The State Administration of Taxation has issued the Provisional Measures of Applying the Exempt, Credit and Refund Method to Zero-rated Value-added Tax Services in Their Transformation from Business Tax to Value-added Tax under the Pilot Program (the “Provisional Measures”) on April 5th, 2012, which has retrospectively become into effective since January 1st, 2012.

The Catalog for the Guidance of Foreign Investment Industries (Amended in 2011) (the “Catalog”), which shall come into force as of January 30th, 2012 and replace the old version of the Catalog promulgated on October 31, 2007. The new Catalog includes 473 items in total - 354 encouraged items, 80 restricted items and 39 prohibited items.

The new Detailed Rules of the Provisional Regulations on Value-added Tax of the People’s Republic of China (the “VAT Rules”) and the new Detailed Rules of the Provisional Regulations on Business Tax of the People’s Republic of China (the “Business Tax Rules”) were issued by the Ministry of Finance and the State Administration of Taxation on October 28, 2011 and will become effective as of November 1, 2011.

Administrative Measures of Shanghai Municipality on Pharmaceutical Prices (Trial Implementation, the “Measures”) were issued by Shanghai Development and Reform Commission on July 29, 2011. The Measures will be effective as of September 1, 2011. The main contents of the Measures are as follows:

The Ministry of Human Resources and Social Security issued the Tentative Measures for Social Insurance Enrollment of Foreign Employees in China (Draft for Comments) (the "Tentative Measures") on June 10, 2011. The main contents of the Tentative Measures are as follows:

On May 4th 2011, the Ministry of Commerce (“MOFCOM”) issued a Draft of the Management Measures regarding Capital Contribution by Equity to Foreign Invested Enterprises (“FIEs”) for public comments ("Draft Measures"). The deadline for the submission of comments was May 20th, 2011.

Shanghai Human Resources and Social Security Bureau issued the New Standard of Social Security Payment in Shanghai (the “New Standard”) on March 31, 2011. The New Standard has come into effect on April 1, 2011 and will expire on March 31, 2012.

On March 4th 2011, Ministry of Commerce (“MOFCOM”) issued the Interim Rules on Implementation of a Security Review System regarding M&A Transactions Executed by Foreign Investors over Domestic Enterprises (the “Interim Rules”), which will come into effect on March 5th, the same day the Notice on the establishment of a security review system regarding merger and acquisition (“M&A”) transactions over domestic enterprises executed by foreign investors (“the Notice”) comes into effect.

Notice on the establishment of a security review system regarding merger and acquisition (“M&A”) transactions over domestic enterprises executed by foreign investors (“the Notice”) was issued by China's State Council on February 3, 2011, which will come into effect on March 5, 2011.

Implementing Measures for the Launching of a Pilot Program for Foreign-Invested Equity Investment Enterprises in Shanghai (the "Measures") were issued jointly by the Shanghai Municipal Financial Services Office, Shanghai Municipal Commission of Commerce and Shanghai Municipal Administration of Industry and Commerce on January 12th, 2011. The Measures will be effective on February 1st, 2011.

On December 30, 2010, Chongqing No.5 Municipal Intermediate People's Court issued a decision on the Pepsi Cola – Tianfu Cola case, establishing that Pepsi shall cease to use Tianfu group’s technology secrets and know-how (including Tianfu Cola’s component, formula and business secrets with respect to the production), return the formula, as well as all the documents with respect to Tianfu group’s technology secrets and know-how.

The State Council of PRC issued the Regulations on Administration of Registration of Resident Representative Offices of Foreign Enterprises(the "New Regulations") on November 19th, 2010 and the New Regulations will take effect on March 1st, 2011.

The State Council issued the Notice on Unifying the City Construction Tax and Educational Surcharge of the Foreign Invested Enterprises, Foreign Enterprises, Foreign Individuals and Domestic Enterprises (the "Notice") on October 18th, 2010.

The 3rd Interpretation regarding the Applicable Law of Labor Dispute Cases (the “Interpretation”) was issued by the Supreme Court on 13rd September, 2010 and was effective since 14th September, 2010.

The PRC Supreme People's Court issued the Provisions on Several Matters Concerning the Hearing of Disputes Involving Foreign-Invested Enterprises (I) (the "Provisions") on August 16, 2010, which entered into force on the same day. The Provisions provide guidance for certain disputes arising from the establishment and changes in the registration of the foreign-invested enterprise (the "FIE").

