NOTICE OF THE MINISTRY OF FINANCE AND STATE ADMINISTRATION OF TAXATION CONCERNING THE RELATED POLICIES FOR COLLECTIVE AND URBAN LAND USE TAX

Notice of the Ministry of Finance and State Administration of Taxation Concerning the Related Policies for Collective and Urban Land
Use Tax

Cai Shui [2006] No. 56

The public finance departments (bureaus) and local taxation bureaus in each province, autonomous region, municipality directly under
the Central Government and city specifically designated in the state plan as well as the Finance Bureau of Xinjiang Production and
Construction Corporations:

In accordance with the new situation and problems in currently utilizing collective land, the related policies for collective and
urban land use tax are hereby, announced upon deliberation as follows:

In case any collectively-owned construction land as taxable is actually utilized, which falls within the levy scope of the urban land
use tax, and if the related procedures for circulating the land use right have not been conducted, the related entity or individual
that actually utilizes the collective land shall pay the urban land use tax subject to the related provisions.

This Notice shall enter into force as from May 1, 2006. In case any of the previous policies and provisions conflicts with this Notice,
this Notice shall prevail.

Ministry of Finance

State Administration of Taxation

April 30, 2006

Ministry of Finance, State Administration of Taxation
2006-04-30

ORDINANCE ON THE PROTECTION OF THE RIGHT TO NETWORK DISSEMINATION OF INFORMATION

Order of the State Council of the People’s Republic of China

No. 468

The Ordinance on the Protection of the Right to Network Dissemination of Information, which was adopted at the 135th executive meeting
of the State Council on May 10, 2006, is hereby promulgated and shall be implemented as of July 1, 2006.

Premier Wen Jiabao

May 18, 2006

Ordinance on the Protection of the Right to Network Dissemination of Information

Article 1

With a view to protecting the right to network dissemination of information of the copyright owners, performers and producers of
audio-visual products (hereinafter referred to as the owners) and encouraging the production and spread of the works which are conducive
to the development of material civilization and spiritual civilization, he present Ordinance is formulated in accordance with the
Copyright Law of the People’s Republic of China (hereinafter referred to as the Copyright Law).

Article 2

The owners’ rights to network dissemination of information shall subject to the protection by the Copyright Law and the present Ordinance.
Unless it is otherwise prescribed by any law or administrative regulation, an organization or individual that provides the general
public with any other person’s works, performance or audio-visual products through the information network shall obtain the owner’s
permission and pay the relevant remunerations.

Article 3

The works, performance or audio-visual products as prohibited from being provided according to law are not protected by the present
Ordinance.

Any owner that exercises his right to network dissemination of information shall not violate the Constitution, the relevant laws and
administrative regulations, and shall not injure any public interest.

Article 4

For the purpose of protecting the right to network dissemination of information, an owner may adopt technical measures.

No organization or individual may purposely avoid or break the technical measures, purposely manufacture, import or provide the general
public with any device or component that is mainly applied to avoiding or breaking the technical measures, or purposely provide such
technical services to any other person for the purpose of avoiding or breaking the technical measures, unless it is otherwise provided
for by any law or regulation that the relevant technical measures may be avoided.

Article 5

No organization or individual may, in the absence of an owner’s permission, conduct any of the following acts:

(1)

Purposely deleting or changing the electronic information on the right administration of works, performance and audio-visual products
as provided to the general public through the information network, with an exception of the circumstance under which it is impossible
to avoid deleting or changing such information due to technical reasons; or

(2)

Providing any work, performance or audio-visual product whose electronic information on right administration has been deleted or
changed in the absence of the owner’s permission to the general public who obviously know or should have known about the deletion
or change through the information network.

Article 6

Under any of the following circumstances, works may be provided through the information network, and the provider may be exempted
from obtaining the owner’s permission as well as paying the relevant remunerations thereto:

(1)

Where an appropriate portion of any published work is quoted in the works one provides to the general public for the purpose of introducing
or commenting on any work or elaborating any issue;

(2)

Where it is inevitable to reproduce or quote any published work in the works he provides to the general public for the purpose of
making any new release;

(3)

Where, in order to support the teaching research or scientific research, a small quantity of published works are provided to some
people who engage in teaching or scientific research;

(4)

Where any state organ provides to the general public any published work within a reasonable range for the purpose of exercising its
functions and duties;

(5)

Where the works as already published by any Chinese citizen, legal person or any other organization in Chinese are translated into
any language of any minority ethnic group and are provided to such people within the territory of China;

(6)

Where any already published work is provided to the blind in a way as particularly perceptible to the blind and not for the purpose
of making profits;

(7)

Where any Article on current affairs such as political and economic issues that has been published is provided through the information
network; or

(8)

Where a speech as delivered in a public gathering is provided to the general public.

Article 7

A library, archives, memorial, museum and art gallery may, in the absence of the copyright holder’s permission, provide the relevant
digital works as lawfully published and preserved by the aforesaid institutions as well as the works that shall, according to law,
be subject to digital photocopying for display or preservation to their objects of service through the information network within
their place and without paying any remuneration. Whereas the aforesaid institutions may not directly or indirectly seek for any economic
interest from such activities, unless it is otherwise stipulated by the parties concerned.

The works subject to digital photocopying for the purpose of display or conservation as prescribed in the preceding paragraph shall
be the works that have been damaged or destroyed or are almost damaged or destroyed, are lost or stolen, whose storage format has
been out-of-date, and which cannot be purchased through the market channel or can only be purchased at a price as obviously higher
than the standardized one.

Article 8

Where the nine-year compulsory education or state education planning is implemented through the information network, the owner’s
permission may be absent in using fragments of works, short written works or musical works, a single work of fine art, or photographic
works to produce courseware; the long-distance education institutions that have produced the courseware or acquired courseware according
to law may provide such courseware to the registered students through information networks but shall pay relevant remuneration to
the copyright owner.

Article 9

In order to alleviate poverty, where any work on planting and breeding, disease prevention and cure, disaster prevention and relief
as well as the works that meet the basic cultural demands is published by Chinese citizens, legal persons or other organizations
to the general public in the rural areas, a network service provider shall announce in advance the upload of such works to the network
as well as the authors and remunerations thereof before they are actually uploaded. Within 30 days as of announcement, where a copyright
holder refuses to provide his works, a network service provider shall not provide his works. Where 30 days elapse as of announcement
and if the copyright holder has no different opinion, the network service provider may provide his works and pay the corresponding
remunerations to the copyright holder in light of the announced rates. After a network service provider provides any work and if
the relevant copyright holder disagrees to the upload, the network service provider shall immediately delete the copyright holder’s
works and pay the relevant remunerations corresponding to the display period of the copyright holder’s works in light of the relevant
announced rates.

As for the works as provided according to the provisions of the preceding paragraph, no economic benefit may be directly or indirectly
obtained.

Article 10

Where any work is provided to the general public through the information network in the absence of the copyright holder’s permission
according to the present Ordinance, the following provisions shall be abided by as well:

(1)

Except for the circumstances as prescribed in sub-paragraphs (1) through (6) of Article 6 of the present Ordinance, the works whose
author has in advance announced that his works are prohibited from providing may not be provided;

(2)

The names of works as well as the names of the authors (post_titles) shall be specified;

(3)

Remunerations shall be paid according to the provisions of the present Ordinance;

(4)

Technical measures shall be adopted so as to prevent any person other than the service objects as prescribed in Article 7 , 8 or
9 of the present Ordinance from acquiring any of the copyright holder’s works and to prevent any material injury as incurred by the
service object’s act of photocopying as prescribed in Article 7 of the present Ordinance; and

(5)

None of the other rights of the copyright holder may be infringed upon.

Article 11

The performance or audio-visual products as provided through the information network shall be governed by the provisions of Articles
6 through 10 of the present Ordinance.

Article 12

Under any of the following circumstances, the relevant technical measures may be avoided, whereas the techniques, devices or components
of the technical measures may not be provided to any other person and the other rights as enjoyed by the owner according to law may
not be injured:

(1)

Where any published work, performance or audio-visual product is provided to a small number of people that engage in teaching or
scientific research through the information network for the purpose of teaching or scientific research, whereby the aforesaid published
products can only be accessed through the information network;

(2)

Where any of the written works as already published is provided not the for the purpose of making profits to the blind through the
information network in a unique way as particularly perceptible by the blind, and the aforesaid works can only be acquired through
the information network;

(3)

Where the state organ exercises its functions according to the administrative and judicial procedures; or

(4)

Carrying out any testing on the computer as well as its system or the safety performance of the network through the information network.

Article 13

The administrative department of copyrights may, with a view to investigating into the infringements upon the right to network dissemination
of information, require the relevant network service provider to provide such materials as the names, contact information, and the
web addresses of its service objects as suspected of infringement.

