Laws of the People's Republic of China

the State Development and Reform Commission

Decree of the State Development and Reform Commission of the People's Republic of China

No. 19

The Interim Measures for Examining and Approving Enterprises' Investment Projects that have been formulated in accordance with the Administrative Licensing Law of the People's Republic of China and the Decision of the State Council on the Reform of Investment System for the purpose of standardizing the examination and approval by the government of enterprises' investment projects, are hereby promulgated and come into force.

Ma Kai, Director of the State Development and Reform Commission

September 15, 2004

Interim Measures for Examination on and Approval of Enterprises' Investment Projects

Chapter I General Provisions

Article 1

These Measures are formulated in accordance with the Administrative Licensing Law of the People's Republic of China and the Decision of the State Council on the Reform of Investment System for the purpose of meeting the requirement of improving the socialist market economy system and further promoting the reform of the administration system of enterprises' investment projects.

Article 2

The state shall formulate and issue a Catalogue of Investment Projects Approved by the Government (hereinafter referred to the "Catalogue"), which shall specify the scope of the investment projects that shall be subject to examination and approval and define the authority limits for different project approving organs, and are subject to timely adjustments according to the economic situation and the need of macro control.

The "project approving organs" as referred to in the preceding paragraph means the administrative organs with authority to examine and approve enterprises' investment projects as prescribed in the Catalogue, of which, the "administrative department for investment of the State Council" refers to the State Development and Reform Commission, the "administrative departments for investment of local governments" refers to the local governments' development and reform commissions (planning commissions) and economy and trade commissions (economic commissions) with the functions of investment administration as appointed by the local governments.

Article 3

In the case of the project subject to examination and approval to be invested and constructed by enterprises, the enterprise shall, in accordance with the relevant provisions of the state, prepare a project application report and submit it to the project approving organ, which shall conduct examination and approval according to law and strengthen the relevant supervision and administration.

Article 4

All investment projects constructed by all kinds of enterprises in China shall be implemented in accordance with these Measures except foreign investment projects and overseas investment projects, of which the measures for examination and approval shall be separately formulated.

Chapter II Contents and Preparation of Project Application Reports

Article 5

The applicant entity shall submit to the project approving organ a project application report in quintuplicate. The project application report shall be prepared by an organ with the corresponding engineering consultancy qualification and, in the case of a project subject to the examination and approval by the administrative department for investment of the State Council, the project application report shall be prepared by an organ with engineering consultancy qualification of grade A.

Article 6

A project application report shall mainly contain the following contents:

(1)

the instance of the applicant entity;

(2)

the instance of the project to be constructed;

(3)

the land to be used and the relevant planning;

(4)

an analysis of utilization of resources and consumption of energy;

(5)

an analysis of the impact on ecological environment; and

(6)

an analysis of economic and social effects.

Article 7

The State Development and Reform Commission shall, in light of the actual need, prepare and issue model project application reports for major industries and give guidance to the enterprises in their project applications.

Article 8

When submitting the application report to the project approving organ, the project applicant entity shall submit the following documents together according to the relevant laws and regulations of the state:

(1)

opinions on city planning as given by the administrative department of city planning;

(2)

preliminary opinions on land use of the project as given by the administrative department of land and resources;

(3)

opinions of examination and approval on the environmental impact assessment documents as given by the administrative department of environmental protection; and

(4)

other documents that shall be submitted in accordance with the relevant laws or regulations.

Article 9

The applicant entity shall be responsible for the authenticity of all submitted documents.

Chapter III Procedures of Examination and Approval

Article 10

In the case of a project subject to examination and approval by the administrative department for investment of the local government to be invested and constructed by enterprises, the applicant entity shall submit the project application report to the local approving organ according to the relevant provisions of the local government.

In the case of a project to be constructed by an entity subordinated to the relevant industry department in charge under the State Council and subject to examination and approval by such department, the entity may submit the project application report directly to such department together with the opinions of the administrative department for investment of the government at the provincial level of the place where the project is to be located.

In the case of a project to be constructed by an enterprise group specifically designated in the state plan or by an enterprise directly under the administration of the Central Government and subject to examination of approval by the administrative department for investment of the State Council, the group or the enterprise may submit the project application report directly to such department together with the opinions of the administrative department for investment of the government at the provincial level of the place where the project is to be located; in the case of a project to be constructed by any other enterprises and subject to the examination of approval by the administrative department for investment of the State Council, the enterprise shall submit the project application report to the administrative department for investment of the government at the provincial level of the place where the project is to be located, which shall present opinions after making preliminary examination and then submit such opinions and the project application report to the administrative department for investment of the State Council (the submission shall be made by the development and reform commission in conjunction with the economy and trade commission or economic commission having the functions of investment administration provided for by the government at the provincial level.)

In the case of a project subject to the examination and approval by the State Council, the enterprise shall submit the project application report to the administrative department for investment of the State Council, which shall give opinions after making examination and then submit such opinions and the project application report to the State Council.

Article 11

In case the approving organ considers the application materials uncompleted or, not in accordance with relevant requirements, the approving organ shall, within five working days after receiving the project application report, notify the applicant entity to make clarification, supply relevant instances and documents or make adjustment to relevant contents.

After the applicant entity has submitted the complete materials properly, the approving organ shall duly accept the application and issue a notice of acceptance to the applicant entity.

Article 12

If necessary, the approving organ shall, within four working days after accepting the application, consign a qualified consultancy agency to make relevant assessment.

The consultancy agency consigned shall present an assessment report within the time limit specified by the approving organ and shall be responsible for the assessment result. When making assessment, the consultancy agency may demand the applicant entity to give explanations on the relevant issues.

