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No.325

 
 
 


CHINA  SCIENCE  AND  TECHNOLOGY
NEWSLETTER
The Ministry of Science and Technology
People's Republic of China


N0.325 March 20,2003
 
IN THIS ISSUE

* Foreign Direct Investment Policy Updated

* Foreign Investors Allowed into School Businesses

* China's New Super Server

* China's Fastest Chip

* China's Plasma Display Improves

* Good News for Hepatitis B Treatment

* China's Nanoscience Center

 
 POLICY AND LAW

Foreign Direct Investment Policy Updated

To adapt China to the new trend of international investment, attract foreign capital through different channels, continuously improve China's management of foreign exchange in the course of foreign direct investment, and further improve foreign investment climate, the State Administration of Foreign Exchange has recently issued the Circular on Improving Foreign Exchange Management of Foreign Direct Investment (referred to as the Circular hereafter), which will come into effect on April 1st, 2003.

The Circular is composed of 22 articles in 4 chapters and an annex of 10 detailed operational procedures.  The new document has made concrete provisions on ten major aspects of the management in the logical sequence from capital flow-in, to qualification examination and registration, and further to capital flow-out. 1) Opening and management of foreign investors' special foreign exchange accounts; 2) the management of investment payment of foreign investors from their offshore accounts in designated banks and investment payment of foreign investors from non-resident current account in China; 3) types and sources of foreign investment in foreign invested businesses; 4) the management of foreign investors' acquisition of domestic enterprises' equity; 5) the management of the investment of non-investment foreign invested businesses in China; 6) the management of the foreign invested joint ventures whose foreign invested equity is lower than 25% 7) the improvement of qualification examination and foreign investors' foreign exchange registration; 8) the management of capital deduction in foreign invested businesses; 9) examination criteria for capital investment report and auditing report; and 10) the simplified operational procedures for settlement of capital fund in foreign exchanges and foreign investor's investment returning.

It is reported that the Circular has made the following readjustments to the original lines and approaches for foreign exchanges control:

1) It allows the direct investment or direct investment related activities on the Chinese territories by foreign investors who have not established their businesses in China. Such investment will be managed under the special foreign exchange account dedicated to such foreign investors.

2) It allows foreign investors to make their payment of investment to foreign invested businesses through their non-resident current account in China or their offshore accounts in the foreign exchange banks designated by the People's Bank of China.!!

3) The scope allowing for foreign investment is expanded from the original foreign exchanges, objects, intangible assets and profits in RMB to liquidation, equity transfer and capital deduction through other forms such as reinvestment, undistributed profits, payable profits, the so-called three funds and loan conversion in the country.

4) It clarifies the registration management principle and concrete operational procedures for foreign investor's acquisition of domestic businesses' equity so as to ensure the validity and legality of the foreign capital flow-in in the acquisition.

5) It provides the principle for the management of foreign exchange by non-investment foreign invested businesses in domestic businesses and foreign exchanges of foreign invested businesses where the foreign partner's investment is lower than 25%, which has filled up a blank on foreign exchanges control in line with other related policies updated by the foreign economy authorities in the country.

Foreign Investors Allowed into School Businesses

The Regulations on China-Foreign Joint Venture School Business of the People's Republic of China adopted at the 68th standing committee meeting of the Chinese State Council will come into effect on September 1, 2003.

The Regulations points out that the state encourages both Chinese and foreign investors to run joint venture schools by taking advantage of advanced foreign education resources, while advocating for joint venture schools in the field of higher learning and professional education and the joint venture schools jointly established by Chinese higher learning institutions and renowned overseas higher learning organizations. Both Chinese and overseas joint venture school investors may establish education and teaching institutions in different types and at different levels. However, they are not allowed to run joint venture schools for mandatory education nor for specialized education on military, police and political affairs.

The Regulations stipulates that the legitimate rights of joint venture school investors and joint venture schools themselves are subject to the protection of Chinese laws. Joint venture schools will enjoy preferential policies provided by the state and shall independently run their education businesses according to law.

The Regulations also stipulates that the dean or major administrative head of the joint venture school shall be the one of the nationality of the People's Republic of China, having permanent residence in China and qualified for education and teaching experience with matched professional level.

