(On November 8, 2002 State economic and Trade Commission, and Treasury, and national business administration General, and safe makes 42nd, announced) first article for guide and specification using foreign restructuring State-owned enterprise of behavior, promote State-owned economic of strategic restructuring, speed up state-owned enterprise established modern enterprise system of pace, maintenance social stable, according to People's Republic of China company law, and People's Republic of China contract method and national about foreign investment and the State-owned assets management of legal regulations provides,
    These provisions are formulated.
    Provisions of this article apply to foreign State-owned enterprises, including stakes in State-owned enterprises (except for financial companies and listed companies) restructuring or the establishment of enterprises with foreign investment of the company (hereinafter referred to as using foreign capital to reorganize State-owned enterprises). Third article this provides by said using foreign restructuring State-owned enterprise including following case: (a) State-owned enterprise of State-owned property holds people will all or part property transfer to foreign company, and enterprise and other economic organization or personal (following referred to foreign investors), enterprise restructuring for foreign investment enterprise; (ii) company business enterprise of State-owned equity holds people will all or part State-owned equity transfer to foreign investors, enterprise restructuring for foreign investment enterprise; (three) State-owned enterprise of territory creditors will holds of claims to foreign investors,
    Enterprise restructuring for foreign investment enterprise; (four) State-owned enterprise or containing State-owned equity of company business enterprise will enterprise of all or main assets sold to foreign investors, foreign investors to by purchase of assets alone or and sold assets of enterprise, common established foreign investment enterprise; (five) State-owned enterprise or containing State-owned equity of company business enterprise through increased funding spread unit absorption foreign investors investment, will the enterprise restructuring for foreign investment enterprise.
    The fourth article of the provisions referred to in article III (a), (b), (c), (e) situation of State-owned enterprises and enterprises were restructured enterprises. State-owned enterprises of State-owned property rights, State-owned shares of the Corporation collectively referred to as State-owned property rights.
    State-owned property rights holders, holders of State-owned shares are collectively referred to as holders of State-owned property rights. State-owned property right holder is authorized by the State Department or State-authorized investment institution, possession of State-owned enterprises and other economic organizations in the capital.
    Transfer of State-owned property rights holders, creditors of State-owned enterprise creditors, sell assets collectively referred to as the restructuring of enterprises.
    Article fifth foreign investors to reorganize the Party shall select one of the following conditions: (a) has been restructured the qualification and skills required by the enterprise; (b) has a good business reputation and management; (c) has a good financial situation and economic strength.
    Reorganization of the Party shall require foreign investors to improve corporate governance and promoting sustainable development of enterprise restructuring programmes, restructuring programmes should include new product development, technological innovation and related investment schemes, measures to strengthen enterprise management, and so on. Sixth using foreign capital to reorganize State-owned enterprises should be guided by the following principles: (a) comply with the national laws and regulations, to ensure national economic security; (b) in line with national industrial policy. Enterprise (including its directly or indirect holding of enterprise) business range belongs to foreign investment industry Guide Directory ban foreign investment industry of, foreign investors shall not participation restructuring; must by China holding or relative holding of enterprise, restructuring Hou should keep China holding or relative holding status; (three) conducive to economic structure adjustment, promote State-owned capital optimization configuration; (four) focused on introduced advanced technology and management experience, established specification of company governance structure, promoted enterprise technology progress and industry upgrade; (five) insisted public, and
    The principles of equity, justice, honesty, preventing the loss of State-owned assets, not trying to escape, the suspended banks and other creditors ' claims, shall be without prejudice to the legitimate rights and interests of employees, protecting the legitimate rights and interests of foreign investors; (f) the promotion of fair competition, must not lead to monopolies in the market. Seventh transfer of State-owned enterprises or State-owned companies and two or more State-owned enterprises or other two or more of the investment subject of State investment in the establishment of State-owned stakes in limited liability companies, restructuring of the Party shall first seek the views of the reorganization of the enterprise workers ' Congress. State-owned equity transfer of enterprises shall be those shareholders would agree to be reorganized. Transfer of State-owned enterprises claim shall be subject to restructuring of State-owned property rights holder.
    Sell wholly or mainly of assets requires a prior consent of the holder of the property right of State-owned enterprises or shareholder approval, and notify the creditors. Eighth article using foreign restructuring State-owned enterprise should meet following requirements: (a) enterprise restructuring Qian, State-owned property holds people should organization was restructuring Enterprise for assets inventory, and property defined, and claims debt cleanup, hired has qualification of intermediary institutions for financial audit, according to state-owned assets assessment management approach (State makes 91st,), and State-owned assets assessment management several problem of provides (Treasury makes 14th,), about provides for assets assessment.
