CIRCULAR ON STRENGTHENING THE ADMINISTRATION OF THE ESTABLISHMENT OF SENSITIVE MATERIALS PRODUCTION ENTERPRISES IN CHINA BY FOREIGN INVESTORS

The State Development Planning Commission, The State Economic and Trade Commission, The Ministry of Foreign Trade and Economic Cooperation

Circular on Strengthening the Administration of the Establishment of Sensitive Materials Production Enterprises in China by Foreign
Investors

GuoJingMaoTingChanYe [2002] No.165

November 26, 2002

The economic and trade commissions (economic commissions), planning commissions and departments of foreign trade and economic cooperation
of all provinces, autonomous regions and municipalities directly under the Central Government, municipalities separately listed on
the State plan and Xinjiang Army Corps of Production and Construction:

Upon the approval of the State Council, the State Development Planning Commission, the State Economic and Trade Commission and the
Ministry of Foreign Trade and Economic Cooperation distributed the Interim Provisions on Guiding the Orientation of Foreign Investment
and the Catalog for the Guidance of Foreign Investment Industries in June, 1995, which provide that the production of sensitive materials
belongs to the restricted category of foreign-funded projects. The relevant departments of Guangdong Province and of Zhuhai City
approved the establishment of a foreign-funded sensitive materials production enterprise—- Zhuhai Zhenke Sensitive Materials Manufacturing
Co., Ltd. in October 1995 without submitting the project to the industrial competent department under the State Council for examination,
approval and record according to the stipulated procedures, and adjusted its proportion of domestic sale to export in violation of
rules in March of 1998, and thus enabled the enterprise to be established in violation of rules and operate in excess of scope. We
hereby give a circularized criticism to the relevant departments of Guangdong Province and Zhuhai City for their approving the establishment
of the foreign-funded sensitive materials production enterprise in violation of rules. The economic and trade commissions (economic
commissions), the planning commissions and the departments (bureaus) of foreign trade and economic cooperation of all provinces,
autonomous regions and municipalities directly under the Central Government and municipalities separately listed on the State plan
shall take this as a warning, and avoid the re-occurrence of similar incidents.

In order to strengthen the normative administration of foreign-funded sensitive materials production enterprises in China, and promote
the healthy development of the sensitive materials industry, we hereby give our notice regarding the relevant issues as follows:

Restatement on Examining and Approving Foreign-Funded Sensitive Materials Projects

According to the Stipulated Procedures It is provided in Article 12 of the Provisions on Guiding the Orientation of Foreign Investment
(Decree No. 346 of the State Council) which were promulgated by the State Council on February 11, 2002 that, “Foreign-funded projects
shall be examined and approved, and put on record respectively by the departments of development planning and the economic and trade
departments according to the limit of authority for examination and approval; the contracts and articles of association of enterprises
with foreign investment shall be examined and approved, and put on record by the departments of foreign trade and economic cooperation.
The foreign-funded projects under the limit for restricted foreign-funded projects shall be subject to the examination and approval
of the corresponding competent departments of the people’s governments of the provinces, autonomous regions, municipalities directly
under the Central Government and municipalities separately listed on the State plan, and shall be reported to the competent departments
at the next higher level and the competent industrial departments, the power for examination and approval of this kind of projects
may not be granted to the authorities at lower levels”. It is provided in Article 13 that “With respect to the foreign-funded projects
examined and approved in violation of the present provisions, the organ of examination and approval at the next higher level shall
cancel it within 30 workdays from the day of receiving the documents for record of that project, its contract and articles of association
shall be void, the department of enterprise registration shall not register it and the customs shall not handle the procedures for
import and export for it.” It is provided in the new Catalog for the Guidance of Foreign Investment Industries that came into force
on April 1, 2002 (Decree No. 21 of the State Development Planning Commission, the State Economic and Trade Commission and the MOFTEC)
that, sensitive materials production belongs to restricted foreign-funded industries. Therefore, the examination and approval of
foreign-funded sensitive materials projects shall be strictly in compliance with the above relevant provisions.

II.

Checking up the Foreign-Funded Sensitive Materials Enterprises Established in Violation of Rules

Where a department in any region approves the establishment of foreign-funded sensitive materials production enterprises in violation
of rules, the economic and trade commission (economic commission), the planning commission, and the department (bureau) of foreign
trade and economic cooperation of the relevant province, autonomous region, municipality directly under the Central Government and
municipality separately listed on the State plan shall organize the checking-up, immediately stop the establishment of such enterprises
in violation of rules, sand order the enterprises concerned to go through the formalities of approval and record within a time limit.

III.

In accordance with Article 16 of the Provisions on Guiding the Orientation of Foreign Investment (Decree No. 346 of the State Council)
which were promulgated by the State Council on February 11, 2002, which stipulates: “With respect to the investment projects established
by overseas Chinese and the investors from Hong Kong Special Administration Region, Macao Special Administrative Region or Taiwan
Area, the present provisions shall be applicable by reference in implementation”, the sensitive materials production enterprises
invested and established in China by overseas Chinese and investors from Hong Kong, Macao or Taiwan, shall also be in compliance
with the above requirements.

The State Development Planning Commission, The State Economic and Trade Commission, The Ministry of Foreign Trade and
Economic Cooperation
2002-11-26

REGULATIONS ON THE MANAGEMENT OF FOREIGN-FUNDED URBAN PLANNING SERVICE ENTERPRISES

Regulations on the Management of Foreign-funded Urban Planning Service Enterprises

Decree of the Ministry of Construction and the Ministry of Foreign Trade and Economic Cooperation,

No 116

The Regulations on the Management of Foreign-funded Urban Planning Service Enterprises, deliberated and ratified at the 65th executive
meeting of the Ministry of Construction on December 13th, 2002 and the 2nd working meeting of the minister of Foreign Trade and Economic
Cooperation on January 30th, 2003, is hereby promulgated for implementation as of May 1st, 2003.

Wang Guangtao, Minister of Construction

Shi Guangsheng, Minister of Foreign Trade and Economic Cooperation

February 13th, 2003

Regulations on the Management of

Foreign-funded Urban Planning Service Enterprises

Article 1 Pursuant to the Law of the People’s Republic of China on Foreign-funded Enterprises , the Law of the People’s Republic of
China on Sino-foreign Equity Joint Ventures , the Law of the People’s Republic of China on Sino-foreign cooperative Joint Ventures
, and the Law of the People’s Republic of China on Urban Planning , the current Regulations is hereby formulated to expand the
scope of opening to the outside; regulate foreign companies, enterprises and other economic entities or individuals investing in
enterprises providing services to urban planning; and strengthen management of the activities of urban planning services provided
by foreign-funded urban planning service enterprises.

Article 2 The Regulations applies to those setting up foreign-funded urban planning service enterprises within the boundary of the People’s
Republic of China and applying for the Certificate of Qualification of Foreign-funded Enterprises for Urban Planning Services
, and to the supervision and management of foreign-funded urban planning service enterprises.

Article 3 The foreign-funded urban planning service enterprises as referred to in the current Regulations include Sino-foreign equity joint
ventures, Sino-foreign cooperative joint ventures, and ventures with exclusive foreign investment that are set up in the People’s
Republic of China in accordance with law to provide services to urban planning.

The term ‘urban planning service’ as used in the current Regulations refers to provide drawing and consulting services to urban
development plans other than general planning.

Article 4 All foreign companies, enterprises, other economic entities or individuals engaged in urban planning services in China shall set
up Sino-foreign equity joint ventures, Sino-foreign cooperative joint ventures, or ventures with exclusive foreign investment and
apply for the Certificate of Qualification of Foreign-funded Enterprises for Urban Planning Services .

Those have not been granted the Certificate of Qualification of Foreign-funded Enterprises for Urban Planning Services shall
not take up the business of urban planning services.

Article 5 The department responsible for the management of foreign trade and economic cooperation under the State Council shall take charge
of management of establishment of foreign-funded urban planning service enterprises, while the department responsible for construction
under the State Council shall take charge of management of qualification of foreign-funded urban planning service enterprises.

The departments responsible for foreign trade and economic cooperation under the people’s governments at the provincial, autonomous
regional and municipal governments under the direct leadership of the central government shall take charge of preliminary examination
of establishment of foreign-funded urban planning service enterprises in their respective administrative areas, and departments responsible
for urban planning under people’s governments at and above the county level shall take charge of supervision and management of the
urban planning service activities carried out by foreign-funded urban planning service enterprises in their respective administrative
areas.

Article 6 Apart from meeting requirements set in relevant Chinese laws and regulations on foreign-funded enterprises, the following requirements
shall be met for the establishment of foreign-funded urban planning service enterprises:

1. The foreign party shall be an enterprise or professional specializing in urban planning services in its resident country
or region.

2. The applicant shall own more than 20 employees specializing in urban planning, architecture, road transportation, gardening
and related disciplines, with foreign specialists accounting for no less than 25 percent of the total, and have at least one foreign
technician specializing in urban planning, architecture, road transportation, and gardening respectively.

3. The applicant shall have technical apparatus and fixed working site as stipulated by the State.

Article 7 Those applying for establishing foreign-funded urban planning service enterprises shall apply, in accordance with law, to the
State Administration of Industry and Commerce or local administrations of industry and commerce with authorization from the State
Administration of Industry and Commerce for examination and approving the post_titles of the foreign-funded enterprises they plan to set
up.

Article 8 After passing examination and receiving approval of the post_titles of the foreign-funded enterprises it plans to set up, the applicant
shall apply to the departments of the provincial, autonomous regional or people’s municipal government under the direct leadership
of the central government in charge of foreign trade and economic cooperation in the region where the enterprise is to be located
for the establishment. it shall submit the following documents:

1. The application for the establishment of a foreign-funded enterprise signed by the legal representative of the investing
party.

2. The feasibility study report, project proposal and plan on the establishment of the enterprise (including staffing of specialists,
plan on technical equipment, and area of the working site) produced or approved by the investing party.

3. The contract and rules of the foreign-funded enterprise signed by the legal representative of the investing party (or rules
only, in the case of an enterprise with exclusive foreign investment).

