Article 1 The present Measures are enacted with a view to regulating
the act of raising foreign debts, bringing more benefits from the
use foreign debt funds, and avoiding the risk of foreign debts.

Article 2 The term "foreign debt" as mentioned in the present
Measures refers to the debts owed by domestic institutions to
non-residents in the form of foreign currency.
Article 3 "Domestic institutions" as mentioned in the present
Measures refers to the permanent bodies established according to law
in the territory of China, including but not limited to the
governmental organs, domestic financial institutions, enterprises,
institutions and social organizations.
Article 4 "Nonresidents" as mentioned in the present Measures refer
to the institutions and natural persons abroad, and the nonpermanent
institutions established according to law in the territory of China.
Article 5 In accordance with the classification of the debts,
foreign debts shall be divided into loans offered by foreign
governments, loans offered by the international financial
organizations and international commercial loans.
1. Loans offered by the foreign governments refer to the official
credit raised by the Chinese government from foreign governments;
2. Loans offered by the international financial organizations refer
to the noncommercial credit which the Chinese government owes to the
World Bank, Asia Development Bank, Agricultural Development Funds of
the United Nations and other international or regional financial
organizations; and
3. International commercial loans refer to the commercial credit
which the domestic institutions owe to the nonresidents, including:
(1) loans raised from overseas banks or other financial
organizations;
(2) loans borrowed from overseas enterprises, or other financial
organizations and natural persons;
(3) medium-term or long-term bonds (including convertible bonds)
issued by foreign banks or short-term bonds (including commercial
negotiable instruments, and large amount transferable deposit
receipts);
(4) the buyers'' credit, deferred payment and trade finance in other
forms;
(5) international financial leases;
(6) foreign currency deposits of nonresidents;
(7) debts repaid in cash in compensation trade; and
(8) international loans of other categories.
Article 6 According to the responsibility for the repayment, foreign
debts may be divided into sovereign debts and non-sovereign debts.
1. The sovereign debts refer to the foreign debts borrowed by the
institutions authorized by the State Council in the name of the
state and guaranteed with the state credit for the repayment;
whereas
2. The non-sovereign debts refer to other foreign debts except as of
the sovereign debts.
Article 7 "Foreign guaranty" mentioned in the present Measures
refers to the guaranty provided by the domestic institutions for the
nonresidents in accordance with the Guaranty Law of the People''s
Republic China through means of surety, mortgage, and pledge.
Potential obligations for the repayment of the foreign debts
resulting from the foreign guaranty shall be regarded as feasible
foreign debts.
Article 8 The State shall conduct an overall control over all of the
foreign debts and feasible foreign debts. The borrowing of foreign
debts, guaranty for foreign debts, and the usage and repayment of
foreign debts shall comply with the provisions of relevant laws,
rules and regulations of the State and comply with the present
Measures.
Article 9 The State Development Planning Commission, Ministry of
Finance, and State Administration of Foreign Exchange are the
departments responsible for the administration of foreign debts.
Chapter II Raising of Foreign Debts and Foreign Guaranty
Article 10 According to the need of the national economy and social
development, and the conditions of the international income and
expenses and capacity of bearing foreign debts, the State
Development Planning Commission shall, jointly with other relevant
departments, draw up the State''s plan for the borrowing of foreign
loans, and rationally determine the overall amount of foreign debts
and the standards of their structural adjustment and control.
Article 11 The State shall, in compliance with the category of
foreign debts, liability for repayment, and the nature of the
borrowers, effect separate management on foreign debts.
Article 12 Loans provided by international financial organizations
or foreign governments shall be borrowed by the State in a
consolidated way.
　　The State Development Planning Commission shall, jointly with
other relevant departments like the Ministry of Finance, make
overall plans for loan projects to be chosen provided by the World
Bank, Asia Developing Bank, Agricultural Development Funds of the
United Nations, and foreign governments; the Ministry of Finance
shall, in accordance with the overall plans, organize the foreign
negotiation, consultation and conclusion of loan agreements, and the
direct relending or relending through the relevant financial
institutions to the domestic debtors. The plans for the loan
projects to be chosen provided by the World Bank, Asia Developing
Bank, Agricultural Development Funds of the United Nations, and some
key foreign governments shall undergo approval by the State Council.
Article 13 Where the Ministry of Finance, in the name of the State,
issues bonds abroad, the Ministry shall report to the State Council
for approval, which shall be included in the plans of foreign loans.
Medium-term or long-term bonds issued by any other domestic
