MEASURES ON INVITATIONS FOR EXPORT BIDDING OF MACHINERY AND ELECTRONIC PRODUCTS

The Ministry of Foreign Trade and Economic Cooperation

Order of the Ministry of Foreign Trade and Economic Cooperation

No.19

The Measures on Invitations for Export Bidding of Machinery and Electronic Products, which were, in accordance with the Foreign Trade
Law of the People’s Republic of China and the Regulations of the People’s Republic of China on the Administration of Import and Export
of Goods, discussed and adopted at the 9th minister’s executive meeting of the Ministry of Foreign Trade and Economic Cooperation
in 2001, are hereby promulgated, and shall come into force on January 1, 2002.

Minister of the Ministry of Foreign Trade and Economic Cooperation: Shi Guangsheng

December 20, 2001

Measures on Invitations for Export Bidding of Machinery and Electronic Products

Chapter I General Provisions

Article 1

These Measures are enacted in accordance with the Foreign Trade Law of the People’s Republic of China and the Regulations of the People’s
Republic of China on the Administration of Import and Export of Goods in order to maintain the benefits of the State and the normal
order in foreign trade, establish an equal competition system, and guarantee the lawful rights and interests of export enterprises.

Article 2

The Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China (hereinafter referred to as “the MOFTEC”)
shall be responsible for enacting, adjusting and promulgating the catalogue of machinery and electronic products subject to invitations
for export bidding, and shall be responsible for administering, directing and supervising the invitations for export bidding of machinery
and electronic products.

Article 3

The invitations for export bidding of machinery and electronic products shall be in compliance with the principles of “fairness, openness
and justice”.

Article 4

These Measures shall be applicable to machinery and electronic products subject to invitations for bidding, which are exported in
various modes of trade, unless otherwise provided for by laws or administrative regulations. The export enterprises may, in accordance
with these Measures, gratuitously obtain and use the export quantity of corresponding machinery and electronic products through independent
bidding.

Chapter II Organizational Structure and Duties

Article 5

The invitations for export bidding of machinery and electronic products shall be carried out under the leadership of the relevant
committee of invitations for export bidding of machinery and electronic products (hereinafter referred to as “the bid invitation
committee”). The bid invitation committee shall be composed of persons from the relevant departments or bureaus under the MOFTEC,
China Chamber of Commerce for Import and Export of Machinery and Electronic Products (hereinafter referred to as “CCCME”) and China
Association of Foreign-Funded Enterprises. The chairman of the bid invitation committee shall be the responsible person of the department
or bureau in charge under the MOFTEC.

The office of invitation for bidding shall be established under the bid invitation committee to be responsible for the daily work
of invitations for export bidding. The office of invitation for bidding shall be established in the relevant branch of the CCCME,
which shall be composed of a director general, several deputy directors general and members. The director general of the office of
invitation for bidding shall be the responsible person of the secretariat in the relevant branch of the CCCME.

Article 6

The duties of the bid invitation committee are as follows:

(1)

to examine and approve the bid invitation plans;

(2)

to examine, approve and promulgate the provisions, notices and announcements on invitation for bidding;

(3)

to settle the market scope of and total quantity in an invitation for export bidding on the basis of the export situation and international
market demands of the commodities subject to the invitation for bidding;

(4)

to be responsible for the opening and evaluation of bid, and to examine and approve the preliminary opinion of the office of invitation
for bidding on the bidding documents, as well as to settle the bid-winning entities and the bid-winning quantity, and to promulgate
the bid-winning result;

(5)

to examine and approve the transfer of the bid-winning quantity;

(6)

to lead the work of the office of invitation for bidding, and to study and settle other problems in invitations for export bidding.

Article 7

The duties of the office of invitation for bidding are as follows:

(1)

to investigate the market situation of the commodities subject to invitation for bidding, and to draft such documents as plans on
invitation for bidding, minutes, announcements, etc., which shall be submitted to the bid invitation committee for examination and
approval before implementation;

(2)

to print and distribute various documents on the commodities subject to invitation for bidding;

(3)

to be responsible for the preparatory work of the opening and evaluation of bid, and to make a preliminary examination on the qualifications
of the bidding enterprises;

(4)

to determine the export performance of the bidding enterprises upon the statistical data of the customs, and to calculate the bid-winning
quantity of the bidding enterprises before submitting the result to the bid invitation committee for examination and approval;

(5)

to supervise and inspect how the bid-winning enterprises use the bid-winning quantity and whether they have abided by the provisions
on invitations for bidding;

(6)

to handle the transfer of the bid-winning quantity;

(7)

other relevant bid invitation affairs handed over by the bid invitation committee.

