount, and the relevant rights and
interests shall be assigned to the new investor who satisfies the conditions as provided in Article 7.
The contract and the articles of association of this enterprise shall be modified and shall be reported
to the check and approving authority for approval.
The transference of the other investors' subscribed amount of capital or invested amount of
capital shall be done in compliance with the contract of the FBIE and the assignee shall meet the
requirements as provided in Article 6. All investors shall make relevant modifications in the contract
and the articles of association of the FBIE and report to the examination and approval organ for
archival purposes.
(4) After an FBIE has been established, the investment application of new investors shall be in
conformity with the present Provisions and the stipulations in the contract, and shall be consented by
the indispensable investors. Relevant modifications shall be made in the contract and the articles of
association of the FBIE and shall be reported to the examination and approval organ for archival
purposes.
(5) Among the incomes of an FBIE arising from selling or disposing of the interests of its invested
enterprise by other means, the part equivalent to its original amount of investment may be directly
allocated to all the investors. Such allocation constitutes a reduction of the invested amount of the
investors. An FBIE shall stipulate concrete methods of allocation in its contract, and at least 30 days
before it makes such allocation, it shall submit an archival statement on the request of reducing the
relevant invested amount of the investors. In the said statement, it shall prove that the amount of the
investments to be made by the investors and the other capital it has at that time is at least in
conformity with the investment obligations that the FBIE shall undertake at that time. However,
such allocation shall not be a plea to the litigation resulted from its violation of any of the
investment obligations.

Article 14
When a non-legal-person organization files an application to the registration authority for
modifying its registration, the archival evidential documents issued by the above-mentioned
examination and approval organ may replace relevant documents for examination and approval.

Article 15
Having made investments according to the proceedings of business-starting investments
and upon relevant capital verification report, the investors of the FBIE shall file an application to the
original registration organ for handling the archival procedures for their investments. The
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registration organ shall fill up the number of its actual amount of capital behind the item of
"Capital Amount" on its Business License.
Where an FBIE makes no investment or fails to make the total investment, it shall be subject to
penalties imposed by the registration organ in accordance with the existing regulations.

Article 16
The investors of an FBIE shall make investments and relevant modifications in accordance
with the existing regulations.
Chapter IV Institutional Structure

Article 17
An FBIE in the form of non-legal-person organization shall establish a joint management
committee. An FBIE in the form of company shall establish a board of directors. The investors shall
stipulate on how to organize the joint management committee or the board of directors in the
contract and in the articles of association of the FBIE. The joint management committee and the
board of directors shall manage the enterprise on behalf of its investors.

Article 18
The subordinate administrative departments of the joint management committee and the board of directors shall, in accordance with the power as specified in the contract and the articles of association of the FBIE, take charge of the routine managerial work and execute the investment decisions made by the joint management committee and the board of directors.

Article 19
The person-in-charge of an administrative department shall satisfy the following conditions:
(1) shall have full capacity for civil conduct;
(2) shall have no record of criminal offence;
(3) shall have no record of bad operations;
(4) shall be experienced in business-starting investments and have no record of illegal practices.
(5) shall meet the other requirements of the examination and approval organ.

Article 20
The administrative departments shall regularly report the following to the joint management committee and the board of directors:
(1) significant investments under authorization;
(2) metaphase & annual performance reports and financial statements;
(3) other matters as provided in laws and regulations;
(4) relevant matters as stipulated in the contract and in the articles of association of the FBIE.

Article 21
The joint management committee and the board of directors may grant the power of
routine administration to a business-investment management enterprise or another FBIE rather than
establish administrative departments. The business-investment management enterprise may be a
domestically-funded business-starting investment enterprise or a foreign-funded one or an overseas
enterprise. In this case, the business-starting investment enterprise and the business-starting
investment management enterprise shall conclude a managerial contract, stipulating respective rights
and interests. Such a contract shall not come into effect until it has been agreed by all the investors
and has been approved by the examination and approval organ.

Article 22
The investors of an FBIE may, by reference to the international practices, stipulate interior system for income allocations and incentive mechanism in the business-starting investment contract.

Chapter V Business-Starting Investment Management Enterprise

Article 23
An entrusted business-starting investment management enterprise shall meet the following conditions:
(1) To accept the entrustment of the FBIEs and to manage the investments made by them shall be
its main business;
(2) It shall have at least 3 professional managerial persons who have at least three years of
practical experience in business-starting investment;
(3) Its registered capital or its total investments shall not be less than 1, 000, 000 yuan or
equivalent foreign exchange;
(4) It shall have a perfect interior control system.

Article 24
A business-starting investment management enterprise is allowed to take the form of the corporate organization or the partnership organization.

Article 25
A business-starting investment management enterprise may be entrusted to manage different FBIEs.

Article 26
A business-starting investment management enterprise shall report the matters as listed in Article 20 to the joint management committee and the board of directors of the entrusting party.

Article 27
The establishment of a foreign-funded business-starting investment management enterprise shall be in conformity with the conditions as provided in Article 23 and shall be reported to the examination and approval organ for approval via the administrative departments of foreign trade and economic cooperation at the provincial level where the company to be established is located. The examination and approval organ shall make a written decision on whether to approve or not within 45 days as of the acceptance of the complete set of the above-mentioned documents. It shall issue a Certificate of Approval for Foreign-invested Enterprises to the approved enterprises, which shall file an application to the registration organ by holding the Certificate within a month as of their acceptance of the Certificate.

Article 28
The following documents shall be submitted to the examination and approval organ in applying for the establishment of a foreign-invested business-starting investment management company:
(1) establishment application;
(2) contract and articles of association of foreign-funded business-starting investment
management company;
(3) the investors' registration certificate (photocopy) and the certificate of the legal representative
(photocopy);
(4) relevant documents required by the examination and approval organ;

Article 29
A foreign-invested business-starting investment management enterprise shall give a clear indication of "INVESTMENT MANAGEMENT" in its name. Except for the foreign-invested business-starting investment management enterprises any other foreign-funded enterprises shall not do so.

Article 30
An overseas business-starting investment management enterprise, which has acquired the approval of engaging in business-starting investment management under the authorization of FBIEs, shall file an application to the registration organ to handle the business registration procedures within 30 days as of the approval day of the management contract.
An applicant shall submit the following documents to the business registration organ and shall
be responsible for their authenticity and effectiveness:
(1) an application for registration signed by the chairman of the board of directors of the overseas business-starting investment management enterprise, or by a competent person;
(2) a management contract and the approval documents of the examination and approval organ;
(3) articles of association or partnership agreement of the overseas business-starting investment management enterprise;
(4) the overseas business-starting investment management enterprise' legal license to do business;
(5) the credit certification of the overseas business-starting investment management enterprise;
(6) the power of attorney, resume and the certification of the identification of the person-in-charge
of the Chinese project appointed by the overseas business-starting investment management enterprise;
(7) the certification of its business offices in China; All of the aforesaid documents should be
written in Chinese, those written in foreign languages other than Chinese shall be accompanied by
good Chinese translations

Chapter VI Business Management

Article 31
An FBIE may engage in the following businesses:
(1) It may make equity investments with all of its own capital through establishing new
enterprises, or investing into an established enterprise, or accepting the stock equities transferred by
the investors of an established enterprise, or through other means as permitted in the laws and regulations of the state;
(2) It may offer business-starting investment consultancy services;
(3) It may offer management consultancy to the invested enterprises;
(4) It may engage in other businesses as approved by the examination and approval organ. The capital of an FBIE may be largely used to make equity investments into its invested enterprise.

Article 32
A business-starting enterprise shall not engage in the following activities:
(1) It shall not make investments into the areas in which foreign investments are prohibited by the state;
(2) It shall not make direct or indirect investments into the listed securities and bonds of an enterprise, but after the invested enterprise is listed, the shares held by the FBIE shall be an exception.
(3) It shall not make direct or indirect investments into real property not for its own use;
(4) It shall not make investments by way of loans;
(5) It shall not make investments by embezzling the capital not in its ownership;
(6) It shall not provide a loan or guaranty to others, but the bonds with a term of more than 1 year issued by its invested enterprise and the investments in the nature of bonds that may be converted into equity investments to the invested enterprise shall be excluded (this paragraph doesn't concern whether the invested enterprise is entitled to issue such bonds or not);
(7) It shall not engage in other activities as prohibited in the law and regulations and the contract of the FBIE.

Article 33
The investors shall stipulate a term for foreign investments in the contract of the FBIE.

Article 34
The incomes of an FBIE shall be generated largely from selling the stock equities it holds in the invested enterprise or from disposing of the stock equities by other means. When an FBIE sell the stock equities it holds in the invested enterprise or dispose of the stock equities by other means, it may, in accordance with the law, choose one of the following available methods of withdrawing:
(1) It may transfer part of or all of the stock equities it holds to other investors;
(2) It may sign an agreement of stock equity counter-purchase with the invested enterprise, which
may counter-purchase the stock equities held by the business-starting investment enterprise under certain circumstances;
(3) Where the invested enterprise satisfies the conditions of listing as provided by laws and administrative regulations, it may apply for listing in the securities markets of home and abroad. In accordance with the law, the FBIE may transfer the shares it holds in the invested enterprise through the securities markets;
(4) The other methods that are allowed by the laws and administrative regulations of China. The concrete regulatory measures concerning the invested enterprise' counter-purchase of the stock equities held by the FBIE shall be separately formulated by the examination organ jointly with the registration organ.

Article 35
An FBIE shall make tax declaration in accordance with the tax laws of the state. As to a non-legal-person organization, in accordance with the law, it may request all the investing parties to file returns for enterprise income taxes on their own, or file an application by itself, after the application has been approved, it shall, in accordance with the law, calculate and pay the enterprise income tax in a consolidated way.
The concrete regulatory measures concerning the levy of enterprise income tax upon the nonlegal- person FBIEs shall be promulgated separately by the State Administration of Taxation.

Article 36
Where the profit or other income obtained by a foreign investor from an FBIE is to be remitted abroad, it shall be paid from the foreign currency account of the FBIE, or shall be remitted through an entrusted bank with the foreign currencies purchased from the bank. Such payment or remittance shall be made on the basis of the allocation decision made by the joint management committee or the board of directors, the audit report issued by an accountant office, the certification of inflow of foreign investments and the report on the verification of capital, the certification of tax payment and the tax return (where an enterprise enjoys tax concession, it shall present the evidential documents of tax concession issued by the tax authorities).
In accordance with the law, a foreign investor may request to purchase foreign currencies to remit the investments withdrawn from the FBIE. As to an FBIE in the form of company, the opening and access of foreign currency account, changes of capital and other matters involving the incomes and expenses of foreign currencies shall be handled pursuant to the existing regulations concerning the administration of foreign exchange. But relevant regulations on the non-legal-person FBIEs shall be formulated separately by the State Administration of Foreign Exchange.

Article 37
The investors shall stipulate the business term of the FBIE in the contract and in the Articles of association, generally speaking, the term shall not exceeds 12 years. When the business term expires, it may be extended upon the approval of the examination and approval organ. Upon the approval of the examination and approval organ, an FBIE may be dissolved, terminate the contract and the articles of association ahead of the schedule. However, if a non-legalperson
organization has sold out all the investments or sold them off by other means, have paid off all its debts and have allocated all the residual properties to the investors, it may, without being
subject to approval, enter into the dissolving and terminating procedure, but it shall submit a written
explanation for archival purposes to the examination and approval organ at least 30 days before the
dissolve comes into effect.
Where an FBIE is to be dissolved, it shall liquidate in compliance with pertinent regulations.

Article 38
An FBIE shall file an application to the original registration organ for deregistration within 30 days as of the completeness of the liquidation.
It shall submit the following documents in applying for the cancellation and it shall be responsible for their authenticity and effectiveness:
(1) an application for deregistration signed by the chairman of the board of directors, or by the
person-in-charge of the joint management committee, or by the person-in-charge of the liquidation
organ;
(2) decision made by the board of directors or the joint management committee;
(3) liquidation report;
(4) certifications for the cancellation of registration issued by tax authorities and the custom;
(5) the approving documents or archival documents of the examination and approval organ;
(6) other documents as required in the laws and administrative regulations. Where an application for deregistration has been approved by the registration organ, the FBIE terminates. The joint liabilities of the indispensable investors of a non-legal-person organization shall not be immune for the termination of the enterprise.

Chapter VII Examination and Supervision

Article 39
The domestic investments of an FBIE shall be made by referring to Rules for Guiding Foreign Investments and the Guiding Catalogue of Industries for Foreign Investments.

Article 40
Where an FBIE invests in any of the encouraged and approved enterprises, it shall go through archival procedures at the entrusted departments of foreign trade and economic cooperation where the invested enterprise is located. Within 15 days as of the acceptance of the archival materials, the said entrusted departments shall complete the examination and issue a Certificate of Approval for Foreign-invested Enterprise to the invested enterprise, which shall file an application for registration to the registration organ upon the Certificate. The registration organ shall decide whether to approve the registration or not in accordance with relevant laws and administrative regulations, and it shall issue a Business License of Foreign Invested Corporate Enterprise to the approved enterprises.

Article 41
Where an FBIE invests in any of the restricted enterprises, it shall file an application to the provincial authorities of foreign trade and economic cooperation where the restricted enterprise is located, and it shall offer the following materials:
(1) its statement on having sufficient investment funds;
(2) its approval certificate and business license (copies);
(3) the contract and the articles of association of the invested enterprise signed by the FBIE (and
the other investors of the invested enterprise).
Within 45 days as of the acceptance of the above-mentioned materials, the provincial authorities of foreign trade and economic cooperation shall make a written reply of approval or disapproval to the applicant, to whom it shall issue a Certificate of Approval for Foreign-invested Enterprise. The invested enterprise shall file an application to the registration organ for registration upon the approving documents and the Certificate. The registration organ shall decide whether to approve the registration or not. It shall issue a Business License of Foreign Invested Corporate Enterprise to the approved enterprises.

Article 42
Where an FBIE invests into the projects in the area of service trade that is open to the foreign investors gradually, it shall be subject to the examination and approval in compliance with pertinent regulations of the state.

Article 43
To increase or transfer any of its investment into the invested enterprise, an FIBE shall go through the procedures in accordance with Articles 40, 41 and 42.

Article 44
An FBIE shall report to the examination and approval organ for archival purposes as of the completeness of the procedures of Articles 40 through 43.

Article 45
Moreover, in March every year, an FBIE shall report the information of fund collection and utilization in the previous year to the examination and approval organ for archival purposes. Within 5 days as of the acceptance of the archival materials, the examination and approval organ shall issue a certification of archival registration, which shall be one of the requisite materials for an FBIE to accept annual joint examination. Where an enterprise that fails to follow the abovementioned procedures, it shall be subject to the relevant punishment by the examination organ after discussing with the pertinent department of the State Council.

Article 46
In the registered capital of the enterprise invested by an FBIE, if the proportion of the actual contributions paid in by a foreign investor or the proportion of the total contributions paid in by the foreign investors in the proportion of the FBIE is not less than 25%, the invested enterprise is entitled to enjoy relevant preferential treatments granted to foreign-invested enterprises. If the said proportion is less than 25 %, the invested enterprise shall not enjoy relevant preferential treatments granted to foreign-invested enterprises.

Article 47
Where an already established domestically-funded enterprise with domestic investor (s) of natural person may continue to keep their status of shareholder(s) after this enterprise has accepted the investments of an FBIE and has changed into a foreign-invested enterprise.

Article 48
Where the person-in-charge of the administrative department of a business-starting investment enterprise or the person-in-charge of the investment management enterprise has illegal practices, he shall be held responsible. If the circumstances are serious, the FIBE shall not continue to engage in business-starting investments and relevant activities of investment management.
z

Chapter VIII Supplementary Provisions

Article 49
The present Provisions shall be applicable to the FBIEs to be established in the mainland by the investors from the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan Region.

Article 50
The power to interpret the present Provisions shall remain with the Ministry of Foreign Trade and Economic Cooperation, the Ministry of Science and Technology, the State Administration for Industry and Commerce, the State Administration of Taxation and the State administration of Foreign Exchange.

Article 51
The present Provisions shall enter into force as of March 1, 2003. The Interim Provisions on the Establishment of Foreign-Funded Business-starting Investment Enterprises promulgated by the Ministry of Foreign Trade and Economic Cooperation, the Ministry of Science and Technology and the State Administration for Industry and Commerce on August 28, 2001 shall be abolished on the same day.

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Provisions on the Administration of Telecommunications Enterprises

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Decree [2001] No.333 of the State Council Provisions on the Administration of Telecommunications Enterprises with Foreign Investment have been passed at the 49th executive meeting of the State Council on December 5, 2001 and are hereby promulgated for implementation as of January 1, 2002.

Chapter I General Provisions

Article 1
The present Provisions have been formulated according to relevant laws and administrative regulations concerning foreign investment and the Telecommunications Regulation of the People's Republic of China for the purpose of satisfying the demand of opening the telecommunications industry to the outside world and promoting the development of the telecommunications industry.
Article 2
A foreign-funded telecom enterprise is one established by foreign investors and Chinese investors within the territory of the People's Republic of China by way of a sino-foreign equity joint venture for engagement in the telecom services.

Article 3
Foreign-funded telecom enterprises shall, apart from observing the present Provisions in their telecom business activities, abide by the provisions of the Telecommunications Regulation and other relevant laws and administrative regulations.

Article 4
Foreign-funded telecom enterprises may be engaged in the basic telecom services and value-added services, the specific business classifications shall be implemented according to the provisions of the Telecommunications Regulation. The geographical areas in which foreign-funded telecom enterprises may do business shall be provided by the administrative department of the information industry under the State Council according to relevant provisions.

Article 5
A foreign-funded telecom enterprise shall meet the following provisions in terms of its registered capital: 1. If the enterprises is engaged in the basic telecom business of the whole country or involving more than 1 province or autonomous region or municipality directly under the Central Government shall have a registered capital of not less than 2 billion yuan; if it is engaged in the value-added telecom businesses, it shall have a registered capital of not less than 10 million yuan; 2. If the enterprise is engaged in the basic telecom business of a province or autonomous region or municipality directly under the Central Government, it shall have a registered capital of not less than 200 million yuan; if it is engaged in the value-added businesses, it shall have a registered capital of not less than 1 million yuan;

Article 6
The ultimate proportion of contribution of the foreign investors of a foreign-funded telecom enterprise that is engaged in the basic telecom services (except the radio paging services) shall not be more than 49%. The ultimate proportion of contribution of the foreign investors of a foreign-funded telecom enterprise that is engaged in the value-added services (including the radio paging business in the basic telecom services) shall not be more than 50%. The different proportions of contribution of the Chinese and foreign investors in a foreignfunded telecom enterprise at different stages shall be determined by the administrative department of the information industry under the State Council according to relevant provisions.

Article 7
In order to engage in the telecom businesses, a foreign-funded telecom enterprise shall not only meet the conditions as mentioned in Articles 4, 5 and 6 of the present Provisions but also those as provided in the Telecommunications Regulation for engaging in the basic telecom businesses and 1/5 value-added telecom businesses.

Article 8
The major Chinese investor of a foreign-funded telecom enterprise that is engaged in the basic telecom businesses shall meet the conditions as mentioned below: 1. It is a legally established company; 2. It has capitals and a staff that suit its business operations; 3. It satisfies the requirements of the administrative department of the information industry under the State Council for discreet and special industries. The term "major Chinese investor in a foreign-funded telecom enterprise" as mentioned in the preceding paragraph shall be the investor that makes the largest contribution among all the Chinese investors and has a share of over 30% of the total investment made by all the Chinese investors.

Article 9
The major foreign investor of a foreign-funded telecom enterprise that is engaged in the basic telecom businesses shall meet the conditions as mentioned below: 1. It has the status of a legal person enterprise; 2. It has obtained a license for engaging in the basic telecom businesses in the country or region where it is registered; 3. It has the capitals and a staff that suit its business operations; 4. It has good performances and operation experiences in the basic telecom businesses. The term "major foreign investor of a foreign-funded telecom enterprise" as mentioned in the preceding paragraph shall refer to one that makes the largest contribution among all the foreign investors and has a share of more than 30% of the total investment made by all the foreign investors.

Article 10
The major foreign investor of a foreign-funded telecom enterprise that is engaged in the value-added telecom businesses shall have good performances and operation experiences in managing the value-added telecom businesses.

Article 11
To establish a foreign-funded telecom enterprise for engaging in the basic telecom businesses or in value-added telecom businesses within the area of more than 1 province, autonomous region or municipality directly under the Central Government, the major Chinese investor shall file an application to the administrative department of the information industry under the State Council and submit the documents as mentioned below: 1. A project proposal; 2. A feasibility study report; 3. Credentials of qualifications of the investors of the joint venture or other relevant certification documents as mentioned in Article 8, 9 and 10 of the present Provisions: 4. Certificates of meeting other conditions for engaging in the business of the basic telecom businesses or value-added telecom businesses and other certification documents as mentioned in the Telecommunications Regulation. The department of the information industry under the State Council shall examine the relevant documents as mentioned in the preceding paragraph as of the day when the application is received. If the application is for engaging in the basic telecom businesses, the examination shall be completed within 180 days and a decision shall be made concerning whether to approve or disapprove the application; if the application is for engaging the value-added telecom businesses, the examination shall be completed within 90 days and a decision shall be made whether to approve or disapprove the application. If the application is to be approved, an Examination Decision of Foreign Investment in the Telecommunications; if the application is to be disapproved, the applicant shall be inform in writing together with a statement of the reasons.

Article 12
To establish a foreign-funded telecom enterprise for engaging in the basic telecom businesses or the value-added telecom businesses within an area of more than 1 province, autonomous region or municipality directly under the Central Government, the major Chinese investor may, when filing an application according to Article 11 of the present Provisions, submit documents other than the feasibility report according to the practical situations and, after being approved and informed in writing by the administrative department of the information industry under the State Council after examination beforehand, then submit a feasibility study report. However, the time period between the day when the applicant is informed in writing of approval and the day when the applicant files a feasibility study report shall not be longer than 1 year, and this time period shall not be included in the time period for examination. 2/5

Article 13
To establish a foreign-funded telecom enterprise for engaging in the value-added telecom businesses within a province, autonomous region or municipality directly under the Central Government, the major Chinese investor shall file an application to the telecom administrative organ of the provinces, autonomous region or municipality directly under the Central Government concerned together with the documents as mentioned below: 1. A feasibility study report; 2. Credentials of qualifications or certification documents as provided in Article 10 of the present Provisions; 3. Certificates or other certification documents of meeting the other conditions for engaging in the value-added telecom businesses as mentioned in the Telecommunications Regulation. The administrative organ of the provinces, autonomous regions and municipalities directly under the Central Government shall make a decision within 60 days after receiving the application. If application is to be approved, it shall be transferred to the administrative department of the information industry under the State Council; if the application is to be disapproved, the applicant shall be informed in writing together with a statement of the reasons. The administrative department of the information industry under the State Council shall, within 30 days after receiving the decision of approving the application made by the telecom administrative organ of the provinces, autonomous regions and municipalities directly under the Central Government, complete the examination and decide whether to approve or disapprove. If approval is to be granted, an Examination Decision of Foreign Investment in the Telecommunications; if the application is to be disapproved, the applicant shall be inform in writing together with a statement of the reasons.

Article 14
The main contents of the project proposal for establishing a foreign-funded telecom enterprise shall include: the titles and basic information of the parties to the joint venture, the total amount of investment and registered capital of the joint venture to be established, the proportion of contributions to be made by the parties concerned, the type of business to be engaged in and the term of the joint venture, etc. The main contents of the feasibility study report for establishing a foreign-funded telecom enterprise shall include: the basic information to the enterprise to be established, the items of services, prediction of business and development planning, analysis of investment results, predicted time for starting business, etc.

Article 15
To establish a foreign-funded telecom enterprise, if the investment project shall be subject to the examination and approval of the administrative department of planning under the State Council or the comprehensive administrative department of economy under the State Council as pursuant to the provisions of the State, the administrative department of the information industry under the State Council shall, prior to issuing an Examination Decision of Foreign Investment in the Telecommunications, transfer the application materials to the administrative department of planning under the State Council or the comprehensive administrative department of economy under the State Council for examination and approval. If the application materials are transferred to the administrative department of planning under the State Council or the comprehensive administrative department of economy under the State Council for examination and approval, the time limit for examination and approval as stipulated in Articles 11 and 13 of the present Provisions may be extended for 30 days.

Article 16
To establish a foreign-funded telecom enterprise that is to be engaged in the basic telecom businesses or the value-added telecom businesses within an area of more than 1 province, autonomous region or municipality directly under the Central Government, the major Chinese investor shall, on the basis of the Examination Decision of Foreign Investment in the Telecommunications, submit to the administrative department of foreign trade and economic cooperation under the State Council the contracts and articles of association of the foreign-funded telecom enterprise to be established; if the foreign-funded telecom enterprise is to be engaged in the value-added telecom businesses within the area of a province, autonomous region or municipality directly under the Central Government, the major Chinese investor shall, on the basis of the Examination Decision of Foreign Investment in the Telecommunications, submit to the administrative department of foreign trade and economic cooperation of the people's government of 3/5 the province, autonomous region or municipality directly under the Central Government the contracts and articles of association of the foreign-funded telecom enterprise to be established. The administrative department of foreign trade and economic cooperation under the State Council and the administrative department of foreign trade and economic cooperation of the people's governments of the provinces, autonomous regions and municipalities directly under the Central Government shall, within 90 days after receiving the contracts and articles of association of the foreign-funded telecom enterprise to be established, complete the examination and decide whether to approve or disapprove. If approval is to be granted, an Approval Certificate of Establishing A Foreign-funded Enterprise shall be issued; if disapproval is to be granted, the applicant shall be informed in writing together with a statement of the reason.

Article 17
The major Chinese investor of a foreign-funded telecom enterprise shall apply for a License of Telecom Business Operations at the administrative department of the information industry under the State Council on the basis of the Approval Certificate of Establishing A Foreignfunded Enterprise. The major Chinese investor of the foreign-funded telecom enterprise shall apply to the administrative department for industry and commerce for registration as a foreign-funded telecom enterprise on the basis of the Approval Certificate of Establishing A Foreign-funded Enterprise and the License of Telecom Business Operations.

Article 18
To engage in cross-border telecom business, a foreign-funded telecom enterprise shall obtain the approval of the administrative department of the information industry under the State Council and does the business through the Entry and Exit Bureau of International Telecommunications established upon the approval of the administrative department of the information industry under the State Council.

Article 19
Any one who violates Article 6 of the present Provisions shall be ordered by the administrative department of the information industry under the State Council to make corrections and be fined not less than 100,000 yuan but not more than 500,000 yuan. In case the violator fails to make the corrections within the time limit, the administrative department of the information industry under the State Council shall revoke the License of Telecom Business Operations and the department of foreign trade and economic cooperation that issued the Approval Certificate of Establishing A Foreign-funded Enterprise shall revoke the Approval Certificate of Establishing A Foreign-funded Enterprise.

Article 20
Any one who violates Article 18 of the present Provisions shall be ordered by the administrative department of the information industry under the State Council to make corrections and be fined not less than 200,000 yuan but not more than 1 million yuan. In case the violator fails to make the corrections within the time limit, the administrative department of the information industry under the State Council shall revoke the License of Telecom Business Operations and the department of foreign trade and economic cooperation that issued the Approval Certificate of Establishing A Foreign-funded Enterprise shall revoke the Approval Certificate of Establishing A Foreign-funded Enterprise.

Article 21
Any one who obtains approval by presenting false or counterfeited credentials or certification materials in its application for establishing a foreign-funded telecom enterprise, the approval shall be invalidated and the violator shall be fined not less than 200,000 yuan but not more than 1 million yuan by the administrative department of the information industry under the State Council, its License of Telecom Business Operations shall be revoked and the department of foreign trade and economic cooperation that issued the Approval Certificate of Establishing A Foreignfunded Enterprise shall revoke the Approval Certificate of Establishing A Foreign-funded Enterprise.

Article 22
Any foreign-funded telecom enterprise violates the Telecommunications Regulation and other relevant laws or administrative regulations in its telecom business operations shall be punished by relevant administrative organs.

Article 23
Any intra-territorial telecom enterprise that applies for getting listed in overseas stock exchanges shall obtain the consent of the administrative department of the information industry under the State Council after examination and shall obtain the approval of relevant administrative organs according to relevant provisions.

Article 24
The present Provisions shall be applicable, by reference, to the companies and enterprises from the Hong Kong and Macao Special Administrative Regions and Taiwan in their investment in the Mainland of China to engage in the telecom businesses.

Article 25
The present Provisions shall take effect as of January 1, 2002.
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Foreign Trade Law of the People's Republic of China

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Adopted at the Seventh Session of the Standing Committee of
the Eighth National People's Congress on May 12, 1994

Chapter I General Provisions


Chapter I Principles
Article 1
This Law is formulated with a view to developing the foreign trade, maintaining the foreign trade order and promoting a healthy development of the socialist market economy.

Article 2
Foreign trade as mentioned in this Law shall cover the import and export of goods, technologies and the international trade in services.

Article 3
The authority responsible for foreign trade and economic relations under the State Council is in charge of the administration of the foreign trade of the entire country pursuant to this Law.

Article 4
The State shall apply the foreign trade system on a uniform basis and maintain a fair and free foreign trade order in accordance with law.
The State encourages the promotion of its foreign trade, exercises the initiative of localities and safeguards the autonomy of business operation of the foreign trade dealers.

Article 5
The People's Republic of China promotes and develops trade ties with other countires and regions on the principles of equality and mutual benefit.

Article 6
The People's Republic of China shall, under international treaties or agreements to which the People's Republic of China is a contracting party or a participating party, grant the other contracting parties or participating parties, or on the principles of mutual advantage and reciprocity, grant the other party most - favored - nation treatment or national treatment within the field of foreign trade.

Article 7
In the event that any country or region applies discriminatory prohibition, restriction or other like measures against the People's Republic of China in respect of trade, the People's Republic of China may, as the case may be, take counter - measures against the country or region in question.

Chapter II Foreign Trade Dealers

Article 8
Foreign trade dealers as mentioned in this Law shall cover the legal entities and other organizations engaged in foreign trade dealings in compliance with the provisions of this Law.

Article 9
A foreign trade dealer who intends to engage in the import and export of goods and technologies shall fulfill the following requirements and acquire the permit from the authority responsible for foreign trade and economic relations under the State Council:
1. having its own name and corporate structure;
2. having definite scope of business in foreign trade;
3. having place of business, financial resources and professional personnel essential to the foreign trade dealings which it intends to engage in;
4. having a required record of import and export which were effected on its behalf or having necessary sources of goods for import or export:
5. other requirements provided in relevant laws and administrative regulations.
The detailed rules for the implementation of the preceding paragraph are to be laid down by the State Council.
The enterprises with foreign investment shall be exempt from the permit requirement provided in paragraph 1 with respect to their import of non-productive articles for their own use, import of equipment's and raw materials and other articles necessary for their production as well as the export of the products they produce under the relevant provisions of laws and administrative regulations governing enterprises with foreign investment.

Article 10
The establishment and operation of enterprises and organizations engaged in international trade in services shall be in compliance with the provisions of this Law and other relevant laws and administrative regulations.

Article 11
Foreign trade dealers shall enjoy full autonomy in their business operation and be responsible for their own profits and losses in accordance with law.

Article 12
In foreign trade activities foreign trade dealers should honor their contracts, ensure the quality of the commodity and perfect the after-sale services.

Article 13
Any organization or individual without foreign trade operation permit may entrust a foreign trade dealer located in China as it s agent to conduct its foreign trade business within the business scope of the latter.
The entrusted foreign trade dealer shall provide the principal with actual business information such as market situation, commodity prices and client position. The agent and the principal shall conclude and sign an agency agreement, in which the rights and obligations of both parties should be specified.

Article 14
Foreign trade dealers are obligated to provide documents and information in relation to their foreign trade dealings to the relevant authorities pursuant to the regulations of the authority responsible of foreign trade and economic relations under the State Council. The relevant authorities shall not disclose the business proprietary information provided by the dealers.

Chapter III Import and Export of Goods and Technologies

Article 15
The State allows free import and export of goods and technologies except where laws or administrative regulations provided otherwise.

Article 16
The State may impose restrictions on the import or export of goods and technologies in any of the following circumstances:
1. where the import or export shall be restricted in order to safeguard the national security or public interest;
2. where the export shall be restricted on account of domestic shortage in supply or effective protection of exhaustible domestic resources;
3. where the export shall be restricted due to the limited market capacity of the importing country or region;
4. where the import shall be restricted in order to establish or accelerate the establishment of a particular domestic industry;
5. where the restriction on the import of agricultural, animal husbandry or fishery products in any form is necessary;
6. where the import shall be restricted in order to maintain the State's international financial status and the balance of international payments;
7. where, as the international treaties or agreements to which the People's Republic of China is a contracting party or a participating party require, the import or export shall be restricted.

Article 17
The States prohibits the import or export of any goods or technologies in any of the following circumstances;
1. where such goods or technologies will endanger national security or public interest;
2. where the import or export of such goods or technologies must be prohibited in order to protect human life or health;
3. where such goods or technologies will disrupt the ecological environment;
4. where the import or export of such goods or technologies shall be prohibited in accordance with the provisions of international treaties or agreements to which the People's Republic of China is a contracting party or a participating party.

Article 18
The authority responsible for foreign trade and economic relations under the State Council shall, in collaboration with the relevant authorities under the State Council and in accordance with the provision of Article 16, Article 17 of this Law, formulate, adjust and publish the list of goods and technologies whose import or export are subject to restrictions or prohibitions.
Upon the approval of the State Council the authority responsible for foreign trade and economic relations under the State Council may, within the framework of Article 16 and Article 17, independently or in collaboration with the relevant authorities under the State Council determine, on a temporary basis, to impose restriction or prohibition on the import or export of particular goods or technologies not included in the list mentioned in the preceding paragraph.

Article 19
Goods whose import or export is restricted shall be subject to quota and /or licensing control; technologies whose import or export is restricted shall be subject to licensing control.
Import or export of any goods and technologies subject to quota and /or licensing control will be effected only with the approval of the authority responsible for foreign trade and economic relations under the State Council or the joint approval of the preceding authorities and other authorities concerned under the State Council in compliance with the provisions of the State Council.

Article 20
Import and export quotas of goods shall be distributed on the basis of the conditions including but not limited to the actual import or export performance and capability of the applicants in foreign trade dealings and on the basis of the principles of efficiency, impartiality, transparency and fair competition by the authority responsible for foreign trade and economic relations under the State Council or the relevant authorities under the State Council within their respective responsibilities.
The ways and means of the distribution of quotas are to be regulated by the State Council.

Article 21
Where the import or export of goods, articles such as cultural relics, wildlife animals, plants and the products there of are prohibited or restricted by other laws or administrative regulations, the provisions of the laws and regulations in question shall be observed.

Chapter IV International Trade in Service

Article 22
The State promotes the progressive development of the international trade in services.

Article 23
With respect to international trade in services, the People's Republic of China , pursuant to the commitments made in international treaties or agreements to which the People's Republic of China is a contracting party or participating party, grants the other contracting parties and participating parties market access and national treatment.

Article 24
The State may restrict international trade in services on the basis of any of the following considerations:
1. In order to safeguard the national security or public interest;
2. In order to protect the ecological environment;
3. In order to establish or accelerate the establishment of a particular domestic service industry;
4. In order to maintain the State*s balance of international payments;
5. Other restrictions provided in relevant laws and administrative regulations.

Article 25
The Sate prohibits any international trade in services which:
1. may endanger national security or public interests;
2. is contrary to the international obligations undertaken by the People's Republic of China;
3. is prohibited by relevant laws and administrative regulations.

Article 26
The authority responsible for foreign trade and economic relations under the State Council and relevant authorities under the State Council are responsible for the administration of international trade in services in accordance with this Law and other relevant laws and administrative regulations.

Chapter V Foreign Trade Order

Article 27
In foreign trade activities, foreign trade dealers shall operate their business in accordance with law and abide by the principle of fair competition, and are prohibited from the following acts:

1. Forgery, distortion or trading of certificates of country of origin and import or export licenses;
2. Infringement on the intellectual property rights protected by the laws of the People's Republic of China;
3. Squeezing out competitors with undue conducts of competition;
4. Defrauding the State of refunded tax on exports;
5. Other acts contrary to the provisions of laws and administrative regulations.

Article 28
In foreign trade activities, foreign trade dealers shall settle and use foreign exchanges in accordance with relevant regulations of the State.

Article 29
Where a product is imported in such increased quantities as to cause or threaten to cause serious injury to domestic producers of like or directly competitive products, the State may take necessary safeguard measures to remove or ease such injury or threat of injury.

Article 30
Where a product is imported at less than normal value of the product and causes or threatens to cause material injury to an established domestic industry concerned, or materially retards the establishment of a particular domestic industry, the State may take necessary measures in order to remove or ease such injury or threat of injury or retardation.

Article 31
Where an imported product is subsidized in any form directly or indirectly by the country of export and causes or threatens to cause material injury to an established domestic industry concerned or materially retards the establishment of a domestic industry, the State may take necessary measures in order to remove or ease such injury or threat of injury or retardation.

Article 32
In the events referred to in Article 29, Article 30 and Article 31, the authority or agency designated by the State Council shall conduct investigations and make determinations in accordance with relevant laws and administrative regulations.

Chapter VI Promotion of Foreign Trade

Article 33
The State shall establish and improve financial institutions for foreign trade and establish funds for foreign trade development and risk as the development of foreign trade requires.

Article 34
The State may take foreign trade promotion measures such as import or export credit and export tax refund for the purpose of the development of foreign trade.

Article 35
Foreign trade dealers may establish or join Chambers of Commerce for Importers and Exporters in accordance with law.
Chambers of Commerce for Importers and Exporters shall abide by relevant laws and administrative regulations, coordinate and guide the foreign trade activities of their members under their Articles of Association, provide advisory services, report to the relevant authorities of the Government the suggestions of their members with respect to foreign trade promotion, and actively promote foreign trade.

Article 36
The international trade promotion organization of China shall, in accordance with its Articles of Association, engage in development of foreign trade relations, sponsor exhibitions, provide information and advisory services and carry out other foreign trade primitive activities.

Article 37
The State shall support and promote the development of foreign trade in national autonomous areas and economically under - developed areas.

