Doing Business in Shaanxi Province -- china.org.cn

I . Survey

(i) Geographic Location and

Major Cities

Shaanxi Province lies in the middle reaches of Yellow River, east of northwest region of China. It stretches from 105°29′east to 111°15′east of longitude and 31°42′north to 39°35′north of latitude. It is bounded on the east by Shanxi through Yellow river, on the west by Gansu, Ningxia, on the north by Inner Mongolia, on the south by Sichuan, Chongqing and on the southeast by Henan and Hubei. Shaanxi connects east with west and links up south and north.

Shaanxi Province has a land area of 205,800 km2. It stretches 880 km from south to north and 160-490km from east to west. The north and the south was higher than that of the middle area, the west was higher than the east. Shaanxi has an extremely varied topography. The north is Loess Plateau, the middle is Guanzhong Plain, and the south is Qinba mountainous area. It governs 10 provincial cities including Xi’an, Baoji, Xianyang, Tongchuan, Weinan, Yan’an, Yulin, Hanzhong, 3 county-level cities, 80 counties, 23 municipal districts.

Rivers bordered by Qinling Mountain were divided into south and north river systems which belong to Changjiang river system and Yellow river system respectively, including Weihe River, Jinghe River, Luohe River, Wuding River, Hanjiang River, Danjiang River and Jialing River. Shaanxi covers a land area of 205,800 km2, accounting for 2.1% of that of China. Of which, cultivated area is 4.154 million ha., gardern area is 681,000 ha., forestry area is 10.203 million ha., grassland area is 3.134 million ha., agricultural area is 303,000 ha. nd unused area is 1.308 million ha.

Shaanxi has mountainous area of 7.41 million ha., plateau area of 9.26 million ha. and plain area of 3.91 million ha., accounting for 36.0%, 45.0% and 19.0% of total area respectively.

Geodetic origin of the People’s Republic of China is situated in Yongle Town, Jingyang County, Shaanxi Province.

(ii) Climate

Shaanxi expands three climate zones of temperate zone, warm temperate zone and northern subtropical zone and two river systems of Yellow River and Changjiang River. It has continental monsoon climate. The mean annual temperature range from 9oC to 16oC and annual rainfall is from 396 to 802 mm.

(iii) Population and Ethnic

Groups

By the end of 2005, Shaanxi had a permanent population of 37.2 million, of which, urban population is 13.85 million, accounting for 37.23% and rural population is 23.35 million, accounting for 62.77%. Shaanxi has Han, Manchu, Hui, Mongolian, Tibetan and other ethnic groups.

(iv) Infrastructure and Transportation

Transportation

Shaanxi has a convenient and safety integrated transportation system. In 2005, turnover of passenger and freight traffic with varied transportation means is 172.3688billion ton-km. Of which, railway finished 145.983 billion ton-km, highway finished 25.446billion ton-km and civil aviation finished 0.904 billion ton-km.

Railway Construction

In 2005, total mileage of railway in Shaanxi was more than 4,300 km, freight volume was 201 million tons and passenger traffic was 37.3696 million peron-times. Xi’an, the capital of Shaanxi, is one of six largest hinges of railway passenger transport in China. Through developing sea-railway combined transportation with Shanghai, Qingdao, Tianjing and other harbors, outbound goods of Shaanxi could be directly exported after one-off customs clearance and commodities inspection in Xi’an.

Highway

Shaanxi construction Traffic mileage was over 50,000 km and mileage of expressway was 1,300 km in 2005. At present, expressway runs through Shaanxi and expressway Xi’an-Baotou was open to traffic. Centered on Xi’an, expressway network of Shaanxi, taking national main trunk line and great path of west China as framework, connecting with 10 cities in Shaanxi and striking towards outside Shaanxi, has taken shape. In 2005, freight volume was 235 million tons and passenger traffi c was 336 million person-times.

Airport Construction

Xi ’an Xianyang International Airport is the important aviation hinge in the western China. It has more than 120 domestic and international flight lines. It has contacted with near 30 airline companies including New York, London, Paris, Tokyo, Seoul, Frankfurt, Vancouver, Singapore, Malaysia and Thailand. In 2005, freight volume was 39,000 tons and passenger traffic was 3.8953 million person-times.

Telecom

Equipment and technical level of Shaanxi communication network have reached the world level. Centered on optical fiber cable and supported by digital microwave and satellite communication, communication transmission network with large capacity and high speed has been formed. Integrated communication network has been covering the whole province. Relay bandwidth of internet in Shaanxi is 155M and bandwidth outside Shaanxi is 50G. Shaanxi has become the communication center in western China. By the end of 2005, total capacity of public exchange had reached 12.3258 million. Telephone subscriber across the whole Shaanxi reached 17.9742 million, including 8.5932 millions of fixed telephone subscribers and 9.381 millions of mobile telephone subscribers. Fixed and mobile telephone diffusion rate arrived at 23.1 telephones/hundred persons and 25.22 telephones/hundred persons respectively.

