REGULATIONS ON COMMODITY SUPPLY AND MARKETING AND
PRICE CONTROL FOR SINO-FOREIGN JOINT EQUITY
VENTURES IN SHANGHAI MUNICIPALITY
(TRIAL IMPLEMENTATION)

(Promulgated on December 5, 1984 by the Shanghai
Municipal People's Government.)

 

 

SUBJECT: PRICE

ISSUING-DEPT: SHANGHAI MUNICIPALITY

ISSUE-DATE: 12/05/1984

IMPLEMENT-DATE: 12/20/1984

LENGTH: 1214 words

TEXT:

These Regulations are formulated in accordance with the Regulations for the Implementation of the Law of the People's Republic of China on Sino-foreign Equity Joint Ventures (hereinafter referred to as Regulations for Implementation), taking into account the actual circumstances of Shanghai Municipality.

[Article 1] In addition to purchasing in accordance with the provisions of Article 58 of the Regulations for Implementation, Sino-foreign joint equity ventures (hereinafter referred to as joint ventures) buying goods and materials in China may, in accordance with their particular production needs, directly establish contracts with production units and have fixed suppliers; or establish bases for the production of raw materials to ensure supply; or may also purchase goods and materials at the various domestic commodity trade fairs and trade markets.

[Article 2] Joint ventures exporting their products may, in addition to exporting in accordance with the provisions of Article 62 of the Regulations for Implementation, also sell in China at the Guangzhou Export Commodity Fair or Export Commodity Symposiums held in Shanghai.

Joint ventures may market their products at various commodity fairs or trade markets in China, in addition to their being handled in accordance with the provisions of Article 64 of the Regulations for Implementation.

[Article 3] Where a joint venture wishes to import, within its approved scope of business, goods and materials for which an import licence must be obtained in accordance with State Regulations, and should the examining and approving body not approve the import or should the quantities approved for import be insufficient to meet the enterprise's requirements for production operations, it may apply to the Shanghai Municipal Committee for Foreign Economic Relations and Trade (hereinafter referred to as the MCFERT) to request the examining and approving body to arrange in turn for the unit in charge of the particular commodity to supply the enterprise at the import price, with payment in foreign exchange.

[Article 4] Where a joint venture wishes to export, within its approved scope of business, products for which an export licence must be obtained in accordance with State Regulations, and should the examining and approving body not approve the export or should the quantities approved for export be insufficient the joint venture may apply to the MCFERT to request the examining and approving body to arrange in turn for a foreign trade corporation to purchase the product at the export price, with payment in foreign exchange.

[Article 5] Joint ventures involved in the import or export of goods and materials for which a licence must be obtained in accordance with State Regulations shall prepare an import or export plan every year and apply for a licence every six months. Goods may be imported or exported in batches within the scope of permission stipulated in each licence.

Where the amount of goods and materials which the enterprise requires to import or export exceeds the original annual plan, the enterprise may apply for an increase in planned amounts.

The enterprise may, based upon its needs for business development, make decisions with regard to the timing of its annual import or export plan and its application for an import or export licence or an increase in planned amounts.

[Article 6] Units entrusted by the Municipality to act as issuing agents for import or export licences shall, within five days of receiving an application from an enterprise, sign and issue the licence or submit it in turn to an issuing unit at a higher level for signature and issue.

[Article 7] Pricing of goods and materials that joint ventures need to purchase in China and services that they require shall be handled in accordance with the provisions of Article 65 of the Regulations for Implementation. Prices of fuel coal, fuel for vehicle use and other goods and materials, with the exception of items (1) and (2) listed in Article 65 of the Regulations for Implementation, which are purchased for the production in China of goods for domestic sale shall be calculated according to the prices for planned supplies provided that they are able to be included in the supply plan and, if they cannot be included in the supply plan, floating prices or a negotiated price may be charged. Fees charged for services provided to a joint venture may be calculated according to the prices decided by the unit in charge of the enterprise supplying the service.

[Article 8] When joint ventures purchase goods and materials which have been imported by commodity departments from such departments, prices may be calculated and paid according to an agency price.

The unit in charge of the enterprises supplying commodities and services may not increase prices at will and any violators shall bear all legal responsibility.

[Article 9] Retail prices in renminbi, based on the ex-factory prices of products to be sold domestically by joint ventures, shall be set according to State Regulations on commodity price control and having reference to domestic prices (including planned and floating prices) of products of a similar type unless approval has been obtained from commodity price control departments allowing prices to be set with reference to international market prices. The selling price of products set by a joint venture shall be reported to and filed with the department in charge of the enterprise and to the commodity price control department.

Joint ventures will decide their own prices for products for export and these will be reported to and filed with the department in charge of the enterprise and to the commodity price control department.

[Article 10] Where a joint venture contract stipulates that the products of the venture will be mainly for domestic sale, and should they be products which are not available or are in short supply in China, such products may, after examination and approval by the department for foreign exchange control, be purchased as import substitutes with foreign exchange at international market prices by the units requiring them.

[Article 11] Products of a joint venture may participate in the Shanghai Municipal or National product quality awards. For products of excellent quality, a certificate of excellence may be awarded by Shanghai Municipality or the joint venture may apply for a national certificate of excellence.

[Article 12] After approval has been granted, a joint venture enterprise may establish business entities in Hong Kong, Macao, Taiwan and abroad to be manned with and to undertake training of management personnel.

[Article 13] These Regulations are applicable to Sino-foreign joint equity ventures established in Shanghai Municipality. Sino-foreign joint co-operative ventures and joint equity and co-operative ventures established by overseas Chinese and investors from Hong Kong, Macao and Taiwan may carry out matters with reference to these Regulations.

[Article 14] The right to interpret these Regulations resides with the Shanghai MCFERT.

[Article 15] These Regulations will be effective from December 20, 1984.