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CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON ENTRY INTO FORCE AND ENFORCEMENT OF THE AGREEMENT BETWEEN THE GOVERNMENT OF PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF KINGDOM OF SAUDI ARABIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ASSETS

Circular of the State Administration of Taxation on Entry into Force and Enforcement of the Agreement between the Government of People’s
Republic of China and the Government of Kingdom of Saudi Arabia for the Avoidance of Double Taxation and Prevention of Fiscal Evasion
with respect to Taxes on Income and Assets

Guo Shui Fa [2007] No.68

The state taxation bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central
Government and the cities specifically designated in the state plan,

The Government of People’s Republic of China and the Government of Kingdom of Saudi Arabia have officially signed the Agreement for
the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Assets (hereinafter referred
to as the Agreement) on January 23, 2006. The foreign affairs departments of both governments have exchanged notes with each other
on March 30, 2006 and August 9, 2006, respectively, confirming that the necessary legal procedures for entry into force have been
accomplished. Subject to the provision of Article 28 of the Agreement, the Agreement shall enter into force as of September 1, 2006
and shall be implemented as of January 1,2007. The State Administration of Taxation has printed and distributed the text of the aforesaid
Agreement to you in the Document “Guo Shui Han [2006] No. 138”. Please comply with and enforce it accordingly.

State Administration of Taxation

June 14, 2007



 
State Administration of Taxation
2007-06-14

 






TRIAL MEASURES FOR THE ADMINISTRATION OF SECURITIES INVESTMENT OUTSIDE THE TERRITORY OF CHINA BY QUALIFIED DOMESTIC INSTITUTIONAL INVESTORS

Decree No. 46 of China Securities Regulatory Commission

No. 46

The Trial Measures for the Administration of Securities Investment Outside the Territory of China by Qualified Domestic Institutional
Investors have been deliberated and adopted at the 27th chairmen’s executive meeting of China Securities Regulatory Commission on
April 30, 2007. They are hereby promulgated and shall enter into force as of July 5, 2007.

Chairman of China Securities Regulatory Commission Shang Fulin

June 18, 2007

Trial Measures for the Administration of Securities investment outside the territory of China by Qualified Domestic Institutional
Investors
Chapter I General Rules

Article 1

In order to regulate the securities investment outside the territory of China by qualified institutional investors within the territory
of China and protect the legitimate rights and interests of investor, the present Measures are formulated in accordance with the
Law on Securities Investment Funds, Securities Law and other related laws and administrative regulations.

Article 2

Qualified domestic institutional investors (hereinafter referred to as the QDII) referred to in the present Measures means fund management
companies, securities companies and other securities institutions within the territory of China that satisfy the requirements as
prescribed in the present Measures, raise funds within the territory of the People’s Republic of China upon approval of China Securities
Regulatory Commission (hereinafter referred to as the CSRC), and implement securities investment management outside the territory
of China in the form of portfolio by way of using part or all of the funds it has raised.

Article 3

Where a QDII engages in the business of securities investment outside the territory of China, it shall entrust a commercial bank
within the territory of China to take charge of asset custody, and may entrust a foreign securities service institution as an agent
for buying and selling securities.

Article 4

The CSRC and the State Administration of Foreign Exchange (hereinafter referred to as the SAFE) shall implement surveillance on the
securities investment outside the territory of China by QDIIs.

Chapter II Qualification Requirements for QDIIs, and Examination and Approval Procedures

Article 5

When applying for the QDII qualification, applicants shall satisfy the requirements as follows:

1.

Having a stable and good status of finance and credit, and its assets scale and operating life, etc. satisfy the requirements as prescribed
by the CSRC;

2.

Having related qualified staff that has the experiences in investment management outside the territory of China;

3.

Having a sound governance structure and a perfect internal control system, as well as normalized business performance;

4.

Having not been subject to any major punishment by the surveillant organ for the last three years, and having nothing important being
investigated by the judicial organ or the surveillant organ; and

5.

Other requirements as prescribed by the CSRC in accordance with the principle of prudent surveillance.

Article 6

The requirement referred to in Article 5 Subparagraph (1) means that:

1.

For a fund management company: its net asset shall be no less than RMB 0.2 billion yuan, it has engaged in the business of managing
securities investment funds (hereinafter referred to as the fund) for more than two years, and its asset management scale at the
end of the latest quarter shall be no less than RMB 20 billion yuan or the foreign exchange assets in an equivalent value;

2.

For a securities company: all of its risk control indicators shall be consistent with the prescribed standards, its net capital shall
not be less than RMB 0.8 billion yuan; the proportion of its net capital to its net assets shall be no less than 70 percent, it has
engaged in the business of asset pool management plans (hereinafter referred to as the pool plan) for at least one year, and its
asset management scale at the end of the latest quarter shall be no less than RMB 2 billion yuan of assets or the foreign exchange
assets in an equivalent value.

Article 7

The requirement referred to in Article 5 (2) means that: an applicant shall have one or more medium-level manager(s) that have the
investment management experiences in the securities market outside the territory of China for at least five years and related qualification,
and shall have three or more staff members that have the investment management experiences in the securities market outside the territory
of China for at least three years.

Article 8

When applying for the QDII qualification, an applicant shall submit to the CSRC the documents (one original and one duplicate thereof)
as follows:

1.

an application form;

2.

a certification document as prescribed in Article 5 of the present Measures; and

3.

other documents as required by the CSRC.

Article 9

The CSRC shall examine such application documents as of the receipt of a complete set of qualification application documents, and
make a decision on approval or disapproval. In the case of approval, the CSRC shall issue a licensing document for securities investment
business outside the territory of China; and in the case of disapproval, the CSRC shall inform the decision to the applicant in written
form.

Article 10

After an applicant has obtained the QDII qualification, it may submit the documents for a product raising application to the CSRC.

Article 11

After receiving a complete set of the documents for a product raising application, the CSRC shall examine the application materials,
make a decision on approval or disapproval, and inform the applicant of the decision in the written form.

Article 12

A QDII shall apply to the SAFE for the qualification for foreign exchange business in accordance with related provisions.

Chapter III Investment Consultant Outside the Territory of China

Article 13

Investment consultant outside the territory of China (hereinafter referred to as “investment consultants”) referred to in the present
Measures are those financial institutions outside the territory of China that comply with the requirements as prescribed in the present
Measures, and provide suggestions for buying and selling securities or provide the management service of investment portfolio, etc.
concerning the securities investment outside the territory of China to QDIIs in accordance with the contract, and obtain proceeds
therefrom.

Article 14

A QDII may entrust an investment consultant that meets the following requirements for the securities investment outside the territory
of China:

1.

It is established outside the territory of China, and engages in the investment management business upon approval of the surveillant
organ of its country or region;

2.

The surveillant organ of its country or region has signed a memorandum of understanding on bilateral surveillant cooperation with
the CSRC, and keeps an effective surveillant cooperation with each other as well;

3.

