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REGULATIONS ON THE RUNNING OF EDUCATIONAL INSTITUTIONS WITH SOCIAL RESOURCES

Category  EDUCATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-07-31 Effective Date  1997-10-01  

Regulations on the Running of Educational Institutions With Social Resources



Chapter I  General Provisions
Chapter II  Establishment of Educational Institutions
Chapter III  Teaching and Administration of Educational Institutions
Chapter IV  Property and Financial Management of Educational Institutions
Chapter V  Change and Disbandment of Educational Institutions
Chapter VI  Security and Support
Chapter VII  Legal Responsibility
Chapter VIII  Supplementary Provisions

(Promulgated by Decree No. 226 of the State Council of the People's

Republic of China on July 31, 1997)
Chapter I  General Provisions

    Article 1  These Regulations are formulated with a view to encouraging
the running of educational institutions with social resources, safeguarding
the legitimate rights and interests of sponsors, schools and other
educational institutions, teachers and other educational workers and
those receiving education and promoting the healthy development of the
cause of running educational institutions with social resources.

    Article 2  These Regulations shall be applicable to the running of society-oriented schools and other educational institutions(hereinafter
referred to as educational institutions) by enterprises, institutions,
societies and other social organizations and individual citizens with
non-state financed educational funds.

    Article 3  The cause of running educational institutions with social
resources constitutes a component part of the cause of socialist education.
People's Governments at all levels should strengthen leadership over the
work of running educational institutions with social resources and integrate
the cause of running educational institutions with social resources into
national socio-economic development plans.

    Article 4  The State adheres to the policy of giving active encouragement,
rendering strong support, correct guidance and strenghtening administration
with respect to the running of educational institutions with social resources.

    Article 5  Social resources should be focused on the running of
educational institutions conducting vocational education, adult education,
senior secondary education and pre-school education. The State encourages
the running of educational institutions conducting compulsory education
with social resources as a supplement to the conducting of compulsory
education by the State. The State exercises strict control over the running
of higher educational institutions with social resources.

    Social resources must not be used in the running of religious schools
and covert religious schools.

    Article 6  Profit-making must not be the aim in the running of educational
institutions with social resources.

    Article 7  No organiation or individual shall seek apportionment of educational funds from enterprises, institutions and individuals in the
name of running educational insstitutions with social resources.

    Article 8  The State safeguards the legitimate rights and interests of educational institutions run with social resources.

    Educational institutions run with social resources have the independent
right in managing these institutions.

    Article 9  Educational institutions run with social resources should
abide by laws and regulations, adhere to the socialist orientation in
running these institutions, implement the State's educational policy to
ensure educational and teaching quality.

    Article 10  Educational institutions run with social resources and their
teachers and students have the equal legal status of the educational
institutions run by the State and their teachers and students.

    Article 11  The department of education administration under the State
Council shall be responsible for the overall planning, integrated coordination
and macro-control of the work related to the running of educational
institutions with social resources nationwide.

    The department of education administration, the department of labor
administration and other departments concerned under the State Council
shall be responsible for the work related to the running of educational
institutions with social resources within the scope of functions and
responsibilities defined by the State Council.

    The departments concerned of People's Governments at or above the county
level shall be responsible for the work related to the running of educational
institutions with social resources in accordance with the functions and
responsibilities defined by the People's Governments of the provinces,
autonomous regions and municipalities directly under the Central Government.

    Article 12  Rewards shall be given to organizations and individuals
having made outstanding contributions to the running of educational
institutions with social resources.
Chapter II  Establishment of Educational Institutions

    Article 13  Units applying for the running of educational institutions
should have the qualifications of a legal person; individuals applying for
the running of educational insitutions should have political rights and
complete capability of civil acts.

    Examination agencies conducting state education examinations, vocational
qualification examinations and technical grade examinations must not run
educational institutions related to their examination businesses.

    Article 14  Establishment of educational institutions should fulfil the
basic conditions prescribed in the Education Law and the Vocational Education
Law.

