Laws of the People's Republic of China

the State-owned Assets Supervision and Administration Commission of the State Council

Order of the State-owned Assets Supervision and Administration Commission of the State Council

No. 10

The Measures for the Administration of Development Strategies and Plans of Central Enterprises (for Trial Implementation), which were deliberated and adopted at the 21st executive meeting of the State-owned Assets Supervision and Administration Commission of the State Council, are hereby promulgated and shall go into effect as of January 1, 2005.

Director of the State-owned Assets Supervision and Administration Commission, Li Rongrong

November 26, 2004

Measures for the Administration of Development Strategies and Plans of Central Enterprises (for Trial Implementation)

Article 1

In order to regulate the formulation and administration of development strategies and plans of central enterprises, improve the scientificity and democracy of development strategies and plans of central enterprises and perform the contributor's duties according to law, the present Measures are formulated in accordance with such laws and regulations as the Company Law of the People's Republic of China and the Interim Regulations on the Supervision and Administration of State-Owned Assets of Enterprises.

Article 2

The central enterprises (hereinafter referred to as the enterprises) as referred to herein are enterprises for which the State-owned Assets Supervision and Administration Commission (hereinafter referred to as the SASAC) performs the contributor's duties.

Article 3

The development strategies and plans of the enterprises as referred to herein are the directional, holistic and overall orientation, development goals and the corresponding plans for implementation during a given future period of time, which are made by the enterprises for the purpose of long-term survival and development thereof pursuant to the national development programming and industrial policies as well as on the basis of the analysis of the status quo and trends of exterior environment and interior conditions.

Article 4

The administration of development strategies and plans of the enterprises shall refer to the examination and approval of the formulation procedure, and the contents and the supervision over the implementation of the development strategies and plans of the enterprises by the SASAC in accordance with the law and with reference to the contributor's duties.

Article 5

The SASAC shall adhere to the following principles for the administration of development strategies and plans of the enterprises:

(1)

to perform the contributor's duties according to the law;

(2)

to respect the legal rights and interests of the enterprises;

(3)

to promote the strategic adjustment of the layout and structure of the state-owned economy, and instruct the enterprises to carry out their structural adjustments;

(4)

to be objective, impartial, scientific and to plan as a whole; and

(5)

to enhance work efficiency, observe professional ethics, and strictly keep state secrets and business secrets.

Article 6

The enterprises shall determine the working organs responsible for the formulation of development strategies and plans, set up the corresponding working systems and report to the SASAC for archival filing.

Article 7

An enterprise shall work out the development strategy and plan thereof in accordance with the prescriptions of the present Measures. An enterprise may, if possible, establish a decision-making committee of development strategy and plan.

Article 8

The development strategy and plan of an enterprise shall include a medium-term development plan of three to five years and a long-term goal of ten years. The priority of formulation shall be given to the 3-5 year development plan, which shall implement rolling adjustment timely according to the changes and development of exterior environment and interior conditions of the enterprise.

Article 9

A development strategy and plan of an enterprise shall mainly contain the following:

(1)

the status quo and developmental environment, including the basic information, analysis of development environment and competitive power of the enterprise;

(2)

development strategies and guiding ideology;

(3)

development goals;

(4)

the emphasis of development and adjustment and the 3-year plans for implementation;

(5)

safeguard measures for the implementation of the plan; and

(6)

any other contents required.

Article 10

When working out the development strategy and plan, an enterprise may refer to the General Outline for Formulation of the Development Strategies and Plans of Central Enterprises as formulated by the SASAC and may make proper adjustments in the light of the actual conditions but the items as brought forward thereby shall be included.

Article 11

An enterprise shall submit the draft of development strategy and plan within the time limit as specified by the SASAC. The contents submitted shall include the draft text of development strategy and plan and an explanation of the formulation.

Article 12

The SASAC shall conduct the examination and approval on the drafts of development strategies and plan of the enterprise and offer feedback on the examination and approval opinions to the enterprise within the time limit.

Article 13

The SASAC shall examine and approve the content of a development strategy and plan submitted by an enterprise mainly in the following aspects:

(1)

whether or not it complies with the national development planning and industrial policies;

(2)

whether or not it complies with the strategic adjustment of the layout and structure of the state-owned economy;

(3)

whether or not it gives prominence to the main business or promotes the core competitive power of the enterprise; and

(4)

whether or not the principles of "giving priority to efficiency" and "sustainable development" have been adhered to.

