Regulations on Government Investment

Chapter I General Provisions

中文版本

Article 1

These Regulations are formulated to fully leverage the role of government investment, increase returns on it, regulate government investment and stimulate non-government investment.

Article 2

Government investment referred to in these Regulations is the budgetary funds for investing in fixed assets construction within China, including projects of new construction, expansion, upgrading, and technical renovation.

Article 3

Government investment should be made in projects, mainly non-commercial ones, in areas where the market is unable to effectively allocate resources, including projects of public services, public infrastructure, agricultural and rural development, eco-environment protection, major scientific and technological advances, social management and national security.

The state shall improve policy measures to enable government investment to guide, encourage and mobilize social investment in the aforementioned areas.

The State shall put in place a mechanism to assess and adjust on a regular basis the scope of government investment to calibrate the orientation of government investment and improve its structure.

Article 4

The principle of making informed decision, conducting well-regulated management and ensuring returns, openness and transparency should be observed in making government investment.

Article 5

Government investment should be made in a way that is in keeping with socioeconomic development and the availability of government budget. The State shall tighten budgetary control over government investment. The government and its departments concerned shall not raise government investment funds through borrowing in breach of law and regulations.

Article 6

Government investment funds shall be appropriated to projects, with direct investment as the main form. Investment in commercial projects that do need government support shall be made mainly through capital injection, supplemented, where appropriate, by investment subsidy and discounted loan.

Government investment should be made in line with the need to reform the division of fiscal powers and expenditure responsibilities between the central and local governments. Investors of various types should be treated equally without discriminatory conditions imposed on them. The state should see that projects are available for government investment by setting up project pools.

Article 7

The investment regulator of the State Council shall exercise overall regulation of government investment in accordance with these regulations and other regulations of the State Council. Other competent departments of the State Council shall perform their respective duties over government investment in accordance with these regulations and their mandates vested by the State Council.

Investment regulators and other competent departments of local people’s governments at and above the county level shall conduct regulation of government investment in accordance with these regulations and their mandates vested by the people’s governments at the same levels.

Chapter II Decision-Making on Government Investment

Article 8

People’s governments at and above the county level should undertake projects funded by government investment in a coordinated way and use various types of government investment for such projects in a well-regulated way in accordance with plans of economic and social development, medium-term budgetary plans and the state’s policy of macroeconomic regulation as well as their respective fiscal conditions.

Article 9

To undertake a project funded by government investment through direct investment and capital injection (hereinafter referred to as a government invested project), the party that undertakes it should prepare a project proposal, a feasibility report and a preliminary design for the project, and submit them to the government investment regulator or other competent government departments for approval in accordance with government regulations on investment and due procedures.

The party that undertakes a government invested project should make good preparations to ensure that they meet relevant requirements. It should hold itself accountable for the authenticity of project proposal, feasibility report, preliminary project design and other documents submitted as required by law.

Article 10

The government investment regulator and other competent government departments shall, with the exception of a project involving state secret, review and make a decision on whether to approve a government invested project through on-line review and regulation platform (hereinafter referred to as “on-line platform”) by using a project code automatically generated by the on-line platform.

The government investment regulator and other competent government departments shall specify on the online platform plans and industrial policies related to government investment as well as the procedures, time frame and other information concerning government investment project review. They should also provide relevant consulting services to the party that undertakes a project.

Article 11

The government investment regulator and other competent government departments shall conduct the following review of a government invested project and decide whether to approve it in accordance with national economic and social development plan, specific plan for a particular field and industrial policies.

1. Necessity of project construction as proposed by the project proposal;

2. Technical and economic feasibility, social returns and project funds as well as other major conditions necessary for undertaking the project outlined in the project feasibility report.

3. Compliance of the preliminary design and investment estimate of the project with the requirements set forth in the approval to the project feasibility report and related national standards and regulations.

4. Other matters whose review is needed as required by laws, government regulations and other related regulations of the government.

