（Adopted at the 22nd Meeting of the Standing Committee of the Eighth National People's Congress on October 29， 1996， promulgated by Order No. 76 Of the President of the People's Republic of China on October 29， 1996）
颁布日期：19961029 　实施日期：19970101 　颁布单位：全国人大常委会

Article 1 This Law is formulated for the purpose of supporting and guiding township enterprises to develop steadily and healthily， protecting the legal rights and interests of township enterprises， standardizing their behaviors， promoting the rural economy and the construction of socialist modernization.

Article 2 Township enterprises as referred to in the this Law mean various enterprises invested in mainly by rural collective economic organizations or peasants and established in townships or towns （including villages under their jurisdiction）， which bear the duty of supporting agriculture.

“Invested in mainly by rural collective economic organizations or peasants” mentioned in the preceding paragraph means that investment made by rural collective economic organizations or peasants exceeds 50% of the total， or the investment can play a holding role or actually has a dominant effect. Any township enterprise that meets the requirements of corporation can be possessed of the qualification.

Article 3 Township enterprises constitute an important pillar supporting rural economy and are an important component of the national economy.

The main task for township enterprises shall be to develop production of goods in accordance with market demand， provide social services and substantial social supply， absorb rural surplus labor， increase peasants' income， support agriculture， give rise to agriculture and rural modernization and promote the development of the national economy and public undertakings.

Article 4 The development of township enterprises shall conform with the principle that rural collective economy plays a leading role while diverse economic components are developing in common.

Article 5 The state shall actively support township enterprises， make rational plans for their development， direct them in sorts and control them in accordance with laws.

Article 6 The state shall encourage and particularly support township enterprises in economically less developed regions or in regions where national minorities live， encourage township enterprises and other economic organizations in economically developed regions to support the development of township enterprises in economically less developed regions and in regions where national minorities live.

Article 7 The department of township enterprise administration under the State Council and other departments concerned under the State Council shall， in accordance with their respective responsibility， be held responsible for planning， coordination， supervision and supplying of service for township enterprises of the whole countries. The department of township enterprise administration and other departments concerned under local governments at the county level and above shall， in accordance with their respective responsibility， be responsible for planning， coordination， supervision and supplying of service for the development of township enterprises within their respective regions.

Article 8 Township enterprises set up and registered in accordance with the law shall go through the procedure of registration for record with the local department of township enterprise administration.

Township enterprises having changes in its name or domicile or because of division， merger， suspension or closing of business， etc. shall， after going through the procedure of change registration， establishment registration or cancellation， report the matter for record to the department of township enterprise administration.

Article 9 Branches set up in cities by township enterprises， or enterprises set up in cities by rural economic organizations with the task of supporting agriculture， shall be treated as township enterprises.

Article 10 For township enterprises established with investment made by rural collective economic organizations， the property shall belong to the whole body of peasants who have set up the enterprises.

For township enterprises established with joint investment made by rural collective economic organizations and other enterprises， organizations or individuals， the property shall belong to every investor in a proportion of the investment made by each of them.

For township enterprises established with investment made by peasants-in partner ship or by individuals， the property shall belong to the investors.

Article 11 Township enterprises shall practice independent accounting， autonomous business operation and self-responsibility for profits and losses.

Township enterprises possessing the status of enterprise legal person shall enjoy the right to the property of the legal person.

Article 12 The state shall protect legal rights and interests of township enterprises with their legal property subject to no encroachment.

No organization or individual may violate laws or administrative regulations by interfering in the production or management of township enterprises， changing the person in charge or illegally encroaching upon or using without compensation their property.

Article 13 Township enterprises shall be established in a form allowed for by laws or administrative regulations； the investors shall， in accordance with relevant laws and administrative regulations， decide on important affairs of the enterprise， set up managerial and administrative system and enjoy rights and bear liabilities.

Article 14 Township enterprises shall practice democratic management according to law. When deciding on the managerial and administrative system or the person in charge of the enterprise， making important policies for running business or setting standards for wages， welfare， labor protection or labor security， etc.， the investors shall heed the opinions of the trade union and employees of the enterprise， and make public regularly the implementation thereof to the employees and subject them to supervision of the employees.

Article 15 The state shall encourage the establishment of social security system for employees in township enterprises in regions where conditions permit.

Article 16 In the case of suspension or termination of business， township enterprises already establishing the social security system shall make arrangement for the employees in accordance with relevant stipulations； those with legal labor contracts shall handle the case by following the contracts. The employees who came from rural collective economic organizations shall have the right to return to their original posts and engage in agricultural production， or they can seek jobs by themselves.

Article 17 Township enterprises shall take a certain proportion of after-tax profit as fund to be used for supporting agriculture and rural social expenses. The actual proportion and measures for managing and using the fund shall be prescribed by the governments of province， autonomous region or municipality directly under the central government.

