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RULES FOR INFORMATION DISCLOSURE OF ASSET-BACKED SECURITIES

the People’s Bank of China

Announcement of the People’s Bank of China

No. 14

For the purpose of regulating the information disclosure conduct of asset-backed securities, maintaining the lawful rights and interests
of investors, ensuring the smooth operation of pilot asset-backed securities, and promoting the smooth development of inter-bank
bond market, the People’s Bank of China has formulated the Rules for Information Disclosure of Asset-backed Securities, which are
hereby promulgated and shall come into force as of the date of promulgation.

People’s Bank of China

June 13, 2005

Rules for Information Disclosure of Asset-backed Securities

Article 1

The present Rules are formulated according to the Administrative Measures for the Credit Assets Securitization (Announcement No. 7
[2005] of the People’s Bank of China) and other relevant provisions for the purpose of regulating the information disclosure conduct
of asset-backed securities, maintaining the lawful rights and interests of investors, and promoting the development of the bond market.
.

Article 2

The information disclosure by an entrusted institution of asset-backed securities (hereinafter referred to as the entrusted institution)
shall be conducted through the China Money Network, China Bond Information Network and other ways as prescribed by the People’s Bank
of China.

Article 3

The entrusted institution shall ensure that the information disclosure is authentic, accurate and complete, and may not have any
false record, misleading statement or significant omission.

The institution that initiate the asset-backed securities and the institution that accepts the entrust by the entrusted institution
to provide the services for securitization shall timely report the relevant information to the entrusted institution according
to agreement on the entrust contract and service contract, and ensure that the information provided is authentic, accurate and complete.

Article 4

The entrusted institution, the institution that provides the services for securitization, the National Inter-bank Funding Center (hereinafter
referred to as the Funding Center), the China Government Securities Depository Trust & Clearing Co., Ltd. (hereinafter referred to
as the CGSDTC) and any other insider may not divulge the information to be disclosed prior to the information disclosure.

Article 5

The entrusted institution shall disclose the instructions for the issuance, rating report, measures for collection and a name list
of the members of the selling group to the investors on the fifth working day prior to the issuance of asset-backed securities.

As to those that issue asset-backed securities by installments, the information disclosure of the first installment shall be conducted
according to the relevant prescriptions of Paragraph 1 of this Article; and from the second installment and onwards, the entrusted
institution shall only disclose the supplementary instructions for the issuance on the fifth working day prior to the issuance of
asset-backed securities of each installment.

Article 6

The entrusted institution shall explain the pay off sequence and investment risk in the instructions for asset-backed securities,
and give the investors the following points of attention at an eye-catching place: “The investors that purchase the asset-backed
securities shall cautiously read this document and the relevant information disclosure documents and shall carry out an independent
investment judgment. The examination and approval of the issuance of securities of this installment by the competent department does
not mean any appraisal is made on the investment value of securities of this installment or any judgment is made on the investment
risk of securities of this installment.”

Article 7

The entrusted institution shall announce the information about the issuance of asset-backed securities on the day or the next working
day when the issuance of asset-backed securities of each installment is completed.

Article 8

During the existing period of asset-backed securities, the entrusted institution shall announce a report of the entrusted institution
(the formulation requirements are attached at the end) three working days prior to the encashment date of the principal and interest
of asset-backed securities of each installment, which shall reflect the situation of the asset pool corresponding to the current
installment of asset-backed securities and the information on the encashment of the principal and interest corresponding to the asset-backed
securities of each class; the entrusted institution shall announce the report of` the entrusted institution of the previous year
as audited by registered accountants prior to April 30 each year.

Article 9

The entrusted institution shall make stipulations with the credit rating institution on the relevant arrangement of follow-up rating
of asset-backed securities, and shall disclose the follow-up rating report of the previous year to the investors prior to July 31
each year during the existing period of asset-backed securities.

Article 10

When a general assembly of asset-backed securities holders is to be held, the convener shall announce the time, place, forms of the
meeting, issues to be deliberated, discussing procedures, and the voting way of the general assembly of holders of asset-backed securities
at leas 30 days in advance, and disclose the resolution of the general assembly within ten days after the conclusion of the general
assembly.

Article 11

In case a temporary significant event occurs that may have a substantial effect on the investment value of asset-backed securities,
the entrusted institution shall submit the information disclosure materials to the Funding Center and the CGSDTC within three working
days upon occurrence of the said event, and report it to the People’s Bank of China.

The significant i event as mentioned in this Article include but not limited to:

(1)

Events that will affect the interests of investors have happened or are going to happen, for example, the entrusted institution cannot
pay the principal and interest of asset-backed securities on schedule;

(2)

Illegal, irregular or defaulting events that will affect the investment value of asset-backed securities have occurred to the entrusted
institution and the securitization service institution;

(3)

The subject of the third-party guarantor for the asset-backed securities is changed;

(4)

The credit rating of the asset-backed securities is changed;

(5)

Other events that need to be announced according to the trust contract;

(6)

Other events as prescribed by the supervision departments like the People’s Bank of China and the China Banking Regulatory Commission
that need to be announced; and

(7)

Other events as prescribed by laws and administrative regulations that need to be announced.

Article 12

The Funding Center and the CGSDTC shall announce the relevant documents not later than the next working day upon receipt of the information
disclosure documents.

Article 13

Except suitable for these Rules, the information disclosure of asset-backed securities shall also be suitable for the Measures
for Administration of Bond Trading in the National Inter-bank Bond Market (Order No. 2 [2000] of the People’s Bank of China), the
Measures for Administration of the Issuance of Financial Bonds in the National Inter-bank Bond Market (Order No.1 [2005] of the People’s
Bank of China) , the Rules for Examination and Approval of Bond Trading and Circulation in the National Inter-bank Bond Market (Announcement
No. 19 [2004] of the People’s Bank of China) and other relevant provisions.

Article 14

The power to interpret these Rules shall remain with the People’s Bank of China.

Article 15

These Rules shall come into force as of the date of promulgation.

Attachment:Requirements for the Formulation of Reports of the Entrusted Institution

I.

Name and address of the entrusted institution and securitization service institution.

II.