    Standards for the establishment of schools conducting higher curricula-
based education shall be worked out by the department of education
administration under the State Council; standards for the establishment of
other educational institutions shall be worked out by the People's Governments
of the provinces, autonomous regions and municipalities directly under the
Central Government according to different categories.

    Article 15  Running of educational institutions conducting curricula-
based education, literacy make-up courses, pre-school education and
grant-aided self-taught examinations shall be subject to the examination
and approval by the departments of education administration of People's
Governments at or above the county level pursuant to the authority of
examination and approval prescribed by the State; running of educational
institutions conducting vocational qualification training and technical grade
training with vocational skills as the main contents and running of
educational institutions conducting labor employment vocational skills
training shall be subject to the examination and approval by the department
of labor administration of People's Governments at or above the county level
pursuant to the authority of examination and approval prescribed by the State
with copies despatched to the department of education administration at the
same level for the record; running of other educational institutions shall be
subject to the examination and approval by the department of education at the
same level upon the examination, verification and consent of the competent
department of administration pursuant to the authority of examination and
approval prescribed by the State.

    Article 16  Sponsors applying for the running of educational institutions
should present the following materials to the organs of examination and
approval:

    (1)an application report;

    (2)certification documents of qualifications of the sponsor;

    (3)certification documents of qualifications of the headmaster-designate
or chief administrator-designate and teachers to be employed;

    (4)certification documents of assets and sources of funds of the
proposed educational institution;

    (5)constitution and development plan of the proposed educational
institution; and

    (6)other materials required by the organ of examination and approval.

    For joint running of an educational institution, an agreement on joint
running of the educational institution should likewise be presented.

    Article 17  Terms and conditions and standards for the establishment of educational institutions should be the basis for the examination and approval
of an educational institution and in keeping with national interests and
public interests of society and the requirements for rational educational
structure and distribution.

    Organs of examination and approval accept applications for the running of educational institutions conducting curricula-based education before the third
quarter of every year and give a reply in writing before the end of April of the following year; organs of examination and approval should give a reply
in writing within three months starting from the date of acceptance of the
application for the running of other educational institution.

    Article 18  Organs of examination and approval shall issue licenses for
the running of educational institution to the educational institutions the
establishment of which have been approved. Format of the license for the
running of an educational institution shall be determined by the department
of education administration under the State Council, and the printing shall
be organized respectively by the department of education administration and
the department of labor administration under the State Council according to
the division of responsibilities.

    Upon obtainment of the license for the running of an educational
institution, the educational institution should enter into registration
pursuant to the Regulations on the Running of Non-enterprise Units with
Social Resources before it can conduct educational and teaching activities.

    Article 19  Educational institutions must not set up branches.

    Article 20  The name of an educational institution should indicate
precisely its category, level and the administrative area in which it is
located; no such characters as "Zhonghua"(Chinese), "Zhonggou"(China) and
"Gouji"(international) should be put ahead the names without the approval of the department of education administration or the department of labor
administration under the State Council according to the division of responsibilities.
Chapter III  Teaching and Administration of Educational Institutions

    Article 21  An educational institution may set up a board of directors.
The board of directors proposes candidates for the position of headmaster or
chief administrator, decides on such major issues as the development,
fund-raising, budget and final accounting of revenue and expenditure of the educational institution.

    The board of directors shall be composed of the sponsor or his/her
representative, representatives of the staff of the educational institution
and social personages enthusiastic about the cause of education and with
moral integrity and good behavior, among them more than one third of the
directors should have more than five years of educational and teaching
experiences.

    The first batch of directors shall be elected on the proposal of the
sponsor, and later directors shall be elected according to the prescribed
procedures of the board of directors. The directors shall be employed upon
verification and approval by the organ of examination and approval.

    Active-duty state functionaries must not concurrently serve as
directors of educational institutions; however, those desigated by
People's Governments at or above the county level or their concerned
departments out of special requirements are exceptions.

    Article 22  The headmaster or chief administrator of an educational
institution shall be responsible for teaching and other administrative work.

