(Adopted 13 April 1988 at the 1st Session of the 7th National People's Congress Revised 31 October 2000 at the 18th Meeting of the Standing Committee of the National People's Congress by the Decision on the Revision of the "Law of the People's Republic of China on Sino-foreign Co-operative Enterprises")

Article 1

This Law is formulated in order to expand economic co-operation and technological exchange with foreign parties and to encourage foreign enterprises and other economic entities or individuals (hereinafter referred to as foreign partners) to establish joint Sino-foreign co-operative enterprises (hereinafter referred to as co-operative enterprises) within Chinese territory together with enterprises or other economic entities of the People's Republic of China (hereinafter referred to as Chinese partners) in accordance with the principles of equality and mutual benefit.

Article 2

When Chinese and foreign partners establish a co-operative enterprise, provisions on such items as investment or terms for co-operation, distribution of earnings or products, sharing of risks and losses, method of business management and the ownership of property on the expiry of the contract term shall be prescribed in the co-operative enterprise contract in accordance with the provisions of this Law.

A co-operative enterprise, which complies with the provisions of Chinese law for a legal person, shall acquire the status of a Chinese legal person．

Article 3

The State shall protect the legal rights and interests of co-operative enterprises as well as the Chinese and foreign partners in accordance with the law.

A co-operative enterprise shall abide by the laws and regulations of the People's Republic of China and shall not harm the public interests of Chinese society.

The relevant State organs shall supervise co-operative enterprises in accordance with the law.

Article 4

The State shall encourage the establishment of export-oriented or technologically advanced production-type co-operative enterprises.

Article 5

When applying to establish a co-operative enterprise, the agreement, contract, articles of association and other relevant documents signed by the Chinese and foreign partners shall be submitted for examination and approval to the State Council department in charge of foreign economic relations and trade or a department or local government authorized by the State Council (hereinafter referred to as an examining and approving organ). The examining and approving organ shall make a decision on whether or not to approve the application within 45 days of its receipt.

Article 6

Following approval of an application to establish a co-operative enterprise, an application for registration and a business license shall be made to the administration for industry and commerce within 30 days of receiving the certificate of approval. A co-operative enterprise shall be deemed to be established from the date of issue of its business license.