Chapter 1 : Tariffs

Objective

APEC Economies will achieve free and open trade in the Asia-Pacific Region by :

(a)           Progressively reducing tariff measures

(b)          Ensuring the transparency of APEC economies’ respective tariff measures

Guidelines

Each APEC economy will:

(a)                 take into account, in the process of progressive reduction of tariff measures, intra-APEC trade trends, economic interests and sectors or products related to industries in which this process may have positive impact on trade and on economic growth in the Asia-Pacific region;

(b)                ensure that the progressive reduction of tariffs is not undermined by the application of unjustifiable measures; and

(c)                 consider extending, on a voluntary basis, to all APEC economies the benefits of reductions and eliminations derived from sub-regional arrangements.

Collective Actions

APEC Economies have agreed to take Collective Actions to help achieve these goals.  These actions are contained in Collective Action Plans (CAPs) which are updated annually. The current CAP relating to tariffs can be found in the Tariffs and Non-Tariff Measures Collective Action Plan. 

{China}’s Approach to Tariffs in 2002

            China became a WTO member at the end of last year. From Jan.,2002,  China began to bind tariffs for all products and  reduce tariff rates  in accordance with  the schedule of commitiment on tariff area.

Bound Tariffs

Bound tariffs for all products in China.

China will bound all traiff lines.

Applied Tariffs

On January 2002,China reduced the import tariff rates on  5332 items,which bring the average tariff rate form 15.3% to 12%.

Customs Imput and Export Tariff of the People's Republic of China is compiled on the basis of the terms of the Customs Cooperation Council(CCC) and the Harmonized System.In 2002, its import tariff lines cover 7316 items (HS 8-digit).Currently, China's simple average tariff rate is 12%

As a member of  WTO,China will fully honour the commitments on tariff reduction.

Tariff Quotas

China reduced some out quota tariff rates since last IAP.

2002, China will arrange tariff rate quota on 11 imported goods.These goods are as follows:wheat(6 items),maize(5items), rice,whether or not busked(14 items),soybean oil(2 items), palm oil(3 items), rape oil(6 items), sugar(6 items), wool(6 items), wool tops(3 items), cotton(2 items), chemical fertilizer(3 items). Their in quota duty ratesare respectively:1%, 3%, 4%, 6%, 9%, 10%, 20%(details see the tariff schedule 2002 china).

China will fulfil its commitments according to its commitments in WTO.

Tariff Preferences

Transparency of Tariff Regime

To ensure the stability and transparency of China's policies on tariff, the Chinese government has legalized the procedures on identifying items for imposing tariffs and the procedures on setting and adjusting tariff rates.  Since 1997, China has submitted its latest tariff database to APEC on the annual basis.  Since June 1998, all the information on tariff policies and legislations could be found on http://www.tax.com.cn/

All the laws and regulations on tariff are published on the Gazette of the People's Republic of China on Taxation Regulations. The following are the main laws and regulations on tariff: Customs Law of the People's Republic of China; Regulations of the People's Republic of China on Import and Export Duties and Measures of the Customs of the People's Republic of China Governing the levying of Import Duties on Articles of Entry Passengers' Baggage and Personal Postal Parcels (Chinese Version Only).

Website: http://www.tax.com.cn/

Bound Tariffs

No bound tariff.

Bound tariffs for all products in China.

Applied Tariffs

Customs Import and Export Tariff of the People's Republic of China was compiled on  the basis of  the terms of the Customs Cooperation Council (CCC) and the Harmonized System. At the end of 1996, its import tariff lines covered 6,549 items (HS 8-digit). The simple average tariff rate was 23%.

China has lowered its tariff rates for several times. On April 1996, the tariff rate was brought down from 35.9% to 23%; on 1 October 1997,  to 17%. On 1January 1999, in order to honour the commitments in the EVSL, China reduced its tariff rates on forest products and toys which brought its average tariff rate to 16.7%. On January 2001,China reduced the import tariff rates on  3462 items,which brought the average tariff rate from 16.4%to 15.3%. On January 2002,China reduced the import tariff rates on  5332 items,which bring the average tariff rate form 15.3% to 12%.

Tariff Quotas

N.A.

China applies its tariff quotas administration fully in accordance with WTO rules and principles and with the provisions set out in China's Schedule of Concessions and Commitments on Goods.

Tariff Preferences

No tariff perferences.

N.A.

Transparency of Tariff Regime

N.A.

All the laws and regulations on tariff are published on the Gazette of the People's Republic of China on Taxation Regulations. The following are the main laws and regulations on tariff: Customs Law of the People's Republic of China; Regulations of the People's Republic of China on Import and Export Duties and Measures of the Customs of the People's Republic of China Governing the levying of Import Duties on Articles of Entry Passengers' Baggage and Personal Postal Parcels (Chinese Version Only).

APEC INDIVIDUAL ACTION PLAN:  TARIFF SUMMARY REPORT FOR 2002

(PLEASE COMPLETE BOXES)

All Goods

Agriculture excluding Fish

Fish and Fish Products

Petroleum Oils

Wood, Pulp, Paper and Furniture

Textiles and Clothing

Leather, Rubber, Footwear and Travel Goods

Metals

Chemical & Photographic Supplies

Transport Equipment

Non-Electric Machinery

Electric Machinery

Mineral Products, Precious Stones & Metals

Manufactured Articles, n.e.s

ITEM

Bound tariff lines as a percentage of all lines

100

100

100

100

100

100

100

100

100

100

100

100

100

100

Duty-free tariff lines as a percentage of all lines

4.9

7.7

10

5.6

20

0.45

4.1

0.65

0.35

4.1

16.2

8.6

1.9

Preferential tariff lines as a percentage of all lines

Ratio of tariff lines with quotas to all lines

0.77

Simple average bound tariff rate

12

Simple average applied tariff rate

12

15.8

14.3

6.1

8.9

17.6

14

7.6

7.9

17.4

9.6

10.7

9.4

13

Simple average applied preferential tariff rate - indicate for

each preferential arrangement

Average applied tariff rate for all lines subject to duty

Import-weighted average applied tariff rate - specify FOB

or CIF

Import-weighted average bound tariff rate - specify FOB

or CIF

                                Notes

APEC INDIVIDUAL ACTION PLAN:  TARIFF DISPERSION TABLE FOR 2002

(PLEASE COMPLETE BOXES)

All Goods

Agriculture excluding Fish

Fish and Fish Products

Petroleum Oils

Wood, Pulp, Paper and Furniture

Textiles and Clothing

Leather, Rubber, Footwear and Travel Goods

Metals

Chemical & Photographic Supplies

Transport Equipment

Non-Electric Machinery

Electric Machinery

Mineral Products, Precious Stones & Metals

Manufactured Articles, n.e.s

NUMBER OF TARIFFS AT OR BETWEEN

0%

358

84

17

1

64

0

1

29

8

1

35

77

30

11

0%<X<=5%

954

84

5

1

17

50

14

204

142

61

96

69

140

71

5%<X<=10%

2589

196

3

16

124

105

78

324

879

74

448

143

64

135

10%<X<=15%

1265

164

77

0

50

179

36

104

122

37

207

93

41

155

15%<X<=20%

912

193

32

0

58

271

63

39

33

19

38

21

23

122

>20%

1186

307

36

0

4

456

32

12

19

97

28

66

50

79

Specific

52

7

0

0

3

0

0

0

35

0

0

7

0

0

TOTAL

7316

1035

170

18

320

1061

224

712

1238

289

852

476

348

573

                                 Note

Chapter 2 : Non-Tariff Measures

Objective

APEC Economies will achieve free and open trade in the Asia-Pacific Region by :

(a)           Progressively reducing non-tariff measures

(b)          Ensuring the transparency of APEC economies’ respective non-tariff measures

Guidelines

Each APEC economy will:

(a)                 take into account, in the process of progressive reduction of non-tariff measures, intra-APEC trade trends, economic interests and sectors or products related to industries in which this process may have positive impact on trade and on economic growth in the Asia-Pacific region;

(b)                ensure that the progressive reduction of non-tariff measures is not undermined by the application of unjustifiable measures; and

(c)                 consider extending, on a voluntary basis, to all APEC economies the benefits of reductions and eliminations of non-tariff measures.

Collective Actions

APEC Economies have agreed to take collective actions to help achieve these goals.  These actions are contained in Collective Action Plans (CAPs) which are updated annually.  The current CAP relating to non-tariff measures can be found in the Tariffs and Non-Tariff Measures Collective Action Plan.

China’s  Approach to Non-Tariff Measures in 2002

Since 1992, in order to meet the requirements for building a socialist market economy and opening-up , the Government of China has voluntarily and drastically eliminated non-tariff measures subject to import quota,licensing administration and specific tendering requirements . On 15 January 2001,the Chinese Government has voluntarily eliminated 5 items of NTMs covered import products subject to quotas and licences (under HS 1996 categories,8-digit level) and 15 items of NTMs covered import products subject to specific tendering requirements (under HS 1996 categories,8-digit level).From 1th January 2002, the Chinese Government has eliminated 221 items of NTMs covered import products subject to quotas,licences and specific tendering requirements (under HS 1996 categories,8-digit level) ,under the commitments for accession to the World Trade Organization(WTO) refer to eliminating NTMs phased out.That  is to say, 241 items of import proucts subject to NTMs have been eliminated from January of this year,1117 items of import products (under HS 1996,8-digit level) subject to NTMs covered import products which were enforced by the Chinese Government have been eliminated totally by now. By 30 September 2002,there are only 130 HS tariff codes (under HS 1996,8-digit level) of import  products covered by NTMs which are implemented by the Chinese Government,which approximate to 1.85% of the customs total import tariff lines.

