Home > Announcement Board


The Ministry of Science and Technology
People's Republic of China

N0.303 August 10,2002

* China's New Foreign Exchange Rules for Duty Free Zones

* West New Materials Action

* Genetically Modified Cotton against Pests

* Progress on Embryo Stem Cell Studies

* The World First Animal Blood Cell Charts Collection

* Major Progress on Beijing Ape Protection

* More Funds for Popular Science


 China's New Foreign Exchange Rules for Duty Free Zones

Not long ago the Chinese State Foreign Exchange Administration published the revised version of the Regulations on Foreign Exchange Management in Tax Free Zones that was enacted firstly in 1995. The new version has seen three major readjustments in the following areas:

1) Enterprises stationed in duty free zones are requested to obtain their Foreign Exchange Registration Certificate for Duty Free Zone on a unified basis. Duty free zone enterprises, either Chinese or foreign invested, shall file the said registration at the foreign exchange authorities and obtain their foreign exchange registration certificate for duty free zone. The foreign exchange authorities will no longer issue any foreign invested business certificate for foreign invested enterprises either in duty free zones. The foreign exchange registration certificate (hereinafter referred to as Certificate) is the identification document for duty free zone enterprises to deal with foreign exchange affairs. When making their receipt or payment in foreign exchanges, duty free zone enterprises shall show their Certificate throughout the entire business process. The unified management of Certificate will facilitate unified tracking and supervision of duty free zone enterprises by the foreign exchange authorities as well as banking institutions' acknowledgement of the identity of duty free zone enterprises.

2) Duty free zone enterprises' foreign exchange purchases shall be regulated. During 1998 when Asia saw its financial crisis, to prevent illegal foreign exchange trafficking through duty free zones, the State Foreign Exchange Control Administration ceased its foreign exchange purchase service for duty free zone enterprises.  Thanks to the continuous improvement of the operational environment of duty free zones, the new regulations resumed foreign exchange transactions in three categories according to the designed basic functions of duty free zones: enterprises engaged in processing and good distribution industry may purchase foreign exchanges with RMB obtained from their domestic sales; the duty free zone enterprises who paid their registered capital in RMB may purchase foreign exchange with the paid-in registered capital; and the earnings, equity interest and dividends entitled to foreign shareholders in duty free zones can be converted into foreign exchange for remittance.

3) The restrictions on foreign exchange account management will be loosened for duty free zone enterprises. In 1995 when the old management rules on foreign exchange control for duty free zones were enacted, to prevent illegal capital trafficking, as some of the duty free zones in the country were not yet fully ready for sealed supervision, duty free zone enterprises were only allowed to open their accounts at banking institutions within the zone. To facilitate capital flowing, the new rules abolished the restrictive provisions that enterprises have to open their accounts only at banking institutions within the zone and gave a green light for duty free zone enterprises to open their foreign exchange account for regular and capital items at the banking institutions in the area where they are registered. Upon the approval, these enterprises may open their foreign exchange account for capital item outside the registration place.

The new rules request that all the economic transactions between the duty free zones and overseas parties be settled in foreign currency instead of RMB; all the transactions of duty free goods between duty free zones and external areas shall be settled in foreign exchanges instead of RMB; the transactions of non duty free goods between duty free zones and external areas may either be settled in foreign exchanges or in RMB; the settlement of official fees by administrative authorities of duty free zones shall be made in RMB; the economic transactions among the institutions within the zone or among duty free zones themselves can either be settled in foreign currencies or RMB.

The new by-law stipulates that duty free zone enterprises shall file an application for the approval of the foreign exchange authorities when opening a foreign exchange account. Foreign exchange accounts can be divided into two major categories: foreign exchange account for regular items and foreign exchange account for capital item. Foreign exchange account for regular items shall, in principle, be only allowed for one account for one enterprise and such account shall be opened at a bank that is located in the area where the enterprise is registered. Foreign exchange account for capital item can either be opened at a bank that is located in the area where the enterprise is registered or at the bank outside the registration area upon the approval of foreign exchange authorities.

The new by-law will come into effect on October 1, 2002.

 West New Materials Action

The Chinese Ministry of Science and Technology (MOST) officially launched on August 19, 2002 its so-called West New Materials Action. The said development constitutes another follow-up in MOST's series efforts aiming at promoting the economic development in the western region of the country. The series include other actions such as West Productivity Promotion Action, West Digital Divide Elimination Action and West New Energy Action.