Article 14

With respect to a network service provider that provides information memory space, or searching or linking services, in case the
relevant owner believes that any of the works, performance or audio-visual products as involved in the services has injured his right
to network dissemination of information or that his electronic information on right administration has been deleted or altered, he
may file a written notice with the relevant network service provider, requesting it to delete his works, performance and audio-visual
products or to cut off the link to the works, performance and audio-visual products concerned, wherein the following contents shall
be included:

(1)

Name, contact information and address of the owner;

(2)

The names of the infringed works, performance and audio-visual products that are required to be deleted or the names of the web addresses
whose link is required to be cut off; and

(3)

The preliminary certification materials on infringement.

The owner shall be responsible for the authenticity of his notice.

Article 15

After receiving a notice from the right owner, the network service provider shall immediately delete the relevant works, performance
and audio-visual products as suspected of infringement or cut off the link to the relevant works, performance and audio-visual products
as suspected of infringement and shall transfer the notice to the service objects that enjoy the relevant works, performance and
audio-visual products simultaneously. Where the web address of a service object is not clear and therefore a transfer is impossible,
the notice contents shall be simultaneously announced on the information network.

Article 16

Where a service object receives a notice as transferred by a network service provider and deems that the works, performance or audio-visual
product it provides have not infringed upon any other person’s right, it may file a written statement with the network service provider,
requesting it to recover the deleted works, performance and audio-visual products or to recover the link to works, performance and
audio-visual products, wherein the following contents shall be included:

(1)

The name (post_title), contact way and address of the service object;

(2)

The names of the works, performance, audio-visual products as well as web addresses as requested for recovery; and

(3)

The preliminary certification materials on non-infringement.

The service object shall be responsible for the authenticity of his written statement.

Article 17

After receiving a written statement from a service object, the network service provider shall immediately recover the deleted works,
performance and audio-visual products or recover the link to the works, performance and audio-visual products and shall transfer
the written statement of the service object to the relevant owner simultaneously, who may not request the network service provider
to delete the works, performance and audio-visual products or to cut off the relevant link any longer.

Article 18

Where anyone violates the present Ordinance by committing any of the following infringement, he shall, in light of the severity of
the situation, assume such civil liabilities as stopping the infringement, eliminating the negative impacts, making an apology and
compensating for the losses incurred. In case the public security is injured, the administrative department of copyright may order
it to stop the infringement, confiscate the illegal proceeds and may impose thereupon a fine of 100, 000 yuan. In the event of any
serious circumstances, the administrative department of copyright may confiscate such facilities as computers that are mainly applied
to providing network services. Where any crime is constituted, the violator shall be subject to criminal liabilities according to
law:

(1)

Providing without permission any work, performance or audio-visual product to the general public through the information network;

(2)

Purposely avoiding or damaging the adopted technical measures;

(3)

Purposely deleting or changing the electronic information on right administration of the works, performance, audio-visual products
as provided to the general public through the information network, or providing any work, performance or audio-visual product whose
electronic information on right administration has been deleted or changed in the absence of the right owner’s permission to the
general public who obviously know or should have known about the aforesaid situation through the information network;

(4)

Overstepping the prescribed scope in providing any work, performance or audio-visual product to the rural areas through the information
network for the purpose of alleviating poverty, failing to pay the remunerations according to the announced rates or failing to immediately
deleting the relevant works, performance and audio-visual products which the owners disagree to provide; or

(5)

When providing any other person’s work, performance or audio-visual product through the information network, failing to clarify the
name of the works, performance or audio-visual products or the names of the relevant authors, performers, or producers of audio-visual,
or failing to pay remunerations or failing to adopt the relevant technical measures according to the present Ordinance so as to prevent
any person other than the service objects from acquiring the other person’s work, performance or audio-visual product or failing
to prevent the service objects from conducting the reproduction that may cause any material damage to such other person.

Article 19

Where anyone violates the present Ordinance by committing any of the following acts, the administrative department of copyright shall
give it a warning, confiscate its illegal proceeds, confiscate the devices or components that are mainly applied to avoiding or damaging
the technical measures. In the event of serious circumstances, such equipments as mainly applied to providing network services may
be confiscated and a fine of less than 100, 000 yuan may be imposed thereupon. In case a crime is constituted, the violator shall
be subject to criminal liabilities according to law:

(1)

Purposely producing, importing or providing any other person with any device or component that is mainly applied to avoiding or damaging
the adopted technical measures or providing any technical services to help any other person to avoid or damage any adopted technical
measure;

(2)

Providing the works, performance or audio-visual products through the information network so as to acquire economic benefits; or

(3)

When providing any work, performance or audio-visual product to the rural area through the information network for the purpose of
alleviating poverty, failing to publicize the name of the works, performance and audio-visual products, the name of the relevant
authors, performers or producers of audio-visual products as well as the rates for remunerations before they are uploaded.

Article 20

Where any network service provider provides the service of automatic access pursuant to the instructions of its service objects or
provides the service of automatic transmission of works, performance and audio-visual products to its service objects and if the
following requirements are satisfied, it is not required to assume the liabilities of compensation:

(1)

Having not chosen or altered the transmitted works, performance and audio-visual products; or

(2)

Providing the works, performance and audio-visual products to the designated service objects and preventing any person other than
the designated service objects from obtaining the access.

Article 21

Where a network service provider obtains the relevant works, performance and audio-visual products from any other network service
provider for the purpose of elevating the efficiency of network transmission and automatic storage and provides the aforesaid works
to the service objects automatically according to the technical arrangement and in case the following requirements are satisfied,
it is not required to assume the liabilities of compensation:

(1)

Having not altered any of the works, performance or audio-visual products that are automatically stored;

(2)

Having not affected the original network service provider of the works, performance and audio-visual products in grasping the relevant
works, performance and audio-visual products; or

(3)

When the original network service provider revises, deletes or shields the works, performance and audio-visual products, automatically
revising, deleting or shielding according to the technical arrangement.

Article 22

Where a network service provider provides information memory space to its service objects, or provides the works, performance and
audio-visual products to the general public through the information network and in case the following requirements are satisfied,
he is not required to assume the liabilities of compensation:

(1)

Clearly indicating that the information memory space is provided to the service objects and publicizing the name, contact person
and web address of the network service provider;

(2)

Having not altered the works, performance and audio-visual products that are provided to the service objects;

(3)

Having no knowledge of and being justifiable reason to know the infringement of the works, performance and audio-visual products;

(4)

Having not obtained any economic benefit from the provision of the works, performance and audio-visual products to its service objects;
and

(5)

After receiving a notice from the owner, deleting those works, performance and audio-visual products that the owner regards as infringing
ones according to the present Ordinance.

Article 23

Where a network service provider provides any searching or linking service to its service objects or cuts off the link to any infringing
work, performance, or audio-visual product after receiving a notice from the right owner according to the provisions of the present
Ordinance, it is not required to assume the liabilities of compensation. However, when anyone is fully aware or should have known
that any of the works, performance or audio-visual product it has linked to constitutes any infringement, it shall be subject to
the liabilities of joint infringement.

Article 24

Where the relevant network service provider, as a result of the right owner’s notice, wrongly deletes or cuts off the link to any
work, performance or audio-visual product and therefore causes any loss to its service object, the owner shall be subject to the
liabilities of compensation.

Article 25

Where any network service provider refuses or delays to provide such network materials as the name, contact information and web address
of its service objects as suspected of infringement, the administrative department of copyright shall give it a warning. In the event
of serious circumstances, equipments such as computers that are mainly applied to providing the network services shall be confiscated.

Article 26

The definitions of the terms in the present Ordinance are as follows:

The term “right to network dissemination of information” refers to the right to provide the works, performance and audio-visual products
to the general public in a wire or wireless manner so that the general public may get access to the works, performance and audio-visual
products at the time and place that the relevant owner has chosen.

The term “technical measures” refers to the efficient techniques, devices and components that are applied to preventing or restricting
the browse or appreciation of the works, performance and audio-visual products in the absence of the relevant owner’s permission
or in providing the works, performance and audio-visual products to the general public through the information network in the absence
of the relevant owner’s permission.

The term “electronic information on right administration” refers to the information elaborating the works and the author thereof,
the performance and the performers thereof, the audio-visual products and the producers thereof, the information on the right owners
of the works, performance and audio-visual products as well as the requirements for application and the digits or codes representing
the aforesaid information.

Article 27

The present Ordinance shall be implemented as of July 1, 2006.

State Council
2006-05-18

ANNOUNCEMENT NO. 32, 2006 OF THE GENERAL ADMINISTRATION OF CUSTOMS ON THE CIRCUMSTANCES OF THE PROTECTION OF CUSTOMS FOR THE ARCHIVAL FILING OF THE SLOGAN AND MASCOTS OF THE 29TH OLYMPIC GAMES

Announcement No. 32, 2006 of the General Administration of Customs on the Circumstances of the Protection of Customs for the Archival
Filing of the Slogan and Mascots of the 29th Olympic Games

[2006] No. 32
May 31, 2006

The Organization Committee of the 29th Olympic Games recently submitted an application to the General Administration of Customs for
the archival filing of the slogan and mascots of the 29th Olympic Games and has obtained an approval. The archival filing information
is hereby announced as follows:

The right holder: The Organization Committee of the 29th Olympic Games

The name of right:

Slogan of the 29th Olympic Games (see Annex 1)

Mascots of the 29th Olympic Games (see Annex 2)

Anyone who illegally imports or exports any goods infringing on the exclusive right of the aforesaid Olympic marks without the permission
of the right holder shall be followed to investigation and punishment by the customs according to the Regulation on the Protection
of Olympic Marks and other relevant laws and regulations.