The foreign teachers and management hired by the joint venture school shall be of the academic degree of Bachelor or above and relevant professional certificates in addition to their at least two-year experience in education or teaching.

China encourages joint venture schools to introduce the courses and teaching materials that are urgently needed domestically or advanced internationally. Fee charging items and associated standards shall be defined and published according to relevant state regulations on pricing. No joint venture schools shall, without the approval, increase fee charging items or raise the fee charging standards.

The fees collected shall mainly be used for education and teaching purposes and improving school conditions.

On the issue of granting academic degrees by the joint venture school, the Regulations stipulates that the degree conferring joint venture schools shall issue academic degree diploma or other schooling certificates according to relevant state regulations. The non-degree-conferring joint venture schools shall issue training or schooling certificates according to relevant state regulations. The joint venture schools that enroll students for professional skill training, if qualified by professional skill evaluation organizations approved by the government, may issue relevant national professional qualification certificates according to relevant state regulations.

The joint venture schools running for higher education may issue its Chinese academic degree diploma according to relevant state regulations. The foreign education institution's degrees and academic certificates issued by the joint venture schools shall be the same as the ones issued by the foreign education institution in its mother country and officially recognized by that country.

RESEARCH AND DEVELOPMENT
 

China's New Super Server

Recently China's largest new super server named Shuguang 4000L jointly developed by the National Intelligent Computer Research Center under the Institute of Computer Science of the Chinese Academy of Sciences and Shuguang Corporation passed its experts' approval check.

Equipped with 644 CPUs of a peak speed of 3000 billion t/s and a super memory capacity for 100 trillion bytes, the super server is not only of a massive data processing capacity for 100 trillion bytes but also enjoys numerous major breakthroughs in intensive data application technologies, desirable for both high performance scientific calculations and information service.

It is briefed that the server is the largest of its kind in the country with extraordinarily strong storage and processing capacity. The system is made up of 40 cabins with the 644G internal memory and 100 trillion bytes storage. The system is also of a strong expanding capacity up to 80 cabins, which would raise its peak speed to 6,750 billion t/s.

China's Fastest Chip

The Institute of Radio Frequency and Optic-Electric Integration Circuit headed by Dr. Wang Zhigong, under the Southeast University has Recently landed a major progress on the research and development of super high-speed integrated circuit applications in optic-fiber telecommunication by working out the chip running the highest speed in the country. The Institute has been contracted to a project under the optic-electricity component of the National 863 Program for the 10th Five-Year Plan period(2001-2005) to develop optical transmission and reception key chip components at a level of 10-40Gb/s. The Institute has, through a collaborative project with overseas manufactures on crystal disks, successfully worked out 0.2 micron gallium arsenide based integrated circuit chips, of which one has reached a working speed of 24Gb/s. The said development has become another landmark result following the two previous world records on integrated circuit design registered by the same Institute in 2001.

It is briefed that the optic transmission and reception system, being the application of the chip at such an advanced level in high speed lase, may raise the speed of China’s present information highway by ten times.

China's Plasma Display Improves

14-inch Full Color and High Brightness PDP Research and Development, a major dedicated project contracted to Chinese Southeast University under the National 863 Program has recently landed major technical breakthroughs in the structures of shield PDP, theoretical studies, structure design optimization, manufacturing techniques and driving system.

The said PDP is of numerous merits such as simple manufacturing techniques, high production efficiency, high finished products rate, fine display performance and competitive cost, which may help to reduce the manufacturing costs of PDP at a large margin and present a very promising industrialization perspective. The said development will not only open a major technical approach to realizing the so-called leap-forward development of China's PDP industry but also greatly stimulate the development of other sectors such as raw materials, machinery and chemistry in the country. At present, the Southeast University is working on the improvement of its PDP manufacturing technology, striving for an earlier industrialization.

China's New Drug Screening System

Recently Shanghai Pharmacology Institute under the Chinese Academy of Sciences has successfully worked out China's first proprietary new drug screening system, which has broken up the bottleneck that has restricted the development of proprietary new drugs and will make a fundamental change of its disadvantage that 97% of the Chinese chemical drugs are imitations.

