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CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL CONCERNING THE APPROVAL AND TRANSMISSION OF SEVERAL PROVISIONS BY THE LEADING GROUP FOR PORT AFFAIRS ON STRENGTHENING THE WORK OF UNCLOGGING HARBOURS

    Several Provisions on Strengthening the Work of Unclogging Harbours
formulated by the Leading Group for Port Affairs under the State Council has
been approved by the State Council. It is hereby transmitted to you for
implementation.
SEVERAL PROVISIONS ON STRENGTHENING THE WORK OF UNCLOGGING HARBOURS

    With the all-round deepening of the reform of the economic structure and
the further implementation of the opening policy, there will be further growth
in our domestic and foreign trade. However, it is not possible to improve the
comprehensive capacity of passage of our harbours fundamentally in the near
future. Sharp contradiction between freight volume and transport capacity will
remain for a fairly long time in the foreseeable future. In order to keep the
harbours unblocked, raise the rate of utilization of vehicle, vessels and
warehouses, speed up the flow of goods, and improve social and economic
results, it is necessary to strengthen the work of unclogging harbours. For
this purpose, provisions are formulated as follows:

    1. The policy of planned transport must be persisted in. The method of
"two-level balance and centralized administration" shall be adopted in
formulating transport plans for import and export of foreign trade goods. The
transport plans, which are issued after going through the procedure of
comprehensive balance, must be strictly implemented by all the departments.

    (l) All the foreign trade companies and industrial trade corporations
shall deliver goods in a balanced way. All the shipping companies shall
dispatch their ships in a balanced way so as to prevent the ships from
crowding into the harbours.

    (2) In arranging loading and unloading foreign trade vessels, the harbours
shall strictly observe the principle of planned ones first and those outside
the plans next, and basically according to the order of their arrival to the
harbours.

    (3) The railway, highway and water transport departments shall take an
active part in the work of unclogging harbours. Railway departments shall, in
dispatching wagons, loading and transporting goods, give priority to the
materials from the clogged harbours, according to the monthly balance plan
made jointly by the Ministry of Communications, the Ministry of Railways and
the Ministry of Foreign Economic Relations and Trade. Except when transport
is suspended as a result of natural disasters and major accidents and when
railways are seriously blocked, the loading and transport of the materials
from the clogged harbours may not, in principle, be stopped or restricted.

    (4) Departments in charge of materials and goods (or their agent units)
shall provide direction of transportation for the arrived materials and take
practical measures for receiving and storing the materials according to the
time set by transport departments. They shall unload the materials and goods
from the wagons during their stay at the stations and must not use the wagons
as storehouses. The relevant departments shall notify departments in charge of
materials and goods, timely, of the delivery and arrival vessels.

    (5) If vessels arrive at harbours without having obtained the approval of
the monthly balance meeting held jointly by the Ministry of Communications,
the Ministry of Railways and the Ministry of Foreign Economic Relations and
Trade, local people's governments shall impose a fine of one yuan for every
ton of goods on the responsible units and the unloading of such vessels shall
be arranged according to relevant stipulations. Fines shall not be imposed on
the vessels which have sent the plans as demanded but have not been included
in the plans due to inadequacy of capacity of the barbours and railways.
However, for large amounts of materials which have crowded into harbours, if
the amount is 15% more than the monthly average of the yearly plan, a fine of
0.5 yuan for every ton of goods shall be imposed on the responsible units.
Local people's governments shall use 50% to 70% of the income derived from
fines in awarding the relevant units (including departments for harbour
inspection and examination) and individuals at the harbour that have made
achievements in unclogging the harbours. This shall be organized and
implemented by the offices in charge of port affairs in the provinces
(regions and municipalities).

    (6) For those materials which have arrived at harbours to be transferred
through railways to certain places and which do not belong to reasonable flow,
if the amount is within the limit (less than 500 ton for sundry goods, less
than 1,000 ton for a large bulk of materials), railway departments shall
undertake their transport as reasonable flow. If the amount exceeds the limit,
the materials shall be unloaded at the harbours.

    (7) Leading Group for Port Affairs of the State Council and the offices in
charge of port affairs in the provinces (regions and municipalities) shall,
together with the relevant competent departments, conduct supervision and
examination over such links of transportation as organizing sources of goods,
ordering goods, delivery of goods, dispatch of vessels, loading and unloading
at harbours and dispersion in transport, and shall handle and arbitrate major
problems which arise in planned transport.

    2. In order to maintain normal production order at harbours, bring into
full play the initiative of all the parties and raise the rate of turn-rounds
of vehicle, vessels and goods, the relevant units at the ports shall, in the
spirit of the current reform of the economic structure, sign bilateral or
multilateral economic agreements, define each party's responsibilities and
clearly observe the policy of awards and penalties. The content of the
agreements may include provisions concerning period of detention for vessels,
number of railway wagons to be loaded, the time freight trains may be allowed
to stay at harbours, awards to those who go beyond the plans in unloading
goods from vessels and loading wagons and trucks, etc. - which, as economic
restrictive clauses for the parties, shall be implemented under the aegis of
the local offices for port affairs.

