ORGANISATION MONDIALE
DU COMMERCES/C/N/211
17 décembre 2002
(02-6955)
Conseil du commerce des services Original:  anglais
NOTIFICATION AU TITRE DE L'ARTICLE III:3 DE L'ACCORD GÉNÉRAL
SUR LE COMMERCE DES SERVICES
La délégation de la République populaire de Chine a fait parvenir au Secrétariat la
notification ci-après.
_______________
1. Membre adressant la notification:
République populaire de Chine
2. Notification au titre de:
Article III, paragraphe 3 de l'Accord général sur le commerce des services
3. Date d'entrée en vigueur/durée:
4 septembre 1995
4. Organisme responsable de la mise en œuvre et de l'application de la mesure:
Ministère du commerce extérieur et de la coopération économique
5. Description complète de la mesure* indiquant les modes de fourniture visés, l'effet sur le
commerce des services (par exemple, restrictions/mesures de libéralisation) et
l'incidence de la mesure sur les engagements  énoncés dans la liste du Membre et dans sa
liste d'exemptions de l'article II (NPF), le cas échéant:
Règlement d'application de la Loi de la République populaire de Chine sur les coentreprises
contractuelles sino-étrangères
On trouvera ci-joint le texte intégral en anglais de ce règlement.1  Seule la version en chinois
fait foi, la traduction en anglais n'étant fournie qu'à titre de référence.
6. Membres spécifiquement affectés, le cas échéant:
Tous les Membres
                                                     
* Y compris les accords internationaux, les me sures de reconnaissance ou d'autres types.
1 En anglais seulement.S/C/N/211
Page 2
7. Les textes peuvent être obtenus auprès de:
- Point d'information /g254
- Secrétariat de l'OMC /g254
- Autres sources (adresse, télécopie
et téléphone d'un autre organisme) /g168
_______________S/C/N/211
Page 3
Regulations for the Implementation of the Law of the People’s Republic of China on
Sino-Foreign Contractual Joint Venture
(Approved by the State Council on August 7, 1995, promulgated by Decree No.6 of the Ministry of
Foreign Trade and Economic Cooperation on September 4, 1995)
Chapter I General Provisions
Article 1 These Rules are formulated in accordance with the Law of the People’s Republic of
China on Chinese-Foreign Contractual Joint Ventures.
Article 2 The establishment of Chinese-Foreign contractual joint ventures (hereinafter referred
to as contractual joint ventures) within the terr itory of China shall comply with the development
policies and industrial policies of the State and shall abide by the State provisions governing guiding
the direction of investment of foreign capital enterprises.
Article 3 Contractual joint ventures shall, within the scope of the approved agreements,
contracts and articles of association of the contractual joint ventures, develop their own business and
conduct operational and managerial activities freely in accordance with the law and without any
interference from any organization or individual.
Article 4 Contractual joint ventures include those which have acquired the status of Chinese
legal persons in accordance with the law and those which do not have the status of Chinese legal
persons.
Contractual joint ventures which do not have the status of legal persons shall be subject to the special
provisions of Chapter IX of these Rules.
Article 5 The competent department of the Chinese party is the competent department of the
contractual joint venture. Where there are two or more Chinese parties, the authority for examination
and approval shall, through consultation with the relevant departments, determine one department as
the competent department, but except where the laws or administrative regulations have otherwise
provided.
The competent department of the contractual joint venture shall, in accordance with the law,
coordinate the relevant matters concerning the contractual joint venture and provide assistance.
Chapter II Establishment of Contractual Joint Ventures
Article 6 The establishment of a contractual joint venture shall be examined and approved by
the Ministry of Foreign Trade and Economic Cooperation or by the department o r the local people’s
government authorized by the State Council.
The establishment of a contractual joint venture under one of the follow in g circumstances shall be
examined and approved by the department or the local peoples government authorized by the State
Council:
1. where the total investment amount is within the limit of the amount stipulated by the
State Council which can be examined and approved by the department or the localpeople's government authorized by the State Council;
2. where the capital is self-financed and the construction and production conditions are
not required to be balanced by the State;S/C/N/211
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3. where the export of products does not require attaining an export quota  or permit
issued by the relevant competent departments of the State, or although such a quota or
permit is required, agreement is already obtained from the relevant competent
departments of the State before the project proposal is submitted; or
4. where there are other cases as stipulated by the laws or administrative regulations to
be examined and approved by the department or the local people’s government
authorized by the State Council.
