Others

1.Arbitration Law of the People's Republic of China

2.Law on Lawyers and Legal Representation 

3.Accounting Regulations of the People's Republic of China for Joint Ventures Using Chinese and Foreign Investment

4.Interim Regulations of the People's Republic of China on Lawyers 

5.Notice Regarding the Printing and Distribution of Regulations on the Interconnection for Operation Between the Grid And Power Plant and Between Grids (Draft)

Arbitration Law of the People's Republic of China
(Adopted at the Ninth Standing Committee Session of the Eighth National People's Congress on August 31, 1994)

Table of Contents
Chapter I. General Principles 

Chapter II. The Arbitration Commission and Arbitration Association 

Chapter III. Arbitration Agreement 

Chapter IV. Arbitration Procedure 

Section 1. Application and Acceptance 

Section 2. The Formation of an Arbitration Tribunal 

Section 3. Hearing and Ruling 

Chapter V. Request to Repeal a Ruling 

Chapter VI. Execution 

Chapter VII. Special Provisions for Arbitrations Involving Foreign Concerns 

Chapter VIII. Supplementary Articles 



Chapter I. General Principles 

Article 1. This law is formulated with a view to ensuring fair and timely arbitration of disputes over economic matters, safeguarding the legitimate rights and interests of the litigants and guaranteeing the sound development of the socialist market economy. 

Article 2. Disputes over contracts or other disputes involving property between civil subjects with equal status, that is, between citizens, legal persons, and other organizations, are subject to arbitration. 

Article 3. Disputes over the following matters are not subject to arbitration: 

(1) disputes over marriage, adoption, custody, support and inheritance; 
(2) administrative disputes that by law should be handled by administrative organs. 

Article 4. Where the litigants choose to settle their dispute through arbitration, they should reach an arbitration agreement of their own accord. When, in the absence of an arbitration agreement, a litigant applies for arbitration, the arbitration commission shall not accept it. 
Article 5. Where the litigants have an arbitration agreement and one litigant brings a suit in the people's court, the people's court shall not accept it. However, exception is to be made when the arbitration agreement is invalid. 

Article 6. The arbitration commission shall be chosen by the litigants by agreement. 

Arbitration is not subject to jurisdiction by level or territorial jurisdiction. 

Article 7. Arbitration shall be carried out on the basis of act and in accordance with law to settle disputes in a fair and rational manner. 

Article 8. Arbitration shall be done independently, free of interference and from administrative organs, mass organizations or individuals. 

Article 9. The system of one ruling only is practised in arbitration. Where, after a ruling is made, a litigant files another application for arbitration or brings a lawsuit in the people's court over the same dispute, the arbitration commission or the people's court shall not accept it. 

Where a court repeals a ruling or orders it not to be executed in accordance with law, the litigants may refile an application for arbitration of the dispute pursuant with a new arbitration agreement reached between the parties or bring a suit in the people's court. 


Chapter II. The Arbitration Commission and Arbitration Association 

Article 10. The arbitration commission may be set up in municipalities directly under the central government or in cities where the provincial or autonomous regional people's government is seated. It may also be set up in other cities that are divided into districts. It is not to be set up at all levels of administrative divisions. 

The people's government in the cities specified in the preceding paragraph shall organize relevant departments and the chambers of commerce to form the arbitration commission in a unified way. 

When an arbitration commission is set up, it shall register with the judicial and administrative departments of the province, autonomous region or municipalities directly under the central government. 

Article 11. The arbitration commission shall have the following qualifications: 

(1) its own name, domicile and articles of association; 
(2) the required property; 

(3) members that make up the commission; and 

(4) arbitration officers retained by it. 

The articles of association of the arbitration commission shall be formulated pursuant to this law. 

Article 12. The arbitration commission shall consist of one director, two to four deputy directors and seven to 11 commission members. 
The director, deputy directors, and members of the arbitration commission shall be held by legal, economic or trade experts and persons with working score. Legal, economic or trade experts shall make up at least two- thirds of the arbitration commission. 

Article 13. The arbitration commission shall appoint fair-minded and respectable persons as arbitration officers. 

Arbitration officers shall have one of the following qualifications: 

(1) have eight years of arbitration score; 
(2) have worked as a lawyer for eight years; 

(3) have served as a judge for eight years; 

(4) have studied law or engaged in educational work and have a senior professional title; or 

(5) have legal knowledge, worked in the fields of economics or trade, and have a senior professional title or equivalent professional expertise. 

The arbitration commission shall compile the panel of arbitrators by their specialities. 

Article 14. Arbitration commissions are independent from administrative organs; they are not subordinate to administrative organs. There is no affiliation among arbitration commissions themselves. 

Article 15. The China Arbitration Association is a social organization as a legal person. The arbitration commissions are members of the China Arbitration Association. The articles of association of the China Arbitration Association shall be formulated by its national membership meeting. 

The China Arbitration Association is an organization for enforcing self-discipline among the arbitration commissions that, pursuant to its articles of association, oversees violations of discipline by the arbitration commissions and their members and the administration officers. 

the China Arbitration Association shall formulate arbitration rules in accordance with the relevant provisions of this law and the Law of Civil Procedure. 


Chapter III. Arbitration Agreement 

Article 16. An arbitration agreement refers to an arbitration clause provided in the contract or other written agreements requesting arbitration concluded prior or subsequent to the occurrence of disputes. 

An arbitration agreement shall have the following contents: 

(1) an expressed intent to request arbitration; 
(2) items for arbitration; and 

(3) the chosen arbitration commission 

Article 17. An arbitration agreement shall be invalid in any of the following circumstances: 

(1) the items for arbitration agreed upon are beyond the scope of arbitration as prescribed by law; 
(2) a party to the arbitration agreement is a person having no capacity or with limited capacity for civil conduct; or 

(3) the arbitration agreement is imposed by one party on the other party by means of coercion. 

Article 18. Where an arbitration agreement does not specify or clearly specify the items for arbitration or an arbitration commission, the litigants may reach a supplementary agreement. Where they fail to reach a supplementary agreement, the arbitration agreement shall be deemed invalid. 
Article 19. an arbitration agreement stands on its own. Modification, rescission, termination of the contract or its being declared invalid does not affect the arbitration agreement's validity. 

The arbitration tribunal has the power to confirm the validity of the contract. 

Article 20. Where a litigant takes exception to the validity of the arbitration agreement, he may request that the arbitration commission make a decision or that the people's court make a judgement. 

Where one litigant requests that the arbitration commission make a decision while the other litigant requests that the people's court make a judgement, the people's court shall make a judgement. 

Where a litigant takes exception to the validity of the arbitration agreement, he shall raise a challenge before the arbitration tribunal starts the first hearing of the case. 


Chapter IV. Arbitration Procedure 

Section 1. Application and Acceptance 

Article 21. The litigants requesting arbitration shall meet the following requirements: 

(1) there shall be an arbitration agreement; 
(2) there shall be a specific appeal request, facts and reasons for the appeal; and 

(3) the case shall be within the jurisdictional power of the arbitration commission. 

Article 22. The litigants shall submit to the arbitration commission the arbitration agreement and application for arbitration and copies. 
Article 23. The application for arbitration shall carry the following items: 

(1) the names, sex, age, profession, work units and addresses of the litigants; the names and addresses of the legal person or other organization concerned; and the names and professions of the legal representative and other principal persons in charge. 
(2) arbitration requested and the facts and reasons on which the request is based; and 

(3) evidence and its sources; the names and addresses of witnesses. 

Article 24. When the arbitration commission has received the application, it shall accept it and so notify the litigants within five days if it deems the application meets the requirements; with respect to cases that do not meet the requirements, it shall notify the litigants in writing that the cases may not be accepted and heard along with an explanation. 
Article 25. After accepting the arbitration application, the arbitration commission shall, within the period prescribed in the arbitration rules, deliver the arbitration rules and the names of the arbitration panel to the applicant; and it shall also deliver a copy of the application as well as the rules and the panel to the adverse litigant. 

After receiving the copy of the arbitration application, the adverse litigant shall furnish a defence to the arbitration commission within the period prescribed in the arbitration rules. After receiving the defence, the arbitration commission shall, within the period prescribed in the arbitration rules, deliver a copy of the defence to the applicant. The absence of a defence on the part of the adverse litigant does not affect the arbitration process. 

Article 26. where an arbitration agreement has already been reached and one litigant has filed a suit with the people's court but failed to state the agreement , the people's court shall reject the case it has accepted when the other litigant had submitted the arbitration agreement prior to the opening of the first court session, except when the arbitration agreement is invalid. Failure of the adverse litigant to express objection before the first court session is considered to be a waiving of the agreement and the people's court shall proceed in examining the case. 

Article 27. The applicant may renounce or change the arbitration request. The adverse litigant may acknowledge or rebut the arbitration request and has the right to submit a counter-request. 

Article 28. Either litigant may request protection of his property when he believes the arbitration cannot be carried out or will be carried out with difficulty owing to the other litigant's conduct or other causes. 

When one litigant requests protection of his property, the arbitration commission shall submit the request to the people's court in accordance with the relevant regulations in the Law of Civil Procedure. 

When the application is faulty, the applicant shall compensate the adverse litigant for the losses incurred from the protection of property. 

Article 29. Either litigant or his legal representative may request a lawyer or an agent to represent him at the arbitration. When he does so, he shall submit a power of attorney to the arbitration commission . 

Section 2. The Formation of an Arbitration Tribunal 

Article 30. An arbitration tribunal may be composed of three arbitrators or only one. A tribunal which is composed of three arbitrators shall have a president arbitration officer. 

Article 31. Where the litigants agree that an arbitration tribunal be composed of three arbitrators, each of them shall elect his own arbitrator, or request the arbitration commission director to designate an arbitrator for him. The third arbitrator shall be selected by the litigants, or by the arbitration commission director at their request. The third arbitrator shall serve as the presiding arbitration officer. 

Article 32. In the event the litigants fail to reach an agreement on the form of an arbitration tribunal, or fail to select their arbitrators within the period prescribed in the arbitration rules, the arbitration commission director shall make the decision for them. 

Article 33. After an arbitration tribunal has been formed, the arbitration commission shall notify the litigants, in writing, about the formation or the tribunal. 

Article 34. An arbitrator shall withdraw from serving in the tribunal when his case is one of the following, and the litigants also have the right to present a withdrawal request: 

(1) where he is one of the litigants in the arbitration, or he is a close relative of any one litigant, or a relative of the attorney; 
(2) where he has a vital interest in the arbitration; 

(3) where he is related to the litigants, or their attorneys, in other respects in the case and the relationship may affect an impartial arbitration; or 

(4) where he has had private meetings with the litigants or with their attorneys, or when he has accepted the invitation of the litigants or their attorneys, to dine, or accepted their gifts. 