Quantitative Import Restrictions/

Prohibitions

By 30 September 2002, 76 import products refer to quota and licence administration (under HS2002,8-digit level,including automobiles and key parts,motorcycles and key parts,cameras and bodies,wrist-watches,crane lorries and chassis etc.) and 42 import products refer to specific tendering requirements (under HS2002,8-digit level,including diesel engine, bulldozers,road rollers,printing machinery,machine-tools,machining centres,lathes,distributed control system,satellite earth station,tankers,tugs and pusher craft,dredgers etc. )are implemented by the central government.

The State prohibits or restricts the importation of some commodities,such as  weapons,ammunition and those mechanical & electronic products etc. which were inconsistent with related state's technical laws and regulations in China.

 As the member of the World Trade Organization(WTO),the Chinese Government  will undertake the commitments refer to NTMs phased elimination that it has made in a responsible manner.

Quantitative Export Restrictions/

Prohibitions

Import Levies

Export Levies

Discretionary Import Licensing

Automatic Import Licensing

Discretionary Export Licensing

Voluntary Export Restraints

Export Subsidies

Minimum Import Prices

Other Non-Tariff

Measures Maintained

General Policy

Position

Quantitative Import Restrictions/

Prohibitions

Quantitative Export Restrictions/

Prohibitions

Import Levies

Export Levies

Discretionary Import Licensing

Automatic Import Licensing

Discretionary Export Licensing

Voluntary Export Restraints

Export Subsidies

Minimum Import Prices

Other Non-Tariff

Measures Maintained

Operational Requirements

Five new foreign law firms have obtained licenses for establishing affiliated representative offices in China since June 2002 and the total number of foreign law firms with offices in China increased to 109.

Newly published Laws and Regulations after China’s accession to the WTO

“Administrative Regulations on Representative Offices of Foreign Law Firms in China” was published by the State Council last December, and took effect on Jan 1, 2002.

“Regulations on the Implementation of the‘Administrative Regulations on Representative Offices of Foreign Law Firms in China’of the Ministry of Justice” was published on July 31, 2002, and brought into effect on September 1, 2002.

N.A.

Licensing and Qualification Requirements of Service Providers

(1) Eliminate the quantitative and geographical limitations on foreign law firms and allow them to establish the second representative office in China;

(2) Reduce the limitations on representatives’ professional years: the chief representative is no less than three years from the past five years; the other representatives are no less than two years from the past three years; and their years mentioned above may be added up;

(3) Process and approve the applications of foreign law firms to establish the representative office within 9 months, and notify the applicant of the reason for disapproval in written form;

(4) Eliminate the regulation on extension application requirement after 5 years’ term of the representative office, and introduce the permanent permission system.

(5) Simplify the administrative departments and streamline the registering procedures.

The representative office of a foreign law firm can engage in the following businesses and charge its clients for services provided:

(1) to provide its clients with consultancy on the legislation of the country/region where the lawyers of the law firm are permitted to engage in lawyer’s professional work, and on international conventions, commercial laws and practices;

(2) to handle, where entrusted by its clients or Chinese law firms, legal affairs of the country/region where the lawyers of the law firm are permitted to engage in lawyer’s professional work;

(3) to entrust, on behalf of foreign clients, Chinese law firms to deal with Chinese legal affairs;

(4) to enter into contracts to maintain long-term entrustment relations with Chinese law firms for legal affairs;

(5) to provide information on the impact of Chinese laws.

According to the contracts with Chinese law firms, the representative offices of foreign law firms may directly make a request to the entrusted Chinese law firms. Representative offices can charge its clients when conducting businesses.

Foreign representative offices and their members are not permitted to interpret Chinese laws to their clients and to employ Chinese lawyers.

N.A.

Foreign Entry

N.A.

Please refer to the above columns.

N.A.

Discriminatory Treatment/

MFN

N.A.

Please refer to the above columns

N.A.

Operational Requirements

Shall be in accordance with the fifth batch of independent auditing standards from July 1, 2002.

Please refer to CICPA website:

http://www.cicpa.org.cn

CPA shall practice in conformity with China's Independent Auditing Standards, General Standard on Professional Ethics, General Standard on Continuing Professional Education, General Standard on Quality Control, and so on.

Please refer to CICPA website:http://www.cicpa.org.cn

The other new batch of independent auditing standards will be established.

Licensing and Qualification Requirements of Service Providers

No change.

Please refer to CICPA website:http://www.cicpa.org.cn

The person who has the Certificate of Chinese CPA.

Please refer to CICPA website:http://www.cicpa.org.cn

The PRC CPA Law is under revision.There will be some changes in the organization mode and establishment condition of CPA firms.

Foreign Entry

No change.

Please refer to CICPA website:http://www.cicpa.org.cn

i)He/she should be a non-practising member of CICPA for at least one year;

ii)He/she should have at least two years' working experience as an auditor in China;

iii)He/she should have permanent address in China and by the time of his/her application, he/she should have stayed in China for at least one year cumulatively;

iv)He/she should be recommended by the Chinese CPA firms he/she works for.

Please refer to CICPA website:http://www.cicpa.org.cn

Foreign CICPA members will be allowed to practise and set up CPA firms in China.

Discriminatory Treatment/

MFN

No change.

Please refer to CICPA website:

http://www.cicpa.org.cn

Except for the first condition listed above, the requirements for foreigners to become CICPA members are as same as those for the Chinese citizens.

Please refer to CICPA website:http://www.cicpa.org.cn

N.A.

Operational Requirements

Administrative Regualtions on Urban Real Estate Intermediary Service was re-promulgated as Decree No.97 by the Ministry of Construction (MOC) with considerable ammendments.www.cin.gov.cnwww.realestate.gov.cn

Trial Measures for the Qualification Administration of Property Management  Enterprises stipulates the qualification standards of property management enterprises at various levels, including registration capital, number of professionals, etc.

http://www.cin.gov.cn

http://www.realestate.gov.cn

Administrative Regualtions on Urban Real Estate Intermediary Service (Decree No.97 of MOC), Administrative Regulations of MOC on the Quality Levels of the Real Estate Appraisal Enterprises, and Notice on the Dislinkage and System Reform of the Real Estate Appraisal Enterprises issued by MOC have made administrative provisions on the registration capital and other operating conditions of real estate price appraisal enterprises.In accordance with these provisions, real estate Appraisal Enterprises shall be set up by people who have got the qualification of Chinese real estate appraisers.

http://www.cin.gov.cn

http://www.realestate.gov.cn

Administrative Regulations on the Development and Management of Urban Real Estate (Decree No. 248 of the State Council) specifically stipulates the registration capital and professionals for establishing a real estate development enterprise, and the development and management of real estate.　

http://www.cin.gov.cn

http://www.realestate.gov.cn

Licensing and Qualification Requirements of Service Providers

Trial Measures for the Qualification Administration of Property Management Enterprises stipulates the qualification requirements for property management enterprises in Chinese territory and work certificate requirements for participants.

http://www.cin.gov.cn

http://www.realestate.gov.cn

Provisional Regulations on the  Qualification System of Real Estate Appraisers, and Administrative Measures for the Registration of Real Estate Appraisers (Decree No. 100 of MOC) have made provisions on the education, major and experience of the participants in appraisal of real estate.Under the approval of the concerned department of the country, foreigners allowed to work in Chinese territory and professionals from Hongkong, Macow and Taiwan, meeting the requirements, can take the  qualification examination for real estate appraisers.  

http://www.cin.gov.cn

http://www.realestate.gov.cn

Administrative Regulations on the Development and Management of Urban Real Estate (Decree No. 248 of the State Council) and Administrative Regulations on the Qualifications of Real Estate Development Enterprises (Decree No. 77 of MOC) make no specific provisions on the qualification administration of foreign-owned enterprises or joint ventures.  Chinese and foreign enterprises are equal.

http://www.cin.gov.cn

http://www.realestate.gov.cn

*Notice on Issuing Provisional Regulations on the Professional Qualification System of Real Estate Agents and Implementation Measures for the Qualification Examination for Real Estate Agents from Ministry of Personnel and MInistry of Construction (NO.[2001] 128 of MOP) stipulates the education, major and experience of real estate agents.Under the approval of the concerned department of the country, foreigners allowed to work in Chinese territory and the professionals from Hongkong, Macow and Taiwan, meeting the requirements, can take the qualification examination for real estate agents.

http://www.cin.gov.cn

http://www.realestate.gov.cn

In accordance with the principle of reciprocity, it is attempted to conduct mutual recognition of professionals'  qualification with similar overseas organizations.

Foreign Entry

Laws and regulations in force don't have limitations on the overseas agents' providing property management service.

http://www.cin.gov.cn

http://www.realestate.gov.cn.

http://www.sdpc.gov.cn

Discriminatory Treatment/

MFN

Operational Requirements

None

According to relevant laws issued by Chinese Government, foreign-funded enterprises, and Chinese-foreign joint ventures and cooperative enterprises both in China and out of China are not allowed to operate or participate in the postal communication services. The delivery services of letters and the article with the letter nature are monopolized by the China Post.