It has engaged in the investment management business for at least five years, and the securities assets under its management for the
latest fiscal year shall be no less than 10 billion USD or the equivalent value in a foreign currency; and

4.

It has a sound governance structure, a perfect internal control system, as well as normalized business performance; and it has not
been subject to any major punishment by the surveillant organ of its country or region and has no major matter that is being put
on files of or investigated by the judicial organ or the surveillant organ for the last five years.

Where a branch that established outside the territory of China by a securities company within the territory of China acts as an investment
consultant, it shall not be restricted by Subparagraph 3 of the preceding paragraph.

Article 15

A QDII shall assume the fiduciary responsibility, and perform the obligation of fidelity surveys during the selection or authorization
of an investment consultant.

Article 16

An investment consultant shall rigidly observe the laws and regulations of the state, the fund contract or the asset pool management
contract, and always put the interests of the fund or pool plan holders at the first place, bring forward suggestions subject to
reasonable evidences, seek for the best transactions of the fund or pool plan, treat all clients in a fair and objective manner,
always carry out the investment decisions in light of the investment purposes, strategies, policies, guidelines and restrictions
of the fund or pool plan, fully reveal all the important facts involving the conflict of interests, and respect the confidentiality
of clients’ information.

Article 17

Where a QDII entrusts an investment consultant to make investment decisions, it shall specify in the agreement that the investment
consultant shall bear the liabilities accordingly for any property loss as caused because of its omission, negligence and failure
to perform duties, etc.

Chapter IV Asset Custody

Article 18

When a QDII engages in the securities investment business outside the territory of China, there shall be a bank with a qualification
for securities investment fund custody (hereinafter referred to as the custodian) to take charge of the asset custody.

Article 19

A custodian may entrust an asset custodian outside the territory of China that satisfies the following requirements to be responsible
for the asset custody business outside the territory of China:

1.

It shall be established in a country or region outside the territory of China, and is subject to the surveillance of the local government,
financial or securities surveillant organ;

2.

It has at least one billion USD of paid-in capital or the equivalent value in a foreign currency in the latest fiscal year, or its
scale of custody assets shall be no less than 100 billion USD or the equivalent value in a foreign currency;

3.

It has sufficient full-time staff members that are familiar with the custody business outside the territory of China;

4.

It shall be with the conditions for safe keeping the assets;

5.

It shall be able to make settlement and delivery safely and high efficiently; and

6.

It has not been subject to any major punishment by the surveillant organ and has nothing important being investigated by the judicial
organ or the surveillant organ for the last three years.

Article 20

A custodian shall perform the duties for the trustee as follows in accordance with the related laws and regulations:

1.

Protecting the holders’ interests, performing surveillance over the daily investment as well as the outward and inward remittance
of capital for a fund or pool plan in accordance with related provisions, and in the case of any illegal or irregular investment
directive, outward or inward remittance of capital, it shall report to the CSRC and the SAFE in a timely manner;

2.

Safely protecting the property of a fund or pool plan, punctually notifying the information on the company’s behaviors to the QDII,
and ensuring that proper incomes could be obtained for the fund or pool plan in a timely manner;

3.

Ensuring that the fund or pool plan is managed in accordance with related laws, regulations, as well as the investment targets and
restrictions as stipulated in the fund contract or the asset pool management contract;

4.

Implementing the directives of the QDII or the investment consultant, and making settlement and delivery in time in accordance with
related laws, regulations as well as the fund contract or the asset pool management contract;

5.

Ensuring that the net value of the fund or pool plan units is calculated in light of the methods as prescribed in related laws, regulations,
as well as the fund contract or the asset pool management contract;

6.

Ensuring that the fund or pool plan is applied for, subscribed or redeemed, etc. in accordance with related laws, regulations, as
well as the fund contract or the asset pool management contract;

7.

Ensuring that the proceeds distribution scheme for a fund or pool plan is determined and implemented in accordance with related laws,
regulations, as well as the fund contract or the asset pool management contract;

8.

Registering the assets in the name of the custodian or the designated agent in accordance with related laws, regulations, as well
as the fund contract or the asset pool management contract;

9.

Reporting the conditions relating to the investment outside the territory of China by the QDII to the CSRC and the SAFE within 7 workdays
after conclusion of each month, and declaring the balance of payments in accordance with related provisions; and

10.

Other responsibilities as prescribed by the CSRC or the SAFE in light of the principle of prudent surveillance.

Article 21

With respect to the assets outside the territory of China of a fund or pool plan, a custodian may entrust a custodian outside the
territory of China to perform the duty for the trustee on its behalf. Where the custodian outside the territory of China leads to
any loss to the assets of a fund or pool plan because of its fault or negligence, etc. during the process of performing duties, the
custodian shall bear the liabilities accordingly.

Article 22

A custodian shall perform the following custody responsibilities in accordance with related laws and regulations:

1.

Safely keeping the assets of a fund and pool plan, and opening a capital account and a securities account;

2.

Handling the settlement, sales, collection and payment of foreign exchange as well as the Renminbi settlement business for the QDII;

3.

Keeping the related materials concerning outward remittance, inward remittance, conversion of capital, the collection and payment
of foreign exchange, capital flows, authorization and transaction records of the QDII for no less than 20 years; and

4.

Other responsibilities as prescribed by the CSRC or the SAFE according to the principle of prudent surveillance.

Article 23

A custodian or a custodian outside the territory of China shall severely separate its own assets from the assets under the management
of the QDII.

Chapter V Capital Raising, Investment Operation and Information Disclosure

Article 24

A fund management company that has obtained the QDII qualification may raise the capital by publicly selling fund units in accordance
with related laws and regulations, and invest fund assets in the securities market outside the territory of China. Where a fund management
company applies for raising a fund, it shall submit the application materials in accordance with related laws and regulations.

Article 25

A securities company that has obtained the QDII qualification may raise the capital by establishing a pool plan, etc., and invest
the capital it raised in the securities market outside the territory of China. In the case of the establishment of a pool plan, a
securities company shall submit the application materials, raise the capital and make the investment in accordance with related provisions.

Article 26

Related benchmarks for the comparison of investment performance shall be selected for a fund for which a raising application is filed
as required.

Article 27

A fund or pool plan shall be used to invest in the financial products or tools as prescribed by the CSRC.

Article 28

A fund or pool plan shall follow the provisions on the proportion of investment.

Article 29

Where a QDII or investment consultant selects or entrusts a securities service institution outside the territory of China for buying
and selling securities, it shall severely perform the fiduciary responsibility, and manage the procedures of investment transactions,
the information disclosure and the records keeping in accordance with related provisions.

Article 30

Where a QDII, an investment consultant carries out the securities trading and the research service arrangement with a securities
service institution outside the territory of China, it shall observe the principles as follows:

1.

The trading commissions shall be the property of the holders of a fund or pool plan; and

2.