Annexes:

Slogan of the 29th Olympic Games

Mascots of the 29th Olympic Games (Omitted)

Annex 1:
Slogan of the 29th Olympic Games

Tong Yi Ge Shi Jie, Tong Yi Ge Meng Xiang

One World, One Dream

General Administration of Customs
2006-05-31

MEASURES OF THE GENERAL ADMINISTRATION OF CUSTOMS FOR NETWORKED SUPERVISION AND ADMINISTRATION OF PROCESSING TRADE ENTERPRISES

Decree No. 105 of the General Administration of Customs of the People’s Republic of China

No. 105

The Measures of the General Administration of Customs for Cyber-Supervision and Administration of Processing Trade Enterprises, which
were discussed and adopted at the executive meeting of the General Administration of Customs on May 30, 2006, are hereby promulgated,
and shall come into force on August 1, 2006. “Measures of the Customs of the People’s Republic of China on Applying Computer Networked
Surveillance to Processing Trade Enterprises” promulgated by the General Administration of Customs in its No. 100 Decree on March
19, 2003 shall be abolished simultaneously.

Mu Xinsheng, Director General

June 14, 2006

Measures of the General Administration of Customs for Networked Supervision and Administration of Processing Trade Enterprises

Article 1

For the purpose of regulating the customs’ administration of processing trade enterprises, these measures are formulated in accordance
with the provisions of the Customs Law of the People’s Republic of China and other relative laws, administrative laws and regulations.

Article 2

The customs’ networked Supervision and administration of processing trade enterprises refers to a mode of the customs’ supervision
and administration of processing trade by which the processing trade enterprises report to the customs the data of logistics, production,
operation, etc. meeting with the customs’ requirements via data exchange network or other computer network, and by which the customs
checks, calculates and verifies the data according to real objects.

Article 3

A processing trade enterprise conducting networked Supervision and administration (hereinafter referred to as networked-enterprise)
shall satisfy the following requirements:

To have qualifications for processing trade business;

To be registered with the customs;

To be a production enterprise.

These measures do not apply to the processing trade enterprises within the areas under the customs’ special supervision and administration
and bonded supervision and administration places.

Article 4

Any processing trade enterprise that needs networked Supervision and administration may submit an application to the authorized customs.
After examination and verification, the customs shall carry out networked Supervision and administration to the enterprise if it
meets the requirements as stipulated in Article 3 of these measures.

Article 5

A networked-enterprise shall conduct its identity attestation for networked Supervision and administration of processing trade before
reporting the data to the customs via the data exchange network or other computer networks.

Article 6

A networked-enterprise shall report to the authorized customs the inventory list of materials to be imported, finished products to
be exported and the corresponding number of the commodities needed for processing trade business. If necessary, corresponding materials
shall also be provided for confirming the number of the commodities according to the customs’ requirements.

The authorized customs shall, in light of the needs of supervision and administration and according to the requirements of the name
and code of the commodities, and calculation unit, merge the commodities subject to grade of material number with the commodities
subject to grade of item number or divide them, establishing a corresponding relationship of one-to-many or many-to-one.

Article 7

A networked-enterprise shall, before the import of the materials and the export of the finished products, go through separately record
and change formalities in the customs for the materials to be imported and the finished products to be exported.

A networked-enterprise shall go through record and change formalities for per- unit-cost according to relative rules of the General
Administration of the Customs.

Article 8

The customs shall, according to the materials for record submitted by the networked-enterprise, establish an electronic account and
carry out administration of the electronic account to the networked-enterprises. The electronic account includes electronic account
book and electronic handbook.

The electronic account book is an electronic account, regarding an enterprise as a unit, established by the customs for a networked-enterprise.
The networked-enterprise conducting the administration of electronic account book shall establish only one such account book. The
customs shall, according to the production status of the enterprise and the needs of the customs’ verification and administration,
set the period for the cancellation after verification, and carry out the administration of cancellation after verification to the
networked-enterprise conducting administration of electronic account book.

The electronic handbook is an electronic account, regarding the processing trade contract as a unit, established by the customs for
a networked-enterprise. The networked-enterprise conducting the administration of electronic handbook shall establish an electronic
handbook for each processing trade contract. The customs shall, according to the period of validity of the processing trade contract,
set the date for the cancellation after verification, and carry out the administration of periodic cancellation after verification
to the networked-enterprise conducting electronic handbook administration.

Article 9

A networked-enterprise shall report the data of the logistics, stock and production control of processing trade commodities and other
dynamic data meeting the needs of the customs supervision and administration.

Article 10

An authorized customs record system is carried out for outward-processing of a networked-enterprise. A processing trade enterprise
shall, before outward processing, register for a record in the authorized customs the name of the enterprise undertaking the outward-processing,
name of the commodities and turnover quantity.

Article 11

The customs may check the networked-enterprise by data verification and spot check in the factory. The check in the factory includes
special check and stock-taking check.

Article 12

A networked-enterprise may, upon approval by the authorized customs, handle duty repayment for domestic sales monthly. A networked-enterprise
shall handle duty repayment for domestic sales in the same month after selling processing trade commodities in domestic market.

Article 13

A networked-enterprise shall pay the interests of delayed payment of duties to the customs in accordance with rules after selling
the processing trade commodities in domestic market.

The starting date to pay the interests of delayed payment of duties shall be set according to the following measures:

For the enterprise conducting electronic handbook administration, the starting date shall be the date of the import of the first lot
of materials under the processing trade contract to which the materials or finished products for domestic sales are corresponding;

For the enterprise conducting electronic account book administration, the starting date shall be the latest date for cancellation
after verification of the electronic account book to which the materials or finished products for domestic sales are corresponding.
If the date for cancellation after verification is not available, the starting date shall be that of the import of the first lot
of materials in the electronic account book to which the materials or finished products for domestic sales are corresponding.

The expiry date to pay the interests of delayed payment of duties shall be the date that the customs issues the duty payment book.

Article 14

A networked-enterprise shall apply for verification within 30 days from the ending date set by the customs for cancellation after
verification. If the application for verification fails to be submitted with proper reasons within the time limit, the period may
be prolonged with the approval of the authorized customs, but the extension may not exceed 60 days.

Article 15

A networked-enterprise shall inform the customs before stock-taking. The customs may, integrating with the enterprise’s stock-taking,
carry out verification and cancellation.

The customs shall, while integrating the stock-taking to carry out the verification and cancellation, compare the calculation of the
electronic account with the real stock of the networked-enterprise and handle them separately as follows:

If the real stock is more than the calculation of the electronic account, the customs shall adjust current balance of the electronic
account according to real stock;

If the real stock is less than the calculation of the electronic account and the networked-enterprise may give proper reasons, the
customs shall order the networked-enterprise to apply for domestic dales to the shortage;

If the real stock is less than the calculation of the electronic account and the networked-enterprise fails to give proper reasons,
the customs may order the networked-enterprise to apply for domestic sales to the shortage, and may also punish it according to the
Implementation Regulations of the General Administration of Customs of the People’s Republic of China for Administrative Punishment.

Article 16

The customs may ask the networked-enterprise to provide margin or bank’s Letter of Guarantee as form of guarantee if the networked-enterprise
is in one of following circumstances:

The enterprise’s administrative classification is adjusted to a lower grade;

The data to the customs according to the facts has not been submitted;

Refuse to provide corresponding account book, bills and certificates and data while the customs is carrying out the verification and
cancellation;

Do not apply for the verification to the customs within the time limit;

Do not establish an account book according to the customs’ request, account management is in chaos or accounts are not in order.

Article 17

Whoever violates these measures and commits a crime of smuggling or violates the customs’ rules on supervision and administration
shall be handled by the customs according to relative provisions of the Customs Law of the People’s Republic of China and the Implementation
Regulations of the General Administration of Customs of the People’s Republic of China for Administrative Punishment. Whoever commits
a crime shall be ascertained criminal liabilities.

Article 18

For the purpose of these measures:

“Electronic account” refers to the electronic data base established by the customs for a networked-enterprise according to its application
for noting down the information of processing trade record, import and export, verification and cancellation and etc.

“Special check” refers to the verification carried out by the customs to a networked-enterprise on one or more contents in light of
the needs of verification and administration.

“Stock-taking check” refers to a mode of verification and administration that the customs carries out material objects verification
and data check to part of bonded commodities within a certain period while a networked-enterprise is conducting stock-taking.

Article 19

The interpretation of the said measures shall be vested in the General Administration of Customs.

