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	NOTICE OF THE NATIONAL DEVELOPMENT AND REFORM COMMISSION, THE EXPORT-IMPORT BANK OF CHINA ON GIVING CREDIT SUPPORT TO THE KEY OVERSEAS INVESTMENT PROJECTS ENCOURAGED BY THE STATE

	(No. 2345 [2004] of the Foreign Investment Dept. of the NDRC promulgated on and shall come into force as of October 27, 2004)


SUBJECT : OVERSEAS INVESTMENT; CREDIT SUPPORT
ISSUING DEPARTMENT : NATIONAL DEVELOPMENT AND REFORM COMMISSION, EXPORT-IMPORT BANK OF CHINA
ISSUE DATE : 10/27/2004
IMPLEMENT DATE : 10/27/2004
LENGTH : 992 words
TEXT :

Since the issuance of the "Notice on the Relevant Issues concerning the Provision of Credit Support to Key Overseas Investment Projects Encouraged by the State" (No. 226 [2003] of the Foreign Investment Dept. of the SDRC) by the National Development and Reform Commission and the Export-Import Bank of China, domestic enterprises have been provided with credit support to invest outside China, and have been effectively encouraged and promoted to "go out". As a result, desirable achievements have been made. In accordance with the "Decision of the State Council on Reforming the Investment System" (No. 20 [2004] promulgated by the State Council) and the "Interim Administrative Measures for Ratification of Overseas Investment Projects" (Decree No. 21 of the SDRC), the relevant contents of Document No. 226 [2003] of the Foreign Investment Dept. of the SDRC need to be adjusted appropriately. We hereby give our notice as follows regarding relevant matters:

I. The National Development and Reform Commission and the Export-Import Bank of China will jointly set up a credit support mechanism for overseas investments. According to the development planning of the State on overseas investments, the Export-Import Bank of China shall, in each year's export credit plan, specially arrange for a certain scale of credit funds (hereinafter referred to "special loans for overseas investments") to support key overseas investment projects encouraged by the State. Preferential export credit interest rates as provided by the Export-Import Bank of China shall apply to the special loans for overseas investments.

II. The special loans for overseas investments shall be mainly used for supporting the following key overseas investment projects:

(1) overseas resource development projects which can make up for the relative insufficiency of domestic resources;

(2) overseas productive projects and infrastructure projects which can give impetus to the export of domestic technologies, products, equipment, and labor services, etc.;

(3) overseas research and development centers which may utilize internationally advanced technologies, management experiences and professional talents;

(4) overseas enterprise acquisition and merger projects which can improve the international competitiveness of enterprises, and accelerate exploration of international markets.

III. The projects under intended application for use of special loans for overseas investments shall be subject to ratification in accordance with the "Decision of the State Council on Investment System Reform" and the "Interim Administrative Measures for Ratification of Overseas Investment Projects", and the Export-Import Bank of China shall examine the conditions for granting loans to such projects by following the principle of independent examination and granting of loans.

IV. The procedures for applying for special loans for overseas investments are as follows:

(1) An enterprise legal person registered inside the People's Republic of China (hereinafter referred to "domestic investor") shall, in accordance with the provisions, submit the project application report to the National Development and Reform Commission or the development and reform department at the provincial level, and submit copies to both the head office and the business branch office of the Export-Import Bank of China. Meanwhile, the domestic investor shall file an application for loans to the Export-Import Bank of China;

(2) The Export-Import Bank of China shall issue a letter of opinions on the use of special loans for overseas investments regarding the project, which shall be considered as the basis for the National Development and Reform Commission or shall be referred to by the development and reform department at the provincial level when examining the project application report; and

(3) The National Development and Reform Commission or the development and reform department at the provincial level shall examine the project, and submit a copy of the opinions from examination to the Export-Import Bank of China. After the project has been ratified, the Export-Import Bank of China shall finally determine the conditions for granting loans to the project.

With respect to a project with significant country-related risks, the domestic investor is required to make full use of the existing overseas investment insurance mechanism to go through relevant procedures for buying the insurance, and to actively avoid overseas investment risks.

V. The National Development and Reform Commission shall strengthen policy guidance and necessary coordination for the projects that meet the conditions for using special loans for overseas investments, and shall accelerate the ratification of such projects. Meanwhile, the National Development and Reform Commission shall cause relevant entities to improve their overseas investment risk guarantee mechanisms, and to do a better job in overseas investment insurance.

VI. The Export-Import Bank of China shall accelerate its examination of special loans for overseas investments in accordance with relevant provisions, and provide the following conveniences in consideration of the specific situation:

(1) Granting a certain amount of credit loans according to the enterprise's credit grade and the overseas investment project's economic benefits;

(2) In the event of a project with minor risks, stable investment proceeds and optimistic benefits, considering to directly grant loans to the overseas project company, causing the domestic investor of the project to provide guarantee and/or regarding the assets or other equity formed from the project as the mortgage;

(3) In the event of some strategic projects whose term of investment is relatively long, appropriately extending the periods of loans in consideration of the actual situation.

VII. The Export-Import Bank of China will, for the projects under intended use of special loans for overseas investments, also provide project-related financial services including bidding guarantee, performance guarantee, prepayment guarantee, quality guarantee, and international settlement, etc., and also provide certain preferences in respect of counter guarantee or guarantee bond in consideration of the situation about the domestic investor and the projects.

VIII. This Notice shall come into force on the date of its promulgation, and the interpretation of which shall be the responsibility of the National Development and Reform Commission and the Export-Import Bank of China. The Document No. 226 [2003] of the Foreign Investment Dept. of the SDRC, which was promulgated by the National Development and Reform Commission, shall be repealed as of the date when this Notice is promulgated.