Laws of the People's Republic of China

MEASURES RELATING TO IMPORT SUBSTITUTION OF
MECHANICAL AND ELECTRICAL PRODUCTS MANUFACTURED
BY CHINESE-FOREIGN JOINT VENTURES AND
CHINESE-FOREIGN COOPERATIVE VENTURES

(Promulgated by State Economic Commission and
approved by State Council in October, 1987)

 

SUBJECT: IMPORT & EXPORT LICENSING & ADMINISTRATION

ISSUING-DEPT: STATE ECONOMIC COMMISSION

ISSUE-DATE: 10/01/1987

IMPLEMENT-DATE: 10/01/1987

LENGTH: 856 words

TEXT:

[Article 1] These Measures are formulated pursuant to the "Measures Relating to the Import Substitution by Products Manufactured by Chinese-Foreign Cooperative Ventures" which is promulgated by the State Planning Commission and approved by the State Council.

[Article 2] Chinese-Foreign joint venture and cooperative venture enterprises which meet the following requirements can apply for listing of their products in the "Mechanical and Electrical Import Substitutes Catalog" (hereinafter referred to as Catalog):

(1) When the Chinese-Foreign joint venture and cooperative venture enterprises need assistance to solve temporary problems in balancing their foreign exchange accounts given that they are enterprises equipped with advanced technology, engaged in the development of new products and generation transition of old products (these enterprises are hereinafter referred to as enterprise/enterprises).

(2) Apart from being able to satisfy the requirements of domestic endusers and the prices no higher than similar foreign imports (inclusive of import duties paid), the capacity and quality of the mechanical and electrical products manufactured by the enterprises shall be on par with those of similar foreign imports.

(3) The mechanical and electrical products manufactured by the enterprises are items that otherwisewould be imported by domestic endusers.

(4) They are enterprises that have performed their export obligation as stipulated in their contracts for which approval has been given.

[Article 3] The parties concerned in the enterprises which plan to apply for import substitution treatment shall give a full evaluation and assessment of the possibility of carrying out import substitution in their feasibility studies which are to be submitted for examination and approval before the joint venture or cooperative venture operations are established.

[Article 4] After an enterprise has begun operation, it can apply to the corresponding government department-in-charge to have its products listed in the Catalog if it can prove that its products are qualified under the requirements stated in Article 2 of these Measures.  Copies of the application should be sent to the State Economic Commission, Ministry of Foreign Economic Relations and Trade (MOFERT) and the local economic commission where the enterprise concerned is located.  The following documents are required when submitting the application: a mechanical and electrical import substitute application from, a product quality certificate and a market demand survey.  The corresponding government department-in-charge should examine the documents received and give its opinion (concerning the application) and then submit the documents to the State Economic Commission and the State Foreign Exchange Administration for approval.  A decision should be made within two months from the date the application is made and the State Economic Commission should announce the results.

[Article 5] Domestic endusers who want to purchase import substitutes listed in the Catalog can do so directly with the pertinent enterprises.  The China Machine and Electrical Equipment Tendering Company (or other tendering companies authorized by the State Economic Commission) can, according to the pertinent measures, on behalf of the domestic endusers invite tenders for the purchase of the import substitutes on the domestic market.

[Article 6] An enterprise can charge the domestic enduser a certain amount of foreign exchange for import substitutes listed in the Catalog subject to approval by the foreign exchange administration departments.  It should reduce the amount (foreign exchange) it charged each year as it increased the degree of localization of the components and parts of its products as required in the contract and feasibility study.

[Article 7] Knockdown kits, components, spare parts, auxiliaries are raw materials imported by enterprises for the production of import substitutes can be put under the supervision of the Customs as bonded goods.  Enterprises shall enjoy reduction or exemption of import duties on materials and parts imported for the production of products which are sold to domestic endusers who happen to have been enjoying reduction or exemption of import duties for importing similar mechanical and electrical products from foreign suppliers directly.

[Article 8] The State Economic Commission shall be responsible for interpreting these Measures.

[Article 9] These Measures shall come into force on the date of promulgation.

Appendix: The Mechanical and Electrical Import Substitutes Catalog (as of October):

(1) Producer: Shanghai-Foxboro Co Ltd Product: SPECTRUM Distributed Control System (includes on-the-spot input and output facilities, 1024-bit data collection facilities, sequential and programable control facilities, CRT operation station and industry control machine).

(2) Producer: China-Schindler Elevator Co Ltd, Shanghai Elevator Works Product: MICONIC-B AC speed governing elevator (speed specification: 1.6 m/s, load: 1,000 kg)