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	ADMINISTRATION OF PRICES AND VALUATION CHARGED FOREIGN PARTIES (TRIAL)

	(No. 845 [1994] of the State Planning Committee and State Administration of Foreign Exchange promulgated on June 17, 1994)


SUBJECT : PRICES AND VALUATION CHARGED FOREIGN PARTIES
ISSUING DEPARTMENT : STATE PLANNING COMMITTEE (DISSOLVED), STATE ADMINISTRATION OF FOREIGN EXCHANGE
ISSUE DATE : 06/17/1994
IMPLEMENT DATE : 06/17/1994
LENGTH : 786 words
TEXT :

Article 1. This rule is promulgated to meet the need of systematic reform of foreign exchange administration and to regulate price marking and settlement in external businesses.

Article 2. With respect to prices and charges, domestic entities (including all enterprises and institutions, government agencies and social associations hereinafter) shall mark price and settle in RMB in business with foreign partners within the territory of China, unless otherwise specified by the state.

Article 3. In conversion of the external price and charges marked and settled in foreign exchange or foreign exchange currency set before this rule is promulgated, domestic entities shall convert into RMB according to the foreign exchange board price or the rate of foreign exchange currency to RMB regulated by the state on December 31, 1993 in principle. Prices and charge standard of all goods and services shall not be raised with currency conversion without authority. In need of an adjustment, the following principles shall be applied to:

(1) If the adjustment in exchange rate does raise the cost and adversely influence the enterprises' normal operation, the prices and charges set by enterprises may be properly adjusted in consideration of market supply and demand, but the extend of adjustment shall not exceed that of exchange rate. The adjusted prices and charge standards shall apply to price administrative department for approval according to relevant administrative authority specified by the state; and

(2) In need of an adjustment in prices and charge standard regulated by the state due to exchange rate fluctuation, entities shall apply to price administrative department for approval according to relevant administrative authority specified by the state.

Article 4. In order to maintain a comparative stability of price in future, prices shall not be changed with a small fluctuation of RMB exchange rate. In case of a big fluctuation in rate, prices and charge standards shall be raised in line with Article 3(1) and (2) of this rule.

Article 5. Prices and charge standards in external businesses shall be set in principle of same price for same quality and high price for high quality. Entities shall not charge differently to different consumers for identical goods or services. The existing bilateral prices and charge standards shall be unified. If there is difficulty in unifying immediately, the bilateral prices shall unified gradually, and the unification shall be implement step by step after getting approval from price administrative department in line with its authority.

Article 6. Except the specified scope in Article 7 and 8 of this rule, contracts signed before 1994 for selling goods on credit or accepting services priced in foreign exchange or foreign exchange currency and not yet settled which therefore form account receivable and payable, while the contract does not mention a conversion rate, the board rate of the settlement bank on date of settlement shall be applicable if it is priced in foreign exchange, and if it is priced in foreign exchange currency, the settlement shall be made in RMB and the conversion rate shall be set upon consultation between contract partners.

Article 7. With respect to the following prices and charges in a certain time period, entities shall apply to the State Planning Committee and SAFE for quoting and marking price in foreign exchange:

(1) Duty free goods operated by domestic entities under supervision of the Customs and priced and settled in foreign exchange. The rule of valuation principle and price management of duty-free goods shall be formulated by the duty-free company and submitted to the State Planning Committee for approval;

(2) The special institutions providing houses and workers to foreign embassies, consulates and oversea legal entities' establishments in China under authority shall quote price in foreign exchange and settle in RMB.

Article 8. Domestic entities involved in businesses at abroad or out of the Customs border including providing goods or service shall quote price and settle in foreign currency. The charges of inspection, quarantine and ship inspection on Customs on oversea entities and individuals shall quota price in RMB while settling in foreign currency by receiving and converting on their behalf.

Article 9. Price marking, valuation, conversion and price adjustment unconformity with this rule shall be corrected or reported in a time limit. The entities or persons who fails to correct or to report in time due are subject to investigation and prosecution of the State Planning Committee or local price inspection agencies according to relevant laws and regulations.

Article 10. The interpretation of this rule shall rest with the State Planning Committee.

Article 11. This rule shall come into effect as of the date of promulgation. Regulations on price and charge standards in external businesses promulgated before shall apply to this rule if there is contradiction with this rule.