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CIRCULAR OF THE STATE COUNCIL ON THE APPROVAL AND TRANSMISSION OF THE SUGGESTIONS SUBMITTED BY THE STATE ECONOMIC AND TRADE COMMISSION AND OTHER DEPARTMENTS CONCERNING THE FURTHER PROMOTION OF COMPREHENSIVE RESOURCES UTILIZATION

Category  GENERAL Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-08-31 Effective Date  1996-08-31  

Circular of the State Council on the Approval and Transmission of the Suggestions Submitted by the State Economic and Trade Commission and Other Departments Concerning the Further Promotion of Comprehensive Resources Utilization




Appendix: Suggestions Concerning the Further Promotion of Comprehensive

(August 31, 1996)

    The State Council has approved the "Suggestions Concerning the Further
Promotion of Comprehensive Resources Utilization" submitted by the State
Economic and Trade Commission, the Ministry of Finance and the State Taxation
Administration. It is hereby transmitted for your earnest implementation.

    With the growth in population and development of the economy, the
contradiction that the resources of the country are relatively inadequate
will become increasingly prominent. The principle of resources development
and economy must be upheld simultaneously, putting economy first. Economy and
rational utilization of all resources must be practiced and reduction in
occupation and consumption of resources by all means in the fields of
production, construction, circulation and consumption.

    Comprehensive utilization of resources constitutes a major technological
and economic policy of the country, and it is also a long-term strategic
policy in national economic and social development, and is of significance in
economy of resources, improvement of the environment and economic efficiency,
promoting the transformation of the mode of economic growth from the
extensive type to the intensive type and the realization of the optimal
disposition of resources and sustainable development. All regions and
departments must pay full attention to it and adhere to the policy of
"adaptation to local conditions, encouragement of exploitation, employment of
multi-channels, striving for practical benefits, achieving breakthrough in
major areas and promoting gradual extension", actively promote comprehensive
resources utilization and economy of resources and strive for the upgrading
of the level of resources comprehensive utilization and promotion of the
healthy development of the national economy and social undertakings in
compliance with the principle of the combination of comprehensive resources
utilization with the development of enterprises, prevention and control of
pollution, and the unification of economic results, environmental and social
effect.

Appendix: Suggestions Concerning the Further Promotion of Comprehensive
Resources Utilization

    Since the issuance of the "Circular of the State Council on the Approval
and Transmission of 'the Interim Rules Concerning the Questions Relating to
Comprehensive Resources Utilization' of the State Economic Commission", under
the encouragement and guidance of the state policy, considerable achievements
have been made in comprehensive resources utilization in our country.
However, there still universally exist such problems as high resources
consumption, low resources utilization ratio, low comprehensive waste
utilization and low degree of harmless treatment. To suit the requirements of
the transformation of the mode of economic growth and the implementation of
the sustainable development strategy and promote comprehensive resources
utilization, the following suggestions are hereby put forth:

    1. Range of Comprehensive Resources Utilization

    Comprehensive resources utilization mainly cover the comprehensive
development and rational exploitation of paragenetic or associated mines in
the mining process; the recycling and rational utilization of waste residue,
waste water, waste gas, surplus heat and surplus pressure from the production
process; collection and regenerative utilization of all kinds of waste and
used materials produced in the process of social production and consumption.
The "Catalogue of Comprehensive Resources Utilization" shall be published
jointly by the State Economic and Trade Commission in conjunction with the
State Planning Commission, the Ministry of Finance and the State Taxation
Administration, which can be amended in the light of actual conditions.

    2. Implementation of Preferential Policies for Encouraging and Supporting
Enterprises in the Active Promotion of Comprehensive Resources Utilization

    The scope of enjoyment of preferential policies shall be those as laid
down in the "Catalogue of Comprehensive Resources Utilization". The existing
preferential taxation policy of the state relating to comprehensive resources
utilization finds its expressions mainly in the following documents:
"Circular on a Number of Preferential Policies Concerning Enterprise Income
Tax", "Circular on the Continued Implementation of the Preferential Policy in
Value-added Tax for Part of Products from Comprehensive Resources
Utilization", "Circular on the Continued Implementation of the Preferential
Policy in Value-added Tax for Enterprises Operating in the Collection of
Waste and Used Materials" and "Circular on the Publication of the Notes of
Taxation Items and Rates of 'Comprehensive Resources Utilization and
Warehousing Facilities' of the Regulatory Tax for Fixed Assets Investment
Direction". The State shall further study and formulate other preferential
policies for comprehensive resources utilization relating to price,
investment, finance and credit. The reduction and exemption in tax(charge)
money gained by enterprises from relevant preferential policies shall be used
for the special purpose of comprehensive resources utilization.

    All regions and departments concerned shall provide key support for
projects of comprehensive resources utilization of enterprises and list those
projects on a priority basis. Banks shall give positive support in arranging
loans in accordance with the credit policy. Management of funds for
comprehensive resources utilization shall be strengthened and efficiency in
fund utilization improved.