The information on the encashment of principal and interest of securities of each class, which includes the amount of principal at
the time of pooling the securities of each class, the amount of principal at the beginning and end of current installment, par interest
rate of securities, information on the payment of principal and interest of current installment, the information on the late payment
of interests of current installment, the information on the loss of the principal of current installment and the rating conditions,
etc..

III.

The explanations for the statistical characters of the asset pool of current installment, which include the balance of loans, amount
of loans, weighted average interest rate of loans and weighted averaged remaining period, etc..

IV.

The explanations for the separate listing of detailed items of the principal of the asset pool of current installment (including the
normal amount of returns of the principal, the amount of the principal settled in advance, the amount of the principal partly paid
in advance, the amount of the principal as disposed and reclaimed and the amount of the principal of repurchased loans) and the explanations
for the separate listing of detailed items of interests (including the taxes and expenses).

V.

The information on the advanced payment, delay, default, treatment, treatment and reclaiming as well as losses of the asset pool.

VI.

The explanations for the internal and external credit rating as raised.

VII.

The information on the credit assets of the asset pool that is subject to the legal procedure, and the progress of legal procedure.

VIII.

The information on the total amount of investment incomes or losses from the approved investment according to the entrust contract.

IX.

Any other explanations.



 
the People’s Bank of China
2005-06-13

 






PROVISIONS FOR THE ADMINISTRATION OF FORWARD TRANSACTIONS OF BONDS IN THE NATIONAL INTER-BANK BOND MARKET

the People’s Bank of China

Announcement of the People’s Bank of China

No. 9

With a view to promoting the development of bond market in China, regulating the forward transactions of bonds, preventing market
risks and protecting the legitimate rights and interests of the market participants, the Provisions for the Administration of Forward
Transactions of Bonds in the National Inter-bank Bond Market, which has been formulated by the People’s Bank of China, are promulgated
here.

The People’s Bank of China

May 11, 2005

Provisions for the Administration of Forward Transactions of Bonds in the National Inter-bank Bond Market

Article 1

With a view to regulating the forward transactions of bonds, protecting the legitimate rights and interests of the market participants
and promoting the development of bond market, the People’s Bank of China has formulated the present Provisions according to the Law
of the People’s Republic of China on the People’s Bank of China and other relevant laws and administrative regulations.

Article 2

The “forward transaction of bonds” as mentioned in the present Provisions refers to the act that both parties of a transaction agree,
on a certain day in the future, to buy and sell the subject matter bonds at the promised price and amount by them.

Article 3

The subject matter bonds for forward transactions shall be the central government bonds, central bank bonds, financial bonds and other
types of bonds issued upon the approval of the People’s Bank of China, which have been traded as existing bonds in the National Inter-bank
Bond Market.

Article 4

The forward transactions shall follow the principles of openness, impartiality and fairness.

Article 5

The market participants of forward transactions shall be institution investors in the National Inter-bank Bond Market.

Article 6

When undertaking forward transactions, a market participant shall establish a sound internal management system and a risk prevention
mechanism, and shall take effective measures to monitor and control the risks of forward transactions.

The market participant shall, before carrying out the business of forward transactions, submit its internal management measures for
forward transactions to the relevant supervisory department, and simultaneously send a copy separately to the National Inter-bank
Funding Center (hereinafter referred to as the NIFC) and the China Government Securities Depository Trust & Clearing Co. Ltd. (hereinafter
referred to as the CGSDTC Co. Ltd).

Article 7

When undertaking forward transactions, the market participants shall enter into primary agreements on the forward transactions.

Article 8

The market participants shall undertake forward transactions through the transaction system of the NIFC, and shall conclude a written
contract on every transaction. Such a written contract shall be the certificate of transaction generated by the transaction system
of NIFC. Both parties to a transaction may conclude a supplementary contract, when they believe it necessary.

The primary forward transaction agreement, the certificate of transaction generated by the transaction system of NIFC and the supplementary
contract shall constitute a complete forward transaction contract.

Article 9

The lawfully concluded forward transaction contract shall have legal binding force on both parties to the transaction. Neither of
the parties may change or cancel the contract.

Article 10

Both parties to a forward transaction may, through negotiation on the basis of their respective credit standing, establish a mechanism
to ensure the implementation of the contract.

Article 11

The time limit for the forward transaction from the trade day to the settlement day (including the trade day, excluding the settlement
day) shall be determined by both parties of the transaction, which shall not exceed 365 days.

Article 12

The forward transactions shall be carried out at a clean price and settled at a full price.

Article 13

Both parties to a forward transaction shall, on the trading day or its next working day, send the settlement instructions and supporting
instructions to the CGSDTC Co. Ltd

Article 14

When a forward transaction is mature, the settlement of fund and bonds shall be made actually.

Article 15

The total balance of the selling and purchase of a single bond during a forward transaction by any market participant (a single fund,
if a fund management company uses the property under the fund to conduct forward transactions) shall not exceed 20 % of the circulating
amount of the bond, and the total balance of sale in a forward transaction shall not exceed 200 % of the total balance of its own
available bonds.

Article 16

The total balance of purchase of a single bond in a forward transaction by a market participant shall not exceed 100 % of the net
value of its assets under the fund. The total balance of the net purchase of a branch within China of a foreign-funded financial
institution in the forward transactions shall not exceed 100% of its RMB operating funds. And the total balance of the net purchase
of any other institution in forward transactions shall not exceed 100% of its actually contributed capital or net assets.

Article 17

No market participant may manipulate the prices of forward transactions of subject matter bonds by any means, or manipulate the prices
of the existing bonds of subject matter bonds through forward transactions.

Article 18

The NIFC and the CGSDTC Co. Ltd shall, in light of the requirements and authorization of the People’s Bank of China, timely uncover
the relevant information on forward transactions and settlement to the market, and may not disclose any non-public information or
mislead the market participants.

Article 19

The NIFC shall be responsible for the routine supervision and control on forward transactions. The CGSDTC Co. Ltd shall be responsible
for the routine supervision and control on settlement of forward transactions. If the NIFC or the CGSDTC Co. Ltd finds out any abnormal
transaction or settlement, it shall initiate the corresponding emergency mechanism and report the relevant information to the People’s
Bank of China.

Article 20

In accordance with the present Provisions, the NIFC shall formulate forward transaction rules, and the CGSDTC Co. Ltd shall formulate
settlement rules.

