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	MEASURES OF OVERSEAS INVESTMENT COMPREHENSIVE PERFORMANCE EVALUATION (TRIAL)

	(Notice of the Ministry of Foreign Trade and Economic Cooperation on Printing and Distributing the Measures of Overseas Investment Comprehensive Performance Evaluation (Trial), (No. 523 [2002] of the Ministry of Foreign Trade and Economic Cooperation), October 24, 2002: Since the Central Committee of the Communist Party and the State Council have proposed speeding up the implementation of the strategy of "going out", China's overseas investment has developed rapidly and has become one of the major methods by which China's enterprises participate in international competition and cooperation. In the new situation that the opening up has entered a new phase, it is necessary to conduct objective and scientific comprehensive evaluation and analysis of China's overseas investment activities to fully understand China's overseas investment status and to effectively regulate China's overseas investment activities. The Ministry of Foreign Trade and Economic Cooperation (hereinafter referred to as the MOFTEC) has established the "system of overseas investment comprehensive performance evaluation" in accordance with the needs of changing the government functions and in light of the new situation of overseas investment after China's accession to the WTO. The Measures for Overseas Investment Comprehensive Performance Evaluation (Trial) are hereby printed, which shall come into force as of January 1, 2003, and the relevant matters are notified as follows: 1. The establishment of the system of overseas investment comprehensive performance evaluation is an attempt to conduct macro-control over overseas investment in line with the market mechanism. The evaluation results will be used in China's macro-control and supervision of the overseas investment, in the early-warning system of the international balance, industry situation and foreign trade and economic relationships, to provide a scientific basis for the formulation of the relevant policies and regulations on the promotion, guarantee and service of overseas investment, and to guide the enterprises to choosing the investment direction and field. 2. Overseas investment performance evaluation will be conducted once a year, the specific methods are provided for in the attached Measures for Overseas Investment Comprehensive Performance Evaluation (Trial). The evaluation results will be an important part of the annual inspection of overseas enterprises. 3. The MOFTEC will organize the relevant training with respect to the overseas investment comprehensive performance evaluation, the entities shall appoint special personnel to take part in such training, and shall make sure to connect the training with the annual inspection of overseas enterprises. 4. The departments (committees, bureaus) of the localities, and the national enterprises shall earnestly carry out the evaluation. If there are any notions and suggestions in the course of work, please contact with this Ministry (Cooperation Department) directly)


SUBJECT : OVERSEAS INVESTMENT COMPREHENSIVE PERFORMANCE EVALUATION
ISSUING DEPARTMENT : MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION OF THE PEOPLE'S REPUBLIC OF CHINA (DISSOLVED)
ISSUE DATE : 10/24/2002
IMPLEMENT DATE : 01/01/2003
LENGTH : 914 words
TEXT :

TABLE OF CONTENTS

CHAPTER I GENERAL RULES
CHAPTER II TIME, CONTENTS AND PROCEDURES OF THE PERFORMANCE EVALUATION
CHAPTER III PERFORMANCE EVALUATION RESULTS
CHAPTER IV SUPPLEMENTARY RULES

CHAPTER I GENERAL RULES

Article 1. These Measures are hereby formulated in order to make a scientific comprehensive evaluation and analysis on overseas investment, to fully understand the overseas investment status of China, to strengthen the effective control of China's overseas investment activities and to promote the healthy development of overseas investment.

Article 2. The MOFTEC shall organize, coordinate, supervise and inspect the overseas investment comprehensive performance evaluation of the whole country. The departments (committees, bureaus) of foreign trade and economic cooperation of the provinces, autonomous regions, municipalities directly under the Central Government and cities directly under State Planning (hereinafter referred to the local departments in charge of foreign trade and economic cooperation) and the enterprises centrally governed (hereinafter referred to central enterprises) shall be in charge of the overseas investment comprehensive performance evaluation of the enterprises under their respective jurisdictions.

Article 3. Foreign enterprises mentioned in these Measures refers to overseas enterprises set up and invested by our legal person.