The QDII and the investment consultant has the responsibility of ensuring the trading quality on behalf of holders, and such responsibilities
shall include, but not limited to:

(a)

seeking for the best implementation of trading;

(b)

seeking the minimized trading costs; and

(c)

using the trading commissions of holders for the benefits thereof.

Article 31

Where a QDII carries out the securities investment outside the territory of China, it shall follow the related laws and regulations
as prescribed by the local surveillant organ and the local stock exchange.

Article 32

Such people with the obligation to make information disclosure as the QDII, and the custodian shall reveal the information in strict
accordance with related laws and regulations.

Chapter VI Quota and Capital Management

Article 33

A QDII shall set reasonable upper limits of the quota and the scale in the raising plan in light of the market conditions and the
characteristics of the product, report them to the SAFE for archival purpose, and shall handle related procedures at the SAFE in
accordance with related provisions. The administration on quota or scale within the extension of a fund or pool plan shall be performed
in accordance with related provisions.

Article 34

A QDII shall open a custody account at the custodian for the custody of all the assets of a fund or pool plan.

Article 35

A custodian shall open a settlement account and a securities custody account for a fund or pool plan, which shall be used for the
capital settlement business and the securities custody business with the securities depository and clearing institution, etc.

Article 36

As for the incomes and expenses of a custody account, settlement account or securities custody account, it shall be consistent with
related provisions, and the capital in such accounts shall not be lent to anyone else or be used for security purposes.

Article 37

A QDII shall report to the SAFE the use of its quota as well as the outward and inward remittance of capital in a regular manner.

Chapter VII Surveillance and Administration

Article 38

The CSRC and the SAFE may request the QDII and the custodian to submit the related materials relating to the overseas investment
activities of QDIIs; and may perform spot inspections if necessary.

Article 39

In case of any of the following circumstances occurs to a QDII, it shall give a report to the CSRC for archival purpose and make
an announcement within 5 workdays as of the occurrence of such a circumstance:

1.

alteration of the custodian or custodian outside the territory of China;

2.

alteration of the investment consultant;

3.

involving in a lawsuit or any other major event outside the territory of China; or

4.

any other circumstance as prescribed by the CSRC.

If there is any alteration in the custodian or custodian outside the territory of China, a QDII shall also make a report to the SAFE
for archival purpose.

Article 40

In the case of any of the following circumstances occurs to a QDII, it shall apply for the qualification of securities investment
business outside the territory of China again within 60 workdays as of the occurrence of such a circumstance, and apply to the SAFE
for the foreign exchange business qualification again and handle the procedure for archival purpose of the investment quota:

1.

alteration of its name;

2.

takeover by any other institution; or

3.

any other circumstance as prescribed by the CSRC or the SAFE.

Article 41

Where a QDII makes the securities investment by using the property of a fund or pool plan, if any major illegal or irregular act
is committed, the CSRC may adopt the measure of restricting its trading, and the SAFE may adopt the measure of restricting its outward
remittance and inward remittance of capital, etc in accordance with related laws.

Article 42

In the case of any serious illegal or irregular act committed by a custodian, the CSRC may render a decision of restricting its custody
business.

Article 43

In the case of any violation of the present Measures by a QDII or custodian, it may be imposed on administrative sanction accordingly
by the CSRC or the SAFE.

Chapter VIII Supplementary Rules

Article 44

The investment in financial products or instruments of the Hong Kong Special Administrative Region or Macao Special Administrative
Region by QDIIs shall be governed with reference to the present Measures.

Article 45

The targeted raising of capital or the acceptance of targeted objects’ asset authorization for the investment in the securities market
outside the territory of China by a fund management company that has obtained the QDII qualification shall be governed with reference
to the present Measures.

Article 46

The directional asset management, specialized asset management business or the capital investment in the securities market outside
the territory of China by a securities company that has obtained the QDII qualification shall be governed with reference to the present
Measures.

Article 47

The present Measures shall enter into force as of July 5, 2007.



 
China Securities Regulatory Commission
2007-06-18

 






MEASURES FOR THE ADMINISTRATION OF LAUNDRY AND DYEING INDUSTRY

Decree of the Ministry of Commerce, State Administration for Industry and Commerce, State Environmental Protection Administration

No.5

Measures for the Administration of Laundry and Dyeing Industry is hereby announced and shall come into effect as of July 1, 2007 after
it has been deliberated and passed at the 10th executive conference of the Ministry of Commerce on December 20, 2006 with the approval
of State Administration for Industry and Commerce and State Environmental Protection Administration

Minister of the Ministry of Commerce Bo Xilai

Director of General Administration for Industry and Commerce Zhou Bohua

Director of State Environmental Protection Administration Zhou Shengxian

May 11, 2007

Measures for the Administration of Laundry and Dyeing Industry

Article 1

The Measures herein are formulated in accordance with the relevant state law, administrative regulations for the purpose of standardizing
the behavior of laundry and dyeing service, maintaining the lawful rights and interests of operators and consumers, preventing environmental
pollution, promoting the sound development of laundry and dyeing industry.

Article 2

The Measures herein shall apply to the laundry and dyeing operation within the territory of the People’s Republic of China.

“Laundry and Dyeing” mentioned in the Measures herein refers to such operation activities as washing, ironing, dyeing, and weaving
of clothes and washing, maintaining of leather-made products and clothes.

Article 3

The Ministry of Commerce shall undertake guidance, coordination, supervision and management of national laundry and dyeing industry,
various local authorities in charge of commerce shall be responsible for the guidance, coordination, supervision and management of
laundry and dyeing industry within its administrative region respectively.

The industrial and commercial authorities shall be responsible for regulating laundry and dyeing industry, supervising the quality
of service products and business operation, and for investigating and punishing in light of the laws such acts as infringing the
legal rights of interests of consumers.

The environmental protection authority shall undertake supervision and administration of such acts as affecting the environments in
the process of opening and operating the laundry and dyeing enterprise, investigating and punishing in light of the laws environmental
unlawful acts.

Article 4

To open washing and dyeing store and water washing factory shall accord with the relevant laws and standard requirement with respect
to safety, sanitary, environmental protection, water saving, energy saving.

The enclosure dry-cleaning making with purifying, recycling and dry-cleaning solvent functions shall be used in the newly build, altered,
or extended washing and dyeing stores.

The open dry-cleaning machine shall be phased out. The open dry-cleaning machine currently used shall be refitted to increase the
compressor cooling recycling system, and forcefully recycle the dry-cleaning solvent; where the open petroleum derivative solvent
dry-cleaning machine and drying machine is used, it shall be equipped with fire-proof and explosion-proof safety equipment.

Article 5

Environmental influence assessment shall be carried out upon the newly built, altered or extended washing and dyeing store and water
washing factory and can be put into use after it has passed the inspection and collection by environmental authority.

The operator who undertakes washing and dyeing shall register lawfully and withdraw the business license.