    Qualifications for the position of the headmaster or chief administrator
of the state-run educational institution at the same level and of the same
category shall be taken as reference for the qualifications for the position
of the headmaster or chief administrator of an educational institution;
however, there may be appropriate relaxation in age.

    Candidacy for the headmaster or chief administrator of an educational
institution shall be proposed by the board of directors where there is a
board of directors; where there is no board of directors, it shall be
proposed by the sponsor and employed upon verification and approval by the
organ of examination and approval.

    Article 23  Rules for relatives and dependents avoidance shall be
observed between those serving as directors, headmaster or chief administrator
and those serving in positions of general services, accountants and
personnel management.

    Article 24  Teachers and other educational workers of educational
institutions have the right to form trade unions pursuant to the Trade Union
Law to safeguard their legitimate rights and interests.

    Article 25  Educational institutions employ teachers and other educational
workers independently pursuant to the relevant provisions of the State.
Teachers employed by educational institutions should meet the qualifications
and conditions for teachers prescribed by the State. Educational institutions
should strengthen political and ideological education and professional
training of the teachers employed by them.

    Employment contracts should be signed by educational institutions and
teachers and other educational workers employed by them.

    Employment of teachers of foreign nationalities by educational
institutions shall be processed pursuant to the relevant provisions of the State.

    Article 26  Educational institutions conduct enrollment independently
pursuant to the provisions of the State on enrollment.

    Constitutions and advertisements for enrollment of educational
institutions can only be made public upon examination by organs of examination and approval.

    Enrollment of students from abroad by educational institutions shall be
handled pursuant to the relevant provisions of the State.

    Article 27  Educational institutions decide on the establishment of specialities independently pursuant to the relevant provisions of the State.

    Article 28  Contents of teaching of educational institutions should
conform to the provisions of the Constitution, laws and regulations.

    Middle and primary schools run with social resources should carry out
education and teaching in accordance with the requirements of the
curricula plans and teaching programs worked out by the department of education administration under the State Council and the departments of education administration of People's Governments of the provinces, autonomous
regions and municipalities directly under the Central Government wherein
they are located, and the textbooks chosen should be subjected to the
examination and finalization of the departments of education administration
of People's Governments of the provinces, autonomous regions and
municipalities directly under the Central Government.

    Article 29  Educational institutions should make full use of public
educational facilities, equipment and information of society and rely fully
on the role of broadcasting and television universities and broadcasting
and television schools to carry out educational and teaching activities
and improve educational and teaching quality.

    Article 30  Educational institutions should establish and implement rules
for students' status and teaching management.

    Article 31  Students of schools conducting curricula-based education upon
approval having completed the studies and passed the examination shall be
issued certificates of curricula by the schools they are in pursuant to the
relevant provisions of the State.

    Students of other educational institutions shall, upon completion of studies, be issued certificates of training or other certificates of studies
by the educational institutions they are in, annotating the subjects learnt
and examination scores, and they may take part in vocational qualification
examinations or technical grade examinations pursuant to the relevant
provisions of the State and obtain corresponding certificates of vocational
qualifications or technical grade certificates upon passing the examinations.

    Article 32  For engraving and making of seals and stamps, educational
institutions should go through the formalities of examination and approval at
the public security organ of the People's Government at or above the county
level of the locality wherein it is located on the presentation of the license
for the running of educational institution and certification issued by the
organ of examination and approval.

    Educational institutions should submit samples of their seals and stamps
to the organs of examination and approval and public security organs for the
record.

    Article 33  Departments of education administration and departments of labor administration and other departments concerned should step up
supervision and control over the work related to the running of educational
institutions with social resources. Local People's Governments at or above the
county level should strengthen supervision, guidance and evaluation of the
educational level, quality of the educational institutions within their
respective administrative areas.

    No administrative department should collect any fee in the exercise of supervision and control over educational institutions.
Chapter IV  Property and Financial Management of Educational Institutions

    Article 34  Educational institutions should establish financial and
accounting rules and property management rules in accordance with law and
keep accounting books pursuant to the provisions for accounting rules for
administrative institutions.

