On the basis of guiding foreign investment orientation,to make their develop-ment in accordance with China national economy and social development plan,and to protect investors?legitimate rights and interests,this Regulations are stipulated according to laws and industry policies concerning foreign investment.

Article 2

The Regulations apply to the projects of a Chinese-foreign joint venture,a Chinese-foreign co-operation venture,a foreign enterprise(in the following simply called them as foreign-invested entreprise)and the projects in other forms (in the following simply called as foreign-invested projects)which in the area under China" jurisdiction.

Article 3

The state Development Planning Commission,the State Economic and Trade Commission and the Ministry of Foreign Trade and Economic Cooperation will compile the Directory of Industries Opening to Foreign Investment and the Directory of Opened Superior Industries in Central and West China,in conjunction with related departments of the State Council.These two Directories will be published by the State Council's approval.According to the changes of real situation,the State Development Planning Commission,the State Economic and Trade Commission and the Ministry of Foreign Trade and Economic Cooperation,in conjunction with related departments of the State Council will amend the Directory of Industries Opening to Foreign Investment and the Directory of Opened Superior Industries in Central and West China and will publish them at right time.

The Directory of Industries Opening to Foreign Investment and the Directory of Opened Superior Industries in Central and West China will serve as the foundation for examining and approving foreign-funded projects and formulating related policies.

Article 4

Foreign investment projects fall into four categories:encouraged,permitted,restricted and banned.Encouraged,restricted and banned projects are included in The Directory of Industries Opening to Foreign Investment ,and what are not included in this Directory are permitted foreign investment projects.

Article 5

Projects in the following fields are encouraged:

New agrotechnologies and multi-purpose agricultural development,energy,communications and major raw materials;

High technologies,advanced applied technologies,as well as new materials and equipment that can improve product performance,raise enterprise efficiency and make up deficient production at home;

Projects that satisfy market demand and can help raise product grade,exploit

new markets and sharpen product competency in the international market;

New technologies and equipment that can spur economization in energy and raw materials,comprehensive utilization of both natural and recycled resources and control of environmental pollution;

Projects that can give full play to human and natural resource advantages in central and west China,and conform to State industrial policies;

????The other conditions stipulated by laws and administrative regulations.

Article 6

Projects in the following fields are restricted;

_Backward technology

_Not good to economize the resources or to improve ecological environment;

_Engaged in special minerals exploration and exploitation which the govern-ment stipulates to be in protection;

_Industries' pening up to the world step by step;

_The other conditions stipulated by laws and administrative regulations.

Article 7

Projects in the following fields are banned;

_Put the country in danger and harm social public interests;

_Pollute environment ,damage natural resources or hurt people's health.

_Occupy large piece of cultivated land,not beneficial for protecting and devel-oping land resources;

_Endanger the safety and efficacy of military installations;

_Produce products by using Chinese special crafts and technologies;

_The other conditions stipulated by laws and administrative regulations

Article 8

The Directory of Industries Opening to Foreign Investment can stipulate foreign investment projects as being restricted to "Chinese-foreign joint venture or Chinese-foreign co-operation venture","hinese-holding"Or "hinese-holding relatively"?

Being restricted to joint venture and co-operation means the projects only permitted on the condition of Chinese-foreign joint venture or chinese-foreign co-operation;Chinese-holding means the total investment sum of Chinese investors in the foreign investment project amounts to 51% or above;Chinese-holding relatively means the total investment sum of Chinese investors surpass any other foreign investors.

Article 9

In addition to the preferential treatment stipulated by related laws and administrative regulations,foreign investors engaged in projects in energy,communications and municipal infrastructures (coal,petroleum,natural gas,electric power,railway,road,port,airport,municipal road,sewage disposal,garbage disposals,and so on)which feature huge input but a long payback period,will be allowed to expand their business scope.

Article 10

Permitted foreign investment projects whose products will be totally exported are regarded as the encouraged.Restricted foreign investment projects whose 70% of products will be exported are regarded as the permitted by the approval of people's government of province,autonomous region,municipality directly under the Central Government,planned special-listed municipality and deparment under the direct controlof the State Council.

Article 11

The restrictions of the projects which can give full play to the advantages in central and west China can be relaxed appropriately;among which be listed in the Directory of Opened Superior Industries in Central and West China can enjoy preferential policies bestowed on the encouaged foreign investment projects.

Article 12

On the basis of current approval rights and restrictions,the Developing and Planning Commission and the Economic and Trade Commission respectively approve and file foreign investment projects according to the projects¡¯nature;the Ministry of Foreign Economic and Trade approve and file the contract and constitution of foreign investment enterprise.The restricted projects and below are approved by the concerning responsible departments of the people's government of province,autonomous rigion,municipality directly under the Central Government,planned special-listed municipality,at the same time reporting to the higher level responsible department or the professional resposible department to be filed,the approval of this kind of projects can not be transferred to a lower level.The projects engaged in service and trade which open up step by step are approved according to related regulations.

The foreign investment projects which are related with quota or permission certificate firstly should apply for them to the Ministry of Foreign Economy and Trade.

Laws or adminstartive rules which have other regulations on the approval procedure and way of the foreign investment projects should be obeyed.

Article 13

The projects against the Regulations should be cancelled in 30 working days when the higher level approval department receives the filed document,the contract and constitution of which is ineffective.The industry register office should refuse its registration,and the customs does not deal with its importing and exporting formalities.

Article 14

The applicant of foreign investment project who cheat the project into approval by deceiving or other malpracticing must be investigated under law according the level of seriousness,the approval office should cancel the approval,and the concerned responsible office handles it appropriately by law.

Article 15

The officials in approval office who abuse power or neglect duty must be investigated under criminal law,whose wrongness is not serious enough to receive criminal punishment should receive administrative punishment as big mistake at least.

Article 16

The regulations will also apply to projects funded by overseas Chinese and businessmen from China¡¯s Hong Kong,Macao and Taiwan.

Article 17

The Regulations will become effective on April 1,replacing the Provisional Regulation on the Guidance of Foreign Invesment Orientation,which was approved by the State Council on July 7,1995,and jointly publicized by the State Planning Commission,the State Economic and Trade Commission and the Ministry of Foreign Trade and Economic cooperation on June 20,1995(the end).