Laws of the People's Republic of China

National Development and Reform Commission

Order of the National Development and Reform Commission of the People's Republic of China

No.22

The Interim Measures for the Administration of Examining and Approving Foreign Investment Projects, which have been deliberated and adopted at the executive meeting of the director of the National Development and Reform Commission, are hereby promulgated and shall go into effect as of the date of promulgation.

Director of the National Development and Reform Commission, Ma Kai

October 9, 2004

The Interim Measures for the Administration of Examining and Approving Foreign Investment Projects

Chapter I General Provisions

Article 1

With the view of regulating the administration of examination and approval of foreign investment projects, the present Measures are formulated in the light of the Administrative License Law of the People's Republic of China and the Decision of the State Council on Reforming the Investment System.

Article 2

The present Measures shall be applicable to examine and approve such foreign investment projects as Chinese-foreign equity joint, Chinese-foreign contractual joint, foreign-owned enterprises, the merger of domestic enterprises by foreign investors and the increase in capital of foreign-owned enterprises.

Chapter II The Examination and Approval Organs and the Limit of Their Authorities

Article 3

In terms of the classification of the Catalogue of Industries for Guiding Foreign Investment, the National Development and Reform Commission shall examine and approve the application reports of encouraged projects and permitted projects with a total investment (including the increased amount of capital, similarly hereinafter) of 100 million dollars or more and of restricted projects with a total investment of 50 million dollars or more. Among above application reports, those encouraged projects and permitted projects with a total investment of 500 million dollars or more and those restricted projects with a total investment of 100 million dollars or more shall be subject to the examination and approval of the National Development and Reform Commission and then be reported to the State Council for verification.

Article 4

Encouraged projects and permitted ones with a total investment lower than 100 million dollars and restricted projects with a total investment lower than 50 million dollars shall be subject to the examination and approval of the local development and reform departments, while restricted projects shall be subject to the examination and approval of all provincial development and reform departments and the power to examine and approve such projects shall not be transferred to a lower-level departments.

In case that the local governments have otherwise formulated rules for examining and approving projects listed in the preceding paragraph, such rules shall prevail.

Chapter III The Application Report of a Project

Article 5

The project application report submitted to the National Development and Reform Commission shall contain:

(1)

the name of the project, the time limit of operation and the fundamental information of an investor;

(2)

the construction scale, main construction projects and products of the project, main technologies and techniques adopted, the target markets of products and the planned number of workers;

(3)

the construction site of the project, the demands of resources such as land, water and energy, and the amount of consumption of main raw materials;

(4)

the evaluation of impacts on the environment;

(5)

the prices involved public products or services; and

(6)

the total investment amount of the project, the registered capital and the amount of contribution of each party, the mode of contribution and the financing schemes, and the equipments needed to be imported and the price thereof.

Article 6

The project application report submitted to the National Development and Reform Commission shall be accompanied by documents following:

(1)

the enterprise registration certificate (business license) of Chinese and foreign parties of the investment project, the certificate of commercial registration and the latest financial statements of the enterprise (including the balance sheet, the profit and loss statement and the cash flow statement), and the certificate of capital credit issued by the bank of deposit;

(2)

the letter of intent to invest, and the resolution of the board of directors of the company for capital increase or merger of the project;

(3)

the financing letter of intent issued by a bank;

(4)

the written evaluation and suggestions about the impact on environment issued by a provincial or the State administrative department in charge of environmental protection;

(5)

the written suggestions regarding the selection of sites issued by a provincial planning department;

(6)

the written suggestions regarding a preliminary examination of land use of the project issued by the administrative department for state land and resources of a province or the state ; and

(7)

in case the contribution is state-owned assets or the right of land use, a confirmation document issued by relevant competent departments is required.

Chapter IV Procedures of Examination and Approval

Article 7

Where a project subjects to the examination and approval of the National Development and Reform Commission and the State Council according to the power to examine and approve projects, the project applicant shall provide the provincial development and reform department at the locality of the project with the project application report which shall be reported to the National Development and Reform Commission after being examined and approved by the provincial development and reform department. The enterprise group of the cities directly under the state planning and enterprises directly under the Central Government may directly submit project application reports to the National Development and Reform Commission.

Article 8

In the course of examining and approving project application reports, if it is necessary to solicit the opinions of the department of the State Council in charge of the industry concerned, the National Development and Reform Commission shall issue a letter soliciting opinions to the administrative department of industry of the State Council and attach relevant materials at the same time. The department of the State Council in charge of industries concerned shall submit written opinions to the National Development and Reform Commission within 7 working days after acceptance of the said materials.

