(Adopted at the 1st Session of the 7th National People's Congress on April 13, 1988, and amended by the 18th Session of the Standing Committee of the 9th National People's Congress on October 31, 2000)

Article 1. This Law is specially formulated in order to expand foreign economic cooperation and technological exchange, and to promote the joint establishment of Chinese-foreign cooperative joint ventures (hereinafter referred to as 
"cooperative joint ventures") in China by foreign enterprises, other economic organizations or individuals (hereinafter referred to as "foreign parties") and enterprises or other economic organizations of the People's Republic of China 
(hereinafter referred to as "Chinese parties") in accordance with the principle of equality and mutual benefit.

Article 2. When a Chinese party and a foreign party establish a cooperative joint venture, they shall, in accordance with the provisions of this Law, provide in the cooperative joint venture contract for matters such as investment or cooperation conditions, the distribution of earnings or products, the sharing of risks and losses, the form of operation and management and the title to property upon termination of the cooperative joint venture.
A cooperative joint venture which complies with the requirements for legal persons contained in Chinese law shall obtain the status of a Chinese legal person according to law.

Article 3. The lawful rights and interests of a cooperative joint venture and of the Chinese party and the foreign party thereto shall be protected by the state according to law.A cooperative joint venture must observe Chinese laws and regulations and may not harm the public interest.The relevant authorities of the state shall supervise cooperative joint ventures according to law.

Article 4. The state encourages the establishment of productive cooperative joint ventures which are export-oriented or technologically advanced.

Article 5. Applications for the establishment of a cooperative 
joint venture shall be made by submitting for examination and 
approval such documents as the agreement, contract and 
articles of association entered into by and between the 
Chinese party and the foreign party to the department in 
charge of foreign economic relations and trade under the State 
Council or the department or local government authorized by 
the State Council (hereinafter referred to as the "examination 
and approval authority"). The examination and approval 
authority shall decide whether to approve or disapprove the 
application within forty-five (45) days from the date of 
receipt of the same.
Article 6. Upon approval of the application for the 
establishment of a cooperative joint venture, an application 
for registration shall be made within thirty (30) days from 
the date of receipt of the approval certificate to the 
authority for the administration of industry and commerce and 
a business license shall be collected. The date of 
establishment of a cooperative joint venture shall be the date 
of issuance of its business license.
A cooperative joint venture shall, within thirty (30) days of 
the date of its establishment, go through tax registration 
procedures with the tax authorities.
Article 7. Major amendments to a cooperative joint venture 
contract agreed upon by the Chinese party and the foreign 
party during the term of cooperation shall be submitted to the 
examination and approval authority for approval. If the 
content to be changed involves statutory items of industrial 
and commercial registration or tax registration, the 
registration with the authority for the administration of 
industry and commerce and the tax authorities shall be 
amended.
Article 8. The investment made or cooperation conditions 
provided by Chinese and foreign parties may be in the form of 
cash, material objects, land-use rights, industrial property 
rights, unpatented technology and other property rights.
Article 9. Chinese and foreign parties shall perform their 
obligations in respect of making the investment in full and 
providing the cooperation conditions according to schedule and 
in accordance with the provisions of the laws, regulations and 
the cooperative joint venture contract. If the parties fail to 
perform the said obligations according to schedule, the 
authority for the administration of industry and commerce 
shall specify a time limit for the performance thereof. If the 
parties have still not performed the said obligations upon the 
expiration of the specified time limit, the matter shall be 
dealt with by the examination and approval authority and the 
authority for the administration of industry and commerce in 
accordance with relevant regulations of the state.
The investment made by or cooperation conditions provided by 
Chinese and foreign parties shall be verified by an accountant 
registered in China or a relevant organization, who (which) 
shall issue a certificate.
Article 10. If a Chinese or foreign party wishes to assign 
part or all of its rights and obligations under the 
cooperative joint venture contract, it must obtain the consent 
of the other party and submit the assignment to the 
examination and approval authority for approval.
Article 11. A cooperative joint venture shall conduct its 
operational and management activities in accordance with its 
approved contract and articles of association. The autonomy of 
a cooperative joint venture in terms of operation and 
management shall not be interfered with.
Article 12. A cooperative joint venture shall form a board of 
directors or a joint management committee which shall decide 
the important issues concerning the cooperative joint venture 
in accordance with the provisions of the contract or the 
articles of association of the cooperative joint venture. If 
the position of chairman of the board of directors or head of 
the joint management committee is assumed by the Chinese party 
or the foreign party, the position of vice chairman or deputy 
head shall be assumed by the other party. The board of 
directors or joint management committee may decide to appoint 
or engage a general manager to take charge of the day-to-day 
operation and management of the cooperative joint venture. The 
general manager shall report to the board of directors or 
joint management committee.
If, upon the establishment of a cooperative joint venture, a 
party other than the Chinese party and foreign party thereto 
is entrusted with the operation and management thereof, such 
change shall be subject to the unanimous consent of the board 
of directors or joint management committee and be submitted to 
the examination and approval authority for approval. In 
addition, the registration with the authority for the 
administration of industry and commerce shall be amended.
Article 13. Matters such as the employment, dismissal, 
remuneration, welfare benefits, labor protection and labor 
insurance of the staff and workers of a cooperative joint 
venture shall be provided for in contracts according to law.
Article 14. The staff and workers of a cooperative joint 
venture shall, according to law, establish a trade union to 
carry out trade union activities and to protect the lawful 
rights and interests of the staff and workers.
A cooperative joint venture shall provide the conditions 
necessary for the activities of its trade union.
Article 15. A cooperative joint venture must keep account 
books in China, submit accounting statements in accordance 
with regulations, and accept the supervision of the finance 
department and tax authorities.
If a cooperative joint venture violates the preceding 
paragraph by failing to keep account books in China, the 
finance department and tax authorities may impose a fine and 
the authority for the administration of industry and commerce 
may order it to cease operation or cancel its business 
license.
Article 16. A cooperative joint venture shall open a foreign 
exchange account with a bank or other financial institution 
that is permitted by the state authority for the 
administration of exchange control to engage in foreign 
exchange business.
Matters concerning foreign exchange of a cooperative joint 
venture shall be handled in accordance with state regulations 
concerning foreign exchange control.
Article 17. A cooperative joint venture may borrow funds from 
financial institutions in China, and may also borrow funds 
outside China.
Loans taken out by the Chinese party and the foreign party for 
the purpose of making its investment or providing cooperation 
conditions, and the guarantees therefor, shall be arranged by 
each Party itself.
Article 18. All insurance of a cooperative joint venture shall 
be carried with an insurance organization in China.
Article 19. A cooperative joint venture may, within its 
approved scope of operation, import supplies it requires and 
export products it has produced. Supplies such as raw 
materials, fuel, etc., required by a cooperative joint venture 
within its approved scope of operation may be purchased on the 
domestic or international market.
Article 20. A cooperative joint venture shall pay tax in 
accordance with state regulations concerning taxation and may 
enjoy preferential treatment in the form of reduction of and 
exemption from tax.
Article 21. If the Chinese party and the foreign party 
stipulate in the cooperative joint venture contract that the 
Chinese party shall take title to all fixed assets of the 
cooperative joint venture upon expiration of the term of 
cooperation, they may provide in the cooperative joint venture 
contract for a method whereby the foreign party first recovers 
its investment during the term of cooperation. If the 
cooperative joint venture contract stipulates that the foreign 
party shall recover its investment before the payment of 
income tax, an application must be filed with the finance 
department and tax authorities, which shall examine and 
approve the same in accordance with state regulations 
concerning taxation.
If the foreign party first recovers its investment during the 
term of cooperation in accordance with the preceding 
paragraph, the Chinese party and the foreign party shall 
assume the liabilities of the cooperative joint venture in 
accordance with the provisions of relevant laws and the 
cooperative joint venture contract.