institutions abroad shall be subject to examination and verification
by the State Development Planning Commission and Ministry of
Finance, which shall report the bonds to the State Council for
approval.; short-term bonds issued abroad shall be subject to
examination and approval by the State Administration of Foreign
Exchange; where the issue of short-term bonds is scrolled, the issue
shall be subject to the joint approval by the State Administration
of Foreign Exchange and State Development Planning Commission and
Ministry of Finance.
Article 14 With regard to the medium-term or long-term international
commercial loans which national commercial banks raise, the State
shall enforce a balance control; the balance shall be subject to the
examination and verification of the State Development Planning
Commission and other relevant departments, and then shall be
reported to the State Council for examination and approval.
Article 15 Long-term or middle-term international commercial loans
borrowed by domestic institutions such as enterprises with Chinese
capital shall be subject to approval by the State Development
Planning Commission.
Article 16 With regard to the short-term international commercial
loans which domestic institutions with Chinese capital raise, the
State shall exert a balance control; the balance be subject to
examination and approval by the State Administration of Foreign
Exchange.
Article 17 With regard to the foreign debts raised by
foreign-capital financial institutions within China, the State shall
enforce an administration on the total amount. Measures on the
administration shall be separately enacted.
Article 18 The summation of the accumulated medium-term and
long-term debts borrowed by enterprises with foreign investment and
the balance of short-term debts shall not exceed the surplus between
the total investment in projects approved by the verifying
departments and the registered capital.
　　Within the range of the surplus enterprises with foreign
investment may borrow foreign loans at their own will. If the loans
exceed the surplus, the total investment in projects shall be
reexamined by the original examination and approval departments.
Article 19 Foreign guaranty provided by domestic institutions for
foreign debts shall be in compliance with the State''s laws, rules
and regulations and the relevant provisions of the State
Administration of Foreign Exchange.
Article 20 Domestic institutions shall not provide guaranty for
non-business external organizations.
Article 21 Without approval of the State Council, no governmental
organs, social organizations or institutions shall raise foreign
loans or provide foreign guaranty.
Article 22 After a domestic institution has concluded a contract for
foreign loans or providing foreign guaranty, it shall, in accordance
with relevant provisions, apply to the foreign exchange
administration departments for registration. Contracts for
international commercial loans or contracts for the corresponding
guaranty shall not enter into force until they are registered.
Chapter III Use of the Foreign Debt Capital
Article 23 Foreign debt funds shall be used in the economic
development and structural adjustment of the stored foreign debts.
Article 24 Favorable foreign medium-term or long-term loans such as
loans provided by the international financial organizations or
foreign governments shall be mainly used in the infrastructure and
construction projects for public welfare, with preference to the
western part of China.
Article 25 Medium-term or long-term international commercial loans
shall be mainly used for introduction of advanced technology and
equipment, and for the adjustment of the structure of industries and
structure of foreign debts.
Article 26 Medium-term or long-term foreign debt capital borrowed by
domestic institutions shall, strictly according to the approved
purposes, be rationally used, and shall not be diverted for other
purposes. Any necessary change of the purposes of use shall be
subject to approval through the original procedures.
Article 27 Short-term debts borrowed by domestic enterprises shall
be mainly used as circulating funds, which shall not be used for
medium-term or long-term purposes such as in fixed assets.
Article 28 Where investment projects of fixed assets are funded with
foreign debt capital, legal person responsibility system of a key
project shall be practiced so as to make the legal persons of the
project responsible for the benefit of the use of the foreign debt
capital.
　　If, in accordance with the Law of the People''s Republic of China
on Bid Invitation and Bidding and the relevant provisions prescribed
by foreign organizations which lend the money, any purchase must be
conducted through bid invitation; the bid invitation shall be
handled in strict accordance to the relevant provisions.
Article 29 Foreign debts regulatory departments shall be responsible
for the administration and supervision of the use of foreign debt
capital.
Article 30 The State Development Planning Commission shall, in
accordance with the provisions of the Regulations on the Check of
the Important National Construction Projects, shall send specials to
key national construction projects which are funded with foreign
debt capital, and shall perform inspection on the implementation of
the projects and usage of the debts.
Chapter IV Repayment of Foreign Debts and Management of Risk
Article 31 Sovereign foreign debts shall be repaid by the State
uniformly. If the sovereign foreign debt capital is relent to
domestic debtors directly by the Ministry of Finance or through
