Investment Provisions

Decree No. 30, 2005, of the Ministry of Commerce of the People's Republic of China

Supplementary provisions to Measures for the Administration on Foreign Investment in Commercial Fields was passed recently after deliberation at the Ministry of Commerce of the People's Republic of China. It is hereby promulgated and enters into force on the same day.

Minister of Commerce: Bo Xilai
January 9, 2006

The following supplementary provisions, concerning investment by Hong Kong and Macao service providers in commercial fields, are instituted to Measures for the Administration on Foreign Investment in Commercial Fields (Ministry of Commerce Decree No. 8) for the purposes of promoting closer economic and trade relations between Hong Kong, Macao and the Mainland and encouraging Hong Kong and Macao service providers to establish commercial enterprises on the mainland, and in line with the Supplementary Agreement II on Hong Kong/Mainland Closer Economic Partnership Arrangement and Supplementary Agreement II on Macao/Mainland Closer Economic Partnership Arrangement as Approved by the State Council, which have been approved by the State Council:

1. Hong Kong and Macao service providers shall be allowed to establish wholly-owned, joint-equity or cooperative enterprises in the mainland when conducting commissioned business in fertilizers, oil products and crude oil, and in the wholesale and retail of fertilizers.

2. For a single Hong Kong/Macao service provider with the number of its total outlets around the mainland exceeding 30, if their business scope covers books, newspapers, magazines, automobiles (restriction on this category shall be rescinded as of December 11, 2006), medicines, agricultural medicines, agricultural film, fertilizers, grains, vegetable oils, table sugar and cotton, and these products are marketed under different brands and come from different suppliers, the Hong Kong/Macao service provider will be allowed to maintain a controlling stake not exceeding 51%.

3. Hong Kong/Macao service providers as stated in this set of supplementary provisions shall comply with the definition of "service provider" and requirements of relevant provisions of the Hong Kong/Mainland Closer Economic Partnership Arrangement and the Macao/Mainland Closer Economic Partnership Arrangement.

4. The Measures for the Administration on Foreign Investment in Commercial Fields still applies in regard to other matters concerning investment by Hong Kong/Macao service providers in mainland commercial fields.

5. This set of supplementary provisions shall enter into force as of the date of its promulgation.