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U.S. Department of State
China Country Commercial Guide FY-95-96
Office of the Coordinator for Business



               CHINA COUNTRY COMMERCIAL GUIDE
                         1995-96


                CHINA COUNTRY COMMERCIAL GUIDE

                         TABLE OF CONTENTS


CHAPTER I.     Executive Summary
CHAPTER II.    Economic Trends and Outlook
CHAPTER III.   Political Environment
CHAPTER IV.    Marketing U.S. Products and Services
CHAPTER V.     Leading Sectors for U.S. Exports and Investment
CHAPTER VI.    Trade Regulations and Standards
CHAPTER VII.   Investment Climate
CHAPTER VIII.  Trade and Project Financing
CHAPTER IX.    Business Travel
CHAPTER X.     Appendices

This Country Commercial Guide (CCG) presents a comprehensive look
at the People's Republic of China's commercial environment
through economic, political and market analyses.

The CCGs were established by recommendation of the Trade
Promotion Coordinating Committee (TPCC), a multi-agency task
force, to consolidate various reporting documents prepared for
the U.S. business community.  Country Commercial Guides are
prepared annually at U.S. Embassies through the combined efforts
of several U.S. government agencies.



                    CHAPTER I.  EXECUTIVE SUMMARY

The People's Republic of China (China) has in recent years
boasted one of the fastest growing economies in the world.  Its
gross domestic product (GDP) increased 11.8 percent in 1994 and
is projected to continue to grow at 9-10 percent during 1995.

Certain regions in China -- especially those along the coast --
are booming, and many people are becoming more prosperous.  Rapid
economic growth, bold reform measures and massive infrastructure
plans point to enormous market potential in China.  Chinese
leaders project spending of at least $100 billion per year on
imports from now until the year 2000.  As China gives priority to
infrastructural development, business opportunities seem
especially promising in the energy, telecommunications and
transport sector.  The central government is also taking steps to
direct more foreign activity to the inland areas and into hi-
technology sectors.

After a 20-year hiatus, trade between the United States and China
resumed in 1972 and developed rapidly after normalization of
diplomatic relations in 1979.  Two-way trade increased from $2.3
billion in 1979 to $48.1 billion in 1994.  However, U.S. trade
with China has been in deficit since 1983, reaching an historic
high at nearly $30 billion in 1994, second only to the U.S.-Japan
trade deficit.

Foreign direct investment continues to pour into China, albeit at
a slower pace than in 1993.  According to Chinese statistics for
1994, contracted direct foreign investment, which measures the
commitment of private foreign funds to Chinese projects and joint
ventures, amounted to roughly US$69 billion, down from 1993's
US$111 billion.  Actual, paid-in foreign direct investment
increased by $28 billion, up over 1993's US$26 billion.  The
United States, with total contracted investment for 1994 of
US$2.5 billion (down from 1993's US$5.21 billion), overtook
Taiwan to become China's second largest foreign investor,
following Hong Kong/Macao.

By the end of 1994, over 220,000 foreign-invested enterprises had
registered in China, an increase from 1993 of over 30,000, with a
total contracted foreign investment of over US$300 billion and
actual funds invested of US$95 billion.  Finance for
international business, while never sufficient to cover all of
the nation's needs, is available as never before (see Chapter
VIII).

The central government encourages foreign investment in the
following seven priority sectors:  (1) comprehensive and
technological agricultural projects; (2) infrastructure and basic
industries, such as highways, railways, harbors, airports, steel
and non-ferrous metals; (3) so-called "pillar industries"
including machinery, electronics, petrochemicals, automobiles and
construction materials; (4) projects involving advanced
technology, technical renovation and energy conservation; (5)
projects supplying products meeting international market demands,
upgrading the quality of Chinese products and increasing China's
exports; (6) new technology and equipment to utilize natural
resources; and (7) projects that utilize human and natural
resources in the western and inland areas.

China's political leadership --  characterized by group consensus
rather than strong leadership by a single individual -- generally
supports foreign trade and business investment in China, and
agrees on the need for continued economic reforms and for
political stability.  Disagreement over the unofficial visit in
June to the United States of Taiwan's Lee Teng-hui, human rights,
proliferation and trade issues could continue to affect U.S.-
China relations.

Apart from macro factors affecting doing business in China,
China's current "socialist market" economic structure continues
to erect roadblocks to doing business in China.  These include
limitations on the right of foreign companies to directly access
China's retail market; foreign exchange controls; an inefficient
banking system; insufficient enforcement of intellectual property
laws; very restricted access for foreign services; and an
inadequate system for dispute resolution.   Other commonly heard
complaints include relatively high tariffs, sometimes
inconsistent application of a 17 percent value-added tax on most
imports, some remaining import quotas and licenses, standards and
quality control requirements, and continued lack of transparency
in the trading system.

Country Commercial Guides are available on the National Trade
Data Bank on CD-ROM or through the Internet.  Please contact
STAT-USA at 1-800-STAT-USA for more information.  To locate
Country Commercial Guides via the Internet, please use the
following world wide web address:  WWW.STAT-USA.gov.  CCGs can
also be ordered in hard copy or on diskette from the National
Technical Information Service (NTIS) at 1-800-553-NTIS.



             CHAPTER II.  ECONOMIC TRENDS AND OUTLOOK

A.   Major Trends and Outlook

Despite a slight cooling of the Chinese economy over the course
of the course of the last year, it remains one of the fastest
growing in the world.  Gross domestic product (GDP) slowed to
11.2 percent during the first quarter of 1995, down from last
year's 11.8 percent.  Even though these official growth figures
may overestimate China's GDP growth by several percentage points,
China's economic growth nevertheless remains at a level many
developing countries would envy.  Inflation also dropped during
the first quarter of 1995, with the year-on-year increase in
consumer prices falling from 25.5 percent in December 1994 to
21.3 percent in March.

China's official GDP growth should slow to between 9-10 percent
for the year 1995 as a whole.  The December-December increase in
consumer prices should be about 17-20 percent, and for retail
prices about 15-17 percent.  While still high, these rates would
be a significant improvement on last December's 25 percent
consumer price inflation.

It is much too early, however, to declare the arrival of the long
hoped-for "soft-landing" of the Chinese economy.  The new set of
price stabilization measures announced by the government during
the last quarter of 1994 rely primarily on the reintroduction of
a broad scale of price controls and other forms of administrative
guidance.  Although these controls -- together with an increase
in price subsidies -- have led to a reduction in inflation,
monetary policy has remained loose, with M2 growth accelerating
to 35.9 percent through the end of the first quarter of 1995.
Continued monetary growth at this level will eventually lead to a
collapse of current price controls and a renewed surge in
inflation.

Since the beginning of China's efforts to stabilize its economy
in mid-1993, Chinese authorities have been reluctant to pursue
tight macroeconomic policies that might lead to a sharp economic
contraction.  At the core of the government's monetary and fiscal
problems remains the issue of state enterprise reforms.  Despite
the crippling financial costs of support for state-owned
enterprises, there is still little to suggest that the central
government is prepared to risk the labor unrest which might
follow any serious effort to tackle the problem.

B.   Principal Growth Sectors

According to Chinese government official data, China's gross
industrial output (GVIO) increased by 18 percent in 1994 to
1,835.9 billion yuan, a slight drop from the 23.5 percent
increase registered in 1993.  It is important to note, however,
that industrial output growth appears to have been overstated in
recent years due to inadequate price adjustments.  Official
Chinese statistics may exaggerate China's industrial and output
growth.

Collective, private, and foreign-invested enterprises (FIEs)
continue to contribute much of China's increased industrial
output.  Despite Beijing's efforts to slow investment in fixed
assets, many state enterprises are still allowed to expand and
accumulate stockpiles of industrial goods.  In the agricultural
sector, the Chinese government is searching for a way to achieve
its conflicting policy goals of maintaining low stable food
prices while raising rural incomes.

Retail sales remained strong during the first four months of
1995.  Since October 1994, real retail sales growth has
fluctuated around 10 percent, hitting peaks of 12.8 percent in
November and 12.1 percent in April.  In nominal terms, however,
  retail sales growth slowed to about 31 percent in January-April
1995, down from 38 percent in the final quarter of 1994.  The
relative stability in real retail sales growth over the past six
months thus reflects the slowdown in retail price inflation.

C.   Government Role in the Economy

After a decade and a half of reform and opening, the government
role in the economy remains strong -- and will be for the
foreseeable future.  The central government, however, continues
to lack sufficient resources to carry out its programs.
Adjustments in purchase prices for grain and other commodities,
increased wages for state workers, and difficulties in collecting
taxes have all contributed to the government's growing budgetary
shortfall.

The government still appears at times to be more willing to use
traditional tools of a planned economy rather than pushing
forward with deeper reforms.  Its current reliance on price
controls is a matter for concern.  Widespread interference with
the market mechanism in key sectors of the economy threatens to
eliminate many of the preliminary gains in macroeconomic
efficiency that were achieved during the round of price reforms
in 1992-93.  Worries over social and political stability have
also slowed the pace of key enterprise and financial reforms that
are needed to sustain rapid economic growth into the next
century.  This more cautious attitude toward market-oriented
economic reform is apparent in the stronger emphasis on state
planning in industrial policy and is likely to persist for some
time.

D.   Balance of Payments Situation

China's positive trade balance of 1994 continues to widen this
year as exports surge.  According to Chinese customs statistics,
Chinese exports increased 53 percent to US$42.9 billion during
the first four months of 1995, while imports were up just 14.5
percent to US$34.1 billion.  China's trade surplus reached almost
US$8.8 billion in January-April, US$3.4 billion more than its
trade surplus for all of 1994.

The widening of China's trade surplus and continued record
capital inflows for direct investment contributed to a US$6.4
billion increase in China's foreign exchange reserves to US$58
billion during the first quarter.  The People's Bank of China has
recalled tens of billions of RMB in loans to the state banks in
an effort to sterilize the impact of the reserve build-up on the

domestic money supply, and in late April and early May it
permitted the RMB to appreciate from RMB 8.43 to RMB 8.28 against
the dollar.  China's foreign exchange reserves were just under
US$60 billion at the end of May, according to Chinese press
reports.



                CHAPTER III.  POLITICAL ENVIRONMENT

China's top political leaders continue their strong commitment to
foreign business investment in China.  In February 1995, the U.S.
and China signed a major agreement on protection of intellectual
property which improved the atmosphere for bilateral economic
relations.  China sharply criticized the U.S. for allowing
Taiwan's Lee Teng-hui to make an unofficial visit in June, and
disagreement over human rights, proliferation and trade issues
could continue to affect bilateral relations.
  
Rapid price inflation, corruption, lay-offs from state-run
enterprises, the growing gap between coastal regions and the
interior, and economic disparities between rural and urban areas
have contributed to dissatisfaction among the populace.
Northwestern China has been troubled by occasional unrest among
minority ethnic and religious groups.  Dissatisfaction has not
often been translated into widespread political activity since
1989, in part because the government is working to minimize
tensions over its economic policies, but also because it has
acted swiftly to repress any potential political protests.

In practice, major decisions are made by a few key leaders of the
Chinese Communist Party.  Ministries and/or the Standing
Committee of the National People's Congress (China's legislature)
formulate policy on day-to-day issues.  Some provincial
governments, especially those in fast-growing coastal regions,
actively adopt local policy variations.  Senior political figures
generally agree on the need for further economic reforms and the
need for political stability, but there are differences over the
content, pace, and ending point of reforms.  Most observers
believe that the death of 90-year old Party elder Deng Xiaoping
will reshape leadership politics, but this readjustment is
expected to be gradual.  China is more likely be governed by a
collective leadership for the foreseeable future rather than one
predominant figure.



               CHAPTER IV.  MARKETING U.S. PRODUCTS

A.   Distribution and Sales Channels/Use of Agents and Distributors

Foreign companies are not permitted to directly engage in trade
in China, other than marketing goods they have manufactured in
China.  Accordingly, U.S. exporters need to use a domestic
Chinese agent for both importation into China and marketing
within China, or handle their own sales through a representative
office.  Searching for an agent in China is complicated by the
separation of the two elements that basically characterize
international trading firms:  import/export authority and
aggressive marketing expertise.

Only those companies that have been authorized by the central
government to handle export and import business are permitted to
sign import and export contracts.  At the end of 1994, over 8,000
Chinese firms have that authority.  Fifteen years ago, only 10 or
so state trading companies acted as purchasing agents for
particular industries nationwide.  While this system is rapidly
becoming obsolete, many trading firms still retain the buyer's
agent mindset.  Nonetheless, with careful selection, training and
constant contact, U.S. exporters can obtain good market
representation from a Chinese trading company, many of which are
authorized to deal in a wide range of commodities.  Some of the
larger companies have offices in the United States and other
countries around the world, as well as branches throughout China.

In addition to trading companies, China is witnessing an
explosion in local sales agents to handle internal distribution
and marketing.  These firms do not necessarily have import/export
authority.  They may be representative offices of Hong Kong or
other foreign trading companies, or domestic Chinese firms with
regional or national networks, under supervision of the Ministry
of Internal Trade.

Given China's size and diversity, U.S. exporters may find it
makes sense to hire several agents to cover different areas.
China can be roughly divided into at least five major regions:
the South (Guangzhou), the East (Shanghai), the Beijing-Tianjin
region, Central China and the Northeast.  The Commercial Service
offers a special program called the Agent/Distributor Service
(ADS), designed to help U.S. exporters find appropriate sales
agents in China.  The ADS can be ordered through a district
office of the U.S. Department of Commerce or at the appropriate
Commercial Service office in China.

B.   Licensing

Technology transfer is another initial market entry approach used
by many companies.  It offers short-term profits but runs the
risk of creating long-term competitors.  Due to this concern,
intellectual property considerations and the lower technical
level prevailing in the China market, some firms attempt to
license older technology, promising higher-level access at some
future date or in the context of a future joint venture
arrangement.

License contracts must be approved by and registered with the
Ministry of Foreign Trade and Economic Cooperation (MOFTEC).  A
tax of 10 - 20 percent (depending on the technology involved and
the existence of an applicable bilateral tax treaty) is withheld
on royalty payments. (See Section K of this Chapter).

C.   Franchising

China has no laws on franchising per se.  In practice, however,
foreign companies are beginning to establish multiple outlets for
distribution under a variety of franchise-type arrangements.

Although China's retail trade is basically still closed to
foreign competition, foreign retailers may now enter the market
through joint ventures, or open specialty stores selling products
made at their own factories in China.  China allows foreign joint
venture retail stores to open on an "experimental basis" in six
cities (Beijing, Shanghai, Guangzhou, Tianjin, Dalian and
Qingdao) and the five special economic zones (Shenzhen, Zhuhai,
Shantou, Xiamen and Hainan), subject to an overall limit of not
more than two retail joint ventures per city.

Apart from these retail operations, foreign fast-food operators
and other service providers are beginning to franchise under
licensing arrangements involving use of trade or service marks,
often in combination with some sort of joint venture arrangement.
Despite the legal murkiness at present, franchising looks to be a
very promising mode of entering the Chinese retail market.

D.   Establishing an Office

Once a company decides the China market warrants a greater
investment, the next logical step is to set up one or more
representative offices.  Having such an office gives a company
increased control over a dedicated sales force and better
utilization of its specialized technical expertise.  These
offices are limited by Chinese law to performing "liaison"
activities.  As such, they cannot actually sign sales contracts,
directly bill customers or supply parts and after-sales services
for a fee.  These offices are subject to Chinese income tax.

Although China's Company Law permits the opening of branches by
foreign companies, as a policy matter China still restricts this
entry approach to selected banks, insurance companies and
accounting and law firms.  Unlike representative offices, branch
offices obtain an actual operating or business license and can
engage in profit-making activities.

The costs of supporting a modest office can range from US$250,000
to over US$500,00 per year, depending on its size and how it is
staffed.  The largest expenses are rent for office space and
housing, and expatriate salaries and benefits.  Accordingly, many
companies choose to set up offices with a local Chinese manager,
and bring in foreign personnel as required.

E.   Establishing a Chinese Subsidiary

A locally incorporated equity or cooperative joint venture with
one or more Chinese partners, or a wholly foreign-owned
enterprise, may be the final step in developing markets for a
company's products.  Domestic production avoids import
restrictions -- including relatively high tariffs -- and provides
U.S. firms with greater control over both intellectual property
and marketing.  However, the inconvertibility of China's currency
means that firms need to devise ways to earn or purchase foreign
exchange for purposes of paying expatriate management salaries
and benefits, remitting profits and royalties, and covering other
hard currency costs.

The role of the Chinese partner in the success or failure of a
joint venture cannot be overemphasized.  A good Chinese partner
will have the connections to help unravel or smooth over red tape
and obstructive bureaucrats.  On the other hand, U.S. companies
should try to ensure that their prospective partners' objectives
are the same, for example, to run an efficient, profit-making
enterprise and to access the domestic market rather than simply
earn foreign exchange through export.  Common investor complaints
deal with conflicts of interest (e.g., the partner setting up
competing businesses), hidden agendas and violations of
confidentiality.

The Commercial Service offers World Trade Data Reports (WTDRs),
which give background data on local firms' credit rating,
organizational affiliation, names of key personnel, payment
record, and more to help evaluate potential business partners.
This service can be ordered through a district office of the U.S.
Department of Commerce or at the appropriate Commercial Service
office in China.

Some companies prefer to establish a wholly foreign-owned
enterprise (WFOE) rather than a joint venture, with a view to
retaining greater management control.  Chinese law requires that
WFOEs either provide advanced technology or be primarily export-
oriented, and restricts or prohibits them in a number of service
and public utility sectors.  However, an increasing number of
U.S. companies find WFOEs, which now account for roughly 20
percent of all foreign-invested enterprises (FIEs), to be a
viable entry vehicle to the China market.

F.   Selling Factors/Techniques

Relationships:  Personal relationships in business are critical.
The Chinese like to deal with "old friends," and it is important
for exporters, importers and investors to establish and maintain
close relationships with their Chinese counterparts and relevant
government agencies.  It is equally important that American
exporters encourage strong personal relationships between their
Chinese agents or distributors and the buyers and end-users.  A
web of strong personal relationships will help ensure smooth
development of business in China.

Foreign Currency:  As of January 1994, Chinese companies are not
permitted to retain any foreign exchange.  However, they should
normally be able to obtain the foreign currency necessary for
imports and for servicing approved foreign obligations such as
licensing fees, royalties and loans, by taking the relevant
documentation to a Chinese commercial bank.

In contrast, FIEs are permitted to retain foreign exchange
contributed to or earned by the enterprise.  In return, FIEs are
excluded from the new interbank forex market and must purchase
any required additional foreign exchange through swap centers;
China has announced that FIEs will be able to access the
interbank forex market in the near future.

G.   Advertising/Trade Promotion

Advertising:  Whether targeted for a specific industry or aimed
at a mass audience, advertising can be an effective way to create
product awareness among potential consumers in China.  Channels
for mass advertising include publications, radio, television and
billboard displays, as well as sports sponsorship and other
innovative means.  There are many advertising companies in China,
including Chinese, foreign and Chinese-foreign joint ventures.

China's 1995 Advertising Law contains guiding principles that set
both very broad requirements, such as advertising should
"safeguard the dignity and interests of the State," and detailed
provisions.  Comparison advertising is not allowed, nor is use of
words such as "highest level or the best, etc".  Prices for
advertising are regulated by the State, and are higher for
foreign than for local companies.  The Chinese government has
promised to eliminate price discrimination in advertising.

Some popular vehicles for advertising (mostly in Chinese)
include:

1.   China Daily (English language)
     15 Huixin Dongjie
     Chaoyang District,  Beijing, 100029
     Tel: (010) 422-9911
     Fax: (010) 423-8055

2.   China Youth Daily
     2 Haiyunchang Dongzhimen
     Beijing 100702
     Tel: (010) 403-3961
     Fax: (010) 403-3961

3.   Economic Daily
     277 Wangfujing Street
     Beijing, 100746
     Tel: (010) 512-5522

4.   Beijing Evening News
     34 Xibiaobei Lane,  Dongcheng District
     Beijing, 100734
     Tel: (010) 529-8696
     Fax: (010) 529-8114

5.   Yangcheng Wanbao
     289 Guangzhou Dadaozhong
     Guangdong, 510601
     Tel: (020) 776-3998
     Fax: (020) 777-8368

6.   Xinmin Evening News
       839 Yanan Middle Road
     Shanghai, 200040
     Tel: (021) 279-1234

7.   Readers
     81 The First New Village
     Lanzhou, Gansu 730030
     Tel: (0931) 846-6321
     Fax: (0931) 848-8297

8.   China Youth
     Jia 22, Guangyuanyu Qianghutong
     Xicheng District,  Beijing, 100034
     Tel: (010) 605-1035
     Fax: (010) 466-1330

Trade Shows and Missions:  Hundreds of international exhibitions
are now held annually in China.  Most are sponsored or
cosponsored by government agencies, professional societies or the
China Council for the Promotion of International Trade (CCPIT).
Shows are also organized by U.S., Hong Kong or other professional
show organizers as well as state trade departments.  Though show
participation costs are high, trade shows can be an efficient way
to make contact with agents, trading companies and end-users.
Occasional catalog shows may also be useful.  For firms already
in China, trade shows of all varieties can be used to conduct
surveys and introduce new products.  The Department of Commerce's
China Desk can provide updated information on upcoming trade
shows and missions.