Chapter VII Legal Liabilities

Article 38
Anyone who smuggles goods that are subject to import or export prohibitions or restrictions, and hereby commits criminal offenses, shall be subject to criminal prosecution pursuant to the Supplementary Decision on the Punishment of Smuggling Crimes. Those offenses of smuggling which do not constitute crimes shall be subject to sanctions under the provisions of the Customs Law. In addition, the authority responsible for foreign trade and economic relations under the State Council may withdraw the foreign trade operation permit of the offender in question.

Article 39
Anyone who commits forgery, distortion of certificates of country of origin or license for import or export shall be subject to criminal prosecution under Article 167 of the Criminal Law. Anyone who commits trading of certificates of country of origin or license for import or export or trading of forged or distorted certificates of country of origin of license for import or export shall be subject to criminal prosecution in the light of Article 167 of the Criminal Law.
Where the criminal offenses referred to in the preceding paragraph are committed by an entity, the entity in question shall be imposed fine while the persons in charge of the entity directly responsible for the offenses and other persons directly responsible for the offenses shall be subject to criminal prosecutions in accordance with or in the light of Article 167 of the Criminal Law. In addition, the authority responsible for foreign trade and economic relations under the State Council may withdraw the foreign trade operation permit of the entity in question.
Anyone who knowingly uses forged or distorted import or export license in importing or exporting goods shall be imposed sanctions in accordance with the provisions of Article 38 of this Law.

Article 40
Anyone who imports or exports technologies that are subject to import or export prohibitions or restrictions in violation of this Law and commits criminal offenses, shall be subject to criminal prosecutions in the light of the Supplementary Decision of the Punishment of Smuggling Crime.

Article 41
Personnel serving in the State's foreign trade authorities who commit any neglect of duty, malpractice, irregularities or abuse of power, which constitute criminal offenses, shall be subject to criminal prosecutions pursuant to law; as to those offenses which do not constitute crimes, administrative sanctions shall apply.
Personnel serving in the State's foreign trade authorities who extort property from others with job convenience or illegally receive others' property and seek advantages for them in return and thus commit criminal offenses shall be subject to criminal prosecutions in accordance with the Supplementary Decision on the Punishment of Embezzlement and Bribery Crimes; where such conducts do not constitute criminal offenses, administrative sanctions shall apply.

Chapter VIII Final Provisions

Article 42
The State applies flexible measures, provides favorable conditions and convenience to the trade between the towns on the frontier and those towns of neighboring countries on frontier as well as trade among border residents. Detailed rules are to be laid down by the State Council.

Article 43
This Law shall not apply to the separate customs territories of the People's Republic of China.

Article 44
This Law shall enter into force as of July 1st, 1994


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Regulations of the People's Republic of China on the Administration of the Import and Export of Goods

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Decree [2001] No.332 of the State Council The Regulation of the People's Republic of China on the Administration of the Import and Export of Goods has been passed at the forty-sixth executive meeting of the State Council on October 31, 2001 and is hereby promulgated for implementation as of January 1, 2002.

Chapter I General Provisions

Chapter I General Provisions
Article 1
The present Regulation has been enacted according to the relevant provisions of the Foreign Trade Law of the People's Republic of China (hereinafter referred to as the Foreign Trade Law) for the purpose of standardizing the administration of the import and export of goods, maintaining the order of import and export of goods and promoting the healthy development of foreign trade.

Article 2
The present Regulation shall be observed in the importation of goods to within the customs boundary of the People's Republic of China or exportation of goods to beyond the customs boundary of the People's Republic of China.

Article 3
The state exercises uniform administration over the import and export of goods.

Article 4
The state allows the free importation and exportation of goods and maintains the fairness and orderliness of the import and export of goods according to law. Unless it is clearly provided in laws or administrative regulations to forbid or restrict the import or export of goods, no entity or individual may establish or maintain prohibitive or restrictive measures over the import or export of goods.

Article 5
The People's Republic of China grants the most-favored-nation treatment or national treatment to other contracting parties or member states to the international treaties or pacts that it has concluded or acceded to, or grants the most-favored-nation treatment or national treatment to its counterparts according to the principle of mutual benefit and reciprocity.

Article 6
Any country or region that takes discriminatory prohibitive or restrictive measures or other similar measures against the People's Republic of China in terms of the import or export of goods, it may, according to the specific situations, take corresponding measures against such country or region.

Article 7
The department of the State Council in charge of foreign trade and economic cooperation (hereinafter referred to as the foreign trade department of the State Council) takes charge of the import and export of goods within the whole country according to the provisions of the Foreign Trade Law and the present Regulation. The relevant departments of the State Council shall, on the basis of the functions and duties as determined by the State Council, be responsible for the administration of the import and export of goods according to the provisions of the present Regulation. Chapter II Administration of Import of Goods Section I Goods Prohibited from Importation

Article 8
In any of the circumstances as provided in Article 17 of the Foreign Trade Law, the goods concerned shall be prohibited from importation. If there are relevant provisions in other laws or regulations on prohibiting the importation of goods, such provisions shall be abided by. The list of goods prohibited from importation shall be formulated, adjusted and promulgated by 1/9 the foreign trade department of the State Council in collaboration with other relevant departments of the State Council.

Article 9
No goods that are prohibited from importation may be imported. Section II Goods Limited in Importation

Article 10
In any of the circumstances as provided in Clauses 1, 4, 5, 6, and 7 of Article 16 of the Foreign Trade Law, the goods concerned shall be limited in importation. Where there are provisions in other laws or regulations on limiting the importation of goods, such provisions shall be abided by. The list of goods limited in importation shall be formulated, adjusted and promulgated by the foreign trade department of the State Council in collaboration with other relevant departments of the State Council. The list of goods limited in importation shall be promulgated at least 21 days prior to the implementation thereof; where the circumstances are urgent, it shall be promulgated at no later than the day of implementation.

Article 11
Where there are quantitative limits of the state on the goods limited in importation, the goods shall be subject to the administration of quotas, and other goods limited in importation shall be subject to the administration of licenses. When importing the goods subject to the administration of quotas in customs tariffs, the provisions of Section IV of the present Chapter shall be followed.

Article 12
The goods limited in importation that are under the administration of quotas shall be subject to the administration of the foreign trade department of the State Council and the relevant economic administrative departments of the State Council (hereinafter referred to as administrative departments of import quotas) on the basis of the functions and duties as provided by the State Council.

Article 13
For the goods limited in importation that are under the administration of quotas, the administrative departments of import quotas shall promulgate the total amount of import quotas for the next year at no later than July 31 of each year. An applicant of quotas shall apply to the administrative departments of import quotas for the next year between August 1 and 31 of each year. The administrative departments of import quotas shall allocate the quotas for the next year to the quota applicants before October 31 of each year. The administrative departments of import quotas may, where it is necessary, make adjustments to the total amount of the year and promulgate it at 21 days prior to its implementation.

Article 14
The quotas may be allocated according to the principle of uniform handling of all applications.

Article 15
Where the quotas are allocated according to the principle of uniform handling of all applications, the administrative departments of import quotas shall decide whether to grant quotas or not within 60 days prior to the prescribed deadline for filing applications.

Article 16
When allocating quotas, the administrative departments of import quotas shall take the following elements into consideration: 1. the performances of the applicant in import; 2. whether the quotas in the past have been fully used; 3. the productive capacity, management scale and the sales of the applicant; 4. the applications filed by new import business operators; 5. the quantity of quotas applied; 6. other elements that need to be considered.

Article 17
An import business operator shall present the quotas certificate issued by the administrative departments of import quotas to the customs offices for handling the formalities of customs declaration and examination. The relevant economic administrative departments of the State Council shall report such information as the total amount of quotas of the year, the plans of allocation, the issuance of quota certificates, etc to the foreign trade department of the State Council for archivist purposes.

Article 18
A holder of quotas who has not used up its quotas for the year shall return the unused 2/9 quotas to the administrative departments of import quotas prior to September 1 of the current year. In case it fails to return the unused quotas and fails to use them up by the end of the current year, the administrative departments of import quotas may make corresponding deductions to the quotas of the holder for the next year.

Article 19
For the goods limited in importation that are subject to the administration of licenses, the import business operators shall file applications to the foreign trade department of the State Council or relevant departments of the State Council (hereinafter referred to as the administrative departments of import licenses). The administrative departments of import licenses shall decide whether to grant a license or not within 30 days after receiving the application. The import business operators shall present the import license issued by the administrative departments of import quotas to the customs office for handling the formalities of customs declaration and examination. The term "import license" as mentioned in the preceding paragraph shall refer to the various kinds of certificates and documents that are of import nature as provided in laws and administrative regulations.

Article 20
The administrative departments of import quotas and the administrative departments of export licenses shall, on the basis of the provisions of the present Regulation, formulate specific measures of administration so as to clarify the qualifications of the applicant, the departments for accepting applications, the principles and procedures of inspections, etc. and shall promulgate the measures prior to their implementation. The department for accepting applications shall, as a general rule, be one department. The documents requested by the administrative departments of import quotas and the administrative departments of import licenses for submission shall be limited to those documents and materials that are necessary for effecting the administration and the departments may not refuse to accept the applications under the pretext of trifle, immaterial mistakes or errors. Section III Goods Subject to Free Importation

Article 21
The goods subject to free importation shall not be limited.

Article 22
The foreign trade department of the State Council and the relevant economic administrative departments of the State Council may, on the basis of the demand for monitoring the importation of goods, exercise automatic import license administration over some of the goods subject to free importation according to the functions and duties determined by the State Council. The list of goods that are under automatic import license administration shall be promulgated at no later than 21 days prior to its implementation.

Article 23
The import of goods that are under automatic import license administration shall be allowed.

Article 24
When importing the goods that are under automatic import license administration, the import business operators shall, prior to handling the formalities of customs declaration, file an application to the foreign trade department of the State Council or the relevant economic administrative departments of the State Council for automatic import licenses. The foreign trade department of the State Council or the relevant economic administrative departments of the State Council shall issue automatic import licenses immediately after receiving the applications; if the circumstances are special, the time space shall no longer than 10 days. The import business operators shall present the automatic import license issued by the foreign trade department of the State Council or the relevant economic administrative departments of the State Council to the customs offices for handling the formalities of customs declaration. Section IV Goods under the Administration of Tariff Quotas

Article 25
The list of goods that are under the administration of tariff quotas shall be formulated, adjusted and promulgated by the foreign trade department of the State Council in collaboration with the relevant economic administrative departments of the State Council.

Article 26
For the goods imported within the tariff quotas, the tariffs shall be levied according to the rates within the quotas; for the goods imported beyond the tariff quotas, the tariffs shall be levied 3/9 according to the rates beyond the quotas.

Article 27
The administrative departments of import quotas shall publicize the total amount of quotas for the next year between September 15 and October 14 of each year. An applicant for quotas shall file its applications to the administrative departments of import quotas between October 15 and October 30 of each year.

Article 28
The tariff quotas may be allocated according to the principle of uniform handling of all applications.

Article 29
Where the tariff quotas are allocated according to the principle of uniform handling of all applications, the administrative department of import quotas shall decide whether to grant quotas or not before December 31 of each year.

Article 30
The import business operators shall present its certificate of tariff quotas issued by the administrative departments of import tariff quotas to the customs offices for handling the formalities of customs declaration and examination of the goods within the tariff quotas. The relevant economic administrative departments of the State Council shall submit in a time way such information as the total amount of tariff quotas for the year, the plans of allocation and the issuance of certificates of tariff quotas, etc. to the foreign trade department of the State Council for archivist purposes.

Article 31
A holder of tariff quotas who has not used up its quotas for the year shall return the unused quotas to the administrative departments of import quotas prior to September 15 of the current year. In case it fails to return the unused quotas and fails to use them up by the end of the current year, the administrative departments of import quotas may make corresponding deductions to the quotas of the holder for the next year.

Article 32
The administrative departments of import quotas shall, on the basis of the provisions of the present Regulation, formulate specific measures of administration so as to clarify the qualifications of the applicant, the departments for accepting applications, the principles and procedures of inspections, etc. and shall promulgate the measures prior to their implementation. The department for accepting applications shall, as a general rule, be one department. The documents requested by the administrative departments of import quotas for submission shall be limited to those documents and materials that are necessary for effecting the administration and the departments may not refuse to accept the applications under the pretext of trifle, immaterial mistakes or errors. Chapter III Administration of the Export of Goods Section I Goods Prohibited from Exportation

Article 33
In any of the circumstances as provided in Article 17 of the Foreign Trade Law, the goods concerned shall be prohibited from exportation. If there are relevant provisions in other laws or regulations on prohibiting the importation of goods, such provisions shall be abided by. The list of goods prohibited from exportation shall be formulated, adjusted and promulgated by the foreign trade department of the State Council in collaboration with other relevant departments of the State Council.

Article 34
No goods that are prohibited from exportation may be exported. Section II Goods Limited in Exportation

Article 35
In any of the circumstances as provided in Clauses 1, 2, 3, and 7 of Article 16 of the Foreign Trade Law, the goods concerned shall be limited in exportation. Where there are provisions in other laws or regulations on limiting the exportation of goods, such provisions shall be abided by. The list of goods limited in exportation shall be formulated, adjusted and promulgated by the foreign trade department of the State Council in collaboration with other relevant departments of the State Council. The list of goods limited in exportation shall be promulgated at least 21 days prior to the implementation thereof; where the circumstances are urgent, it shall be promulgated at no later than 4/9 the day of implementation.

Article 36
Where there are quantitative limits of the state on the goods limited in exportation, the goods shall be subject to the administration of quotas, and other goods limited in importation shall be subject to the administration of licenses.

Article 37
The goods limited in exportation that are under the administration of quotas shall be subject to the administration of the foreign trade department of the State Council and the relevant economic administrative departments of the State Council (hereinafter referred to as administrative departments of export quotas) on the basis of the functions and duties as provided by the State Council.

Article 38
For the goods limited in exportation that are under the administration of quotas, the administrative departments of export quotas shall promulgate the total amount of export quotas for the next year at no later than October 31 of each year. An applicant of quotas shall apply to the administrative departments of export quotas for the next year between November 1 and 15 of each year. The administrative departments of export quotas shall allocate the quotas for the next year to the quota applicants before December 15 of each year.

Article 39
The quotas may be allocated directly or by way of invitation for bids.

Article 40
The administrative departments of export quotas shall decide whether to grant quotas within 30 days after receiving the applications and at no later than December 15 of the current year.

Article 41
The export business operators shall present the certificate of quotas issued by the administrative department of export quotas to the customs offices for handling the formalities of customs declaration and examination. The relevant economic administrative departments of the State Council shall submit such information as the total amount of quotas for the year, the plans for allocation and the issuance of certificates of quotas, etc. to the foreign trade department of the State Council for archivist purposes.

Article 42
A holder of quotas who has not used up its quotas for the year shall return the unused quotas to the administrative departments of export quotas prior to October 31 of the current year. In case it fails to return the unused quotas and fails to use them up by the end of the current year, the administrative departments of export quotas may make corresponding deductions to the quotas of the holder for the next year.

Article 43
For the goods limited in exportation that are subject to the administration of licenses, the export business operators shall file applications to the foreign trade department of the State Council or relevant departments of the State Council (hereinafter referred to as the administrative departments of export licenses). The administrative departments of export licenses shall decide whether to grant a license or not within 30 days after receiving the application. The import business operators shall present the export license issued by the administrative departments of export quotas to the customs office for handling the formalities of customs declaration and examination. The term "export license" as mentioned in the preceding paragraph shall refer to the various kinds of certificates and documents that are of export nature as provided in laws and administrative regulations.

Article 44
The administrative departments of export quotas and the administrative departments of export licenses shall, on the basis of the provisions of the present Regulation, formulate specific measures of administration so as to clarify the qualifications of the applicant, the departments for accepting applications, the principles and procedures of inspections, etc. and shall promulgate the measures prior to their implementation. The department for accepting applications shall, as a general rule, be one department. The documents requested by the administrative departments of export quotas and the administrative departments of export licenses for submission shall be limited to those documents and materials that are necessary for effecting the administration and the departments may not refuse to accept the applications under the pretext of trifle, immaterial mistakes or errors. Chapter IV State-run Trade and Designated Administration

Article 45
The state may administer the import and export of some goods by way of state-run trade. The list of goods for import and export under the state-run trade administration shall be formulated, adjusted and promulgated by the foreign trade department of the State Council in collaboration with other relevant economic administrative departments of the State Council.

Article 46
The foreign trade department of the State Council and other relevant economic administrative departments of the State Council shall determine and publicize the list of state-run trade enterprises according to the functions and duties as determined by the State Council.

Article 47
For the goods that are subject to the state-run trade administration, the state may allow non-state-run trade enterprises to import and export some of the goods.

Article 48
The state-run trade enterprises shall provide to the foreign trade department of the State Council on the semi-annual basis such information as the prices for buying or selling the goods subject to the state-run trade administration, etc.

Article 49
The foreign trade department of the State Council may, upon the demand for maintaining the management order of import and export, exercise designated management over some of the goods during certain periods. The list of goods subject to designated management shall be formulated, adjusted and promulgated by the State Council.

Article 50
The specific standard and procedures for determining the enterprises to engage in designated management shall be promulgated by the foreign trade department of the State Council before implementation. The list of enterprises to engage in designated management shall be publicized by the foreign trade department of the State Council.

Article 51
Unless provided in Article 47 of the present Regulation, the enterprises or other organizations that have not been included in the list of state-run trade enterprises and enterprises to engage in designated management may not engage in the import or export of goods that are subject to state-run trade administration and designated management.

Article 52
The state-run trade enterprises and the enterprises to engage in designated management shall carry out their business activities under normal commercial conditions, and may not choose provider according to non-commercial considerations, nor may they reject the entrustment of other enterprises or organizations on the basis of non-commercial considerations. Chapter V Monitoring of Import and Export and Provisional Measures

Article 53
The foreign trade department of the State Council shall be responsible for the monitoring and appraisal of the import and export of goods, shall report regularly to the State Council about the import and export of goods, and give suggestions.

Article 54
In order to maintain the international balance of payments equilibrium including the occurrence of serious international unbalance of payments or the threat of serious unbalance of payments, or to maintain a level of foreign exchange reserves that is suitable for carrying out the plans of economic development, the state may take provisional restrictive measures with regard to the value or quantity of the goods to be imported.

Article 55
In order to establish or quicken up the establishment of a certain domestic industry, the state may, in case this target cannot be achieved through the incumbent measures, take provisional measures for restricting or prohibiting the import of goods.

Article 56
To take any of the following measures, the state may, when it is necessary, take provisional measures to restrict the import of any form of agricultural products or aquatic products: 1. Taking restrictive measures over the domestic production or sale of the products that are of the same kind or that directly compete with each other; 2. Clearing up, by way of subsidizing consumptions, the domestic superfluous products that are of the same kinds or that directly compete with each other; 3. Limiting the yield of animal products whose production is completely or mainly dependent upon the import of the agricultural products or aquatic products.

Article 57
In any of the following circumstance, the foreign trade department of the State Council may take provisional measures to restrict or prohibit the export of certain goods: 6/9 1. It is necessary to restrict or prohibit the export due to the occurrence of abnormalities such as serious natural disasters; 2. It is necessary to restrict the export of goods due to serious disorder of export management; 3. It is necessary to restrict or prohibit the export of goods as pursuant to the provisions of Articles 16 and 17 of the Foreign Trade Law.

Article 58
In case provisional measures are to be taken for restricting or prohibiting the export of goods, the foreign trade department of the State Council shall make public announcements prior to the implementation of the measures. Chapter VI Promotion of Foreign Trade

Article 59
The state takes the measures like export credit insurance, export credit, export rebates, establishing funds for developing foreign trade, etc. to promote the development of foreign trade.

Article 60
The state takes effective measures to promote the technological innovation and technological development of the enterprises and to enhance the international competition capacity of the enterprises.

Article 61
The state helps the enterprises to exploit the international market by way of providing information consultation services.

Article 62
The business operators that import or export goods may establish or join chambers of commerce for import and export so as to achieve self-disciplinary and coordination.

Article 63
The state encourages the enterprises to actively respond to the discriminatory antidumping, anti-subsidy or safeguard measures of foreign countries so as to protect the lawful rights and interests of the enterprises in normal trade. Chapter VII Legal Liabilities

Article 64
Any one who imports or exports goods that are prohibited from import or export or imports or exports goods that are limited in importation or exportation without approval or permission shall be subject to investigation for assuming penal liabilities according to the provisions of the Criminal Law on smuggling; if the activities are not serious enough for assuming criminal liabilities, they shall be punished according to the relevant provisions of the Customs Law, and the foreign trade department of the State Council may revoke their business licenses for foreign trade at the same time.

Article 65
Any one who imports or exports goods that are limited in importation or exportation beyond the scopes approved or permitted shall be subject to investigation for assuming penal liabilities according to the provisions of the Criminal Law concerning the crime of smuggling or the crime of illegal management; if the activities are not serious enough for assuming criminal liabilities, they shall be punished according to the relevant provisions of the Customs Law, and the foreign trade department of the State Council may suspend or even revoke their business licenses for foreign trade at the same time.

Article 66
Any one who counterfeits or alters or buys or sells certificates of import or export quotas, approval documents, licenses or automatic import licenses shall be subject to assume criminal liabilities according to the Criminal Law concerning the crime of illegal management or the crime of counterfeiting, altering, buying or selling official documents, certificates, seals of state organs; if the activities are not serious enough for assuming criminal liabilities, they shall be punished according to the relevant provisions of the Customs Law, and the foreign trade department of the State Council may revoke their business licenses for foreign trade at the same time.

Article 67
In case any business operator of import or export who obtains quotas for the import or export of goods, certification documents or automatic import licenses by deception or other unfair means, the quotas for the import or export of goods, certification documents or automatic import licenses shall be taken back, and the foreign trade department of the State Council may suspend or even revoke their business licenses for foreign trade at the same time.

Article 68
In case any one who violates the provisions of Article 51 of the present Regulation by engaging in the import or export of goods that are subject to state-run trade administration or designated management and thus disrupts the market order and if the circumstances are serious, it shall be subject to assume criminal liabilities according to the provisions of the Criminal Law on the crime of illegal management; if the activities are not serious enough for assuming criminal liabilities, they shall be given administrative punishments by the administrations for industry and commerce, and the foreign trade department of the State Council may suspend or even revoke their business licenses for foreign trade at the same time.

Article 69
Any state-run trade enterprise or designated management enterprise violates the provisions of Articles 48 and 52 of the present Regulation shall be given a warning by the foreign trade department of the State Council; if the circumstances are serious, its qualifications as a state-run trade enterprise or designated management enterprise may be suspended or even revoked by the foreign trade department of the State Council.

Article 70
Any staff member engaged in the administration of the import or export or goods that, in the process of performing its functions of administration over the import or export of goods, abuses its power or neglects its duties or accepts or exacts property or money from other people by taking advantage of its functions shall be subject to assuming criminal liabilities according to the provisions of the Criminal Law concerning the crime of abusing power or the crime of neglecting duties or the crime of accepting bribes or other crimes; if the activities are not serious enough for assuming criminal liabilities, it shall be given administrative punishments. Chapter VIII Supplementary Provisions

Article 71
Any one who refuses to accept the decision of the administrative organs as provided in the present Regulation on the granting of quotas, tariff quotas, licenses or automatic licenses or to accept the decision on determining the qualifications of state-run trade enterprises or designated management enterprises or accept the decision on administrative punishments may plead for administrative reconsideration or institute a lawsuit at the people's court.

Article 72
The provisions of the present Regulation shall not foreclose the taking of measures such as tariff, inspection and quarantine, security, environmental protection, intellectual property, etc. according to the provisions of laws or administrative regulations over the goods imported or exported.

Article 73
The export of goods under export control like nucleus products, nucleus-related civil products, monitored chemical products, military products, etc shall handled according to the provisions of relevant administrative regulations.

Article 74
Where it is necessary to take antidumping, anti-subsidy or safeguard measures against imported goods, the provisions of the Foreign Trade Law and other relevant laws and administrative regulations shall be observed.

Article 75
Where there are otherwise provisions in laws or regulations concerning the import or export of goods of special economic zones like the bonded areas or export processing areas, etc, such provisions shall be observed.

Article 76
The foreign trade department of the State Council shall be responsible for the bilateral or multilateral discussions and negotiations concerning the import and export of relevant goods, and shall be responsible for settling trade disputes.

Article 77
The present Regulation shall take effect as of January 1, 2002. The Interim Regulation of the People's Republic of China on the License of Import of Goods which was promulgated by the State Council on January 10, 1984, the Interim Measures on the Administration of Export Commodities which was ratified by the State Council on December 21, 1992 and issued by the MOFTEC on December 29, 1992, the Interim Measures on the Administration of the Import of Machinery and Electrical Equipments which was jointly issued by the State Economic and Trade Commission and the MOFTEC on October 7, 1993, the Interim Measures on the Administration of Quotas for the Import of General Commodities which was ratified by the State Council on December 22, 1993 and jointly issued by the State Development Planning Commission and the MOFTEC on December 29, 1993, and the Interim Measures on the Administration and Management of Imported Goods which was ratified by the State Council on June 13, 1994 and jointly issued by the MOFTEC and the State Development Planning Commission on July 19, 1994 shall be concurrently repealed.

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Customs Law of the People's Republic of China

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Adopted at the 19th Meeting of the Standing Committee of the Sixth National People's
Congress on January 22, 1987,Promulgated by Order No. 51 of the President of the People's
Republic of China on January 22, 1987, and effective as of July 1, 1987


Chapter I General Provisions

Chapter I General Provisions
Article 1
This Law is formulated for the purpose of safeguarding state sovereignty and
interests, strengthening supervision and control by the Customs, promoting exchanges with
foreign countries in economic affairs, trade, science, technology and culture, and ensuring
socialist modernization.

Article 2
The Customs of the People's Republic of China shall be the state organ responsible
for supervision and control over everything entering and leaving the Customs territory
(hereinafter referred to as inward and outward persons and objects). The Customs shall, in
accordance with this Law and other related laws and regulations, exercise supervision and
control over the means of transport, goods, travellers' luggage, postal items and other articles
entering or leaving the territory (hereinafter referred to as inward and outward means of
transport, goods and articles), collect Customs duties and other taxes and fees, uncover and
suppress smuggling, work out customs statistics and handle other Customs operations.

Article 3
The State Council shall set up the General Customs Administration which shall
exercise unified administration of Customs establishment throughout the country.
The State shall set up Customs establishments at ports open to foreign countries and regions
and at places which call for concentrated Customs operations of supervision and control. The
subordination of one Customs establishment to another shall not be restricted by
administrative divisions.
Customs establishments shall exercise their functions and powers independently in
accordance with the law, and shall be responsible to the General Customs Administration.

Article 4
A Customs establishment shall exercise the following powers:
(1) To check inward and outward means of transport and examine inward and outward goods
and articles: to detain those entering or leaving the territory in violation of this Law or other
relevant laws and regulations.
(2) To examine the papers and identifications of persons entering or leaving the territory; to
interrogate those suspected of violating this Law or other relevant laws and regulations, and
investigate their illegal activities;
(3) To examine and make copies of contracts, invoices, book accounts, bills, records,
documents, business letters and cables, audio and video products and other materials related
to the inward and outward means of transport, goods and articles; to detain those related to
the means or other relevant laws and regulations;
(4) To search, within a Customs surveillance zone and the specified coastal or border area in
the vicinity of a Customs establishment, means of transport suspected of involvement in
smuggling, and storage places suspected of concealing smuggled goods and articles, and to
search persons suspected criminal smuggler may be detained and handed over to judicial
organ. Such detention shall not exceed 24 hours and, under special circumstances, may be
extended to 48 hours.
The scope of the specified coastal or border area in the vicinity of a Customs establishment
shall be defined by the General Customs Administration and the public security department
under the State Council in conjunction with the relevant provincial people's governments;
(5) Customs officers may chase means of transport or persons defying and escaping from
Customs supervision an control to places beyond a customs surveillance zone or the
specified coastal or border area in the vicinity of a Customs establishment and bring them
back to be properly dealt with; and
(6) A Customs establishment may be provided with arms for the performance of its duties.
Rules governing the carrying and use of arms by Customs officers shall be drawn up by the
General Customs Administration jointly with the public security department under the State
Council and reported to the State Council for approval.

Article 5
All inward and outward means of transport, goods and articles shall enter or leave
the territory at a place where there is a Customs establishment. If, under special
circumstances, they have to enter or leave the territory at a place without a Customs
establishment as a matter of contingeney, permission shall be obtained from the State
Council or an organ authorized by the State Council, and Customs formalities shall be duly
completed in accordance with this Law.

Article 6
Unless otherwise provided for, all import and export goods shall be declared and
duties on them paid by declaration enterprises registered with the Customs, or by enterprises
entitled to engage in import and export business. The persons of these enterprises in charge
of the declaration shall be evaluated and approved by the Customs.
The Customs formalities concerning declaration of inward and outward articles and payment
of duties on them may be completed either by the owner or by a person the owner has
entrusted to act as his agent.
The agent entrusted to complete the declaration formalities shall abide by all provisions of this
Law applicable to the owner.

Article 7
Customs personnel shall abide by the laws and regulations, enforce the law
impartially, be devoted to their duties and render services in a civilized manner.
No unit or individual may obstruct the Customs from performing its duties according to law.
Where a Customs of officer meets with resistance while carrying out his duties, the public
security organ and the People's Armed Police units performing related tasks shall provide
assistance.

Chapter II Inward and Outward Means of Transport

Article 8
When a means of transport arrives at or departs from a place where there is a
Customs establishment, the person in charge of the means of transport shall make a truthful
declaration to the Customs, submit the relevant papers for examination and accept Customs
control and examination.
The inward and outward means of transport staying at a place with a Customs establishment
shall not depart from it without prior permission by the Customs.
Before an inward or outward means of transport moves from one place with a Customs
establishment to another place with a Customs establishment, it shall comply with the control
requirements of the Customs and complete Customs formalities; no means of transport shall
be allowed to change its course and leave the territory unless it has cleared the Customs.



Article 9
An inward means of transport which has entered the territory but has not made its
declaration to the Customs or an outward means of transport which has cleared the Customs
but has not left the territory shall move along routes specified by competent communications
authories; in the absence of such specification, the routes shall be designated by the
Customs.

Article 10
The Customs shall be notified in advance, either by the person in charge of a
means of transport or by the relevant transport and communications department, of such
details as when an inward or outward vessel, train or aircraft will arrive and depart, where it
will stay, what places it will move to during its stay, and when the loading or unloading of the
goods and articities will take place.

Article 11
The inward or outward goods and articles being loaded on or unloaded from a
means of transport and the inward and outward passengers boarding or getting off a means
of transport shall be subject to Customs control.
Upon the completion of such loading or unloading, the person in charge of the means of
transport shall submit to the Customs documents and records which reflect the actual
situation of the toading and unloading.
Those boarding or getting off an inward or outward means of transport who carry articles with
them shall truthfully declare to the Customs and shall be subject to Customs examination.

Article 12
When an inward or outward means of transport is being checked by the Customs,
the person in charge of the means of transport shall be present and open the holds, cabins,
rooms or doors of the vehicles at the request of the Customs; where smuggling is suspected,
such person shall also open or dismantle the part of the means of transport which may
conceal smuggled goods and articles or remove the goods and materials. In accordance with
work requirements, the Customs may dispatch officers to perform duties on board the means
of transport. The person in charge of the means of transport shall provide them with
conveniences.

Article 13
An inward means of transport of countries or regions outside the territory or an
outward means of transport of units or enterprises inside the territory shall not be transferred
or devoted to other uses prior to the completion of Customs formalities and payment of
Customs duties.

Article 14
Where inward or outward vessels and aircraft are concurrently engaged in
transportation of goods and passengers within the territory, Customs approval shall be
obtained and requirements for Customs control shall be fulfilled.
Customs formalities shall be completed with the Customs for an inward or outward means of
transport to change to transport business within the territory.

Article 15
Coastal transport vessels, fishing boats and ships engaged in special operation at
sea may not carry, obtain on an exchange basis, purchase or transfer inward and outward
goods and articles without Customs approval.

Article 16
When, owing to force majeure, an inward or outward vessel or aircraft is forced to
berth, land or jettison and discharge goods and articles at a place without a Customs
establishment, the person in charge of the means of transport shall report immediately to the
Customs establishment nearby.

Chapter III Inward and Outward Goods

Article 17
All import goods, throughout the period from the time of arrival in the territory to the
time of Customs clearance; all export goods, throughout the period from the time of
declaration to the time of departure from the territory, shall be subject to Customs control.



Article 18
The consignee for import goods and the consignor for export goods shall make an
accurate declaration and submit the import or export licensee and relevant papers to the
Customs for examination. In the absence of import or export license, goods whose
importation or exportation is restricted by the State Council Declaration of import goods
should be made to the State shall not be released. Specific measures for handling such
matters shall be enacted by the Customs by the consignee within 14 days of the declaration
of the arrival of the means of transport; declaration of export goods shall be made by the
consignor 24 hours prior to loading unless otherwise specially approved by the Customs.
Where the consignee fails to declare the import goods within the time limit prescribed in the
preceding paragraph, a fee for delayed declaration shall be imposed by the Customs.

Article 19
All imports and export goods shall be subject to Customs examination. While the
axamination is being carried out, the consignee for the import goods or the consignor for the
export goods shall be present and be responsible for moving the goods and opening and
restoring the package. The Customs shall be entitled to examine or reexamine the goods or
take samples from them without the presence of the consignee or the consignor whenever it
considers this necessary.
Import and export goods may be exempted from examination if an application has been made
by the consignee or consignor and approved by the General Customs Administration.

Article 20
Unless specially approved by the Customs, import and export goods shall be
released upon Customs endorsement only after the payment of duties or the provision of a
guarantee.

Article 21
Where the consignee fails to declare the import goods to the Customs within three
months of the declaration of the arrival of the means of transport, the goods shall be taken
over and sold off by the Customs. After the costs of transport, loading and unloading and
storage and the duties and taxes are deducted from the money obtained from the sale, the
remaining sum, if any, shall be returned to the consignee provided he submits an application
to the Customs within one year of the sale of the goods; if nobody applies within the time limit
the money shall be turned over to the State Treasury. Inward goods confirmed by the
Customs to be misdischarged or over discharged may be returned to the place of
consignment or imported upon completion of necessary formalities by the person in charge of
the means of transport carrying the goods or the consignee or the consignor for the goods
within three months of the discharging. When neccessary, an extension of three months may
be granted through Customs approval. If the formalities are not completed within the time limit,
the goods shall be disposed of by the Customs in accordance with the provisions laid down in
the preceding paragraph. Where goods listed in the preceding two paragraphs are not
suitable for storage over a long period, the customs may, according to actual circumstances,
dispose of them before the time limit is reached.
Import goods declared to be abandoned by the consignee or the owner shall be taken over
and sold off by the Customs. The money thus obtained shall returned over to the State
Treasury after the costs of transport, loading, unloading and storage are deducted.

Article 22
Goods that are temporarily imported or exported with the approval of the Customs
shall be re-shipped out of or into the territory with six months. An extension may be granted in
special circumstances through Customs approval.

Article 23
The operation of the storage, processing and assembling and consignment sales of
bonded goods shall be approved by and registered with the Customs.

Article 24
Customs formalitites for import goods shall be completed by the consignee at the
Customs establishment at the place where the goods enter the territory; those for export
goods shall be completed by the consignor at the Customs establishment where the goods
depart from the territory.
If applied for by the consignee or the consignor and approved by the Customs, Customs
formalities from import goods may be completed at the place of destination where there is a
Customs establishment, and those for export goods at the place of consignment where there
is a Customs establishment. The transport of such goods from one place with a Customs
establishment to another shall comply with the control requirements of the Customs. When
necessary, Customs officers may escort the goods in transportation. Where goods enter or
leave the territory by electric cables, pipelines or other special means of conveyance, the
management units concerned shall report at regular intervals to the designated Customs
establishment and complete Customs formalities as required.

Article 25
All transit, transshipment and through goods shall be truthfully declared by the
person in charge of the means of transport to the Customs establishment at the place where
the goods enter the territory, and shall be shipped out of the territory within the designated
time limit. The Customs may examine such goods whenever it considers this necessary.

Article 26
Without Customs approval, no unit or individual may open, pick up, deliver, forward,
change, repack, mortgage or transfer goods under Customs control or change the
identification marks on such goods.
Seals affixed by the Customs may not be opened or broken by any person without Customs
authorization.
The managers of warehouses and places where goods under Customs control are kept shall
complete procedures for the receipt and delivery of goods in accordance with Customs
regulations.
The storage of goods under Customs control at a place outside a Customs surveillance zone
shall be approved by the a Customs and subject to Customs control.

Article 27
The General Customs Administration shall draw up, independently or jointly with the
relevant departments under the State Council, rules for control over the salvage of inward and
outward containers; rules for control over the salvage of inward and outward goods and
sunken shipis rules for control over inward and outward goods involved in small volumes of
border transactions and other inward and outward goods not specified in this Law.
Chapter IV Inward and Outward Articles

Article 28
Inward and outward luggage carried by individuals and inward and outward articles
sent by post shall be limited to reasonable quantities for personal use and shall be subject to
Customs control.

Article 29
All inward and outward articles shall be accurately declared to the Customs by the
owner and shall be subject to Customs examination.
Seals affixed by the Customs may not be opened or broken by any person without
authorization.

Article 30
The loading, unloading, transshipment and transit of inward and outward mail bags
shall be subject to Customs control, and a covering waybill shall be submitted to the Customs
by the postal enterprise enterprise concerned.
The postal enterprise shall inform the Customs in advance of the schedule for the opening
and sealing of international mail bag. The customs shall promptly dispatch officers to
supervise checking and examination on the spot.

Article 31
Inward and outward articles sent by post shall be posted or delivered by the
Customs.



Article 32
Articles registered with and approved by the Customs for temporarily entering or
leaving the territory duty free, shall be taken out or brought into the territory again by the
owner. Persons passing through the territory may not leave in the territory, without Customs
approval, the articles they carry with them.

Article 33
In accordance with Article 21 of this law, the Customs shall dispose of inward and
outward articles declared to be abandoned by the owner; articles to which no one makes a
claim or for which Customs formalities are not completed within the time limit set by the
Customs; and inward postal items which can neither be delivered nor be returned.

