PROVISIONS FOR LABOR MANAGEMENT IN CHINESE-FOREIGN JOINT VENTURES

(Promulgated by the State Council on and Effective as of July 26, 1980)

   Article 1. The labor management problems of Chinese-foreign joint ventures ( hereafter referred to as “joint ventures”) shall all be handled
in accordance with these Provisions, except for the those governed by the provisions of Article 6, Paragraph 2 of the Law of the
People’s Republic of China on Chinese-Foreign Joint Ventures.

   Article 2. The employment, dismissal and resignation of the staff and workers of joint ventures, and their production and work tasks, wages
and awards and punishments, work schedules and holidays and paid leaves of absence, labor insurance and welfare benefits, labor protection,
labor discipline and other matters shall be prescribed through the signing of labor contracts.

A labor contract shall be signed collectively by the joint venture and the venture’s union organization; a relatively small joint
venture may sign contracts with staff and workers on an individual basis.

After a labor contract is signed, it must be submitted to the labor management department of the people’s government of the relevant
province, autonomous region or municipality directly under the central authority for approval.

   Article 3. The staff and workers of a joint venture, whether recommended by the local department in charge of the venture or the local labor
management department, or recruited by the joint venture itself with consent of the labor management department, must all be tested
by the joint venture and selected for employment on the basis of their qualifications.

Joint ventures may establish skilled worker’s schools and training courses for the training of managerial personnel and skilled workers.

   Article 4. A joint venture may dismiss staff and workers who become superfluous as a result of changes in production and technical conditions
if, after training, they cannot meet its requirements and they are not suitable for transfer to other work; but the venture must
give them compensation in accordance with provisions of the labor contract.

The dismissed staff and workers shall be assigned other work by the department in charge of the venture or by the labor management
department.

   Article 5. A joint venture may, in accordance with the seriousness of the case, impose necessary sanctions against staff and workers who violate
the rules and regulations of the venture and thereby cause certain bad consequences. The sanction of discharge must be reported to
the department in charge of the venture and the labor management department for approval.

   Article 6. If the trade union considers the joint venture’s dismissal of or imposition of sanctions against staff and workers to be unreasonable,
it has the right to raise an objection and to send representatives to resolve the matter through consultation with the board of directors;
if the matter cannot be resolved through consultation, it shall be handled in accordance with the procedures set forth in Articles
14 of these Provisions.

   Article 7. When, because of special circumstances, staff and workers of a joint ventures, in accordance with the provisions of the labor contract,
submit their resignations to the venture through their trade union, the venture shall give its consent.

   Article 8. The wage levels of the staff and workers of joint ventures shall be fixed at 120 to 150 per cent of the real wages of the staff and
workers of state enterprises in the locality in the same line of business.

   Article 9. The system of wage standards, types of wages, bonuses, subsidies, etc. for staff and workers of a joint venture shall be discussed
and decided by the board of directors.

   Article 10 The bonus and welfare fund for staff and workers that is established by a joint venture from its profits must be used for bonuses
and the collective welfare of the staff and workers, and may not be misappropriated.

   Article 11. A joint venture must pay the labor insurance and medical expenses of the Chinese staff and workers, as well as the various government
subsidies for staff and workers, in accordance with the standards for state enterprises.

   Article 12. Matters such as the employment, dismissal, resignation, pay, welfare and social insurance of foreign staff and workers of a joint
venture shall be provided for in the employment contract.

   Article 13. Joint ventures must implement the rules and regulations of the Chinese Government concerning labor protection and ensure safety in
production and civilized production, and the labor management department of the Chinese Government has the right to carry out supervision
and inspection.

   Article 14. Labor disputes that occur in a joint venture shall first of all be resolved through consultation between the two disputing parties;
if consultation cannot resolve the matter, one or both parties to the dispute may request arbitration by the labor management department
of the people’s government of the province, autonomous region or municipality directly under the central authority where the joint
venture is located; if one party does not accept the arbitration award, it may file a suit in the people’s courts.

   Article 15. The right to interpret these Provisions resides in the State General Labor Bureau of the People’s Republic of China.

   Article 16. These Provisions shall go into effect on the day of their promulgation.

(The English translations are for reference only)