Article 1
These Measures are formulated to implement the relevant policy and provisions on the national high and new technology industry development zone approved by the high and new technology industry in our country.

Article 2
High and new technology enterprises in national high and new technology industry development zones (hereinafter referred to as the Development Zones) shall be identified and designated according to these Measures.

Article 3
Science and technology commission in each province, autonomous region, municipality, planned separate city (hereinafter referred to as science and technology commission at provincial and city level) shall be the authority in charge of the identification and designation of high and new technology enterprises in the Development Zones administered by the people's government of each province, autonomous region, municipality planned separate city, and shall be responsible for the implementation of
these Measures. The Development Zone Office shall, under the leadership of the people's government and the leadership and supervision of the science commission at provincial and city level, specifically handle the examination and approval of the identification and designation of the high and new technology enterprises.

Article 4
According to the current development of science and technology in the world, high and new technology is divided into following categories:

(1) microelectronics and electronic information technology;
(2) space science and aerospace and aeronautical technology;
(3) optoelectronics and optical, mechanical and electronic integra-
tion technology;
(4) life science and biological engineering technology;
(5) material science and new materials technology;
(6) energy science and new energy, high efficient energy conservation
technology;
(7) ecology and environmental science;
(8) earache science and ocean engineering;
(9) basic matter science and radiation science;
(10) medical science and bio-medical engineering;
(11) other new process or new technology applicable in the tradi-
tional industries.

The categories of high and new technology shall be supplemented and amended from time to time according to the constant development inside and outside China, and shall be published by the State Science Commission.

Article 5

High and new technology enterprises shall be knowledge-intensive and technology-intensive economic enterprises. High and new technology enterprises within the Development Zones must meet the following conditions:

(1) they are engaging in the research, development, production and sale of one or more high technologies within the scope of Article 4 and their products. However, pure commercial distribution of such technologies and their products are excepted;
(2) they are practicing independent accounting, autonomous operation and bearing their own profit and loss;
(3) the persons in charge of the enterprises with the research, development, production and sale of the products in their enterprises, and shall be the full time personnel of the enterprises;
(4) scientist and technical personnel with college and university education shall account or more than 30% of all the staffs of the enterprises; scientists and technical personnel engaged in the research and development of high and new technology products shall account or more than 10% of all the staffs of the enterprises. For those labor-intensive high and new technology enterprises engaging in the production or service of high and new technology products, scientists and technical personnel with college and university education shall account or more than 20% of all the staffs of the enterprises;
(5) they have more than RMB 100000 yuan as their own funds, as well as appropriates places of business and facilities corresponding to their respective scale of business activities;
(6) more than 3% of the gross revenue of the enterprises shall have been allotted as expenses of the research and development of high and new technology products;
(7) the gross revenues of the high and new technology enterprises shall be composed of technology income, value of the high and new technology products, value of the ordinary technological products and technology-related trade. The aggregate of technological income and value of the high and new technology products shall account of more than 50% of the annual gross revenue of the enterprises. Technological income shall mean income derived from technical consultancy, technology transfer, technology contributed as equity investment, technical services, technical training, technical engineering design and contracts, technology export, adoption and acquisition of
imported technology and trial productions;
(8) they have specific articles of association and strict technical and financial administration system;
(9) their terms of operation shall be more than 10 years.

Article 6
An application for the establishment of high and new technology shall be submitted to the Development Zone Office, after the Development Zone Office has examined and determined, the application shall be approved and a "Certificate of High and New Technology Enterprise" shall be granted by the science and technology commission at provincial and city level.

Article 7
The Development Zone Office shall examine and verify the high and new technology enterprises according to the conditions set forth in Article 5 on a regular basis. Those high and new technology enterprises that do not meet the above conditions shall not be entitled to the policies and provisions of the national high and new technology industry development zone.

Article 8
The duration of those classified as high and new technology products shall be within 5 years, and duration of those high and new technology products that have a longer technological cycle shall upon approval be extended to 7 years.

Article 9
High and new technology enterprises that alter their scope of business, merge with or separate from other entities, charge their production line, redomicile or wind-up shall apply to the Development Zone Office for examination and approval, and shall undertake corresponding industrial and commercial and tax registration.

Article 10
Science research institutes with the ownership of the whole people in the Development Zones whose administrative and operational expenses have been reduced pursuant to the stipulations of the State, that practice independent accounting and that meet the conditions set forth in Article 5 may, upon verification by the Development Zone Office, be converted into high and new technology enterprises.

Article 11
These Measures shall replace Interim Provisions on the Conditions and Standards for the Designation of High and New Technology Enterprises promulgated by the State Science and Technology Commission.

Article 12
Science and technology commissions in each province and city shall adopt implementing rules based on these Measures. The existing implementing rules that do not conform to these Measures shall be amended in accordance with these Measures.

Article 13
The State Science Commission shall be responsible for the interpretation and amendment to these Measures.

Article 14
These Measures shall be implemented from the date of approval by the State Council.