Chapter I　General Provisions

Article 1　Interim Administrative Measures for Chinese-foreign Joint Venture and Cooperative Medical Institutions (the "Measures") are formulated in accordance with the pertinent state laws and administrative regulations such as the Law of the People's Republic of China on Sino-Foreign Equity Joint Ventures, the Law of the People's Republic of China on Sino-Foreign Cooperative Joint Ventures, the Regulations for the Administration of Medical Institutions for the purposes of further catering to the needs of reforms and opening up to the outside world, enhancing the administration of Chinese-foreign joint equity venture and cooperative medical institutions and promoting the healthy development of the medical and health undertakings of the country.

Article 2　The term "Chinese-foreign joint venture medical institutions and Chinese-foreign cooperative medical institutions" as used for the purpose of the Measures refers to the medical institutions established in the forms of joint venture or cooperation by foreign medical institutions, companies, enterprises or other economic organizations (the "foreign joint venturers" or "foreign cooperators") with Chinese medical institutions, companies, enterprises or other economic organizations (the "Chinese joint venturers" or "cooperators") within the territory of China (Hong Kong, Macao and Taiwan are excluded, same below) on the basis of the principle of equality and mutual benefit and on approval of the Chinese government.

Article 3　The Measures apply to applications for the establishment of Chinese-foreign joint venture or cooperative medical institutions within the territory of China.

Article 4　Chinese-foreign joint venture medical institutions and Chinese-foreign cooperative medical institutions shall abide by the pertinent laws, administrative regulations and rules of the state. The legitimate operational activities of Chinese-foreign joint venture and cooperative medical institutions and the lawful rights and interests of parties thereto shall be protected by the laws of the land.

Article 5　The Ministry of Health and the Ministry of Foreign Trade and Economic Cooperation (the "MOFTEC") will be in charge of the administration of Chinese-foreign joint venture and cooperative medical institutions in accordance with the respective functions of the two ministries.

The administrative departments of health (including the competent departments in charge of Chinese traditional medicine/treatment) and the administrative departments of foreign trade and economic cooperation at and above the county level will be responsible for the administration of Chinese-foreign joint venture and cooperative medical institutions in their respective regions of jurisdiction according to their respective spheres of responsibility.

Chapter II　Conditions for Establishment

Article 6　The establishment and development of the Chinese-foreign joint venture and cooperative medical institutions will conform to the local regional health programs and the local regional plan for the establishment of medical institutions, and implement the Basic Standards for Medical Institutions formulated by the Ministry of Health.

Article 7　Both of the Chinese and foreign parties that apply for the establishment of a Chinese-foreign joint venture medical institution or a Chinese-foreign cooperative medical institution must be legal persons who can bear their civil liabilities independently. The Chinese and foreign parties to a joint venture medical institution or a cooperative medical institution shall have direct or indirect experience in medical and health investment and management, and shall meet one of the following requirements:

1. they are able to provide internationally advanced managerial experience in managing medical institutions, modes of management and modes of services;

2. they are able to provide international cutting-edge medical technologies and equipment, and

3. they can complement or make up for the inadequacy of local medical service capacity, medical treatment technologies, fund and medical facilities.

Article 8　A Chinese-foreign joint venture or cooperative medical institution to be established must satisfy the following conditions:

1. having an independent legal person;

2. having a total amount of investment not less than RMB 20 million;

3. having an equity proportion or interest the Chinese party to a Chinese-foreign joint venture medical institution or a cooperative medical institution hold therein not less than 30%;

4. having the time period for the joint venture or the cooperative medical institution not longer than 20 years; and

5. other conditions prescribed by the administrative departments of health at or above the provincial level.

Article 9　The Chinese party to a joint venture of cooperative medical institution must obtain the approval from the corresponding competent department of its investment therein with state-owned assets (including priced investment or as a condition for cooperation). The assets shall, in accordance with the pertinent provisions on the administration of asset valuation, be appraised by an asset appraisal agency recognized by the department of administration of state-owned assets before they are used as investment therein. The appraisal result confirmed by an administrative department of state-owned assets at or above the provincial level may be taken as the basis of pricing the state-assets to be invested in a joint venture or cooperative medical institution.

