Regulations on Foreign Investment Orientation
On Feb. 21, 2002, Zhu Rongji, Chinese Premier inked his signature on No. 346 Decree of the State Council, the People's Republic of China, which enacted the Regulations on Foreign Investment Orientation that would become effective on April 1st, 2002.
Pursuant to the provisions on foreign investment defined by relevant Chinese laws and requirements of industrial policies, this Regulations is enacted for the purpose of providing guidance for foreign investment orientation so as to make such investment in line with China's national economic and social development and protect investors' legitimate interests.
This by-law is applicable to the projects sponsored by Chinese-foreign joint ventures, Chinese-foreign cooperation businesses, and foreign invested businesses (hereinafter referred to as foreign invested businesses) on Chinese territories or foreign invested projects in others forms (hereinafter referred to as foreign invested projects).
Guidance Catalog on Industries for Foreign Investment and Catalog on Priority Industries for Foreign Investment in Middle and West Regions shall be jointly formulated by the State Development Planning Commission, the State Economic and Trade Commission and the Ministry of Foreign Trade and Economic Co-operation in collaboration with competent agencies under the State Council, and be published upon the approval of the State Council. Pursuant to actual needs, the said catalog can be revised when necessary for further publication jointly by the State Development Planning Commission, the State Economic and Trade Commission and the Ministry of Foreign Trade and Economic Co-operation in collaboration with competent agencies under the State Council.
Both Guidance Catalog on Industries for Foreign Investment and Catalog on Priority Industries for Foreign Investment in Middle and Western Regions are policy basis for approving the establishment of foreign invested projects and foreign invested businesses.
Foreign invested projects are classified into four categories: encouraged, allowed, restricted and prohibited. Foreign invested projects that fall into the categories of encouraged, restricted and prohibited are listed in the Guidance Catalog on Industries for Foreign Investment. Foreign invested projects that are not classified as encouraged, restricted and prohibited are the ones rated as allowed shall not be listed in the Guidance Catalog on Industries for Foreign Investment.
A project that serves for one of the following purposes shall be classified as encouraged foreign investment projects.
1) New agricultural technologies, integrated agricultural development, industries related to energy, transport and major raw materials;
2) High technologies, advanced proven technologies, new equipment and materials able to improve products' performance and enterprises' technical and economic benefits or those that domestic manufacturers cannot have sufficient supply;
3) Meeting market demands, upgrading products, creating new market or enhancing international competitiveness;
4) New technologies, new equipment, energy and raw material saving, integrated utilization of resources and renewable resources, and environmental pollution prevention;
5) Taking advantage of manpower and resources strength of the middle and the western regions in line with the state industrial policies;
6) Other provisions defined by laws or administrative by-laws.
A project featured with one of the following conditions shall be classified as restricted foreign investment projects.
1) Using outdated technologies;
2) Unfavorable for resources efficiency and ecological environment improvement;
3) Prospecting and mining of special minerals under the state protection;
4) Belonging to industries scheduled for step-by-step opening;
5) Other provisions defined by laws and administrative by-laws.
A project featured with one of the following aspects shall be classified as prohibited foreign investment projects.
1) Endangering national security or harmful to public interests;
2) Causing pollution to environment, damaging natural resources or harmful to human health;
3) Occupying extensive arable land, or unfavorable for land resources protection and development;
4) Endangering military facilities' security and effective applications;
5) Manufacturing products with China's unique techniques or technologies;
6) Related to other provisions defined by laws and administrative by-laws.
The Guidance Catalog on Industries for Foreign Investment can make such provisions as “only limited to joint ventures or cooperation businesses”, “Chinese partner shall take a majority equity” or “Chinese partner may take a relative majority equity” for foreign invested projects.
Here “only limited to joint ventures or cooperation businesses” means only Chinese-foreign joint ventures and Chinese-foreign cooperation businesses are allowed; referring to Chinese partner taking majority equity, it is defined that the total investment made by the Chinese partner in a foreign invested project shall be positioned at 51% or above; “Chinese partner shall take a relative majority equity” means that the total investment made by the Chinese partner in a foreign invested project shall be larger than the proportion offered by any foreign party in the investment.