Postal laws and other regulations of the People's Republic of China;

UPU Postal Convention signed and approved by the Chinese Government;

Directory of Foreign Investment Industries;

Regulations for the supervision and management of postal articles and tools;

Regulations for philately markets.

To amend the postal law;To observe the commitments of the Chinese Government and the delivery services, other than the exclusive services operated by China Post stipulated by the Postal Law will be opened to foreign-funded enterprises in a planned way.

Carry out the opening policy,enhance international postal exchange and cooperations;takeing an active action to fufill the obligations of the Postal   Convention of UPU.

Licensing and Qualification Requirements of Service Providers

None

Introduce a system of examination and opproval to the postal articles and tools used in Postal network.  The postal communication enterprises will select them according to the national technical and quality standards and their requirments.

Invite public bidding from both home and abroad for postal communication equipment, which will be selected by the postal communication enterprises according to the national communication technical standards and network requirements.

A licensing system will be performed for the operators of delivery sevices other than the exclusive sevices.

Foreign Entry

None

None

Ditto

Discriminatory Treatment/

MFN

None

None

None

Operational Requirements

On December 20, 2001, the "Notice in relation to Administration on the Entrustment of Postal and Delivery Services for Import and Export letters and Materials of lettlers in Nature" was issued jointly by the MII,the MOFTEC, and the SPB. The Notice  regulates: The international freight transport agent enterprises can operate the delivery services of the inward and outward letters and articles with the letter nature only by   entrustment of postal administration according to law and receiving <the Certificate of Entrustment by Postal Administration>.

The work of drafting "Management Procedures of Delivery Market" has been started.

According to relevant laws issued by Chinese Government, foreign-funded enterprises, Chinese-foreign joint ventures and cooperative enterprises both in China and out of China are not allowed to operate or participate in the postal communication services. The delivery services of letters and the article with the letter nature can only be operated and practised by the China Post.

Postal laws and other regulations of the People's Republic of China;

UPU Postal Convention signed and approved by the Chinese Government;

 Annex 9 "Concessional Form of Concrete Commitments on Service Trade" of the Protocol of the People's Republic of China on the Accession to the WTO;

Directory of Foreign Investment Industries;

Other laws and regulations issued by the Chinese Government.

To amend the postal law;

To study and formulate <Management Procedures of Delivery Market>;

In line with the commitments of the Chinese Government in WTO, the delivery services other than the exclusive services operated by China Post stipulated by the Postal Law will be opened to foreign-funded enterprises in a planned way.

To enhance international exchanges and cooperation.

Licensing and Qualification Requirements of Service Providers

Ditto

To operate the delivery services of inward and outward letters and the articles with the letter nature by the entrustment of postal administration, the following requirements should be satisfied:

1.The registered capital should be above 2 million yuan;

2.Having the permanent production area;

3.Persons in charge of professional work should be trained according to the national competent department of labor management;

4.The other requirements stipulated by the state laws and regulations.

Ditto

To study and formulate the quality requirements of the services provided by express delivery enterprises and the subsidiary mechanism to universal postal service.

Foreign Entry

Ditto

Upon the time of China's accession to WTO, the foreign service suppliers will be permitted to establish joint venture with investment not exceeding 49 percent. Within one year after China’s accession,foreign majority ownership will be permitted .Within four years after China ‘s accession,foreign servise suppliers will be permitted to establish wholly foreign-owned subsidiaries.

Ditto

Ditto

Discriminatory Treatment/

MFN

None

None

None

Operational Requirements

Administrative Regulation on Foreign Investment Enterprise Operating Telecommunications has been promulgated by the State Council on December 11, 2001.The new Industrial Catalogue Guiding Foreign Investment changes the telecommunications industry from the industry prohibiting foreign investment to the  industry conditionally permitting foreign investment.Promote telecom reform, restructure the existing telecommunications enterprises. There are 6 basic telecommunications operators, and more than 4,400 Internet and other value-added service providers in China. The competitive state of the market is further formed.The drafting work of Telecommunications Law of the P.R.C. has begun.

N.A.

According to China’s commitments to the WTO, and complying with the rules of WTO, China will further perfect the related domestic regulations.Continue to implement opening policy, strengthen international cooperation and exchanges.

Licensing and Qualification Requirements of Service Providers

N.A.

According to Telecommunications Regulations of the People's Republic of China, the State implements a system of licensing for the operation of telecommunications services, based on the categorization of such services. According to Administrative Regulation on Foreign Investment Enterprise Operating Telecommunications,

In order to operate basic telecommunications services, the Chinese side shall meet the following conditions:

1. the operator shall be a legally established company that specializes in basic telecommunications services and in which the State's equity interest or shareholding is no less than 51%;

2. it shall have a feasibility study and technical plan regarding network formulation;

3. it shall have funds and specialized personnel commensurate with its proposed business activities;

4. it shall have a venue and the corresponding resources to carry out its operations;

5. it shall have the reputation for, or be capable of, providing long-term services to its subscribers; and

6. other conditions as stipulated by the State.

To operate value-added telecommunications services, the Chinese side shall meet the following conditions:

1. the operator shall be a legally established company;

2. it shall have funds and specialized personnel commensurate with the business activities to be developed;

3. it shall have the reputation for, or be capable of, providinglong-term services to subscribers; and

4. other conditions as stipulated by the State.

China is prepared to implement Phase I of the Asia-Pacific Economic Cooperation Mutual Recognition Arrangement for Conformity Assessment of Telecommunications Equipment ( APEC Telecom MRA ) in the scope of telecommunications terminal equipment in 2002.

Foreign Entry

Shanghai Xintian Communications Co. Ltd., the joint venture company between Shanghai Telecommunications Corporation, Shanghai Information Investment joint-stock company and the US's AT&T company, started operation in March 2002.

According to China’s commitments to WTO, China will progressively open the telecommunications market, permitting foreign investment in the telecommunications services industry, but only through the joint venture with Chinese operator who meets certain conditions, solely foreign-owned enterprise is not permitted. The proportion of foreign investment in the join venture shall be dealt with respectively according to the following circumstances.

Value-added Services: Foreign service suppliers will be permitted to establish joint venture value-added telecommunication enterprises, without quantitative restrictions, and provide services in the cities of Shanghai, Guangzhou and Beijing. Foreign investment in joint venture shall be no more than 30 per cent. Within one year after China's accession, the areas will be expanded to include Chengdu, Chongqing, Dalian, Fuzhou, Hangzhou, Nanjing, Ningbo, Qingdao, Shenyang, Shenzhen, Xiamen, Xi'an, Taiyuan and Wuhan and foreign investment shall be no more than 49 per cent. Within two years after China's accession, there will be no geographic restriction and foreign investment shall be no more than 50 per cent.

Basic Telecommunication Services:

-Paging Services: Foreign service suppliers will be permitted to establish joint venture enterprises, without quantitative restrictions, and provide services in and between the cities of Shanghai, Guangzhou and Beijing. Foreign investment in joint venture shall be no more than 30 per cent. Within one year after China's accession, the areas will be expanded to include services in and between Chengdu, Chongqing, Dalian, Fuzhou, Hangzhou, Nanjing, Ningbo, Qingdao, Shenyang, Shenzhen, Xiamen, Xi'an, Taiyuan and Wuhan and foreign investment shall be no more than 49 per cent. Within two years after China's accession, there will be no geographic restriction and foreign investment shall be no more than 50 per cent.

-Mobile Voice and Data Services: Upon China’s accession, foreign service suppliers will be permitted to establish joint venture enterprises, without quantitative restrictions, and provide services in and between the cities of Shanghai, Guangzhou and Beijing. Foreign investment in the joint venture shall be no more than 25 per cent. Within one year after accession, the areas will be expanded to include services in and between Chengdu, Chongqing, Dalian, Fuzhou, Hangzhou, Nanjing, Ningbo, Qingdao, Shenyang, Shenzhen, Xiamen, Xi'an, Taiyuan and Wuhan and foreign investment shall be no more than 35 per cent. Within three years after accession, the areas shall be same as above, and foreign investment shall be no more than 49 per cent. Within five years after accession, there will be no geographic restriction, foreign investment shall be no more than 49%.

-Domestic Services and International Services: Within three years after China's accession, foreign service suppliers will be permitted to establish joint venture enterprises, without quantitative restrictions, and provide services in and between the cities of Shanghai, Guangzhou and Beijing. Foreign investment in the joint venture shall be no more than 25 per cent. Within five years after accession, the areas will be expanded to include services in and between Chengdu, Chongqing, Dalian, Fuzhou, Hangzhou, Nanjing, Ningbo, Qingdao,Shenyang, Shenzhen, Xiamen, Xi'an, Taiyuan and Wuhan. And foreign investment shall be no more than 35 per cent. Within six years after accession, there will be no geographic restriction and foreign investment shall be no more than 49 per cent.

N.A.

Discriminatory Treatment/

MFN

N.A.

N.A.

N.A.