Article 35. Where one litigant submits a withdrawal request, he shall state the reasons, and the reasons shall be submitted prior to the opening of the first court session. When a cause of the withdrawal is not known until the first court session has been held, the cause may be submitted prior the closure of the last court session. 
Article 36. The arbitration commission director shall decide whether an arbitrator should withdraw; when the arbitration commission director serves as an arbitrator, other members or the arbitration commission shall make the decision collectively. 

Article 37. When an arbitrator cannot perform his duties owing to withdrawal or other causes, a new arbitrator shall be elected or designated to take his place in accordance with this law. 

After a new arbitrator has been elected or designated as a result of the withdrawal of another arbitrator, the litigants may request that the ongoing arbitration process be started anew, and the arbitration process tribunal shall decide whether or not to approve the request. The arbitration tribunal may also decide on its own whether the ongoing arbitration process should be started anew. 

Article 38. Where an arbitrator has situation (4) under Article 34, and the case is serious, or where an arbitrator has situation (6) under Article 58, he shall be liable for legal responsibilities according to the law and the arbitration commission shall remove his name from the panel. 

Section 3. Hearing and Ruling 

Article 39. the arbitration shall be held as a tribunal. Where the litigants agree to have an open session, arbitrations may be held openly, except for cases which involve state secrets. 

Article 40. Arbitrations do not proceed openly. Where the litigants agree to have an open session, arbitrations may be held openly, except for cases which involve state secrets. 

Article 41. The arbitration commission shall notify both litigants of the date of the tribunal session within the period prescribed in the arbitration rules. Within the period prescribed in the arbitration rules, litigants may request a postponement of the session if any of them has a legitimate reason. The arbitration tribunal shall decide whether the session should be postponed. 

Article 42. The applicant shall be considered to have withdrawn his arbitration request if he, after being notified, fails to attend the tribunal session without a legitimate reason, or if he leaves the tribunal during the session without the tribunal's approval. 

If the adverse litigant, after being notified, fails to attend the tribunal session without a legitimate reason; or if he leaves the tribunal session without the arbitration tribunal's approval, a ruling can be made by default.

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Law on Lawyers and Legal Representation 
(Promulgated by the 19th meeting of the Eighth National People's Congress Standing Committee on May 15, 1996) 

Table of Contents:
Chapter I. General Rules 

Chapter II. Requirements for Lawyers to Set up Practice

Chapter III. Law Offices

Chapter IV. Business, Rights and Obligations of Lawyers Who Set up in Practice

Chapter V. Bar Association

Chapter VI. Legal Assistance

Chapter VII. Legal Responsibility

Chapter VIII. Supplementary Articles


Chapter I. General Rules 

Article 1. This law is formulated to improve the system of legal representation, ensure that lawyers conduct their business in accordance with the law, standardize lawyers' behaviour, protect the legitimate rights and interests of litigants, safeguard the correct enforcement of laws and bring into full play the positive role of lawyers in establishing a socialist legal system.

Article 2. Lawyers mentioned in this law refer to personnel who have obtained a business licence for setting up a lawyer's practice in accordance with the law and who are providing legal services for the public.

Article 3. When setting up a practice, lawyers must abide by the Constitution and the law, and must scrupulously observe professional ethics and discipline.

Lawyers who set up in practice must use facts as a basis and the law as criteria.

Lawyers who set up in practice must accept supervision by the state, the public and litigants.

Lawyers who set up in practice in accordance the law are protected by the law.

Article 4. The judicial administration department of the State Council shall supervise and provide guidance for lawyers, law offices and bar associations in accordance with this law.


Chapter II. Requirements for Lawyers to Set up Practice

Article 5. To set up in practice, lawyers must have obtained both the credentials of a lawyer and a lawyer's business licence.

Article 6. The state is implementing a system of holding examinations in a unified way nationwide for lawyers' credentials. Personnel with a formal schooling record at and above the level of professional college training in the science of law at institutions of higher learning, or personnel having attained the same level of specialities as well as personnel with a formal schooling record at and above the level of regular college course other than the science of law, will be conferred with lawyers' credentials by the judicial administration department of the State Council if they pass the examination for lawyers' credentials.

The judicial administration department of the State Council shall draw up methods for holding examinations in a unified way nationwide for the credentials of a lawyer.

Article 7. If personnel who have a formal schooling record at and above the level of regular college courses majoring in the science of law at institutions of higher learning have been engaged in studying and teaching law and have a senior job title, or have attained the same level of specialities, submit applications for setting up practice as a lawyer, the State Council's judicial administration department shall appraise and approve their applications in accordance with the regulations and confer lawyers' credentials on them after their applications are approved.

Article 8. Those who support the Constitution of the PRC and who meet the following requirements may apply for a lawyer's business licence to set up practice:


(1) have a lawyer's credentials;

(2) have worked as a trainee in a law office for a full year; and

(3) show good behaviour.


Article 9. Those who are found to have one of the following conditions shall be denied the business licence of a lawyer to set up practice:


(1) are incapable of civil action or under restrictions to perform civil action; or

(2) have received a criminal sanction, but those who have committed an involuntary crime are excepted; and

(3) those who have been discharged from public employment or have had their lawyer's business licences revoked.

Article 10. Those who submit an application for a lawyer's business licence to set up in practice should submit the following documents:


(1) an application form;

(2) a lawyer's credentials;

(3) training verification issued by the law office at which the applicant works; and

(4) duplicate of the applicant's identification card.

Article 11. The judicial administration departments of people's governments at and above the provincial, autonomous regional and municipal levels shall issue a lawyer's business licence to an applicant if examination finds his or her application meets the requirements stipulated in this law within 30 days after receipt of his or her application, and shall deny an applicant a lawyer's business licence if examination finds his or her application fails to meet the requirements stipulated in this law and serve a notice in writing to the applicant within 30 days after receipt of his or her application.

Article 12. A lawyer should pursue his or her practice at a law office and must not pursue the practice at more than two law offices at the same time.

A lawyer is not under restrictions of locality in pursuing his or her practice.

Article 13. Personnel currently working at a state organ are not permitted to set up practice of a lawyer on a part-time basis.

While serving as a member of the standing committees of people's congresses at all levels, lawyers are not permitted to set up practice.

Article 14. Those who have not obtained a lawyer's business licence are prohibited to set up practice in the name of a lawyer or act as a legal representative or defend a case in court for economic interests .


Chapter III. Law Offices

Article 15. Law offices are the organizations in which lawyers set up in practice.

A law office should meet the following requirements:


(1) it should have its own name, address and articles of association;

(2) have assets worth more than 100,000 yuan renminbi; and

(3) have a lawyer that meets the requirements stipulated in this law.

Article 16. Law offices financed by the state shall independently pursue the practice of a lawyer in accordance with the law, and shall be responsible for their liabilities with all the assets owned by such law offices.

Article 17. Lawyers may establish an cooperative law office and be responsible for its liabilities with all its assets.

Article 18. Lawyers may set up a law office in partnership. Partners are responsible for the unlimited liability and joint liability of such a law office.

Article 19. The judicial administration departments of the people's governments at and above the provincial, autonomous regional and municipal level shall examine an application for the establishment of a law office, and should issue a business licence to the applicant within 30 days of receiving his or her application if it is found to meet the requirements stipulated in this law, or, if not, deny the applicant a business licence and should serve notice in writing to the applicant within 30 days of receipt of his or her application.

Article 20. A law office may set up a branch. The judicial administration department of the provincial, autonomous regional or municipal people's government of the locality in which such a branch is going to be set up shall examine the relevant application in accordance with stipulated requirements.

A law office shall take responsibility for the liability of the branch it has set up.

Article 21. A law office should report such major events as a change to its name, address, articles of association and partners or a dissolution to the department that originally examined its application for establishment.

Article 22. Law offices should organize lawyers to pursue practice, study laws and national policies, and sum up and exchange working experiences in accordance with their articles of association.

Article 23. When a lawyer accepts a commission for a case, his or her law office shall undertake such a commission in a unified way, sign a commission contract in writing with the client, collect fees from the litigant in accordance with state regulations and accurately enter such fees in the account book.

Law offices and lawyers should pay taxes in accordance with the law.

Article 24. Law offices and lawyers must not try to secure business for themselves by such dishonest competition methods as calumniating other lawyers or paying commission for referral of client.


Chapter IV. Business, Rights and Obligations of Lawyers Who Set up in Practice

Article 25. Lawyers may conduct the following business:


(1) accept appointment by citizens, legal persons and other organizations to act as their legal advisers;

(2) accept commissions for civil and administrative cases by litigants to act as their representatives and participate in lawsuits ;

(3) accept appointment by suspects involved in a criminal case to provide them with legal advice, act as their representatives to appeal or file charges in court and apply for release upon bail pending trial; accept the commission by suspects involved in a criminal case and by defendants or accept the appointment by people's courts to act as defenders; and accept the commission by private party who prosecutes a case by himself, by the victim of a prosecution case or by their close relatives to act as their representatives and participate in lawsuits;

(4) act as representatives for various lawsuit cases to appeal;

(5) accept a commission by litigants to participate in mediation and arbitration;

(6) accept a commission by litigants of legal affairs not related to a lawsuit to provide them with legal services; and

(7) answer questions concerning the law and draft documents for legal proceedings and other documents on legal affairs.

Article 26. A lawyer who acts as a legal adviser should offer his or her opinion on relevant legal issues to clients; draft and examine legal documents; act as a representative to participate in a lawsuit, or mediation or arbitration; handle other legal affairs commissioned by clients; and maintain their legitimate rights and interests.

Article 27. A lawyer who acts as a representative for legal affairs either related or not related to a lawsuit should maintain the legitimate rights and interests of his or her client to the extent that the scope of authorization of the client's commission permits.

Article 28. A lawyer who acts as a defender in a criminal case should present information, material and opinion based on facts and law to prove the suspect and defendant is not guilty, or only guilty of misdemeanour, or qualified for a reduction or exemption of the responsibility for a crime to maintain the legitimate rights and interests of the suspect and defendant.

Article 29. A client who has commissioned a lawyer to handle a case for him or her may refuse to let the lawyer continue to defend or act as a representative for the case, or commission another lawyer to act as his or her defender or representative.

After a lawyer accepts a commission to handle a case, he or she must not refuse to defend or act as a representative without good reason. However, if the case commissioned is illegal and if the client uses the services provided by a lawyer to conduct illegal activities or conceal a fact, a lawyer has the right to refuse to act as a defender or a representative for such a case.

Article 30. When participating in a legal action, a lawyer may collect and consult information and material related to the case in accordance with the stipulations contained in the litigation law, meet and correspond with the parties whose personal freedom is under restriction, attend court hearings, participate in a lawsuit and enjoy such other rights as are stipulated by the litigation law.