Article 34
Inward and outward articles intended for offical or personal use by foreign missions
or personnel enjoying diplomatic privileges and immunities shall be dealt with in accordance
with the Regulations of the People's Republic of China on Diplomatic Privileges and
Immunities.

Chapter V Customs Duties

Article 35
Unless otherwise provided for in this Law, Customs duties shall be levied according
to the import and export tariff on goods permitted to be imported or exported and articles
permitted to enter or leave the territory. The tariff shall be made known to the public.

Article 36
the consignee of import goods, the consignor of export goods and the owner of
inward and outward articles shall be the obligatory Customs duty payer.

Article 37
The Customs duty payer of import or export goods shall pay the amount levied
within seven days following the date of issuance of the duty memorandum. In case of failure
to meet this time limit, a fee for delayed payment shall be imposed by the Customs. Where
the delay excceds three months, the Customs may instruct the guarantor to pay the duties or
sell off the goods to offset the duties. The Customs may inform the bank to deduct the amount
of duties due from the deposits of the guarantor or the obligatory Customs duty payer when it
considers this necessary.
The payment of duties on inward or outward articles shall be made, prior to their release, by
the obligatory Customs duty payer.

Article 38
The duty-paying value of an import item shall be its normal CIF price, which shall be
approved by the Customs; the duty-paying value of an export item shall be its normal FOB
price, which shall be approved by the Customs, minus the export duty. Where it is impossible
to ascertain the CIF or FOB price, the duty-paying value of an import or export item shall be
fixed by the Customs. The duty-paying value of an inward or outward article shall be fixed by
the Customs.

Article 39
Duty reduction or exemption shall be granted for import or export goods and inward
or outward articles listed below:
(1) Advertising items and trade samples of no commercial value;
(2) Materials presented free of charge by foreign governments or international organizations;
(3) Goods to which damage or loss has occurred prior to Customs release;
(4) Articles of a quantity or value within the fixed limit;
(5) Other goods and articles specified by law as items for duty reduction or exemption; and
(6) Goods and articles specified as items for duty reduction or exemption by international
treaties to which the People's Republic of China is either a contracting or an acceding party.



Article 40
Duty reduction or exemption may be granted for import and export goods of the
Special Economic Zones and other specially designated areas: for import and export goods of
specific enterprises such as Chinese-foreign equity joint ventures, Chinese-foreign
contractual joint ventures and enterprises with exclusive foreign investment; for import and
export goods devoted to specific purposes; and for materials donated for use by public
welfare undertaking. The State Council shall define the scope and formulate the rules for such
reduction and exemption. The State Council or departments empowered by the State Council
shall define the scope and formulate the rules for duty reduction exemption or involved in
small volumes of border transactions.

Article 41
All import goods and articles for which duty reduction or exemption is granted in
accordance with the preceding Article shall be used only in specific areas and enterprises or
for specific purposes. They shall not be utilized otherwise unless Customs approval is
obtained and duties duly paid.

Article 42
Temporary duty reduction or exemption not specified in Articles 39 and 40 of this
Law shall be examined and approved by the general Customs Administration independently
or jointly with the financial department under the State Council in accordance with the
regulations of the State Council.

Article 43
Temportary duty exemption shall be granted for goods approved by the Customs as
temporarity imported or exported items and for bonded goods imported by special permission
after the consignee or the consignor of the goods submits to the Customs a guarantee or a
deposit of an amount equal to the duties.

Article 44
Where the Customs finds that the duties are short-levied or not levied on a
consignment of import or export goods or on an inward or outward article atter its release, the
Customs shall collect the money payable from the obligatory Customs duty payer within one
year of the previous duty payment or the release of the item. If the short-levied or non-levied
duties are attributable to the duty payer's violation of the Customs regulations, the Customs
may collect the unpaid amount from him within three years.

Article 45
Where the duties are over-levied, the Customs, upon discovery, shall refund the
money without delay. The duty payer may ask the Customs for refunding within one year of
the date of duty payment.

Article 46
Where the obligatory Customs duty payer is involved in a dispute over duty
payment with the Customs, he shall first pay the duties and may, within 30 days of the
issuance of the duty memorandum, apply to the Customs in writing for a reconsideration of
the case. The Customs shall reach a decision within 15 days of the receipt of the application.
If the obligatory customs duty payer refuses to accept the decision, he may apply to the
General Customs Administration for a reconsideration of the case within 15 days of the
receipt of the decision. If the decision of the General Customs Administration is still
considered unacceptable by the obligatory customs duty payer, he may file a suit in a
people's court within 15 days of the receipt of the decision.
Chapter VI Legal Responsibility

Article 47
Evasion of Customs control in one of the forms listed below shall constitute a crime
of smuggling: (1) To transport, carry or send by post into or out of the territory narcotic drugs,
weapons or counterfeit currencies which are prohibited by the State from being imported or
exported; to transport, carry or send by post into or out of the territory obscene objects for the
purpose of profit-making or dissemination; or to transport, carry or send by post out of the
territory cultural relics which are prohibited by the State from being exported; (2) To transport,
carry or send by post into or out of the territory, for the purpose of making a profit, articles in
relatively large quantities or of a relatively high value which are prohibited by the State from
being imported or exported, but which are not included in Item (1) of this Article; and goods or Articles in relatively large quantities or of a relatively high value whose importation or
exportation is restricted by the State or which are subject to the collection of Customs duties
according to law; or (3) To sell, without Customs approval and payment of duties, bonded
goods imported by special permission or goods listed for special duty reduction or exemption
which are in relatively large quantities or of a relatively high value. Any armed smuggling or
resistance by violence to Customs examination of smuggled goods or articles shall constitute
a crime of smuggling, whatever the quantity or value of the goods or articles involved. The
criminal punishments imposed by the people's court to persons guilty of smuggling include
imposing a fine and the confiscation of the smuggled goods or articles, of the means of
transport used for smuggling and of the illegal proceeds obtained therefrom. Where an
enterprise, an institution or a state organ or a public organization is guilty of smuggling, the
judicial organ shall investigate and determine the criminal responsibility of the person or
person in charge and the person or persons directly answerable for the offence, and issue an
order to impose a fine on the unit and confiscate the smuggled goods or articles, the means
of transport used for smuggling and the illegal proceeds obtained therefrom.

Article 48
If the smuggled goods and articles involved in one of the acts listed under Items (2)
and (3) of Article 47 of this Law are not large in quantity not of high value, or where the
carrying or sending by post of obscene objects into or out of the territory does not yet
constitute a crime of smuggling, the Customs may, while confiscating the goods, articles or
illegal proceeds obtained therefrom, concurrenly impose a fine on the person or persons
concerned.

Article 49
Any of the following acts shall be dealt with as a crime of smuggling and shall be
punishable accordance with the provisions of Article 47 of this law:
(1) To purchase directly and illegally from a smuggler articles which are prohibited by the
State from being imported; or to purchase directly and illegally from a smuggler other
smuggled goods or articles in relatively large quantities or of a relatively high value; or
(2) To transport, purchase or sell on inland or territorial waters articles which are prohibited by
the State from being imported or exported; or to transport, purchase or sell without legal
certification goods or articles whose importation or exportation is restricted by the State and
which are in relatively large quantities or of a relatively high value. Where an act listed in the
preceding paragraphs does not yet constitute a crime of smuggling, punishment shall be
applied in accordance with the provisions of Article 48 of this Law.

Article 50
Any individual who carries or sends by post articles for personal use into or out of
the territory in a quantity exceeding the reasonable limit and fails to declare them to the
Customs shall be made to pay the duties and may be fined.

Article 51
A fine may be imposed for any of the following acts which violate the regulations on
Customs control prescribed in this Law: (1) For a means of trans port to enter or leave the
territory at a place without a Customs establishment; (2) To fail to inform the Customs of the
arrival and departure time of a means of transport and the place where it will stay or any
change of such a place; (3) To fail to declare truthfully to the Customs the import or export
goods or the transit, transshipment and through goods; (4) To fail to accept, in accordance
with relevant regulations, the checking and examination by the Customs of the means of
transport, goods or articles entering or leaving the territory; (5) For an inward or outward
means of transport to load or unload inward or outward goods or articles or let passengers get
on or off without Customs approval; (6) For an inward or outward means of transport staying
at a place with a Customs establishment to leave without Customs approval; (7) For an
inward or outward means of transport en route from one place with a Customs establishment
to another with a Customs establishment to move out of the territory or to a point in the
territory where there is no Customs establishment without completing the clearance
formalities and obtaining Customs approval; (8) For an inward or outward means of transport
to engage concurrently in or change to service within the territory without Customs approval;
(9) For an inward or outward vessel or aircraft which, by force majeure, stops or lands at a
place without a Customs establishment, or jetisons or discharges goods or articles in the
territory to fail unjustifiably to report to the Customs authorities nearby; (10) To open, pick up,
deliver, forward, change, repack, mortgage or transfer goods under Customs control without
Customs approval; (11) to open or break seals affixed by the Customs without authorization;
or (12) to violate other provisions specified in this Law concerning Customs control so that the
Customs cannot exercise or has to suspend control over inward and outward means of
transport, goods or articles.

Article 52
The smuggled goods and articles, illegal incomes and means of transport used for
smuggling which are confiscated and the fines which are imposed by order of the people's
court shall all be turned over to the State Treasury, and so shall be the smuggled goods andArticles and illegal incomes which are confiscated and fines which are inposed by decision of
the Customs. It is the responsibility of the Customs to handle all smuggled goods and articles
and the means of transport used for smuggling which are confiscated by order of the people's
court or by decision of the Customs and to turn them over to the State Treasury in
accordance with the rcgulations of the State Council.

Article 53
If the party concerned objects to the Customs decision of punishment, he may hand
in an application for reconsideration of the case, either to the Customs establishment making
the decision or to one at the next highe level within 30 days of the receipt of the notification
punishment or, in case notification is impossible, within 30 days of the public announcement
of punishment. If the party concerned finds the decision reached after reconsideration still
unacceptable, he may file a suit in a people's court within 30 days of the receipt of the
decision. The party concerned may also file suit directly in people's court within 30 days of the
receipt of the notification on punishment or within 30 days of the public announcement of the
punishment. If the party concerned refuses to carry out the Customs decision and fails to
apply for a reconsideration of the case or file a suit in people's court within the prescribed time
limit, the Customs establishment making the decision of punishment may confiscate the
deposit of the party concerned or sell off the goods, articles or means of transport it has
detained to substitute for the penalty, or ask the people's court for mandatory execution of the
decision.

Article 54
If the Customs causes damage to any inward goods or articles while examining
them, it shall make up for the actual loss from such damage.

Article 55
The criminal responsibility of any Customs personnel who divide up confiscated
smuggled goods or article among themselves shall be investigated and determined in
accordance with Article 155 of the Criminal Law of the People's Republic of China. No
Customs personnel shall be allowed to purchase confiscated smuggled goods or articles.
Those who have done so shall be made to return the goods or articles, and may be given a
disciplinary sanction.

Article 56
Any Customs personnel who abuse their powers and intentionally create difficulties
in or procrastinate the control and examination process shall be given a disciplinary sanction.
Those who act illegally for personal gains neglect their duties or connive at smuggling shall be
given a disciplinary sanction or investigated for criminal responsibility in accordance with the
law, depending on the seriousness of the case.

Chapter VII Supplementary Provisions

Article 57
Terms used in this Law are defined as follows:
The term 'inward and outward means of transport' means various types of vessels, vehides,
aircraft an pack animals which enter or leave the territory carrying persons, goods or articles.
The term 'transit, transshipment and through goods' means goods which come from a place
outside the territory and pass through the territory en route to a place outside the territory.
Among them, 'transit goods' are those which pass through the territory by land, 'transshipment
goods' are those which do not pass through the territory by land but are loaded on a different
means of transport at a place with a Customs establishment, and 'through goods' are those
which are carried into and out of the territory by the same vessel or aircraft.
The term 'goods under Customs control' means inport and export goods and transit goods,
transshipment goods and through goods listed under Article 17 of this Law, temporarily
imported and exported goods, bonded goods and other inward and outward goods for which
Customs formalities have not been completed. The term 'bonded goods' means goods which
have entered the territory by approval of the Customs as items for which no formalities have
been performed in the way of duty payment and which will be reshipped out of the territory
after being stored, processed or assembled on the territory.
The term 'Customs surveillance zone' means any seaport, railway or highway station, airport,
border pass or international postal matter exchange station where there is a Customs
establishment, any other place where Customs control is exercised, and any place without a
Customs establishment which has been approved by the State Council as a point of entry into
and exit from the territory.

Article 58
The Customs, shall reward units or individuals for meritorious service in providing
information or assistance which leads to the disscovery and seizure of offenders against this
Law. It shall keep the identities of such units or individuals strictly confidential.

Article 59
The State Council shall draw up rules governing control over the means of transport,
goods and articles going between the Special Economic Zones and other specially
designated areas and other parts of the territory.

Article 60
The General Customs Administration shall, pursuant to this Law, formulate rules of
implementation to be reported to the State Council for approval before they come into force.

Article 61
This Law shall go into effect as of July 1, 1987. The Provisional Customs Law of the
People's Republic of China promulgated by the Central People's Government on April 18,
1951, shall be annulled therefrom.

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Provisions on Administration of Employment of Foreigners in China

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Decree [2001] No.336 of the State Council The Regulation of the People's Republic of China on the Administration of Insurance Companies with Foreign Investment has been passed at the 49th executive meeting of the State Council on December 5, 2001 and is hereby promulgated for implementation as of February 1, 2002.Premier of the State Council: Zhu Rongji December 12, 2001(11-26 10:47)

Chapter I General Provisions

Chapter I General Provisions
Article 1
These Provisions are hereby formulated in accordance with stipulation in relevant laws and
regulations to enhance management of employment of foreigners in China.



Article 2
The foreigners as referred to in these Provisions refer to persons who do not have Chinese
nationality as stipulated in the Nationality Law of the People's Republic of China. The term of
"employment of foreigners in China" as used in these Provisions refers to the behaviour of engaging
in social labour and receiving remunerations in accordance with law by foreigners who have not
obtained permits to reside in China.

Article 3
These Provisions are applicable to foreigners working inside China and units employing
foreigners. These Provisions are not applicable to persons enjoying diplomatic prerogatives and
immunity, such as those working in foreign embassies and consulates in China, UN representative
offices in China, and other international organizations stationed in China.

Article 4
The labour administrations under the people's governments at the provincial, autonomous
regional and municipal level and those at the prefectural level shall take charge of management of
the employment of foreigners in China.

Chapter II Employment Permission

Article 5
Units that employ foreigners shall apply for employment permission for these foreigners
and shall employ foreigners only after obtaining Certificates of the People's Republic of China
Permitting the Employment of Foreigners (hereinafter referred to as certificates of permission).

Article 6
The posts which employing units decide to fill with foreigners shall be those in special
need and which can not be taken up by domestic candidates for the time being. Moreover, no
relevant state provisions shall be violated in the while.
No units shall employ foreigners to engage in cultural performances with a business character,
except for those conforming with stipulations in Paragraph 3 of Article 9 of these Provisions.

Article 7
Foreigners seeking employment in China should meet the following qualifications:
(1) having reached the age of 18 and being healthy;
(2) possessing the professional skills needed for and corresponding work experiences in the work
to be taken up;
(3) free from criminal records;
(4) having specific employer units;
(5) possessing valid passports or other international travel documents that can replace passports
(hereinafter referred to as passport substitutes).

Article 8
Foreigners seeking employment in China shall enter China on the strength of occupation
visas (or in line with agreements on mutual exemption of visas if such agreements have been
reached) and can get employed only after obtaining Employment Certificates for Foreigners
(hereinafter referred to employment certificates) and residential documents for foreigners.
Foreigners who have not obtained residential documents (namely, those holding, F, L, C, and
G visas), foreigners studying or doing field work in China, and the dependents of foreigners holding
occupation visas shall not be employed in China. In special cases, employing units shall apply for
certificates of permission according to the examination and approval procedures stipulated in these
Provisions, and the foreigners to be employed shall change their status at public security
departments on the strength of these certificates of permission, and obtain employment certificates
and residential documents before they become employed.
The employment of the spouses of the persons in foreign embassies and consulates, in UN
organizations, and in the representative offices of other international organizations in China shall be
handled according to the Provisions of the Ministry of Foreign Affairs of the People's Republic of
China on the Employment of the Spouses of the Persons Working in Foreign Embassies, Foreign
Consulates, and UN Organizations in China, with relevant proceedings to be completed in line with
the examination and approval procedures stipulated in Paragraph 2 of this article.
Certificates of permission and employment certificates shall be prepared by the Ministry of
Labour in a unified way.

Article 9
Foreigners meeting one of the following qualifications can be exempted from certificates of
permission and employment certificates:
(1) Foreign experts and management personnel engaged with funds directly from the Central
Government or with funds from State organs or institutional units, foreign experts and management
personnel with senior professional titles or certificates of special skills acknowledged by
authoritative technical management departments or trade associations of their home countries or
international organizations, and foreigners carrying Certificates of Foreign Experts issued by the
Administration of Foreign Experts.
(2) Foreign labourers with Permits for Foreigners to Engage in Offshore Oil Operations in the
People's Republic of China who are engaged in offshore oil operations and do not have the need to
land, and who have special skills.
(3) Foreigners putting on art performances of a business character on the strength of Permits for
Temporary Performances of a Business Character as approved by the Ministry of Culture.

Article 10
Foreigners meeting any of the following qualifications can be exempted from obtaining
certificates of permission and can directly apply, upon entry into China, for employment permits on
the strength of occupation visas and other relevant certificates:
(1) Foreigners who are employed to work in China according to agreements and protocols signed
between China and foreign governments or international organizations, or who are employed to
implement Sino- foreign cooperative projects or projects of exchanges.
(2) Chief representatives and representatives of the residential offices of foreign enterprises in China.

Chapter III Application and Examination and Approval

Article 11
Units employing foreigners shall fill Application form for Employing Foreigners
(hereinafter referred to as the Application), file applications to departments in charge of their
respective trades at the same level of departments in charge of their labour management (hereinafter
referred to as departments in charge of respective trades), and present the following documents in
validity:
(1) Resume of the foreigners to be employed.
(2) Letter of employment intent.
(3) Explanation of reasons for the employment.
(4) Certificates qualifying the foreigners for the work.
(5) Health certificates of the foreigners to be employed.
(6) Other documents required by laws and regulations.
Departments in charge of respective trades shall carry out examination and give approval in
line with stipulations in Article 6 and Article 7 of these Provisions and other relevant laws and
regulations.

Article 12
After approval by departments in charge of respective trades, employer units shall go
through verification procedures with labour administrations at the provincial, autonomous regional
and municipal level or with authorized labour administrations at the prefectural level at their
locations, carrying with them the application forms. Labour administrations at the provincial,
autonomous regional and municipal level or authorized labour administrations at the prefectural
level shall appoint special organs (hereinafter referred to as certificate issuing departments) to take
specific charge of the work of the signing and issuance of certificates. Certificate issuers shall carry
out verification according to the opinions put forward by departments in charge of respective trades
and the supply and demand situation at the labour market, and issue certificates of permission to
employer units after verification.

Article 13
Employer units at the central level and those without being affiliated to any departments
in charge of respective trades may, if they want to employ foreigners, directly file applications and
go through employment permission procedures with the certificate issuing departments of labour
administrations.
Enterprises with foreign investment hoping to employ foreigners do not need to ask for
examination and approval from departments in charge of respective trades. They may apply for and
obtain certificates of permission directly from the certificate issuing departments of labour
administrations on the strength of their contracts, articles of association, certificates of approval,
business licenses, and the documents specified in Article 11 of these Provisions.

Article 14
The employer units that have obtained the approval to employ foreigners shall not directly
issue certificates of permission to the foreigners to be employed. The authorized units shall issue
visa notices and certificates of permission to the foreigners to be employed in stead.

Article 15
The foreigners who have obtained approval to work in China shall apply for occupation
visas at Chinese embassies or consulates on the strength of the certificates of permission issued by
the Chinese Ministry of Labour, the notices and certificates of permission issued by authorized units,
valid passports issued by their own countries, or documents that can substitute passports.
Those conforming with conditions specified in Paragraph 1 of Article 9 of these Provisions
shall apply for occupation visas on the strength of the notices sent by authorized units, those
conforming with conditions specified in Paragraph 2 of Article 9 of these Provisions shall apply for
occupations visas on the strength of the notices given by the China Offshore Oil Corporation, and
those conforming with conditions specified in Paragraph 3 of Article 9 of these Provisions shall
apply for occupation visas on the strength of the notices given by the foreign affairs offices of the
people's governments of relevant provinces, autonomous regions or municipalities and the
documents of approval issued by the Ministry of Culture (both will be given directly to Chinese
embassies or consulates in the countries concerned).
Those conforming with conditions in Paragraph 1 of Article 10 of these Provisions shall apply
for occupation visas on the strength of the notices given by authorized units and letters of projects of
cooperation and exchange. Those conforming with conditions specified in Paragraph 2 of Article 10
of these Provisions shall apply for occupation visas on the strength of the notices given by
authorized units and certificates of registration issued by administrations for industry and commerce.

Article 16
Employer units shall, within 15 days of the entry of the foreigners they employ, apply to
the original certificate issuing departments for certificates of employment for these foreigners and
fill the Form of Registration of Employment of Foreigners) on the strength of the certificates of
permission, the labour contracts they have signed with these foreigners, the valid passports of these
foreigners, or documents that can substitute the passports.
The certificates of employment are valid only in areas designed by certificate issuing
departments.

Article 17
Foreigners who have received certificates of employment shall, within 30 days after entry,
apply for and obtain residence cards from public security departments on the strength of their
certificates of employment. The term of validity of residence cards can be determined according to
the term of validity of the certificates of employment.
Chapter IV Labour Management

Article 18
Employer units and the foreigners employed shall sign labour contracts in accordance
with law. The term of labour contracts shall not be more than five years at the longest. Labour
contracts shall terminate upon the expiration of their terms, although their can be renewed after
completing procedures of examination and approval as stipulated in Article 19 of these Provisions.

Article 19
The certificates of employment of foreigners shall become invalid upon expiration of the
labour contracts they sign with employer units. If both parties hope to prolong the contracts, the
employer unit shall apply, within 30 days of the termination of the original labour contracts, to
labour administrations for prolonging the employment and go through, if approved, procedures for
extending the term of the certificates of employment.

Article 20
The foreigners who have prolonged their term of employment in China or changed their
locations of employment or employers shall go through alteration procedures with local public
security departments within 10 days of such changes.

Article 21
After termination of the labour contracts between the employed foreigners and the
employer units, the employer units shall make timely reports to labour and public security
departments, return the certificates of employment and residence cards of the foreigners, and go
through exit procedures with public security departments.

Article 22
Employer units shall not pay the foreigners they employ wages lower than local minimum
wage standards.

Article 23
The working hours, rest, holidays, labour safety and sanitation, and social insurance for
foreigners employed in China shall be handled in line with relevant State provisions.



Article 24
The employer units with which the foreigners work in China shall be same and one as
specified in the certificates of employment.
The foreigners who change their employers within the location designed by the certificate
issuing departments but still engage in the same occupation shall ask for approval from the original
certificate issuing departments and go through employment alteration procedures.
The foreigners who get jobs beyond the area designated by the certificates issuing departments
or change their employer within the area designated by the certificate issuing departments but
engage in different occupations shall go through procedures for employment permission anew.

Article 25
Employer units must terminate their labour contracts with the foreigners who have been
deprived by Chinese public security departments of the right to reside in China due to violation of
Chinese laws, and labour departments shall revoke the certificates of employment of these
foreigners.

Article 26
Should any labour disputes arise between employer units and employed foreigners, these
disputes shall be handled in line with the Labour Law of the People's Republic of China and the
Regulations of the People's Republic of China on the Settlement of Labour Disputes in Enterprises.

Article 27
Labour administrations shall carry out annual checks of certificates of employment.
Within 30 days of the conclusion of each full year of employment of foreigners, the employer units
shall go through procedures with the certificate issuing departments of labour administrations for the
annual check of certificates of employment on behalf of the foreigners they employ. Certificates of
employment shall become invalid automatically should employer units fail to go through these
procedures within the prescribed time.
Foreigners who lose or damage their certificates of employment while working in China shall
report their cases to the original certificate issuing departments and go through procedures for new
certificates.

Chapter V Penalty Provisions

Article 28
Foreigners who get employed without obtaining certificates of employment and employer
units that employ foreigners without obtaining certificates of permission shall be handled by public
security departments in line with Article 44 of the Rules for the Implementation of the Law of the
People's Republic of China on Administration of the Entry and Exit of Foreigners.

Article 29
Labour administrations shall revoke the certificates of employment of foreigners who
refuse checks of their certificates of employment by labour administrations, change their employers
or jobs without permission, or prolong their terms of employment without authorization, and ask
public security departments to deprive these foreigners of their qualification for residing in China. If
these foreigners are to be repatriated, the repatriation costs shall be shouldered by the employer units
or the foreigners themselves.

Article 30
Foreigners and employer units that forge, alter, transfer, trade or use other's certificates of
employment or certificates of permission shall be subject to confiscation of these certificates of
employment or certificates of permission by labour administrations and be fined at between over
10,000 yuan and below 100,000 yuan. Those who commit cases so serious as to become criminal
shall be handed over to judicial departments to affix criminal responsibilities.

Article 31
The staff members of certificate issuing departments and other relevant departments who
usurp their power, ask for illegal charges, or do wrong to serve their friends or relatives and as a
result commit crimes shall be affixed with criminal responsibilities or be administratively
disciplined if their cases are not so serious as to be criminal.

Chapter VI Supplementary Provisions

Article 32
Residents from China's Taiwan, Hong Kong and Macao regions who seek jobs on the
Chinese mainland shall be treated in line with the Provisions on Administration of Employment of
Taiwan, Hong Kong and Macao Residents on the Chinese Mainland.

Article 33
These Provisions are not applicable those foreigners who are employed in China's Taiwan,
Hong Kong, or Macao regions.



Article 34
Privately-owed economic organizations and individuals are forbidden to employ
foreigners.

Article 35
Labour administrations at the provincial, autonomous regional and municipal level may
formulate, together with public security departments and other departments, local implementing
rules of these Provisions and report these rules to the Ministry of Labour, the Ministry of Public
Security, the Ministry of Foreign Affairs, and the Ministry of Foreign Trade and Economic
Cooperation for the record.

Article 36
The Ministry of Labour is responsible for the interpretation of these Provisions.

Article 37
These Provisions shall enter into force as of May 1, 1996. The Provisions on the
Employment of Foreigners Who have Not Obtained Residence Cards and Foreigners Who Come to
China for the Purpose of Study promulgated by the former Ministry of Labour and Personnel and the
Ministry of Public Security on October 5, 1987 shall be repealed simultaneously.

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Catalogue of Encouraged Hi-tech Products for Foreign Investment (2003)

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CHINA LEGAL BULLETIN'S ONLINE AMAZON.COM CHINA MINI- BOOKSTORE Books and periodicals on Chinese law, import/export, sourcing from China, and foreign direct investment in Shanghai, Beijing, Guangzhou, Shenzhen, and Hong Kong
Chapter I General Provisions


Electronics, Computer and Computer Peripheral Equipments

1 Supercomputer (ten billion times and above)
2 Top-grade server (which comprises subsystems, such as supervisory control of network, disk,security, etc)
3 Large-scale simulation and emulation system
4 Large-scale industrial controlling machine and controlling unit
5 Computer digital signal processing board
6 High-speed, high-capacity memory system equipment
7 Wide-roll, high-resolution color printing equipment
8 Wide-roll, high-definition color Xerox equipment
9 Digital input liquid crystal display for flat PC
10 DVD reading and recording laser head
11 Printing head of high-resolution color printer (1200dpi and above)
12 Computer hard disk and its pivotal parts (120G and above)
13 Distance, non-tangible IC card and related implements
14 Hand-held GPS receiver
15 Graphics and image identifying and processing system
16 Wireless network interface adapter
17 Mobile PDA for wireless network
18 Hand-held inspection equipment for wireless network terminal
19 Data collection station for wireless network terminal Microelectronics and Photoelectron device
20 LSIC with line thickness¡Ü0.18 micrometer
21 Power electronic device
23 CCD devices
24 MCT infrared detector
25 CMOS image sensor
26 LED epitaxial wafer
27 High-brightness light-emitting diode (LED)
28 Blue and white luminotron
29 Fourth generation of (920¡Á720mm) and above polysilicon TFT-LCD and its support pieces
30 PDD flat display and its pivotal pieces
31 New-type LCOS display
32 Chip semiconductor device
33 Chip multi-layer compound device
34 Chip quartz crystal resonator
35 Chip ceramic and quartz crystal filter Communication Equipment and Products
36 High-end router
37 IP data communication equipment
38 Thousand Mb/s and above network exchanger
39 Communication equipment for broadband fiber access network
40 Communication equipment for fixed wireless access network
41 Digital trunked Communication equipment
42 10Gb/s and above SDH fiber communication equipment
43 Fiber wavelength-division multiplexer
44 OXC equipment
45 Fiber preformrod
46 3G mobile Communication Base Station
47 3G mobile communication exchange equipment
48 3G mobile phone
49 CDMA mobile Communication Base Station
50 CDMA mobile communication exchange equipment
51 CDMA mobile phone
52 622Mb/s and above SDH digital microwave transmission equipment
53 Microcomb wireless communication equipment
54 Satellite communication and transmission equipment
55 Velocity¡Ý10Gb/s laser for light communication
56 Light communication metering and check-out equipment
57 GSM, CDMA and IMT-2000 mobile communication check-out equipment Broadcast and Television echnology and Products
58 Broadcast grade SDTV and HDTV digital CCD phonograph
59 Broadcast grade digital video recorder
60 Broadcast grade digital television monitor
61 Digital video switch
62 Digital audio sound console
63 Multi-track digital audio decoder
64 MPEG code stream recording equipment
65 MPEG code stream editing equipment
66 Digital television program storing system equipment
67 Digital television broadcast MUX
68 TV Standards Converter
69 Digital television source (high definition television) encoder and decoder
70 Digital television converter
71 Equipment of data transaction broadcasting system for digital television
72 Digital television broadcasting transmitter
73 Digital sound broadcasting transmitter
74 Digital television broadcasting SFN equipment
75 CATV QAM modulator
76 CATV optical transmitter and receiver
77 Satellite digital television broadcasting uplink station equipment
78 SMATV head-end equipment
79 MVDS (multi-point video distribution system) equipment
80 Plasma (PDP) flat digital television receiver
81 High definition television big screen liquid crystal projection television
82 DLP (digital light processing) big screen projection television
83 Digital television bit error ratio supervising equipment
84 Digital television test Signal Generator
Production equipment and test instrument for specialized techniques
85 Automatic precise chip mounter
86 Automatic-manual printed circuit precise printer
87 Hot wind loading welder
88 Multistep repetitive ray recorder
89 Plasma sediment and erosion equipment
90 Ion injector
91 Epitaxial growth equipment of compound semiconductor
92 High-speed online checkout equipment
93 Large-scale digital integrated circuit function test set
94 Specialized integrated system SOC scale test technology equipment
95 Multi-chip assembling module test technology equipment
96 Digital oscillometer (1000MHz and above)
97 Spectrometer
98 Logic analyzer Software

System Software

1 Operating system software
2 Network and communication protocol processing software
3 High level language compiler
4 Device driver
5 Embedded operating system
6 Embedded browser
7 embedded graphical user interface Support Software
8 Internet/Intranet network administration software
9 Software development and testing platform
10 Computer-aided tool software
11 Middleware (non-confidential involved)
12 Database management system Application Software
13 E-commerce software
14 Multimedia design software
15 Simulation and emulation software
16 ERP application software
17 Intelligent software
18 Information and network security software (non-confidential involved)
19 three-dimension computer-aided design software
20 Integrated circuit design computer-aided application software
21 Online storage and offline backup software Aeronautics and Astronautics

Aircraft and Support Products

1 Commercial transporter (including aerobus and airfreighter)
2 Training plane
3 general-purpose airplane
4 Parts and components for commercial planes
5 Commercial helicopter
6 Parts and components for helicopters
7 Wing in ground effect craft
8 Commercial aircraft turbine fan engine
9 Commercial aircraft gas turbine engine
10 Turbine propeller engine
11 Turbine shaft engine
12 Fan engine
13 New-type piston engine
14 Aeronautic auxiliary propulsion system
15 Parts and components for aeroengine
16 Airborne equipment for commercial plane