H.   Pricing Product

While China's growing middle class is increasingly willing and
able to buy high-priced status symbols, most Chinese buyers are
sensitive to price and will usually choose the less expensive
product unless they can be swayed by after-sales service or clear
technical superiority.

Attractive financing offered by Japanese, European and other
foreign government, which lower the effective price, may make
some U.S. goods look less competitive.  However, current exchange
rates among the U.S. dollar, the Japanese yen and European
currencies somewhat mitigate this problem for U.S. products.

I.   Sales Service/Customer Support

As a tangent to China's anti-retail laws, foreign companies and
FIEs are not normally permitted to provide sales service and
customer support other than in respect of products the company
itself manufactures in China.  Accordingly, these firms must
engage the services of authorized Chinese entities, on a
contractor basis, to establish service centers that can provide
spare parts and after-sales service.

American companies complain that such arrangements give them
inadequate control over the quality of customer service and
result in loss of customer confidence.  Some companies thus opt
to provide regular servicing from bases outside of China, such as
in Hong Kong.  American firms, with the support of the U.S.
government, are pressing for relaxation of these restrictions.

J.   Selling to the Government

In its 1994 annual report for 1994, the U.S. Trade Representative
found that, with few exceptions, China's government procurement
practices are not consistent with open and competitive bidding.
  For the most part, these practices remain non-transparent and
inaccessible to foreign suppliers.  Purchases for virtually all
projects in China are subject to at least one, and usually
several, approvals from governments at various levels.

While tenders for projects funded by international organizations
are usually openly announced, most government procurement is by
invitation only.  Competition is by direct negotiation rather
than by competitive bid.  Goods and vendors for large projects
that are covered in the annual state plan are frequently
designated during the planning process.  All information, from
solicitation to award, remains secret and is known only to those
companies involved or to officials in the planning and industrial
ministries.

China has committed to improve this situation.  Pursuant to the
1992 U.S.-China Memorandum of Understanding (MOU) on Market

Access, China published government procurement guidelines
regarding machinery and electronics.  These guidelines, however,
contain registration requirements and unacceptably vague
tendering regulations.  The U.S. government is discussing with
the Chinese government improvements in the tendering regulations
that would bring them up to the standards of the GATT government
procurement code.

K.   IPR Protection

The U. S. and China signed a Memorandum of Understanding on the
Protection of Intellectual Property (IPR MOU) in 1992, pursuant
to which China improved its laws governing IPR protection over
the following two years and joined the Berne and Geneva
Phonograms Conventions.  The March 1995 extension of the IPR MOU
sets out a plan for enforcing IPR and grants market access to
certain products.  China confirms it will not impose non-tariff
restrictions on the importation of audiovisual or published
products.  China also commits to allowing joint ventures with
Chinese entities in audio-visual products and computer software.
For film products, China allows U.S. individuals and entities to
enter film products into revenue-sharing arrangements in China.

Copyright:  China and the U. S. established bilateral copyright
relations in March 1992, and China subsequently acceded to
several international conventions.  U.S. owners of computer
software, books, films, sound recordings, and other subject
matter now enjoy protection under China's copyright legislation
(which includes a Copyright Law and separate Regulations on the
Protection of Computer Software), the Berne Convention, the
Universal Copyright Convention and the Geneva Phonogram
Convention.  Computer software programs will be protected for 50
years without mandatory registration requirements.  Copyright
infringement claims should be handled first through the National
Copyright Administration; if this does not yield results, claims
should be filed with China's courts, which now include
specialized IPR courts in several cities such as Beijing,
Shanghai and Guangzhou.

Patent:  China's Patent Law, enacted in 1984, was extended in
1993 to protect chemical inventions, in particular pharmaceutical
products and agricultural chemicals, and the period for
protection was lengthened to 20 years.  The amendments also
provide patent-holders the rights to import, and expand the scope
of patent infringement to include unauthorized sale or
importation of products manufactured with the use of patented
processes.  Under the IPR MOU, China provides transitional
administrative protection to some U.S. pharmaceutical and
  agrichemical products for up to seven-and-a-half years.

China acceded to the Patent Cooperation Treaty in 1994 and will
perform international patent searches and preliminary
examinations of patent applications.  Under the Patent Law,
foreign parties must utilize the services of a registered Chinese
agent to submit the patent application.  Preparation of the
application may be done by foreign attorneys or the Chinese
agent.

Trademark:  Trademark registration in China should be an integral
part of any company's initial market entry.  Moreover, China's is
a first-to-register system that requires no evidence of prior use
or ownership.  However, well-known trademarks are to receive
protection even if there is no prior registration in China.

Although problems remain with enforcement, China's trademark
regime basically conforms to world standards.  China joined in
1989 the Madrid Pact for the Protection of Trademarks, which
grants reciprocal trademark registration to member countries.
China amended its laws in 1993 to add special regulations
allowing criminal prosecution for trademark infringement.  The
Trademark Law amendments also permit for the first time
registration of service marks, and the 1993 Unfair Competition
Law extends IPR protection to trade dress.

Foreign companies must utilize the services of registered agents
to submit the trademark application.  Foreign attorneys or the
Chinese agent may prepare the application.

Trade Secrets:  China's 1993 Unfair Competition Law defines
unfair competition to include conduct that infringes the "lawful
rights" of another business operator, including acts that violate
"commercial secrets."  Commercial secrets are defined to include
technical information and operational information not known by
the public, which can bring economic benefits to the authorized
users and which are protected by the taking of appropriate
security measures.  Sanctions under the law include civil
remedies (damages), administrative sanctions like fines, and
criminal penalties for "serious violations."  The implementing
rules and procedures for this law are still being drafted.

As this law is new and untested, most firms continue to rely upon
confidentiality and non-competition clauses in contracts to
protect business or technical information.  China is also
obligated to protect trade secrets as a signatory of the Paris
Convention for the Protection of Industrial Property.

Regulation of Technology Licensing:  Technology transfer by
foreign companies is governed by 1985 regulations on technology
import contracts, which include contracts licensing patents,
trademarks, know-how or trade secrets; contracts for technical
services; and other technology import contracts.  Contracts
transferring intellectual property as part of the foreign equity
contribution to FIEs are generally regulated by laws concerning
foreign investment.  Technology licensing contracts must be
approved by MOFTEC or its provincial commissions.  Some of the
issues of particular concern to U.S. companies include:

--  The licensor cannot require confidentiality beyond the
duration of the contract, except where the supplier provides
improvements to the technology, and most technology contracts are
not to extend beyond 10 years.

--  The licensor cannot restrict sales channels or impose
"unreasonable" restrictions on the export of products produced
  with the licensed technology.

--  Special approval is required for extended confidentiality,
export restrictions, and preferential treatment for payment of
royalty tax.  The approval authority may reject or modify
contracts which contain unreasonable price terms, assign unclear
or inequitable obligations to the Chinese party, or other unequal
conditions for exchanging technical improvements.

L.   Need for Local Professional Services

Straightforward sales transactions normally do not require
special professional assistance.  However, licensing technology,
opening a representative office and establishing a subsidiary in
China all involve Chinese tax and other laws, as well as complex
questions on structuring and business practices that indicate the
need to obtain advice from attorneys, accountants and consultants
familiar with Chinese requirements.

Chinese law requires representative offices and FIEs to retain
the services of accountants registered in China to prepare for
official submission annual financial statements and other
specified financial documents.  To date, only Chinese accountants
and joint venture accounting firms may provide these services.
However,  all the major international public accounting firms
have offices in China and operate a thriving practice providing
services to foreign firms, from advice on tax matters to
assistance in setting up accounting systems and preparation of
feasibility studies.

Only attorneys licensed in China may appear in court and advise
on questions of Chinese law.  At present, no foreign lawyers are
permitted to qualify to practice Chinese law, nor are foreign law
firms permitted to form joint ventures with Chinese lawyers.
Registered foreign law firms in China are restricted to advising
on the law of their own jurisdictions.  Nonetheless, many U.S.
and international law firms with years of experience in doing
business in China are an invaluable source of advice and guidance
in setting up ventures, drafting agreements and resolving
disputes.  They can also help retain the services of local
attorneys when warranted.

Commercial Service posts in China maintain lists of U.S. law,
accounting and consulting firms with offices in China, as well as
of Chinese firms with which the office or its customers have had
favorable dealings.
V.        LEADING SECTORS FOR U.S. EXPORTS


A.   Best Prospects for Non-Agricultural Goods and Services

1    AIR  Aircraft and Parts
2    ELP  Electric Power System
3    CPT  Computers and Peripherals
4    TEL  Telecommunications Equipment
5    APS  Automotive Parts and Service Equipment
6    AGC  Agricultural Chemicals
7    ICH  Industrial Chemicals
8    PMR  Plastic Material and Resins
9    POL  Pollution Control
10   MTL  Machine Tools/Metalworking Equipment
11   OGM  Oil & Gas Field Machinery Service
12   MED  Medical Equipment
13   MIN  Mining Industry Equipment
14   BLP  Building Materials
15   ELC  Electronics Components
  16   INS  Insurance
17   CSF  Computer Software
18   FPP  Food Processing/Packaging
19   DRG  Pharmaceutical
20   COS  Cosmetics/Toiletries
21   LES  Leasing Services

B.   Best Prospects for Agricultural Goods and Services

Rank PS&D      Description

1    0410000   Wheat
2    2631000   Cotton
3    0114000   Poultry Meat
4    2111000   Hides and Skins
5    N/A       Snack Foods


Below are the best prospects for U.S. commercial exports to China
for 1995-96 (in US$ millions).  All statistics are unofficial
estimates.


Non-Agricultural Exports
------------------------

1  -  Aircraft and Parts (AIR)

U.S. aircraft are preferred by Chinese airlines, but the U.S.
faces competition from other countries.  Foreigners will be
allowed to invest in joint venture airlines, airport
construction, and general aviation.  The prospect of joint
venture airlines,  previously prohibited, indicates that China is
making a sincere attempt to turn its aviation industry into a
international-level player.


                               1994        1995         1996

A. Total Market Size          4,945       5,686        6,528
B. Total Local Production     3,120       3,744        4,492
C. Total Exports                660         792          808
D. Total Imports              2,645       3,041        3,497
E. Total Imports from U.S.    2,415       2,777        3,193
F. Exchange Rate                8.4         8.4          8.4


2  -  Electric Power Systems (ELP)

China is expected to approve a number of large-scale power
projects this year which will require imported foreign equipment.
U.S. suppliers are advantaged by the decline in the U.S. dollar
and a growing reputation for quality product and a willingness to
transfer technology.  A key factor in U.S. firm's competition for
these contracts will be the financing packages which they can
provide.  The Chinese are looking for soft loans and other types
of favorable financing.

These numbers for total market size are deceptive.  The vast bulk
of the market is denominated in local currency.  Imports are
possible only for that portion of the market which is denominated
in foreign exchange, about US$6-8 billion per year.

U.S. exports are highly competitive.  The major local competitors
are Harbin Power Plant Equipment Corporation, the Dongfang Power
Plant Equipment Corporation, and Shanghai United Electric
  Corporation

China is planning to increase its power production capacity by
15,000 MW per year through the early 21st century.  Imports of
technology and equipment are actively being sought.

Most promising subsectors include:
- Steam/Gas turbine generators
- Boilers
- Control and Communication Equipment

                               1994        1995         1996

A. Total Market Size         40,989      70,900       77,990
B. Total Local Production    40,176      72,300       79,550
C. Total Exports              2,167       2,600        2,860
D. Total Imports              1,806       1,200        1,300
E. Total Imports from U.S.
F. Exchange Rate                8.4


3  -  Computers and Peripherals (CPT)

China's computer industry has been growing at an annual rate of
nearly 60 per cent during the past five years.  The so-called
"Golden Projects", and the growing family market for PCs will
maintain the growth rate at 50 percent until 2000.

U.S. exports are highly competitive in both price and quality and
are preferred by Chinese end users.  Major competitors in PCs are
Taiwanese, while both Japanese and Taiwanese firms are important
in peripherals.  Local firms are quickly losing market share and
being forced to tie in with foreign firms to survive.

Promising subsectors:

-- Personal computer
-- Notebook
-- Server
-- CD-ROM drive
-- Modem

                               1994        1995         1996

A. Total Market Size          3,600       4,700        6,000
B. Total Local Production     4,400       5,600        7,300
C. Total Exports              2,800       3,600        4,500
D. Total Imports              2,000       2,500        3,200
E. Total Imports from U.S.    1,000       1,200        1,500
F. Exchange Rate                8.4         8.4


4  -  Telecommunications Equipment (TEL)

This sector is of high priority and is heavily invested by the
government.  It is infected by politics because of the high value
of equipment sales and because of ministerial level competition
with the Ministry of Posts and Telecommunications for industry
control.  There is significant use of loans from sources such as
Japan's OECF, the IMF, the ADB, and the World Bank.

Technology transfer is increasingly being required for the
completion of sales contracts.  Joint ventures are becoming more
common in this sector.

Many Chinese firms are exploring CATV markets, especially
  emphasizing future integration of CATV on ISDN networks.

Best subsector prospects within this subsector include:
--   Central Office Switches
--   Private Branch Exchange (PBX)
--   Paging Networks -- 10 million subscribers
--   Cellular Networks -- 1.2 million subscribers
--   Network Computer equipment
--   CATV equipment

                               1994        1995         1996

A. Total Market Size          5,600       7,200        8,700
B. Total Local Production     2,000       2,800        3,500
C. Total Exports                400         600          800
D. Total Imports              4,000       5,000        6,000
E. Total Imports from U.S.      270         350          420
F. Exchange Rate                8.4         8.4          9.0


5  -  Automotive Parts/Service Eq. (APS)

Chinese state plans call to replace 1.8 million outdated vehicles
during the Ninth Five-Year Plan period (1996-2001).  The best
investment opportunities in the automotive sector are in the
components area of highly integrated state-owned automobile
manufacturers.  The Chinese government is especially emphasizing
the development of its parts and components industry.  The four
categories are engine parts, chassis and related parts, auto
electrical appliances and other components.

                               1994        1995         1996

A. Total Market Size         26,929      33,318       36,780
B. Total Local Production    22,600      28,340       31,174
C. Total Exports                515         592          680
D. Total Imports              4,844       5,570        6,305
E. Total Imports from U.S.      478         550          633
F. Exchange Rate                8.4         8.4          8.4


6  -  Agricultural Chemicals (AGC)

China's agricultural markets have been the subject of great
attention recently.  In the first half of 1995, imports of
fertilizer have increased rapidly.  Imports of pesticides and
herbicides are also increasing.  China does not have the raw
materials to produce many products.  Foreign companies are slowly
increasing the amount of investment into China.  Over the shorter
term, however, this should not slow down the rapid growth of
imports into this important market.  1996 should be another boom
year.

                               1994        1995         1996

D. Total Market Size          8,180       9,350       10,200
E. Total Local Production     5,526       6,550        7,100
F. Total Exports                136         150          200
G. Total Imports              2,790       2,950        3,300
H. Total Imports from U.S.      754         983        1,102
I. Exchange Rate                            8.4         8.45


7  -  Industrial Chemicals (ICH)

Many American companies report rapid increases in exports of
  industrial chemicals.  These imports are not all reflected in the
statistics below because of the complex multi-national supply
relationships.  If the U.S. dollar remains relatively low,
compared to the yen and mark, U.S. source chemicals should grow
at a rate faster then the market overall.  At the same time,  the
Chinese economy shows signs of slowing.  If GDP growth rates
remain at approximately 8 to 9 percent, there will still be
substantial growth in the industrial chemicals sector, as
indicated below.

                               1994      1995      1996

A. Total Market Size         14,520    15,700    16,790
B. Total Local Production    12,832    13,900    14,780
C. Total Exports              1,762     3,070     4,380
D. Total Imports              3,450     4,870     6,280
E. Total Imports from U.S.      470       624       778
F. Exchange Rate                          8.4      8.45


8  -  Plastic Material and Resins (PMR)

As indicated in the statistics below, this market is increasing
very rapidly.  The American segment of the market is
characterized by high technology inputs and additives.  This
segment is growing probably faster than any other.  We expect
continued strength in this market as both national and foreign
investment continues to increase.  China's ability to supply its
own up-stream feedstocks remains uncertain, especially in light
of increased investment in the down-stream part of the market.

                               1994      1995      1996

A. Total Market Size          5,650     6,800     8,410
B. Total Local Production     1,770     2,010     2,420
C. Total Exports                200       410       510
D. Total Imports              4,080     5,200     6,500
E. Total Imports from U.S.      433     549.9       698
F. Exchange Rate                          8.4      8.45


9  -  Pollution Control Equipment (POL)

Annually there are more than USD 1,300 million worth of
multilateral agency funded environment-related projects in China,
which are enhanced by Renminbi matching portions allocated by the
Chinese government.  Many of these projects call for pollution
control equipment, which is normally procured with hard currency
through an international bidding process.  American companies,
when they have participated, have been unusually successful in
the bidding process.

There appears to be a growing market for environmental equipment,
outside of that procured in the above process.  Best prospects
include environmental monitoring equipment, solid waste
management equipment (incinerators and landfill liners), clean
coal technology, and inexpensive but effective waste treatment
plants.  Used technology is expected to be in demand.

                               1994      1995      1996

A. Total Market Size          2,700     2,800     3,000
B. Total Local Production       900     1,000     1,100
C. Total Exports                100       200       300
D. Total Imports              1,900     2,000     2,200
E. Total Imports from U.S.      900     1,000     1,100
  F. Exchange Rate                8.4       8.4       8.4


10  -  Machine Tools/Metalworking Equipment (MTL)

U.S. products are considered to be of consistently high quality,
but most analysts admit privately that German, Swiss, and
Japanese high end products are just as good.  Taiwan products at
the lower end are regarded favorably too.

U.S. products have suffered from lack of exposure in the market.
In contrast Taiwanese, German, Japanese, and Italian firms have
actively marketed their products.  German and Italian training
facilities have long been established in Tianjin and Beijing
respectively.  Taiwanese firms reportedly won the largest foreign
market share because of extensive personal connections in the
mainland.

Major competitors in this market are Taiwanese (22%), Japanese
(21.5), and Germany (18%).  Mainland and Taiwanese products are
mostly cheap, low-end products and do not compete with high-
technology tools produced by U.S. and  other foreign exporters.

Many Chinese machine tool factories were originally designed
through Soviet, Czechoslovakian, or Bulgarian partnerships.
These now wholly Chinese owned factories are looking to improve
their very low levels of technology through foreign cooperation.

In addition to cost and financing challenges, the U.S. export
license review seems to be more stringent and lengthy than those
of other nations.

Best subsector prospects within this sector include automotive,
aircraft and aerospace, natural resource extraction and
exploitation, communications, and electronics production.


                               1994        1995         1996

A. Total Market Size          3,500       4,000        4,500
B. Total Local Production     1,400       1,800        2,500
C. Total Exports                240         300          400
D. Total Imports              2,340       2,500        2,400
E. Total Imports from U.S.      220         250          280
F. Exchange Rate                8.4         8.4          9.0


11  -  Oil Field Machinery Service (OGM)

China is increasing the priority given to better exploitation of
its existing wells and exploration for new ones.  This has opened
substantial new opportunities for major U.S. oil companies,
especially those with unique technologies.  The Chinese have
open new tracks in the far Western part of the country for
another round of bidding.  China also wants to do more to exploit
its on share gas reserves and is interested in foreign
cooperation for this purpose.

Most promising subsectors within the sector:

--  Major pipeline projects
--  Geophysical instruments and secondary recovery equipment
    and technologies

                               1994        1995         1996

  A. Total Market size          6,050       6,655        7,390
B. Total Local Production     5,700       6,270        6,900
C. Total Exports                495         540          600
D. Total Imports                820         990        1,090
E. Total Imports from U.S.      275         305          335
F. Exchange Rate                8.4


12  -  Medical Equipment (MED)

Due to the increasing living standard and the aging population,
there is a growing interest in importation of medical equipment
in China.  Demand for scanners, CTs, MRI systems, X-rays
machines, and ultrasound equipment has shown steady growth.
Although the larger manufacturers are already producing in China,
an unexplored area of growth is the second-hand equipment sector.

Need for small equipment such as "electronic" sphygmomanometers,
which can be utilized by the consumers without the aid of medical
professionals, is exploding.  This does not include the
traditional manual sphygmomanometers, but small electronic
devices such as blood pressure monitors, electrocardiographs, and
glucose testing devices.  However, exports from the U.S. have
been declining since 1993.  This market has a tremendous growth
potential for U.S. companies despite the domination by Japanese
products.  The appreciation of the yen may pose as an obstacle
for the Japanese competitors creating an opening for U.S.
products.


