Regulation on Government Investment

Regulation on Government Investment

Order of the State Council of the People's Republic of China

(No. 712)

The Regulation on Government Investment, as adopted at the 33rd executive meeting of the State Council on December 5, 2018, is hereby issued, and shall come into force on July 1, 2019.

Premier: Li Keqiang

April 14, 2019

Regulation on Government Investment

Chapter I General Provisions

Article 1 This Regulation is developed to maximize the role of government investment, improve the efficiency of government investment, regulate government investment behavior, and stimulate the vitality of social investment.

Article 2 For the purpose of this Regulation, “government investment” means the fixed asset investment and construction activities conducted with the funds arranged by budgets within China, including new construction, expansion, reconstruction and technical transformation.

Article 3 Government investment funds shall be channeled to projects in public fields where resources cannot be effectively allocated by the market, such as social welfare services, public infrastructures, agriculture and rural affairs, ecological and environmental protection, significant scientific and technological progress, social management, and national security, and mainly target not-for-profit projects.

The state shall improve relevant policies and measures, maximize the guiding and driving roles of government investment funds, and encourage the investment of social funds in the fields as prescribed in the preceding paragraph.

The state shall establish the regular assessment and adjustment mechanism for the scope of government investment, and keep optimizing the direction and structure of government investment.

Article 4 Government investment shall follow the principles of scientific decision-making, standardized management, performance-orientation, openness and transparency.

Article 5 Government investment shall be commensurate with the level of economic and social development and the situation of financial revenues and expenditures.

The state shall strengthen the constraints on budgets of government investment funds. Governments and their relevant departments are prohibited from raising government investment funds through borrowing in violation of laws or regulations.

Article 6 Government investment funds shall be arranged according to projects and mainly used in the manner of direct investment. Where any for-profit project truly needs support, the relevant fund arrangement shall be made mainly through capital injection, or appropriately through investment subsidiary, or loan with discounted interest or other methods.

The arrangement of government investment funds shall satisfy the relevant requirements of the reform of the division of fiscal powers and expenditure responsibilities between the Central Government and the local governments, and equally treat all kinds of investors, and shall not establish discriminatory conditions.

The state shall, by establishing project library and other means, strengthen the reserve of projects using government investment funds.

Article 7 The investment department of the State Council shall, in accordance with the provisions of this Regulation and the provisions issued by the State Council, perform the comprehensive government investment management function. Other relevant departments of the State Council shall perform the corresponding government investment management functions in accordance with this Regulation and the division of responsibilities as prescribed by the State Council.

The investment departments of the local people's governments at or above the county level and other relevant departments shall perform the corresponding government investment management functions in accordance with this Regulation and the division of responsibilities as prescribed by the people's governments at the same level.

Chapter II Government Investment Decision-Making

Article 8 The people's governments at or above the county level shall, in accordance with the national economic and social development planning, the medium-term fiscal planning and the national macro-control policies and in consideration of financial revenues and expenditures, make overall arrangements for projects using government investment funds, and use various government investment funds in a standardized manner.

Article 9 For the projects invested by governments by means of direct investment or capital injection (hereinafter collectively referred to as “government investment projects”), project entities shall prepare project proposals, feasibility study reports and preliminary designs, and submit them to investment departments or other relevant departments for approval according to government investment management powers and specified procedures.

Project entities shall strengthen the preliminary work concerning government investment projects, ensure that the preliminary work meets the specified requirements in terms of depth, and be responsible for the authenticity of the project proposals, feasibility study reports, preliminary designs and other documents that shall be attached according to the law.

Article 10 Except for the projects involving state secrets, investment departments and other relevant departments shall, through online platforms for the approval and regulation of investment projects (hereinafter referred to as “online platforms”), handle the approval formalities for government investment projects by using the project codes generated by online platforms.

Investment departments and other relevant departments shall list the plans and industrial policies, among others, related to government investment through online platforms, make public the handling procedures and time limits, among others, for approval of government investment projects, and provide project entities with relevant consultation services.

Article 11 Investment departments or other relevant departments shall, in accordance with the national economic and social development planning, special plans in relevant fields, and industrial policies, review government investment projects from the following aspects and make a decision of approval or disapproval:

(1) The necessity of project construction proposed in project proposals.

(2) The implem......