Natural Gas

Natural gas transmission pipeline between Xi’an and Weinan, Xianyang and Baoji has been built.

Water Conservancy

10 projects include second-phase engineering of pumping water from Yellow river in Donglei and Erlangba engineering of introducing Jialingjiang into Hanjiang River have been built. The completion of Xi’an Heihe River Jinpen Hydro Project, Addition Project of Dam and Gate in Baojixia Dam and Western Suburb of Sanyuan Hydro Project mitigates the urban water shortage and increases the ability to fight flood. Xi’an Heihe River Project makes Xi’an won’t worry water utilization within 20 years.

Electric Power

330kv electric network system has covered the whole province. Xi’an urban electric power network and rural power network guarantee the plenteous industrial electricity, agricultural electricity and residential electricity. Because of rich energy resources, power supply in Shaanxi could not only meet itself requirements, but also transmit to eastern and middle region.

Finance

Shaanxi has complete finance services institutes which spread all cities and communities. By the end of 2005, all outstanding of deposits in RMB in Shaanxi financial institutes was 644.648 billion Yuan and all balance of loans was 398.319 billion Yuan.

Insurance

In 2005, management body in insurance market arrived at 13, various insurance companies reached 1,492 and the employed was 48,000. The premium income was RMB 9.74 billion Yuan, including RMB 2.39 billion Yuan of property insurance and RMB 7.35 billion Yuan of life insurance.

(v) Ecological Environment

The temperate climate, warm temperate climate and northern subtropical climate and Yellow River and Changjiang River System can be found in Shaanxi Province. Featuring in complicate landform, distinct climate, Shaanxi Province boasts of various biological resources. Especially Qinba Mountainous area in located in the joint belt of south and north climate, therefore, the biodiversity is very distinctive. It was called the natural bank of China Plant resources. It has over 3,700 wild seed plants, 37 rare plants and nearly 800 medical use plants. It also has 80 rare animal such as Giant Panda，golden monkey and Crested ibis. A part from this, Shaanxi is an important ecological barrier of middle and east part of China. The ecological environment protection has important signifi cance for soil erosion of Yellow river, south water diversion and water quality. In 2005, the whole province has 45 natural protection zones with total protection area of 995,000 Ha. Among them, there are 7 national natural protection zones. In order to improve the ecological environment, Shaanxi Province launched a series project such as natural forest protection, returning infield to forest and grass and water conservancy and etc. by the end of 2005, over 30 million mu had realized returning infield to forestry, standing the first in China.

(vi) Foreign Communication

Friendly Provinces and Cities

By 2005, Shaanxi had 44 friendly provinces and cities in total. Through visiting, economic and trade negotiation, talent communication, technical training and other activities, it not only deepens understanding and friendship between Shaanxi and its friendly cities, but promotes their economic cooperation and trade contacts, helping to the culture, education, technology and cooperation.

List of Friendly Provinces and Cities between Shaanxi and Its Friendly Countries

By the end of 2005, Shaanxi had 44 pair of friendly cities in total.

Foreign-related Exhibition

The Investment & Trade Forum for Cooperation between East & West China (the“ Forum” for short) is an international economic and trade forum, aiming to strengthen the cooperation between east, middle and west China and promote harmonious development of regional economy. It has been successfully held for 9 consecutive years. Each year, there are more than 2,000 exhibition booths on average. In addition, delegations from 30 provinces/areas/cities and 100,000

domestic and international traders attend the forum every year. During the exhibition, there are generally over 350,000 audiences. In the principle of handling concrete matters and serving enterprises, the Forum focuses upon field demonstration and negotiation, Taiwan businessmen going-west campaign, briefing of“ Silk Road” international tourism projects, inter-provincial key projects recommendation , as well as special meetings on assets recombination, science and technology, medicine, and culture, etc.

Euro-Asia Economic Forum Euro-Asia Economic Forum is an Important conference , sponsored by Shanghai Cooperation Organization, State Development Bank and United Nations Economic and Social Commission, cosponsored by Boao Forum for Asia, and undertaken by Xi’an Municipal People’s Government and Beijing Contemporary World Development Research Institute. The 1st Euro-Asia Economic Forum was held in Xi’an from November 10 - 11 of 2005. It is a grand meeting for strengthening the friendly visit and exchange between China and Central Asian and European nations, for advancing the economic & trade cooperation and economic development between nations and regions, for re-displaying the “Silk Road” brilliance, and for promoting common prosperity and rejuvenation of Eurasia. In addition, the Forum has not only promoted foreign economic cooperation and exchange, but also accelerated the in-depth implementation of West Development Strategy and internationalized process.