Article 7 Where a contractual joint venture is to be established, the following documents shall
be submitted to the examination and approval authority by the Chinese party:
1. the project proposal for establishing a contractual joint venture, attached with the
examination and approval documents of the competent department;
2. the feasibility study report jointly made by all parties to the contractual joint venture,
attached with the examination and approval documents of the competent department;
3. the agreement, contract and articles of association for the contractual  joint venture
signed by the legal representatives of the parties to the contractual joint venture or
their authorized representatives;
4. the business licenses or registration certificates and credit standing certificates of the
parties to the contractual joint venture, a nd the valid certification documents of their
legal representatives; in case the foreign party is a natural person, the valid
certification documents showing his identity, resume and credit standing information;
5. the name list of the chairman, vice chairmen and directors of the board of directors or
the director, vice directors and members of the joint management committee of the
contractual joint venture as decided in consultation by the parties; and
6. other documents whose submission is required by the examination and approval
authority.
The documents listed in the preceding paragraph shall be submitted in the Chinese language with the
exception of the documents listed in Item (4) provided by the foreign party; the documents listed in
Items (2), (3) and (5) may be simultaneously submitted in a foreign language as decided in
consultation by the parties to the contractual joint venture.
The examination and approval authority shall decide whether or not to grant approval within 45 days
of receiving all the documents stipulated; in cases where the examination and approval authority
deems that the documents submitted are incomplete or unsuitable, it has the right to demand that the
parties to the contractual joint venture complete or amend them within the specified time limit.
Article 8 The Ministry of Foreign Trade and Economic Cooperation shall issue an approval
certificate to a contractual joint venture whose establishment is approved by the Ministry of Foreign
Trade and Economic Cooperation or the department authorized by the State Council.
The relevant local people’s government shall issue an approval certificate to a contractual joint
venture whose establishment is approved by the local people’s government authorized by the State
Council, and shall, within 30 days from  the date of approval, submit the approval documents to the
Ministry of Foreign  Trade and Economic Cooperation for the record.S/C/N/211
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A contractual joint venture which is approved to be established shall, in accordance with the law,
apply to the administrative authority for industry and commerce for registration and obtain a business
license.
Article 9 Approval shall not be granted to an application for establishment of a contractual
joint venture under any of the following circumstances:
(1) injuring the State sovereignty or social or public interests;
(2) endangering the safety of the State;
(3) causing pollution to the environment;
(4) any other circumstances in violation of the law, administrative regulations or State
industrial policies.
Article 10 The term agreement of the contractual joint venture as referred to in these Rules
means the written document drawn up by the parties to the contractual joint venture after they have
come to a unanimous agreement on the principles and major matters for establishing the venture.
The term contract of the contractual joint venture as referred to in these Rules means the written
document drawn up by the parties to the contractual joint venture after they have come to a
unanimous agreement on their mutual rights and obligations for the establishment of the venture.
The term articles of association of the contractual joint venture as referred to in these Rules means the
written document drawn up with the unanimous agreement of the parties to the contractual joint
venture according to the agreements made in the contract of the contractual joint venture to agree on
such matters as the organizational principles and the methods of management and operation.
In cases where discrepancies exist between the agreement or articles of association of the contractual
joint venture and the contract of the contractual joint venture, the contract of the contractual joint
venture shall prevail.
The parties to the contractual joint venture may choose not to conclude a contractual joint venture
agreement.
Article 11 The agreement, the contract and the articles of association of the contractual joint
venture shall enter into force as of the date when the certificate of approval is issued by the
examination and approval authority. During the period of cooperation, any major changes to the
agreement, the contract or articles of association of the contractual joint venture shall be approved by
the examination an d approval authority.
