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Several Proposals of the State Administration for Industry and Commerce on Bringing the Functions of Administration for Industry and Commerce into Full Play to Further Providing Service for the Development of Foreign-Invested Enterprises Administrations for industry and commerce and market supervision administrations of all provinces, autonomous regions, municipalities directly under the Central Government, municipalities separately listed on the state plan and sub-provincial cities: For the purpose of conscientiously implementing the Some Comments on Further Doing a Good Job in the Utilization of Foreign Capital promulgated by the State Council, bringing the function of administration for industry and commerce into full play, providing better service for the development of foreign-invested enterprises, giving better play to the positive roles of the foreign capital in promoting technological innovation, industry upgrading, regional coordinated development and other aspects, accelerating and improving the quality and level of foreign capital utilization and giving impetus to the transfer of economic development modes actively, the following comments are hereby proposed: I. Further Encourage Foreign Investors to Increase Investment (I) Fully support group operation of foreign-invested enterprises. Investment companies established by foreign investors are encouraged to apply for establishing enterprise groups. The names of enterprise groups are allowed to have abbreviations; the parent companies can use such mark as “group” or “(group)” in their company names; the names of subsidiary companies can be preceded by the names of enterprises groups or the abbreviations; joint-stock companies names can also be preceded by the names of enterprise groups or the abbreviations with the approval from the enterprise groups. (II) Fully support capital increase of foreign-invested enterprises with creditors rights. Actively research administrative measures for capital contribution with credit, and standardize the procedures of capital contribution. Conscientiously do a good job in the modification registration of ways of capital contributions of foreign-invested enterprises. Upon the registration of foreign exchange and approval from the approval authorities, great efforts should be made to support investors of foreign-invested enterprises to increase the registered capital with the creditors rights of the enterprises. (III) Actively encourage foreign investors to establish partnership enterprises. Encourage foreign enterprises or individuals with advanced technologies and management experience to establish partnership enterprises in China through enhancing guidance, practicing more coordination and improving efficiency, and diversify types of foreign-invested enterprises and broaden channels of foreign-related economic cooperation and technological exchanges. (IV) Positively render help to alleviate investment difficult of foreign-invested enterprises. For those foreign-invested enterprises which default on further capital contributions due to temporary capital shortage after the initial capital contribution and without a record of law-breaking, - 2 - a prolonged time limit to the capital contribution shall be granted by the registration authorities upon the approval of application. II. Promote the structure optimization of foreign capital utilization vigorously (V) Vigorously support accelerated development of foreign-invested service enterprises. Wholly foreign-invested enterprises or foreign-invested enterprises controlled by foreign investors using the titles of enterprises in foreign countries (regions) can apply to use such mark as “(China)” in their names, if they invest in modern service industry and high and new technology industry with registered capital of RMB 30,000,000. Upon otherwise specified, foreign-invested service enterprises and their authorized branches can apply for registration of other business branches at the registration authorities where they are located. (VI) Substantially support establishment of functional organizations by multinational corporations and investment in service outsourcing industry by foreign investors. For multinational corporations which establish the regional headquarters, R for the industries which foreign investors are restricted to invest in, registration authorities should examine related certificates strictly before issuing licenses; no project prohibited to foreign investment by the state shall be registered. Take measures to rectify the activities of foreign-invested enterprises engaging in the restricted industries without approval, and resolutely measures should be given to those engaging in the prohibited industries. And the quality of foreign capital utilization should be improved in a pragmatic way. (XV) Substantially improve the investment contribution rate of foreign-invested enterprises. Strengthen administration for capital contribution of shareholders of foreign-invested enterprises, focus on initial capital contribution, standardize capital contribution activities, establish a system of capital contribution reminding, dunning and publication, and urge contributors to implement their responsibilities and obligations of capital contribution, and improve their credit of capital contribution. (XVI) Further improve efficiency of annual inspection of foreign-invested enterprises. Popularize classified annual inspection of foreign-invested enterprises; strengthen examination on foreign-invested enterprises in key and hot industries and those with lower credit grades. For those foreign-invested enterprises which operate strictly according to law and without a record of law- breaking, efforts should be made to simplify the procedures of annual inspections; mechanisms to encourage legal operation and punish illegal operation should be established. The system of summarizing and reporting the annual inspections of foreign-invested enterprises should be further improved to