The West New Material Action will embrace the following activities: 1) surrounding the development of new materials industry, organize research and development of a number of key technologies; 2) nurture new materials businesses of international competitiveness, especially R&D oriented small and medium businesses; 3) strengthen and enhance the industries of west characteristics in the field such as rare earth; and 4) establish new material industrial bases. To reach the said goals, MOST will during the 10th Five-Year Plan period allocate dedicated funds up to RMB 200 million to ensure the smooth implementation of the action. 


 Genetically Modified Cotton against Pests

In 1991, China's 863 Program kicked off its study on genetically modified cotton against pests. Under the strong support of the Chinese government, the research and associated industrial process for the project have witnessed breakthroughs.  Chinese scientists with the Biotechnology Institute under the Chinese Academy of Agricultural Sciences have synthesized and modified the pest killing genes of bacillus thuringienesis and introduced the modified genes into the major cotton species grown extensively over the Yangtze River basin, the Yellow River basin and Xinjiang area, which has made China the second country in the world possess the proprietary technology for developing such pest resistant cotton.

To prevent bollworms from producing resistance to single pest-killing protein, the scientists have developed another cotton variety able to produce two different pest killing proteins. These cottons went into commercial production in 1997 with the approval of the Chinese Ministry of Agriculture. Up to date, China has cumulatively grown such varieties over an area of 27 million and more mu in the country.

Since 1996, under the special funds dedicated for cotton R&D activities by 863 Program, 973 Program and Key Technologies Program sponsored by the Chinese Ministry of Science and Technology, the scientists of the Institute have made their consecutive studies of ecological environment security of genetically modified cotton. The results have shown that the pest killing protein contained in cotton is able to impose a control effect on bollworms as high as 85% and on pink bollworm and corn borer 90%, apparently better than that of chemical pesticides. In the meantime, such cotton needs pesticide application 70% less than the ordinary cotton. Experiments have shown that growing such cotton is able to remarkably raise the diversity level of arthropod communities in cotton fields. As the result of less pesticide application, the natural enemy of  aphid such as ladybug、Chrysopa perla and spider have greatly boosted their number, which effectively control the reproduction of aphid.

The diffusion and application of the genetically modified pest resistant cotton have created impressive economic, social and ecological benefits. As is shown by the joint investigations of scientists both at home and abroad, growing such cotton will reduce pesticide application by 13 times on average, or 3.3 kilos less per mu a year. The reduced pesticide application also greatly brings down the intoxication of both farmers and animals as well as human resources in fighting the pests. Investigation results also show that farmers have saved their production costs about RMB 140 per mu in growing such cotton and recorded a cumulative social and economic benefit over RMB 2.4 billion.

 Progress on Embryo Stem Cell Studies

Study of Ox and Human Embryo Stem Cells, a national major R&D project undertaken by Northwest Agriculture and Forestry University has recently passed experts' approval check.

In 1993, the University started the first ox embryo stem cell study in the country. In 1995, it for the first time in the country cloned ox stem cells. In 1999, it passed ox stem cells derived from earlier ox embryo cells to the sixth generation. In 2000, it made the record to the 15th generation. As is shown by the testing and verification results through shape observation, external separation and core type analysis, the cloned cells are of typical features of ox stem cells.

The scientists obtained epithelium cells, soft bone cells, neuron cells from external separation process and worked out ox heart beating cell cluster. They also developed the embryo cloning technique using ox stem cells as the core, laying a foundation for cloning ox embryo stem cells.

In 1997, the University separated human stem cells and passed the cloned cells to its 13th generation, the highest in the country, with derived dermoid cells, neuron cells, neuroglia cells and fat cells. On August 31, 2000, the scientists obtained for the first time in the world human heart beating cell cluster and developed the techniques for cloning human embryo stem cells, which laid a foundation for separating human stem cells and worked out the fine conditions for cloning ox and human stem cells. 

 The World First Animal Blood Cell Charts Collection

On the basis of their two-year study, the researchers from Chinese Medical University and Beijing Zoo have eventually worked out a wild animal blood cell charts collection, the first of its kinds in the world. As a result, scientists may now clearly understand an animal's physical condition, nutritional status and possible diseases by screening a drop of blood collected from it.

