PROCEDURES OF SHANGHAI MUNICIPALITY ON THE ADMINISTRATION OF JOINT OPERATION OF SCHOOLING IN SHANGHAI BY INSTITUTIONS AND INDIVIDUALS FROM OUTSIDE MAINLAND CHINA

   Article 1 These Procedures are enacted, in accordance with the relevant provisions of the State and in the light of the specific circumstances
in Shanghai, for the purpose of strengthening the administration of joint operation of schooling in Shanghai by institutions and
individuals from outside mainland China.

   Article 2 The term “joint operation of schooling by institutions and individuals from outside mainland China” (hereinafter referred to as Joint
Operation of Schooling) used in these Procedures refers to the operation of schooling for officially recognized education and non-
officially-recognized education, except compulsory education, by institutions and individuals from outside mainland China with domestic
institutions through co-investment or other forms of cooperation, and jointly taking part in teaching and management.

The term “institutions and individuals from outside mainland China” refers to any institutions and individuals except religious institutions
and clergymen from outside mainland China.

The “officially recognized education” mentioned in Section 1 of this Article refers to the education for which the certificate of
formal schooling or the certificate of academic degree recognized by the Chinese Government shall be issued.

   Article 3 The joint operation of schooling shall abide by the laws, regulations and rules issued by the People’s Republic of China, and meet
the basic requirements of the educational quality stipulated by the government.

The legal rights and interests of the coordinators in the joint operation of schooling shall be protected by the law.

   Article 4 The Shanghai Municipal Education and Labor Administration Departments shall be in charge of the unified administration of joint operation
of schooling.

The District or County Education and Labor Administration Departments shall be in charge of the administration of joint operation
of schooling in their respective regions according to one’s own responsibility.

   Article 5 The jointly operated school shall accept the supervision, inspection, guidance and appraisal of the education and labor administration
departments.

   Article 6 Application for joint operation of schooling shall meet the following requirements:

1. To define the form of cooperation that shall be conducted by Chinese and foreign coordinators;

2. To set up a board of directors with its chairman and directors determined; no less than half of the board members shall come from
the Chinese side;

3. To have Chinese citizens act as the legal representative and the president of the jointly operated school;

4. To have the personnel who is familiar with the professional work of education and management of school take charge of the daily
work of the school;

5. To have a faculty of full-time and part-time teachers who meet the State requirements on formal schooling and are competent in
teaching, and to have the number of teachers shall match the scope of education offered;

6. To have definite plans for operating the school, for teaching, and for selecting teaching materials;

7. To have the teaching sites and facilities that meet the requirements of running a school; and

8. To have necessary funds for starting the school and financial resources to guarantee the normal operation of regular teaching
activities.

Joint operation of schooling for higher education shall, in addition to the requirements mentioned in the previous paragraphs, meet
the basic requirements stipulated in the “Provisional Regulations for Setting Up Ordinary Schools for Higher Education.”

   Article 7 When applying for joint operation of schooling, the applicant shall submit the following documents:

1. The project proposal and the feasibility study report;

2. The written opinions of the department in charge of the Chinese coordinator;

3. The identification certificates of both coordinators;

4. The credit certificate on the funds for operating the school; and

5. The letter of intention on cooperation and the plan for running the school.

   Article 8 Applicants for joint operation of schooling shall go through the procedures for examination and approval according to the following
provisions:

1. The applicant with the intention to set up a school for officially recognized higher education, except the officially recognized
education for senior technicians, shall apply to the Municipal Education Administrative Department. After receiving the application,
the Municipal Education Administrative Department shall organize Shanghai Municipal Reviewing Committee for the Establishment of
Higher Education to appraise the application. If the application has been approved by the Committee, the Municipal Education Administrative
Department shall then submit the application to the Shanghai Municipal people’s Government for examination and approval. If the application
involves undergraduate and graduate courses, the Municipal People’s Government shall submit the application to the State Education
Administrative Department for approval after the examination.

2. The applicant with the intention to set up a school for officially recognized intermediate education, except the officially recognized
education for technicians, shall apply to the Municipal Education Administrative Department. The Municipal Education Administrative
Department shall make a decision within 15 days after receiving the application.

3. The applicant with the intention to set up a school for higher and intermediate education for technicians shall apply to the Municipal
Labor Administrative Department. The Municipal Labor Administrative Department shall make a preliminary decision within 15 days after
receiving the application. If it has been approved, the Municipal Labor Administrative Department shall submit the application to
the Municipal Education Administrative Department for examination and approval. The Municipal Education Administrative Department
shall make a final decision within 15 days after receiving the preliminary decision.

4. The applicant with the intention to set up a school for non- officially-recognized education, except pre-school education, shall
apply to the relevant education and labor administration departments according to the relationship of subordination, who shall make
a preliminary decision within 15 days after receiving the application and submit the approved application to the Municipal Education
Administrative Department or the Municipal Labor Administrative Department for examination and approval. The Municipal Education
Administrative Department and the Municipal Labor Administrative Department shall make a final decision within 15 days after receiving
the preliminary decision and the Municipal Labor Administrative Department shall report its case to the Municipal Education Administrative
Department for the record.

5. The applicant with the intention to set up a school for pre-school education shall apply to the District or County Education Administrative
Department in the respective locality, who shall make a preliminary decision within 15 days after receiving the application. If it
has been approved, the application shall be submitted to the Municipal Education Administrative Department for examination and approval.
The Municipal Education Administrative Department shall make a final decision within 15 days after receiving the preliminary decision.

