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PROVISIONS OF THE STATE COUNCIL ON THE OPENING OF PORTS

    With the development of our foreign trade, international exchanges and
tourisms, more ports will be opened. These Provisions are formulated in order
to strengthen the work in the examination and approval for opening ports to
foreign countries.

    1. The term "ports" referred to in these Provisions denotes the harbours,
airports, stations, thoroughfares, etc. which are used for personnel, goods
or means of transport to enter or leave the country. The ports in our country
are divided into two categories. Category-1 ports refer to those ports which
have been opened upon the approval of the State Council (including those
administered by the Central Government and some of the ports administered by
the provinces, autonomous regions and municipalities directly under the
Central Government); category-2 ports refer to those ports which have been
opened upon approval by the people's governments at the provincial level and
are administered by them.

    2. The opening and closing of ports shall be announced and executed after
the examination and approval by the State COuncil or the people's governments
at the provincial level.

    3. Organs in charge of frontier inspection, Customs, harbour
superintendency, quarantine, quarantine for animals and plants, commodity
inspection, etc., as well as other port organs stipulated by State shall be
set up at the open ports according to the actual needs.

    4. Criteria for the division of the two categories of ports:

    (1) The following are category-1 ports:

    A. ports open to vessels, planes, vehicles and other means of transport of
foreign nationality used to transport passengers and goods into or out of
China through sea, land or air;

    B. ports for use only by Chinese vessels, planes and vehicles transporting
passengers and goods out of or into the country through sea, land or air;

    C. spots on the sea within our territorial waters where vessels of foreign
nationality are allowed to enter or leave for the purpose of delivering goods.

    (2) The following are category-2 ports:

    A. spots for loading and unloading, starting shipment and delivering goods
for Chinese vessels engaged in foreign trade where the formalities for exit
and entry inspection and examination are conducted by personnel sent from
other ports;

    B. ports where border trade in small amounts and contacts between people
are carried out with local governments of neighbouring countries;

    C. ports restricted to the exit or entry of the local residents in the
border areas.

    5. The procedures for report and approval:

    (1) Category-1 ports: the relevant ministries (or bureaus) or the people's
governments of the provinces where the harbours, wharves, stations, airports
and thoroughfares in question are situated shall, after consultation with the
military area commands, submit the application to the State Council for
approval, with copies of the application sent to the Leading Group for Port
Affairs of the State Council, the Headquarters of the General Staff of the
People's Liberation Army and the relevant competent departments.

    (2) Category-2 ports: The people's governments of the regions where the
ports in question are situated shall first obtain the agreement of the
military area commands concerned and the Navy, and hold consultations with the
units in charge of port inspection and examination. Applications shall then be
submitted to the people's governments at the provincial level for approval,
with copies of which sent to the Leading Group for Port Affairs under the
State Council and the relevant competent departments for the record.

    6. The following materials should be attached to application for opening a
port:

    (1) A feasibility report, the materials concerning the basic conditions of
the ports, the volume of passenger transport and freight volume in the last
three years, and the potential economic results and the prospects for
development.

    (2) The plan for the establishment of such port organs as offices in
charge of inspection and examination, offices for port affairs and branches of
the Bank of China, according to the task for transporting passengers and goods.

    (3) Plans for constructing inspection and examination grounds and for
building facilities for office work and the daily life of the staff members,
as well as investment budget and source of funds.

    7. Final check-up and acceptance before a port is opened:

    (1) Before a new port is opened, the establishment of organs and the
provisions of staff members of offices in charge of traffic safety, for
telecommunications, combined inspection and examination as well as facilities
for office work and daily life must go through the procedure of final check-up
and acceptance. New ports may be opened only after the facilities are finally
checked and accepted.

    (2) The office of the Leading Group for Port Affairs of the State Council
shall be responsible for the check-up and acceptance of category-1 ports. The
offices for port affairs in the provinces, autonomous regions and
municipalities directly under the Central Government or other competent
departments in charge of port affairs shall be responsible
for the check-up and acceptance of category-2 ports.

    8. The competence for examination and approval of applications for
temporarily entry and exit at the non-open areas of our country:

    (1) Applications by vessels of Chinese or foreign nationality for
temporarily entry or exit at non-open harbours or coastal waters of China
shall be examined and approved by the Ministry of Communications and reported
to the Leading Group for Port Affairs of the State Council for the record.
Betore the applications are submitted for approval, the agreement of the
competent authorities for military affairs, the local people's governments and
the relevant units in charge of examination and inspection shall be obtained,
and the details of the examination and inspection work shall be arranged.