When a lawyer acts as a representative or a defender in a lawsuit, his or her right to dispute and defend should be protected in accordance with the law.

Article 31. With the approval of relevant units or individuals, a lawyer may make inquiries with them to conduct investigations after he or she has undertaken to handle a legal matter.

Article 32. A lawyer's personal rights are immune to violation when he or she is conducting the business activities of a lawyer's practice.

Article 33. A lawyer should keep state secrets and a litigant's commercial secrets learned through conducting the business activities of a lawyer's practice, and should not disclose the privacy of litigants.

Article 34. A lawyer is prohibited from acting as a representative for both parties in the same case.

Article 35. When conducting the business activities of a lawyer's practice, lawyers are prohibited from:


(1) privately accepting a commission from a client to handle a case, or privately collecting fees from a client who gave the case to him or her, or accepting money or personal belongings from the client;

(2) trying to gain rights and interests disputed between both parties to a lawsuit by taking advantage of the opportunity arising from providing legal services, or accepting money or personal belongings from the other party to the case of litigation;

(3) meeting a judge, public procurator or an arbitrator in violation of the regulations;

(4) inviting a judge, public procurator or an arbitrator or other relevant personnel to dinner, or offering gifts or bribes to them, or instigating or misleading litigants into offering bribes;

(5) providing false evidence, concealing facts or coercing or luring others by promise of gain to provide false evidence or conceal facts, or interfering with the lawful gathering of evidence by other party to the lawsuit; or

(6) disturbing the order of a law court or an arbitration court or interfering with the normal proceedings of legal action or arbitration.

Article 36. Lawyers who have acted as a judge or a public procurator are prohibited from acting as a representative or a defender for a lawsuit within two years of leaving their posts at the people's courts or people's procuratorates.


Chapter V. Bar Association

Article 37. The bar association is the legal entity of a social organization and an organization for lawyers to exercise self-discipline.

The All-China Lawyers'Association ACLA , a national organization, has been established, while local bar associations have been established in all the provinces, autonomous regions and municipalities. Cities with districts may establish local bar associations in the light of their needs.

Article 38. The articles of association for bar associations shall be drawn up by a national congress of members of bar associations in a unified way, and shall be reported to the judicial administration department of the State Council for the record.

Article 39. Lawyers must join the local bar association in the locality in which their law offices are located. Lawyers who have joined a local bar association will automatically become ACLA members .

In accordance with the articles of association of a bar association, members of a bar association are entitled to enjoy the rights endowed by its articles of association and should fulfil the obligations stipulated by the articles of association.

Article 40. Bar associations should fulfil the following duties:


(1) guarantee that lawyers pursue their practice in accordance with the law, and maintain the legitimate rights and interests of lawyers;

(2) sum up and exchange the experiences acquired by lawyers in conducting their work;

(3) organize training of the practice of a lawyer;

(4) conduct education in, inspection of and supervision over the professional ethics and discipline of lawyers;

(5) organize lawyers to conduct exchanges with foreign counterparts;

(6) mediate disputes arising from lawyers' pursuit of their practice; and

(7) other duties stipulated by laws.

Bar associations shall award or punish lawyers in accordance with their articles of association.


Chapter VI. Legal Assistance

Article 41. When citizens need lawyers'assistance to request support, or compensation or the issue of pensions for the disabled or for the family of the deceased from the state for injury suffered during the course of work or to file a criminal suit but cannot afford the counsel fee, they may receive legal assistance according to state regulations.

Article 42. Lawyers must undertake the obligation to provide legal assistance in accordance with state regulations, fulfil their duties and provide those who need assistance with legal services.

Article 43. Specific measures for legal assistance shall be drawn up by the State Council's judicial administration department and submitted to the State Council for approval.


Chapter VII. Legal Responsibility

Article 44. The judicial administration department of the provincial, autonomous regional and municipal people's government and of the people's government of a city with districts shall serve a disciplinary warning to lawyers found to have committed one of the following violations. If the degree of violation is found to be serious, they shall be suspended from pursuing their lawyer's practice for a period of more than three months and less than one year. Whatever illegal income they have received shall be confiscated .


(1) Conduct business at more than two law offices at the same time;

(2) act as a representative for both parties to a lawsuit in the same case;

(3) try to secure business for themselves by such dishonest competition methods as calumniating other lawyers or paying commission for referral of client;

(4) refuse to defend or act as a representative for a client without a good reason after having accepted a commission from the client to handle a case;

(5) fail to appear on court on time to participate in a lawsuit or arbitration without a good reason;

(6) disclose a litigant's commercial secret or personal privacy;

(7) privately accept the commission by a client to handle a case, or privately collect fee from a client who commissioned the case to them, or accept money or personal belongings from client, or try to gain the rights and interests disputed between both parties to a lawsuit by taking advantage of the opportunity arising from providing legal services, or accept the money or personal belongings from the other party to the case of litigation;

(8) meet with a judge, or a public procurator, or an arbitrator in violation of regulations or invite a judge, or a public procurator, or an arbitrator, or other relevant personnel to dinner, or offer gifts or bribes to them;

(9) interfere with the legal obtainment of an evidence by other party to the lawsuit; or

(10) disturb the order in a law court or an arbitral court or interfere with the normal proceedings of legal action or arbitration; or

(11) conduct other punishable activities.

Article 45. The business licence of a lawyer shall be revoked by the judicial administration department of the provincial, autonomous regional and municipal people's government if the lawyer is found to have committed one of the following violations. If such violations constitute a crime, the lawyer shall be prosecuted for criminal liability;


(1) If he discloses a state secret;

(2) offers bribes to a judge, public procurator or an arbitrator, or other relevant personnel or instigate or mislead litigants to offer bribes; and

(3) provides false evidence, conceals an important fact or coerces or lures others by promise of gain to provide a false evidence or conceal an important fact.

The business licence of a lawyer should be revoked if he or she is given a criminal sanction for having deliberately committed a crime.

Article 46. Public security organs shall order those who provide legal services by passing themselves off as a lawyer to stop their illegal business activities, confiscate their illegal income and impose a fine of no more than 5,000 yuan in conjunction with a punishment of detention for no more than 15 days.

Judicial administration department of people's government at and above county level shall order those who act as a legal representative and defence, without a lawyer's business licence in a lawsuit for economic interests, to stop them practising illegally as a lawyer, confiscate their illegal income and impose a fine of between 100 and 500 per cent of their illegal income.

Article 47. If law offices are found to have violated any of the regulations contained in this law, the judicial administration department of provincial, autonomous regional and municipal people's government shall order them to correct their violation, confiscate their illegal income and impose a fine to an amount between 100 and 500 per cent of their illegal income. If the degree of their violation is serious, they shall be ordered to stop practising as a lawyer, or conduct consolidation, or have their business licences revoked.

Article 48. If those who have been given a punishment refuse to abide by the decision on administrative penalty made by a judicial administration department, they may apply to the judicial administrative department at the higher level for a reconsideration within 15 days after receipt of a decision on administrative penalty and, if they refuse to abide by the decision made after reconsideration, they may either take legal proceedings in a people's court within 15 days after receipt of the decision made after reconsideration or directly take legal proceedings in a people's court as published .

Anyone who fails to apply for an administrative reconsideration or file an administrative lawsuit and refuses to comply with a penalty decision after having a fine imposed, the judicial administration department which made the penalty decision may request a people's court to enforce such a decision.

If anyone who has applied for a lawyer's business licence according to Article 11 of this law or for the establishment of a law office according to Article 19 of this law refuses to accept the decision of the judicial administration department denying him or her a lawyer's or law office's business licence, he or she may apply for reconsideration or take legal proceedings in accordance with the procedure stipulated in the first paragraph of this article.

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Accounting Regulations of the People's Republic of China for Joint Ventures Using Chinese and Foreign Investment
(Promulgated on March 4, 1985 by the Ministry of Finance of the People's Republic of China)

 Table of Contents
Chapter I General Provisions

Chapter II Accounting Office And Accounting Staff

Chapter III General Principles For Accounting

Chapter IV Accounting For Paid-in Capital

Chapter V Accounting Cash And Current Accounts

Chapter VI Accounting For Inventories

Chapter VII Accounting For Long Term Investment And Long Term Liabilities

Chapter VIII Accounting For Fixed Assets

Chapter IX Accounting For Intangible Assets And Other Assets

Chapter X Accounting For Costs And Expenses

Chapter X Accounting For Sales And Profit

Chapter XII Classification of Accounts And Accounting Statements

Chapter XIII Accounting Documents and Accounting Books

Chapter XIV Audit

Chapter XV Accounting Files

Chapter XVI Dissolution And Liquidation

Chapter XVII Other Provisions


Chapter I General Provisions

Article 1. The present Regulations are formulated to strengthen the accounting work of joint ventures using Chinese and foreign investment, in accordance with the provisions laid down in the "Law of the People's Republic of China on Joint Ventures Using Chinese and Foreign Investment", the "Income Tax Law of the People's Republic of China Concerning Joint Ventures Using Chinese and Foreign Investment" and other relevant laws and regulations.

Article 2. These Regulations are applicable to all joint ventures using Chinese and foreign investment (hereinafter referred to as "joint ventures") established within the territory of the People's Republic of China.

Article 3. The public finance departments or bureaus of provinces, autonomous regions and municipalities directly under the Central Government as well as the business regulatory departments of the State Council shall be permitted to make necessary supplements to these regulations on the basis of complying with these regulations and in the light of specific circumstances, and submit the supplements to the Ministry of Finance for the record.

Article 4. Joint ventures shall work out their own enterprise accounting system in accordance with these Regulations and the supplementary provisions made by the relevant public finance department or bureau of their provinces, autonomous regions or municipalities, or by the relevant business regulatory departments of the State Council, and in the light of their specific circumstances and submit their own system to their enterprise regulatory departments, local public finance department and tax authority for the record.


Chapter II Accounting Office And Accounting Staff

Article 5. A joint venture shall set up a separate accounting office with necessary accounting staff to handle its financial and accounting work.

Article 6. A joint venture of large or medium size shall have a controller to assist the president and to take the responsibility in leading its financial and accounting work. A deputy controller may also be appointed when necessary.

A joint venture of relatively large size shall have an auditor responsible for review and examination of its financial receipts and disbursements, accounting documents, accounting books, accounting statements and other relevant data and those of its subordinate branches.

Article 7. The accounting office and accounting staff of a joint venture shall fulfil their duties and responsibilities with due care, make accurate calculation, reflect faithfully the actual conditions, and supervise strictly over all economic transactions, protect the legitimate rights and interests of all the participants of the joint venture.

Article 8. Accounting staff who are transferred or leaving their posts shall clear their responsibility transfer procedures with those who are assuming their positions, and shall not interrupt the accounting work.