                               1994        1995         1996

A. Total Market Size            770         800          830
B. Total Local Production       400         420          440
C. Total Exports                 10          20           30
D. Total Imports                380         400          420
E. Total Imports from U.S.      130         150          180
F. Exchange Rate                8.4         8.4          8.4


13  -  Mining Industry Equipment (MIN)

The Chinese central government has placed emphasis on mining,
particularly coal, in the Ninth Five-Year Plan.  While China's
transportation system continues to limit equipment sales, as
infrastructure improves, the demand for equipment will increase.
Energy demand continues to increase, thereby increasing mining
equipment demand.

The appreciation of the Yen will make Japanese imports less
attractive, while the depreciation of the U.S. dollar will make
U.S. imports more attractive.  Revised Eximbank lending policies
currently allow for the matching or over-matching of offers made
by competing export credit agencies, which should also bolster
U.S. mining equipment sales.

Best Sales Prospects:
-trucks
-scrapers
-extractors
-continuous miners
-longwall shearers
-shuttle cars
-roof bolters
-feeder crushers
-integrated automation & control systems
  -coal washing & cleaning equipment
-centrifugal dryers
-rotary breakers
-draglines

                               1994        1995         1996

A. Total Market Size            970       1,060        1,150
B. Total Local Production       610         670          720
C. Total Exports                 50          60           70
D. Total Imports                410         450          500
E. Total Imports from U.S.       70          81           93
F. Exchange Rate                8.4         8.4          8.4


14  -  Building Products (BLP)

China's rapid economic growth over the past few years has created
strong demand on the building products.  But the improvements in
the domestic building materials industry will affect the entire
import market.  The Chinese want to produce high quality building
products for both the domestic and export market.  In the future,
U.S. manufactures should expect strong competition from domestic
producers.  Opportunities for foreign companies are joint venture
and foreign invested projects or come to the Chinese companies
who desire better living and working accommodations.  Best sales
prospects are bathroom fixtures and facilities, elevators
systems, glass curtain wall etc.


                               1994        1995         1996

A. Total Market Size         10,200      12,500       15,100
B. Total Local Production    12,000      14,400       17,200
C. Total Exports              3,800       4,400        5,000
D. Total Imports              2,000       2,500        2,900
E. Total Imports from U.S.      340         389          447
F. Exchange Rate                8.4         8.4          8.4


15  -  Electronic Components (ELC)

U.S. exports are highly competitive in price and quality and are
preferred by Chinese end users.  Major competitors in this market
are Japanese, Germany and other major players in
telecommunications field.  Local firms are trying to reclaim
high-tech market share by setting up more joint ventures.

Promising subsectors:
- Microprocessors (General purpose and function specific),
- Microcontrollers (General purpose and function specific),
- Other high-end semiconductors (memory, advanced logic,
programmable logic, and advanced linear products).

                               1994        1995         1996

A. Total Market Size          4,400       5,000        5,600
B. Total Local Production     3,000       3,300        3,800
C. Total Exports              2,100       2,400        2,700
D. Total Imports              3,500       4,100        4,500
E. Total Imports from U.S.      300         340          380
F. Exchange Rate                8.4         8.4          9.0


16  -  Insurance Services (INS)

  China passed its first Insurance Law in July 1995, and is
gradually seeking to open the insurance sector to foreign
participation.  At present, only two foreign insurance companies,
American International Assurance (American International Group)
and Tokyo Marine, have been granted licenses to sell insurance,
and these are restricted to the Shanghai area.  While the market
remains substantially closed, many U.S. insurance companies have
established representative offices in 1994, and several are
pressing hard to be allowed to open branch offices in the near
future.  Insurance is high on the list of service sectors the
U.S. government is actively seeking to open in China.  U.S.
insurance companies have a high reputation, but face strong
competition from Japanese, European and Canadian competitors.

                               1994        1995         1996

A. Total Market Size         11,839      15,391       18,930
B. Total Local Production     7,590      10,626       14,876
C. Total Exports                n/a
D. Total Imports                n/a
E. Total Imports from U.S.       60          75           94
F. Exchange Rate                8.4         8.4          8.4


17  -  Computer Software (CSF)

U.S. exports of computers software are highly competitive.  Major
competitors are the Germans and Japanese in manufacturing
software and the French in telecommunications software.
Statistics are difficult because of piracy.  Data from the
Business Software Alliance, published in the May 1994 China
Economic Review reported that over 90 percent of available
software is pirated, available at about RMB 15 per disk (US
$1.70).

Although in February 1995, the U.S. and China reached an
agreement on IPR enforcement issues, piracy of software remains a
serious problem.  Recently, Chinese authorities have begun to
enforce software protection laws, but the actual impact seems to
have been minimal.

Analysts agree that one important key to the China market is the
ability to manufacture a Chinese version your program.


                               1994        1995         1996

A. Total Market Size            560         800        1,200
B. Total Local Production       400         600          800
C. Total Exports                 25          40           60
D. Total Imports                185         240          460
E. Total Imports from U.S.      160         200          400
F. Exchange Rate                8.4


18  -  Food Processing and Packaging Equipment Industry (FPP)

Chinese end-users have expressed an interest in purchasing
American food processing and packaging equipment if only given
the opportunity to do so.  Strong demand is anticipated for
machinery used for deep-processing of farm and side-line
products, meat and aquatic products processing, and complete sets
of machinery for baby food, elderly food, and health food.

                               1994        1995         1996

  A. Total Market Size          2,850       3,346        3,881
B. Total Local Production     1,760       2,110        2,553
C. Total Exports                 40          44           48
D. Total Imports              1,130       1,280        1,408
E. Total Imports from U.S.       90          48           52
F. Exchange Rate                8.4         8.4          8.4


19  -  Pharmaceuticals (DRG)

There is a good potential for pharmaceuticals in China, both in
distribution and in production.  Because the current method of
distributing pharmaceutical products is completely chaotic,
products and/or services that can aid in organizing the logistics
of dissemination is in high demand.  Software and furniture are
examples of some viable products.

Chinese doctors are knowledgeable about Western drugs, consumers
enjoy increasing levels of disposable income, and patients are
receptive to Western drugs.  Many of the larger Western
pharmaceutical companies have already entered the market, causing
the competition to increase among the providers.  However, the
demand is still large enough to provide room for medium and small
size companies as well as manufacturers of generic drugs for more
price-sensitive Chinese consumers.

Packaging of pharmaceutical products affords excellent prospects.
Chinese products are normally poorly packaged posing health
hazards for the public.  Western companies specializing in
packaging, for example, powder medicine in capsules, pills in
aluminum blisters, and other methods of western packaging, are
much sought after.

                               1994        1995         1996

A. Total Market Size          9,732      11,680       14,030
B. Total Local Production    10,000      12,000       14,400
C. Total Exports                480         490          500
D. Total Imports                212         170          130
E. Total Imports from U.S.       30          40           50
F. Exchange Rate                8.4         8.4          8.4


20  -  Cosmetics/Toiletries (COS)

The market for cosmetics in China has been growing rapidly, but
cosmetics consumption is still in its primary, immature stage.
Cosmetics business is an open market with great potential.  Color
cosmetics will be the fastest-growing category and facial, body
cleansing products will also grow at above-average rate.

                               1994        1995         1996

A. Total Market Size          1,320       1,868        2,615
B. Total Local Production     1,498       2,086        2,920
C. Total Exports                223         256          294
D. Total Imports                 45          54           65
E. Total Imports from U.S.       11        12.5         14.3
F. Exchange Rate                8.4         8.4          8.4


21  -  Leasing Services (LES)

China's financial leasing industry offers excellent prospects.
Of some 35 joint venture leasing companies (JVLCs), controlling
roughly 80 percent of China's onshore leasing business, only two
  boast U.S. partners (China Non-Ferrous Metals International
Leasing Company and the Tianjin International Leasing Co.).
China's government encourages more U.S. participation in this
market.  Strong competitors are mainly from Japanese, French and
German companies which own some 20, 6 and 2 of those JVLCs
respectively.

                               1994        1995         1996

A. Total Market Size           595          654          655
B Total Local Production       550          578          607
C. Total Exports                n/a         n/a          n/a
D. Total Imports                 45          46           48
E. Total Imports from U.S.      n/a         n/a          n/a
F. Exchange Rate                8.4         8.4          8.4


Agricultural Exports
--------------------

Agriculture: Wheat
PS&D Code:  0410000

China continues to be a major importer of U.S. wheat and is often
the largest buyer of wheat from the United States.  The
underlying demand factors, i.e., limited land, increasing
population, wider variety of wheat based food products, indicate
that China will continue to be a major consumer and importer of
wheat.  Imports continue to be controlled by the central
government and purchases are handled by a grain monopoly.  Note:
the table below does not account for wheat held as stocks.

                              1993/94   1994/95   1995/96

Total Market Size            112.0     115.0     117.0
Total Local Production       106.4     101.0      103.0
Total Exports                  0.0       0.0       0.0
Total Imports                  6.0      10.5      12.0
Total Imports from U.S.        2.4       4.0       5.0
Unit: Million metric tons


Agriculture: Cotton
PS&D Code:  2631000

China's fast growing domestic and export demand for cotton fabric
has pushed China into a perpetual deficit situation.  China is
the worlds largest importer of cotton and the largest export
market for U.S. cotton.  Currently, the expansion of the textile
industry is constrained by lack of resources.  Chinese cotton
production is limited by insect infestations, and is highly
susceptible to weather anomalies.  Therefore, China will continue
to be a buyer of cotton for the foreseeable future.  Note:  the
above table does not account for cotton held as stocks.

                              1993/94   1994/95   1995/96

Total Market Size             4,700     4,500     4,400
Total Local Production        3,739     4,341     4,300
Total Exports                   163        60        80
Total Imports                   190       750       700
Total Imports from U.S.         165       700       650
Unit: 1,000 metric tons


Agriculture: Poultry Meat
PS&D Code: 0114000

China is a net exporter of poultry meat, but because its export
and import markets are disjointed, both exports and imports are
expected to exhibit double-digit growth through the end of the
century.  Exports are dominated by live bird exports to Hong Kong
and de-boned chicken pieces to Japan.  The import sector consists
primarily of frozen 'moving parts', i.e., paws, wings, wing tips,
and legs.  Rapid rise of the fast food industry in China, both
domestic and foreign, bodes will for continued strong demand for
imported poultry meat.  Import statistics reported above are
highly understated due to the common practice of unreported
transshipments through Hong Kong into Southern China.

                              1994      1995      1996

Total Market Size             7,437     7,380     8,850
Total Local Production        7,550     7,500     9,000
Total Exports                   252       370       500
Total Imports                   139       250       350
Total Imports from U.S.         101       170       250
Unit:  1,000 metric tons


Agriculture: Hides and Skins
PS&D Code:  2111000

There are no reliable statistics on China's production.
Unofficial estimates indicate that about 10 million cattle hides
are produced each year.  The rapid growth of China's leather
manufacturing industry, fueled largely by investors from Taiwan,
Hong Kong, and more recently, South Korea, are generating the
demand for raw hides and skins.  While U.S. product quality is
highly regarded, Australia is an effective price competitor.  The
rapid increase in both exports and imports in 1995 and 1996 is
reflected in Chinaís first quarter 1995 trade data.
                              1994      1995      1996

Total Market Size             n/a       n/a       n/a
Total Local Production        n/a       n/a       n/a
Total Exports                 18,413    20,000    25,000
Total Imports                 46,868    70,000    90,000
Total Imports from U.S.       12,288    30,000    50,000
Unit: 1,000 pieces


Agriculture: Snack Foods
PS&D Code:

Reliable statistics are not yet available on China's consumption,
production, or trade of snack foods, but U.S. trade data clearly
reflects the increasing demand for this high-value product.  In
the 1990-1994 period, U.S. exports of snack foods to China
increased at an annual rate of 160 percent.  Rising living
standards and income, when combined with consumers interest in
convenience and quality, are generating the demand for imported
snack foods.  Hong Kong remains an important conduit for these
products, and it is likely that the above figures underestimate
the actual sales of U.S. snack foods in China.

                              1994      1995      1996

Total Market Size             n/a       n/a       n/a
Total Local Production        n/a       n/a       n/a
  Total Exports                 n/a       n/a       n/a
Total Imports                 n/a       n/a       n/a
Total Imports from U.S.       $6,871    $8,000    $10,000
Unit: U.S.$1,000



             CHAPTER VI.  TRADE REGULATIONS AND STANDARDS

A.   Tariffs and Import Taxes

The most comprehensive guide to Chinese Customs regulation is The
Official Customs Guide, compiled by the General Customs
Administration.  This guide contains the tariff schedule and
national Customs rules and regulations.  It may be obtained from
the Sino Hong Kong International Co., Sing Pao Building 15/F, 101
King's Road, North Point, Hong Kong; Fax: (852) 807-0024.

In addition to assessment and collection of tariffs, the Customs
General Administration (CGA) collects a value-added tax (VAT),
generally equal to 17 percent, on imported items.  Certain
imports are also subject to a consumption (excise) tax.

Tariff Rates:  Import tariff rates are divided into two
categories: the general tariff and the minimum (most-favored-
nation) tariff.  Imports from the United States are assessed the
minimum tariff rate, since the U.S. has concluded an agreement
with China containing reciprocal preferential tariff clauses.

The five Special Economic Zones, open cities, and foreign trade
zones may offer preferential duty reduction or exemption.
Companies doing business in these areas should consult the
relevant regulations.

B.   Customs Valuation

According to Chinese Customs regulations, the dutiable value of
an imported good is its c.i.f. price, which includes the normal
transaction price of the good, plus the cost of packing, freight,
insurance, and seller's commission.  Customs may reject the
transaction value submitted to it by the declarant and may assess
a c.i.f. price based upon the normal transaction value of
identical or similar goods imported from the same country or
region.

In practice, Chinese customs valuation remains nontransparent and
is applied inconsistently.  For example, importers face arbitrary
determinations of value by customs officials, who have
discretionary authority to ignore the invoice or transaction
price as the principal basis for valuation.  These practices
appear inconsistent with obligations China will need to undertake
if it becomes a member of the World Trade Organization (WTO).

C.   Import Licenses/Quotas

China administers a complex system of non-tariff trade barriers,
including individual quotas on imports of machinery, electronic
equipment and general goods like grain, fertilizer, textiles and
chemicals; automatic and non-automatic import license
requirements on a smaller number of goods; and a tendering system
applied to both quota and non-quota commodities, including
machinery and electronic equipment.  China also reserves 350 line
items for designated foreign trade corporations, and has other
non-transparent administrative controls or restrictions on
importation of goods and agricultural products.  The U.S.-China
market access memorandum of understanding (MOU) signed in 1992
commits China to curtail most of these barriers by 1997.

The MOU also confirms that only barriers that are imposed by the
central authorities will be enforceable.  Unauthorized import
bans, quotas, licensing requirements, restrictions, and controls
(imposed by provincial or local authorities) will not be given
effect.  This provision is significant because it precludes
replacement of central control by local controls.

The MOU further commits China to use sound scientific principles
to justify any sanitary and phytosanitary technical standards
required of imported agricultural and food products.  However,
existing standards continue to unnecessarily prohibit the entry
of most U.S. fresh fruits as well as high quality animal
genetics.

According to Chinese statistics, some 784 products remain under
license or quota restriction.  An additional 367 products will
have quotas, licensing requirements or controls eliminated
effective June 30, 1995.  Further phase-outs are scheduled for
the end of 1995 and 1996.

Import Licensing:  While China is in the process of eliminating a
great number of import licensing requirements, licenses will
continue to be required after the MOU is implemented for certain
items including rubber products, wool, passenger vehicles, and
hauling trucks.

Quotas:  After implementation of the MOU, some 42 categories of
commodities will remain affected by quotas, including watches,
automobiles, and motorcycles.  Import quotas for machinery and
electronic items, as well as carbonated beverages, are set by the
State Economic and Trade Commission under the State Council,
while the State Planning Commission administers quotas for a
variety of general commodities.

Administrative Controls:  Certain designated commodities must go
through an automatic registration process and secure a
certificate of registration for the import of special
commodities, prior to importation.  The certificate is valid for
six months.  For 1994, the list of such commodities consisted of
rolled steel, steel billets, scrap steel, out-of-service ships,
non-ferrous metals, plastic materials, paper, fruit and
cosmetics.

Thirty-one categories of goods which were previously controlled
through the administrative import approval process but not
subject to import license requirements, including certain
machinery production lines, electronic equipment, and
construction materials and equipment, will have controls removed
under the MOU.

Transparency:  The MOU commits China to publish all relevant
laws, rules, regulations, administrative guidance and policies
governing foreign trade that are not currently published.  In
conjunction with this commitment, China has designated the MOFTEC
Gazette (Wengao) as the official register for publication of all
laws and regulations relating to international trade.
Publication of the Gazette began in October 1993.  In addition,
to ensure that unpublished internal regulations will not be
enforced, China's State Council issued a notice stating that
beginning October 10, 1993, only published laws and regulations
should be implemented.

D.   Export Controls

Export Licensing Overview:  U.S. licensing requirements for most
exports to China continue to relax.  At the same time the U.S.
has tightened its enforcement of regulations prohibiting any type
of export to Chinese end-users involved in the proliferation of
missiles or weapons of mass destruction.

The U.S. approved export licenses worth over $1.8 billion in
1994, up from $1.5 billion in the previous year.  As fewer
exports to China required formal licensing after a major
relaxation of regulations in 1994, the greater value reflects
increased Chinese purchases of U.S. high technology as well as a
greater likelihood of approval for license applications.

U.S. export regulations have traditionally focused on technology-
based controls, requiring licenses for "dual-use" products, which
are generally high-technology products that might have a military
as well as a civilian end-use.  In the post-Cold War era, the
U.S. has steadily relaxed export controls on such items.

This process slowed and even regressed in the early 1990s due to
the U.S. reaction to the 1989 Tiananmen Incident, but in May 1994
a major across-the-board relaxation allowed the export to former
Cold War adversaries of many more high technology products, such
as powerful computer workstations.  However, in line with
continuing U.S. policy towards China this massive relaxation,
known as "General License GLX", does not apply if the end-user is
involved in military activities.

U.S. export control policy has taken a tougher line on the
proliferation of missiles and weapons of mass destruction.  This
policy began with the Gulf War, in the form of the Enhanced
Proliferation Control Initiative (EPCI), and has led the U.S. to
require closer scrutiny of Chinese end-users of U.S. exports of
all kinds.  The proliferation regulations require a Validated
License application if the exporter has "reason to know" that the
end-users might be involved in this sort of weapons
proliferation, even if the export would not normally require an
export license under the technology-based controls.

End-Users and Application Delays:  An application that does not
involve serious end-user concerns is approved in about one week
on average.  However, in the first half of 1995 over 25 license
applications were delayed more than six months awaiting
cooperation from the Chinese government on Pre-License Checks
(PLCs) or government-to-government assurances, and as of July
1995 only two PLCs had been performed during the calendar year.

PLCs involve a visit to an end-user site by a commercial officer
from the nearest U.S. Embassy or Consulate, accompanied by an
official from the Chinese Ministry of Foreign Trade and Economic
Cooperation (MOFTEC).  In 1994 and 1995, the U.S. requested - but
has not yet received - government-to-government assurances,
consisting of documents signed by officials of the Chinese
government pledging not to allow transfer of the licensed
technology to missile proliferation end-uses.

The U.S. is concerned with China's active program of military
exports, as China maintains an independent policy on nuclear,
chemical/biological weapons, and missile technology sales.  U.S.
interest in exposing connections to these activities often causes
problems with license applications, due to the Chinese military's
expanded role in civilian profit-making ventures.

However, much of the conflict over this U.S. policy also arises
from Chinese resistance to the enforcement of U.S. laws on
Chinese soil.  MOFTEC has also pleaded limitations on the amounts
  of time and budget that it can allocate to cooperation on U.S.
export control activities.  In addition, MOFTEC has invoked some
procedural concerns not yet resolved between the two sides.
Caught up in these issues, many pending export license
applications have been delayed, rejected, or returned without
action, although the U.S. has found other ways to approve a few.

Chinese Buyer Complaints vs. Multilateral Agreements:  Chinese
buyers often threaten to buy from Europe, Japan or Australia
while awaiting a particularly slow export license approval.
However, there has been a remarkable coordination of technology-
based export controls since the passing of the Cold War export
control alliance known as COCOM, even though a planned successor
regime has not yet been formed.  The former COCOM countries are
also signatories to the various weapons proliferation regimes,
and most impose some restrictions.  Moreover, U.S. technology
enjoys a very good reputation in China and, despite their
complaints, most Chinese end-users hold out for the issuance of a
U.S. export license.

For a Successful License Application:  Despite a proposed re-
write of the U.S. Export Administration Regulations, many U.S.
exports to China will continue to require licenses under
technology-based controls.  Applicants must give as much detailed
information as possible on their applications to avoid
unnecessary delays.  The less detail given about the
relationships between the various parties and the intended end-
use, the more likely that the application will crawl through a
very slow, very careful review process.