Article 12 The contract of the contractual joint venture shall clearly state the following:
(1) the name, place of registration, and domicile of each party to the contractual joint
venture and the name, position and nationality of its legal representatives (where the
foreign party is a natural person, his name, nationality and domicile);
(2) the name, domicile and scope of business of the contractual joint venture;(3) the total investment and the registered capital of the contractual joint venture, and the
manner and time limit of the investment or conditions for cooperation provided by
each party to the contractual joint venture;
(4) the transfer of the investment or conditions provided by the parties to the contractual
joint venture;
(5) the distribution of earnings or products and the sharing of risks and losses among the
parties to the contractual joint venture;S/C/N/211
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(6) the composition of the board of directors or the joint management committee of the
contractual joint venture and the allocation of the number of people to be directors or
committee members, the powers and responsibilities of the general manager and other
high ranking managerial personnel and the measures for their appointment and
dismissal;
(7) the major equipment used for production, the productive technology and their
sources;
(8) marketing arrangements for products sold inside and outside the Chinese territory;
(9) plans for foreign exchange revenue and expenditure;
(10) the period of operation, dissolution and liquidation of the contractual joint venture;
(11) other obligations of the parties to the contractual joint venture and responsibilities for
breach of the contract;
(12) the operational principles for finance, accounting and auditing;
(13) the settlement of disputes among the parties to the contractual joint venture;  and
(14) the procedures for amending the contract of the contractual joint venture.
Article 13 The articles of association of the contractual joint venture shall clearly state the
following:
(1) the name and domicile of the contractual joint venture;
(2) the business scope and the period of cooperation of the contractual joint venture;
(3) the name, place of registration and domicile of each party to the contractual joint
venture, and the name, position and nationality of its legal representative (where theforeign party is a natural person, his name, nationality and domicile);
(4) the total investment and the registered capital of the contractual joint venture, the
manner and time limit of the investment or the conditions for cooperation provided by
each party to the contractual joint venture;
(5) the distribution of earnings or products and the sharing of risks and losses among the
parties to the contractual joint venture;
(6) the composition, powers and rules of procedure of the board of directors or the joint
management committee, the terms of office of directors of the board of directors or
members of the joint management committee, the powers and responsibilities of the
chairman and vice chairmen of the board of directors, or of the director and vice
directors of the joint management committee;
(7) the establishment, powers and working procedures of operation and management
organs, and the powers and responsibilities of the general manager and other high
ranking managerial personnel, and the measures for their appointment  and dismissal;
(8) the provisions relating to such labor management matters as recruitment, training,
work contracts, wages, social insurance, welfare, on the job safety and hygiene of the
staff and workers;
(9) systems of finance, accounting and auditing of the contractual joint venture;
(10) the procedures for the dissolution and liquidation of the contractual joint venture; and
(11) the procedures for amending the articles of association of the contractual joint
venture.
Chapter III Organizational Forms and Registered Capital
Article 14 A contractual joint venture which has attained the status of a Chinese legal person in
accordance with the law shall be a limited liability company. The parties to the venture shall bear
responsibility for the contractual joint venture to the extent of their investment or of the conditions for
cooperation they contribute, with the exception of those cases otherwise agreed in the contract.
The contractual joint venture shall be liable for covering the debts of the venture with all its assets.S/C/N/211
Page 7
Article 15 The total investment in the contractual jo int venture means the total funds which need
to be contributed according to the scale of production and operation as stipulated in the contract and
the articles of association of the contractual joint venture.
Article 16 The registered capital of the contractual joint venture means the total capital
contributed by the parties to the contractual joint venture as registered in the administrative authority
for industry and commerce for the purpose of establishing the contractual joint venture. The registered
capital shall be expressed in Renminbi or in a convertible foreign currency agreed by the parties to the
contractual joint venture.
The registered capital of the contractual joint venture may not decrease in the period of cooperation.
However, in cases where changes occurring in the total investment and the scale of production oroperation mean that there is a real need to reduce the registered capital, approval shall be granted by
the authority for examination and approval.
Chapter IV Investment or Conditions for Cooperation
Article 17 The parties to the contractual joint venture shall provide investment or conditions for
cooperation for the venture in accordance with the provisions of the relevant laws or administrative
regulations and the agreement in the contract of the contractual joint venture.
Article 18 The investment or conditions for cooperation contributed by the parties to the
contractual joint venture may be provided in cash, in kind, industrial property rights, specialized
technology, the right to the use of land or other property rights.