(vii)Higher education and science & technology

Higher education

Shaanxi Province has 72 colleges and universities, such as Xi’an Jiaotong University, Northwestern Polytechnical University, Xidian University, Chang’an University, Northwest University, Northwest University of Politics and Law, etc., inside which there are 95 first-class disciplines for accrediting Ph.D (561 Ph.D workstations), 132 first-class disciplines for accrediting Master’s Degree (1,415 master workstations). Shaanxi Province has already become the important graduates training base in China. In 2005, there were 208,900 enrolled undergraduates and junior undergraduates, 666,900 in-school students; 20,700 enrolled postgraduates, 58,400 in-school postgraduates.

Science and technology

Shaanxi is the important scientific research and production base in China’s aviation, spaceflight, electronics, and agriculture, etc. There are 1.08 million professional technicians, 51 academicians of the Chinese Academy of Sciences and Chinese Academy of Engineering, 1,076 research institutes. In 2005, There were 110 projects altogether, of which there were 10 key projects, and the annual sales income was RMB 3.891 billion Yuan. Among the key research results, there were 16 internationally leading projects, and 93 internationally advanced ones, 141 domestically leading ones, 58 domestically advanced ones. There were 4,166 cases of patent applications, and 1,894 cases were authorized, of which there were 445 patents for invention, 1,131 patents for practical and new techniques, and 318 patents for appearance design. In the whole year, 3,392 technological contracts altogether were signed, including 2,222 contracts for technological development, 183 for technological transfer, 275 for technological consultation, and 712 for technological services. Total turnover of technological contracts was RMB 1.89 billion Yuan.

(viii) Tourism

Shaanxi is the important cradle of Chinese civilization and culture. Xi’an, Athens, Rome and Cairo have been called the four major civilized ancient capitals in the world. Since the 11th century B.C., 13 dynasties had successively established their capitals here, such as Zhou, Qin, Han, and Tang dynasties, lasting 1,180 years. 5,000-year Chinese history left the abundant historic sites here and accumulated profound culture. There are site of Lantian Ape Man dating back to more than 800,000 years, the Terra Cotta Warriors and Horses of Emperor Qin which is known as the 8th major miracle in the world, the History Museum showing China’ s historical epitome, and the ancient city wall which is the largest and best preserved wall in the world so far ……Here, Lao Tzu composed scriptures, Li Bai wrote poems, King Zhouyou doted his concubines, and Tang Minghuang met his wife…… The abundant historic sites and cultural accumulation have made Xi’an become an international famous tourism city. At present, there are 89 national key cultural relics protection units (113 locations) in the whole province, accounting for 1/10 that of China. In addition, Shaanxi is rich in natural landscapes, in which Mt. Huashan is located. There are 44 approved natural reserves (scenic spots) throughout the province, covering an area of 995,000 ha. In 2005, around 59.879 million domestic tourists and 928,400 overseas tourists came here, and domestic tourism income and foreign exchange income were respectively RMB 31.63 billion Yuan and US$ 446 million.

(ix) Local specialty

Shaanxi has abundant products, with local specialty as follows: Lantian Jade, Shanbei Red Date, Shannan Tea, dense wine, walnut in Shangluo, strawberry, prickly ash, Chinese kiwi fruit, xiang jujube, fire persimmon, Lintong pomegranate, apple, peach, grape, Chinese chestnut, Chinese lacquer, Fructus Schisandrae Chinensis and Auricularia auricular, etc.

II . Economy

(i) Overview of economic development in Shaanxi Province

In recent years, the national economy of Shaanxi Province has increased in a sustained and fast way. In 2005, total output value of Shaanxi was RMB 367.475 billion Yuan. Of which, the added value of the primary industry was RMB 41.86 billion Yuan, and its proportion in the total output value was 11.4%; The added value of the secondary industry was RMB 184.897 billion Yuan, and its proportion in the total output value was 50.3%; The added value of the tertiary industry was RMB 140.718 billion Yuan, and its proportion in the total output value was 38.3%. Per capita total output value was RMB 9,844 Yuan.

Total Output Value in Shaanxi Province in 2005

(ii) Overview of industrial development in Shaanxi Province

The industrial production has remained steady growth in Shaanxi Province. In 2005, the State-owned industrial enterprises (SOIEs ) and non-SOIEs with annual sales income above RMB 5 million Yuan (hereinafter referred to as the Scaled Industrial Enterprises) completed the industrial added value of RMB 126.718 billion Yuan.