    3. Except bulk cargo and those which can be transported through special
railway lines, the materials destined for places not far from harbours shall
in principle be transported by trucks. Highway transportation enterprises
shall try every means to improve business management, lower the cost and
freight rates, and apply the business policies of good service, and small
profits but quick turnover. The distance limit within which the materials and
goods from harbours must be transported by trucks shall be set by local
people's government of the province (region or municipality) in accordance
with the local conditions. Except for special circumstances, the materials
and goods for places within the prescribed distance limit shall not be
transported through railways.

    4. The harbours from which materials and goods can be transported by water
shall make full use of vessels. In case the provinces, autonomous regions and
municipalities directly under the Central Government are unable to transport
timely their materials and goods from clogged harbours, local offices for
port affairs and the relevant departments shall organize transport for them,
and the harbours of arrival sha11 treat such vessels as those within the plan
and arrange unloading for them.

    5. In case a harbour is clogged or in other special circumstances, the
Ministry of Communications, the Ministry of Railways and the Ministry of
Foreign Economic Relations and Trade as well as the competent departments of
the relevant units in charge of materials and goods, or the Leading Group for
Port Affairs of the State Council, may decide to change the harbour of arrival
for foreign trade vessels. The ports of arrival for those vessels and
departments for transportation shall treat them equally as those within their
plans and, with the close cooperation of the owners of the cargo, adjust the
direction of transportation for the cargo and take measures for receiving and
storing the cargo. The extra shipping expenses shall be borne by the shipping
companies and the extra domestic freight, by the owners. If agreements have
been signed, the agreements shall apply.

    6. Except for small quantities, imported grade-1 dangerous goods shall be,
in pinciple, transported in containers. Highly dangerous goods shall be, in
principle, transloaded directly without touching the ground. If it is
necessary to move them onto storage ground in extraordinary circumstances, the
owners must take delivery of the goods and leave the ground within a time
limit.

    7. If economic agreements have not yet been signed in accordance with
Article 2 of these Provisions, the relevant departments shall handle the cases
according to the following measures:

    (1) In case the imported materials which have been unloaded onto harbour
storage grounds remain at the harbour for more than 10 days (the 4 days of
reasonable storage period is not included, the same below) because the owners
or their agents fail to provide reasonable directions of transportation and
adopt practicable measures for receiving and storing the goods, an additional
storage fee, which is 50% of the set rate, shall be collected from the owners
or their agents starting from the first day that is overdue; an additional
storage fee, which is 100% of the set rate, shall be collected if the
materials are overdue for more than 20 days. If the owners cannot take
delivery of their goods in time because of the harbour's responsibity, the
harbour authority shall exempt them from additional storage fees and pay the
owners the expenses for hiring the vehicle and vessels which have come in
vain for the goods. If the owners cannot take delivery of the goods which
are within the monthly balance plans because of the railway department's
responsibity, the railway department shall bear the additional storage fees.
If goods cannot be taken delivery of in time due to force majeure or other
special reasons, additional storage fees shall be exempted. Local offices for
port affairs shall mediate and arbitrate any disputes over issues of
responsibilities.

    (2) In case any unloaded and stored goods remain on the storage grounds of
a clogged harbour for more than 14 days, and the owner has already been
urged to take delivery of the goods, the local office for port affairs may
decide to move the goods to a warehouse or move them outside the harbour area.
The owner shall bear all the expenses arising therefrom. The choice of the
warehouses shall facilitate transportation of goods from the clogged harbour.
When the owners apply for train wagons for the transportation of the goods in
the warehouses, railway departments shall treat their goods as materials from
clogged harbours.

    (3) In case imported goods remain at a harbour for more than two months
and the owner has not taken delivery of the goods although he has been urged
to do so, they shall be treated as goods which cannot be delivered. Those
goods which have gone through Customs declaration shall be confiscated by the
relevant department at the harbour according to the instructions of the local
people's government. Those goods which have not gone through Customs
declaration shall be confiscated by the Customs. The income from the sale of
the confiscated goods shall be turned over to the State treasury according to
the relevant stipulations. If it is proved that the goods have been wrongly
confiscated and sold, the party responsible for the error shall pay for the
economic loss of the owner.

    (4) When a harbour is seriously blocked, in order to unclog it as soon as
possible, upon the suggestion of the local office for port affairs and the
approval of the Leading Group for Port Affairs of the State Council, some
materials which have remained at the harbour for less than two months may also
be subjected to necessary treatment.

    8. The provinces, autonomous regions and municipalities directly under
the Central Government, where there are harbours, shall, in accordance with
these Provisions, formulate rules for implementing the work of unclogging
harbours in the light of their respective conditions and report to the Leading
Group for Port Affairs of the State Council for the record. Local offices for
port affairs shall be responsible for the implementation of the rules.

    9. These Provisions shall be trial implemented as of February 1, 1985. If
any existing provisions in this regard conflict with these Provisions, these
Provisions shall prevail.