Exporters should track their applications through the licensing
system and determine if there is any additional information they
can provide to assist in the approval of their licenses.  For
example, even when the U.S. regulations do not require that an
application include an End User Certificate from MOFTEC, if a PLC
of the end-user becomes necessary MOFTEC will not, as of this
writing, allow the visit without having issued that document.  To
assure a successful PLC, the Chinese end-user should be asked to
obtain an End-User Certificate regardless of U.S. requirements.

Contacts:  Exporters can determine if their exports require a
license and can track their applications through the system with
the help of the Bureau of Export Administration (BXA) Exporter
Services Division.  If a PLC is required the applicant should
contact the commercial officer in charge of export licensing at
the U.S. Embassy in Beijing to determine the status of the visit.

BXA Exporter Services Division:
Washington, D.C.              202-482-4811        Fax 202-482-
3322
Newport Beach, CA             714-660-0144        Fax 714-660-
9347
Santa Clara, CA               408-748-7450        Fax 408-748-
7470

U.S. Embassy-Beijing, Commercial Section:
BXA Commercial Officer
86-10-532-6924, Fax 532-3297

Chinese Export Controls:   China maintains export bans and
restrictive licensing procedures on certain items.  Products
banned from export include musk, copper, platinum, specified
chemical compounds, and products whose export is banned under
international treaties.  Products subject to strict licensing
controls include dual-use chemicals, chemical precursors, heavy
water, and exports of fish, fresh vegetables and fruits to Hong
  Kong and Macao.  Foreign-invested enterprises are restricted to
exports of products they manufacture.

The export licensing system is administered by MOFTEC and
designated local offices.  An export tendering system for a
limited but growing number of products has also been
introduced.Most licenses are valid for a single use within three
months after issuance.  For certain items, including 26
categories of agricultural and petroleum products, licenses are
granted for six months with multiple use up to 12 times.

E.   Import/Export Documentation

Import Documentation:  Normally, documentation requirements are
handled by the Chinese importer (agent, distributor or joint
venture partner).  Necessary documents include the bill of
lading, invoice, shipping list, sales contract, an import quota
certificate for general commodities (where applicable), import
license (where applicable), inspection certificate issued by the
State Administration of Import and Export Commodity Inspection or
its local bureau (where applicable), insurance policy, and
customs declaration form.

Export Documentation:  Some commodities are covered by bilateral
quota and export licensing requirements, as well as mandatory
quality standards requiring commodity inspection certificates.
Outgoing shipments need to pass Customs inspection and receive
the necessary certification.

F.   Temporary Entry

Goods imported to China for display or demonstration at trade
shows and exhibitions are exempt from Customs duty provided they
are re-exported normally within three months.  Samples, exhibits,
or articles for advertising and display sold rather than re-
exported are subject to assessment of import duty based upon the
purchase price.  The exhibition organizer must obtain advance
approval from Customs, provide certain shipping documents and a
list of items to be exhibited, and coordinate with Customs
officials.  When the shipping containers for goods to be
exhibited are opened, Customs officers are present for the
examination.  Customs may request a guarantee in the form of a
deposit or letter in some instances.

A local sponsor with authority to engage in foreign trade may
sponsor small exhibitions or technical seminars, requiring less
than 500 square meters, without first seeking approval from
MOFTEC.  Customs will handle the tariff exemption formalities
based upon a guarantee of re-export that is signed between the
sponsor and the foreign party.  If the amount of space required
for the exhibition exceeds 500 square meters, then prior approval
from MOFTEC is required.

Food and beverage exhibition "not for sale" sample entry rules
are not clearly defined and appear capriciously applied.  Some
local Customs authorities are willing to permit duty free entry
of such items for sampling at shows but with the proviso that the
remainder of such goods at the conclusion of an exhibition be
relinquished to Customs or quarantine authorities while other
local Customs authorities does not permit such arrangements.
U.S. exhibitors should contact the exhibition organizers to
determine their liabilities regarding sample entries for such
events before registering to participate, to obtain a clearer
understanding of exhibition-related expenses.

G.   Labelling, Marking Requirements
  
Under Chinese law governing safety and product quality standards,
certain imported commodities must be inspected and certified to
be in compliance with compulsory national, domestic trade or
contractually stipulated standards (see Section I on Standards).
Once a quality certificate for a product is issued, a safety
label can be affixed.  The codes, serial numbers and names of the
standards used are to be marked on the products, or written in
accompanying technical manuals or on the packaging.  The State
Administration for Import and Export Commodity Inspection (SACI)
has established an office in the United States to facilitate U.S.
exporters in the quality certification and marking process.

All products sold in China must be marked -- in the Chinese
language -- with the name of the product and producer and the
address of the producer; the primary ingredients, their grades,
and specifications as to quantities where applicable; the
production date and expiration date for sale or effective use;
explanatory warnings as to potential hazards associated with the
products and their prevention by proper use; and, in case of
potentially hazardous products, directions for proper transport
and storage.

The National Health and Quarantine Administration requires
imported (but not domestic) food items such as candy, wine, nuts,
canned food and cheese to be affixed with a laser sticker
evidencing the product's safety.  Importers are charged five to
seven cents per sticker, and the stickers must be affixed under
State administration.

China implemented new food labelling regulations in 1995,
effective for imported foods beginning October 1, 1995.  These
new regulations require Chinese language labelling on all
imported food and beverage products intended for retail consumer
sales.  Product identification, lists of ingredients and the like
must all be set forth.  English language versions of the new
regulations and other rules on food additives may be obtained
from Audrey Talley, USDA/Foreign Agricultural Service, tel.:
(202) 720-9408; fax: (202) 690-0677.

H.   Prohibited Imports

The following items are prohibited from entering China: arms,
ammunition, and explosives of all kinds; counterfeit currencies
and counterfeit negotiable securities; printed matter, magnetic
media, films, or photographs which are deemed to be detrimental
to the political, economic, cultural and moral interests of
China; lethal poisons; illicit drugs; disease-carrying animals
and plants; foods, medicines, and other articles coming from
disease-stricken areas; old/used garments; and RMB.  Food items
containing certain food colorings and additives deemed harmful to
human health by the Ministry of Health are also barred entry.

The following items may not leave China: all items listed in the
previous paragraph; manuscripts, printed matter, magnetic media,
photographs, films or other articles which involve state secrets;
valuable cultural relics; and endangered animals and plants.

I.   Standards

China is moving toward adoption of international ISO standards.
Standards for manufactured goods do not appear to be used as a
protectionist measure, although certain standards applied to
agricultural and mechanical products are a subject of current
bilateral negotiations.

  Import Commodity Inspection:  Chinese law provides that all goods
included on a published Inspection List or subject to inspection
pursuant to other laws and regulations or the terms of the
foreign trade contract must be inspected prior to importation,
sale, or use in China.  The Inspection List requires 17
categories containing 303 items to be inspected.  In addition,
safety license and other regulations also apply to importation of
medicines, foodstuffs, animal and plant products, and mechanical
and electronic products.

Chinese buyers or their purchase agents must register for
inspection at the port of arrival.  The scope of inspection
undertaken by local commodity inspection authorities concerns
product quality, technical specifications, quantity, weight,
packaging, and safety requirements.  The standard of inspection
is based upon compulsory national standards, domestic trade
standards or, in their absence, the standards stipulated in the
purchase or sale contract.

An import safety/quality inspection certificate, also referred to
as a safety license, may be obtained from the local China
Commodity Inspection Bureau, which is entrusted to perform local
inspections by the SACI.  Safety licenses are required for the
following categories of goods:  automobiles, motorcycles, and
motorcycle engines; refrigerators and food freezers; air
conditioners; compressors; television sets; and kinescopes.  The
State Technical Supervision Bureau (which is responsible for
standard-setting for domestic production) also imposes safety
certification controls over certain electrical products including
leakage protectors, insulating wire and cable, power-driven
tools, refrigerators, electric fans, air conditioners,
televisions, radio receivers, and tape recorders.  International
Electrical Committee standards have been adopted for these
products.

In order to meet the inspection requirements, it is advisable
that quality certification be obtained from Chinese authorities
prior to shipment of goods to China.  The quality and safety
certification process appears to require extensive investigation
and may be time-consuming.  To apply, contact the SACI at 15
Fangcaodi Xijie, Chaoyang District, Beijing 100020 China; tel:
(86-10) 506-8150 or fax: (86-10) 500-2387.

The Commodity Inspection Law allows foreign inspection agencies
to be accredited and entrusted by the SACI to undertake
inspection work in China and abroad.  No foreign company has yet
been authorized by SACI to issue official inspection certificates
or quality licenses.  One cooperative agreement exists between
the SACI and the Underwriter's Laboratory in the United States.
The State Technical Supervision Bureau, which is responsible for
general management of the national technical supervision system,
is interested in cooperating with foreign laboratories to
undertake reciprocal quality inspection matters.

Quarantine Inspection:  A 1991 quarantine law provides the legal
basis for the quarantine inspection of animals, plants and their
products, as well as the containers and packaging materials used
for transporting these items.  The law also establishes the
Animal and Plant Quarantine Administration under the State
Council, giving it responsibility to carry out import and export
quarantine inspections.

The importer must submit an application in advance and the
products must undergo the required inspections upon arrival in
China.  Contracts must specify the requirements for inspection
under China's law, as well as indicate the necessary quarantine
  certificates to be issued by the appropriate agency in the
exporting country.  Catalogues of the Class A and B infectious or
parasitic diseases of animals and the catalogues of the diseases,
pests and weeds dangerous to plants are determined and announced
by the Animal and Plant Quarantine Administration.

Those objects prohibited from entering the country and include:
pathogenic micro-organisms of animals and plants, insect pests,
and other harmful organisms; animals and plants and their
products from countries or regions with prevalent epidemic animal
or plant diseases; dead animals; and soil.

J. Free Trade Zones/Warehouses

Goods that are allowed to be stored at a bonded warehouse -- for
up to one or two years -- are limited to (a) materials and
components to be used for domestic processing subject to re-
exportation, (b) goods imported under special Customs approval on
terms of suspending the payment of import duties and VAT, (c)
goods in transit, and (d) spare parts for free maintenance of
foreign products within the period of warranty.  At the end of
the two-year period, the goods must be imported for processing
and re-exported, licensed for import, or disposed by Customs.
Customs duties and VAT may be assessed depending upon the degree
of processing done in China.  Goods imported under normal import
contracts are not allowed to be stored in bonded warehouses.

K.   Special Import Provisions

Firms seeking the following exemptions should consult with
Customs authorities for information on the procedures and to
obtain copies of appropriate forms.

Passenger Baggage:  Reasonable quantities of items for personal
use by short-term visitors may be imported duty-free.  Other
items such as cameras, televisions, stereo equipment, computers,
and tape recorders must be declared and may be assessed a duty
depending upon the item's value.  Items intended to be sold,
transferred, rented, or used for a non-personal purpose within
two years may be subject to duty.

Advertising Material and Trade Samples:  Samples and advertising
material are exempt from Customs duty and VAT if the item's value
does not exceed RMB 200.  If the value exceeds this amount, the
items will be subject to Customs duty and VAT.  Regardless of
value, samples and advertising material concerning certain
electronic products are subject to customs duty and VAT.

Representative Offices:  Resident offices intending to import
office equipment and vehicles must submit a written application
to Customs.  Approval by Customs waives any relevant import
license requirements and allows the office to import the
equipment in reasonable amounts for office use only.  Office
equipment and motor vehicles are subject to Customs duty.

Staff members who have obtained a residence certificate may
import a reasonable amount of personal effects for private use,
some duty free.  Restricted goods such as consumer appliances may
be included in a single shipment of household effects but are
subject to quantitative limits.  This shipment must occur within
six months from the date of approval of the representative
office.  One car and one motorcycle may be imported for each
registered representative, subject to customs duty.

As of January 1, 1995, duty and tax-free import privileges for
the following 20 items imported by representative offices and
  foreign-invested enterprises have been eliminated:  television
sets, video cameras, video recorders, video tape players, audio
equipment/hi-fi sound systems, air conditioners, refrigerators
(freezers), washing machines, cameras, photocopiers, program-
controlled telephone exchanges/switchboards, microcomputers,
telephone sets, paging systems, facsimile machines, electronic
calculators, typewriters and word processors, furniture, lighting
fixtures, and certain foodstuffs and beverages.

Office equipment, personal effects, and cars may not be sold
without permission from Customs.

Foreign-Invested Enterprises (FIEs):  China permits four types of
foreign-invested enterprises -- equity joint ventures,
cooperative (contractual) joint ventures, wholly foreign-owned
enterprises, and foreign-invested joint stock companies (see
Chapter VI).

Machinery, equipment, and other materials that are part of the
foreign participant's contribution, cannot be supplied by Chinese
manufacturers, and are required for the FIE's construction are
exempted from Customs duty and VAT.  Goods imported by
cooperative joint ventures (CJVs) for commerce, catering, service
centers, occupational training, passenger-cargo transportation,
offshore fishing, and other service trades are not exempt from
levy of Customs duty and VAT.  CJVs may not import personal
effects, items for office use, and motor vehicles for personnel
on a duty-free basis.  Automobiles for production use are exempt
from import license requirements but are subject to Customs duty
and VAT.

As of January 1, 1995, 20 items imported by FIEs are no longer
exempted from customs duty and import tax.  The list is set forth
above under representative offices.

Processing Materials and Parts:  Raw materials, components, spare
parts, auxiliary materials, and packaging materials imported by
FIEs for the production of goods which will be exported are
exempt from Customs duty and VAT.  The materials and components
must be processed into products and exported within one year from
the date of importation.  Bonded warehouses may be established
within the FIE and are subject to supervision by Customs.

L.   Membership in Free Trade Agreements

China is not a signatory of any free trade agreement.



                CHAPTER VII.  INVESTMENT CLIMATE

A.   Openness to Foreign Investment

Government Attitude toward Foreign Private Investment:  Since
1978, China has actively sought foreign manufacturing investment
and technology.  More recently,  following Deng Xiaoping's
celebrated trip to South China in early 1992, China has started a
series of "experiments" to allow limited foreign participation in
service sectors and placed even greater emphasis on attracting
higher technology and infrastructure investments.  In recent
months, Chinese government officials have hinted that certain tax
and duty investment incentives may be scaled back, particularly
in coastal areas.  At the same time, the government is seeking to
attract foreign investment to poorer inland provinces and is
unlikely to reduce -- and indeed may increase -- incentives in
inland areas.
  
In 1994, China pressed forward with reforms in foreign exchange
controls, taxation, foreign trade, and state enterprise
restructuring.  It also created three new policy banks, including
an export-import bank.  Since roughly the second half of 1994,
however, concerns about inflation and social instability
constrained the central government's ability to undertake more
thorough reforms.  This being said, modest reforms continued
early in 1995 with, for example, the passage of laws governing
commercial banks and the central bank, as well as regulations
permitting foreign-invested holding companies and foreign-
invested companies limited by shares (joint stock companies).

Basic Laws and Regulations Covering Direct Investment:  The
fundamental legislation dealing with foreign investment in China,
the Law on Chinese-Foreign Equity Joint Ventures, was promulgated
in 1979.  Implementing regulations issued in 1983 (which, like
the joint venture law, have subsequently been amended) detail the
form and organization of joint ventures, ways of contributing
investment, and rules on the organization of the board of
directors and management.  Laws on other forms of foreign
investment have subsequently been passed.  Provisions also cover
technology transfer, land use rights, taxes, foreign exchange
control, financial affairs, and hiring and firing of workers.

Forms of Foreign Ownership: In those sectors where foreign
investment is allowed, foreign-invested enterprises (FIEs) can be
established as holding companies, wholly foreign-owned
enterprises, equity joint ventures, cooperative (contractual)
joint ventures or -- since January 1995 -- foreign-invested
companies limited by shares.  Under China's 1994 Company Law,
foreign firms can also now open branches in China.  Foreigners
can also purchase certain shares in Chinese companies listed on
Chinese stock exchanges (B shares), the Hong Kong stock exchange
(H shares) or the New York Stock Exchange (N shares), but foreign
portfolio investment is restricted to less than majority
ownership.

Investment Screening Procedures:  Potential investment projects
usually go through a multi-tiered screening process.  The first
step is approval of the project proposal.  The central government
has delegated varying levels of approval authority to local
governments.  Formerly only the Special Economic Zones of
Shenzhen, Shantou, Zhuhai, Xiamen and Hainan, and "open" cities
could approve projects valued at up to US$30 million.  This
approval authority has now been extended to many provincial
capitals and coastal cities.  The inland cities and regions are
limited to approving projects valued below US$10 million.
Projects exceeding these limits are approved by the Ministry of
Foreign Trade and Economic Cooperation (MOFTEC) and the State
Planning Commission (SPC), for greenfield projects, or the State
Economic and Trade COmmission (SETC), for projects involving
existing enterprises.  If an investment involves US$100 million
or more, it must also obtain State Council approval, after
MOFTEC's review and approval.

Government officials evaluate proposals against guidelines
favoring projects that promote exports to earn foreign exchange,
introduce advanced technology, and provide technical or
managerial training.  Other factors include the fairness of the
contract, whether the technology is available elsewhere in China,
and whether China already has sufficient production capacity.

Investment Incentives:  China has a complex system of investment
incentives.  The five Special Economic Zones and designated
cities all promote investment with unique packages of tax
  incentives.  In recent years, Chinese authorities also
established a number of free ports and bonded zones, as well as
locally-organized "development zones."

Incentives are not automatically conferred upon foreign
investors, who must apply and sometimes negotiate for these
benefits with the relevant governmental authorities on a
case-by-case basis.  The incentives available include significant
reductions in national and local income taxes, land fees, import
and export duties, and priority treatment in obtaining basic
infrastructural services.  The Chinese authorities have also
established special preferences for projects involving high-tech
and export-oriented investments.  Priority sectors include
agriculture, transportation (highways, harbors, railways,
airports), energy, metallurgy, and the "pillar" industries of
construction materials, machinery, petrochemicals, automobiles,
and electronics.

China encourages reinvestment of profits.  A foreign investor may
obtain a refund of 40 percent of the tax paid on its share of
income which is reinvested in China for at least five years.
Where profits are reinvested in high-technology or
export-oriented enterprises, the foreign investor may receive a
full refund.

National Treatment:  The 1994 Foreign Trade Law provides for
extension of national treatment on a reciprocal basis to
contracting parties of international treaties to which China is
also a party.  This law also provides for extension of market
access and national treatment in services under similar
conditions.  In practice, however, China's restrictive foreign
trade and investment regulations deny foreign companies national
treatment in all service and many industrial sectors.  The U.S.
is working bilaterally and with other WTO contracting parties to
encourage China to grant unconditional national treatment as part
of its accession to the WTO.

B.   Conversion and Transfer Policies

In periods such as late 1993 when foreign currency was relatively
scarce, it was difficult to repatriate profits from China which
were not generated in foreign exchange.  Throughout 1994 and the
first half of 1995, however, China's foreign reserves grew
rapidly and the ability of FIEs to purchase foreign exchange
through swaps centers and repatriate profits was generally not an
issue.

Although often ignored in practice, PRC regulations still require
that FIEs balance their foreign exchange receipts and
expenditures.  The authorities often require that extensive
documentation, including evidence that contractual performance
requirements have been met, accompany requests for purchases of
foreign currency.  Nevertheless, in recent months there have been
only rare cases of Chinese authorities flatly refusing to sell
foreign exchange for purposes of repatriation.

C.   Expropriation and Nationalization

There have been no cases of outright expropriation of foreign
investment since China opened to the outside in 1979.  In fact,
foreign investment legislation forbids nationalization, except
under "special" circumstances.  The "special" circumstances have
not yet been defined; officials claim that they would include
national security considerations and obstacles to large civil
engineering projects.  Chinese law calls for compensation of
expropriated foreign investments, but it does not define the
  terms of compensation.

D.   Dispute Settlement

PRC authorities place strong emphasis on resolving disputes
through informal conciliation.  When required to employ a formal
mechanism, the authorities greatly prefer arbitration through
Chinese agencies.  Litigation is considered only reluctantly as a
final option.  Many foreign investors have found the Chinese
approach time-consuming and unreliable.  China is a member of the
International Center for the Settlement of Investment Disputes
(ICSID).  China has also ratified the New York Convention on the
Enforcement of Foreign Arbitral Awards.

Investment contracts often stipulate arbitration in Stockholm
because the forum there is considered neutral.  Most Chinese
contracts call for arbitration by the China International
Economic and Trade Arbitration Commission (CIETAC).  Another
forum for resolving investment and trade disputes is the Beijing
Conciliation Center (BCC), an organization affiliated with the
China Council for the Promotion of International Trade (CCPIT).
The BCC signed an agreement with the American Arbitration
Association (AAA) in 1992 whereby the BCC and AAA would work
together in joint conciliation to resolve trade and investment
disputes between U.S. and Chinese parties.

One pending case of which the U.S. Embassy is aware raises
questions about the willingness and ability of the Chinese
government to follow through on its international arbitration
commitments.  A U.S. company has tried unsuccessfully since
December 1993 to file for enforcement of a Swedish arbitration
award with the intermediate court in Shanghai.  Under Chinese law
and the New York Convention, the court should have acknowledged
the request within seven days.  As of June 1995, there were still
no signs that the arbitral award would be enforced.  If China
will not enforce foreign arbitral awards in cases such as this,
foreign investors will be forced to arbitrate in China.  The
domestic arbitral process, however, has at times been unfair and
domestic awards are also difficult to enforce.