Ground Service Equipment

17 Facilities for civil airports
18 Protective equipment for civil airports
19 Ground test equipment
20 Ground equipment for aviation experiment
21 Aeronautic test and measurement equipment
22 Specialized equipment for aeronautic manufacture
23 Specialized equipment for trial manufacture of aeronautic material
24 Aviation simulation and training equipment
25 Comprehensive test devices for airborne equipment
Commercial Carrier Rocket
26 Structural components for the body of carrier rocket
27 Ground test equipment for carrier rocket
28 Mechanic and environmental test equipment for carrier rocket
29 transport equipment for carrier rocket
30 Equipment for space museum
Commercial spacecraft and ground facilities
31 Electronic equipment for spacecraft
32 Optical mechanical and Electronic products for spacecraft
33 Structural and institutional product for spacecraft
34 Temperature control product for spacecraft
35 Test equipment for satellite-related product
36 Ground reception and application equipment
Opto-mechatronics
Automated Machinery and Equipment
1 Convertible five-sided processing center
2 Longmen processing center
3 Numerical controlled superfine lathe
4 Numerical controlled milling center
5 Numerical controlled precise spalling center
6 Highly efficient, high precision numerical controlled flat sharpener (precision accuracy<0.5¦Ì)
7 Numerical controlled high precision sharpener for internal and external circles (precision
accuracy<0.5¦Ì)
8 Numerical controlled cutter sharpener (principal coordinate interlocked)
9 Numerical controlled low-speed cross-threading, electric-spark line cutting machine
10 Numerical controlled tooth wimbling, milling machine
11 Numerical controlled precise hobber
12 Numerical controlled tooth-milling machine with worm and abrasive wheel and numerical
controlled shaping machine with abrasive wheel
13 FTL flexible cone production line
14 Numerical controlled mechanical press
15 Punching-shear compound processing machine
16 Plate multi-point shaping machine press without modules
17 Industrial robot and intelligent robot
18 Laser cutting and welding suite
19 Precise laser processing and erosion suite
20 Vacuo ion-ailming equipment
21 High-speed super-hard precise cutter system
22 Numerical controlled servo system
23 Tricoordinate gauging machine
24 Intelligent cooling device for processing equipment
25 High-speed, multi-spindle processing center (main spindle speed>12000r/min, rapid
speed>50m/min)
26 Numerical controlled precise tooth-milling machine with coiling umbrella and tooth gear
27 Numerical controlled multi-rod precise leveling machine
28 Numerical controlled coordinate-measuring milling center
29 Bottomup numerical controlled lathe and spalling center
30 Straightline and flat dynamo and its driving system
31 Numerical controlled coordinate-measuring grinding machine
32 Automated three-dimensional stockhouse
33 Rare earth permanent-magnet dynamo
34 Direct current pressure-modulating chopping draught gear
35 Alternating current frequency-and-pressure-modulating draught gear
36 Quarto four-color rotary offset machine and self-control system
37 Sterilizing equipment and automatisation
38 Computer jacquard weaving artificial fur machine
39 Superfine desintegrator (submicro grade)
40 Large-scale sterilized baling press
41 Weaving pill and corner loom
42 Superfine filter equipment (submicro grade)
43 Ceramic filter machine (submicro grade)
44 High-precision strip mill (10¦Ìm)
Key Basic Parts of Electromechanics
45 hydraumatic plunger pump and motor with high voltage>40MPa
46 High-voltage monoblock-type multiport valve
47 Low-power pneumatic valve, control valve for island use
48 High-frequency electric controlled air valve
49 Intelligent air cylinder
50 High-performance rubber obturator
51 High-temperature, high-voltage mechanical sealing
52 Non-tangible gas film sealing
53 Bearing for high speed passenger train car(1000 km/h and above)
54 Low noise bearing (vibration value 55 Covering piece die assembly for automobile
56 Intelligent plastic-shell circuit breaker (Voltage 380V, 660V, current 1000A)
57 Intelligent chest or drawer circuit breaker for large-scale project
58 Anti-skid brake system (ABS)
59 Electron controlled automatic transmission case
60 Electric steering gear with booster
61 On-vehicle diagnostic equipment
62 Electric device for gasoline engine
63 Electric device for diesel motor
64 Transfer device for automobile alternative fuel
65 Advanced electronic sensor for automobile
66 Turbocharger for engine
67 Exhaust gas recirculation equipment for engine
68 Efficient automobile tail gas purge switch (reach Europe III Standard)
69 Fueling battery for automobile
70 High-pressure oil supply system for diesel motor (¡Ý1600Bar)
71 Vehicle dynamic control system(VDC)
72 Active suspension system
73 Automobile collision avoidance system
74 Automobile electric antijoyride device
75 Intelligent control system for the internal environment of automobile
76 Multi-energy management system for automobile motive power
77 Air suspension system
78 Electronic Braking Device (EBD)
Instrumentation and System
79 On site bus control system
80 Dynamo and control system for electric automobile
81 Electricity dispatch and management automatic system
82 Automatic system for transportation and management
83 GPS position fix, inspection, alarming dispatch system
84 Comprehensive management system for security check-out in the coalmine
85 Automatic inspection and control system for hydraulic power plant
86 Non-work automatic compensation device
87 Automatic device for power generating facilities with new energy
88 Automatic cruise control system (automobile auxiliary driving system)
89 Electronic charging management system (non-stop electronic payment system)
90 Two pass flowmeter
91 Solid flowmeter
92 On-site bus intelligent instrument
93 Liquid phase chromatograph
94 Mass spectrograph
95 X-ray diffractometer
96 X-ray fluorescence spectrograph
97 Industrial chromatograph
98 Industrial mass spectrograph
99 Near infrared spectrograph
100 Optical Emission Spectrometer
101 Laser scanning microscope
102 Scanning tunneling microscope
103 Transmission microscope
104 Scanning electron microscope
105 Laser comparator
106 Optical maser (power>2KW)
107 Total station meter
108 High-definition numeric voltmeter (with measuring range of seven bit and a half and above)
109 High-definition numeric ampere meter (with measuring range of seven bit and a half and above)
110 Industrial X-ray defectoscope (800KV and above)
111 Performance test device specialized for automobile components
112 Automatic film plating machine with electron gun
113 Overspeed ultra centrifuge (100000r/min and above)
114 VXI bus automatic test system (in accordance with IEEE1155 international standards)
115 humidity, air and ion sensitive sensor
116 Fiber sensor
117 photoelectric sensor
118 Single lens reflex with high performance
119 Digital camera(with definition of 2 million pels and above)
120 Digital multifunctional duplicating machine
121 Automatic zooming camera
122 Digital multimedia projector
123 Nuclear magnetic resonance spectrometer
Biomedicine and Medical Equipment
Biomedicine
1 TNF receptor medicine
2 Growthfactor of neurocyte
3 Anti-body tumor antigen monoclonal antibody
4 Anti-body virus antigen monoclonal antibody
5 Recombinant Streptokinase
6 Monoclonal antibody-oriented medicine
7 P53 anti-cancer agent for recombinant adenovirus
8 Hepatitis detection kit
9 Pathogen diagnosis kit
10 Tumor diagnosis kit
11 Human immunodeficiency virus(HIV) diagnosis kit(including detection kit of standard enzyme
and standard golden as well as gene chip, etc.)
12 Extract of traditional Chinese medicine
Chemical medicine
13 Moracizine Hydrochloride
14 Ozagrel
15 Esmolol hydrochloride
16 Celiprolol Hydrochloride Tablets
17 Levamlodipine Besylate Tablet
18 Provastatin
19 Simvastatin
20 Lisinopril Capsules
21 Ticlopidine
22 Doxazosin
23 losartan
24 Macrogol 4000
25 Tegaserod
26 Docusate
27 Mifeprex
28 Norethisterone Enanthate
29 Piperaquine Phosphate
30 Sirolimus
31 Etimicin Sulfate
32 Cefaclor
33 Maxipime
34 Cefpirome
35 Meropenem
36 Linezolid/Zyvox
37 Flutamide
38 Memantine
39 Lamivudine
40 Production of paclitaxel by biotechnology
41 Exemestane
42 Gallium Nitrate
43 Capecitabine
44 Melphalan
45 Voriconazole
46 Phencynonate Hydrochloride
47 Machloramine
48 Paroxetine Hydrochloride
49 Pramipexole hydrochloride
50 Fluticasone
51 Salmeterol
52 Ibudilast
53 Articaine
54 Gabexate Mesilate
55 Poloxomer
56 polymethacrylamine I, II
57 Polyacrylic Acid
58 Carbomer
59 Compound sodium phosphate tablets
60 Zidovudine, Stavudine
Food Biotechnology and Products
61 Alkaline cellulase
62 Xylanase
63 Alkali tolerant protease
64 New type of L-amino acid
65 New type of D-amino acid
66 Glutathion
67 Chiral compound resolution or isomerase
68 L-amino acid
69 D-amino acid
70 Fungus amylose
71 High purity Metallo thionein (MT)
72 Fermentation glycerol
New-type medical equipment
73 Entrapping treatment equipment with boron neutron
74 Proton treatment equipment
75 Ultrasonic transducer for medical use
76 Digital diasonograph
77 Notebook digital color diasonograph
78 Cardiac pacemaker (including intracorporal one)
79 Electric craniotome
80 Cardiac telemetric monitor
81 Endoscope for medical use
82 Eyeground camera
83 Digital X-ray unit
84 X-ray tube (including tungsten target, molybdenum target and X-CT ray tube)
85 Specialized X-ray unit
86 X-ray image intensifier
87 Positive electron tomography (PET) device
88 ¦Ã single photon emitter tomography (SPECT) device
89 X-ray three-dimensional directional radiation treatment system (X-ray)
90 ¦Ã-ray three-dimensional directional radiation treatment system (¦Ã-ray)
91 Sensor for medical use
92 Standard enzyme immunity analyzer
93 Blood analyzer
94 Biochemical analyzer
95 Mechanical heart valve and invitro test device
96 Blood dialyzer (mechanical kidney)
97 Aqueduct for medical use
98 Blood vessel embolus agent and plunger material
99 Hemanalysis blood transfusion device
100 Device for reimportation of blood from his own body
New Material
Metal Material
1 High damping material
2 Full-length quenching heavy rail (rail of 60, 75 kg)
3 Anti-crush oil pipe for superdeep well
4 Pipeline steel of X70 and above
5 Purified, high carbon chromium bearing steel and carburization bearing steel
6 High-quality deep-drawing steel plate for automobile
7 Expansion joint of metal bellows
8 Metal hose of high-flexibility stainless steel
9 Iron based or ironnickel based amorphous, minicrystal alloy
10 Cobalt based or cobaltnickel based amorphous, minicrystal alloy
11 Hitemperature alloy powder
12 High-performance prestress steel wire
13 High-intensity and low-relaxation prestress steel strand
14 New type structural stainless strand
15 Erosion resistant modification material for the surface of turbine blade
16 High-performance agglomeration rare earth material with permanent magnetism
17 High-performance welding rare earth material with permanent magnetism
18 Highly-insulated rare earth material with permanent magnetism
19 High-performance ferrite material
20 Rare earth permanent magnet processed by anti-shielding technology
21 welding wire and thread of drug core
22 Hydrogen-stored rare earth material for dynamic battery
23 Lithium ion electrode material
24 Niobium powder and thread for capacitor
25 Polysilicon
26 Silicon monocrystal and polished chip with diameter of 150mm and 200mm
27 Zone-melting silicon monocrystal
28 Compound semiconductor material (gallium arsenide, gallium phosphide, gallium nitride)
29 Polysilicon, amorphous silicon for solar battery and battery components
30 Hitemperature superconducting material
31 Memory alloy material (titaniumnickel, copper-based and ferrum ¨Cbased memory alloy material)
32 Superfine (nanometer) calcium carbide and superfine (nanometer) crystal hard alloy (including
high-precision hard alloy and high-precision hard cutter)
33 Superhard composite material
34 precious metal composite material
35 New material of rare earth and application ware
36 Compound aluminum foil for radiator
37 Medium and high voltage aluminum foil of cathode capacitance
38 Large-scale aluminum alloy bar section of special type
39 Prestretching thick plate of aluminum alloy and enveloped plate of aluminum alloy
40 Precise die forging of aluminum alloy
41 High-intensify aluminum alloy material
42 PS aluminum alloy plate
43 Aluminum plate for beverage can
44 Electrified rail overhead wire
45 Superthin copper strip
46 Erosion and heat resistant copper alloy tube for exchanger
47 High-performance coppernickel and copper ferroalloy strip
48 Berrillium copper strip, wire, tube bars
49 Rare earth luminescent material (plasma panel display fluoresent material, white LED rare earth
fluoresent material)
50 High temperature and senescence resistant tungsten filament
51 Magnesium alloy cast
52 Solder without plumbum
53 Processed material of magnesium alloy plate, tube and bar
54 Magnesium alloy and magnesium alloy weld assembly processed by surface modification
technology
55 Foamed aluminum
56 Titanium alloy bar and titanium welding tube
57 Big-mangneto stretching material of rare earth ferroalloy and application products
Inorganic Nonmetal material
58 Superfine powder of silicium carbide(SIC) (purity>99%, average power diameter: 0.5~5¦Ìm)
59 Superfine power of silicon nitride(SI3N4) (purity>99%, average power diameter: 0.5~5¦Ìm)
60 Superfine r-AL2O3 miropowder(average power diameter<0.5¦Ìm)
61 Zirconium oxide ceramic powder
62 Highly-purified aluminium nitride powder(Aln) (powder diameter: 0.5-2¦Ìm)
63 Antiseptic scavenger
64 Titanium dioxide (powder diameter 50~100nm, purity¡Ý98.5% )
65 Silica pigment (powder diameter 10~100nm)
66 Barium titanate (purity 99% , powder diameter<1¦Ìm)
67 High concentration hydrogen peroxide(content 95~98%)
68 Specialized sodium phosphate
69 Ceramic wafer
70 Inorganic splitting membrane and functional diaphragm
71 Piezoelectric ceramic parts
72 High-performance ceramic cutter material
73 Multifunctional light composite board
74 Fiber gypsum board
75 High-quality synthetic quartz crystal
76 High-performance synthetic mica and products
77 Thermotropic thermal resistor (PTC)
78 Silicon carbide ceramic
79 Silicon nitride ceramic
80 Ceramic with microwave as medium
81 BN-TiB2 current conducting compound ceramic
82 ZrO2 ceramic
83 Hitemperature resistant workable ceramic
84 Diamond membrane tool
85 Diamond drawing die
86 Artificial diamond of saw blade level
87 Cubic boron nitride crystal
88 Ceramic material and product of comb extrusion
89 Porous ceramics and product
90 High-efficiency compound thermal insulation material for external wall
91 Lightweight aggregate concrete building block (not load bearing type)
92 Multidimensional, multi-directional integrated weaving fabric and modeling fabric
93 High-intensity fiberglass and high-elasticity modulus fiberglass
94 Quartz fiberglass and product
95 Aluminum coated fiberglass
96 Grey yarn felt of consecutive fiberglass and superficial felt of fiberglass
97 Direct twistless slubbing of high-density fiberglass
98 Fiberglass cloth and thin felt for microelectronics
99 Electromagnet wave screening glass
100 High-intensity anti-bulletin glass
101 Microcrystal glass baseplate for disk
102 Glass baseplate for microelectronics
103 Infrared penetrating glass
104 Fused sealing glass for electron device
105 Quartz glass for laser
106 Large-scale quartz glass diffusion tube, crucible and bell of electronic level
107 High-performance optical quartz glass
108 Optical fiber plate, image inverter and fiber light cone
109 micro-channel plate of super second generation and third generation
110 Image inverting beam
111 Laser medical fiber and laser transmitting quartz fiber
112 Fiber preformrod, fiber and fiber cable
Organic Macromolecule Material and Products
113 High anti-weathering decorative anticorrosion paint
114 Metal lighting vanish and coating varnish of CA series
115 WBC aqueous metal lighting vanish for automobile
116 cathode electrophoretic vanish with thick film of HED series
117 Paint for ship
118 Paint for aircraft
119 Rare earth cerium sulphide red dye
120 Flexible resinous plate
121 Laser image output film
122 Color ink jet printing material
123 Photoresist
124 Electronic enveloping resin
125 Ray-recording pulp for plasma color display
126 High-performance printing ink(Fineness¡Ü20¦Ìm, acidproof, alkaliproof)
127 Superpure gas with electronic grade
128 Carbinol synthetic catalyst under low pressure
129 Conversion catalyst low water carbonizing methane
130 Catalyst of low water carbonizing CO under high temperature
131 Catalyst for catalysis and crack of heavy oil
132 FCC catalyst and accessory ingredient against the contamination of heavy metal
133 Special molecular sieve
134 Three-effect catalyst for purification of automobile tail gas
135 Special type catalyst for dearsenication of oil product
136 Aramid fiber
137 Carbon fibre
138 High-performance superfine fiber
139 High-die, low-shrinking industrial terylene filament
140 Elastic fiber
141 Electrolytic capacitor paper
142 High-performance base paper for copper-coated foil board
143 High-precision fuel filter
144 Color spray painting paper
145 Temperature-resistant sheathing paper
146 Hidronickel and Lithium battery diaphragm
147 Macromolecule splitting membrane
148 ¦Á- alkenyl sulphonate
149 APG
150 Glucose acidamide
151 Auxiliary ingredient and additive for plastic and rubber
152 New type of leather tanning agent and auxiliary tanning agent
153 New type of leather tallow-adding agent and softening agent
154 Water-type polyurethane leather coating agent of PU series
155 Leather coloring agent and fixing agent
156 Pourpoint depressor and thinning agent of crude oil
157 Amphion polymer mud conditioner
158 High-temperature-resistant, edge-water encroaching, sand fixing agent
159 Biochemical treating compound for oily waste water
160 Citric acid diglyceride
161 Dye fixing agent of color jet printing paper
162 Polycarbonate alloy
163 Polyformaldehyde
164 Poly phenylene oxide (ppo)
165 Engineering plastics nylon 11, nylon 12
166 Polyphenylene sulfide (pps)
167 Polyimide (pi)
168 Polysulfone
169 Polyarylester (PAR)
170 Polyether ether ketone (PEEK)
171 Liquid crystal polymer
172 Organosilicon and organosilicon rubber
173 Thiocol
174 Fluoro resin
175 Fluoro rubber
176 Polyvinyl resin of medium density
177 Neutral sizing agent of spreading rosin size
178 Control agent for the second fiber blockage
179 Polymer emulsion (surface cypres)
180 Biologically degradable polyester
181 Deltamethric Acid
182 2-Chloro-5-(chloromethyl) pyridine
183 Tebufenozide (pesticide)
184 Oxaxystrobin (bactericide)
185 Flumetsulam (weed killer)
186 Rimsulfuron (weed killer)
187 Ryclosulfamuron (weed killer)
188 Ethoxysulfuron (weed killer)
189 Azolsulfuron (weed killer)
190 Fludioxonil (bactericide)
191 Cyazofamid (bactericide)
Composite Materials
192 Continuous fiber enhanced thermoplasticity material (including presoaking material)
193 Pivotal aided material used in resin base composition
194 Resin base composite oar
195 High-grade sports goods with resin base composite
196 High-performance composite container
197 Special-performance glass-reinforced plastic pipe(pressure>1.2MPa)
198 Special-performance composite material and products
199 Deep water and diving composite products
13/21
200 Composite products for medical and healing purpose
201 Carbon/ carbon compound material and brake block
202 High-performance ceramic based composite and products
203 Metal based composite and products
204 Metal stratiform composite and products
205 Extrahigh pressure composite plastic tube with pressure¡Ý320MPa
206 Precise rubber products
207 Specialized rubber fabric products
208 Aircraft tire
209 Specialized emulsion products
210 Hydroacoustic rubber products
211 New-type high speed preservative
New Energy and Efficient Energy Saving
New Type Energy and Equipment
1 Solar battery and components
2 Photovoltaic generation invertor
3 Photovoltaic generation controller
4 Photovoltaic generation measuring equipment
5 Solar battery production equipment
6 Solar battery production raw material
7 Solar photovoltaic power supply
8 Water battery water pump system
9 Geothermal power generation suite
10 Automatic geothermal constant pressure water supply system
11 Tide power generation suite
12 Wave power generation suite
13 Proton exchange membrane fuel cell(PEMFC)
14 Power generation equipment for proton exchange membrane fuel cell(PEMFC)
15 New type valve controlled panseal maintenance-free lead acid battery
16 Metal hydride-nickel (MH/Ni) powered cell
17 Zinc nickel storage battery
18 Zinc silver storage battery
19 Aeronautic cadmium nickel battery
20 Lithium ion battery
21 Rechargeable non-Hg alkaline manganese battery
22 Cylinder zinc air battery
23 Non-Hg alkaline manganese battery with retention period>5years
24 1000KW and above large-scale parallel wind driven generator group
25 1000KW and above large-scale parallel wind driven generator group blade
26 Concentration and distance inspection system of wind driven power plant
27 Independent wind driven generator group controller and invertor
28 Low-heat small-scale gas turbine generator group
29 Sterling generator group
30 Megaton direct coal fluidification equipment
31 Megaton indirect coal fluidification equipment
32 Hydrogen energy generation, reservation and transportation equipment and checkout system
33 Solar airconditioning and heating system
34 Solar drying unit
35 Solar thermal power generation system
36 Biomass pyrolysis system
37 Biomass gasifiying equipment
38 Waste power generation suite
39 Specialized marsh gas power generation equipment
Energy-saving Product
40 Electric diesel engine and high-pressure fuel injection equipment
41 Electric gasoline engine
42 High power of 50 tons and above direct current arc furnace
43 amorphous state alloy transformer
44 IGBT contravariant electric welding machine
45 Static reactive compensation equipment
46 600MW and above supercritical turbo power generator group
47 40MW and above combustion turbine power generator group
48 300MW and above large-scale recycling fluidized bed boiler(CFB)
49 Pressure enforced fluidizing cooperative cycling generator group(PFBC)
50 Integrated gasified cooperative cycling generator group(IGCC)
51 300MW and above large-scale air cooling generator group
52 35MW and above large-scale stay column assembly hydroelectric generator group
53 100MW and above large-scale pump storage groups
54 600MW and above nuclear power generator group
55 ¡À500MV and above extrahigh voltage direct current transmission facilities
56 Cool and heat storage device
57 New type heavy residual oil atomizing nozzle
58 Coal-water slurry burner
59 High-efficiency steam draining valve(leakage rate ¡Ü0.5%)
60 High temperature(¡Ý1000¡æ) ceramic heat exchanger
61 Blower fan of adjustable vane adjustable axle power station
62 Low noise disrotatory booster
63 high pressure compressor for ship and vessel with working pressure ¡Ý15MPa
64 Reclaimed water treatment and recycling system
65 clean coal suite and device
66 Device for comprehensive utilizing of waste gas, waste liquor and water residue
67 Comprehensive utilizing device of worn-out tyres
Environmental Protection
Atmospheric Pollution Prevention and Control Equipment
1 Large-scale bag type collector
2 Horizontal electrical precipitator
3 High temperature resistant filtering material
4 (Semi-) Dry stack gas desulfurization suite
5 Wet stack gas desulfurization
6 Low NOX combustion train
7 Stack-gas denitrification suite
8 High-efficiency acid mist purifier
9 Industrial organic waste gas purifier
10 High-efficiency ternary catalyzing and purifying apparatus
11 Purifying device for exhaust air emitted by diesel oil automobile
Water Pollution Prevention and Control Equipment
12 Belt press filter with concentration and dehydration integrated
13 Horizontal screw centrifugal dehydrator
14 Automatic filter
15 Membrane separating device
16 Sesalination of sea water device
17 Ozonator
18 Chlorine dioxide generator
19 Oxidation unit
20 Membrane electrolyzer
21 Ultraviolet disinfection unit
22 Mechanical face aerator
23 Brush aeration
24 Automatic decanting unit
Solid Waste Disposal Equipment
25 High-density polythene antiseepage membrane
26 Waste compactor
27 Anaerobic fermentation device for biologically degradable organic waste
28 domestic waste incineration device
29 Waste incineration & power generation device
30 Incineration device for toxic and harmful solid waste
31 Compressing city refuse collector trunk
32 Deserted foam recycling device
33 Worn-out household appliances recycling and disposal suite
34 Device for power generating by marsh gas in the landfill
35 CNG generating and reserving suite by marsh gas in the landfill
Environment Monitoring Instrument
36 PM10 automatic sampler and calcimeter
37 SO2 automatic sampler and calcimeter
38 NOX, NO2 automatic sampler and calcimeter
39 O3 automatic monitor
40 CO automatic monitor
41 automatic sampler and calcimeter for acid rain
42 automatic sampler and calcimeter for soot and dust
43 automatic sampler and calcimeter for flue gas
44 Automatic calcimeter for automobile tailor gas
45 Portable calcimeter for harmful and toxic gas
46 Floating air quality monitoring car
47 Intermittent automatic analyzer for organic pollutants in the air
48 COD automatic online monitor
49 BOD automatic online monitor
50 Automatic online monitor for turbidity and conductance
51 DO automatic online monitor
52 TOC automatic online monitor
53 TOD automatic online monitor
54 Automatic online monitor for ammonia nitrogen
55 Calcimeter for oil content
56 Multifunctional onsite monitor for water quality
57 On-vehicle XX-ray fluorescence (XRF) spectrometer
58 Noise spectrum analyzer
59 Vibration gauge
60 Radiation dose monitor
61 Ray analyzer
62 CH automatic monitor
63 Sound insulation and absorption material and device
64 Ventilation silencer
65 Ventilation noise suppressor and silencer
66 Silencer for pressure-reducing¨Cand-relieving valves of blast furnace
Geospace and Ocean
Reconnoitering and developing apparatus for energy sources and the mineral sources
1 Digital seismograph (equal and above 4000 way)
2 Earthquake reconnoitering data processing system
3 Electricity-driving super-deep well drilling machine
4 Apparatus and equipments for horizontal well, directional well and artesian well
5 MWD well meteraging apparatus
6 Bore well slurry fixing equipment and combination gas floor protective agent
7 Digital deep petroleum well drilling machine
8 Super-deep well mending preparation
9 Portable geologic radar
10 Measuring and disaster-forecasting apparatus for under ¨Cwells and mines
11 Mill running apparatus for those poly-elements, meticulous granule metal minerals and those
difficult to select ones
12 Multi-functional electric reconnoitering apparatus
13 Aviation electric and drgama energy chart measuring apparatus
14 Under-well gravity and three-heft magnetometer (<10nT)
15 High-precision measuring apparatus for tiny-gal gravity and aviation gravity
16 Portable field geologic information gathering and processing apparatus with the function of GPS
and GIS
17 On-the-spot field fast analytic apparatus for chemical elements
Equipments for engineering meteraging and globe physical observation
18 Digital triangle measuring system
19 Digital programmed system for three-dimensional topography model (acreage>1000¡Á1000mm,
horizontal error<1mm, altitude error <0.5mm)
20 Super-wide frequency band seismograph (¦Õ<5cm, frequency band0.01-50HZ, equivalentquaking
speed noise<10-9m/s)
21 Earthquake data processing system
22 Extensive under-well earthquake and auspice measuring apparatus
23 Long-time controlled precise epicenter system
24 Engineering acceleration measuring system.
25 High-precision GPS receiver (precision 1mm + 1ppmm)
26 INSAR graphics receiving and processing system
27 Absolute gravimeter with the precision less than 1gal
28 Satellite gravimeter
29 Doppler weather radar (adopting coherent technology or double polarization technology)
30 Electronic sounding apparatus
31 Auto- remote sensing weather station
32 Meteorological satellite receiving and processing system.
33 Visibility measuring apparatus
34 Intelligent meteorological sensor (including temperature, pressure, humidity, wind, precipitation,
dew point and solar irradiance)
35 Anti lightning stroke system
36 Multilevel soot and dust sampler
37 Micaps meteorological graphics interchange system
38 Acoustic anemoscope (applicable to land and ocean)
Foundation Stability Exploration and Checkout for Large-scale Project
39 Tunnel borer(TBM, gross section>20M2)
40 Big-caliber spinning drilling machine (caliber>1M, depth>30M)
41 Large-scale no-dig underground line seepage suite (towing force>100 ton)
42 Underground continuous wall borer
43 Computer-controlled automatic vertical drilling system (VDS)
Ocean Inspection Technology
44 Ship-borne weather instrument
45 Flux gate compass and potentiometer compass
46 Glass floating ball (net buoyancy>25kg, Depth no less than 1500 m)
47 Wavemeter (applicable in the seashore and open sea)
48 Haulier for marine survey
49 Auxiliary deck equipment for oceanographic research ship (including hydrographic winch and
undulation compensator)
50 Underwater sealed electronic connector
51 Lab salinity indicator
52 Standard seawater
53 Standard solution
54 Oceanic standard matter
55 Counter-osmosis desalinator with daily output of one to ten thousand tons
56 Low temperature multieffecient distilling desalinator with daily output of ten thousand tons and
above
57 Consecutive microstraining and ultrafiltrating device
58 Marine ecosystem inspection buoy
59 Self-vicissitude ocean drifting buoy(Section depth 2000M, work continuously for 3-5 years)
60 Disposable bathythermometer(XBT)
61 Disposable measuring instrument of electrical conductivity, temperature and depth (XCTD)
62 Selfreversal deep sea floor sampling equipment (application depth>4000M)
63 On-the-spot water quality measuring apparatus
64 Intelligent transducer for measuring the water quality of the ocean (continues work for 3-
6months)
65 Ocean current measuring apparatus (by the way of acoustics, mechanism and electromagnetism)
66 Navigating acoustic Doppler current profiler (ADCP for ship)
67 CTD section measuring apparatus
68 Acoustic responding emancipator
69 Acoustic fluviograph
70 Tide measuring system for blue water (set deep into the ocean)
Nuclear Applied Technology
1 Radiation source and production equipments
2 Neutron, electron and ¦Ãirradiation equipments
3 Anti-nuclear materials and equipments
4 Ion source and equipments
5 Modified product by nuclear irradiation
6 Isotope products and manufactured goods
7 Isotope production equipments
8 Non-heavy isotope segregating unit
9 Isotope detection equipments
10 Radionuclide generator
11 Nuclear fuel component element and discreteness
12 Particle accelerator (including high-voltage multiplier)
13 Nuclear magnetic resonance apparatus
14 Ion and radial detection and analysis apparatus
15 Geology perambulation and mine detection apparatus
16 Nuclear apparatus for national soil investigation
17 Apparatus for nuclear radiation defense
18 Component elements for nuclear detection
19 Experimental reactor and its relevant equipments
20 Light water nuclear power plant and its relevant equipment
21 Heavy water nuclear power plant and its relevant equipment
22 Neutron breeder reactor and its relevant equipments
23 High temperature air-cooled reactor and its relevant apparatus
24 Low temperature heat-providing reactor and relevant apparatus
25 Controlled nuclear fusion equipments and its relevant equipments
26 Nuclear battery
27 Technological equipments for nuclear apparatus retirement
28 Disposion equipments for nuclear waste
29 Managing, checking and maintaining apparatus of the nuclear power plant
30 Training simulator for nuclear power plant running
Modern agriculture
New breeds of choiced animals and plants
1 Breeding selection for new rice breed and new combination (including two crops of hybrid rice)
2 Breeding selection for new wheat breed and new combination (including special and hybrid wheat)
3 Breeding selection for the new breed of beer barley
4 Breeding selection for new combination of corn (including anti-insects GM corn)
5 Breeding selection for the new breed of choiced cole
6 Breeding selection for the new breed of choiced soy bean (including anti-weedicide GM breed)
7 Breeding selection for the new breed of choiced cotton (including anti-insects GM corn breed
8 Breeding selection for new hybrid breed of cabbage
9 Breeding selection for the storage-enduring GM tomatoes.
10 Breeding selection for new capsicum (hot or sweet) breed and new combination
11 Breeding selection and poison-free, fast propagation of the new breed of potatoes.
12 Breeding selection for new tea breed and the production of the tea that has no social effects of
poison
13 New breed of polyploid trees
14 New anti-insect GM tree breeds.
15 Breeding selection and processing of choiced feedstuff and new breeding grass
16 Breeding selection and fast propagation for new breed of fish, shellfish and algae
17 Polyploid for fish, shellfish and algae
18 Genetic engineering for fish, shellfish and algae
19 Trigamous growth system of fish and shrimp
Fine breed's embryo biologic engineering products of the livestock
20 Choiced Holstein cattle's frozen sperm
21 Choiced Holstein cattle's frozen embryo
22 Choiced cattle's sperm and embryo
23 Choiced sheep's frozen sperm and embryo
24 Choiced goats' frozen sperm and embryo
25 Choiced livestock's embryo transplanting and breeder
26 GM embryo for livestock
27 Biologic reactor and its relevant products of animals
28 Embryo biologic engineering medicine and the relevant apparatus
Biologic pesticide and biologic prevention products
29 Animalcule pesticide
30 Animalcule antiseptic
31 Pesticide antibiotics
32 Peculiar botanic source pesticide
33 Peculiar creatural source pesticide
34 Natural enemy of the insects
New diagnostic reagent and biologic vaccine
35 Mono-colon antibody diagnostic reagent
36 Reformed antigen diagnostic reagent
37 PCR diagnostic reagent
38 Gene technology sub-unit vaccine
39 Living carrier vaccine
40 Gene-deficiency reformed vaccine
41 Nucleic acid vaccine
42 Edible vaccine
43 Anti-peculiar antibody vaccine
New fertilizer
44 Compounded animalcule inoculation preparation
45 Compounded animalcule fertilizer
46 Botanic bacterium promotion preparation
47 Stalk and rubbish rotting preparation
48 Animalcule preparation with special function
49 New fertilizer
50 Biologic organic fertilizer
51 Organic compounded fertilizer
52 Botanic stable nourishing fertilizer
New high-efficiency f feedstuff and additive
53 Feedstuff nourishing additive
54 Chemical combined additive for feedstuff's use
55 Enzyme preparation for foodstuff's use
56 Biologic avidity preparation for foodstuff's use
57 Natural effective components preparation for foodstuff's use
Agricultural engineering apparatus
58 Auto-controlled agricultural engineering apparatus
59 Auto-collocation and fertilization apparatus for glasshouse irrigation nourishment liquid
60 Laneway intelligent brooder
61 High-efficiency processing equipment for the seeds of agricultural products
62 Auto-revolving engrafting machine for vegetables
63 Plough-free corn seeder
64 100 horsepower tractor and low discharging diesel engine
65 High-speed rice transplanter and circumvolving rice transplanter
66 Cotton picking Machine and picking head
67 Polished seeder and seeds-picking machine
68 Tying machine, film wrapping and knotting machine
69 Hydraulic- pressure drive automatic combine harvester for corns
70 Slight drop irrigation apparatus
71 Slight drop irrigation fertilization apparatus
72 Slight drop irrigation filtration apparatus
73 Sprinkling irrigation equipment
Apparatus for the storage of agricultural products and byproducts, and the processing of the new
tech-products
74 Testing apparatus for grain processing quality
75 Non-damage detection apparatus for fruit and vegetables
76 Rheometer
77 Farinograph
78 Pre-cooling and fresh keeping equipment for fruit and vegetables
79 Pre-cooling and fresh keeping truck for fruit and vegetables
80 Fast pre-cooling equipment for fruit and vegetables
81 Auto-cleaning and grading equipment for fruit and vegetables
82 Slight smash and super-slight smash equipment
83 Powder non-screen separation equipment
84 Energy-saving and high-efficiency dehydration equipment
85 Energy-saving and high-efficiency juice-condensed equipment
86 Heated steamy drying equipment
87 Energy-saving and high-efficiency drying equipment
88 Ice-out equipment of macro-wave and high frequency
89 Sterilization equipment for powdery food material
90 Axenic canned equipment for containing solid and half-solid food
91 Axenic canned equipment for containing liquid food
92 Axenic wrapping wrapper
93 Advanced equipment for non-heated sterilization
94 Low formaldehyde of high density of E1 grade
95 Continuous microwave sterilization and extraction

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Accounting Law of the People's Republic of China

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Originally Adopted at the Ninth Meeting of the Standing Committee of the Sixth National People's Congress on January 21, 1985, as Amended at the Fifth Session of the Standing Committee of the Eighth National People's Congress on December 29, 1993

Chapter I General Provisions

Chapter I General Provisions
Article 1.
This law is formulated in order to standardize and improve accounting work, ensure that accountants will function in accordance with law, and bring into play the role of accounting in safeguarding the order of the socialist market economy, strengthening economic administration and improving economic efficiency.

Article 2.
State bodies, public organizations, enterprises, institutions, self-employed industrialists and businessmen and other organizations shall execute their accounting matters in accordance with this law.

Article 3.
The accountancy body and personnel must observe the laws and decrees set down in this Law and abide by them when carrying on the business of accounting and performing accountancy supervision.

Article 4.
The leader of a unit shall supervise the accountant departments, accountants and other personnel in implementing this law; make sure that accounting data are lawful, truthful, accurate and complete; and ensure that the functions and powers of accountants are not infringed upon. No one is allowed to retaliate against an accountant.Accountants who carry out this Law conscientiously, devote themselves to their duties and achieve remarkable success in their work will be rewarded appropriately.

Article 5.
The financial department of the State Council shall administer the work of national accountancy.The financial department of the local people's government at various levels shall administer accountancy in their region.

Article 6.
The national unified accounting system is formulated by the financial department of the State Council in line with this Law.Financial departments of the provinces, autonomous regions and municipalities, competent departments of the State Council and the General Logistics Department of the People's Liberation Army may, under the precondition of not contravening this law and uniform state accounting systems, formulate specific procedures or supplementary provisions for implementing uniform state accounting systems and submit them to the financial authorities for approval or for the record.

Chapter II Business Accounting

Article 7.
The following matters should go through accounting procedures and business accounting:

(1) Receipts and payments of funds and/or securities;

(2) The receipt and disposal, increase and decrease and use of a piece of property;

(3) Occurrence and settlement of a credit or debt;

(4) Increase or reduction of capital and funds as well as income and outlays;

(5) Calculations of revenue, expenses or costs;

(6) Calculation and treatment of financial achievements; and

(7) Any other matters necessary for going through accounting procedures and business accounting.

Article 8.
The financial year begins on 1 January and ends on 31 December of the Gregorian calendar.

Article 9.
Renminbi shall be the unit used in accounting books.Units whose primary income and outlays are in foreign currency (currencies) may choose a certain foreign currency as the unit used for accounting purposes. In such cases, the currency shall be converted into renminbi when compiling accounting statements."

Article 10.
Accounting proofs, accounting books, accounting statements and other accounting data shall conform to provisions regarding uniform state accounting systems. Forgery or alteration of accounting proofs or accounting books or submission of false accounting statements are not allowed."When computers are used in accounting, requirements regarding software used and the accounting proofs, accounting books, accounting statements and other accounting data generated therefrom shall conform to State Council and Ministry of Finance provisions.

Article 11.
In handling the matters listed in Article 7 of this Law, original vouchers must be filed or presented, and should be handed over to the accounting body in good time. The accounting body must examine the original vouchers and draw up accounting vouchers on the basis of the examined original vouchers.

Article 12.
Units may set up their own accounting departments and accounts books in accordance with the provisions of the accounting system.
The accounting body, according to the examined original vouchers and accounting vouchers, shall calculate accounts in line with the provisions of the accounting system.

Article 13.
Units should set up a property-checking system to ensure that the accounting records conform with the quantities of existing materials and funds.

Article 14.
Units shall compile accounting statements according to the uniform state accounting systems and on the basis of accounting books and submit them to the Ministry of Finance and other departments concerned.Accounting reports should be signed or sealed by the unit's administrative head, the leading member of the accounting body and the accountant in charge. Units with a general accountant should also have their accounting reports signed or sealed by him or her.

Article 15.
Vouchers, accounts books, reports and other accounting data should be filed and well kept in accordance with the related rules of the State. The time limits for the keeping of accounting files and the methods of their destruction will be decided by the financial department of the State Council jointly with the departments concerned.

Chapter III Accounting Supervision

Article 16.
The accounting body and accounting personnel in various units may practise accounting supervision in their own units.

Article 17.
The accounting body and accounting personnel should not accept or handle any false or illegal vouchers and should return any inaccurate and incomplete vouchers for correction or completion.

Article 18.
When the accounting body and accounting personnel find that differences exist between accounting records and quantities of existing materials and funds, they should deal with them according to the relevant provisions; if the required authority is not held by the particular accounting body or personnel it should immediately be reported to the administrative head of their unit, in order that the truth may be discovered and a decision made.

Article 19.
Accounting agencies or accountants shall refuse to handle illegal income and outlays.Accounting agencies or accountants shall take action to stop or correct illegal income and outlays; where their action is ineffectual, they shall submit a written memorandum asking the unit's leader to handle it. The unit's leader shall, within ten days of receipt of the memorandum, make a decision which shall be put in writing, to which he is held accountable.Accounting agencies or accountants who neither take action to stop or correct illegal income and outlays nor submit a written memorandum to the unit's leader are also held accountable.Accounting agencies or accountants shall report to the competent unit or financial, auditing, taxation authorities about income and outlays that are severely harmful to the state and public interest. Authorities receiving such a report have the responsibility to deal with it.

Article 20.
Various units must, in accordance with the law and related stipulations of the state, accept supervision of financial, auditing and taxation organizations and truthfully provide accounting vouchers, accounting books, accounting statements, accounting data and other related information. They must not reject such supervision or demand related documents and must not hide documents or make false reports.

Chapter IV Accounting Bodies And Accounting Personnel

Article 21.
Various units should establish accounting departments according to the accounting need or establish positions for accountants and designate a chief accountant in related departments. Units which do not have conditions for establishing accounting departments or hiring accountants may entrust approved accounting consultation and service organizations to do accounting work for them. Large and medium-sized enterprises and large business undertakings may set up a chief accountant, who must have qualifications as a professional accountant.An accounts-checking system may be set up within an accounting body.Cashiers may not concurrently hold responsibility for checking accounts, keeping accounting files and casting accounts of revenue, expenditure, credits or debits.

Article 22.
The main duties of the accounting body and accounting personnel are:

(1) To make business accounting conform with the provisions of Chapter II of this law;

(2) To practice accounting supervision in line with the provisions of Chapter III of this Law;

(3) To work out the main methods of handling accountancy matters within the unit itself;

(4) To take part in the drawing up of economic plans and business plans, and the checking and analysing of the implementation budget and financial plan; and

(5) To handle any other accounting business.

Article 23.
Accounting personnel must have necessary professional knowledge. The appointment and removal of chief accountants or responsible persons of accounting departments of state-owned enterprises and business ventures must have the concurrence of higher units having jurisdiction over them. Chief accountants or responsible persons of accounting departments must not be appointed or removed willfully. If faithful accounting personnel who adhere to principle are treated in an improper manner, the higher units having jurisdiction over those enterprises or ventures should order those enterprises or ventures to take remedial measures. If accounting personnel neglect their duties, lack principles or are unsuitable for accounting work, the higher units should order concerned units to transfer or dismiss those unqualified accounting personnel.

Article 24.
In the case of an accountant being removed or leaving his post, whether temporarily or permanently, he should conduct the handing over procedures in a competent manner with his successor.Handing over procedures conducted by a common accountant should be supervised by a leading member of the accounting body or the accountant in charge. The procedures conducted by a leading member of the accounting body or the accountant in charge should be supervised by the administrative head of the unit and, if necessary, under the joint supervision of the administrative head of the unit and the person being replaced by the higher competent authority.

Chapter V Legal Responsibility

Article 25.
If any administrative head of a unit or any accounting personnel violate the provisions of business accounting set forth in Chapter II of this Law, they may have imposed on them administrative sanctions, if the case is of a serious nature.

