MEASURES ON ADMINISTRATION OF LISTED COMPANIES’ BUYING BACK THE SHARES HELD BY THE PUBLIC (FOR TRIAL IMPLEMENTATION)

The China Securities Regulatory Commission

Notice on the Release of the Measures on Administration of Listed Companies’ buying back the shares held by the public (for trial
implementation)

Zheng Jian Fa[2005] No. 51

Listed Companies:

To standardize listed companies’ acts of buying back shares that are held by the public, the China Securities Regulatory Commission
formulates the Measures on ministration of Listed Companies’ buying back the shares that are held by the public (for trial implementation)
in accordance with the Company Law, the Securities Law, the Provisional Regulations on the Administration of Share Issuance and Trading
and other relevant laws and administrative regulations. The China Securities Regulatory Commission hereby makes public these Measures
which shall come into force as of the date of promulgation.

The China Securities Regulatory Commission

June 16, 2005

Measures on Administration of Listed Companies’ Buying Back the Shares Held by the Public (for trial implementation)

Chapter 1 General Provisions

Article 1

These Measures are formulated in accordance with the Company Law, the Securities Law, the Provisional Regulations on the Administration
of Share Issuance and Trading and other relevant laws and administrative regulations to standardize listed companies’ acts of buying
back shares held by the public.

Article 2

Listed Company’s buying back shares held by the public as mentioned in these Measures refers to that a listed company purchases public
shares it issued (hereinafter referred to as shares) and deregisters those shares to reduce its registered capital.

Article 3

To buy back shares, a listed company shall submit relevant archive-filing materials to the China Securities Regulatory Commission
(hereinafter referred to as CSRC) in accordance with provisions in these Measures.

Article 4

A listed company’s buying back shares shall be in the interests of its sustainable development rather than detrimental to legitimate
rights and interests of its shareholders and creditors.

The directors, supervisors and senior officers of the listed company shall practice good faith and due diligence in the buying back
process.

Article 5

A listed company shall perform its obligation of disclosing information set forth in these Measures in buying back shares.

The listed company and its directors shall ensure the authenticity, accuracy and integrity of the information disclosed by them and
ensure that there is no falsified record, misleading representation and major omission in the information.

Article 6

A listed company shall hire independent financial advisors and law firms to issue professional opinions.

The aforesaid professional institutions shall practice good faith and due diligence to conduct dutiful investigation on matters related
to the buy-back, verify the archive-filing materials to be submitted and ensure the authenticity, accuracy an integrity of the documents
they issue.

Article 7

Anyone is prohibited from taking up insider transactions, manipulating prices in securities trading or practicing fraud in securities
trading by listed company’s buying back shares.

Article 8

A listed company shall meet the following conditions to buy back shares:

(1)

Its shares have been listed on market for 1 year;

(2)

It has not committed major illegal acts within the previous year;

(3)

It is capable to sustain its operation after the buy-back;

(4)

After the buy-back, its equity distribution shall principally meet conditions for listing; if it has planned to terminate the trading
of its shares on market through the buy-back, it shall comply with the relevant provisions and obtain the approval from the securities
exchange on which its shares are listed.

Article 9

A listed company may take one of the following forms to buy back shares

(1)

Centralized price competition presided over by securities exchange;

(2)

Offer;

(3)

Other means that CSRC allows to be adopted.

Article 10

Shares bought back by a listed company lose their rights since they have been put under its special account for buy-back; in calculating
the relevant indicators, the listed company shall deduct the amount of shares that it has bought back from the total equity.

Article 11

A listed company is not allowed to issue fresh shares during share buy-back process.

The listed company is not allowed to buy back shares by centralized price competition within the 5 working days prior to the release
of its annual report and mid-term/interim report or information having crucial impact on share prices.

Article 12

If the share buy-back of a listed company leads its shares held or controlled by any individual shareholder to exceed 30%, such shareholder
doesn’t have to perform the obligation of tender offer.

Chapter 3 Share Buy-back Procedures and Information Disclosure

Article 13

The board of directors of a listed company shall make public announcement of its resolution and prepared plan for share buy-back within
2 working days since it decides to buy back shares and makes public announcement of the notice on holding shareholder meeting.

The prepared plan for share buy-back shall include at least the following contents:

(1)

Purpose of share buy-back;

(2)

Means by which the shares are bought back;

(3)

Prices or price range of shares to be bought back and the pricing principle;

(4)

Kinds/Categories and amount/number of shares proposed to be bought back and the proportion they account for of the total equity;

(5)

The total amount of capital allocated to buy back shares and its sources;

(6)

Term valid for share buy-back;

(7)

Changes predicted of equity structure of the listed company after the buy-back;

(8)

Analysis by the management of the buy-back’s impact on the listed company’s operation, financial standing and future development.