In cases where the investment or conditions for cooperation contributed by the Chinese parties are
part of the State assets, they shall be valued acco rding to the provisions of the relevant laws and
administrative regulations.
In cases where the contractual joint venture has attained the status of a Chinese legal person in
accordance with the law, the investment contributed by foreign parties shall usually not be less than
25% of the registered capital of the contractual joint venture. In cases where the contractual joint
venture has not attained the status of a Chinese legal person, the specific requirements as to the
investment or conditions contributed by the parties to the contractual joint venture shall be stipulatedby the Ministry of Foreign Trade and Economic Cooperation.
Article 19 The parties to the contractual joint venture shall contribute their own property or
property rights as an investment or conditions for cooperation, and may not  raise mortgages or other
forms of guarantee on the contributed investment or conditions for cooperation.
Article 20 The parties to the contractual joint venture shall, according to the production and
management needs of the contractual joint venture and in accordance with the provisions of the
relevant laws or administrative regulations, agree in the contract of the contractual joint venture upon
a deadline before which each party shall provide the investment or conditions for cooperation in thecontractual joint venture.
In cases where any party to the contractual joint venture fails to provide the investment or conditions
for cooperation as agreed in the contractual joint venture’s contract, the administrative authority for
industry and commerce shall prescribe a time limit for its performance of the obligation; in caseswhere the obligation is not performed before the time limit, the authority for examination and
approval shall revoke the certificate of approval of the contractual joint venture, and the
administrative authority for industry and commerce shall revoke the business license of the
contractual joint venture and shall publicly announce this decision.S/C/N/211
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Article 21 In cases where any party to the contractual joint venture fails to provide the
investment or conditions for cooperation in accordance with the contractual joint venture contract, he
shall be liable for breach of the contract to th e other party who has provided an investment and
conditions for cooperation in accordance with the contract of the contractual joint venture.
Article 22 The investments or conditions for cooperation provided by the parties to the
contractual joint venture shall be verified by a Chinese certified public accountant, who shall make
out a verification report. Based on the report, the contractual joint venture shall issue certificates of
investment to the parties to the venture. The certificates of investment shall clearly state the
following:
(1) the name of the contractual joint venture;
(2) the date of establishment of the contractual joint venture;
(3) the designation or name of each party to the contractual joint venture;
(4) the contents of the investment or conditions for cooperation contributed by the parties
to the contractual joint venture;
(5) the date on which the parties to the contractual joint venture provided the investment
or conditions for cooperation; and
(6) the serial number and the date of issue of the investment certificate.
Copies of the investment certificate shall be submitted to the examination and approval authority and
the administrative authority for industry and commerce.
Article 23 If the parties to the contractual joint venture transfer all or some of the rights
stipulated in the contract of the contractual joint ve nture to each other, or if one party to the venture
transfers all or some of the rights stipulated in the contract to a party other than the other party to the
venture, it shall obtain the written consent of the other party and make a submission to the
examination and approval authority for approval.
The examination and approval authority shall decide whether or not to grant approval within 30 days
of receiving the document regarding the transfer.
Chapter V Organizational Structure
Article 24 The contractual joint venture shall establish a board of directors or a joint
management committee. The board of directors or the joint management committee is the power
organ of the contractual joint venture, and decides the major issues of the contractual joint venture
according to the provisions of the articles of association of the contractual joint venture.
Article 25 The board of directors or the joint management committee shall be composed of not
less than three members, and their distribution shall be determined through consultation by the
Chinese and foreign parties with reference to the investment or conditions for cooperation contributed
by each party.
Article 26 The members of the board of directors or the joint management committee shall be
appointed or dismissed by the parties to the venture respectively. The method of the selection of the
chairman and vice chairman of the board of directors or the director and vice director of the joint
management committee shall be stipulated in the ar ticles of association of the contractual joint
venture. Where the Chinese or the foreign party assumes the chairmanship of the board of directors or
the directorship of the joint management co mmittee, the other party shall assume the vice
chairmanship or the vice directorship.S/C/N/211
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Article 27 The term of office of the members of the board of directors or the joint management
committee shall be specified in the articles of association of the contractual joint venture; however,
each term may not be longer than three years. At the expiration of a director’s or a committee
members term, he may serve another term if reappointed.