Article 21

All branches of the People’s Bank of China shall reinforce its communication with the NIFC or the CGSDTC Co. Ltd, and shall conduct
routine supervision and inspection over the forward transactions of the market participants within their respective jurisdiction.

Article 22

When conducting forward transactions, the market participants shall, besides the present Provisions, abide by other relevant provisions
on the National Inter-bank Bond Market.

Article 23

Where a contract on a forward transaction is breached, and there is any dispute over the fact of breach of contract or over the liabilities
for the breach of contract, both parties to the transaction may, through negotiation, apply for arbitration or file a lawsuit with
the people’s court. And they shall send the final result to the NIFC or the CGSDTC Co. Ltd no later than 12 o’clock of the working
day next to the day when they receive the final result of arbitration and lawsuit. The NIFC or the CGSDTC Co. Ltd shall announce
the final result on the same day of its reception.

Article 24

If a market participant or the NIFC or the CGSDTC Co. Ltd violates any of the present Provisions, it shall be punished by the People’s
Bank of China according to Article 46 of the Law of the People’s Republic of China on the People’s Bank of China.

Article 25

The People’s Bank of China may, pursuant to the development of forward transactions, make timely revision to Articles 11, 14, 15 and
16 of the present Provisions.

Article 26

The power to interpret the present Provisions shall remain with the People’s Bank of China.

Article 27

The present Provisions shall come into force as of June 15, 2005.



 
the People’s Bank of China
2005-05-11

 






THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION NOTICE ON THE POLICIES RELATING TO THE INDIVIDUAL INCOME TAX ON DIVIDENDS AND BONUSES

Ministry of Finance, State Administration of Taxation

The Ministry of Finance and the State Administration of Taxation Notice on the Policies Relating to the Individual Income Tax on Dividends
and Bonuses

Cai Shui [2005] No. 102

The public finance departments (bureaus), the state taxation bureaus and local taxation bureaus of all provinces, autonomous regions,
municipalities directly under the Central Government and cities specifically designated in the state plan, and the Public Finance
Bureau of Xinjiang Production and Construction Corps:

With a view of promoting the development of the capital market, upon the approval of the State Council, the notice on the policy relating
to the individual income taxes on dividends and bonuses is given as follows:

I.

The individual income taxes on the incomes of individual investors from the dividends and bonuses of listed companies shall be levied
in accordance with the current tax laws after temporarily deducting 50% of individual taxable incomes.

II.

The aforesaid provision shall be implemented as of the date of release of this notice.

Ministry of Finance

State Administration of Taxation

June 13, 2005



 
Ministry of Finance, State Administration of Taxation
2005-06-13

 






THE STATE ADMINISTRATION OF TAXATION CIRCULAR ON THE COMING INTO EFFECT AND IMPLEMENTATION OF THE AGREEMENT ON AVOIDING DOUBLE TAXATION BETWEEN THE CHINESE AND THE SRI LANKAN GOVERNMENTS

State Administration of Taxation

The State Administration of Taxation Circular on the Coming into Effect and Implementation of the Agreement on Avoiding Double Taxation
between the Chinese and the Sri Lankan Governments

Guo Shui Fa [2005] No. 78

All the bureaus of State taxation and local taxation in all provinces, autonomous regions, municipalities directly under the Central
Government, and cities specifically designated in the state plan, Yang Zhou Taxation Institute, and all departments under the SAT:

Chinese government and the government of the Democratic Socialist Republic of Sri Lanka signed the agreement on avoiding double taxation
and preventing tax evasion on incomes in Beijing on August 11, 2003. The agreement has been confirmed by both governments by exchanged
notes on April 22, 2005 and March 24, 2005, and has now completed the necessary legal procedures for coming into force. In accordance
with the stipulations of Article 28 of the agreement, the agreement will come into force on May 22, 2005, and will be implemented
on January 1, 2006. The State Administration of Taxation has distributed the agreement text as “Letter No. 950 [2003] of the State
Administration of Taxation” on August 14, 2003. The agreement shall be implemented accordingly.

The State Administration of Taxation

May 11, 2005



 
State Administration of Taxation
2005-05-11

 






PROVISIONS FOR THE ADMINISTRATION ON THE EMPLOYMENT OF TAIWAN, HONG KONG AND MACAO RESIDENTS IN THE MAINLAND

Order of the Ministry of Labor and Social Security of People’s Republic of China

No.26

The Provisions for the Administration on the Employment of Taiwan, Hong Kong and Macao Residents in the Mainland, which has been adopted
at the tenth executive meeting of the Ministry of Labor and Social Security on June 2, 2005, are hereby promulgated and shall go
into effect as of October 1, 2005.
Zheng Silin, the Minister of Ministry of Labor and Social Security

June 14, 2005

Provisions for the Administration on the Employment of Taiwan, Hong Kong and Macao Residents in the Mainland

Article 1

With a view to maintaining the lawful rights and interests related to the employment of Chinese citizens resided in Taiwan, Hong
Kong and Macao in the Mainland (hereinafter referred to as the persons from Taiwan, Hong Kong and Macao) and strengthening the administration
on the employment of the persons from Taiwan, Hong Kong and Macao by the employing entities in the Mainland, the present Provisions
are formulated according to the Labor Law of the People’s Republic of China and other relevant laws and administrative regulations.

Article 2

The present Provisions shall be applicable to the persons from Taiwan, Hong Kong and Macao and working in the Mainland, and the enterprises,
public institutions, individual industrial and commercial households and other legally registered organizations in the Mainland (hereinafter
referred to as the employing entities) that hire persons from Taiwan, Hong Kong and Macao or accept the assigned persons from Taiwan,
Hong Kong and Macao.

If there are other state provisions for the administration on the employment of experts from the regions of Taiwan, Hong Kong and
Macao, such provisions shall prevail.

Article 3

The “person from Taiwan, Hong Kong and Macao and working in the Mainland” as mentioned in the present Provisions refers to:

(1)

the persons that have established labor relationship with the employing entities;

(2)

the persons from Hong Kong and Macao that engage in self-employed business in the Mainland; and

(3)

the persons who have established the labor relationship with foreign or Taiwan, Hong Kong and Macao employing entities and assigned
by them to work in a same employing entity in the Mainland accumulatively for more than three months within one year (from January
1 to December 31 of the Gregorian calendar year).