Operational Requirements

Administrative Regualtions on Urban Real Estate Intermediary Service was re-promulgated as Decree No.97 by the Ministry of Construction (MOC) with considerable ammendments.www.cin.gov.cnwww.realestate.gov.cn

Trial Measures for the Qualification Administration of Property Management  Enterprises stipulates the qualification standards of property management enterprises at various levels, including registration capital, number of professionals, etc.

http://www.cin.gov.cn

http://www.realestate.gov.cn

Administrative Regualtions on Urban Real Estate Intermediary Service (Decree No.97 of MOC), Administrative Regulations of MOC on the Quality Levels of the Real Estate Appraisal Enterprises, and Notice on the Dislinkage and System Reform of the Real Estate Appraisal Enterprises issued by MOC have made administrative provisions on the registration capital and other operating conditions of real estate price appraisal enterprises.In accordance with these provisions, real estate Appraisal Enterprises shall be set up by people who have got the qualification of Chinese real estate appraisers.

http://www.cin.gov.cn

http://www.realestate.gov.cn

Administrative Regulations on the Development and Management of Urban Real Estate (Decree No. 248 of the State Council) specifically stipulates the registration capital and professionals for establishing a real estate development enterprise, and the development and management of real estate.　

http://www.cin.gov.cn

http://www.realestate.gov.cn

Licensing and Qualification Requirements of Service Providers

Trial Measures for the Qualification Administration of Property Management Enterprises stipulates the qualification requirements for property management enterprises in Chinese territory and work certificate requirements for participants.

http://www.cin.gov.cn

http://www.realestate.gov.cn

Provisional Regulations on the  Qualification System of Real Estate Appraisers, and Administrative Measures for the Registration of Real Estate Appraisers (Decree No. 100 of MOC) have made provisions on the education, major and experience of the participants in appraisal of real estate.Under the approval of the concerned department of the country, foreigners allowed to work in Chinese territory and professionals from Hongkong, Macow and Taiwan, meeting the requirements, can take the  qualification examination for real estate appraisers.  

http://www.cin.gov.cn

http://www.realestate.gov.cn

Administrative Regulations on the Development and Management of Urban Real Estate (Decree No. 248 of the State Council) and Administrative Regulations on the Qualifications of Real Estate Development Enterprises (Decree No. 77 of MOC) make no specific provisions on the qualification administration of foreign-owned enterprises or joint ventures.  Chinese and foreign enterprises are equal.

http://www.cin.gov.cn

http://www.realestate.gov.cn

*Notice on Issuing Provisional Regulations on the Professional Qualification System of Real Estate Agents and Implementation Measures for the Qualification Examination for Real Estate Agents from Ministry of Personnel and MInistry of Construction (NO.[2001] 128 of MOP) stipulates the education, major and experience of real estate agents.Under the approval of the concerned department of the country, foreigners allowed to work in Chinese territory and the professionals from Hongkong, Macow and Taiwan, meeting the requirements, can take the qualification examination for real estate agents.

http://www.cin.gov.cn

http://www.realestate.gov.cn

In accordance with the principle of reciprocity, it is attempted to conduct mutual recognition of professionals'  qualification with similar overseas organizations.

Foreign Entry

Laws and regulations in force don't have limitations on the overseas agents' providing property management service.

http://www.cin.gov.cn

http://www.realestate.gov.cn.

http://www.sdpc.gov.cn

Discriminatory Treatment/

MFN

Operational Requirements

N.A.

Principal Regulatory Instruments:

Law of the People's Republic of China on Equity Joint Ventures Using Chinese Foreign Investment;

Law fo the People's Republic of China on Contractual Joint Ventures Using Chinese Foreign Investment;

Provisions on Pilot of Commercial Foreign-Investment Enterprises

The State Economic & Trade Commission (http://www.setc.gov.cn) the Ministry of Foreign Trade and Economic Cooperation (http://www.moftec.gov.cn) and the State Administration for Industry & Commerce are in charge of establishment and operation of the commercial joint venture company in China.

N.A.

Licensing and Qualification Requirements of Service Providers

N.A.

As stipulated in Article 6 of Provisions on Pilot of Commercial Foreign-Investment Enterprises.

(http://www1.moftec.gov.cn/moft
ec_en/zcjs/wzgl/wzgl_05_en.htm
l)

N.A.

Foreign Entry

N.A.

In the WTO context, China has made comprehensive market access and national treatment commitments on commission agents' services, retailing, wholesaling, franchising, and wholesale or retail trade services away from a fixed location, excluding commission agents' services and wholesale of salt and tobacco, and retail of tobacoo.

N.A.

Discriminatory Treatment/

MFN

N.A.

In the WTO context, China has made comprehensive national treatment commitments on commission agents' services, retailing, wholesaling, franchising, and wholesale or retail services away from a fixed location.

China applies the MFN principle in the distribution sector.

N.A.

Operational Requirements

Banking:

1.This year, the central bank has continued to carry out a sound monetary policy and strengthened supervision according to the regulations. The central bank took some steps to prevent and put out financial risks indeed while give more support to the macroeconomic development. As a whole, this year, the money supply has increased calmly, the loans gradually increased, the structure of loans has been continued to be improved, the profit from loans raised, the status of international income and expenses are satisfactory, the increasing of loans has matched the growth of economy on the whole and the central bank has achieved the target of monetary policy which was expected.

2.The State Council has revised and improved the Regulations Governing Foreign Financial Institution in the People’s Republic of China. The central bank has revised and improved several regulations including the Rules for the Implementation of the Regulations Governing Foreign Financial Institutions in the People’s Republic of China; the Rules for Governing Representative Offices of Foreign Financial Institutions in China.According to the international practice, the central bank has also issued several new regulations, such as the Guidelines for Loan Provisioning for Commercial Banks; the Guidelines for Rick-based Assets Classification Methodology; the Guidelines of information Disclosure  for Commercial Banks; Guidelines for Internal Controls of Commercial banks; guidelines for Corporate Governance of Joint-equity Commercial Banks and etc.

3.The China Unionpay company has been established to facilitate the interchange and transaction information and provide cleaning services for the bank card business.

4.The credit registration has continued to be  improved.

5. The restriction on customers of foreign currency business for foreign banks has been removed, and they are allowed to provide foreign currency business to all customers.6.  In addition to Shanghai and Shenzhen,  foreign banks have been allowed to apply  local currency business in Tianjin and Dalian since December 11 2001. Up to the end of June 2002, 44 foreign bank’s branches in total  have been  approved to conduct local currency business in the four cities.

Insurance:

China has completed the revision of The Insurance Law (1995), which has been approved by the State Council and was submitted to the People’s Congress, and finished the revision of The Regulation on Insurance Company(2000), According to WTO principles and the commitmenst made by China in WTO entry negotiations, China issued The Revision on <The Regulation on Insurance Company >(2002)

Securities:

China has implemented Guide on Improving Internal Compliance System and Code of Conduct in Commercial Banks Selling Securities Investment Funds (December 10, 2001). The Guide provides detailed guidance on the internal compliance system and code of conduct of staff for commercial banks when they are engaged in sales of securities investment funds.

China has implemented Contents and Format of Annual Report of Securities Company (Revised Version, February 4, 2002). The Revised Version sets forth specific regulations on drafting annual reports by securities companies.

China has implemented Measures on the Administration of Securities Company (March 1, 2002). The Measures sets forth specific regulations on the establishment, modification, termination, staff management, internal control, and risk management in securities companies registered domestically.

China has implemented Notice on the Adjustment of  Securities Trading Commission (May 1, 2002), which sets forth floating securities trading commission up to 3‰ for brokerage business in A share and B share stocks, funds, and bonds.

China has implemented China Securities Depository & Clearing Co. Ltd’s Rules on the Administration of Securities Account (June 1, 2002), which sets forth  business rules on the management of securities accounts including A share and B share stocks, and funds accounts.

China has implemented Measures on the Administration of Futures Exchanges (Revised Version, July 1, 2002). The Measures sets forth specific regulations on the establishment, modification, termination, organizational issues, and basic operation rules in domestically- registered futures exchanges.

China has implemented Measures on the Administration of Futures Brokerage Company (Revised Version, July 1, 2002). The revised Measures sets forth specific regulations for domestically-registered futures brokerage companies on their establishment, modification, termination, basic operation rules, and special procedure for dealing with crises caused by sudden and substantial withdrawal of clients’ margin.

For more information, please refer to http://www.csrc.gov.cn http://www.sse.com.cn http://www.sse.org.cn

Refer to the below.

Insurer in China must meet the minimum capital and solvency margin requirements, management and controllers to be fit and qualified persons, adequate reinsurance protection arrangement and the investment restriction of the insurance fund.Further information may be found in The Insurance Law issued in 1995 and The Regulations of Insurance Companies in 2000 on our web-site at http://www.circ.gov.cn/ The Revision on <The Regulation on Insurance Company >(2002).

Laws and regulations issued that apply to domestic service providers:

Company Law of PRC (1993)

Securities Law of PRC (1998)

Interim Regulations of Stock Issuing and Trading (1993)

Interim Measures on the Prohibition of Fraud in Securities Market (1993)

Measures on the Administration of Securities Company's Underwriting Business (1996)

Measures on the Administration on Dealing Business of  Securities Company (1996)

Interim Measures on the Administration of Securities Investment Funds (1997)

Interim Regulations on the Administration of Futures Exchange (1999)

Trial Measures on the Open End Securities Investment Fund (2000)

Interim Measures on the Administration of Online-trading (2000)

Rules for Assessment  of Securities Company's Net Capital (2000)

Measures on the Administration of Clients' Trading Settlement (2001)

Guide on Improving Internal Compliance System and Code of Conduct in Commercial Banks Selling Securities Investment Funds (2001)

Contents and Format of Annual Report of Securities Company (2002)

Measures on the Administration of Securities Company (2002)

Notice on the Adjustment of Securities Trading Commission (2002)

China Securities Depository & Clearing Co. Ltd’s Rules on the Administration of Securities Account (2002)

Measures on the Administration of Futures Exchange (2002)

Measures on the Administration of Futures Brokerage Company (2002)

Laws and regulations issued that apply to foreign service providers:

Regulation of State Council Regarding B Share (1995)

Interim Measures on the  Administration of Sino-foreign Joint-venture Investment Bank (1995)

Interim Regulations on the Administration of Qualification of Domestic and Foreign Securities Institutions Engaged in Foreign-capital  Shares Business  (1996)

Measures on the Administration of Representative Offices of Foreign Securities Institutions (1999)

For more information, please refer to http://www.csrc.gov.cn and http://www.pbc.gov.cn

Objectives

Short term (2002-2003)

Gradually increase the number of cities where foreign banks are allowed to handle RMB business. In the meantime, efforts will be made to continue to revise and improve financial regulations according to China’s commitments made for its WTO membership.