The operator shall, within 60 days after having acquired the business license, handle the record in the same level commerce authority
as the industrial and commercial administrative authority at the registration place.

Article 6

The operator shall have fixed business site, such equipments as washing, custody, and pollution prevention in par with its business
scale and accord with the relevant national regulations.

Article 7

The washing and dyeing store shall not use such dry-washing solvents as does not accord with the relevant national regulations. The
storage, usage and recycling site shall be equipped with leakage-proof condition, the dangerous chemical products shall accord with
the relevant administration of dangerous chemical products.

The laundering factory shall be encouraged to use phosphor-free and low phosphor washing products.

Article 8

The discharge of pollutant shall meet the requirement of pollutant discharge in national or local regulations. The new discharge
standard shall be implemented after it has been promulgated.

The residue, sewage containing dry-cleaning solvent generated in the process of dry cleaning shall be appropriately collected and
handled. The dangerous wastes shall be lawfully entrusted to the units holding the business license of dangerous wastes for handling
and disposal.

Where the sewage is discharged to urban sewage tubes to be treated together, it shall accord with the relevant water quality requirement
by the sewage treatment factory. Where the factory hereof is equipped with sewage treatment equipment, it shall carry out innocuity
treatment upon the generated sewage.

Such sewage as does mot accord with the standard shall not be discharged to river, lake, rain sewer, leakage pit, leakage well and
etc.

The noise zone in the laundering and water-washing factories shall accord with the relevant rules of the Standard of Noise at Boundary
of Industrial Enterprises GB12348-90.

Article 9

The operator shall formulate the system of safe production, environmental protection and sanitary management system in line with
the requirement of laws and regulations, provide effective protective products to the staff and undertake regular safe, environmental
protection, sanitary education training upon the staff.

Article 10

The employed staff shall observe professional ethics, abide by national laws and regulations, the washing and dyeing technical staff
shall have the relevant professional skills, shall be encouraged to obtain the qualification certificate issued by the relevant national
authority or the training qualification certificate issued by the relevant organizations and to work with the certificates hereof.

Article 11

The operator shall hang business license at the noticeable place of the business site and to expressly show service content, service
price and complaint telephone number and etc.

Article 12

The operator shall follow the principle of good faith in the process of operation and give real and clear reply to the relevant questions
raised by consumers, may not deceive and misguide consumers, may not conduct the following deceptions:

(1)

deceptive propaganda;

(2)

to undertake consumption default by using value card;

(3)

such deceptive acts as using “water washing”, ” iron” to work off dry wash;

(4)

to conceal the fact that the clothes have been damaged in the process of washing deliberately;

(5)

other deceptive acts against laws, and administrative regulations.

Article 13

The operator shall check seriously the received clothes and perform the following liabilities:

(1)

hint the consumer to check whether any carry-over is left and to confirm whether the attachment and decorates are complete;

(2)

hint the consumer the damageable, corruptive and expensive decorates or attachment to clarify service liabilities;

(3)

to explain to consumers new and old, dirty and clean, damage of clothes, quality of the cloth, performance variance and effect of
washing and dyeing;

(4)

to inform consumers the clothes which is really difficult to wash and dye or have hard besmirch and to confirm the effect of washing
and dyeing.

Article 14

The operator may undertake value-preserving washing in accordance with the willing of the consumers, i.e. the written washing agreement
made by the operator and consumers about cost of washing, value-preserving cost, value-preserving amount and service content.

Where the clothes subject to value-preserving are damaged or lost, or directly undermine the quality of the original clothes after
washing, the operator shall compensate in accordance with the preserving amount agreed with the consumer.

Article 15

The operator shall issue service bill to consumers when offering service. The content of the service bill shall include: name of
clothes, quantity, color, damage or shortage, service content, price, date of delivery, period of custody, particulars agreed by
both parties, means of dispute settlement.

Article 16

The operators shall act the service code of launder and dyeing industry, operation regulations and quality standard and appoint designated
personnel to undertake quality inspection launder and dyeing.

Article 17

The operators shall standardize the clothes handing-over procedure to prevent loss or damage of clothes; dirty and clean clothes
shall be stored and paid respectively.

Article 18

The textile products of the medical unit shall be washed and processed in the specialized factory zone, special washing equipment
and be sanitized strictly.

The washed textile products after sanitation shall accord with the relevant national requirement.

Article 19

Where the washed clothes fail to meet the washing quality requirement or do not accord with the requirement reached with the consumers
in advance or the clothes are damaged or lost because of the responsibilities of the operators, the operator shall reprocess it in
light of different situation, refund the launder and dyeing fee or compensate the damage.

Where the quality of washed clothes fails to reach quality standard because the misguided washing mark or quality does not accord
with national and professional standard requirement rather than it is the fault of the operator, the operator shall be exempted from
the relevant responsibility.

Article 20

The authority in charge of commerce shall standardize and clean market order and promote the development of the industry herein by
formulating industrial development program, promotion policy, standard and comprehensive coordination, promoting the industrial development.

The authorities in charge of commerce shall guide and support launder and dyeing quality appraisal committee to carry out quality
appraisal work, guide the relevant professions to formulate solutions to consumption dispute and to maintain the lawful rights and
interests of the operators and consumers.

Article 21

The Laundry and Dye Industry Association shall accept the business guidance of the authorities in charge of commerce to strengthen
professional self-discipline, carry out such industrial promotion development works as faithful operation, organizing the implementation
standard, providing information consultation, pursuing technical training, mediating service disputes, and reflecting the opinions
and requirements of the operators.

Article 22

Should the operator violates the Measures herein which is prescribed in laws and regulations, the laws and regulations herein shall
prevail; otherwise, the Ministry of Commerce, the industrial and commercial authority and the environmental authority shall, in accordance
with Article 3 in the Measures herein￿￿order the violators herein to rectify its acts, should the violators have illegal income,
the violators herein may be fined below 3 times and the maximum fine shall not exceed 30,000 yuan, should the violators have no illegal
income. The violators may be charged less than 10,000 yuan and may be announced.

Article 23

The authorities in charge of commerce in all provinces, autonomous regions, and municipalities may, in accordance with the Measures
herein and the practical situation of the dyeing industry in its administrative region , enact the relevant implementation measures
with the relevant authorities.

Article 24

The definitions of the terms mentioned in the Measures herein:

Enclosure dry-cleaning machine: such dry cleaning machines as use Tetrachloroethylene or petroleum derivative solvent as dry-cleaning
solvent, equipped with solvent recycled cooling system, in the process of deodorization, the gas in machine and the work place don’t
exchange and waste gas doesn’t discharge directly.

Open dry cleaning machine: such dry cleaning machines as use Tetrachloroethylene or petroleum derivative solvent as dry-cleaning solvent,
use water-cooling recycling system to conduct deodorization by absorbing fresh air and discharging dry-cleaning solvent and gas mixture
discharged from the machine before opening the in-out gate.

