1. In technology trade, we shall abide by international norms and practices and protect intellectual property rights according to law so as to safeguard the legitimate rights and interests of the cooperative parties. We shall introduce and learn the advanced technology and experience of other countries so as to promote domestic economic development. We shall encourage the active exploration of technology export market and extensively participate in international division of labor in an effort to gradually make China's technology-intensive industries one of the important links of the international industrial technology chain.

2. We shall develop foreign technology trade in various flexible manners. In terms of technology introduction, various ways may be adopted such as licensing trade, cooperative production, cooperative design, technological service, consultance and importing key equipments and complete plants, while the specific method of introduction will be adopted according to the specific situation. The key point of importing technologies is to renovate the existing enterprises and we encourage the import of techniques of the products designing, processing, manufacturing and production management. In terms of technology export, we encourage the export of mature industrialized techniques.

3. We shall speed up the work of combining trade with scientific research and industrial production so as to establish a new type of scientific research and development system. We shall greatly accelerate the integration of trade with scientific research and industrial production, increase the capital input and scientific research and development and enhance digesting, absorptive and innovative capabilities of the introduced technologies. In this way, scientific research and development can be gradually transformed from being mainly managed by the state to managed by the enterprises. We shall establish a R&D system which is conducive to the industrialization and commercialization of the introduced technologies so as to give the best play to the introduced technology.

We shall pay attention to the sophistication and the applicability of the imported technologies so as to yield better economic and social returns through digestion and absorption. By sophistication of the technologies, we mean the sustainability of the technologies and the competitiveness of the products, while the applicability means that the level technologies is commensurate with the general technical level in the country, which can be quickly mastered and implemented.

5. We shall raise funds from various channels so as to support the development of technological trade with foreign countries. In the field of technology import, we shall strive to make use of foreign governmental loans, mixed loans , export credit , loans from international financial organizations and commercial loans . The state shall place priority on financial arrangement and offer preferential interest rate so as to safeguard the construction of these key projects in urgent need by the nation's economic development. In the field of technology export, the state applies the internationally prevailing credit policy in supporting technology export by establishing seller's credit and buyer's credit for the export of technologies and complete plants. Banks, based on the principle of granting loans, place priority on the financial arrangement for technology export and offer preferential interest rate.

Preferential taxation policies are granted to the enterprises engaging in technology trade. In technological introduction, the policy of pegging the introduced technology to technological contents is adopted . And the strategy of introducing technologies mainly for leading industries (machine-building, electronics, chemical industries and so on) is practised. We shall reduce and exempt the customs duties on the equipment in the contract in accordance with the technical content in the technology import contract; import with high technical content will enjoy more tariff reduction and exemption and vice versa. With regard to the provision of advanced technologies in some important areas such as industry, agriculture, forestry, fishery and animal husbandry by foreign countries, the reduction or exemption of enterprise income tax will be granted. In the field of technology export, those companies and enterprises which import raw materials, components and spare parts needed for technical upgrade and for the export of complete plants and new and high technologies will enjoy preferential treatment according to the relevant stipulations concerning processing with imported materials.

The state will mainly rely on legal and economic means to exercise macro control over technology trade and classify the technology trade projects as prohibited, restricted, allowed and encouraged. The state will only apply the guidance plans to major technology import projects which have a bearing upon the economic development and technology export projects which involve significant interests of the country.

8.The combination of technology trade and investment shall be encouraged. Technology may be taken as equity investment to establish joint ventures so as to realize technology transfer. Foreign enterprises, when making investment in China and at the same time bringing in sophisticated technologies, may enjoy various preferences in accordance with relevant laws and relations. It is still in the trial stage for China to make overseas investment and provide the recipient countries with advanced technology. However, China enjoys a promising prospect to develop technology trade in the way of making overseas investment.

Policies Concerning Overseas Contracting Projects and Labor Cooperation.

1.China follows the guideline of equality and mutual benefit, pursuing practical results, adopting various ways and seeking common development in developing overseas contracting projects and labor cooperation undertakings.

2.Enterprises which satisfy the following conditions are eligible to apply for the rights in dealing with overseas contracting and labor cooperation:economic entities which exercise independent management, assume independent accounting and be solely responsible for profits and losses;

1.economic entities equipped with relevant personnel, adequate funds and technology in conducting overseas business activities;

2.economic entities blessed with the track record and credibility of conducting cooperation with those enterprises already granted with the said rights to develop business activities abroad.

