2. Work was completed on important legislation bearing on overall economic
and social development, the Enterprise Bankruptcy Law and the revised Law on
Compulsory Education were promulgated and implemented, and the draft Law on
Corporate Income Tax has been submitted to this session for your deliberation
and approval. Formulating the Enterprise Bankruptcy Law to set up a legal
framework for orderly closing down enterprises so that enterprises that perform
well can thrive and enterprises that don't can fall by the wayside was an
objective requirement for the development of the socialist market economy. The
Standing Committee placed great importance on formulating and passing a law on
enterprise bankruptcies. It formulated a law on the bankruptcy of state-owned
enterprises in 1986, but it was always difficult to implement due to failure to
solve the problem of funding to take care of the employees of bankrupted
enterprises. The old law on enterprise bankruptcy could no longer meet practical
needs as the socialist market economy developed, the reform of state-owned
enterprises was deepened and the non-public sector of the economy developed. We
urgently needed to formulate a new bankruptcy law that would apply to all
enterprises and would be strongly operational. On the basis of a careful review
of the legislative work of the past two Standing Committees, the current
Standing Committee conducted thorough surveys and studies, widely solicited
opinions, once again formulated the draft Enterprise Bankruptcy Law and finally
passed it after deliberating it three times. The Enterprise Bankruptcy Law
contains special provisions to require giving priority to paying unpaid wages
and contributions for social security due from bankrupt enterprises, and also
contains provisions to standardize enterprise bankruptcy procedures and protect
the legitimate rights of enterprise employees.
Children are the future of the motherland and the hope of the people. Their
healthy development is not only of the greatest concern for hundreds of millions
of families but is also a basic guarantee for continued burgeoning progress in
China's socialist modernization. The Standing Committee completely revised the
Law on Compulsory Education and the Law on the Protection of Minors to address
serious problems in compulsory education and the protection of minors.
In revising the Law on Compulsory Education, we mainly clarified three areas:
First, we established the legal framework for a mechanism to ensure funding
for compulsory education, made it clear that students will no longer be charged
for tuition and miscellaneous fees for compulsory education, and left it to the
State Council to determine the steps to implement these provisions.
Second, we set out the requirement that development of compulsory education
should make the distribution of compulsory education more uniform and that
governments at all levels must appropriately distribute education resources.
Third, we incorporated the requirement for competence-oriented education into
the law and further clarified the principles and goals for compulsory education.
The revised Law on Compulsory Education more fully embodies the principle of
fairness in education, which is of major significance for ensuring the sound
development of compulsory education in China.
The revised Law on the Protection of Minors further clarifies the
responsibility of families, schools, society and the state in the protection of
minors and highlights the right of minors to receive an education, and it will
play a major role in ensuring the physical and mental health of minors and
protecting their legitimate rights.
Since the policy of reform and opening up was first instituted, farmers have
founded hundreds of thousands of specialized cooperative economic organizations,
but their legal status has never been clear. The Standing Committee formulated
the Law on Specialized Farmer Cooperatives based on extensive surveys and
studies, for the first time confirming in a law their status in the market and
standardizing their property system and means of distribution. This has great
significance for upholding and improving the basic rural operating system,
improving the degree of organization among farmers and promoting
industrialization of agriculture.
We formulated the Law to Combat Money Laundering on the basis of extensive
surveys and studies and a review of actual experience in order to meet the
requirements of the fight against money laundering in China and relevant
international treaties. The Standing Committee revised the Partnership
Enterprise Law to encourage independent innovation and risk investment,
strengthen the integration of technology and capital and promote the growth of
professional service organizations. The revised Banking Oversight and Management
Law gives agencies responsible for overseeing the banking industry the power to
carry out investigations and contains provisions stipulating the conditions and
procedures for them to carry out such investigations and relevant legal
obligations to strengthen oversight and management of the banking industry. The
Decision on Revision of the Organic Law of the People's Courts requires that the
clause that authorizes higher people's courts to rule on some cases carrying the
death penalty be deleted, reserving that power for the Supreme People's Court
alone. This will have a major role in ensuring fairness in the judicial system.
The Law on Corporate Income Tax is an important law that affects overall
economic and social development. The objective for reform to introduce a unified
tax code for enterprises was clearly defined at the Third Plenary Session of the
Sixteenth Central Committee. Over 540 of you have submitted 16 bills on
formulating a unified law on corporate income tax since the Second Session of
the Tenth NPC. The current Standing Committee included formulation of the Law on
Corporate Income Tax in the five-year plan for legislation and called on the
relevant departments of the State Council to work hard on its formulation. The
State Council submitted the proposed draft Law on Corporate Income Tax to the
Standing Committee after conducting thorough surveys and studies and extensively
soliciting opinions. There were three main changes incorporated in the draft:
The first was to unify the income tax rate for domestic and foreign enterprises
and standardize the deductible amount. The second was to set a lower tax rate
and institute a preferential treatment policy for small enterprises and new- and
high-technology enterprises. The third was to adopt a transition measure for
enterprises that formerly enjoyed preferential tax status and make appropriate
arrangements for special economic zones and the western region. The draft was
conscientiously deliberated and revised at the Twenty-fifth Meeting of the
Standing Committee, and the decision was made at the same meeting to submit it
to this session for your deliberation and approval.
Formulation of the Law on Property Rights and the Law on Corporate Income Tax
were two major events in China's legislative work and are two important items on
the agenda for this session. Because of the wide concern in society as well as
among you about these two laws, when we submitted the drafts of these laws and
related documents to you for your deliberation and comments in January, we also
organized the leaders of relevant organizations to report to you in different
localities on their contents to prepare for deliberation at this session. The
Standing Committee and the State Council revised these two proposed laws based
on your opinions and the comments members of the Standing Committee made during
deliberation and explained the two draft laws to this session. Thanks to your
concerted efforts, we are confident that we can successfully formulate these two
laws.