It is briefed that the Institute has so far established 65 screening models at cellular and molecular level, 16 of which are the first of their kinds in the world. In the screening process, Chinese scientists have found 3,143 chemical compounds that have the elements to be developed into new drugs, of which 199 are of strong effects. On the basis of these new findings, the Institute has applied for 41 invention patents either at home or abroad and 9 of them have been granted with patent rights both at home and abroad. So far two chemical compounds of completely new structures, namely Salvicine for the candidate for cancer treatment and ZT-1, a new derivative huperzine A for senile dementia have entered the clinic testing stage as Class I new drugs. These new drugs have materialized their technical transfer and produced direct economic benefits approaching RMB 100 million.

Good News for Hepatitis B Treatment

Double Tiger (Shuanghu) Liver Better, a new drug for treating chronic hepatitis B developed by the Chinese Academy of Traditional Medicines and Huashen Pharmaceutical Co. Ltd. has been granted with the second prize for S&T Advancement Award. The new drug has experienced a development process for more than 4 decades. Massive clinic testing has shown that Double Tiger has the characteristics of hepatitis B treatment combined with both western and traditional approaches and capable of treatment at different levels and through different channels. Analysis of hepatitis B viruses e-system has shown that the new drug is of a longer and more stable treatment effects with less rebounding when comparing with its western counterparts. The testing performed by the Institute of Viruses under the Chinese Academy of Preventive Medical Sciences has shown that Double Tiger is of strong suppressing effects on ten and odd viruses. The State Administration of Traditional Chinese Medicine has recommended the new drug to authorities concerned for accelerating its industrialization.

 
 NEWS BRIEFS

 China-Britain S&T Pioneer Award

On March 13, Chinese and British Governments jointly announced the establishment of China-Britain S&T Pioneer Award to encourage Chinese S&T personnel to work on technical innovations and create their own S&T businesses, enhancing the global competitiveness of S&T businesses.

Jointly established by the Chinese Ministry of Science and Technology and the British Office of Trade and Industry, the Award is based on a competition fund financed by both governments with 50,000 sterling pounds or about RMB 650,000 from each side. A selection committee made up of 12 venture capital experts with 6 from each country will be established to review and supervise the competition process. An organization named the Small S&T Businesses Technical Innovation Fund Management Center will be responsible for the management and initial selection of contest winners and it will submit 15 selected projects for the further review of the selection committee. The selection committee will screen out 6 from the said 15 to be the final candidates for the award. Two of them will eventually become the winners of the contest. The Award conferring ceremony will be held in late Autumn 2003.

It is briefed that China-Britain S&T Pioneer Award is an important component of Originality UK series activities, which has sponsored numerous high level events and media coverage in the fields of commerce, science and technology, arts, music and design, aiming at bringing British spirit of innovation and creation into China.

China's Nanoscience Center

Recently the Chinese Academy of Sciences (CAS), Peking University and Tsinghua University jointly announced that they would soon establish the National Nanoscience Center in the country. It is reported that initially co-sponsored by the Nano Science and Technology Center under the Chinese Academy of Sciences, Peking University and Tsinghua University, the Center will be physically located in CAS' premises and enjoy a state initial investment of RMB 250 million. The Center will, on the basis of disciplinary interactions and strength integration, make itself a public technical service platform, S&T development center, international academic exchange center and high caliber talents training center in the field of nanometer scientific studies in the country. The near term targets of the Center will focus on four areas: nanomaterial processing and nanocomponents; major nanomaterials and their structures; nanotechnologies and their applications in the field of medicine and life sciences; and the expressing methods and techniques of nanometer structures and performances.

China's Toxicant Free Rockets

The spokesman of Beijing Institute of Space System Engineering disclosed recently that China would work out its new generation, strong thrust, toxicant and pollution free carrier rockets before 2010. While developing the new generation carrier rocket, the Institute will also work on a number of other projects on space carrier technologies such as launching space lab, deep space exploration activities represented by moon trip, carrier tools that can be reused and the carrier tools technologies that can meet the demands of fast, mobile and flexible entry into space. It is briefed that so far the Institute has achieved remarkable progresses in these studies, which has further consolidated and advanced China's international position in the field of space carrier technologies.


       Comments or inquiries on editorial matters or Newsletter content should be directed to:Mr. Cheng Jiayi, Department of International Cooperation, MOST 15B, Fuxing Road Beijing 100862, PR China  Tel: (8610)68512650 Fax: (8610) 68512594

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