Except as otherwise stipulated by laws or administrative regulations， no government department， organization or individual may charge any fees or assess any expenses in any form from township enterprises.

Article 18 The state shall， in accordance with the situation of the development of township enterprises， reduce a portion of tax levied from township enterprises within a certain period. The categories for which， the period within which and the proportion by which， the taxation shall be reduced， shall be prescribed by the State Council.

Article 19 Medium- and small-sized township enterprises that meet one of the following requirements may， in accordance with particular situation， enjoy preferential treatment of taxation within a certain period：

（1） collective-owned township enterprises during their early stage， meeting real difficulty in business；

（2） those established in minority nationality regions， remote regions or poverty-stricken regions；

（3） those engaging in businesses of processing， storing， conveying or distributing grain， feed or meat； or

（4） those to which the state industrial policies promise to render special support.

The concrete measures for the preferential treatment of taxation mentioned in the preceding paragraph shall be prescribed by the State Council.

Article 20 The state shall， by means of credits， encourage and support the development of township enterprises. State financial institutions may offer preferred loans to township enterprises which meet any of the requirements stipulated in the preceding article and satisfy the conditions for loans， and among said township enterprises， those with financial handicap but promising well may enjoy loans on favorable terms.

The concrete measures for the preferred loans and loans on favorable terms mentioned in the preceding paragraph shall be prescribed by the State Council.

Article 21 Governments at and above county level may， in accordance with relevant regulations of the state， set up development funds for township enterprises. The funds shall comprise of the following resources：

（1） revolving funds the state appropriates for the development of township enterprises；

（2） a portion of the annual increment of taxes turned over to the localities by township enterprises；

（3） earnings from use of the funds； and

（4） funds voluntarily provided by rural collective organizations， township enterprises and individual peasants， etc.

Article 22 The development funds for township enterprises shall be used specially for supporting the development of township enterprises， with the scope of using as follows：

（1） supporting the development of township enterprises in minority nationality regions， remote regions and poverty-stricken regions；

（2） supporting the economic and technological cooperation and the conduct of joint venture projects by and between township enterprises in developed regions and those in economically less developed regions or minority nationality regions；

（3） supporting township enterprises to adjust their setup of production and product mix in accordance with the state industrial policies；

（4） supporting township enterprises to make technological innovation， develop famous products， special local products， products of good quality and new products and produce traditional handicraft products；

（5） developing township enterprises that produce agricultural means of production or that directly serve agricultural production；

（6） developing township enterprises that engage in businesses of processing， storing， conveying or distributing grain， feed or meat；

（7） supporting the vocational education and technical training for employees in township enterprises； and

（8）supporting other items in need of such support.

Measures for the establishment， use and management of development funds for township enterprises shall be prescribed by the State Council.

Article 23 The state shall take active measures to train talents for township enterprises， encourage technicians， managers and graduates from colleges and secondary schools to work in them and serve them in various ways.

Township enterprises shall train technicians， managers and workers through various channels and in different ways and adopt preferential policies to attract talents.

Article 24 The state shall take preferential measures to encourage township enterprises to develop economic and technological cooperation in various forms with research institutions， colleges and universities， state-owned enterprises and other enterprises and organizations.

Article 25 The state shall encourage township enterprises to develop foreign economic and technological cooperation and exchanges， set up production bases for export-oriented products， and earn foreign exchange through export.

Township enterprises that meet certain requirements can be granted with franchise for running foreign trade， after being approved in accordance with the law.

Article 26 Local governments at all levels shall， in line with the principle of unified planning and rational distribution， combine the development of township enterprises with the construction of small-sized towns， guide and promote township enterprises to develop in an appropriately concentrated way and strengthen step by step the construction of infrastructure and service facilities， to speed up the construction of small-sized towns.

Article 27 Township enterprises shall， in accordance with the market demand and the state industrial policies， rationally readjust their setup of production and product mix， strengthen technological innovation， continuously adopt advanced techniques， production technologies and equipment， and raise the managerial and administrative ability of the enterprises.

Article 28 The construction of township enterprises shall conform to the overall plan for land utilization， with land used under strict control and in a rational and economical way. Where there is wasteland or inferior land available for use， no farmland or fertile land shall be used.

When township enterprises use land which is under the possession of rural collective bodies， corresponding procedures for approval and registration shall be followed in accordance with relevant laws and regulations.

The land used by township enterprises shall be retrieved by the original owner and put into new use when the land has been set idle for more than two years or for more than one year as a result of business being stopped.

Article 29 Township enterprises shall explore and use natural resources in a lawful and rational manner.

Township enterprises wishing to engage in mineral resources exploitation must subject to approval by departments concerned according to stipulations of relevant laws， and obtain the mining license and production license. They must conduct regular operation， try to prevent waste of resources and any damage to resources shall be strictly prohibited.