    Article 35  Educational institutions shall collect fees in accordance with
the relevant provisions of the State.

    The items and rates for fee collection of educational institutions
shall be set forth by them and, upon being given remarks after examination
and verification by organs of examination and approval, be verified and
determined by the departments of finance and departments of price control
according to the division of responsibilities in the light of the actual
conditions pertaining to the education, teaching costs and acceptance of subsidies of the educational institutions.

    Article 36  Educational institutions may, during their existence and
continuation, manage and use their properties which however must not be
transferred or used for guarantee.

    No organization or individual shall infringe on or occupy the properties
of educational institutions.

    Article 37  Educational institutions should determine the percentage of expenditure in wages and benefits of all categories of personnel in the
constant expenses of running the educational institutions which should be
submitted to the organs of examination and approval for the record.

    The accumulated funds of educational institutions can only be used
to increase input into education and improve conditions in running the
educational institutions and must not be used for distribution and
extra-school investment.

    Article 38  Educational institutions should make financial and
accounting reports at the end of every accounting year, and entrust
auditing institutions of society to audit their financial and accounting
condition in accordance with the requirements of the organs of examination
and approval and submit the reports to the organs of examination and
approval for scrutiny.
Chapter V  Change and Disbandment of Educational Institutions

    Article 39  Changes in the name, nature and level of an educational
institution should be submitted to the organ of examination and approval
for approval; changes in other items should be submitted to the organ of examination and approval for the record.

    Article 40  Check-up of properties and final financial settlements
should be made in the merger of educational institutions, and the amalgamated
educational institution shall resettle the students in the previous
educational institutions in a satisfactory manner.

    Article 41  Educational institutions having any of the following
circumstances should be disbanded:

    (1)The board of directors or sponsor of an educational institution
requests disbandment in accordance with the provisions of the constitution
of the educational institution; and

    (2)Inability to carry on normal educational and teaching activities
on account of various reasons.

    Disbandment of an educational institution shall be subjected to the
verification and approval of the organ of examination and approval.

    Article 42  An educational institution should, in disbandment, resettle
the in-school students in a satisfactory manner, and the organ of examination
and approval may provide assistance. During disbandment of an educational
institution conducting compulsory education, the organ of examination and
approval should make arrangements for the in-school students receiving
compulsory education to continue their studies.

    Article 43  Clearing of properties should be carried out in accordance
with law in the disbandment of an educational institution.

    The educational institution should, in clearing, first of all pay the
salaries of teachers and staff members due and the social security expenses;
surplus properties of an educational institution after clearing, upon
returning or returning in terms of money the input of the sponsor, overall
arrangement shall be made by the organ of examination and approval for the
remaining portion to be used in the development of the cause of running
educational institutions with social resources.

    Article 44  An announcement shall be made by the organ of examination
and approval of the educational institution verified and approved for
disbandment which shall be notified to hand back the license for the
running of an educational institution and its seals and stamps that
should be kept in sealed storage.
Chapter VI  Security and Support

    Article 45  The departments concerned of People's Governments at or above
the county level should provide support to the running of educational
institutions with social resources pursuant to the provisions of relevant
laws and regulations.

    Article 46  The departments of education administration, departments of labor administration and other conceerned departments of People's Governments
at or above the county level should give equal treatment to educational
institutions run with social resources as given to educational institutions
run by the State in professional guidance, teaching and research activities,
teacher management and citations and rewards.

    Article 47  For land required for the construction of educational
institutions, local People's Governments at or above the county level should
integrate it into plans in accordance with the relevant provisions of the
State and in the light of actual conditions, handle it as land use for
non-profit undertakings, and may give priority to it in making the
arrangement.

    Article 48  Salaries, social security and benefits of teachers and
other educational workers of educational institutions shall be insured
by the educational institutions in accordance with law.