Article 20

These measures shall be implemented on August 1, 2006. The Measures of the General Administration of Customs for Networked Supervision
and Administration of Processing Trade Enterprises promulgated by the General Administration of Customs in its No. 100 Decree on
March 19, 2003 shall be abolished simultaneously.

General Administration of Customs
2006-06-14

REPLY OF THE STATE COUNCIL ON THE DECISION THAT THE CONVENTION OF UNIFYING SEVERAL RULES ON INTERNATIONAL AIR TRANSPORT APPLIES TO HONG KONG SPECIAL ADMINISTRATIVE REGION

Reply of the State Council on the Decision That the Convention of Unifying Several Rules on International Air Transport Applies to
Hong Kong Special Administrative Region

Guo Han [2006] No.92

Civil Aviation Administration of China and Ministry of Foreign Affairs,

The State Council agrees on the decision made on February 28, 2005 by the Standing Committee of the National People’s Congress of
the People’s Republic of China on approving that the Convention of Unifying Several Rules on International Air Transport applies
to Hong Kong Special Administrative Region, and the specific formalities shall be conducted by the Ministry of Foreign Affairs.

The State Council

September 7, 2006

State Council
2006-09-07

CIRCULAR OF THE MINISTRY OF FINANCE & THE STATE ADMINISTRATION OF TAXATION ON ADJUSTING THE STANDARD OF THE TAXABLE AMOUNT OF COAL RESOURCE TAX OF SICHUAN PROVINCE

Circular of the Ministry of Finance & the State Administration of Taxation on Adjusting the Standard of the Taxable Amount of
Coal Resource Tax of Sichuan Province

Cai Shui [2006] No.136

The public finance department and the local taxation bureau of Sichuan Province:

It is decided upon deliberation that the standard of the taxable amount of coal resource tax of your province will be increased to
2.5 yuan per ton as of September 1, 2006.

Please abide hereby.

Ministry of Finance

State Administration of Taxation

September 15, 2006

Ministry of Finance, State Administration of Taxation
2006-09-15

MEASURES FOR ADMINISTRATIVE PUNISHMENT HEARINGS OF THE CUSTOMS OF PEOPLE’S REPUBLIC OF CHINA

General Administration of Customs

Order of the General Administration of Customs

No.145

The Measures for Administrative Punishment Hearings of the Customs of People’s Republic of China , which were adopted through discussion
at the executive meeting of the General Administration of Customs on December 27, 2005, are hereby promulgated, and shall come into
force as of March 1, 2006.

Director General of General Administration of Customs, Mu Xinsheng

January 26, 2006

Measures for Administrative Punishment Hearings of the Customs of People’s Republic of China

Chapter I General Provisions

Article 1

The present Measures are formulated according to the Administrative Punishment Law of the People’s Republic of China, Regulation
of the People’s Republic of China on the Implementation of Customs Administrative Punishment and the provisions of other relevant
laws and administrative regulations with the view of regulating the procedures of hearings on customs administrative punishment,
and protecting the lawful rights and interests of citizens, legal persons and other organizations.

Article 2

The present Measures shall be applicable to the hearings upon the application of the parties before the custom making a decision on
administrative punishment.

Article 3

The customs shall, before making any decision of administrative punishments such as suspension of relevant businesses, suspension
of practice in customs declaration, revocation of customs registration, cancellation of qualification on the practice of customs
declaration, and imposing a fine of more than RMB 10,000 Yuan upon a citizen, or imposing a fine of more than RMB 100,000 Yuan upon
any legal person or other organization, confiscation of the relevant goods, articles, smuggling means of transport, and etc., notify
the parties of their rights to request for holding hearings; if the parties request for a hearing, the customs shall organize it.

Article 4

The principle of openness, fairness, justness, and convenience for the people shall be followed for the hearings of customs administrative
punishment. The hearings of customs administrative punishment shall be held openly, unless any state secret, business secret or
personal privacy is involved.

Chapter II Organs and Personnel to Organize Hearings

Article 5

The hearings on the cases of customs administrative punishment shall be organized by the department for the trial of customs administrative
punishment cases. The hearings involving punishment on intellectual property rights cases shall be organized by the department of
legal affairs of the customs; the hearings involving punishment on qualifications cases shall be organized by the department of the
customs that makes the decision on qualification punishment.

Article 6

A presider and a clerk shall be designated to organize the hearing, and if necessary, another one up to four hearing members may
be designated to assist the presider to organize the hearing.

In case of the hearing involves any professional customs knowledge, the hearing organization organ may invite the relevant experts
of the customs business to act as a hearing member..

Article 7

A hearing presider shall perform the following functions:

Determining to postpone or suspend the hearing;

Asking questions on the facts of the case, the basis to make the administrative punishment, and the reasons thereof;

Requiring the participants in the hearing to provide or supplement evidence;

Presiding over the hearing procedures and maintaining the hearing order, and stopping acts in violation of the hearing disciplines;
and

Determining whether the relevant witnesses or authenticators may take part in the hearing.

Article 8

In case any presider, hearing members or clerk has any of the following circumstances, he shall withdraw by himself, and the parties
and their agents also have the right to apply for their withdrawal:

He is the investigator of the case;

He is a close relative of any of the parties concerned or the investigators of the case;

He has acted as a witness or authenticator of the case; or

He has an interest relationship with the handling result of the case.

The preceding provisions shall be applicable to interpreters and authenticators.

The withdrawal of any hearing member, clerk, interpreter, or authenticator shall be determined by the presider; the withdrawal of
the hearing presider shall be determined by the person-in-charge of the hearing organization organ, if the hearing presider is the
person-in-charge of the hearing organization organ, his withdrawal shall be determined by the person-in-charge of the customs that
holds the hearing.

Chapter III Rights and Obligations of the Participants and Other Personnel in the Hearing

Article 9

The participants in the hearing include the parties and their agents, the third party and its/his agent, and the case investigators;
other personnel shall include witnesses, interpreters, and authenticators.

Article 10

The parties shall enjoy the following rights:

Taking part in the hearing by using the languages of their own nationalities;

Applying for or giving up the hearing;

Applying for not holding the hearing in public;

Entrusting an attorney or other personnel to act as the agent for the hearing;

Making statements, arguments, presenting proof, and making cross-examination; and

Referring to and making modifications on the hearing records, and confirming them through signature.

Article 11

Any citizen, legal person, or other organization that has direct interests relationship with the handling result of a case may attend
the hearing as a third party if he/it requests.

Article 12

The parties and the third party may entrust one or two agents to attend the hearing. The agents shall enjoy the equal rights with
the principal within the delegated power, and perform equal obligations.

Article 13

In case any party or third party entrusts any agent to attend the hearing, he/it shall submit the power of attorney to the customs
before the hearing is held. The following matters shall be specified in the power of attorney:

The brief information of the principal and its/his agent;

The power of agency of the agent;

The starting and ending time for the power of agency; and

The date of entrustment and the seal of the principal.

In case any principal cancels the entrustment in advance, it/he shall notify the hearing organization organ in written form.

Article 14

The case investigators shall refer to the staff members of the customs who undertake investigations and gather evidence for administrative
punishment cases and attend the hearings thereof.

During the course of hearings, the case investigators shall state the illegal facts of the parties, and show the evidence thereof,
describe the decision on administrative punishment to be made, and the legal basis thereof, and make cross-examination and argument
with the parties.

Article 15

Upon the approval of the hearing presider, the case investigators, the parties, and the third party may request the witnesses to attend
the hearing, and provide the witnesses’ basic information one day before the hearing is held.

Article 16

The customs shall retain the interpreters for participants and other personnel in the hearings who are not familiar with the local
language.

Where there is necessity to make an authentication concerning the professional technical issues, the customs shall hand them over
to the customs laboratory test authentication organ or entrust other organs recognized by the state to make an authentication. Upon
the approval of the hearing presider, the parties and their agents, the third party and his/its agents, and case investigators may
request the authenticators to attend the hearing.

Article 17

The parties and their agents, the third party and its/his agent, case investigators, witnesses, interpreters, and authenticators shall
attend the hearing on schedule, observe the hearing disciplines, and answer the questions of the hearing presider truthfully.

Chapter IV Application for Hearings and the Decisions Thereof

Article 18

The parties concerned shall, within 3 days from the day when the customs house informs them of their rights to apply hearing, file
an application for hearings to the customs in written form. If the application is filed by mail, the application date shall be the
date shown in the postmark.

In case any party fails to file an application for the hearing within the prescribed time limit due to force majeure or other special
circumstances, it/he may file an application for hearing within 3 days after the obstacle is eliminated upon the approval of the
customs.

Article 19

If the customs determines to organize a hearing, it shall hold the hearing within 30 days from the day when it receives the application
for hearing, and serve the Notice of Hearing on Customs Administrative Punishment (See Annex I) to the parties seven days before
the hearing is held.

