Laws of the People's Republic of China

The Ministry of Foreign Economic Relations and Trade

Measures on Purchasing and Exporting Domestic Products to Balance Foreign Exchange Income and Expenses by Enterprises with Foreign Investment

the Ministry of Foreign Economic Relations and Trade

January 20, 1987

Article 1

These measures are hereby formulated in accordance with the relevant provisions of the State Council for the purpose of facilitating enterprises with foreign investment to balance their foreign exchange income and expenses. Upon the approval of their application, the above-mentioned enterprises are allowed to purchase and export non-resultant domestic products so as to make up for their foreign exchange deficiencies.

Article 2

In principle, enterprises with foreign investment should balance their foreign exchange income and expenses by exporting the resultant products of their own enterprises. However, enterprises which have run into temporary difficulties in this regard may apply, within a certain period of time, for purchasing and exporting nonresultant domestic products (except those subject to unified handling under the State regulations) so as to balance their foreign exchange income and expenses.

Article 3

An enterprise with foreign investment which complies with Article 2 of the measures and which needs to purchase and export non-resultant domestic products to balance its foreign exchange income and expenses should first apply to the local provincial department of foreign economic relations and trade, stating the sum of foreign exchange and the corresponding sum of Renminbi yuan needed the very year to purchase domestic products for export, and their names, specifications and quantities and their export channels.

Article 4

The approved quantity of non-resultant domestic products to be purchased by an enterprise with foreign investment should be limited within the amount of foreign exchange needed to make up for what is needed in its production and operation of the year and in helping the foreign investor to remit its earned profits abroad or in its termination and liquidation.

Article 5

Enterprises with foreign investment which are approved to purchase and export non-resultant domestic products to balance their foreign exchange income and expenses should mainly purchase products manufactured in the provinces, autonomous regions or municipalities directly under the Central Government where they are located. If they need to purchase them in other provinces, they should first have the approval of the provincial-level department of the foreign economic relations and trade of the relevant provinces, autonomous regions and municipalities.

Article 6

The domestic products purchased by enterprises with foreign investment for export in order to balance the enterprises' foreign exchange income and expenses must be shipped out of China and sold abroad, and must not be re-sold within China.

Article 7

Enterprises with foreign investment which are approved to purchase non-resultant domestic products to balance their foreign exchange income and expenses may export the products by themselves or by China's foreign trade corporations as their agents.

Article 8

Apart from approving enterprises with foreign investment to purchase domestic products for export, the people's governments of all provinces, autonomous regions, municipalities directly under the Central Government and municipalities (regions) separately listed on the State plan may, with the prerequisite of fulfilling State export targets, organize export of their local products through specialized foreign trade companies. Of the foreign exchange thus earned and retained by localities in accordance with the relevant State regulations, some will go to the suppliers of the products according to the stipulated ratios and the rest may be used by local people's governments to balance the foreign exchange income and expenses among the enterprises with foreign investment under the supervision of the local foreign exchange control departments.

Article 9

With regard to the products to be purchased and exported by enterprises with foreign investment as mentioned in Article 3 of the measures, and those to be exported by people's governments of provinces, autonomous regions, municipalities directly under the Central Government and municipalities (regions) separately listed on the State plan as mentioned in Article 8 , the purchase and export of those commodities which require State export licences or are subject to export quotas should be approved by the Ministry of Foreign Economic Relations and Trade. That of other commodities should be approved by provincial-level departments of foreign economic relations and trade and then be submitted to the Ministry of Foreign Economic Relations and Trade for record.

The above-mentioned approving departments should give replies for the applications within one month beginning from the date of receiving them. Among the approved export products, the export licences required for those that should be exported with licences should be issued in accordance with the Measures of the Ministry of Foreign Economic Relations and Trade on Applying for Import and Export Licences by Enterprises with Foreign Investment.

Article 10

These measures shall enter into force as of the date of promulgation.