CHAPTER II TIME, CONTENTS AND PROCEDURES OF THE PERFORMANCE EVALUATION

Article 4. The period from April 1 to June 30 of each year shall be the work time for performance evaluation.

Article 5. The comprehensive performance evaluation of overseas enterprises shall be conducted in 3 categories, namely service trade, manufacturing and resource development.

Article 6. Contents of overseas enterprise performance evaluation shall include 5 aspects, namely asset operation efficiency, asset quality, repayment capacity, development capacity and social contributionL

(1) The specific norms for asset operation efficiency are:

1. Rate of yield on net assets = total profits (before tax)/average shareholder equity
2. Rate of growth of fixed assets = (total fixed assets of the current year - total fixed assets of last year)/total fixed assets of last year;
3. Returns on total assets = total profits/average total assets
4. Returns on sales = total profits/sales income

(2) The specific norms for asset quality are:

1. Asset turnover = income from main operation/average total assets
2. Current asset turnover = income from main operation /average current assets
3. Utilization ratio of fixed assets

(3) The specific norms for repayment capacity are:

1. Asset liability ratio = average total debts/average total assets
2. Current ratio = current assets/current debts

(4) The specific norms for development capacity are:

1. Market share
2. Profit growth ratio = (profits of the current year - profits of the last year) / profits of last year
3. Sales growth ratio = (sales income of the current year - sales income of the last year)/sales income of the last year
4. Labor productivity = industrial added value/average employee number

(Among them, the industrial added value refers to the final result of industrial production presented in the form of currency within the report period of the industrial trades. Industrial added value calculated according to production method equals to the total output with the intermediate input deducted; industrial added value calculated according to the income method equals to the sum of the labors' remuneration, net production tax, depreciation of fixed assets and operating surplus)

(5) The specific norms for social contribution are:

1. Tax (total tax amount paid by overseas enterprises)
2. Foreign exchange earned (total domestic export amount promoted by overseas enterprises)
3. Amount and cash value of resources obtained
4. Growth ratio of net assets = (net assets of the current year ¨C net assets of the last year)/net assets of the last year

Article 7. The local departments in charge of foreign trade and economic cooperation and the central enterprises shall collect the specific data from April 1 to May 15 each year, and evaluate the overseas enterprises from May 15 to June 15 by using the "software of overseas investment comprehensive performance evaluation system".

The local departments in charge of foreign trade and economic cooperation and the central enterprises shall, upon receipt of the notice of the MOFTEC, draw the "overseas investment comprehensive performance evaluation system" software and the software manual with the Cooperation Department of the MOFTEC.

CHAPTER III PERFORMANCE EVALUATION RESULTS

Article 8. The results of overseas investment comprehensive performance evaluation will be an important part of the annual inspection over overseas enterprises, and will be used in the annual inspection by the local departments in charge of foreign trade and economic cooperation and the central enterprises. Those not participating in the performance evaluation will be regarded as not passing the annual inspection.

Article 9. The local departments in charge of foreign trade and economic cooperation and the central enterprises shall submit the performance evaluation results and the original materials to the Foreign Economic Cooperation Department of the MOFTEC before June 30 each year. The MOFTEC will make selective review of the performance evaluation work of the entities. No entity or individual may, without the authorization of the MOFTEC, promulgate the evaluation results.

Article 10. The MOFTEC is in charge of the analysis, study and promulgation of the overseas investment performance evaluation of the whole country. The evaluation results will be used as the basis for the formulation and adjustment of policies on the administration of overseas investment and overseas enterprises of the state.

CHAPTER IV SUPPLEMENTARY RULES

Article 11. The performance evaluation of the enterprises established in Hong Kong, Macao, and Taiwan and the enterprises established with the reinvestment by overseas enterprises shall be carried out with reference to these Measures.

Article 12. The power to interpret these Measures shall remain with the MOFTEC.

Article 13. These Measures shall come into force as of January 1, 2003.