Laws of the People's Republic of China

    Artilce 1  These Provisions are formulated in accordance with the
Foreign Trade Law of the People's Republic of China for purposes of deepening the reform of the foreign trade system, sustaining and guiding
the sound development of the nonpublic economy, and actively promoting
the privately-owned production enterprises or scientific research academies
and institutes in participating in international competition.

    Article 2  The privately-owned production enterprises and scientific
research academies and institutes referred to in these Provisions mean the
production enterprises or scientific research institutions of capital under
private ownership or holdings by private capital registered according to law
(including sole-proprietorship enterprises, partnership enterprises, limited
liability companies and joint-stock companies limited).

    Article 3  Application Qualifications

    I.A privately-owned production enterprise possessing the following
requisites simultaneously may apply for rights of self-managed import
and export:

    (1)an enterprise which has already entered into registration
at the organ of industry and commerce administration of the locality
wherein the production enterprise is located, has obtained a business
licence and has a registered capital and net assets both more than
RMB 8.5 million Yuan;

    (2)the annual sales revenue and volume of export supply amount to more
than RMB 50 million Yuan and US$ 1 million respectively for two consecutive
years(the annual sales revenue and volume of export supply of an enterprise
for electrical and mechanical products amount to more than RMB 30 million
Yuan and US$ 500000 respectively); and

    (3)having specialized personnel required for self-managed import-export
business operations.

    II.A privately-owned scientific research academy or institute(including
new and high-tech enterprise) possessing the following requisites
simulatneously may apply for rights of self-managed import and export:

    (1)an academy(institute or enterprise) that has already entered into
registration at the organ of industry and commerce administration of the
locality wherein it is located, has obtained a business licence and has
a registered capital and net assets both more than RMB 8.5 million Yuan;

    (2)the annual sales revenue of the scientific research academy or
institute amounts to more than RMB 3 million Yuan, the annual sales revenue
of the new and high tech enterprise confirmed by the competent department
of science and technology above the provincial level amounts to more than
RMB 30 million Yuan(the annual sales revenue of the development-type
new and high-tech enterprise amounts to more than RMB 10 million Yuan); and

    (3)having specialized personnel required for self-managed import-export
business operations.

    Article 4  Application Materials Submission

    1.An application report for rights of self-managed import and export
of the privately-owned production enterprise or scientific research academy
or institute;

    2.Articles of association of the enterprise or academy(institute);

    3.The business licence of the legal entity(photocopy of the original);

    4.Certification of the enterprise passing annual inspection for two
consecutive years and certification of assets issued by the organ of industry
and commerce administration;

    5.A catalog of commodities for self-managed import and export
under application;

    6.Certification of export supply issued by the foreign trade enterprise
for export agency;

    7.Certification of tax payment issued by the tax department above the
county level; and

    8.In the case of a new and high-tech enterprise, a certificate of new
and high-tech enterprise issued by the competent department of science and
technology is required to be produced.

    Article 5  Application and Examination and Approval Procedures

    A privately-owned production enterprise or scientific research academy
(institute) shall file an application in writing with the competent department
of foreign economic relations and trade of the locality of registration
which shall, upon examination of the competent deprtment of foreign economic
relations and trade of the provinces, autonomous regions, municipalities
directly under the Central Government and municipalities under direct
planning by the state, be submitted to the Ministry of Foreign Economic
Relations and Trade(hereinafter referred to as MFERT for abbreviation)
for examination and approval.

    Article 6  The privately-owned production enterprise or scientifc
research academy(institute) that has obtained the rights of self-managed
import and export upon approval shall, on the strength of the approval
document, go through the relevant formalities at departments of customs,
entry and exit inspection, foreign exchange control, industry and commerce
administration and taxation, and apply for the obtainment of a certificate of qualification of import-export enterprise from the competent department of foreign economic relations and trade of the provinces, autonomous regions,
municipalities directly under the Central Government and municipalities
under direct planning by the state, then conduct self-managed import-export
business operations. Separation, amalgamation and change in the catalog of commodities for self-managed import and export of a privately-owned production
enterprise or scientific research academy(institute) with the obtainment of rights of self-managed import and export must be submitted to MFERT for
approval; change in enterprise name shall be subject to advance verification
and approval of the name by the organ of industry and commerce administration
and submitted to MFERT for corresponding formalities of approval; cases of
nullification shall be submitted to MFERT for the record.  

    Article 7  Rights and Obligations

    The rights enjoyed by and obligations to be undertaken by the privately-
owned production enterprise and scientific research academy(institute) with
the obtainment of rights of self-managed import and export upon approval
are as follows:

    1.It may directly engage in self-manged import-export business operations.

    2.It may, within the approved import-export business scope, operate
export business of the self-produced products of the said enterprise or
academy(institute) and operate import business of machinery and equipment,
spare parts and components, raw materials and auxillary materials required
for the production and scientific research of the said enterprise or academy
(institute).

    3.It may apply to join the chamber of commerce for import and export,
participate in relevant foreign economic and trade activities organized by
the competent departments of foreign economic relations and trade of the
state or the locality, and receive guidance from the state foreign trade
policy.

    4.It may, in conducting self-managed import-export trade activities,
enjoy identical treatment enjoyed by publicly-owned production enterprises
or scientific research academies(institutes) with self-managed import-
export business operations.

    5.It shall abide by the policy, laws and regulations relating to
foreign trade.

    6.It shall subject itself to the supervision, administration and
coordination of the competent department of foreign economic relations
and trade and the chamber of commerce for import and export.

    7.It shall actively promote export for foreign exchange earning.

    Article 8  The competent departments of foreign economic relations
and trade at all levels should, with respect to the conduct of import-
export business by privately-owned production enterprises or scientific
research academies(institutes) with the obtainment of rights of self-
managed import and export, render active support, strengthen guidance
and do a good job in providing services and standardized administration.

    Article 9  Privately-owned production enterprises or scientific research
academies(institutes) with the obtainment of rights of self-managed import
and export shall, in the event of violation of the provisions of relevant
state policies, be imposed the peanlties of meteing out criticism in a
circular, administering a warning or revocation of rights of self-managed
import and export.

    Article 10  The Ministry of Foreign Economic Relations and Trade shall
be responsible for the interpretation of these Provisions.

    Article 11  These Provisions shall come into force as of January 1, 1999.