Output of Major Industrial Products above Scale

(iii) Overview of Agricultural Development in Shaanxi Province

Shaanxi is a large province of agriculture, and its agricultural products such as grain, oil plants, vegetables, cured tobacco, apple and Chinese chestnut are at leading position throughout the country. In 2005, the total output value of farming, forestry, animal husbandry and fishery (including service industry for farming, forestry, animal husbandry and fi shery) was RMB 73.07 billion Yuan.

Output of Major Agricultural Products in 2005

(iv) Overview of Natural Resources in Shaanxi Province

Mineral Resources

Shaanxi Province is rich in coal resources, with the reserves of nonferrous metals, building materials and precious metals ranking the top in China. Petroleum and natural gas have considerable prospects, with many verities of mineral products and large amount of proved reserves. Proved reserves of coal are 165.9 billion tons in Shaanxi, second only to Shanxi and Inner Mongolia, which are mainly scattered in Shanbei and Weibei Area. The petroleum is mainly scattered inside Yan’an, and 12 oildoms have been discovered, the geological reserves are about 700 million tons, proved reserves are more than 400 million tons, ranking the 10th throughout the country; the proved reserves of natural gas are 170 billion m3 in west area of Shanbei and 3.3 billion m3 in Hengshan and Yulin areas. There are 27 mineral products which reserves rank the top 3 and 54 ones which reserves rank the top 10 in the whole country.

Water Resources

Total volume of water resources is 45.5 billion m3 in the whole province, but water resources are not distributed evenly, and rivers contain a large amount of silts. Shannan covers 1/3 land of the whole province, but has more than 70% water resources; Guanzhong and Shanbei cover 2/3 land of the whole province, but only has less than 30% water resources.

Land Resources

Every 10,000 people cover 57.5 km2 land in the whole province, slightly higher than national average level. The cultivatable wasteland is 382,000 ha., and unused land is 1.845 million ha. Every 10,000 people have 107 ha. cultivatable wasteland and 517 ha. unused land. Land resources feature more mountainous region but less plains. Rivers, plains and diluvial-alluvial deposition with elevation less than 800 m cover only 10% land of the whole province. Land types cover mountainous area, hills, plateau, plain, sand area, and marsh. The land is mainly used for agriculture (cultivated land, forest land, field, meadow), covering about 87% land of the whole province.

Biological Resources

Shaanxi has abundant plants and vegetation resources, with complicated and various vegetation types; the growth of various ecological natural vegetation, secondary vegetation and artificial vegetation is relatively typical.

The wild animal resources have more than 700 varieties, such as beasts, birds and amphibians, which are scattered most unevenly in north and south, with big difference between belt and non-belt. Qinling-Bashan Mountainous Area has the most abundant animal resources, which is a natural botanical garden with miscellaneous species and national Class-I, Class-II and Class-III protected animals. Qinling-Bashan Mountainous Area and Shanei Plateau have miscellaneous ecological and biological species, but most of which are not scattered in centralized way.

(v) Overview of Business Development in Shaanxi Province

Foreign Trade

In 2005, total import and export value was US$ 4.577 billion. Export value was US$ 3.076 billion, Import value was US$ 1.501 billion. The favorable balance of trade was US$ 1.575 billion in the whole year. Foreign trade export still focuses upon ordinary trading way, and the ordinary trade export value was US$ 2.52 billion, accounting for 81.9% of total export value.

Utilization of Foreign Funds

In 2005, around 256 FDI (Foreign Direct Investment) projects were approved, and the contractual foreign funds were US$ 1.582 billion; Actual utilization of foreign funds was US$ 628 million. By the end of 2005, 4,367 FDI projects altogether have been approved in the whole province, and actual utilization of foreign funds was US$ 5.408 billion. Accumulatively, there are investors from 69 countries and regions who have invested in Shaanxi.

International Economic and Technological Cooperation

In 2005, the turnover of foreign contracting projects and labor service cooperation was US$ 242 million; At the end of the year, there were 3,850 emigrant labors. By the end of 2005, there were 47 enterprises which have been eligible for foreign economic cooperation and completed turnover of US$ 1.552 billion and export of labor services of 37,400 person-time.

Commerce and Circulation Industry

Consumption scale is expanding continuously and its pulling role has appeared obviously day by day. In 2005, the total retail amount of social consumables was RMB 132.241 billion Yuan. The total retail amount of the wholesale business was RMB 115.562 billion Yuan; the total retail amount of the accommodation and food & beverage industry was RMB 14.009 billion Yuan; the total retail amount of other trades was RMB 2.67 billion Yuan.

