Ministry of Foreign Trade and Economic Cooperation and Ministry of Railways, Examination, Approval and Administration of Foreign Investment in the Railway Freight Transport Industry Tentative Measures

Published: December 16 2000
Effective: as of date of promulgation
Interpreting authority: Ministry of Foreign Trade and Economic Cooperation and Ministry of Railways
Applicability: The Measures apply to foreign investors establishing Sino-foreign railway freight transport joint ventures (including equity and cooperative joint ventures) in the PRC (Article 2). The establishment of railway freight transport joint ventures in other Chinese provinces, autonomous regions or municipalities directly under the central government by investors from the Hong Kong and Macao Special Administrative Regions and from Taiwan shall be dealt with in accordance with the Measures (Article 23). The Measures also apply to the existing railway freight administration system (Article 25).

Main contents: The Measures state the conditions that must be met by the principal foreign investor: it must be a successful freight transport company that has been engaged in freight transport for over ten years and that has strong funding capabilities. The Chinese partner's share shall be not less than 51% during the term stipulated by the government. They state the criteria that a joint venture must fulfil, such as steady sources of freight and registered capital of not less than US$25 million. They list the documents that must be submitted when applying to set up a joint venture and set out the application procedure. In general the term of the joint venture shall not exceed 20 years, but this can be extended for companies funding construction or purchase of lines or station facilities. Joint ventures may engage in freight transport business through use of their own or leased freight cars and other means of transport, and engines, station facilities and use of lines leased from other railway freight transport enterprises; or use their own rolling stock and other means of transport and engage in transport on their own or other enterpriseslines through funding of construction or purchase of branch lines, end-lines and station facilities. The Measures also state regulations governing transport charges, provision of statistics, annual reports, etc.
Related legislation: PRC, Sino-foreign Equity Joint Venture Law (Revised), Apr 4 1990, CLP 1990 No.4 p36 and PRC, Sino-foreign Cooperative Joint Venture Law (Revised), Oct 31 2000, CLP 2000 No.10 p4