Chapter III General Principles For Accounting

Article 9. The accounting work of joint ventures must comply with the laws and regulations of the People's Republic of China.

Article 10. The fiscal year of a joint venture shall run from 1 January to 31 December under the Gregorian calendar.

Article 11. Joint ventures shall adopt debit and credit double entry bookkeeping.

Article 12. The accounting documents, accounting books, accounting statements and the other accounting records of a joint venture shall be prepared accurately and promptly according to the transactions actually taken place, with all required routines done and contents complete.

Article 13. All the accounting documents, accounting books and accounting statements prepared by a joint venture must be written in Chinese. A foreign language mutually agreed by the participants of the joint venture may be used concurrently.

Article 14. In principle, a joint venture shall adopt Renminbi as its bookkeeping base currency. However, a foreign currency may be used as the bookkeeping base currency upon mutual agreement of the participants of a joint venture.

If actual receipts or disbursements of cash, bank deposits, other cash holdings, claims debts, income and expenses, etc. are made in currencies other than the bookkeeping base currency, a record shall also be made in the currencies of actual receipts or disbursements.

Article 15. Joint ventures shall adopt the accrual basis in their accounting. All revenues realised and expenses incurred during the current period shall be recognised in the current period, regardless of whether receipts or disbursements are made. The revenues or expenses not attributable to the current period shall not be recognised as current revenue or expenses, even if they are currently received or disbursed.

Article 16. The revenues and expenses of a joint venture must be matched in its accounting. All the revenues and relevant costs and expenses of a period shall be recognised in the period and shall not be dislocated, advanced or deferred.

Article 17. All the assets of a joint venture shall be stated at their original costs and the recorded amounts are generally not adjusted whether there is any fluctuation in their market prices.

Article 18. A joint venture shall draw clear distinction between capital expenditures and revenue expenditures. All expenditures incurred for the increase of fixed assets and intangible assets are capital expenditures. All expenditures incurred to obtain current revenue are revenue expenditures.

Article 19. Accounting methods adopted by a joint venture shall be consistent from one period to the other and shall not be arbitrarily changed. Changes, if any, shall be approved by the board of directors and submitted to the local tax authority for examination. Disclosure of the changes shall be made in the accounting report.


Chapter IV Accounting For Paid-in Capital

Article 20. The participants of a joint venture shall contribute their share capital in the amount, ratio and mode of capital contribution within the stipulated time limit as provided in the joint venture contract. The accounting for paid-in capital by a joint venture shall be based on the actual amount contributed by each of its participants.


(1) For investment paid in cash, the amount and date as received or as deposited into the Bank of China or other banks where the joint venture has opened its bank account shall be the basis for recording the capital contribution.

The foreign currency contributed by a foreign participant shall be converted into Renminbi or further converted into a predetermined foreign currency at the exchange rates quoted on the day of the cash payment by the State Administration of Foreign Exchange Control of the People's Republic of China (hereinafter referred to as the "State Administration of Foreign Exchange Control"). Should the cash Renminbi contributed by a Chinese participant be converted into foreign currency, it shall be converted at the exchange rate quoted by the State Administration of Foreign Exchange Control on the day of the cash payment.

(2) For investment in the form of buildings, machinery, equipment, materials and supplies, the amount shown on the examined and verified itemisation list of the assets as agreed upon by each participant and the date of the receipt of the assets shall be the basis of accounting according to the joint venture contract.

(3) For investment in the form of intangible assets, i.e. proprietory technology, patents, trade marks, copyright and other franchises, etc. the amount and date as provided in the agreement or contract shall be the basis of accounting.

(4) For investment in the form of the right to use sites, the amount and date as provided in the agreement or contract shall be the basis of accounting.

The capital contributed by each participant shall be recorded into the accounts of the joint venture as soon as they are received.

Article 21. The capital amount contributed by the participants of a joint venture shall be validated by Certified Public Accountants registered with the government of the People's Republic of China, who shall render a certificate on capital validation, which shall then be taken by the joint venture as the basis to issue capital contribution certificates to the participants.


Chapter V Accounting Cash And Current Accounts

Article 22. A joint venture shall open its deposit accounts in the Bank of China or the other banks within the territory of the People's Republic of China and approved by the State Administration of Foreign Exchange Control or by one of its branches. All foreign exchange receipts must be deposited with the bank in the foreign currency deposit account and all foreign exchange disbursements must be made from the accounts.

Article 23. A joint venture shall set up journals to itemise cash and bank transactions in chronological order. A separate journal shall be set up for each currency if there are several currencies.

Article 24. The accounts receivable, accounts payable and other receivables and payables of a joint venture shall be recorded in separate accounts set up for different currencies. Receivables shall be collected and payables shall be paid in due time and shall be confirmed with the relevant parties periodically. The causes of uncollectible items shall be investigated and the responsibilities thereof shall be determined. Any item proved to be definitely uncollectible through strict management review shall be written off as a bad debt after approval is obtained through reporting procedures specified by the board of directors. No "reserve for bad debts" shall be accrued.

Article 25. For a joint venture using Renminbi as the bookkeeping base currency, its foreign currency deposits, foreign currency loans and other accounts denominated in foreign currency shall be recorded not only in the original foreign currency of the actual receipts and payments, but also in Renminbi converted from the foreign currency at an ascertained exchange rate (using the exchange rate quoted by the State Administration of Foreign Exchange Control).

All additions of foreign currency deposits, foreign currency loans and other accounts denominated in foreign currencies shall be recorded in Renminbi converted at their recording exchange rates, while deductions recorded in Renminbi and converted at their book exchange rates shall be recognised as "foreign exchange gains or losses" (hereinafter referred to as "exchange gains or losses").

The recording exchange rates for the conversion of foreign currency to Renminbi may be the rate prevailing on the day of recording the transaction or on the first day of the month, etc. The book exchange rate may be calculated by the first-in-first-out method, or by the weighted average methods, etc. However, for the decrease of accounts denominated in a foreign currency, the original recording rate may be used as the book rate. Whichever rate is adopted, there shall be no arbitrary change once it is decided. If any change is necessary, it must be approved by the board of directors and disclosed in the accounting report.

The difference in Renminbi resulting from the exchange of different currencies shall also be recognised as exchange gains or losses.

The exchange gains or losses recognised in the account shall be the realised amount. In case of exchange rate fluctuation, the Renminbi balances of the foreign currency accounts shall not be adjusted.

Article 26. In a joint venture using a foreign currency as its bookkeeping base currency, its Renminbi deposits, Renminbi loans and other accounts denominated in Renminbi shall be recorded not only in Renminbi but also in the foreign currency converted from Renminbi at the exchange rate adopted by the enterprise. Differences in the foreign currency amount resulting from the conversion at different Exchange rates shall also be recognised as exchange gains or losses as stipulated in Article 25.

A joint venture using a foreign currency as its bookkeeping base currency shall compile not only annual accounting statements in the foreign currency but also separate accounting statements in Renminbi translated from the foreign currency at the end of a year. However, the joint venture's Renminbi bank deposits, Renminbi bank loans and the other accounts denominated in Renminbi shall still be accounted for in their original Renminbi amounts, and shall be combined with the other items converted into Renminbi from foreign currency. The differences between the original Renminbi amount of the Renminbi items and their Renminbi amount from currency translation shall not be recognised as foreign exchange gains or losses, but shall be shown on the balance sheet with an additional caption as "currency translation differences".


Chapter VI Accounting For Inventories

Article 27. The inventories of a joint venture refer to merchandise, materials and supplies, containers, low-value and perishable articles, work in process, semi-finished goods, finished goods, etc. in stock, in processing or in transit.

Article 28. All the inventories of a joint venture shall be recorded at the actual cost.


(1) The actual cost of materials and supplies, containers, low-value and perishable articles purchased from outside shall include the purchase price, transportation expenses, loading and unloading charges, packaging expenses, insurance premium, reasonable loss during transit, selecting and sorting expenses before taken into storage etc. The cost of imported goods shall further include the custom duties and industrial and commercial consolidated tax, etc.

For merchandise purchased by a commercial or service-trade enterprise, the original purchase price shall be taken as the actual cost for bookkeeping.

(2) The actual cost of self-manufactured materials and supplies, containers, low-value and perishable articles, semi-finished goods and finished goods shall include the materials and supplies consumed, and wages and relevant expenses incurred during the manufacture process.

(3) The actual cost of materials and supplies, containers, low-value and perishable articles, semi-finished and finished goods completed through outside processing shall include the original cost of the materials and supplies or semi-finished goods consumed, the processing expenses, inward and outward transportation expenses and sundry charges.

The merchandise of the commercial or service-trade enterprises processed under contract with outside units shall be recorded at the purchase price after processing, including the original purchase price of the merchandise before processing, processing expenses and the industrial and commercial consolidated tax attributable. 

Article 29. The receipt, issuance, requisition and return of the inventories of a joint venture shall be processed on time through accounting procedures according to the actual quantity and shall be itemised in the subsidiary ledger accounts with established columns for quantities and amounts, so as to strengthen inventory control. The merchandise, materials, etc. in transit shall be accounted for through subsidiary ledgers and their condition of arrival shall be inspected at all times. For those goods that have not arrived in due time, the relevant department shall be urged to take action. As to those goods that have arrived but have not yet been checked or taken into storage, their acceptance test and warehousing procedures shall be carried out in a timely manner.

Article 30. The actual cost or original purchase price of inventories issued or requisitioned from the store of a joint venture may be accounted for by it under one of the following methods; first-in-first-out, shifting average, weighted average, batch actual, etc. Once the accounting method is adopted, no arbitrary change shall be allowed. In case a change of accounting method is necessary, it shall be submitted to the local tax authority for approval and disclosed in the accounting report.

Article 31. In the joint ventures using planned cost in daily accounting for materials and supplies, finished goods, etc. the planned cost of those issued from stock, shall be adjusted into actual cost at the end of each month.

For commercial and service-trade enterprises using a selling price in daily accounting for merchandise, the cost of goods sold shall be adjusted from the selling price to the original purchase price at the end of a month.

Article 32. A joint venture shall take physical inventory of its stock periodically, at least once a year. If any overage, shortage, damage, deterioration, etc. is found, the relevant department shall investigate the cause and write out a report. Accounting treatment shall be made as soon as the report is approved through strict management review and the reporting procedures specified by the board of directors. The treatment shall generally be completed before the annual closing of final accounts.


(1) The inventory shortage (minus inventory overage) and damage (minus salvage) of materials and supplies, work in process, semi-finished goods, finished goods, and merchandise, etc. shall be charged to the current expenses, except the amount, if any, that should be indemnified by the persons in fault.

