Chapter I General Provisions

Article 1
With the view of regulating the administration of the examination and approval of overseas investment projects, the present Measures are formulated in accordance with the Administrative License Law of the People's Republic of China and the Decision of the State Council on Reforming the Investment System.

Article 2
The present Measures shall be applicable to the examination and approval of overseas investment projects (including new establishment, merger by purchase, purchase of stocks, increase in capital and reinvestment) of all kinds of juridical persons within the territory of the People's Republic of China (hereinafter referred to as "investors") and enterprises or organs overseas held by them.The present Measures shall be applicable to the examination and approval of the investors' investment projects in Hong Kong and Macao Special Administrative Regions and in Taiwan.

Article 3
The "overseas investment projects" referred to in the present Measures are those activities through which the investors activate to obtain the overseas ownership, power of operation and management and other related rights and interests by pouring assets and rights and interests such as the money, securities, material objects, intellectual property or technology, stock rights, creditor's rights and etc. or by offering the security.

Chapter II Organs of Examination and Approval and The Purview of Their Authorities

Article 4
The overseas investment projects of resource development and the overseas investment projects using large amount of foreign exchange shall be subject to the examination and approval of the State.The projects of resource development refer to the projects invested overseas to prospect for such resources as crude oil and mines. Among them, the projects with the Chinese party's investment amount of 30 million dollars or more shall be subject to the examination and approval of the National Development and Reform Commission; the projects with the Chinese party's investment amount of 200 million dollars or more shall be subject to the auditing by the National Development and Reform Commission and then be reported to the State Council for examination and approval.The projects using large amount of foreign exchange refer to the overseas investment projects with the Chinese party's foreign exchange amount of 10 million dollars or more beyond the fields prescribed in the preceding paragraph And this kind of projects shall be subject to the examination and approval of the National Development and Reform Commission. The projects with the Chinese party's investment amount of 50 million dollars or more shall be subject to the examination of the National Development and Reform Commission and then be reported to the State Council for examination and approval.

Article 5
The projects of resource development, with the Chinese party's investment amount of 30 million dollars or less and other projects using the foreign exchange of 10 million dollars or less by the Chinese party, shall be subject to the examination and approval of the provincial development and reform departments of all provinces, autonomous regions, municipalities directly under the Central Government, the cities under separate state planning and XinJiang Production and Construction Corp. and the power to examine and approve the projects shall not be transferred to the lower level departments. For the purpose of immediately mastering the information of the examination and approval of the projects, all provincial development and reform departments shall submit a copy of the documents of the examination and approval of the projects to the National Development and Reform Commission within 20 working days counted from the date of examination and approval.Where the local governments have otherwise prescribed for the examination and approval of the projects listed in the preceding paragraph, such prescriptions shall prevail.

Article 6
For the overseas investment projects of resource development with the Chinese party's investment amount of 30 million dollars or less invested by the enterprises under the administration of the Central Government and other overseas investment projects with the Chinese party's foreign exchange of 10 million dollars or less, the decisions shall be made by the enterprises independently and then pertinent documents shall be reported after decision-making to the National Development and Reform Commission for the record-keeping purpose. The National Development and Reform Commission shall issue the record-keeping certificate within 7 working days after acceptance of the record-keeping materials mentioned above.

Article 7
The investment projects in Taiwan and countries without any diplomatic relations with China shall, no matter what the amount is, be subject to the examination and approval of the National Development and Reform Commission or be reported to the State Council for approval after being examined and approved by the National Development and Reform Commission.

Chapter III Procedures of Examination and Approval

Article 8
Where the power to examine and approve the projects remains with the National Development and Reform Commission or the State Council, the investors shall put forward the project application reports to the provincial development and reform department at the locality of registration. The provincial development and reform department at the locality of registration shall submit it to the National Development and Reform Commission after examining and approving it. The enterprise groups of the cities under separate state planning and the enterprises under the administration of the Central Government may directly submit the project application reports to the National Development and Reform Commission.

Article 9
The National Development and Reform Commission shall solicit the opinions of the departments concerned before examining and approving the investment projects in Hong Kong and Macao Special Administrative Regions, Taiwan Province and countries and sensitive areas without any diplomatic relations with China. The departments concerned shall put forward the written suggestions to the National Development and Reform Commission within 7 working days after acceptance of the materials mentioned above.

Article 10
The National Development and Reform Commission shall entrust qualified consultation organizations to assess the key issues that are necessary to be evaluated and demonstrated within 5 working days after acceptance of the application report. The entrusted consultation organizations shall put forward the appraisal report to the National Development and Reform Commission within the prescribed time limit.

Article 11
The National Development and Reform Commission shall, within 20 working days after the acceptance of the project application report, finish examining and approving the project application report or put forward the opinions on the examination and approval to the State Council. Where it is difficult to make the decision on the examination and approval or put forward opinions on the examination and approval within 20 working days, the period shall be extended for ten working days with the approval of the principal of the National Development and Reform Commission and the project applicant shall be notified of the reasons for the extension.The period specified in the preceding paragraph does not include the period for assessment conducted by the entrusted consultation organization.

Article 12
For approved projects, the National Development and Reform Commission shall issue the examination and approval documents in written form to the project applicants. For disapproved projects, the National Development and Reform Commission shall notify the project applicants of the reasons and the rights to apply for an administrative review or to initiate an administrative lawsuit in written form.