The Notice of Hearing on Customs Administrative Punishment shall specify the name of the parties, the post_title of the case to be heard,
the time and place for holding the hearing, affix the special seal of the customs administrative case , and may also specify the
following matters:

Whether the hearing shall be held openly. If the hearing is not to be held openly, the reasons shall be explained ;

The name of the hearing presider, hearing members, and the clerk;

The requirement to the parties to submit the name list and identity certificates of the personnel participating in the hearing, ,
to prepare the relevant evidence materials, , and to notify the witnesses and other matters;

Rights and obligations of the parties and their agents; and

Other relevant matters concerned.

Article 20

Under any of the following circumstances, the customs house shall make a decision on not holding a hearing:

The applicant is not a party or its agent of the case in question;

The applicant fails to file an application for hearing within the time limit as prescribed in Article 18 of the present Measures;
or

It does not fall within the scope as prescribed in Article 3 of the present Measures.

If the customs house determines not to hold a hearing, it shall make a Notice of Not Holding Hearing on the Customs Administrative
Punishment (See Annex II) within 5 days from the day when it receives the application for hearing, and serve the applicant in a timely
manner.

Article 21

In case two or more parties file an application for hearing respectively on a same administrative case, the hearing may hold jointly.

If there are two or more parties in a case, and only some of the parties concerned file an application for hearing, the customs house
may notify other parties to attend the hearing.

If only part of the parties concerned take part in the hearing, the hearing may be hold only on the facts, evidence, and law application
concerning these parties, but the custom shall make a decision on punishment in a joint way after the hearing finished .

Chapter V Holding of the Hearing

Article 22

During the hearing process, the participants and other personnel in the hearing shall abide by the following hearing disciplines:

The hearing participants and other personnel shall observe the hearing order, and can not make statements and arguments until after
the hearing presider agrees;

The auditors shall not affect the normal going of the hearing; and

Anyone who wishes to make audio recording, video recording, photographing, and interview shall report to the hearing presider for
approval beforehand.

Article 23

The following procedures shall be followed for the hearing:

The shall verify the identity of the parties and their agents, the third party and its/his agent, and the case investigators;

The hearing presider shall announce the name list of the hearing participants, interpreters, and authenticators, and inquire the parties
and their agents, the third party and its/his agent, and case investigators whether they want to apply for withdrawal;

The announcement of the hearing disciplines;

The hearing presider shall announce that the hearing begins and introduce the causes for the case;

The case investigators shall state the illegal facts of the parties, show relevant evidences, and bring forward the decisions and
basis for making administrative punishment;

The parties and their agents make statements and arguments, and bring forward opinions and allegations;

The third party and its/his agent make statements, and bring forward opinions and allegations;

The hearing presider asks questions on the facts of the case, the evidence thereof, and the basis for punishment;

The parties and their agents, the third party and its/his agent, and case investigators make cross-examination and arguments;

10.

The parties and their agents, the third party and its/his agent, and case investigators make final statements; and

11.

The announcement of the ending of the hearing.

Article 24

The parties and their agents, the third party and its/his agent, and the case investigators shall make cross examination on the truthfulness,
authenticity and connection of the evidences, aiming at whether the evidence has any effectiveness of proof and the extent of the
effectiveness of proof .

Upon the approval of the hearing presider, the parties and their agents, the third party and its/his agent, and the case investigators
may ask questions mutually in respect of the evidence, or may ask questions to the witnesses or authenticators. No one may ask any
question by such language or ways as inducing, threatening or insulting, and etc., the content of questions shall have connection
with the facts of the case.

Article 25

When making cross examination on documentary evidence, material evidence and audio-visual reference materials, the parties and their
agents, the third party and its/his agent, and the case investigators shall show the originals or the original things of the evidence;
they may not show the originals or the original things under one of the following circumstances:

If it is really difficult to show the originals or the original things, they may show the duplicates or the reproduced products upon
the approval of the hearing presider; or

If the originals or the original things do not exist any longer, but it can prove that the duplicates or the reproduced products
are consistent with the originals or the original things.

The audio-visual reference materials shall be broadcast or demonstrated at the conference of hearing, and shall be recognized after
being cross-examined.

Article 26

The hearing shall be postponed under any of the following circumstances:

The parties or their agents are unable to attend the hearing due to force majeure or other justifiable reasons;

The hearing presider, hearing personnel or the clerk shall withdraw upon temporary decision, and it is unable to determine the substituting
person on site;

There are circumstances of merger, division or other circumstances of reorganization of assets by any legal person or other organization
that acts as the party, and there is necessity to wait for the successor of the rights and obligations; or

Other circumstances under which the hearing shall be postponed according to law.

After the reasons for postponing the hearing are eliminated, the hearing presider shall determine the time for holding the hearing
once again, and notify the participants and other personnel in the hearing in written form.

Article 27

Under any of the following circumstances, the hearing shall be suspended:

There is necessity to notify new witnesses to attend the hearing or to make an authentication once again or supplement any evidence;

The parties are unable to attend the hearing for the time being due to force majeure or other justifiable reasons;

The participants and other personnel in the hearing do not observe the hearing disciplines, which results in the chaos of the hearing
order; or

Other circumstances under which the hearing shall be suspended according to law.

After the reasons for suspension of the hearing are eliminated, the hearing presider shall determine the time for resuming the hearing,
and notify the participants and other personnel in the hearing in written form.

Article 28

Under any of the following circumstances, the hearing shall be terminated:

The parties withdraw the application for hearing;

The parties fail to attend the hearing on schedule without justifiable reasons;

The parties exit the hearing during the holding of the hearing without justifiable reasons;

The parties die or the legal person or other organization that acts as one party is terminated without any successor of the rights
and obligations; or

Other circumstances under which the hearing shall be terminated according to law.

Article 29

Written transcripts shall be made for the hearings. The written transcripts for the hearings shall specify the following matters:

Causes of the case;

Name or post_title of the participants and other personnel in the hearing;

Name of the hearing presider, hearing members or clerk;

Time, place and ways for holding the hearing;

The facts and evidence of this case brought forward by the case investigators and the decision and basis for the administrative punishment
to be made;

The contents of statements, arguments and cross-examination;

Testimony of the witnesses; and

Other matters that shall be listed as required.

Article 30

The written transcripts for the hearing shall be signed or sealed by the participants and other personnel in the hearing page by page
after they have confirmed that there is no error in it. If anyone demurs about the contents of the transcripts, he may make corrections
on site and confirm it with signature or seal.

If any participant or other personnel in the hearing refuses to sign his name or seal, the clerk shall indicate this on the written
transcripts of the hearing.

Chapter VI Supplementary Provisions

Article 31

In case any hearing presider, hearing member or clerk violates the relevant provisions of the present Measures, and the circumstance
is serious, his entity shall give him an administrative punishment according to law in accordance with the relevant provisions.

Article 32

Serving of legal documents as prescribed in the present Measures shall be done in accordance with the provisions of the Civil Procedure
Law of the People’s Republic of China .

Article 33

The “day” as mentioned in the present Measures shall refer to the workday, the terms “above”, “within” and “before” shall all include
the said number itself.

Article 34

The fees for organizing the hearings on customs administrative punishment shall be borne by the customs house.

Article 35

The power to interpret the present Measures shall remain with the General Administration of Customs.

Article 36

The present Measures shall be implemented as of March 1, 2006. The Interim Measures of the People’s Republic of China for Hearings
on Customs Administrative Punishments, which were promulgated on November 12, 1996 by the General Administration of Customs, shall
be abolished simultaneously. Annex I:The__________ ___Custom of People’s Republic of China

Notice of Hearing on Customs Administrative Punishment

Custom No:[___]

_____________________:

Through the examination, the hearing applied by you (your enterprise) were accorded with the provision of Article 42 of Administrative
Punishment Law of the People’s Republic of China, and Article 49 of Regulation of the People’s Republic of China on the Implementation
of Customs Administrative Punishment. The Custom decided to hold the hearing on____________case. Please you (your enterprise) attend
the hearing at___________on____________.

(seal of the Custom)

______(year/month/day) Annex II:The___________________Custom of People’s Republic of China

Notice of Not Holding Hearing on the Customs Administrative Punishment

Custom No:[___]

_______________:

Through examination, the hearing applied by you (your enterprise) were belonged to the circumstance of iterm________thereinafter:

The applicant is not a party or its agent of the case in question;

The applicant fails to file an application for hearing within the time limit as prescribed;

It does not fall within the scope of the hearing according to law.; or

______________________________________________.

The Custom decided not to hold the hearing in accordance with the provision of Article 42 of Administrative Punishment Law of the
People’s Republic of China, and Article 49 of Regulation of the People’s Republic of China on the Implementation of Customs Administrative
Punishment.

(seal of the Custom)

_________(year/month/day)

General Administration of Customs
2006-01-26

LETTER OF CHINA BANKING REGULATORY COMMISSION CONCERNING APPROVING THE CHINA-BASED BRANCHES OF DBS BANK (HONG KONG) LIMITED TO LAUNCH OUT ON-LINE BANKING BUSINESS

Letter of China Banking Regulatory Commission concerning Approving the China-based Branches of DBS Bank (Hong Kong) Limited to Launch
out On-line Banking Business

DBS Bank (Hong Kong) Limited,

Our commission has received the letter which was signed by Mr. Randolph Sullivan, administrative president of your Bank.

