THE INTERIM MEASURES FOR THE ADMINISTRATION OF THE EXPORT OF TEXTILE PRODUCTS

Decree of the Ministry of Commerce

No. 21

The Interim Measures for the Administration of the Export of Textile Products have been deliberated and approved by the Ministry of
Commerce and agreed by the General Administration of Customs, General Administration of Quality Supervision , Inspection and Quarantine
and are hereby promulgated and shall come into effect as of the date of promulgation. The quotas of interim export of textile products
in 2006 shall be implemented in accordance with the Interim Measures for the Administration of Textile Products (Decree of the Ministry
of Commerce [2005] No.20). The Interim Measures for the Administration of Textile Products (the Ministry of Commerce shall be annulled
as of January 1, 2007.
Minister of the Ministry of Commerce: Bo Xilai

September 18, 2006

The Interim Measures for the Administration of the Export of Textile Products

Article 1

For the purpose of standardizing the export and operation order of textile products, the Measures herein are hereby formulated in
accordance with the Foreign Trade Law of the People’s Republic of China and the Administrative License Law of the People’s Republic
of China.

Article 2

The Ministry of Commerce shall be responsible for administrating of the export of national textiles and for cooperating with the
General Administration of Customs, the General Administration of Quality Supervision, Inspection and Quarantine to formulate and
adjusting the Catalogue of Commodities Subject to Interim Administration of the Export of Textile Products (hereinafter referred
to as “the Catalogue of Commodities Subject to Administration”).

The Catalogue of Commodities Subject to Administration shall be released by means of an announcement, and shall cover such contents
as the type, the number of tax regulations, and the country or region concerned, the time limit for the implementation, and the overall
licensed quantity of the products hereof.

Article 3

The Ministry of Commerce shall authorize the authority in charge of commerce of all provinces, autonomous regions, municipalities
directly under the Central Government, cities specifically designated in the state plan, Xinjiang Production and Construction Corps,
Harbin, Changchun, Shenyang, Nanjing, Wuhan, Chengdu, Guangzhou, and Xi’an (hereinafter referred to as “the local authorities in
charge of commerce”) to be responsible for administrating the interim export license of textile products).

The General Administration of Quality Supervision, Inspection and Quarantine shall, by referring to the advice of the Ministry of
Commerce, provisionally authorize the aforesaid authorities to be responsible for issuing the certification of the place of origin
of the textile products listed in the Catalogue of Commodities Subject to Administration.

Article 4

The export destination countries as mentioned herein refers to the ultimate destination countries (regions), and the countries involved
in processed trade export refers to the actual export countries with declaration. And the administration of entrepot trade shall
not be governed by the Measures herein.

Article 5

The Measures herein shall be applicable to the license administration of general trade, barter trade, processing and assembling trade,
bonded factory and other means of textile products export.

Where the textile products enter such special supervision zones of customs and bonded place as bonded area and export processing zone
from the outside zone within the territory of the People’s Republic of China and fall under the textile products listed in the Catalogue
of Commodities Subject to Supervision, the customs shall not examine and check the license hereof.

Where the textile products listed in the Catalogue of Commodities Subject to Administration are to be exported via the warehouses
under export supervision (export distribution warehouses), the customs shall check the license when the products are entered in the
warehouse and within the time limit (departure from the territory of the People’s Republic of China) as specified in the license,
the products shall be exported to the countries(regions) designated in the Catalogue of Commodities Subject to Administration and
shall not be remained within the territory of the People’s Republic of China.

Article 6

The textile products listed in the Catalogue of Commodities Subject to Administration shall be subject to interim export administration.
The Ministry of Commerce shall authorize the Quota & License Administrative Bureau to be responsible for consolidated administration
and guidance of the License of Interim Export of Textile Products( hereinafter referred to as “the License”) of the local authorities
in charge of commerce. The name list of the certificate authority, the form of the license and the stamp for special use shall be
otherwise promulgated by the Ministry of Commerce, the General Administration of Customs, and the General Administration of Quality
Supervision, Inspection and Quarantine.

Article 7

The foreign trade operators (hereinafter referred to as “the operators”) shall, prior to the export of the textile products listed
in the Catalogue of Commodities Subject to Supervision, handle the examination and approval procedures of interim export license
and withdraw the license in the local authorities in charge of commerce and handle the procedures of customs declaration, examination
and clearance formalities on the strength of the license.