E.   Political Violence

Rapid price inflation, corruption, layoffs from state-run
enterprises, the growing gap between coastal regions and the
interior, and economic disparities between rural and urban areas
have contributed to dissatisfaction among the Chinese populace.
Northwestern China has been troubled by occasional unrest among
minority ethnic and religious groups.  Dissatisfaction has not
translated into widespread political activity since 1989,
however, because the government is working to minimize tensions
and because most people believe Beijing is able and willing to
swiftly repress any sizeable anti-government protests.

F.   Performance Requirements/Incentives

Export Requirements:  While Chinese law does not require it,
MOFTEC encourages contractual clauses outlining export targets
and many contracts reached between Chinese and foreign partners
stipulate such targets.  Failure of FIEs to meet export targets
may result in withholding of rights to purchase foreign exchange.

Local Content:  Chinese regulations grant FIEs freedom to source
inputs both in China and abroad, except that priority is given to
Chinese products where conditions are equal.  Chinese regulations
forbid the imposition of "unreasonable" geographical, price, or
quantity restrictions on the marketing of a licensed product, and
  thus the foreign venture retains the right to purchase equipment,
parts, and raw materials from any source.

Nonetheless, Chinese officials strongly encourage localization of
production, and investment contracts often call for foreign
investors to commit themselves to gradually increasing the
percentage of local content.  Under China's current automotive
industrial policy, for example, no joint venture will be approved
unless it provides for 40  percent local content.  This
percentage for local content is being raised over time.  The poor
quality of many domestically produced inputs makes localization
difficult for FIEs, especially in high tech sectors.

Technology Transfer:  Most joint ventures involve the transfer of
technology from the foreign partner as part of its capital
contribution, from a licensing agreement, or from a third party.
While China's investment laws and regulations do not require
technology transfer, they strongly encourage it, and foreign
investors are likely to encounter pressure to agree to it.  A
range of incentives are available to attract tech transfer.

Employment of Host Country Nationals:  Rules for hiring Chinese
nationals depend on the type of establishment: wholly-owned,
joint venture, or representative office.  (See section L below on
labor regulations.)  Although wholly foreign-owned companies are
not required to nominate Chinese nationals to their upper
management, in practice expatriate personnel normally occupy only
a small number of managerial and technical slots.  In some such
enterprises, there are no foreign personnel at all.

The amended Chinese-Foreign Equity Joint Venture Law provides
that the joint venture partners, by consultation, shall determine
the chairman and vice chairman, leaving open the possibility for
either a foreign or a Chinese representative to hold these
positions.  However, the consultation or election process is
restricted by the provision that, if the foreign side assumes the
chairmanship, the Chinese party must have the vice chairmanship,
and vice versa.

While FIEs are free to recruit employees directly or through
agencies, representative offices of foreign companies must hire
all local employees under contract with approved "labor services
companies."  These labor services companies pay contracted local
employees only a portion of the amount paid by foreign companies
for their services and at times have been unwilling to allow
local employees to continue with the same foreign firm after the
expiration of their labor services contract.

Enforcement Procedures for Performance Requirements:  The same
Joint Venture Law provides that the failure of a party to fulfill
the obligations prescribed by the contract is a basis for
termination of the joint venture.  To the extent that performance
requirements such as local content and export performance are
typically part of contracts establishing joint ventures.  This
stipulation implicitly provides the legal basis for enforcing
performance requirements.  Denial of the right to purchase
foreign exchange with renminbi profits is another method of
enforcing investment contract performance requirements.

G.   Right to Private Ownership and Establishment

In China's partially-reformed command economy, numerous
restrictions are placed on foreign ownership and the
establishment of business enterprises.  A new investment policy
now in draft attempts to orient foreign investment into various
sectors which are described as encouraged and limits investment
  in certain restricted and prohibited sectors.  Large sectors of
the Chinese economy -- particularly in services and
infrastructure -- remain largely or completely closed to foreign
investment.

China has been gradually relaxing some restrictions on ownership
and establishment.  Since 1992, for example, new service sectors
were opened on an experimental basis, including retailing,
insurance, and tourism.  Most of these experiments, however, are
limited in the maximum number of investments and locations.

China is now also encouraging, on a limited basis, foreign
investment in other previously closed sectors, such as roads,
railroads and harbors, Chinese airlines (with the percentage of
voting shares limited to 25 percent), and gold mines.

China is also moving gradually to open its power industry -- a
major growth area of the economy -- to direct foreign investment.
It is likely that China will approve a number of foreign power
projects for inclusion in the ninth Five Year Plan (1996-2000).
It is also experimenting with build-operate-transfer (BOT)
schemes in the power sector.  Nonetheless, there are major
obstacles involving ownership share, rates of return and finance
regimes which must be resolved before foreign investment can move
ahead.  Following a February 1995 business mission to China by
Energy Secretary O'Leary, there were some signs that China may
move toward a bidding system for power projects.

H.   Protection of Property Rights

IPR:  Since the January 1992 conclusion of a U.S.-China
Memorandum of Understanding (MOU) on the Protection of
Intellectual Property Rights (IPR), China followed through on its
commitments to join relevant international conventions and enact
or amend IPR legislation.  However, enforcement of IPR rights
either through judicial or administrative means remained a
serious problem.  In March 1995, USTR Kantor and MOFTEC Minister
Wu Yi concluded an extension to the 1992 MOU in which the Chinese
promised to open the Chinese market to companies with IPR
products and enforce rigorously Chinese IPR regulations.  See
Chapter IV, Section K for further information on IPR enforcement.

Mortgages/Secured Interests in Property:  Under Chinese law, the
land is owned by the whole people and cannot be privately owned.
However, enterprises, including FIEs, can obtain long-term
leasehold rights to the use of land for up to 70 years in some
cases.  Moreover, individuals and enterprises can own and dispose
of buildings and other forms of property.  Though China does not
yet have a developed or uniform national legal system governing
mortgages or secured transactions, there are national laws that
acknowledge the existence of secured transactions.  In addition,
a variety of regional and internal regulations governing secured
transactions and mortgages have recently been adopted.  The
National People's Congress may pass a Mortgage Law by the end of
1995.

Until a more comprehensive mortgage law is enacted, the primary
and clearest source of creditor's security rights will be the
written agreement between creditor and debtor.  Creditors
involved in financing transactions in China will likely continue
to rely on alternative means of protecting their loans to, or
investments in, Chinese entities.  The most common of these
alternatives is obtaining payment guarantees from authorized
guarantors and transferring the use of equipment or goods (for
example, through leasing) rather than transferring title.

  Bankruptcy:  China's bankruptcy law, passed in December 1986,
provides for membership in creditor's meetings to discuss and
adopt plans for the distribution of bankrupt property.  The
resolutions of creditor's meetings, which are binding on all
creditors, are adopted by a majority of the attending creditors,
who must account for more than half of the total amount of
unsecured credit.  However, the law fails to address bankruptcy
of individuals, private companies, and township and village
enterprises.

I.   Regulatory System:  Laws and Procedures

There are over 150 major laws and regulations which apply to
foreign investment.  In general, however, China's legal and
regulatory system is characterized by a general lack of
transparency and inconsistent enforcement.  Investors may also
face excessive bureaucratic influence in FIE operations.

The supreme legislative authority in China rests in the National
People's Congress and its Standing Committee, working primarily
through the Legislative Committee.  In accordance with the 1982
Constitution, the State Council and the people's congresses at
the provincial and municipal level each have the authority to
formulate administrative regulations and local legislation that
are not inconsistent with national law.

China's formal legal system consists of the people's courts, the
people's procuratorate, and the public security apparatus.  In
cooperation with the National People's Congress, the Supreme
Court interprets new laws and then passes its guidance down to
lower courts.  At times, China's governmental departments have
reportedly interfered in court decisions.  China's legal system
is a mixture of common law and continental legal systems, but
relatively less emphasis is placed on legal precedents.

The 1979 Organic Law of the People's Courts of the PRC authorized
the establishment of economic courts at China's national Supreme
Court and three levels of provincial courts.  The economic courts
are given jurisdiction over contract and commercial disputes
between Chinese entities; trade, maritime, insurance, and
intellectual property rights; other business disputes involving
foreign parties; and various economic crimes including theft,
bribery, and tax evasion.  In 1994, the lowest level of
provincial courts started to try economic cases involving foreign
parties.  In general, foreign lawyers cannot act as attorneys in
Chinese courts, but may be present informally.

J.   Bilateral Investment Agreements

While periodic discussions have been held, the United States does
not have a bilateral investment treaty with the PRC.  The two
sides still disagree on a number of issues such as national
treatment, third party arbitration, and compensation for
expropriation.  At present, such subjects are covered in the body
of each investment contract.

China has entered into bilateral investment agreements with more
than 50 countries.  Some of the more important countries that
have bilateral investment treaties with the PRC are Japan,
Germany, the United Kingdom, France, Italy, Thailand, Romania,
Sweden, the Belgium-Luxembourg Economic Union, Finland, Norway,
Spain, Canada, and Austria.  The provisions of these agreements
cover in general terms such issues as: expropriation,
arbitration, most favored nation treatment, and transfer or
repatriation of proceeds.

  K.   OPIC and Other Investment Insurance Programs

OPIC's active program in China has been suspended since the
Tiananmen incident in June 1989, first by executive action, and
then by the legislative sanctions that took effect in February,
1990.  As of the end of 1990, 31 U.S. investments had OPIC
political risk insurance.  These projects represented an
investment of approximately US$ 300 million in China.  OPIC
programs will remain suspended in China subject to U.S. foreign
policy concerns, the terms of the sanctions legislation enacted,
and improvements in worker rights conditions.  OPIC continues to
honor outstanding political risk insurance contracts.

The Multilateral Investment Guarantee Agency (MIGA), an
organization affiliated with the World Bank, can be a source of
political risk insurance for investors interested in investing in
China.  Some commercial insurance companies also offer political
risk insurance, as does the People's Insurance Company of China.

L.  Labor

Labor Availability:  FIEs can take over a joint venture partner's
workforce, hire through a local labor bureau or job fair,
advertise in newspapers or rely on word of mouth.  As described
in the above section on performance requirements, however,
representative offices must hire their local employees through a
labor services agency.  Skilled workers are often in short
supply, although many companies have found an abundance of recent
university graduates who are talented and highly motivated.
Shortages can be especially acute in south China, which has far
fewer institutions for higher education than exist in the north.
While engineers and technicians can sometimes be difficult to
find, finding -- and keeping -- managers and those with marketing
skills is especially difficult.  Foreign ventures often find
workers move rapidly from job to job within the foreign-invested
and private sectors.

Compensation:  Workers are either paid a salary, hourly wages or
piece-work wages.  The provision of subsidized services, such as
housing and medical care, is very widespread, and compensation
beyond the basic wage constitutes a very large portion of a
venture's labor expenses.  Local governments also tax enterprises
and workers to support social security and unemployment insurance
funds.  In general, as long as they meet local minimum wage
levels, FIEs are free to pay whatever wage rates they want above
a locally designated minimum wage.  Chinese income tax laws often
make it desirable to provide greater subsidies and services
rather than higher wage rates, and these decisions are often
taken after observing local practice.  China's National Labor Law
specifies rates for payment of overtime compensation under
various circumstances.

Termination of Employment:  Terminating individual workers for
cause is legally possible throughout China but may require prior
notification/consultation with the local union.  In general, due
to market conditions, it is easier to fire in the south than in
the north, and in smaller enterprises than in larger ones.
Large-scale layoffs can arouse opposition from the local
government and from the workers themselves.  Where workers are
hired by short-term contracts or agreements, it is generally
relatively easy to let them go at the end of the contract period.

Worker Rights:  China's foreign investment legislation and labor
law require FIEs to allow union recruitment, but do not require
an FIE actually to set up the union (as management does in state
enterprises).  In recent years, most coastal provinces have
  passed stricter regulations that require unions in all FIEs.  To
date the majority of such enterprises do not have unions and some
(in contravention of Chinese law) have agreements with localities
not to establish unions in their factories.  China's Labor Law
provides for the establishment of collective labor contracts to
specify wage levels, working hours, working conditions and
insurance and welfare.  The All-China Federation of Trade Unions
(ACFTU) has launched a drive to conduct collective negotiations
in at least 30 percent of foreign-invested enterprises in 1995
and to continue their efforts to organize unions in this sector.
FIEs should be aware that it is illegal according to Chinese law
to oppose these efforts.  Although China is a signatory to a
number of ILO conventions, it has not signed any key ILO
conventions on freedom of association or forced labor.

M.  Foreign-Trade Zones/Free Ports

China has established a number of duty-free import/export zones.
Some of the main ones are located in Dalian, Tianjin, Shanghai,
Guangzhou, and Hainan.  Privileges similar to those offered in
the officially-designated free zones can also be found in the
other SEZs and open cities, but there are still a range of
restrictions and charges that affect FIE operations.

In order to make progress towards a consistent national trade
regime as part of its WTO accession, China has indicated that it
will not introduce any new investment incentives for its SEZs and
will decrease existing incentives over time.  China's Customs
Administration claims success in controlling the duty-free
importation of production inputs into the zones, but the lack of
physical barriers makes it difficult to control the flow of
non-dutied items out of the zones.

N.  Major Foreign Investors

Countries and regions with the highest cumulative contracted
foreign direct investment in China are, in declining order, Hong
Kong and Macao, Taiwan, the U.S., Japan, and Singapore.



            CHAPTER VIII.  TRADE AND PROJECT FINANCING

A.   The Banking System

China's banking system is changing rapidly under the impetus of
economic reforms.  At the top of the system is the central bank,
the People's Bank of China, which sets monetary and, together
with the State Administration for Exchange Control (SAEC),
foreign exchange policies.

Below the central bank are the state-owned "specialized" banks:
Bank of China; People's Construction Bank of China; Agricultural
Bank of China; Industrial and Commercial Bank of China; and Bank
of Communications.  These banks were originally integral elements
of the socialist economic planning system and functioned as
conduits for state investment.  They are now being gradually
transformed into commercial banks, which will operate on market
principles.  This is a slow process, given the number of
subsidized or non-performing "policy" loans still on the books.

In the 1980's the government established some new investment
banks that engage in various forms of merchant and investment
banking activities.  These operate on a profit-loss basis.  They
are:  China International Trust and Investment Corporation
(CITIC) and the Investment Bank of China.  Localities have also
  established numerous international trust and investment
companies, referred to as "ITICs."

Three new government "policy" banks were established in 1994: the
State Development Bank, the State Agricultural Development Bank
and the Export-Import Bank of China.  These banks have the
financial responsibility for financing economic and trade
development and state-invested projects included in the
government's five-year economic plans.

B.   Foreign Exchange Controls

The People's Bank of China and the SAEC regulate the country's
foreign exchange (forex).  As of January 1, 1994, all Chinese
enterprises and agencies must turn over all forex earnings to the
banking system, in exchange for renminbi.  When forex is required
for import and other legitimate transactions, they apply to
purchase the funds from designated banks that are members of the
interbank foreign exchange market.

Foreign-invested enterprises (FIEs) are permitted to keep foreign
exchange in their special forex accounts, but are excluded from
the new interbank market.  The Chinese government has retained
the foreign exchange swap centers through which FIEs can trade
foreign exchange and renminbi among themselves, and has indicated
it may permit FIEs access to the interbank forex market by the
end of 1995.

Beginning in 1995, China will require that FIEs submit an annual
report on their forex transactions, known as the Foreign Exchange
Examination Report.  This report must be prepared by a certified
public accounting firm registered in China and approved by the
SAEC.  The report, designed to ensure that FIE forex earnings are
sufficient to meet their own requirements as well as any
obligation to repatriate profits, is necessary to qualify for
foreign exchange privileges.  Once approved, firms are provided
with a stamped Foreign Exchange Registration Certificate which
enables them to obtain forex at the swap centers.  Without such
approval, companies must obtain specific swap approval on a case
by case basis.

C.   General Financing Availability

There are now more sources of financing for imports and
investment than at any time since China's initial opening to the
outside world.  They include:

Central government reserves:  The Chinese Government's official
reserves total nearly US$60 billion as of mid-1995.  The
country's debt service ratio is at the 20 percent benchmark set
by most banks as the threshold between healthy and unhealthy
international financial accounts.  In 1995, in the aftermath of
the Mexican currency crisis, China tightened up considerably on
new obligations by the national government and is enforcing
restrictions on borrowing by provinces, municipalities and their
banking entities.  The Ministry of Finance has designated 12
entities as authorized to borrow foreign funds, preferably at
low interest rates from multilateral institutions and soft
credits from foreign governments:  Bank of China; CITIC; Bank of
Communications; Investment Bank of China; Construction Bank of
China; Agricultural Bank of China; Dalian International Trust and
Investment Corp.; Tianjin International Trust and Investment
Corp.; Shanghai International Trust and Investment Corp.;
Guangdong International Trust and Investment Corp.; Hainan
International Trust and Investment Corp.; Shandong International
Trust and Investment Corp.; Fujian International Trust and
  Investment Corp.

The World Bank:  The World Bank, based in Washington, D.C.,
maintains a large loan program in China.  It is gradually
shifting its programs from key infrastructure projects in
transportation and energy toward environmental and agriculture
support.  The best way to find out about World Bank and other
multilateral funding opportunities is to establish close and
continuous contact with Chinese ministries in your sector.  The
World Bank publishes bidding opportunities in the United Nations
publication "Development Business".  This is available by
subscription from United Nations, P.O. Box 5850  Grand Central
Station  New York, New York 10163-5850.

The International Finance Corporation:  A member of the World
Bank Group, the IFC is increasingly active in China.  Its mandate
is to assist joint venture and shareholding companies with
substantial non-state ownership to raise capital in the
international markets.  The IFC takes equity positions in these
companies.  Its core business is "project finance" in which it
currently has over US$300 million invested in China.  IFC can be
contacted through its Washington, D.C. Headquarters, (202) 473 -
0631, or at its Beijing office (fax: (86-10) 501-5176).

The Asian Development Bank:  China was the ADB's largest borrower
in 1994, with a total of US$3.2 billion.  Loans were largely for
infrastructure and environmental projects.  Bidding on Asian
Development Bank projects works similar to the World Bank.  Once
a project is initially approved by the ADB and the Chinese
government, it is included in a monthly publication called "ADB
Business Opportunities" which is available by subscription from
the Publications Unit, Information Office, ADB, P.O. Box 789,
Manila, Philippines, fax (632) 632-5122 or 632-5841.  The
Commerce Department has established a Multilateral Development
Bank Operations Office (fax 202/273-0927), which publishes
information to assist companies in winning such contracts.

The Overseas Economic Cooperation Fund (OECF) of Japan:  The OECF
is a Japanese government organization that extends long-term,
below market interest rate loans to China.  In the 1996-98 period
some US$400 million will be available for 40 projects under the
Fourth Yen Loan.  These projects are described in the "OECF
Quarterly Report Supplement" available from the Public Relations
Division of the OECF in Tokyo, Tel: (81-3) 3215-1307.

Many U.S. companies have been successful in obtaining contracts
under these loans either on their own or by working in
conjunction with large Japanese trading firms.  Potential bidders
must begin working with Chinese ministries and end users at the
consultant (pre-feasibility study) stage when specifications are
being developed for the project, usually a year or two before the
tender is formally published.  OECF projects tends to be in
infrastructure, environmental and agricultural sectors.

The Japanese Export Import Bank also offers untied credits which
are medium or long term loans at market interest rates.
Approximately 30 percent of JEXIM's credits are untied.  These
also are subject to international competitive bidding.

Bilateral government loans:  The Chinese are actively seeking low
interest, long term soft loans, primarily from European
countries.  These are designed to support their country's
exporters and are usually offered under annual protocols not tied
to particular projects.  U.S. firms, otherwise competitive on
price and quality, sometimes lose contracts because they cannot
compete with such loans.  OECD negotiations concluded in the
  spring of 1992 succeeded in establishing criteria that limit such
loans to non-commercially viable projects.

In 1994, the U.S. Export-Import Bank established a program to
quickly match competitors' soft loan terms, once there is proof
of such an offer.  U.S. EXIM will not initiate a soft loan offer
on its own.  U.S. firms should consult with a Commercial Service
officer if it believes it is competing against a soft loan.

D.   Financing Exports/Methods of Payment

In China's liberalized economic regime, there are many ways to
finance exports.  The most commonplace are the letter of credit
and "documents against payment."   Under these methods, foreign
exchange is allocated by the central government for an approved
import.

Letters of credit:  Although the Bank of China dominates China's
trade finance business, several banks, both Chinese and foreign,
have the authority to issue letters of credit (L/Cs) for Chinese
imports.  Other major Chinese banks engaged in trade finance are
the People's Construction Bank of China, Industrial and
Commercial Bank of China, Agricultural Bank of China and CITIC
Industrial Bank.  Foreign banks with branch or representative
offices in China (see Appendix E) can issue L/Cs as well.