III . Investment

(i)Policy and Administrative Rules

Catalogue of Related Laws

Foreign Trade Law of the People’s Republic of China

Customs Law of the People’s Republic of China

Law of the People’s Republic of China on Import and Export Commodity Inspection

Law of the People’s Republic of China on Chinese-Foreign Equity Joint Ventures

Law of the People’s Republic of China on Chinese-Foreign Contractual Joint Ventures

Law of the People’s Republic of China on Foreign-Capital Enterprises

Company Law of the People’s Republic of China　

Law of the People’s Republic of China on the Entry and Exit Animal and Plant Quarantine

Law of the People’s Republic of China on Control of the Entry and Exit of Aliens

Law of the People’s Republic of China on the Control of the Exit and Entry of Citizens

Securities Law of the People’s Republic of China

Income Tax Law of the People’s Republic of China for Enterprises with Foreign Investment and Foreign Enterprises

Individual Income Tax Law of the People’s Republic of China

Law of the People’s Republic of China on the Administration of Tax Collection

Environmental Protection Law of the People’s Republic of China

Law of the People’s Republic of China on Evaluation of Environmental Effects

Law of the People’s Republic of China on Promotion of Cleaner Production

Law of the People’s Republic of China on Prevention and Control of Desertifi cation

Marine Environment Protection Law of the People’s Republic of China

Law of the People’s Republic of China on the Prevention and Control of Atmospheric Pollution

Law of the People’s Republic of China on Prevention and Control of Environmental Pollution by Solid Waste

Law of the People’s Republic of China on Prevention and Control of Water Pollution

Law of the People’s Republic of China on Prevention and Control of Environmental Noise Pollution

Law of the People’s Republic of China on Prevention and Control of Radioactive Pollution

Frontier Health and Quarantine Law of the People’s Republic of China

Labour Law of the People’s Republic of China

Trade Union Law of the People’s Republic of China

Searching Website for the Related Laws

1 . Searching System of Laws and Regulations of China (website of National People’s Congress of China)

http://law.npc.gov.cn:87/home/begin1.cbs

2. China Legislative Information Network System

http://www.chinalaw.gov.cn/jsp/jalor/index.jsp

3. Ministry of Commerce

http://www.mofcom.gov.cn

the above-mentioned websites are for reference only.

(ii) Investment Procedures

Investment Approval Authority

1. Investment competent authorities (Development and Reform Commission at provincial and city level) are responsible for approving the project application report with foreign investment.

2 . Commerce ( foreign trade and economic cooperation) competent authorities (Ministry of Commerce at provincial and city levels) are responsible for examining the approved contracts and articles of association on foreign investment, obtaining the certificate of approval and conducting

the alternation.

3 . The industry and commerce administration departments (provincial and municipal administration for industry and commerce) are responsible for the name checking, registration and business license gaining of foreign-funded enterprises.

Investment Power to Approve and Examine

1. The encouraged and/or permitted projects with total investment over USD 100 million and limited projects with total investment over USD 50 million shall be subject to approval by the department authorized by the State Council.

2. The encouraged and/or permitted foreign-funded projects with total investment from USD 10 million to 100 million and limited projects shall be subject to approval by provincial competent authority.

3. The encouraged and/or permitted foreign-funded projects with total investment less than USD 10 million shall be subject to approval by municipal competent authority.

Procedures for Setting up Foreign-funded Enterprise

Procedure for Foreign (region) Enterprises to Apply for Resident Representative Office in Shaanxi

For any foreign enterprise which apply for establishing representative office, Shaanxi Provincial Administration for Industry and Commerce shall handle registration procedures, meanwhile, it shall be filled in Shaanxi Provincial Department of Commerce.

Documents to be prepared:

1) Application form signed by president or general manager (including corporation profile, purpose to set up resident representative office, personnel, business name, scope, term of residence, offi ce address);

2 ) Fillin Application Form for Establishment of Resident Representative Office of Foreign Enterprises and Application Form for Personnel of Resident Representative Office of Foreign Enterprises;

3 ) Duplicate of lawful business certificate issued by concerned local authority;

4 ) Letter of attorney of chief representative signed by president or general manager, resume and ID card of chief representative;

5) Agreement on leasing or purchasing foreign-related office place.

Registration in other related departments:

If the application from of foreign enterprises was approved and the registration procedures were finished, resident representative office of foreign enterprise shall provide approved certificate, license and representative certificate to such departments as public security , taxation , customs, bank , exchange control and foreign enterprise service for conducting relevant procedures.

Six steps for Enterprise Registering Trade Mark

Trademark registration was divided into 6 steps, with simple documents and fee of about RMB 1,000 Yuan.

Preparation

Registration form selection

One is to apply for registration in local trade mark office of administration for industry and commerce directly; the other is to entrust an experienced trademark agency.

Inquiry

Before registration, you’d better choose an authoritative inquiry company that could reduce risks and increase assurance on trademark registration, due to the possibility of same or alike trademark from other registrants.