strengthen sorting out and analyzing annual inspection information, and make the dynamic information of foreign-invested enterprises more precisely. IV. Make great efforts to create a favorable market environment. (XVII) Earnestly maintain a market order of fair competition. Efforts should be made to further strengthen law enforcement of competition, continue the special competition law enforcement of cracking down “imitating famous brands”, severely deal with the cases of unfair - 4 - competition that infringe the rights and interests of foreign-invested enterprises. Strengthen the protection of famous names of foreign-invested enterprises, restrain the utilization of famous names for unfair competition. Severely deal with cases of monopoly and unfair competition to create a market environment of fair competition. (XVIII) Make efforts to create a harmonious consumption environment. Further strengthen protection of consumers rights and interests, carry out special law-enforcement to against counterfeit goods; severely investigate and punish irregularities such as counterfeiting, faking and inferior quality, and pragmatically protect the legal rights and interests of consumers and foreign-invested enterprises. Positively guide foreign-invested enterprises to establish and improve a self-discipline system of maintaining consumption rights such as consumption dispute reconciliation mechanism to solve disputes related to consumption in time, consciously implement the social responsibility of maintaining consumers legal rights and interests, and increase the enterprise reputation and establish sound enterprise images. (XIX) Actively guide foreign-invested enterprises to improve their abilities in trademark registration, utilization, protection and management. Effectively protect the trademark rights of foreign-invested enterprises, continue to accelerate the examination process of trademark registration, and enhance the protection of trademark rights. Establish and improve the communication channels with foreign-invested enterprises, guide and help the enterprises to protect their trademarks; justly hear foreign-related cases of trademark assessment and examination according to law and pragmatically maintain the legal trademark rights and interests of the foreign party involved. For the trademark assessment and examination cases that can help utilize foreign capital to promote Chinas scientific and technological innovation, industrial upgrading and regional coordinative development, efforts should be made to hear these cases in advance according to circumstances. (XX) Further improve the administrative permission efficiency. Mechanisms and measures should be innovated to improve the working efficiency and standardize the food circulation licenses. Administrations for industry and commerce of the provincial levels should be authorized to examine and approve the projects of foreign-invested advertisement enterprises. Improve regulations on examination and approval, establish recording system, promote formatted examination and approval, and strengthen guidance, supervision and inspection of examination and approval for the projects of foreign-invested advertisement enterprises. Actively coordinate with related authorities to do a good job in examining and approving foreign-invested auto sales enterprises, and support the development of foreign-invested auto sales enterprises. (XXI) Actively promote the healthy development of advertisement industry. Support foreign-invested advertisement enterprises to take advantages in management, technologies and human resources so as to promote the development of advertisement industry. Guide foreign- invested advertisement enterprises to shoulder social responsibilities, participate in activities of public advertisements, and make contribution to improve the level of public advertisements in China. Continue to deepen the work of rectifying advertisement market, and further strengthen the efforts to punish the fraudulent advertising that harm the legal rights and interests of consumers and foreign-invested enterprises, pragmatically maintain the civilized and honest order of advertisement market. (XXII) Bring the function of administrative instruction into full play. The role of administrative instruction should be brought into active play on the basis of strict law-based governance; improve the effects of administrative instruction by suggestion, guidance, reminding, persuading, setting examples and demonstration. With more attention on unification of - 5 - administrative punishment and administrative guidance, efforts should be made to guide foreign- invested enterprises to do business honestly and standardize their operation so as to create a harmonious supervision and law-enforcement environment for foreign-invested enterprises. V. Expedite and perfect the service system mechanism for development of foreign-invested enterprises (XXIII) Further enlarge authorized scope of registration administration of foreign- invested enterprises. According to the actual needs, actively support the administrations for industry and commerce which are located in central and western China or in national-level economic and technological development zones and hi-tech development zones where foreign- invested enterprises are relatively concentrated, to be authorized the rights of approving and registering foreign-invested enterprises. Facilitate foreign-invested enterprises to apply for registration in the neighborhood, actively serve for foreign investment transferring to central and western China and increasing investment, and promote coordinated development of regional economies. (XXIV) Further perfect the long-term mechanism of supervision of foreign-invested enterprises. Make full use of the double advantages of the authorized registration and territorial supervision of foreign-invested enterprises, conscientiously implement the supervision responsibility of the administrations for industry and comm

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