Article 26.
Leaders, accounting personnel and other staff members of various units who prepare false accounting vouchers, change or intentionally destroy vouchers, accounting books, accounting statements, accounting data and other related information, or if they use false accounting vouchers, accounting books, accounting statements and other accounting information and thus infringe upon interests of the state, society and the public shall be handled and investigated for their roles in these activities by financial, auditing, taxation and other related responsible units in accordance with the law and administrative rules and regulations. Those whose actions constitute crimes shall be investigated for their criminal responsibility.

Article 27.
Accounting personnel who accept and handle unlawful accounting vouchers, who do not make written comments to leaders of respective units on illegal income and expenditures, or if they do not make reports to higher units or financial, auditing and taxation organizations, will be given administrative punishment if the situation is serious. Accounting personnel who are responsible for major losses to government or private properties and whose actions constitute crimes shall be investigated for their criminal responsibility in accordance with the law.

Article 28.
If the leaders of various units, after receiving the written comments of accounting personnel in compliance with paragraph 2 of Article 19 of this law, still approve of such illegal income or expenditures or if they take no remedial action within a certain period without a proper reason and in this manner cause serious consequences, they shall be given administrative punishment. If their action or inaction causes severe harm to state and public interests and constitute crimes, they shall be investigated for their criminal responsibility.

Article 29.
If an administrative head in a unit or other persons dispute the decisions of accountants who have carried out their duties in accordance with this Law, they should be imposed upon with administrative sanctions or investigated with regard to criminal responsibility in accordance with the law, if the case is a serious one.

Chapter VI Supplementary Provisions

Article 30.
This Law shall come into effect on May 1, 1985. Amendments to this Law shall come into force on the date of promulgation [December 29, 1993]
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Contract Law of the People's Republic of China

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Adopted at the Second Session of the Ninth National People's Congress on March 15, 1999

Chapter I General Provisions

Chapter 1 General Provisions
Article 1
This Law is formulated with a view to protecting the lawful rights and interests of the parties to contracts, maintaining the social economic order and promoting the progress of the socialist modernization drive.

Article 2
A contract in this Law refers to an agreement establishing, modifying and terminating the civil rights and obligations between subjects of equal footing, that is, between natural persons, legal persons or other organizations.Agreements involving personal status relationship such as on matrimony, adoption, guardianship, etc. Shall apply the provisions of other Laws.

Article 3 The parties to contract shall have equal legal status. No party may impose its will on the other party.

Article 4 The parties shall have the rights to be voluntary to enter into a contract in accordance with the law. No unit or individual may illegally interfere.

Article 5 The parties shall abide by the principle of fairness in defining the rights and obligations of each party.

Article 6 The parties must act in accordance with the principle of good faith, no matter in exercising rights or in performing obligations.

Article 7 In concluding and performing a contract, the parties shall abide by the laws and administrative regulations, observe social ethics. Neither party may disrupt the social-economic order or damage the public interests.

Article 8 As soon as a contract is established in accordance with the law, it shall be legally binding on the parties. The parties shall perform their respective obligations in accordance with the terms of the contract. Neither party may unilaterally modify or rescind the contract.

The contract established according to law shall be under the protection of law.

Chapter 2 Conclusion of Contracts

Article 9 In concluding a contract, the parties shall have

appropriate civil capacity of right and civil capacity of conduct.

The parties may conclude a contract through an agent in accordance

with the law.

Article 10 The parties may conclude a contract in written, oral or

other forms.

Where the laws or administrative regulations require a contract to

be concluded in written form, the contract shall be in written form.

If the parties agree to do so, the contract shall be concluded in

written form.

Article 11 The written forms mean the forms which can show the

described contents visibly, such as a written contractual agreement,

letters, and data-telex (including telegram, telex, fax, EDI and

e-mails).

Article 12 The contents of a contract shall be agreed upon by the parties, and shall contain the following clauses in general:

(1) title or name and domicile of the parties;

(2) contract object;

(3) quantity;

(4) quality;

(5) price or remuneration;

(6) time limit, place and method of performance;

(7) liability for breach of contract; and

(8) methods to settle disputes.

The parties may conclude a contract by reference to the model text of each kind of contract.

Article 13 The parties shall conclude a contract in the form of an

offer and acceptance.

Article 14 An offer is a proposal hoping to enter into a contract

with other parties. The proposal shall comply with the following

stipulations:

(1) Its contents shall be detailed and definite;

(2) It indicates the proposal of the offeror to be bound in case of

acceptance.

Article 15 An invitation for offer is a proposal for requesting

other parties to make offers to the principal. Price forms mailed,

public notices of auction and tender, prospectuses and commercial

advertisements, etc. Are invitations for offer.

Where the contents of a commercial advertisement comply with the

terms of the offer, it may be regarded as an offer.

Article 16 An offer becomes effective when it reaches the offeree.

If a contract is concluded by means of data-telex, and recipient

appoints a specific system to receive the data-telex, the time when

the data-telex enters the system shall be the time of arrival; if no

specific system is appointed, the time when the data-telex first

enters any of the recipient's systems shall be regarded as the time

of arrival.

Article 17 An offer may be withdrawn, if the withdrawal notice

reaches the offeree before or at the same time when the offer

arrives.

Article 18 An offer may be revoked, if the revocation reaches the

offeree before it has dispatched an acceptance.

Article 19 An offer may not be revoked, if

(1) the offeror indicates a fixed time for acceptance or otherwise

explicitly states that the offer is irrevocable; or

(2) he offeree has reasons to rely on the offer as being irrevocable

and has made preparation for performing the contract.

Article 20 An offer shall be null and void under any of the

following circumstances:

(1) The notice of rejection reaches the offeror;

(2) The offeror revokes its offer in accordance with the law;

(3) The offeree fails to make an acceptance at the time when the

time limit for acceptance expires;

(4) The offeree substantially alters the contents of the offer.

Article 21 An acceptance is a statement made by the offeree

indicating assent to an offer.

Article 22 Except that it is based on transaction practices or that

the offer indicates an acceptance may be made by performing an act,

the acceptance shall be made by means of notice.

Article 23 An acceptance shall reach the offeror within the time

limit fixed in the offer.

Where no time is fixed in the offer, the acceptance shall arrive in

accordance with the following provisions:

(1) If the offer is made in dialogues, the acceptance shall be made

immediately except as otherwise agreed upon by the parties;

(2) If the offer is made in forms other than a dialogue, the

acceptance shall arrive within a reasonable period of time.

Article 24 Where the offer is made in a letter or a telegram, the

time limit for acceptance commences from the date shown in the

letter or from the moment the telegram is handed in for dispatch. If

no such date is shown in the letter, it commences from the date

shown on the envelope. Where an offer is made by means of

instantaneous communication, such as telephone or facsimile, the

time limit for acceptance commences from the moment that the offer

reaches the offeree.

Article 25 A contract is established when the acceptance becomes

effective.

Article 26 An acceptance becomes effective when its notice reaches

the offeror. If an acceptance needn't be notified, it becomes

effective when an act of acceptance is performed in accordance with

transaction practices or as required in the offer.

Where a contract is concluded in the form of data-telex, the time

when an acceptance arrives shall apply the provisions of Paragraph

2, Article 16 of this law.

Article 27 An acceptance may be withdrawn, but a notice of

withdrawal shall reach the offeror before the notice of acceptance

reaches the offeror or at the same time when the acceptance reaches

the offeror.

Article 28 Where an offeree makes an acceptance beyond the time

limit for acceptance, the acceptance shall be a new offer except

that the offeror informs the offeree of the effectiveness of the

said acceptance promptly.

Article 29 If the offeree dispatches the acceptance within the time

limit for acceptance which can reach the offeror in due time under

normal circumstances, but the acceptance reaches the offeror beyond

the time limit because of other reasons, the acceptance shall be

effective, except that, the offeror informs the offeree promptly

that it does not accept the acceptance because it exceeds the time

limit for acceptance.

Article 30 The contents of an acceptance shall comply with those of

the offer. If the offeree substantially modifies the contents of the

offer, it shall constitute a new offer. The modification relating to

the contract object, quality, quantity, price or remuneration, time

or place or method of performance, liabilities for breach of

contract and the settlement of disputes, etc., shall constitute the

substantial modification of an offer.

Article 31 If the acceptance does not substantially modifies the

contents of the offer, it shall be effective, and the contents of

the contract shall be subject to those of the acceptance, except as

rejected promptly by the offeror or indicted in the offer that an

acceptance may not modify the offer at all.

Article 32 Where the parties conclude a contract in written form,

the contract is established when both parties sign or affix a seal

on it.

Article 33 Where the parties conclude the contract in the form of a

letter or data-telex, etc., one party may request to sign a letter

of confirmation before the conclusion of the contract. The contract

shall be established at the time when the letter of confirmation is

signed.

Article 34 The place of effectiveness of an acceptance shall be the

place of the establishment of the contract.

If the contract is concluded in the form of data-telex, the main

business place of the recipient shall be the place of establishment.

If no main business place, its habitual residence shall be

considered to be the place of establishment. Where the parties agree

otherwise, the place of establishment shall be subject to that

agreement.

Article 35 Where the parties conclude a contract in written form,

the place where both parties sign or affix a seal shall be the place

where the contract is established.

Article 36 A contract, which shall be concluded in written form as

provided for by the laws and administrative regulations or as agreed

upon by the parties, shall be established, as the parties do not use

the written form, but one party has performed the principal

obligation and the other party has received it.

Article 37 A contract, which is concluded in written form, shall be

established, if one party has performed its principal obligation and

the other party has received it before signature or affixing with a

seal.

Article 38 In case the State issues a mandatory plan or a State

purchasing order task based on necessity, the relevant legal persons

or other organizations shall conclude contracts between them in

accordance with the rights and obligations as stipulated by the

relevant laws and administrative regulations.

Article 39 Where standard terms are adopted in concluding a

contract, the party which supplies the standard terms shall define

the rights and obligations between the parties abiding by the

principle of fairness, request the other party to note the exclusion

or restriction of its liabilities in reasonable ways, and explain

the standard terms according to the requirement of the other party.

Standard terms are clauses which are prepared in advance for general

and repeated use by one party and which are not negotiated with the

other party in concluding a contract.

Article 40 When standard terms are under the circumstances

stipulated in Article 52 and Article 53 of this Law, or the party

which supplies the standard terms exempts itself from its

liabilities, weights the liabilities of the other party, and

excludes the rights of the other party, the terms shall be null and

void.

Article 41 If a dispute over the understanding of the standard terms

occurs, it shall be interpreted according to general understanding.

Where there are two or more kinds of interpretation, an

interpretation unfavourable to the party supplying the standard

terms shall be preferred. Where the standard terms are inconsistent

with non-standard terms, the latter shall be adopted.

Article 42 The party shall be liable for damages if it is under one

of the following circumstances in concluding a contract and thus

causing losses to the other party:

(1) disguising and pretending to conclude a contract, and

negotiating in bad faith;

(2) concealing deliberately the important facts relating to the

conclusion of the contract or providing deliberately false

information;

(3) performing other acts which violate the principle of good faith.

Article 43 A business secret the parties learn in concluding a

contract shall not be disclosed or unfairly used, not matter the

contract is established or not. The party who causes the other party

to suffer from losses due to disclosing or unfairly using the

business secret shall be liable for damages.

Chapter 3 Effectiveness of Contracts

Article 44 The contract established according to law becomes

effective when it is established.

With regard to contracts which are subject to approval or

registration as provide for by the laws or administrative

regulations, the provisions thereof shall be followed.

Article 45 The parties may agree on some collateral conditions

relating to the effectiveness of a contract. The contract with

entry-into-force conditions shall be effective when such conditions

are accomplished. The contract with dissolving conditions shall be

null and void when such conditions are accomplished.

To unfairly prevent the conditions from being accomplished by one

party for its own interests shall be regarded as those conditions

have been accomplished. To unfairly promoting the accomplishment of

such conditions by one party shall be regarded as

non-accomplishment.

Article 46 The parties may agree on a conditional time period as to

the effectiveness of the contract. A contract subject to an

effective time period shall come into force when the period expires.

A contract with termination time period shall become invalid when

the period expires.

Article 47 A contract concluded by a person with limited civil

capacity of conduct shall be effective after being ratified

afterwards by the person's statutory agent, but a pure profit-making

contract or a contract concluded which is appropriate to the

person's age, intelligence or mental health conditions need not be

ratified by the person's statutory agent.

The counterpart may urge the statutory agent to ratify the contract

within one month. It shall be regarded as a refusal of ratification

that the statutory agent does not make any expression. A bona fide

counterpart has the right withdraw it before the contract is

ratified. The withdrawal shall be made by means of notice.

Article 48 A contract concluded by an actor who has no power of

agency, who oversteps the power of agency, or whose power of agency

has expired and yet concludes it on behalf of the principal, shall

have no legally binding force on the principal without ratification

by the principal, and the actor shall be held liable.

The counterpart may urge the principal to ratify it within one

month. It shall be regarded as a refusal of ratification that the

principal does not make any expression. A bona fide counterpart has

the right withdraw it before the contract is ratified. The

withdrawal shall be made by means of notice.

Article 49 If an actor has no power of agency, oversteps the power

of agency, or the power of agency has expired and yet concludes a

contract in the principal's name, and the counterpart has reasons to

trust that the actor has the power of agency, the act of agency

shall be effective.

Article 50 Where a statutory representative or a responsible person of a legal person or other organization oversteps his/her power and concludes a contract, the representative act shall be effective except that the counterpart knows or ought to know that he/she is overstepping his/her powers.

Article 51 Where a person having no right to disposal of property disposes of other persons' properties, and the principal ratifies the act afterwards or the person without power of disposal has obtained the power after concluding a contract, the contract shall be valid.

Article 52 A contract shall be null and void under any of the following circumstances:

(1) A contract is concluded through the use of fraud or coercion by one party to damage the interests of the State;

(2) Malicious collusion is conducted to damage the interests of the State. A collective or a third party;

(3) An illegitimate purpose is concealed under the guise of legitimate acts;

(4) Damaging the public interests;

(5) Violating the compulsory provisions of the laws and administrative regulations.

Article 53 The following immunity clauses in a contract shall be

null and void:

(1) those that cause personal injury to the other party;

(2) those that cause property damages to the other party as a result

of deliberate intent or gross fault.

Article 54 A party shall have the right to request the people's

court or an arbitration institution to modify or revoke the

following contracts:

(1) those concluded as a result of serious misunderstanding;

(2) those that are obviously unfair at the time when concluding the

contract.

If a contract is concluded by one party against the other party's

true intentions through the use of fraud, coercion or exploitation

of the other party's unfavorable position. The injured party shall

have the right to request the people's court or an arbitration

institution to modify or revoke it.

Where a party requests for modification, the people's court or the

arbitration institution may not revoke the contract.

Article 55 The right to revoke a contract shall extinguish under any

of the following circumstances:

(1) A party having the right to revoke the contract fails to

exercise the right within one year from the day that it knows or

ought to know the revoking causes;

(2) A party having the right to revoke the contract explicitly

expresses or conducts an act to waive the right after it know the

revoking causes.

Article 56 A contract that is null and void or revoked shall have no

legally binding force ever from the very beginning. If part of a

contract is null and void without affecting the validity of the

other parts, the other parts shall still be valid.

Article 57 If a contract is null and void, revoked or terminated, it

shall not affect the validity of the dispute settlement clause which

is independently existing in the contract.

Article 58 The property acquired as a result of a contract shall be

returned after the contract is confirmed to be null and void or has

been revoked. Where the property can not be returned or the return

is unnecessary, it shall be reimbursed at its estimated price. The

party at fault shall compensate the other party for losses incurred

as a result therefrom. If both parties are at fault, each party

shall respectively be liable.

Article 59 If the parties have maliciously conducted collusion to

damage the interests of the State, a collective or a third party,

the property thus acquired shall be turned over to the State or

returned to the collective or the third party.

Chapter 4 Performance of Contracts

Article 60 The parties shall perform their obligations thoroughly

according to the terms of the contract.

The parties shall abide by the principle of good faith and perform

the obligations of notice, assistance and maintaining

confidentiality, etc. Based on the character and purpose of the

contract or the transaction practices.

Article 61 Where, after the contract becomes effective, there is no

agreement in the contract between the parties on the terms regarding

quality, price or remuneration and place of performance, etc. Or

such agreement is unclear, the parties may agree upon supplementary

terms through consultation. In case of a failure in doing so, the

terms shall be determined from the context of relevant clauses of

the contract or by transaction practices.

Article 62 If the relevant terms of a contract are unclear, nor can

it be determined according to the provisions of Article 61 of this

Law, the provisions below shall be applied:

(1) If quality requirements are unclear, the State standards or

trade standards shall be applied; if there are no State standards or

trade standards, generally held standards or specific standards in

conformity with the purpose of the contract shall be applied.

(2) If the price or remuneration is unclear, the market price of the

place of performance at the time concluding the contract shall be

applied; if the government-fixed price or government-directed price

shall be followed in accordance with the law, the provisions of the

law shall be applied.

(3) If the place of performance is unclear, and the payment is

currency, the performance shall be effected at the place of location

of the party receiving the payment; if real estate is to be

delivered, the performance shall be effected at the place of

location of the real estate; in case of other contract objects, the

performance shall be effected at the place of location of the party

fulfilling the obligations.

(4) If the time limit for performance is unclear, the obligor may at

any time fulfill the obligations towards the obligee; the obligee

may also demand at any time that the obligor performs the

obligations, but a time period for necessary preparation shall be

given to the obligor.

(5) If the method of performance is unclear, the method which is

advantageous to realize the purpose of the contract shall be

adopted.

(6) if the burden of the expenses of performance is unclear the cost shall be assumed by the obligor.

Article 63 In cases where the government-fixed price or government-directed price is followed in a contract, if the said price is readjusted within the time limit for delivery as stipulated in the contract, the payment shall be calculated according to the price at the time of delivery. If the delivery of the object is delayed and the price has risen, the original price shall be adopted; while the price has dropped, the new price shall be adopted. In the event of delay in taking delivery of the object or late payment, if the price has risen, the new price shall be adopted; while the price has dropped, the original price shall be adopted.

Article 64 Where the parties agree that the obligor performs the obligations to a third party, and the obligor fails to perform the obligations to the third party or the performance does not meet the terms of the contract, the obligor shall be liable to the obligee for the breach of contract.

Article 65 Where the parties agree that a third party performs the obligations to the obligee, and the third party fails to perform the obligations or the performance does not meet the terms of the contract, the obligor shall be liable to the obligee for the breach of contract.

Article 66 If both parties have obligations toward each other and there is no order of priority in respect of the performance of obligation, the parties shall perform the obligations simultaneously. One party has the right reject the other party's request for performance if the other party's performance. One party has the right to reject the other party's corresponding request for

performance if the other party's performance does not meet the perms

of the contract.

Article 67 Where both parties have obligations towards each other

and there has been an order of priority in respect of the

performance, and the party which shall render its performance first

has not rendered the performance, the party which may render its

performance lately has the right to reject the other party's request

for performance. Where the party which shall render its performance

first violates the terms of a contract while fulfilling the

obligations, the party which may render its performance lately has

the right to reject the other party's corresponding request for

performance.

Article 68 One party, which shall render its performance first, may

suspend its performance, if it has conclusive evidence that the

other party is under any of the following circumstances:

(1) Its business conditions are seriously deteriorating;

(2) It moves away its property and takes out its capital secretly to

evade debt;

(3) It loses its commercial credibility;

(4) Other circumstances showing that it loses or is possible to lose

the capacity of credit.

Where a party suspends performance of a contract without conclusive

evidence, it shall be liable for the breach of contract.

Article 69 One party to a contract which suspends its performance of

the contract in accordance with the provisions of Article 68 of this

Law, shall promptly inform the other party of such suspension. It

shall resume its performance of the contract when the other party

provides a sure guarantee. After the suspension of the performance,

if the other party does not reinstate its capacity of performance

and does not provide with a sure guarantee, the party suspending

performance of the contract may rescind the contract.

Article 70 If the obligee does not notify the obligor its

separation, merger or a change of its domicile so as to make it

difficult for the obligor to perform the obligations, the obligor

may suspend the performance of the contract or have the object

deposited.

Article 72 The obligee may reject the partial performance of the

contract by the obligor, except that the partial performance does

not damage the interests of the obligee.

Additional expenses caused to the obligee by partial performance

shall be borne by the obligor.

Article 73 If the obligor is indolent in exercising its due

creditor's right, thus damaging the interests of the obligee, the

obligee may request the people's court for subrogation in its own

name, except that the creditor's right exclusively belongs to the

obligor.

The subrogation shall be exercised within the scope of the

creditor's right of the obligee. The necessary expenses caused to

the obligee by exercising subrogation shall be borne by the obligor.

Article 74 If the obligor renounces its due creditor's right or

transfers its property gratis, thus damaging the interests of the

obligee, the obligee may request the people's courts to revoke the

obligor's act. If the obligor transfers its property at an obviously

unreasonable low price, thus damaging the interests of the obligee,

and the transferee knows such situation, the obligee may request the

people's court to revoke the obligor's act.

The right of revocation shall be exercised within the scope of the

creditor's right of the obligee. The necessary expenses caused to

the obligee by exercising the right of revocation shall be borne by

the obligor.

Article 75 The time limit for exercising the right of revocation

shall be one year, commencing from the day when the obligee is aware

or ought to be aware of the causes of revocation. If the right of

revocation has not been exercised within five years from the day

when the act of the obligor takes place, the right of revocation

shall be extinguished.

Article 76 After a contract becomes effective, the parties may not

reject to perform the obligations of the contract because of

modification of the title or name of the parties, or change of the

statutory representative, the responsible person or the executive

person of the parties.

Chapter 5 Modification and Assignment of Contracts

Article 77 A contract may be modified if the parties reach a

consensus through consultation.

If the laws or administrative regulations stipulate that a contract

shall be modified through the procedures of approval or

registration, such provisions shall be followed.

Article 78 If the contents of the modified contract agreed by the

parties are unclear, it shall be presumed that the contract is not

modified.

Article 79 The obligee may assign, wholly or in part, its rights

under the contract to a third party, except for the following

circumstances:

(1) The rights under the contract may not be assigned according to

the character of the contract;

(2) The rights under the contract may not be assigned according to

the agreement between the parties;

(3) The rights under the contract may not be assigned according to

the provisions of the laws.

Article 80 An obligee assigning its rights shall notify the obligor.

Without notifying the obligor, the assignment shall not become

effective to the obligor.

The notice of assignment of rights may not be revoked, unless the

assignee agrees thereupon.

Article 81 If the obligee assigns is rights, the assignee shall

acquire the collateral rights relating to the principal right,

except that the collateral rights exclusively belong to the obligee.

Article 82 After the obligor receives the notice of assignment of

the creditor's right, it may claim its demur in respect of the

assignor to the assignee.

Article 83 When the obligor receives the notice of assignment of the

creditor's rights, and the obligor has due creditor's rights to the

assign or, and the creditor's rights of the obligor are due in

priority to the assigned creditor's rights or due at the same time,

the obligor may claim to offset each other to the assignee.

Article 84 If the obligor assigns its obligations, wholly or in

part, to a third party, it shall obtain consent from the obligee

first.

Article 85 If the obligor assigns its obligations to a third party,

the new obligor may claim the demur belonging to the original

obligor in respect of the obligee.

Article 86 If the obligor assigns its obligations to a third party,

the new obligor shall assume the collateral obligations relating to

the principal obligations, except that the obligations exclusively

belong to the original obligor.

Article 87 Where the laws or administrative regulations stipulate

that the assignment of rights or transfer of obligations shall go

through approval or registration procedures, such provisions shall

be followed.

Article 88 One party to a contract may assign its rights and

obligations under the contract together to a third party with the

consent of the other party.

Article 89 If one party to a contract assigns its rights and

obligations under the contract together to a third party, the

provisions of Article 79, Article 81 to 83, and Article 85 to 87 of

this Law shall be applied.

Article 90 If one party to a contract is merged after the contract

has been concluded, the legal person or other organization

established after the merger shall exercise the contract rights and

perform the contract obligations. If one party is separated after

the contract has been concluded, the legal persons or other

organizations thus established after the separation shall exercise

the contract rights or assume the contract obligations jointly and

severally.

Chapter 6 Termination of the Rights and Obligations of Contracts

Article 91 The rights and obligations of contracts shall be

terminated under any of the following circumstances:

(1) The debt obligations have been performed in accordance with the

terms of the contract;

(2) The contract has been rescinded;

(3) The debts have been offset against each other;

(4) The obligor has deposited the object according to law;

(5) The debt obligations have been exempted by the obligee;

(6) The creditor's rights and debt obligations are assumed by the

same person; or

(7) Other circumstances for termination as stipulated by the laws or

agreed upon by the parties in the contract.

Article 92 When the rights and obligations of contracts are

terminated, the parties to a contract shall, abiding by the

principle of good faith, perform such obligations as making a

notice, providing assistance and maintaining confidentiality according to transaction practices.

Article 93 A contract may be rescinded if the parties to the contract reach a consensus through consultation.

The parties to a contract may agree upon the conditions to rescind the contract by one party. When such conditions are accompanished, the party entitled to rescind the contract may rescind it.

Article 94 The parties to a contract may rescind the contract under any of the following circumstances:

(1) The purpose of the contract is not able to be realized because of force majeure;

(2) One party to the contract expresses explicitly or indicates through its acts, before the expiry of the performance period, that it will not perform the principal debt obligations;

(3) One party to the contract delays in performing the principal debt obligations and fails, after being urged, to perform them within a reasonable time period;

(4) One party to the contract delays in performing the debt obligations or commits other acts in breach of the contract so that the purpose of the contract is not able to be realized; or

(5) Other circumstances as stipulated by law.

Article 95 Where the laws stipulate or the parties agree the time

limit to exercise the right to rescind the contract, and no party

exercises it when the time limit expires, the said right shall be

extinguished.

Where the law does not stipulate or the parties make no agreement

upon the time limit to exercise the right to rescind the contract,

and no party exercises it within a reasonable time period after

being urged, the said right shall be extinguished.

Article 96 One party to a contract shall make a notice to the other

party if it advances to rescind the contract according to the

provisions of Paragraph 2, Article 93 and Article 94 of the Law. The

contract shall be rescinded upon the arrival of the notice at the

other party. The party may, if the other party disagrees therewith,

request the people's court or an arbitration institution to confirm

the effectiveness of rescinding the contract.

Where the laws or administrative regulations stipulate that the

rescinding of a contract shall go through the formalities of

approval and registration, the provisions thereof shall be followed.

Article 97 If a contract has not yet been performed, its performance

shall be terminated after the rescission. If it has been performed,

a party to the contract may, in light of the performance and the

character of the contract, request that the original status be

restored or other remedial measures be taken.

Article 98 The termination of the rights and obligations of a

contract may not affect the force of the settlement and clearance

clauses in the contract.

Article 99 Where the parties to a contract have debts due mutually

and the category and character of the debts are the same, any party

may offset his debt against the other's one, except that the debts

may not be offset according to the provisions of the laws or to the

character of the contract.

Any party advancing to offset the debts shall make a notice to the

other party. Such notice shall be effective upon the arrival at the

other party. The offset may not be accompanied by any conditions or

time limit.

Article 100 Where the parties to a contract have debts due mutually

and the category and character of the debts are different, the debts

may be offset against each other if both parties have reached a

consensus through consultation.

Article 101 The obligor may deposit the object if the debt

obligations are difficult to be performed under any of the following

circumstances:

(1) The obligor refuses to accept them without justified reasons;

(2) The obligee is missing;

(3) The obligee is deceased and the heir is not yet determined, or

the obligee has lost his conduct capacity and the guardian is not

yet determined; or

(4) Other circumstances as stipulated by law.

If the object is not fit to be deposited or the deposit expenses are

excessively high, the obligor may, according to law, auction or sell

the object and deposit the money obtained therefrom.

Article 102 After the object is deposited, the obligor shall, except

that the obligee is missing, make a notice promptly to the obligee

or the obligee's heir or guardian.

Article 103 The risk of damage to and missing of the object after

being deposited shall be borne by the obligee. During the period of

depositing, the fruits generated by the object shall belong to the

obligee. The deposit expenses shall be borne by the obligee.

Article 104 The obligee may claim the deposited object at any time.

However, if the obligee is under a debt due to the obligor the

deposit authorities shall refuse him to claim the deposited object

at the request of the obligor, before the obligee has performed his

debt obligations or provides a guaranty.

The right to claim the deposited object by the obligee shall be

extinguished if it has not been exercised within 5 years as of the

date of deposit. The deposited object shall be owned by the State

with deduction of the deposit expenses.

Article 105 If the obligee exempts the obligor from the debt

obligations wholly or in part, the whole or part of the rights and

obligations of a contract shall be terminated.

Article 106 If the creditor's rights and debt obligation are assumed

by the same person, the rights and obligations of a contract shall

be terminated, except for those involving the interests of a third

party.

Chapter 7 Liability for Breach of Contracts

Article 107 Where one party to a contract fails to perform the

contract obligations or its performance fails to satisfy the terms

of the continue to perform its obligations, to take remedial

measures, or to compensate for losses.

Article 108 Where one party to a contract expresses explicitly or

indicates through its acts that it will not perform the contract,

the other party may demand it to bear the liability for the breach

of contract before the expiry of the performance period.

Article 109 If one party to a contract fails to pay the price or

remuneration, the other may request it to make the payment.

Article 110 Where one party to a contract fails to perform the

non-monetary debt or its performance of non-monetary debt fails to

satisfy the terms of the contract, the other party may request it to

perform it except under any of the following circumstances:

(1) It is unable to be performed in law or in fact;

(2) The object of the debt is unfit for compulsory performance or

the performance expenses are excessively high; or

(3) The creditor fails to request for the performance within a

reasonable time period.

Article 111 If the quality fails to satisfy the terms of the

contract, the breach of contract damages shall be borne according to

the terms of the contract agreed upon by the parties. If there is no

agreement in the contract on the liability for breach of contract or

such agreement is unclear, nor can it be determined in accordance

with the provisions of Article 61 of this Law, the damaged party

may, in light of the character of the object and the degree of

losses, reasonably choose to request the other party to bear the

liabilities for the breach of contract such as repairing,

substituting the goods, or reducing the price or remuneration.

Article 112 Where one party to a contract fails to perform the

contract obligations or its performance fails to satisfy the terms

of the contract, the party shall, after performing its obligations

or taking remedial measures, compensate for the losses, if the other

party suffers from other losses.

Article 113 Where one party to a contract fails to perform the contract obligations or its performance fails to satisfy the terms of the contract and causes losses to the other party, the amount of compensation for losses shall be equal to the losses caused by the breach of contract, including the interests receivable after performance of the contract, provided not exceeding the probable losses caused by the breach of contract which has been foreseen or ought to be foreseen when the party in breach concludes the contract.

The business operator who commits default activities in providing to the consumer any goods or service shall be liable for paying compensation for damages in accordance with the Law of the People's Republic of China on the Protection of Consumer Rights and Interests.

Article 114 The parties to a contract may agree that one party shall, when violating the contract, pay breach of contract damages of certain amount in light of the breach, or may agree upon the calculating method of compensation for losses resulting from the breach of contract.

If the agreed breach of contract damages are lower than the losses caused, any party may request the people's court or an arbitration institution to increase it; if it is excessively higher than the losses caused, any party may request the people's court or an

arbitration institution to make an appropriate reduction.

If the parties to a contract agree upon breach of contract damages

in respect to the delay in performance, the party in breach shall

perform the debt obligations after paying the breach of contract

damages.

Article 115 The parties to a contract may, according to the Guaranty

Law of the People's Republic of China, agree that one party pays a

deposit to the other party as the guaranty for the creditor's

rights. After the debt obligations are performed by the obligor, the

deposit shall be returned or offset against the price. If the party

that pays the deposit fails the perform the agreed debt obligations,

it shall have no right to reclaim the deposit. If the party that

receives the deposit fails to perform the agreed debt obligations,

it shall return twice the amount of the deposit.

Article 116 Where the parties to a contract agree on both breach of

contract damages and a deposit, when one party violates the

contract, the other party may choose to apply the breach of contract

damages clause or the deposit clause.

Article 117 In case that a contract is not able to be performed

because of force majeure, the liabilities shall be exempted in part

or wholly in light of the effects of force majeure, except as

otherwise stipulated by law. If the force majeure occurs after one

party has delayed in performance, the liability may not be exempted.

Force majeure as referred to in this Law means the objective

circumstances that are unforeseeable, unavoidable and

insurmountable.

Article 118 One party to a contact that is not able to perform the

contract because of force majeure shall make a notice to the other

party promptly so as to reduce the probable losses to the other

party and provide evidence within a reasonable time limit.

Article 119 After one party violates a contract, the other party

shall take proper measures to prevent from the enlargement of

losses; if the other party fails to take proper measures so that the

losses are enlarged, it may not claim any compensation as to the

enlarged losses.

The reasonable expenses paid by the party to prevent from the

enlargement of losses shall be borne by the party in breach.

Article 120 In case that both parties violate a contract, they shall

bear the liabilities respectively.

Article 121 One party that violates the contract because of a third

party shall be liable for the breach of contract to the other party.

The disputes between the said party and the third party shall be

settled according to law or their agreement.

Article 122 In case that the breach of contract by one party infringes upon the other party's personal or property rights, the aggrieved party shall be entitled to choose to claim the assumption by the violating and infringing party of liabilities for breach of contract according to this Law, or to claim the assumption by the violating and infringing party of liabilities for infringement according to other laws.

Chapter 8 Miscellaneous Provisions

Article 123 If there are provisions as otherwise stipulated in

respect to contracts in other laws, such provisions shall be

followed.

Article 124 Any contract which is not addressed explicitly in the

Specific Provisions of this Law or in other laws shall apply the

provisions of the General Provisions of this Law or in other laws

may be applied mutatis mutandis.

Article 125 With regard to disputes between the parties to a

contract arising from the understanding of any clause of the

contract, the true intention of such clause shall be determined

according to the terms and expressions used in the contract, the

contents of the relevant clauses of the contract, the purpose for

concluding the contract, the transaction practices and the principle

of good faith.

Where two or more languages are adopted in the text of a contract and it is agreed that both texts are equally authentic, it shall be presumed that the terms and expressions in various versions have the same meaning. In case that the terms and expressions in different versions are inconsistent, they shall be interpreted according to the purpose of the contract.

Article 126 The parties to a contract involving foreign interests may choose the law applicable to the settlement of their contract disputes, except as otherwise stipulated by law. If the parties to a contract involving foreign interests have not made a choice, the law of the country to which the contract is most closely connected shall be applied.

The contracts for Chinese-foreign equity joint ventures, for Chinese-foreign contractual joint ventures and for Chinese-foreign cooperative exploration and development of natural resources to be performed within the territory of the People's Republic of China shall apply the laws of the People's Republic of China shall apply the laws of the People's Republic of China shall apply the laws of the People's Republic of China.

Article 127 The departments of administration for industry and commerce and other competent departments shall, within the scope of their respective competence and functions, be responsible for supervision over and dealing with illegal acts in taking advantage of contracts to endanger and harm the State interests and public interests. In case that a crime is constituted, criminal responsibility shall be investigated.

Article 128 The parties may settle their disputes relevant to the contract through conciliation or mediation.

The parties may, if unwilling to settle their disputes through conciliation or mediation or failing in the conciliation or mediation, apply to an arbitration institution for arbitration according to their arbitration agreement. The parties to a contract involving foreign interests may, according to their arbitration agreement, apply for arbitration to a Chinese arbitration institution or other arbitration institutions. If there is no arbitration agreement between the parties or the arbitration agreement is null and void, they may bring a lawsuit before the people's court. The parties shall perform the court judgments, arbitration awards or mediation documents with legal effectiveness.

In case any refusal in respect to the performance, the other party may request the people's court for execution.

Article 129 The time limit for action before the people's court or for arbitration before an arbitration institution regarding disputes relating to contracts for international sales of goods and contracts for technology import and export shall be four years, calculating from the date on which the party knows or ought to know the infringement on its rights. The time limits for action before the people's court or for arbitration before an arbitration institution regarding other contracts disputes shall be in accordance with the provisions of the relevant laws.

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Company Law of the People's Republic of China

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Adopted at the Fifth session of the Standing Committee of the Eighth National People's Congress on December 29, 1993

Chapter I General Provisions


Article 1
This Law is formulated in accordance with the Constitution in order toadapt to the needs to establish a modem enterprise system, standardize theorganization and activities of companies, protect the legitimate rightsand interests of companies, shareholders and creditors, safeguard socialand economic order and promote the development of the socialist market economy.
Article 2
In this Law, the term "company" refers to a limited liability companyor a company limited by shares stablished within Chinese territory in accordance with this Law.

Article 3
All limited liability companies and companies limited by shares are enterprise legal persons. In the case of a limited liability company, a shareholder is liable to the company to the extent of the amount of the shareholder's capital contribution. A limited liability company is liable for the debts of the company with all its assets.In the case of a company limited by shares, its entire capital is divided into shares of equal value and shareholders shall be liable to the company to the extent of the shares held by them. A company limited by shares is liable for the debts of the company with all its assets.

Article 4
The shareholders of a company, as capital contributors, have the right to enjoy the benefits of the assets of the company, make major decisions, choose managers etc. in accordance with the amount of capital they have invested in the company.
A company enjoys all legal person property rights constituted by the shareholders' investment, enjoys civil rights and assumes civil liabilities in accordance with law. Ownership of the State-owned assets in a company belongs to the state.

Article 5
With respect to all its corporate property, a company conducts its business autonomously in accordance with law and is responsible for its own profits and losses.Under the state's macro regulation and control adjustment, a company organizes its production and operations autonomously according to market demand with the objectives of raising economic efficiency and labour productivity and preserving
and increasing the value of assets.

Article 6
A company implements an internal management structure with a clear division of rights and responsibilities, scientific management and combined incentives and restrictions.

Article 7
A state owned enterprise which is being reorganized as a company shall replace its system of operation, gradually and systematically take inventory of its assets and verify its capital, determine property rights, clear creditors' rights and indebtedness, value assets and set up a standardized internal management structure in accordance with the law and conditions and requirements of administrative regulations.

Article 8
The establishment of a limited liability company or a company limited by shares shall comply with the conditions set out in this Law. A company complying with the conditions of this Law is registered as a limited liability company or a company limited by shares. A Company which does not comply with the conditions set out in this Law shall not be registered as a limited liability company or a company limited by shares.
Where the law or administrative regulations require that the establishment of a company be submitted for examination and approval, the procedures for such examination and approval are carried out before the
company is registered.