Article 4

The employment of the persons from Taiwan, Hong Kong and Macao in the Mainland shall be subject to the employment permit system.
Where an employing entity plans to hire the persons from Taiwan, Hong Kong and Macao or accept the assigned persons from Taiwan,
Hong Kong and Macao, it shall apply for the Employment Permits for them (hereinafter referred to as the employment permits); persons
from Taiwan, Hong Kong or Macao, who engage in the individual industrial and commercial households in the Mainland, shall apply for
employment permits by themselves. Upon authorization and with employment permits, the employment of the persons from Taiwan, Hong
Kong and Macao in the Mainland is protected by law.

The archival filing system shall be adopted when an employing entity hires the persons from Taiwan, Hong Kong and Macao or accepts
the assigned persons from Taiwan, Hong Kong and Macao.

The Ministry of Labor and Social Security shall print the Employment Permits uniformly.

Article 5

When hiring persons from Taiwan, Hong Kong and Macao or accepting the assigned persons from Taiwan, Hong Kong and Macao, the employing
entity shall observe the state laws and regulations.

Article 6

Where an employing entity plans to hire persons from Taiwan, Hong Kong and Macao or accept the assigned persons from Taiwan, Hong
Kong and Macao, the said persons shall meet the following conditions:

(1)

being aged 18 up to 60 (the age of an investor that directly participates in the business operation or a technical person badly needed
in the Mainland may be over 60);

(2)

being in good health;

(3)

having effective travel permits (including the valid certificates for Taiwan, Hong Kong and Macao residents to come and go to the
Mainland as issued by the competent organs in the Mainland);

(4)

having corresponding qualification certificates as prescribed by the State in the case of that the engagement in professional (technical)
occupations is prescribed by the State; and

(5)

meeting other qualifications as prescribed by laws and regulations.

Article 7

When applying for employment permits for the employment of the persons from Taiwan, Hong Kong and Macao in the Mainland, an employing
entity shall submit the Application Form for the Employment of Taiwan, Hong Kong and Macao Residents in the Mainland and the following
effective documents to the local administrative department of labor and social security at the prefecture (municipal) level:

(1)

the business license or the registration certificate of the employing entity;

(2)

the effective travel permits of the persons to be hired or the assigned persons to be accepted;

(3)

the health certificates of the persons to be hired or the assigned persons to be accepted;

(4)

the letters of intent for employment or employment certificates;

(5)

the corresponding professional qualification certificates if the persons to be hired will engage in the professional (technical)
occupations as prescribed by the State; and

(6)

other documents as prescribed by laws and regulations.

Article 8

The administrative departments of labor and social security shall make a decision on the approval of employment within ten working
days as of the receipt of the Application Form for the Employment of Taiwan, Hong Kong and Macao Residents in the Mainland and the
relevant documents as submitted by an employing entity; and if the conditions as prescribed by Article 6 of the present Provisions
are met, the administrative departments shall approve the employment and issue an employment permits; if the conditions as prescribed
by Article 6 of the present Provisions are not met, the administrative departments shall disapprove the employment and notice the
employing entity of the disapproval in written form and explain the reasons.

Article 9

The employing entity shall, upon the strength of employment permits, go through the formalities for registration and archival filing
for the employment of persons from Taiwan, Hong Kong and Macao at the administrative department of labor and social security that
has issued the said permits.

Article 10

Where a person from Hong Kong or Macao engages in the individual industrial and commercial household in the Mainland, he shall, upon
the strength of household business license, his health certificate and effective travel permit, apply with the local administrative
department of labor and social security at the prefecture (municipal) level for an employment permit. The administrative department
of labor and social security shall handle it within five working days upon the receipt of the documents as submitted by the person
from Hong Kong or Macao.

Article 11

The employing entity shall sign labor contracts with persons from Taiwan, Hong Kong or Macao as hired thereby, and pay the social
insurance premiums in light of the Interim Provisions on the Collection and Payment of Social Insurance Premiums.

Article 12

When an employing entity terminates or dissolves the labor contracts with persons from Taiwan, Hong Kong or Macao, or when the employment
terms of persons from Taiwan, Hong Kong or Macao expire, the employing entity shall write off the employment permit at the organ
that originally issued the permit within ten working days upon the termination or dissolution of the labor contracts or upon the
expiration of the employment terms of the persons from Taiwan, Hong Kong or Macao.

When persons from Hong Kong or Macao engaging in the individual industrial and commercial household in the Mainland suspend or cease
his business, they shall write off the employment permits at the organs that have originally issued the permits within 30 working
days upon the suspension or ceasing.

Article 13

In case any employment permit is lost or destroyed, the employing entity shall apply to the administrative department of labor and
social security that has issued the said permit for re-issuing a new employment permit for the person from Taiwan, Hong Kong or Macao.

Article 14

The employing entity for which a person from Taiwan, Hong Kong or Macao works shall be identical with that indicated in the employment
permit. Where the employing entity is altered, the altered employing entity shall apply to the local administrative department of
labor and social security at the prefecture (municipal) level for another employment permits for the persons from Taiwan, Hong Kong
or Macao.

Article 15

If a labor dispute between an employing entity and a person from Taiwan, Hong Kong or Macao hired by it occurs, it shall be settled
according to the relevant state provisions on the settlement of labor disputes.

Article 16

In case an employing entity fails to apply for employment permits or go through the formalities for archival filing when hiring any
person from Taiwan, Hong Kong or Macao or accepting any assigned person from Taiwan, Hong Kong or Macao, it shall be charged to make
corrections by the administrative department of labor and social security, and a fine of 1000 Yuan may be imposed upon it.

Article 17

In case an employing entity fails to write off the employment permit when terminating or dissolving a labor contract with any person
from Taiwan, Hong Kong or Macao or when the employment term of any person from Taiwan, Hong Kong or Macao expires, it shall be charged
to make corrections by the administrative department of labor and social security, and a fine of 1000 Yuan may be imposed upon it.

Article 18

In case an employing entity forges, alters, fraudulently uses or transfers the employment permits, it shall be charged to make corrections
by the administrative department of labor and social security, and be fined 1000 Yuan upon it. And the said employing entity may
not hire any person from Taiwan, Hong Kong or Macao within one year.