Article 8

The commodities shall be listed in the Catalogue of Commodities Subject to Supervision in any of the following circumstances.

(1)

The relevant countries and regions set limit upon the textile products of the People’s Republic of China;

(2)

The textile products needed to be subject to the interim quantitative administration in accordance with the agreement made through
bilateral agreement.

Article 9

The interim export licensed quantity of the textile products listed in the Catalogue of the Commodities Subject to Administration
shall be allocated to all the operations by means of achievement distribution, the agreement of bid invitation. The detailed types
and quantity shall be otherwise promulgated by the Ministry of Commerce.

The achievement distribution shall be implemented in accordance with the Measures herein. The specific rules about the agreement of
bid invitation shall be otherwise announced by the Ministry of Commerce under the Measures herein.

Where such special situations occurs as volatile market change, the excessively low use rate of export licensed quantity or the chaotic
export order, the Ministry of Commerce may, in accordance with the proposal of textile export industry, adopt the interim measures
except Article 1 herein to restore the normal export order.

Article 10

The operation shall, in accordance with the relevant national labor, safety, and environmental protection laws and rules, conduct
the operational activities.

As for the operators confirmed by the relevant sectors and yet fail to fulfill the obligations of labor, security and environmental
protection, the Ministry of Commerce may abrogate the qualification the interim export licensed quantity herein obtained in accordance
with Article 9 herein and withdraw all the licensed quantity.

Article 11

The achievement distribution part shall be based upon the actual export achievement of the relevant commodities, and the applicable
amount with the interim export license (hereinafter referred to as “the applicable volume”) subject to the actual achievement of
customs export shall be determined in accordance with the following formula:

STc70%1/M1+30%2/M2

Where

(1)

S stands for the applicable volume;

(2)

T stands for the confirmed national total volume of temporary export licenses;

(3)

Q1 stands for the export performance of an operator to a restricting country (region). Q2 stands for the export performance of an
operator to all other countries and regions except the restricted ones (Q1);

(4)

M1 stands for the export performance of all operators of the country to the restricting countries (regions); M2 stands for the export
performance of all operators to the whole world (Q1except the restricted countries(regions);

(5)

The minimum applicable amount of all types of commodities shall be otherwise promulgated by the Ministry of Commerce. Where the applicable
amount calculated in accordance with the aforesaid formula is lower than the minimum applicable amount, the applicable amount of
the operator shall be zero;

(6)

The surplus amount lower than the minimum amount shall be allocated completely in accordance with the principle of priority of achievement.

Article 12

The Ministry of Commerce shall, in accordance with the following principles, determine the export achievement of the relevant commodities:

(1)

The export statistics subject to the 10-digit tariff line of China’s customs;

(2)

The time of statistics is the 12 months prior to the interim export license amount;

(3)

The export achievement of general trade, processing trade shall be calculated pursuant to 100% of the statistic export sum of China’s
customs;

(4)

The export achievement of the enterprises in western region of China shall be calculated in accordance with 150% of the statistical
export volume of China’s customs, the middle region and the enterprises in the northeast old industrial base shall be calculated
in accordance with 130% of the statistical export volume of Chinese customs;

(5)

The group enterprises with many subsidiaries and branches or holding company shall, in accordance with the actual amount of the operators
(the code of customs enterprises) and the amount of interim export license shall be calculated under the name of various operators.

Article 13

The Ministry of Commerce shall, in accordance with the aforesaid distribution principle, determine the types and amounts of the applicable
amount of various operators and distribute to the local authorities in charge of commerce by means of batches and the electronic
form and publish it in the website of the Ministry of Commerce.

Article 14

The operators shall, within the applicable types and amounts delivered by the Ministry of Commerce, raise the license amount application
with the local authorities in charge of commerce.

Article 15

The local authorities in charge of commerce shall, within 15 days as of the receipt of the applicable amount, summarize the application
of the local operators and submit them attached by the electronic data to the Ministry of Commerce.

The Ministry of Commerce shall, within 15 days as of the receipt of the application report from the local authorities in charge of
commerce, determine to deliver the distribution amount of interim export of the national operators.