(2) The net loss resulting from natural disasters shall be charged to non-operating expenses after deducting the salvage value recoverable and insurance indemnity.


Article 33. If there is any inventory in a joint venture to be disposed of at a reduced price due to obsolescence, it shall be reported for approval according to the procedures specified by the board of directors, and the net loss on disposal shall be recognised as loss on sales. If the disposal is not yet done at the end of a year, disclosure shall be made in the annual accounting report for the actual cost per book, the net realisable value and the probable loss thereof.

Article 34. Disclosure shall be made in the annual accounting report of a joint venture on the actual cost per book, net realisable value and probable loss of its inventories of which the net realisable value is lower than the actual cost per book due to the decline of the market price.


Chapter VII Accounting For Long Term Investment And Long Term Liabilities

Article 35. The investment of a joint venture in other units shall be accounted for at the amount paid or agreed upon at the time of the investment, and shall be shown in the balance sheet with a separate caption as "long term investment."

Income and loss derived from long term investment shall be recognised as non-operating income or non- operating expense.

Article 36. The bank loans borrowed by a joint venture for capital construction during its preparation period or for increasing fixed assets, expanding its business, or making renovation and reform of its equipment after its operation has started, shall be accounted for at the amount and on the date of the loan and shall be presented in the balance sheet with a separate caption as "long term bank loans".

The interest expenses on long term bank loans incurred during the construction period shall be charged to construction cost and capitalised as a part of the original cost of the fixed assets; but interest expense incurred after the completion of the construction and the transfer of fixed assets for operation purposes shall be charged to current expenses.


Chapter VIII Accounting For Fixed Assets

Article 37. A joint venture shall prepare a fixed assets catalogue as the basis of accounting according to the criteria of fixed assets laid down in the "Income Tax Law of the People's Republic of China Concerning Joint Ventures Using Chinese and Foreign Investment" and in consideration of its specific circumstances.

Article 38. The fixed assets of a joint venture shall be grouped into five broad categories as follows: building and structures; machinery and equipment; electronic equipment; transport facilities (trains or ships, if any, shall be grouped separately); and other equipment. The joint venture may further group them into sub- categories according to the need of its management.

Article 39. The fixed assets of a joint venture shall be recorded at their original cost.

For fixed assets contributed as investment, the original cost shall be the price of the assets agreed upon by all the participants of the joint venture at the time of investment.

For fixed assets purchased, the original cost shall be the total of the purchase price plus freight, loading and unloading charges, packaging expenses and insurance premium, etc. The original cost of the fixed assets that need installation work, shall include installation expenses. The original cost of imported equipment shall further include the customs duties, consolidated industrial and commercial tax, etc. paid as required.

For fixed assets manufactured or constructed by the joint venture itself, the original cost shall be the actual expenditure incurred in the course of manufacture or construction.

Expenditures of a joint venture on technical innovation and reform that result in the increase of the fixed assets value shall be recorded as increments of the original cost of the fixed assets.

Article 40. Depreciation on the fixed assets of a joint venture shall generally be accounted for on an average basis under the straight line method.


(1) Depreciation on fixed assets shall be accounted for on the basis of the original cost and the group depreciation rate of the fixed assets.

The depreciation rate of fixed assets shall be calculated and determined on the basis of the original cost, estimated residual value and useful life of the fixed assets.

A joint venture shall determine the specific useful lives and depreciation rates for different groups of fixed assets according to the minimum depreciation period and the estimated residual value of the fixed assets as provided in the "Income Tax Law Concerning Joint Ventures Using Chinese and Foreign Investment".

(2) In a case where a joint venture needs accelerated depreciation or a change of depreciation method for special reasons, application shall be submitted by the joint venture to the tax authority for examination and approval.

(3) Generally, depreciation of the fixed assets of a joint venture shall be accounted for monthly according to the monthly depreciation rates and the monthly beginning balances of the original cost per book of the fixed assets in use. For fixed assets put in use during a month, depreciation shall not be calculated for the month but shall be started from the next month. For fixed assets to be used during the month which are reduced or stopped depreciation shall still be calculated for the month and be stopped from the next month.

(4) For fixed assets fully depreciated but still useful, depreciation shall no longer be calculated. For fixed assets discarded in advance, no retroactive depreciation shall be made either.

For fixed assets declared scrap in advance or transferred out, the difference between the net proceeds obtained from disposal (less liquidation expenses) and the net value of the fixed assets (original cost less accumulated depreciation) shall be recognised as non- operating income or non-operating expenses of a joint venture.

Article 41. For the purchase, sales, disposal, discarding and internal transfer, etc. of the fixed assets, a joint venture must execute accounting routines and set up a fixed assets subsidiary ledger for the relevant accounting so as to strengthen the control of fixed assets.

Article 42. A physical inventory must be taken on the fixed assets of a joint venture at least once a year. If any average, shortage or damage of the fixed assets is found, the cause shall be investigated and a report written out by the relevant department. Accounting treatment shall be made as soon as the report is approved through strict management review and the reporting procedures specified by the board of directors. Generally, this work shall be finished before the annual closing of final accounts.


(1) For fixed assets average, the replacement cost shall be taken as the original cost, the accumulated depreciation shall be estimated and recorded according to the existing usability and wear and tear of the assets, and the difference between the original cost and the accumulated depreciation shall be credited to non-operating income.

(2) For fixed assets shortage, the original cost and accumulated depreciation shall be written off and the excess of original cost over accumulated depreciation shall be charged as non-operating expenses.

(3) For damaged fixed assets, the net loss after the original cost deducted by the accumulated depreciation, recoverable salvage value and the indemnity receivable from the person in fault or from the insurance company, shall be charged as non-operating expenses.




Chapter IX Accounting For Intangible Assets And Other Assets

Article 43. The intangible assets and other assets of a joint venture include proprietary technology, patents, trade marks, copyrights, right to use sites, other franchises and organisation expenses, etc.

For intangible assets contributed as investment by the participants of a joint venture, the original cost shall be the value provided in the agreement or contract. The original cost of purchased intangible assets shall be the amount actually paid. Monthly amortisation of the intangible assets shall be made over their useful life from the year when they come into use. Those without specified useful life may be amortised over a period of ten years. The amortisation period shall not be longer than the duration of a joint venture.

Article 44. The expenses incurred by a joint venture during its preparation period (not including expenditure for acquiring fixed assets and intangible assets and the interest incurred during the construction period to be included in the construction cost may be accounted for as organisation expenses according to the provisions of the agreement and with the consent of all participants, and shall be amortised after the production or operation starts. The annual amortisation shall not exceed 20 per cent of the expenses.

Article 45. The expenditure incurred by a joint venture on major repair and improvement of the leased-in fixed assets shall be amortised over the period benefitting from such expenditures. However, the amortisation period shall not be longer than the lease term of the fixed assets.


Chapter X Accounting For Costs And Expenses

Article 46. Joint ventures shall maintain complete original records, practise norm control, adhere strictly to the procedures of measuring, checking, receiving, issuing, requisitioning and returning goods and materials, strengthen the control of and accounting for costs and expenses.

Article 47. All expenditure of a joint venture related to production or operation shall be recognised as its costs or expenses.

Materials consumed by a joint venture in the course of production or operation shall be correctly calculated and charged to costs or expenses according to the quantity actually consumed and the price per book.

Wages and salaries of the staff and workers shall be calculated and charged to the costs or expenses according to the provisions in the contract and the decisions of the board of directors on the system of wage standards, wage forms, bonuses and allowances, etc. as well as the attendance records, time cards and production records. Payment as required on labour insurance, health and welfare benefits and government subsidies, etc. for the Chinese staff and workers shall also be charged to costs or expenses as the same item as wages and salaries.

All other expenses incurred by a joint venture in the course of production or operation shall be charged to costs or expenses according to the amount actually incurred. The expenses attributable to the current period but not yet paid shall be recognised as accrued expenses and charged to the costs or expenses of the current period; however, the expenses paid but attributable to the current and future periods shall be recognised as deferred charges and amortised to the costs or expenses of the relevant periods.

Article 48. A joint venture shall summarise all the expenses incurred in the course of production or operation according to the specified cost and expense items.


(1) The production cost items of an industrial joint venture shall generally be classified into: direct materials, direct labour, and manufacturing overheads. A joint venture may set up additional items for fuel and power, outside processing costs, special instruments, etc. according to its actual needs.

Manufacturing overheads refer to those expenses arising from organising and controlling production by workshop and factory administrative departments, including expenses for salaries and wages, depreciation, repairs and maintenance, materials consumed, labour protection, water and electricity, office supplies, travelling transportation, insurance and so on.

Selling and general administrative expenses of an industrial joint venture shall be accounted for separately and shall not be included in the production cost of products.

Selling expenses refer to those expenses incurred in selling products and attributable to the enterprise, including expenses for transportation, loading and unloading, packaging, insurance, travelling, commission and advertising, as well as salaries and wages and other expenses of specifically established selling organs, etc.

General and administrative expenses include company headquarters expenses (salaries and wages, etc.), labour union dues, interest expenses (less interest income), exchange losses (less exchange gains), expenses of board of directors' meetings, advisory fees, entertainment expenses, taxes (including urban building and land tax, licence tax for vehicles and vessels, etc.), amortisation of organisation expenses, expenses for staff and workers' training, research and development expenses, fees for the use of site, fees for the transfer of technology, amortisation of intangible assets and other administrative expenses.

(2) The expenses of commercial enterprises incurred in the course of operation include purchasing expenses, selling expenses and administrative expenses.

Purchasing expenses include those expenses incurred in the process of merchandise purchase, such as expenses for transportation, loading and unloading, packaging, insurance, reasonable loss during transit, selecting and sorting before warehousing. 

Selling expenses include those expenses incurred in the course of merchandise sales and attributable to the joint venture, such as expenses for transportation, loading and unloading, packaging, insurance, travelling, commission, advertising, salaries and wages and other expenses of sales organs, etc.

Administrative expenses include those expenses incurred in the course of merchandise storage, and the expenses of the enterprise administrative departments, such as expenses for salaries and wages, depreciation, repairs and maintenance, materials consumed, labour protection, office supplies, travelling, transportation, insurance, labour union dues, interest expenses (less interest income), exchange losses (less exchange gains), expenses of board of directors' meetings, advisory fees, entertainment, tax, fees for the use of site, staff and workers' training and other administrative expenses.

(3) Expenses of the service-trade enterprises incurred in the course of operation include operating expenses and administrative expenses.

The operating expenses include various expenses incurred in business operation and may be summarised separately for different kinds of service.

The administrative expenses include various expenses incurred for the administration of the enterprise.

Joint ventures other than the above-mentioned types shall account for their expenses with reference to the above provisions.