Article 13

Where conducting examination and approval, the approving organ shall seek opinions from such authorities, if it finds that the functions of any other authorities are involved in its examination. Such authorities shall provide to the approving organ written opinions within seven working days after receiving the letter of request for opinions (together with the project application report); it shall be considered as approval if no such opinions have been returned within the time limit.

Article 14

In the case of a project that may have a serious impact on the public interests, when making its examination, the approving organ shall ask for opinions from the public in an appropriate manner. For especially important projects, the specialist appraisal system shall be adopted.

Article 15

The approving organ shall, within 20 working days after receiving the project application report, make a decision on whether or not to approve the application, and publicize it to public or submit its opinions to the approving organ at a higher level. Where it is difficult due to any special reason to make a decision within such time limit, the period may be extended for ten working days with the approval of the person in charge of the approving organ and promptly notify the applicant entity the reasons for the extension stated.

The period specified in the preceding paragraph does not include time required for the assessment by a consultancy agency, asking for opinions from the public or appraisal by the specialists.

Article 16

In the case of an approved project, the approving organ shall issue to the applicant entity an approval letter with copies thereof sent to the relevant departments and the approving organ at a lower level; for a disapproved project, the approving organ shall issue to the applicant entity a disapproval letter with the reasons for disapproval stated, with copies thereof sent to the relevant departments and the approving organ at a lower level. In the case of a project approved by the State Council, the approval letter shall be issued by the administrative department for investment of the State Council.

Article 17

Any applicant entity disagreeing with the decision of the approving organ may apply for an administrative review or initiate administrative proceedings in accordance with law.

Chapter IV Standards for Examination and Validity of Approval

Article 18

The project approving organ conducts examinations on the investment projects mainly with regard to the following standards:

(1)

compliance with the laws and regulations of the state;

(2)

compliance with the national economic and social development planning, planning of the industry, industrial policy, standards for admittance into the industry and the overall land use planning;

(3)

compliance with the macro control policies of the state;

(4)

rationality of regional distribution;

(5)

the major products of the project not constituting a monopoly in the domestic market;

(6)

no adverse effect on the country's economic security;

(7)

rational exploitation and effective utilization of resources;

(8)

effective protection of ecological environment and natural and cultural heritage; and

(9)

no serious adverse effect on the public interests, especially those in the place where the project is to be located.

Article 19

According to the project approval document, the applicant entity shall go through the procedures for the use of land, utilization of resources, city planning, safe production, import of equipment and confirmation of tax exemption and reduction, etc.

Article 20

The validity term of the approval document shall be two years, starting from the date of issue. In case the construction of any project has failed to start within the validity term of the approval document for the project, the enterprise concerned shall, 30 days prior to the expiry of the validity term, apply to the original project approving organ for extension. The original project approving organ shall make a decision on whether or not to permit the extension before the expiry of the validity term. An approval document shall automatically become invalid upon the expiry of the validity term thereof, if the construction of the project has failed to start within the validity term and no application for extension has been made to the original project approving organ.

Article 21

In case the content of the approval document for any project needs to be adjusted, the enterprise concerned shall promptly submit a written report to the original project approving organ, which shall, in light of the specific circumstances, issue a confirmation letter or demand the enterprise to go through the approval procedures anew.

Article 22

None of the authorities for land and resources, environmental protection, city planning, quality supervision, securities regulation, foreign exchange administration, supervision and control of safe production, administration of water resources and customs may handle relevant procedures, and no financial institution may grant any loan, for any project that is subject to the examination and approval by the project approving organ but not applied, or for which the application submitted has not been approved.

Chapter V Legal Responsibility

Article 23

Project approving organs and their staff shall strictly abide by the relevant provisions, laws, regulations and these Measures, may not add or reduce under disguised form any matters to be examined, and may not put off the examination and approval.

Article 24

Any staff of the approving organs who abuses his authority, neglect his duties, engages in malpractice for personal benefits, extorts or takes bribes in the work of examination of approval of the investment projects shall be subject to an administrative sanction or, if a crime is constituted, his criminal responsibility shall be investigated according to law.

Article 25

Any consultancy and assessment agency and its staff who acts contrary to the professional ethics and causes gross losses and baneful effects in the work of assessment shall be subject to corresponding responsibility.

Article 26

In case any applicant entity has obtained an approval letter by unjust means, such as partitioning the project and providing false materials, the project approving organ shall cancel the approval letter according to law.

Article 27

The project approving organs shall strengthen the supervision and management of enterprises' investment projects in conjunction with the authorities for city planning, land and resources, environmental protection, banking supervision and administration and safe production. Where it comes to notice that the construction of any project subject to examination and approval has started without submitting a report for such examination and approval or without an approval letter or without abiding by the requirements by the approval letter, the approving organ shall promptly give an order to stop the construction, and the person liable shall subject to the legal and administrative responsibilities.

Chapter VI Supplementary Provisions

Article 28

The administrative departments for investment of the governments at the provincial level and the relevant trade departments in charge under the State Council with the examination and approval authority may formulate their respective implementing measures in accordance with the spirit of and requirements of the Administrative Licensing Law of the People's Republic of China, the Decision of the State Council on the Reform of the Investment System and these Measures.

Article 29

Projects falling into the scope of the Catalogue of Investment Projects Subject to Approval of the Government and to be constructed by any institution or social organization other than an enterprise shall be subject to examination and approval in accordance with these Measures.

Article 30

The power to interpret the present Measures shall remain with the State Development and Reform Commission.

Article 31

These Measures shall come into force as of the date of promulgation. Where there is any discrepancy between any provisions concerning the examination and approval of enterprises' investment projects as made before and these Measures, the latter shall prevail.