Article 13
For the projects of competitive bidding overseas or purchase, the written information report shall be submitted to the National Development and Reform Commission before the competitive bidding or the formal proceeding of business activities. The National Development and Reform Commission shall issue the related confirmation letters within 7 working days after acceptance of the written information report. The information report shall mainly include:(1)the fundamental information of the investors;(2)the background particulars of the investment project;(3)the sites and the orientation of investment, the predicted investment scale and construction scale; and(4)the schedule of working hours.

Article 14
Where the investors need pouring the necessary first-phase project expenses including the use of foreign exchange (including the deposit for the performance of contract and the letter of guarantee), they shall apply to the National Development and Reform Commission for examination and approval. The approved first-phase expenses shall be calculated into the total investment amount of the projects.

Article 15
In case the approved projects are under any of the following circumstances, the investors shall apply to the National Development and Reform Commission for alteration:(1)the alteration of the construction scale, the main construction items and main products;(2)the alteration of the construction sites;(3)the alteration of the investors or their stock rights; or(4)The Chinese party's investment exceeds 20% or more of the originally approved amount of the Chinese party's investment.The procedures for examining and approving the alteration shall be implemented according to the related prescriptions of the present chapter.

Chapter IV Project Application Report

Article 16
Project application reports submitted to the National Development and Reform Commission shall contain the following items:(1)the name of the project and the fundamental information of the investors;(2)the particulars of the project background and the investment environment;(3)the construction scale of the project, the main construction items, products, target markets, and the particulars of benefits and risks of the project;(4)the total investment amount of the project, the amount of contribution of each party, the mode of contribution, the financing schemes and the amount of foreign exchange; and(5)for the merger projects by purchase or the projects of purchasing shares, the specific conditions of the companies to be merged or whose shares are to be purchased shall be illuminated.

Article 17
The project application reports submitted to the National Development and Reform Commission shall be attached with documents as follows:(1)the resolution of the board of directors of the company or the pertinent resolutions of contribution;(2)the documents which can demonstrate the conditions of the assets, the management and the credibility of the Chinese party and the foreign cooperators;(3)the letter of intent for financing issued by banks;(4)where the contribution is offered in forms of assets and rights and interests such as securities, material objects, intellectual property or technology, stock rights and creditor's rights, the amount of contribution shall be checked and ratified according to the assessed value and the fair value of the rights and interests of the assets. The evaluation report of assets, which is issued by such intermediary institutions as the accountants and the assets appraisal institutions with the corresponding qualification, and the document from the third party, which can demonstrate the value of the related assets and rights and interests, shall be submitted;(5)for competitive bidding projects, merger projects by purchase or venture-joint and cooperative projects, the letters of intent or the documents of the framework agreement signed by the Chinese party and foreign party shall be submitted; and(6)for the overseas competitive bidding projects or overseas merger projects by purchase, the information report, with the attachment of the pertinent confirmation letters of the National Development and Reform Commission, shall be submitted pursuant to Article 13 of the present Measures.

Chapter V The Conditions and Validity of Examination and Approval

Article 18
The requirements for the project that shall be examined and approved by the National Development and Reform Commission are as follows:(1)it shall abide by the laws and regulations of the state and the industrial policies, not do harm to the sovereignty, safety and public interests of the state and not violate the rules of international laws;(2)it shall comply with the demands of sustainable development of the economy and society and be helpful to the development of strategic resources required for developing the national economy; and comply with the requirements of the State for adjusting the industrial structure; it shall promote the export of the technology, products, equipments and labor services with the comparative predominance and absorb the advanced foreign technology;(3)it shall comply with the administrative prescriptions of national capital projects and the foreign loans; and(4)the investors shall possess the corresponding investment strength.

Article 19
The investors shall, pursuant to the examination and approval documents of the National Development and Reform Commission, handle the pertinent formalities of foreign exchange, customs, entry and exit administration and tax revenue according to law. The enterprises under the administration of the Central Government prescribed in Article 6 of the present Measures shall handle the pertinent formalities mentioned above on the strength of the record-keeping certificates issued by the National Development and Reform Commission.

Article 20
Before signing any documents of final legal binding force for the overseas investment projects, the investors shall obtain the examination and approval documents or record-keeping certificates issued by the National Development and Reform Commission.

Article 21
The validity period shall be stipulated in examination and approval documents issued by the National Development and Reform Commission. Within the validity period, the examination and approval documents shall be the basis for the investors to go through corresponding formalities prescribed in Article 19 of the present Measures. After the validity period, the investors shall simultaneously present the documents for permitting the extension issued by the National Development and Reform Commission when they go through the pertinent formalities mentioned above.

Article 22
For the overseas investment projects not approved by authoritative institutions and not put on records, no departments of foreign exchange management, customs or taxation may handle the pertinent procedures.

Article 23
Where the investors obtain the approval documents or record-keeping certificates by such malfeasance means as providing false materials, the National Development and Reform Commission may repeal the approval documents or record-keeping certificates of the projects.

Article 24
The National Development and Reform Commission may conduct supervision and check on the implementation particulars of investors' projects and on the particulars of examination and approval of the overseas investment projects by the provincial development and reform departments and deal with the problems found out through supervision and check according to law.

Chapter VI Supplementary Provisions

Article 25
All provincial development and reform departments shall, pursuant to the prescriptions of the present Measures, enact corresponding measures for the administration of examination and approval.

Article 26
The examination and approval of projects invested overseas by natural persons and other institutions shall be implemented referring to the present Measures.

Article 27
The power to interpret the present Measures shall remain with the National Development and Reform Commission.

Article 28
The present Measures shall come into force as of October 9, 2004. Where the former rules of examination and approval of the overseas investment projects are contrary to the present Measures, the present Measures shall prevail.