Chapter III　Examination, Approval and Registration of Establishment

Article 10　Application for the establishment of a Chinese-foreign joint venture or cooperative medical institution shall first be submitted to an administrative department of health at the municipal level (cities at the prefecture level) and the following materials are required:

1. A written application for the establishment of a medical institution;

2. Project proposals signed by the legal representatives of both of the Chinese and foreign parties to the joint venture or cooperative medical institution, and the feasibility study report on the establishment of the Chinese-foreign joint venture or cooperative medical institution;

3. The registration certificates (photocopies) of the Chinese and foreign parties, the identity certificates (photocopies) of the Chinese and foreign legal representatives and their credit reports by the bank.

4. The confirmation document from the administrative department of state-owned assets of the appraisal report on the state-owned assets to be used as investment therein.

The administrative department of health at the municipal level (cities at the prefecture level) must conduct a preliminary examination on the documents submitted by the applicants, and provide preliminary opinions in light of the regional health program and the regional plan for the establishment of medical institutions. It shall submit its preliminary opinions together with the application documents and the regional health program and the regional plan for the establishment of medical institutions to the administrative department of health of the province where it is located for examination.

Article 11　The administrative department at the provincial level shall, upon completion of the examination thereof, submit the application documents and the preliminary opinions of the municipal (city at the prefecture level) health administration department to the Ministry of Health for examination and approval. The administrative department of health at the provincial level shall, in submitting the above listed documents for approval, provide the following documentary information to the Ministry of Health:

1. the applicants' documents of application for the establishment;

2. the Plan for the Establishment of Medical Institutions promulgated upon approval of the people's government at the municipal level in the locality of the establishment of the medical institution, and the examination opinions of the administrative departments of health at the provincial and municipal levels about whether the proposed establishment of the Chinese-foreign joint venture or cooperative medical institution conforms to the local regional health program and the plan for the establishment of medical institutions;

3. the examination opinions of the administrative department of health at the provincial level on the establishment of the Chinese-foreign joint venture or cooperative medical institution, which include its opinions on the name, location, scale (number of hospital beds and dentist chairs), subjects and items of consultation and period of operation, etc. of the proposed Chinese-foreign joint venture or cooperative medical institution; and

4. other materials prescribed by the pertinent laws, administrative regulations and the Ministry of Health.

The Ministry of Health shall, within 45 working days as of the date of acceptance, make a written decision on whether to approve or disapprove the application.

Article 12　Applications for the establishment of Chinese-foreign joint venture or cooperative medical institutions of Chinese traditional medicine (including Chinese-foreign joint venture or cooperative medical institutions that combine Western medicine with traditional Chinese medicine and Chinese-foreign joint venture or cooperative medical institutions for ethnic medicine) shall be preliminarily examined by the municipal administrative departments of health in the localities where the medical institutions are to be established and be re-examined by the provincial administrative departments of health in the localities where they are to be established in accordance with the requirements in Articles 10 and 11 of the Measures, and be submitted to the State Administration of Traditional Chinese Medicine, which shall, upon completion of examination, refer the same to the Ministry of Health for approval.

Article 13　The applicant shall, upon the approval of establishment from the Ministry of Health, apply to the MOFTEC in accordance with the relevant laws and administrative regulations, and submit the following materials thereto:

1. materials submitted on the application for the establishment of the medical institution and the approval documents;

2. the contract and articles of association of the Chinese-foreign joint venture or cooperative medical institution signed by the legal representatives or their authorized representatives of the Chinese and foreign parties thereto;

3. a name list of the members of the board of directors of the proposed Chinese-foreign joint venture or cooperative medical institution and the letters of appointment of the members of the board of directors from the Chinese and foreign parties thereto;

4. the notification letter on the advance approval of the name of the medical institution issued by the relevant department of administration for industry and commerce; and

5. other materials prescribed by the relevant laws, administrative regulations and the MOFTEC.

The MOFTEC shall, within 45 working days as of the date of acceptance of the application, make a written decision on whether to approve or disapprove the application. Once an application is approved, the Approval Certificate for Enterprises with Foreign Investment shall be issued to the applicant.