Article 14

A solely state-owned enterprise or solely state-owned company shall revise the development strategy and plan according to the examination and approval opinions of the SASAC.

Article 15

The stockholders' representatives and directors as assigned by the SASAC in the state controlling and state holding enterprises shall sufficiently state examination and approval opinions of the SASAC at the shareholders' meetings or boards of directors of the enterprises.

Article 16

An enterprise shall submit a certified true text of the development strategy and plan to the SASAC for archival filing after making revisions to the development strategy and plan in accordance with the internal decision-making process.

Article 17

While in the process of implementing the development strategy and plan, an enterprise shall work out an annual plan, make contrastive evaluation between the implementation and the development targets and make adjustments timely.

Article 18

The SASAC shall bring the targets and implementation of development strategies and plans of enterprises into the operation achievement assessments that it shall carry out on the central enterprises principals.

Article 19

The present Measures shall go into effect as of January 1, 2005.

Attachment:Instructions of Formulation of the Measures for the Administration of Development Strategies and Plans of Central Enterprises (for Trial Implementation)

The Measures for the Administration of Development Strategies and Plans of Central Enterprises (for Trial Implementation) (hereinafter referred to as the Measures for the Administration of Planning) as formulated by this Commission have passed the examination and are promulgated in accordance with the legislative procedure. The present Measures are formulated according to such laws and regulations as the Company Law of the People's Republic of China and the Interim Regulations on the Supervision and Administration of State-owned Assets of Enterprises as well as in the light of the actual conditions of central enterprises.

I.

Formulation Background of the Measures for the Administration of Planning

(I)

The administration of development strategies and plans of the enterprises forms important part of supervision and administration of the contributor.

Having a bearing upon the long-term development of the enterprise and the value maintenance and appreciation of state-owned assets, the development strategy and plan of an enterprise belongs to a significant decision of the enterprise. As the contributor, the state-owned assets supervisory and administrative organ shall perform contributor's duties to the development strategies and plans of the contributed enterprises, conduct supervision and administration and maintain the owner's rights and interests, all these are the basic requirements for ensuring the full performance of the contributor's duties and the realization of the combination of managing assets, managing persons and managing affairs, and the unification of the rights, duties and obligations.

(II)

The administration of development strategies and plans of the enterprises is an essential work.

The development strategy and plan is the overall designing of an enterprise to seek for the long-term survival and sustainable development when it is confronted with a management environment with violent changes and serious challenges, is the concentrated embodiment of development strategic ideology of the enterprise, and is the basis for the enterprise to work out various plans and for the SASAC to conduct office-term assessments on the enterprise principals. To strengthen the administration of development strategy and plan is a fundamental task both for the enterprise and for the SASAC to supervise and administrate enterprises. In order to enhance the ability to handle affairs, reduce randomness and blindness in the work and avoid interference in the decision-making power of the enterprise in operation and management, the essential work shall be strengthened for the administration of development strategy and plan of the enterprises, the rules and regulations shall be established and improved and the standardized administration shall be carried out.

(III)

The administration of development strategies and plans of the enterprises and the strategic adjustment of the layout and structure of the state-owned economy shall be an organic whole.

The SASAC shall, according to the requirements of the strategic adjustment of the layout and structure of the state-owned economy, study and put forward the direction, principles, emphasis and working thoughts of the strategic adjustment of the layout and structure of central enterprises as the working guidelines for formulating the development strategies and plans of the enterprises. The enterprises shall, according to the overall thoughts of the adjustment of the layout and structure of central enterprises and their own conditions, put forward the development orientation and strategies of their own. These two shall be complementary to each other as an organic whole.

(IV)

The implementation of the Measures for the Administration of Development Strategies and Plans of Central Enterprises shall be beneficial to the strengthening of the enterprise's status as a subject of market economy.

The SASAC shall carry out its administration on the significant investments of the enterprises, which is the important duty of the contributor. Confronted with increasingly severe market competition, the enterprises shall intensify the strategic research and management and correctly control its own developmental direction so as to seize opportunities, speed up the development and evade investment risks at the same time. The SASAC shall carry out the supervision over and administration on the significant investments of the enterprises mainly based on the development strategies and plans of enterprises, and all investments in main business, within the plan and in line with the developmental direction of an enterprise shall be decided by the enterprise on its own initiative, and the SASAC shall carry out the administration of archival filing. All investments in sideline businesses and outside the plan shall be strictly supervised and administrated. It is beneficial to the strengthening of the enterprises' status as subjects of market economy in order to create a more relaxed environment for the enterprises.