Article 28 Meetings of the board of directors or the joint management committee shall be
convened at least once a year, and shall be convened and presided over by the chairman or the
director. When the chairman or the director is unab le to perform his duties due to special reasons, the
vice chairman, the vice director or another board or committee member designated by the chairman or
the director shall convene and preside over the meeting. A meeting of the board of directors or the
joint management committee may be convened upon a proposal made by one third or more of the
directors or committee members.
Meetings of the board of directors or the joint management committee may be held only if two thirds
or more of the directors or committee members are present. Directors or committee members who are
unable to attend the meetings of the board of directors or the joint management committee shall
entrust in a written form representatives to attend and to vote. A resolution made at a meeting of theboard of directors or joint management committee requires the approval of more than half of all the
directors or committee members before it is passed. A director or a committee member who does not
attend the meeting of the board of directors or the joint management committee without any just cause
and does not entrust a representative to attend on his behalf shall be deemed to have been present at
the meeting of the board of directors or the joint management committee and to have abstained fromvoting.
All directors or committee members shall be notified ten days before a meeting of the board of
directors or the joint management committee is convened.
The meetings of the board of directors or the joint management committee may use means of
communication to make a resolution.
Article 29 A resolution on the following matters must be adopted unanimously by all directors
or committee members attending the meeting of the board of the directors or the joint management
committee:
(1) amendment to the articles of association of the contractual joint venture;
(2) increase or decrease in the registered capital of the contractual joint venture;
(3) dissolution of the contractual joint venture;
(4) mortgage of the assets of the contractual joint venture;
(5) merger, division or change in the corporate form of the contractual joint venture; or(6) other matters agreed by the parties to the contractual joint venture which must be
adopted unanimously by all directors or committee members present at the meeting of
the board of the directors or the joint management committee.
Article 30 Except as otherwise stipulated in these Rules, the methods of discussion and voting
procedures used in the meetings of the board of directors or the joint management committee shall be
stipulated in the articles of association of the contractual joint venture.
Article 31 The chairman or the director is the lega l representative of the contractual joint
venture. In cases when the chairman or the director is unable to perform his duties due to specialreasons, he must authorize the vice chairman, the vice director or another director or committee
member to represent the contractual joint venture in its external relations.S/C/N/211
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Article 32 The contractual joint venture shall have one general manager who shall be
responsible for the day-to-day operation and management of the contractual joint venture and shall be
responsible to the board of directors or the joint management committee.
The general manager of the contractual joint venture shall be appointed and dismissed by the board of
directors or the joint management committee.
Article 33 The general manager and other high-ranking managerial personnel may be either
Chinese or foreign citizens.
Directors or committee members, when appointed by the board of directors or the joint management
committee, may concurrently hold the position of general manager or other high-ranking managerialpositions of the contractual joint venture.
Article 34 When the general manager or other high-ranking managerial personnel are not
competent in their jobs, neglect their duties seriously or engage in fraudulent practices or
embezzlement, they may be dismissed through a resolution adopted by the board of directors or thejoint management committee; in cases where damage  is caused to the contractual joint venture,
liability for the damages shall be assumed in accordance with the law.
Article 35 When a contractual joint venture, after it s establishment, entrusts its operation and
management to any other person other than the party to the venture, unanimous consent shall beobtained from the board of the directors or the joint management committee, and a contract for
entrusting the operation and management shall be concluded with the person thus entrusted.
The contractual joint venture shall submit such documents as the resolution of the board of directors
or the joint management committee, the signed contract for entrusting the operation and managementand the credit certificate of the person thus entrusted to the examination and approval authority for
approval. The examination and approval authority shal l decide whether or not to grant approval within
30 days of receiving the relevant documents.
Chapter VI Purchase of Materials and Sale of Products
Article 36 The contractual joint venture shall formul ate its own plans regarding production and
operation in accordance with the scope of the business and the scale of operation and production
approved.
Government departments may not force contractual joint ventures to carry out plans regarding
production and operation determined by them.
Article 37 The contractual joint venture may decide by itself to buy the machinery, equipment,
raw materials, fuel, components, auxiliary equipment, means of transportation and office appliances
etc. used by it (hereinafter referred to as materials) inside or outside Chinese territory.
