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Relevant Provisions of Administrative Regulations, Documents of the State Council and the Departmental Rules Approved by the State Council

Implementation Adjustment

1

Provisions on the Administration of Foreign-Funded Telecommunications Enterprises
Article 2: A “foreign-funded telecommunications enterprise” means an enterprise engaging in the telecommunications business jointly invested in and formed by foreign investors and Chinese investors in accordance with the law within the territory of the People's Republic of China in the form of a Chinese-foreign equity joint venture.
Paragraph 2 of Article 6: The ultimate ratio of capital contribution of foreign investors of a foreign-funded telecommunications enterprise engaging in the value-added telecommunications business (including the radio paging business in the basic telecommunications business) shall be not more than 50%.
Article 11: To form a foreign-funded telecommunications enterprise engaging in the basic telecommunications business or in value-added telecommunications business out of the scope of a province, autonomous region or municipality directly under the Central Government, the principal Chinese investor shall file an application with the competent department of industry and information technology of the State Council and submit the following documents:
(1) A project application report.
(2) Certificates of qualifications of all investors of the joint venture or other relevant certification documents as prescribed in Articles 8, 9 and 10 of these Provisions.
(3) Certificates or confirmation documents for satisfaction of other conditions for engaging in the basic telecommunications business or value-added telecommunications business as prescribed inthe Telecommunications Regulation.
The competent department of industry and information technology of the State Council shall examine the relevant documents as prescribed in the preceding paragraph from the date of receipt of the application. If an application for engaging in the basic telecommunications business is filed, the examination thereof shall be completed within 180 days and a decision on whether to approve the application shall be made. If an application for engaging in the value-added telecommunications business is filed, the examination thereof shall be completed within 90 days and a decision of whether to approve or disapprove the application shall be made. If the application is approved, the Examination Opinions on Foreign Investments in the Operation of the Telecommunications Business shall be issued; or if the application is disapproved, the applicant shall be notified in writing and the reasons therefor shall be given.
Article 12: To form a foreign-funded telecommunications enterprise engaging in the value-added telecommunications business within a province, autonomous region or municipality directly under the Central Government, the principal Chinese investor shall file an application with the telecommunications administrative organ of the province, autonomous region or municipality directly under the Central Government concerned and submit the following documents:
(1) Certificates of qualifications or relevant confirmation documents as prescribed in Article 10 of these Provisions.
(2) Certificates or confirmation documents for satisfaction of other conditions for engaging in the value-added telecommunications business as prescribed inthe Telecommunications Regulation.
The telecommunications administrative organ of a province, autonomous region or municipality directly under the Central Government shall sign opinions within 60 days of receipt of an application. If the application is approved, it shall be transferred to the competent department of industry and information technology of the State Council; or if the application is disapproved, the applicant shall be notified in writing and the reasons therefor shall be given.
The competent department of industry and information technology of the State Council shall, within 30 days of receipt of the application materials approved by the telecommunications administrative organ of a province, autonomous region or municipality directly under the Central Government, complete the examination and make a decision of approval or disapproval. If the application is approved, the Examination Opinions on Foreign Investments in the Operation of the Telecommunications Business shall be issued; or if the application is disapproved, the applicant shall be notified in writing and the reasons therefor shall be given.
Article 14: To form a foreign-funded telecommunications enterprise, if the investment project shall be subject to the approval of the department of development and reform of the State Council in accordance with the relevant provisions of the state, the competent department of industry and information technology of the State Council shall, prior to issuance of the Examination Opinions on Foreign Investments in the Operation of the Telecommunications Business, transfer the application materials to the department of development and reform of the State Council for approval. If the application materials are transferred to the department of development and reform of the State Council for approval, the time limit for approval as prescribed in Articles 11 and 12 of these Provisions may be extended for 30 days.
Article 15: To form a foreign-funded telecommunications enterprise engaging in the basic telecommunications business or the value-added telecommunications business out of the scope of a province, autonomous region or municipality directly under the Central Government, the principal Chinese investor shall, upon the strength of the Examination Opinions on Foreign Investments in the Operation of the Telecommunications Business, submit to the competent department of commerce of the State Council the contract and articles of association in respect of the formation of the foreign-funded telecommunications enterprise; if the foreign-funded telecommunications enterprise is to engage in the value-added telecommunications businesses within a province, autonomous region or municipality directly under the Central Government, the principal Chinese investor shall, upon the strength of the Examination Opinions on Foreign Investments in the Operation of the Telecommunications Business, submit to the competent department of commerce of the people's government of the province, autonomous region or municipality directly under the Central Government the contract and articles of association in respect of the formation of the foreign-funded telecommunications enterprise.
The competent department of commerce of the State Council or the competent department of commerce of the people's government of a province, autonomous region or municipality directly under the Central Government shall, within 90 days of receipt of the contract and articles of association in respect of the formation of the foreign-funded telecommunications enterprise, complete the examination and make a decision of approval or disapproval. If the application is approved, an Approval Certificate for A Foreign-funded Enterprise shall be issued; or if the application is disapproved, the applicant shall be notified in writing and the reasons therefor shall be given.
Article 16: The principal Chinese investor of a foreign-funded telecommunications enterprise shall, after applying for enterprise registration to the administrative department for industry and commerce upon the strength of the Approval Certificate for A Foreign-Funded Enterprise, apply for a telecommunications business permit to the competent department of industry and information technology of the State Council upon the strength of the Approval Certificate for A Foreign-Funded Enterprise and the enterprise's business license.

The implementation of relevant administrative approval items and special access administration measures for service providers from Hong Kong and Macao shall be temporarily adjusted in Chinese mainland, and such service providers shall be allowed to engage in the telecommunications service business as prescribed in the Agreements. The specific administrative measures shall be developed by the competent department of industry and information technology of the State Council.