Article 9
A limited liability company established in accordance with this Law shall have the words "limited liability company" in its name.
A company limited by shares established in accordance with this Law shall have the words "company limited by shares" in its name.

Article 10
The domicile of a company is the place where its principal place of business is located.

Article 11
In establishing a company, the company's articles of associationshall prepared in accordance with this Law. The articles of association are binding on the company, the shareholders, directors, supervisors and managers.
A company's business scope is specified in its articles of association and registered in accordance with the law. For items in a company's business scope which are restricted by law or administrative regulations, approval shall be obtained in accordance with the law.
A company shall conduct business activities within its registered business scope. A company may change its business scope by amendments to its articles of association in accordance with procedures provided by law and after changing its registration with the company registration authority.

Article 12
A company may invest in other limited liability companies or companies limited by shares and be liable to the companies which it has invested in to the extent of the amount of capital invested in such companies.
Except for investment companies and holding companies specified by theState Council, where a company invests in other limited liability companies or companies limited by shares, the aggregate amount of
investment shall not exceed fifty per cent of the net assets of the company, not including any increase in the capital of the other limited liability companies or companies limited by shares in which the company
invests arising from any conversion of profits of these companies into capital following such investment.

Article 13
A company may set up branches. Branches of a company do not have the status of enterprise legal persons and the company assumes the civil liabilities of its branches.
A company may set up subsidiaries. Subsidiaries of a company have the status of enterprise legal persons and assume civil liabilities independently in accordance with the law.

Article 14
In conducting its business activities, a company shall abide by the law and by business ethics, strengthen the construction of socialist spiritual civilization and accept the supervision of the government and the public.
The legitimate rights and interests of a company are protected by law and shall not be infringed.

Article 15
A company shall protect the legitimate rights and interests of its staff and workers, strengthen labour protection and bring about production safety.
A company should use various means to enhance vocational education and on-the-job training for staff and workers to increase their work quality.

Article 16
The staff and workers of a company organize a trade union in accordance with the law to carry out union activities and protect the lawful rights and interests of the staff and workers. A company shall provide the necessary conditions for activities of the trade union of the company.
Limited liability companies established with investment by a wholly state-owned company and those established with investment by two or more state-owned enterprises or two or more other state-owned investment entities practice democratic management in accordance with the provisions of the Constitution and of relevant laws through the representative conferences of the staff and workers and otherwise.

Article 17
The activities of the base-level organizations of the Communist Party of China in the company are dealt with in accordance with the Charter of the Communist Party of China.

Article 18
The Law applies to limited liability companies with foreign investment. Where the laws on Sino-foreign equity joint venture enterprises, Sino-foreign co-operative joint venture enterprises and wholly-owned foreign
enterprises otherwise provide, the provisions of such aws apply.

Chapter 2 Establishment and Organizational Structure of A Limited Liability Company
Section 1 Establishment

Article 19
Establishment of a limited liability company shall be subject to fulfillment of the following conditions;
(1) the number of shareholders meets the requirements of the law;
(2) the investment contributed by shareholders meets the minimum amount of capital required by law;
(3) the company's articles of association are formulated jointly bythe shareholders;
(4) there is a company name, and an organizational structure complyingwith the requirements for establishing a limited liability company; and
(5) there is a fixed site for production and operations and thenecessary conditions for production and operations.

Article 20
A limited liability company is established by capital contributionsmade jointly by at least two and no more than fifty shareholders.
A state-authorized investment institution or a department authorized by the state may invest on its own to establish a wholly state-owned limited liability company.

Article 21
A state-owned enterprise established before the implementation of this Law which fulfills the conditions for the establishment of a limited liability company under this Law may be reorganized as a wholly state-owned limited liability company in the case of an investment entity with a single investor, or as a limited liability company as provided in the first paragraph of the preceding Article in the case of an investment entity with many investors.
Implementing procedures and specific means for the reorganization of state-owned enterprises into companies are specified by the State Council in separate provisions.

Article 22
The articles of association of a limited liability company shall set out the following:
(1) the company's name and domicile;
(2) the company's business scope;
(3) the company's registered capital;
(4) shareholders' names or titles;
(5) shareholders' rights and obligations;
(6) the form and amount of shareholders' capital contributions;
(7) conditions for shareholders' transfer of capital contributions;
(8) the company's organs and the method of establishing them, their powers and rules of procedure for discussion;
(9) the company's legal representative;
(10) grounds for the dissolution of the company and method for its liquidation; and
(11) other matters which the shareholders consider necessary toprovide for.The shareholders shall sign and seal the company's articles of association.

Article 23
A limited liability company's registered capital is the capital actually contributed by all the shareholders and registered with the company registration authorities.
The registered capital of a limited liability company shall not be less than the following minimum amounts:
(1) for a company engaging principally in production operations, RMB500,000 yuan;
(2) for a company engaging principally in wholesaling commodities, RMB 500,000 yuan;
(3) for a company engaging principally in commercial retailing, RMB 300,000 yuan;
(4) for a company engaging principally in technology development, consultancy and services, RMB 100,000 yuan.
Requirements for the minimum amount of registered capital for a limited liability company in a particular line of business to be higher than the amount stated in the preceding paragraphs are provided for in separate laws or administrative regulations.

Article 24 Shareholders may make capital contributions in currency, or may invest in kind, use industrial property, non-patented technology or land use rights to make capital contributions based on their appraised value. For investment in kind, industrial property, non-patented technology or land use rights which are capital contributions, a valuation shall be carried out and the property contributed verified, without overvaluation or undervaluation.
The valuation of land use rights is to be dealt with in accordance with the provisions of laws and administrative regulations.The amount of industrial property or non-patented technology contributed as
capital based on its appraised value shall not exceed twenty percent of the registered capital of a company, except as otherwise specified by the state for the use of the results of new and high technology.

Article 25 Shareholders shall pay in full their respective subscribed capital
contributions specified in the article of association. If a shareholder
makes its contribution in currency, the currency contribution shall be
deposited in full into a temporary account established with a bank by the
proposed limited liability company; if the contribution is to be made in
investment in kind, industrial property, non-patented technology or land
use rights, procedures for transfer of the property rights shall be dealt
with in accordance with the law.
If a shareholder does not pay its subscribed capital contribution in
accordance with the provisions of the preceding paragraph, such
shareholder shall be liable for default to the other shareholders who have
fully paid their capital contributions.

Article 26
After the shareholders have paid in full their subscribed capital contributions a legally authorized investment verification authority must verify the investment and issue certificate.

Article 27
Upon verification by a legally authorized investment verification authority of all capital contributions of shareholders, a designated representative or jointly appointed agent of all the shareholders applies to the company registration authority to register the establishment of the company, submitting the company registration application, the company's Article of association, investment verification certificate and other
documents.
If examination and approval from relevant departments is required in accordance with any law or dministrative regulation, the approval documents shall be submitted when applying to register the establishment
of the company.Where the conditions required by this Law are met, the company registration authority registers the company and issues a company business licence. Where the conditions of this Law are not met, the company is not registered.
The date of issue of the business licence is the date of establishment of a limited liability company.

Article 28
After the establishment of a limited liability company, if the actual values of the investment in kind, industrial property, non-patented technology or land use rights are obviously lower than the values set in
the articles of association, the difference shall be made up by the shareholder(s) who contributed such investment, and other shareholders at the time of the establishment of the company shall be jointly liable for
the difference.

Article 29
If a branch or branches of a limited liability company is established at the same time a limited liability company is established, application for the registration of the branch(es) shall be made to the company
registration authority to obtain the business licence(s).
If a branch or branches of a limited liability company are established after the establishment of the company, application for registration shall be made by the legal representative of the company to the company registration authority to obtain the business licence(s).

Article 30
An investment certificate shall be issued to each of the shareholders upon the establishment of a limited liability company.
An investment certificate shall set out the following:
(1) the company's name;
(2) the company's date of registration;
(3) the company's registered capital;
(4) the shareholder's name and the amount and date of payment of capital contribution; and
(5) the number and date of issue of the investment certificate.An investment certificate is sealed with the company's seal.

Article 31
A limited liability company shall establish a register of shareholders setting out the following:
(1) the shareholders' names and domiciles;
(2) the shareholders' amounts of capital contributions;
(3) the numbers of the investment certificates.

Article 32
Shareholders have the right to examine the minutes of shareholders' meetings and the company's financial and accounting reports.

Article 33
Shareholders are entitled to receive dividends in accordance with the proportions of their capital contributions. Shareholders have a preemptive right to subscribe capital when a company increases its capital.

Article 34
Shareholders shall not withdraw their capital contributions after the registration of a company.

Article 35
Shareholders may transfer among themselves all or part of their capital contributions.Where a shareholder transfers its capital contribution to a person other than a shareholder, the consent of more than half of all shareholders shall be required. A shareholder objecting to such transfer shall purchase the capital
contribution to be transferred and such shareholder is deemed to have agreed to the transfer if he does not purchase the capital contribution.
For a transfer of capital contribution which is transferred with the consent of the shareholders, other hareholders have a pre-emptive right to purchase it on the same conditions.

Article 36 After a shareholder transfers its capital contribution in accordance with the law, the company records in the register of shareholders the name of the transferee, its domicile and the amount of the capital contribution transferred.

Section 2 Organizational Structure

Article 37
The shareholder's meetings of a limited liability company are made up of all shareholders. The shareholders' meeting is the company's authoritative organization, exercising its powers in accordance with this Law.

Article 38
The shareholders' meeting exercises the following powers:
(1) to decide on the company's operational policies and investment plans;
(2) to elect and replace directors and decide on matters relating to the remuneration of directors;
(3) to elect and replace the supervisors who are representatives of the shareholders, and decide on matters relating to the remuneration of supervisors;
(4) to examine and approve reports of the board of directors;
(5) to examine and approve reports of the board of supervisors or any supervisor(s);
(6) to examine and approve the company's proposed annual financial budget and final accounts;
(7) to examine and approve the company's plans for profit distribution and recovery of losses;
(8) to decide on increases in or reductions of the company's registered capital;
(9) to decide on the issue of bonds by the company;
(10) to decide on transfers of capital contribution by shareholders to a person other than a shareholder;
(11) to decide on issue such as merger, division, change in corporate form or dissolution and liquidation ofthe company;
(12) to amend the company's articles of association.

Article 39
Except as otherwise provided in this Law, methods of discussion and voting procedures for shareholders' meetings are specified in the company's articles of association.
A resolution for an increase in or reduction of registered capital, division, merger, dissolution or change in corporate form of the company shall be passed by shareholders representing two-thirds or more of the
voting rights.

Article 40
A company may amend its articles of association. A resolution to amend the company's articles of association shall be passed by shareholders representing two-thirds or more of the voting rights.

Article 41
Shareholders shall exercise voting rights at shareholders' meetings in accordance with the proportions of their capital contribution.

Article 42
The first shareholders' meeting is convened and presided over by the shareholder whose capital contribution is the largest. Such shareholder exercises its rights in accordance with this Law.

Article 43
Shareholders' meetings are divided into regular meetings and interim meetings. Regular meeting shall be convened on time in accordance with the provisions of the articles of association. Shareholders representing one-fourth or more of the voting rights or one-third or more of the directors or supervisors may request
that an interim meeting be convened.
Where a limited liability company has a board of directors, shareholders' meetings are convened by the board of directors and presided over by the chairman of the board of directors. If the chairman of the board of directors is unable to perform his duties for a particular reason, the vice-chairman or another director designated by the chairman presides over the meeting.

Article 44
When convening a shareholders' meeting, notice shall be given to all shareholders fifteen days before the meeting is convened.
Shareholders' meetings shall keep minutes of the decisions made on matters discussed. The minutes shall be signed by the shareholders present at the meeting.

Article 45
A limited liability company has a board of directors with three to thirteen members. For a limited liability company established with the investment of two or more state-owned enterprises or two or more state-owned investment entities, members of its board of directors shall include representatives of the staff and workers of the company. Representatives of staff and workers on the board of directors are chosen by the company's staff and workers by democratic election.
The board of directors has one chairman and may have one or two vice-chairmen. The method of election of the chairman and vice-chairmen is specified in the articles of association.
The chairman of the board of directors is the legal representative of the company.

Article 46
The board of directors is responsible to the shareholders' meetings and exercises the following powers:
(1) to be responsible for convening shareholders' meetings and accountable to the shareholders' meeting;
(2) to implement the resolutions of the shareholders' meeting;
(3) to decide on the operational plans and investment plan of the company;
(4) to formulate the company's proposed annual financial budget and final accounts;
(5) to formulate plans for profit distribution and recovery of losses;
(6) to formulate plans for increases in or reductions of the company's registered capital;
(7) to prepare plans for merger, division, change in corporate form and dissolution of the company;
(8) to decide on the set up of the company's internal management structure;
(9) to appoint or dismiss the company's manager (general manager) (the "manager") and pursuant to the manager's nominations to appoint or dismiss the deputy manager and the financial officers of the company and decide upon their remuneration; and
(10) to formulate the company's basic management system.

Article 47
The term of office of the directors is as provided in the company's Articles of association, provided that each term shall not be longer than
three years. At the end of a director's term, the director may serve another term if re-elected.
The shareholders' meeting shall not without reason remove a director from office before the expire of that director's term.

Article 48
Meetings of the board of directors are convened and presided over by the chairman. When the chairman is unable to perform his duties for a particular reason, the vice-chairman or another director designated by the chairman convenes and presides over the meetings. One-third or more of the directors may request that an interim meeting be convened.

Article 49
Except as otherwise provided in this Law, methods of discussion and voting procedures for the board of directors are provided for in the company's articles of association.
When convening a meeting of the board of directors, notice of the meeting shall be given to all directors ten days before the meeting is convened.
The board of directors shall keep minutes of the decisions made on matters discussed. Such minutes shall be signed by the directors present at the meeting.

Article 50
A limited liability company has a manager who is appointed or dismissed by the board of directors. The manager is responsible to the board of directors and exercises the following powers:
(1) to be in charge of the company's production, operations and management and organize the implementation of the resolutions of the board of directors;
(2) to organize the implementation of the company's annual business plan and investment plan;
(3) to propose plans for the putting in place of the company's internal management structure;
(4) to propose the company's basic management system;
(5) to formulate specific rules and regulations for the company;
(6) to propose the appointment or dismissal of the company's deputy manager(s) and financial officers;
(7) to appoint or dismiss management officers other than those required to be appointed or dismissed by the board of directors; and
(8) other powers conferred by the company's articles of association
and the board of directors.
The manager is present at meetings of the board of directors.

Article 51
A limited liability company with a relatively small number of shareholders and of a relatively small scale may have one executive director and no board of directors. The executive director may also be the company's manager.
The powers of the executive director shall be specified in the company's articles of association with reference to the provisions of Article 46 of this Law.
Where a limited liability company has no board of directors, the executive director is the legal representative of the company.

Article 52
A limited liability company with a relatively large scale of operations shall have a board of supervisors with not less than three members. The board of supervisors elects a convener from among its members.
The board of supervisors is made up of representatives of shareholders and a reasonable proportion of representatives from the company's staff and workers, the specific proportion to be provided in the company's

Articles of association. Representatives of the staff and workers on the board of supervisors are chosen by the company's staff and workers by democratic election.
A limited liability company with a relatively small number of shareholders and of a small scale may have one to two supervisors.
The directors, manager and financial officers of the company shall not act concurrently as supervisors.

Article 53
The term of office of the supervisors is three years. At the end of a supervisor's term, the supervisor may serve another term, if reelected.

Article 54
The board of supervisors as supervisor (s) exercises the following powers:
(1) to inspect the company's financial situation;
(2) to exercise supervision over the acts of the directors and manager carried out while performing their corporate functions which violate laws, regulations or the company's articles of association;
(3) to demand remedies from a director or manager when the acts of such director or manager are harmful to the company's interests;
(4) to propose the convening of an interim shareholders' meeting;
(5) other powers specified in the company's articles of association. The supervisors are present at meetings of the board of directors.

Article 55
When considering and deciding on the wages, welfare and production safety of the staff and workers and labour protection, labour insurance and other issues involving the personal interests of the staff and workers, the company shall first solicit and consider the opinions of the company's trade union and staff and workers, and shall invite representatives from the trade union and the staff and workers to attend the relevant meetings.

Article 56
When considering and deciding on major issues relating to the company's production and operations and formulating important rules and regulations, the company shall solicit and consider the opinions and proposals of the company's trade union and staff and workers.

Article 57
Any of the following persons shall not serve as a director, supervisor or manager of a company:
(1) persons without civil capacity or with restricted civil capacity;
(2) persons who have committed the offences of corruption, bribery, infringement of property, misappropriation of property or sabotaging the socioeconomic order, and have been sentenced to criminal penalties, where less than five years have elapsed since the date of completion of the sentence; or persons who have been deprived of their political rights due to criminal offences, where less than five years have elapsed since the date of the completion of implementation of this deprivation;
(3) persons who are former directors, factory directors or managers of a company or enterprise which has become bankrupt and been liquidated as a result of mismanagement and are personally liable for the bankruptcy of such company or enterprise, where less than three years have elapsed since the date of the completion of the bankruptcy and liquidation of the company or enterprise;
(4) persons who were legal representatives of a company or enterprise which had its business licence revoked due to a violation of the law and who are personally liable, where less than three years have elapsed since the date of the revocation of the business licence; or
(5) persons who have a relatively large amount of debts due and outstanding.
Where a company elects, nominates or appoints any director or supervisor or employs a manager contrary to the provisions of the preceding clause, such election, appointment or employment is ineffective.

Article 58
State civil servants shall not act concurrently as a company's director, supervisor or manager.

Article 59
The directors, supervisors or managers shall abide by the company's Articles of association, faithfully execute their official duties and protect the company's interests. They shall not exploit their position and power in the company to advance their own private interests.
The directors, supervisors or managers of a company shall not exploit their position to accept bribes or other illegal income or wrongfully take over company property.

Article 60
The directors or managers shall not misappropriate company funds or loan such funds to others.
The directors or managers shall not open accounts in their own names or in the names of other individuals for the deposit of the company's assets.
The directors or managers shall not provide a guarantee for debts of a shareholder of the company or other individual(s) with the company's assets.

Article 61
The directors or managers shall not engage on their own behalf or on behalf of others in any business similar to the business of the company in which they hold office or in activities harmful to the company's interests. The proceeds from such business or activities shall belong to the company.
Unless otherwise provided in the company's articles of association or with the consent of a shareholders' meeting, a director or manager shall not enter into any contracts or transactions with the company.

Article 62
The directors, supervisors or managers shall not disclose the secrets of the company except in accordance with the provisions of the law or with the consent of a shareholders' meeting.

Article 63
Where a director, supervisor or manager of a company violates the law, administrative regulations or the company's articles of association while performing his official corporate duties resulting in harm to the company, such director, supervisor or manager shall be liable for damages.

Section 3 Wholly State-Owned Companies

Article 64
"A wholly state-owned company" in this Law refers to a limited liability company in which a state-authorized investment institution or a state-authorized department is the sole investor and which is established solely by a state-authorized investment institution or by a state-authorized department.
A company designated by the State Council for the production of special products or belonging to a specified trade shall be established in the form of a wholly state-owned company.

Article 65
The articles of association of a wholly state-owned company are formulated in accordance with this Law by the state-authorized investment institution or the state-authorized department or formulated by the board of directors, and reported to the state-authorized investment institution or the state-authorized department for approval.

Article 66
A wholly state-owned company does not have shareholders' meetings. The company's board of directors is authorized by the state-authorized investment institution or the state-authorized department to exercise part
of the powers of the shareholders' meetings, decide on the major issues of the company, provided that decisions on merger, division, dissolution of the company, increase or decrease in capital and issue of corporate bonds shall be decided by the state-authorized investment institution or the state-authorized department.

Article 67
The state-authorized investment institution or the state-authorized department shall exercise supervision and management over the state-ownedassets of a wholly state-owned company in accordance with the provisions of law and administrative regulations.

Article 68
A wholly state-owned company shall have a board of directors which carries out its duties in accordance with the provisions of Article 46 and Article 66 of this Law. The term of office of the board of directors is three years.
The board of directors has three to nine members, appointed or replaced by the state-authorized investment institution or the state-authorized department in accordance with the board of directors' terms. Members of the board of directors shall include representatives of the staff and workers of the company. Representatives of the staff and workers on the board of directors are chosen by the company's staff and workers by democratic election.
The board of directors has a chairman and may have one vice-chairman if necessary. The chairman and the vice-chairman are designated from among the directors by the state-authorized investment institution or the state-authorized department.
The chairman of the board of directors is the legal representative of the company.

Article 69
A wholly state-owned company shall have a manager who is appointed or dismissed by the board of directors. The manager exercises his powers in accordance with the provisions of Article 50 of this Law.
With the consent of the state-authorized investment institution or the state-authorized department, members of the board of directors may act concurrently as manager.

Article 70
The chairman and vice-chairman of the board of directors, directors and the manager of a wholly state-owned company shall not act concurrently as officers of other limited liability companies, companies limited by shares or other economic organizations without the consent of the state-authorized investment institution or the state-authorized department.

Article 71
To transfer assets of a wholly state-owned company, in accordance with the provisions of law and administration regulations, examination and approval and procedures for transfer of property rights are handled by the state-authorized investment institution or the state-authorized department. Article 72 Large-scale wholly state-owned companies with a sound system of operation and management and whose operational situation is relatively good may be authorized by the State Council to exercise rights as the owner of the assets.

Chapter 3 Establishment and Organizational Structure of A Company Limited by Shares
Section 1 Establishment

Article 73
Establishment of a company limited by shares shall be subject to the fulfillment of the following conditions:
(1) the number of promoters meets the requirement of the law;
(2) the share capital subscribed by the promoters and by public offer meets the minimum amount of capital required by law;
(3) the issue of shares and related preliminary matters comply with the provisions of law;
(4) articles of association are formulated by the promoters and adopted by the founding meeting;
(5) there is a company name and the establishment of an organizational structure
complying with the requirements for the establishment of a company limited by shares; and
(6) there is a fixed site for production and operations and the necessary conditions for production and operations.

Article 74
A limited liability company may be established by means of promotion or offer.
Establishment by the promoter method means the establishment of a company by the subscription by the promoters for all the shares to be issued by the company.
Establishment by the offer method means establishment of a company by the subscription by the promoters of part of the shares to be issued by a company and a public offer of the remaining part of the shares.

Article 75
The establishment of a company limited by shares shall have at least five promoters including more than half of the promoters with domiciles within Chinese territory.
When a state-owned enterprise is reorganized into a company limited by shares, there may be less than five promoters, but the offer method shall be adopted for its establishment.

Article 76
The promoters of a company limited by shares shall subscribe for
shares for which they are required to subscribe in accordance with this Law and
shall be responsible for the preparation of the establishment of the company.

Article 77
The establishment of a company limited by shares shall be approved by
the department authorized by the State Council or by the provincial-level
people's government.

Article 78
The registered capital of a company limited by share is the total
share capital which has been registered with the company registration authority
and which has been actually received.
The minimum amount of the registered capital of a company limited by
shares is RMB 10,000,000. Requirements for the minimum amount of the
registered capital of a company limited by shares to be higher than the
above amount are provided for in separate laws or administrative
regulations.

Article 79
The articles of association of a company limited by shares shall set out the following:
(1) the company's name and domicile;
(2) the company's scope of business;
(3) the company's method of establishment;
(4) the total shares, value per share and registered capital of the company;
(5) the names of the promoters and the number of shares subscribed by them;
(6) the rights and obligations of the shareholders;
(7) the composition, powers, term of office and rules of procedure for discussion of the board of directors;
(8) the company's legal representative;
(9) the composition, powers, term of office and rules of procedure for discussion of the board of supervisors;
(10) the company's method of profit distribution;
(11) grounds for the dissolution of the company and method for its liquidation;
(12) procedures for company notices and announcements; and
(13) other matters which the shareholders' general meeting considers necessary to specify.

Article 80
The promoters may make capital contributions in currency, or may invest in kind, use industrial property, non-patented technology or land use rights to make capital contributions based on their appraised value.
For investment in kind, industrial property, non-patented technology or land use rights which are capital contributions, a valuation shall be carried out, the property contributed, verified and conversion into shares made, without over valuation or under valuation. The valuation of land use rights is to be dealt with in accordance with the provisions of laws and administration regulations.
The amount of industrial property or non-patented technology contributed as capital based on its appraised value shall not exceed twenty percent of the registered capital of a company.

Article 81 When a state-owned enterprise is reorganized into a company limited by shares, it is strictly prohibited to under value state-owned assets for conversion into shares, sell them at prices below their value, or distribute them without compensation to individuals.

Article 82 Where a company limited by shares is to by established by the promoter method, the promoters shall pay the full amount for the shares immediately after they have subscribed in writing for all shares which the Articles of association provide to be issued. If investment in kind, industrial property, non-patented technology or land use rights are used as payment for the shares, procedures for the transfer of the property rights shall be dealt with in accordance with the law.
The board of directors and the board of supervisors shall be elected after the promoters have paid all capital contributions. The board of directors submits to the company registration authority the approval document(s), the company's

Articles of association, the investment verification certificate and other documents for the establishment of the company and applies to register the establishment of the company.

Article 83 Where a company limited by shares is to be established by the offer method, the shares subscribed for by the promoters shall not be less than thirty-five percent of the total number of shares of the company. The remaining portion shall be offered to the public.

Article 84
When the promoters offer shares to the public, and application for the offer shall be submitted to the securities administration authorities of the State Council together with the following major documents:
(1) document(s) approving the establishment of the company;
(2) the company's articles of association;
(3) the operating budget;
(4) the promoters' names, the number of shares subscribed by the promoters, the type(s) of capital contribution and investment verification certificate;
(5) the prospectus;
(6) the names and addresses of the receiving bankers; and
(7) the names of the underwriters and relevant agreements.
The promoters shall not offer any shares to the public without prior approval of the securities administration authorities of the State
Council.

Article 85
Subject to the approval of the securities administration authorities of the State Council, promoters may publicly offer shares to investors outside China. The concrete procedures for such offers are set out in
specific regulations of the State Council.

Article 86
The securities administration authorities of the State Council grant approval to applications for offers which comply with the conditionsprovided in this Law. If the applications do not comply with theconditions provided in this Law, no approval is granted.
If, after the approval has been granted, the offer is found not to comply with the provisions of this Law, approval shall be revoked. Ifshares have not been offered, the offer will not be carried out. If shares have already been offered, the subscribers may demand that the promoters refund their payments for shares with interest at the bank's rate for a deposit of the same term.

Article 87
The articles of association formulated by the promoters shall be attached to the prospectus which shall set out the following:
(1) the number of shares subscribed by the promoters;
(2) the par value per share and issue price for each share;
(3) the total number of non-registered shares issued;
(4) the rights and obligations of the subscribers;
(5) the duration of the offer and explanation that subscribers may revoke their subscription to shares if the offer is under-subscribed at the close of the offer.

Article 88
In making a public offer of shares, promoters shall publish a prospectus and prepare share subscription applications. Share subscription applications shall set out the items stated in the preceding article.
Subscribers fill in the number of shares subscribed, the amount of payment and their domiciles, and sign and seal the share subscription application.
Subscribers make payment for shares according to the number of shares they have subscribed.

Article 89
A public offer of shares by promoters shall be underwritten by securities institutions. established in accordance with the law, and an underwriting agreement shall be entered into.

Article 90
In making a public offer of shares, the promoters shall enter into a agreement with the receiving bankers.
The receiving bankers shall receive and hold as agents the payments for shares, issue receipts to subscribers making payments, and shall be obliged to issue evidence of receipt of payments to the relevant
departments.

Article 91
After payment in full has been made for the shares issued, an authorized investment verification authority shall verify the investments and issue an investment verification certificate. The promoters shall
convene a founding meeting within thirty days. The founding meeting is made up of the subscribers.
If the shares issued are not fully subscribed after the closing date specified in the prospectus; or if the promoters do not convince the founding meeting within thirty days of payment in full having been made for the shares offered, the subscribers may demand that the promoters refund their payments for shares plus interest at the bank's rate for a deposit of the same term.

Article 92
The promoters shall give notice to all subscribers or make an
announcement of the date of the founding meeting fifteen days before the meeting. The founding meeting shall be held only if subscribers representing half or more of the total shares are present.
The founding meeting exercises the following powers:
(1) to examine the report of the promoters on preparations for the establishment of the company;
(2) to adopt the company's articles of association;
(3) to elect the members of the board of directors;
(4) to elect the members of the board of supervisors;
(5) to examine and verify the expenses incurred for the establishment of the company;
(6) to examine and verify the valuation of the property used by promoters as payments for shares; and;
(7) in the case of the occurrence of force major or substantial changes to operating conditions which have a direct effect on the establishment of the company, a resolution not to establish the company may be made.
A resolution at the founding meeting on any of the matters set out above requires the approval of subscribers with more than half of the voting rights present at the meeting.

Article 93
The promoters and subscribers shall not withdraw their share capital after
making payments for shares or making their contribution of capital as payment for shares, except where the shares have not been fully subscribed within the offer period, the promoters have not convened the founding meeting within the period specified, or a resolution not to establish the company is adopted at the founding meeting.

Article 94
Within 30 days of the conclusion of the founding meeting, the board of directors shall submit to the company registration authority the following documents and shall apply to register the establishment of the company:
(1) approval document from the relevant supervising departments;
(2) minutes of the founding meeting;
(3) the company's articles of association;
(4) the auditors' report on financial matters relating to the preparation of the establishment of the company;
(5) investment verification certificate;
(6) the names and domiciles of members of the board of directors and board of supervisors; and
(7) the name and domicile of the legal representative.

Article 95
The company registration authority shall, within thirty days from the date of receipt of an application to register the establishment of a company limited by shares decide whether or not to grant registration.
Registration is granted and a business licence issued if all the conditions set out in this Law are met. Registration is not granted if the conditions set out in this Law are not met.
The date of issue of the business licence is the date of establishment of a company limited by shares. After the company is established, a public announcement shall be made.
After the registration and establishment of a company limited by shares, in the case of establishment by the offer method, a report on the offer of shares shall be filed with the securities administration authorities of the State Council for the record.

Article 96
Where a branch or branches are to be set up at the same time as the establishment of a company limited by shares, application shall be made to the company registration authority to register it or them and obtain business licence(s).
Where a branch or branches are to be set up after the establishment of a company limited by shares, the legal representative of the company shall apply to the company registration authority to register it or them and obtain business licence(s).

Article 97
Promoters of a company limited by shares shall assume the following responsibilities:
(1) to be jointly liable for the debts and expenses arising from actions to establish the company, if the company can not be established;
(2) to be jointly liable to refund subscribers' payments for shares plus interest at the bank's rate for a deposit of the same term, if the company cannot be established;
(3) to be responsible for compensating the company for damages to the interests of the company arising from negligence of the promoters during the process of establishing the company.

Article 98
A limited liability company being converted into a company limited by shares shall meet the conditions for a company limited by shares set out in this Law, and procedures for the establishment of a company limited by shares shall be carried out in accordance with this Law.

Article 99
When a limited liability company is converted into a company limited by shares in accordance with the law and with approval, the total amount of shares into which conversion is made shall be equivalent to the amount of the company's net assets. When a limited liability company is converted into a company limited by shares and increases its capital by public offer of shares, the provisions of this Law concerning public offer of shares shall be followed.

Article 100
Where a limited liability company is being converted into a company limited by shares, the creditors' rights and indebtedness of the original limited liability company are assumed by the company limited by shares after the conversion.

Article 101
A company limited by shares shall deposit its articles of association, register of shareholders, minutes of shareholders' general meetings and financial and accounting reports at the company.


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Arbitration Law of the People's Republic of China

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Adopted at the 8th Session of the Standing Committee of the 8th National People's Congress and romulgated on August 31, 1994

Chapter I General Provisions


Article 1
This Law is formulated in order to ensure that economic disputes shall be impartially and promptly arbitrated, to protect the legitimate rights and interests of the relevant parties and to guarantee the healthy development of the socialist market economy.
Article 2
Disputes over contracts and disputes over property rights and interests between citizens, legal persons and other organizations as equal subjects of law may be submitted to arbitration.

Article 3
The following disputes shall not be submitted to arbitration:

1. disputes over marriage, adoption, guardianship, child maintenance and inheritance; and

2. administrative disputes falling within the jurisdiction of the relevant administrative organs according to law.

Article 4
The parties adopting arbitration for dispute settlement shall reach an arbitration agreement on a mutually voluntary basis. An arbitration commission shall not accept an application for arbitration submitted by one of the parties in the absence of an arbitration agreement.

Article 5
A people's court shall not accept an action initiated by one of the parties if the parties have concluded an arbitration agreement, unless the arbitration agreement is invalid.

Article 6
An arbitration commission shall be selected by the parties by agreement.

The jurisdiction by level system and the district jurisdiction system shall not apply in arbitration.

Article 7
Disputes shall be fairly and reasonably settled by arbitration on the basis of facts and in accordance with the relevant provisions of law.

Article 8
Arbitration shall be conducted in accordance with the law, independent of any intervention by administrative organs, social organizations or individuals.

Article 9
The single ruling system shall be applied in arbitration. The arbitration commission shall not accept any application for arbitration, nor shall a people's court accept any action submitted by the party in respect of the same dispute after an arbitration award has already been given in relation to that matter.
If the arbitration award is canceled or its enforcement has been disallowed by a people's court in accordance with the law, the parties may, in accordance with a new arbitration agreement between them in respect of the dispute, re-apply for arbitration or initiate legal proceedings with the people's court.

Chapter II Arbitration Commissions and Arbitration Association

Article 10
Arbitration commissions may be established in the municipalities directly under the Central Government, in the municipalities where the people's governments of provinces and autonomous regions are located or,if necessary, in other cities divided into districts. Arbitration commissions shall not be established at each level of the administrative divisions.The people's governments of the municipalities and cities specified inthe above paragraph shall organize the relevant departments and the Chamber of Commerce for the formation of an arbitration commission. The establishment of an arbitration commission shall be registered with the judicial administrative department of the relevant province, autonomous region or municipalities directly under the Central Government.

Article 11
An arbitration commission shall fulfil the following conditions:
1. it must have its own name, domicile and Articles of Association;
2. it must possess the necessary property;
3. it must have its own members; and
4. it must have arbitrators for appointment.
The articles of association of the an arbitration commission shall be
formulated in accordance with this Law.

Article 12
An arbitration commission shall comprise a chairman, two to four vice-chairmen and seven to eleven members.The chairman, vice-chairmen and members of an arbitration commission must be persons specialized in law, economic and trade and persons who have actual working experience. The number of specialists in law, economic and trade shall not be less than two-thirds of the members of an arbitration association.

Article 13
The arbitration commission shall appoint fair and honest person as its arbitrators. Arbitrators must fulfil one of the following conditions:
1. they have been engaged in arbitration work for at least eight years;
2. they have worked as a lawyer for at least eight years;
3. they have been a judge for at least eight years;
4. they are engaged in legal research or legal teaching and in senior
positions; and
5. they have legal knowledge and are engaged in professional work relating to economics and trade, and in senior positions or of the equivalent professional level. The arbitration commission shall establish a list of arbitrators according to different professionals.

Article 14
Arbitration commissions are independent of administrative organs and there are no subordinate relations with any administrative organs nor between the different arbitration commissions.

Article 15
The China Arbitration Association is a social organization with the status of a legal person. Arbitration commissions are members of the China Arbitration Association. The Articles of Association of the China Arbitration Association shall be formulated by the national general meeting of the members.The China Arbitration Association is an organization in charge of self-regulation of the arbitration commissions. It shall conduct supervision over the conduct (any breach of discipline) of the arbitration commissions and their members and arbitrators in accordance with its articles of association. The China Arbitration Association shall formulate Arbitration Rules in accordance with this Law and the Civil Procedure Law.

Chapter III Arbitration Agreement

Article 16
An arbitration agreement shall include the arbitration clauses provided in the contract and any other written form of agreement concluded before or after the disputes providing for submission to arbitration.
The following contents shall be included in an arbitration agreement:
1. the expression of the parties' wish to submit to arbitration;
2. the matters to be arbitrated; and
3. the Arbitration Commission selected by the parties.

Article 17
An arbitration agreement shall be invalid under any of the following circumstances:
1. matters agreed upon for arbitration are beyond the scope of arbitration prescribed by law;
2. an arbitration agreement concluded by persons without or with limited capacity for civil acts; and
3. one party forces the other party to sign an arbitration agreement by means of duress.

Article 18
If the arbitration matters or the arbitration commission are not agreed upon by the parties in the arbitration agreement, or, if the relevant provisions are not clear, the parties may supplement the agreement. If the parties fail to agree upon the supplementary agreement, the arbitration agreement shall be invalid.

Article 19
An arbitration agreement shall exist independently. Any changes to, rescission, termination or invalidity of the contract shall not affect the validity of the arbitration agreement. An arbitration tribunal has the right to rule on the validity of a contract.

Article 20
If the parties object to the validity of the arbitration agreement, they may apply to the arbitration commission for a decision or to a people's court for a ruling. If one of the parties submits to the arbitration commission for a decision, but the other party applies to a people's court for a ruling, the people's court shall give the ruling.
If the parties contest the validity of the arbitration agreement, the objection shall be made before the start of the first hearing of the arbitration tribunal.

Chapter IV Arbitration Procedure
Section 1: Application and Acceptance for Arbitration

Article 21
The parties applying for arbitration shall fulfil the following conditions:
1. they must have an arbitration agreement;
2. they must have a specific claim with facts and argument on which the claim is based; and
3. the arbitration must be within the jurisdiction of the arbitration commission.

Article 22
The party applying for arbitration shall submit to an arbitration commission the arbitration agreement, an application for arbitration and copies thereof.

Article 23
An arbitration application shall state clearly the following:
1. the name, sex, age, occupation, work unit and address of the party, the name address and legal representative of the legal person or other organization and the name and position of its person-in charge;
2. the arbitration claim and the facts and argument on which the claim is based; and
3. evidence and the source of evidence, the name and address of the witness(es).

Article 24
Within 5 days from the date of receiving the arbitration application, the arbitration commission shall notify the parties that it considers the conditions for acceptance have been fulfilled, and that the application is accepted by it. If the arbitration commission considers that the conditions have not been fulfilled, it shall notify the parties in writing of its rejection, stating its reasons.