4. Notice of pre-approval on the post_title of the enterprise to be set up.

5. Certificate of legal person registration of the investing party and certificate of the credit provided by the bank of the
investing party.

6. Documents and certificates of appointment of the chairman, board members, managers, and leading engineers or technicians
to be appointed by the investing party.

7. The balance sheets and statements of loss and gain of the investing party during the latest three years as audited by a
chartered accountant or an accountant firm.

8. Certificate of registration and certificate of bank credit of the urban planning service enterprise(s) run by the foreign
investing party in its country or region.

9. Certificates of experiences and achievements of the foreign investing party in urban planning services produced by responsible
government departments or associations, societies, or notary organs in the residential country or region of the said party.

Article 9 The department under provincial, autonomous regional or people’s municipal governments under the direct leadership of central
government in charge of foreign trade and economic cooperation shall complete preliminary examination within 30 days after receiving
an application and submit its approval to the State Council department in charge of foreign trade and economic cooperation.

Article 10 The State Council department in charge of foreign trade and economic cooperation shall submit the application documents that have
passed preliminary examination and approval to the State Council department in charge of construction for soliciting the comments
within 10 days. The State Council department in charge of construction shall put forward its opinion within 30 days after receiving
the application documents. Within 30 days after receiving the written opinion of the State Council department in charge of construction,
the State Council department in charge of foreign trade and economic cooperation shall make a decision of approval or disapproval.
In the case of approval, a certificate of approval shall be issued; and in the case of disapproval, a written explanation shall be
given.

Article 11 After receiving the Certificate of Approval of Foreign-funded Enterprise, the applicant shall register with an administration
of industry and commerce in accordance with law to get a business license.

Article 12 After receiving a legal person business license, the applicant shall apply to the State Council department in charge of construction
for the Certificate of Qualification for Urban Planning Services for Foreign-funded Enterprises .

Article 13 The following documents shall be supplied for application for the Certificate of Qualification for Urban Planning Services for
Foreign-funded Enterprises :

1. Form of Application for the Certificate of Qualification for Urban Planning Services for Foreign-funded Enterprises ;

2. Certificate of Approval of Foreign-funded Enterprise;

3. Business license for enterprise legal person;

4. Contract of employment of technicians and specialists and certificates of technical qualifications of these people put on
file in labour and personnel departments;

5. Documents about the technical equipment of the enterprise.

Article 14 The foreign-funded urban planning service enterprise shall report, within 30 days after receiving the Certificate of Qualification
for Urban Planning Services for Foreign-funded Enterprises , to the urban planning administration in the city or county of its registered
for the record.

Article 15 The foreign-funded urban planning service enterprise that contracts for urban planning services in areas other than that of its
registration shall report to the urban planning administrations of these areas for the record.

Article 16 All the documents submitted by the applicant shall be written in Chinese. If any document of certification is written in a foreign
language, a Chinese version shall be supplied.

Article 17 Foreign-funded urban planning service enterprises shall abide themselves by pertinent Chinese laws, regulations, and technical
standards and norms when providing urban planning services.

Article 18 The foreign technicians employed by foreign-funded urban planning service enterprises shall stay in China for a total length of
no less than 6 months per person a year.

Article 19 The State Council department in charge of construction shall carry out annual checks to the foreign-funded urban planning service
enterprises that have received the Certificate of Qualification for Urban Planning Services for Foreign-funded Enterprises . Those
found unqualified shall have their Certificate of Qualification for Urban Planning Services for Foreign-funded Enterprises revoked.

Article 20 Chinese units that have received the Certificate of Qualification for Compilation of Urban Planning shall hand in the Certificate
when they are restructured into Sino-foreign equity or cooperative joint ventures specializing in urban planning services.

Article 21 Foreign-funded urban planning service enterprises shall hand in their Certificate of Qualification for Urban Planning Services
for Foreign-funded Enterprises when they stop operations or are disbanded or terminated.

Article 22 It is strictly forbidden to entrust any businesses of urban planning services to foreign-funded enterprises that have not granted
the Certificate of Qualification for Urban Planning Services for Foreign-funded Enterprises .

It is strictly forbidden to entrust any businesses of service to general urban planning to foreign-funded enterprises.

Article 23 Those that contract for urban planning services without the Certificate of Qualification for Urban Planning Services for Foreign-funded
Enterprises shall be ordered by the construction administrations of people’s governments at or above the county level to stop their
illegal activities, together with a penalty above RMB10,000 yuan and below RMB30,000 yuan. Their achievements shall not be acknowledged
by any department.

Article 24 Those foreign-funded urban planning service enterprises that provide services to compilation of general urban planning in violation
of the current Regulations shall be ordered by the construction administrations of people’s government at or above the county level
to mend themselves. Those involved in severe cases shall have their Certificate of Qualification for Urban Planning Services for
Foreign-funded Enterprises withdrawn by the original issuer.

Those foreign-funded urban planning service enterprises that obtain the Certificate of Qualification for Urban Planning Services
for Foreign-funded Enterprises through fraud and deception shall have their Certificate withdrawn by the issuer.

After withdrawing a Certificate, the issuer shall inform the registration department concerned of the case. The enterprise whose
certificate has been withdrawn shall apply to the original department of registration for cancellation of its registration. Those
that refuse to go through cancellation formalities shall be handled by registration departments in accordance with law.

Article 25 Those that entrust urban planning services or general urban planning services to foreign-funded enterprises that have not got
the Certificate of Qualification for Urban Planning Services for Foreign-funded Enterprises in violation of the current Regulations
shall be corrected by their senior departments, with administrative responsibilities to be affixed upon the person responsible in
accordance with law. If a crime is committed, criminal responsibilities shall be found out in accordance with law.

Article 26 The current Regulations shall be interpreted by the State Council department in charge of construction and the State Council department
in charge of foreign trade and economic cooperation according to their respective functions.

Article 27 Investors from the Hong Kong Special Administrative Zone, the Macao Special Administrative Zone, and Taiwan area coming to run
urban planning service enterprises on the mainland shall be handled with reference to the current Regulations.

Article 28 The current Regulations shall take effect as of May 1, 2003.

To be sent to: The Law Committee of the National People’s Congress, the Law Office of the State Council, the Editorial Office
of the Gazette of the State Council, the construction commissions and bureaus of foreign trade and economic cooperation of people’s
governments at the provincial, autonomous regional and municipal level, the construction commission of cities as independent entries
in State plans and budgets, ministries and commissions of the State Council, and leaders, bureaus, and subsidiary institutions of
the Ministry of Construction.

Secretariat of the General Office of the Ministry of Construction

Printed and issued on February 20th, 2003

REPLY OF THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE ON THE ISSUE OF WHETHER THE BRANCH OF A ENTERPRISE WITH FOREIGN INVESTMENT SHALL BE PUNISHED FOR ITS BUSINESS OPERATIONS WITHOUT GOING THROUGH THE EXTENSION PROCEDURES AFTER THE OPERATIONAL PERIOD EXPIRES

The State Administration for Industry and Commerce

Reply of the State Administration for Industry and Commerce on the Issue of Whether the Branch of A Enterprise with Foreign Investment
Shall be Punished for its Business Operations without Going through the Extension Procedures after the Operational Period Expires

GongShangWaiQiZi [2002] No.10

January 18, 2002

The Administration for Industry and Commerce of Inner Mongolia Autonomous Region:

The “Request for Instruction on Whether the Branch of A Enterprise with Foreign Investment Shall Be Punished for Its Business Operations
without Going through the Extension Procedures after the Operational Period Expires” by the Industrial and Commercial Bureau of Baotou
City in your region (BaoGongShangFa [2001] No. 489 [2001]) has been received. Upon study of the issue, we hereby give the reply as
follows:

Operational period is one of the registration items stated in the new-version business license of enterprises with foreign investment.
An enterprise with foreign investment shall go through the modification or cancellation registration in accordance with the provisions
once its operational period has expired.

II.

On the verification of the operational period of the branch of an enterprise with foreign investment, the validity period of the administrative
permit on the matters for approval, which is involved in the scope of business, shall be considered, unless otherwise provided for
by laws, regulations, rules or the regulatory documents by the State Administration for Industry and Commerce. The operational period
of the branch shall be determined within that of the enterprise with foreign investment upon the period applied for by the enterprise.

III.

Any branch of a company with foreign investment that continues business operations without going through the modification or cancellation
registration after the expiry of its operational period verified in compliance with the above principle, shall be punished in accordance
with Article 63 of the “Regulations on the Administration of Registration of Companies”.

For the violators whose operational period is directly verified by the registration organ to be one year due to administrative habits,
they shall generally be imposed upon a criticism, warning and be ordered to mend up in consideration of the specific situation and
the extent of the actual harm to the society. If the case is serious, they shall be punished in accordance with the preceding paragraph.

The State Administration for Industry and Commerce
2002-01-18

CIRCULAR OF THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE CONCERNING THE OPINIONS ON HANDLING DISPUTES OVER STOCK EQUITY OF ENTERPRISES WITH FOREIGN INVESTMENT

The State Administration for Industry and Commerce

Circular of the State Administration for Industry and Commerce Concerning the Opinions on Handling Disputes over Stock Equity of Enterprises
with Foreign Investment

GongShangWaiQiZi [2002] No.38

February 20, 2002

The administrations for industry and commerce of all provinces, autonomous regions and municipalities directly under the Central Government
and the administrations for industry and commerce of the authorized cities:

Recently, the State Administration for Industry and Commerce has continually received complaints and reports on disputes over stock
equity of enterprises with foreign investment. The opinions on handling the relevant issues are hereby put forward as follows:

Based on the existing laws and regulations, an enterprise with foreign investment shall be confirmed according to the status of its
investors, source of fund, the proportion of the foreign fund and the industry policies, and shall be established according to legal
procedures.

Where a dispute over the investment ownership of enterprise with foreign investment arises between the relevant parties and reconfirmation
is needed, the legal procedures for examination and approval and the legal procedures for examination and approval for alteration
shall be gone through, according to the actual contribution of investment and upon the unanimous agreement of the parties or after
the judicial or arbitration organs confirm the ownership according to law.

