Laws of the People's Republic of China

General Office of the State Council

Circular of General Office of the State Council on Issues Concerning the Investment of Chinese Citizens of Hong Kong Special Administrative Region in the Mainland of China

GuoBanHan [1997] No. 66

December 22, 1997

The people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government:

Shortly before and after the Government of the People's Republic of China resumed the exercise of sovereignty over Hong Kong, a few regions, in order to attract the investment of medium and small investors from Hong Kong, successively worked out and publicized some policies, which stipulated that the residents of Hong Kong may apply for the establishment of small-scaled private business or private enterprises on the volunteering basis and receive same treatment with respect to industry engaged and operational method as inland residents. The above provisions are in violation of the relevant laws, regulations and policies of China on foreign investment utilization. Moreover, they are inconsistent with the spirit of the Circular of the Central Committee of the Communist Party of China (CCCPC) and the State Council on Several Issues Concerning How to Properly Handle the Relationship between the Mainland of China and Hong Kong(ZhongFa [1996] No. 8) and the Circular of the General Office of the CCCPC and the General Office of the State Council on Publicizing the " Notice on Issues Concerning Hong Kong' Return to China"(ZhongBanFa [1997] No. 8). Upon approval of the State Council, the Circular on the issues concerned is hereby publicized as follows:

1.

The existing laws, regulations and corresponding procedural stipulations on foreign investment apply to the companies, enterprises and other economic organizations or individuals of Hong Kong Special Administrative Region in investing in the Chinese mainland. The regulations of different localities for the purpose of attracting investment from medium and small investors of Hong Kong that are already publicized or in the pipeline shall be immediately stopped from formulating or implementing if they are not consistent with the existing laws, regulations and corresponding procedural stipulations.

2.

All regions shall solicit the opinions of the competent authority of the State Council before formulating any local laws and regulations relating to Hong Kong Special Administrative Region. Major issues shall be reported to and approved by the CCCPC and the State Council.