Article 19

The present Provisions shall go into effect as of October 1, 2005. The Provisions on the Administration of the Employment of Taiwan,
Hong Kong and Macao Residents in the Mainland as promulgated by the former Ministry of Labor on February 21, 1994 shall be abolished
simultaneously.



 
Ministry of Labor and Social Security
2005-06-14

 






CIRCULAR OF MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION ON ABOLISHING TAXATION POLICIES RELATING TO STEELS PROCESSED AND EXPORTED FOR SPECIAL PURPOSE

Ministry of Finance, The State Administration of Taxation

Circular of Ministry of Finance and the State Administration of Taxation on Abolishing Taxation Policies relating to Steels Processed
and Exported for Special Purpose

Cai Shui [2005] No.105

To department (bureaus) of finance in all the provinces, autonomous regions, municipalities directly under the Central Government
and cities specifically designated in the state plan, State Administration of Taxation, financial bureau of Xinjiang Production and
Construction Corporations,

Upon the approval of the State Council, the existing taxation policies related to steels processed and exported for special purpose
shall be abolished, the related matters are hereby notified as follows:

I.

The documents listed below shall be abolished from the date of July 1, 2005,

1.

Circular on Tax-refund on Domestic Steel Sold in Tax-reserving Zones Replacing Imported Steel for Listed Enterprises (Cai Shui Zi
[1998] No.53);

2.

Complementary Circular on Modifying the Steel Producing Substitution Measures of Ministry of Finance, The state Economy and Trade
Commission, The State Administration of Taxation and The General Administration of Customs(Cai Shui Zi [1999] No.34);

3.

Circular on the Steel Producing Substitution Measures of The state Economy and Trade Commission, Ministry of Finance, The State Administration
of Taxation and The General Administration of Customs(MFOTEC Trade[1999] No.144);

4.

Circular on Distributing ‘The Detailed Implementing Rules on Modifying the Steel Producing Substitution Measures’ of The State Administration
of Taxation, The state Economy and Trade Commission, Ministry of Finance, The General Administration of Customs and State Administration
of Foreign Exchange (Guo Shui Fa [1999] No.68);

5.

Circular on Issues Relating to Adjusting the Steel Producing Substitution Measures of The state Economy and Trade Commission, Ministry
of Finance, The State Administration of Taxation and The General Administration of Customs(MFOTEC Trade[2002] No.381);

6.

Circular on Tax-refund on Steels Processed and Exported for Special Purpose for Listed Enterprises of Ministry of Finance and The
State Administration of Taxation (Cai Shui [2004] No.15);

7.

Circular on Issues Relating to Ensuring the List of Tax-refund on Steels Processed and Exported for Special Purpose Enterprises of
Ministry of Finance and Ministry of Business(Cai Shui [2004] No.102).

II.

Value-added tax shall be levied and invoice on value-added tax shall be issued on domestic steel sold by listed enterprises to the
processing and exporting enterprises producing exporting products for special purpose in accordance with law, and no offset shall
be available from the date on.

III.

The known plan for the duty exemption on processing and exporting steels for special purpose in 2005 shall be reissued after being
adjusted by The State Administration of Taxation. The steels processed and exported for special purpose listed in the adjusted plan
shall be sold within the date of June 30, 2005, and the supervision rules on steel producing substitution shall be issued before
the date of June 30, 2005 by The Ministry of Supervision.

IV.

The offset taxation shall be collected and late fee shall be captured in accordance from the listed enterprises by local Taxation
Offices should these enterprises, after the sale and the issuing of the invoice of the steels processed and exported for special
purpose under the supervision rules on steel producing substitution, have not received the ensuring purchasing list on steel producing
substitution from local Taxation Offices 3 months after having all the offset procedures finished.

V.

As for the steels processed and exported for special purpose duty-freely sold to processing enterprises by listed enterprises ahead
of June 30, 2005, local Taxation Offices shall continue their work on the administration of tax on the use of duty-free steels processed
and exported for special purpose in accordance with laws such as the Circular on Distributing ‘the Detailed Implementing Rules on
Modifying the Steel Producing Substitution Measures’ of The State Administration of Taxation, The state Economy and Trade Commission,
Ministry of Finance, The General Administration of Customs and State Administration of Foreign Exchange (Guo Shui Fa [1999] No.68).

This circular is specifically issued.

Ministry of Finance

The State Administration of Taxation

June 15, 2005



 
Ministry of Finance, The State Administration of Taxation
2005-06-15

 






CIRCULAR OF THE MINISTRY OF FINANCE AND THE CHINA BANKING REGULATORY COMMISSION ON REGULATING THE WORK OF ASSET APPRAISAL IN THE NON-PERFORMING ASSETS DISPOSAL IN ASSET MANAGEMENT COMPANIES

the Ministry of Finance, the China Banking Regulatory Commission

Circular of the Ministry of Finance and the China Banking Regulatory Commission on Regulating the work of Asset Appraisal in the Non-performing
Assets Disposal in Asset Management Companies

Cai Qi [2005] No. 89

Jun. 15,2005

The departments (bureaus) of finance, the banking regulatory offices of all provinces, autonomous regions and municipalities directly
under the Central Government, all financial asset management companies:

With a view to regulating the acts of the asset management companies, asset appraisal institutions and certified asset appraisers
in the non-performing assets disposal, further clarifying the functions and roles of the asset management companies, asset appraisal
institutions and certified appraisers, and promoting the orderly disposal of non-performing assets, you are hereby notified of the
relevant issues of asset appraisal in the non-performing assets disposal:

I.

The Requirements for Asset Management Companies in Non-performing Assets Disposal

An asset management company shall, in the non-performing assets disposal, strengthen the institutional improvement and internal control,
intensify the management of the asset appraisal and the utilization of the appraisal reports in the non-performing assets disposal,
and give full play to the positive roles of the appraisal institutions in the non-performing assets disposal.

1.

The asset management company shall regard the non-performing assets disposal as an important link, and shall, in light of the concrete
circumstances of various non-performing assets, entrust an asset appraisal institution to assess the to-be-disposed non-performing
assets in strict accordance with the relevant laws and regulations. It shall strictly comply with the appraisal-prior-to-disposal
procedure, shall not operate conversely;

2.