The relevant parties that provide false documents and cheat to obtain the registration during the process of examination, approval
and registration shall bear the corresponding legal liabilities.

The State Administration for Industry and Commerce
2002-02-20

IMPORT AND EXPORT COMMODITY INSPECTION LAW

Law of the People’s Republic of China on Import and Export Commodity Inspection



	(Adopted at the 6th Meeting of the Standing Committee of the Seventh National People’s Congress on February 21, 1989 and promulgated by Order No. 14 of the President of the People’s Republic of China on February 21, 1989, amended in accordance with the Decision on Amending the Law of the People’s Republic of China on Import and Export Commodity Inspection adopted at the 27th Meeting of the Standing Committee of the Ninth National People’s Congress on April 28, 2002.) Contents Chapter I General Provisions Chapter II Inspection of Import Commodities Chapter III Inspection of Export Commodities Chapter IV Supervision Chapter V Legal Responsibility Chapter VI Supplementary Provisions Chapter I General Provisions Article 1 This Law is enacted with a view to improving the inspection of import and export commodities, regulating inspection of import and export commodity, protecting public interests and the legitimate rights and interests of the parties involved in foreign trade, and promoting the smooth development of China’s economic and trade relations with other countries. Article 2 The State Council shall establish an administration for import and export commodity inspection (hereinafter referred to as the State administration for commodity inspection, in short), which shall be in charge of the inspection of import and export commodities throughout the country. The local import and export commodity inspection authorities set up by the State administration for commodity inspection (hereinafter referred to as the commodity inspection authorities, in short) shall be responsible for the inspection of import and export commodities within the regions under their jurisdiction. Article 3 The commodity inspection authorities and the inspection bodies permitted by the State administration for commodity inspection shall, in accordance with law, perform the inspection of import and export commodities. Article 4 The import and export commodities shall be inspected in adherence to the principles of protecting human health and safety, animal and plant life and health, and the environment; preventing deceptive practices and preserving security of the State. The State administration for commodity inspection shall compile and readjust the catalogue of import and export commodities subject to compulsory inspection (hereinafter referred to as the Catalogue, in short) and publish it for implementation. Article 5 The inspection of the import and export commodities which are listed in the Catalogue shall be conducted by the commodity inspection authorities. No import commodities specified in the preceding paragraph that are not inspected may be said or used; and no commodities specified in the preceding paragraph that fail to pass the inspection may be exported. Among the import and export commodities specified in the first paragraph of this Article, those that meet the requirements for exemption from inspection, as prescribed by the State, may be exempted from inspection, if the consignee or consignor files an application and the application is approved by the State administration for commodity inspection after examination. Article 6 By compulsory inspection of import and export commodities is meant the conformity assessment as to whether the import and export commodities included by decision in the Catalogue meet the compulsory requirements of the technical regulations of the State. The procedures for conformity assessment include: sampling, testing and inspection; evaluation, verification and assurance of conformity; and registration, accreditation and approval as well as their combinations. Article 7 The import and export commodities which are listed in the Catalogue shall be inspected in accordance with the compulsory requirements of the technical regulations of the State. With regard to those commodities for which compulsory requirements of the technical regulations of the State have not yet been formulated, such requirements shall be formulated in time according to law. Before their formulation, those commodities may be inspected with reference to the relevant foreign standards designated by the State administration for commodity inspection. Article 8 The inspection bodies permitted by the State administration for commodity inspection may provide inspection and survey services in respect of the import and export commodities as entrusted by parties involved in foreign trade or by foreign inspection bodies. Article 9 Import and export commodities or items subject to inspection by other inspection bodies, as provided for by laws or administrative rules and regulations, shall be inspected in accordance with the provisions of relevant laws or administrative rules and regulations. Article 10 The State administration for commodity inspection and the commodity inspection authorities shall, without delay, collect information on the inspection of import and export commodities and make it available to the relevant quarters. The staff members of the State administration for commodity inspection and the commodity inspection authorities shall have the obligation to keep the commercial secrets of which they become aware in the course of fulfilling their duties of inspection of import and export commodities. Chapter II Inspection of Import Commodities Article 11 For import commodities which are subject to inspection by the commodity inspection authorities, as provided for by this Law, the consignee or his agent shall apply for inspection to the commodity inspection authorities located at the place he makes Customs declarations. The Customs shall check and release the commodities on the strength of the Documents for Customs Clearance issued by the commodity inspection authorities. Article 12 For import commodities which are subject to inspection by the commodity inspection authorities, as provided for by this Law, the consignee or his agent shall, in the places and within the time limit specified by the commodity inspection authorities, accept inspection of the import commodities conducted by the commodity inspection authorities. The commodity inspection authorities shall complete the inspection and issue an inspection certificate within the time limit specified uniformly by the State administration for commodity inspection. Article 13 Where the consignee of the import commodities other than those that are subject to inspection by the commodity inspection authorities, as provided for by this Law, finds that the import commodities do not meet the relevant quality requirements, are damaged or are short on weight or quantity, he shall apply to the commodity inspection authorities for inspection and the issuance of an inspection certificate if such a certificate is necessary for claiming compensation,. Article 14 For important import commodities and complete sets of equipment in large size, the consignee shall, in accordance with the terms agreed upon in foreign trade contracts, conduct initial inspection or initial supervision over manufacturing or loading in the exporting country before shipment, over which the relevant competent departments shall tighten their supervision. The commodity inspection authorities may, when necessary, dispatch inspection officials to take part in such inspection and supervision. Chapter III Inspection of Export Commodities Article 15 For export commodities which are subject to inspection by the commodity inspection authorities, as provided for by this Law, the consigner or his agent shall, in the places and within the time limit specified by the commodity inspection authorities, apply for inspection to the commodity inspection authorities. The commodity inspection authorities shall complete the inspection and issue an inspection certificate within the time limit specified uniformly by the State administration for commodity inspection. For the export commodities that are subject to inspection, as provided for by this Law, the Customs shall check and release the commodities on the strength of the Documents for Customs Clearance issued by the commodity inspection authorities. Article 16 Export commodities which have passed the inspection conducted by the commodity inspection authorities and for which inspection certificates have been issued shall be declared for export within the time limit specified by the commodity inspection authorities. Re-application for inspection is necessary when the specified time limit expires. Article 17 An enterprise manufacturing packagings for dangerous export commodities shall apply to the commodity inspection authorities for a test of the performance of such packagings. An enterprise producing dangerous export commodities shall apply to the same authorities for a test of the use of packagings. No permission shall be granted for the export of dangerous commodities kept in packagings which have not passed the test. Article 18 For vessel holds or containers used for carrying perishable foods, the carrier or the exporter using the vessel holds or containers shall apply for inspection before loading. No permission shall be granted for loading and shipment until the vessel holds or containers have passed the inspection. Chapter IV Supervision Article 19 For the import and export commodities other than those that are subject to inspection by the commodity inspection authorities, as provided by this Law, the commodity inspection authorities may conduct random inspection in accordance with State regulations. The State administration for commodity inspection may publicize the results of random inspection or notify the relevant departments of the random inspection. Article 20 For the convenience of foreign trade, the commodity inspection authorities may, in accordance with State regulations, conduct quality supervision and inspection in respect of the export commodities which are listed in the Catalogue, before they leave the factory. Article 21 The agent going through the formalities of applying for inspection on behalf of the consignee of import commodities or consigner of export commodities shall register with the commodity inspection authorities. When going through the formalities of applying for inspection, the agent shall submit his letter of authorization to the commodity inspection authorities. Article 22 The State administration for commodity inspection may, in accordance with the relevant regulations of the State and after examining their qualifications, permit the qualified inspection bodies at home and abroad to undertake the inspection and survey of import and export commodities entrusted to them. Article 23 The State administration for commodity inspection and the commodity inspection authorities shall, in accordance with law, exercise supervision over the inspection and survey of the import and export commodity conducted by the inspection bodies permitted by the State administration for commodity inspection and may conduct random inspection of the commodities which have been inspected by such bodies. Article 24 The State administration for commodity inspection shall, in adherence to the unified certification system of the State, have the relevant import and export commodities supervised through certification. Article 25 The commodity inspection authorities may, on the basis of the agreements signed between the State administration for commodity inspection and the foreign bodies concerned or upon entrustment by the foreign bodies concerned, undertake quality certification of import and export commodities, and permit the use of quality certification marks on the import and export commodities qualified. Article 26 The commodity inspection authorities shall supervise, through inspection of certificates, over the import and export commodities which are subject to the permit system, as provided for by this Law, examining the certificates and checking whether they conform to the commodities concerned. Article 27 The commodity inspection authorities may, when necessary, place commodity inspection marks or sealing on the import and export commodities which have passed the inspection. Article 28 Where an applicant for the inspection of import and export commodities disagrees with the results of inspection presented by the commodity inspection authorities, he may apply for re-inspection to the same authorities, or to those at the next higher level or up to the State administration for commodity inspection. The commodity inspection authorities or the State administration for commodity inspection which accepts the application for re-inspection shall draw a timely conclusion after re-inspection. Article 29 Where a party is not satisfied with the conclusion drawn after re-inspection by the commodity inspection authorities or the State administration for commodity inspection, or is not satisfied with the decision on punishment made by the commodity inspection authorities, he may, in accordance with law, apply for administrative reconsideration or bring a suit in a People’s Court according to law. Article 30 The State administration for commodity inspection and the commodity inspection authorities shall, in the course of performing their duties, abide by laws, safeguard the interests of the State, execute the laws strictly in pursuant to their statutory functions and powers and the statutory procedures, and accept supervision. The State administration for commodity inspection and the commodity inspection authorities shall, on the basis the requirements for performing their duties according to law, strengthen the building of their contingents and enable their staff members to possess good political and professional qualifications. The staff members engaged in commodity inspection authorities shall receive professional training and appraisal regularly, and only those who pass the appraisal may be assigned to their duties. The staff members engaged in commodity inspection shall devote themselves to their duties, offer services with civility and observe professional ethics, and refrain from abusing their powers and seeking personal gain. Article 31 The State administration for commodity inspection and the commodity inspection authorities shall establish a sound system for internal supervision, and conduct supervision and inspection on the execution of laws by their staff members. The limits of duties and powers of the key posts for accepting applications for inspection, conducting inspection and issuing certificates to release commodities shall be explicitly defined, so that they are separate from each other and are mutually conditioned. Article 32 Any unit and individual shall have the right to accuse and inform against the violations of laws and rules of discipline committed by the State administration for commodity inspection, the commodity inspection authorities and their staff members. The departments receiving the accusations and information shall, in accordance with law and the division of duties, investigates and deal with them without delay, and shall keep secret for the accusers and informers. Chapter V Legal Responsibility Article 33 Where a person, in violation of the provisions of this Law, sells or uses the import commodities subject to inspection by the commodity inspection authorities, for the inspection of which he fails to file an application and which have not undergone inspection, or exports the commodities for export subject to inspection by the commodity inspection authorities, for the inspection of which he fails to file an application and which fail to pass the inspection, his unlawful gains derived therefrom shall be confiscated by the commodity inspection authorities and, in addition, be fined not less than five percent but not more than twenty percent of the value of the commodities; and if the violation constitutes a crime, he shall be investigated for criminal responsibility according to law. Article 34 Where a unit, in violation of the provisions of this Law and without permission by the State administration for commodity inspection, conduct inspection and survey of import and export commodities, the commodity inspection authorities shall order it to desist from the illegal operation; confiscate its unlawful gains derived therefrom and, in addition, impose on it a fine of not less than the amount of, but not more than three times the amount of, the unlawful gains. Article 35 Where a person imports or exports commodities which are adulterated or mixed with fake commodities, spurious commodities as genuine ones or defective commodities as good ones, or unqualified commodities as qualified ones, the commodity inspection authorities shall order him to desist from importing or exporting commodities, confiscate his unlawful gains derived therefrom and, in addition, impose on him a fine of not less than fifty percent of, but not more than three times the amount of, the value of the commodities; and if the violation constitutes a crime, he shall be investigated for criminal responsibility according to law. Article 36 Where a person fabricates, adulterates, deals in or steals commodity inspection certificates or documents, seals or stamps, marks, sealing or quality certification marks, he shall be investigated for criminal responsibility according to law; and if the violation is not serious enough for criminal punishment, the commodity inspection authorities shall order him to rectify, confiscate his unlawful gains derived therefrom and, in addition, impose on him a fine of not more than equivalent of commodities value. Article 37 Where a staff member of the State administration for commodity inspection or the commodity inspection authorities, in violation of the provisions of this Law, divulges the commercial secrets of which he is aware, he shall be given an administrative sanction according to law; his unlawful gains, if any, shall be confiscated; and if the violation constitutes a crime, he shall be prosecuted for criminal responsibility according to law. Article 38 Where a staff member of the State administration for commodity inspection or the commodity inspection authorities abuses his power, intentionally creates difficulties, engages in malpractices for personal gain, fabricates inspection results or neglects his duty and delays the inspection of commodities and the issuance of certificates, he shall be given an administrative sanction according to law; and if the violation constitutes a crime, he shall be investigated for criminal responsibility according to law. Chapter VI Supplementary Provisions Article 39 The commodity inspection authorities and other inspection bodies that conduct inspection or providing inspection and survey services in accordance with the provisions of this Law shall collect fees according to relevant State regulations. Article 40 Regulations for the implementation of this Law shall be formulated by the State Council. Article 41 This Law shall go into effect as of August 1, 1989.

