Shanghai Municipality, Thorough Implementation of the «State Council, Encouraging, Supporting and Guiding the Development of Non-publicly Owned Economic Sectors such as Family Proprietorship and Private Economic Sectors Several Opinions» Opinions

Issued: May 30 2005

Main contents: The Opinions state that fair access to the market shall be implemented and policies should treat enterprises belonging to various forms of ownership equally (Items Three and Four). Non-publicly owned science- and technology-oriented enterprises are to be actively developed (Item Seven). Scientific and technological innovations of non-publicly owned enterprises will be given active support (Item Eight). Investment of non-publicly owned capital in such modern service industries as finance, commerce and trade, logistics, real property, information services, shipping, exhibition and tourism, intermediary service, leasing, culture, education, scientific research, medical service and sports is encouraged. Use of non-publicly owned capital in the development of such intermediary organizations of the certification market as law firms, accounting firms and asset valuation institutions as well as other intermediary institutions in various types of markets that are not prohibited by laws and regulations is supported (Item Nine). Guidance will be given to non-publicly owned capital to invest in running schools (Item 10). Except for certain sectors in culture, press and media where access have not been permitted by laws and regulations, further opening-up to non-publicly owned capital is encouraged for other sectors of these industries. Non-publicly owned capital is to be attracted to invest in cultural and sports affairs. Also, non-publicly capital is permitted to set up such cultural and sports enterprises as film and television production, distribution and projection, performing arts, entertainment, sports business in such forms as holding a controlling interest, equity participation and cooperation. Such enterprises shall enjoy the same treatment as state-owned cultural and sports enterprises, and may even enjoy relevant preferential tax policy if they comply with the conditions provided by the state. Such intangible assets as reputation of individuals, copyright and qualifications of management personnel are permitted to be used as the consideration for taking part in the establishment of cultural enterprises (Item 11). Non-publicly owned capital is permitted to adopt various forms to take part in the restructuring of public medical institutions outside the main framework of basic medical services, set up non-profit and for-profit medical institutions and establish medical investment companies, medical management companies and medical groups. Guidance and encouragement will be given to non-publicly owned capital to invest in the setting up of medical and health institutions for nursery, rehabilitation and psychiatric treatment catered for the elderly, and for-profit medical and health institutions that may provide high-end services (Item 12). Non-publicly owned capital will be continually encouraged to participate in the investment, construction and operation of such infrastructure and urban public utilities as water conservancy, transport, energy, water supply, gas supply, heat supply, roads, refuse disposal, sewage treatment and environmental protection facilities by way of such various forms as wholly-owned enterprises, equity joint ventures, co-operative joint ventures, associated companies and project financing. Such infrastructural networks with natural monopoly characteristics as water supply networks, drainage networks and gas pipeline networks may, on the basis of ensuring absolute controlling interest of state-owned capital, absorb non-publicly owned capital for equity participation. Non-publicly owned capital is encouraged to participate in the investment, construction and operation in the agricultural sector by various forms (Item 13). Qualified completed infrastructure and urban public utility projects may transfer franchises or assets and equity to non-publicly owned capital in accordance with the law (Item 14). Active guidance will be given to non-publicly owned capital to participate in state-owned enterprise reform and vigorously develop a mixed ownership structure (Item 15). The public is also encouraged to start their own business (Item 17).
Related legislation: State Council, Encouraging, Supporting and Guiding the Development of Non-publicly Owned Economic Sectors such as Family Proprietorship and Private Economic Sectors Several Opinions, Feb 24 2005, CLP 2005 No.4 p.9; Administrative Approval Law, Aug 27 2003, CLP 2003 No.7 p.7; Shanghai Municipality, Promoting the Practical Application of High and New Technology Achievements Several Provisions, 2004; State Council, Entry into the Cultural Sector of Non-publicly Owned Capital Several Decisions, Apr 13 2005, CLP 2005 No.5 p.61; Intensifying Asset and Equity Reform for Restructured Science and Technology Institutions of the Municipality Several Opinions, 2005; PRC Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p.21 and PRC Labour Law, July 5 1994, CLP 1994 No.6 p.6