3.China practises an organized manner in dispatching its personnel to undertake overseas contracting projects and labor cooperation. These people will return to China after the fulfillment of the contracts and therefore will not bring social problems or employment pressure to the host country .The government has established the training and examination system for these people and requests departments and enterprises concerned to examine the ethics , technical level and health condition of these dispatched people so as to raise their quality and the government strictly prohibits illegal emigration and unlawful activities by using the channel of official labor service provision .

4.The government shall constantly improve the coordinated administration mechanism , and shall strengthen the coordinated service for the enterprises engaging in overseas contracting and labor cooperation via intermediate organizations such as chambers of commerce .

5.The Chinese government actively supports and encourages the development of overseas contracting and labor cooperation undertakings and has formulated corresponding preferential policies and measures in providing preferential loans , tax exemption or reduction and guarantee.

6.The Chinese government actively supports and guides the enterprises which undertake overseas contracting and labor cooperation to develop various forms of international economic cooperation , to embark on the road of conducting multiple business while centering on one main business line and to stride toward industrialization , conglomeration and internationalization .

Policies Concerning Overseas Investment .

1.China's principle in making overseas investment and setting up enterprises abroad is equality and mutual benefit , pursuing practical results , conducting various forms and seeking common development .

In establishing overseas enterprises. China sticks to the principle of equality and mutual benefit, respects the sovereignty of the host country, does not interfere with the internal affaires of the country and attaches no political conditions. Overseas Chinese-invested enterprises and staff working abroad shall abide by the local laws, respect local customs and habits. The Chinese side shall take full consideration of the possible conditions and the actual needs of both sides and fully exploit their respective advantages and potentiality. The ratio of investment, the way of investment and the manner of conducting business shall be decided in line with the specific conditions of the host country and the cooperative partners so that not only investment partners are able to gain profits, but also China and the host country may achieve direct or indirect economic and social returns through joint investment and joint management.

Supportive Policies.

Being a developing country, it is impossible for China to develop large size overseas investment. Currently, the major task is to support and encourage those powerful enterprises to make proper overseas investment based on needs and possibilities.

In a bid to promote export enterprises (referring to foreign trade companies, industrial and trading companies, export-oriented production enterprises, enterprise groupings, enterprises of high and new technologies and other qualified economic entities) to actively tap the international market and raise the competitiveness of the Chinese-made machinery and electronic products on international market, these enterprises are encouraged to set up manufacturing enterprises and service network aimed at export expansion through overseas investment.

Manufacturing enterprises and domestic investors which have sponsored comparatively large amount of development projects of overseas resources or make comparatively large investment abroad may apply to the state banks for preferential loans (including foreign exchanges and Chinese RMB yuan) in addition to raising part of the funds themselves.

Domestic investors, when they receive the share of the after-tax profits (no matter whether China has signed the agreement on the avoidance of dual taxation with the host countries of the overseas enterprises), may retain all the money and are exempted from income tax within five years starting from the date of the establishment of the enterprises and thereafter, shall pay income tax according to tax ratio set by the state.

3.Sectoral Guidance Policies

The industrial orientation of the overseas investment enterprises is decided by the requirement of China's economic development and international economic environment. The overseas Chinese-invested enterprises shall generate more foreign exchange earnings for the country, participate in international competition and division of labor and bring benefits to the development of the national economy. Overseas investment in the following sectors is encouraged at present: manufacturing sector of the processing and assembling type, development of natural resources, development of high technologies and sciences, contracting projects and service sector.

XII. Policies concerning Foreign Assistance.

The Eight Principles governing foreign assistance are the fundamental principles in China's foreign assistance. In July of 1979, Comrade Deng Xiaoping pointed out:" We should give positive assessment to the previous assistance offered to the third world. Though China has economic difficulties, we still must earmark certain necessary amount of foreign assistance appropriation and we shall keep this in mind. In providing foreign assistance, we should persist in the eight principles which we have had. Basically, the eight principles remain to be our foreign assistance guidelines, but some modifications must be made on the specific methods so as to truly benefit the recipient countries. ¡°These Remarks have set forth correct guidelines for the development and reforms of the foreign assistance in the new period.

In the new period, the principle of China's foreign assistance is to help recipient countries develop small and medium-sized projects which can meet the local needs and can be supported by local resources and to make a combination of developing bilateral and multilateral economic and trade relations as well as mutually beneficial cooperation. In this way, we can make the foreign assistance appropriations generate greater returns for the recipient countries so as to achieve common development for these countries and China. This can be manifested in the following aspects:

1.Diversification in providing Foreign Assistance. We shall, based on the real situation, different conditions and different needs in different countries, provide foreign assistance funds with different contents in different ways and of different nature to different recipient countries while taking into consideration the capabilities of our country. The governments of the recipient countries are permitted to re-lend the loans granted by the Chinese government to enterprises cosponsored by the two sides or just by one side.