2

Regulation of the People's Republic of China on International Maritime Transportation
Paragraphs 1, 2 and 3 of Article 28:
With the approval of the competent department of transport of the State Council, foreign investors may, in accordance with the relevant laws, administrative regulations and other relevant provisions of the state, invest in the formation of Chinese-foreign equity joint ventures or Chinese-foreign contractual joint ventures to engage in international shipping, international shipping agency, international ship management,loading and unloading of international maritime shipments, international maritime cargo warehousing, and international maritime container station and storage yard business; and may invest in the formation of foreign-funded enterprises to engage in theinternational maritime cargo warehousing business.
For a Chinese-foreign equity joint venture engaging in international shipping or international ship agency, theproportion of capital contribution by foreign investors in the enterprise may not exceed 49%.
For a Chinese-foreign contractual joint venture engaging in international shipping or international ship agency, the provisions of the preceding paragraph shall apply, mutatis mutandis, to the proportion of capital contribution by foreign investors in the enterprise.

The implementation of relevant special access administration measures for service providers from Hong Kong and Macao shall be temporarily adjusted in Chinese mainland, and such service providers shall be allowed to engage in the transport services as prescribed in the Agreements. The specific administrative measures shall be developed by the competent department of transport of the State Council.

3

Regulation of the People's Republic of China on Chinese-Foreign Cooperative Education
Article 62: No foreign educational institution, other organization or individual may solely form within the territory of China any school or other educational institution mainly enrolling Chinese citizens.

The implementation of relevant special access administration measures for service providers from Hong Kong and Macao shall be temporarily adjusted in Chinese mainland, and such service providers shall be allowed to engage in the non-academic vocational skill training business as prescribed in the Agreements. The specific administrative measures shall be developed by the administrative department of human resources of the State Council.

4

Regulation on the Administration of Commercial Performances
Paragraph 1 of Article 11: Investors from the Hong Kong Special Administrative Region and the Macao Special Administrative Region may invest in the formation of equity joint ventures, contractual joint ventures and wholly foreign-owned performance brokerage agencies andperformance venue operating entities. A performance brokerage agency of Hong Kong Special Administrative Region or Macao Special Administrative Region may set up branch offices in the Chinese mainland.

The implementation of relevant special access administration measures for service providers from Hong Kong and Macao shall be temporarily adjusted in Chinese mainland, and such service providers shall be allowed to invest in Chinese mainland in the formation of joint venturecultural and artistic performance groups whose shares are controlled by the Chinese mainland parties. The Chinese citizens among Hong Kong and Macao permanent residents may form individual industrial and commercial households in Chinese mainland without being subject toforeign investment approval to engage in the individual performance broker business. The specific measures shall be developed by the competent department of culture of the State Council in conjunction with the relevant departments of the State Council.

5

Regulation on the Administration of Entertainment Venues
Article 6: Foreign investors may form entertainment venues as Chinese-foreign equity joint ventures or Chinese-foreign contractual joint ventures jointly with Chinese investors in accordance with the law, and may not form wholly foreign-owned entertainment venues.

The implementation of relevant special access administration measures for service providers from Hong Kong and Macao shall be temporarily adjusted in Guangdong province, and such service providers shall be allowed to formsolely-funded entertainment venues in Guangdong province. The specific administrative measures shall be developed by the People's Government of Guangdong Province.

6

1. Decision of the State Council on Establishing Administrative Licensing for the Administrative Approval Items Really Necessary to Be Retained
Item (179): Approval of Projects of Holding Foreign Economic and Technological Exhibitions within the Territory of China
2. Notice of the General Office of the State Council on Strengthening the Administration of Holding of Foreign Economic and Technological Exhibitions within the Territory of China (No. 25 [1997], General Office of the State Council)
II. The entities sponsoring and undertaking a foreign economic and technological exhibition must have the qualifications for sponsoring and undertaking such exhibition approved by the competent department of foreign trade and economic cooperation. An overseas institution shall hold within the territory of China an economic and technological exhibition together with or by authorizing an entity with the qualification for sponsoring economic and technological exhibitions within the territory of China.
III. A foreign economic and technological exhibition with theexhibition areaof more than 1,000 square meters shall be subject to graded approval administration.
(2) A foreign economic and technological exhibition held byan entity affiliated to the relevant department of the State Council or an overseas institution shall be reported to the Ministry of Foreign Trade and Economic Cooperation for approval. Where a foreign economic and technological exhibition is held in an area outside Beijing, the sponsor shall gain in advance the consent of the competent department of foreign trade and economic cooperation at the place where the exhibition is to be held.

The implementation of relevant administrative approval items and special access administration measures for service providers from Hong Kong and Macao shall be temporarily adjusted in Chinese mainland, and such service providers shall be allowed to engage in the conference and exhibition services as prescribed in the Agreements. The specific administrative measures shall be developed by the competent department of commerce of the State Council.

7

Provisions on Foreign Investments in Civil Aviation
Paragraph 4 of Article 6: The foreign-funded airplane maintenance projects (having the obligation to undertake the business on the international maintenance market) and aviation oil projects shall be controlled by the Chinese parties. For the projects of freight transport and storage, ground service, aviation food and parking lots, among others, the proportion of foreign investments shall be determined upon negotiation by both the Chinese and foreign parties.

The implementation of relevant special access administration measures for service providers from Hong Kong and Macao shall be temporarily adjusted in Chinese mainland, and such service providers shall be allowed to engage in air transport support services as prescribed in the Agreements. The specific administrative measures shall be developed by the competent department of civil aviation of the State Council.