State Administration of Industry and Commerce (hereinafter "SAIC") issued the Measures on the Management of Trademark Agency (the "Measures") on July 12, 2010, according to the Trademark Law and the Implementation Measures of the Trademark Law.

Ministry of Commence of PRC issued the Notice on the Transfer of Approval Authorization of Foreign Investment (hereinafter the "Notice") on June 10, 2010.

Several Opinions on Further Improving the Work of Utilizing Foreign Investment (the "Opinions") were issued by the State Council of China (the "State Council") on April 6th, 2010.

The Provisional Measures for Tax Administration of Foreign Enterprise Representative Office ("Provisional Measures") was issued by the State Administration of Taxation on February 20th, 2010 and became effective since January 1st, 2010.

The Notice on Further Administration of Registration of Foreign Companies' Resident Representative Offices (the "Notice") was issued by China's State Administration for Industry and Commerce ("SAIC") and the Ministry of Public Security jointly on 4th January, 2010.

The amendment of the PRC Renewable Energy Law (the “Amendment”) has been adopted on December 26th, 2009, and shall come into effect as of April 1st, 2010.

Measures for the Administration on the Establishment of Partnership Business by Foreign Enterprises or Individuals in China (the “Measures”) shall come into effect as of March 1, 2010.

The PRC State Administration of Taxation issued the Notice on “Strengthening the Management of Enterprise Income Tax Collection of Income from Share Transfers by Non-resident Enterprises”, on December 10, 2009 (the "Notice").

The Ministry of Commerce (“MOFCOM”) issued the Measures for the Reporting of Concentrations of Business Operators (“Reporting Measures”) on November 21, 2009 and Measures for the Review of Concentrations of Business Operators (“Review Measures”) on November 24, 2009. Both of the regulations related to Anti-Monopoly Law will take effect on January 1, 2010.

The State Administration of Taxation issued the “Notice on Interpretation and Determination of Beneficial Owner under Tax Treaties” (the "Notice"). The Notice intends to regulate the acts of foreign companies preventing them from taking advantage of the “double taxation arrangements” signed by China.

On September 25 2008, Tianjin Climate Exchange (TCX) was set up in the Tianjin Binhai New Area, which is a joint venture between Chicago Climate Exchange (CCX), the municipal government of Tianjin and the asset management unit of Petro China.

In order to regulate the development of the construction industries and remedy the problems during the implementation of the recent RMB4 trillion government stimulus package, the general office of the Central Committee of the Communist Party of China and the State Council jointly issued "Zhong Banfa" Document No. 27 on July 9th, 2009, which stated the harms and specific measures to settle the problems mentioned.

September 14, 2009.

In order to encourage and regulate the overseas investment by domestic institutions, the State Administration of Foreign Exchange (SAFE) has issued the provisions, which will be effective on August 1st, 2009.

1) Guidelines for Project Finance Business, [2009] No.71 2) Provisional Measures on the Administration of Fixed Assets Loans, CBRC Order [2009] No.2

The “Measures” and the “Implementation” stipulate for the first time that some designated and qualified enterprises are allowed to implement the RMB settlement in cross-border trade in the pilot areas.

No.6 Decree of the Ministry of Commerce PRC on Promulgation of the Provisions on M&A of a Domestic Enterprise by Foreign Investors “Provisions”.

The author makes a comparison with the setting up of a representative office.

The new PRC Enterprise Income Tax Law (the “New Law”) , which took effect on January 1st 2008, levels the playing field between foreign invested enterprises (“FIEs”) and domestic enterprises. The New Law sets an enterprise income tax (“EIT”) rate of 25% applicable to both FIEs and domestic enterprises.

In order to establish a Joint Venture in China, the first step shall be to find a qualified and agreeable Chinese partner. In this regard, it should be borne in mind that Chinese laws often (expressly or by implication) provide for qualification requirements on the Chinese partner to a joint venture.

The Chinese have a reputation for “not abiding by the contract" or for changing contractual terms after they have been agreed.

The new "Regulations Concerning the Merger and Acquisition of Domestic Enterprises by Foreign Investors" (the "New M&A Regulations") were promulgated on 8 August 2006.