China does not allow L/Cs issued by its banks to be confirmed by
other banks, Chinese or foreign.  Moreover, China is not a member
of the International Chamber of Commerce and, therefore, is not
subject to the Unified Customs and Practices (UCP) 400 code
regarding international trade payments.  Some Chinese practices
may diverge from the practices established under the UCP regime.
For example, Chinese banks usually release funds not at sight,
but only after the headquarters office in China receives and
examines all of the trade documents.  UCP rules require at sight
payments from the branch office overseas, upon receipt of the
full set of required trade documents.  Although there are still
standard L/C forms, terms and conditions are generally
negotiable, and are set on a transaction-by-transaction basis.

Documents against payment:  This method of payment is similar to
an L/C, but less formal and more flexible.  Just as with L/Cs,
the exporter submits a full set of trade documents for payment to
the bank designated in the contract.  The Chinese bank sends the
documents to the home office, which examines them and, in some
cases, passes them to the buyer for further examination.  Payment
is made after the documents been approved by all parties.   While
it can be considerably less expensive than an L/C, this method of
payment provides rather thin coverage against default.

Other methods:

--  Bank or Enterprise Loans:  Many Chinese companies have
relationships with local banks or other enterprises which will
loan funds for the purchase of imports.

--  Foreign Government Soft Loan:   These loans must be approved
by the relevant ministry in coordination with the Ministry of
Foreign Trade and Economic Cooperation and the State Planning
Commission.

--  Foreign Supplier Loan:  The supplier helps to finance, on
behalf of the Chinese buyer, the purchase of its equipment.

--  Proceeds sharing/cooperative joint venture:  Some suppliers
enter into a cooperative joint venture to ensure the sale and
  financing of their equipment.

--  Countertrade:  There are no formal countertrade requirements,
but some Chinese entities resort to countertrade to finance
imports.  This can be difficult, and success in this business
requires a global trading network and a good deal of patience.

E.   U.S. Export Financing and Insurance

Export credits:  The Export-Import Bank of the United States
(Eximbank) offers a full range of export loans and loan
guarantees for companies exporting products with at least 51
percent U.S. content.  The bank works regularly with Bank of
China and the People's Construction Bank of China, and will work
with other banks on an ad hoc basis, assuming full faith and
credit guarantees as available from the Chinese government.  It
also will consider guaranteeing loans to local banking entities
authorized by the Chinese government to borrow from abroad.  The
rates and terms of such loans are governed by the OECD agreements
on export credits.

Insurance:  The China operations of the Overseas Private
Investment Corporation have been suspended since the Tiananmen
incident of 1989.  No U.S. government investment risk insurance
is currently available.  Some private companies, such as American
International Group, offer insurance policies for China.

F.   Project Financing

Eximbank is also seeking to implement a limited recourse project
financing program in China, for projects with anticipated cash
flows that can cover debt service to lenders and payment of
dividends to shareholders, without government guarantees.  Loans
under this program will be available for projects that involve
imports from the U.S.  Project financing is also available from
the various multilateral financial institutions.

G.   U.S. Banks in China

Scores of national and regional U.S. banks have correspondent
banking relationships with Chinese banks.  For a list of U.S.
banks with representative offices and branches in China, please
see Appendix E.



                  CHAPTER IX.  BUSINESS TRAVEL

A.   Business Customs

Names:  In China, the  family or surname is placed first, thus Li
Da Ming is addressed as Mr. Li.

Business Cards:  It is customary to present and receive business
cards at business meetings.  It is helpful if one side of the
business card is printed in Chinese characters.

Meetings:  Meetings with Chinese government organizations and
most Chinese corporations are held in conference or meeting
rooms, rarely in the official's own office, and tend to be quite
formal.  Seating usually follows protocol.  The senior Chinese
host will usually seat the senior foreign guest to his right,
with members of the foreign party arrayed along one side of the
room, and the Chinese party on the other.  Punctuality is
expected in meetings.  A group will enter the meeting room in
protocol order, led by the senior guest, and will be greeted by
  the senior Chinese host.  Business meetings typically open with a
brief statement of welcome and purpose and introductions, to be
reciprocated by the guests' side.  It is customary, especially in
early meetings, for one side to present each of its key points in
succession, and for the other side to respond only after all the
points have been presented.  Following this, a more unstructured
exchange may take place.

Banquets:  Small dinners and large banquets are all a very common
aspect of doing business in China.  Chinese-hosted dinners
usually start early -- six o'clock is common -- and conclude,
somewhat abruptly, usually before 8:00 p.m., shortly after the
fruit dish.  The senior host is seated (usually at a round table)
facing the entrance to the room, with the senior guest seated to
his right, and the second guest to the host's left.  The co-host
is seated across the table from the host.  At the conclusion, the
guests will all file out.

Appointments:  Business appointments (when made directly, rather
than through a middleman or host organization) are usually made
through the Foreign Affairs Office (or Office of Foreign
Cooperation) that virtually every organization has.

Host Organizations:  It is still very common for business
travelers to have a "host organization" for their visit.  While
it is no longer absolutely necessary, as it once was, to have a
host organization, a host can assist with appointments and
provide letters of invitation to facilitate applications for a
business visa (see "Passport and Visa Requirements", below).  Of
course, the business counterpart -- if one is already identified
-- would commonly be the host organization.  Companies with no
existing business relationships may come to China on their own
and develop contacts in-country.  (No letter of invitation is
required for a tourist visa, which most business people use for
initial visits.)  Companies wishing to find a host organization,
however, contacts can usually be arranged through the commercial
section of the Chinese embassy or consulates in the U. S.

One should be aware that a host organization may have its own
agenda, and may steer visitors toward its own objectives,
frequently claiming the "exclusive" authority to conduct a
particular line of business.  Such claims should be treated with
skepticism.  For senior executive visits, it is possible to
retain the services of an organization set up under the auspices
of the central government, the China People's Association for
Friendship with Foreign Countries (CPAFFC), to arrange high-level
government meetings.  Mr. Yao Mingyu, Division Chief, American
and Oceanian Division of CPAFFC, can be contacted at fax number
(86-10) 512-8354.

B.   Travel Advisory and Visas

Travel to China:  United Airlines, Northwest Airlines, Japan
Airlines, and Air China (CAAC) fly to China from the United
States.  Connecting flights from Hong Kong or through Narita
Airport in Japan are normally necessary when traveling from the
United States.  These flights arrive daily in two major
international airports (Beijing and Shanghai).  From Hong Kong,
there are air, rail, and ferry connections to many Chinese
cities.

International hotels in major cities now accept reservations, but
bookings at Chinese hotels are usually confirmed only a short
time before arrival.

Passport and Visa Requirements:   All American citizens are
  required to have a valid passport and visa for entry into China.
Visas are not available at the airport, but may be obtained from
the Chinese Embassy in Washington or Chinese consulates in New
York, San Francisco, Los Angeles, Chicago, and Houston.  For a
tourist visa, a complete visa application, a current passport
photograph, a valid passport, and a copy of a round-trip air
ticket must be submitted.  Families or groups travelling on one
passport need submit only one application, but a photograph of
all those travelling on the passport must be supplied.  For a
business visa, a letter from a U.S. company stating the purpose
of the visit, or a letter of invitation from a Chinese
organization, and a copy of the round-trip ticket also are
required.

Most business visitors, however, especially for initial visits,
enter on tourist visas, which do not require a letter of
invitation.  Visas on U.S. passports are issued for a fee of
approximately US$30, and applications by mail must also include
the express return mail.  Visas normally take 10 days in the
U.S., but tourist visas can also be obtained, usually within 24
hours, in Hong Kong.  Application can usually be handled by local
travel agents, offices of the China International Travel Service,
or the Chinese visa office located in the China Resources
Building.  Tourist visas, restricted for use in the border areas
of Shenzhen (adjacent to Hong Kong) or Zhuhai (adjacent to
Macao), can be obtained at the border.

C.   Business Hours and Holidays

Business Hours:  The normal commercial week in China is from
Monday through Friday, 8:00 a.m. to noon and 1 (or 2) to 5:00
p.m. (Most government offices close by 4:30 p.m.)

China is normally 13 hours ahead of standard East Coast Time.
When the United States is on daylight savings time, China is 12
hours ahead of East Coast Time.  China is a single time zone.

Holidays:  The following are Chinese and American holidays
observed by the U.S. Embassy and Consulates in China in 1996:

     January 1                          New Year's Day
     January 15                         M. L. King's Birthday
     February 19-21                     Spring Festival
     February 19                        President's Day
     May 1                              International Labor Day
     May 27                             Memorial Day
     July 4                             Independence Day
     September 2                        Labor Day
     October 1 & 2                      Chinese National Day
     October 14                         Columbus Day
     November 11                        Veterans Day
     November 28                        Thanksgiving Day
     December 25                        Christmas

D.   Business Infrastructure

Transportation:  Domestic airline travel is often difficult to
book, and sometimes unreliable.  Travel by rail is reliable but
slow and often crowded and difficult to book.  Secondary or
return reservations cannot be made at the point of departure, and
any reservations made through a travel agent before departure
from the United States or by a Chinese host organization must be
reconfirmed, frequently in person, at the intermediate stop.
Despite these difficulties, travel permits previously issued by
the Public Security Bureau are no longer required for travel to
most destinations of interest to foreign business people.
  
Taxis are easily available at hotels and on the streets in
Beijing, but most drivers do not speak English.  You should have
a Chinese friend or hotel doorman write down the address to which
you are going in Chinese characters.  You should also carry the
address of your hotel written in Chinese characters.  Taxi
companies can be reached by telephone as follows: Beijing Taxi:
831-2288; Capital Taxi: 513-8993; Beijing Tourism Taxi: 436-3452.

Currency Exchange:  On arrival, travelers may convert foreign
currency to the local currency, renminbi (RMB).  Unused RMB may
be converted to foreign currency when departing China.  Most
transactions are in cash, though the major international credit
cards are accepted in a growing number of locations, including
most international class hotels and restaurants.  Traveler's
checks are readily converted at Bank of China or CITIC Industrial
Bank offices, hotels, and large tourist shops.  Personal checks
normally are not accepted, but American Express offers card
members check cashing services, though selected Bank of China and
CITIC Industrial Bank Branches in China.  Travelers may contact
the American Express representative Office in Beijing at World
Trade Tower #2702, Tel: 505-2639/505-4407, for more information.
Western Union has set up a service in China whereby you can wire
US$1,500 per transaction in or out of the country.  (Tel: 303-
2258, ext. 1607/08 for referral to nearest branch office).

Telephones/Fax:  The country's telephone system is undergoing
very rapid development, and service quality spans a wide range,
from state-of-the-art digital exchanges and cellular systems to
the woefully outdated older parts of the system.  Generally, in
major cities, the new digital exchanges provide good local
service as well as high quality international phone and fax
service.  Domestic long distance is available and, again, is of
varying quality; transmission quality is often poor and service
unreliable.  AT&T (dial 10811), Sprint (Dial 10813) and MCI (Dial
10812) offer direct-dialing programs to the U.S.  Given the
shortage of telephone lines, it can take up to one year to obtain
a new telephone connection.  Both paging services and cellular
phones are available.  However, because of inconsistency in the
frequencies used between large cities, roaming service is not
available.

Office Facilities:  As of mid-1995, office space in the major
commercial cities (Beijing, Shanghai, Guangzhou) is very tight,
and rents continue to increase.  In general, office rents in
these major cities is comparable to New York and a bit lower than
Hong Kong.   Hiring a local firm to locate office facilities is a
good option.  Temporary office space and secretarial support is
available in Beijing through such companies as Regus Business
Service Co. Ltd., Tel: (86-10) 465-1239; Fax: (86-10) 465-1240.

Housing:  Most expat managers in the major commercial cities live
in relatively high quality expat housing projects or compounds.
Such expat housing, like office space, is currently (mid-1995) in
short supply.  Monthly rent in the range of US$7,000 to US$14,000
should be expected for executive quarters in Beijing.  There are
also a range of residential hotels available to expats.
Increasingly, some of the newer apartment buildings in "Chinese
neighborhoods" will cater to both foreigners, overseas Chinese
and wealthier local Chinese.  Some apartments in this category,
located outside of foreign "ghettos," are renting for under
$2,000 per month.

Food:  China has a long and legendary culinary tradition.
Restaurants, with a bewildering variety of food are plentiful.
The temptation to sample everything may well be overwhelming.
  Nevertheless, some measure of caution is in order.  Generally,
the large international hotel restaurants are safe and they
provide potable water. In local restaurants, one should eat only
cooked food.  Greater caution should be exercised at street-side
stands and night markets.  The municipal water supply is not
suitable for drinking.  Unless in a major hotel, one should
consume only boiled or distilled water or other substitutes.

Health:  While there are a number of western doctors in Beijing,
often attached to specific embassies, and also works in western
clinics, the city does not have the variety of facilities
available in the west.  Health insurance coverage should include
emergency evacuations.  More serious or complicated medical cases
are often handled in Hong Kong through referrals from western
doctors.

Hospitals and Medical Clinics

International Medical Center
Lufthansa Center, Office Apartment Building, Room 106
50 Liangmaqiao Lu
Tel: 465-1563, 465-1561
Fax: 465-1984
Emergency trauma room, ambulance, outpatient services, western
doctors available. Hours: member 24 hours, non-members 0900 to
1700, Monday through Friday.

Asia Emergency Assistance
24 hour medical service  Tel: 462-9112

Sino-German Policlinic
Landmark Tower, B-1
8 Dongsanhuan Road
Tel: 501-1983, 501-6688 ext. 20903
Outpatient services only, Western doctors available, 24 hours.

Beijing Capital Hospital
53 Dongdanbei Dajie
Dongchen District
Foreign Emergency Clinic, 6th Floor
Tel: 512-7733 ext 556
Hours: Monday-Friday: 0800-1130, 1330-1630
Saturday: 0800-1130, 1300-1500.  Closed Wednesday afternoons and
sundays.  Emergency room entrance: 1 Shuaifuyuan Hutong, behind
the hospital.  Tel: 512-7733 ext. 217.  24 hours.

Sino-Japanese Hospital
(Foreigners Clinic)
Hepingjie Beikou
Tel: 422-2951, 422-1122 ext 3411
Hours Monday-Friday: 0800-1130, 1300-1630
Saturday: 0800-1130, 1300-1600 Closed Wednesday afternoons and
Sundays.

Friendship Hospital
95 Yongan lu, Xuanwu District
Tel: 301-4411 ext. 441, 442
Hours: Monday-Saturday: 0800-1130, Monday, Tuesday, Thursday:
1330-1700

Dental Clinics

Stomatology Hospital of Beijing medical University
Weigongcun Baishiqiaolu, Haidian District
Tel: 832-9977, ask for Dr. Wang

  Sino-German Poly Clinic
Landmark Tower B-1
8 Dongsanhuan Lu
Tel; 501-1983, 501-6688 ext. 20903
By appointment, Singaporean dentist available.

Capital Hospital
53 Dongdanbei Dajie
6th Floor
Tel: 512-7733 ext. 556

Sino-Japanese Hospital
Hepingjie Beikou
Tel: 422-2951, 422-1122 ext. 3411

Jennifer Talford
Dental Therapist and Children's Dentist Australian trained.
Tel: 401-1330, by appointment

Hong Kong International Medical Clinic
3rd Floor Swissotel
Beijing Hong Kong Macao Center
2 Chaoyangmenbei Dajie
Tel: 501-2288 ext. 2346
Fax: 500-4660
Hours: 0900-2100, Monday to Saturday

Optical Services

Vita Optical Company
China World West Wing Office Building
Lower Basement
Hours: Monday-Friday, 0930-2030

Pharmacies Stocking "Western" Medicines

Wangfujing Medicine Shop
267 Wangfujing
Tel: 55-2322

Dongdan Medicine Shop
97 Dongdan Beidajie
Tel: 55-1904

Sino-German Policlinic
Landmark Tower B-1
8 Dongsanhuan Road
Tel: 501-1983, 501-6688 ext. 20903

International Medical Center
Lufthansa Center
Office And Apartment Building Room 106
50 Liangmaqiao Lu
Tel; 465-1563, 465-1561
24 hours emergency service.

Stores Stocking Non-prescription Western Medicines

Watson's and Lido Market
Holiday Inn Lido
Jiangtai Road
Turn to Jichang Road for the commercial entrance to the hotel
Hours: 0830-21-- daily.

Wellcome Supermarket
China World Trade Center
  1 Jianguomenwai Dajie
Basement, Hours 0900-2100 daily.

Schools:  There are growing variety of international schools in
Beijing, ranging from preschool to secondary school.  Some
schools give a priority to children of the founding nationalities
or to diplomats' children.  Applications for enrollment in school
of choice should be filed well in advance.

Nursery and Pre-schools

Lido Kindergarten (starting age 1-1/2)
Jiangtai Road, Beijing
Behind the Holiday Inn Lido,
Tel: 437-6688 ext. 1641
Language: English

The Montessori School of Beijing (ages 2-7)
Lufthansa Center
Ground Floor, Apartment Building
Tel: 465-2021
Language: English

The Children's House (Montessori) (ages 2-5)
China World Trade Center
South Lodge, Ground Floor
Tel: 5052288 ext. 1299
Language: English

East Lake Villas Preschool Apartments
Tel; 4678221 ext. 219
Language: English

Rainbow School (Ages 2-5)
San Li Tun Diplomatic Compound
Tel: 532-5280
Language: English (Very Limited Admissions)

Beijing Number One Kindergarten (ages 3-6)
Wangzhimao Hutong
(Near Hong Kong Macao Center)
Tel: 44-1851
Language: Chinese

Beihai You'er Yuan (ages 3-6)
22 Di'anmen Xi Dajie
(next to Beihai Park)
Tel: 44-2575
Language: Chinese

Elementary and Secondary Schools

Fang Cao Di Primary School
1 Fang Cao Di (north of Ritan Park)
Tel: 509-4328
Language: Chinese (and English as a second language)

Shijia Hutong Elementary School
5 Shijia Hutong, Dongcheng District
Tel: 55-2762
Language: Chinese

International School of Beijing
Jiangtai Road, Lido Hotel Complex
Tel; 437-7119
Language: English
  
Beijing ISS International School
No. 17  Area 4  An Zhen Xi Li
Chaoyang District, Beijing  100029
Tel: 8610/ 428-3151  Fax: 8610/428-3156

New School of Collaborative Learning (K - 8th)
Shangdi West Road, Haidian
Beijing 100085
Tel:  Stephanie Tansey, 532-4296
Language:  English and Chinese

Western Academy of Beijing
North Grounds, Beijing Textile Machinery Plant
(W. of Airport Expressway, N. of 4th Ring Road)
Tel:  Sabrina Brady, O: 512-5627/H: 841-2898;
Michael Crook, 501-1365
Language:  English

French School (Elementary and Secondary)
French Cultural Center
13 Dongsanjie, Sanlitun
Tel: 532-3498
Language: French

Japanese School (Elementary and Secondary)
Jiangtai Road, Behind Holiday Inn Lido Complex
Tel: 437-2571
Language: Japanese

German School (Elementary and Secondary)
Jiangtai Road, Holiday Inn Lido
Tel: 437-2571
Language: German

Number 55 Middle School
(Elementary and Secondary)
12 Xinzhongjie
(North of Workers Stadium)
Tel: 467-1356
Language: Chinese

Pakistan School
Pakistan Embassy Compound
1 Dongzhimenwai Dajie
Tel: 532-1905

None of the schools listed is equipped to handle anything but
extremely mild learning dysfunctions.  Extra services such as
counseling or special needs teachers are sporadically available
and often non-existent.

Tutors for extra-curricular language, music, dance, sports, art,
or other special teachers are best found through word of mouth
referrals from schools, advertising or supermarket bulletin
boards.  There are highly qualified Chinese specialists and
academics, but not all of them speak a second language.


                                APPENDIX A

                                COUNTRY DATA

Population
                            1994       1995      1996
                            ----       ----      ----
  
Population (in millions)   1,199      1,212     1,226
Population Growth Rate      1.12%     1.12%     1.12%

(Note:  Actual growth rate for 1994 is assumed for 1995 and 1996
and is used to produce population estimates for those years.)

Religion:  Officially atheist, but traditionally pragmatic and
eclectic; most important religions are Confucianism, Taoism, and
Buddhism, followed by Muslim and Christian.

Languages:  Standard Chinese; also Cantonese, Shanghaiese,
Minbei, Minnan, Xiang, Gan, and Hakka dialects, and minority
group languages.

Work week:  Official work week is 40 hours per week.


