Laws of the People's Republic of China

    Article 1  These Measures are formulated for the purpose of attracting
foreign investment for the development and management of tracts of land
(hereinafter referred to as "tract development") so as to intensify the
construction of public works, improve the environment for investment,
introduce foreign-invested technically advanced enterprises and
export-oriented enterprises and develop the export-oriented economy.

    Article 2  The term "tract development" as used in these Measures means
that after obtaining the right to the use of state-owned land, the investors
shall carry out, as planned, comprehensive development and construction on the
land, including levelling the ground and constructing such public works as
water supply and drainage systems, power and heat supply systems, roads and
communications networks, and communications facilities, so that conditions
shall be created for the land to be used for industrial or other construction
purposes. The investor shall then transfer the right to the use of the land
for operating public utilities, or proceed to construct such above-ground
buildings as industrial houses and the supporting facilities for production
and everyday life services and engage in the business activities of
transferring or leasing these above-ground buildings.

    Definite development targets shall be specified for tract development and
there shall be definite construction projects that are intended to make use of
the developed land.

    Article 3  With respect to a project to attract foreign investment for
tract development, the municipal or county people's government shall organize
the drawing up of a tract development project proposal (or a feasibility study
report, the same hereinafter).

    With respect to a tract development project which is to make use of 1,000
mu or less of arable land or 2,000 mu or less of other land and whose amount
of investment for comprehensive development falls within the limits of powers
for examination and approval of the people's government of the province,
autonomous region or municipality directly under the Central Government
(including the people's government or administrative committee of a special
economic zone, the same hereinafter), the project proposal shall be submitted
to the people's government of the province, autonomous region or municipality
directly under the Central Government for examination and approval.

    With respect to a tract development project which is to make use of more
than 1.000 mu of arable land or more than 2,000 mu of other land and whose
amount of investment for comprehensive development exceeds the limits of
powers for examination and approval of the people's government of the
province, autonomous region or municipality directly under the Central
Government, the project proposal shall be submitted, through the people's
government of the province, autonomous region or municipality directly under
the Central Government, to the State Planning Commission for examination,
verification and overall balancing and then to the State Council of the
People's Republic of China for examination and approval.

    Article 4  Foreign investors who intend to invest for tract development
shall, in accordance with the respective provisions of the Law of the People's
Republic of China on Chinese-Foreign Equity Joint Ventures, the Law of the
People's Republic of China on Chinese-Foreign Contractual Joint Ventures and
the Law of the People's Republic of China on Foreign-Capital Enterprises, form
a Chinese-foreign equity joint venture, or a Chinese-foreign contractual joint
venture or a foreign-capital enterprise (hereinafter referred to as a
"development enterprise") to engage in the development and management of the
tract of land.

    Development enterprises shall be governed and protected by the law of
China and all their activities shall abide by the laws and regulations of the
People's Republic of China.

    Development enterprises shall have the right to act on their own in
business operations and management in accordance with the law, but they shall
have no administrative power in their development areas. The relationship
between a development enterprise and other enterprises shall be of a
commercial nature.

    The State encourages the state-owned enterprises to form development
enterprises with foreign investors by using the right to the use of
state-owned land as investment or condition of co-operation.

    Article 5  Development enterprises shall obtain the right to the use of
the state-owned land in their development areas in accordance with the law.

    In assigning the right to the use of State-owned land to a development
enterprise, the people's government of the municipality or county where the
development area is located shall, in accordance with the laws and
administrative rules and regulations of the State on the administration of
land, rationally specify the bounds of the tract of land, the purpose of its
use, the term of the right, the assignment fee and other conditions, sign a
contract for assigning the State-owned land and submit it for approval in
accordance with the limits of powers for examination and approval with respect
to the assignment of the right to the use of State-owned land.

    Article 6  After the right to the use of State-owned land has been
assigned, the resources and objects buried thereunder shall continue to be
owned by the State. If it is necessary to exploit and utilize them, the
exploitation and utilization shall be administered in accordance with the
pertinent laws and administrative rules and regulations of the State.

    Article 7  A development enterprise shall draw up a tract development plan
or a feasibility study report which shall specify the overall targets and
respective targets for different stages, the specific details and requirements
in the actual development, and the plan to utilize the developed land.