Preparing materials

10 pieces of the trademark patterns (10 color trademark patterns with appointed color, and 1 pattern of black and white manuscript), the length and width of which shall be no more than 10cm, and no less than 5cm. If trademark pattern has unclear direction, please mark the upside and downside with arrows. If the applicant is individual, please show ID card and submit duplicate; if the applicant is enterprise, please show duplicate of business license and submit duplicate. Moreover, both shall submit filled application form on trademark registration with enterprise’s official seal or individual’s signature.

Application

Applicant identity

Trademark registration applicant shall be enterprises and institutions, public organization, privately-owned small business, individual partnership, foreigner and foreign companies who signed agreement with China, or participate in international treaty together with China or established with principle of reciprocity.

Application according to commodity and service classification

At present, there are 42 varieties of commodity and service projects, including 34 commodity projects and 8 service projects. When applying for registration, applicant shall confirm the commodity and service category of trademark according to classification table; if the applicant shall use the same trademark for commodity with different categories, he/she should put forward application of registration according to different categories.

Application Date Confirmation

Application date is very important. China’s trademark registration adopts prior application principle. Once you disputed with other enterprises on trademark right, enterprise with prior application shall be protected by law. So, application date confirmation is important, application date shall be subject to the date when trademark bureau received application form.

The following procedures are trademark examination, preliminary examination announcement and registration announcement. It is emphasized that a trademark which has been given preliminary examination and approval and no opposition is filled after three months of public announcement, registration shall be granted, and the trademark shall be protected by law. The period of validity of a registered trademark shall be ten years, counted from the day the registration is approved. When the period of validity of registered trademark expires and needs to continue to use, an application for renewal of registration shall be made.

Obtain Trademark Registration Certificate

After registered , a trademark registration certificate shall be issued to registrant by trademark bureau.

If the application was made by agency, the agency shall send Trademark Registration Certificate to registrant. If the application was made by registrant directly, registrant, within 3 months after receiving the notice on getting trademark registration certificate, shall go to trademark bureau to get trademark registration certificate with letter of introduction, ID Card and duplicate, original of duplicate of business license and copy with official seal of local industrial and commercial department. If registrant changed, alternation evidence issued by local industrial and commercial department is required.

Note: The period of getting a new trademark from application to issuance shall be 1 year to 1 year and a half, of which, application examined and preliminary examination shall be 1 month, substantive examination shall be 4-5 months, objection period shall be 3 months and approval announcement to issuance shall be 3 months.

Investment Forms of Foreign Investor in Shaanxi

If invested into Shaanxi, foreign investors could adopt the following forms:

1. Wholly foreign-owned enterprise;

2. Joint venture established together with domestic enterprises;

3. Contractual cooperative business through signing contract with domestic enterprises;

4. BOT and TOT;

5. Equity participation within the boundaries and purchasing partial stock rights and production and management right;

6. Conducting compensation trade, processing with supplied materials and assembling;

7. Leasing and contracting domestic enterprises;

8. Purchase and merger domestic small and medium-size enterprise;

9. Holding company, investment company, stock company and multinational company conducted by Shaanxi;

10. Loan to domestic projects or enterprises;

11. Other investment forms permitted by Chinese law.

Charge Item and Standard on Handling Registration

(1) Production cost of approval certificate

At examination and approval of contract and constitution stage, examining and approving organization shall charge foreign-funded enterprise RMB 20 Yuan for production cost of approval certificate on each item.

(2) Name registration fee

When foreign-funded enterprise registers company’s name, industrial and commercial organization shall charge RMB 100 Yuan as registration fee.

(3) Registration fee

For the registered capital of under RMB 10 million Yuan, industrial and commercial organization shall charge 1‰ of registered capital. For the registered capital of over RMB 10 million Yuan, the extra portion is charged at 0.5‰. The portion exceeding RMB 100 million Yuan is not charged. The lowest registration fee is RMB 50 Yuan and production cost of each duplicate of business license is RMB 10 Yuan.

Documents Required

1) Project application report;

2) Each investor’s business license, latest audited enterprise financial statement and a bank certificate of its credit worthiness;

3) Investment intention, resolution of board of directors on capital increase, merge and acquisition;

4) Those who will finance with bank loans should issue bank financing intention;

5) Environmental impact assessment proposal issued by environmental protection administrative department;

6) Planned site selection proposal issued by the planning departments;

7) Position paper on prequalification of projected land use issued by the land and resources administrations;

8) Confirmation documents should be provided if the investment is provided in the form of state-owned assets or land use rights.

The Documents Submitted in Applying for Contract and Constitution Examination and Approval

1) Contract documents (imported materials list, contribution list in kind, export agreement of product and other appendix) and constitution signed by authorized representatives of each party;

2) Available business license or other certificate of legal person of each party;

3) Certificate of credit worthiness of foreign investor;

4) Project report (including capital, land, water, electricity and environmental assessment certificate) and documents approved by development and reform department;

5) Proposed name list of members of board of directors assigned by each party, attached: a. letter of attorney of members of the Chinese side (including member resume and examination opinions of competent authority); b. letter of attorney of foreign members.