Foreign invested projects falling into the category of encouraged, in addition to the preferential treatment they may enjoy according to relevant laws or administrative by-laws, may upon the approval, expand their related business scopes, if they are the ones featured with huge investment and long return period such as construction activities related to energy, transportation, urban infrastructure construction ( coal, petroleum, natural gas, electric power, railways, highways, harbors, airports, urban roads, sewage and garbage treatment).
A foreign invested project in the category of allowed, when all of its products are exported, can be deemed as encouraged upon the approval of the people's government at provincial, autonomous regional and municipal (the cities under direct jurisdiction of the Central Government) level or by the competent authorities under the State Council; a foreign invested project in the category of restricted can be deemed as allowed when its products export volume reaches 70% or more of its total products sales.
A foreign invested project in the category of allowed or restricted, when proven of its role in taking advantage of the strength of the middle and the western regions, can be duly granted with more favorable conditions; when it occurs in the Catalog on Priority Industries for Foreign Investment in Middle and Western Regions, the project may enjoy the preferential treatments entitled to the foreign invested projects in the category of encouraged.
Under the existing authorized power of approval, a foreign invested project shall be subject to the approval and put on records by development planning authorities and economic and trade authorities respectively in terms of the nature of the project; a foreign invested business's contracts or constitutions shall be approved by and recorded at the authorities responsible for foreign economy and trade. Of them, the ones falling into the category of restricted and prohibited shall be subject to the approval of competent authorities under the people's government at provincial, autonomous regional and municipal (the cities under direct jurisdiction of the Central Government) level before being recorded at the upper level competent and sectional authorities. The said approval power shall not be decentralized. Foreign invested projects in the service and trade sectors scheduled for step-by-step opening shall be approved under relevant state regulations.
Foreign invested projects involving quota or licensing shall file quota or license applications at foreign economy and trade authorities.
When provided otherwise, the procedures and methods for approving foreign invested projects shall observe existing laws and administrative by-laws.
Superior approval authorities shall revoke the approval and invalidate associated contracts and constitutions within 30 work days from the receipt of the project's on-record document if the said foreign invested project runs counter against this Regulations. In the meanwhile, industry registration agency shall nullify the project registration and the Customs shall not handle its import and export requirements.
When the applicant of a foreign invested project obtains its approval by unfair means such as fraud, it shall bear legal liabilities in terms of its violation; the approval authorities shall invalidate its approval for the project and the violator shall be punished by competent authorities according to the law.
When abusing or neglecting his or her duties, the working staff of the approval agency shall bear criminal liabilities in accordance with the provisions on abusing and neglecting duties in criminal laws; when such abusing or neglecting is not serious enough for criminal liabilities, the person who commits such act shall be recorded with a serious administrative demerit.
Investment projects sponsored by overseas Chinese or by the investors from Hong Kong Special Administrative Zone, Macao Special Administrative Zone and Taiwan area shall be handled in accordance with this Regulations.
The Regulations comes into force on April 1st, 2002. The Interim Regulations on Foreign Investment Orientation approved by the State Council on June 7, 1995 and jointly published by the State Planning Commission, the State Economic and Trade Commission and the Ministry of Foreign Economy and Trade Co-operation on June 20, 1995 shall be invalidated from the same day on.
Sand Control for Beijing and Tianjin Area
The so-called Plan for Wind and Sand Control Projects in Beijing and Tianjin was recently approved by the Chinese State Council. Being one of the six priority forestry projects in the country, the Wind and Sand control Project for Beijing and Tianjin will see full-fledged implementation on the basis of its experiments made in the past two years. The project is scheduled to be completed in ten years, striving for the targets of increasing forest coverage, control of desertified land, decreasing winds and sands and associated severe weathers by applications of different biological and engineering measures, eventually reaching the face lifting goal for ecological conditions in Beijing, Tianjin and adjacent areas and curbing further expansion of desertification.