The government investment regulator and other competent government departments shall inform the party that undertakes the project in writing if a project is not approved, and state the reasons for not approving it.

The government investment regulator and other competent government departments shall, on the basis of evaluation by intermediary service, public participation, expert review and risk assessment, make a decision on whether to approve a government invested project that has major impact on economic and social development and public interests or requires large investment.

Article 12

The investment estimate approved by the government investment regulator and other competent government departments shall be the basis for determining the total size of investment to be made in a government invested project.

If investment estimate proposed in the preliminary design exceeds that proposed in the approved feasibility report by 10% or above, the party which undertakes the project should report this to the government regulator of investment and other competent government departments, and they may require the submission of a new feasibility report.

Article 13

The documents required and procedures of project review may be simplified for the following government invested projects in accordance with related government regulations.

1. Projects that are explicitly included in a related development plan;

2. Projects of partial expansion or upgrading;

3. Projects that are simple in nature, require a small amount of investment and have simple technical plans.

4. Projects that are urgently needed to be undertaken to respond to natural disaster, work accident or disaster, public health emergency, social safety incidents or other emergencies.

The specific scope of projects listed in the preceding paragraph 3 shall be decided by the investment regulator of the State Council in consultation with other State Council departments concerned.

Article 14

A party that undertakes an investment project to be made through government subsidy or discounted loan shall go through due procedures in accordance with related government regulations.

Chapter III Annual Plan for Government Investment

Article 15

The investment regulator of the State Council shall formulate an annual plan for government investment for which it is responsible. Other competent departments of the State Council shall formulate annual plans for government investment in industries or fields under their regulation.

The relevant departments of the people’s governments at the county level and above shall formulate annual plans for government investment in accordance with the regulations of their respective people’s governments.

Article 16

An annual plan for government investment shall specify the following information of an investment project: name, purpose of construction, scale, construction schedule, total investment, amount of annual investment and sources of funding.

Article 17

A project included in an annual plan for government investment shall meet the following requirements.

1. For a project funded through direct investment or capital injection, a feasibility report or investment estimate has been approved.

2. For a project funded through investment subsidy or discounted loan, due procedures have been completed in accordance with related government regulations.

3. Other requirements by relevant departments of people’s governments at the county level and above.

Article 18

An annual plan for government investment shall be covered by the budget of the government at the same level.

Article 19

The government departments of finance shall appropriate government investment funds on time and in full in accordance with the approved budget as well as laws, government regulations and the regulations concerning coffer management.

Chapter IV Implementation of Government Invested Projects

Article 20

The construction of a government invested project can start only when the conditions for construction stipulated in these regulations, relevant laws and government regulations are met. Otherwise, project construction shall not start. As required by the State council, the construction of a major government invested projects can start only after the procedures of approving the commencement report of the project are completed.

Article 21

A government invested project shall be undertaken at the location, of scale and with the purpose of construction approved by the government investment regulator or other competent government departments. To change location or make major change in construction scale and purpose of the invested project, an application for approval should be submitted to the regulator that has given approval through required procedures.

Article 22

The funds needed for undertaking a government invested project shall be provided in accordance with related government regulations.

A government invested project shall not be built with funds borrowed from the company that carries out its construction.

Article 23

Generally, the investment made in constructing a government invested project should not exceed the approved investment estimate.

If additional investment is needed for the project due to adjustment in government policy, price increases, major changes in geological conditions and other factors, the party that undertakes the project shall submit through due procedures a plan of project adjustment and funding sources for approval to the government department which has approved the original preliminary design or investment estimate. If such adjustment involves budgetary adjustment or reallocation, it shall be handled in accordance with relevant laws as well as government regulations and rules on budgeting.

Article 24

The construction schedule of a government invested project shall be properly decided and strictly followed in accordance with related government regulations, which no government department or individual should illegally interfere with.

Article 25

Upon the completion of a government invested project, its acceptance check should be conducted in accordance with related government regulations, and the final budgetary account of the completed project should be promptly made after the completed project is accepted.

