Article 1. These procedures are formulated for the purpose of attracting foreign investment in the development and management of whole area of land (hereafter referred to as "area development"), so as to step up the construction of public utilities, improve the investment environment, bring in foreign-funded, technologically advanced and export-oriented enterprises, and develop and export-oriented economy.

Article 2. "Area development", as used in these Procedures, means the comprehensive development of State-owned land as planned. This is carried out after acquisition of the right to use that land, including leveling the ground, building the drainage and waterpower and heat-supply systems, and road transport, communications and other public facilities to lay down appropriate conditions for industrial and other construction purpose. Then land developers can proceed with the transfer of land-use right and the operation of public utilities, or building general-purpose factory buildings, supporting facilities in the service of production and people's livelihood, and other buildings erected on the ground; and transfering or leasing these buildings to others.

Development of whole areas of land shall have explicit goals and there shall be construction projects that are explicitly intended to make use of the developed land.

Article 3. In attracting foreign investment for area development, a written project proposal (or a preliminary feasibility study report, the same below) shall be prepared under the auspices of a municipal or county people's government.

For area development projects each using less than 1,000 mu (1/ 15 of a hectare) of farm land or less than 2,000 mu of other land and the comprehensive development investment confined within the stipulated limits that the People's governments of provinces, autonomous regions and municipalities directly under the jurisdiction of the central authorities (here and below, including the people's governments or administrative committees of special economic zones) are authorized to examine and approve, the written project proposals shall be submitted to these governments for examination and approval.

For area development projects each using more than 1,000 mu of farm land or 2,000 mu of other land, or the comprehensive development investment in which exceeds the aforesaid limits, the written project proposals shall be submitted through these respective governments to the State Planning Commission for examining overall balance; and then to the State Council for examination and approval.

Article 4. Foreign investors in area development shall set up Chinese-foreign joint ventures, Chinese-foreign cooperative ventures or solely foreign-owned enterprises for development operations (hereafter referred to as "development enterprises") respectively in accordance with the Law of the People's Republic of China on Chinese-Foreign Joint Ventures, the Law of the People's Republic of China on Chinese-Foreign Cooperative Ventures and the Law of the People's Republic of China on Foreign Enterprises.

Development enterprises are governed and protected by Chinese laws and all their activities should comply with the laws and regulations of the People's Republic of China.

In their business operations and management, development enterprises make their own decisions in accordance with law, but they have no administrative power over their development areas. The relations between development enterprises and other enterprises are business relations.

The State encourages State-owned enterprises to use their right to make use of State-owned land as investment or terms of cooperation to form development enterprises with foreign firms.

Article 5. Development enterprises shall obtain the right to use State-owned land in development areas in accordance with law.

In leasing the right to use State-owned land to development enterprises, the municipal and county people's governments of the places where the development areas are located should, in accordance with the laws and decrees on the administration of State-owned land, rationally determine the limits, usage and terms of use of the areas, the rent-charges and other terms, sign the contracts on leasing that right, and submit them to the related authorities for approval.

Article 6. After the right to use State-owned land in an area is leased out, the natural resources and other objects buried underground in the area are still owned by the State. If there is need to develop and use them, the development and utilization shall be governed in accordance with the pertinent laws and decrees of the State.

Article 7. Development enterprises shall draw up area development programs or feasibility study reports, clearly defining the overall goals and the goals for each phase of development and overall goals and the goals for each phase of development and construction, the specific tasks and requirements attaching on carrying out the development, the developed-land utilization schemes, etc.

The area development programs or feasibility study reports shall be examined by the municipal or county people's governments and then submitted to the people's governments of provinces, autonomous regions or municipalities directly under the jurisdiction of the central authorities for examination and approval. The examination and approval agencies shall organize the relevant departments to coordinate the work relating to the construction and operation of public facilities.

Article 8. If a development area is located in a zone governed by urban planning, the work of development and construction there must conform to the requirements of urban planning and submit its control.

All construction projects in development areas must conform to the State environmental protection laws, decrees and standards.

Article 9. Development enterprises may transfer their right to use State-owned land to others only after they have implemented their area development programs and carried out the terms prescribed in the contracts on leasing the right to use State-owned land. Those development enterprises that have failed to make investment in land development in accordance with the terms of the aforesaid contracts or the requirements of the area development programs may not transfer their right to use State-owned land to others.

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