Article 25
Upon acceptance of an arbitration application, the arbitration commission shall, within the time limit provided by the Arbitration Rules, serve a copy of the Arbitration Rules and the list of arbitrators on the applicant, and serve a copy of the arbitration application, the Arbitration Rules and the list of arbitrators on the respondent. Upon receipt of a copy of the arbitration application, the respondent shall, within the time limit prescribed by the Arbitration Rules, submit its defence to the arbitration commission. Upon receipt of the defence, the arbitration commission shall, within the time limit prescribed by the Arbitration Rules, serve a copy of the reply on the applicant. The failure of the respondent to submit a defence shall not affect the proceeding of the arbitration procedures.

Article 26
Where the parties had agreed on an arbitration agreement, but one of the parties initiates an action before a people's court without stating the existence of the arbitration agreement, the people's court shall, unless the arbitration agreement is invalid, reject the action if the other party submits to the court the arbitration agreement before the first hearing of the case. If the other party fails to object to the hearing by the people's court before the first hearing, the arbitration agreement shall be considered to have been waived by the party and the people's court shall proceed with the hearing.

Article 27
The applicant may abandon or alter his arbitration claim. The respondent may accept the arbitration claim or object to it. It has a right to make a counterclaim.

Article 28
A party may apply for property preservation if, as the result of an act of the other party or for some other reasons, it appears that an awardmay be impossible or difficult to enforce. If one of the parties applies for property preservation, thearbitration commission shall submit to a people's court the application of the party in accordance with the relevant provisions of the Civil Procedure Law. If a property preservation order is unfounded, the applicant shall compensate the party against whom the order was made for any losses sustained as a result of the implementation of the property preservation order.

Article 29
The parties and their legal representatives may appoint lawyers or engage agents to handle matters relating to the arbitration. In the event that a lawyer or an agent is appointed to handle the arbitration matters,a letter of authorization shall be submitted to the arbitration commission.
Section 2: Composition of the Arbitration Tribunal

Article 30
An arbitration tribunal may comprise three arbitrators or one arbitrator. If an arbitration tribunal comprises three arbitrators, a presiding arbitrator shall be appointed.

Article 31
If the parties agree to form an arbitration tribunal comprising three arbitrators, each party shall select or authorize the chairmen of thearbitration commission to appoint one arbitrator. The third arbitrator shall be selected jointly by the parties or be nominated by the chairman of the arbitration commission in accordance with a joint mandate given by the parties. The third arbitrator shall be the presiding arbitrator. If the parties agree to have one arbitrator to form an arbitration tribunal, the arbitrator shall be selected jointly by the parties or be nominated by the chairman of the arbitration commission in accordance with a joint mandate given by the parties.

Article 32
If the parties fail, within the time limit prescribed by the Arbitration Rules, to select the form of the constitution of the arbitration tribunal or fail to select the arbitrators, the arbitrators shall be appointed by the chairman of the arbitration commission.

Article 33
After the arbitration tribunal is constituted, the arbitration commission shall notify the parties in writing of the composition of the arbitration tribunal.

Article 34
In any of the following circumstances, an arbitrator must withdraw from the arbitration, and the parties shall have the right to apply for his withdrawal if he:
1. is a party or a close relative of a party or of a party's representative;
2. is related in the case;
3. has some other relationship with a party to the case or with a party's agent which could possibly affect the impartiality of the arbitration;
4. meets a party or his agent in private, accepts an invitation for dinner by a party or his representative or accepts gifts presented by any of them.

Article 35
When applying for the withdrawal of an arbitrator, the petitioning party shall state his reasons and submit a withdrawal application before the first hearing. A withdrawal application may also be submitted before the conclusion of the last hearing if reasons for the withdrawal only became known after the start of the first hearing.

Article 36
Whether an arbitrator is withdrawn or not shall be determined by the chairman of the arbitration commission. If chairman is serving as an arbitrator, the withdrawal or not shall be determined collectively by the arbitration commission.

Article 37
If an arbitrator is unable to perform his duties as an arbitrator as a result of the withdrawal or any other reasons, another arbitrator shall be selected or appointed in accordance with the provisions of this Law. After a replaced arbitrator has been selected or appointed following the withdrawal of an arbitrator, the parties may apply to resume the arbitration procedure. The arbitration tribunal shall determine whether the resumption of the procedure may be allowed. The arbitration tribunal may determine on its own whether the arbitration procedure shall be resumed.

Article 38
An arbitrator involved in one of the circumstances described in Item 4, Article 34, if it is serious, or those described in Item 6, Article 58, such arbitrator shall be legally liable in accordance with the law. The arbitration commission shall remove his name from the list of arbitrators.
Section 3: Hearing and Arbitral Awards

Article 39
An arbitration tribunal shall hold a tribunal session to hear an arbitration case. If the parties agree not to hold a hearing, the arbitration tribunal may render an award in accordance with the arbitration application, the defence statement and other documents.

Article 40
An arbitration shall not be conducted in public. If the parties agree to a public hearing, the arbitration may proceed in public, except those concerning state secrets.

Article 41
The arbitration commission shall notify the two parties within the time limit provided by the Arbitration Rules of the date of the hearing. Either party may request to postpone the hearing with in the time limit provided by the Arbitration Rules if there is a genuine reason. The arbitration tribunal shall decide whether to postpone the hearing.

Article 42
If the applicant for arbitration who has been given a notice in writing does not appear before the tribunal without good reasons, or leaves the tribunal room during a hearing without the permission of the arbitration tribunal, such applicant shall be deemed as having withdrawn his application. If the party against whom the application was made was served with a notice in writing but does not appear before the tribunal without due reasons or leaves the tribunal room during a hearing without the permission of the arbitration tribunal, an award by default may be given.

Article 43
The parties shall produce evidence in support of their claims. An arbitration tribunal may collect on its own evidence it considers necessary.

Article 44
For specialized matters, an arbitration tribunal may submit for appraisal to an appraisal organ agreed upon by the parties or to the appraisal organ appointed by the arbitration tribunal if it deems such appraisal to be necessary. According to the claim of the parties or the request of the arbitration tribunal, the appraisal organ shall appoint an appraiser to participate in the hearing. Upon the permission of the arbitration tribunal, the parties may question the appraiser.

Article 45
Any evidence shall be produced at the start of the hearing. The parties may challenge the validity of such evidence.

Article 46
In the event that the evidence might be destroyed or if it would be difficult to obtain the evidence later on, the parties may apply for the evidence to be preserved. If the parties apply for such preservation, the arbitration commission shall submit the application to the basic-level people's court of the place where the evidence is located.

Article 47
The parties have the right to argue during an arbitration procedure. At the end of the debate, the presiding arbitrator or the sole arbitrator shall ask for the final opinion of the parties.

Article 48
An arbitration tribunal shall make a written record of the hearing. If the parties or other participants to the arbitration consider that the record has omitted a part of their statement or is incorrect in some other respect, they shall have the right to request correction thereof. If no correction is made, the request for correction shall be noted in the written record. The arbitrators, recorder, parties and other participants to the arbitration shall sign or affix their seals to the record.

Article 49
After the submission of an arbitration application, the parties may settle the dispute among themselves through conciliation. If a conciliation agreement has been reached, the parties may apply to the arbitration tribunal for an award based on the conciliation agreement. Then may also withdraw the arbitration application.

Article 50
If the parties fall back on their words after the conclusion of a conciliation agreement and the withdrawal of the arbitration application, application may be made for arbitration in accordance with the arbitration agreement.

Article 51
Before giving an award, an arbitration tribunal may first attempt to conciliate. If the parties apply for conciliation voluntarily, the arbitration tribunal shall conciliate. If conciliation is unsuccessful, an award shall be made promptly. When a settlement agreement is reached by conciliation, the arbitration tribunal shall prepare the conciliation statement or the award on the basis of the results of the settlement agreement. A conciliation statement shall have the same legal force as that of an award.

Article 52
A conciliation statement shall set forth the arbitration claims andthe results of the agreement between the parties. The conciliation statement shall be signed by the arbitrators, sealed by the arbitration commission, and served on both parties. A conciliation statement shall have legal effect once signed and accepted by the parties. If the parties fall back on their words before the conciliation statement is singed and accepted by them, an award shall be made by the arbitration tribunal promptly.

Article 53
An award shall be based on the opinion of the majority arbitrators. The opinion of the minority arbitrators shall be recorded in writing. If an opinion of the minority arbitrators shall be recorded in writing. If an opinion of the majority arbitrators can not be constituted at the tribunal, the award shall be given according to the opinion of the presiding arbitrator.

Article 54
The arbitration claims, the matters in dispute, the grounds upon which an award is given, the results of the judgement, the responsibility for the arbitration fees and the date of the award shall be set forth in the award. If the parties agree not to include in the award the matters in dispute and the grounds on which the award is based, such matters may not be stated in the award. The award shall be signed by the arbitrators and sealed by the arbitration commission. The arbitrator who disagrees with the award may select to sign or not to sign it.

Article 55
During the course of arbitration by an arbitration tribunal, where a part of facts has been made clear, a partial award may first be given in relation to that part.

Article 56
The parties may, within 30 days of the receipt of the award, request the arbitration tribunal to correct any typographical errors, calculation errors or matters which had been awarded but omitted in the award.

Article 57
An award shall be legally effective on the date it is given.
Chapter V Application for Cancellation of an Award

Article 58
The parties may apply to the intermediate people's court at the place where the arbitration commission is located for cancellation of an award if they provide evidence proving that the award involves one of the following circumstances:
1. there is no arbitration agreement between the parties;
2. the matters of the award are beyond the extent of the arbitration agreement or not within the jurisdiction of the arbitration commission;
3. the composition of the arbitration tribunal or the arbitration procedure is in contrary to the legal procedure;
4. the evidence on which the award is based is falsified;
5. the other party has concealed evidence which is sufficient to affect the impartiality of the award; and
6. the arbitrator(s) has (have) demanded or accepted bribes, committed graft or perverted the law in making the arbitral award. The peoples' court shall rule to cancel the award if the existence of one of the circumstances prescribed in the preceding clause is confirmed by its collegiate bench. The people's court shall rule to cancel the award if it holds that the award is contrary to the social and public interests.

Article 59
If a party applies for cancellation of an award, an application shall be submitted within 6 months after receipt of the award.

Article 60
The people's court shall, within 2 months after receipt of the application for cancellation of an award, render its decision for cancellation of the award or for rejection of the application.

Article 61
If the people's court holds that the case may be re-arbitrated by the arbitration tribunal after receipt of the application for cancellation of an award, the court shall inform the arbitration tribunal of re-arbitrating the case within a certain period of time and rule to suspend the cancellation procedure. If the arbitration tribunal refuses to re-arbitrate, the people's court shall rule to resume the cancellation procedure.

Chapter VI Enforcement

Article 62
The parties shall execute an arbitration award. If one party fails to execute the award, the other party may apply to a people's court for enforcement in accordance with the relevant provisions of the Civil Procedure Law, and the court shall enforce the award.

Article 63
A people's court shall, after examination and verification by its collegiate bench, rule not to enforce an award if the party against whom an application for enforcement is made provides evidence proving that the award involves one of the circumstances prescribed in Clause 2, Article 217 of the Civil procedure Law.

Article 64
If one party applies for enforcement of an award while the other party applies for cancellation of the award, the people's court receiving such application shall rule to suspend enforcement of the award. If a people's court rules to cancel an award, it shall rule to terminate enforcement. If the people's court overrules the application for cancellation of an award, it shall rule to resume enforcement.
Chapter VII Special provisions on Foreign-Related Arbitration

Article 65
The provisions of this Chapter shall apply to all arbitration of
disputes arising from foreign economic, trade, transportation or maritime matters. In the absence of provisions in this Chapter, other relevant provisions of this Law shall apply.

Article 66
A foreign arbitration commission may be organized and established by the China International Chamber of Commerce. A foreign arbitration commission shall comprise one chairman, several vice-chairmen and several committee members. The chairman, vice-chairmen and committee members may be appointed by the China International Chamber of Commerce.

Article 67
A foreign arbitration commission may appoint foreigners with
professional knowledge in such fields as law, economic and trade, science and technology as arbitrators.

Article 68
If the parties to a foreign-related arbitration apply for evidence preservation, the foreign arbitration commission shall submit their applications to the intermediate people's court in the place where the evidence is located.

Article 69
The arbitration tribunal of a foreign arbitration commission may record the details of the hearing in writing or record the essentials of the hearing in writing. The written record of the essentials shall be signed or sealed by the parties and other participants in the arbitration.

Article 70
A people's court shall, after examination and verification by its collegiate bench, rule to cancel an award if a party to the case provides evidence proving that the arbitration award involves one of the circumstances prescribed in Clause 1, Article 260 of the Civil Procedure Law.

Article 71
A people's court shall, after examination and verification by its collegiate bench, rule not to enforce an award-if the party against whom an application is made provides evidence proving that the arbitration award involves one of the circumstances prescribed in Clause 1, Article 260 of the Civil Procedure Law.

Article 72
Where the party subject to enforcement or its property is not within the territory of the People's Republic of China, a party applying for the enforcement of a legally effective arbitration award shall apply directly to the foreign court having jurisdiction for recognition and enforcement of the award.

Article 73
Foreign arbitration rules may be formulated by the China International Chamber of Commerce in accordance with this Law and the relevant provisions of the Civil Procedure Law.
Chapter VIII Supplementary Provisions

Article 74
If the law has stipulated a time limitation of arbitration, such provisions of the law shall apply. If the law has not stipulated a time limitation of arbitration, the provisions on the limitation of actions shall apply.

Article 75
The arbitration Commission may formulate provisional arbitration rules in accordance with this Law and the relevant provisions of the Civil Procedure Law before the formulation of the arbitration rules by the China Arbitration Association.

Article 76
The parties shall pay arbitration fees in accordance with the relevant provisions. The methods for the collection of arbitration fees shall be submitted to the commodity prices administration department for approval.

Article 77
Arbitration of labor disputes and disputes over contracts for undertaking agricultural projects within agricultural collective economic organizations shall be separately stipulated.

Article 78
In the event of conflict between the provisions on arbitration formulated before the coming into effect of this Law and the provisions of this Law, the provisions of this Law shall prevail.

Article 79
Arbitration organs established before the coming into effect of this Law in the municipalities directly under the Central Government, in the municipalities where the people's governments of the provinces or autonomous regions and in other cities divided into districts must be re-organized in accordance with the relevant provisions of this Law. The arbitration organs which are not re-organized shall be terminated at the expiration of one year after the date of effectiveness of this Law.

All other arbitration organs established before the implementation of this Law and not conforming to the provisions of this Law shall be terminated on the date of effectiveness of this Law.

Article 80
This Law shall be effective as of September 1, 1995.


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Interim Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors

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The Interim Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (hereinafter referred to as the "Provisions"), reviewed and adopted at the First Ministry Meeting of the Ministry of Foreign Trade and Economic Cooperation of the People's Republic of China on January 2, 2003, is hereby published and will come into force on April 12, 2003.

Chapter I General Provisions

Article 1
The Provisions are formulated in accordance with the laws and administrative regulations
governing foreign investment enterprises and other relevant laws and administrative regulations to
promote and regulate foreign investors' investment in China introduce advanced technologies and
management experience from abroad, improve the utilization of foreign investment, rationalize the
allocation of resources, ensure employment and safeguard fair competition and national economic
security.
Article 2
For the purpose of the Provisions, mergers and acquisitions of a domestic enterprise by
foreign investors shall mean that foreign investors, by agreement, purchase equity interest from
shareholders of domestic enterprise with no foreign investment (hereinafter referred to as the
"Domestic Company") or subscribe to the increase in the registered capital of the Domestic
Company with the result that such Domestic Company changes into a foreign investment enterprise
(hereinafter referred to as "Equity Merger and Acquisition"); or the foreign investors establish a
foreign investment enterprise and then, through such enterprise, purchase the assets of a domestic
enterprise by agreement and operate such assets, or the foreign investors purchase the assets of a
domestic enterprise by agreement and use such assets as investment to establish a foreign investment
enterprise to operate such assets (hereinafter referred to as "Asset Merger and Acquisition").

Article 3
In mergers and acquisitions of domestic enterprises, foreign investors shall comply with the
laws, administrative regulations and departmental rules and adhere to the principles of fairness,
reasonableness, compensation for equal value, and honesty and good faith, and shall not create
excessive concentration, eliminate or hinder competition, disturb the social economic order or harm
the societal public interests.

Article 4
In mergers and acquisitions of domestic enterprises, foreign investors shall comply with the
requirements regarding the investors' qualifications and industrial policy as set forth in the laws,
administrative regulations and departmental rules and the relevant requirements under industry
policies.
In the case of industries where no wholly foreign ownership is allowed under the Guidance
Catalog of Foreign Investment Industries, any merger or acquisition of a domestic enterprise
engaging in the industry shall not lead to the foreign investors' wholly ownership of all equity
interest in the acquired enterprise. In the case of industries which require the Chinese party to be
controlling or relatively controlling, the Chinese party shall remain to be in the controlling or
relatively controlling position in the acquired enterprise after any merger or acquisition of the
domestic enterprise engaging in such industries. In the case of industries where operation by foreign
investors is prohibited, no foreign investors may merge with or acquire any enterprise engaging
in such industries.

Article 5
Any merger or acquisition of a domestic enterprise by foreign investors to set up a foreign
investment enterprise shall be subject to the approval of the examination and approval authorities in
accordance with the Provisions, and procedures for change registration or establishment registration
shall be handled with the registration authorities. The contribution made by the foreign investors to
the registered capital of the foreign investment enterprise established after the merger or acquisition
shall generally not be less than 25% of the registered capital. Except as provided otherwise by the
laws or administrative regulations, if the contribution made by foreign investors is less than 25% of
the registered capital, the foreign investment enterprise shall be subject to the examination, approval
and registration in accordance with the currently applicable examination and registration procedures
for the establishment of a foreign investment enterprise. When issuing the foreign investment
enterprise approval certificates, the examination and approval authority shall add a notation "foreign
investment proportion less than 25%". When issuing the foreign investment enterprise business
licenses, the registration authority shall add the notation "foreign investment proportion less than
25%" .

Article 6
For the purpose of the Provisions, the examination and approval authority shall be the
Ministry of Foreign Trade and Economic Cooperation of the PRC (hereinafter referred to as
"MOFTEC") or the administrative authority in charge of foreign trade and economic cooperation at
the provincial level (hereinafter referred to as the "Provincial Examination and Approval
Authority"), and the registration authority shall be the State Administration for Industry and
Commerce of the PRC (hereinafter referred to as "SAIC") or its authorized local industrial and
commercial bureaus.
If the foreign investment enterprise established after the merger or acquisition falls into a
specific type or a specific industry subject to MOFTEC approval in accordance with the laws,
administrative regulations and departmental rules, the provincial examination and approval authority
shall submit the application documents to MOFTEC for examination and approval and MOFTEC
shall decide to approve or disapprove the application in accordance with the law.

Article 7
In the case of Equity Merger and Acquisition by foreign investors, the foreign investment
enterprise established thereafter shall succeed to the creditor's rights and liabilities of the merged or
acquired Domestic Company .
In the case of Asset Merger and Acquisition by foreign investors, the domestic enterprise
selling assets shall assume all its original creditor's rights and liabilities.
The Foreign investors, merged or acquired domestic enterprises, creditors and other parties may
reach separate agreements regarding the disposition of the creditor's rights and liabilities of the
merged or acquired domestic enterprises, provided that the agreement shall not result in any damage
to any third party interest or societal public interest. Any agreement on the disposition of the
creditor's rights and liabilities shall be submitted to the examination and approval authority.
The domestic enterprise selling assets shall, within 10 days of the adoption of the resolution to
sell its assets, gives notice to its creditors and makes a public announcement on a newspaper at the
provincial level or above with national circulation. A creditor of the domestic enterprise may, within
10 days from the date of receipt of such notice or publication of such public announcement, requests
the domestic enterprise selling assets to provide the corresponding security.

Article 8
The parties to a merger or acquisition shall determine the transaction price on the basis of
the result of the evaluation of the equity interest to be transferred or of the assets to be sold
conducted by the asset evaluation institution. The parties to a merger or acquisition may agree on an
asset evaluation institution established within the territory of China in accordance with the law.
Asset evaluation shall be conducted by adopting internationally recognized evaluation methods.
Where the merger or acquisition of a domestic enterprise leads to any change in the equity
interest formed by the investment of state-owned assets or resulting in any transfer of the property
right in state-owned assets, evaluation shall be conducted and transaction price shall be determined
in accordance with the relevant regulations governing the administration of state-owned assets.
It is prohibited to transfer equity interest or sell assets at a price obviously lower than the
evaluation result for the peupose of transferring the capital out of China in a disguised way.

Article 9
In case of a merger or acquisition of a domestic enterprise by foreign investors to set up a
foreign investment enterprise, the foreign investors shall, within 3 months from the date of issuance
of the foreign investment enterprise business license, pay the full consideration to the shareholder(s)
transferring equity interest or to the domestic enterprise selling assets. If the above time limit needs
to be extended under special circumstances, the foreign investors shall, upon the approval by the
examination and approval authority, pay 60% or more of the total consideration within 6 months and
full considerations within 1 year from the date of issuance of the foreign investment enterprise
business license, and shall distribute the proceeds in proportion to the actual capital contribution.
Where the foreign investors conduct Equity Merger and Acquisition and the foreign investment
enterprise established after such mergers and acquisitions increases its registered capital, the
investors shall set forth a time schedule for capital contribution in the contract and the articles of
association of the foreign investment enterprise. If it is set forth that the capital contribution shall be
paid up in one lump sum, the investors shall make the contribution within 6 months from the date of
issuance of the foreign investment enterprise business license ; or if it is set forth that the capital
contribution shall be paid by installments, the investors' first installment shall not be less than 15%
of their respective capital subscription and shall be made within 3 months from the date of issuance
of the foreign investment enterprise business license .
In case of an Asset Mergers and Acquisition by foreign investors, the investors shall set forth
the time schedule for capital contribution in the contract and the articles of association of the foreign
investment enterprise to be established. If the investors intend to establish a foreign investment
enterprise and purchase and operate such assets of a domestic enterprise through such enterprise, the
investors shall pay the part of its capital contribution equal to the price of such assets within the time
schedule specified for consideration payment in Paragraph 1 of this Article and the remaining part of
its capital contribution shall be paid within the time schedule agreed upon in accordance with
Paragraph 2 of this Article .
Where foreign investors establish a foreign investment enterprise through merger or acquisition
of a domestic enterprise, and the proportion of the foreign investors' capital contribution is less than
25% of the registered capital ,if the investors pay their capital contribution in cash, the full
contribution shall be made within 3 months from the date of issuance of the foreign investment
enterprise business license ; if the investors pay their capital contribution in kind or in industrial
property rights and so on, full contribution shall be made within 6 months from the date of issuance
of the foreign investment enterprise business license.
The instruments of payment of any consideration shall be in compliance with the provisions of
the relevant state laws and administrative regulations. Where a foreign investor intends to use any
stock it has the right to dispose of or any Renminbi assets it legitimately possesses as the instrument
of payment, such payment shall be subject to the approval of the foreign exchange administration
authority .

Article 10
Where a foreign investor acquires any equity interest held by a shareholder of a Domestic
Company by agreement, after the Domestic Company has changed into and established as a foreign
investment enterprise, the registered capital of such foreign investment enterprise shall be the
registered capital of the original Domestic Company and the proportion of the the foreign investor's
capital contribution shall be the proportion of the equity interest acquired by the foreign investor in
the original registered capital. Where a Domestic Company subject to Equity Merger and
Acquisition an Equity Merger and Acquisition also increases its capital at the same time, the
registered capital of the foreign investment enterprise established upon the Merger and Acquisition
shall be the sum of the registered capital of the original Domestic Company and the increased
capital. The foreign investors and the other original investors of the acquired Domestic Company
shall determine the proportion of their capital contribution respectively to the registered capital of
the foreign investment enterprise based on the evaluation of the Domestic Company's assets.
Where foreign investors subscribe to any increased capital of a Domestic Company, after the
Domestic Company has changed into and established as a foreign investment enterprise, the
registered capital of such foreign investment enterprise shall be the sum of the registered capital of
the original Domestic Company and the increased capital. The foreign investors and the other
original shareholders of the acquired Domestic Company shall determine the proportion of their
capital contribution respectively to the registered capital of the foreign investment enterprise
based upon the evaluation of the Domestic Company's assets.
If a natural person shareholder of the Domestic Company subject to Equity Merger and
Acquisition has been a shareholder of such Domestic Company for more than 1 year, the person
may, upon approval, continue to be a Chinese party investor of the foreign investment enterprise
established after the change.

Article 11
In case of an Equity Merger and Acquisition by foreign investors, the ceiling for the total
amount of investment of the foreign investment enterprise established upon the Merger and
Acquisition shall be determined according to the following proportions:
(1) no more than ten sevenths (10/7) of the registered capital of the foreign investment enterprise,
if the registered capital is less than US$ 2.1 million;
(2) no more than twice the registered capital, if the registered capital is between US$ 2.1million
and US$ 5 million;
(3) no more than two and a half times the registered capital, if the registered capital is more than
US$ 5 million but less than or equal to US$ 12 million; or
(4) no more than three times the registered capital, if the registered capital is more than US$ 12
million.

Article 12
In case of an Equity Merger and Acquisition by foreign investors, the investors shall
submit the following documents to the examination and approval authority with corresponding
jurisdiction of approval based on the total amount of investment of the foreign investment enterprise
established upon the Merger and Acquisition:
(1) the resolution adopted by the shareholders of the domestic limited liability company subject to
the Merger and Acquisition unanimously approving the Equity Merger and Acquisition by the
foreign investors, or the resolution adopted by the shareholders' meeting of the domestic company
limited by shares subject to the Merger and Acquisition approving the Equity Merger and
Acquisition by the foreign investors;
(2) the application of the Domestic Company subject to the Merger and Acquisition to be changed
in to and established as a foreign investment enterprise in accordance with the law;
(3) the contract and the articles of association of the foreign investment enterprise established
upon the Merger and Acquisition;
(4) the agreement for the purchase of the shareholders' equity interest or subscription for the
increased capital of the Domestic Company by the foreign investors
(5) the audited financial report for the most recent fiscal year of the Domestic Company subject to
the Merger and Acquisition;
(6) identification documents or incorporation certification and creditworthiness certification of the
foreign investors;
(7) explanation of the situation regarding the enterprises the Domestic Company subject to the
Merger and Acquisition has invested in;
(8) the business licenses (duplicates) of the Domestic Company subject to the Merger and
Acquisition and enterprises it has invested in;
(9) the plan for the re-settlement of the employees of the Domestic Company subject to the
Merger and Acquisition; and
(10) documents required to be submitted under Articles 7 and 19 of the Provisions.
Where any permission given by any other government authority is required in connection with
the business scope or business scale, or obtaining of any land use right by the foreign investment
enterprise to be established upon the Merger and Acquisition, the relevant documents of such
permission shall be submitted simultaneously.
The business scope of any company the Domestic Company subject to the Merger and
Acquisition originally invested in shall comply with the requirements of relevant foreign investment
industrial policies. Adjustments shall be made in case of noncompliance.

Article 13
The equity interest purchase agreement or the agreement to increase the capital of the
Domestic Company as set forth in Article 12 of these Provisions shall be governed by the Chinese
law and shall contain the following main contents:
(1) information regarding each of the parties to the agreement, including its full name, address,
4/8
and the name, position and citizenship of its legal representative,etc.;
(2) proportions and the price of the equity interest to be acquired or the increased capital to be
subscribed;
(3) term and methods of performance of the agreement;
(4) rights and obligations of the parties to the agreement;
(5) liabilities for breach of the agreement and settlement of dispute; and
(6) the date and the place of the execution of the agreement.

Article 14
In the case of an Asset Merger and Acquisition by foreign investors, the total amount of
investment of the foreign investment enterprise established upon the Merger and Acquisition shall
be determined on the basis of the transaction price of such assets and the actual scale of production
and operation. The proportion between the registered capital and the total amount of investment of
the foreign investment enterprise to be established shall be consistent with the relevant regulations.

Article 15
In the case of an Asset Merger and Acquisition by foreign investors, the investors shall
submit the following documents to the examination and approval authority with the corresponding
jurisdiction of approval, based on the total amount of investment, enterprise type, and industry of the
foreign investment enterprise to be established and in accordance with the laws, administrative
regulations and departmental rules governing the establishment of foreign investment enterprises:
(1) the resolution by the property rights holders or the agency of authority of the domestic
enterprise approving the sale of such assets;
(2) the application for the establishment of the foreign investment enterprise;
(3) the contract and the articles of association of the foreign investment enterprise to be
established;
(4) the asset purchase agreement executed between the foreign investment enterprise to be
established and the domestic enterprise or the asset purchase agreement executed between the
foreign investors and the domestic enterprise;
(5) the articles of association and the business license (duplicates) of the domestic enterprise
subject to the Merger and Acquisition;
(6) certification proving that the domestic enterprise subject to the Merger and Acquisition has
given notice and the public announcement to its creditors;
(7) identification documents or incorporation certification and creditworthiness certification of the
foreign investors;
(8) the plan for the re-settlement of employees of the domestic enterprise subject to the Merger
and Acquisition; and
(9) documents required to be submitted under Articles 7 and 19 of the Provisions.
Where any permission given by any other government authority is required in connection with
the purchase and operation of the assets of the domestic enterprise as specified in the above
paragraph, the relevant documents of such permission shall be submitted simultaneously.
If foreign investors purchase any assets by agreement with the domestic enterprise and invest
such assets to set up a foreign investment enterprise, such assets shall not be used for operation
purposes until and unless the foreign investment enterprise has been duly established.

Article 16
The asset purchase agreement set forth in Article 15 shall be governed by the Chinese law
and shall contain the following main contents:
(1) information regarding each of the parties to the agreement, including its name and address,
and the name, position and citizenship of its legal representative, etc.;
(2) list and the price of the assets to be purchased;
(3) term and methods of performance of the agreement;
(4) rights and obligations of the parties to the agreement;
(5) liabilities for breach of the agreement and settlement of dispute; and
(6) the date and the place of the execution of the agreement.

Article 17
Except as otherwise provided for in Article 20, where foreign investors establish a foreign
investment enterprise through merger and acquisition of a domestic enterprise,, the examination and
approval authority shall, within 30 days upon its receipt of all the documents required to be
submitted, decide according to law whether to approve the application for the establishment. Upon
such approval, the examination and approval authority shall issue the foreign investment enterprise
approval certificate.
If the examination and approval authority decides to approve foreign investors' acquisition of
equity interest of a Domestic Company from its shareholders, the examination and approval
authority shall concurrently copy the relevant approval documents to the local foreign exchange
administration authority of the transferor and of the Domestic Company respectively. The foreign
exchange administration authority in the locality of the transferor shall complete the foreign capital
foreign exchange registration procedures for the transferor's receipt of foreign exchange and shall
issue the foreign capital foreign exchange registration certificate certifying the payment of the
consideration for the above acquisition by the foreign investors.

Article 18
In the case of an Asset Merger and Acquisition by foreign investors, the investors shall,
within 30 days of its receipt of the foreign investment enterprise approval certificate for, apply to the
registration authority for the establishment registration and obtain the foreign investment enterprise
business license.
In the case of an Equity Merger and Acquisition by foreign investors, the acquired Domestic
Company shall apply to its original registration and administration authority for the change of
registration and obtain the foreign investment enterprise business license in accordance with the
Provisions. If the original registration and administration authority has no jurisdiction of registration
and administration, it shall, within 10 days upon its receipt of the application documents, deliver
such documents to the registration and administration authority with such jurisdiction, accompanied
by the registration files of the Domestic Company. The acquired Domestic Company shall submit
and be responsible for the authenticity and effectiveness of the following documents at the time of
its application for the change of registration:
(1) the application for the change of registration;
(2) the resolution adopted by the shareholders' meeting of the acquired Domestic Company in
accordance with the Company Law of the PRC and its articles of association, approving the transfer
of equity interest or the increased capital;
(3) the agreement for the purchase of the shareholders' equity interest or subscription for the
increased capital of the Domestic Company by the foreign investors
(4) amended articles of association of the Domestic Company or any amendment to the original

Articles of association and the contract of the foreign investment enterprise to be submitted as
required by law;
(5) the foreign investment enterprise approval certificate ;
(6) identification documents or incorporation certification and creditworthiness certification of the
foreign investors;
(7) the amended list of directors, the document specifying the names and addresses of new
directors and the documents of appointment of new directors; and
(8) other relevant documents and certificates required by SAIC.
In case of the transfer of state-owned equity interest and in case of foreign investors'
subscription to any increased capital of a company with state-owned equity interest, the approval
documents of the authority in charge of economic and trade administration shall also be submitted.
Investors shall, within 30 days upon the receipt of the foreign investment enterprise business
license, handle the necessary registration formalities with authorities for taxation, customs, land
administration and foreign exchange administration, etc..

Article 19 In case of any of the following occurrences in connection with the merger or acquisition of
a domestic enterprise by foreign investors, the investors shall submit notification to MOFTEC and
SAIC:
(1) the revenue of a party to the merger or acquisition in the domestic market for the current year
exceeds RMB1.5 billion ;
(2) the foreign investors have merged with or acquired more than 10 domestic enterprises in
aggregate engaging in the related businesses within one year;
(3) the market share of a party to the merger or acquisition in the domestic market has reached
20%;
(4) the market share of a party to the merger or acquisition in the domestic market will reach 25%
as a result of the merger or acquisition.
Even without the above occurrences, MOFTEC or SAIC may still require the foreign
investors to submit notification upon the request by any competing domestic enterprise, relevant
functional department or industrial association, if MOFTEC or SAIC finds that the merger or
acquisition will involve a huge market share, or if there is any other material aspect of the merger or
acquisition which might severely affect market competition, national economy or people's livelihood
and national economic security.
The above-mentioned "a party to a merger or acquisition" shall include any affiliated enterprise
of foreign investors.

Article 20
In case of any of the described in Article 19 in connection with a merger or acquisition of a
domestic enterprise by foreign investors, and if MOFTEC and SAIC believe that the merger or
acquisition might lead to over-concentration, impair fair competition or damage consumers'
interests, MOFTEC and SAIC shall, within 90 days upon its receipt of all the documents required to
be submitted, jointly or separately after consultation with each other, hold a hearing of the relevant
departments, organizations, enterprises and other related parties and decide according to law
whether to approve the application for the merger or acquisition.

Article 21
In case of any of the following occurrences in connection with an offshore merger or
acquisition, any party to the merger and acquisition shall, prior to its public announcement of the
plan for the merger or acquisition or together with its application to the regulatory authorities of the
country where it is located, submit to MOFTEC and SAIC the plan for the merger or acquisition.
MOFTEC and SAIC shall examine whether the merger or acquisition might cause overconcentration
of the domestic market, impair fair competition in the domestic market or damage the
domestic consumers' interests, and decide whether to approve the plan:
(1) the assets owned by a party to the offshore merger and acquisition within China exceeds RMB
3 billion;
(2) the sales of a party to the offshore merger or acquisition in the domestic market for the current
year have exceeded RMB 1..5 billion;
(3) the aggregate market share in the domestic market by a party to the offshore merger or
acquisition and its affiliated enterprises has reached 20%;
(4) the aggregate market share in the domestic market by a party to the offshore merger or
acquisition and all of its affiliated enterprises in the domestic market will reach 25% as a result of
the offshore merger or acquisition; or
(5) as a result of the offshore merger or acquisition, a party to the offshore merger or acquisition
will hold, directly or indirectly, equity of more than 15 foreign investment enterprises engaging in
the related businesses within China.

Article 22
In case of any of the following occurrences in connection with a merger or acquisition, a
party to the merger or acquisition may apply to MOFTEC and SAIC for an exemption from
examination:
(1) the merger or acquisition may improve the conditions for fair competition in the domestic
market;
(2) the merger or acquisition will restructure the enterprise running at a loss and ensure
employment;
(3) the merger or acquisition will absorb advanced technologies and management professionals
and enhance the international competitiveness of the domesticenterprise; or
(4) the merger or acquisition will improve the environment.

Article 23
All documents submitted by investors shall be grouped into categories as required by the
regulations and accompanied by a table of contents of the documents. All documents required to be
submitted shall be in Chinese.

Article 24
The Provisions shall apply to all mergers and acquisitions of domestic enterprises by
investment companies duly established by foreign investors withinChina.
Any acquisition of equity interest of PRC foreign investment enterprise by foreign investors
shall be governed by the currently laws and administrative regulations governing foreign investment
enterprises and Certain Regulations on Change in Shareholders' Equity Interest of Foreign
Investment Enterprises. Matters not covered therein shall be governed by the Provisions.

Article 25
Any merger or acquisition by investors in Hong Kong Special Administrative Region,
Macao Special Administrative Region and Taiwan of a domestic enterprise established in any
other regions of the PRC shall be handled with reference to the Provisions.

Article 26
The Provisions shall come into force on April 12, 2003.


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

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

Chapter I General Provisions


Article 1
The present Provisions are formulated to encourage foreign-funded companies, enterprises and other economic organizations or individuals (hereinafter referred to as foreign investors) to come to China to engage in business-starting investments, and to establish and perfect the mechanism of business-starting investments in China in accordance with the Law of the People's Republic of China on Chinese-foreign Contractual Joint Ventures, the Law of the People's Republic of China on Chinese-foreign Equity Joint Ventures, the Law of the People's Republic of China on Foreign-capital Enterprises, the Company Law of the People's Republic of China and other related laws and regulations.
Article 2
The term "foreign-funded business-starting investment enterprise " (hereinafter referred to as FBIE" refers to the foreign-funded investment enterprises established by foreign investors or by foreign investors jointly with companies, enterprises or other economic organizations established and registered in China in accordance with the Chinese law (hereinafter referred to as Chinese investors). To establish an FBIE shall be in conformity with the present Provisions. It shall mainly engage in business-starting investments.

Article 3
The term "business-starting investment" means making principal equity investments to high and new tech enterprises that haven't been listed in the stock market (hereinafter referred to as invested enterprises), and providing management services to them for the prospective capital gains.