financial institutions, the domestic debtors shall be liable for
repayment of the debts to the Ministry of Finance or to the
financial institutions which handle the relending.
Article 32 Non-sovereign foreign debts shall be subject to the
responsibility of the debtors themselves for risk and repayment.
Article 33 Debtors may fulfill the repayment of the debts with the
foreign exchanges which they possess, or upon verification and
approval by foreign exchange regulatory departments, with foreign
exchanges purchased with Renminbi.
Article 34 With respect to the debts which a debtor fails to repay,
if there is a surety, the surety shall be responsible for the
repayment of the debts.
Article 35 If the surety needs, pursuant to the provisions of the
contract for surety, to perform the obligation of repayment of the
debts for the debtor, the surety shall apply to the foreign exchange
regulatory departments for verification for the performance of the
contract for surety.
Article 36 Debtors shall reinforce the management on the risk of
foreign debts, and adjust and optimize the debt structure.
　　On the premise that the range of the original debts is not
enlarged, debtors may, upon examination and approval of the State
Development Planning Commission, reduce the cost of foreign debts
and optimize the their structure by means of repayment of foreign
debts at a higher cost with foreign debts borrowed at a lower cost.
Therein, if the sovereign foreign debts are concerned, examination
and approval by the Ministry of Finance shall be needed.
Article 37 Debtors may, for the purpose of evasion of risk, entrust
competent financial institutions to use financial tools to evade the
exchange rate risk and interest rate risk of the foreign debts.
Chapter V Supervision and Administration on Foreign Debts
Article 38 Foreign debt regulatory departments shall, pursuant to
the laws, rules and regulations, and the relevant provisions of the
present Measures, conduct supervision and administration on foreign
debts and foreign guaranty.
Article 39 When the foreign debt regulatory departments perform
duties and responsibilities of supervision and administration, they
are entitled to demand the debtors and relevant units to offer
information concerned, check the bills and capital.
Article 40 If a domestic institution fails to perform the procedures
of examination and approval or to fulfill the registration according
to the relevant provisions when it raises foreign debts or provides
foreign guaranty, the contracts for loans or guaranty which it
concludes shall not be legally binding.
Article 41 Foreign debts or guaranty, which are not embodied in the
form of contracts for foreign debts or guaranty, but actually
constitute obligations or potential obligations of repayment of
foreign debts, shall be subject to the supervision and
administration on foreign debts according to the present Measures.
Article 42 Violation of the principle of pooling of interest and
joint assumption of risk shall be forbidden so as to ensure that the
direct foreign investors will not raise foreign debts disguisedly by
means of fixed return.
Article 43 Without approval by the foreign debts regulatory
departments, overseas enterprises with Chinese capital shall not
transfer the risk of their foreign debts or obligations of repayment
to domestic enterprises.
Article 44 If financial institutions operating foreign exchange
business find any act that violates the present Measures in the
course of opening foreign exchange and foreign debts accounts, and
handling the business of foreign exchange, they shall timely submit
report to the foreign debts regulatory departments concerned, and
shall cooperate with the regulatory departments to carry out
investigations.
Article 45 The foreign debt regulatory departments shall pay strict
attention to the trends of the foreign debts, establish and perfect
an overall early warning system.
Article 46 The State Administration of Foreign Exchange shall be
responsible for the monitoring of foreign debts through statistics,
and regularly publicize the statistical data of the foreign debts.
Article 47 If any domestic institution, in violation of the present
Measures, raises foreign debts or provides foreign guaranty, its
competent department shall impose administrative sanction on the
persons directly in charge or the other persons directly
responsible. If the offense constitutes a crime, criminal liability
shall be pursued according to law.
Article 48 If a staff member of the foreign debt regulatory
department engages in malpractices for personal gain, abuses his
power or neglect his duty, the department for which he works shall
impose an administrative sanction on him. If the offense constitutes
a crime, the offender shall be subject to criminal liabilities.

Chapter VI Supplementary Provisions

Article 49 Loans raised by domestic institutions from the Special
Administrative Regions of Hong Kong and Macau, and from the Region of
Taiwan and guaranty provided for them, shall be subject to
administration with reference to the present Measures.

Article 50 Foreign debts regulatory departments shall, according to
the present Measures, enact and perfect the relevant regulations for
the implementation of the present Measures.

Article 51 The present Measures shall be subject to interpretation
of the State Development Planning Commission, Ministry of Finance,
and State Administration of Foreign Exchange.

Article 52 The present Measures shall enter into force as of March 1, 2003.