2.In accordance with the requirements of the recipient countries, we shall discuss with them to select those small and medium-sized projects which they can construct and operate and which are commensurate with their economic development, e.g. industrial and agricultural production projects, processing and assembling projects, commodity distribution centers, bonded warehouses and department stores, etc. We encourage enterprises from both sides to establish equity or cooperative joint ventures in production projects, and we should strengthen various forms of technical assistance.

3.The provision of material assistance to foreign countries should serve the development of the foreign trade market apart from serving the purpose of disaster relief. We should ensure the quality of the assistance materials and offer a good service after the provision. We should both meet the needs of the recipient countries and bring benefits to the expansion of bilateral trade.

4.We shall support foreign trade, overseas investment and other forms of mutually-beneficial cooperation. Apart from relending governmental loans to the enterprises, certain amount can also be appropriated from fund for foreign assistance to support, in the form of credit, Chinese enterprises to establish joint ventures and undertake overseas projects in the developing countries. The assistance fund can also be used in the cooperation in resource survey or the prospecting and design of the projects.

5.We shall continue to adopt flexible and timely forms of foreign assistance and provide small volume of grant (material, technical assistance and small projects) to the recipient countries so as to help then surmount certain difficulties.

6.We shall strengthen multilateral cooperation. We can combine some aid fund with the funds from UN and other multilateral development institutions in order to carry out economic and technical cooperation in developing countries.

7.The ways and practices in foreign assistance shall both carry our own characteristics and be consistent with the internationally prevailing practices and rules. The contents of the contracts of assistance in the form of projects and materials shall be in line with the international norms so that different recipient countries will be willing to accept.

8.The recipient countries are allowed to repay our loans in various forms.

Policies on International Trade and Economic Cooperation.

With regard to the relations with international organizations for multilateral economic and trade cooperation, our principle is to strengthen trade and economic contacts with all members of international multilateral organizations on the basis of mutual respect, equality and mutual benefit so as to promote common development. WE are of the view that economic development and common prosperity can not be achieved without constantly strengthened cooperation and coordination as well as exchange of needed goods and complementing each other on the basis of equality and mutual benefit. We shall strictly abide by this principle in the relevant activities in GATT, WTO, UNCTAD and APEC.

With regard to the development of regional blocs in the world economy, it is our view that regional economic blocs should be open rather than exclusive and be conducive to the establishment of a new international economic order. Given the different conditions in the countries and regions, it is impossible to have just one form of cooperation, the countries and regions concerned may choose a suitable mode of cooperation in the light of their actual conditions. We are willing to consult with the countries concerned and carry out various forms of regions economic and trade cooperation according to the needs and possibilities.

3.With respect to the resumption of china's GATT contracting party status, China is willing to enjoy the equal rights that it is entitled to and to perform the obligations commensurate with the level of economic development in China along with other contracting parties on the basis of balance between rights and obligations. Our purpose is to, through the participation in multilateral trade system, introduce proper competition mechanism into our country, deepen the reform of the domestic economic and trade system, promote the development of domestic industries, create a more favorable and stable international trade environment for the development of China's foreign economic relations and trade and the establishment of a new world economic order. In the light of these principles and targets, while bearing the obligation to open more domestic market, we will also demand our trading partners to reduce and eventually eliminate those discriminatory tariff and non-tariff measures against China, reduce trade barriers and improve the environment for China's foreign trade.

4.The Asia-Pacific region is the most dynamic region in the world economy today. As a member in APEC, China attaches great importance to the activities of this Organization. In November 1994 at the informal meeting of APEC leaders held in Bogor, Indonesia, President Jiang Zemin clearly stated that diversity and interdependence were the reality of the Asia-Pacific region. Based on this perception, he put forward five principles for the future development of economic cooperation in the Asia-Pacific region, which are mutual respect, consensus through consultations; progressive and steady development; openess to each other and non-exclusion; extensive cooperation and mutual benefit; narrowing differences and achieving common prosperity. These five principles are also China's principles for dealing with other regional economic organizations. APEC should be an open, flexible and pragmatic forum and a consultative body and not an inward-looking economic and trade bloc. The Asia-Pacific countries and regions should open their markets to each other and to the rest of the world as well.

5.China's principle for bilateral and multilateral assistance is "give and take". In 1982, we began to receive the economic assistance from some developed countries and international organizations. We shall take into consideration the capacity of the donor countries and our priority needs in the economic construction and do our utmost to obtain more grants and advanced technologies so as to promote the economic development in our country. At the same time, we shall provide assistance to other countries within our capacity through international organizations

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