AUDITING MEASURES FOR CHINESE-FOREIGN EQUITY AND CONTRACTUAL JOINT VENTURES

The State Auditing Administration

Auditing Measures for Chinese-foreign Equity and Contractual Joint Ventures

the State Auditing Administration

January 12,1993

Article 1

These Measures are formulated according to the “Auditing Regulations of the People’s Republic of China” to safeguard the value and
accretion of State assets, enforce the State’s financial and economic laws and regulations, strengthen audit supervision over Chinese-foreign
equity and contractual joint ventures (hereinafter referred to as equity and contractual joint ventures) and promote their sound
development.

Article 2

The equity and contractual joint ventures mentioned in these Measures are businesses established according to the Law on Chinese-foreign
Equity Joint Ventures and Law on Chinese-foreign Contractual Joint Ventures of the People’s Republic of China, and other relevant
laws and regulations.

Any equity and contractual joint ventures and their branches that have State-owned assets shall be subject to examination by auditing
offices.

Article 3

According to PRC’s laws and regulations, the auditing offices shall exercise independent audit supervision over such equity and contractual
joint ventures without interference from any other administrative offices, mass organizations, or individuals.

The auditing offices carry out auditing according to law to safeguard the legal rights and interests of Chinese and foreign investors.

Article 4

The auditing offices shall exercise audit supervision over the maintenance and accretion of the property value, assets and liabilities,
gains and losses, and other related economic activities of equity joint ventures where State assets have a holding status.

When they deem it necessary, the auditing offices can exercise audit supervision over equity joint ventures with equity participation
of State assets and contractual joint ventures having State assets.

Article 5

In the course of auditing the accounts of equity and contractual joint ventures, if the auditing offices discover that the auditor’s
report and acceptance certificate provided by the auditing service or accounting firm are false and unlawful, they shall notify the
department concerned for correction or dealing with the matter.

Article 6

Before they start auditing, the auditing offices should notify the related equity and contractual joint ventures, which should accept
the auditing and provide the necessary work conditions.

In the course of auditing, the auditing offices have the right to examine the vouchers, account books, data, and other relevant documents
of the equity and contractual joint ventures, and to make investigations in related departments or among related personnel for relevant
material and documentary evidence. The related departments or personnel should provide the relevant material and documentary evidence.
The documentary evidence should be under the hand and seal of the person who provides it.

The auditing officers shall not use the relevant material and documentary evidence they have obtained for purposes that are irrelevant
with the auditing.

Article 7

After auditing, the auditing officers shall write a report, and after soliciting the opinions of the equity and contractual joint
ventures to be audited, submit the report to the auditing office. After examining and checking the report, the auditing office shall
reach an audit conclusion and decision and notify the joint ventures.

Article 8

Should violation of financial and economic regulations by equity and contractual joint ventures be discovered, the auditing offices
shall notify, besides the related equity and contractual joint ventures, related department for handling the matter according to
law. If the related department puts off the matter without reason or deals with it improperly, the auditing office, after ascertaining
the reason, has the right to report to the people’s government at the same level.

Article 9

Audit supervision over equity and contractual joint ventures established in China by Hongkong, Macao or Taiwan companies, businesses,
other economic organizations, or individuals shall be exercised with reference to these Measures.

Article 10

The Auditing Administration shall be responsible for interpreting these Measures.

Article 11

These Measures shall enter into force as of January 12, 1993.