Medium term

(2003-2010)Further open the financial market. Until before  December 11 2006, China will remove all the restrictions on the service areas and customers of foreign banks in conducting local currency business, and grant “National Treatment” to foreign banks according to China’s WTO commitments.

According to the commitment made by China in WTO entry negotiation, China will further open the insurance market to foreign investors. Strictly following the timetable of the commitment, China will repeal   the restriction on form of establishment、operational region、business scope and statutory insurance to foreign insurance companies in China step by step.Detail information may be found on the web-site of the MOFTEC regarding the  commitment made by China in WTO entry negotiation at http://www.moftec.gov.cn

The Measures on the Administration of Securities Credit Rating is under draft.

The Securities Investment Fund Law is under review by the Standing Committee of China’s National People’s Congress.

Licensing and

Qualification Requirements of Service Providers

Banking:

IRevise and improve several financial regulations. (Refer to the right).The Regulations Governing Foreign Financial Institutions in the PRC has been revised to effect the commitments which China has made for its WTO membership, incarnated the principles of prudential supervision, the international supervisory practice, consolidated supervision of local and foreign currency business and link up the supervisory policies on Chinese and foreign financial institutions. In the other two rules, regulated the matters which are relevant to establishment, register, business scope, qualifications of management, detailed rules of supervision for foreign banks and etc.

Insurance:

N.A.

Securities:

China has implemented Measures on the Administration of Clients’ Securities Settlement Funds (January 1, 2002), which sets forth the qualification criteria for commercial banks when serving as custodian banks of clients’ settlement funds.

China has implemented Measures on the Administration of Qualification of Professionals Working in the Areas of Futures (Revised Version, February 2002). The Measures sets forth specific regulations on the qualification and administration for professionals in futures industry.

China has implemented Measures on the Administration of Qualification of Senior Management of Futures Brokerage Company (February 2002), which sets forth specific regulations on the competence, qualification, and management of senior executives in futures brokerage companies.

For more information, please refer to http://www.csrc.gov.cn

The existing regulations relevant to foreign financial institutions are as follows:. The Regulations Governing Foreign Financial Institutions in the People’s Republic of China (2002).Rules for the Implementation of the Regulations Governing Foreign Financial Institutions in the People’s Republic of China (2002).Rules for Governing Representative Offices of Foreign Financial Institutions in the People’s Republic of China  (2002).

Investor intend to set up an insurance company in China must fulfill standard prudential requirements, including fit and proper management and ownership, minimum size capital requirement, adequate system of internal controls and feasible business plan. For detail information on licensing and qualification requirements of service providers, please refer to The Insurance Law issued in 1995 and The Regulations of Insurance Companies in 2000 on our web-site at http://www.circ.gov.cn/

Laws and regulations issued regarding licensing and registration of individual service providers:

Interim Regulations on the Administration of Qualification of Professionals Working in the Areas of Securities (1995)

Interim Measures on the Administration of Qualification of Senior Management Officers of Securities Management Agencies (1998)

Measures on the Administration of Qualification of Professionals Working in the Areas of Fund (1999)

Measures on the Administration of Qualification of Professionals Working in the Areas of Futures (2002)

Measures on the Administration of Qualification of Senior Management of Futures Brokerage Company (2002)

Laws and regulations issued regarding licensing and registration of firms service providers:

Regulations of China Securities Regulatory Commission and Ministry of Finance on Verifying Qualifications of Accounting Firms and Certified Public Accountant Engaging in Securities Business (1993)

Measures on the Administration on Examination and Confirmation of Qualification of Primary Self-Runner of PRC Treasury Bond (1993)

Measures on the Administration of Underwriting of Stocks by Securities Management Agencies (1996)

Measures on the Administration of Self-Running of Stocks by Securities Management Agencies (1996)

Interim Measures on the Administration of Investment Consultation  in the Areas of Securities and Futures (1998)

Interim Measures on the Administration of Online Securities Business (2000)

Measures on the Administration of Clients’ Securities Settlement Funds (2002)

Requirements of securities professionalsl:           

1. national of the PRC;

2. at least 21 years old and eligible for full civil liabilities;

3. honest, proper, and possess good professional ethics;

4. no criminal record or serious administrative sactions in the five years prior to application;

5. at least 3 years’ college education, or high school education plus no less than 2 years’ experience in securities business/3 years experience in financial business, or no less than 4 years’ relevant experience recognized by the CSRC;

6. according to Article 9 of Interim Regulations on the Administration of Qualification of Professionals Working in the Areas of Securities, the applicant should meet sufficiency requirements by attending training courses recognized by the CSRC or other studies, and pass the qualification examination organized by the CSRC;

7. comply with relevant national laws, code of conduct of self-regulatory organizations, and supervision of the CSRC.

For more information, please refer to http://www.csrc.gov.cn

N.A.

N.A.

China is about to promulgate the Measures on the Administration of Qualification of Professionals Working in the Areas of Securities, which will impose no restriction on the nationality of professionals.

Foreign Entry

Banking:

As of the end of June 2002, there were 181 business institutions established by 82 foreign financial institutions and enterprises from 19 countries and regions. Among them, there were 19 locally incorporated subsidiaries (7 joint-venture banks, 6 wholly owned foreign banks and 6 foreign finance companies), 7 branches of the locally incorporated subsidiaries, and 147 branches of foreign banks as well as 8 sub-branches of foreign bank branches. From June 2001 to June 2002, 1 branch and 13 representative offices of foreign banks were authorized. The number of representative offices as of June 2002 was 201.

Insurance:

After China entered the WTO,  strictly followed the commitment made by China in WTO entry negotiation and the relevant insurance laws, China further opened insurance market to foreign insurers, including:

1)repealed the limit to the number of the license to foreign insurers.

2)foreign non-life insurance companies were permitted to set up branches or joint ventures with ownership of no more than 51% in China.

3)foreign brokers were permitted to set up joint ventures with ownership of no more than 50% in China.

4)foreign reinsurance companies were permitted to set up branches、joint ventures with no limit to ownership or wholly-owned subsidiary in China.

5) in addition to Guangzhou and Shanghai, foreign insurers were permitted to provide services in Shenzhen, Dalian and Foshan.

Securities:

China has implemented Certain Opinions on Listed Company Relating to Foreign Investment (December 8, 2001). The Opinions sets forth stipulations regarding: 1) offering and listing of securities by foreign-invested joint stock companies; 2) listing of untradable foreign-invested shares at the B share stock market by foreign-invested joint stock companies that have already issued B share stocks; 3) transfer of domestically-listed companies’ untradable shares to foreign-invested enterprises.

China has implemented Compiling Rules for Content and Format of Information Disclosure of Public Offering Companies (No.17)-Content and Format of Prospectus for Foreign-invested Company Limited (March 2002). The Rules sets forth special requirements on the content and format of the prospectus of foreign-invested companies.

China has implemented Measures for Administration of Stock Exchange (Revised Version, December 12, 2001), Provisional Regulations on the Administration of Shanghai Stock Exchange on Foreign Special Members (July 24, 2002), and Provisional Regulations on the Administration of Shenzhen Stock Exchange on Foreign Special Members (July 24, 2002). According to the Measures and Regulations, representative offices of foreign securities institutions may become special members of stock exchanges in China.

China has implemented Rules of Shenzhen Stock Exchange on the Administration on B shares Seat of Foreign Institutions (June 19, 2002) and Interim Measures of Shanghai Stock Exchange on the Application for B Share Seat by Foreign Securities Institutions (July 24, 2002). According to the Rules and Measures, foreign securities institutions may engage in the transaction of B share stocks directly without going through a domestic intermediary.

China has implemented Rules on the Establishment of Securities Company with Foreign Shareholding (July 1, 2002). According to the Rules, eligible foreign institutions can buy equities in existing securities companies, subscribe the shares offered by securities companies or take part in setting up securities companies.

China has implemented Rules on the Establishment of Fund Management Company with Foreign Shareholding (July 1, 2002). According to the Rules, eligible foreign institutions can buy equities in existing fund management companies, subscribe the shares offered by fund management companies or take part in setting up fund management companies.

China is actively studying the scheme of Qualified Foreign Institutional Investor (QFII) and will permit QFIIs to invest in the A share stocks and bonds.

For more information, please refer to http://www.csrc.gov.cn

1.The market entry requirements for the establishment of a wholly foreign-funded bank or finance company by a foreign applicant: The applicant is a financial institution;. The applicant has maintained a representative office in China for more than two years; The total end-of year assets of the applicant one year prior to the application shall be no less than US$ 10 billion; A sound prudential supervision system is in place at the location of the applicant and the applicant is subject to effective supervision of the regulatory authority in its home country or region;The regulatory authority in the home country or region of the applicant has approved its application; and other prudential conditions required by the People’ Bank of China.