Dyeing: only the redyeing and dyeing of other colors in the washing and dyeing stores,

Article 25

The Measures herein shall come into effect as of July 1, 2007.



 
Ministry of Commerce, State Administration for Industry and Commerce, State Environmental Protection Administration
2007-05-11

 






ANNOUNCEMENT NO. 23, 2007 OF MINISTRY OF COMMERCE

Announcement No. 23, 2007 of Ministry of Commerce

[2007] No. 23

Mixture mentioned in the Article 7 of Provisions on the Administration of the Import and Export of Precursors and Chemicals Used
in Production of Narcotic Drugs and Psychotropic Substances (hereinafter referred to as “the Provisions”) means:

1.

Commodity that contains one of the four precursors and chemicals used in production of narcotic drugs and psychotropic substances,
namely toluene, acetone, butanone, sulphuric acid, with a proportion of more than 40% (excluded) and commodity with a hydrochloric
acid proportion of more than 10%(excluded).

2.

Commodity that contains other precursors and chemicals used in production of narcotic drugs and psychotropic substances, other than
the above-mentioned 5 categories, listed in the Provisions on the Administration of the Import and Export of Precursors and Chemicals
Used in Production of Narcotic Drugs and Psychotropic Substances.

Compound medicine formulation with the precursors and chemicals used in production of narcotic drugs and psychotropic substances are
not included.

When importing or exporting the above-mentioned mixture, the operators shall apply the permission in accordance with the Provisions.

Commodity that contains one of the five precursors and chemicals used in production of narcotic drugs and psychotropic substances,
namely toluene, acetone, butanone, sulphuric acid, hydrochloric acid with a proportion of no more than the above-mentioned regulations
shall not be considered as the “mixture” mentioned in the Article 7 . And the operators could apply permission without the Provisions
while importing or exporting the commodity.

Ministry of Commerce

May 16, 2007



 
Ministry of Commerce
2007-05-16

 






ANNOUNCEMENT OF THE PEOPLE’S BANK OF CHINA CONCERNING EXPANDING THE FLOATING RANGE OF TRADING PRICE OF THE US DOLLAR AGAINST THE RMB IN THE INTER-BANK SPOT FOREIGN EXCHANGE MARKET

Announcement of the People’s Bank of China concerning Expanding the Floating Range of Trading Price of the US Dollar against the RMB
in the Inter-bank Spot Foreign Exchange Market

The People’s Bank of China determined to expand the floating range of the trading prices of the US Dollar against the RMB in the inter-bank
spot foreign exchange market for the purpose of further improving the regulated and managed floating exchange rate systemon the basis
of market supply and demand and by referring to a basket of currencies, promoting the development of foreign exchange market, and
improving the independent pricing and risk management capacity of financial institutions. The related particulars are hereby rendered
as follows:

The floating range of the trading prices of the US Dollar against the RMB in the inter-bank spot foreign exchange market will be expanded
from 0.3% to 0.5% as from 21May 2007, viz. the daily trading price of the US Dollar against the RMB in the inter-bank spot foreign
exchange market may be floated within the range of 0.5% of the middle price of the US Dollar against the RMB on the current day as
announced by China Foreign Exchange Center to the outside.

After the publication of this Announcement, the measures for the administering the floating range of trading price of the US Dollar
against the RMB in the inter-bank spot foreign exchange market and the spread of US Dollar exchange rate quotation of the banks to
their clients will not be changed, and the Circular concerning Further Improving the Administration of Trading Exchange Rates in
the Inter-bank Foreign Exchange Market and the Exchange Rate Quotations of Foreign Exchange Designated Banks (Yin Fa [2005] No. 250)
as promulgated by the People’s Bank of China on 23 September, 2005 is still applicable thereto.

The People’s Bank of China will, in light of the domestic and international economic and financial tendencies, on the basis of market
supply and demand and by reference to a basket of currencies, maintain the normal floating of RMB exchange rates, keep the RMB exchange
rates at a reasonable and balanced level, promote a basic balance of international payments, and guarantee the stability of macro-economy
and financial market.

People’s Bank of China

May 18, 2007



 
People’s Bank of China
2007-05-18

 






ANNOUNCEMENT NO. 43, 2007 OF MINISTRY OF COMMERCE AND GENERAL ADMINISTRATION OF CUSTOMS

Announcement No. 43, 2007 of Ministry of Commerce and General Administration of Customs

[2007] No. 43

In accordance with the Measures on the Administration of Automatic Import Licenses of Goods, Ministry of Commerce made the following
adjustment to the List of Administration of Automatic Import Licenses on Goods, 32 items of the Administration of Automatic Import
Licenses are eliminated. The list of the eliminated items is now promulgated and shall be put into effect as from June 10, 2007.

Appendix: The Eliminated List of Administration of Automatic Import Licenses on Goods(omitted)

Ministry of Commerce

General Administration of Customs

May 20, 2007



 
Ministry of Commerce, General Administration of Customs
2007-05-20

 






MEASURES FOR THE ADMINISTRATION OF FOREIGN STOCK EXCHANGES’ REPRESENTATIVE OFFICES IN CHINA

Order No. 44 of China Securities Regulatory Commission

No. 44

The Measures for the Administration of Foreign Stock Exchanges’ Representative Offices in China have been deliberated and adopted
at the 203rd chairmen’s executive meeting of China Securities Regulatory Commission on April 3, 2007. They are hereby promulgated
and shall enter into force as of July 1, 2007.

Chairman of China Securities Regulatory Commission, Shang Fulin

May 20, 2007

Measures for the Administration of Foreign Stock Exchanges’ Representative Offices in China
Chapter I General Rules

Article 1

For the purpose of regulating the establishment of foreign stock exchanges’ representative offices in China and their business operations
these Measures are constituted under the Securities Law of the People’s Republic of China and the related regulations.

Article 2

The “foreign stock exchanges” as mentioned in these Measures means the stock exchanges, securities automated quotation or electronic
trading systems or markets established abroad. The “foreign stock exchanges’ representative offices in China” (hereinafter referred
to as representative offices) as mentioned in these Measures means the permanent representative offices established by foreign stock
exchanges inside the territory of China under the approval of engaging in liaison, market promotions, investigations and other similar
non-business activities. The person in-charge of a representative office is the chief representative.

Article 3

A representative office shall conform to the laws, regulations of China and the related provisions of China Securities Regulatory
Commission (hereinafter referred to as CSRC). The legitimate rights and interests of representative offices shall be protected by
Chinese law.

Article 4

The CSRC shall examine, approve and supervise the representative offices subject to the principle of prudent supervision.