Article 16

The licensed amount of interim export of textile products shall be allowed to be transferred. The transferor and the receiver may
log in the website of the interim export licensed amount of textile products http:\xk.ec.com.cnand transact it directly, the
transferor in some region may also have its technology transfer conducted by the regional authority in charge of commerce. The receiver
shall register in the industrial and commercial administrative authority, record and register in the authority in charge of foreign
trade and fulfill such obligations as labor, safety, and environmental protection.

Article 17

The temporary export licenses of textile product shall be subject to the system of “one license valid for one batch of products”
and “one license valid only for one customs authority clearance”. The licenses herein shall be effective within a calendar year and
the validity period shall be 6 months.

Where the textile products herein are not exported within the prescribed time limit, the holders of temporary export licenses of textile
products may go to the original license issuing authority to handle the extension procedures within at most three months. Where the
license is delayed or altered, the new one shall replace the original one.

Article 18

Where the operator who has obtained the interim export license amount does not completely use the quantity of the interim export
license, the operator shall hand the remaining part to the Ministry of Commerce via local authorities in charge of commerce.

Article 19

The amount which is handed over, fails to be applied for or relinquished shall be calculated in the remaining amount of interim export
of textile products of that year. The remaining overall amount shall be continuously distributed by the Ministry of Commerce in accordance
with Article 11 and shall complete the distribution hereof prior to at least 75 days as of the completion f the licensing year.

Article 20

Where the operator who has obtained the interim export licensed amount of textile products has used more than 20% yet no more than
30% of the achievement distribution within the effective time limit, the Ministry of Commerce shall deduct it from the equal amount
in the distribution amount of the next year. Where the unused amount exceeds 30% of the achievement performance within the effective
time limit, the Ministry of Commerce shall deduct it doubly from the distribution amount of the next year.

Article 21

Where the operator who has obtained the interim export license amount applies for and withdraws the license, the operator shall fill
in the Application Form for License and seal the seal of the unit. Where the operator applies via Internet, the operator shall faithfully
fill in the relevant electronic form and deliver it to the relevant license issuing authority.

Where the operator conducts the application in written form or via the Internet, the operator shall deliver the copy of the relevant
export contract to the license issuing authority at the same time.

Article 22

Every license issuing authority shall, after having received the substantially faithful and formally complete and effective application
of the license amount hereof, issue the license within three working days in accordance with the approved document of interim export
quantity and the relevant electronic data distributed by the local authority in charge of commerce with the authorization of the
Ministry of Commerce.

Article 23

As for the commodities subject to the interim export license administration, the operator shall, after having conducted the interim
export license, apply for and withdraw the certificate of the original place of textile products from the interim certificate issuing
authority authorized by the General Administration of Quality Supervision , Inspection and Quarantine. The certificate issuing authority
shall issue the certificate of the original place of textile products pursuant to the license.

The certificate of the original place shall be identity with such content as the quantity and sum in the license.

Article 24

The operator shall handle the export declaration procedure on the basis of the licenses stamped with the special seal for textiles
license; the commodities shall be cleared on the strength of the electronic data and written licenses from the Ministry of Commerce
and the certificate of original place of issued by competent issuing authorities.

Article 25

In the course of handling textiles export relevant procedures, the customs shall inspect and verify the licenses stamped with the
special seal for textile licenses. As for the textile products subject to legitimate inspection, the customs shall also handle the
clearance procedures on the strength of the Clearance Note of Entry Goods issued by the inspection and quarantine authorities.

The Ministry of Commerce as well as the General Customs Administration shall verify the license via Internet. The administration about
electronic check mechanism and the relevant inspection and verification shall be promulgated otherwise.

Article 26

The interim export license of textile products shall not be forged and altered. Where the export license approval document or the
export license are forged or altered, the parties involved in shall be given the relevant punishment in accordance with the Foreign
Trade Law of the People’s Republic of China, the Customs Law of the People’s Republic of China, Regulations of the People’s Republic
of China on the Administration of Import and Export Commodities and Measures Governing Goods Subject to Export Licenses.

Article 27

The exported sample products may be exempted from obtaining export licenses in cases where the quantity of each batch of exported
commodities does not exceed 50 pieces (including sets, pairs, kilograms or other commodities unit, excluding dozen, double ,dozen,
dozen set, ton); where the products are subject to license administration by the customs authority of the importing country, the
operators shall apply to the issuing bodies for licenses within the quota of license for the enterprise.

