I. NATURE AND PLURPOSES

The Torch Programme is a guidance programme for developing new/high tech industries in China, It was approved by the State Council and is implemented by the Ministry of Science and Technology. The purposes of the programme are to Technology. The purposes of the programme are to implement the strategy "Promote the development of the country with science and education", carry out the general policy of reform and opening to the outside world, bring into full play the advantages and potential of China's scientific and technological forces, take market for orientation, promote the commercialization of new/high tech achievements, industrialization of new/high tech good and internationalization of new/high tech industries.

II THE MAIN CONTENTS

I. Create a Proper Environment for the Development of New/high tech Industries

Widely carry out advocating campaign for the Torch Programme formulate complete sets of policies, laws and regulations for the development of new/high tech industries; create sound supporting environment and establish the managerial system and operational mechanism fit for the development of new/high tech industries; open up financing sources and build up risk investment mechanism ; open up domestic and overseas information channel and establish information networks; and formulate medium to long term plans and implementation plans conforming to realities.

2. Establish New/high tech Industrial

Development Zones and Pioneering Service Centres.

The establishment and development of new/high tech industrial development zones are an important component of the Torch Programme and an inevitable outcome of reform, opening to the outside world and the social development of the socialist market economy .The new/high tech industrial development zones are based on intensive intelligence and open environment and mainly depend on China's own scientific and technological and economic strength. They are concentrated zones established for purposes of transforming achievements of science and technology into practical productive force to the maximum extent through local optimization of soft and hard environments, orienting to both domestic and overseas markets and developing China's new/high tech industries.

The new/high tech industrial development zones have the following seven functions;

(1) Bases for the development of new/high technologies;

(2) Sources of new/high technologies and products for traditional industries;

(3) Windows opening to the outside world;

(4) Experimental zones for close combination of science and technology with economy, and promotion of transformation of achievements of science and technology and technical innovation;

(5) Demonstrative zones for close combination of science and technology with economy, and promotion of transformation of achievements of science and technology and technical innovation;

(6) New urban areas of socialist modern civilization ;

(7) Schools for training and bringing up high technology industrialist.

The new high/new tech pioneering service centres are a new type of scientific and technological service agencies of public good type, established by consulting the successful experiences of foreign countries in the development of "hatcher" and considering the conditions of China, Their purposes are to depend on the related policies of the state and the necessary conditions provided by the governments at various levels to create locally optimized environments, bring up new stating points of economic growth for the development of new/high technologies ,promote commercialization of achievements of new /high technologies so as so "hatch" new/high tech enterprises, and provide comprehensive services for the establishment of new/high tech enterprises

The new/high tech pioneering service centres are an important link in transformation of new/high tech industries, a starting point between laboratories and enterprises, a school for bringing up scientific and technological industrilists, links connecting the development zones and institutions of higher education and large and medium enterprise, and an important component of the supporting service systems for the development of new/high tech industries

3. Projects

The projects of the Torch Programme are an important component of the programme, functioning as the starting point and basis of the programme.

The project of the Torch Programme are high technology projects oriented to domestic and overseas markets, based on the key research programmes of the state, localities and sectors, achievements of programmes for the research and development of new/high technologies and other research achievements, aimed industries, selected and good economic benefits, Through the implementation of the programme new/high tech enterprises and enterprise groups will be brought up.

The key fields of development of the Torch Programme include: new materials, biological engineering, electronics and information, optomechanic electronics integration, new energies, high energy, efficiency, energy saving and environmental protection.

4. Internationalization of New/high tech Industries

Enhancing international cooperation and promoting the internationalization of China's new/high tech industries is one of the Torch Programme's major tasks. The approach to the internationalization is to establish wide cooperative relation with various countries and regions and enter into various forms of and technological, financial, enterprise and commercial sectors in foreign countries through governmental or non-governmental channels, on the basis of equality and mutual benefit, so as to help China's new/high tech products enter international markets and promote the development to new/high tech industries towards internationalization.

5. Training

Training and attracting talents are one of the key factors for the development of mew/high tech industries, and is the basic guarantee for the achievement of commercialization, industrialization and internationalization of new/high tech products, To foster a great number of talents of scientific and technological management and scientific and technological industries, who have mastery of technologies, are good at management, business handling, and innovation, and innovation, and meet the challenge of market competition, is a key task of the Torch Programme.

III. THE MAIN OBJECTIVES FOR YEAR 2000

1. The Objectives of Development

2. (1) Carry out construction and development of the new/high-tech industrial development zones to form a batch of bases for the development of new/high tech industries with clear-cut features of new/high-tech industries, advanced managerial system, flexible operational mechanism, complete sets of policies, laws and regulations, perfect supporting service systems and graceful environment.

(2) Through the implementation of the projects of the Torch Programme, bring up a number of new a and developing mainstay new/high tech industries, effectively promote rational adjustment of industrial structures and promote the national productivity greatly.