    The teaching age of special-subject teachers shall be calculated on
a continuous basis during their work in the educational institutions.

    Article 49  Students of educational institutions run with social
resources have equal rights as those of the educational institutions
run by the State in going to a higher grade, taking part in examinations
and social activities in accordance with law.

    The principle of orientation to society, equal competition and
employment on merit shall be followed in the employment of students of educational institutions, and employer units must not discriminate.
Chapter VII  Legal Responsibility

    Article 50  Whoever violates the provisions of the Education Law
in activities of running educational institutions with social resources
shall be penalized pursuant to the relevant provisions of the Education
Law.

    Article 51  A sponsor who makes false contribution to funds or withdraw
the funds after the establishment of the educational institution shall be
directed by the organ of examination and approval to amend; one
who refuses to amend shall be imposed a fine less than 200% of the amount he/she should have contributed or the amount he/she has
withdrawn; where the circumstances are serious, the organ of examination
and approval shall direct him/her to stop enrollment and revoke the license
for the running of an educational institution.

    Article 52  Whoever engages in the forgery, alteration and buying and
selling of licences for the running of educational institutions shall be
penalized by the public security organ according to the Penalties for
Violation of Public Security Regulations; one whose offence constitutes
a crime shall be investigated of the criminal responsibilities.

    Article 53  An educational institution which indulges in indiscriminate
collection of fees exceeding the verified items and rates shall be directed
by the organ of examination and approval to refund the fees overcharged
within the specified time period, and shall be penalized by the department
of finance and the department of price control according to relevant laws
and regulations.

    Article 54  An educational institution which fails to determine the
percentage of expenditure of salaries and benefits in the constant expenditure
of running the educational institution or fails to implement the percentage
determined, or use the accumulation for distribution or extra-school
investment shall be directed by the organ of examination and approval to
amend and may be administered a warning; where the circumstances are serious
or one who refuses to amend shall be directed by the organ of examination
and approval to stop enrollment, its license for the running of the
educational institution revoked or the educational institution taken over.

    Article 55  An educational institution where there is disorder in
administration, low quality in education and teaching resulting in pernicious
influences shall be directed by the organ of examination and approval to
consolidate within the specified time period, and may be administered a
warning; where the circumstances are serious or one which fails to meet
the requirements after consolidation shall be directed by the organ of examination and approval to stop enrollment, its license for the running of the educational institution revoked or the educational institution taken
over.

    Article 56  An organ of examination and approval that indulges in
abuse of power and malpractices for selfish gains, or neglects administration
of the educational institutions approved by it resulting in serious
consequences, the person-in-charge bearing direct responsibilities and other
personnel directly responsible shall be imposed administrative sanctions
according to law; those whose offences constitute a crime shall be
investigated of the criminal responsibility according to law.

    An administrative department which collects fees in the exercise of supervision and control over educational institutions shall refund the
fees collected; the person-in-charge bearing direct responsibilities and
other personnel directly responsible shall be imposed administrative sanctions
according to law.
Chapter VIII  Supplementary Provisions

    Article 57  Conducting of training activities with social resources
without the establishment of independent institutions shall be carried
out with reference to these Regulations.

    Article 58  Separate measures shall be worked out by the State Council
for the running of educational instituions by external organizations and
individuals from abroad within the territory of China to which these
Regulations shall not be applicable.

    Article 59  Educational institutions run with social resources approved
for establishment or registration pursuant to laws, rules and regulations
before the coming into effect of these Regulations may continue to be
retained. Those which should obtain licenses for the running of educational
institutions pursuant to the provisions of these Regulations should obtain
retrospectively licenses for the running of educational institutions;
among which those that do not fully meet the qualifications prescribed by
these Regulations should comply with the qualifications prescribed by these
Regulations within the specified time period.

    Article 60  These Regulations shall come into force as of October 1, 1997;
among which the second paragraph of Article 18 of these Regulations shall
come into effect as of the date of implementation of the Regualtions
Concerning the Registration of Running of Non-enterprise Units with Social
Resources.



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