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5). Business Scope
Retail
a. Retail operations (including commissioned and postal retail);
b. Organization of domestic products for export;
c. Self-initiated commodity export and import; and
d. Pertinent supporting services.
Wholesale
Wholesale of domestic products, domestic wholesale of self-initiated imports and organization of domestic products for export.
Equity and contractual joint venture commercial enterprises that are engaged in retail business can handle wholesale upon approval, but cannot conduct agent business for import and export.
6). Examination and Approval Procedures
a. The Chinese joint venture should submit the feasibility study report (in place of project proposal) and relevant documents to the economic and trade commission of the locale pilot area, which will handle the report in cooperation with the responsible domestic trade department and forward it to the State Economic and Trade Commission in accordance with stipulated procedures. On receipt, the State Economic and Trade Commission will examine the report and decide whether to approve it or not after consultation with the Ministry of Foreign Trade and Economic Cooperation.
b. After the feasibility study report (in place of project proposal) is approved, the foreign trade and economy department of the locale pilot area will submit, in accordance with stipulated procedures, the contract and articles of corporation of the applicant joint venture to the Ministry of Foreign Trade and Economic Cooperation for approval.
c. The approved joint venture should go through registration formalities with the State Administration for Industry and Commerce within a month of the issuance of the Approval Certificate.
d. For existent equity and contractual joint venture commercial enterprises that apply for concurrent wholesale business, opening of branches, or change of partners, the Ministry of Foreign Trade and Economic Cooperation will examine such applications and decide whether to approve or not after consultation with the State Economic and Trade Commission. Other alterations should be examined and sanctioned by the previous examination and ratification authorities, in accordance with existent laws and regulations concerning foreign investment.
7). Others
a. State-owned commercial enterprises in equity and contractual joint venture commercial projects shall put their physical and non-physical assets to scientific and just assessment by an evaluation agency recognized by the state assets management authorities in accordance with Administrative Measures on the Evaluation of State-owned Assets. The result of an evaluation confirmed by the state assets management authorities at the provincial level or higher may be used as the basis for the pricing of the state assets to be invested.
b. The equity and contractual joint venture commercial enterprises that deal in commodities subject to special state regulations, or in import and export commodities subject to quotas or permit requirements should go through examination and approval procedures in accordance with relevant regulations.
c. The total value of import commodities of an equity or a contractual joint venture commercial enterprise cannot exceed 30 percent of its current year sales value.
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