Laws of the People's Republic of China

The State Press and Publication, the Ministry of Foreign Trade and Economic Cooperation

Circular of the Press and Publication Administration and the Ministry of Foreign Trade and Economic Cooperation on Issues Concerning the Establishment and Equipment Introduction of Chinese-foreign Equity Joint Ventures and Chinese-foreign Contractual Joint Ventures Engaging in the Duplication and Production of Compact Disks (CDs)

XinChuLian [2000] No.36

November 2, 2000

Press and Publication Bureaus, relevant audiovisual product administrations and Foreign Trade and Economic Commissions (Departments, Bureaus) of all provinces, autonomous regions and municipalities directly under the Central Government:

On June 12, 1996, The Circular for Further Strengthening the Administration of the Duplication of Compact Disks (CDs) (ZhongXuanFa [1996] No.7) was jointly published and distributed by the Publicity Department of the CCCPC, the Press and Publication Administration, the State Development Planning Commission, the Ministry of Foreign Trade and Economic Cooperation, the General Administration of Customs, the State Administration for Industry and Commerce and the National Copyright Administration. On May 19, 1997, the Circular on the Disposal of CD Production Lines of Closed Plants and Confiscated Illegal CD Production Lines was jointly published and distributed by the Publicity Department of the CCCPC, the Press and Publication Administration, the State Development Planning Commission, the Ministry of Foreign Trade and Economic Cooperation, the General Administration of Customs, the State Administration for Industry and Commerce and the National Copyright Administration. The implementation of the above-mentioned circulars has exerted positive effects for standardizing the administration of Chinese CD duplication industry and adjusting the layout structure of the industry.

With the development of CD memory technology and increasing demand on all kinds of large-storage CDs, the CD duplication and manufacturing industry in China is currently facing excellent opportunities. To seize the opportunities, standardize the administration and promote the development of the CD duplication and manufacturing industry, related policies and regulations are hereby reiterated and supplemented as follows:

1.

The CD duplication and production in this circular refer to the duplication and production of Read-only CDs and Recordable CDs, and writing of source CDs. Read-only CDs include CD-DA, VCD, Super-VCD, CD-ROM, DVD-Audio, DVD-Video, DVD-ROM and LD etc. Recordable CDs include CD-R, CD-RW, DVD-R, DVD-RAM and MO etc. The equipment for production and duplication of CDs in this circular include Precise Injection Molding Machine, High-pressure Injection Molding Machine and other equipment of the same tax line.

2.

In principle, no more Chinese-foreign equity and contractual joint ventures engaging in the duplication of read-only CDs are supposed to be established. Foreign investors coming to China to establish Chinese-foreign equity and contractual joint ventures engaging in the duplication of read-only CDs should obtain the Business License for CD Duplication from the Press and Publication Administration and the Approval Certificate of Foreign-invested Enterprises from the Ministry of Foreign Trade and Economic Cooperation upon examination and approval. These joint ventures should only begin their production after registration with competent administrations of industry and commerce.

3.

Existing Chinese-foreign equity and contractual joint ventures with a sound track record and without any violation of laws may introduce production lines for Read-only CDs upon approval.

4.

The Chinese side of a Chinese-foreign equity or contractual joint venture engaging in the duplication and production of CDs should hold the majority of the shares or plays a dominant role. The capital contribution by the foreign side of this type of joint venture should be no less than 25% of the registered capital. Foreign investors are encouraged to create projects for manufacturing C D duplication and production equipment.

This circular shall enter into force on the day of issuing.