Ministry of Communications and Ministry of Foreign Trade and Economic Cooperation, Administration of Foreign Investment in the Road Transportation Sector Provisions

Promulgated: 20 November 2001
Effective: as of date of promulgation
Applicability: These Provisions apply to foreign investment (including investment from Hong Kong, Macao, Taiwan and overseas Chinese investors) in the road transportation sector in China. For the purposes of these Provisions, "road transportation sector" includes road passenger transportation, road cargo transportation, road cargo moving, loading and unloading, road cargo warehousing and other supporting services and vehicle maintenance services relating to road transportation (Articles 2 and 19).

Main contents: Under the Provisions, foreign investment is permitted in (1) road passenger transportation in the form of Sino-foreign equity joint ventures, (2) other road transportation business in the form of Sino-foreign equity joint ventures or Sino-foreign cooperative joint ventures, and (3) other road transportation business in the form of wholly foreign-owned enterprises subject to a sector entry schedule to be announced by the State Council departments in charge of foreign trade and communications (Article 3). Project approval for foreign investment in the road transportation sector shall be obtained from the State Council department in charge of transportation, and contracts and articles of association of the foreign investment enterprises in this sector shall be subject to approval by the State Council department in charge of foreign trade (Article 4). In relation to any foreign investment enterprise engaged in road passenger transportation business, at least one of the main investors must have engaged in the road transportation business in China for five or more years and the foreign equity interest must not exceed 49% (Article 6). A foreign investment enterprise in the road transportation sector shall normally have a term of no more than 12 years, but a 20-year term may be granted if more than 50% of the investment is to be used in construction of transportation terminal infrastructure (Article 16). The Provisions also set out the procedures for applying for approvals required for the establishment of foreign investment enterprises in the road transportation sector.

Related legislation: PRC, Sino-foreign Equity Joint Venture Law (2nd Revision), Mar 15 2001, CLP 2001 No.3 p5; PRC, Sino-foreign Cooperative Joint Venture Law (Revised), Oct 31 2000, CLP 2000 No.10 p4 and PRC, Wholly Foreign-owned Enterprise Law (Revised), Oct 31 2000, CLP 2000 No.10 p4