Chapter III Bidding

Article 8

The bid invitation committee shall announce the relevant information on invitation for bidding in the International Business Daily
or other media 20 working days before each invitation for bidding.

Article 9

A bidding enterprise must fulfill the following qualifications:

(1)

having been registered in the administrative organ of industry and commerce;

(2)

having the qualification to operate foreign trade export;

(3)

being a member of the CCCME or the China Association of Foreign-Funded Enterprises.

Article 10

Each bidding enterprise shall bid on the basis of its actual export capacity and the specifications of its products, and the bidding
price shall not be lower than the agreement price in its industry.

Article 11

The bidding enterprises shall fill out the bidding documents in accordance with the provisions in the announcement on invitation for
bidding.

Article 12

Each enterprise is allowed to submit only one set of bidding documents, which shall be sealed, and shall be served to the office of
invitation for bidding prior to the expiry date of the invitation for bidding provided for in the announcement on invitation for
bidding. The bidding documents shall include:

(1)

the written application for bidding;

(2)

the written guaranty for bidding;

(3)

the attestation on membership of the CCCME or China Association of Foreign-Funded Enterprises (copy);

(4)

the approval documents on the right to engage in export, or the “Examination and Approval Certificate of Foreign Trade Enterprise”,
or the approval certificate of enterprise with foreign investment (copy);

(5)

the business license of legal entity checked and issued by the administrative department of industry and commerce (copy);

(6)

the quality license for export products issued by the department of the State for quality supervision, inspection and quarantine (copy);

(7)

other documents provided for by the bid invitation committee.

Article 13

The office of invitation for bidding shall, upon receipt of the bidding documents, immediately register and seal them for preservation.

Chapter IV Opening and Evaluation of Bid

Article 14

The bid invitation committee shall open the bid within the stipulated time limit, and the office of invitation for bidding shall preliminarily
evaluate the bidding documents.

Article 15

In order to promote the scale operation of the enterprises, the bid invitation committee may set up the lowest export capacity for
the enterprises. Any enterprise that does not fulfill the lowest export capacity shall not be enpost_titled to win a bid.

Article 16

The office of invitation for bidding shall calculate an enterprise’s bid-winning quantity on the basis of the following formulas for
invitation for bidding.

(1)

to determine “A”, which means the proportion of the bid-winning enterprises’ commodities in the total quantity of the commodities
subject to invitation for bidding:

A =the total value of this item of commodities of the enterprise in the last year / the total export value of this item of commodities
in the last year

(2)

to determine “B”, which means the average export price of the unit commodity subject to invitation for bidding all over the country,
and “C”, which means the average export price of the bid-winning enterprises’ unit commodity subject to invitation for bidding:

B =the total export value of this item of commodities all over the country / the total export value of this item of commodities in
the last year

C =the total value of this item of commodities exported by the bid-winning enterprise in the last year / the total quantity of this
item of commodities exported by the bid-winning enterprise in the last year

(3)

to determine “Q”, which means the bid-winning enterprise’s bid-winning quantity:

Q = the total quantity of the invitation for bidding * A * C / B

The bid invitation committee may, on the basis of the different circumstances of the commodities, adjust the above said formulas when
inviting the bidding for specific commodities.

Article 17

After the opening of bid, the office of invitation for bidding shall complete the preliminary evaluation within 7 working days before
reporting it to the bid invitation committee. The bid invitation committee shall, after its receipt of the preliminary evaluation
by the office of invitation for bidding, check and settle the bid-winning enterprises and their bid-winning quantity within 10 working
days on the basis of the effective bidding documents of the enterprises.

Article 18

The bid invitation committee shall promulgate the name list of the bid-winning enterprises in the International Business Daily or
other media, and meanwhile the office of invitation for bidding shall distribute the Bid Winning Registration Handbook to each bid-winning
enterprise.