Documents on Registration to be submitted

1) Approval document and certificate (origin of duplicate) of approving and examining authority;

2) Project application report and authorized document, contract, articles of association and approval documents;

3) Available business license or other certificate of legal person of each party;

4) Certificate of credit worthiness of investor;

5) Name list of members board of directors, appointment documents and ID Card of director, general manager and vice general manager;

6) Certification of corporation legal address;

7) Application form for enterprise registration signed by president and deputy president.

Applying Procedures for lnvestment Enterprise and Project

Documents to Be Submitted for Investment

Sino-foreign joint venture and cooperative business

Application for Approval:

1. Instruction of higher department of Chinese party for applying for approval;

2. Project proposal of investor;

3. Letter of intent signed by each investing party;

4. Opinions from industry competent department on establishing project (partial industries);

5. Qualification of a legal person (duplicate of business license) of each party.

Submitting feasibility study report:

1. Instruction of higher department of Chinese party for approving feasibility study report;

2. Project proposal and replying documents;

3. Feasibility study report signed by each party;

4. Qualification of a legal person and certificate of credit worthiness of each party;

5. State-owned enterprise of China shall provide asset appraisal report issued by state-owned assets management department;

6. Opinions from departments such as environmental protection, fire control, labor security and sanitary facility;

7. Preliminary examination or appraisal reports of project of related competent departments (partial industries).

Contract and articles of association and approved certificate application:

1. The examination and approval of higher authority of Chinese side on contract and Articles of Association of investment enterprise;

2. Project proposal and replying document;

3. Feasibility study report and replying document;

4. Contract, articles of association and related accessories signed by China and foreign party;

5. Certificate of legal person and credit worthiness of each investor;

6. Imported device list;

7. Name List of board of directors and appointment of members and the identity certificate of above said personals

8. Corporation name approval notice issued by department of industry and commerce;

9. State-owned enterprise of China shall provide asset appraisal report issued by state-owned assets management department;

10. Other required documents.

Foreign-funded enterprise (wholly foreign-owned enterprise)

Application for Approval:

1. Feasibility study report;

2. Certificate of legal person of foreign investor (overseas individual investor shall provide ID certification);

3. Certificate of credit worthiness of foreign investor.

Submitting articles of association and applying for approval certificate:

1. Feasibility study report and written opinions of related departments;

2. Application form for setting up foreign-funded enterprise;

3. Articles of Association of foreign-funded enterprises;

4. Certificate of legal person of foreign investor and certificate of credit worthiness;

5. Balance sheet for the past three years;

6. Imported device list;

7. Name List of board of directors and appointment of members, and the identity certification of above said personals;

8. Name approval notice of foreign-funded enterprise issued by department of industry and commerce;

9. Other required documents.

Industry and Commerce Registration of Foreign-funded Enterprise:

1. Application form of foreign-funded enterprise;

2. Application form on registration signed by the president of foreign-funded enterprise;

3. Feasibility study report;

4. Application form on establishing foreign-funded enterprise;

5. Contract, articles of association, approved documents and approval certification of foreign-funded enterprise;

6. Certification of legal person and credit worthiness of each investor;

7. Name List of board of directors and appointment of members, GM and VGM and the identity certification of above said personals;

8. Place leasing document;

9. Other required document.

Form of Contribution:

Establishing foreign-funded enterprise, except for cash investment, investor also could contribute by means of workshop, equipment, other materials, land-use rights, industrial property and proprietary technology. The price shall be negotiated referring to international market price according to fair and reasonable principle, or be evaluated by specialized institution agreed by all cooperative parties.

Ratio between investments:

Amount of investment of foreign investor in Sino-foreign joint venture (cooperative business) shall not be less than 25% of registered capital.

(iii) Reference Prices of Basic Elements

Price of Labor Force

Average Annual Salary Level by Industry

Reference Price Table of Railway Freight

Basic Price List of Xi’ an State-owned Land Unit: Yuan/m2 (10,000 Yuan/Mu)

Wholesale Price List of Electric Power in Shannxi Province

Natural Gas Price List of Shaanxi Province (executed as of March 15,2006) Unit: Yuan/m3

Xi’ an Tap Water Sales Price List Unit: Yuan/m3

Note: Special industry refers to vehicle washing, wedding dress photograph, hairdressing, sauna,

surf, foot-bath, taproom, tea house, coffee house, singing & dancing hall, Kara-Ok, Indoor

Swimming, and water entertainment.