Article 4
An FBIE is allowed to take the form of the non-legal-person organization or the corporate organization.
As to a non-legal-person organization, the investors shall bear joint liabilities for its debts.
The investors may also specify in the contract of the FBIE that: When the assets of an FBIE are not enough to clear the debts of this enterprise, the indispensable investors as stated in Article 7 shall bear joint liabilities and the other investors shall bear the liabilities to the company within the limit of contributions made by each of them.
For a corporate-form FBIE, the investors shall bear the liabilities to the company within the limit of the amount of investment made by each of them.

Article 5
The FBIEs shall abide by relevant laws and regulations of China, shall be in conformity with the policies of foreign investment industries and shall not damage the public interests of China.
The legitimate businesses and lawful rights and interests of the FBIE within the borders of China shall be subject to the protection of Chinese law.

Chapter II Establishment and Registration

Article 6
To establish an FBIE, the following requirements shall be met:
(1) There are more than 2 but less than 50 investors, and at least one shall be an indispensable
investor as stated in Article 7;
(2) The investors of a non-legal-person organization shall subscribe to a minimum total contribution in the sum of 10, 000, 000 U.S. $. The investors of an incorporated FBIE shall subscribe to a minimum total capital in the sum of 5, 000, 000 U.S. $. Except for the indispensable investors as provided in Article 7, each of the other investors shall subscribe to a minimum capital contribution no less than 1, 000, 000 yuan. Foreign investors may contribute their investments in convertible currencies and Chinese investors may contribute their investments in Renminbi.
(3) It shall have definite organization form;
(4) It shall have a definite and legitimate investment direction;
(5) Except that the operations of such an enterprise are subject to the management of a businessstarting
investment management company under authorization, an FBIE shall have at least 3
professional managerial persons who have practical experience in business-starting investment;
(6) It shall meet the other requirements as provided in laws and administrative regulations.

Article 7
An indispensable investor shall meet the following requirements:
(1) Business-starting investment is its main business;
(2) The accumulative total capital managed by it in the three years before the application is not less than 100, 000, 000 U.S. dollars, and of which no less than 50, 000, 000 U.S. dollars have been used in business-starting investment If the indispensable investor is a Chinese investor, the accumulative total capital managed thereby in the three years before the application is submitted is not less than 100, 000, 000 Yuan, and of which no less than 50, 000, 000 yuan have been used in business-starting investment; (3) It shall have at least 3 professional managerial persons who have practical experience in business-starting investment;
(4) If the affiliated entity of an investor meets the above-mentioned requirements, the investor may apply for the status of an indispensable investor. The term "affiliated entity" in this paragraph refers to an entity controlled by the investor, or an entity that controls the investor, or another entity that subject to the control of the same entity that controls the investor. The term "control" in this paragraph means that the controlling party has a voting power of more than 50 % over the controlled party.
(5) Neither the above-mentioned indispensable investor nor its affiliated entity shall have any record of being prohibited from engaging in business-starting investment or business of investment consultancy, or being punished for the reason of cheat, by the judicial departments and other relevant agencies of the country where it is located;
(6) An indispensable investor of a non-legal-person enterprise shall subscribe to and actually pay not less than 1 % of the subscribed contributions and the actual total contributions respectively, and it shall bear joint liabilities for the debts of this enterprise. An indispensable investor of an incorporated FBIE shall subscribe to and actually pay not less than 30% of the subscribed contributions and the actual total contributions respectively.

Article 8
The following procedures shall be observed in the establishment of an FBIE:
(1) The investors shall submit the establishment application and relevant documents to the administrative departments in charge of foreign trade and economic cooperation at the provincial level of the place where the FBIE is to be established.
(2) The administrative departments in charge of foreign trade and economic cooperation at the provincial level shall complete the original examination and report to the Ministry of Foreign Trade and Economic Cooperation (hereinafter referred to as the MOFTEC) within 15 days as of the acceptance of the above-mentioned materials.
(3) The MOFTEC shall, with the consent of the Ministry of Science & Technology£¬make a written decision on approval or disapproval within 45 days as of the acceptance of all the abovementioned materials. And it shall issue a Certificate of Approval for Foreign-invested Enterprises to the approved enterprises.
(4) With the approved of establishing an FBIE, the applicant shall file an application for registration at the State Administration of Industry and Commerce or at local bureaus with its authorization by presenting the Certificate of Approval for Foreign-invested Enterprise within one month as of the acceptance of the Certificate of Approval for Foreign-invested Enterprise.

Article 9
The following documents shall be submitted to the MOFTEC when applying for the establishment of an FBIE:
(1) an establishment application signed by the indispensable investors;
(2) contracts and articles of association of the FBIE signed by all the investors;
(3) a written declaration made by the indispensable investors (covering: a. the investors meet the equirements as provided in Article 7; b. all the materials submitted are genuine; and c. the investors
will strictly abide by the present provisions and other relevant Chinese laws and regulations);
(4) a letter of legal advice issued by a law firm affirms that the legal indispensable investors exist and the above-mentioned declaration has got valid authorization and has been signed;
(5) explanations of the business-starting operations of the foreign investors, explanations of the capital managed by them of the three years before the application is submitted, explanations of the investment made among the capital managed by them of the three years before the application is submitted, resumes of its professional managerial persons of business-starting investment;
(6) the registration certificate of the investors (photocopy) and the certificate of the legal representative (photocopy);
(7) the notice of pre-approval of the name of the FBIE issued by the name registration organ;
(8) If the qualifications of the indispensable investors are based on the requirements as provided
in paragraph (4) of Article 7, they shall submit relevant materials of the affiliated entity that meets the requirements;
(9) other documents related to the establishment application as required by the examination and approval authority.

Article 10
The FBIEs shall give a clear indication of "Business-starting Investment" in its name.
Except for business-starting investment enterprises, none of the other foreign investment enterprises
may use the aforesaid words in their name.

Article 11
In applying for establishing an FBIE, the following documents shall be submitted to the
registration organ and shall be responsible for their authenticity and effectiveness:
(1) registration application signed by the chairman of the board of directors or by the person-incharge
of the joint management committee;
(2) contracts, articles of association, the documents and certificate of approval issued by the
approving authorities;
(3) legal license to do business or the certification of the ID of the investor;
(4) credit certification of the investor;
(5) appointment documents and the certification of the ID of the legal representative and archival
documents of the directors and managers of this enterprise;
(6) notice of pre-approval of its name;
(7) the certification of the address of the enterprise and the certification of its business offices.
In the case of applying for establishing a non-legal-person organization, the applicant shall
submit the articles or agreement of overseas indispensable investors besides the aforesaid materials.
Where an enterprise includes investors as provided in Article 7 (4) of the present Provisions, the
applicant shall submit the letter of undertaking issued by its affiliated entity, which is to bear the
joint liabilities of investments. All of the aforesaid documents should be written in Chinese. Those
written in foreign languages other than Chinese shall be accompanied by good Chinese translations.
An FBIE should apply to the original registration organ for the modification registration of its
modified registration matters.

Article 12
Upon the approval of the registration organ, the incorporated FBIEs shall be issued the
business license of legal entity, and the non-legal-person FBIEs shall be issued a business license.
A business license shall clearly states the total registered capital of the investors and the names
of the dispensable investors.

Chapter III Capital Contributions and Relevant Modifications

Article 13
The capital contributions made by the investors of a business-starting enterprise without
qualifications of legal entity and the relevant modifications shall be in conformity with the
following:
(1) The investors may pay the their subscribed capital by installments according to the
proceedings of the business-starting investment, but the longest term shall be no more than 5 years.
The amount of capital to be invested at each stage shall be decided by the FBIE itself according to
the contract of the enterprise and the agreement concluded by it and its invested enterprise. In the
contract, the investors shall stipulate liabilities of the investors who do not pay the subscribed capital
contributions and relevant measures.
(2) During the period of the continuous existence of the FBIE, the investors generally shall not
reduce their subscribed amount of capital. Upon approval of the examination and approval organ, an
investor may reduce its subscribed amount of capital if the said amount exceeds 50 % of the total
provided that it has obtained the consent of the indispensable investors and the business-starting
FBIE isn't in violation of the requirement of minimum registered capital of 1, 000, 000 U.S. $ (The
present provision shall not be applicable to a case where an investor reduces its invested amount of
capital in accordance with item (5) of this Article or the FBIE reduces the untapped capital when its
term of investment expires). In this case, the investors shall stipulate the conditions, procedure and
methods for reducing the subscribed amount of capital in the contract of the FBIE;
(3) Indispensable investors shall not withdraw from the FBIE during the period of its continuous
existence. A necessary withdrawal under a special circumstance shall be upon the consent of the
investor whose investment amount exceeds 50% of the total amount, and the relevant rights and
interests shall be assigned to the new investor who satisfies the conditions as provided in Article 7.
The contract and the articles of association of this enterprise shall be modified and shall be reported
to the check and approving authority for approval.
The transference of the other investors' subscribed amount of capital or invested amount of
capital shall be done in compliance with the contract of the FBIE and the assignee shall meet the
requirements as provided in Article 6. All investors shall make relevant modifications in the contract
and the articles of association of the FBIE and report to the examination and approval organ for
archival purposes.
(4) After an FBIE has been established, the investment application of new investors shall be in
conformity with the present Provisions and the stipulations in the contract, and shall be consented by
the indispensable investors. Relevant modifications shall be made in the contract and the articles of
association of the FBIE and shall be reported to the examination and approval organ for archival
purposes.
(5) Among the incomes of an FBIE arising from selling or disposing of the interests of its invested
enterprise by other means, the part equivalent to its original amount of investment may be directly
allocated to all the investors. Such allocation constitutes a reduction of the invested amount of the
investors. An FBIE shall stipulate concrete methods of allocation in its contract, and at least 30 days
before it makes such allocation, it shall submit an archival statement on the request of reducing the
relevant invested amount of the investors. In the said statement, it shall prove that the amount of the
investments to be made by the investors and the other capital it has at that time is at least in
conformity with the investment obligations that the FBIE shall undertake at that time. However,
such allocation shall not be a plea to the litigation resulted from its violation of any of the
investment obligations.

Article 14
When a non-legal-person organization files an application to the registration authority for
modifying its registration, the archival evidential documents issued by the above-mentioned
examination and approval organ may replace relevant documents for examination and approval.

Article 15
Having made investments according to the proceedings of business-starting investments
and upon relevant capital verification report, the investors of the FBIE shall file an application to the
original registration organ for handling the archival procedures for their investments. The
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registration organ shall fill up the number of its actual amount of capital behind the item of
"Capital Amount" on its Business License.
Where an FBIE makes no investment or fails to make the total investment, it shall be subject to
penalties imposed by the registration organ in accordance with the existing regulations.

Article 16
The investors of an FBIE shall make investments and relevant modifications in accordance
with the existing regulations.
Chapter IV Institutional Structure

Article 17
An FBIE in the form of non-legal-person organization shall establish a joint management
committee. An FBIE in the form of company shall establish a board of directors. The investors shall
stipulate on how to organize the joint management committee or the board of directors in the
contract and in the articles of association of the FBIE. The joint management committee and the
board of directors shall manage the enterprise on behalf of its investors.

Article 18
The subordinate administrative departments of the joint management committee and the board of directors shall, in accordance with the power as specified in the contract and the articles of association of the FBIE, take charge of the routine managerial work and execute the investment decisions made by the joint management committee and the board of directors.

Article 19
The person-in-charge of an administrative department shall satisfy the following conditions:
(1) shall have full capacity for civil conduct;
(2) shall have no record of criminal offence;
(3) shall have no record of bad operations;
(4) shall be experienced in business-starting investments and have no record of illegal practices.
(5) shall meet the other requirements of the examination and approval organ.

Article 20
The administrative departments shall regularly report the following to the joint management committee and the board of directors:
(1) significant investments under authorization;
(2) metaphase & annual performance reports and financial statements;
(3) other matters as provided in laws and regulations;
(4) relevant matters as stipulated in the contract and in the articles of association of the FBIE.

Article 21
The joint management committee and the board of directors may grant the power of
routine administration to a business-investment management enterprise or another FBIE rather than
establish administrative departments. The business-investment management enterprise may be a
domestically-funded business-starting investment enterprise or a foreign-funded one or an overseas
enterprise. In this case, the business-starting investment enterprise and the business-starting
investment management enterprise shall conclude a managerial contract, stipulating respective rights
and interests. Such a contract shall not come into effect until it has been agreed by all the investors
and has been approved by the examination and approval organ.

Article 22
The investors of an FBIE may, by reference to the international practices, stipulate interior system for income allocations and incentive mechanism in the business-starting investment contract.

Chapter V Business-Starting Investment Management Enterprise

Article 23
An entrusted business-starting investment management enterprise shall meet the following conditions:
(1) To accept the entrustment of the FBIEs and to manage the investments made by them shall be
its main business;
(2) It shall have at least 3 professional managerial persons who have at least three years of
practical experience in business-starting investment;
(3) Its registered capital or its total investments shall not be less than 1, 000, 000 yuan or
equivalent foreign exchange;
(4) It shall have a perfect interior control system.

Article 24
A business-starting investment management enterprise is allowed to take the form of the corporate organization or the partnership organization.

Article 25
A business-starting investment management enterprise may be entrusted to manage different FBIEs.

Article 26
A business-starting investment management enterprise shall report the matters as listed in Article 20 to the joint management committee and the board of directors of the entrusting party.

Article 27
The establishment of a foreign-funded business-starting investment management enterprise shall be in conformity with the conditions as provided in Article 23 and shall be reported to the examination and approval organ for approval via the administrative departments of foreign trade and economic cooperation at the provincial level where the company to be established is located. The examination and approval organ shall make a written decision on whether to approve or not within 45 days as of the acceptance of the complete set of the above-mentioned documents. It shall issue a Certificate of Approval for Foreign-invested Enterprises to the approved enterprises, which shall file an application to the registration organ by holding the Certificate within a month as of their acceptance of the Certificate.

Article 28
The following documents shall be submitted to the examination and approval organ in applying for the establishment of a foreign-invested business-starting investment management company:
(1) establishment application;
(2) contract and articles of association of foreign-funded business-starting investment
management company;
(3) the investors' registration certificate (photocopy) and the certificate of the legal representative
(photocopy);
(4) relevant documents required by the examination and approval organ;

Article 29
A foreign-invested business-starting investment management enterprise shall give a clear indication of "INVESTMENT MANAGEMENT" in its name. Except for the foreign-invested business-starting investment management enterprises any other foreign-funded enterprises shall not do so.

Article 30
An overseas business-starting investment management enterprise, which has acquired the approval of engaging in business-starting investment management under the authorization of FBIEs, shall file an application to the registration organ to handle the business registration procedures within 30 days as of the approval day of the management contract.
An applicant shall submit the following documents to the business registration organ and shall
be responsible for their authenticity and effectiveness:
(1) an application for registration signed by the chairman of the board of directors of the overseas business-starting investment management enterprise, or by a competent person;
(2) a management contract and the approval documents of the examination and approval organ;
(3) articles of association or partnership agreement of the overseas business-starting investment management enterprise;
(4) the overseas business-starting investment management enterprise' legal license to do business;
(5) the credit certification of the overseas business-starting investment management enterprise;
(6) the power of attorney, resume and the certification of the identification of the person-in-charge
of the Chinese project appointed by the overseas business-starting investment management enterprise;
(7) the certification of its business offices in China; All of the aforesaid documents should be
written in Chinese, those written in foreign languages other than Chinese shall be accompanied by
good Chinese translations

Chapter VI Business Management

Article 31
An FBIE may engage in the following businesses:
(1) It may make equity investments with all of its own capital through establishing new
enterprises, or investing into an established enterprise, or accepting the stock equities transferred by
the investors of an established enterprise, or through other means as permitted in the laws and regulations of the state;
(2) It may offer business-starting investment consultancy services;
(3) It may offer management consultancy to the invested enterprises;
(4) It may engage in other businesses as approved by the examination and approval organ. The capital of an FBIE may be largely used to make equity investments into its invested enterprise.

Article 32
A business-starting enterprise shall not engage in the following activities:
(1) It shall not make investments into the areas in which foreign investments are prohibited by the state;
(2) It shall not make direct or indirect investments into the listed securities and bonds of an enterprise, but after the invested enterprise is listed, the shares held by the FBIE shall be an exception.
(3) It shall not make direct or indirect investments into real property not for its own use;
(4) It shall not make investments by way of loans;
(5) It shall not make investments by embezzling the capital not in its ownership;
(6) It shall not provide a loan or guaranty to others, but the bonds with a term of more than 1 year issued by its invested enterprise and the investments in the nature of bonds that may be converted into equity investments to the invested enterprise shall be excluded (this paragraph doesn't concern whether the invested enterprise is entitled to issue such bonds or not);
(7) It shall not engage in other activities as prohibited in the law and regulations and the contract of the FBIE.

Article 33
The investors shall stipulate a term for foreign investments in the contract of the FBIE.

Article 34
The incomes of an FBIE shall be generated largely from selling the stock equities it holds in the invested enterprise or from disposing of the stock equities by other means. When an FBIE sell the stock equities it holds in the invested enterprise or dispose of the stock equities by other means, it may, in accordance with the law, choose one of the following available methods of withdrawing:
(1) It may transfer part of or all of the stock equities it holds to other investors;
(2) It may sign an agreement of stock equity counter-purchase with the invested enterprise, which
may counter-purchase the stock equities held by the business-starting investment enterprise under certain circumstances;
(3) Where the invested enterprise satisfies the conditions of listing as provided by laws and administrative regulations, it may apply for listing in the securities markets of home and abroad. In accordance with the law, the FBIE may transfer the shares it holds in the invested enterprise through the securities markets;
(4) The other methods that are allowed by the laws and administrative regulations of China. The concrete regulatory measures concerning the invested enterprise' counter-purchase of the stock equities held by the FBIE shall be separately formulated by the examination organ jointly with the registration organ.

Article 35
An FBIE shall make tax declaration in accordance with the tax laws of the state. As to a non-legal-person organization, in accordance with the law, it may request all the investing parties to file returns for enterprise income taxes on their own, or file an application by itself, after the application has been approved, it shall, in accordance with the law, calculate and pay the enterprise income tax in a consolidated way.
The concrete regulatory measures concerning the levy of enterprise income tax upon the nonlegal- person FBIEs shall be promulgated separately by the State Administration of Taxation.

Article 36
Where the profit or other income obtained by a foreign investor from an FBIE is to be remitted abroad, it shall be paid from the foreign currency account of the FBIE, or shall be remitted through an entrusted bank with the foreign currencies purchased from the bank. Such payment or remittance shall be made on the basis of the allocation decision made by the joint management committee or the board of directors, the audit report issued by an accountant office, the certification of inflow of foreign investments and the report on the verification of capital, the certification of tax payment and the tax return (where an enterprise enjoys tax concession, it shall present the evidential documents of tax concession issued by the tax authorities).
In accordance with the law, a foreign investor may request to purchase foreign currencies to remit the investments withdrawn from the FBIE. As to an FBIE in the form of company, the opening and access of foreign currency account, changes of capital and other matters involving the incomes and expenses of foreign currencies shall be handled pursuant to the existing regulations concerning the administration of foreign exchange. But relevant regulations on the non-legal-person FBIEs shall be formulated separately by the State Administration of Foreign Exchange.

Article 37
The investors shall stipulate the business term of the FBIE in the contract and in the Articles of association, generally speaking, the term shall not exceeds 12 years. When the business term expires, it may be extended upon the approval of the examination and approval organ. Upon the approval of the examination and approval organ, an FBIE may be dissolved, terminate the contract and the articles of association ahead of the schedule. However, if a non-legalperson
organization has sold out all the investments or sold them off by other means, have paid off all its debts and have allocated all the residual properties to the investors, it may, without being
subject to approval, enter into the dissolving and terminating procedure, but it shall submit a written
explanation for archival purposes to the examination and approval organ at least 30 days before the
dissolve comes into effect.
Where an FBIE is to be dissolved, it shall liquidate in compliance with pertinent regulations.

Article 38
An FBIE shall file an application to the original registration organ for deregistration within 30 days as of the completeness of the liquidation.
It shall submit the following documents in applying for the cancellation and it shall be responsible for their authenticity and effectiveness:
(1) an application for deregistration signed by the chairman of the board of directors, or by the
person-in-charge of the joint management committee, or by the person-in-charge of the liquidation
organ;
(2) decision made by the board of directors or the joint management committee;
(3) liquidation report;
(4) certifications for the cancellation of registration issued by tax authorities and the custom;
(5) the approving documents or archival documents of the examination and approval organ;
(6) other documents as required in the laws and administrative regulations. Where an application for deregistration has been approved by the registration organ, the FBIE terminates. The joint liabilities of the indispensable investors of a non-legal-person organization shall not be immune for the termination of the enterprise.

Chapter VII Examination and Supervision

Article 39
The domestic investments of an FBIE shall be made by referring to Rules for Guiding Foreign Investments and the Guiding Catalogue of Industries for Foreign Investments.

Article 40
Where an FBIE invests in any of the encouraged and approved enterprises, it shall go through archival procedures at the entrusted departments of foreign trade and economic cooperation where the invested enterprise is located. Within 15 days as of the acceptance of the archival materials, the said entrusted departments shall complete the examination and issue a Certificate of Approval for Foreign-invested Enterprise to the invested enterprise, which shall file an application for registration to the registration organ upon the Certificate. The registration organ shall decide whether to approve the registration or not in accordance with relevant laws and administrative regulations, and it shall issue a Business License of Foreign Invested Corporate Enterprise to the approved enterprises.

Article 41
Where an FBIE invests in any of the restricted enterprises, it shall file an application to the provincial authorities of foreign trade and economic cooperation where the restricted enterprise is located, and it shall offer the following materials:
(1) its statement on having sufficient investment funds;
(2) its approval certificate and business license (copies);
(3) the contract and the articles of association of the invested enterprise signed by the FBIE (and
the other investors of the invested enterprise).
Within 45 days as of the acceptance of the above-mentioned materials, the provincial authorities of foreign trade and economic cooperation shall make a written reply of approval or disapproval to the applicant, to whom it shall issue a Certificate of Approval for Foreign-invested Enterprise. The invested enterprise shall file an application to the registration organ for registration upon the approving documents and the Certificate. The registration organ shall decide whether to approve the registration or not. It shall issue a Business License of Foreign Invested Corporate Enterprise to the approved enterprises.

Article 42
Where an FBIE invests into the projects in the area of service trade that is open to the foreign investors gradually, it shall be subject to the examination and approval in compliance with pertinent regulations of the state.

Article 43
To increase or transfer any of its investment into the invested enterprise, an FIBE shall go through the procedures in accordance with Articles 40, 41 and 42.

Article 44
An FBIE shall report to the examination and approval organ for archival purposes as of the completeness of the procedures of Articles 40 through 43.

Article 45
Moreover, in March every year, an FBIE shall report the information of fund collection and utilization in the previous year to the examination and approval organ for archival purposes. Within 5 days as of the acceptance of the archival materials, the examination and approval organ shall issue a certification of archival registration, which shall be one of the requisite materials for an FBIE to accept annual joint examination. Where an enterprise that fails to follow the abovementioned procedures, it shall be subject to the relevant punishment by the examination organ after discussing with the pertinent department of the State Council.

Article 46
In the registered capital of the enterprise invested by an FBIE, if the proportion of the actual contributions paid in by a foreign investor or the proportion of the total contributions paid in by the foreign investors in the proportion of the FBIE is not less than 25%, the invested enterprise is entitled to enjoy relevant preferential treatments granted to foreign-invested enterprises. If the said proportion is less than 25 %, the invested enterprise shall not enjoy relevant preferential treatments granted to foreign-invested enterprises.

Article 47
Where an already established domestically-funded enterprise with domestic investor (s) of natural person may continue to keep their status of shareholder(s) after this enterprise has accepted the investments of an FBIE and has changed into a foreign-invested enterprise.

Article 48
Where the person-in-charge of the administrative department of a business-starting investment enterprise or the person-in-charge of the investment management enterprise has illegal practices, he shall be held responsible. If the circumstances are serious, the FIBE shall not continue to engage in business-starting investments and relevant activities of investment management.
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Chapter VIII Supplementary Provisions

Article 49
The present Provisions shall be applicable to the FBIEs to be established in the mainland by the investors from the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan Region.

Article 50
The power to interpret the present Provisions shall remain with the Ministry of Foreign Trade and Economic Cooperation, the Ministry of Science and Technology, the State Administration for Industry and Commerce, the State Administration of Taxation and the State administration of Foreign Exchange.

Article 51
The present Provisions shall enter into force as of March 1, 2003. The Interim Provisions on the Establishment of Foreign-Funded Business-starting Investment Enterprises promulgated by the Ministry of Foreign Trade and Economic Cooperation, the Ministry of Science and Technology and the State Administration for Industry and Commerce on August 28, 2001 shall be abolished on the same day.
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Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures

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Adopted on July 1, 1979 at the Second Session of the Fifth National People's Congress, and amended by by the 4th Session of the Standing Committee of the 9th National People's Congress on March 15,2000

Chapter I General Provisions

Article 1.
The People's Republic of China, in order to expand international economic cooperation and technological exchange, permits foreign companies, enterprises and other economic organizations or individuals(hereinafter referred to as the "foreign party") to jointly establish and operate equity joint ventures within the territory of the People's Republic of China with Chinese companies, enterprises or other economic
organizations (hereinafter referred to as the "Chinese party") based on the principle of equality and mutual benefit, and upon the approval of the Chinese Government.
Article 2.
The Chinese Government shall protect in accordance with the law the investments of the foreign party, the profits due to it and its other lawful rights and interests in an equity joint venture under the agreement, contract and articles of association approved by the Chinese Government.All the activities of an equity joint venture shall comply with the provisions of the laws and regulations of the People's Republic of
China.
The state will not nationalize or expropriate equity joint ventures; under special circumstances, based on the requirements of social and public interests, equity joint ventures may be expropriated in accordance with legal procedures, and corresponding compensation shall be provided.

Article 3.
The agreement, contract and articles of association of an equity joint venture signed by the parties to the venture shall be submitted to the state department in charge of foreign economic relations and trade (hereinafter referred to as "the examination and approval authority") for examination and approval. The examination and approval authority shall decide within three months to approve or disapprove. After an equity joint venture has been approved, it shall register with the state department in charge of administration of industry and commerce, obtain its business licence, and commence business operations.

Article 4.
The form of an equity joint venture shall be a limited liability company.The proportion of the foreign party's contribution to the registered capital of an equity joint venture shall in general not be less than 25 percent.
The parties to the venture shall share profits and bear risks and losses in proportion to their respective contributions to the registered capital.The transfer of a party's contribution to the registered capital must be agreed upon by each party to the venture.

Article 5.
The parties to an equity joint venture may make their investments in cash, in kind, in industrial property
rights, etc.The technology and equipment contributed by a foreign party as its investment must be advanced technology and equipment which is truly suited to the needs of China. In case of losses
caused by deception through the intentional provision of outdated technology and equipment, compensation shall be paid for such losses.The investment of a Chinese party may include providing the
right to use a site during the term of operation of the equity joint venture. If the right to use a site is not a part of the investment by a Chinese party, the venture shall pay the Chinese Government a fee for its use.
The various investments mentioned above shall be specified in the contract and articles of association of the equity joint venture, and the value of each contribution (except for the site) shall be appraised and determined through discussions between the parties to the venture.

Article 6.
An equity joint venture shall establish a board of directors with a size and composition stipulated in the contract and the articles of association after consultation between the parties to the venture; and each party to the venture shall appoint and replace its own director(s). The chairman and the vice-chairman of the board shall be determined through consultation between the parties to the venture or elected by the board. Where a director appointed by the Chinese party or the foreign party serves as chairman, a director appointed by the other party shall serve as vice-chairman. The board of directors shall decide important issues concerning the equity joint venture based on the principle of equality and mutual benefit.The function and powers of the board of directors shall be to discuss and decide, pursuant to the provisions of the articles of association of the equity joint venture, all important issues concerning the venture, namely: the development plan of the enterprise, production and business programs, the budget, distribution of profits, plans concerning labor and wages, the termination of business, and the appointment or hiring of the general manager, the deputy general manager(s), the chief engineer, the chief accountant and the auditor, as well as their functions and powers and their remuneration, etc.The positions of general manager and deputy general manager(s) (or the factory manager and deputy factory manager(s)) shall be assumed by nominees of the respective parties to the
venture.The employment£¬dismissal, remuneration, welfare, labor protection and insurance of the employees of an equity joint venture shall be stipulated according to laws in the agreement or contract between employees and the venture.

Article 7.
Employees of an equity joint venture, in accordance with laws to set up labor union to protect employees' lawful rights by conducting union's activities.An equity joint venture shall provide the labor union with
necessary conditions.

Article 8.
From the gross profit earned by an equity joint venture, after payment of the venture's income tax in accordance with the provisions of the tax laws of the People's Republic of China, deductions shall be made for the reserve fund, the bonus and welfare fund for staff and workers, and the enterprise
development fund as stipulated in the articles of association of the venture and the net profit shall be distributed to the parties to the venture in proportion to their respective contributions to the registered capital.
An equity joint venture may enjoy preferential treatment in the form of tax reductions and exemptions in accordance with provisions of state laws and administrative regulations
relating to taxation.When a foreign party uses its share of the net profit as reinvestment within the territory of China, it may apply for a refund of part of the income tax already paid.

Article 9.
An equity joint venture shall, on the basis of its business license, open a foreign exchange account with a bank or another financial institution which is permitted by the state foreign exchange control authority to engage in foreign exchange business.Matters concerning the foreign exchange of an equity joint venture shall be handled in conformity with the foreign exchange control regulations of the People's Republic of
China.An equity joint venture may, in the course of its business activities, raise funds directly from foreign banks.The various items of insurance of an equity joint venture shall be obtained from insurance companies in the territories of China.

Article 10
.For the raw and processed materials, fuel, auxiliary equipment, etc. needed by an equity joint venture in
the approved business scope thereof, shall be purchased in China or on the international market pursuant to the principle of fairness.An equity joint venture shall be encouraged to sell its products outside the territory of China. Export products may be sold on foreign markets by an equity joint venture directly or by entrusted institutions related to it, and they may also be sold through China's foreign trade institutions. The
products of an equity joint venture may also be sold on the Chinese market.When necessary, an equity joint venture may set up branch institutions outside China.

Article 11.
The net profit received by a foreign party after fulfilment of its obligations at law and under the provisions
of agreements and contracts, the funds received by it upon the expiration or termination of an equity joint venture as well as other funds may be remitted abroad in accordance with foreign exchange control regulations in the currency stipulated in the joint venture contract.The foreign party shall be encouraged to deposit in the Bank of China the foreign exchange which may be remitted abroad.

Article 12.
The wage income and other legitimate income of foreign staff and workers of an equity joint venture may be remitted abroad in accordance with foreign exchange control regulations after payment of individual income tax under the tax laws of the People's Republic of China.

Article 13.
The term of operation of equity joint ventures may be agreed upon differently according to different lines of business and different circumstances. The term of operation of equity joint ventures engaged in some lines of business shall be fixed while the term of operation of equity joint ventures engaged in other lines of business may or may not be fixed. Where the parties to an equity joint venture with a fixed term of operation agree to extend the term of operation, they shall submit an application to the examination and approval authority not later than six months prior to the expiration of the operation term. The examination and approval authority shall decide, within one month of receipt of the application, to approve or disapprove.

Article 14.
If serious losses are incurred by an equity joint venture, or one party fails to fulfil its obligations under the contract and the Articles of association, or an event of force majeure occurs, etc., the
contract may be terminated after consultation and agreement between the parties to the venture, subject to approval by the examination and approval authority and to registration with the state department in
charge of administration of industry and commerce. In case of losses caused by breach of contract, economic responsibility shall be borne by the breaching party.

Article 15
.When a dispute arises between the parties to a venture and the board of directors is unable to resolve it through consultation, the dispute shall be settled through conciliation or arbitration conducted by an arbitral institution of China, or through arbitration by another arbitral institution agreed upon by the parties to the venture.The partied to an joint venture may submit the disputes to the People's court, if the parties neither stipulated any arbitrations clause in the joint venture contract nor reach such written arbitration clause after the occurrence of disputes.

Article 16.
This law shall come into force on the date of its promulgation.
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Law of the People's Republic of China on Chinese-Foreign Contractual Joint Ventures

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Adopted at the First Session of the Seventh National People's Congress and promulgated by Order No.4 of the President of the People's Republic of China on April 13, 1988, and effective as of the date of promulgation

Chapter I General Provisions


Article 1
This Law is formulated to expand economic cooperation and technological exchange with foreign countries and to promote the joint establishment, on the principle of equality and mutual benefit, by foreign
enterprises and other economic organizations or individuals (hereinafter referred to as the foreign party )and Chinese enterprises or other economic organizations (hereinafter referred to as the Chinese party )of Chinese-foreign contractual joint ventures (hereinafter referred to as contractual joint ventures) within the territory of the People's Republic of China.

Article 2
In establishing a contractual joint venture, the Chinese and foreign parties shall, in accordance with the provisions of this Law, prescribe in their contractual joint venture contract such matters as the investment or conditions for cooperation, the distribution of earnings or products, the sharing of risks and losses, the manners of operation and management and the ownership of the property at the time of the termination of the contractual joint venture. A contractual joint venture, which meets the conditions for being considered a
legal person under Chinese law, shall acquire the status of a Chinese legal person in accordance with law.

Article 3
The State shall, according to law, protect the lawful rights and interests of the contractual joint ventures and of the Chinese and foreign parties. A contractual joint venture must abide by Chinese laws and regulations and must not injure the public interests of China. The relevant State authorities shall exercise supervision over the contractual joint ventures according to law.

Article 4
The State shall encourage the establishment of productive contractual joint ventures that are export-oriented or technologically advanced.

Article 5
For the purpose of applying for the establishment of a contractual joint venture, such documents as the agreement, the contract and the articles of association signed by the Chinese and foreign parties shall be submitted for examination and approval to the department in charge of foreign economic relations and trade under the State Council or to the department or local government authorized by the State Council (hereinafter referred to as the examination and approval authority). The examination and approval authority shall, within 45 days of receiving the application, decide whether or not to grant approval.

Article 6
When the application for the establishment of a contractual joint venture is approved, the parties shall, within 30 days of receiving the certificate of approval, apply to the administrative authorities for industry and commerce for registration and obtain a business license. The date of issuance of the business license of a contractual joint venture shall be the date of its establishment. A contractual joint venture shall, within 30 days of its establishment, carry out tax registration with the tax authorities.

Article 7
If the Chinese and foreign parties, during the period of operation of their contractual joint venture, agree through consultation to make major modifications to the contractual joint venture contract, they shall report to
the examination and approval authority for approval, if the modifications include items involving statutory industry and commerce registration or tax registration, they shall register the modifications with the administrative authorities for industry and commerce and with the tax authorities.

Article 8
The investment or conditions for cooperation contributed by the Chinese and foreign parties may be provided in cash or in kind, or may include the right to the use of land, industrial property rights, non-patent technology
or other property rights.

Article 9
The Chinese and foreign parties shall, in accordance with the provisions of the laws and regulations and the agreements in the contractual joint venture contract, duly fulfil their obligations of contributing full investment and providing the conditions for cooperation. In case of failure to do so within the prescribed time, the administrative authorities for industry and commerce shall set another time limit for the fulfillment of such
obligations; if such obligations are still not fulfilled by the new time limit, the matter shall be handled by the examination and approval authority and the administrative authorities for industry and commerce according to relevant state provisions.
The investments or conditions for cooperation provided by the Chinese and foreign parties shall be verified by an accountant registered in China or the relevant authorities, who shall provide a certificate after verification.

Article 10
If a Chinese or foreign party wishes to make an assignment of all or part of its rights and obligations prescribed in the contractual joint venture contract, it must obtain the consent of the other party or parties and report to the examination and approval authority for approval.

Article 11
A contractual joint venture shall conduct its operational and managerial activities in accordance with the approved contract and articles of association for the contractual joint venture. The right of a contractual joint
venture to make its own operational and managerial decisions shall not be
interfered with.

Article 12
A contractual joint venture shall establish a board of directors or a joint managerial institution which shall, according to the contract or the Articles of association for the contractual joint venture, decide on the major
issues concerning the venture.
If the Chinese or foreign party assumes the chairmanship of the board of directors or the directorship of the joint managerial institution, the other party shall assume the vice-chairmanship of the board or the deputy directorship of the joint managerial institution.
The board of directors or the joint managerial institution may decide on the appointment or employment of a general manager, who shall take charge of the daily operation and management of the contractual joint venture.
The general anager shall be accountable to the board of directors or the joint managerial institution. If a contractual joint venture, after its establishment, chooses to entrust a third party with its operation and management, it must obtain the unanimous consent of the board of directors or the joint managerial institution, report to the examination and approval authority for approval, and register the change with the administrative authorities for industry and commerce.

Article 13
The employment, dismissal, remuneration, welfare, labour protection and labour insurance, etc. of the staff members and workers of a contractual joint venture shall be specified in contracts concluded in accordance with law.

Article 14
The staff and workers of a contractual joint venture shall, in accordance with law, establish their trade union organization to carry out trade union activities and protect their lawful rights and interests.
A contractual joint venture shall provide the necessary conditions for the venture's trade union to carry out its activities.

Article 15
A contractual joint venture must establish its account books within the territory of China, file its accounting statements according to relevant provisions and accept supervision by the financial and tax authorities.
If a contractual joint venture, in violation of the provisions prescribed in the preceding paragraph, does not establish its account books within the territory of China, the financial and tax authorities may impose a fine on it, and the administrative authorities for industry and commerce may order it to suspend its business operations or may revoke its business license.

Article 16
A contractual joint venture shall, by presenting its business license, open a foreign exchange account with a bank or any other financial institution which is permitted by the exchange control authorities of the State
to conduct transactions in foreign exchange. A contractual joint venture shall handle its foreign exchange transactions in accordance with the provisions of the State on foreign exchange control.

Article 17
A contractual joint venture may obtain loans from financial institutions within the territory of China and may also obtain loans outside the territory of China.
Loans to be used by the Chinese and foreign parties as investment or conditions for cooperation, and their guarantees, shall be provided by each party on its own.

Article 18
The various kinds of insurance coverage of a contractual joint venture shall be furnished by insurance institutions within the territory of China.

Article 19
A contractu