Article 28

The export of articles for overseas exhibition and articles for sales shall be handled in accordance with the relevant provisions
of the Measures for the Administration of Goods Subject to Export Licenses; where the goods are allowed for clearance in accordance
with the requirement of customs of the import country (region), it shall be handled in accordance with the Measures herein.

Article 29

Where the operator evades the Measures herein to transit the commodities produced in China to the countries (regions) prescribed
in the Catalogue of Commodities subject to Administration, the Ministry of Commerce shall render the relevant punishment hereto,
and prohibit the operator from being involved in the export operational activities within one year as of the date when the relevant
administrative punishment comes into effect.

Article 30

The inspection upon the issue of the license, the investigation of the law enforcement body, the verification upon the certificate
issuing authority as well as the punishment upon the certificate issuing authority in violation of the Measures herein and upon the
operators who forge or alter the license shall be handled in accordance with the Measures for the Administration of the License of
Exported Goods, unless otherwise prescribed.

Article 31

Such textile products as are processed in the mainland of China and yet its original place is outside the mainland shall not be applicable
to the Measures herein.

Article 32

The Ministry of Commerce shall be responsible for interpreting the Measures herein.

Article 33

The Measures herein shall come into effect as of the date of its promulgation.

Ministry of Commerce
2006-09-18

THE MEASURES GOVERNING ELECTRONIC BANKING

China Banking Regulatory Commission

Order of China Banking Regulatory Commission

No. 5

The “Measures Governing Electronic Banking”, which were adopted at the 40th chairman’s meeting of China Banking Regulatory Commission
on November 10, 2005, are hereby promulgated, and shall come into force on March 1, 2006.

Chairman Liu Mingkang

January 26, 2006

The Measures Governing Electronic Banking

Chapter I General Provisions

Article 1

The present Measures are formulated in accordance with the “Banking Supervision Law of the People’s Republic of China”, the “Law of
the People’s Republic of China on Commercial Banks”, the “Regulation of the People’s Republic of China on the Administration of
Foreign- funded Financial Institutions”, as well as other laws and regulations for the purposes of strengthening the risk management
of electronic banking, safeguarding the lawful rights and interests of customers and banks, and promoting the healthy and orderly
development of electronic banking.

Article 2

The term “electronic banking” as mentioned in the present Measures shall refer to the banking services provided to customers by commercial
banks or other financial institutions in the banking sector via the use of communication channels open to the general public or
the open public network, and the special networks built up by banks for certain self-service facilities or customers.

Electronic banking business includes: the banking business via the use of the computer or Internet (hereinafter referred to as online
banking business), the banking business via the use of audio equipment such as telephone or telecommunication network (hereinafter
referred to as telephone banking business), the banking business via the use of the mobile phone or wireless network (hereinafter
referred to as mobile banking business), and other banking business via the use of electronic service equipment and network, in
which customers complete their financial transactions by self-service means.

Article 3

Financial institutions in the banking sector and foreign- funded financial institutions established in accordance with the “Regulation
of the People’s Republic of China on the Administration of Foreign- funded Financial Institutions (hereinafter uniformly referred
to as financial institutions) shall develop the electronic banking business in accordance with the present Measures.

The financial asset management companies, trust and investment companies, finance companies, financial lease companies, which are
established inside the territory of the People’s Republic of China, and other financial institutions established upon approval of
China Banking Regulatory Commission (hereinafter referred to as CBRC) shall, when initiating electronic finance business of the electronic
banking nature, be governed by the relevant provisions on financial institutions to provide electronic banking business in the present
Measures.

Article 4

Upon the approval of CBRC, a financial institution may initiate its electronic banking business inside the territory of the People’s
Republic of China, to provide electronic banking services to enterprises, residents and other customers inside the territory of the
People’s Republic of China, or to develop the trans- territory electronic banking services in accordance with the relevant provisions
of the present Measures.

Article 5

A financial institution shall comply with the principles of rational planning, uniform administration and guaranteeing safe operation
of the system when developing the electronic banking services, and shall guarantee the healthy and orderly development of electronic
banking business.

Article 6

A financial institution shall, according to the feature of electronic banking business, establish and perfect the risk management
system and the internal control system for the electronic banking business, set up corresponding management departments, clarify
the duties of electronic banking business management, and identify, evaluate, monitor and control the risks of the electronic banking
business effectively.