    3. Enhancement of Comprehensive Resources Development and Rational
Utilization, Prevention of Waste in Resources and Environment Pollution

    (1) In the prospecting and mining of mineral resources, there must be
unified planning and comprehensive exploration, evaluation, mining and  
exploitation of paragenetic or associated mines having the value of
development and exploitation. The geological exploration reports of the
geological prospecting departments shall contain a chapter(section) on
comprehensive resources utilization; the mine designing departments shall
present feasible proposals for the collection and exploitation of paragenetic
or associated mines while deciding on the plan for the mining of major
mineral.

    (2) Installations for comprehensive resources utilization at a
construction project must be designed, built and brought into operation
together with the principal part of the project. For projects with a
possibility of comprehensive utilization, the project proposals, feasibility
study reports and preliminary designs shall all contain contents of
comprehensive resources utilization, otherwise no examination and approval
shall be given by the departments concerned.

    (3) Enterprises shall actively promote comprehensive utilization of wastes
from the production processes. Those which do not have the required
conditions for utilization shall support other units in the promotion of
comprehensive utilization and give appropriate subsidy for loading and
transporting to the enterprises exploiting the wastes. Enterprises providing
exploitable wastes and enterprises exploiting the wastes should sign long-
term supply-and-demand contracts and strictly carry out the contracts.
Enterprises providing exploitable wastes shall not collect charges from
enterprises exploiting the wastes for unprocessed or dumped industrial solid
wastes; for processed industrial solid wastes, enterprises providing
exploitable wastes may charge a certain amount of expenses from enterprises
exploiting the wastes according to the processing cost and quality and in
accordance with the principle that benefits of enterprises exploiting the
wastes shall be greater than those of the enterprises providing exploitable
wastes.

    (4) The departments of construction administration shall, by means of
building design standards, construction standards and requirements, render
active support to enterprises in the promotion of new-type wall building
materials produced through utilizing wastes. Neither new construction nor
expansion of solid clay brick factories shall be permitted within the
parameter of 20 kilometers of the piling sites of coal dust or gangue; solid
clay brick factories and other building materials enterprises already in
existence must use a certain percentage of coal dust and gangue in the
production of solid clay bricks, if they have the necessary conditions; a
certain percentage of coal dust must be used in road-building, dam-
construction and port-construction projects.

    (5) All departments of industries administration shall work out standard
quotas for water consumption and plans of economy of water for their
respective industries, adopt measures of circulated use of water and multiple
uses of the same water to improve the rate of repetition in water use. In
areas where there are shortage of water resources, development of industries
of high water consumption shall be strictly restricted and the feasibility
study reports of new construction projects of high water consumption must
include special demonstration on water use.

    4. Adoption of Measures in Support of the Production of Electricity and
Heat by Comprehensive Exploitation Power Plants

    As for enterprises engaging in the production of electric power and heat
by exploiting surplus heat, surplus pressure, urban garbage and such low heat
value fuels as gangue and coal peat or coal seam gas(hereinafter referred
to as comprehensive exploitation power plants), the single-generator capacity
of which is 500kw and above conforming to the conditions of grid control, the
departments of electricity shall permit them to join the grid and sign grid
agreements, with generators joining the grid exempted from matching expenses
for joining the grid by small thermal power plants, and give priority in
purchasing their electricity within the approved volume of the grid
electricity.

    Rates of grid electricity from comprehensive exploitation power plants
shall, in principle, be determined according to the principle of same grid,
same quality and same rate, and peak rate may be adopted where conditions are
ripe; where due to such special circumstances as over high cost, the
principle of same grid, same quality and same rate cannot be followed,
separate rate can be fixed and proposals put forward by the comprehensive
exploitation power plants in consultation with the enterprises operating the
grid and submitted to departments of price administration at the provincial
level and above for examination and approval in accordance with relevant
provisions of the state. Expenses incurred from purchasing the electricity
from comprehensive exploitation power plants by the grid can be included in
its cost as the basis for the adjustment of rate of electricity sold by the
grid. The amount of electricity mutually supplied between a comprehensive
exploitation power plant and the grid at the same measurement point can be
settled monthly by mutual setoff. Electricity generated by comprehensive
exploitation power plants shall not be included in the national distribution
plan but can be used for internal adjustment. The electricity departments
shall not deduct and reduce the planned targets of electricity supply to the
enterprise.

    Comprehensive exploitation power plants with an installed generating
capacity under 12000kw(inclusive) shall not join peak adjustment of the grid;
comprehensive exploitation power plants with an installed generating capacity
above 12000kw may have an arrangement of certain amount for peak adjustment
and are permitted to have full peak generation but, during the low period
generation, payload shall not be lower than 85% of the rated capacity of the
generation equipment.

