Laws of the People's Republic of China

CONTENTS

CHAPTER I GENERAL PROVISIONS

CHAPTER II THE MANAGEMENT OF LAND

CHAPTER III THE TERM AND FEE OF THE LAND USE

CHAPTER IV REDUCTION AND EXEMPTION OF LAND USE FEE AND SITE

DEVELOPMENT FEE

CHAPTER V PUBLIC UTILITIES

CHAPTER I GENERAL PROVISIONS

   Article 1. These Interim Regulations are formulated in the light of specific conditions and in accordance with the relevant laws and regulations of the People's Republic of China.

   Article 2. All the land, seabeaches, hills, waters, forests and other natural resources shall be put under centralized planning and administration of the Administrative Commission of the Economic and Technological Development Zone (hereinafter referred to as the Administrative Commission of the Development Zone).

   Article 3. All units and individuals shall comply with and carry out the overall development program of the Development Zone. No one may alter without approval the topography or landforms of the land within the confines of the Development Zone. The historical relics and sites shall be protected in accordance with the Pertinent rules of Shandong Province and the People's Republic of China.

   Article 4. Any unit or individual requiring the use of land shall apply for the approval of the Administrative Commission of the Development Zone and may use the land only after going through necessary procedures. The unit or individual that has been approved to use the land shall only have the right to use the land but shall not have the right of the ownership. Overt and covert sales and purchases of land as well as the renting out and unauthorized transfer of land are forbidden. The use, development or destruction of the resources of both upperground and underground shall not be allowed without approval. Legal sanction shall be imposed on those that offend against the present article.

   Article 5. Compensations for requisition of land dismantlement and rebuilding of houses and other structures in case of development shall be paid in accordance with the relevant rules of the People's Government of Shandong Province and the People's Republic of China.

   Article 6. The development project of land in the Development Zone may be carried out either by the Development and Construction Company or jointly by the company and foreign investment. The income and expenses for the development and use of land shall be under the centralized arrangement of the Development and Construction Company.

CHAPTER II THE MANAGEMENT OF LAND

   Article 7. The units and individuals requiring the use of land for any purpose shall file an application with the Administrative Commission of the Development Zone, present the documents and contracts approved by the department of the government concerned within their authority. After the approval, the planning and construction department shall check and assign the land and sign contract with the applicants for the use of land. Contracts signed directly with the units and individuals originally using the land shall be entirely null and void without the approval of the Administrative Commission of the Development Zone.

The contract for the use of land shall include the following terms: the location, area, use, term, fees, the way of paying fees, the rights and obligations of both parties and the sanctions for breaching contract etc.

   Article 8. From the date when the contract becomes effective, the user of land shall, within the period prescribed by the planning and construction development of the Development Zone, produce an overall blueprint for the construction of the land and the construction plan and the plan for putting it into operation. The project shall be started out and finished as scheduled in the plan. If the construction is unreasonably delayed, the right to the use of land shall be cancelled and all fees paid shall not be reimbursed.

   Article 9. All the structures within the confines of the land assigned shall conform to the relevant construction standards and the rules for fireproofing, civilized production and environment protection regulated by Shandong Province and the People's Republic of China. After their completion, the structures shall undergo final inspection and approval by the planning and construction department of the Development Zone jointly with other departments concerned before they are put into operation. Anyone who puts a structure into operation without approval shall be punished by a fine and shall pay compensation for the losses incurred and bear the liability when causing an accident.

   Article 10. The units and individuals using land may not demolish, alter, enlarge or rebuild any existing buildings and structures within the confines of the land in use without be permission of the planning and construction department.

   Article 11. The units and individuals using land shall go through the procedures stipulated in Article 7 when they need to change the area or usage of the land.

CHAPTER III THE TERM AND FEE OF THE LAND USE

   Article 12. The term of land used by the units and individuals investing in the Development Zone shall be determined through consultation basing on the category of the project, the amount of investment and the actual needs.

The maximum term shall be: for industrial use, 40 years; for commercial use, for food and service use, and for crop farming, animal husbandry, aquatic and poultry raising use, 20 years; for culture and education, scientific research, medical and health, commodity residential buildings, villas and office buildings use, 50 years; for tourist industry use, 30 years.