    Assessment in accordance with regulations after approval or for the record, as a basis for determining the State-owned property and asset prices. (B) the restructuring of corporate control right transfer or business after wholly or mainly engaged in sale of assets to foreign investors, restructuring and the reorganization of the Enterprise shall make proper arrangements for workers ' programme, and should be considered by the workers ' Congress passed. Reorganization of the Enterprise shall be based on the existing assets in satisfaction of arrears for employees wages, do not return the funds raised, in default of payment of social insurance premiums and other costs. Restructuring of enterprises and workers to implement bi-directional selection. On the retention of staff in accordance with renewal or modification of labor contracts.
    To terminate the labor contract according to law to pay economic compensation of employees and workers to transfer social insurance institutions in accordance with one-time paid social insurance contributions, the funds required from the restructuring of the company to be reorganized before deduction of net assets, or from the transfer of State-owned property rights of State-owned property rights holders benefit paid in priority. (C) to sell assets restructuring, corporate debt inherited by the original enterprise; otherwise restructured, corporate debt inherited by the restructured enterprise. Transfer of mortgage or pledge of property rights of State-owned assets, should be consistent with the People's Republic of China relevant provisions of the law.
    Successors shall be signed with the creditors of debt-related credit and debt disposition agreement. (D) restructuring of the reorganization of the party should publicly release information widely to solicit foreign investors, foreign investors qualifications, reputation, financial position, management, payment guarantees, quality carry out investigations.
    Priorities can bring advanced technologies and management expertise, high correlation to long-term investors.
    Restructuring and foreign investors should be each other's reasonable request, and detailed information on the information shall not be misleading and fraudulent practices, and bear an obligation of confidentiality. (E) corporate restructuring to transfer ownership or sell assets, reorganization of the party established should give priority to public bidding to foreign investors, and the transfer price. Transfer of open bidding, shall perform the formalities, and the proposed transfer of State-owned property right or intended to sell the assets of the relevant circumstances shall be published.
    Transfer by agreement, it should operate openly. In whatever manner, restructuring and foreign investors shall be in accordance with the relevant provisions of the State signed a transfer agreement and the present provisions.
    Transfer agreement shall include the transfer of State-owned property, staff placement, credit and debt disposition, transfer, transfer pricing, payment methods and terms of payment, settlement of property rights, as well as corporate restructuring and other provisions. Nineth using foreign capital to reorganize State-owned enterprises should be in accordance with the following procedures: (I) restructuring (reorganization of the Party shall determine a restructuring of two or more parties) shall apply to the restructuring of the economic and trade departments at the same level.
    Restructuring application material should attached feasibility research report, and restructuring party and was restructuring enterprise of situation, and foreign investors of situation (including by registered accountants audit of recently three years of financial report and in China territory has actual control right of industry enterprise products or service of market share), and restructuring programme (including workers placed, and claims debt disposal and enterprise restructuring programme), and restructuring Hou of enterprise (including its directly or indirect holding of enterprise) of business range and equity structure, file. Under the economic and trade authorities shall, in accordance with the regulations on guiding foreign investment direction of permission and audit the relevant laws and regulations. Enterprises under the Central Government and its wholly owned or has control over enterprise restructuring, reorganization of enterprises directly or indirectly hold shares, after the restructuring of the enterprise total assets of not less than $ 30 million, approved by the economic and Trade Department of the State Council; that could lead to monopoly, hinder fair competition in the market, at the hearing before the review.
    Restructuring of the economic and trade authorities in receiving application materials should be made within 45 days after consent of the reply; needs a hearing, the reply within 3 months to agree.
    State enterprise to be reorganized and its direct or indirect stake in the industry utilizing foreign capital and changes in property rights of State-owned stock holders in listed companies caused by the changing nature of State-owned shares held by otherwise provided, in accordance with its provisions. (B) restructuring and foreign investors to sign a transfer agreement should be issued in accordance with the Ministry of Finance of the State-owned capital and the notice of interim measures for the administration of Finance (finance and Enterprise [2001]325) the relevant provisions of the approval.
    After approval, the transfer agreement entered into force.
    Transfer agreement shall be attached to state-owned property right registration, reorganization of the company's audit and valuation report approval or for the record, staff placement programme and debt agreements, corporate restructuring programmes, restructuring and reorganization of the company's relevant resolution, restructuring enterprises and workers ' Congress or resolutions and other documents.
    (C) restructuring the restructuring or reorganization of the Enterprise shall apply and approval document of the transfer agreement in accordance with the law the approval procedures for foreign-invested enterprises; of the restructured company for the limited, pursuant to the People's Republic of China company law regulations.