(3) Through the implementation of the key projects of the programme, emphatically develop a number of new/high tech enterprises with modernize enterprise systems and famous brand products; emphatically bring up a batch of large and medium demonstrative enterprises for the reform of traditional industries with new/high technologies, emphatically promote the technical and managerial levels of a number of township enterprises that already have necessary conditions; and emphatically support a batch of private science and technology enterprises and new/high tech industries to expand scale.

(5) Carry out all directions and whole process "hatching" service for medium and small science and technology enterprises through the new/high tech pioneering service centres, promote the transfomation of new/high tech products to commercial goods and transformation of the products, and continuously provide new starting points for the sustainable development of new/high tech industries.

(6) Through the implementation of the programme, foster a great number of talents of the development, operation and management of new/high tech industries, who have mastery of technology, are good at management, business handling and innovation, and meet the challenge of market competition.

3. Expected Outcomes

(1) Through the implementation of the Torch Programme, realize a total annual income of 600 billion yuan from technological development, industrial production and trade, in which 500 billion yuan will come form the sale of new/high tech products.

(2) Through the construction and development of the new/high tech industrial development zones, realize a total annual income of 500 billion yuan form technological development, industrial production and trade, in which industrial output will occupy 400 billion yuan.

(3) Through the implementation of the programme, realize a total annual income of 300 billions yuan form sale. The national level projects will total 3, 00 and the local level ones 9, 000.

(4) Through the implementation of projects and key projects of the programme and the construction and development of the new /high tech industrial development zones foster and confirm 30, 000 new/high tech enterprises of all kinds.

(5) Through the implementation of the programme, bring up 500.00 talents for development, operation and management of new/high tech industries.

IV THE MAIN SUPPORTIVG CONDITIONS AND MEASURES

The implementation of the Torch Programme is domestic and overseas market oriented, adopts multiple methods to raise funds, including bank loans, self financing, absorbing social and foreign funds, etc., with the support of the state and local preferential policies, guide and promote the commercialization, industrialization and internalization of the achievements of China's new/high technologies

1. Policies

(1) If an enterprise in the development zone is confirmed as new/high tech enterprise the income tax will be collected at the reduced rate of 15% since the date of confirmation.

(2) If the output value of export products of a confirmed new/high tech enterprise in the development zone accounts for more than 70% of the total output value in the same year, the income tax will be collected at the reduced rate of 10% after checked by the tax authority.

(3) A confirmed newly opened new /high tech enterprise in the development zone can be exempted form income tax within the two years since the year when it is put into production after an exemption application is made by the enterprise and approved by the tax authority

2. Financing Sources

(1) The projects of the programme can use the special loan for scientific and technological development.

(2) The projects of the programme have priority in getting financial support form the New Product Programme.

(3) The projects, of the programme can get financial support from the Chinese Torch Foundation and the Chinese Scientific and Technological Development Foundation.

(4) The new/high tech industrial development zone can use the special construction loan.

V MANAGEMENT

Two level management is implemented for the projects of the Torch Programme, The office of Torch Programme of Ministry of science and Technology is responsible for the organization, confirmation, institution and tracing management of the national level projects and the local science and technology commissions are responsible for the organization, confirmation, institution and tracing management of the local projects, The management commissions of the national level new/high tech industrial development zones are responsible for the organization and management of the development zones, under the leadership and support of local governments, receiving the guidance of corresponding local science and technology commission for professional matters, and the Office of Torch Programme of the Ministry of Science and Technology is responsible for the overall management.

1. Management Organizations

The Ministry of Science and Technology

Office of Torch Programme

Division of Planning

Division of Information and Investigation

Division of Management of New/high tech Industrial Development Zones

Division of Propaganda and Education

Division of Project Management

Division of Computer Software

Division of International Development

2. Functions of the Office of Torch Programme

(1) Fomulate the general and specific policies and plans for the implementation of the Torch Programme in cooperation with related departments and agencies.

(2) Raise funds for the Torch Programme, determine the scheme for the fuse of funds and monitor the use of funds.

(3) Take charge of the confirmation, institution and management of the national level projects of the Torch Programme, and the selection, tracing and examination and acceptance of the key projects of the programme.

(4) Take charge of the overall management of the national new/high tech industrial development zones and new/high tech pioneering service centres.

(5) Take charge of the overall management of propaganda, training, statistics, consultation and information and communication networks.

(6) Take charge of the overall management of the Chinese Association of New/high tech Industrial Development.

(7) Take charge of international exchange and cooperation soliciting merchants and investors, and opening up international markets.

(8) Promote the development of computer software industry.

(9) Take charge of the confirmation and supervision of new/high tech enterprises.

(10) Take charge of the contact with private new/high tech enterprises.