Unused budgetary funds for a completed government invested project shall be returned to the government in accordance with related government regulations.

Article 26

Government investment regulators or other competent government departments shall select typical completed government invested projects and entrust intermediary agencies to conduct assessment of them in accordance with relevant government regulations. Such assessment should provide comprehensive evaluation and explicit views on the approval and implementation of the project on the basis of the actual performance of the completed project.

Chapter V Oversight

Article 27

Government investment regulators and other government departments vested by law with the function of conducting oversight over government invested projects shall conduct such oversight through online monitoring, on site investigation and other means.

The party which undertakes a government invested project shall submit true basic information about the commencement, progress and completion of the project via online platform.

Article 28

Government investment regulators and other government departments vested by law with the function of conducting oversight over government invested projects shall set up mechanisms of sharing information on government invested projects and share such information through online platform.

Article 29

The party which undertakes a government invested project shall keep archives for such project in accordance with related government regulations, and archive related documents and information concerning project approval and implementation for future check.

Article 30

Annual government investment plans and information on review, approval and implementation as well as oversight over and check-up of government invested projects shall be made public in accordance with law.

Article 31

Performance, construction quality and workplace safety management of government invested projects shall be conducted in accordance with related laws, government regulations and rules.

Chapter VI Legal Accountability

Article 32

Those responsible for the following circumstances shall be ordered to correct them; leading officials responsible and individuals directly responsible for them shall be disciplined in accordance with law.

1. Giving approval to a government invested project that oversteps one’s authority;

2. Approval is given to a government invested project that does not meet the criteria of government regulations;

3. Investment estimate is not approved or adjusted as required by government regulations;

4. Government investment funds including investment subsidy and discounted loan are provided to projects that do not meet the criteria of government regulations;

5. Other cases of negligence, abuse of power, or malpractice for personal gains in conducting regulation over government investment.

Article 33

Those responsible for the following circumstances shall be held legally accountable in accordance with relevant law, government regulations and rules on budgeting.

1. Government investment funds are raised through borrowing by government or its competent departments in violation of laws and regulations;

2. Government investment funds are not appropriated on time and in full as required;

3. Government investment funds are diverted, stolen or misappropriated.

Article 34

Those responsible for the following circumstances shall be ordered to correct them. As called for in different cases, fund appropriation shall be suspended, stopped or funds appropriated revoked; construction activities shall be suspended or terminated; the leading officials responsible and individuals directly responsible shall be disciplined in accordance with law.

1. Construction of a government invested project is commenced without approval or without meeting construction criteria;

2. Approval of a government invested project or government investment funds including investment subsidy and discounted loan is acquired through cheating;

3. Construction location is changed or major changes are made to the scale or purpose of construction of a government invested project without approval;

4. Investment estimate is increased without approval.

5. The company that carries out construction of a government invested project is asked to lend fund for it.

6. An approved government invested project is not implemented or its construction schedule is not followed without legitimate reasons.

Article 35

If the relevant documents and information concerning a government invested project approval and implementation are not archived as required or such documents and information are diverted, hidden, altered, discarded or destroyed, the party that undertakes such project shall be ordered to rectify the problem. Leading officials responsible and individuals directly responsible shall be disciplined in accordance with law.

Article 36

If a violation of these regulations constitutes a criminal offence, the individual who has committed it will be prosecuted for criminal accountability as required by law.

Chapter VII Supplementary Provisions

Article 37

The regulations for government investment in the defense industry shall be formulated by the competent department for defense industry of the State Council in accordance with the principles established in these regulations.

Article 38

Regulations of fixed asset investment made by the Chinese People Liberation Army and the Chinese People’s Armed Police shall be conducted in accordance with the regulations of the Central Military Commission.

Article 39

These regulations shall enter into force on July 1, 2019.

The Regulations on Government Investment, adopted at the 33rd Executive Meeting of the State Council on December 5, 2018, shall enter into force on July 1st, 2019.

English Translation by Chen Mingming, Jin Gang