Laws of the People's Republic of China

The State General Bureau of Radio, Film and Television, the Ministry of Foreign Trade and Economic Cooperation and the Ministry of Culture

Decree of the State General Bureau of Radio, Film and Television, the Ministry of Foreign Trade and Economic Cooperation and the Ministry of Culture

No.3

"The Interim Provisions Concerning Foreign-Invested Cinemas" is promulgated and shall come into force as of the date of promulgation.

Xu Guangchun, General Director of the State General Bureau of Radio, Film and Television

Shi Guangsheng, Minister of the Ministry of Foreign Trade and Economic Cooperation

Sun Jiazheng, Minister of the Ministry of Culture

October 25, 2000

Interim Provisions Concerning Foreign-invested Cinemas

Article 1 .

These provisions have been formulated according to relevant such as the Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures, Law of the People's Republic of China on Chinese-Foreign Contractual Joint Ventures, the Provisions on the Regulations of Film, in order to meet the needs of openness and reform, to attract foreign capital, to introduce advanced technology and equipment, and to promote the prosperity of the film industry.

Article 2 .

These provisions apply to the establishment of Chinese-foreign equity joint venture and Chinese-foreign cooperative joint venture, by foreign companies, enterprises and other economic organizations and individuals (hereafter referred to as foreign parties to a joint venture) with Chinese companies and enterprises (hereafter referred to the Chinese parties to a joint venture) in China, which are engaged in the construction and renovation of the cinemas, and film projections, in accordance with the principles of equality and reciprocity and under the approval of the Chinese government.

Article 3 .

No cinema is allowed to be solely funded by foreign investors.

Article 4 .

The establishment of foreign-invested cinemas shall conform to the following conditions:

1.

It shall conform to the layout and planning of the local cultural facilities;

2.

The registered capital shall be no less than RMB10 million;

3.

It shall have a fixed location of business for film projection;

4.

The Chinese-foreign equity joint venture cinemas or cooperative joint venture cinemas shall not be named as foreign film and television (media), or cinemas;

5.

The ratio of investment of a Chinese party to a Chinese-foreign equity joint cinema shall not be less than 51 percent; decision-making power shall rest on the Chinese party;

6.

The period of joint investment and cooperation shall not be more than 30 years;

7.

It shall conform to relevant Chinese laws, administrative regulations or other stipulations.

Article 5 .

If a Chinese party to a joint venture cinema invests with state-owned assets (except cash investment), it shall make an evaluation of these invested assets in accordance with the relevant regulations concerning the evaluation of state-owned assets, and then submit to the provincial departments in charge of the management of state-owned assets for their confirmation.

Article 6 .

The establishment of foreign-invested cinemas shall undertake the following procedures of reporting and approval:

1.

The Chinese party shall file an application with the provincial authorities in charge of trade and economic cooperation where the enterprise is located, and submit the following documents:

(1)

The written application for the project to establish foreign-invested cinemas;

(2)

The Chinese party's business license as an enterprise with legal person status, certificate of the right to use the site of the cinema, certificate of credit worthiness.

(3)

Foreign investor's business license, certificate of creditworthiness, and financial statements issued by an accounting firm.

(4)

The designated names of the foreign-invested cinemas preliminarily approved by the administrative authorities in charge of industry and commerce.

(5)

The feasibility study report, contract and articles of association;

(6)

Other documents required to be provided in accordance with laws and regulations or by the authorities in charge of examination and approval.

2.

After the provincial administrative department in charge of foreign trade and economic cooperation in charge of the site consults with the provincial administrative departments in charge of cinemas, the department shall submit their approvals to the Ministry of Foreign Trade and Economic Cooperation. After consulting with the State General Bureau of Radio, Film and Television as well as the Ministry of Culture, the Ministry of Foreign Trade and Economic Cooperation will, in accordance with the relevant laws and regulations concerning foreign investment, examine and approve these applications, and then grant the Certificate for Approving the Establishment of Enterprises with Foreign Investment to these enterprises.

3.

The foreign-invested cinemas shall, within one month as of the receipt of the approval certificate, register the certificate with the state authorities in charge of industry and commerce.

4.

After completing construction and renovation of the cinema, the foreign-invested cinemas shall be checked and approved by the relevant qualified authorities. They shall then apply to the provincial administrative authorities in charge of cinemas for the Business License for Film Projection, using their Certificate for Approving the Establishment of Foreign-Invested Enterprises and Business License. Only after obtaining the Business License for Film Projection can foreign-invested cinemas conduct film screenings.

Article 7 .

If the established foreign-invested cinemas change their stock rights and the total amount of investment, they shall handle these matters in accordance with the procedures in Article 6 hereof.

Article 8 .

Foreign-invested cinemas shall abide by the relevant State laws and regulations, conduct business in accordance with the Provisions on the Regulation of Film, and accept the supervision and administration of the relevant authorities. The films shown in the cinemas shall have the Film Projection License granted by the State General Bureau of Radio, Film and Television. The cinemas shall not show smuggled or pirated films, as well as project any videos, VCDs and DVDs for the purpose of seeking profits.

Article 9 .

If foreign-invested cinemas conduct other entertainment services, they must abide by the relevant State regulations.

Article 10 .

The construction and renovation of cinemas, or film projections by investors from the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan in any other province, autonomous region, or municipality of China shall be handled with reference to these provisions.

Article 11 .

These provisions shall come into force as of the date of the promulgation.