Article 14

Within 3 days prior to the shareholder meeting, the listed company shall make public the names of the top 10 holders of public shares(among
all the holders of public shares who have registered with the relevant institution on the trading day prior to the release of buy-back
resolution by the listed company or on the date of equity registration during shareholder meeting), amount/number of shares they
are holding and the proportion of their shares in total equity on the website of the securities exchange.

Article 15

The independent financial advisors shall carry out investigation with due diligence on affairs related to the share buy-back by a
listed company, issue report of independent financial advisor and release the report on CSRC designated journals 5 days prior to
the shareholder meeting.

The report of independent financial advisor shall include the following contents:

(1)

Whether the company’s buying back shares complies with provisions set forth in these Measures;

(2)

Explanation of necessity of buying back the shares based on factors such as purpose of share buy-back, performance of share price,
analysis of valuation of the listed company and etc.

(3)

Identification of feasibility of the buy-back solution by analyzing the impact of the share buy-back on the listed company’s daily
operation, its profiting capability and debt-servicing ability based on factors such as capital necessary for share buy-back, its
sources and etc.

(4)

Other items that shall be clarified.

Article 16

The shareholder meeting of the listed company shall vote on the following items one after another:

(1)

Means by which the shares are bought back;

(2)

Prices or price range of shares to be bought back and the pricing principle;

(3)

Kinds/Categories and amount/number of shares proposed to be bought back and the proportion they account for of the total equity;

(4)

The total amount of capital allocated to buy back shares and its sources;

(5)

Term valid for share buy-back;

(6)

Authorization to the board of directors to implement the buy-back solution;

(7)

Other relevant items.

When making decision of buying back shares on shareholder meeting, the listed company shall make clear in written on the resolution
that “this buy-back solution may be implemented after submitting the archive-filing materials to the CSRC and no objection to it
is raised by the CSRC”.

Article 17

The share buy-back resolution made on the shareholder meeting of the listed company needs over two-thirds of the voting rights held
by all shareholders attending this shareholder meeting to be passed.

Article 18

A listed company shall inform its creditors of its share buy-back resolution after making this decision.

Article 19

A listed company may submit the share buy-back materials to the CSRC and forward a copy of those materials to the representative office
of the CSRC in the place where the listed company is located after informing its creditors of its share buy-back resolution in accordance
with relevant laws.

Article 20

Share buy-back materials that the listed company shall submit for record shall include:

(1)

Application for buying back shares;

(2)

Resolution of the board of directors;

(3)

Resolution of the shareholder meeting;

(4)

Buy-back report of the listed company;

(5)

The report of independent financial advisor;

(6)

Legal advice;

(7)

The latest financial accounting statement(audited) of the listed company;

(8)

Self-review reports by directors, supervisors, senior officers and all intermediaries participating in this share buy-back concerning
their purchasing or selling shares of the listed company within the 6 months prior to the shareholder meeting’s decision to buy back
the shares.

(9)

Other documents required by CSRC.

Article 21

The buy-back report of a listed company shall include the following contents:

(1)

All items listed in the prepared plan on share buy-back in Article 13 of these Measures;

(2)

Explanation on whether the directors, supervisors, senior officers of the listed company have bought its shares within 6 months prior
to the public announcement of the buy-back resolution of the shareholder meeting or not and whether any of them has, individually
or in collaboration with others, carried out insider transactions or manipulated the market or not;

(3)

Conclusive advice issued by independent financial advisors on this share buy-back;

(4)

Conclusive advice issued by law firm on this share buy-back;

(5)

Other items that shall be clarified.

If it buys back shares by offer, the listed company shall also disclose the way and procedures by which the shareholders accept the
offer, the way and procedures by which the shareholders withdraw acceptance of offer in advance and post_titles and contacting information
of securities company that the shareholders entrust to handle acceptance in advance, withdrawal, clearing, registration on transfer
of ownership and other affairs of shares in question in buy-back by offer.

Article 22

The legal advice issued by law firm on a listed company’s share buy-back shall include the following contents:

(1)

Whether the listed company’s buying back shares meets conditions set forth in these Measures or not;

(2)

Whether the listed company has already followed the mandatory procedures in buying back shares; in the event that approvals of other
competent authorities are required, whether such approvals have already been obtained or not;

(3)

Whether the listed company has already performed its obligation of disclosing information set forth in these Measures in buying back
shares or not;

(4)

Whether the sources of the listed company’s capital for share buy-back is legal or in line with relevant regulations or not;

(5)

Other items that shall be clarified.