The following reply is hereby given to you according to the Regulation of the People’s Republic of China on the Administration of
Foreign-funded Financial Institutions (Order No. 340 of the State Council), the Detailed Rules for the Implementation of the Regulation
of the People’s Republic of China on the Administration of Foreign-funded Financial Institutions (Order No. 4,2004 of China Banking
Regulatory Commission) and the Interim Measures for Controlling On-line Banking Operations (Order No. 6, 2001 of the People’s Bank
of China):

The branches set up by your bank within China are hereby approved to launch out the on-line banking business, the business scope and
clients shall be limited under the approved scope of each branch.

The on-line banking business to be approved to launch out shall comply with the Interim Measures for Controlling On-line Banking Operations
and other related provisions.

The branches of your bank approved to be established within China to launch out on-line banking business shall, with the strength
of this Reply and the authorization document issued by your bank, report the type and nature of the business to be launched, the
rules on managing the risks of on-line banking business and the operating procedures to the local organ dispatched by China Banking
Regulatory Commission, and shall be supervised and inspected by it.

According to the Regulation of Management on Commercial Cipher, your bank shall hand in an application to the state cipher administrative
organ for an approval of using cipher products, or using equipment containing cipher technologies.

China Banking Regulatory Commission

February 9, 2006

China Banking Regulatory Commission
2006-02-09

ACCOUNTING STANDARD FOR BUSINESS ENTERPRISES NO. 9 – EMPLOYEE COMPENSATION

Ministry of Finance

Accounting Standard for Business Enterprises No. 9 – Employee Compensation

Cai Kuai [2006] No. 3

February 15, 2006

Chapter I General Provisions

Article 1

To standardize the confirmation and measurement of the employee compensation, and the disclosure of relevant information, these Standards
are formulated according to the Accounting Standard for Business Enterprises – Basic Standards.

Article 2

The term ” employee compensation ” refers to all kinds of payments and other relevant expenditures given by enterprises in exchange
of the services offered by the employees. The employee compensation shall include:

(1)

Wages, bonuses, allowances and subsidies for the employees;

(2)

Welfare expenses for the employees;

(3)

Medical insurance, endowment insurance, unemployment insurance, work injury insurance, maternity insurance and other social insurances;

(4)

Housing accumulation fund;

(5)

Labor union expenditure and employee education expenses;

(6)

Non-monetary welfare;

(7)

Compensations for the cancellation of the labor relationship with the employees; and

(8)

Other relevant expenditures of services offered by the employees.

Article 3

The following items shall be subject to other relevant accounting standards:

(1)

The enterprise annuity funds shall be subject to the Accounting Standard for Business Enterprises No. 10 -Enterprise Annuity Fund;
and

(2)

The compensation based on shares shall be subject to the Accounting Standard for Business Enterprises No. 11 – Share-based Payment.

Chapter II Confirmation and Measurement

Article 4

During the accounting period of an employee’ providing services to an enterprise, the enterprise shall recognize the compensation
payable as liabilities. Except for the compensations for the cancellation of the labor relationship with the employee, the enterprise
shall, in accordance with beneficiaries of the services offered by the employee, treat the following circumstances respectively:

(1)

The compensation for the employee for producing products or providing services shall be recorded as the product costs and service
costs;

(2)

The compensation for the employee for any on-going construction project or for any intangible asset shall be recorded as the costs
of fixed asset or intangible assets; or

(3)

The compensation for the employee other than those as mentioned in Items (1) and (2) shall be recorded as profit or loss for the current
period.

Article 5

During the accounting period of an employee’ providing services to an enterprise, the enterprise shall calculate the medical and insurance,
endowment insurance, unemployment insurance, work injury insurance, maternity insurance and other social insurances, as well as the
housing accumulation fund, which are paid by the enterprise to the employee, on the basis of a certain proportion in the total amount
of wages, and treat them according to Article 4 of these Standards.

Article 6

If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant labor contract or brings
forward any compensation proposal for the purpose of encouraging the employee to accept a layoff, and the following conditions are
met concurrently, the enterprise shall recognize the expected liabilities incurred due to the compensation for the cancellation of
the labor relationship with the employee, and shall simultaneously record them into the profit or loss for the current period:

(1)

Where the enterprise has formulated a formal plan on the cancellation of labor relationship or has brought forward a proposal on voluntary
layoff and will execute it soon.

This plan or proposal shall include the department at which the employee to be laid off works, the post of the employee and the number
of the employees to be laid off, the amount of compensation for the cancellation of labor relationship or for layoff as determined
on the basis of the job category or post according to the relevant provisions, and the planned time for the cancellation of labor
relationship or layoff.

(2)

The enterprise is unable to unilaterally withdraw the plan on the cancellation of labor relationship or the layoff proposal.

Chapter III Disclosure

Article 7

An enterprise shall disclose the following information related to the employee compensation in the annotation:

(1)

The wages, bonuses, allowances and subsidies, which shall be paid to the employees, and the amounts payable at the end of period;

(2)

The medical insurance, endowment insurance, unemployment insurance, work injury insurance, maternity insurance and other social insurances,
which shall be paid by the enterprise for the employees, as well as the amounts payable at the end of period;

(3)

The housing accumulation fund that shall be paid for the employees, as well as the amounts payable at the end of period;

(4)

The non-monetary welfare provided for the employees, as well as the calculation basis;

(5)

The compensation that shall be paid for the cancellation of the labor relationship with the employees, as well as the amounts payable
at the end of period; and

(6)

Other employee compensations.

Article 8

The contingent liabilities incurred due to the uncertainty of the number of the employees who offer to accept the layoff proposal,
the compensation standards and etc. shall be disclosed according to the Accounting Standard for Business Enterprises No. 13 – Contingencies.

Ministry of Finance
2006-02-15

ACCOUNTING STANDARDS FOR ENTERPRISES NO. 24 – HEDGING

Ministry of Finance

Accounting Standards for Enterprises No. 24 – Hedging

Cai Kuai [2006] No. 3

February 15, 2006

Chapter I General Principles

Article 1

These Standards are formulated in accordance with the Accounting Standards for Enterprises – Basic Standards for the purpose of regulating
the recognition and measurement of the hedging.

Article 2

The term ” hedging” refers to one or more hedging instruments which are designated by an enterprise for avoiding the risks of foreign
exchange, interest rate, commodity price, stock price, credit and etc., and which is expected to make the changes in fair value or
cash flow of hedging instrument(s) to offset all or part of the changes in the fair value or cash flow of the hedged item.

Article 3

The hedging are classified into fair value hedging, cash flow hedging, and net investment hedging in an overseas operation.

(1)

A fair value hedging refers to a hedging of the risk to changes in the fair value of a recognized asset or liability or a previously
unrecognized firm commitment, or to changes in the identifiable portion of the fair value of a recognized asset or liability or a
previously unrecognized firm commitment. Such changes in value are attributable to a particular risk and could affect enterprise’
profit or loss.

(2)

A cash flow hedging refers to a hedging of the risk to changes in cash flow. Such changes in cash flow are attributable to a particular
risk related to a recognized asset or liability or a highly probable forecast transaction and could affect enterprise’ profit or
loss.

(3)

A net investment hedging in an overseas operation refers to hedging of the foreign exchange risk arising from net investment in an
overseas operation. The “net investment in an overseas operation” refers to an enterprise’ equity of rights and interests in the
net assets in an overseas operation.

Article 4

For a hedging which satisfies the conditions as prescribed in Chapter III of these Standards, the enterprise may deal with it through
the hedging accounting method.

The ” hedging accounting method” shall refer to a method to record the result of offsetting the hedging instrument and the changes
of the fair value of the hedged item.

Chapter II Hedging Instruments and Hedged Items

Article 5

The term “hedging instrument” shall refer to a derivative instrument which is designated by an enterprise for hedging and by which
it is expected that changes in its fair value or cash flow can offset the changes in fair value or cash flow of the hedged item.
For a hedging of foreign exchange risk, a non-derivative financial asset or non-derivative financial liability may be used as a hedging
instrument.

Article 6

To establish the hedging relationship, an enterprise shall designate all or certain proportion of the hedging instruments (excluding
a certain time period within the residual time limit of the hedging instrument), but with the exception of the following circumstances:

(1)

For an option, the enterprise may separate the intrinsic value from the time value of the option and merely designate the option as
a hedging instrument based on the changes of its intrinsic value; and

(2)

For a forward contract, the enterprise may separate the interest from the spot price of a forward contract and merely designate the
forward contract as a hedging instrument based on the changes of spot price.

Article 7

Generally an enterprise may designate a single derivative instrument as a hedging for one kind of risk, but if the following conditions
are met at the same time, it may designate a single derivative instrument as a hedging for one or more kinds of risks:

(1)

All risks to be hedged are clear and identifiable;

(2)

The effectiveness of hedging may be proved; and

(3)

It can insure that there is a specific specifying relationship between the derivative instrument and different risk positions.