Article 38 The State shall encourage contractual joint ventures to sell their products on the
international market. Contractual joint ventures may sell their products on the international market by
themselves, or may entrust foreign sales organizations or Chinese-Foreign trade companies to sell
their products on a commission basis or distribute their products.
The sale price of the products of the contractual joint venture shall be independently determined by
the contractual joint venture in accordance with the law.S/C/N/211
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Article 39 The machinery, equipment, components and other materials imported by the foreign
party as an investment and those imported by the contractual joint venture as required for the purposes
of production and operation using funds which are part of the total invested amount are exempt from
import duty and circulation tax during the process of importation. The duty-free materials mentioned
above, approved to be resold within the Chinese te rritory or used as domestic sales, shall be taxed or
the overdue tax upon them shall be paid according to law.
Article 40 The contractual joint venture may not export products at a price which is clearly
lower than a reasonable price for the same type of products on the international market, nor may the
contractual joint venture import materials at a price which is clearly higher than that of the same type
of products on the international market.
Article 41 The contractual joint venture shall sell its products in accordance with the agreement
in the approved contractual joint venture contract.
Article 42 Where the commodities imported or exported by the contractual joint venture are
those which are controlled by import or export permits or quotas, the application procedures must behandled in accordance with the relevant provisions of the State.
Chapter VII Distribution of Earnings and Recovery of Investments
Article 43 The Chinese and foreign parties may distribute the earnings by distributing profits,
distributing products or by other means decided through consultation by all parties to the contractual
joint venture.
Where earnings are distributed through the method of distributing the products or other methods, the
amount of tax to be paid shall be calculated in accordance with the relevant provisions of the tax law.
Article 44 Where it is agreed upon by the Chinese and foreign parties in the contract of the
contractual joint venture that upon the expiration of the period of the venture’s operation all the fixed
assets of the contractual joint venture shall be returned gratis to the Chinese party, the foreign party
may, in the period of the venture’s operation, appl y to recover the investment ahead of time in the
following ways:
(1) to reach agreement in the contractual joint venture contract to enlarge the foreign
party’s proportion in the distribution of earnings on the basis of distribution according
to the investment or conditions for cooperation provided;
(2) when examined and approved by the financial and tax authorities in accordance with
the relevant tax provisions of the State, to recover its investment prior to the payment
of income tax by the contractual joint venture; or
(3) to recover the investment by other methods which have been approved by the
financial and tax authorities and the examination and approval authorities.
If the foreign party is to recover its investment ahead of time during the period of the ventures
operation according to the provisions of the preceding paragraph, the Chinese and foreign parties shall
be liable for the debts of the contractual joint venture according to the relevant laws and the
agreement in the contractual joint venture contract.
Article 45 The foreign party who, in accordance with the provisions of Items (2) and (3) of
Article 44 of these Rules, applies to recover its inve stment ahead of time shall clearly state the total
investment which it wishes to recover ahead of time, the time schedule and the method of recovery.S/C/N/211
Page 12
When the application has been examined and agreed upon by the financial and tax authorities, it shall
be submitted to the examination and approval authorities for approval.
No foreign party may recover its investment before the losses of the contractual joint venture are
recompensed.
Article 46 The contractual joint venture shall employ a Chinese certified public accountant to
check the accounts and verify them in accordance with the relevant provision’s of the State. Each
party to the contractual joint venture may, together with the other parties or by itself, entrust a Chinese
certified public accountant in China to check the accounts. The accountant’s fees shall be paid by the
party by whom he is employed.
Article 47 The period of operation of a contractual joint venture shall be determined by the
Chinese and foreign parties through consultation, and shall be clearly specified in the contract of the
contractual joint venture.
Where the parties to the contractual joint venture agree through consultation to extend the period of
operation of the contractual joint venture after the expiration of its period of operation, they shall
apply to the examination and approval authority 180 days prior to the expiration of the period,
explaining the conditions of implementation of the existing contract of the contractual joint venture
and the reason for extending the period of the venture’s operation, and shall submit an agreement
reached between all parties to the venture on such matters as the rights and obligations of each partyin the extended period of operation. The examination and approval authority shall decide whether or
not to grant approval within 30 days of receiving the application.