Article 23

If the CSRC raises no objection to its share buy-back archive-filing materials within 10 working days since it receives those materials,
a listed company may implement its buy-back solution.

If it buys back shares by centralized price competition, the listed company shall make public announcement of its buy-back report
within 5 working days since it receives the letter of acceptance from the CSRC; if it buys back shares by offer, the listed company
shall make public announcement within 2 working days since it receives the letter of acceptance from the CSRC and make public announcement
of its buy-back report before implementing its buy-back solution.

The listed company shall make public announcement of the legal advice together with its buy-back solution.

Article 24

Before implementing its buy-back solution, a listed company shall open special account with the securities registration and clearing
institution which is monitored by securities exchange; This account is to be used only for buying back its shares; the shares that
have already bought back shall be locked up and are prohibited from being sold.

Article 25

A listed company shall implement its buy-back solution within the valid term.

If the listed company has not implemented its buy-back solution until 3 months prior to the expiry of the valid term, the board of
directors shall make public in circular reasons for failure to implement the buy-back solution.

Article 26

When the valid term for buy-back solution expires or it has finished implementing the buy-back solution, the listed company shall
stop buying back shares, clear the special account and make public announcement within 2 working days of the report on changes of
shares. It shall also, in accordance with relevant laws, deregister the shares it just bought back and undergoes procedures of changes
in registration with the authorities for industry and commerce.

Chapter 4 Special Provisions on Share Buy-back by centralized price competition

Article 27

A listed company shall entrust securities company with professional qualifications to engage in securities brokering to handle the
affairs related to its share buy-back in accordance with relevant provisions set forth by securities exchange and securities registration
and clearing institution.

Article 28

In the process of share buy-back, the listed company shall, within the firs 3 trading days of each month, make public announcement
of the development of its share buy-back up to the previous month, including total number/amount of shares already bought back, the
top purchasing price and the lowest purchasing price, and the total amount of capital paid.

Article 29

Where the period of buy-back expires or the buy-back plan has been completed, the listed company shall, in the report of change of
shares, disclose the total number of buy-back shares, highest and lowest price for purchase and total of payment.

Chapter 5 Special Provisions on Share Buyback by Offer

Article 30

If a listed company buys back share by offer, the prices it offers shall be no less than the numerical average of the weighted daily
average price of such share during the 30 trading days prior to the release of buy-back report.

Article 31

If it buys back share by offer, a listed company shall deposit capital necessary for buy-back under the bank account designated by
securities registration and clearing institution when it releases the buy-back report.

The term for offer shall be no shorter than 30 days and no longer than 60 days.

Article 32

If a listed company buys back share by offer and when the number of shares shareholders have planned to accept in advance is much
more than that of shares that have been planned to be bought back, the listed company shall buy back, in the same proportion, the
shares that the shareholders have planned to accept in advance; where the number of shares shareholders have accepted in advance
is short of that of shares that have been planned to be bought back, the listed company shall buy back all the shares that the shareholders
have panned to accept in advance.

Article 33

If a listed company buys back shares listed in China but funded by foreign investors, such trading shall comply with provisions in
operation rules set forth by securities exchanges and securities registration and clearing institution.

Chapter 6 Regulatory Measures and Legal Liabilities

Article 34

If a listed company fails to submit relevant archive-filing materials to CSRC in violation of these Measures, the CSRC is enpost_titled
to order such company to suspend or terminate its buying back shares and punish it and its employees who are liable for such violation.

Article 35

If there is falsified record, misleading representation or major omission in information disclosed by a listed company concerning
its buying back shares, the CSRC orders it to set right and, in accordance with relevant laws, punishes this listed company and its
employees who are liable for such violation.

Article 36

If a listed company practices fraud, manipulates the market or takes up insider transaction through buying back shares, the CSRC punishes
them in accordance with relevant laws; if its acts have already constituted offenses, the listed company will be transferred to judicial
organs for investigation and punishment.

Article 37

If the professional institutions that issued opinions for listed companies in their buyback process fail to perform obligation of
due diligence and issue professional opinions containing falsified record, misleading representation or major omission, the CSRC
will take measures such as regulatory talk, issuing warning letter or ordering to set right against these professional institutions
concerned and their employees who have signed up the professional opinions; if the circumstances are grave, measures such as suspending
or revoking their professional qualification will be taken against these institutions and their employees.

Chapter 7 Supplementary Provisions

Article 38

These Measures shall be implemented as of the date of promulgation.