Circular of State Council on the Approval and Transmission of the Opinions of Further Strengthening Project Management of the Auto Industry

GuoFa [1997] No.24
July 11, 1997

The State Council has approved the Opinions Concerning Further Strengthening Project Management of the Automotive Industry of the State Planning Commission, the State Economic and Trade Commission, the Ministry of Machinery, the Ministry of Public Security, the Ministry of Foreign Trade and Economic Cooperation, the General Administration of Customs and the State Industry and Commerce Administration, which is hereby transmitted to you for earnest implementation.

All regions and departments must strictly carry out the Circular of the State Council Concerning the Issuance of the Industrial Policy of the Automotive Industry, and seriously conduct an inspection on the status of its implementation. Examination and approval of projects of automobiles, motorcycles and engines without authorization in violation of state provisions must be seriously dealt with once uncovered and the leading personnel involved shall be investigated of their responsibilities. The State Planning Commission shall, in conjunction with the departments concerned, conduct the inspection in accordance with the spirit of this Circular, deal with the problems discovered in time and submit a report to the State Council.

Since the issuance of the Circular of the State Council Concerning the Issuance of the Industrial Policy of the Automotive Industry in 1994, the momentum of dispersed, blind and repetitious development of the automotive industry in our country has been somewhat curbed. However, of late, a number of regions and departments have, proceeding from local interests, taken up new automotive projects without state approval outside the designated sites under state planning. A number of units have conducted talks with foreign businesses without authorization on the construction of joint-venture automotive projects, and gone through the formalities of examination and approval on their own by breaking the whole project into parts or "acting first and reporting afterwards", forcing the state to approve after making the fait accompli. A number of automobile manufacturing enterprises have, in violation of the provisions of the relevant ministries and commissions of the state on the administration of automobile, converted civilian vehicle and motorcycle manufacturing enterprises and their product catalogs nationwide, illegally assembled automobiles, speculated on selling certificates of quality, transferred product catalogs and even embarked on whole-vehicle manufacture projects in the name of vehicle conversion. These problems, if not corrected in time, will lead to new, blind and repetitious construction, seriously affecting the sound development of the automotive industry in China. For the purpose of further implementation of the Industrial Policy of the Automotive Industry, realization of tasks prescribed in the Ninth Five-year Plan for National Socio-economic Development and the Program for Perspective Goals in 2010 and promotion of the sound development of the automotive industry in China, the following Opinions are hereby put forth:

1. Further enhancing the macro-control over investment projects in the automotive industry. All fixed-asset investment projects involving automobiles (including buses and all types of converted vehicles, the same hereinafter), whole motorcycles and engines (including motorcycle engines, the same hereinafter), regardless of the nature of construction (including capital construction, technological transformation, technological induction as well as assembly projects for export with import auto and motorcycle components and complete-set manufactured parts under processing trade, etc.), irrespective of the source of capital(domestic capital or utilization of foreign capital) and whether it is above ceiling or below ceiling, shall be submitted to the State Planning Commission, the State Economic and Trade Commission for examination and approval in conjunction with the departments concerned, among which the major projects shall be submitted to the State Council for examination and approval. Upon remarks in preliminary examination put forth by the Ministry of Machinery with respect to the aforesaid projects, projects involving capital construction and processing trade shall be subject to the examination and approval of the State Planning Commission and projects of technological transformation shall be subject to the examination and approval of the State Economic and Trade Commission; major projects shall be submitted to the State Council for examination and approval upon examination and verification by the State Planning Commission or the State Economic and Trade Commission according to the nature of construction. The State Economic and Trade Commission shall, before the examination and approval of above-ceiling projects of technological transformation utilizing foreign capital and submitting the projects of technological transformation to the State Council for examination and approval, first dispatch the papers of the said projects to the State Planning Commission for countersignature.

2. With respect to projects of whole-vehicle automobiles and motorcycles as well as import components and complete-set manufactured parts under processing trade, customs formalities for the record shall be completed on the strength of project approval documents of the State Planning Commission or the State Economic and Trade Commission.

3. For requests for increase in investment in Sino-Foreign joint venture projects of whole-vehicle automobiles and motorcycles and engines, irrespective of whether they are projects above the ceiling or below the ceiling, their feasibility studies shall be submitted to the State Planning Commission or the State Economic and Trade Commission according to the nature of construction while listing the projects under the state plan for examination and approval in conjunction with the departments concerned, revision of joint venture enterprise contracts shall be submitted to the Ministry of Foreign Trade and Economic Cooperation for examination and approval.

4. For enterprise business scope involving projects of manufacture, assembly and processing trade of whole-vehicle automobiles and motorcycles and engines, applications for the completion of formalities of registration shall be filed at organs of industry and commerce administration on the strength of the project approval documents of the State Planning Commission or the State Economic and Trade Commission and the Ministry of Machinery. Organs of industry and commerce administration shall not process the registration of those enterprises without going through the formalities of examination and approval in accordance with the aforesaid provisions, and the products manufactured by them shall be prohibited from distribution in the market. Enterprises that commit violations of the provisions shall be investigated and dealt with by organs of industry and commerce administration. Specific measures for implementation shall be worked out by the State Administration of Industry and Commerce.

5. A sorting-out and consolidation of the existing automobile and motorcycle manufacturing enterprises shall be carried out in 1997 which shall be headed by the Ministry of Machinery in conjunction with the Ministry of Public Security and other departments concerned. Enterprises that do not have the basic required conditions for manufacture and enterprises that have committed acts of manufacturing vehicle types inconsistent with the product catalog or transferring the catalog and selling product quality certificates shall all be revoked of their corresponding product catalogs. Double quality certificate system (whole vehicle quality certificate and chassis quality certificate) shall be practiced with respect to the products manufactured by vehicle conversion plants.

Specific measures shall be worked out by the Ministry of Machinery in conjunction with the relevant departments.