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Provisions of Shanghai Municipality on Encouraging the Absorption of and Bringing Forth New Ideas in Introduced Technologies

Provisions of Shanghai Municipality on Encouraging the Absorption of and Bringing Forth New Ideas in Introduced Technologies
 

(Adopted at the 16th Session of the Standing Committee of the 11th Shanghai Municipal People's Congress on January 25, 2000.  Revised according to the "The Decision on the Revision of the 'Provisions of Shanghai Municipality on Encouraging the Absorption of and Bringing Forth New Ideas in Introduced Technologies' " adopted on February 1, 2002 at the 36th session of the Standing Committee of the 11th Shanghai Municipal People' s Congress)

Article 1
On the strength of relevant laws and regulations and with reference to the context of this Municipality, these Regulations are formulated in order to encourage and strengthen this Municipality to absorb and innovate the introduced technologies, accelerate industrial upgrading and technological progress, and promote socio-economic development.
Article 2
"To absorb and innovate introduced technologies" (hereinafter referred to as "absorption and innovation" ) hereunder means to acquire advanced technologies from overseas through trade, economic-technical cooperation, or otherwise, and to successfully apply technologies in production and operation by mastering such technological factors as their design theory and work processes and the development and commercialization of those new technologies and products on such a basis.
Article 3
These Regulations are applicable to the absorption and innovation within this Municipality.
Article 4
The absorption and innovation must comply with laws and regulations as well as those international treaties and agreements acceded to or signed by the PRC, on protecting intellectual property.
If a technology import or export contract contains an agreement on technology secret, such an agreement governs.
Intellectual property generated by absorption and innovation programs is protected by law.
Article 5
The Municipal People's Government is responsible for the organization and coordination of the absorption and innovation by effective macro control so as to minimize the low-level repetitive import.
Shanghai Municipal Economy Commission (hereinafter referred to as MEC) is responsible for the organization of the preparation and implementation of the absorption and innovation plans city-wide, the preparation and publication of the guiding list of city-wide priority projects for absorption and innovation (hereinafter referred to as the list) and the annual plan, and guiding the implementation of the projects under the annual plans and organizing their appraisal and acceptance.
Relevant departments of this Municipality, district, and county people's governments shall join their efforts in ensuring the success of the absorption and innovation as required by their respective functions and duties.
Article 6
Enterprises, as subject of absorption and innovation, have the right to import on their own advanced and appropriate technologies in light of their production and operation needs and market demand and to decide on the contents and mode of absorption and innovation.
Large enterprises or enterprise groups may establish absorption and innovation bases according to relevant provisions of the State and undertake major technological equipment or absorption and innovation projects of the State and this Municipality.
Workers shall comply with the technology-secret regime legally set up by the enterprises.
Article 7
This Municipality encourages enterprises, scientific research institutions and institutions of higher learning to jointly research and develop absorption and innovation or jointly establish technological development institutions.
Parties to absorption and innovation projects shall sign contracts, agreeing on the ownership of relevant technological rights and interests and their other respective rights and obligations.
Article 8
Enterprises may apply for the inclusion of their own absorption and innovation projects in the annual municipal plan for absorption and innovation according to the guiding list and prescribed conditions and procedures.
Upon receiving such applications, the MEC shall organize experts to examine and evaluate them fairly, impartially and rationally, determine the projects to be included in the annual plan for the first quarter of each year, and inform the applicant units in writing to that effect.
Article 9  
A special-purpose fund for absorption and innovation, to be increased gradually, is to be established in this Municipality and listed in the city budget.
Such special-purpose fund is, according to these Regulations, to be used to extend such financial assistance to absorption and innovation projects as low interest loans, subsidized interest rate for loans and subsidies for technological development.
The Enterprise-wise Technical Innovation Service Center (hereinafter referred to as the Service Center) authorized by MEC shall be responsible for the settlement and management of the special-purpose fund for absorption and innovation.
District and county people's governments may establish corresponding special-purpose funds for supporting absorption and innovation projects in their respective areas, in the light of the economic development status of their respective areas and the needs of absorption and innovation projects.
Article 10
Relevant departments of this Municipality shall earmark a proportion of more than 10 per cent of other special funds for technological advancement to encourage absorption and bringing forth of new ideas, with priority given to the support for the research and development, transformation of achievements, and authentication of introduced high and new technologies.
Article 11
Units with their projects listed in the annual municipal plan for absorption and innovation may apply for low interest loans, while those granted loans by financial institutions may apply for subsidized interest rates for their loans.
Article 12
The following projects or technologies are eligible for subsidies from technological development funds:
(1) State technological innovation projects or absorption and innovation projects under the priority support of this Municipality;
(2) Technologies innovated on the basis of absorption, endowed with market competitiveness or granted independent intellectual property right;
(3) Projects not listed in the annual municipal plan for absorption and innovation, but up to the requirements of the guiding list and, after appraisal organized by the MEC, found to represent major technological breakthroughs of a certain scale.
Article 13
Technological development expenses actually incurred by enterprises for absorption and innovation may be included in the costs.