                           APPENDIX B

                        DOMESTIC ECONOMY


                                         1994      1995      1996
                                        -----     -----     -----

GDP (billions of RMB) /1                4,380     5.611     7,091
GDP Growth (Pct)                         11.8       9.5       8.0
GDP Per Capita (US$) /2                   430       555       681
Government Spending as Pct GDP           13.3      12.0      14.0
Retail Price Inflation (Pct)             21.7      16.5      15.0
Unemployment (percent) /3                 2.9       3.2       3.5
Total Foreign Exchange Reserves (US$bn)  51.6      63.0      65.0
Average Exchange Rate (RMB/US$)           8.5      8.35       8.5
Foreign Debt (US$ billions)               100       110       120
Debt Service Ratio /4                    12.6      13.4      12.6


Notes:

1/  At current prices.
2/  Converted at average RMB/US$ exchange rate.
3/  Official Chinese estimate of urban unemployment.  Unofficial
  estimates range from 8-15 percent.
4/  IMF estimates


                                             APPENDIX C

                           TRADE DATA

                      (USD Million unless
                      otherwise specified)


Category                    1994          Proj'd         Proj'd
                          (actual)         1995           1996
---------                  -------        -------        -------

Total PRC exports /1      121,038        148,800         171,100
Total PRC imports /1      115,693        136,500         163,800
U.S. exports to PRC /2      9,287         11,500          14,300
U.S. imports to PRC /2     38,781         47,300          55,800

1/   PRC Customs General Administration for 1994, U.S. Embassy
     estimate for 1995 and 1996
  
2/   U.S. Department of Commerce for 1994, U.S. Embassy estimate
     for 1995 and 1996

                         APPENDIX D
                    INVESTMENT STATISTICS

Table 1    Foreign Direct Investment in China (1979-1994)
           (U.S. Millions)
---------------------------------------------------------
Year           U.S.              All Countries(1)
----           ----             -----------------
1979-1982      N/A               1,166.0
1983           N/A                 636.0
1984           N/A               1,258.0
1985           357.2 (2)         1,661.0
1986           N/A               1,874.0
1987           262.8             2,314.0
1988           236.0             3,194.0
1989           284.3             3,392.0
1990           456.0             3,487.0
1991           323.2             4,366.0
1992           519.4 (2)         11,007.0
1993           2,067.8 (2)       27,515.0
1994           2,490.8           33,787.0

Cumulative
Total:                           7,768.6      95,657.0

(1) Includes Hong Kong and province of Taiwan
(2) Includes "other capital" from U.S., excluding loans.
Sources: China Statistical Yearbooks, 1994, 1992, 1990, 1988,
1986; 1994 figures taken from official press


Table 2        China's Actual Foreign Capital Utilization 1994
               (In U.S. Millions)
---------------------------------------------------------------
                                 Foreign Loans
                                and other
                   FDI amount   Foreign Capital  Total
                   ----------   ---------------  -----
Hong Kong/Macao    20,174          171          20,345
Taiwan              3,391                        3,391
U.S.A.              2,491          576           3,027
Japan               2,075          986           3,061
Singapore           1,180                        1,180
South Korea           723           72             795
U.K.                  689          397           1,086
Germany               259          325             584
Italy                 206          318             524
Canada                216          425             641
------------------------------------------------------
Total from all
countries          33,767        9,446          43,213
source: MOFTEC


Table 3            China's Contracted Foreign Capital
                   Utilization 1994
                   (In U.S. Millions)



                                Foreign Loans
                                and other
                     FDI Amount   Foreign Capital  Total
                   ----------   ---------------  -----
Hong Kong/Macao    48,692          322          49,014
U.S.A.              6,010          527           6,537
Taiwan              5,395            2           5,397
Japan               4,440        1,528           5,968
Singapore           3,778                        3,778
U.K.                2,748          308           3,056
South Korea         1,806           81           1,887
Germany             1,233          798           2,031
Canada                890          137           1,027
Australia             849          139             988
------------------------------------------------------
Total from all
countries          82,680       11,076          93,756
source: MOFTEC


APPENDIX E

                U.S. AND CHINESE CONTACTS

1.  Chinese Government Agencies

STATE ECONOMIC AND TRADE COMMISSION
Wang Zhongyu, Minister
Wang Shanchuan, Director of Foreign Affairs
26 Xuanwumen Xidajie, Beijing 100053
Tel: (86-10) 304-5330
Fax: (86-10) 304-5326

STATE PLANNING COMMISSION
Chen Jinhua, Minister
Yuan Shuxun, Director of Foreign Affairs
38 Yuetan Nanjie, Xicheng District
Beijing 100824
Tel: (86-10) 850-2105
Fax: (86-10) 850-2728

MINISTRY OF AGRICULTURE
Liu Jiang, Minister
Wang Jian, International Cooperation
11 Nongzhanguang Nanlu, Beijing 100026
Tel: (86-10) 500-4363
Fax: (86-10) 500-2448

MINISTRY OF CHEMICAL INDUSTRY
Gu Xiulian, Minister
He Fan, International Cooperation
Building 16, Hepingli Qiqu, Dongcheng District
Beijing 100013
Tel: (86-10) 421-5693
Fax: (86-10) 421-5982

MINISTRY OF COAL INDUSTRY
Wang Senhao, Minister
Bai Ran, Director of Foreign Affairs
211 Hepingli Beijie, Beijing 100713
Tel: (86-10) 421-3949
Fax: (86-10) 601-6077

MINISTRY OF COMMUNICATIONS
Huang Zhendong, Minister
Hujinglu, Foreign Affairs Office
11 Jianguomennei Street, Beijing 100736
Tel: (86-10) (86-10) 529-2204
  Fax: (86-10) (86-10) 529-2345

MINISTRY OF CONSTRUCTION
Hou Jie, Minister
Xie Hongchang, Director of Foreign Affairs
Xijiao Baiwanshuang, Beijing 100835
Tel: (86-10) 832-3296
Fax: (86-10) 839-3333

MINISTRY OF ELECTRIC POWER INDUSTRY
Shi Dazhen, Minister
Tai Aixing, International Cooperation
137 Fuyoujie, Xicheng District
Beijing 100031
Tel: (86-10) 602-3816, 602-3879
Fax: (86-10) 601-6077

MINISTRY OF ELECTRONICS
Hu Qili, Minister
Zhang Xuan, International Cooperation
Wanshou Road, Beijing 100846
Tel: (86-10) 822-1838
Fax: (86-10) 822-1835

MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION
Wu Yi, Minister
Ma Xiaoye, American & Oceanian Affairs
2 Dong Chang'anjie, Dongcheng District
Beijing 100731
Tel: (86-10) 519-8328
Fax: (86-10) 512-9568

MINISTRY OF FORESTRY
Xu Youfang, Minister
Yang Yuchou, Director of Foreign Affairs
18 Hepingli Dongjie, Dongcheng District
Beijing 100714
Tel: (86-10) 421-3278

MINISTRY OF GEOLOGY AND MINERAL RESOURCES
Zhu Xun, Minister
Sun Renyi, International Cooperation
64 Funeidajie, Beijing 100812
Tel: (86-10) 601-8170
Fax: (86-10) 601-7791

MINISTRY OF INTERNAL TRADE
Chen Bangzhu, Minister
Wang Minghong, Director of Foreign Affairs
45 Fuxingmennei Dajie, Xicheng District

Beijing 100801
Tel: (86-10) 839-1216
Fax: (86-10) 601-8207

MINISTRY OF LABOR
Li Boyong, Minister
Zhang Youyuan, Director of Foreign Affairs
12 Hepinglizhongjie, Dongcheng District
Beijing 100716
Tel: (86-10) 421-3431, x703/ 421-1624
Fax: (86-10) 421-1624

MINISTRY OF MACHINE BUILDING INDUSTRY
He Guangyuan, Minister
Zhi Xiaozhou, International Cooperation
  46 Sanlihe, Xicheng District
Beijing 100823
Tel: (86-10) 859-4970, 859-4962
Fax: (86-10) 851-3867

MINISTRY OF METALLURGICAL INDUSTRY
Liu Qi, Minister
Geng Yan, Director of Foreign Affairs
46 Dongsixi Dajie, Beijing 100711
Tel: (86-10) 513-3322, X2107, 4107
Fax: (86-10) 513-0074

MINISTRY OF NATIONAL DEFENSE
Chi Haotian, Minister
Zhang Liantai, Senior Colonel, Foreign Affairs
25 Huangsidajie, Deshengmenwai
Beijing 100011
Tel: (86-10) 201-8305
Fax: (86-10) 201-8356

MINISTRY OF POSTS AND TELECOMMUNICATIONS
Wu Jichuan, Minister
Wang Zhanning, Foreign Affairs Office
13 Xichanganjie, Beijing 100804
Tel: (86-10) 602-0540
Fax: (86-10) 601-1370

MINISTRY OF PUBLIC HEALTH
Chen Minzhang, Minister
Li Shicuo, Director of Foreign Affairs
44 Houhai Beiyan, Xicheng District, Beijing 100725
Tel: (86-10) 403-4433
Fax: (86-10) 401-4331

MINISTRY OF RAILWAYS
Han Zhubin, Minister
Tang Wenshen, Director of Foreign Affairs
10 Fuxingjie, Haidian District, Beijing 100844
Tel: (86-10) 326-0990, 324-1855
Fax: (86-10) 327-1295


MINISTRY OF WATER RESOURCES
Niu Maosheng, Minister
Yang Dingguan, Director of Foreign Affairs
1 Baiguanglu'ertiao, Xuanwu District
Beijing 100761
Tel: (86-10) 326-0192
Fax: (86-10) 326-0365

CIVIL AVIATION ADMINISTRATION OF CHINA
Chen Guangyi, Director
Lu Ruiling, Director of Foreign Affairs
155 Dongsixidajie, Beijing 100710
Tel: (86-10) 401-2233
Fax: (86-10) 401-6918

CHINA NATIONAL AUTOMOTIVE INDUSTRY CORPORATION
Cai Shiqing, President
Li Zichun, Director of Foreign Affairs
27B Liuyin Jie, Xicheng District, Beijing 100009
Tel: (86-10) 601-1319
Fax: (86-10) 601-1393

CHINA NATIONAL OFFSHORE OIL CORPORATION
Wang Yan, President
  Li Rongguo, Manager of Foreign Affairs
Jingwin Building 2A, Donsanhuan Beilu
Beijing 100027
Tel: (86-10) 466-2195
Fax: (86-10) 466-2994

CHINA NATIONAL PETROLEUM CORPORATION
Wang Tao, President
Li Huaiqi, Director of Foreign Affairs
P.O. Box 766, Liupukang, Beijing 100724
Tel: (86-10) 201-6107/209-4798
Fax: (86-10) 209-4806

GENERAL ADMINISTRATION OF CUSTOMS
Qian Guanlin, Director
Liu Yulin, Director of Foreign Affairs
6 Jianguomenwai Dajie, Beijing 100730
Tel: (86-10) 519-5244
Fax: (86-10) 512-6020

NATIONAL ENVIRONMENTAL PROTECTION AGENCY
Qu Geping, Director
Chen Weixue, Foreign Affairs
115 Xizhimennei Nanxiaojie, Xicheng District
Beijing 100035
Tel: (86-10) 601-5642
Fax: (86-10) 601-5641

PEOPLE'S BANK OF CHINA
Dai Xianglong, Governor
Li Aihua, Director of Foreign Affairs
410 Fuchengmen Dajie, Beijing 100034
Tel: (86-10) 601-1829
Fax: (86-10) 601-4096

PEOPLE'S INSURANCE COMPANY OF CHINA
Ma Yongwei, President
Xu Yanqing, Division Chief
410 Fuchengmen Dajie, Beijing 100034
Tel: (86-10) 601-6688
Fax: (86-10) 601-1869

STATE ADMINISTRATION FOR INSPECTION OF IMPORT AND EXPORT
COMMODITIES
Wang Jian, Director
Zhang Xunzhu, Director of Foreign Affairs
12 Building, Jianguomenwai Dajie, Beijing 100022
Tel: (86-10) 500-4042, 500-4625
Fax: (86-10) 506-1315, 500-4625

STATE PHARMACEUTICAL ADMINISTRATION
Qi Moujia, Director
Huang Jiye, Director of Foreign Affairs
38A Beilishilu, Beijing 100810
Tel: (86-10) 831-3344
Fax: (86-10) 831-5648

2.  Chambers of Commerce/Trade Associations

ALL-CHINA FEDERATION OF INDUSTRY AND COMMERCE
Jing Shuping, Chairman
93 Beiheyan Dajie, Dongcheng
Beijing 100006
Tel:  (86-10) 512-7232/513-6677, ext. 2176
Fax:  (86-10) 513-1769

  AMERICAN CHAMBER OF COMMERCE IN BEIJING
William Warwick, Chairman
Jane Drake, Executive Director
Room 301, Great Wall Sheraton Hotel
Beijing 100026
Tel: (86-10) 500-5566, x 2271
Fax: (86-10) 501-8273

AMERICAN SOYBEAN ASSOCIATION
Don Bushman, Representative
China World Tower, Room 1323
Beijing 100004
Tel:  (86-10) 505-1830, 505-1831, 505-3533
Fax:  (86-10) 505-2201

CHINA CHAMBER OF INTERNATIONAL COMMERCE
1 Fuxingmenwai Street
Beijing 100860
Tel:  (86-10) 851-3344
Fax:  (86-10) 851-1370

CHINA COUNCIL FOR THE PROMOTION OF INTERNATIONAL TRADE
Guo Dongpo, Chairman
1 Fuxingmenwai Street
Beijing 100860
Tel:  (86-10) 851-3344
Fax:  (86-10) 851-1370

U.S.-CHINA BUSINESS COUNCIL
Anne Stevenson-Yang, Chief Representative
CITIC Building, Room 22C
Beijing 100004
Tel:  (86-10) 500-2255, x2263 or 2266
Fax:  (86-10) 512-5854

U.S. FEED GRAINS COUNCIL
Jeff Brown, Director
China World Tower, Room 1320
Beijing 100004
Tel:  (86-10) 505-1314, 505-1302
Fax:  (86-10) 505-2201

U.S. WHEAT ASSOCIATES
Matt Weimar, Director
China World Tower, Room 1318
Beijing 100004
Tel:  (86-10) 505-1278, 505-3866
Fax:  (86-10) 505-2201

3.  Market Research Firms

ALL CHINA MARKETING RESEARCH COMPANY
David Liu
No. 3 Yuetan Beijie, Beijing 100037
Tel:  (86-10) 835-4703
Fax:  (86-10) 835-4718

BEIJING EXPLORER DESIGN AND COMMUNICATIONS CORPORATION
Zhao Yi
44 A Baishiqiao Road, Beijing 100081
Tel:  (86-10) 831-4488, x 2004
Fax:  (86-10) 823-3164

CHINA INTERNATIONAL ECONOMIC CONSULTANTS, INC.
Zhang Zai
13/F Capital Mansion
  6 Xin Yuan Nan Road
P.O. Box 9412
Beijing 100004
Tel:  (86-10) 466-0088, x1304, 466-3012
Fax:  (86-10) 466-2468

CONNECTIONS CONSULTING COMPANY OF CHINA
Zhao Qi
61 A Wan Quan He Lu, Haidian District
Beijing 100080
Tel:  (86-10) 401-5321
Fax:  (86-10) 500-3590

CONSULTEC
Hao Mei
B-12 Guanghua Road, Jianguomenwai, Beijing 100020
Tel:  505-1588 or 505-2255, x1201
Fax:  (86-10) 505-1571

THE GALLUP ORGANIZATION
Ren Qimin
G-202 Huiyuan Gongyu International
Asian Games Village, Beijing 100101
Tel:  (86-10) 499-1749
Fax:  (86-10) 499-1749

MESSAGE FACTORS, INC.
Allen Smith
Xin Qiao Hotel, Suite 579
Tel:  (86-10) 513-3366, x 1579
Fax:  (86-10) 513-3516, (901) 368-0499

MTI - MANAGEMENT TECHNOLOGIES INTERNATIONAL, INC.
Joe T. Peebles
23 Youyi Road, Room 231
Tianjin 300201
Tel:  (86-10) 835-9918, x481
Fax:  (86-10) 835-9389

PINNACLE MANAGEMENT
Eric Zhang & Martin C. Liu
Room 359 Shangrila Hotel
Beijing 100081
Tel:  (86-10) 841-2211, x 355, or 842-5669
Fax:  (86-10) 842-8271

WKI - WILLIAM KENT INTERNATIONAL, INC.
Sarah Neroni
Room 552, Tianlun Dynasty Hotel
50 Wangfujing Avenue
Beijing, China 100006
Tel:  (86-10)- 513-3888, x 552,or 8152
Fax:  (86-10) - 513-7866

4.  Banks

Chinese:

AGRICULTURE BANK OF CHINA
Chen Jianjie, Director of Foreign Affairs Office
40 Fucheng Road, Yulong Hotel 3/F #3008
Beijing, China 100046
Tel: (86-10) 841-5588 x23007-23009/2301
Fax: (86-10) 841-3128

BANK OF CHINA (Headquarters)
  Li Aihua, Chief of American & Oceanic Division
410 Fuchengmennei Dajie
Beijing, China 100818
Tel: (86-10) 601-1829; 601-6688 (SB)
Fax: (86-10)

CITIC INDUSTRIAL BANK
Dou Jianzhong, President
Capital Mansion, 6 Xinyuan Nanli
Beijing, China 100027
Tel: (86-10) 466-0344
Fax: (86-10) 466-1059

COMMUNICATIONS BANK OF CHINA (Headquarters)
18 Xianxia Lu, Shanghai 200335
Tel: (86-21) 275-1234 Ext. for Int'l Department
Fax: (86-21) 275-2191

EVERBRIGHT BANK OF CHINA
Tang Gengyao, President
Jiang Bo, General Manager of Int'l Department
Everbright Building
No. 6 Fuxingmenwai Dajie
Beijing 100045
Tel: (86-10) 857-1302; 857-1303; 857-1304; 851-5577(SB)
Fax: (86-10) 857-1301; 857-1260; 857-1290

EXPORT IMPORT BANK OF CHINA
Lei Zuhua, President
Jinlang Hotel, Floors 5-6, 75 Chongnei Street, Beijing
100005
Tel: (86-10) 513-2288 Ext. 531, 533, 535, 537, 541
Fax: (86-10) 513-6809

FUJIAN INDUSTRIAL BANK
1 Hualin Huanbaolu, Fuzhou 350003, Fujian
Tel: (86-591) 784-2470

GUANGDONG DEVELOPMENT BANK
1 Qiyi Road, Guangdong Trade Centre, Guangzhou 510120
Guangdong
Tel: (86-20) 332-1398; 333-8293 Ext. 1872

HUAXIA BANK
6/F., Grand Wangfujing Hotel, Beijing 100006
Li Xikui, President
Ye Huatang, Director of Int'l Business Dept.
Tel: (86-10) 522-4101; 522-1188 (SB)
Fax: (86-10) 522-4105

INDUSTRIAL & COMMERCIAL BANK OF CHINA (Headquarters)
Zhang Xiao, President
Han Ruixiang, Senior Manager
15 Cuiwei Road, Beijing 100036
Tel: (86-10) 821-7273
Fax: (86-10) 821-7920

INVESTMENT BANK OF CHINA
Meng Fanjun, Deputy Director of Foreign Affairs Office
88 Xuanwumenwai Dajie, Beijing 100038
Tel: (86-10) 318-8665

MERCHANTS BANK
4/F., Building AB, No. 3 Huaqiang Beilu, Shenzhen 518031
Guangdong Province
Tel: (86-755) 321-5434
  
MINSHENG BANK OF CHINA
Jing Shuping (Director)
Scite Tower Torch Hall, 22 Janguomenwai Street, Beijing
100004
Tel: (86-10) 512-3388 Ext. 72276; 523-2307
Fax: (86-10) 523-2037

PEOPLE'S CONSTRUCTION BANK OF CHINA (Headquarters)
Tao Li, Director of Foreign Affairs Office
C 12 Fuxing Road
Beijing, China 100810
Tel: (86-10) 851-4488 x 4111/327-2505
Fax: (86-10) 851-5301

SHANGHAI PUDONG DEVELOPMENT BANK
50 Ningbo Road, Shanghai 200002
Tel: (86-21) 329-6188
Fax: (86-10) 323-2036

SHENZHEN DEVELOPMENT BANK
HubeiBaofeng Building, 45 Baoan Nanlu, Shenzhen 518028,
Guangdong
Tel: (86-755) 224-7128; 556-2114

STATE DEVELOPMENT BANK
Yao Zhenyou, President
Yulong Hotel, 40 Fucheng Road, Haidian District
Beijing, China 100046
Tel: (86-10) 843-7253
Fax: (86-10) 843-7254

U.S.:

AMERICAN EXPRESS BANK
Beijing Representative Office
Sandy So, Deputy Representative
Room 2702, China World Trade Centre
Beijing 100004
Tel: (86-10) 505-2838/505-4626
Fax: (86-10) 505-4626

Guangzhou Representative Office
CI, G/F., Central Lobby, Guangdong
International Hotel, 339 Huanshi Dong Lu,
                   Guangzhou 510060
Tel:               (86-20) 331-1771
Fax:               (86-20) 331-3535

Shanghai Representative Office
Lennon Lau,  Deputy Representative
Room 1502, Ruijin Building, 205 Mao Ming Nan Road
Shanghai 200002
Tel: (86-21) 472-9390/472-7589
Fax: (86-21) 472-8400