(V)

Principles for formulation of the Measures

During the course of formulation of the Measures for the Administration of Planning, we mainly abided by the following principles:

1.

to respect the legitimate rights and interests of the enterprises and promote development of the enterprises; and

2.

to exercise administrative powers according to law and establish lawful and efficient administrative procedures.

(VI)

Process of formulation of the Measures for the Administration of Planning

The formulation of the Measures has undergone one year and five months. During the course of formulation, the working methods such as the collective discussion and widely soliciting opinions were adopted. The text of the Measures has gone through big amendments and improvements for more than ten times.

II.

Several Issues Specified by the Measures for the Administration of Planning

(I)

The enterprise is the subject to formulate and implement the development strategy and plan.

The Measures for the Administration of Planning have embodied that the enterprise shall be the subject to formulate and implement the development strategy and plan. The enterprise shall be responsible for formulating and implementing the development strategy and plan. The SASAC shall carry out examination and approval on the development strategy and plan, which mainly includes the examination and approval of formulation procedures and contents and the supervision over the implementation of the development strategy and plan of the enterprise.

(II)

The principles that shall be abided by for the administration of development strategies and plans of the enterprises

In the administration of development strategies and plans of the enterprises, the following principles prescribed in the Measures for the Administration of Planning shall be always abided by: First of all, the development strategies and plans formulated by the enterprises shall conform with the national development planning and industrial policies, shall be of benefit to the strategic adjustment of the layout and structure of the state-owned economy, and shall give prominence to the main business and sustainable development. Through the examination and approval conducted on the development strategies and plans of the enterprises, the directions of adjustment and goals of businesses to be integrated and optimized shall be specified as well as the main business of the enterprise, so that the steady development of enterprises shall be promoted and the enterprises shall grow stronger and greater. Secondly, the SASAC shall abide by the said principles when it examines and approves the development strategies and plans of the enterprises and carries out the supervision over and administration on the implementation.

(III)

The Measures for the Administration of Planning have specified the working procedures for the SASAC in the administration of development strategies and plans of the enterprises:

1.

An enterprise shall formulate the development strategy and plan of its own pursuant to the requirements and report the draft of development strategy and plan to the SASAC;

2.

The SASAC shall examine and approve the development strategies and plans of the enterprises and offer feedback on the examination and approval opinions to the enterprises;

3.

An enterprise shall submit the official text of development strategy and plan to the SASAC for archival filing after making revisions; and

4.

An enterprise shall implement the development strategy and plan. The SASAC shall include the targets and implementation of the development strategy and plan of the enterprises into the operation achievement assessments it shall conduct on the enterprise principals.

III.

Structure and Main Contents of the Measures for the Administration of Planning

(I)

The Measures include the purposes of the legislation, scope of application, specific prescriptions and the date of entry into force pursuant to the requirements of legislation rules of the SASAC.

(II)

The Measures are not divided into chapters and sections in accordance with the prescriptions of the Regulations on the Procedures for Formulation of Regulations. The structure of the text is arranged according to the framework of such six parts including general provisions, institutional framework, formulation of development strategy and plan of the enterprise, examination and approval, implementation and supplementary provisions. The contents mainly include:

1.

the legislative authority of the formulation and the scope of application of the Measures;

2.

the definitions of the development strategies and plans of the enterprises and of the administration of the development strategies and plans of the enterprises;

3.

the principles that shall be adhered to and the contents that shall be complied with by the SASAC for the administration of planning;

4.

the obligations and duties that shall be performed by the enterprises, such as setting up working institutions and corresponding work systems, etc.;

5.

the main contents that shall be contained in the development strategies and plans of the enterprises. The Measures prescribe the main contents which shall be contained in the development strategies and plans of the enterprises under common circumstances, and to match them, the General Outline for Formulation of the Development Strategies and Plans of Central Enterprises (which has been distributed to the central enterprises at an earlier date) has been formulated; and

6.

the procedures for the administration of development strategies and plans of the enterprises, namely: submission, examination and approval, the enterprise's treatment of examination and approval opinions , archival filing (submission of certified true texts), implementation and adjustment, etc..

IV.

Implementation of the Measures for the Administration of Planning

The present Measures shall go into effect as of January 1, 2005. The administration of development strategies and plans of the enterprises regulated by them is exploratory, therefore the experiences shall be continuously summed up in the administration work ahead so as to improve the present Measures gradually and make timely revisions on them according to the changes of circumstances.