2.The market entry conditions for setting up branches of foreign banks: The applicant has maintained a representative office in China more for than two years;The total end-of-year assets of the applicant one year prior to the application shall be no less than US$20 billion, and capital ratio shall be no less than 8%.A sound prudential supervision system is in place at the location of the applicant and the applicant is subject to effective supervision of the regulatory authority in its home country or region;The regulatory authority in the home country or region of the applicant has approved its application; and other prudential conditions required by the People’s Bank of China

3.The market entry conditions for setting up joint-equity banks or joint-equity finance companies:The applicant is a financial institution;. The foreign partner has set up a representative office in China;. The total end-of-year asset of the  foreign partner one year prior to the application shall be no less than US$10 billion. A sound prudential supervision system is in place at the location of the foreign partner and the foreign partner is subject to effective supervision of the regulatory authority in its home country or region.The local authorities approved the application of the applicant.

4.To conduct RMB business, foreign financial institution shall satisfy the following conditions:The applicant has operated in the China for at least  three years prior to the application.The applicant has remained profitable in the two consecutive years prior to the application; and other prudential conditions required by the People’s Bank of China.

According to The Regulation on Foreign Insurance Company in China put in practice in Feb 2, 2002, the basic requirement of  market entry for foreign insurers is as below:

1)has engaged in the insurance business over 30 years;

2)has a representative office for 2 consecutive years in China;

3)has total assets of more than 5 billion USD at the end of the year prior to submitting the application;

4)the country or region where such applicant is located should have a competent insurance supervisory and regulatory authority, and the applicants has been effectively supervised and regulated by such authority;

5)satisfies the solvency standards of the country or region where the applicants is located;

6)obtains the consent on the application of the competent authority where the applicants company is located; and

7)other prudent criteria prescribed by CIRC.Detail information may be found in The Regulation on Foreign Insurance Company in China put in practice in Feb 2, 2002.

Requirements of establishing representative office of securities company and fund management company in China:

1. the country or region where the applicant resides shall have sound securities laws and regulations;

2. eligible for engaging in securities business according to the laws of the country/region where the applicant resides;

3. operate legally, have good reputation, and have profit records in the past three years.

Requirements of establishing Sino-foreign JV investment bank:

1. have engaged in investment banking for more than 20 years;

2. have established representative office in China;

3. net capital is no less than USD 200 million at the end of the year prior to application;

4. the country or region where the applicant resides shall have sound securities laws and regulations.

5. have good reputation, prudential operation, and no serious sanctions in the past three years before application.

Requirements of foreign shareholders of securities companies with foreign shareholding:

1. the country or region where foreign institution resides shall have sound securities laws and regulations, and the securities regulatory authorities should have signed bilateral MOUs with the CSRC;

2. eligible for engaging in securities business, having engaged in financial business for more than ten years, and in the past three years no heavy sanctions imposed by home securities regulators or judicial organisations;

3. in the past three years, risk management system accords with laws in home jurisdictions and the requirements of home securities regulator;

4. sound internal control system;

5. good reputation and good operational performance in international securities markets;

6. other prudential terms specified by the CSRC.

Requirements of foreign shareholders of fund management companies with foreign shareholding:

1. have a legal identity, and in recent three years no sactions imposed by home securities regulators or judicial organizations;

2. the country or region where foreign institution resides shall have sound securities laws and regulations, and the securities regulatory authorities should have signed MOUs with the CSRC;

3. paid-in capital should be convertible currency, and equivalent to no less than RMB 300 million;

4. other prudential terms specified by the CSRC.

Requirements of the representative office of foreign Securities institution applying for becoming special members of stock exchanges in China:

1. have a legal identity and no less than one year’s operation record;

2. accept the articles of association and business rules of the stock exchange and submit to the supervision of the stock exchange;

3. the applicant’s parent company should have experience in international securities business, good reputation and good performance;

4. the applicant and their parent company have not been punished for committing a major illegal act over the past year by home securities regulatory authority.

Requirements of overseas securities institutions engaging in brokerage business of B share stocks:

1. eligible for engaging in securities brokerage business according to laws of the country/region where the overseas securities institution resides;

2. effectively regulated by home securities regulatory authority;

3. at least RMB 50 million of net capital or guaranteed by eligible institutions based on overseas laws and recognized by the CSRC;

4. at least two years of experience in international securities business;

5. in the past two years, all financial indicators meet the risk control requirement set by home securities regulatory authority;

6. extensive business network;

7. executive directors and other senior management officers have more than five years’ experience in securities business and good reputation;

8. no sanction records for serious violation imposed by home securities regulatory authorities in the past two years;

9. comply with laws and regulations of the PRC;

10. at least two professionals familiar with Chinese securities market,  policies and laws.

For more information, please refer to http://www.csrc.gov.cn and http://www.pbc.gov.cn

N.A.

China will further open the insurance market to foreign investors according to the commitment and the opening timetable made by China in WTO entry negotiation.Detail information may be found on the web-site of the MOFTEC regarding the  commitment made by China in WTO entry negotiation at http://www.moftec.gov.cn

Short and mid-term Objectives (2002-2010):

According to the Rules on the Establishment of Securities Company with Foreign Shareholding, China shall actively promote the establishment of  securities companies with foreign shareholding.

According to the Rules on the Establishment of Fund Management Company with Foreign Shareholding, China shall actively promote the establishment of fund management companies with foreign shareholding.

Allow qualified foreign investors to invest in the A share market.

Long-term Objectives (2010-2020):

Sino-foreign joint securities companies  are accorded to the status of national treatmeat.

Allow foreign securities companies to establish solely foreign-owned securities companies.

Further opening up the Chinese securities market.

Discriminatory Treatment/

MFN

Banking:

Refer to the right.

Insurance:

N.A.

Securities:

No further stipulation except for those mentioned above.

At present, some differences remain between  domestic and foreign banks in terms of the RMB business scope, customers and service areas.

N.A.

No further stipulation except for those mentioned above.

Refer to the above.

N.A.

No further stipulation except for those mentioned above.

Operational Requirements

Licensing and Qualification Requirements of Service Providers

Temporary License for Foreign Physician to Practice Medicine in the P.R.China.

Check details in website:www.moh.gov.cn

Foreign Entry

To participant test of fortign medical practitioners owned Chinese medical academic degree in China

To participant test of medical practitioners coming from Chinese Taipei, Hong Kong, China and Macou and holding with mainland medical academic degree in China

Provisional Regulations For The Management of Short Term Medical Practice of Foreign Physicians in China.

Temporal Licence of Foreign Medical Practitioner Practicing in China

To participant test of fortign medical practitioners owned Chinese medical academic degree in China

To participant test of medical practitioners coming from Chinese Taipei, Hong Kong, China and Macou and holding with mainland medical academic degree in China

Check details in websites: http://www.moh.gov.cn

aking in the near future to allow a foreign practitioner to come to China to engage in academic exchange of a short time

Making in the near future to allow a foreign practtioner to come to China to engage in clinic medicine

Discriminatory Treatment/

MFN

Chapter 3 (i) : Tourism and Travel Related Services

Category

Improvements Implemented since last IAP

Current Entry Requirements

Further Improvements Planned

Operational Requirements

Travel Agency:

Further lower the requirement for foreign investors of foreign invested travel agencies:

a) To lower the requirement of the annual revenue from $50 million to $40 million;

b) To remove the requirement of computer reservation system;

c) To lower the registered capital of joint venture  travel agencies from 5 million RMB to 4 million RMB.

Further lower the requirement to the Chinese investors of foreign invested travel agencies:

 a) Remove the requirement of receiving 30 thousand inbound tourists annually on average during the previous 3 years;

b) Remove the requirement  of 50 million RMB for annual revenue during the previous 3 years.

Travel agency:

The foreign service provider who fulfill the following requirement can provide service in appointed resorts by the Chinese Government, Beijing, Shanghai, Guangzhou and Xi’an in form of joint venture travel agencies or tourism operators:

a) The main business of travel agencies or tourism operators is travel and tourism related;

b) The annual total revenue worldwide is over $40 million;

c) Being a full member of the national travel agency association;

d) The registered capital of joint venture travel agencies or tourism operator is no less than 4 million RMB.

The requirement to the Chinese investors in foreign invested travel agencies:

a) Being a company set up in accordance with law;

b) Have no record of violation of law and regulation within the last 3 years;

c) In line with the prudent and special industry requirement set by  the State Council and the National Tourism Administration.

The joint venture travel agency or tourism operator are allowed to operate the following business:

a) To provide travel and accommodation service that could be done directly by the Chinese transportation and hotel operators to foreign tourists;

b) To provide travel and accommodation service that could be done directly by the Chinese transportation and hotel operators to domestic tourists;

c) To provide tour guides for tourists within China;

d) Exchange of the traveler’s check within China.

Foreign-invested travel agencies are not allowed to set up branches.Joint ventured or fully owned travel agencies or tourism operators are not allowed to operate outbound group travel of Chinese citizens to foreign countries as well as regions of Hong Kong SAR, Macao SAR and Chinese Taipei.

Tourist Hotels (including apartments) and Restaurants:

Foreign service providers may build，renovate and manage hotels and restaurants in the form of joint ventures in China and are permitted to be the major shareholder.

