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New Law Tracking & Comparison Study Service
Issue 1 (Jan. 14 - 21, 2008)

Section A: Comparison Study

New System of Land Registration in
For Subscribers Only:
China
→ Index of procedures: establishment,

On November 28, 2007, the Ministry of alteration and cancellation of

Land and Resources of the People’s registration of construction land use

Republic of China (“PRC”) promulgated the right and mortgage right;

Measures for Land Registration (hereinafter → Index of practice guides for land

referred to as “the 2007 Measures” or “the registration in provinces and major

Measures”), which set forth detailed cities of China;

implementation of relevant provisions of the → Full texts comparison between the

Real Rights Law of PRC about land 2007 Measures and the 1995 Rules

registration in mainland China. Before the (in Chinese);

2007 Measures come into force on February → Co-relationship study: the Real

1, 2008, the dominant guides in this regard Rights Law, the Law on Land

are the Rules for Land Registration which Administration and its

was promulgated in 1989 and revised in 1995 Implementation Regulations, the

by the former State Administration of Land Law on Administration of Urban Real

(hereinafter referred to as “the 1995 Rules” or Estate and the 2007 Measures (in

“the Rules”). Chinese);

I. Effect of registration. According to the 1995 Rules, registration of land was taken as an
administrative measure of the government. Those who do not register in accordance with
the Rules timely will be regarded as occupying the land illegally or in violation of the law.
However, in the 2007 Measures, this provision has been removed; Land registration is
regarded as a civil conduct to announce one’s real right on the land; Failure to make

1/5 Disclaimer: Our legal research reports are delivered for reference only; content contained therein
does not constitute legal advice and should not be relied upon as such.

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registration does not lead to administrative liability any more, but may result in the
proposed establishment or transfer of certain land right (such as transfer or mortgage of
land use right) not becoming effective.

II. Classification of registration. The 2007 Measures have introduced a more
reasonable classification of registration of land. Pease click here to view a comparison
between the 2007 Measures and the 1995 Rules in this regard.

III. Procedures for registration. Compared with the 1995 Rules, the step of cadastral
survey is removed in the 2007 Measures. Pease click here to view a comparison between
the 2007 Measures and the 1995 Rules in this regard.

IV. Joint application and unilateral application. Under the 2007 Measures, the parties
concerned shall jointly apply for the land registration unless unilateral application is
expressly allowed by the Measures. For example, it is provided for in Article 36 of the
2007 Measures that in the case of a mortgage of land use right, the mortgagee and
mortgagor shall jointly apply for registration of such mortgage by presenting the land right
certificate, master contract, mortgage contract and other relevant documents.

V. Application by foreigners for registration of land. Where foreigners apply for
registration of land via agents, the power of attorney and the identity certificate of the
principal shall be notarized or authenticated in accordance with relevant law.

VI. Land register and land right certificate. In accordance with the 2007 Measures, the
land register is the basis on which land rights and interests are determined; the land right
certificate is the proof of the owner’s possession of the land right; If there are
discrepancies between the two documents, the land register shall prevail unless relevant
record in the register is proved wrong.

VII. Expiration of the land use right. Under the Article 52 of the 2007 Measures, if the
period of the state-owned construction land use right for non-residential purpose expires


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and the land user does not apply for extension or his application is not approved, the user
concerned shall apply for cancellation of registration by presenting the original land right
certificate 15 days before the period expires. Please note that the 2007 Measures do not
mention the circumstance where the period of the construction land use right for
residential purpose expires. The Article 149 of the Real Rights Law provides that the
period of the construction land use right for residential purpose will be extended
automatically upon expiry.

Please note that the Ministry of Land and Resources does not clarify whether the 1995
Rules will be maintained effective or become void after the 2007 Measures enter into force.
Further clarification is expected from the Ministry in the near future.

Section B: Summary of New Laws

The 2007 Decision of Commodity Classification - Announcement of the General
Administration of Customs No. 71 of 2007（promulgated and effective on December 5,
2007）

From December 5, 2007, the consignors, consignees of import and export goods and their
agents shall make declaration of their import and export goods according to the 2007
Commodity Classification and pay customs duties at the tax rates of corresponding
classifications.

Administrative Measures for Establishment of Vessel Inspection Companies in
China by Foreign Vessel Inspection Instituion （promulgated on December 29, 2007
and will come into force on March 1, 2008）

Under these Measures:

I. Upon approval by the Chinese authorities, foreign vessel inspection institutions
(hereinafter referred to as “VII”) may establish foreign-invested vessel inspection
companies (hereinafter referred to as “FIVIC”) to conduct business in China; However, an
VII is allowed to set up one FIVIC only;


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II. An VII who does not set up a FIVIC may not conduct business of vessel inspection
within China; Documents (such as certificates and reports) issued by such VII within China
shall be invalid;

III. Registered capital of a FIVIC shall be no less than RMB 3 million; In the case of setting
up branches, the registered capital shall be increased by an amount of RMB 2 million for
each branch;

VI. Upon its establishment in China, a FIVIC shall deposit 20% of its registered capital (if
its registered capital is not more than RMB 10 million), or (in the case of its registered
capital exceeding RMB 10 million) an amount equivalent to RMB 2 million plus 5% of the
portion in excess of RMB 10 million, as guarantee fund with a bank designated by relevant
authority. The guarantee fund shall only be used for paying relevant fees arising from
investigation activities in the case of an inspection accident for which the FIVIC is hold
responsible.

Circular of the General Office of the State Council on Strengthening and
Standardizing the Administration of Newly-commenced Projects—Announcement
of the General Office of the State Council No.64

According to this Circular, a foreign-invested project may not start construction unless the
following requirements are fulfilled in accordance with relevant laws and regulations:

I. Complying with the industry policy on foreign investment, development and construction
planning and land supply policy;

II. The proposal of the project has been verified;

III. The location and layout of the project conform to the planning of the area where it is
located; Planning permission has been obtained;

IV. Application for use of land has been approved and the contract for use of state-owned
land has been signed;

V. The environmental impact assessment approval has been obtained;


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VI. The energy saving evaluation and examination (in the case of fixed assets investment)
has been completed;

VII. Construction license has been obtained; and safety measures have been taken to
guarantee the quality of construction of the project.

Circular on Land Conservation and Intensive Use—Announcement of the State
Council No.3 of 2008

According to this Circular:

I. If a land has been idle for more than 2 years, the government may recover land use
rights at no cost in accordance with laws; As to the land which has been idle for more than
1 year but no more than 2 years, 20% of the land grant premium will be collected by the
government as the fee for idle land; the value added on the price of the idle land,
especially the one used for real estate development, will be exposed to the risk of being
collected by the government;

II. As to the existing land for industrial purpose, no more land fee will be charged by the
government in the case of its utilization rate and plot ratio are increased, provided that the
original planning and use of such land remains unchanged; As to the newly-added land for
industrial purpose, no more land fee will be charged by the government in the case of the
construction area of plant exceeds the area allowed under the plot ratio.

III. Supply of land for villa development project remains prohibited;

- the End -

Final review: George Yan
Executive editor: Lynn Liu
Comparison Study: Lilian Li
Summary of New Laws: Allen Zhang
Translation: Tina Xu
Technical backup: Kent Wen


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