BANK OF AMERICA
Beijing Representative Office
Tony Cheng, Chief Representative
Room 2722-23, China World Trade Centre
Beijing 100004
Tel: (86-10) 505-3546/505-3508/505-3545
Fax: (86-10) 505-3509

Guangzhou Branch
Li Mingwei (Manager)
  Room 1325, Dong Fang Hotel, 120 Liuhua Lu
Guangzhou 510016
Tel: (86-20) 667-8063/666-9900-1325
Fax: (86-20) 667-8063

Shanghai Branch
James Cheng-Kuang Chiou, Manager
Room 104-107A, Union Building Ground Floor
100 Yanan Dong Lu, Shanghai 200002
Tel: (86-21) 329-2828;             320-2491
Fax:               (86-21) 320-1297

BANK OF THE ORIENT
Xiamen Branch
Ernest Go, Manager
G/F., Overseas Chinese Front Building, Xinhua Road
Xiamen 361006
Tel: (86-592)      203-3828
Fax: (86-592)        202-5614

Zhuhai Representative Office
Wu Zhensheng, Chief Representative
Room 4-401, Nanjun Road, Nanshan District,
Zhuhai 519015
Tel: (86-756) 33-3022

BANKERS TRUST COMPANY
Beijing Representative Office
Vincent J.J. Lien, Chief Representative
Suite 125, Ground Floor, Lufthansa Center
50 Liangmaqiao Road, Chaoyang District, Beijing 100016
Tel:  (86-10) 463-8-38; 463-8039
Fax:  (86-10) 463-8037

CHASE MANHATTAN BANK, N.A.
Beijing Representative Office
Richard William Mounce, Chief Representative
Room 509/512, China Science & Technology Exchange Centre
Beijing 100004
Tel: (86-10) 512-3457
Fax: (86-10) 512-3693

Shanghai Representative Office
David Lee, Chief Representative
Suite 203A, Shanghai Centre, 1376 Nanjing Road (W.),
Shanghai 200040
Tel: (86-21)  279-7022
Fax: (86-21)  279-7023

Tianjin Branch
Douglas Red, General Manager
14/F., Tianjin International Building, 75 Nanjing Road,
Tianjin 300050
Tel: (86-22) 339-5111
Fax: (86-22) 339-8111

CHEMICAL BANK
Beijing Representative Office
Hua Qingcheng, Chief Representative
Room 1205/1812,
China Science & Technology Exchange Centre, Beijing
100004
Tel: (86-10) 512-3700; 512-3722; 512-3701
Fax: (86-10) 512-3771

  Shanghai Representative Office
Room 2606, Union Building, 100 Yanan Dong Lu, Shanghai
200002
Tel: (86-21) 326-1888/326-3888
Fax: (86-21) 320-1524

CITIBANK, N.A.
Beijing Representative Office
Edmond Ho, Chief Representative
Room 1801/1811, Citic Building, Beijing 100004
Tel: (86-10) 500-4425/500-6530/500-6531
Fax: (86-10) 500-4425/512-7930

Guangzhou Representative Office
Dong Shaowen, Manager
Room 1215, Main Building, Guangzhou Int'l Hotel, 339
Huanshi Donglu, Guangzhou 510098
Tel: (86-20) 332-1711/331-1888 Ext. 1215 0r 1711
Fax: (86-20) 331-1323

Shanghai Branch
Bell Chong, Manager
Suite 509, Union Building, 100 Yanan Road (E.)
Shanghai 200002
Tel: (86-21) 328-9661, 328-9662, 320-1988
Fax: (86-21) 273-1317

Shenzhen Branch
Abraham Wong, General Manager
38/F., International Financial Building,
23 Jianshe Road, Shenzhen 528000
Tel: (86-755) 223-1138/223-2338
Fax: (86-755) 223-1238

Xiamen Representative Office
Paul Jie, Customer Relations Manager
8/f., Meilihua Hotel, Xiamen 361006
Tel: (86-592) 601-2666 Ext. 818
Fax: (86-592) 602-1814

FAR EAST NATIONAL BANK
Beijing Representative Office
Fanqi Zhang, Chief Representative
Room 813/814, Acftu Hotel, Beijing 100810, Beijing 100005
Tel: (86-10) 512-6688 Ext. 5005
Fax: (86-10) 512-9972

FIRST NATIONAL BANK OF BOSTON
Shanghai Representative Office
Gu Quanbin, Chief Representative
4/F., Shanghai Union Building, 100 Yan An Road East
Shanghai 200002
Tel: (86-21) 320-0244/329-0808 ext. 55/57
Fax: (86-21) 320-0244

FIRST NATIONAL BANK OF CHICAGO
Beijing Representative Office
Robert W. Poole, Chief Representative
Room 1605, Citic Building,
Beijing 100004
Tel: (86-10) 500-3281/500-3514; 500-2255 x 1640/41/50
Fax: (86-10) 500-3166

REPUBLIC NATIONAL BANK OF NEW YORK
Beijing Representative Office
Li Baoliang, Chief Representative
  Room 2201, Liang Ma Tower, Chao Yang District
Beijing 100004
Tel: (86-10) 506-6548/506-6549
fax: (86-10) 506-6943

SECURITY PACIFIC NATIONAL BANK
Guangzhou Office
Ms. Chen Wen Shan, Secretary
Suite 1350-51, Garden Hotel Office Tower,
368 Huanshi Dong Road, Guangzhou
Tel: (86-20) 333-8999 ext. 1337-38
Fax: (86-20) 335-0706

CHINA INTERNATIONAL FINANCE CO. LTD. (SECURITY PACIFIC
NATIONAL BANK JV)
Shoji Moriguchi  (General Manager)
33/F., International Trade Center
Renmin Nan Road, Shenzhen, Guangdong, PRC
Tel: (86-755) 225-1510/223-7567
Fax: (86-755) 223-7566

5.  U.S. Embassy Contacts

U.S. EMBASSY BEIJING
No. 3 Xiu Shui Beijie
Beijing, China 100600

Mailing Address from U.S.:
U.S. Embassy Beijing
Department of State
Washington, D.C. 20521-7300

AMBASSADOR'S OFFICE
Ambassador                                      86-10
                                                532-3831,
                                                x400532-3178
DCM Scott S. Hallford                           86-10
                                                532-3831,
                                                x401532-3178


DEFENSE ATTACHE OFFICE
Assistant Air Attache,
Captain Mark Stokes
                                                86-10
                                                532-3831,
                                                x601532-2160


ECONOMIC SECTION
Minister-Counselor for Economic
Affairs, Jack Gosnell                           86-10
                                                532-3831
                                                x423
                                                532-3178
Deputy William Monroe                           86-10
                                                532-3831
                                                x432
                                                532-3178


FOREIGN COMMERCIAL SERVICE
Minister-Counselor for Commercial
Affairs Ying Lam                                86-10
                                                532-6924
                                                x332 532-
                                                  3297
Deputy Jamie P. Horsley                         86-10
                                                532-6924
                                                x331 532-
                                                3297

FOREIGN AGRICULTURAL SERVICE
Agricultural Counselor,
William Brant                                   86-10
                                                532-3431
                                                x275
                                                532-2962
Agricultural Trade Officer,
Scott Reynolds                                  86-10
                                                505-4575/6  505-4574

POLITICAL SECTION
Minister-Counselor for Political
Affairs, Neil Silver
                                                86-10
                                                532-3831
                                                x560
                                                532-3178
Deputy Joseph Donovan                           86-10
                                                532-3831
                                                x565
                                                532-3178

VISA SECTION
Minister-Counselor for Consular
Affairs, Arturo Macias                          86-10
                                                532-3431
                                                x253
                                                532-2483
Non-Im Visas, Charles Parish                    86-10
                                                532-3431
                                                x235
                                                532-2483

AMERICAN CITIZEN SERVICES
Consul, Daniel Piccuta                          86-10
                                                532-3431
                                                x252
                                                532-2483


AMERICAN CONSULATE CHENGDU
No. 4 Lingshiguan Road, Section 4
Renmin Nanlu
Chengdu 610041
Consul General, Cornelius Keur     86-28  555-3119;
                                   558-3520
Commercial Rep, Andy Patton        86-28  555-3119;
                                   558-3520


AMERICAN CONSULATE GUANGZHOU
No. 1 South Shamian Street
Guangzhou 510133
Consul General,
Eugene G. Martin                   86-20   666-9900;
                                   886-2341
Principal Commercial Officer,
William Strotman
                                   86-20  667-7842;
                                   666-6409
  

AMERICAN CONSULATE SHANGHAI
1469 Huaihai Zhong Lu
Shanghai 200031
Consul General,
Jospeh Borich                                   86-21
                                   433-6880;    433-4122
Principal Commercial Officer,      86-21 433-2492;433-
1576                Ned Quistorff               X1681

AMERICAN CONSULATE SHENYANG
No. 52, 14th Wei Road
Heping District
Shenyang 110003
Consul General,
Eugene Pascua                                   86-24
                   282-0068         024 282-0074
Commercial Rep,
Jennifer Young                                  86-24
282-0057            024 282-0074

6.  Washington-based USG China Contacts

U.S. DEPARTMENT OF COMMERCE
International Trade Administration
Office of China Economic Area
Room 1229, 14th & Constitution Avenue
Washington, D.C. 20230
Tel:  (202) 482-3583
Fax:  (202) 482-1576

Multilateral Development Bank Office
Brenda Ebeling, Director
Tel:  (202) 482-3399
Fax:  (202) 482-5179

TPCC Trade Information Center
Tel:  800-USA-TRADE

U.S. DEPARTMENT OF STATE
Office of China and Mongolia
Bureau of East Asia & Pacific Affairs
Room 4318, 2201 C Street, N.W.
Washington, D.C. 20520
Tel:  (202) 647-6796
Fax:  (202) 647-6820

U.S. DEPARTMENT OF AGRICULTURE
Foreign Agricultural Service

Foreign Agricultural Affairs: East Asia & Pacific
AG Box 1080
Washington, D.C. 20250-1080
Tel:  (202) 720-2690
Fax:  (202) 720-6063

Trade Assistance & Promotion Office
Tel:  (202)  720-7420

OFFICE OF U.S. TRADE REPRESENTATIVE
China Desk
600 17th Street, NW
Washington, DC 20506
Tel:  (202) 395-5050
Fax:  (202) 395-3911
  
7.  U.S.-Based Multipliers

U.S.-CHINA BUSINESS COUNCIL
Robert Kapp, President
1818 N Street, N.W., Suite 500
Washington, D.C. 20036-5559
Tel:  (202) 429-0340
Fax:  (202) 775-2476


                       APPENDIX F

                     MARKET RESEARCH


Non-Agricultural Research
-------------------------
1995 Industry Subsector Analyses (ISAs)

Airport Related Equipment                       6/95
Auto After Market                               6/95
Automotive Emissions                            9/95
Aviation Services and Equipment                 9/95
Building Materials Guangzhou                    7/95
Clean Coal                                      7/95
Cleaning Supplies                               9/95
Computer Software                               6/95
Cosmetics                                       7/95
Data Communications                             9/95
Diagnostics                                     9/95
Electricity Transmission Systems                9/95
Emergency Medical Care Equipment                6/95
Equipment Leasing                               5/95
Food Processing Industry                        9/95
Hard Currency Financing, Environment            5/95
Highway Construction                            4/95
Hotel and Restaurant Equipment                  7/95
LAN Software                                    9/95
Medical Equipment Guangzhou                     1/95
Medical Equipment Update                        4/95
Mining Industry and Equipment                   7/95
Environmental Monitoring Systems                9/95
Municipal Sewage Treatment Equipment            7/95
Plastics Processing Equipment                   6/95
Power Generation Equipment                      9/95
Semiconductor Industry                          9/95
Steel Manufacturing Equipment, East             9/95
Telecommunications Services                     9/95
Textile Machinery                               4/95
U.S.-China IPR Agreement                        5/95
Power Investment                                9/95


1996               Industry Sector Analyses (ISAs)

Agricultural Chemicals
Aviation, update
Building Products
Cable Television, South China
Environmental Industry, West China
Franchise, update
Pharmaceutical, update
Refining Equipment
Veterinary Equipment and Supplies
Wireless Telecommunications
  Automotive Parts, West China
Books and Periodicals
CAD/CAM/CAE
Electronic Components
Food Processing Equipment, South China
Foundry Equipment, update
Housewares/Imported Consumer Goods
Processed Foods, East China
Agricultural Machinery, update
Education and Training
Laboratory Scientific Instruments
Materials Handling Equipment
Oil and Gas Exploration Equipment, update
Printing and Graphic Arts Equipment
Retail, update
Construction Equipment, update
Insurance, update
Metal Working Machine Tools
Power Generation, South China
Railroad Equipment, update
Telecommunications, update

Agricultural Research
---------------------

Sugar - semi                                    10/95
Citrus (oranges, tangerines)                    11/95
Tobacco (flue cured, burley, dark air &         11/95
(semi-annual) sun, dark air (cigar))
Dairy (milk, nonfat dry milk, whole milk powder)12/95
Livestock (cattle, beef, hides, sheep, mutton, swine,
02/96
pork, tallow) (semi-annual)
Grain & Feed (wheat, corn, barley, oats, rice, beans,
02/96 sorghum)
Oilseeds (seed, oil, & meal for cotton, peanut, 03/96
rape, soy, sunflower)
Sugar (Centrifugal sugar) (annual)              04/96
Tobacco (flue cured, burley, dark air & sun cured, 05/96
dark air (cigar), cigarettes, cigars) (annual)
Cotton (upland, ELS)                            06/96
Poultry (eggs, meat, broiler meat)              06/95
Forest Products (softwood: logs, lumber, plywood; 07/96
tropical: logs, lumber, plywood; temperate: logs, lumber;

wood chips, fiber board)
Market Information                              07/96
Livestock          (same as above) (annual)     08/96
Walnuts                                         08/96
Honey                                           08/96
Tea                                             09/96
Seeds (planting seeds)                          TBD

Note:  A complete list of market research is available on
the National Trade Data Bank.
                       APPENDIX G


              TRADE EVENT SCHEDULE FY 1996

Non-Agricultural
----------------

Event name: Clean Coal Trade Mission
Event ID Number: MTL
Event Location: Beijing and Shanghai
  Dates of Event: October 2 - 6

Event name: Computer Trade Mission
Event ID Number: Iverson
Event Location: Beijing, Shanghai and Guangzhou
Dates of Event: October 95

Event name: Health Economics Seminar
Event ID Number: PHARMA
Event Location: Beijing
Dates of Event: October 95

Event name: Retail Trade Mission
Event ID Number: Burroughs
Event Location: Guangzhou and Beijing
Dates of Event: October 9 - 20

Event name: Information World
Event ID Number: CTF
Event Location: Shanghai
Dates of Event: October 20 - 24

Event name: Auto Emissions Trade Mission
Event ID Number: MTL
Event Location: Beijing and Shanghai
Dates of Event: October 16 - 20

Event name: Automotive Aftermarket Industry Week
Event ID Number: IBP, Guangzhou
Event Location: Las Vegas
Dates of Event: 10/24 - 27

Event name: Power Expo, 3rd International
Event ID Number: Litman, (show and mission)
Event Location: Beijing, CIEC
Dates of Event: 10/31 - 11/4

Event name: Mining 95
Event ID Number: 96000227
Event Location: Beijing
Dates of Event: 11/1/95

Event name: Megashow - Food and Dairy Expo
Event ID Number: IBP, Guangzhou
Event Location: Chicago
Dates of Event: November 4 - 7

Event name: DOE Transmission/Distribution Mission
Event ID Number: DOE
Event Location: Guangzhou, Shanghai, Beijing
Dates of event: November 6 - 12

Event name: China Paper/China Forest 95
Event ID Number:CTF, Krause
Event Location: CIEC Beijing
Dates of Event: 11/7-11, 1995

Event name: Surfactant Trade Mission
Event ID Number: Harrington
Event Location: Beijing and Shanghai
Dates of Event: November 13 - 17

Event name: Textile Trade Mission
Event ID Number: Brill
Event Location: Beijing, Shanghai, Guangzhou
Dates of Event: November 13 - 14
  
Event name: Coal Preparation
Event ID Number:96000623, Litman
Event Location: Guangzhou, Shanghai
Dates of Event:11/14/95

Event name: MEDTRADE/NHHCE
Event ID Number: IBP, Guangzhou
Event Location: Atlanta
Dates of Event: November 15 - 18

Event name: Potable Water Trade Mission
Event ID Number: MTL
Event Location: Shanghai and Beijing
Dates of Event: November 20 - 24

Event name: Aerospace China '95
Event ID Number: CTF
Event Location: Agricultural Exhibition Hall, Beijing
Dates of Event: 11/27 - 12/1, 1995

Event name: Mississippi Trade Mission
Event ID Number:
Event Location: Guangzhou
Dates of Event: November 27 - 30

Event name: PT/Wireless
Event ID Number: Possible CTF

Event Location: Beijing
Dates of Event: November 28 - December 2

Event name: FAA Airport Symposium (Shenzhen)
Event ID Number:
Event Location: Shenzhen
Dates of Event: December 4 - 7

Event name: Expo Comm South 95
Event ID Number: CTF, Krause
Event Location: Guangzhou
Dates of Event: December 5 - 9, 1995

Event name: POWER-GEN
Event ID Number: IBP, Guangzhou
Event Location: Anaheim, Ca.
Dates of Event: December 5 - 7

Event name: Microelectronics Mission to China
Event ID Number:9600504, Roark
Event Location:Shanghai, Beijing
Dates of Event: 2/1/96

Event name: Medical/Dental Devices Trade Mission
Event ID Number: Barry
Event Location: Beijing, Shanghai, Guangzhou
Dates of Event: February, 1996

Event name: Nuclear Safety Waste Management
Event ID Number: 96000623, Litman
Event Location:Beijing, Shanghai, Guangzhou
Dates of Event:2/19/96

Event name: Hotelex/Foodex '96
Event ID Number: CTF
Event Location: INTEX, Shanghai
Dates of Event: April 2-6, 1996
  
Event name: Building South China
Event ID Number: 96000226, BFC
Event Location: Guangzhou
Dates of Event: 3/1/96

Event name: International Franchise Expo
Event ID Number: IBP
Event Location: Winter Park, Fa.
Dates of Event: 3/8-10

Event name: Plastics Trade Mission
Event ID Number: 96000668, Tarter
Event Location: Beijing and Shanghai
Dates of Event: 3/13 - 18

Event name: China Plas 96
Event ID Number: Possible CTF, Adsale
Event Location: Beijing
Dates of Event: 3/19 - 23

Event name: CONEXPO - CON/AGG '96
Event ID Number: IBP, Guangzhou
Event Location: Las Vegas
Dates of Event: March 20 - 24

Event name: Intermedia
Event ID Numbers: IBP, Guangzhou and Beijing
Event Location: San Francisco
Dates of Event: 4/1 - 3

Event name: Housewares Trade Mission
Event ID Numbers: Bratland
Event Location: Shanghai
Dates of Event: April

Event name: Semiconductor China, NEPCON
Event ID Numbers: CTF
Event Location: Shanghai
Dates of Event: April

Event name: Telecom Mission TM
Event ID Number: 96000474, Stechulte
Event Location: Beijing
Dates of Event: 4/1/96

Event name: Networld/Interop '96
Event ID Number: IBP, Guangzhou
Event Location: Las Vegas
Dates of Event: April 1 - 3

Event name: Information Super Highway China '96
Event ID Number: Possible CTF
Event Location: Beijing
Dates of Event: April 23 - 27, 1996

Event name: Advanced International Instrumentation
Event ID Number:9600482
Event Location: Shanghai
Dates of Event: 5/1/96

Event name: Computer Software Mission
Event ID Number:9600530, Hijikata
Event Location:Shanghai, Beijing
Dates of Event:6/1/96

  Event name: SinoMed Exhibition
Event ID Number:
Event Location: Beijing
Dates of Event: June 9 - 13

Event name: Enviro-Pro China '96
Event ID Number: Possible CTF, EJ Krause
Event Location:Beijing
Dates of Event:June 96

Event name: Pharmaceutical Industry Trade Mission
Event ID Number: Barry
Event Location: Beijing
Dates of Event: September '96

Event name: Chemical Week Conference
Event ID Number: Harrington
Event Location: Shanghai
Dates of Event: September '96


Agricultural
------------

Agriculture:  Consumer-Ready Food Products

Event name:        "Hotelex/Foodex '96"
Event Location: INTEX, Shanghai
Dates of Event: April 2-5, 1996
Type of Event:  Food and hotel equipment trade show

Event name:        "Food and Hotel China, '96"
Event Location: Beijing
Dates of Event: September 1996
Type of Event:  Food and hotel equipment trade show

Agriculture: Agricultural Inputs

Event name:        "Agro-Expo China '96"
Event Location: National Agricultural Exhibition Center,
Beijing
Dates of Event: April 16-20, 1996
Type of Event:  Agricultural inputs and equipment show

Note:  Because trade event schedules may change, please
consult the Export Promotion Calendar on the National
Trade Data Base or contact the post for the latest
information.
```

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