Chapter II Application and Establishment

Article 5

A foreign stock exchange applying for establishment of a representative office (hereinafter referred to as the applicant) shall be
subject to the requirements as follows:

(1)

The country or region where the applicant is located has perfect laws and regulations on financial supervision;

(2)

The financial supervision authority in the country or region where the applicant is located has concluded a memorandum of understanding
on supervisory cooperation with CSRC, and keeps a good cooperation with CSRC;

(3)

The applicant is a financial institution established under the approval or ratification of the financial supervision authority of
the country or region where it is located;

(4)

The applicant has been established for more than 20 years, it has a stable operation and, standardization and its financial situation
is well; and

(5)

Other prudential conditions put forward by the CSRC.

Article 6

An applicant can only apply for establishing one representative office, and at the time of application, shall submit the materials
as follows to the CSRC:

(1)

an application letter as signed by the board chairman (director-general) or the general manager to the CSRC;

(2)

a written opinion or any other related document issued by the financial supervision authority of the country or region where the applicant
is located on approval of establishing such a representative office by the applicant;

(3)

a copy of the business license or of the attestation on lawfully opening business as issued upon verification by the related competent
authority of the country or region where the applicant is located, notarized and certified by a competent notary public or certification
institution in the country or region where the applicant is located, and certified by the Chinese embassy or consulate accredited
to that country;

(4)

articles of association and main business rules of the applicant;

(5)

a name list of board of directors (board of governors) and the management personnel;

(6)

the annual reports for the latest 3 years;

(7)

a scheme on establishing the representative office, including, but not limited to, the purposes, necessity of the establishment, working
plan, set-up of internal organs and personnel arrangement, management systems and office site, etc.;

(8)

a power of attorney as signed by the board chairman (governor-general) or general manager on appointing the chief representative;

(9)

a declaration that the applicant published, which the chief representative to-be has no record of penalty due to any serious violation
of law or regulation, and which shall be notarized by a notary public institution in the country or region where the applicant is
located;

(10)

the identity certificate, academic credentials and resume of the chief representative to-be; and

(11)

other documents required to be filed by the CSRC.

Article 7

The CSRC will accept and examine the application materials for establishment as filed by applicants. Where the CSRC decides to approve
an application, it shall produce an approval document.

Article 8

Within 90 days upon approval of the CSRC, a representative office shall handle the procedures for industrial and commercial registration
as well as taxation registration upon the approval document, move into a fixed office, and report the matters as follows to the CSRC
in written form:

(1)

certificates on industrial and commercial registration and taxation registration;

(2)

a certificate for the lawful right to use the office;

(3)

the telephone number, fax number and post address of the office; and

(4)

the mobile phone number and email address of the chief representative.

In case the representative office, within the time limit provided above, fails to file a written report with the CSRC, the original
approval document shall be automatically abated.

Article 9

The name of a representative office shall be composed of the following contents in an order as: “the name of the country or region
where the foreign stock exchange is located”, “the name of the foreign stock exchange”, “the name of the local city” and ” the representative
office”.

Article 10

Other main staff members of a representative office shall be referred to as “representatives” or “deputy representatives” except
for the chief representative.

Article 11

The qualification for the chief representative of a representative office to hold the post shall acquire the approval of the CSRC.
A chief representative shall satisfy the requirements as follows:

(1)

Being known well with the finance laws and regulations of China;

(2)

Having a bachelor’s degree or above, 10 years or more of experiences in finance or economy, and 3 years or more of experiences in
undertaking Chinese-related business in the latest 5 years; and

(3)

Having a good character and no record of criminal or administrative penalty.

Article 12

To appoint a representative or deputy representative, within 5 working days as of the date of appointment, a representative office
shall report the name list, identity certificates and resumes of that person to the CSRC for archival purpose.

Chapter III Alteration and Cancellation

Article 13

Where a representative office changes its name, it shall submit an application to the CSRC, and file an application letter signed
by the board chairman (governor-general) or general manager of its stock exchange as well as other documents as required by the CSRC.

Article 14

Where a representative office changes its chief representative, it shall submit an application to the CSRC, and file an application
letter signed by the board chairman (governor-general) or general manager of its stock exchange as well as the related materials
provided in Items (8) up to (11) of Article 6 of these Measures.

Article 15

The CSRC will accept and examine the application materials for changing the name or chief representative submitted by the applicants.
It shall reissue an approval document if the CSRC decides to approve an application.

Article 16

Where a representative office changes, adds or reduces a representative or deputy representative, it shall report the name, identity
certificate and resume of the person to the CSRC for archival purpose within 5 working days as of the alteration.

Article 17

A representative office can change its office only inside the city where it is located. Within 5 working days as of the alteration,
the representative office shall report the matters as follows to the CSRC in written form:

(1)

a certificate for the lawful right to use the new office; and

(2)

the telephone number, fax number and post address of the new office.

The “change of office” as mentioned in this Article means the relocation, enlargement or reduction of the former office.

Article 18

The cancellation of a representative office shall, ahead of 20 working days, be reported to the CSRC, and handle the formalities
for deregistration at the administrative organ for industry and commerce upon the pertinent confirmation document issued by the CSRC
on approval of the cancellation. The pertinent deregistration certificate shall, within 5 working days, be submitted to the CSRC
after a representative office is deregistered.

Article 19

The unsettled matters shall be responsible for by its stock exchange after a representative office is cancelled.

Chapter IV Supervision and Administration

Article 20

A representative office shall have an independent and fixed office of its own, employ a reasonable amount of staff members, of which,
the proportion of domestic residents shall not be lower than 50%. The foreign staff members of a representative office shall handle
the formalities for residence under the pertinent laws upon entry.

Article 21

Any chief representative may not concurrently hold a post in the head office or a regional head office, nor may he concurrently hold
a post in any other commercial institution inside the territory of China. A chief representative shall stay in the representative
office to take charge of the daily routine. Where a chief representative goes abroad for 30 consecutive days, he shall file a report
with the CSRC and designate a special person to carry out the duties on his behalf. Where a chief representative concurrently holds
a post in any other institution or goes abroad for more than 30 consecutive days without reporting, the CSRC may require the stock
exchange to replace the chief representative.

Article 22

Any representative office and any of its staff members may not conduct any commercial activities or do so in a disguised form, it
or he may not conclude an agreement or contract with any legal person or natural person that may bring about incomes to the representative
office or the stock exchange.

Article 23

Any representative office and any of its staff members may not conduct publicity in any form, it or he may not hold any market promotion
activity oriented to individuals in any form.

Article 24

Where a representative office and its staff members organize and hold a large-scale market promotion activity oriented to enterprises,
they shall report a related scheme to the CSRC in advance, and if the CSRC does not present any objection within 10 working days,
it can hold such promotion activity.

Article 25

Any representative office and any of its staff members may not hold any false market promotion activity in any form, and it or he
may not conduct unfair competition in any form or seek for interests for any other institution in any form.

Article 26

A representative office shall submit a work report of the previous year to the CSRC within two months upon conclusion of each year.

Article 27

A representative office shall file the information about Chinese companies whose stocks are listed and traded in its stock exchange
in the previous year as well as the information about Chinese-funded members within two months upon conclusion of each year.