The “effectiveness of hedging” shall refer to the extent that the changes in the fair value or cash flow of a hedging instrument may
offset the changes resulted from the hedging risks in the fair value or cash flow of a hedged item.

Article 8

An enterprise may designate a combination of two or more derivative instruments or a certain proportion of such a combination as a
hedging instrument.

For a foreign exchange hedging, the enterprise may designate a combination of two or more non-derivative instruments or a certain
proportion of such a combination, or a combination of derivative instrument(s) and non-derivative instrument(s) or a certain proportion
of such a combination as a hedging instrument.

For a collar option, or for an option composed of an issued option and a purchased option, if its essential is equivalent to an option
issued by the enterprise (that is to say, the enterprise charges for the net option), the enterprise cannot designate it as a hedging
instrument.

Article 9

The “hedged item” shall refer to the following items which make an enterprise faced to changes in fair value or cash flow and are
designated as the hedged objectives:

(1)

A single recognized asset, liability, firm commitment, highly probable forecast transaction, or a net investment in an overseas operation;

(2)

A group of recognized assets, liabilities, firm commitments, highly probable forecast transactions, or net investments in overseas
operations with similar risk characteristics; and

(3)

A portion of the portfolio of financial assets or financial liabilities that share the risk of interest rate of the same hedged (only
applicable to a portfolio of hedging in the fair value of interest rate risk).

The “firm commitment” shall refer to an agreement with legal control force regarding the exchange of a particular number of resources
at the stipulated price on a specific future date or in a specific future period. The “forecast transaction” shall refer to a transaction
for which no commitment is made, but which is expected to occur.

Article 10

If the hedged risk is a credit risk or foreign exchange risk, the held-to-maturity investment may be designated a hedged item. If
the hedged risk is an interest rate risk or risk of repayment ahead of the schedule, the held-to-maturity investment shall not be
designated as a hedged item.

Article 11

If the exchange gain or loss of any monetary item formed by an intra-group transaction of an enterprise is unable to be fully offset
in the consolidated statements, the foreign exchange risk of this monetary item may be designated as a hedged item in the consolidated
financial statements.

For a highly probable forecast intra-group transaction of an enterprise, if its price is denominated in a currency other than the
functional currency of the subject entering into that transaction (that is to say, its price is denominated in an overseas currency)
and if the relevant foreign exchange risk will affect consolidated financial statements, such foreign exchange risk may be designated
as a hedged item in the consolidated financial statements.

Article 12

For a portion of the risk relating to the cash flow or fair value of a financial liabilities or financial asset, if the effectiveness
of hedging may be measured, the enterprise may, based on the risk, designate financial asset or financial liability as a hedged item.

Article 13

In the matter of a hedging in fair value of the interest rate risk of a portfolio of financial assets or financial liabilities, an
asset or liability denominated in a certain currency (such as RMB, US dollar or Euro dollar) may be designated as a hedged item.

Article 14

An enterprise may designate all of the cash flows of a financial asset or financial liability as a hedged item. However, if only a
portion of the cash flows of a financial asset or financial liability is designated as a hedged item, the designated portion shall
be less than the total amount of the cash flows of the financial asset or financial liability.

Article 15

Where a non-financial asset or non-financial liability is designated as a hedged item, the hedged risk shall be all risks or foreign
exchange risks pertinent to this non-financial asset or non-financial liability.

Article 16

With regard to a hedging by the portfolio of assets or liabilities with similar risk characteristics, each single asset or liability
among the portfolio shall undertake the hedged risk simultaneously, and the changes in fair value of each single asset or liability
in the portfolio resulted from the hedged risk shall, by and large, be expected in proportion to the holistic changes in the fair
value of the portfolio resulted from the hedged risk.

Chapter III Recognition and Measurement of Hedging

Article 17

Where a fair value hedging, cash flow hedging or a hedging of net investment in an overseas operation satisfies the following conditions
simultaneously, it may be dealt with through the hedging accounting method as prescribed in these Standards:

(1)

At the commencement of the hedging, the enterprise shall specify the hedging relationship formally (namely the relationship between
the hedging instrument and the hedged item) and prepare a formal written document on the hedging relationship, risk management objectives
and the strategies of hedging. This document shall at least specify the contents of hedging instrument, the hedged item, the nature
of the hedged risk and the method for the effectiveness assessment of the hedging and etc..

The hedging shall be relevant to the designated specific identifiable risk, and will ultimately affect the profits and losses of the
enterprise.

(2)

The hedging expectation is highly efficient and meets the risk management strategy, which is confirmed for the hedging relationship
by enterprise at the very beginning.

(3)

For a cash flow hedging of forecast transaction, the forecast transaction shall be likely to occur and shall make the enterprise faced
to the risk of changes in cash flow, which will ultimately affect the profits and losses.

(4)

The effectiveness of hedging can be reliably measured.

(5)

An enterprise shall continuously evaluate the effectiveness of hedging and ensure that this hedging is highly effective in accounting
period in which the hedging relationship is specified.

Article 18

If a hedging satisfies the following conditions simultaneously, the enterprise shall recognize it as being highly efficient:

(1)

At the beginning and in subsequent periods of a hedging, this hedging expectation shall be highly effective in offsetting the changes
in the fair value or cash flows caused by the hedged risk during the specified periods;

(2)

The hedging ‘s actual offset results are within a range of 80% to 125%.

Article 19

An enterprise shall at least evaluate the hedging effectiveness when formulating medium-term or annual financial statements.

Article 20

For a hedging of interest rate risk, the enterprise shall, by formulating the maturity timetable of financial assets and financial
liabilities, mark out the net risk of interest rate for each period and evaluate the hedging effectiveness accordingly.

Article 21

If a fair value hedging satisfies the conditions for adopting the hedging accounting method, it shall be dealt with according to the
following provisions:

(1)

If the hedging instrument is a derivative instrument, the gain or loss from the changes in the fair value of the hedging instrument
shall be recorded in the profits and losses of the current period. If the hedging instrument is a non-derivative instrument, the
gain or loss on the book value of the hedging instrument resulting from changes in exchange rate shall be recorded in the profits
and losses of the current period.

(2)

The gain or loss of the hedged item resulting from the hedged risk shall be recorded in the profits and losses of the current period
and the book value of the hedged item shall be adjusted at the same time. The said provision shall also be applicable if the hedged
item is an inventory of which the subsequent measurement will be made at its cost and realizable net value, whichever is lower, or
a financial asset of which the subsequent value will be made at the amortized cost, or a financial asset available for sale.

Article 22

With regard to a fair value hedging for the interest rate risk of a portfolio of financial assets or financial liabilities, for satisfying
the requirements of Article 21 (2) of these Standards, the enterprise may deal with the gain or loss formed by the hedged item according
to the following methods:

(1)

If the hedged item is an asset within the re-pricing period, it shall be presented as a separate item under the assets item ( presenting
behind the financial assets) of the balance sheet, and shall be written off after the termination of recognition.

(2)

If the hedged item is a liability within the re-pricing period, it shall be presented as a separate item under the liabilities item
( presenting behind the financial liabilities) of the balance sheet, and shall be written off after the termination of recognition.

Article 23

Where any of the following conditions is satisfied, the enterprise shall stop making the treatments according to the Article 21 of
these Standards:

(1)

The hedging instrument has been mature or has been sold, or the contract is terminated or has been exercised.

Where the period of hedging instrument is extended, or where a hedging instrument is replaced by another one, if the extension or
replacement is an composing part of the hedging strategy as specified in the formal written document of the enterprise, the enterprise
shall not deal with it as being in the case of maturity or termination of contract.

(2)

The hedging does not satisfy the conditions for adopting the hedging accounting method as specified in these Standards any longer.

(3)

The enterprise has revoked the specifying of the hedging relationship.

Article 24

If a hedged item is a financial instrument measured at the amortized cost, an adjustment which is made to the book value of the hedged
item according to the Article 21 (2) of these Standards shall, during the period from the adjustment date to the maturity date,
be amortized based on the effective interest rate recalculated on the adjustment date and shall be recorded in the profits and losses
of the current period.

With regard to a fair value hedging of interest rate risk portfolio, the relevant items separately presented in the balance sheet
shall, during the period from the adjustment date to the relevant date on which the re-pricing period ends, be amortized based on
the effective interest rate re-calculated on the adjustment date. If it is not feasible to adopt the effective interest rate method
for the amortization, the straight-line method may be adopted. .

The amortization of above-mentioned adjustment amounts shall be finished on the maturity date of the financial instrument. For a fair
value hedging of interest rate risk portfolio, the amortization shall be finished prior to the date of end of the relevant re-pricing
period.

Article 25

If a hedged item is an unrecognized firm commitment, the accumulative amount of the changes in the fair value of the firm commitment
resulting from the hedged risk shall be recognized as an asset or liability and the related gain or loss shall be included into the
profits and losses of the current period.