   Article 9 After the project of joint operation of schooling has been approved, both parties shall make ready the funds, buildings, facilities
and personnel necessary for the running of school, and shall submit to the original approval department a formal application for
setting up the school, together with the following documents.

1. the cooperation contract signed by the Chinese and foreign coordinate parties and the Articles of the school;

2. The name list of the board members and the senior administrative staff of the school;

3. The teaching curricula and the plan for selecting teaching materials; and

4. The certificate of using the teaching buildings.

Within one month after obtaining the approval from the original approval department for setting up the school, the coordinate parties
shall go through the procedures for registration with the education or labor administration departments designated by the original
approval department. The school can only be legally opened after registration.

   Article 10 The jointly operated school shall sign the engagement contract with the teaching and administrative staff. The Municipal Education
Administrative Department shall, together with the relevant departments, formulate specific provisions concerning the recruitment,
dismissal and resignation of the teaching and administrative staff and their salaries, welfare benefits, labor insurance, pension
insurance and unemployment insurance.

   Article 11 All kinds of jointly operated schools for officially recognized education shall, after registration, submit their plans of enrollment
to the education administration department designated by the original approval department for approval, and they can conduct enrollment
only after obtaining approval.

   Article 12 The enrollment, entrance examination and admission of the jointly operated schools for officially recognized higher education shall
abide by the relevant provisions formulated by the Municipal Education Administration Department.

   Article 13 Jointly operated schools for officially recognized education shall set their main curricula and teaching hours by referring to the
requirements on the curricula and teaching hours of the state-run schools of the same level and the kind. The teaching materials
used must be examined and approved by the Municipal Education Administration Department.

   Article 14 Without authorization, the teaching buildings and facilities of the jointly operated school shall not be diverted for other use.

The start-up funds of the school, the tuition fees collected from students and the funds (equipment included) raised abroad in the
name of the jointly operated school must be used as expenditures against budgeted items or as the school funds, and may not be diverted
for other use or transferred out of mainland China.

   Article 15 Religious dissemination in any form is not allowed in jointly operated schools.

   Article 16 Specific provisions on the administration of foreign currency and the opening of accounts in RMB and foreign currency shall be separately
formulated by the Municipal Education Administrative Department together with the State Administration of Foreign Exchange, Shanghai
Branch.

   Article 17 The entry and exit from the territory of the People’s Republic of China of the foreign coordinators in the jointly operated school
or of the foreign faculty members engaged by the school shall be dealt with in accordance with the provisions of the Law of the People’s
Republic of China on Entry and Exit of Aliens.

   Article 18 The standard of tuition charged by the jointly operated school shall be set as stipulated by Shanghai Pricing Bureau and Shanghai
Finance Bureau.

   Article 19 The teaching equipment brought into China by the foreign coordinator, which is to be exempted from customs duties, shall be handled
in accordance with the relevant rules of General Customs Administration.

   Article 20 For the termination or cancellation of the jointly operated school, the applicant shall, with the plan for dealing with the aftermath
and the inventory of the property of the school, apply to the original education or labor administration department who accepted
the application for setting up the school; and the latter shall, after the preliminary examination, submit the application to the
original approval department for approval.

   Article 21 After receiving the application for termination or cancellation of the jointly operated school, the relevant education and labor
administration departments shall liquidate the assets of the school and appoint the finance and audit departments to audit the financial
status of the school. The remnant property of the school, except the part that is to be returned to the foreign coordinator according
to the contract stipulation, shall be returned to the Chinese coordinator.

   Article 22 Acts in violation of these Interim Procedures shall be penalized by the education or labor administrative department at different
levels according to the following provisions:

1. The jointly operated school set up without authorization shall be ordered to correct its fault within a specified period, and
to return their illegal gains;

2. The school which enrolls students without authorization from the approval department shall be ordered to correct its fault within
a specified period;

3. The school which is poorly managed and its education and teaching quality does not meet the required standard shall be ordered
to correct its fault within a specified period; in case of serious violation, it may be ordered to stop enrollment;

4. The school which diverts its building, funds and equipment for other use without authorization shall be ordered to correct its
fault within a specified period; in case of serious violation, it may be ordered to stop enrollment;

5. The school that does not issue certificates of formal schooling in accordance with the stipulations of the State shall be ordered
to correct its fault within a specified period; in case of serious violation, it may be ordered to stop enrollment; or

6. The school which is engaged in religious dissemination in any form shall be ordered to correct its fault within a specified period;
in case of serious violation, it may be ordered to stop enrollment.

   Article 23 In meting out administrative punishment, the competent education and labor administrative departments shall issue a notification
of decision about the administrative punishment. In collecting the punished fines, unified receipts of the punished fines or confiscated
properties printed by the Municipal Finance Department shall be issued.

All the fined or confiscated income shall be turned over to the State Treasury.

   Article 24 If the party concerned does not accept the administrative act taken by the competent education and labor administration department,
the party concerned may apply for administrative reconsideration or bring an administrative suit in accordance with the Regulations
on Administrative Review and the Administrative Litigation Law of People’s Public of China. If the party concerned has neither applied
for reconsideration against administrative sanction nor brought a suit within the legal time limit, the relevant education and labor
administration department may apply to the people’s court for compulsory enforcement.

   Article 25 Specific provisions on the joint operation of the school that enrolls only the children of foreigners stationed in Shanghai shall
be formulated separately.

Specific implementation rules for jointly operated schools in the Pudong New Area shall be formulated separately.

   Article 26 Shanghai Municipal Education Administrative Department is responsible for the interpretation of the application of these Interim
Procedures.

   Article 27 These Interim Procedures shall become effective on March 1, 1994.