    (D) the restructured enterprises or investors should take this article (a), (c) the approval document in accordance with the regulations for Administration of registration of enterprises with foreign investment registration rights to the original registration organ or domicile has the right to registration of foreign-invested enterprises registered with the registration authority procedures; restructured companies for the limited, pursuant to the People's Republic of China company law regulations. (E) applications for reorganization should be restructured and transfer agreement approval documents, foreign exchange registration certificates and related documents, in accordance with the relevant provisions of State-owned property rights delivery procedures and registration of changes in ownership, and entrusted the capital verification report issued by the certified public accountant according to law.
    Original restructured enterprises into State-owned allocated land, shall go through the land and transfer procedure.
    (F) restructure the transfer of State-owned property, foreign exchange income from debt or selling assets, restructuring shall be applied for and transfer agreement approval documents and approval of the relevant documents submitted to the Foreign Exchange Management Department in the settlement.
    Enterprise to be reorganized through a capital increase and share expansion in attracting foreign investors to invest in restructuring, approved by the administration of foreign exchange, can open a foreign exchange capital account to retain foreign investors into the foreign exchange funds.
    (G) limit by the local economic and trade authorities and financial authorities relating to key State enterprises, the State approved a debt-for-equity enterprises and belong to the catalogue for the guidance of foreign investment industries limited types of industrial enterprise restructuring application, transfer protocols and approval documents, should be submitted to the State Council economic and trade departments, financial departments of the State Council for the record. The tenth foreign investors remitted should be freely convertible currencies or other lawful property rights pay the transfer price or capital. Approved by the administration of foreign exchange, can also be obtained with investments in China's Yuan net profits or other lawful property rights transfer to pay the price or capital contribution.
    Above other legal property interests including: (a) foreign investors from China territory held of other foreign investment enterprise for liquidation, and equity transfer, and first recycling investment, and reduction funding, proceeds of property; (ii) foreign investors acquisition State-owned enterprise or containing State-owned equity of company business enterprise of State-owned property or assets; (three) foreign investors acquisition State-owned enterprise of creditors of claims; (four) legal regulations provides of other funded way.
    CPA for foreign investors while going through the verification, shall, in accordance with Ministry of finance, State administration of foreign exchange on further strengthening the verification of foreign invested enterprises and perfecting registration system of foreign exchange notifications (accounting [2002]1017) carry out the verification procedures, issue a verification report. 11th article in the manner of restructuring, foreign investors should generally be in the foreign investment business license issued within 3 months from the date of payment of the full price.
    It is really difficult, business license should be issued within 6 months from the date of payment of the price 60% per cent of the total and the remainder should be legally guaranteed, paid off in a year.
    The 12th after the transfer of property right of State-owned enterprises control right transfer or business wholly or mainly engaged in sale of assets to foreign investors, in front of the foreign investors to pay the full purchase price, restructuring of the party has the right to know, supervise the production and operation of restructured enterprises and financial conditions, foreign investors and restructuring of enterprises should be given appropriate and convenient.
    Foreign investors in the acquisition of assets prior to the establishment of foreign-invested enterprises shall be subject to the assets and activities.
    13th State-owned property right and asset transfer by a restructuring charge, in accordance with the relevant provisions of the financial authorities under management and use. The 14th foreign investor from the reorganized enterprise's share of the net profit, equity transfer income, business income upon expiry or termination of funds around and other lawful sources of income can be remitted in accordance with law.
    Approved by the administration of foreign exchange, can also be used for reinvestment.
    15th in the process of using foreign capital to reorganize State-owned enterprises, tax policy in accordance with the relevant provisions of the tax laws and administrative regulations of the Executive, charging policy in accordance with the State Development Planning Commission, State economic and Trade Commission, the Ministry of supervision, Ministry of finance, National Audit Office, State Council Office for rectifying malpractices on implementing reforms in the process of restructuring related charges of carrying out relief notice (valuation fee [1998]1077) shall apply.
    16th restructuring and reorganization of the enterprise staff beyond power, negligence or collusion, bribery and foreign investors in private, State, creditors and workers ' rights and interests, shall be subject to administrative penalties and disciplinary action by the relevant authorities constitutes a crime, criminal responsibility shall be investigated according to law.
    17th section is responsible for the approval of government authorities who violate this provision, without authorization, ratification or approval of abusing power for personal gain, damage State, creditors and workers ' rights and interests, the relevant departments according to the cadre management authority, held directly responsible and managers of administrative liability constitutes a crime, criminal responsibility shall be investigated according to law.
    18th Hong Kong S.A.R., and Macau S.A.R., and Taiwan investors and foreign-funded enterprises to participate in the restructuring of State-owned enterprises had been established, with reference to these provisions.
    The 19th article of the rules by the State economic and Trade Commission, the Ministry of finance, the State administration for industry and commerce, State administration of foreign exchange is responsible for the interpretation.
                                                            The 20th article of the regulations come into force on January 1, 2003.