Announcement from the Ministry of Transport on Piloting Several Sea Transportation Policies at the National Pilot Free Trade Zone

No. 24 Announcement of the Ministry of Transport 2015

In order to implement the overall scheme of Guangdong, Tianjin and Fujian pilot free trade zones and further deepening the reform and opening up scheme of Shanghai pilot free trade zone issued by the State Council, and promote smooth implementation of the sea transportation policies at the above pilot free trade zones (hereinafter referred to as “free trade zone”), relevant items are hereby announced as follows.

I. Approved by the transport administrative department of the State Council, foreign merchants can set up Sino-foreign joint venture and cooperative enterprises with unlimited proportion of shares, to operate the international vessel transportation business in and out of the Chinese ports; among them, exclusively foreign-owned enterprises can be set up at Shanghai free trade zone, and exclusively Hong Kong and Macau owned enterprises can be set up at Guangdong free trade zone. Relevant requirements and handling procedures shall be implemented as per the Regulations of the People's Republic of China on International Ocean Shipping and Implementation Rules for the Regulations of the People's Republic of China on International Ocean Shipping.

II.Approved by the transport administrative department of the State Council, the Sino-foreign joint venture and cooperative enterprises set up at the free trade zones can operate the public international shipping agency business, with foreign shares extended up to 51%; the exclusively foreign-owned enterprises can operate international sea transportation cargo loading and unloading, international sea transportation container station and storage yard businesses. Relevant requirements and handling procedures shall be implemented as per the Regulations of the People's Republic of China on International Ocean Shipping and Implementation Rules for the Regulations of the People's Republic of China on International Ocean Shipping.

III.Approved by the provincial transport administrative department at places where free trade zones are located, the exclusively foreign-owned enterprises set up at the free trade zones can operate the international vessel management business. The provincial transport administrative department at places where free trade zones are located refers to the relevant provisions of Article 9 and 10 of the Regulations of the People's Republic of China on International Ocean Shipping and Article 8 of the Implementation Rules for the Regulations of the People's Republic of China to handle approval procedures, and put the approval results on records at the transport administrative department of the State Council.

IV. The chairman of the board of directors and general manager of the Sino-foreign joint venture and cooperative international vessel transportation business enterprises set up at the free trade zones shall be determined through negotiation by the both sides of the Sino-foreign joint venture and cooperative enterprises.

V. For the foreign-invested enterprises set up at the free trade zones to operate the international vessel transportation business, the Sino-foreign joint venture and cooperative enterprises set up to operate the public international shipping agency business, or exclusively foreign-owned enterprises to operate the international vessel management business, international sea transportation cargo loading and unloading business and international offshore container station and storage yard businesses. For those not specified in this announcement, relevant regulations of the Law on Sino-Foreign Equity Joint Ventures, Law on Sino-foreign Cooperative Joint Ventures and Law of the People's Republic of China on Wholly Foreign-Owned Enterprises shall apply.

VI.The Chinese-invested shipping company registered domestically can utilize its wholly-owned or held non-Five Starred Red Flag international shipping vessels to operate the transport business of the international business containers taking the free trade zones' open ports as the international transfer ports between the domestic coastal open ports and free trade zones’ open ports. When carrying out above businesses, filing shall be carried out at the transport administrative department of the State Council. See the appendix for relevant filing handling procedures.

VII. The Chinese-invested shipping company shall not sublet the vessels filed to carry out pilot business to others without permission. Except the vessels filed as per this announcement, any other non-Five Starred Red Flag vessels shall not carry the container cargos between the Chinese ports, including the international business container cargos loaded at a domestic port, transferred to another domestic port to leave the country, or enter into China through a domestic port and unloaded at another domestic port.

It is hereby announced.

Ministry of Transport of People’s Republic of China

01.06.15