G.F. 326
CONFIDENTIAL & X
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R
(a)
(b)
to make decisions on the production programme, the management plan and the labour wages plan
(though the submission of these plans to the
relevant departments is required for record purposes);
to purchase the required raw materials and equipment directly from the domestic or
international market;
(c)
(a)
(e)
to enter into contracts with domestic and
foreign enterprises;
to raise funds in Renminbi or foreign currencies
from international or Chinese financial
institutions (but recently, the Chinese authorities have issued new guidelines to
regulate the debt-to-equity ratios of joint
ventures); and
to draw up budgets, to establish financial management system, and to determine the method of profit distribution.
As regards the duration of joint ventures, the maximum
period has been extended from 30 years to 50 years.
13.
It
Although the joint ventures are in principle
entitled to all the above rights, in practice they have
difficulties in exercising fully these rights because
Government approval is still required in many areas.
was reported that the Chinese Government often interferes
with the investment and business decisions of the joint
ventures on the grounds that their activities have to be integrated within the state economic program (paragraph
61).
CONFIDENTIAL #3
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