MEASURES ON THE TAKEOVER OF LISTED COMPANIES

2002092820021201The Chinese Securities Regulatory CommissionDecree of the Chinese Securities Regulatory CommissionNo.10Measures on the Takeover of Listed Companies are hereby promulgated and shall enter into force as of December 1, 2002.Chairman of the Chinese Securities Regulatory Commission Zhou XiaochuanSeptember 28, 2002epdf/e03125.pdfIlisted company, takeover, purchaser by agreement, purchaser by offer, shares, equity capitale03125Measures on the Takeover of Listed CompaniesChapter I General ProvisionsArticle 1 These Measures are formulated, in accordance with the Company Law, the Securities Law, and other laws and relevant rules and regulations,
for the purpose of standardizing the activities of the takeover of the listed companies, promoting the optimum distribution of the
resources of the securities markets, protecting the lawful rights and interests of the investors, and safeguarding the normal order
of the securities market.Article 2 The takeover of the listed companies as mentioned in these Measures refers to an act which enpost_titles a purchaser to the practical control
right of or the potential practical control right of a listed company if, through activities of the transfer of shares in the stock
exchange, or through lawful means other than the activities of transfer of shares in the stock exchange, the purchaser holds a certain
proportion of the shares issued by the said listed company.Article 3 A purchaser may, by agreement or by offer, or through transaction in the manner of public centralized trading at the competing price,
take over a listed company, and obtain the practical control right of a listed company.Where a purchaser takes over a listed company, he shall adhere to the provisions stipulated by these Measures, and shall perform the
obligations of making timely report and announcement in accordance with the provisions stipulated by these Measures.Article 4 The activities of the takeover of the listed companies shall be conducted in line with the principles of openness, fairness and impartiality.
The relevant parties shall be faithful and reliable, and shall consciously safeguard the order of the securities market.Article 5 Information reported and announced by the relevant parties involved in the takeover of the listed companies shall be truthful, accurate,
and complete, and shall not contain a falsehood, misleading statement or major omission.No individuals shall spread false information, disturb the market order, or undertake other fraudulent activities by taking advantage
of the takeover of the listed companies.Article 6 Takeover of the listed companies may be conducted through payment by cash, by lawfully transferable securities, or by other means
prescribed by laws, or rules and regulations.Article 7 A purchaser shall not damage the lawful rights and interests of the company under takeover and its shareholders by taking advantage
of the takeover of the listed company.Any purchaser who is incompetent for the practical performance shall be forbidden to enter into the takeover of a listed company;
company to be taken over shall not provide the purchaser with financial aids in any form.Article 8 The holding shareholders and other practical controller of a listed company shall bear good faith to the company under their control
and other shareholders.A purchaser shall be faithful and reliable to the listed company under takeover and other shareholders of the listed company, and
shall provide completely effective guarantees to perform the specific matters which the purchaser has promised.Article 9 Directors, supervisors and senior management persons of a listed company shall have the obligation of good faith to the listed company
which they work for and to the shareholders of such listed company.Where a listed company changes its directors or its directors quit their positions during the term of the takeover, such listed company
shall explain the reasons and make it publicly known.Article 10 The Chinese Securities Regulatory Committee (hereinafter referred to as CSRC) shall supervise the activities of the takeover of the
listed companies.The stock exchange and the securities registration and clearing institution shall, pursuant to the duties and responsibilities authorized
by the CSRC and their respective work regulations, supervise the daily activities of the takeover of the listed companies.Article 11 The CSRC may establish a special committee composed of professionals, which shall provide opinions on whether a specific transaction
constitutes a takeover of a listed company, on how the parties shall perform their relevant duties, on whether the specific transaction
matters will affect the continuous listing status of the listed company under takeover, and as to other entities and procedural matters.Chapter II Provisions on Takeover by AgreementArticle 12 Where a listed company is taken over by agreement, the purchaser shall submit to the SCRC a report on the takeover of the listed company
the next day after the conclusion of the agreement; at the same time, the purchaser shall submit a copy of the report to the office
under the SCRC located in the place where the listed company lies, send a copy of the report to the stock exchange, notify the listed
company that is taken over, and make a suggestive announcement of the summary of the report on the takeover of the listed company.If the SCRC fails to offer objection within 15 days from the date of receiving the report on the takeover of the listed company, the
purchaser may make an announcement of the report on the takeover of the listed company, and perform the takeover agreement.Article 13 Where a listed company is taken over by agreement, if the purchaser continues to increase shareholding or aggrandizing the control
of the listed company after he comes to hold or control 30 percent of the shares issued by the listed company, he shall issue a takeover
offer to all shareholders of the listed company to be taken over, which indicates a proposal to buy all the shares held by all the
shareholders; if the takeover offer complies with the provisions stipulated in Chapter IV of these Measures, the purchaser may submit
an application to the SCRC for exemption; upon exemption, the listed company may be taken over by agreement.Article 14 Where a listed company is taken over by agreement, if the shares the purchaser plans to hold or control excess 30 percent of the shares
issued by the listed company, the purchaser shall issue a takeover offer to all shareholders of the listed company to be taken over,
which indicates a proposal to buy all the shares held by all the shareholders; if the takeover offer complies with the provisions
stipulated in Chapter IV of these Measures, the purchaser may submit an application to the SCRC for exemption; upon exemption, the
listed company may be taken over by agreement.Article 15 When the listed company to be taken over receives the notification sent by the purchaser, its board of directors shall state a timely
opinion on the potential influence which the takeover may impose upon the listed company; simultaneously the independent director
shall express his independent opinion when he is engaged in the development of the opinion of the board of directors. If the board
of directors of the listed company under takeover deems it necessary, the board may employ professional institutions such as an independent
financial consultant to offer them consultative opinion in the name of the listed company. The opinion of the board of directors
of the listed company under takeover, the opinion of the independent director, and the opinion of the professional institution shall
be made known to the general people.Where a listed company is taken over by the management, or staff members, the independent director of the company under takeover shall
state his independent review on the potential influence which the takeover may impose upon the listed company. The independent director
shall demand the company to employ such professional institutions as an independent financial consultant to offer consultative opinion,
which plus the opinion of the independent director shall be made publicly known. The fees for the financial consultant shall be borne
by the company to be taken over.Article 16 In the case of the transfer of shares held by institutions authorized by the state, or the transfer of shares which is subject to
administrative examination and approval, the relevant parties to the takeover agreement shall not effect the takeover by agreement
before examination and approval is provided by the competent administrative department.Article 17 The relevant parties to the takeover agreement shall, in accordance with the regulations and requirements drawn up by the stock exchange
or the securities registration and clearing institution, apply for the transfer of shares and the registration of change of ownership.The stock exchange and the securities registration and clearing institution shall not handle the transfer of shares and the registration
of change of ownership if, inconsistent with provisions, no report or announcement is performed, or no application is submitted.Article 18 Where a listed company is taken over by agreement, the relevant parties shall, on an ad hoc basis, entrust a securities registration
and clearing institution with custody of the shares planned to be transferred and with deposit of the cash to be used as the payment
with the designated bank.Article 19 By agreement, if the transfer of shares issued by a listed company and quoted for trading on the stock exchange results in the purchaser’s
practical control right or feasible control right of the said company, the following procedures shall be applicable:1.after the takeover report on the listed company is announced, the relevant parties shall entrust the securities company to apply for
transfer of shares and registration of change of ownership; the entrusted securities companies shall apply to the stock exchange
and the securities registration and clearing institution for suspension of trading and ad hoc custody of the shares scheduled to
take over; if the shares of a listed company are suspended for trading or entrusted with custody on a ad hoc basis, an announcement
shall be made;The stock exchange may, in light with the needs of the management of the securities market, decide on the suspension of listing of
the shares which are quoted and traded on the stock exchange.2.the transferee shall, on the next day from submitting an application for transfer of shares, make announcement of the matters of the
transfer agreement and the name of the securities company that accepts the entrustment, and inform the listed company of these.3.the stock exchange shall, within 3 work days from the date on which it receives the application, complete the examination and rectification,
and decide on whether to affirm the application or not;4.if the stock exchange affirms the application for transfer of shares, the entrusted securities company shall, in the name of both
the transferor and transferee, apply to the securities registration and clearing institution for registration of the change of ownership;
the transferee shall, within 2 days after the completion of the registration of the change of the ownership, make the registration
publicly known.if the stock exchange refuses to affirm the application, the entrusted securities company shall on the same date when it receives
the notification from the stock exchange, inform both the transferor and transferee of the shares and the company under takeover
of the refusal to affirm the application, and shall, in the name of the transferor and transferee, apply to the securities registration
and clearing institution for elimination of the temporary custody of the said shares; the transferor shall, within 2 work days from
the date on which he is informed of the refusal to affirm the application, make announcement of the matter;5.after the registration of the change of the ownership of the shares, the entrusted securities company shall, in the name of the transferee,
apply to the securities registration and clearing institution for elimination of the temporary custody of the said shares; the transferee
shall, within 2 work days from the date of submitting the application for the elimination of the custody, make announcement of the
matter; the said section of shares shall resume trading in the stock exchange.Article 20 Where Holding shareholders of a listed company or other practical controllers of a listed company transfer their practical control
rights of the listed company, if they fail to repay their debts in full to the company; or if they fail to eliminate the guarantee
which the company has provide for their debts; or if there exist other matters that damage the interests of the company, the board
of directors of the listed company shall, for the company, employ an audit institution, which shall make special rectification and
examination of the relevant matters and produce a report on the rectification and examination, and demand the holding shareholders
of the listed company or other practical controllers of the listed company offer feasible resolutions. The board of directors of