Article 22. After performing its statutory obligations and its obligations under the cooperative joint venture contract, a foreign party may remit out of China, according to law, the profit distributed to it, other income lawfully derived by it, and the funds distributed to it upon termination of the cooperative joint venture contract. The expatriate staff and workers of a cooperative joint venture may remit out of China their income from wages and other lawful income after paying individual income tax in accordance with the law.

Article 23. Upon the expiration or early termination of the term of a cooperative joint venture, its assets, claims and obligations shall be liquidated in accordance with statutory procedures. The Chinese party and the foreign party shall determine the ownership of the property of the cooperative joint venture in accordance with the provisions of the cooperative joint venture contract.
Upon the expiration or early termination of the term of a cooperative joint venture, the registration of the enterprise with the authority for the administration of industry and commerce and the tax authorities shall be cancelled.

Article 24. The term of cooperation of a cooperative joint venture shall be discussed by the Chinese party and the foreign party and shall be specified in the cooperative joint venture contract. If the Chinese party and the foreign party agree to extend the term of cooperation, they shall, no later than one hundred and eighty (180) days prior to the expiration of such term, file an application with the examination and approval authority. The examination and approval authority shall, within thirty (30) days from the date of receipt of the 
application, decide whether to approve or disapprove the same.

Article 25. When a dispute arises in connection with the performance of the contract and articles of association of a cooperative joint venture, the Chinese party and the foreign party shall resolve the dispute through consultation or 
mediation. If the Chinese party and the foreign party are unwilling to settle by consultation or mediation, or if consultation or mediation is unsuccessful, the dispute may be submitted for arbitration to a Chinese arbitration organization or other arbitration organization in accordance with an arbitration clause in the cooperative joint venture contract or a written arbitration agreement subsequently reached.
If the Chinese party and the foreign party have neither included an arbitration clause in the cooperative joint venture contract nor subsequently reached a written arbitration agreement, legal proceedings may be commenced in a Chinese court.

Article 26. Implementing rules shall be formulated by the department in charge of foreign economic relations and trade under the State Council on the basis of this Law, which rules shall come into force upon approval by the State Council.

Article 27. This Law shall come into force on the date of promulgation.