Article 49. A joint venture must distinguish the costs and expenses of the current period from that of the ensuing period. Neither accrual nor amortisation shall be made arbitrarily. The costs and expenses of different internal departments shall be distinguished from each other and shall not be mixed up. An industrial joint venture shall distinguish the cost of work in process from the cost of finished goods and the cost of one product from that of the other. Neither the cost of work in process nor the cost of finished goods shall be arbitrarily increased or decreased.

Article 50. The joint venture shall select the methods of costing and of expense allocation appropriate to the characteristics of its production and operation, its type of product and its purpose of service.

An industrial joint venture may select one or more than one of the following methods for its cost accounting: product type costing, process costing, job order costing, product category costing, norm costing and standard costing.

For enterprises adopting norm costing or standard costing in accounting for product cost, the variances between actual cost and norm cost or between actual cost and standard cost shall generally be allocated according to the proportion of the products sold during a month and the products held at the end of the month.

Once the cost accounting method or the cost variance allocation method is adopted, no arbitrary change shall be allowed. If a change is necessary, it shall be approved by the board of directors, reported to the local tax authority for examination and disclosed in the accounting report.

Article 51. Joint ventures shall strengthen their control over costs and expenses, establish a responsibility cost system, formulate plans on costs and expenses, control expenditure at all times in accordance with the plans, evaluate the condition in implementing the plans periodically, analyse the cause of fluctuation in costs and expenses, take appropriate action to reduce the costs and expenses and to improve the operation and administration of the enterprise.


Chapter X Accounting For Sales And Profit

Article 52. The sales of merchandise, products and services of a joint venture shall be regarded as realised after merchandise and products are shipped, services are rendered, invoices, bills and bills of lading issued by the shipping agency and all other shipping documents are sent to the buyers or are accepted by the bank for collection.

Under the condition of delivery upon payment, if the sales proceeds are received, invoices and delivery orders are sent to the buyers, sales shall be regarded as realised whether the goods are actually issued or not.

Article 53. All the sales of a joint venture realised in a month shall be recognised in the month, and the relevant cost of the sales and expenses shall be transferred simultaneously. Revenue from sales must be matched with the cost of sales and expenses attributable. It is not allowed to recognise merely the sales revenue and disregard the relevant cost of sales and expenses. On the other hand, it is not allowed to charge the cost of sales and expenses without crediting the relevant revenue from sales.

Article 54. The sales returns of a joint venture occurring in a month shall reduce the sales revenue and cost of sales of the current month, regardless of to which year the returned sales belong.

Sales allowances given to the buyers through negotiation due to unsatisfactory quality of the merchandise or products sold or due to some other reasons shall be deducted from the sales revenue of the current month.

Article 55. A joint venture shall account for its profit every month. Joint ventures in agriculture, animal husbandry, aquaculture and other business that cannot account for profit monthly shall at least do their accounting for profit at the end of a fiscal year.

Article 56. The elements of the profit of a joint venture are as follows:


(1) The profit of an industrial joint venture includes profit from sales of the products, profit on other operations, non-operating income and expenses.

Profit from sales of the products refers to the profit derived from the products sold by the joint venture (including finished goods, semi-finished goods and industrial services).

Profit from other operations refers to those profits of a joint venture derived from rendering non-industrial services (such as transportation, etc.) and from sales of purchased merchandise and surplus materials, etc.

Non-operating income and expenses refer to the various gains and losses other than profit from sales of products and from other operations, including income from investment, loss on investment, income on disposal of fixed assets, loss on disposal of fixed asses, penalties and fines paid, penalties and fines received, donations contributed, bad debts, extraordinary losses, etc.

(2) The profit of a commercial enterprise includes profit from sales, profit from other operations and non- operating income and expenses.

Profit from sales refers to the profit derived from selling merchandise.

Profit from other operations refers to that profit derived from operations other than sales of merchandise (such as occasional repairs, rental, etc.).

Non-operating income and non-operating expenses refer to various non-operating gains and losses other than profit from sales and profit from other operations, including income on investment, loss on investment, income from disposal of fixed assets, loss on disposal of fixed assets, penalties and fines received, penalties and fines paid, donations contributed, bad debts, extraordinary losses, etc.

(3) Profit of a service-trade enterprise includes net operating income and non-operating income and expenses.


Article 57. The profit distributable by a joint venture shall be the excess of its net profit over income tax payable and the required provisions of the reserve fund, staff and workers' bonus and welfare fund and enterprise expansion fund. It shall be distributed to the participants of the joint venture in proportion to their shares of contributed capital if the board of directors decides to make the distribution.

The reserve fund may be used as a provisional financial cushion against the possible losses of a joint venture. The staff and workers' bonus and welfare fund shall be restricted to the payment of bonuses and collective welfare for staff and workers. The enterprise expansion fund may be used to acquire fixed assets or to increase the working capital in order to expand the production and operation of the joint venture.

Article 58. If a joint venture carries losses from previous years, the profit of the current year shall first be used to cover the losses. No profit shall be distributed unless the deficit from the previous years is made up.

The profit retained by a joint venture and carried over from previous years may be distributed together with the distributable profit of the current year, or after any deficit of the current year's profit is made up therefrom.

Article 59. A joint venture shall compile a profit distribution programme at the end of a year, based on the profits or losses realised in the year and the retained profit or deficit carried over from the previous years, and submit the programme to the board of directors for discussion and decision. The distribution shall be recorded in the books of accounts and recognised in the annual final accounts after the decision is made.


Chapter XII Classification of Accounts And Accounting Statements

Article 60. The rules on the classification of accounts and accounting statements of the joint ventures shall be formulated by the Ministry of Finance of the People's Republic of China, or by the relevant business regulatory departments and submitted to the Ministry of Finance for examination and approval.

A joint venture may supplement or omit the stipulated ledger accounts and the stipulated items of the accounting statements according to its specific circumstances, provided that it does not affect the accounting requirements and the summarisation of the indexes in the accounting statements.

Article 61. The accounts of the joint ventures shall generally be classified according to the operation and management needs into four broad categories: assets, liabilities, capital, profit and loss. Profit and loss accounts may also be classified into income accounts and expense accounts. For industrial joint ventures, another category may be added for cost accounts. The ledger accounts of a joint venture shall be coded according to their classification.

Article 62. The accounting statements of a joint venture shall include:


(1) Balance sheet;

(2) Income statement;

(3) Statement of changes in financial position; and

(4) Relevant supporting schedules.

A joint venture may add additional information in its accounting statements after it is approved by all its participants, in order to meet the need of the foreign participant's head office in consolidation of financial statements.

Article 63. When a joint venture with subsidiary enterprises combines its accounting statements with those of its subsidiaries, its funds appropriated to and its current accounts with its subsidiaries shall be offset against the corresponding items in the accounting statements of the subsidiaries.

Article 64. On submitting its annual accounting statements, a joint venture shall attach a descriptive overview of its financial condition, primarily explaining:


(1) Conditions of production and operation;

(2) Conditions of realisation and distribution of profit;

(3) Conditions of changes in capital and its turnover;

(4) Conditions of foreign exchange receipts and disbursements and their equilibrium;

(5) Conditions of the payment of consolidated industrial and commercial tax, income tax, fees for the use of site and fees for the transfer of technology;

(6) Conditions of overage, shortage, deterioration, spoilage, damage and write-off of different properties and supplies; and

(7) Other necessary issues to be explained.

On submitting quarterly statements, the joint venture shall also explain any special conditions.

Article 65. The quarterly and annual accounting statements of a joint venture shall be submitted to each participant of the joint venture, local tax authority, the relevant business regulatory department of the joint venture and the public finance department at the same level.

The quarterly accounting statements of a joint venture shall be submitted within 20 days after the end of each quarter, and the annual accounting statements shall be submitted together with the audit report made by the Certified Public Accountants within four months after the end of a year.

Article 66. The accounting statements of a joint venture shall be examined and signed by its president and controller and shall be under the seal of the joint venture.


Chapter XIII Accounting Documents and Accounting Books

Article 67. A joint venture must acquire or fill out original documents for every transaction occurring. All the original documents must carry faithful contents, evidence of all the required procedures and accurate figures. Original documents from an outside unit must be signed and sealed by the unit. The original documents shall be verified and signed by the head of the department and the person responsible for handling the transaction.

A joint venture shall check and inspect the original documents seriously. Any falsified or altered original document, or any fraudulent application or request or other similar event must be rejected and reported to the relevant party. The original documents with incomplete contents, insufficient evidence of required procedures or inaccurate figures shall be returned, amended or refilled. Only the original documents examined and proved correct can be taken as the basis for preparing accounting vouchers.

Article 68. The accounting vouchers of a joint venture include receiving vouchers, disbursement vouchers, and journal vouchers. All vouchers must be filled out with the required contents and can be taken as the basis in bookkeeping only after being signed by the preparer, the designated verifier and chief officer of the financial and accounting department. A receiving or disbursement voucher shall also be signed by the cashier.

Each kind of accounting voucher shall be filed according to its sequential number and bound into books monthly together with the original documents attached thereto, and shall be kept in safety without any loss or damage. For important documents concerning claims and debts that need separate safe-keeping, cross reference shall be made on the original documents of the transaction and on the related vouchers.

Article 69. A joint venture shall number sequentially all documents issued to the outside, and retain its duplicate copy (or copies) or the stub. An original of such documents with clerical errors or withdrawn for cancellation shall be kept together with the duplicate or stub of the same sequential number. If the original copy is missing or unable to be recovered, the reason shall be noted on the duplicate or stub.

Article 70. All the blank forms of important documents, such as cheque books, cash receipts, delivery orders, etc. shall be registered in a special registration book by the financial and accounting department. Requisition of those blank forms shall be approved by the chief officer or a designated person of the financial and accounting department, and the person making the requisition shall sign the registration book for receiving the forms.

Article 71. A joint venture shall set up three kinds of primary accounting books, namely, journals, general ledgers and subsidiary ledgers, as well as appropriate supplementary memorandum books.

All the books shall be kept with complete records, accurate figures, clear descriptions and prompt registration, on the basis of the examined original documents and vouchers or summary of vouchers that are proved correct.

No record in the books of a joint venture shall be destroyed, amended, altered or eliminated by correction fluid. When errors are made, they shall be amended by crossing off the error or by preparing additional vouchers according to the nature and circumstances of the error. When the crossing method of amendment is used, the person making the correction shall sign on the place of amendment.

Article 72. A joint venture keeping its accounts by electronic computer shall maintain properly its accounting records stored in or printed out by the computer and shall regard such records as accounting books. The tapes, discs, etc. shall be kept and no deletion shall be allowed unless the records in them are printed out in visible form.