The asset management company shall further improve the system for selecting and hiring the best asset appraisal institution. It shall,
in strict compliance with the industrial qualifications, choose an asset appraisal institution with an asset appraisal qualification
certificate to conduct an appraisal in the non-performing assets disposal. It shall introduce the competition mechanism into the
course of selecting and hiring an asset appraisal institution, shall give priority to the asset appraisal institutions with good
reputation, qualification and professional ethics and shall not merely consider the lowest appraisal fee as the unique basis for
selecting the asset appraisal institution;

3.

The asset management company shall maintain the independence of the appraisal institution, shall actively help it to complete the
appraisal, shall not interfere with its normal practice, nor insinuates it and the certified asset appraisers to issue any untrue
or false appraisal report;

4.

The asset management company shall use the conclusion of value appraisal or value analysis issued by the appraisal institution reasonably
and properly. It shall not use it maliciously.

II.

The Requirements for Appraisal Institutions and Certified Asset Appraisers in the Non-performing Assets Disposal

During the course of disposing non-performing assets, the asset appraisal institution and certified appraisers shall practice in strict
accordance with the law, shall ensure the independence, objectivity and impartiality of their practices in pursuance of the relevant
appraisal standards and norms, and shall safeguard the public interests, as well as the legitimate rights and interests of all parties
concerned to the asset appraisal.

1.

The asset appraisal institutions and certified asset appraisers shall practice in strict accordance with the relevant laws, regulations
and asset appraisal rules, scrupulously abide by the professional ethics and shall be diligent and dutiful. They shall follow the
necessary asset appraisal procedures in strict compliance with the relevant provisions. Their appraisal measures, appraisal reports
and value analysis reports shall conform to the relevant laws, regulations and asset appraisal rules. They shall not cancel any necessary
asset appraisal procedure, nor cater for any improper request of the entrusting party or interested parties, nor issue any untrue
or false appraisal report;

2.

During the course of appraising non-performing assets, the asset appraisal institutions and certified asset appraisers shall strictly
abide by the Guiding Opinions on the Financial Appraisal of Non-performing Assets (Zhong Ping Xie[2005] No. 37) issued by the China
Appraisal Society, and shall regulate the acts of appraising non-performing assets;

3.

An appraisal institution shall choose and assign competent professional certified asset appraisers to perform the businesses of appraising
non-performing assets, intensify the quality control of performing, strictly implement its internal level-by-level verification procedures,
implement the verification responsibility, ensure the quality of appraisal of non-performing assets and protect the legitimate rights
and interests of the parties to the asset appraisal.

III.

The Requirements for the Supervision over Appraisal Businesses of the Non-Performing Asset

The Ministry of Finance and China Appraisal Society shall strengthen the supervision over asset appraisal businesses in the non-performing
assets disposal. The public finance departments and industrial associations of all provinces, autonomous regions and municipalities
directly under the Central Government shall further intensify the supervision over asset appraisal businesses in the non-performing
assets disposal, strengthen the quality inspection over the asset appraisals in the non-performing assets disposal, promote the quality
of asset appraisal practices in non-performing assets disposal and offer better asset appraisal services in non-performing assets
disposal.

Where an asset appraisal institution and its certified asset appraisers issue any untrue or false report by colluding with the entrusting
party or the relevant interested party, once found, the appraisal qualification certificate of the asset appraisal institution shall
be revoked by the financial department and the certificates of the certified asset appraisers shall be revoked by the China Appraisal
Society.

The China Banking Regulatory Commission shall, in pursuance of the law, strengthen the supervision over the appraisal entrustment
in the non-performing assets disposal by the asset management companies and over the utilization of the asset appraisals so as to
give full play to the positive roles of asset appraisal in the non-performing assets disposal.

An asset management company shall strictly abide by the relevant provisions on the non-performing assets disposal and shall do well
the work of non-performing assets disposal. Where anyone insinuates or colludes with the appraisal institution and certified asset
appraisers to issue untrue or false appraisal report or uses any appraisal report maliciously, if it is found, the liabilities of
the relevant institution and person liable shall be investigated for.



 
the Ministry of Finance, the China Banking Regulatory Commission
2005-06-15

 






CIRCULAR ON RELEVANT ISSUES CONCERNING THE FURTHER IMPROVEMENT OF PROCEDURE FOR THE APPLICATION AND EXAMINATION OF RAISING SECURITIES INVESTMENT FUNDS

China Securities Regulatory Commission

Circular on Relevant Issues Concerning the Further Improvement of Procedure for the Application and Examination of Raising Securities
Investment Funds

Zheng Jian Ji Jin Zi [2005] No. 101

To various fund management companies and fund custodian banks

In order to further improve the procedure for the application and examination of raising securities investment funds (hereinafter
referred to as the “funds”) , improve the review efficiency and quality, promote the sound and standardized development of fund market,
and subject to the Securities Investment Fund Law, Measures for the Administration of Operation of Securities Investment Funds and
the Interim Measures for the Administration of Professional Consultative Committee (Zheng Jian Ji Jin Zi [2003] No.13) and the Provisions
of the China Securities Regulatory Commission on the Procedures for the Implementation of Administrative License (For Trial Implementation)
(hereinafter referred to as the Procedure Provisions), relevant issues concerning the further improvement of procedure for the application
and review of raising securities investment funds are hereby notified as follows:

1.

The China Securities Regulatory Commission (the CSRC) shall, after accepting the application for raising funds, decide on whether
to organize a fund expert review meeting to review the said application pursuant to the pertinent specific situations in connection
with the collection of funds.

For an application submitted to the review meeting attended by fund experts for the collection of funds, the reviewing experts shall
focus on the review of such aspects of funds as their investment management and risk control and independently give their own review
comments which shall be offered to the CSRC for reference.

2.

If a fund management company, which conducts standardized acts, has strong investment research capacities and wins good market evaluation,
shall not be required to submit its application for raising funds to the fund expert review meeting for review, except to the extent
of the following circumstances:

(1)

If the said company hasn’t been in operation for a full year from its establishment;

(2)

If the said company has greatly innovated the design for its fund products;

(3)

If the said design requires further improvement and reference to the review opinions given by the fund expert review meeting; and

(4)

any other circumstances as deemed necessary by the CSRC to be submitted to the fund expert review meeting for review based on the
principle of careful supervision.