the listed company and the independent director shall state their respective review on the feasibility of the resolution. The listed
company under takeover shall make announcement of the report on the rectification and examination, as well as announcement of the
resolution, and of the respective opinion of the board of directors and the independent director.If the holding shareholders or other practical controllers refuse to make resolutions, the board of directors, or the independent
director shall adopt completely effective legal measures to protect the interests of the company.Article 21 If, upon approval by the SCRC and the stock exchange, the shareholders of a listed company transfer by public collection the shares
they hold which are issued by the listed company, the transfer shall be entrusted to the securities company, specific procedures
and requirement for which shall be consistent with the professional provisions stipulated by the stock exchange.Article 22 Where a purchaser holds, controls the shares of a listed company by means of administrative distribution or transfer of the state-owned
shares, by ruling of the courts, by inheritance, and by donation, which enpost_titles him to the practical or possible control of a listed
company, these regulations shall be applicable.Chapter III Provisions on Takeover by OfferArticle 23 When the number of shares held or controlled by a purchaser comes to 30 percent of the shares issued by a listed company, the purchaser
shall, on the next day after such shareholding becomes a fact, submit a report on the takeover of the said company to the CSRC. At
the same time the purchaser shall submit a copy of the report to the office under the CSRC located in the place where the listed
company lies, send a copy of the report to the stock exchange, and make an announcement. Without performing the obligation of reporting
and announcing in accordance with these Measures, the purchaser shall not continue to increase the shareholding or aggrandize the
control right.Where the purchaser prescribed in the proceeding paragraph continues to increase the shareholding or aggrandizing the control right,
the purchaser shall, in the form of offer takeover, send an offer to all the shareholders of the said company which indicates that
the purchaser attempts to buy all the shares which they hold; if the takeover complies with the provisions stipulated in Chapter
IV of these Measures, an application may be submitted to the CSRC for the exemption.Where the purchaser prescribed in the proceeding paragraph has produced a report on and made announcement of the takeover of the listed
company before it comes to hold or control 30 percent of the shares issued by a listed company, the purchaser may make a report only
on the difference between the statement of this report and the statement of the former one and make it publicly known.Article 24 When the number of shares held or controlled by a purchaser accounts for less than 30 percent of the shares issued by a listed company,
if the purchaser increases the shareholding of the said company by offer, the proportion of shares the purchaser schedules to takeover
shall not account for less than 5 percent; upon the completion of the scheduled takeover, the proportion of shares held or controlled
by the purchaser shall not exceed 30 percent; if the proportion is planned to exceed 30 percent, an offer shall be sent to all the
shareholders of the said company which indicates that the purchaser attempts to buy all the shares which they hold; if the case complies
with the provisions prescribed in Chapter IV of these Measures, an application for exemption may be submitted to the CSRC.Article 25 Where a listed company is taken over by offer, the purchaser shall submit to the CSRC a report on the offer takeover. Simultaneously,
the purchaser shall submit a copy of the report to the office under the CSRC located in the place where the listed company lies,
send a copy of the report to the stock exchange, notify the company to be taken over, and make a suggestive announcement of the summary
of the report on the offer takeover.The stock exchange may, according to the needs of the securities market, make decide on the suspension of the trading of the shares
of the listed company quoted and traded on the stock exchange.Article 26 A report on the takeover by offer shall state the following matters:1.the name and domicile of the purchaser;2.the purchaser’s decision on the takeover;3.the name of the listed company under takeover;4.the purpose of the takeover;5.a detailed description of the shares to buy up and the total number of the shares scheduled to buy up;6.the term and price of the takeover;7.the amount and guaranteed availability of the funds required for the takeover;8.the ratio between the total number of the issued shares of the company to be taken over and the number of such shares held at the
time the offer takeover report is submitted;9.the follow-up schedule after the completion of the takeover; and10.other matters required by the CSRC.Article 27 In the report on the takeover by offer, a purchaser shall state whether the listing of the company under takeover shall be planned
to cease or not; if the listing of the company is to planned be cease, special suggestion shall be highlighted in the report on the
offer takeover.A purchaser shall state in the report on the offer takeover whether, upon the completion of the takeover, the change of distribution
of the shareholding of the company under takeover may have influence upon the continuous listing of the said company; if influence
does exist, the purchaser shall make specific programs to maintain the continuous listing of the said company.Article 28 A purchaser shall employ lawyers who shall undertake verification and examination of the truthfulness, accuracy, and completeness
of the contents of the report on the offer takeover, and who shall produce a lawful statement.A purchaser shall employ such professional institutions as a financial consultant who shall appraise the capability of a purchaser
to perform the takeover. The professional opinion of the financial consultant shall be announced.Article 29 Where a purchaser applies to revoke the takeover plan after an application has be submitted to the CSRC for a takeover by offer but
before an offer is sent out, the purchaser shall not, within 12 months from the date on which the application for the revoke of the
takeover is submitted to the CSRC, reapply for a takeover of the listed company.Article 30 If the CSRC fails to state objection within 15 days from the date of the receipt of the report on the takeover by offer, the purchaser
may make announcement of the documents of the offer takeover; if the CSRC objects, the purchaser shall make remedy or supplement
concerning the relevant matters. The time for the remedy or supplement shall not be accounted into the time period specified in this
paragraph.Article 31 The board of directors of the company under takeover shall in the interest of the said company employ such professional institution
as a independent financial consultant to analyze the financial status qua of the company under takeover. The independent financial
consultant shall state its review on matters such as the fairness and rationality of the conditions for the takeover by offer, and
the potential influence of the takeover upon the said company. The matters shall be made known to general people.Where the management, and the staff members conduct the takeover of a listed company, the independent director of a listed company
shall employ such institutions as an independent financial consultant to analyze the financial status qua of the company under takeover.
The independent financial shall state its review on matters such as the fairness and rationality of the conditions for the takeover
by offer, and the potential influence of the takeover upon the said company. The matters shall be made known to general people..
The fees for the consultants shall be borne by the company under takeover.Article 32 The board of directors of the company to be taken over shall, within 10 days from the date on which a purchaser sends out takeover
offer, submit the report of the board of directors, and the professional opinion of the independent consultant as well to the CSRC.
Simultaneously, the board of directors shall submit a copy of the report and opinion to the office under the CSRC located in the
place where the listed company lies, send a copy of the report and opinion to the stock exchange, and make announcement of the report
and opinion.The statement of the board of directors of the listed company shall provide advice for the shareholders as to whether to accept the
takeover offer or not. The independent director of the company under takeover shall express independent opinion. Both the statement
and the opinion shall be made publicly known.Where the purchaser make major alteration of the conditions for the takeover offer, the board of directors of the listed company under
takeover shall make a supplementary report on the alteration of the conditions for the takeover offer, and the independent director
shall state independent review. Both the report and the review shall be made publicly known.Article 33 Strategies and measures adopted by the directors, supervisors and senior management of a company under takeover concerning the purchasing
activities shall not damage the legal rights and interests of the company and its shareholders.If a purchaser has made a suggestive announcement, the board of directors of the company that is taken over may continue to perform
the concluded contracts or decisions made by the shareholders’ meeting, but shall not suggest the following matters:1.issuing shares;2.issuing company bonds that can be converted into shares;3.repurchasing the shares issued by the listed company;4.modifying the articles of association of the company;5.concluding contracts that may have great influence on the assets, debts, rights or interests, or operation results of the company,
with exception of the conclusion of contracts concerning the normal business of the company; and6.disposing or purchasing assets with a great value, or readjusting the major business of the company, with exception of the readjustment
of the business or redistribution of the assets for the companies that are confronted with grim financial difficulty.Article 34 The purchaser shall abide by the following principle when he decides on the price of the takeover by offer:1.the price at which the same kind of shares quoted and traded is taken over by offer shall not be lower than the higher price listed
as follows:(1)the highest price at which a purchaser buy the said kind of shares of the company under takeover quoted and traded within 6 months
prior to the date on which the suggestive announcement is made;(2)90 percent of the arithmetic average value of the daily added average price at which the said kind of shares of the company under
takeover quoted and traded within 30 trading days prior to the date on which the suggestive announcement is made;2.the price at which shares not quoted and traded are taken over shall not be lower than the higher price listed as follows:(1)the highest price which a purchaser pays for the shares issued by the listed company which are not quoted and traded within 6 months
prior to the date on which the suggestive announcement is made;(2)the net asset value of per share of the company under takeover which is audited in the last announcement.Under special circumstances, if the principle for the determination of the prices prescribed in the proceeding paragraph needs to
be readjusted, the purchaser shall seek consent from the CSRC in advance. If the price offered by the purchaser is obviously unfair,
the CSRC may demands the purchaser to make readjustment.Article 35 Where a purchaser pays for the takeover in cash, the purchaser shall, at the same time when a suggestive announcement is made, deposit
not less than 20 percent of the total amount of the guaranteed funds for the performance in the account of a bank designated by the
securities registration and clearing institution, and shall undertake procedures to freeze the account.Where a purchaser pays for the takeover with lawfully transferable company bonds, the purchaser shall, at the same time when a suggestive
announcement is made, entrust the securities registration and clearing institution with the custody of the total securities that
the purchaser will use to pay for the takeover, except that the securities are not included in custody pursuant to the regulations
of the securities registration and clearing institution.Where a purchaser revokes the takeover plan, if the purchaser is not involved in inappropriate investigation, the purchaser may submit
an application for unfreezing the guaranteed funds for the performance and for unfreezing the custody of securities.Article 36 The effective term of a takeover offer shall not be less than 30 days, but not be more than 60 days, except that competing offers
occur.Within the effective term of a takeover offer, the purchaser shall not withdraw the takeover offer.Article 37 Where a purchaser modifies the conditions for the takeover offer within the effective term of the takeover offer,