Article 28

A representative office shall file the annual report on its stock exchange for the previous year within four months upon conclusion
of each accounting year of its stock exchange.

Article 29

Where a foreign stock exchange gives any major punishment to any Chinese company whose stocks are listed and traded in it or any
Chinese-funded member thereof, the representative office shall timely render a notice to the CSRC, and submit a written report to
the CSRC within 10 working days as of the date of punishment.

Article 30

If a foreign stock exchange is under any of the following circumstances, the representative office shall, within 10 days after the
event occurs, file a written report with the CSRC:

(1)

Its articles of association, registered capital or registered address alters;

(2)

The stock exchange is split up, consolidated or implements any other major merger;

(3)

Its board chairman (governor-general) or general manger changes;

(4)

It is operating at a heavy loss or with serious financial difficulties;

(5)

The competent supervisory authority of the country or region where the stoke exchange is located takes major supervisory measures
against the stock exchange; or

(6)

Other events that severely affect the foreign stock exchange’s business.

Article 31

The CSRC will implement regular or irregular on-site or off-site inspections of a representative office from, but not limited to,
the aspects as follows:

(1)

Whether the representative office conducts commercial activities or does so in a disguised form;

(2)

Whether the representative office engages in publicity or holds any market promotion activity oriented to individuals;

(3)

Whether the representative office organizes and holds any large-scale market promotion activity oriented to enterprises without reporting
in advance;

(4)

Whether the application materials filed by the representative office are truthful or accurate;

(5)

Whether the representative office goes through complete formalities for any alteration thereof;

(6)

Whether the representative office goes through complete formalities for employment or alteration of any of its staff member; or

(7)

Other matters to be inspected by the CSRC.

Article 32

The CSRC may take such regulatory measure as ordering its chief representative or any other person in-charge to make correction,
arranging a supervisory interview and issuing a letter of warning where a representative office violates these Measures. In case
of serious circumstances, the CSRC may take the measure of prohibiting its chief representative or any other person in-charge from
entry into the securities market.

Chapter V Legal Liabilities

Article 33

Where a foreign stock exchange, without approval, illegally establishes a representative office or conduct activities in the name
of any representative office or in any other form, the CSRC shall ban such representative office or activities under law. Where the
foreign stock exchange violates the criminal law, it shall assume criminal liabilities.

Article 34

Where a representative office conducts commercial activities or does so in a disguised form, the CSRC shall give it a warning, confiscate
its illegal gains, or even revoke it, etc.

Article 35

Where a representative office implements publicity or holds any market promotion activity oriented to individuals, the CSRC shall
give it a warning, or even revoke it, etc.

Article 36

Where a representative office organizes and holds a large-scale market promotion activity oriented to enterprises without reporting
in advance, the CSRC shall impose upon it a warning, or a fine, or even revoke it, etc.

Article 37

Where a representative office implements false publicity or unfair competition, the CSRC shall give it a warning, a fine, or even
revoke it, etc.

Chapter VI Supplementary Rules

Article 38

The establishment of a representative office within the territory of China by a stock exchange of Hong Kong Special Administrative
Region, Macao Special Administrative Region or Taiwan Area shall be implemented by reference to these Measures.

Article 39

The documents as required to be submitted by an applicant under these Measures shall be in Chinese. For the articles of association,
main business rules or annual reports of a foreign stock exchange, Chinese abstracts thereof may be provided together with the original
texts.

Article 40

These Measures shall enter into force as of July 1, 2007.



 
China Securities Regulatory Commission
2007-05-20

 






CIRCULAR OF THE MINISTRY OF COMMERCE AND THE STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING FURTHER STRENGTHENING AND STANDARDIZING THE EXAMINATION AND APPROVAL OF FOREIGN DIRECT INVESTMENT IN REAL ESTATE INDUSTRY

Circular of the Ministry of Commerce and the State Administration of Foreign Exchange concerning Further Strengthening and Standardizing
the Examination and Approval of Foreign Direct Investment in Real Estate Industry

Shang Zi Han [2007] No.50

The authorities responsible for commerce and foreign exchange in all provinces, autonomous region, municipalities, and cities specifically
designated in the state plan, and Xinjiang Production and Construction Corps:

Six departments of the State Council (namely, Ministry of Construction, Ministry of Commerce, National Development and Reform Commission,
People’s Bank of China, State Administration for Industry of Commerce and State Administration of Foreign Exchange) jointly issued
Opinions on Regulating the Access to and Administration of Foreign Investment in the Real Estate Market (Jian Zhu Fang [2006] No.
171, hereinafter referred to as the Opinions) for the purpose of standardizing foreign fund access to and administration of real
estate market. The local authorities strictly implemented the prescriptions and requirements in the Opinions and made some substantial
achievement. However, some problems still remain in some regions. In accordance with the laws and regulations of foreign investment
and the relevant prescriptions in the Opinions, the relevant particulars concerning further strengthening and standardizing the examination,
approval, record for file and supervision of foreign investment in real estate are hereby notified as follows:

1.

The local commerce authorities shall strictly implement the Opinions and the Circular of the General Office of the Ministry of Commerce
concerning Implementing Circular concerning Standardizing Foreign Fund Access to and Administration of Real Estate Market (Shang
Zi Zi [2006] No. 192), strengthen the examination, approval and supervision of foreign-funded real estate enterprises, and strictly
control foreign investment in top grade real estate.

2.

Foreign-funded investment in the development and operation of real estate market shall observe the principle of project company.

(1)

In the case of applying for opening a real estate company, the right of land use and ownership of real estate building, or the booking
sale/purchase of land use or real estate right signed with land administration authority, land developer/ the owner of real estate
building. The examination and approval authority may not approve it if the aforesaid requirements are not met.

(2)

Should such enterprises as have established new-added real estate or business of foreign-funded enterprises, and as are engaged in
the development and operation of new real estate project, the enterprises hereof shall, in light of the relevant laws and rules,
apply to the examination and approval authority for the relevant procedures concerning increasing business scope or extending business
scale.

3.

The merge and acquisition or investment in domestic real estate enterprises by means of return investment (including the same actual
manipulator) shall be strictly controlled. Foreign investor may not alter the means of actual manipulator of domestic real estate
enterprises, evade the examination and approval upon foreign-funded real estate. Should the foreign exchange authority discovers
the foreign-funded real estate enterprises established by such means as deliberate evasion and false statement, the authority hereof
shall investigate it for remitting capital and the additive yield of its own accord to evade foreign exchange responsibility.

4.

Foreign investor engaged in domestic real estate development or operation shall abide by the principle of business existence, lawfully
apply for establishing foreign-funded enterprises in real estate and engage in the relevant business in accordance with the approved
business scope. The Chinese and foreign parties to the foreign-funded real estate enterprise shall not conclude the clauses guaranteeing
fixed return or the fixed return in disguised form of any party by any means.