3.

In case any greater innovation take place in the design of fund products, the CSRC shall give priority to arrangement of review conducted
by the fund expert review meeting and examination of application materials. If the innovation in fund products are significant, and
after the fund collection has been approved by the CSRC, other fund management companies shall, within a time limit stipulated by
the CSRC, be forbidden to reproduce or imitate such significant innovation.

4.

If an application for fund collection is found rough, ambiguous and incomplete respectively in connection with its design scheme,
operating thoughts for investment or risk control measures after examination, the fund management company filing such application
shall be ordered to make important amendments subject to the procedures laid down in Article 24 and 25 of the Procedure Provisions.
As to an application of the kind mentioned above, which has been submitted to the fund expert review meeting for review, a decision
shall also be made on whether or not such application shall be re-applied to the fund expert review meeting for review again based
on the specific situations after the said amendment.

5.

If there remains any issue in the application for fund collection which has been amended and submitted to the fund expert review meeting
for review, the CSRC shall not grant an approval to such application and adopt administrative supervision measures in compliance
with specific situations.

6.

Any lawyer or law firm producing legal opinions to the application for fund collection and offering legal services shall comply with
pertinent provisions, earnestly fulfill his or its responsibilities, check and verify pertinent materials and facts and ensure the
authenticity, accurateness and completeness of documents issued thereof.

7.

This Circular shall go into effect as of the date of promulgation.

China Securities Regulatory Commission

June 16, 2005



 
China Securities Regulatory Commission
2005-06-16

 






THE CIRCULAR OF THE MINISTRY OF COMMERCE AND THE MINISTRY OF PUBLIC SECURITY ON RELEVANT ISSUES CONCERNING THE IMPLEMENTATION OF THE MEASURES FOR ADMINISTRATION OF PAWN

The Ministry of Commerce, the Ministry of Public Security

The Circular of the Ministry of Commerce and the Ministry of Public Security on Relevant Issues concerning the Implementation of the
Measures for Administration of Pawn

With a view to better implementing the Measures for Administration of Pawn (Order [2005] No.8 of the Ministry of Finance and the Ministry
of Public Security, hereinafter referred to as the Measures) and further strengthening and improving the supervision and administration
of pawn industry, relevant issues concerning the implementation of the Measures are hereby notified as follows:

1.

to study hard and implement the Measures

The competent departments of commerce and public security authorities of all levels shall fully comprehend the importance of implementation
of the Measures in standardizing the pawn activities, strengthening the supervision and administration on pawn industry and promoting
its continuous health development, etc., and shall, based on the overall interest of assuring the economic development and maintaining
the social stability, hold precisely the position of pawn industry in the development of social economy; they shall build up the
concept of overall outlook, and increase the awareness of responsibility and the consciousness in implementing the Measures. The
competent departments of commerce and public security authorities of all levels shall reinforce the training of people in charge
of the supervision on local pawn industry, study hard the Measures, comprehend completely and accurately the basic contents and requirements
of all provisions, strengthen and improve continuously the supervision on pawn industry, report timely to the Ministry of Commerce
and the Ministry of Pubic Security of relevant information and problems in the process of implementing the Measures and attach importance
to the self-discipline effect of such intermediary organizations as pawn associations and increase the awareness of paw companies
to operate legally.

2.

to enhance cooperation and do a good job in the administration of pawn industry

The competent departments and public security authorities of all levels shall abide by the provisions of the Measures, attend to their
respective functions and take practical measures to do a good job in the administration of pawn industry. Firstly, the market admittance
shall be guarded in accordance with the laws and regulations such as the Administrative License Law and the Measures, etc. Local
competent departments of commerce shall carry out earnestly the preliminary examination of new pawn companies or branches; the public
security authority shall earnestly carry out the verification and issuance of the License for Special Industry. The examination and
approval shall be standardized in accordance with laws and regulations to insure an open, just and fair process of the examination
and approval and to eliminate blind examination and approval and the examination and approval that violates the laws and regulations.
Secondly, daily business supervision and public security administration shall be carried out earnestly. The competent departments
of commerce shall strictly abide by the Measures to standardize the business activities of pawn industry, establish and implement
the systems of periodic examination, aperiodic selective examination, trade statistics and report of material events carry out dynamic
supervision and whole process supervision. The acts violating provisions such as operating beyond the business scope and charging
interest and fees above the prescribed standard shall be investigated and dealt with timely. The public security authorities shall
carry out centralized administration of the public security administration on pawn industry. The security sectors of the public security
authorities shall be in charge of the daily public security administration. The public security authorities shall strengthen the
preventing measures in the security administration on pawn industry, and strictly require the pawn company that conducts the pledge
or pawn business of movable property or property rights to fill in as required by the Measures the Registration Table of Pawned Goods
(in the attachment) and to submit it to the public security authorities for future reference; periodic and aperiodic security examination
of pawn companies shall be carried out to prevent, find out and fight against, in accordance with laws, the violating acts or crimes
in the pawn industry to construct actively an integrative mechanism in prevention and control of security administration of pawn
industry and to maintain the security order of pawn industry in accordance with laws and regulations. Where the pawner pawns or redeems
a motor vehicle, the vehicle administrative department shall go through the pledge registration procedure of the motor vehicle such
as the drive stop or recover procedure, and take back or return the number plate and registration license. The vehicle transfer shall
be registered after dead pawn based on the transaction invoice. Thirdly, the administrative job shall be well done. On the one hand,
the service awareness shall be enhanced, and the procedure simplification and the changing procedure shall be done timely. On the
other hand, the administration on the outside transfer of stocks of the pawn company shall be strengthened to prevent the access
of ineligible companies or individuals to the pawn industry, especially to prevent the pawn company from taking the chance to raise
funds, attracting deposit in a disguised form or selling the business certificate at a profit.

The competent departments of commerce and public security authorities at all levels shall cooperate with each other to form a combined
force to increase the effect of supervision. One is to increase the awareness of coordination, publicize timely the information of
market access, daily business supervision, security administration, change and annual examination and do a good job in the link and
cooperation of related departments. Two is that the competent departments of commerce shall inform timely the security authorities
and handle the transfer procedure if clues of violation or crimes are found in the process of supervision and administration. Three
is to fight against the business acts that violate the laws and regulations and that the security authorities shall, in accordance
with laws and regulations, put on record and quickly deal with the case of interference with the performance of official duties,
especially the case of violent resistance against laws.