Article 9

The National Development and Reform Commission shall entrust a qualified consultation organization to assess the key issues that need to be evaluated and demonstrated within 5 working days after acceptance of an application report. The entrusted consultation organization shall put forward an appraisal report to the National Development and Reform Commission within the prescribed time limit.

Article 10

The National Development and Reform Commission shall finish the examination and approval of the project application report or report opinions of the examination and approval to the State Council within 20 working days since the date when accepting the project application report. If it is difficult to make a decision on examination and approval or report the opinions of examination and approval within 20 working days, the period may be extended for 10 working days by the approval of the principal of the National Development and Reform Commission and the project applicant shall be notified of the reasons for extension.

The authorizing period specified in the preceding paragraph shall not include the period for assessment conducted by an entrusted consulting organization.

Article 11

For an approved project, the National Development and Reform Commission shall issue an examination and approval document in written form to the project applicant; for a disapproved project, the National Development and Reform Commission shall notify the project applicant of the decision in written form and tell them, the reasons as well as the right to apply for an administrative review or initiate an administrative lawsuit according to law.

Chapter V Examination and Approval Conditions and Effectiveness

Article 12

The conditions for the National Development and Reform Commission to examine and approve a project are as follows:

(1)

complying with the laws and regulations of the State and the prescriptions of the Catalogue of Industries for Guiding Foreign Investment and the Catalogue of Priority Industries for Foreign Investment in the Central-Western Region;

(2)

complying with the requirements of middle-term and long-term plans of the national economy and social development, the industry plans and the policies of adjustment of industry structure;

(3)

complying with the public interests and related anti-monopoly prescriptions of the State;

(4)

complying with the requirements of plans of land use, general planning of cities and policies of environmental protection;

(5)

complying with the requirements of technological and technical standards set down by the State;

(6)

complying with the related prescriptions of the national capital project management and the management of foreign debts.

Article 13

The project applicant shall, in light of examination and approval documents of the National Development and Reform Commission, go through the formalities of land use, city planning, quality supervision, work safety, resources utilization, registration (modification) of enterprises, capital project management, import of equipments, application of tax policies and etc..

Article 14

The period of validity shall be stipulated in examination and approval documents issued by the National Development and Reform Commission. Within the period of validity, the examination and approval document shall be the basis for the project applicant to go through corresponding formalities prescribed in Article 13 of the present Measures; after the period of validity, the applicant shall simultaneously present documents permitting the extension issued by the National Development and Reform Commission when going through the said formalities.

Article 15

For an unauthorized foreign investment project, no departments of land, city planning, quality supervision, supervision of work safety, industry and commerce, the customs, tax or foreign exchange may process the pertinent procedures.

Article 16

In case a project applicant obtains an examination and approval document by such unjustifiable means as breaking down a project or providing false materials, the National Development and Reform Commission may withdraw the examination and approval document of the project.

Article 17

The National Development and Reform Commission may conduct supervision and examination over the implementation situation of the applicant's project and the situation of examination and approval of an overseas investment project by a regional development and reform department, and dispose the verified problems according to law.

Chapter VI Alteration and its Examination and Approval Thereof

Article 18

The alteration of an approved project by the National Development and Reform Commission shall be applied to the National Development and Reform Commission in case the project is under any of the following circumstances:

(1)

the alteration of construction site;

(2)

the alteration of investors or their share rights;

(3)

the alteration of main construction contents and main products;

(4)

the overall investment beyond 20 percentage or more of the approved investment amount;

(5)

other circumstances required to be altered according to related laws and regulations and industrial policies.

Article 19

The examination and approval procedures of alteration shall be implemented by referring to the prescriptions of Chapter IV of the present Measures.

Chapter VII Supplementary Provisions

Article 20

For the purpose of timely mastering the examination and approval information of a project, the regional development and reform department shall submit a copy of the examination and approval document of a foreign investment project with a total investment amount of more than USD 30 million approved by a regional departments to the National Development and Reform Commission within 20 working days since the date of examination and approval.

Article 21

Each provincial development and reform department shall, according to the prescriptions of the Provisions on Guiding the Direction of Foreign Investments (Order No. 346 of the State Council) and the present Measures, constitute corresponding measures for administration.

Article 22

Projects invested in the Mainland of China by investors from Hong Kong or Macao Special Administrative Region or Taiwan shall be implemented with reference to the present Measures.

Article 23

The power to interpret the present Measures shall be vested in the National Development and Reform Commission.

Article 24

The present Measures shall go into effect as of October 9, 2004. In case any of the former rules for the examination and approval of foreign investment projects conflicts with the present Measures, the present Measures shall prevail.