To allow foreign managers and experts including chef and senior managers who are employed by joint venture hotels or restaurants on contracts to work in China

Travel agency:

To lower the registered capital to no less than 2.5 million RMB as of December 11th, 2004 and to allow the foreign investors to be the major shareholder.

To allow to set up fully owned foreign branch companies and remove the regional restriction as of December 11th 2007.

To remove the restriction on setting up branch companies of joint venture travel agencies or tourism operators. To make the registered capital of the foreign travel agencies or tourism operators equal to domestic travel agencies and tourism operators.

Tourism Hotels (including apartment)and Restaurants

 To allow foreign invested companies to set up its fully owned subsidiaries as of the date of December 11th, 2005.

Licensing and Qualification Requirements of Service Providers

Please refer to the above column.

Please refer to the above column

Please refer to the above column

Foreign Entry

Please refer to the above column

Please refer to the above column

Please refer to the above column

Discriminatory Treatment/

MFN

Please refer to the above column

Please refer to the above column

Please refer to the above column

Operational Requirements

The Regulations of the People’s Republic of China on International Maritime Transportation (hereinafter referred to as the RIMT) took effect as of January 1st, 2002, while the Provisions of the People’s Republic of China on Administration of Internationa Maritime Container Transport promulgated by the State Council on December 5th, 1990, and revised and promulgated by the State Council on April 18th, 1998 was repealed simultaneously.

Website: http://www.moc.gov.cn

 To be engaged in international liner services, an application shall be submitted to the Ministry of Communications of the Peoples’ Republic of China (hereinafter referred to as MOC), and the following documents shall be attached thereto:

(1) the name of the international liner service operator, its registered place of business, photocopy of its business license, and the information of its main investor(s);

(2) the names and idnetification documents of the operator’s main management staff;

(3) the particulars of the vessels under operation;

(4) the description of the intended shipping lines, shipping schedules and ports of call along the shipping lines;

(5) the freight tariff; and

(6) the sample of its bill of lading, passage ticket or multimodal transport documents.

MOC shall complete examination and verification within 30 days from the date of receipt of the application for international liner services. If the application documents are authentic and complete, registration shall be granted and the applicant shall be notified of the result, or, if the application documents are inauthentic or incomplete, no registration shall be granted and the applicant shall be notified in writing and given the reasons therefor.

Website: http://www.moc.gov.cn

MOC is going to stipulate the Implementation Rules of RIMT.

Licensing and Qualification Requirements of Service Providers

N.A.

An international shipping operator who intends to be engaged in international liner services to and from the ports of the People’s Republic of China shall acquire the qualifications for operation of international liner services in accordance with the provision of RIMT.

Those who have not acquired the qualifications for the operation of international liner services shall not be engaged in international liner services, nor publish their liner shipping schedules, nor accept space booking.      

Where the operation of international liner services is conducted through joint employment of vessels, slot sharing of cargo spaces or joint operation of services, the provisions in the preceding paragraph shall apply.

Website: http://www.moc.gov.cnn

Upon the introduction of the system of registration, considerations and verifications will be conducted in accordance with the new technical terms and conditions.

Foreign Entry

Upon the approval of MOC, foreign investors may, in accordance with the relevant laws, administrative regulations and other pertinent provisions of the State, make investment to establish Chinese-foreign equity joint ventures or contractual joint ventures to be engaged in international shipping services.

Upon the approval of MOC, foreign investors may, in accordance with the relevant laws, administrative regulations and other pertinent provisions of the State, make investment to establish Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures or wholly foreign capital enterprises to offer such routine services as canvassing of cargoes, issuance of bills of lading, settlement of freight and signing of service contracts for their owned or operated vessels; if they have not established any Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures or wholly foreign capital enterprises within Chinese territory, they must commission a Chinese international shipping agent to undertake the above-mentioned business.

Upon the approval of MOC, foreign cooperators of international shipping services may establish representative offices within Chinese territory according to law.

Website: http://www.moc.gov.cn

The proportion of the investment made by foreign investors into Chinese-foreign equity joint ventures engaged in international shipping services shall not exceed 49%.

The provisions in the preceding paragraph are mutatis mutandis applicable to the proportion of the investment made by foreign investors into Chinese-foreign contractual joint ventures engaged in international shipping services.

The chairperson of the board of directors and the general manager of a Chinese-foreign equity joint venture or Chinese-foreign contractual joint venture engaged in international shipping services shall be appointed by the Chinese side through consultation between the two sides.

The representative offices established by foreign operators of international shipping services shall not be engaged in profit-making business activities.Foreign invested enterprises enjoy the national treatment.

Website: http://www.moc.gov.cn

N.A.

Discriminatory Treatment/

MFN

National treatment

Website:http://www.moc.gov.cn

Website: http://www.moc.gov.cn

N.A.

Operational Requirements

n.a

Master law instrument;

Civil Aviation Law of P. R. China

Principal regulatory Instruments:

State Council Order No. 288: Basic Rules for Navigation of P. R. China

CCAR Chapter 60: Employment of Foreign Air crew

CCAR Chapters 71, 73, 75, 77, 79: Airspace Augonization and Management

CCAR Chapter 119: Non Scheduled International Services Provided by Foreign Carriers

CCAR Chapter 129: Foreign Aircraft Operational Certification and Airworthiness Inspection

CCAR Chapter 221-II: International Tariff

CCAR Chapter 276: Dangerous Goods Transport

CCAR Chapter 293: Wet Leasing of Foerign Aircraft

CCAR: Chapter 299: Sales Agents

For details, see: http://www.caac.gov.cn

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Licensing and Qualification Requirements of Service Providers

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Regulatory instrument:

"Requirements for Foreign Carriers applying for Operation Permit for Scheduled Air Services into China"

The bilateral Air Services Agreements between China and other 85 countries provide that each Contracting Party shall recognize the valid certificate of airworthiness, certificate of competency and licences issued or validated by the other Contracting Party, provided that the standards of such certificates and licences are equal to or above the minimum standards established from time to time in accordance with the Convention on International Civil Aviation.

Non scheduled international services shall meet the provisions of CAR Chapter 119 "Regulations on Non Scheduled Services Provided by Foreign Carriers".

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Foreign Entry

"Provisions on Foreign Investment in Civil Aviation Industry" has come into force as of August 1, 2002. According to the provisions, the scope of foreign ownership in China's civil aviation industry in enlarged, a variety of modes of foreign investment is allowed, the proportation of foreign ownership is increased while the  management power of foreign owners is enhanced.

Market access for scheduled international services is determined through bilateral Air Services Agreements.

Market access for non scheduled services is determined on the case by case basis mainly taking into account the market needs.

Foreign airlines, maintenance and repairs companies and aviation manufacturers are permitted to set joint venture aircraft maintenance and repair companies in China.

Foreign ownership for the airlines of China is permitted up to 49% while a single foreign investor's share should be no more than 25% .

Foreign ownership for the airports other than air traffic control systems in China is permitted with Chinese share holders holding a relative control proportion of shares.

Foreign citizens are allowed to hold the post of Chairman or General Manager of  Chinese airlines or airports.

The designated foreign international airlines are allowed to wet lease third country aircraft and crew to operate the agreed services into China, subject to their compliance with the safety requirements set forth by the aeronautical authority of China.

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Discriminatory Treatment/

MFN

n.a

n.a

n.a

Operational Requirements

Rules on Administration of Foreign Investment in Road Transport (hereinafter referred to as RAFIRT) were jointly promulgated by the Ministry of Communications (MOC) and the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) on 20th November 2001, and effective as of the same date. The Provisional Regulations of the Ministry of Communications of the People’s Republic of China Governing the Review and Approvement of Applications for Foreign Investment in Road Transport promulgated on 11th November  1993 were repealed simutaneously.

Website: http://www.moc.gov.cn

To establish foreign-invested road transport enterprises, an application for project proposal approval shall be submitted to the competent communicaitons department of a municipality, where the proposed enterprise is to be located, and the following documents shall be attached thereto:

(1) an application, in which total investment volume, registered capital and business scope, scale as well as duration are inculeded;

(2) project proposals;

(3) legal identification documentation of the investor;

(4) credit certificates of the investor;

(5) effective certificates of assets evaluation; in case that the investor is to invest with the right to the use of land, facilities and equipment; and

(6) any other documents required by the competent authorities.

To establish Chinese-foreign equity joint ventures and Chinese-foreign contractual joint ventures, a letter of intent on the cooperation shall be submitted in addition to the above-mentioned documents.

A Chinese translation of documents in foreign languages shall be attached at the same time.

If a foreign-invested enterprise is to extend business scope to road transport services, or if a foreign-invested road transport enterprise is to extend business scope or to extend business scale beyond the originally verified standards, or if a foreign-invested road transport enterprise is to incoperate, split, move and alter investment subject, registered capital, and investment share proportions, the enterprise shall submit an application for alteration to the competent communications department of a municipality, where the enterprise is located, with the following documents:

(1) an application;

(2) photocopies of business licence of the legal person of the enterprise;

(3) photocopies of approval certificate for the establishment of theforeign-invested enterprise;

(4) photocopies of approving document for the project proposal of the foreign-invested enterprise; and

(5) credit certificaitons.