ANNOUNCEMENT OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE (SAFE) ON THE PROMULGATION OF THE INTERIM PROVISIONS ON FOREIGN EXCHANGE ADMINISTRATION OF DOMESTIC SECURITIES INVESTMENT BY QUALIFIED FOREIGN INSTITUTIONAL INVESTORS

The State Administration of Foreign Exchange

Announcement of the State Administration of Foreign Exchange (SAFE) on the Promulgation of the Interim Provisions on Foreign Exchange
Administration of Domestic Securities Investment by Qualified Foreign Institutional Investors

[2002] No.2

November 28, 2002

In compliance with the Interim Measures on the Administration of Domestic Securities Investment by Qualified Foreign Institutional
Investors promulgated as Decree No. 12 by the China Securities Regulatory Commission and the People’s Bank of China, the State Administration
of Foreign Exchange has formulated the Interim Provisions on Foreign Exchange Administration of Domestic Securities Investment by
Qualified Foreign Institutional Investors, which is hereby promulgated and shall take effect as from December 1, 2002.

Attachment: Interim Provisions on Foreign Exchange Administration of Domestic Securities Investment by Qualified Foreign Institutional
Investors Attachment:Interim Provisions on Foreign Exchange Administration of Domestic Securities Investment by Qualified Foreign Institutional Investors

Chapter I General Provisions

Article 1

Pursuant to the Regulations on the Exchange System of the People’s Republic of China and the Interim Measures on the Administration
of Domestic Securities Investment by Qualified Foreign Institutional Investors (hereinafter referred to as Interim Measures), the
Provisions is enacted to regulate the investment activities of the qualified foreign institutional investors (hereinafter referred
to as QFIIs) in the PRC securities market and to maintain the stability of China’s foreign exchange market and balance of payments.

Article 2

A QFII shall entrust its custodian to go through all procedures stipulated in the Provisions on its behalf.

Article 3

A QFII and its custodian shall comply with relevant regulations and rules on foreign exchange administration in China.

Article 4

The State Administration of Foreign Exchange (hereinafter referred to as the SAFE) shall implement according to law the foreign exchange
administration of domestic securities investment by QFIIs.

Chapter II Administration of the Custodian

Article 5

In addition to the documents prescribed in Article 14 of the Interim Measures, a domestic commercial bank applying for the qualification
as a QFII custodian shall submit to the SAFE a report on the management of its foreign exchange business for the previous 3 years
and other documents required by the SAFE.

Article 6

A QFII custodian shall fulfill the following responsibilities with regard to foreign exchange administration:

Handle QFII-related foreign exchange settlement and sale, receipt and payment, and RMB settlement business;

Supervise the investment operations of the QFII, and report in a timely manner to the SAFE if it discovers that the QFII’s investment
instructions violate foreign exchange regulations;

Open a special RMB account for the QFII, and record accurately in the QFII’s foreign exchange registration certificate (hereinafter
referred to as Foreign Exchange Registration Certificate) any remittance of investment principal or proceeds by the QFII in or out
of China;

Report to the SAFE on any remittance of investment principal or proceeds by a QFII in or out of China within two business days after
the remittance is made;

Report to the SAFE on the receipts to and payments from the special RMB account of the QFII and the investment return or loss of such
account for the previous month within the first five business days of each month;

Prepare an annual financial report on the domestic securities investments of the QFII for the preceding year and submit it to the
SAFE after it has been audited by a Chinese certified public accountant, within the first three months of each fiscal year;

Preserve such materials as records of the remittance of funds in or out of China, conversion, receipts and payments of Renminbi funds
of the QFII for no less than fifteen years;

Prepare statistical report on the balance of payments according to relevant foreign exchange regulations; and

Other responsibilities stipulated by the SAFE according to the principles of prudential supervision.

Chapter III Administration of the Investment Quota

Article 7

In addition to documents prescribed in the Article 8 of the Interim Measures, the QFII applying for investment quota shall submit
a photocopy of the Securities Investment License issued by the CSRC along with other documents required by the SAFE.

Article 8

The investment quota in Renminbi applied for by a single QFII shall be no less than the equivalent of USD50 million and no more than
the equivalent of USD800 million.

The SAFE may adjust the above ceiling and floor level in accordance with the capital market conditions and balance of payments.

Article 9

A QFII that fails to remit in the full amount of approved principal within three months after obtaining the Foreign Exchange Registration
Certificate and therefore needs to make up the difference between the actually remitted amount and the approved investment quota,
or needs to make another inward remittance of investment principal after part of the principal has been remitted abroad, or needs
to increase its investment quota, shall apply to the SAFE with the following documents:

A written application (including proposed investment quota, investment plan, etc.);

The Foreign Exchange Registration Certificate;

An explanation of the source of funds and a commitment letter of no repatriation of investment during the approval period;

A power of attorney issued by the applicant;

A report on the applicant’s domestic securities investment activities; and

CIRCULAR OF MINISTRY OF CONSTRUCTION CONCERNING THE ISSUE THAT ENTERPRISES WITH FOREIGN INVESTMENT APPLY FOR CITY PLANNING SERVICE QUALIFICATION CERTIFICATE

The Ministry of Construction

Circular of Ministry of Construction Concerning the Issue that Enterprises with Foreign Investment Apply for City Planning Service
Qualification Certificate

JianGui [2003] No.94

May 9, 2003

Construction offices of provinces and autonomous regions and planning bureaus (planning commissions) of municipalities directly under
the Central Government:

In order to implement the Provisions on Administration of Foreign-Invested City Planning Service Enterprises (hereinafter referred
to as Provisions), it is hereby announced as follows concerning the issue that enterprises with foreign investment apply for City
Planning Service Qualification Certificate:

Technical equipment and work site

The enterprises with foreign investment applying for City Planning Service Qualification Certificate are supposed to meet the following
requirement in terms of technical equipment and work site:

(I)

having a certain number of computers, each professional technician should have one computer.

(II)

having digital AO or scanners, AO plotting instruments, color printers with high resolution ratio;

(III)

possessing CAD or GIS software;

(IV)

the construction area of per capita work site is no less than 10 square meters.

II.

Application materials of enterprises with foreign investment

Enterprises with foreign investment should provide original application materials and two copies. Original materials will be returned
to applicants after checked with copies by material receiving organs.

Professional technology proving materials refer to diplomas, technical post post_title certificates or certificated city planner qualification
certificates of employed Chinese main land technicians; diplomas of employed foreign technicians and certifying documents issued
by the competent departments of the governments of the countries or regions foreign technicians live in or industry associations,
academic institutions or notary offices to prove their experiences of taking up city planning and their achievements.

Enterprise technical equipment materials refer to allocation instruction of technical equipment and purchase credence.

The application form of City Planning Service Qualification Certificate for Enterprises with Foreign Investment can be obtained from
construction offices of the provinces or autonomous regions or planning bureaus (planning commissions) of municipalities directly
under the Central Government where they registered in advance.

III.

