Ministry of Foreign Trade and Economic Cooperation, Ministry of Finance and People's Bank of China, Absorption of Foreign Capital by Financial Asset Management Companies to Participate in Asset Restructuring and Disposal Tentative Provisions

Promulgated: October 26 2001
Effective: as of date of promulgation
Applicability: The Provisions are also applicable where Hong Kong, Macao and Taiwan investors participate in the restructuring and disposal of the assets of asset management companies (Article 10).

Main contents: The Provisions state that asset management companies may restructure and dispose of their assets by absorbing foreign capital (Article 2). These assets include equity interests owned and physical assets controlled by asset management companies as well as their claims against indebted enterprises (Article 5). Asset management companies may sell such assets to foreign investors before or after a restructuring or use such assets to form joint ventures with foreign investors (Article 6). Other investors in the asset management companies shall be consulted and they shall have the right of first refusal on the same terms as the foreign investors (Article 7). Absorption of foreign capital in such restructuring and disposal shall be carried out in a consistent manner with the industrial policy of the State, including the Foreign Investment Industrial Guidance Catalogue (Article 4). Short-term transactions exclusively for speculative purposes shall be prevented (Article 3).
Related legislation: State Council, Financial Asset Management Companies Regulations, Nov 10 2000, CLP 2001 No.1 p9; Ministry of Finance, Administration of the Disposition of Assets by Financial Asset Management Companies Procedures, Nov 8 2000 and Foreign Investment Industrial Guidance Catalogue (Amended in 2007), Oct 31 2007, CLP 2007 No.10 p22