5.

The local authority responsible for examining and approving the establishment of foreign investment shall record for file in the Ministry
of Commerce.

6.

The authority responsible for foreign exchange administration and designated foreign exchange bank shall not handle procedure of settlement,
sale, and remittance of capital exchange for such foreign-invested real estate enterprises as have not completed the procedure of
record for file in the Ministry of Commerce or have not passed the joint annual inspection upon foreign-funded enterprises.

7.

With regard to the foreign-funded real estate enterprises examined and approved by local authority hereof against the law, the Ministry
of Commerce shall investigate and rectify it, the authority of foreign exchange administration shall not handle such procedures as
foreign exchange registration hereto.

Ministry of Commerce

State Administration of Foreign Exchange

May 23, 2007



 
Ministry of Commerce, State Administration of Foreign Exchange
2007-05-23

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ABOUT MATTERS REGARDING THE PAYMENT OF ENTERPRISE INCOME TAX BY FOREIGN-INVESTED ENTERPRISES CONDUCTING COMMUNICATIONS SERVICES

Circular of the State Administration of Taxation about Matters Regarding the Payment of Enterprise Income Tax by Foreign-invested
Enterprises Conducting Communications Services

Guo Shui Han [2007] No. 610

The state taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically
designated in the state plan, the local taxation bureaus of Guangdong Province, Hainan Province and Shenzhen Municipality:

The related matters regarding the payment of enterprise income tax by foreign-invested enterprises conducting communication services
are notified as follows subject to the related provisions of the Detailed Rules for the Implementation of the Income Tax Law of the
People’s Republic of China for Foreign-invested Enterprises and Foreign Enterprises (hereinafter referred to as Detailed Rules):

1.

Depreciation life of some fixed assets

(1)

Issues concerning the depreciation of pylons, pipelines, simple houses, mobile houses and other fixed assets. The comprehensive communication
pylons that are used by communications enterprises for receiving and sending signals, the pipelines that are used for storing communications
optical cable facilities and the simple houses that are used for storing the facilities of communications stations, as well as other
fixed assets, etc are absolute component parts of the communications equipments, and shall be uniformly included into the scope of
fixed assets of the communications equipments, the depreciation of which shall be calculated based on the period of 10 years in accordance
with the provisions in Article 35 of the Detailed Rules.

(2)

Issues concerning the depreciation life of communications equipments and computer system equipments. Due to equipment renewal, replacement,
upgrading and transformation and other reasons, a communications enterprise may change the 7-year depreciation life of 2G communications
equipments and computer system equipments of supporting net into 5 years, the shortest as prescribed in Article 35 of the Detailed
Rules according to the equipment renewal condition. In the remaining years after the adjustment, depreciation shall be calculated
on the basis of the book balance of each fixed asset by the straight-line method. The aforesaid adjustment shall be reported to the
competent taxation authorities for archival filing.

2.

Deduction of personnel cost

When prepaying the enterprise income tax of each season, any communications enterprise that implements the management mode of pegging
labor cost to performance evaluation with respect to personnel cost (including wages and welfare expenses, etc.) may temporarily
list the planned amount of personnel cost as the actual personnel cost in accordance with the principle of accounting on the accrual
basis as prescribed in Article 11 of the Detailed Rules,. When making annual declaration of enterprise income tax, it shall adjust
this amount on the basis of the amount actually occurred.

3.

Deduction of expenses for plan of accumulated points

Communications enterprises will develop the plan of accumulated points to reward the clients, which contains giving accumulated points
to clients with certain consuming capacity and rewarding them real objects or services in light of the accumulated points. The expenses
incurred to the real objects or services rewarded to clients may be listed under the cost of the current period by communications
enterprises, while those spent for other purposes may not be listed under the cost.

4.

Accounting unit of entertainment expenses

The entertainment expenses of each branch of a communications enterprise shall be calculated on the basis of branch unit independently.
When paying enterprise income tax on a consolidated basis, a communications enterprise shall calculate the amount concerning the
entertainment expenses actually incurred by the enterprise as a whole (including those incurred by the head office) on a consolidated
basis in light of the proportion as prescribed in Article 22 of the Detailed Rules for the Implementation of the Tax Law.

The present Circular shall enter into force as of the tax year of 2006.

State Administration of Taxation

May 30, 2007



 
State Administration of Taxation
2007-05-30

 






OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ABOUT HOW TO DEAL WITH THE TAX ISSUES CONCERNING THE INCOMES OBTAINED BY FOREIGN-FUNDED ENTERPRISES ENGAGING IN REAL ESTATE DEVELOPMENT FROM LEASEBACK BUSINESS

Official Reply of the State Administration of Taxation about How to Deal With the Tax Issues Concerning the Incomes Obtained by Foreign-funded
Enterprises Engaging in Real Estate Development from Leaseback Business

Guo Shui Han [2007] No.603

The State Taxation Bureau of Hunan Province:

We have received your Request for Instructions on Tax Issues Concerning the Incomes Obtained by Enterprises Engaging in Real Estate
Development and Operation from Leaseback Business (Xiang Guo Shui Fa [2006] No.106). We hereby make a reply as follows:

1.

In case any foreign-funded enterprise that engages in real estate development and operation transfers any estate such as premise or
building, etc, as built and developed by itself by means of distribution, and then leases back the estate from the buyer, it shall
split the leaseback business into distributing business and leasing business, and handle the tax affairs of each business respectively
whatever leasing mode it takes. The balance between the income as obtained by the enterprise from distributing or transferring the
post_title to the estate and the related cost and expenses on the post_title to the transferred estate shall be counted into the taxable amount
of income in the current period as the business profits and losses in the current period.

2.

In case any enterprise transfers one or more of the following rights and interests or risks of assets via leaseback business, it shall
be regarded as that the enterprise has transferred part or whole post_title to the estate no matter whether the formalities for the alteration
of legal ownership of the estate (such as estate rights registration or ownership transfer) has been handled:

(1)

rights and interests to obtaining the income from the appreciation of fixed assets;

(2)

assuming the losses as incurred from various kinds of damage (including physical damage and depreciation);

(3)

rights and interests to the possession of assets;

(4)

rights and interests to using assets during the period of continued existence of the assets in the future;

(5)

rights and interests to disposing the assets.

3.

With respect to any leaseback transactions of estate between an enterprise and any of its affiliated parties, the provisions of this
Reply, as well as related taxation administrative provisions on business contact between affiliated enterprises shall be applicable.

4.

Where overdue tax or tax refund is involved when handling tax affairs under the provisions of this Reply, it shall be handled pursuant
to the related provisions of the Law of the People’s Republic of China on the Administration of Tax Collection and the Detailed Rules
for its implementation.

State Administration of Taxation

May 31, 2007



 
State Administration of Taxation
2007-05-31

 






12Page 1 of 2

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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