Chapter XIV Audit

Article 73. A joint venture shall engage the Certified Public Accountants registered with the government of the People's Republic of China to audit its annual accounting statements and the books of accounts of the year and to issue an auditor's report, according to the provisions of the "Income Tax Law of the People's Republic of China Concerning Joint Ventures Using Chinese and Foreign Investment".

Article 74. Each participant of a joint venture may audit the accounts of the joint venture. The expenses thereon shall be paid by the participant making the audit. Any problem noted in the audit that needs to be resolved by the joint venture shall be submitted to the joint venture in a timely manner for discussion and resolution.

Article 75. The joint ventures shall furnish the auditors with all the documents, books and other relevant data as needed by them. The auditors shall be responsible for maintaining confidentiality.


Chapter XV Accounting Files

Article 76. The accounting files of a joint venture, including accounting documents, accounting books, accounting statements, etc. must be appropriately kept within the territory of the People's Republic of China. No loss or spoilage shall be allowed.

Article 77. The annual accounting statements and all other important accounting files relevant to the rights and interests of all the participants of a joint venture, such as joint venture agreements, joint venture contracts, articles of association of the joint venture, resolutions of the board of directors, investment appraisal lists, certificates on capital validation, auditing reports of the Certified Public Accountants, long term economic contracts, etc. must be kept permanently. General accounting documents, accounting books and monthly and quarterly accounting statements shall be kept for at least 15 years.

Article 78. If the accounting files need to be destroyed after the expiration of the retention period, an itemised list of the files to be destroyed shall be prepared and reported to the board of directors, business regulatory department and tax authority for approval. No files can be destroyed unless such a list is approved. The list of destroyed accounting files must be kept permanently.


Chapter XVI Dissolution And Liquidation

Article 79. When a joint venture declares dissolution and goes into liquidation on or before the expiration of the joint venture contract, a liquidation committee shall be formed to conduct an overall check of the assets of the joint venture and its claims and debts, to prepare a balance sheet and a detailed list of assets, to suggest a basis for the valuation and calculation of the assets and to formulate a plan for liquidation. After approval is obtained through submitting the liquidation plan to the board of directors for its discussion, the liquidation committee shall dispose of the assets, collect the claims, pay taxes and clear debts, and resolve all remaining problems appropriately.

Article 80. The liquidation expenses of a joint venture and the remuneration to its liquidation committee members shall be given priority in making payments from the existing assets of the joint venture.

Article 81. The net liquidation income, i.e. the liquidation income in the process of the liquidation of a joint venture less the liquidation expenses and various liquidation losses, shall be dealt with as the profit of the joint venture.

Article 82. The assets of a joint venture left over after the clearance of all its debts shall be distributed among the participants of the joint venture according to the proportion of each participant's investment contribution, unless otherwise provided by the agreement, contract or articles of association of the joint venture.

Article 83. The accounting statements on liquidation and dissolution of a joint venture shall be valid only after an examination is made and a certificate is issued by Certified Public Accountants registered with the government of the People's Republic of China.

Article 84. After the dissolution of a joint venture, its accounting books and all other documents shall be left in the care of the Chinese participant.


Chapter XVII Other Provisions

Article 85. The present Regulations are formulated by the Ministry of Finance of the People's Republic of China. If there is any change in the laws, regulations and other relevant provisions of the People's Republic of China on which these Regulations are based, the new provisions shall govern. If the present Regulations need corresponding amendment, it shall be made by the Ministry of Finance of the People's Republic of China.

Article 86. For joint ventures established in the special economic zones, if there are special provisions in the laws or regulations adopted by the National People's Congress of the People's Republic of China or its Standing Committee, or by the State Council, such provisions shall be followed.

Article 87. The right to interpret these Regulations resides in the Ministry of Finance of the People's Republic of China.

Article 88. The present Regulations shall be implemented on and after July 1, 1985.

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Interim Regulations of the People's Republic of China on Lawyers 
(Adopted at the 15th Meeting of the Standing Committee of the Fifth National People's Congress and promulgated by Order No. 5 of the Standing Committee of the National People's Congress on August 26, 1980, and effective as of January 1, 1982, Repealed by the Law of Lawyers and Legal Profession, effective January 1, 1997) 

Table of Contents:
Chapter I The Task and Rights of Lawyers

Chapter II The Qualifications of Lawyers

Chapter III Business Organizations of Lawyers

Chapter IV Supplementary Provisions


Chapter I The Task and Rights of Lawyers

Article 1. Lawyers are state legal workers whose task is to give legal assistance to state organs, enterprises and institutions, public organizations, people's communes and citizens in order to ensure the correct implementation of the law and protect the interests of the state and collectives as well as the lawful rights and interests of citizens.

Article 2. The principal duties of lawyers shall be:


(1) To accept the mandate of state organs, enterprises and institutions, public organizations and people's communes to serve as their legal advisers;

(2) To accept the mandate of a party to a civil action to serve as his representative in litigation;

(3) To accept the mandate of a defendant or the assignment of a people's court to serve as his defender in a criminal case; to accept the mandate of a private prosecutor or of the victim and his near relatives in a public prosecution to serve as their representative in litigation;

(4) To accept the mandate of a party in a nonlitigious matter to give legal assistance or serve as its representative in mediation or arbitration;

(5) To give consultative advice on legal questions and draft documents in connection with litigation or other legal matters.

Lawyers shall publicize the socialist legal system through all their professional activities.


Article 3. In performance of their duties, lawyers shall serve the cause of socialism and the interests of the people, act on the basis of facts and take the law as the criterion.

In the performance of their functions according to law, lawyers shall be protected by the law of the state, subject to no interference by any organization or individual.

Article 4. When being retained by an organization as its legal adviser, a lawyer shall have the responsibility to give advice on legal questions arising from the business of the client organization, draft and examine legal documents for it, represent it in litigation, mediation or arbitration, and safeguard its lawful rights and interests.

Article 5. When acting as representatives in litigation and nonlitigious matters, lawyers shall have the responsibility to safeguard the lawful rights and interests of the client within the scope of the mandate.

Within the scope of the mandate, the lawyer's procedural and legal acts shall have the same effect as those of the client.

Article 6. When acting as defenders in criminal cases, lawyers shall have the responsibility to safeguard the lawful rights and interests of the defendants on the basis of facts and the law.

A lawyer may refuse to act as the defender of a defendant if he believes that the defendant has not truthfully stated the facts of the case to him.

Article 7. In legal proceedings, lawyers shall have the right to consult the materials of the case and may make enquiries from organizations and persons concerned in accordance with relevant regulations. When acting as defenders in criminal cases, lawyers may meet and correspond with the defendants held in custody.

The organizations and persons concerned shall have the duty to render assistance to the lawyers engaged in the activities mentioned in the preceding paragraph.

Lawyers shall have the responsibility to keep confidential state secrets and matters of personal privacy which they come into contact within their work.


Chapter II The Qualifications of Lawyers

Article 8. The undermentioned citizens who cherish the People's Republic of China, support the socialist system and have the right to vote and stand for election shall be eligible as lawyers after passing an examination:


(1) Those who have graduated from law faculties of universities or colleges and have engaged for two or more years in judicial work, legal instruction or jurisprudential studies;

(2) Those who have had professional legal training and have worked as judges in people's courts or as procurators in people's procuratorates;

(3) Those who have received college education, have completed three or more years of economic, scientific and technological work, are proficient in their professions and the relevant laws and decrees thereof, and have gone through professional legal training and who are fit for the work of a lawyer; and

(4) Those who have attained the same level of knowledge of practical legal work as is required of persons prescribed in Items (1) and (2) above and the same level of learning as is given by college education and who are fit for the work of a lawyer.


Article 9. To be eligible as a lawyer, a person must be examined and approved by the judicial department (bureau) of a province, autonomous region, or municipality directly under the Central Government and issued a lawyer's certificate, and a report shall be made to the Ministry of Justice of the People's Republic of China for the record. Upon discovery of an improper examination and approval, the Ministry of Justice shall instruct the relevant judicial department (bureau) to conduct a reexamination.

Article 10. Those who are eligible as lawyers but are unable to leave their present positions to practise law may act as part-time lawyers. The current organizations in which they are working shall support such arrangements.

Personnel presently attached to the people's courts, people's procuratorates and people's public security organs may not act as part-time lawyers.

Article 11. Those who have graduated from law faculties of universities or colleges or have gone through professional legal training may act as apprentice lawyers after examination and approval by the judicial departments (bureaus) of provinces, autonomous regions, or municipalities directly under the Central Government.

The training period for apprentice lawyers shall be two years. Upon completion of the training period, apprentice lawyers shall be given lawyers credentials in accordance with the procedure prescribed in Article 9 of these Regulations; the training period may be extended if an apprentice lawyer fails to pass the examination.

Article 12. Lawyers who are incompetent shall be disqualified as lawyers by decision of the judicial departments (bureaus) of provinces, autonomous regions, or municipalities directly under the Central Government and with the approval of the Ministry of Justice.


Chapter III Business Organizations of Lawyers 

Article 13. Legal advisory offices shall be the business organizations for which lawyers perform their duties.

Legal advisory offices shall be public institutions under the organizational leadership and professional supervision of the judicial administrative organs of the state.

Article 14. Legal advisory offices shall be established in counties, cities and municipal districts. When necessary, specialized legal advisory offices may be established with the approval of the Ministry of Justice.

Legal advisory offices shall not be subordinate to one another.

Article 15. The principal functions of a legal advisory office shall be to direct lawyers in the development of their professional work, to organize their political studies and professional studies in law and to sum up and exchange their work score.

Article 16. A legal advisory office shall have one director and may have deputy directors where necessary. The director and deputy directors shall be elected by the lawyers in that office, subject to approval by the judicial department (bureau) of a province, autonomous region, or municipality directly under the Central Government. They shall be elected for a term of three years and may be reelected to successive terms in office.

The director and deputy director(s) of a legal advisory office shall direct the work of the office and at the same time perform their duties as lawyers.

Article 17. The mandates for lawyers to handle cases shall be accepted and service fees collected exclusively by the legal advisory office.

In the distribution of cases to lawyers, the legal advisory office shall, as best as possible and according to actual conditions, assign lawyers as requested by clients.

Article 18. A legal advisory office may appoint lawyers to carry out professional activities in other localities, and the legal advisory office there shall provide them with assistance.

Article 19. A lawyers association shall be established to protect the lawful rights and interests of lawyers, to exchange work score, to further the progress of lawyers work and to promote contacts between legal workers both at home and abroad.

The lawyers association is a social organization. It shall formulate its own articles of association.


Chapter IV Supplementary Provisions

Article 20. The standards for the title of lawyer, the regulations on awards and penalties for lawyers and the measures for the collection of service fees shall be stipulated separately by the Ministry of Justice.

Article 21. These Regulations shall come into force on January 1, 1982.