Article 26

For a fair value hedging of firm commitment to purchase an asset or undertake a liability, an adjustment shall, based on the accumulative
amount of the changes in the fair value resulting from the hedged risks (recognized to be an asset or liability), be made to the
amount of initial recognition of the asset obtained or liability undertaken due to the firm commitment.

Article 27

Where a cash flow hedging meets the conditions for adopting the hedging accounting method, it shall be dealt with in accordance with
the following provisions:

(1)

In the profit or loss of the hedging instrument, the portion, which is attributed to the effective hedging shall be directly recognized
as the owner’s equity and shall be presented as a separate item. The amount of the portion of the effective hedging shall be confirmed
in accordance with the absolute amounts of the following items whichever is lower:

(a)

The accumulative profit or loss of the hedging instrument as of the commencement of hedging; or

(b)

The accumulative amount of changes in the present value of the estimated future cash flow of the hedged item as of the commencement
of the hedging.

(2)

In the profit or loss of the hedging instrument, the portion, which is attributed to the ineffective hedging (namely the other profit
or loss after deducting the portion directly recognized as the owner’s equity) shall be recorded in the profit and loss of the current
period.

(3)

If the formal written document on the risk management strategy states that a certain portion of the profit or loss of a hedging instrument,
or the relevant effects on the cash flow shall be excluded when evaluate the hedging effectiveness, the profit or loss of excluded
portion shall be dealt with according to the Accounting Standards for Enterprises No. 22 – Recognition and Measurement of Financial
Instruments.

An enterprise may deal with a hedging of foreign exchange risk of firm commitment as a cash flow hedging or fair value hedging.

Article 28

If a hedged item is a forecast transaction and if the forecast transaction makes the enterprise subsequently recognize a financial
asset or financial liability, the relevant profit or loss directly recognized as the owner’s equity originally shall be shifted out
of the same period in which this financial asset or financial liability affects the profit or loss of the enterprise and shall be
recorded in the profits and losses of the current period. However, when all or partial net loss expected by the enterprise to be
directly recognized in the owner’s equity originally can not be made up in the future accounting period, the portion which can not
be made up shall be shifted out and shall be recorded in profits and losses of the current period.

Article 29

If a hedged item is a forecast transaction and if the forecast transaction makes the enterprise recognized a non-financial asset or
non-financial liability subsequently, the enterprise may deal with it by choosing either of the following methods:

(1)

The relevant profit or loss directly recognized in the owner’s equity originally shall be shifted out during the same period in which
this non-financial asset or non-financial liability affects the profit or loss of the enterprise and shall be recorded in the current
profits and losses of the current period. However, when all or partial net loss expected by the enterprise to be directly recognized
in the owner’s equity originally can not be made up in the future accounting period, the portion which can not be made up shall be
shifted out and shall be recorded in profits and losses of the current period.

(2)

The relevant profit or loss directly recognized in the owner’s equity originally shall be shifted out and shall be recorded in the
amount of the initial recognition of the non-financial asset or non-financial liability.

When the forecast transaction of a non-financial asset or non-financial liability forms a firm commitment, if the firm commitment
satisfies the conditions for adopting the hedging accounting method as prescribed in these Standards, either of the above-mentioned
methods shall be chose to deal with it as well.

When either of the above-mentioned methods is chosen by an enterprise as the accounting policy, it shall be applied to all relevant
forecast transaction hedging and shall not be changed randomly.

Article 30

With regard to a cash flow hedging without involved in Articles 28 and 29 of these Standards, the profit or loss of the hedging instrument
directly recorded in the owner’s equity originally shall be shifted out at the same period, during which the profits and losses of
the hedged forecast transaction are affected, and shall be recorded in the profits and losses of the current period.

Article 31

Under the following circumstances, an enterprise may not make any treatment in accordance with the provisions from Article 27 to
30 of these Standards:

(1)

The hedging instrument has been mature or sold, or the contract is terminated or has been exercised.

The profit or loss of the hedging instrument, which is directly recorded in the owner’s equity during effective period of the hedging
shall not be shifted out, until the forecast transaction actually occurs, it shall be dealt with according to Article 28 , 29 or
30 of these Standards.

If the period of a hedging instrument is extended, or if a hedging instrument is replaced by another, and if the extension or replacement
is an composing part of the hedging strategy as specified in the formal written document of the enterprise, it shall not be dealt
with as being in the case of maturity or termination of contract.

(2)

The hedging no longer satisfies the conditions for adopting the hedging accounting methods as prescribed in these Standards.

The profit or loss of the hedging instrument, which is directly recorded in the owner’s equity during the effective period of the
hedging shall not be shifted out, until the forecast transaction actually occurs it shall be dealt with according to the Article
28 , 29 or 30 of these Standards.

(3)

It is expected that the forecast transaction will not occur.

The profit or loss of the hedging instrument, which is directly recorded in the owner’s equity during the effective period of the
hedging shall be shifted out and shall be recorded in the profits and losses of the current period.

(4)

An enterprise revokes the designation of the hedging relationship.

For a hedging of forecast transaction, the profit or loss of the hedging instrument, which is directly recorded in the owner’s equity
during the effective period of the hedging, shall not be shifted out until the forecast transaction actually occurs, or until it
is expected that it will not occur. If the forecast transaction actually occurs, it shall be dealt with according to the Article
28 , 29 or 30 of these Standards. If it is expected that the forecast transaction will not occur, the relevant profit or loss directly
recorded in the owner’s equity originally shall be shifted out and shall be recorded in the profits and losses of the current period.

Article 32

A hedging of net investment in an overseas operation shall be dealt with according to the similar to the provisions of cash flow hedging
accounting:

(1)

In the profit or loss formed by the hedging instrument, the portion that is attributed to the effective hedging shall be recognized
as the owner’s equity directly and shall be presented as a separate item.

When disposing an overseas operation, the profit or loss of the hedging instrument reflected by the separately presented item in the
owner’s equity shall be shifted out and shall be recorded in the profits and losses of the current period.

(2)

In the profit or loss formed by the hedging instrument, the portion that is attributed to the ineffective hedging shall be recorded
in the profits and losses of the current period.

Ministry of Finance
2006-02-15

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Probate

INTERIM PROVISIONS ON ADMINISTRATION OF THE EXPORT OF PRECURSOR CHEMICALS TO PARTICULAR COUNTRIES (REGIONS)

DETAILED RULES FOR THE IMPLEMENTATION OF THE REGULATION ON THE ADMINISTRATION OF COMMERCIAL PERFORMANCE

NOTICE OF THE MINISTRY OF FINANCE AND STATE ADMINISTRATION OF TAXATION CONCERNING THE RELATED POLICIES FOR COLLECTIVE AND URBAN LAND USE TAX

ORDINANCE ON THE PROTECTION OF THE RIGHT TO NETWORK DISSEMINATION OF INFORMATION

ANNOUNCEMENT NO. 32, 2006 OF THE GENERAL ADMINISTRATION OF CUSTOMS ON THE CIRCUMSTANCES OF THE PROTECTION OF CUSTOMS FOR THE ARCHIVAL FILING OF THE SLOGAN AND MASCOTS OF THE 29TH OLYMPIC GAMES

MEASURES OF THE GENERAL ADMINISTRATION OF CUSTOMS FOR NETWORKED SUPERVISION AND ADMINISTRATION OF PROCESSING TRADE ENTERPRISES

REPLY OF THE STATE COUNCIL ON THE DECISION THAT THE CONVENTION OF UNIFYING SEVERAL RULES ON INTERNATIONAL AIR TRANSPORT APPLIES TO HONG KONG SPECIAL ADMINISTRATIVE REGION

CIRCULAR OF THE MINISTRY OF FINANCE & THE STATE ADMINISTRATION OF TAXATION ON ADJUSTING THE STANDARD OF THE TAXABLE AMOUNT OF COAL RESOURCE TAX OF SICHUAN PROVINCE

MEASURES FOR ADMINISTRATIVE PUNISHMENT HEARINGS OF THE CUSTOMS OF PEOPLE’S REPUBLIC OF CHINA

LETTER OF CHINA BANKING REGULATORY COMMISSION CONCERNING APPROVING THE CHINA-BASED BRANCHES OF DBS BANK (HONG KONG) LIMITED TO LAUNCH OUT ON-LINE BANKING BUSINESS

ACCOUNTING STANDARD FOR BUSINESS ENTERPRISES NO. 9 – EMPLOYEE COMPENSATION

ACCOUNTING STANDARDS FOR ENTERPRISES NO. 24 – HEDGING

CONSTITUTION ACT, 1982 – page 22

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

CONSTITUTION ACT, 1982 – page 17

CONSTITUTION ACT, 1982 – page 16

CONSTITUTION ACT, 1982 – page 12

CONSTITUTION ACT, 1982 – page 11

CONSTITUTION ACT, 1982 – page 10

CONSTITUTION ACT, 1982 – page 9

CONSTITUTION ACT, 1982 – page 8

CONSTITUTION ACT, 1982 – page 7