The Provisions
on Guiding the Orientation of Foreign Investment are hereby promulgated and
shall enter into force on April 1, 2002.
Premier of the State Council: Zhu Rongji
February
11, 2002
Article 1
In
order to guide the orientation of foreign investment, to keep the orientation of
foreign investment in line with the national economy and social development
planning of China, and to protect of the lawful rights and interests of
investors, these Provisions have been formulated according to the laws and
provision on foreign investment and the requirements of industrial policies of
the State.
Article 2
These Provisions shall be applicable to the projects of
investment and establishment of Chinese-foreign equity joint ventures,
Chinese-foreign contractual joint ventures and foreign-capital enterprises
(hereinafter referred to all as enterprises with foreign investment), and
projects with foreign investment in other forms (hereinafter referred to as
projects with foreign investment) within the territory of China.
Article 3
The Guidance Catalog of Industry with Foreign Investment and the
Catalog of Dominant Industries with Foreign Investment of the Mid-west Region
shall be formulated by the State Development Planning Commission, the State
Economic and Trade Commission, the Ministry of Foreign Trade and Economic
Cooperation jointly with other relevant departments under the State Council, and
shall be promulgated upon the approval of the State Council; when it is needed
to partly adjust the Guidance Catalog of Industry with Foreign Investment and
the Catalog of Dominant Industries with Foreign Investment of the Mid-west
Region in light of the actual situation, the State Economic and Trade
Commission, the State Development Planning Commission, the Ministry of Foreign
Trade and Economic Cooperation jointly with the relevant departments under the
State Council shall make the revision and promulgation timely.
The Guidance Catalog of Industry with Foreign Investment and the Catalog of
Dominant Industries with Foreign Investment of the Mid-west Region shall be the
basis of the application of relevant policies in directing and examining and
approving projects with foreign investment and enterprises with foreign
investment.
Article 4
Projects with foreign investment fall into 4 categories, namely
encouraged, permitted, restricted and prohibited ones.
The Projects with foreign investment that are encouraged, restricted and
prohibited shall be listed in the Guidance Catalog of Industry with Foreign
Investment. And the projects with foreign investment that don't fall into the
categories of encouraged, restricted or prohibited projects shall be the
permitted projects with foreign investment. The permitted projects with foreign
investment shall not be listed in the Guidance Catalog of Industry with Foreign
Investment.
Article 5
A project in any of the following situations shall be listed as
the encouraged projects with foreign investment:
1) being of new agriculture technologies, agriculture comprehensive
development, or energy, transportation and important raw material industries;
2) being of high and new technologies or advanced application technologies
that can improve the product performance and increase the technology economic
efficiency of the enterprises or those that can produce the new equipments and
new materials which the domestic production capacity fails to produce;
3) meeting the market needs and being able to improve the product level,
develop new markets or increase the international competitive capacity of the
products;
4) being of new technologies and new equipments that can save energy and
raw material, comprehensively utilize resources and regenerate resources, and
prevent environment pollutions;
5) being capable of bring into the advantages of human power and resources
of the mid-west region into full play and being in conformity to the industrial
policies of the State;
6) other situations as provided for by laws and administrative
regulations.
Article 6
A project in any of the following situations shall be a
restricted project with foreign investment:
1) being of technology lagged behind;
2) being adverse to saving resources and improving environment;
3) engaged in the prospecting and exploitation of the specific type of
mineral resources to which the State applies protective exploitation;
4) falling into the industries that the State opens step by step;
5) other situations as provided by laws and administrative regulations.
Article 7
A project in any of the following situations shall be a
prohibited project with foreign investment:
1) harming the State safety or impairing the public interests;
2) polluting the environment, damaging natural resources or harming human
health;
3) occupying too much farmland and being adverse to the protection and
development of land resources;
4) harming the safety and usage of military facilities;
5) using the particular techniques or technologies of China to produce
products;
6) other situations as provided for by laws and administrative
regulations.
Article 8
The Guidance Catalog of Industry with Foreign Investment may
provide that a enterprise with foreign investment is "limited to joint
venture, contractual venture", "with Chinese party at the holding
position" or "with Chinese party at the relatively holding
position".