Chapter V Transfer of Bid-winning Quantity and Issuance of the Export Licenses

Article 19

The bid-winning quantity may be transferred, provided that the relevant formalities of transfer must be gone through in the office
of invitation for bidding, and meanwhile the enterprise as the transferee shall have the biding qualification. The office of invitation
for bidding shall issue the “Notification for Being A Transferee” to each enterprise as a transferee, and shall send a copy to the
local organ issuing the license.

Article 20

An enterprise shall, after obtaining the Bid Winning Registration Handbook, obtain the export license in the local organ issuing the
license authorized by the MOFTEC. The basis for the organ issuing the license to issue the export license is:

(1)

the bid-winning result distributed in the form of writ by the MOFTEC to the organs issuing the licenses or the “Notification for Being
A Transferee” issued by the office of invitation for bidding;

(2)

the Bid Winning Registration Handbook issued by the bid invitation committee;

(3)

the bid-winning enterprise’s effective export contract.

Article 21

A bid-winning enterprise must, before September 30 of the year when the invitation for biding is held, report to the office of invitation
for bidding for registration of the bid-winning quantity that cannot be used up, and shall return such quantity before November 15
of the present year. The bid-winning quantity reported by an enterprise for registration or returned by an enterprise may be used
for transfer.

The bid-winning quantity of a bid-winning enterprise, which is confiscated or deducted, may be used for transfer in the present year.

Chapter VI Administration on Invitations for Bidding

Article 22

The office of invitation for bidding shall follow up and inspect how the export enterprises use the won or transferred bids, and know
about the problems of the commodities subject to invitation for bidding in export and the opinions and requests of the enterprises,
as well as report to the bid invitation committee in time.

Article 23

The office of invitation for bidding shall, when the total quantity in the invitation for export bidding is not enough for use, report
to the bid invitation committee, which shall decide in accordance with the actual situation on whether to increase the total quantity
in the invitation for bidding and the times of the invitation for bidding.

Article 24

A bid-winning enterprise shall, within one month as of its receipt of the Bid Winning Registration Handbook, pay the deposit for winning
of bid in a certain proportion of the bid-winning amount. The proportion shall be determined on the basis of the specific situation
of the commodities subject to invitation for bidding, provided that it shall not exceed 0.03%. The deposit for winning of bid shall
be paid with the sale price of foreign exchange, which is promulgated by the State administrative department of foreign exchanges
on the date when the bid-winning result is promulgated, converted into RMB.

Article 25

The deposit for winning of bid shall be collected by the office of invitation for bidding on behalf of the Ministry of Finance and
shall be deposited in a special account. The office of invitation for bidding may apply for part of the funds for administering the
invitations for bidding, provided that it shall report to the bid invitation committee the income and expenses of the deposit for
winning of bid.

Chapter VII Penalty Provisions

Article 26

The bid invitation committee may impose a corresponding penalty upon any enterprise in violation of these Measures:

(1)

whoever commits any of the following acts shall be imposed upon such penalties as circulated criticism, warning, confiscation of the
bid-winning quantity, cancellation of the qualification for bidding, etc. on the basis of the seriousness of the case; if a crime
is constituted, he shall be investigated for criminal liabilities in accordance with the law:

(i)

to falsely declare the bidding documents;

(ii)

to transfer or sell off the bid-winning quantity without authorization;

(iii)

to export in a price actually lower than the agreement price of its industry or to cut price in a disguised form;

(iv)

to be investigated by the relevant department to have infringed upon the intellectual property;

(v)

not to pay the deposit for winning of bid on time.

(2)

Where an enterprise that has obtained the bid-winning quantity does not return the bid-winning quantity which cannot be used up, its
bid-winning quantity of the next year shall be correspondingly deducted on the basis of the proportion of its unreturned quantity
to the bid-winning quantity.

(3)

The bid invitation committee shall notify the penalty upon the bid-winning enterprise to the local organ issuing the license, which
shall take corresponding measures.

Chapter VIII Supplementary Provisions

Article 27

The MOFTEC shall be responsible for the interpretation of these Measures.

Article 28

These Measures shall come into force on January 1, 2002, and the original Measures on Invitations for Export Bidding of Machinery
and Electronic Products shall be repealed simultaneously.