The procedure of applying for City Planning Service Qualification Certificate

In order to make it easy for foreign enterprises to apply for City Planning Service Qualification Certificate and strengthen the supervision
and administration to city planning activities of local foreign-invested city planning enterprises conducted by construction offices
of the provinces and autonomous regions and planning bureaus (planning commissions) of municipalities directly under the Central
Government, enterprises with foreign investment should submit the application materials stipulated by Article 13 of the Provisions
to construction offices of the provinces and autonomous regions and planning bureaus (planning commissions) of municipalities directly
under the Central Government where they registered; Construction offices of the provinces and autonomous regions and planning bureaus
(planning commissions) of municipalities directly under the Central Government will submit the materials which they have checked
and written comments on to Ministry of Construction within 30 days after receiving the application materials; Ministry of Construction
will make the decision to approve the application or not within 30 days after receiving the checked materials. Those who meet Article
6 and Article 13 of the Provisions will be presented City Planning Service Qualification Certificate for Enterprises with Foreign
Investment; those who do not meet the two articles will not be presented the certificate and will be informed the reasons. Furthermore,
Ministry of Construction will inform the enterprises not be approved to State Administration for Industry and Commerce and the Ministry
of Commerce by letter.

Construction offices of the provinces and autonomous regions and planning bureaus (planning commissions) of municipalities directly
under the Central Government should take the work of accepting the application materials of enterprises with foreign investment for
City Planning Service Qualification Certificate seriously and check the materials correctly according to the requirement of the Provisions
and this Circular.

IV.

Announcement on foreign-invested city planning enterprises

For the enterprises presented City Planning Service Qualification Certificate for Enterprises with Foreign Investment, the Ministry
of Construction will declare their names, addresses, legal representatives and name lists of professional technicians etc in the
website of Information Center of the Ministry of Construction.

The Ministry of Construction
2003-05-09

DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS ON AMENDING THE AUDIT LAW OF THE PEOPLE’S REPUBLIC OF CHINA

Standing Committee of the National People’s Congress

Order of the President of the People’s Republic of China

No. 48

The Decision of the Standing Committee of the National People’s Congress on Amending the Audit Law of the People’s Republic of China,
which was adopted at the 20th meeting of the Standing Committee of the 10th National People’s Congress of the People’s Republic of
China on February 28, 2006, is hereby promulgated and shall come into force as of June 1, 2006.

President of the People’s Republic of China, Hu Jintao

February 28, 2006

Decision of the Standing Committee of the National People’s Congress on Amending the Audit Law of the People’s Republic of China

(Adopted at the 20th meeting of the Standing Committee of the 10th National People’s Congress of the People’s Republic of China on
February 28, 2006)

It is decided at the 20th meeting of the Standing Committee of the 10th National People’s Congress of the People’s Republic of China
to amend the Audit Law of the People’s Republic of China as follows:

Article 1 shall be amended as: “This Law is formulated in accordance with the Constitution for the purpose of strengthening the
audit supervision of the State, maintaining the fiscal and economic order of the State, enhancing the efficiency in using fiscal
capital, promoting the building of a clean government and ensuring the sound development of national economy and society.”

A new paragraph shall be added to Article 3 as Paragraph 2: “An auditing organ shall carry out audit evaluation according to the
laws and regulations on fiscal revenues and expenditures and financial revenues and expenditures as well as other relevant provisions
of the State, and shall make an audit decision within the scope of its statutory authorities.”

Article 4 shall be amended as: “The State Council and the local people’s government at or above the county level shall annually present
to the standing committee of the people’s congress at the corresponding level with an audit work report of the auditing organ on
budget implementation and other fiscal revenues and expenditures. An audit work report shall give emphasis to the audit of budget
implementation. When necessary, the standing committee of the people’s congress may make a resolution on the audit work report.

“The State Council and the local people’s government at or above the county level shall report the conditions on the correction circumstance
of the problems pointed out in the audit work report and the handling results to the standing committee of the people’s congress
at the same level.”

Article 10 shall be amended as: “An auditing organ may, according to the requirements for the work and upon approval of the people’s
government at the same level, establish dispatched offices within its audit jurisdiction.

“The dispatched offices shall carry out the audit work according to law based on the strength of the authorization by the auditing
organ.”

A new paragraph shall be added to Article 15 as Paragraph 4: “For the appointment and dismissal of the person in-charge of the local
auditing organ at any level, it is necessary to seek the opinions of the auditing organ at the next higher level in advance.”

Article 16 shall be amended as: “The auditing organ shall exercise audit supervision over the budget implementation, final settlement
of accounts as well as other fiscal revenues and expenditures of all the other departments (including subordinate organs) at the
corresponding level and the governments at lower levels.”

Article 17 shall be amended as: “The National Audit Office shall, under the leadership of the Premier of the State Council, exercise
audit supervision over the implementation of central budget and other fiscal revenues and expenditures, and submit reports on audit
results to the Premier of the State Council.

“The local auditing organ at any level shall, under the respective leadership of the governor of the province, chairmen of the autonomous
region, mayor, prefect, head of the county and head of the district as well as the leadership of the auditing organ at the next higher
level, exercise audit supervision over the budget implementation and other fiscal revenues and expenditures of the corresponding
level, and submit reports on audit results to the people’s government at the corresponding level and the auditing organ at the next
higher level.”

Article 19 shall be amended as: “The auditing organ shall exercise audit supervision over the financial revenues and expenditures
to the public institutions and organizations of the State and other public institutions and organizations that use fiscal capital.”

Article 21 shall be deleted.

10.

Article 22 shall be changed into Article 21 and amended as: “The audit supervision over the enterprises and financial institutions
in which the State-owned capital play a controlling or leading role shall be prescribed by the State Council.”

11.

Article 23 shall be changed into Article 22 and amended as: “The auditing organ shall exercise audit supervision over the budget
implementation and final settlement of accounts relating to the construction projects that are invested or mainly invested by the
government.”

12.

Article 24 shall be changed into Article 23 and amended as: “An auditing organ shall exercise audit supervision over the financial
revenues and expenditures of the social security funds, funds from public donations and other relevant funds and capital managed
by the government department or by any other entity commissioned by government “

13.

A new article shall be added as Article 25 : “An auditing organ shall, according to the relevant provision of the State, exercise
audit supervision over the main principals of state organs and other entities belonging to the audit supervision object of the auditing
organ according to law for their fulfillment of economic liabilities of fiscal revenues and expenditures, financial revenues and
expenditures and other economic activities for their respective regions, departments or entities during the course of holding posts.”

14.

Article 29 shall be amended as: “The entities subject to audit supervision object of the auditing organ according to law shall establish
and improve their internal auditing systems in accordance with the relevant provisions of the State, and their internal auditing
work shall be subject to the professional guidance and supervision of the auditing organ.”

15.

Article 30 shall be amended as: “If an entity under audit by a social audit institution is an object of audit supervision of the
auditing organ according to law, the auditing organ shall be enpost_titled to check the relevant audit report as issued by the aforesaid
social audit institution in the light of the provisions of the State Council.”

16.

Article 31 shall be amended as: “The auditing organ shall be enpost_titled to require an entity under audit to submit, in accordance with
the provisions of the auditing organ, the budget or plan on financial revenues and expenditures, budget implementation, final settlement
of accounts, financial accounting reports, electronic data on fiscal or financial revenues and expenditures stored and disposed
by computers and necessary computer technical documents, the conditions about the account opening at the financial institution, the
audit report issued by the social audit institution as well as other materials about fiscal or financial revenues and expenditures.
And the entity under audit shall not refuse or delay the submission or give a false report.

“The person in-charge of an entity under audit shall be responsible for the authenticity and integrity of the financial accounting
materials provided by his own entity.”

17.

Article 32 shall be amended as: “The auditing organ shall, during the course of audit, be enpost_titled to examine accounting vouchers,
accounting books, financial accounting reports, the electronic data system of fiscal or financial revenues and expenditures operated
and managed by computers as well as other materials and assets related to fiscal or financial revenues and expenditures. And the
entity under audit shall not refuse to submit them.”

18.

A new paragraph shall be added to Article 33 as Paragraph 2: “The auditing organ shall be enpost_titled to inquiry the account of an entity
under audit at the financial institution upon approval of the person in-charge of the auditing organ of the people’s government at
or above the county level.”

And a new paragraph shall be added as Paragraph 3: “If the auditing organ can prove that an entity under audit deposits public money
in the name of individuals, it shall be enpost_titled to inquire about the deposits of the entity under audit in the name of individuals
at the financial institution upon approval of the person in-charge of the auditing organ of the people’s government at or above the
county level.”

19.

Paragraph 1 of Article 34 shall be amended as: “When an auditing organ carries out an audit, the entity under audit shall not transfer,
conceal, alter or destroy its accounting vouchers, accounting books, financial accounting reports and other materials about fiscal
or financial revenues and expenditures, nor may it transfer or conceal the assets it obtained in violation of the provisions of the
State.”

A new paragraph shall be added as Paragraph 2: “Where an entity under audit has the action to violates the preceding Paragraph, the
auditing organ shall be enpost_titled to deter it, and when necessary and upon approval of the person in-charge of the auditing organ
of the people’s government at or above the county level, the auditing organ may have the right to seal up the relevant materials
and the assets obtained in violation of the provisions of the State. If the auditing organ needs to freeze the relevant deposits
at the financial institution, it shall file an application to the people’s court.”

Paragraph 2 shall be changed into two paragraphs as Paragraphs 3 and 4 and be amended as: “Where an entity under audit is carrying
out any act relating to fiscal or financial revenues and expenditures in violation of the provisions of the State, the auditing
organ shall be enpost_titled to deter it. If the determent fails, the auditing organ shall, upon approval of the person-in-charge of the
auditing organ of the people’s government at or above the county level, notify the fiscal department and the relevant competent authorities
to suspend the allotment of money directly related to the act of fiscal or financial revenues and expenditures in violation of the
provisions of the State; if the aforesaid money has been allotted, the use thereof shall be suspended.

“The measures adopted by auditing organ as prescribed by the preceding two paragraphs shall not affect the lawful business operations
or production and management activities of the entity under audit.”

20.

A new article shall be added as Article 37 : “The auditing organ may, when performing the duty of audit supervision, request the administrative
department of public security, supervision, public finance, taxation, customs, price or industry and commerce to offer assistance.”

21.

Article 37 shall be changed into Article 38 , and Paragraph 1 shall be amended as: “The auditing organ shall form an audit team in
light of the audit matters as determined in the plan on the audit, and shall, within 3 days before the audit implementation, serve
an audit notice to the entity under audit. In the case of any special circumstance, the auditing organ may, upon approval of the
people’s government at the same level, directly carry out the audit with the audit notice.”