3.

the specific issues concerning the implementation of the Measures

(1)

Issues on the preliminary examination of the applying materials of a new pawn company. Before the applying materials for establishing
of a pawn company or of a branch of an existing pawn company is submitted to the Ministry of Commerce, the local competent departments
of commerce shall transfer the applying materials concerning security administration to the security authority of the people’s government
at the same level which shall, within 5 workdays after the receipt of the materials transferred by the competent department of commerce,
form a preliminary examination and approval opinion and inform the competent department of commerce at the same level (the detail
operation procedure is determined by the competent departments of commerce and the public security department or bureaus of all provinces,
autonomous regions and the cities directly under central planning). The security sections of the public security department or bureaus
of all provinces, autonomous regions and the cities directly under central planning shall submit in written form the preliminary
examination opinion to the Security Administration Bureau of the Ministry of Public Security for archival purpose. When preliminarily
examining the applying materials, local competent departments of commerce and public security authorities shall, with respect to
the security protection measures, attach importance to the examination of the ichnography and the construction structure chart of
the business sites and storehouses, the distributing chart of the installation and setting of security prevention measures, related
written materials and the written promise made by the applicant.

(2)

Issues concerning the verification and issuance of the License for Special Industry. The verification and issuance of the License
for Special Industry of pawn industry is in the charge of the public security authorities of the municipalities that are divided
into districts; the verification and issuance of the License for Special Industry of pawn industry in autonomous regions shall be
in the charge of the public security authorities of the autonomous regions. The public security authority shall verify and issue
the License for Special Industry after the security prevention measures are installed and meet the requirements of checkup and acceptance.
Where the applicant does not handle the license for special industry within prescribed time with allowable reasons, the local public
security authority may make deferral thereof; with respect to deferral or delayed handling, the public security authority shall require
the applicant to give written explanations.

(3)

The scope of senior managers. The “other senior managers” as prescribed in paragraph 4 of article 16 of the Measures shall refer
to the directors, supervisors, managers, and the staff in charge of finance. Where a person is separated from the registered permanent
residence and resides more than 6 months in the temporary residence, the public security authorities in the temporary residing place
shall issue the non-crime record in the temporary residing period besides the attestation by the public security authorities in the
registered permanent residence.

(4)

The issues concerning the security standard to be met by existing pawn companies. The competent department of commerce and public
security authority shall require the pawn company whose existing security system has not been up to the standard to make reforms
in accordance with the provisions of the Measures before August 1, 2005 so as to establish and perfect relevant security systems.
Where the buildings, business facilities and security prevention facilities of the pawn company do not meet the requirements of article
10 of the Measures, they shall be disposed of to meet the requirements before April 1, 2006. The public security authority verifying
and issuing the License for Special Industry, together with the competent department of commerce, shall organize the pawn companies
within respective jurisdiction to carry out the examination and reform.

The information of implementation shall be reported timely to the Department of Market System Construction Department of the Ministry
of Commerce by the competent departments of all provinces, autonomous regions, cities directly under central government and Xinjiang
Production and Construction Corps; the public security departments, bureaus of all provinces, autonomous regions, cities directly
under central government and Xinjiang Production and Construction Corps shall make report thereof timely to the Security Administration
Bureau of the Ministry of Public Security.

The linkmen and telephones: Sunyong, Ligang of the Market Construction Department of the Ministry of Commerce, 010-85226396 or 5226395

The Security Administration Bureau of the Ministry of Public Security: Xuyong, 010-65203702

Attachment: the Registration Form for Pawned Goods(omitted)

The Ministry of Commerce

The Ministry of Public Security

May 17, 2005



 
The Ministry of Commerce, the Ministry of Public Security
2005-05-17

 






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

The China Securities Regulatory Commission

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

Zheng Jian Fa[2005] No. 51

Listed Companies:

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

The China Securities Regulatory Commission

June 16, 2005

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

Chapter 1 General Provisions

Article 1

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

Article 2

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

Article 3

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

Article 4

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

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

Article 5

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

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

Article 6

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

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

Article 7

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

Article 8

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

(1)

Its shares have been listed on market for 1 year;

(2)

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

(3)

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

(4)

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

Article 9

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

(1)

Centralized price competition presided over by securities exchange;

(2)

Offer;

(3)

Other means that CSRC allows to be adopted.

Article 10

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

Article 11

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

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

Article 12

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

Chapter 3 Share Buy-back Procedures and Information Disclosure

Article 13

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

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

(1)

Purpose of share buy-back;

(2)

Means by which the shares are bought back;

(3)

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

(4)

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

(5)

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

(6)

Term valid for share buy-back;

(7)

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

(8)

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

Article 14

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

Article 15

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

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

(1)

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

(2)

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

(3)

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

(4)

Other items that shall be clarified.

Article 16

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

(1)

Means by which the shares are bought back;

(2)

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

(3)

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

(4)

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

(5)

Term valid for share buy-back;

(6)

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

(7)

Other relevant items.

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

Article 17

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

Article 18

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

Article 19

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

Article 20

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

(1)

Application for buying back shares;

(2)

Resolution of the board of directors;

(3)

Resolution of the shareholder meeting;

(4)

Buy-back report of the listed company;

(5)

The report of independent financial advisor;

(6)

Legal advice;

(7)

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

(8)

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

(9)

Other documents required by CSRC.

Article 21

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

(1)

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

(2)

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

(3)

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

(4)

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

(5)

Other items that shall be clarified.

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

Article 22

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

(1)

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

(2)

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

(3)

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

(4)

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

(5)

Other items that shall be clarified.

Article 23

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

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

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

Article 24

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

Article 25

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

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

Article 26

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

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

Article 27

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

Article 28

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

Article 29

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

Chapter 5 Special Provisions on Share Buyback by Offer

Article 30

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

Article 31

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

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

Article 32

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

Article 33

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

Chapter 6 Regulatory Measures and Legal Liabilities

Article 34

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

Article 35

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

Article 36

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

Article 37

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

Chapter 7 Supplementary Provisions

Article 38

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



 
The China Securities Regulatory Commission
2005-06-16

 






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CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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