Current medical treatment of animals is mostly relying on veterinarian's experience or test treatment with medicines, lack of scientific basis for treating viruses and bacteria related diseases. With the help of these charts, a veterinarian may reach accurate diagnosis through identifying relevant blood cells. It is briefed that the accuracy of diagnosis made with the help of these charts may reach 95% or more.

It is reported that some other countries have worked out blood cell charts for certain animals while Chinese scientists have produced blood cell charts for more than a hundred animals.


China-UK Expedition to Heaven Pit&Seam

Physically sitting in a small village of Xinglong Town, Fengjie County, the so-called Heaven Pit&Seam was discovered in the 1980s.  The oval-shaped pit is of a diameter of 626 m, depth 662 m and a total volume 119 million cubic meters.  The pit was called funnel in karst term. As is verified by experts, Fengjie Pit is the largest karst funnel so far discovered in the world. At the bottom of it runs a huge underground river with its origin possibly from the “earth seam”, a mysterious canyon so called by the local folks. As is shown by the investigations, the “seam” runs as long as 37 km with the narrowest section only of 2m but an impressive height reaching 900m.

Since 1994, Chinese and foreign scientists and explorers have made a dozen of expeditions to the Pit&Seam. Up to date, explorers have visited more than 60 caves over the pit's bottom and toured part of the underground river for more than 100km in the Seam where a number of rare fish species such as salamander were found.

The current expedition jointly sponsored by Chinese and British scientists will further explore the Pit&Seam from August 19 to September 9, hoping to find the flowing direction of the underground river and the geological connections between the Pit and the Seam.

 Major Progress on Beijing Ape Protection

Recently the Beijing Municipal Government and the Chinese Academy of Sciences inked an agreement on joint protection of the relics of Beijing Zhoukou Ape, according to which a new management mechanism will be created to plan the site protection.

Beijing Zhoukou Ape Relics will see a changed management system under their joint!protection of both the Beijing Municipal Government and the Chinese Academy of Sciences. The Beijing Municipal Government will be responsible for the protection, construction, management and popular science education activities of the site while the Chinese Academy of Sciences taking care of the research part of the protection. A joint management and coordination committee with members from both organizations will be created to guide the formulation of site protection plan and coordinate related major events.

As is defined in the agreement, the Chinese Academy of Sciences will transfer all the land and structures within the site to the Beijing Municipal Government for free, though it will keep its right to the site unearthing, the sample researching and the ownership to the existing samples and the ones to be unearthed in the future. With the approval of Chinese national authorities on cultural relics management, the Chinese Academy of Sciences may unearth samples from the site and study and maintain them, providing guidance for the site protection and associated popular science activities and supplying free exhibits and findings for the relics museum.

 More Funds for Popular Science

To support social organizations, enterprises and governmental agencies to launch their popular science diffusion activities, the Chinese Science Association will from 2002 establish a dedicated fund for public efforts in diffusing science and technology.

The Fund will select its grant recipients from schools and education institutions, R&D institutes, higher learning institutions, natural and social sciences related social groups, governmental agencies and social groups related to news media, publishing, radio and TV broadcasting, cultural activities, health and medicine, family planning, environmental protection, national land resources, sports, meteorology, seismology, cultural relics and tourism, workers union, youth league, women's federation and enterprises etc.

The Fund will support population science projects diffusing S&T knowledge, advocating scientific approaches, spreading scientific ideas and concepts, carrying forward scientific spirit and improving people's scientific and cultural qualities.  The Fund will in 2002 start its candidate selection from the publication of popular science works and theoretical study of popular sciences. Later it will gradually extend its project scope.

 Major Progress on Experimental Fast Reactor

China's first experimental fast reactor has recently witnessed the completed construction of its major shelter, which marks a major progress so far achieved on the project.

Approved by the Chinese State Council in 1992 and established in December 1995, the experimental fast reactor is one of the major energy projects under China's National 863 Program. The Chinese Institute of Atomic Energy is the organizer of the project's construction as well as the manager of the following research and operation. With a thermal power of 65MW, the fast reactor is able to generate 20MW of electric power.  Expected to reach its critical target at the end of 2005, the new generation nuclear reactor is of a higher safety level than that of pressurized water nuclear power station currently running in the country.

       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