(iv) Key Investments

Economic society of Shaanxi province focuses on four big base constructions, and coordinates regional economic development. According to local conditions and characteristic principals, it builds up the advantage complementary and economic coordinated development regional pattern. It is also form four investment hotspot. The four bases are:

“One Line and Two Belts ” in Guanzhong

Taking Xi’an as center, Longhai Railway and Baotong Expressway as axes, the province develops high-tech industry and manufacturing in national Guanzhong high-tech development belt and national Guanzhong Star Industry belt. It takes line to chain spot and takes spot to promote the side in order to build technical base and industry base( including 5 industrial engineering: electronic information, software and software export, biopharmaceuticals, aircraft manufacturing and high-tech demonstration), and forms an industry economic system charasteristic of high-tech.

“ One Line and Two Belts” includes five cities and one district in Guanzhong（Xi’an , Xianyang , Baoji , Weinan, Tongchuan, Yangling）. It concentrated 80% of scientific force, 75% of GDP in Shaanxi province. It includes 4 national development zones and one national export processing zone.

Shanbei Energy Chemical Industry Base

The construction of Shanbei Energy Chemical Industry Base withholds the “Three Transformation”, and creates “4 industry chain”, and adopts comprehensive water-saving measures. The four industrial chains includes a coal-electricity-energy industry chain, a coal-oil chain, a coal-salt chemical industry chain and an oil-gas chemical chain.

Shannan Modern Traditional Medicine Industry Chain

Giving full play of resources and environment and taking market as orientation , Shannan is speeding up modern traditional medicine industry base construction, hydro-electric development, ecological tourism resources and actively develop the livestock, tea, silkworm and fruit industry.

Weibei Green Fruit Base

It focuses on improving fine-fruit rate, transferring rate and export rate and expanding the market share of Shaanxi apple, and will build the largest fruit base in China.

IV . Development Zones

(i) National Development Zone

Xi’an National High-Tech Industrial Development Zone (hereinafter referred to as XTDZ) is a national high-tech development zone approved in the first batch by the State Council. There 1,883 enterprises were confirmed as high-tech enterprises and it accumulatively has over 6,000 technological achievements, of which 1,009 has been included into national industrial plan. It ranked the first among the whole country. XTDZ has created 2 international standards and 72 national and industrial standards.

At present, XTDZ has become one of the areas featuring better investment environment, high marketilization and the most active economy in west part of China. It has become a window of Xi’an and Shaanxi’s economic growth and opening up, and an important base of developing high technologies.

http://www.xdz.com.cn/

Xi’an Economic Technology Development Zone was approved by the State Council as a national economic technology development zone in February 2000. After 10 years’ development, the development zone gradually formed extroverted modern industry park and city new zone, which has become an investment hotpot at home and aboard. In recent years, the economic indices of the develop zone is increasing at a speed of about 40%. It becomes a model in the functions of collecting industry and attracting foreign capital.

http://www.xetdz.com.cn

Baoji High-tech Zone is a national high-tech industrial development zone approved by the State Council in November 1992. It can be divided into two parts. the Technology Incubation Park and the New District. The development area in the middle and future plan is 40 km2. After 12 years’ effort, Baoji High-tech Development Zone has become an area featuring perfect auxiliary facilities, obvious environmental advantageous scientific enterprise accumulation in Baoji.

http://www.bj-hightech.com

Yangling Agricultural High-Tech Industries Demonstration Zone, founded in July 29, 1997, is the only national agricultural high-tech industry development zone. After 6 years’ efforts, Yangling Demonstration Zone has become the increasing point with most development potentials and the bright spot of West China Development. It has become one of ten largest industry parks approved of opening to The Asia-Pacific Economic Cooperation, one of key –supported high-tech industry zones, and one of six agricultural cooperation test zones of Taiwan and Mainland.

Yangling is the birthplace of the Chinese agricultural civilization and is famous for agricultural-technology. Situated in the hinterland of 800-li Qinchuan plain, Yangling enjoys an advantageous geographic position and convenient traffic condition. It has a total population of 140,000 and total land area of 94 km2. The newly-built district has a planned area of 22.12 km2. Yangling boasts of powerful agriculture, forestry, animal husbandry technology force, with over 70 subjects about over 5,000 talents. Since the establishment of the People’s Republic of China, the scientific research achievements accumulated to over 5,000 items, which created economic benefits of over RMB 250 billion Yuan and made a great contribution to agricultural development of our country. It has reached the advanced level in such fields as wheat breeding, dry farming and water-saving agriculture, plantation protection, soil fertilizer, animal reproductive endocrinology and embryo engineering, water conservancy treatment, desertification treatment, forestry cultivation, gardening, plant resource protection, development and comprehensive use and part of them reached international level.

http://www.ylagri.gov.cn

(ii) Development Zone at Provincial Level