Article 7

CBRC shall take charge of supervising and administering for electronic banking business.

Chapter II Application and Modification

Article 8

A financial institution shall, when initiating electronic banking business inside the territory of the People’s Republic of China,
file an application or make a report to CBRC in accordance with the relevant provisions of the present Measures.

Article 9

A financial institution that intends to initiate electronic banking business shall meet the following conditions:

(1)

Its business operation is in normal state, a sound risk management system and a sound internal control rules has been established,
and its main information management system and business handling system meet with no major breakdown within one year before it applies
for initiating electronic banking business;

(2)

It has constituted the overall development strategy, development planning, and electronic banking safety strategy for its electronic
banking business, and has established the organizational system and institutional system for risk management of the electronic banking
business;

(3)

It has, according to the development planning and safety strategy for electronic banking business, built up the basic facilities and
system for operation of electronic banking business, and has made necessary safety checking and business testing on relevant facilities
and systems;

(4)

It has made safety evaluation which meets the supervisory requirements on circumstance of risk management , work operation facilities
and system, and etc. of the electronic banking business.

(5)

It has set up a specific electronic banking business management department, and has staffed qualified managers and technicians for
it; and

(6)

Other conditions required by CBRC.

Article 10

A financial institution that initiates electronic banking business in the form of online banking operation or mobile banking operation,
etc. by using Internet as the medium shall, in addition to meeting the conditions listed in Article 9 , meet the following conditions:

(1)

Its basic facilities and equipment of electronic banking can guarantee the normal operations of electronic banking;

(2)

Its electronic banking system has the necessary business processing capacity, and can satisfy the customer’s demand for business processing
timely;

(3)

It has established an effective external attack detection mechanisms;

(4)

If it is a Chinese- funded financial institution in the banking sector, its electronic banking operation system and business processing
server should be established inside the territory of the People’s Republic of China; or

(5)

If it is a foreign- funded financial institution, its electronic banking operation system and business processing server may be established
either inside or outside the territory of the People’s Republic of China. When they are established outside the territory, the said
institution shall establish facilities and equipment inside the territory of the People’s Republic of China for recording and preserving
the transaction data, be able to meet the requirements of the financial regulatory department on on-site inspection, and be able
to, in case of any legal dispute, meet the requirements of Chinese judicial institutions on investigation and evidence collection.

Article 11

A foreign- funded financial institution that initiates electronic banking business shall, in addition to meeting the conditions as
listed in Article 9 and Article 10 , establish a business office inside the territory of the People’s Republic of China in accordance
with the relevant laws and administrative regulations, while the regulatory authorities of its home country (region) shall have
the legal framework and the supervisory capacity for the supervision of electronic banking business.

Article 12

When a financial institution applies for initiating electronic banking business, the approval system and report system shall be applied
separately on the basis of different types of electronic banking business.

(1)

For the electronic banking business initiated with Internet or other open network or wireless network, including online bank, mobile
bank, and the electronic banking initiated with PDA such as palm computer, the approval system shall be applied ;

(2)

For the electronic banking business initiated with domestic or regional telecommunication network or cable network, etc., the report
system shall be applied ; and

(3)

For the electronic banking business initiated with the special network built up by the bank for certain self-service facilities or
with the customer, the separate provisions in the laws, regulations or administrative rules, if any, shall be complied with, or the
report system shall be applied when there are no such provisions.

After a financial institution initiates electronic banking business, the relevant services it provides through the direct network
connections with its certain customer shall belong to the normal daily electronic banking services, not belong to the type of initiation
application for the electronic banking business.

Article 13

A financial institution shall, before applying for initiating the electronic banking business in need of examination and approval,
communicate with CBRC first regarding the business in application, stating the scheme on the design and construction of the system
and basic facilities, as well as the basic operational mode, etc. of the applied electronic banking business, It shall also, according
to the communication result , adjust the relevant scheme.

After the communication for supervision is conducted, the financial institution shall carry out the electronic banking system construction
according to the adjusted and improved scheme, and shall finish the internal testing work of the relevant system before filing the
application.

The objects of internal testing shall be limited to the insiders of the financial institution, the relevant working staff of the contracted
out institution, and the working staff of the relevant institution, but shall not extend to the ordinary customers.