A new paragraph shall be added as Paragraph 3: “The auditing organ shall enhance the efficiency of audit work.”

22.

Article 38 shall be changed into Article 39 , and Paragraph 1 shall be amended as: “The auditors shall carry out their audit and
obtain the prove materials through the way of examining accounting vouchers, accounting books and financial accounting reports, consulting
the documents and materials about audit matters, inspecting the cash, physical objects and securities and making investigations
to the relevant entities or individuals.”

23.

Article 39 shall be changed into Article 40 and be amended as: “An audit team shall, after carrying out the audit of matters, submit
an audit report to the auditing organ. However, the audit team shall, prior to the submission of the audit report to the auditing
organ, solicit the opinions of the entity under audit. The entity under audit shall, within ten days upon receipt of the audit report
of the audit team, submit its written opinions to the audit team. The audit team shall submit the aforesaid written opinions together
with the audit report to the auditing organ.”

24.

Article 40 shall be changed into Article 41 and be amended as: “The auditing organ shall deliberate the audit report submitted by
the audit team according to the procedures as set down by the National Audit Office, and present an audit report of its own after
concurrently studying the opinions of the entity under audit about the audit report delivered by the audit team. It shall, within
the scope of its statutory authorities, make an audit decision or put forward the opinions for disposition and punishment to the
competent authorities in case the disposition or punishment should be imposed according to law on an act of fiscal or financial revenues
and expenditures in violation of the provisions of the State.

“The auditing organ shall serve the audit report and audit decision of its own to the entity under audit and the relevant competent
organ or entity. The audit decision shall enter into force as of the date of service.”

25.

A new article shall be added as Article 42 : “If the auditing organ at the higher level considers that an audit decision made by an
auditing organ at the lower level has violated the relevant provisions of the State, it may order the auditing organ at the lower
level to alter or cancel the aforesaid decision, and may directly make a decision on alteration or cancellation when necessary.”

26.

Article 41 shall be changed into Article 43 and be amended as: “If an entity under audit violates any provisions in this Law by
refusing or delaying to provide the materials about audit matters, or providing untrue or incomplete materials, or refusing or impeding
the inspection, the auditing organ may order it to make corrections, and may circulate a notice of criticism and give a warning.
If the entity under audit refuses to make corrections, it shall be subject to liabilities according to law.”

27.

Articles 42 and 43 shall be incorporated into one article as Article 44 and be amended as: “Where an entity under audit violates
the provisions in this Law by transferring, concealing, altering or destroying accounting vouchers, accounting accounts, financial
accounting reports or other materials related to fiscal or financial revenues and expenditures, or transferring or concealing the
assets obtained by violation of the provisions of the State, and if the auditing organ considers that the principal and other persons
held to be directly responsible should be given sanctions according to law, the auditing organ shall put forward the suggestions
for punishment, and the entity under audit or the organ at the higher level and the supervisory organ shall make a timely decision
according to law, and notify the result to the auditing organ in written form; and if a crime is constituted, the entity under audit
shall be subject to criminal liabilities according to law.”

28.

Article 44 shall be changed into Article 45 and be amended as: “Where any other department (including subordinate entities) at the
corresponding level or the government at the lower level commits the acts against the budget or other acts of fiscal revenues and
expenditures against the provisions of the State, the auditing organ, the people’s government or the competent authorities shall,
within the scope of its statutory authorities and in accordance with the laws and administrative regulations, take the following
measures in light of the specific situation:

(1)

Ordering it to pay the money that should be turned over within the time limit;

(2)

Ordering it to return the occupied state-owned assets within the time limit;

(3)

Ordering it to refund the unlawful proceeds within the time limit;

(4)

Ordering to dispose the matter in accordance with the relevant provisions on the unified national accounting system; and

(5)

Other disposal measures.

29.

Article 45 shall be changed into Article 46 and be amended as: “Where an entity under audit commits the acts of financial revenues
and expenditures in violation of the provisions of the State, the auditing organ, the people’s government or the competent authorities
shall, within the scope of its statutory authorities and in accordance with the laws and administrative regulations, take measures
as prescribed in the preceding Article in light of the specific situation, and may impose punishments on the entity under audit according
to law.”

30.

A new article shall be added as Article 47 : “The auditing organ shall make an audit decision within the scope of its statutory authorities,
and the entity under audit shall implement the aforesaid decision.

“Where the auditing organ orders an entity under audit to turn over a sum of money that should be turned over according to law, but
the entity under audit refuses to do so, the auditing organ shall circulate a notice to the competent authorities, and the competent
authorities shall, according to the laws and administrative regulations, withhold the aforesaid money or take other disposal measures,
and notify the results to the auditing organ in written form.”

31.

A new article shall be added as Article 48 : “Where an entity under audit holds objection to an audit decision on financial revenues
and expenditures made by the auditing organ, it may file an application for administrative reconsideration or lodge an administrative
lawsuit according to law.

“Where an entity under audit holds objection to an audit decision on fiscal revenues and expenditures made by the auditing organ,
it may request the people’s government at the same level with the auditing organ for ruling, and the ruling made by the people’s
government at the same level shall be the final decision.”

32.

Article 46 shall be changed into Article 49 and be amended as: “Where the fiscal or financial revenues and expenditures of an entity
under audit break the provisions of the State and the auditing organ considers it necessary to punish the principal and other persons
held to be directly responsible, it shall put forward the suggestions for punishment, and the entity under audit, the organ at the
higher level or the supervisory organ shall timely make a decision according to law and notify the results to the auditing organ
in written form.

33.

Article 48 shall be changed into Article 51 and be amended as: “Anyone who retaliates or makes a false charge against the auditor
shall be given sanctions according to law; and shall be subject to criminal liabilities according to law if any crime is constituted
.”

34.

Article 49 shall be changed into Article 52 and be amended as: “Where an auditor abuses his authorities, resorts to frauds for personal
ends, neglects his duties or divulges national secrets or business secrets he has learnt about, he shall be punished according to
law; and if a crime is constituted, he shall be subject to criminal liabilities according to law.”

This Decision shall come into force as of June 1, 2006.

The Audit Law of the People’s Republic of China shall be re-promulgated after the amendments have been made and the sequential numbers
of the articles are correspondingly adjusted according to this Decision.

Standing Committee of the National People’s Congress
2006-02-28

CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE (SAFE) ON CONDUCTING ANNUAL INSPECTION ON FOREIGN EXCHANGE ACCOUNTS UNDER CURRENT ACCOUNT FOR THE YEAR OF 2001

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange (SAFE) on Conducting Annual Inspection on Foreign Exchange Accounts under
Current Account for the Year of 2001

HuiFa [2002] No.9

January 25, 2002

SAFE branches in all provinces, autonomous regions, and municipalities directly under the Central Government, exchange administration
offices, and SAFE branches in the cities of Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo:

With a view to strengthening the supervision of foreign exchange accounts under current account, and normalizing annual inspection
on foreign exchange accounts, a notice concerning annual inspection on foreign exchange accounts under current account for the year
of 2001 is given as follows in accordance with the Provisions on the Administration of Domestic Foreign Exchange Accounts and the
Interim Provisions on Annual Inspection on Foreign Exchange Accounts under Current Account of Domestic Entities (hereinafter referred
to as Provisions on Annual Inspection):

Schedule of the inspection

All SAFE branches shall conduct the annual inspection in their respective jurisdiction from March to May of 2002, and submit the inspection
report to the Current Account Management Department of the SAFE at the end of June.

Scope of the inspection

The inspection shall cover the foreign exchange settlement accounts and foreign exchange special accounts of Chinese-funded entities,
and the foreign exchange accounts of foreign establishments in China.

Requirements on the inspection

3.1

All SAFE branches shall carry out the inspection seriously and ensure its quality in accordance with the requirements of the SAFE
on the annual inspection.

3.2

In order to encourage law-abiding entities and establishments, properly simplify the inspection procedure on the law-abiding, and
raise the efficiency of work, Chinese-funded entities and foreign establishments that were found to have no problem related to infraction
of regulations in the previous annual inspection may be exempted from the 2001 annual inspection. Chinese-funded entities that were
evaluated as “honorable enterprises for collection of export proceeds” by SAFE offices in accordance with the Proposed Methods for
the Examination on Collection of Export Proceeds shall enjoy priority in going through relevant formalities after submitting their
inspection reports to SAFE offices.

3.3

This annual inspection shall, on the basis of an overall inspection on the foreign exchange accounts under current account of Chinese-funded
entities and foreign establishments in China, highlight:

3.3.1

cases of Chinese-funded entities exceeding the balance ceilings of their foreign exchange accounts;

3.3.2

cases of Chinese-funded entities opening accounts without approval of the SAFE offices;

3.3.3

cases of foreign exchange funds in foreign exchange special accounts of Chinese-funded entities being switched to time deposit account
without approval;

3.3.4

sales of net foreign exchange income in foreign exchange special accounts of Chinese-funded entities.

Requirement on the inspection report

4.1

The report shall be authentic and accurate.

4.2

The report shall cover: process of the annual inspection (including arrangement of the inspection, checkup and conclusion); inspection
overview; main problems with account-opening entities and banks and analysis of their causes; classification of problems related
to infraction of regulations that exist in accounts opened in violation of rules and case analysis thereto related; measures taken
by the reporting SAFE office aiming at problems found and policy suggestions on improving the administration of foreign exchange
accounts.

The State Administration of Foreign Exchange
2002-01-25

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CONSTITUTION ACT, 1982 – page 22

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CONSTITUTION ACT, 1982 – page 18

CONSTITUTION ACT, 1982 – page 17

CONSTITUTION ACT, 1982 – page 16

CONSTITUTION ACT, 1982 – page 12

CONSTITUTION ACT, 1982 – page 11

CONSTITUTION ACT, 1982 – page 10

CONSTITUTION ACT, 1982 – page 9

CONSTITUTION ACT, 1982 – page 8

CONSTITUTION ACT, 1982 – page 7