    The tract development plan or feasibility study report shall, after
examination and verification by the municipal or county people's government,
be submitted to the people's government of the province, autonomous region or
municipality directly under the Central Government for examination and
approval. The examining and approving authorities shall organize the competent
authonties concerned to provide co-ordination concerning the construction and
management of the relevant public works.

    Article 8  If the development area is within the limits of a planned urban
area, the various items of development and construction shall be in conformity
with the requirements of city planning and be submitted to the administration
of the planning.

    The various items of construction in a development area shall be in
conformity with the laws, administrative rules and regulations and standards
of the State concerning environmental protection.

    Article 9  A development enterprise may transfer the right to the use of
the state-owned land only after it has carried out the plan of tract
development and satisfied all the conditions prescribed in the contract for
assigning the right to the use of the state-owned land. No development
enterprise that fails to invest for the development of the land in accordance
with the conditions prescribed in the contract for assigning the right to the
use of the state-owned land and the requirements of the plan for tract
development may transfer the right to the use of the state-owned land.

    The transfer or mortgage of the right to the use of state-owned land by
development enterprises and other enterprises, and the termination of the
right to the use of state-owned land shall be handled in accordance with the
laws and administrative rules and regulations of the State on the
administration of land.

    Article 10  A development enterprise may attract investors to the
development area to make investment, accept the transferred right to the use
of state-owned land and launch enterprises. Enterprises with foreign
investment shall be established in accordance with the respective provisions
of the Law of the People's Republic of China on Chinese-Foreign Equity Joint
Ventures, the Law of the People's Republic of China on Chinese-Foreign
Contractual Joint Ventures and the Law of the People's Republic of China on
Foreign-Capital Enterprises.

    The launching of enterprises in the development areas shall be in
conformity with the State policy concerning the investment in industries. The
State encourages the launching of technically advanced enterprises and
export-oriented enterprises.

    Article 11  The postal and communication undertakings in the development
areas shall be placed under the unified planning, construction and management
of the postal department. Or they may, with the approval of the province,
autonomous region or municipality directly under the Central Government, be
constructed with investment by a development enterprise; or the development
enterprise and the postal department may pool their investment for the
construction of communications facilities, which, in either case, shall be
transferred, after completion, to the postal department for operation, with
financial compensation to be given to the development enterprise in accordance
with the contract signed between the two parties.

    Article 12  Development enterprises that invest in public utilities of
their own such as power stations, heat stations and water plants within the
development area may operate the business of power, water and heat supplies
within the development area or hand them over to the local enterprises of
public utilities for operation. If the capacity of the public utilities is in
surplus, which renders it necessary to be supplied to places outside the
development area or to be connected to a network outside the development area
for operation, the development enterprise shall sign a contract with the local
enterprises of public utilities in accordance with the pertinent provisions of
the State and operate in accordance with the conditions prescribed in the
contract.

    If it is necessary for a development area to use water and power resources
from outside, the business thereof shall be operated by the local enterprises
of public utilities.

    Article 13  If a development area covers a coastal port or bay, or a river
port sector, the coastline or riverside line shall be placed under the unified
planning and administration of the State. The development enterprise may
construct and operate a special port area and wharf in accordance with the
unified planning of the competent state communication authorities.

    Article 14  No business activities or social activities that are banned by
the laws and administrative rules and regulations of the State may be engaged
within the development areas.

    Article 15  If special administrative measures are required in respect of
import and export administration and Customs administration for a development
area which is mainly intended for the operation of export processing
enterprises, these shall be submitted to the State Council of the People's
Republic of China for approval and specific measures of administration shall
be formulated by the competent authorities of the State.

    Article 16  The general administration, judicial administration, port
administration and Customs administration in a development area shall be
organized and exercised respectively by the competent authorities of the
State, the people's government of the 1ocality where the development area is
situtated, and the judicial organs that have jurisdiction.

    Article 17  Tract development with investment by firms, enterprises and
other economic organizations or individuals from the regions of Hong Kong,
Macao and Taiwan shall be governed with reference to these Measures.

    Article 18  These Measures shall be put into effect within the limits of
the specific economic zones, the open coastal cities and the open coastal
economic zones as of the date of promulgation.