    (2) Applications by civil planes of Chinese or foreign nationality for
temporarily take-offs or landings at China's non-open airports shall be
examined and approved by the Civil Aviation Administration of China, which,
however, should obtain the agreement of the competent authorities for military
affairs. Applications by non-civil planes shall be examined and approved by
the competent authorities for military affairs. Both kinds of applications
must be reported to the Leading Group for Port Affairs of the State Council
for the record. Before the applications are submitted for approval, the
agreement of the local people's governments and the relevant departments for
examination and inspection should be obtained, and the details of the
examination and inspection work shall be arranged.

    (3) Applications by vehicle and personnel of Chinese or foreign
nationality for temporarily entry and exit at our non-open border areas on
land shall be examined and approved by the people's governments at the
provincial level. Before the applications are submitted for approval, the
agreement of the relevant provincial military area command and the department
of public security shall be obtained, and the details of the examination and
inspection work shall be arranged.

    9. New ports shall be opened according to the relevant State or local
plans. The competent departments under the State Council, and the provinces,
autonomous regions and municipalities directly under the Central Government,
shall send plans (drafts) of opening ports to the Leading Group for Port
Affairs of the State Council two months before a planned year begins, with
copies sent to the State Planning Commission, the Ministry of Labour and
Personnel and the relevant competent departments of the units in charge of
inspection and examination.

    10. The sources of funds for building facilities for inspection and
examination at the open ports:

    (1) The Central Government shall be responsible for providing the funds
for the ports under its administration. The local people's governments shall
be responsible for providing funds for the ports under their administration.

    (2) Where grounds for combined inspection and examinations are needed in
such port construction projects (including projects with foreign investment
and Chinese and foreign equity joint-venture projects) as harbours, wharves,
railway stations and airports (including those which have been transformed
from military airports used for both military and civilian purposes) as well
as in such projects as newly-built operation areas at old ports and new
harbour areas in economic development zones, the construction of these grounds
shall be incorporated into the plans of the main projects of the prescribed
harbours, wharves, railway stations and airports. The investment needed for
the construction of these grounds shall be incorporated in the investment for
the main projects. The competent departments for port construction projects
shall organize the relevant units to carry out research on the investment
structure for the construction of the facilities for office work and for the
daily life of the staff members (including dormitories) of the units in
charge of inspection and examination and present itemized reports to the
State Planning Commission for examination and approval. After the approval is
obtained, the investment shall be transferred to the provinces, autonomous
regions and municipalities directly under the Central Government where the
ports are situated. The local people's governments shall be responsible for
the unified planning, designing and construction of the ports. Where military
airports are to be transformed into airports for both military and civilian
purposes, agreement should be obtained from the Air Force or the Navy
beforehand. In the case that the construction is to be carried out within the
airports, the units responsible for the construction may submit draft plans,
which shall be incorporated in the unified plans of the Air Force or the Navy.

    (3) Where the existing harbours, wharves, railway stations and airports
directly under the administration of various ministries (or bureaus) need to
be opened, the grounds for combined inspection and examination for these
ports shall, in principle, be set by making use of the existing buildings and
facilities. If it is necessary to extend the original buildings or build new
grounds for combined inspection and examination, the competent departments
for the harbour, wharves, railway stations and airports shall be responsible
for the investment. The investment for the construction of the facilities
for office work and the daily life of the staff members (including
dormitories) of the units in charge of inspection and examination shall, in
principle, be provided by their respective competent departments. In the
extreme cases of difficulty with respect to investment, the State or the local
governments may provide appropriate subsidies. The investment shall be turned
over to the relevant people's governments, which are held responsible for the
completion of the construction.

    (4) The local people's governments shall be responsible for the investment
and construction of the grounds for combined inspection and examination and
the infrastructure facilities for office work and the daily life of the staff
members (including dormitories) of the units in charge of inspection and
examination, which are needed in their newly-opened ports.

    (5) The construction plans and sources of investment for international
seamen's clubs shall be provided in accordance with the provisions of
Paragraphs (2), (3) and (4) of this Article.

    (6) The means of transport, instruments, equipment, etc. needed by the
units in charge of inspection and examination shall be provided by their
respective competent departments.

    (7) Within grounds for combined inspection and examination, the rooms for
office work and other related purposes (including water, electricity and
inner-city telephone) which have been assigned to the units in charge of
inspection and examination shall be provided free of charge by the business
units of the harbours, wharves, railway stations and airports (including those
used for both military and civilian purposes).

    11. These Provisions shall be interpreted by the office of the Leading
Group for Port Affairs of the State Council.

    12. These Provisions shall enter into force as of the date of
promulgation.