Beijing-Tianjin Winds and Sands Control Project horizontally runs 700 km from Damaoqi, Inner Mongolia in the west to A'luke'erqinqi in Inner Mongolia in the east , and vertically 600 km from Daixian county, Shanxi Province in the south to Dongwuzhumuqinqi, Inner Mongolia in the north. The said project covers an areas of 458,000 square kilometers containing 75 counties or township under the jurisdictions of Beijing, Tianjin, Hebei, Shanxi and Inner Mongolia. The control strategies are defined as: 1) protect all existing woods in the area and forbid any wood felling activities for business operation; 2) reclaim wooded land from cultivated one over hilly areas in the valley; 3) accelerate integrated control of soil erosions and reduce sand sediments in water reservoirs; 4) grow multi-level water keeping forests mixed with timbers and brushes over waste mountains and lands; 5) relentlessly construct wind break and sand fixation system made of woods; 6) readjust domestic animal compositions and change irrational production modes of animal husbandry, turning herding into fenced breeding; 7) construct forest network interlaced through farmland and the same over pasture land; 8) ecological migration in the northern area of Beijing. As is shown by the project schedule, during the period from 2001 to 2010, 39.44 million mu(1mu=0.0667ha.) of farmland shall be reclaimed to be wooded land with 74.16 million mu under afforestation and 159.42 million mu of pastureland will be put under control. In addition, it is planned to build or reconstruct 113,889 water irrigation infrastructure facilities and place 23,445 square kilometers of small basin under integrated control and migrate a population of 180,000 for ecological purpose.
The World First Oral Insulin Spray
Thanks to their 8-year painstaking efforts, the scientists of Pharmaceutical Institute under Huazhong Science and Technology University have recently completed the clinic testing of its proprietary oral insulin spray. Being the first of its kind in the world, the said result puts an end to the history of 30 million Chinese diabetic patients relying on insulin injection and ushers in a period of more convenient, efficient and safer insulin.
Clinic testing has shown that after oral spraying both blood insulin concentration and sugar reducing effect in human body reach their peak values almost simultaneously, which prove the sugar reducing effect brought by outside insulin. Furthermore, scientists have found no difference in statistics between oral spraying and hypodermic injection nor damages to oral mucosa.
Asia was Mammals' Eden Garden
A new research result jointly worked out by Chinese and U.S. scientists has shown that Asia used to be the Garden of Eden for some earlier mammals. Some present mammals such as horse, goat, sheep, deer, rhinoceros and hippo were originated from Asia though they migrated to North America or Europe later. U.S. based Science that was published on March 15, 2002 carried the paper telling the discovery jointly made by Wang Yuanqing, a research fellow of the Institute of Palaeovertebrate and Palaeoanthropology under the Chinese Academy of Science and his U.S. counterpart.
Not long ago Chinese and U.S. scientists unearthed fossils of some earlier mammals over Hengyang Basin in Hunan Province, China. The analysis of these fossils and associated sediment soil has proved that their ages sit at the transitional period between Ancient epoch and Eocene epoch. This is the first stratum so far recorded with time demarcation between Ancient epoch and Eocene epoch in Asia. The said discovery will make the comparison of similar fossils discovered in Asia, North America and Europe for the same period possible and provide new evidence for animals' origins and migration in the said period. At the same time the comparison proves that global climatic upheaval has had a significant influence on Asia. The research result worked out by both Chinese and US scientists have not only confirmed the fact that ancient carnivore mammals found their earliest origin in Asia before migrating to North America but also make new time evidences available for the Asian origins of major present-day artiodactyl, perissodactyla and primates.
26 Cave Animals Discovered in China
China-foreign joint scientific expedition team have recently discovered 26 animals in the underground river running in Niuping Cave on the town outskirts in Leye County, Guangxi Zhuang Autonomous Region. It is believed that some of the discoveries can lead to new species. So far scientists have confirmed that these animals are mainly spiders, shrimps, fish and snail, though not yet worked out the identification of families for some of them. In addition, they discovered parasite animals on catfish. These new discoveries need further studies and confirmation. It is reported that it is currently a hot topic to study ancient climate and environment by taking advantage of cave environment. China is of great quantity of caves and is naturally a hot spot for such studies. It is reported that Guangxi Zhuang Autonomous Region alone has claimed at least 100,000 caves over its territories.
Comments or inquiries on editorial matters or Newsletter content should be directed to:Mr. Cheng Jiayi, Department of International Cooperation, MOST 15B, Fuxing Road Beijing 100862, PR China Tel: (8610)68512650 Fax: (8610) 68512594