Chapter I General Provisions

Chapter II The Establishment， Modification and Termination of the Enterprise

Chapter III Rights and Obligations of the Enterprise

Chapter IV The Factory Director

Chapter V The Staff and Workers and the Staff and Workers' Congress

Chapter VI The Relationship Between the Enterprises and the Government

Chapter VII Legal Liability

Chapter VIII Supplementary Provisions

Chapter I

General Provisions

Article 1 This Law is formulated in accordance with the Constitution of the People's Republic of China with a view to ensuring the consolidation and development of the economic sector under ownership by the whole people， defining the rights and obligations of industrial enterprises owned by the whole people， safeguarding their lawful rights and interests， enhancing their vitality and promoting socialist modernization.

Article 2 An industrial enterprise owned by the whole people （hereinafter referred to as the enterprise） shall be a socialist commodity production and operation unit which shall， in accordance with law， make its own managerial decisions， take full responsibility for its profits and losses and practise independent accounting.

The property of the enterprise shall be owned by the whole people， and shall be operated and managed by the enterprise with the authorization of the state inline with the principle of the separation of ownership and managerial authority. The enterprise shall enjoy the rights to possess， utilize and dispose of， according to law， the property which the state has authorized it to operate and manage.

The enterprise shall obtain the status of a legal person in accordance with law and bear civil liability with the property which the state has authorized it to operate and manage.

The enterprise may， in accordance with the decision of the competent department of the government， adopt contract， leasing or other forms of the system of managerial responsibility.

Article 3 The fundamental task of the enterprise shall be the development of commodity production， creation of wealth， increase of savings and satisfaction of society's growing material and cultural requirements by acting in line with state plans and market demands.

Article 4 While achieving socialist material growth， the enterprise must persistently promote socialist cultural and ideological progress and build up a contingent of well-educated and self-disciplined staff and workers with high ideals and moral integrity.

Article 5 The enterprise must observe the laws and regulations and keep to the socialist orientation.

Article 6 The enterprise must effectively utilize the property which the state has authorized it to operate and manage and realize the multiplication of its assets； the enterprise must， according to law， pay taxes and fees and hand in profits.

Article 7 The enterprise shall implement the system whereby the factory director（manager） assumes overall responsibility for the work of the enterprise.

The factory director shall exercise functions and powers according to law， which shall be protected by law.

Article 8 The grassroots organization of the Chinese Communist Party in the enterprise shall guarantee and supervise the implementation of the guiding principles and policies of the Party and the state in the enterprise.

Article 9 The state shall ensure that the staff and workers enjoy the status of the masters， and the lawful rights and interests of the staff and workers shall be protected by law.