BIZCHINA / Foreign Investment Catalogue
Provisions on Guiding Foreign Investment Direction
Updated: 2006-04-18 17:01
Article 8 "Equity joint venture and contractual joint venture only" or
"Chinese partners shall hold the majority of shares" or "Chinese partners
shall hold relative majority of shares " may be regulated for certain
foreign investment projects in Catalogue for the Guidance of Foreign
Investment Industries.
" Equity joint venture and contractual joint venture only " means that
such projects shall be conducted in forms of Chinese-foreign equity joint
venture and Chinese-foreign contractual joint venture only; Chinese
partner shall hold the majority of shares" means that the sum of shares
held by Chinese investor(s) of such a project shall be 51 percent of the
total or up; "Chinese partner shall hold the relative majority of shares"
means that the Sum of shares held by Chinese investor(s) of such a
project shall greater than the shares held by any single foreign investor
in the project.
Article 9 Encouraged foreign investment projects apart from the
preferential terms stipulated in the relevant laws or administrative
regulations of the State, may enlarge their scope of business with
approval, if they are engaged in the construction and operation of
infrastructure facilities related to energy, transportation and urban
utility sectors(coal, oil, natural gas, power, railway, highway, port,
airport, urban road, sewerage treatment and garbage disposal, etc.),
which need a large amount of investment and a long payoff period.
Article 10 Those permitted projects that export all their products
directly shall be deemed as encouraged projects. Restricted foreign
investments may be deemed as permitted foreign investment projects with
approval from the government of provinces, autonomous regions,
municipalities directly under the Central Government or cities of direct
planning by the State, if the export sales of products amount to over 70
percent of the total sales of the product.
Article 11 Restrictions can be properly eased for those permitted and
restricted foreign investment projects that can really make full use of
the advantages of mid-west regions. Those projects which listed in
Catalogue of Advantaged Industries for Foreign Investment in Mid-west
China can enjoy preferential treatments for encouraged foreign investment
projects.
Article 12 With existing project approval authorization, foreign
investment projects shall be examined and approved or be filed for record
by development economy and trade departments respectively according to
the construction nature of the projects. Contracts and articles of
associations of foreign investment enterprises shall be examined and
approved or be filed for record by the departments in charge of foreign
trade and economic cooperation. Those restricted foreign investment
projects whose investment is lower than the competence limit shall be
examined and approved by corresponding competent departments of
provinces, autonomous regions, municipalities directly under the Central
Government or cities of direct planning by the State and shall be filed
for record to higher-up responsible ministries and corresponding line
ministries simultaneously. The approval authorization for restricted
foreign investment projects shall not be allowed to be delegated to the
lower levels. Foreign investment projects in service sector that shall be
opened gradually should be examined and approved according to relevant
regulations of the State.
Foreign investment projects that involve issues of quota or license shall
apply to the competent departments of foreign economy and trade for quota
or license. If laws or administrative regulations have otherwise
stipulations concerning the procedures and measures of examination and
approval of foreign investment projects, stipulations of those laws or
administrative regulations shall be followed.
Article 13 Examination and approval organs of higher levels shall cancel
the foreign investment projects that are examined and approved in
violation of these Provisions within 30 working days after receiving the
recorded files of the concerned projects. The contracts and articles of
association shall be invalid. The enterprise registration organs shall
not register these projects. And the Customs shall not handle import or
export formalities for these projects.
Article 14 The relevant parties of foreign investment projects who have
obtained approval of the project through swindle or other illicit means
shall be investment for legal responsibility in the light of the
seriousness of cases according to law. The examination and approval
organs shall cancel the approval of the project, and relevant competent
units should deal with these projects correspondingly according to the
law.
Article 15 Staff of examination and approval organs who abuse their
authority, neglect their duties, shall be investigated for criminal
responsibility as the crime of authority abusing or the crime of duty
neglecting according to the criminal law. In cases that offenses are not
serious enough to trigger criminal punishments, disciplinary sanctions
harsher than special demerit for record shall be applied according to
laws.
Article 16 Investment projects sponsored by overseas Chinese and
investors from Hong Kong Special Administrative Region, Macao Special
Administrative Region and Taiwan region shall be handled by reference of
these provisions.
Article 17 These provisions shall enter into force on Apr. 1, 2002. And
Interim Provisions on Guiding Foreign Investment Direction promulgated by
the State Planning Commission, SETC and MOFTEC on Jun. 20, 1995 shall be
abrogated simultaneously.
Note: State Development Planning Commission has been renamed as State
Development and Reform Commission; SETC, MOFTEC now has merged as the
Ministry of Commerce. The English information is provide for reference
only, please check the Chinese version.
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