The establishment of a Chinese-foreign joint venture or cooperative medical institution which has been approved shall, within one month as of the date of receipt of the Approval Certificate for Enterprises with Foreign Investment issued by the MOFTEC, go through the registration formalities in the relevant state administrative department for industry and commerce by presenting the approval certificate.

Article 14　The conditions on the establishment of Chinese-foreign joint venture or cooperative medical institutions as contained in Articles 7 and 8 of the Measures may be appropriately eased with regard to the establishment of Chinese-foreign joint venture or cooperative medical institutions in the central and western regions of China or in the areas that were liberated early during the Chinese revolution, areas inhabited by ethnic minorities, border areas and poor areas of the country, if the scope and contents of the medical services to be provided by the proposed Chinese-foreign joint venture or cooperative medical institutions conform to the medical services of those areas the state encourages.

Article 15　The establishment of a Chinese-foreign joint venture or cooperative medical institution which has been approved shall, in accordance with the provisions on the procedures and requirements concerning the practice registration of medical institutions as contained in the Regulations on the Administration of Medical Institutions and the Implementation Rules for the Regulations on the Administration of Medical Institutions, apply for practice registration at the administrative department of health designated by the administrative department of health at the provincial level to obtain the Practice Permit for Medical Institutions.

The administrative departments of health at the provincial level shall, on the basis of the category and size of Chinese-foreign joint venture or cooperative medical institutions, determine whether the applications for practice registration of Chinese-foreign joint venture or cooperative medical institutions shall be accepted by the administrative departments of health at the provincial level or by municipal (cities at the prefecture level) administrative departments of health.

Article 16　The naming of Chinese-foreign joint venture or cooperative medical institutions shall be guided by the provisions of the Rules of Implementation for the Regulations on the Administration of Medical Institutions. The name of a Chinese-foreign joint venture or cooperative medical institution shall consist of the name of the place where it is located, its title for identification and its general name in that order.

Article 17　No Chinese-foreign joint venture or cooperative medical institution shall be allowed to set up subsidiaries or branches.

Chapter IV　Changes, Extension and Termination

Article 18　If a Chinese-foreign medical institution already established needs to alter the scale (number of hospital beds and dentist chairs), subjects and items of consultation or the term of joint venture or cooperation, it shall, in accordance with the procedures of examination and approval as prescribed in the provisions of Chapter III of the Measures, go through the corresponding formalities for the registration thereof at the original registration department.

Any changes of the contents of contracts and articles of association of Chinese-foreign joint venture or cooperative medical institutions shall be referred by the local departments of foreign trade and economic cooperation to the MOFTEC for approval.

Article 19　Where the 20-year period of joint venture or cooperation of a Chinese-foreign joint venture or cooperative medical institution is going to be expired and there is the need for an extension due to special circumstances, the parties to the Chinese-foreign joint venture or cooperative medical institution may apply for an extension thereof, they shall submit an application for extending the period of joint venture or cooperation 90 days before the end of the period of joint venture or cooperation. The application for an extension shall, upon the consent of the provincial administrative department of health and the provincial department of foreign trade and economic cooperation after examination, be submitted to the Ministry of Health and the MOFTEC for examination and approval. The examining and approving department shall, within 45 working days as of the date of receipt of the application, issue a written decision on whether to approve or disapprove the application for extension.

Article 20　The Chinese-foreign joint venture or cooperative medical institutions whose establishment have been approved shall go through all the relevant registration procedures within the given time limit prescribed by the examining and approving departments; the joint venture project shall, upon approval of the examining and approving department, be cancelled if a Chinese-foreign joint venture or cooperative medical institution fails to complete the registration procedures within the given time limit.

Chapter V Practice

Article 21　A Chinese-foreign joint venture or cooperative medical institution shall, as an independent legal person entity, be responsible for its own profits and losses, and exercise independent accounting and bear its own civil liabilities independently.

Article 22　A Chinese-foreign joint venture or cooperative medical institution shall implement the provisions pertaining to the practice of medical institutions as contained in the Regulations on the Administration of Medical Institutions and the Rules of Implementation for the Regulations on the Administration of Medical Institutions.

