Laws of the People's Republic of China

The Ministry of Foreign Trade and Economic Cooperation

Circular of the Ministry of Foreign Trade and Economic Cooperation Concerning Strengthening the Administration of the Examination and Approval of Enterprises with Foreign Investment

WaiJingMaoZiZongHanZi [1998] No.260

May 7,1998

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

After the 15th CPC Congress and the 9th National People's Congress, each new local government has been paying much attention to foreign capital utilization and has adopted, in varying degrees, certain measures to improve the level of foreign capital utilization and the investment climate, including simplifying the examination and approval procedures, shortening the time for examination and approval and promoting "one-stop service", etc., which all turn out to be quite effective. However, there are a rare number of local authorities that act against state laws and regulations by canceling the examination and approval of enterprises with foreign investment. This not only impairs the solemnity of the state laws on foreign capital utilization but also leaves the rights and interests of both Chinese and foreign investors unprotected because unapproved contracts and statutes of enterprises with foreign investment are considered invalid. Furthermore, a series of legal issues are left unsolved as a result of this, which confuses the state administration on foreign capital utilization. To safeguard the solemnity of the state laws and the uniformity of law enforcement in China, the circular for strengthening the administration of the examination and approval of enterprises with foreign investment by rule of law are hereby given as follows:

1.

The Law on Chinese-foreign Equity Joint Ventures, the Law on Chinese-foreign Contractual Joint Ventures and the Law on Foreign-capital Enterprises are laws passed by the National People's Congress and no local authority at any level should have the right to set contradictory provisions without authorization. Each should strictly abide by the state laws and regulations and conduct examination and approval of the enterprises with foreign investment as well as their contracts and statutes (including amendments to these contracts and statutes) in accordance with the existing examination and approval procedures.

2.

The CPC central committee and the State Council have recently circulated the Opinions for Further Opening-up and Enhancement of Foreign Capital Utilization (ZhongFa [1998] No.6). Authorities at various levels should carefully study it and comprehend its spirit to ensure the actual implementation of the state policy on foreign capital utilization.

3.

Faithfully implement each provision of the above-mentioned document ZhongFa [1998] No.6. Local governments at various levels should improve their work efficiency and reduce layers of management to ensure openness and transparency. The measure of one open window is encouraged to provide standardized and convenient services of high quality. The governments should also improve the modalities and simplify the procedures of examination and approval of foreign-capital projects in combination of their further efforts in deepening the reform of the investment capital system. On the other hand, all authorities at various levels should promote uniform leadership and coordination on foreign capital utilization and faithfully implement the policies and guidelines of the CPC Central Committee and the State Council on foreign capital utilization so as to keep in tune and ensure the rule of law. To ensure the uniformity and faithful observance of the state laws and regulations, all local authorities should have no right to formulate regional and industrial policies without proper authorization.