Laws of the People's Republic of China

State Administration of Radio, Film and Television

Order of the State Administration of Radio, Film and Television

No. 20

The "Interim Provisions on the Access of Operational Qualifications for Movie Production, Distribution and Projection", which were passed at the administration's executive meeting on September 28, 2003, are hereby issued, and shall go into effect on December 1, 2003.

Xu Guangchun, Director General

October 29, 2003

Interim Provisions on the Access of Operational Qualifications for Movie Production, Distribution and Projection

Article 1

The present Provisions are formulated in order to stimulate the non-government sectors to facilitate the development of movie industry, cultivate market subjects, govern market access, increase the overall strength and competitiveness of the movie industry, promote the boom of socialist movie industry, and meet the people's demands on their spiritual and cultural lives.

Article 2

The present provisions shall be applicable to the administration of qualification access for domestic state-owned and non-state-owned enterprises to operate movie production, distribution and projection and for wholly foreign-owned companies to take part in the operation of movie production and projection.

Article 3

The domestic state-owned and non-state-owned (not including wholly foreign-owned) entities are stimulated to establish movie production companies through joint venture or cooperation with the existing state-owned movie production entities, or to independently establish production companies. The overseas investors are permitted to establish movie production companies by means of joint venture or cooperation by having share of the existing domestic state-owned movie production entities.

(1)

The application requirements for establishing a joint venture or cooperative (not including wholly foreign-owned) movie production company are as follows:

1).

The registered capital shall be not less than 1 million Yuan; and

2).

Such documents as the application letter, the contract, the articles of association and the photocopy of the business license of each party to the cooperation, which was issued by the administration for industry and commerce, must be submitted.

(2)

The application requirements for establishing a Chinese-foreign joint venture or cooperative movie production company are as follows:

1).

The registered capital shall be not less than 5 million Yuan;

2).

The share of overseas investment in the registered capital shall not exceed 49%; and

3).

Such documents as the application letter, the contract, the articles of association and the photocopy of the business license of each party to the cooperation, which was issued by the administration for industry and commerce, must be submitted. (The foreign party may offer the financial documents of proof issued by the accounting firm).

(3)

The application requirements for a domestic state-owned or a non-state-owned (not including wholly foreign-owned) movie and television culture entity that has not got the "Permit for Movie Production" to independently found a movie production company are as follows:

1).

For the first time it produces a film, it shall apply to obtain the "Permit for Movie Production (for one film only)". And it must, at the time of application, submit to the State Administration of Radio, Film and Television a photocopy of the business license issued by the administration for industry and commerce, a proof on its capital, the main idea of the film to be produced and other relevant documents. It shall carry out the relevant formalities in the local administration for industry and commerce after it has obtained the "Permit for Movie Production (for one film only)";

2).

It has, by way of the "Permit for Movie Production (for one film only)", invested to produce two or more films;

3).

Its registered capital shall be no less than 1 million Yuan; and

4).

It must file such documents as the application letter, the photocopy of the business license issued by the administration for industry and commerce, the "Permit for Movie Production (for one film only)" and the "Permit for Public Projection of Films" for the two films it has invested to produce, and other relevant documents.

(4)

To any one that meets the requirements stated in Items (1), (2), and (3), the State Administration of Radio, Film and Television shall issue the "Permit for Movie Production".

The applicant shall carry the approval document and the "Permit for Movie Production" issued by the State Administration of Radio, Film and Television to carry out the relevant formalities in the local administration for industry and commerce at its/his locality.

Article 4

In the light of the "Regulation on the Administration of Movies", a movie production company that has obtained the "Permit for Movie Production" in accordance with Article 3 of the present provisions may have the same rights and obligations as those enjoyed by the existing state-owned movie production entities.

Article 5

The state-owned and non-state-owned (not including wholly foreign-owned) entities are encouraged to control the shares or to independently found film technology companies, improve the basic facilities and technical equipment for movie production and projection. While the wholly foreign-owned company are permitted to operate such business by having share, or to operate such business in the approved provinces and cities by controlling the shares. The application requirements are as follows:

(1)

The registered capital shall be no less than 5 million Yuan;

(2)

Such documents as the application letter, the contract, the articles of association, and the photocopy of the business license of each party to the cooperation issued by the administration for industry and commerce, must be submitted.

(3)

If the applicant meets the requirements mentioned above, it shall, after approval by the State Administration of Radio, Film and Television, carry the approval documents issued by the State Administration of Radio, Film and Television to the relevant department of the state to carry out the relevant approval formalities.

Article 6

Whichever entity engaged in the foreign-involved business as prescribed in Articles 3 and 5 shall carry out the relevant formalities in the light of the relevant laws and regulations of the state.