Article 30 Township enterprises shall， in accordance with relevant stipulations of the state， institute financial and accounting rules， strengthen financial control， set up account books in accordance with the law and keep a true record of financial activities.

Article 31 Township enterprises must， in accordance with statistical rules of the state， submit true statistical data. Township enterprises shall have the right to reject any statistical investigation reports and forms that are made and handed down in violation of provisions of the state.

Article 32 Township enterprises shall， in accordance with the law， make tax registration， submit timely tax returns and pay tax to the due amount.

Governments at all levels shall strengthen the administration of taxation with regard to township enterprises. Relevant departments may not give tax reductions or exemptions to township enterprises by overstepping their authority.

Article 33 Township enterprises shall strengthen the quality control of their products， make substantial efforts to improve quality of products. Goods they produce or sell must be up to the standards set by the state and the trade for the security of human health and personal and property safety. No product which has lose effectiveness or has deteriorated or which the state has declared to be obsolete may be sold or produced， and it shall be prohibited to mix impurities or imitations into products that are produced or sold， to pass a fake product as a genuine one or pass a defective product as a high-quality one.

Article 34 Township enterprises shall use trademarks in accordance with the law and attach importance to their commercial credit. They shall make marks for their products as required by state provisions. It is prohibited to forge the origin of a product or to forge or use the name or address of a factory of another producer or forge or use authentication marks or marks for famous quality products of others.

Article 35 Township enterprises must comply with laws and regulations concerning environmental protection and， in accordance with the state's industrial policies and under the unified guidance of the local people's government， take measures to develop pollutant-free or less polluting and less resources-consuming enterprises， substantially and practically prevent and control environmental pollution and eco-hazards， protect and improve environment.

Local people's governments shall make and implement programs for township enterprises to do environmental protection， to raise the capability of township enterprises to prevent and control environmental pollution.

Article 36 In constructing some projects that may affect environment， township enterprises shall strictly follow the procedure for the assessments of environmental impact.

Installations for the prevention and control of pollution at a construction project must be designed， built and put into operation simultaneously with the principal part of the project. No permission shall be given for a construction project to be commissioned or used， until its installations for the prevention and control of pollution are examined and considered up to the standard by the competent department of environmental protection administration.

Township enterprises may not adopt or use production technologies or facilities which may seriously pollute the environment and are expressly prohibited by the state， or produce or sell products which may seriously pollute the environment and are expressly prohibited by the state. Those discharging pollutants in excess of the state or local discharge standards and causing serious environmental pollution shall eliminate or control the pollution within a prescribed period of time or， in the case of failure to do so， they shall be ordered to close down， stop production or change the line of production.

Article 37 Township enterprises must comply with laws and regulations concerning labor protection and labor safety， conscientiously stick to the principle of “putting safety first， putting prevention first”， take effective technical and managerial measures for labor hygiene to prevent accidents and casualties and vocational diseases. In the case of hidden dangers endangering the employees' safety， a time limit shall be set or the production shall be suspended for removing the dangers. It is strictly prohibited for the managerial personnel to break rules and regulation and force employees to perform risky operations. When accident and casualties occur， they shall take active actions to perform rescue and make proper treatment and report the case to the departments concerned.

Article 38 Any of the following acts that breach the stipulations of this Law shall be corrected under the order of the department of township enterprise administration under the governments at or below the county level：

（1） illegally make change to the ownership of any township enterprise；

（2） illegally seize or use without compensation property of any township enterprise；

（3） illegally replace the person-in-charge of any township enterprise； or

（4） encroach upon any township enterprise's right to autonomous running of business.

If any act referred to in the preceding paragraph causes economic losses the enterprise， a compensation shall be paid to the enterprise in accordance with the law.

Article 39 Township enterprises shall have the right to lodge complaints with or inform the department of audit， supervision， finance or price control or the department of township enterprise administration against any unit or individual that illegally charge fees， assessments from or impose fines on the township enterprise. The department concerned and the higher authorities shall order the persons responsible to stop the illegal acts and make restitution within a time limit. The department concerned may， in accordance with the seriousness of the case， impose certain penalty on those directly responsible for the illegal acts.

Article 40 Any township enterprise violating laws or regulations concerning product quality， environmental protection， land administration， the exploitation of natural resources， labor safety or taxation， etc. shall， in accordance with the seriousness of the case， cease partly or completely to enjoy the preferential treatment stipulated by this Law until they make corrections， in addition to being dealt with in accordance with relevant laws and regulations.

Article 41 If any township enterprise refuses to bear the duty to support agriculture in violation of this Law， the department of township enterprise administration shall order it to make corrections， and may order that the enterprise cease partly or completely to enjoy the preferential treatments stipulated by this Law before the corrections have been made.

Article 42 Any party who refuses to accept penalties or decisions made under Articles 38 to 41 of this Law may apply for administrative reconsideration or take legal proceedings.

Article 43 This Law shall enter into force on January 1， 1997.