Laws of the People's Republic of China

The Ministry of Foreign Trade and Economic Cooperation

Circular of the General Office of Ministry of Foreign Trade and Economic Cooperation on Relevant Issues of Joint Stock Companies with Foreign Investment

WaiJingMaoZiZi [2001] No.39

May 17, 2001

The commissions (departments) of foreign trade and economic relations of all provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately listed on the State plan:

In order to standardize the listing of joint stock companies with foreign investment, this Ministry hereby circularizes the relevant issues as follows:

I.

The establishment of a joint stock company with foreign investment or the application for turning a joint stock company with foreign investment into a joint stock company with foreign investment must meet the requirements in Interim Provisions on Some Issues in Establishing Joint Stock Companies with Foreign Investment, and be submitted in accordance with the provided procedures to Ministry of Foreign Trade and Economic Cooperation for examination and approval.

II.

Where a joint stock company with foreign investment applies to have its A-shares or B-shares listed and issued, it shall win the consent of Ministry of Foreign Trade and Economic Cooperation in writing and shall meet the following conditions:

(I)

the joint stock company with foreign investment shall, when it is applying to have its shares listed or after its shares have been listed, comply with the policies on foreign investment industries;

(II)

thejoint stock company with foreign investment applying to have its shares listed shall be an enterprise established or reformed in accordance with the provisions and procedures;

(III)

the proportion of non-listed foreign shares of the joint stock company with foreign investment after its shares have been listed shall not be lower than 25% of the total share capital;

(IV)

it shall meet other conditions required by the relevant regulations on listed companies.

III.

Where a B-share company which is a Chinese-foreign joint venture before it has its shares listed is to apply to have its non-listed foreign shares listed and circulated, it shall, as required by Circular on the Issue for (B-share) Companies Which Have Had Their Foreign Shares Listed Within the Territory of China to Have Their Non-listed Foreign Shares Listed and Circulated, and upon written consent by Ministry of Foreign Trade and Economic Cooperation, submit the application to China Securities Regulatory Commission. The company which applies to have its non-listed foreign shares listed and circulated shall meet the following conditions:

(I)

the proportion of non-listed foreign shares of a joint stock company with foreign investment in the total share capital shall not be lower than 25% after the company has turned its non-listed foreign shares into B-shares and issued them;

(II)

the non-listed foreign shares planned to be listed and circulated have existed for more than one year;

(III)

after the non-listed foreign shares have been turned into circulated shares, the successor of the above said company is able to perform the original non-listed foreign shareholder's obligations and liabilities provided in the company's article of association;

(IV)

it meets other conditions required by the relevant regulations on listed companies.

The non-listed foreign shares held by a joint stock company with foreign investment shall not be turned into circulated shares for the time being.

Please comply with and implement the above provisions.