Where approval is granted to extend the period of operation, the contractual joint venture shall apply
to the administrative authority for industry and commerce to alter the registration on the basis of thedocument of approval. The extended period of operation shall be calculated as of the first day after the
expiration of the operation period.
Where it is agreed upon in the contractual joint venture contract that the foreign party may recover its
investment ahead of time and the investment has already been recovered, the operation period of the
contractual joint venture shall not be extended; however, where the foreign party increases its
investment, when agreed by all the parties through consultation, they may apply to the examinationand approval authority to extend the period of operation in accordance with Paragraph 2 of this
Article.
Article 48 The contractual joint venture shall dissolv e in any of the following situations:
(1) The operation period expires;
(2) The contractual joint venture is unable to continue to operate because of serious
losses, or suffers from serious losses due to force majeure;
(3) One or more of the Chinese or foreign parties fail to perform the obligations
stipulated in the contract or the articles of association of the contractual joint venture,which causes the venture unable to continue to operate;
(4) There appears any other cause for dissolving the venture as stipulated in the contract
or the articles of association of the contractual joint venture; or
(5) The contractual joint venture is ordered to be closed down according to law for its
violation of laws or administrative regulations.
Where the situations listed in Items (2) and (4) of the preceding paragraph occur, the board of
directors or the joint management committee of the contractual joint venture shall come to a decision
and shall submit it to the examination and approval authority for approval. Where the situations listedS/C/N/211
Page 13
in Item (3) of the preceding paragraph occur, the Chinese or foreign party or parties who fail to
perform the obligations stipulated in the contract or the articles of association of the venture shall be
liable to compensate other parties who are carrying out the contract for losses resulting there from;
one or more parties who are carrying out the contract have the right to apply to the examination and
approval authority to dissolve the contractual joint venture.
Article 49 The liquidation of the contractual joint venture shall be dealt with according to the
laws and administrative regulations of the State, and the contract or the articles of association of the
contractual joint venture.
Chapter IX Special Provisions for contractual Joint Ventures without the Status of Legal
Persons
Article 50 Contractual joint ventures which have not acquired the status of legal persons and the
parties to such ventures shall be liable for civil responsibility according to the relevant provisions of
Chinese civil law.
Article 51 Contractual joint ventures which have not acquired the status of legal persons shall
register the investments or conditions for cooperation provided by the parties to the venture with the
administrative authority for industry and commerce.
Article 52 The investments or conditions for cooperation provided by the parties to a contractual
joint venture which has not acquired the status of a legal person shall be owned by the respective
parties. When all parties to the contractual joint venture are in agreement, they may be co-owned by
all parties, or part of them may be owned by respective parties while other parts may be co-owned.
The property accumulated during the operation of the contractual joint venture belongs to all parties to
the venture.
The investment or conditions for cooperation provided by the parties to the contractual joint venture
which has not acquired the status of a legal person shall be managed and used by the whole venture.
One single party may not dispose of any of the properties without the consent of the other parties.
Article 53 A contractual joint venture which has not acquired the status of a legal person shall
establish a joint managerial institution. The institution shall be made up of representatives appointedby the parties to the venture and shall represent the respective parties in co-managing the venture.
The joint managerial institution shall make all the major decisions concerning the contractual joint
venture.
Article 54 A contractual joint venture which has not acquired the status of a legal person shall
set up joint account books at the place where the venture is located; the parties to the venture shall set
up their own respective account books.
Chapter X Supplementary Provisions
Article 55 Chinese law shall apply to the conclusion, validity, interpretation, performance and
dispute settlement of the contractual joint venture contract.
Article 56 The provisions of the relevant laws and administrative regulations shall apply to
matters which are not specified in these Rules including finance, accounting, auditing, foreign
exchange, tax, labor management, trade unions and other matters.S/C/N/211
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Article 57 Any company, enterprise or other economic organization or individual from Hong
Kong, Macao or Taiwan or any Chinese citizen living abroad who wishes to establish a contractual
joint venture shall go through the procedures with reference to these Rules.
Article 58 These Rules shall come into force as of the date of promulgation.
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