Ministry of Foreign Trade and Economic Cooperation, Establishment of Sino-foreign Foreign Trading Joint Ventures Tentative Measures

Promulgated: January 31 2003
Effective: 30 days after the date of promulgation
Interpreting authority: Ministry of Foreign Trade and Economic Cooperation
Applicability: These Measures shall apply to the Sino-foreign foreign trading equity joint ventures established within China by foreign companies and enterprises with Chinese companies and enterprises, and specializing in foreign trading activities (Article 2). Where a company or enterprise from Hong Kong, Macao or Taiwan establishes a foreign trading joint venture with a domestic company or enterprise, such company or enterprise shall refer to these Measures (Article 15).

Main contents: As compared to the Establishment of Pilot Sino-foreign Foreign Trading Joint Ventures Tentative Measures of 1996, the new Measures abolish the requirement for the Chinese party to contribute at least 51% of the registered capital and the legal representative to be appointed by the Chinese party (Article 2). However, applications for foreign trading equity joint ventures with Chinese party's contribution of registered capital lower than 51% will temporarily not be handled before December 11 2003 (Article 16). In addition to that the foreign party is no longer required to have been established in China nor is the Chinese party required to have invested in companies outside China (Article 4). The foreign party is still required to have an average trade volume with China of at least US$30 million over the previous three years but the average annual import and export volume over the previous three years of the Chinese party is now lowered to be at least US$30 million instead of US$200 million with no minimum requirement on the export volume (Article 4). The minimum registered capital of a foreign trading equity joint venture is now lowered from Rmb100 million to Rmb50 million. The requirement is lower if the joint venture is established in the central and western areas (Article 4). The foreign party can now use money capital, material goods and intangible assets as its capital contribution (Article 7).
Related legislation:PRC Foreign Trade Law (Revised), Apr 6 2004, CLP 2004 No.4 p34 and PRC Sino-foreign Equity Joint Venture Law (2nd Revision), Mar 15 2001, CLP 2001 No.3 p5
Repealed legislation: Establishment of Pilot Sino-foreign Foreign Trading Joint Ventures Tentative Measures, Sep 30 1996, CLP 1996 No.8 p11