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Notice Regarding the Printing and Distribution of Regulations on the Interconnection for Operation Between the Grid And Power Plant and Between Grids (Draft) 
(Issued by the Ministry of Power Industry by Dian Zheng Fa [1994] No. 315 Decree on May 31, 1994) 

To Each Power Administration, Power Bureau of Each Province, Municipality and Autonomous Region:

In accordance with the relevant stipulations under the Administrative Rules for Grid Dispatch of the State Council, and on the basis of the consultations with the relevant departments and entities, the Ministry [of Power Industry] has formulated the Regulations on the Interconnection for Operation Between the Grid and Power Plant and Between Grids (Draft) in order to ensure the operation of the grid in a safe, high-quality and economic way and maintain the legitimate rights and interests of the interconnecting parties. We now print and distribute to you these regulations. Please report to the State Power Dispatch Communication Center in a timely manner if you encounter any questions in practice.


Regulations on the Interconnection for Operation Between the Grid and Power Plant and Between Grids (Draft) 

(Issued by the Ministry of Power Industry by Dian Zheng Fa [1994] No. 315 Decree on May 31, 1994) 


Table of Contents:

Chapter I General Provisions

Chapter II Procedures and Conditions for Interconnection Application

Chapter III Interconnection Economic Agreement

Chapter IV Interconnection and Dispatch Agreement

Chapter V Supplementary Provisions


Chapter I General Provisions

Article 1. In accordance with the relevant stipulations under the Administrative Rules, these regulations have been formulated in order to meet the demands of the socialist market economy, ensure the operation of the grid in a safe, high-quality and economic way and maintain the legitimate rights and interests of the interconnecting parties.

Article 2. These regulations shall be applied to power grid administration departments and their dispatch agencies, interconnected power plants (stations), substations and grids.

Article 3. Newly built power plants which need to be interconnected for operation shall meet the relevant industrial policies of the State and the unified plan and technical requirements for interconnection issued by the grid. Relevant power administration departments shall participate in the examination and review of the designs in connection with the interconnection. 

Article 4. Any power plant or power grid, which needs to be interconnected for operation, must enter into an interconnection agreement with the relevant grid administration department under the principles of mutual benefit and mutual agreement before it interconnects with the grid.

Article 5. The interconnection agreement shall include interconnection economic agreement, interconnection and dispatch agreement and any other agreements the parties deem necessary. The parties to the agreement shall respectively submit it to their competent department at an upper level for filing. 

Article 6. Any power plant or grid, which is interconnected for operation, shall be subject to the unified dispatch of the grid dispatch agency. The technical requirements on the interconnection by the power plant shall conform to national standards or the standards issued by the power administrative department of the State Council. The requirements for grid interconnection may be formulated as per these regulations. 


Chapter II Procedures and Conditions for Interconnection Application

Article 7. Any power plant which wants to get interconnected for operation shall submit its application to the relevant grid administration department three months prior to the examination and review of the project design, which shall examine if the design meets the requirement for interconnection, and shall give a written reply thereto within a month upon the receipt of the application.

Article 8. Any power plant which applies for interconnection must have the technical equipment and management facility which is able to accept unified dispatch by the grid.

Article 9. The construction of the power plant applying for interconnection must be completed and put into operation simultaneously with the supporting transmission facility and secondary system (including relevant devices for relay protection, automatic safety and measurement, telecommunication, automatic grid dispatch, etc.) in accordance with the approved design, and shall be examined and accepted by relevant grid administration department.

Article 10. The following terms and conditions must be met before any power plant enters into an interconnection agreement with the relevant grid administration department:

(1) providing to the relevant grid administration department with the master electrical wiring diagram, parameters for major equipment, method of interconnection, information regarding the relay protection and automatic safety devices, tele-control and telecommunication equipment; for a hydro-electric plant (including pumped-storage hydro-electric plant), information regarding the hydro construction, hydrography, reservoir dispatch curve (dispatch diagram) shall also be provided; for a nuclear power plant, information and drawings concerning the nuclear island shall also be provided;

(2) The telecommunications facility with the relevant grid dispatch agency has been completed according to the design, and are ready to go into operation;

(3) The tele-control facility has been completed according to the design, and the relevant tele-control information is ready to be sent into the grid dispatch automation system of the relevant grid dispatch agency;

(4) The relay protection and automatic safety devices installed pursuant to the design are ready for operation;

(5) The technical level of the measuring devices for electricity and energy in connection with the interconnection shall meet the relevant stipulations of the State, and the devices have been installed and initially calibrated and tested; 

(6) any other matters.

Article 11. In the event that the relevant grid administration department, because of change of circumstances, requires the power plant to install additional equipment in order to ensure the safe operation of the grid, the power plant shall do so. 

Article 12. The technical conditions for grid interconnection shall be implemented as per the regulations governing power plant.

Article 13. Interconnected power grids shall have the capability to control the safe operation of the interconnection.

Article 14. Whether the power plant or grid meets the conditions for interconnection is subject to the acceptance upon completion of the power plant, substation and transmission lines, trial operation after interconnection or other means of testing.

Article 15. Relevant grid administration department shall provide necessary technical instruction and assistance to the power plant or grid which need to get interconnection, and creative positive conditions for their interconnection. 

Article 16. In case of any dispute between the interconnecting parties on the conditions for interconnection, decision shall be made by their competent departments at a higher level (including the Ministry of Power Industry) through coordination. 


Chapter III Interconnection Economic Agreement

Article 17. The power plants or the grids shall execute the interconnection economic agreement with the relevant grid management authority.

Article 18. With respect to the quantity of on-grid energy, the power plants shall execute a purchase and sales agreement with the relevant grid management authority, and shall have the on-grid power price fixed through consultations in accordance with the relevant State regulations. Such on-grid power price shall be implemented only after they are submitted to the State or provincial authority in charge of power price for approval in accordance with relevant regulations.

Article 19. The interconnection economic agreement executed between the grid management authority and the power plants shall include the following contents:

(1) The power purchase and sales terms;

(2) The pricing terms;

(3) Terms on financial settlement;

(4) Terms regarding the liability for breach of contract;

(5) Terms on incentives and punishment;

(6) Terms on the calculation and examination of the on-grid power or power quantity which is more (less) than that set forth in the agreement due to the causes of the other party or itself;

(7) Terms on the examination of technological index and settlement;

(8) Terms on the handling of force majeure events;

(9) Terms on the amendments to the agreement;

(10) Terms on the settlement of disputes under the agreement and on arbitration; and

(11) Miscellaneous.

Article 20. Measures governing the metering of back-up power or power quantity provided during emergencies between two interconnected parties and the compensation therefor shall be determined through consultations by the parties and shall be clearly set forth in the interconnection economic agreement.

Article 21. The parties shall decide the necessity regarding the notarization for the interconnection economic agreement through consultation. The notary organ at the location of either party may notarize the interconnection economic agreement.


Chapter IV Interconnection and Dispatch Agreement

Article 22. Upon receiving the application for interconnection from a power plant, the relevant grid management authority shall, in addition to the examination and verification of its interconnection conditions, seriously organize the calculation of the adjusting value the relay protection and security automation facilities co-ordinating with the grid in order to secure the security of the grid, and then shall give the instruction to carry out the application.

Article 23. The interconnection and dispatch agreement executed by and between the grid management authority and the power plant shall include the following:

(1) Interconnected power plants must be subject to unified dispatch by the grid and comply with the relevant directive rules on grid dispatch. Grid dispatch centers shall, based on the designed capacity of each power generating unit and under the principles of equality, fairness, economy and being reasonable, make unified arrangement of peak adjusting, frequency adjusting, voltage adjusting and back-up capacity for use during emergencies by the interconnected power plants.

(2) The maximum and minimum designed output of each generating unit as verified by the relevant grid management authority shall form the basis of the relevant dispatch centers in arranging the daily load curve and peak-adjusting capacity of the power plants.

(3) When the relevant grid management authority prepares the monthly power generation plan, it shall meet the operating conditions necessary for the power plants to fulfil the power generation target set by the State or set forth in the relevant agreement.

(4) When a power plant prepares its maintenance and repair plan, it shall give overall consideration of the needs of the grid and the capability of the power plant, and shall perform its scheduled maintenance and repair in accordance with the plan approved by the grid management authority. The progress rate of repairs shall be in line with the unified arrangement of the relevant dispatch centers. Any changes to the maintenance and repair arrangements and application for approval regarding any temporary repairs shall be handled in accordance with the relevant directive rules of the power grid.

(5) Power plants shall be operated in strict compliance with the daily load curve instructed by the relevant dispatch centers, with a maximum variance of ?/FONT> 3%. When changes are made in accordance with the "Administrative Regulations on Grid Dispatch", settlement shall be made in line with the stipulations of the economic agreement. Principle stipulations shall be provided regarding the availability rate of the power plant generating units.

(6) The relevant grid management authorities will carry out specialized management of such professional work as power-relay protection of the power plants, safety automation installations, communications, grid dispatch automation and so on, and will conduct supervision of the operating status of these facilities.

(7) Determination of the points for measuring power (including active power and reactive power), power quantity and voltage. The technical grade of the meters shall be in line with the relevant State regulations and the meters shall be subject to periodic verification. The point for measuring power quantity shall be in principle located on the equipment at the ownership parting.

(8) The power plants shall, as per the requirements of the relevant grid management authorities, submit the relevant statistical statements, the accident wave-recording chart and other materials in a timely and accurate manner.

(9) The scope of dispatch.

(10) Administration of the grid safety measures.

(11) Training, examination and verification of the on-duty personnel of the dispatch system.

(12) Measures governing the amendment of agreements.

(13) Measures governing the settlement of disputes under any agreement as well as arbitration.

(14) Miscellaneous.

Article 24. In accordance with the capacity of the power plant generating units, the voltage level of the interconnection system as well as the specific conditions of the grid, the inter-provincial or the provincial power grid management authority shall determine the grid dispatch center with which a power plant shall execute the interconnection and dispatch agreement.

Article 25. The substance of the interconnection and dispatch agreement shall be in accordance with the relevant regulations applicable to the power plants.


Chapter V Supplementary Provisions

Article 26. Power plants or power grid which have already been interconnected but which have not executed the interconnection agreement shall execute a supplementary interconnection agreement with the relevant grid management authority within one (1) year upon the promulgation of these Regulations and if the interconnection conditions do not satisfy the requirements set forth in these Regulations, the deadline for improving such technical conditions of interconnection shall be clearly defined in such agreement.

Article 27. The inter-provincial or the provincial grid management authority may formulate its own detailed implementing rules in accordance with these Regulations.

Article 28. The Ministry of Power Industry shall be responsible for the interpretation of these Regulations.

Article 29. These Regulations shall be performed on a trial basis as of the date of their promulgation.

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