Key equipment and testing instruments used for absorption and innovation may be included in the cost either in a lump sum or in installments, provided their unit price is below the prescribed amount.
Subject to the examination and approval of municipal financial and tax authorities, projects listed in the city municipal plan for absorption and innovation may have their equipment depreciated at a faster rate and enjoy corresponding preferential treatment with reference to the municipal plans for trial production of new products or for interim trial products.
Article 14
Absorption and innovation projects that involve the transformation of high and new tech achievements or the transfer of achievements of innovations on the basis of assimilating high and new technologies with profits are eligible for preferential treatment according to the State and municipal regulations on the transformation of high and new tech achievements.
Article 15
Applications may be submitted to the MEC for project listed in the annual municipal plan for absorption and innovation to be included in a preferential order in the municipal plan for technical renovation and financial assistance in the form of subsidized interest rates for loans.
Article 16
To apply for domestic or foreign patents on absorbed and innovated technologies or products, applications may be made, to the city' s science and technology administrative departments, municipal patent administrative departments and MEC for financial assistance to cover part of the patent application fees, patent maintenance fees and patent agency fees.
Enterprises introducing foreign patented technologies to be used for the first time in China in technological development may apply to the MEC for subsidies against such valid certificates as contracts on patent transfer or licensing.   
Article 17
Enterprises intending to set up the following institutions for absorption and innovation in this Municipality may apply to the MEC for subsidies for their start-up funds:
1. State or city-level enterprise technological development centers;
2. State or city-level absorption and innovation bases;
3. City-level technological development institutions set up in alliance with scientific research units or institutions of higher learning.
Article 18
The export of absorbed and innovated high and new tech products may enjoy the preferential zero VAT rate according to relevant State regulations.
Enterprises may apply to the MEC for subsidies for expenses for authentication of technological quality of their absorbed and innovated products.
Article 19
Units undertaking projects of the annual city plan for absorption and innovation that need to recruit technologists from other cities or provinces may directly apply for going through the formalities for their transfer into this Municipality accordingly. Units that need to recruit foreign technologists-administrators or high-level returned students from overseas may apply accordingly for support from relevant specific funds.
If it is necessary to employ foreign experts for the purpose of brainstorming on key technologies in projects listed in the annual municipal plan for absorption and innovation, applications therefore may, accompanied by employment contracts, be made to competent municipal departments for financial subsidies.
Article 20
Other conditions being equal, government offices at different levels of this Municipality shall give priority in their procurement to absorbed and innovated products of those industries whose development is under support.
Article 21
Competent departments shall award enterprises, project managers, and scientists and technologists who have contributed significantly to the absorption and innovation.
Enterprises shall set aside a percentage of the profits from the absorbed and innovated products to reward the enterprisers, project managers, and scientists and technologists who have contributed significantly to the absorption and innovation either in cash payment or in terms of stocks or capital contribution for the awards to share in the profits accordingly.
Article 22
For achievements or products of absorption and innovation application may be made for awards for scientific and technological achievements at various levels.
Article 23
Innovation service centers shall sign contracts with project units on the basis of the absorption and innovation projects and sums as approved by the MPC and appropriate through relevant financial institutions these sums in full and on time to the project units; The project units shall perform their obligations as agreed in the contract.
Article 24
Personnel of competent departments and innovation service centers in this Municipality who violate these regulations, neglect their duties, engage in fraudulent practices to pursue personal ends or infringe on the legitimate rights and interests of absorption and innovation project units in the course of absorption and innovation shall be ordered to make corrections and subjected to administrative penalties by their own units or competent superior authorities; those who embezzle, withhold or divert special-purpose funds for absorption and innovation shall be ordered to return them within a specified time limit and subjected to administrative penalties by their own units or competent superior departments; those who commit crimes shall be prosecuted according to the criminal law.
Article 25
Any infringement of others' intellectual property in violation of Article 4 of these Regulations shall be dealt with according to relevant laws and regulations.
An enterprise has the right to claim damages from those who violate Clause 3, Article 6 of these Regulations to the prejudice of the enterprise and to hold them accountable therefor accordingly.
Article 26
If enterprises secure financial assistance in the form of low-interest loans, subsidized interest rates for loans or of technological development subsidies by fraud, the MEC shall, in coordination with other competent departments, recover the funds so secured and impose on them a fine of 1 to 3 times the sum so secured; those who secure other preferential treatment by fraud shall be dealt with according to relevant laws and regulations.
For those get rewarded by fraud, the rewardee is to be divested of the reward by the MEC and other competent departments after the same departments have canceled their rewardeeship.
Article 27
These Regulations become effective on March 1, 2000, when the "Interim Regulations of Shanghai Municipality to Encourage the Absorption and Assimilation of Introduced Technologies" ratified by the Eighth People's Congress of Shanghai Municipality at its 29th Session on June 20,1987 is simultaneously annulled.


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