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Notice for implement and carry out the opinion of state Council for encouraging the enterprises to trade on the foreign aid loan on of favourable and foreign aid joint invest and cooperation fund to open the business of transfrontier making over and

The foreign trading ministry (Department ,Bureau) of different province ,autonomous region, municipality directly under the central and cities with independent planing power, the relevant enterprises

For implement the "Notice of the opinion of encouraging enterprises to do the transfrontier making over and assemble with materials items which stated by foreign trading ministry , state trading and economic Commission , financial Department exchanged by general office of the state Council"(the state council exchanged (1999)No.17, here after in notice), for carry out the requirements in notice for suggesting the transfortier making over and assemble with materials enterprises by the capital which from the foreign aid loan on favourable and foreign aid joint invest and cooperation fund", encouraged prepotent enterprises such as light industry, textile, domestric electric appliance and so on, mechanic and electric and suit working calling to open the business of calling and assemble with materials abroad, for enlarging export and setting forward the incountry industrial restructuring, at present, notice the concrete requirements of enterprises to trade on the foreign aid loan on favourable and foreign aid joint invest and cooperation fund, as follows:

1. Foreign aid loan on favourable

A. Foreign aid loan on favourable ( here after in loan on favourable) is low interest rate loan with long or medium term ,there are favor composition, assuming government aiding property , proffered to foreign country and by financial institution which ordered by china government. Our government will subsidy the interest differential between the favorable interest rate and the basic interest rate-annunciated by bank of people's china to accepted financial institution. "loan on favourable" principle for the productely items which building and dealing in as joint invest and cooperation by china and aided country , or for awarding the setting equipments and mechanic electric produce which made in china and so on.

Foreign trading and economic cooperation department is control by china government, the export and import bank of china is accepted bank for "loan on favourable", whom ordered by china government

B .Main program

According to the aided country's requirement and the possible of our country, our country will signing the frame agreement with brow , main terms of loan ,using extent, accepted loan bank, exchanged loan bank of the loan on favourable, with aided country. Our country's enterprises could antecedence approaching items before sign the frame agreement between our government and aided country's government, for our government reference when it offer the "loan on favourable".The explorative can be done after approved by in charging of foreign trading department or embassy of china abroad then agreed by foreign trading ministry.

After approved by The foreign trading ministry and the aided country's in charging of department, for the items which will using the "loan on favourable", and will recommend to accepted loan bank and exchanged loan bank by each other. The china enterprises whom apply the "loan on favourable" should offer item's explorative report and report of feasibility study, joint invest and cooperation letter of intent signed by both side enterprises, contract and stipulations initial signed by both side enterprises for joint invest and cooperation, the certification for cooperation comate capital and honor issured by other side government's in charging of department or bank, and so on.

The accepted loan bank and exchange loan bank will assessing the recommended items, and finally decided loan or not. The enterprises whom apply the "loan on favourable" should offer the above documents and record to accepted loan bank and exchanged loan bank, the statutable name ,address, stipulations and the documents which government approved establishing, liability report, statement of loss and gain, cash flow report and so on financial report.

Both side bank will signed the loan agreement for the items which assessed and confirmed by them. The terms and using for loan, payment of loan, payment of interest and payment of capital, the capital of item, charging of bank and so on matter will stated on the loan agreement.

After signed the loan agreement between bank, exchange bank will sign the exchange "loan on favourable" agreement with the enterprises whom will using the "loan on favourable", and the enterprises should issued guarantee for return the loan. For joint invest and cooperation item, the both side of joint invest enterprises is accepted "loan on favourable" enterprises; for setting equipment and mechanic-electric items, supplying the enterprises in china can decided by accepted loan bank and exchanged loan abnk by negotiation.

The enterprises whom take on the loan on favourable, should carry out the item within the extent of the agreement between banks and governments, and will inspected and oversaw by both government's relevant department.

The exchanged loan bank will pay the capital , interest and other relevant charge of "loan on favourable" to accepted loan bank according to the loan agreement .

2.Foreign aid joint invest and cooperation fund

A. Foreign aid joint invest and cooperation fund (here after in fund ), is a specially fund, for supporting our country's enterprises using the local resource of aided country and ours' equipments and technology, with aided country's enterprises to deal in the marketable, benefitable, producing , medium undersize joint invest and cooperation items.

B. Main program

The enterprises to aided country for explorative for using the fund , should approved by their in charging of foreign trading department or commercial counsellor of embassy abroad then agreed by foreign trading ministry after report to them.

The debt enterprises whom apply the fund should be the enterprises with corporative certification, state ,country control stock and there are the terms for dealing in foreign trade; the amount of dept generally not over 60% of the amount of china enterprises' invest , the other parts need dept enterprise by themselves, the applying fund enterprises should issued irrevocable return capital guarantee when they applying fund.

The applying dept enterprise should issue the following documents and information: Applying dept report, The opinion of foreign trading departments for setting the item, the agreement signed (or initial) by both investing side, feasibility analysis report of item, the opinion for item from commercial counsellor of embassy abroad . The dept enterprise and guarantee enterprises should have the certifications of incountry registering in industry and commerce and closeness 3 years annual audited fiscal statement
After received the above documents, The foreign trading ministry after agreeding with the relevant department to approve the item, will transmit the task statement and the answer for dept applying and so on, the dept enterprise will do the item oversaw by foreign trading ministry, after finished the formalities of approval establish transfrontier enterprise and transfrontier register.

Please execute according to the above , if any problem or situation there are in executing please contact with foreign trading ministry (planning and accounting office) on time.

Hereby Notice