The competent communication department shall conduct consideration and verificaiton and grant an approval to the project proposal and alteration applications of foreign investment in road transport in accordance with the following procudures:

(1) the competent communicaitons department of a municipality shall, within 15 working days from the date of reciept of the application, make comments on initial examination and verification of the application, and submit the comments and application documents to the competent communications department of the province to which the municipality belongs;

(2) the competent communications department of the province shall, within 15 working days from the date of reciept of the comments and documents referred to in Paragraph (1), make comments on verification and examination in accordance with RAFIRT, and submit the comments and the application documents to MOC for approval thereafter.   

(3) MOC shall complete the consideration and verification of the application documents within 30 working days from the date of reciept of the comments and documents referred to in Paragraph (2). If the application documents are in compliance with the provisions of RAFIRT, an approving document for project proposal or an approving document for alteration shall be issued to the applicant, or, if the application documents are not in compliance with the provisions of RAFIRT, the application shall be rejected and the applicant shall be notified in writing and given the reasons therefor.

The applicant shall, within 30 days from the date of receipt of the approving document refferred to in Paragraph (3), apply to the competent foreign trade and economic cooperation department of the province for the grant or alteration of the approval certificate of the foreign-invested enterprise with the approving document and the following documents:

(1) an application;

(2) a feasibility study report;

(3) the contract and articles of the enterprise concerned, (for wholly foreign owned road transport enterprises, only articles of the company)

(4) names and curriculum vitae of members of the board of directors and key administrative personnel;

(5) a notification of  the approval for the enterprise’s name issued by the competent industry and commerce administration;

(6) legal identification document and credit certificates issued in the country or region, where the investor inhabitates; and

(7) any other documents required by the competent authorities.

Competent foreign trade and economic cooperation department of the province concerned shall, after examination and consideration of the above-mentioned documents, submit the application documents and comments made upon the  examination and consideration to MOFTEC or its authoried department. MOFTEC and its authorized department shall, within 45 days from the date of receipt of the application documents, make a decision on granting or not granting an approval. If the application is in compliance with the relevant regulations, an approval certificate for the foreign-invested enterprise shall be granted or altered, or If the application is not in compliance with the relevant regulations, the application shall be rejected, and the applicant shall be notified in writing and given the reasons therefore.

The applicant shall, within 30 days from the date of receipt of the approving certificate for the foreign-invested enterprise, acquire operation permit for road transport service from the competent communications department of the province, where the proposed enterprise is located, with the approving document of project proposal and the approval certificate, and start road transport service operations in accordance with the verified business scope after completing the industrial and commercial registration according to law.

The applicant shall, within 30 days from the receipt of the altered approval certificate for the foreign-invested enterprise, carry out the corresponding alteration formalities at the competent communications department and the industry and commerce administration of the province with the approving document for the alteration, the altered approval certificate of the foreign-invested enterprise and other relevant application documents.   

The applicant shall, after completing the relevant formalities, file with MOC photocopies of business license of the enterprise, the approval certificate for the foreign-invested enterprise concerned and the road transport service operation permit

The approving document shall become invalid automatically in case that the industrial and commercial registration formalities are failed to be completed within 18 months from the date of receipt of the approving document for project proposal of the foreign-invested road transport enterprise.

Website: http://www.moc.gov.cn

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Licensing and Qualification Requirements of Service Providers

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Foreign investors inevesting in road transport service shall be in compliance with the road transport development policies of MOC, satisfy the qualification requirements made by MOC, and be in compliance with the road transport development plan of the competent communications department of a province, where the proposed foreign-invested road transport enterprise is located.

All investors shall invest with capital under their ownership and possess good credibility.

To engage in road passenger transport,  foreign investors shall also meet the following conditions:  

(1) at least one of the main investors must be an enterprise with more than 5 years of experience in road transport services in China.

(2) share proportions of foreign capital shall not be more than 49%;

(3) 50% of the registered capital of the enterprise shall be used in the construction and renovation of passenger transport infrastructure; and

(4) vehicles put into operation shall be coaches of middle-and –above classed.

Website: http://www.moc.gov.cn

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Foreign Entry

Website: http://www.moc.gov.cn

Project proposal for foreign investment in road transport services and the relevant issues shall be subject to the approval of MOC.

The contract and articles of a foreign-invested road transport enterprise shall be subject to the approval of the competent foreign trade and economic cooperation department of the State Council.

The operation duration of a foreign-invested road transport enterprise shall be no more than 12 years normally. However, the operation duration of a foreign-invested road transport enterprise may be 20 years, provided more than 50% of the total investment of the enterprise is used for the construction of infrastructure, such as passenger and goods transport stations and depots.

A foreign-invested road transport enterprise, whose business operation is in compliance with industrial policies on and development plans of road transport industry, and which has passed operation qualification (quality and credibility) assessment, may apply for prolongation of operation duration with a period of no more than 20 years each time upon the approval of the competent department which granted the original approving document.

A foreign-invested road transport enterprise applying for operation duration prolongation shall submit an application, 6 months in advance of the invalidity of the operation duration, to the competent communications department of a province, where the enterprise is located, and records of operation qualification (quality and credibility) assessment and other relevant documents shall be attached thereto. After being considered and verified by the competent communications department of the province, the documents shall be submitted to MOC and be decided by MOC after consulting with the competent foreign trade and economic cooperation department of the State Council.

To suspend, withdraw or terminate a business, a foreign-invested road transport enterprise shall go through the relevant formalities forthwith at MOC, the competent foreign trade and economic cooperation department of the State Council or their authorized department and the industry and commerce administrations.

N/A

Discriminatory Treatment/

MFN

Website: http://www.moc.gov.cn

No discrimination.

N/A

Operational Requirements

Maritime Auxiliary Services:

This area has been further opened. A number of Chinese-foreign equity joint ventures engaging in international container depot and Chinese-foreign contractual joint ventures engaging in container handling have been established.

Website: http://www.moc.gov.cn

Coastal Shipping:

Website: http://www.moc.gov.cn

  To be engaged in international shipping agency services, an application shall be submitted to MOC, and the relevant documents in compliance with the conditions set forth in RIMT shall be attached thereto. To be engaged in international shipping agency services, the following conditions shall be met: 

(1) having at least two senior executives with no less than three years’ experience in international maritime transportation business operations; 

(2) having fixed places of business and necessary business facilities. 

MOC shall complete examination and verification within 15 days from the date of receipt of the application. If the application documents are authentic and complete, registration shall be granted and the applicant shall be notified of the result, or, if the application documents are inauthentic or incomplete, no registration shall be granted and the applicant shall be notified in writing and given the reasons therefor. 

To be engaged in international ship management services, an application shall be submitted to the competent communications department of the people’s government of a province, an autonomous region or a municipality directly under the Central Government where the proposed business is to be located, and the relevant documents in compliance with the conditions set forth in RIMT shall be attached thereto. To be engaged in international ship management services, the following conditions shall be met: 

(1) having at least two senior executives with no less than three years’ experience in international maritime transportation business operation; 

(2) having staff members in possession of Master’s credentials and chief engineer’s credentials appropriate to the types of ships and trading zones under their management; and 

(3) having equipment and facilities appropriate to international ship management services. 

The consideration and verification of the application documents shall be completed within 15 days from the receipt of the application documents. If the application documents are authentic and complete, registration shall be granted and the applicant shall be notified of the result, or, if the application documents are inauthentic or incomplete, no registration shall be granted and the applicant shall be notified in writing and given the reasons therefor. 

Website: http://www.moc.gov.cn

Applications shall be considered and verified by the local competent authorities in charge of communications, and approved by MOC thereafter.

Website: http://www.moc.gov.cn

The system of registration will be introduced gradually.

N.A.

Licensing and Qualification Requirements of Service Providers

Maritime Auxiliary Services:

Website: http://www.moc.gov.cn

Coastal Shipping:

Website: http://www.moc.gov.cn

N.A.

Maritime shipping services and towing services between Chinese ports shall be operated by vessels flying the flag of the People’s Republic of China. Vessels under the ownership of Chinese-foreign contractual joint ventures may have the right to be registered in China and fly the flag of the People’s Republic of China. 

Chinese-foreign equity joint ventures engaging in international shipping services shall be established on the basis of Chinese majority ownership, and the vessels thereof shall fly the flag of China.

N.A.

N.A.

Foreign Entry

Maritime Auxiliary Services:

Website: http://www.moc.gov.cn

Coastal Shipping:

Website: http://www.moc.gov.cn

Upon the approval of MOC, foreign investors may, in accordance with the relevant laws, administrative regulations and other pertinent provisions of the State, make investment to establish Chinese-foreign equity joint ventures or contractual joint ventures to be engaged in international shipping agency services, international ship management services, international maritime cargo warehousing, and international maritime container freight station and container yard services, and may establish wholly foreign capital enterprises to be engaged in international maritime cargo warehousing services. The proportion of the investment made by foreign investors into Chinese-foreign equity joint ventures engaged in international shipping agency services shall not exceed 49%. The provisions in the preceding are mutatis mutandis applicable to the proportion of the investment made by foreign investors into Chinese-foreign contractual joint ventures engaged in international shipping agency services.

Chinese-foreign equity joint ventures engaging in shipping services must possess advanced technology and high-leveled management, and be established upon the demand of market.

N.A.

N.A.

Discriminatory Treatment/

MFN

Maritime Auxiliary Services:

Website:http://www.moc.gov.cn

Coastal Shipping:

Website:http://www.moc.gov.cn

National treatment.

N.A.

N.A.

N.A.

Operational Requirements