The units and individuals desirous of continuing to operate on the land which they have used after the expiry of the term stipulated may renew the agreement for land use with the check and approval of the department originally approving the agreement.

   Article 13. The units and individuals shall pay land use fee and site development fee for use of the land, be it newly required land or the site originally used by the enterprise.

   Article 14. The land use fees payed by the users shall be determined and classified by the Administrative Commission of the Development Zone according to different locations, trades and terms of land use. The fees per square metre per year (RMB) are as follows:

(1) For industrial use, 1 to 1.3 yuan;

(2) For commercial use and for food and service and tourist buildings use, 11 to 15 yuan;

(3) For commodity residential buildings and office buildings, 4 to 6 yuan; for villas use, 6 to 8 yuan;

(4) For open-air amusement structure, crop farming, animal husbandry, aquatic and poultry raising use, 0.3 to 0.4 yuan.

The rates for land use fees may not be changed within five years since the date of promulgation of these Interim Regulations and they may be readjusted late in the light of specific conditions.

   Article 15. The land use fees shall be paid annually from the date beginning to use the land as agreed upon in the contract. For the first calender year, the fees will be calculated as the amount for half a year if the land has been used for over half a year but less than one year. If the land has been used for less than half a year, the land use fees will be exempted. The land use fees shall be collected and managed by the responsible department authorized by the Administrative Commission of the Development Zone and they shall be used for the maintenance and construction of public utilities.

   Article 16. The site development fees (including land development fee, fee for houses dismantling and rebuilding and fee shared for public utilities necessary immediately for the enterprises, such as the supply of water, electricity, gas and heat, the drainage of water, the erection of communication and road and land leveling) shall be determined by the Administrative Commission of the Development Zone according to different locations, trades and terms of land use. The units and individuals that use the land shall pay the fees to the Development and Construction Company. If the units and individuals can pay all the fees within two years, no interest may be paid. Interest shall be paid for those unpaid within the two years, basing on the interest rate of the bank for loan of working fund.

   Article 17. The land use fee and site development fee shall be paid by the enterprise using the land or by the Chinese party when they are included in the investment of the Chinese party in an enterprise with foreign investment.

CHAPTER IV REDUCTION AND EXEMPTION OF LAND USE FEE AND SITE DEVELOPMENT FEE

   Article 18. If an enterprise can finish the capital construction in time or ahead of time agreed upon in the contract, the Administrative Commission of the Development Zone shall reduce, in the light of specific conditions, the land use fee payable by the enterprise within the period of capital construction.

   Article 19. For projects with highly advanced technology or with an urgent need in the domestic market, the land use fees may be reduced or exempted under the approval of the Administrative Commission of the Development Zone and subject to the examination and approval of the competent department of the city or relevant department above the city level.

   Article 20. Enterprises within the Development Zone with an export amount of over 50% of their production may be regularly reduced of or exempted from land use fees under the approval of the Administrative Commission of the Development Zone.

   Article 21. No land use fee may be collected for the projects of culture and education, scientific research, medical and health work and public interests.

   Article 22. Enterprises established in the Development Zone in 1986 and before, 1987 and 1988 shall be reduced of site development fee respectively by 30%, 20% and 10%, and shall enjoy the preferential treatment of exemption from land use fee respectively for five years, four years and three years.

   Article 23. Enterprises that really can not pay land use fee for the sake of force majeure or other special situations shall be exempted from the year's land use fee under the approval of the Administrative Commission of the Development Zone.

CHAPTER V PUBLIC UTILITIES

   Article 24. The units and individuals using land shall be responsible for building at their own expenses, within the confines of the land they use, roads and facilities for the supply of electricity, heat, water drainage, gas pipes and telecommunication equipments. They shall also pay the installation fees for their connections with all types of mainlines outside the confines of their land and provide other project investment outside of the enterprise but especially used by the enterprise.

   Article 25. The discharge and disposal of waste residue, waste gas and waste water within the confines of the land used by the units and individuals using land shall conform to the standards for discharge and requirement for disposal regulated in the environmental protection laws of the People's Republic of China. They shall be subject to the inspection and supervision of the environmental protection authorities of the cities where they are located and of Shandong Province, and they shall pay the disposal fee as required.

   Article 26. These Interim Regulations shall come into force on the date of promulgation.