"Limited to joint venture and operative venture" shall refer to that
only Chinese-foreign joint ventures and Chinese-foreign contractual joint
ventures are allowed; "with the Chinese parties at the holding
position" shall refer to that the total investment proportion of the
Chinese parties in the project with foreign investment shall be 51% or more;
"with Chinese parties at the relatively holding position" shall refer
to that the total investment proportion of the Chinese parties in the project
with foreign investment shall be higher that the investment proportion of any
foreign party.
Article 9
Apart from enjoying the preferential treatments according to the
provisions of the relevant laws and administrative regulations, the encouraged
projects with foreign investment that engage in the construction and operation
of energy, transportation, municipal infrastructure (coal, oil, natural gas,
electric power, railways, highways, ports, airports, city roads, sewage
disposition, and garbage disposition, etc.) that needs large amount of
investment and long term for recovery may expand their relevant business scope
upon approval.
Article 10
The permitted projects with foreign investment of which the
products are all directly exported shall be regarded as the encouraged project
with foreign investment; the restricted projects with foreign investment of
which the export sales accounts for more than 70% of their total amount of sales
may be regarded as the permitted projects with foreign investment upon the
approval of the people's governments of provinces, autonomous regions,
municipalities directly under the Central Government and municipalities
separately listed on the State plan or the competent department under the State
Council.
Article 11
The conditions may be eased for the permitted and restricted
projects with foreign investment that really can bring the advantages of the
mid-west region into full play; among which, those listed in the Guidance
Catalog of Industry with Foreign Investment may enjoy the preferential policies
for the encouraged projects with foreign investment.
Article 12
Projects with foreign investment shall be examined and
approved, and put on record respectively by the departments of development
planning and the economic and trade departments according to the limit of
authority for examination and approval; the contracts and articles of
association of enterprises with foreign investment shall be examined and
approved, and put on record by the departments of foreign trade and economic
cooperation. Among which, the projects with foreign investment under the limit
for restricted projects with foreign investment shall be subject to the
examination and approval of the corresponding competent departments of the
people's governments of the provinces, autonomous regions, municipalities
directly under the Central Government and municipalities separately listed on
the State plan, and shall be reported to the competent departments at the next
higher level and the competent industrial departments, the power for examination
and approval of this kind of projects may not be granted to the authorities at
lower levels. The projects with foreign investment in the service area that are
opened to the outside world step by step shall be subject to the examination and
approval according to the relevant provisions of the State.
The projects with foreign investment involving quotas and licenses must apply to
the departments for quotas and licenses first.
Where there are otherwise provisions of laws and administrative regulations on
the procedures and measures for the examination and approval of projects with
foreign investment, those provisions shall be observed.
Article 13
With respect to the projects with foreign investment examined
and approved in violation of the present provisions, the organ of examination
and approval at the next higher level shall cancel it within 30 workdays from
the day of receiving the documents for record of that project, its contract and
articles of association shall be void, the department of enterprise registration
shall not register it and the customs shall not handle the procedures for import
and export for it.
Article 14
Where the applicant of a project with foreign investment
manages to obtain the approval for the project by deceiving or other illicit
means, his legal liabilities shall be investigated for according to law
regarding the seriousness of the circumstances; the organ of examination and
approval shall cancel the approval for that project and the relevant competent
organs shall deal with it correspondingly according to law.
Article 15
Where any of the personnel of the organ of examination and
approval abuses his power or neglects his duties, criminal responsibilities
shall be investigated for according to the provisions of the criminal law on the
crime of abusing powers or the crime of neglecting duties; where the
circumstances are not serious enough for criminal punishment, administrative
punishment of recording a special demerit or more severe punishment shall be
given.
Article 16
With respect to the investment projects established by overseas
Chinese and the investors from the Hong Kong Special Administration Region,
Macao Special Administrative Region or Taiwan Area, these Provisions shall be
applicable by reference in implementation.
Article 17
These Provisions shall enter into force on April 1, 2002. The
Interim Provisions on the Guidance of Foreign Investment Directions approved by
the State Council on June 7, 1995 and promulgated by the State Planning
Commission, the State Economic and Trade Commission and the Ministry of Foreign
Trade and Economic Cooperation on June 20, 1995 shall be nullified
simultaneously.
