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CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL TRANSMITTING OPINIONS OF THE STATE PLANNING COMMISSION AND OTHER DEPARTMENTS ON STRICTLY CONTROLLING REPETITIVE CONSTRUCTION OF SHIP BUILDING AND REPAIRING INFRASTRUCTURES

    The Opinions on Strictly Controlling Repetitive Construction of Ship Building and Repairing Infrastructures submitted by the State Planning Commission, the State Economic and Trade Commission, the Commission of National Defense Science and Industry, the Ministry of Foreign Trade and Economic Cooperation, the People's Bank and the General Administration of Customs have been agreed by the State Council and are hereby issued to you for your careful implementation.

Appendix: Opinions on Strictly Controlling Repetitive Construction of Ship Building and Repairing Infrastructures (submitted by the State Planning Commission, the State Economic and Trade Commission, the Commission of National Defense Science and Industry, the Ministry of Foreign Trade and Economic Cooperation, the People's Bank and the General Administration of Customs on September 10, 1999)

    Since the reform and opening up to the outside world, by implementing the strategic guideline of "Chinese ships shall enter the international market" advanced by the central authorities, the shipbuilding industry of our country has accomplished substantial development in shipbuilding capacity, technical level, ship exportation and other areas, and the shipbuilding capacity of the whole country in civil vessels has reached 4 million deadweight tonnage. In recent years, affected by the Asian financial crisis, the shipbuilding industry is in depression, the shipbuilding capacity around the world is commonly in surplus, and the main shipyards of our country are also facing the difficulty of working under capacity. Under the circumstances, however, large-scale shipbuilding and repairing infrastructures remain under construction in parts of coastal and riverbank areas of our country. It's difficult for the productive capacity formed by these construction projects to be internationally competitive in a short time, and if they turn toward the domestic market, excessive competition must arise between them and the existing domestic productive capacity. In order to prevent such repetitive construction from spreading and promote the healthy development of our ship industry, the following opinions are hereby proposed:

    I. In the last two years of the "Ninth Five-year Plan" period, regardless of the nature of the construction (capital construction or technical reformation), the sources of funds (domestic capital or foreign investment) and above or under the limit, all localities and departments shall suspend examination and approval of dry docks, floating docks, building berths as well as apparels and tackles, repair jetties and other construction projects for ship building and repairing infrastructures. During the "Tenth Five-year Plan" period, on the basis of the State development planning and the demand condition on the international ship market, with respect to construction projects for ship building and repairing infrastructures that are really internationally competitive, the Commission of National Defense Science and Industry shall give its opinions upon examination, and then the State Planning Commission or the State Economic and Trade Commission shall review and report the same to the State Council for examination and approval.

    II. With respect to reconstruction or expansion projects for ship building and repairing technologies and equipment and capital increase projects of foreign investment enterprises using existing ship building and repairing infrastructures to increase varieties, improve the quality and enhance product's competitiveness, if they are large- or medium-scale projects with a total investment above the limit, the Commission of National Defense Science and Industry shall give its examination opinions, and then the State Planning Commission or the State Economic and Trade Commission shall conduct examination and approval for those to be examined and approved within the authority of the State Planning Commission or the State Economic and Trade Commission; the State Planning Commission or the State Economic and Trade Commission shall report them to the State Council for examination and approval for those to be examined and approved within the authority of the State Council. Those with a total investment under the limit shall be subject to examination and approval by the Commission ?of National Defense Science and Industry and then reported to the State Planning Commission or the State Economic and Trade Commission for the record. For foreign-invested projects, the Ministry of Foreign Trade and Economic Cooperation shall handle relevant procedures in accordance with the documents of official reply of relevant State departments.

    III. In examining and approving loans to be granted to construction projects for ship building and repairing facilities, all relevant commercial banks shall require the load applicants to present the approval documents issued by relevant State departments for the feasibility study reports of such projects. No loan may be granted to projects having not been approved by the State.

    IV. All localities and departments shall carefully clean up construction projects for ship building and repairing infrastructures of 10,000 deadweight tonnage or above which have been examined and approved since 1995 and the fund sources thereof, and report the same to the Commission of National Defense Science and Industry before the end of December in 1999. The Commission of National Defense Science and Industry, jointly with the State Planning Commission, the State Economic and Trade Commission and the Ministry of Foreign Trade and Economic Cooperation shall reexamine these projects. Projects not examined and approved in accordance with State regulations shall be subject to reexamination and approval by the aforesaid four commissions and ministries. For projects without such approval, relevant commercial banks shall not grant loans, and Customs shall not release imported equipment and materials. Those who do not submit reports shall be made known to the public and have their projects cancelled once being found after investigation.

    V. The Commission of National Defense Science and Industry, as the administrative department for the ship industry, shall formulate the middle- and long-term national development plan for the ship building and repairing industry and the industrial development policies without delay to promote the healthy development of the ship industry.