I. Notes for Catalogue of Encouraged Industries:

1. Prospecting and exploitation of oil and natural gas: In cooperation with Chinese partner only.

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2. Exploitation of oil deposits (fields) with low osmosis: In cooperation with

Chinese partner only.

3. Development and application of new technologies that can increase recovery factor of crude oil: In cooperation with Chinese partner only.

4. Development and application of new technologies for prospecting and exploitation of petroleum, such as geophysical prospecting, well-drilling, well-logging and downhole operation, etc.: In cooperation with Chinese partner only.

5. Manufacturing of automobile and motorcycle: The proportion of foreign investments shall not exceed 50%.

6. International liner and tramp maritime transportation business: The proportion of foreign investments shall not exceed 49%.

7. International container multi-modal transportation: The proportion of foreign investments shall not exceed 50%. Foreign majority ownership will be permitted no later than Dee. 11, 2002. Wholly foreign ownership will be permitted no later than Dec. 11, 2005.

8. Road freight transportation companies: Foreign majority ownership will be permitted no later than Dec. 11, 2002. Wholly foreign ownership will be permitted no later than Dec. 11, 2004.

9. Wholesale, retail and logistic distribution of general goods: As described in No. 5 of Notes for Catalogue of Restricted Industries of the Attachment,10 Accounting and auditing: In cooperation with Chinese partner and in the form of partnership only.

II. Notes for Catalogue of Restricted Industries:

1. Cross-border automobile transportation companies: Foreign majority ownership will be permitted no later than Dec. 11. 2002. Wholly foreign owned enterprises will be permitted no later than Dec. 11,2004.

2. Water transportation companies.: The proportion of foreign investment shall not exceed 49%.

3. Rail freight transportation companies: The proportion of foreign investment shall not exceed 49%. Foreign majority ownership will he permitted no later than Dec. 11. 2004. Wholly foreign owned enterprises will be permitted no later than Dec, 11. 2007.

4. Telecommunication Companies

(1) Value-added services and paging services in basic telecommunication services: Foreign investments are permitted no later than Dec. 11, 2001 with the proportion of foreign investment not exceeding 30%. The proportion of foreign investment in joint venture shall not exceed 49% no later than Dec. 11. 2002, and shall be allowed to reach 50% no later than Dec. 11, 2003.

(2) Mobile voice and data services in basic telecommunication services; Foreign investments are permitted no later than Dec. 11, 2001 with the proportion of foreign investment not exceeding 25%. The proportion of foreign investment in joint venture shall not exceed 35% no later than Dec. 11, 2002 and shall be allowed to reach 49% no later than Dec. 11, 2004.

(3) Domestic and international services in basic telecommunication services: Foreign investments will be permitted no later than Dec. 11, 2004 with the proportion of foreign investment not exceeding 25%. The proportion of foreign investment in joint venture shall not exceed 35% no later than Dec. 11, 2006 and shall be allowed to reach 49% no later than Dec. 11, 2007.

5. Commodities trade, direct selling, mail-order selling. Internet selling, sales agent, franchising, commercial management; whole sale, retail and logistic distribution of grain, cotton, vegetable oil, sugar, pharmaceutical products, tobacco, automobile, crude oil, capital goods for agricultural 17/18 production; whole sale and retail of books, ewspapers, periodicals; wholesale of product nil, construction and operation of gasoline station

(1) Commission agents' services and wholesale trade services (excluding salt, tobacco): Foreign invested enterprises are permitted no later than Dec. 11, 2002 with foreign investment not exceeding 50%, but can not engage in the distribution of books, newspapers, magazines, pharmaceutical products, pesticides, mulching films, chemical fertilizers, processed oil and crude oil.Foreign majority ownership will be permitted no later than Dec. 11, 2003. And wholly foreign-owned enterprises will be permitted no later than Dec. 11, 2004, and can engage in the distribution of books, newspapers, magazines, pharmaceutical products, pesticides, mulching films. The distribution of chemical fertilizers, processed oil and crude oil are permitted no later than Dec. 11,2006.

(2) Retailing services (excluding tobacco): Foreign invested enterprises are permitted but can not engage in the distribution of books, newspapers, magazines, pharmaceutical products, pesticides, mulching films, chemical fertilizers, processed oil. The proportion of foreign investment can reach 50% no later than Dec. 11, 2002, and can engage in the distribution of books, newspapers and magazines. Foreign majority ownership will be permitted no later than Dee. 11, 2003. And wholly foreign-owned enterprises will be permitted no later than Dee. 11, 2004, and can engage in the distribution of

pharmaceutical products, pesticides, mulching films, and processed oil. The distribution of chemical fertilizers are permitted no later than Dec. 11, 2006. Foreign investors can not take majority ownership of a Chain-store that has over 30 branch stores and engages in the distribution of automobiles (the limitation will be lift no later than Dec. 11, 2006), books, newspapers, magazines, pharmaceutical products, pesticides, mulching films, processed oil, chemical fertilizers, grain, vegetable oil, sugar, tobacco, cotton.

(3) Franchising and wholesale or retail trade services away from a fixed location: Foreign invested enterprises are permitted no later than Dec. 11, 2004.

6. The distribution of audiovisual products (excluding movies): Foreign investments shall be permitted no later than Dee.11, 2004.

7. Goods leasing companies: Foreign majority ownership shall be permitted no later than Dec.11,2002. Wholly foreign owned enterprises shall be permitted no later than Dec. 11,2004.

8. Agencies

(1) Ship agencies: The proportion of foreign investment shall not exceed 49%.

(2) Freight forwarding agencies (excluding those services specially reserved for Chinese postal authorities): The proportion of foreign investment shall not exceed 50% (not exceed 49% in the case of courier services). Foreign majority ownership shall be permitted no later than Dec. 11, 2002. Wholly foreign owned enterprises shall be permitted no later than Dec. 11, 2005.

(3) Cargo handling for foreign vessels: In forms of equity joint ventures or contractual joint ventures only

(4) Advertising agencies: Tile proportion of foreign investment shall not exceed 49%. Foreign majority ownership shall be permitted no later than Dec. 11, 2003. Wholly foreign owned enterprises shall be permitted no later than Dec. 11, 2005.

9. Insurance

(1) Non-life insurance companies: The proportion of foreign investments shall not exceed 51%. Wholly foreign owned enterprises shall be permitted no later than Dec. 11, 2003.

(2) Life insurance companies: The proportion of foreign investments shall not exceed 50%.

10. Securities company, securities investment fund management companies

(1) Securities companies: Foreign investments shall be permitted no later than Dec. 11, 2004 with the proportion of foreign investment not exceeding 1/3. Securities investment fund management companies: The proportion of foreign investment shall not exceed 33%. The proportion of foreign investment shall be allowed to reach 49% no later than Dec. 11, 2004.

11. Insurance brokage companies: The proportion of foreign investment shall not exceed 50%. The proportion shall be allowed to reach 51% no later than Dec. 11, 2004. Wholly foreign owned enterprises shall be permitted no later than Dec. 11,2006.

12. Companies of inspection, verification, attestation for imported and exported goods: Foreign majority ownership shall be permitted no later than Dee. 11, 2003. Wholly foreign owned enterprises shall be permitted no later than Dee. 11, 2005.

Promulgated by the State Development and Reform Commission, the Ministry of Commerce on 2004-11-30
 

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