Article 23　Chinese-foreign joint venture or cooperative medical institutions shall abide by the norms for access to medical technologies and norms for clinical diagnostic and medical treatment, and implement the relevant provisions concerning clinical application of new technologies, new equipment and huge-sized medical equipment.

Article 24　Medical accidents that occur in Chinese-foreign joint venture or cooperative medical institutions shall be handled according to the pertinent state laws and administrative regulations.

Article 25　The employment of foreign doctors and nurses by Chinese-foreign joint venture or cooperative medical institutions shall be handled in accordance with the relevant provisions in the Law of the People's Republic of China on Medical Practitioners and the Measures of the People's Republic of China for the Administration of Nurses.

Article 26　The Chinese-foreign joint venture or cooperative medical institutions and their medical and technical personnel shall obey the assignments from the administrative departments of health when major disasters, accidents, the eruption of epidemics or other unexpected circumstances have taken place.

Article 27　Advertisements to be released by Chinese-foreign joint venture or cooperative medical institutions shall be handled in accordance with the Advertising Law of the People's Republic of China and the Measures for the Administration of Medical Advertisements.

Article 28　The rates for the charges on the medical services provided by Chinese-foreign joint venture or cooperative medical institutions shall be governed by the relevant state provisions.

Article 29　The tax policy for the Chinese-foreign joint venture or cooperative medical institutions shall be based on the relevant state provisions.

Chapter VI　Supervision

Article 30　The local administrative departments of health at or above the county level shall be responsible for the day-to-day supervision of the Chinese-foreign joint venture or cooperative medical institutions in their respective administrative areas.

The Practice Permit of Medical Institutions of Chinese-foreign joint venture or cooperative medical institutions shall be subjected to annual inspections and be verified by the registration departments of the Chinese-foreign joint venture or cooperative medical institutions.

Article 31　Chinese-foreign joint venture or cooperative medical institutions shall be subject to the supervision of the relevant departments of the state in accordance with the pertinent state provisions on enterprises with foreign investment.

Article 32　Violations of the pertinent laws, administrative regulations and rules by Chinese-foreign joint venture or cooperative medical institutions shall be investigated and dealt with by the competent departments according to law. Chinese-foreign joint venture or cooperative medical institutions that violate the Measures may be punished by the administrative departments of health and departments of foreign trade and economic cooperation at or above the county level in accordance with the relevant laws, administrative regulations and rules.

Article 33　Where any local administrative departments of health and local administrative departments of foreign trade and economic cooperation approves without authorization, in contravention of the provisions of the Measures, the establishment or changes of Chinese-foreign joint venture or cooperative medical institutions, responsibilities shall be pursued against those are in charge thereof.

Where parties to a Chinese-foreign joint venture or cooperative medical institution which , in the absence of approval from the Ministry of Health and the MOFTEC, establish the institution and conduct medical activities or operate subjects and items of consultation by way of a contract, it shall be regarded as illegal medical practice and the parties shall be penalized in accordance with the pertinent provisions as contained in the Regulations on the Administration of Medical Institutions and the Rules of Implementation for the Regulations on the Administration of Medical Institutions.

Chapter VII　Supplementary Provisions

Article 34　The joint venture or cooperative medical institutions set up in the mainland by investors from the Hong Kong Special Administrative Region, the Macao Special Administrative Region and the Taiwan region shall be governed with reference to the Measures.

Article 35　Applications for the establishment of medical institutions with wholly foreign investment within the territory of China shall not be approved.

Article 36　The administrative departments of health and the administrative departments of foreign trade and economic cooperation of all provinces, autonomous regions and municipalities directly under the Central Government may draw up specific provisions in accordance with the Measures and in light of the actual local conditions of their respective administrative regions.

Article 37　The Measures shall be interpreted by the Ministry of Health and the Ministry of Foreign Trade and Economic Cooperation.

Article 38　These Measure will come into in force as of July 1, 2000. Document Wei Yi Zi (89) No. 3 released on February 10, 1989 and Document Wei Jing Mao Fa (1997) No. 292 released on April 30, 1997 will be repealed simultaneously.

This English version is only for reference. To learn more, please refer to the authoritative Chinese version.