    5. Enforcement of Strict Administration to Ensure the Collection,
Recycling and Exploitation of Waste and Used Materials

    Enterprises shall formulate rules for the collection and recycling of
waste and used materials and for the repair of old equipment and exploitation
of wastes. Waste and used materials the enterprise itself is incapable of
exploitation shall be sold positively to enterprises collecting waste and
used materials. Enterprises collecting waste and used materials shall improve
their methods of purchasing and actively organize collection and purchase;
where conditions are ripe, processing according to varieties shall be carried
out.

    Enterprises intending to engage in the collection and processing of waste
and used metals for production purposes must go through the examination and
approval procedure with the competent department designated by the people's
government of the locality where the enterprise is located and upon the
issuance of the unifiedly printed certificate of examination and approval,
apply to the public security organ for the examination and issuance of
special industries license, and then to the administrative department for
industry and commerce for the examination and issuance of business license,
before they can engage in business operations of the collection and
processing of waste and used metals for production purposes within designated
scope of categories. No points for the collection and purchase of waste and
used metals may be set up in the neighborhood of railways, mining areas,
oilfields, ports, airports, construction sites, restricted military area or
metallurgical refining and processing enterprises. Individual businesses are
prohibited from engaging in business operations of collection or processing
of waste and used metals for production purposes. People's governments at all
localities must henceforth ban the existing individual businesses engaging in
the collection and processing of waste and used metals for production
purposes. Public security organs shall, in accordance with the law, reinforce
their supervision over enterprises engaging in the collection of waste and
used materials.

    It is strictly forbidden to transfer vehicles condemned or mechanical and
electrical equipment phased out by unequivocal order to the country or
township enterprises to be used there. Units and individuals not permitted to
operate in the collection and purchase of condemned vehicles must not collect
and purchase condemned vehicles. Departments of vehicle operations
supervision shall carry out inspection over the state of use of the tyres of
automotive vehicles and supervise timely renewal of tyres of units employing
vehicles.

    6. Acceleration of the Pace of Legislation, Formulation and Perfection of
Rules for Administration to Promote Comprehensive Resources Utilization

    (1) All regions and departments shall actively formulate certain local
regulations in accordance with relevant regulations of the state and taking
into account the actual conditions of the localities to promote the
standardization and legalization of comprehensive resources utilization.

    (2) Enterprises shall organize production in strict accordance with
national standards, industrial standards or local standards to promote
comprehensive resources utilization.

    (3) Rules shall be formulated gradually for statistics of basic
information on comprehensive resources utilization. Enterprises shall submit
statistical report on comprehensive resources utilization to the competent
departments concerned at regular intervals.

    (4) The work of examination and approval of applications for projects of
comprehensive resources utilization shall be strengthened. The departments
concerned shall strengthen the administration of examination and approval
of projects, implement the preferential policies of the state and prevent
fraud in taxation preferences.

    (5) The reward and penalty system for comprehensive resources utilization
shall be established. Units and individuals scoring outstanding achievements
shall be praised and rewarded. Those violating relevant provisions shall be
penalized. Enterprises having any of the following misconduct shall be
criticized in circulars and rectifications should be made within the specified
time limit:

    a. Failing to exploit the wastes while the conditions are ripe or failing
to exploit and failing to support other enterprises in their exploitation;

    b. Non-fulfillment or incomplete fulfillment of contracts on
comprehensive wastes exploitation or arbitrary suspension of the relation of
demand and supply of wastes;

    c. Non-compliance of the rules for the submission of relevant
information; or

    d. Collection of charges or disguised collection of charges in violation
of relevant provisions.

    7. Upgrading the Technical Levels of Comprehensive Resources Utilization
by Relying on the Advancement of Science and Technology

    Technical and economic policies conducive to the development and
extension of technologies of comprehensive resources utilization shall be
implemented and catalogues on state technological guidance of comprehensive
resources utilization shall be published at irregular intervals. Major
subjects of scientific research and technological development of
comprehensive resources utilization shall be included in state or local plans
for the joint tackling of key scientific and technical projects and their
implementation organized in earnest. Demonstration projects shall be actively
arranged for mature technologies with broad prospects of application and
industrialization gradually realized; a number of advanced technologies in
comprehensive resources utilization suitable for the state of our country
shall be introduced appropriately and scientific and technical forces
organized for their digestion, absorption and innovation; technical markets
shall be fostered and developed for the promotion of consultancy and
information services and transfer and extension in the application of
scientific and technological achievements.

    Organization work for the implementation of these Suggestions shall be
done by the State Economic and Trade Commission in conjunction with the State
Planning Commission, the Ministry of Finance and the State Taxation
Administration and other departments concerned. The Provinces, Autonomous
Regions and Municipalities directly under the central government as well as
cities enjoying the provincial-level status in the state economic plan and
departments concerned under the State Council may formulate specific measures
for implementation in accordance with these Suggestions.



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