Article 7

The state-owned and non-state-owned movie and television culture entities are encouraged to found companies that exclusively operate the distribution of domestically produced films. The application requirements and procedures are as follows:

(1)

The registered capital shall be no less than 500,000 Yuan;

(2)

The applicant has been entrusted by a movie production entity to represent represented the distribution of two movies before or has been entrusted by a TV play production entity to distribute two TV plays;

(3)

The applicant must offer such documents as the application letter, the photocopy of the business license issued by the administration for industry and commerce, the proof on having been entrusted to represent the distribution of movies and TVs, and other relevant documents; and

(4)

If the applicant meets the requirements mentioned above and applies to the State Administration of Radio, Film and Television to establish a company exclusively running the distribution of domestically produced films, the "Operating Permit for Movie Distribution" shall be issued to him by the State Administration of Radio, Film and Television, which allows the applicant to distribute domestically produced films throughout the country. If the applicant applies to the local administrative department of movie at the provincial level to found a company exclusively operating the distribution of domestically produced films, the "Operating Permit for Movie Distribution" of the province shall be issued by the said local administrative department of movie, which allows the exclusive operation of domestically produced films. The applicant shall carry the "Operating Permit for Movie Distribution" of domestically produced films to the local administration for industry and commerce at its locality to carry out the relevant formalities.

Article 8

In the light of the "Regulation on the Administration of Movies", a company that has obtained, in accordance with Article 7 of the present provisions, the "Operating Permit for Movie Distribution" for exclusively running domestically produced films may have the equal rights and obligations to those enjoyed by an existing movie distribution company at the provincial level.

Article 9

In the light of the "Measures for the Annual Assessment of the Distribution and Projection of Domestically Produced Films", the State Administration of Radio, Film and Television shall, make the annual evaluation on the companies that have got the "Operating Permit for Movie Distribution".

Article 10

The movie circuit companies may be permitted to integrate either in an intense type or a loose type. They are encouraged to take the trans-provincial circuits as the basis for the reunification pursuant to the principle of separate management, but merge of the circuits on the basis of administrative regions are forbidden. The integration of circuits shall be submitted to the State Administration of Radio, Film and Television for approval.

(1)

The domestic state-owned and non-state-owned movie and television culture (excluding wholly foreign-owned) entities are encouraged to, by having or controlling share, invest in the existing circuit companies or independently established circuit companies.

1).

When an entity invests in an existing circuit company by having share (in a proportion below 49%), its investment must be no less than 30 million Yuan within three years, which shall be used to the construction and reform of the movie theaters in this circuit. If an entity invests in an existing circuit company by controlling share, the shareholding entity must invest no less than 40 million Yuan within three years, which shall be used to the construction and reform of the movie theaters in this circuit.

2).

In the case that an entity independently establishes an intra-provincial or national movie circuit company, the investment must be no less than 50 million Yuan within three years, which shall be used to the construction and reform of the movie theaters in this circuit.

3).

The relevant formalities shall be carried out for the establishment of a circuit company in the light of the provisions of the State Administration of Radio, Film and Television on establishment of movie circuits. The establishment of an intra-provincial circuit company shall be examined and approved by the administrative department of movie of the people's government of the province, autonomous region or municipality directly under the jurisdiction of the Central Government where the establisher is located, and be reported to the State Administration of Radio, Film and Television for record. The establishment of a trans-provincial circuit company shall be examined and approved by the State Administration of Radio, Film and Television.

(2)

In the light of the "Regulation on the Administration of Movies", the state-owned and non-state-owned entities and individuals are encouraged to, operate movie distribution and projection in the countryside throughout the country by various means, and also operate movie projection in schools and communities in cities by various means.

(3)

The state-owned and non-state-owned entities and individuals are encouraged to invest to build and reform movie theaters. The running of the movie projection business is requested to submit to the local administrative department of movie at the county level or above for approval, and the relevant formalities shall be carried out in the local administration for industry and commerce.

Article 11

The import of films shall be exclusively operated by the film import enterprises which have got approvals from by the State Administration of Radio, Film and Television. The distribution of imported films shall be undertaken by the distribution companies approved by the State Administration of Radio, Film and Television, which enjoy the right to distribute imported films nationwide.

Article 12

The film-producing entities are encouraged to, through various channels, export domestically-produced films which have obtained the "Permit for Public Projection of Films". The movie production entities are encouraged to participate in foreign film festivals (exhibitions). And the films in exhibition must be those that have obtained the "Permit for Public Projection of Films", and shall be reported to the State Administration of Radio, Film and Television for record in advance.

The report with the plan to hold a Chinese-foreign film exhibition or an international movie festival (exhibition) within the territory of China must be submitted to the State Administration of Radio, Film and Television for approval.

Article 13

There is an every-two-year inspection system that shall be applicable to the "Permit for Movie Production" and the "Operating Permit for Movie Distribution" awarded by the State Administration of Radio, Film and Television. The local administrative department of movie shall, within the scope of its administrative authority, apply an annual inspection system to the "Operating Permit for Movie Distribution" and the "Operating Permit for Movie Projection" it has issued.

Article 14

Any matter not specified in the present provisions shall be dealt with in the light of the "Regulation on the Administration of Movies" and the relevant provisions.

Article 15

The present provisions shall go into effect on December 1, 2003.