Laws of the People's Republic of China

Urgent Circular of the Ministry of Commerce on Strengthening the Statistical Work of China's Outward Foreign Direct Investment

Shang He Han [2006] No. 66

The commerce departments of all provinces, autonomous regions, municipalities directly under the central government, cities specifically designated in the state plan and Xinjiang Production and Construction Corps, and the relevant enterprises directly under the central authorities,

Since the implementation of the Statistical System of Direct Overseas Investment in effect as of January 2003, the statistical work of China's outward foreign direct investment, under the active cooperation and earnest support of the commerce departments at each level and relevant enterprises and entities, has been getting along smoothly. The Ministry of Commerce has so far, in conjunction with the National Bureau of Statistics, promulgated the Statistical Bulletin of China's Outward Foreign Direct Investment (Non-Finance Part) of 2003, 2004 and 2005. China's outward foreign direct investment statistics data have been drawing wide attention from the government departments, research institutions, experts and scholars throughout the world. For the purpose of further doing well the statistical work of China's outward foreign direct investment in the next phase, the following requirements are hereby set forth.

1.

Each entity shall seriously and actively implement the Statistical System of Direct Overseas Investment, attach great importance to the statistical work of the outward foreign direct investment, intensify the publicity of the statistical system, continuously improve the quality of the statistical data and strengthen the timeliness and accuracy of data report.

2.

The commerce departments at the provincial level shall communicate with the local foreign exchange departments in an initiative and active manner and establish the information exchange and contact mechanism therewith so as to guarantee that the outward foreign direct investment be more comprehensive and complete.

3.

The statistical personnel shall intensify their study of professional knowledge and continuously improve their professional quality and operational level. The statistical personnel shall start with studying the Statistical System of Direct Overseas Investment, correctly understand the basic concepts and computation principle therein, and master the application program therein.

4.

The commerce departments at each level and enterprises (groups) directly under the central authorities shall, in serious accordance with the time and format as provided for in the Statistical System of Direct Overseas Investment, assign the statistical work of the outward foreign direct investment of 2006 for the enterprises under their jurisdiction and subsidiary enterprises thereof, well organize and arrange the statistical work of the outward foreign direct investment of 2006 in advance. The comprehensiveness, completeness and accuracy of the statistical indexes shall be emphasized. Such indexes that can reflect on the contribution of enterprises outside the territory of China to the host country as the number of employed people in enterprises outside the territory of China, the total amount of taxpaying overseas by enterprises outside the territory of China shall be emphatically examined. Reinvesting through tax havens, if any, shall be seriously reported by enterprises concerned.

5.

The Ministry of Commerce will commend and reward those entities and individuals with outstanding performance in the statistical work. Any act of delaying, falsifying, concealing or refusing the report of statistical data of the outward foreign direct investment shall be circulated a report of criticism by the Ministry of Commerce and shall be imposed on a punishment by the statistics departments at the county level or above in accordance with the relevant provisions of the Detailed Rules for the Implementation of the Statistics Law of the People's Republic of China. Furthermore, whether reporting statistical documents in accordance with the statistical system in time, when the Ministry of Commerce formulates financial support policies in conjunction with other relevant departments and commissions, shall be taken as one of the qualifications and conditions of enjoying the state policy support. Those reporting statistical data otherwise not in a timely and comprehensive way will not enjoy the state policy suport.

Appendix: Form of Information on Reinvesting through Major Tax Havens by Domestic Investing Entities

The Ministry of Commerce

November 21, 2006