REGULATIONS OF ANSHAN MUNICIPAL PEOPLE'S
GOVERNMENT FOR THE ENCOURAGENMENT OF
FOREIGN INVESTMENT

(Issued 7 November 1986 by the
Anshan Municipal People's Government)

 

SUBJECT: ENTERPRISES WITH FOREIGN INVESTMENT

ISSUING-DEPT: LIAONING PROVINCE

ISSUE-DATE: 11/07/1986

IMPLEMENT-DATE: 11/07/1986

LENGTH: 1116 words

TEXT:

These Regulations are formulated in order to improve the investment environment of Anshan Municipality and attract foreign companies, enterprises, other economic organisations and individuals to invest in and establish Sino-foreign joint equity enterprises, Sino-foreign co-operative enterprises and investment enterprises in Anshan Municipality.

(1) In addition to the areas of investment encouraged by the State Council and the Liaoning Provincial People's Government, the Anshan Municipal People's Government encourages Foreign investors to invest in and establish the following types of enterprises in Anshan Municipality:

(i) enterprise that will fully develop and utilise the resources available in Anshan;

(ii) enterprises that will engage in the thorough processing of agricultural, forestry, animal husbandry products and by-products;

(iii) enterprises that will engage in the thorough processing of steel.

(2) To assist foreign investment enterprises to achieve a foreign exchange balance:

(i) Foreign investment enterprises shall themselves achieve a balance of foreign exchange.  Should a foreign investment enterprise which is approved as an exporting enterprise or technologically advanced enterprise face genuine difficulties achieving a foreign exchange balance during the first three years after its establishment, the problem may be submitted to Anshan Municipal Leadership Group for Foreign economic Relations and Trade through the jurisdictional framework by which the Chinese party is administered and a partial or final resolution will be given.

(ii) After the State export plan has been completed, Anshan Municipality will nominate some products and, acting through foreign trade companies which have the right to carry out business with foreigners, will authorise foreign parties to joint ventures to market the products abroad.  Apart from the portion for the supply units, all foreign exchange earnings from sales of such products that are retained by Anshan Municipality will be used to resolve the foreign exchange imbalance of foreign investment enterprises, but priority will be given to those enterprises that were involved in the said marketing.

(iii) Foreign investment enterprises may use local products over which the state Foreign Trade Corporation does not have monopoly control and which do not require an export quota nor an application for a licence to carry out comprehensive compensation trade.

(iv) Where foreign investment enterprises face genuine difficulties achieving a foreign exchange balance, their foreign staff and their families stationed in Anshan may use Renminbi for payment of their food, accommodation, transportation, communications, medical and other expenses.

(3) Supply of goods and materials to foreign investment enterprises:

(i) Priority supply will be provided, in line with the treatment awarded to key projects in Anshan, for the various goods and materials that are required by foreign investment enterprises for their establishment, provided that these items are included in the feasibility study report.

(ii) Priority supply will be provided, in line with the treatment awarded to State-owned enterprises, for the various goods and materials that are required by foreign investment enterprises during the course of production, provided that these are included in the feasibility study report.

(4) Land use fees:

(i) Land use fees will be chareged at between 5 and 10 yuan per square metre per year.  Where the Chinese party to a joint venture contributes the land use fees as capital investment, 3 to 5 yuan square metre per year will be charged.

(ii) In remote areas where foreign investment enterprises occupy large areas of land, the land use fees per square metre per year may be less than 3 yuan.

(iii) Ptocedures for the use of land by foreign investment enterprises are to be submitted for approval together with the contract.

(iv) Foreugb oartues to a co-operative enterprise will be encouraged to establish office and residential buildings and facilities for cultural and recreational purposes in Anshan Municipality in accordance with the requirements of the overall plan approved by the State.  The relevant municipal authorities will allocate appropriate sites and provide all the necessary public works.

(5) Funding:

(i) Where investment capital is required by a Chinese party as its contribution towards the establishment of a foreign investment enterprise, the Chinese party, being a prospective shareholder, should use its own efforts to explore all avenues for raising funds.  The municipal finance authority and local banks may provide lans (in renminbi) as part of the capital contribution of the Chinese party.

(ii) The shortfall in the Chinese party's contribution of foreign exchange capital will be resolved following approval by the Bank of China.

(6) Foreign investment enterprises will adopt the manager (factory director) responsibility ystem working under the leadership of the Board of directors.  The necessary departmental managers and the number of employees will be determined by the board of directors itself.  Any employees required, apart from personnel from the Chinese party's original enterprise whose recruitment in accordance with contract provisions will be given preference, shall generally be recruited from the area where the enterprise is located.  Recruitment numbers only require to be filed with the Department of Labour and Personnel as submission for approval is not necessary.  Technical and management personnel may be recruited from other places or from abroad.  Employees' wages and incentive awards will be determined by the Board of Directors.

(7) To simplify procedures and improve efficency the Municipal Office for Foreign Economic relations and Trade, within 15 days of receiving the complete set of documents applying for the establishment of a foreign investment enterprise, must decide whether or not to approve the application and whether or not to submit a report.

(8) These Regulations apply from their date of promulgation to foreign investment enterprises which obtained approval for establishment prior to promulgation of these Regulations and which qualify for the preferential terms of the Regulations.

(9) Joing equity, co-operative and sole investment enterprises operated in Anshan Municipality by investors from Hong Kong, Macao and Taiwan will also be administered in accordance with these regulations.

(10) Thses Regulations will be effective from the date of promulgation and the Anshan Municipal Office for Foreign Economic Relations and Trade will be responsible for their interpretation.