Circular on Delegating Matters Concerning the Changes to, and Examination and Approval of, Foreign-invested Companies Limited by Shares and Enterprises

(Issued by the Ministry of Commerce on August 5 2008 and effective as of August 11 2008.)

Shang Zi Han [2008] No.50

Departments in charge of commerce of provinces, autonomous regions, municipalities directly under the central government, cities with independent development plans and the Xinjiang Production and Construction Corp, and state level economic and technology development zones:

With a view to thoroughly implementing the spirit of the Second Plenary Session of the 17th Central Committee of the Communist Party of China, further transforming the work functions of government and improving the examination and approval of foreign investment, we hereby notify you concerning relevant matters as follows:

1. If the increased investment and registered capital of a foreign-invested enterprise approved by the Ministry of Commerce (or the former Ministry of Foreign Trade and Economic Cooperation) will fall within the limit (US$100 million for an enterprise in the encouraged category or permitted category, or US$50 million for an enterprise in the restricted category of the Industrial Guidance Catalogue for Foreign Investment; the “Limit”), the provincial-level department in charge of commerce shall be responsible for the examination and approval thereof (except where the matters specified in Article 3 are involved).

2. Except where the matters specified in Article 3 are involved, the provincial-level departments in charge of commerce shall be responsible for the examination and approval of the establishment of, and changes (including other relevant changes to foreign-invested listed companies under the Limit) to, foreign-invested companies limited by shares under the Limit (if an enterprise changes corporate form, the determination as to whether it falls below the Limit shall be calculated based on its net asset value following an appraisal).

3. Foreign investment in industries with special provisions or specific industrial policies or industries that are subject to macroeconomic control shall continue to be handled in accordance with existing provisions. The strategic investment in listed companies by foreign investors shall continue to be subject to the examination of the Ministry of Commerce in accordance with relevant provisions.

4. Departments nationwide responsible for the examination and approval of foreign investment shall carry out examination and approval in strict accordance with relevant state laws and regulations and the requirements of relevant policies, and report the same to the Ministry of Commerce for the record in a timely manner.

5. This Circular shall be effective as of August 11 2008.