Article 14

A financial institution may, when applying for initiating electronic banking business, simultaneously apply for different types of
electronic banking services in a same application report, but shall indicate the types of electronic banking business in the application.

Article 15

A financial institution shall, when applying to CBRC or its dispatched office for initiating electronic banking business, submit the
following documents and information (in triplets):

(1)

the application report for initiating electronic banking business, which was signed by the legal representative of the financial institution;

(2)

the type of electronic banking business to be applied for , and the kinds of business to be carried out;

(3)

the development planning on the electronic banking business;

(4)

the introduction on the operation facilities and technical system of the electronic banking business;

(5)

a testing report on the electronic banking business system;

(6)

a safety evaluation report on the electronic banking;

(7)

the operational emergency responding plan and business continuity plan on the electronic banking business;

(8)

the risk management system and corresponding rules on the electronic banking business;

(9)

the management department and management duties of the electronic banking business, as well as the introduction on the principal person-in-charge;

(10)

the name, telephone, fax, and e-mail box, etc. of contact person of the applicant institution, ; and

(11)

other documents and information to be submitted as required by CBRC.

Article 16

CBRC or its dispatched office shall, after receipt of the financial institution’s application materials, inform the financial institution
of the relevant requirements once and for all when requiring a commercial bank to supplement materials in light of the regulatory
requirements.

The financial institution shall work out and bind up the application materials anew in light of the requirements of CBRC or its dispatched
office, and correct the date of submission, as well.

Article 17

CBRC or its dispatched office shall, within 3 months as of receipt of the complete set of application materials for approval by a
financial institution for initiating the electronic banking business, make a written decision on approval or disapproval. If it decides
to disapprove the application, it shall explain the reason therefor.

Article 18

Where a financial institution applies an application report with more than one type of electronic banking business, CBRC or its dispatched
office may approve all or parts of the electronic banking services according to the relevant provisions and requirements.

With respect to the types of electronic banking business which are not approved by CBRC or its dispatched office, the financial institution
may file the application anew in accordance with the relevant provisions.

Article 19

A financial institution does not have to file an application if initiating the electronic banking services are applied by the report
system, but it shall, with reference to the relevant provisions in Article 15 , submit relevant materials to CBRC or its dispatched
office one month before initiating the electronic banking business.

Article 20

A financial institution may, after initiating electronic banking business, make use of the electronic banking platform to advertise
and sell traditional bank products and services, or develop new types of business according to the features of electronic banking
business.

A financial institution shall, when making use of the electronic banking platform to advertise relevant bank products or services,
abide by the relevant laws, regulations and business management rules. It shall, when making use of the electronic banking platform
to sell relevant bank products or services, carefully analyze and choose the products suitable to be sold by way of electronic banking,
instead of making use of electronic banking to sell banking products which may not be sold until the customer has been evaluated
or has confirmed the products face to face, unless there are otherwise different provisions in any law, regulation or administrative
rule.

Article 21

Where a financial institution adds or modifies the types of electronic banking business when required by its business development,
the approval system or report system shall be applied to .

Article 22

Where a financial institution adds or modifies any of the following types of electronic banking services, the approval system shall
be applied to :

(1)

the services as required by any relevant law, regulation or administrative rule to be subject to examination and approval, but which
the financial institution has not applied for, and prepares to initiate by making use of electronic banking;

(2)

the services which may not be carried out until is directly connected with the securities sector or insurance sector, etc. for real-time
data exchange when the financial institution applying the approved business to electronic banking;

(3)

the services to be carried out between financial institutions through the connected electronic banking platform; and

(4)

the services by trans- territory electronic banking .

Article 23

Where a financial institution adds or modifies any type of electronic banking service that is subject to examination and approval,
it shall submit the following documents and information (in triplets) to CBRC or its dispatched office:

(1)

the application for adding or modifying the type of business, which is signed by the legal representative of the financial institution;

(2)

definition and operational flow of the types of business services to be added or modified;

(3)

features of risks of the types of business services to be added or modified, and the prevention measures;

(4)

relevant management rules;

(5)

the name, telephone, fax, and e-mail box, etc. of the entity applicant’s contact person; and

(6)

other documents and information to be submitted as required by CBRC.

Article 24

A financial institution in the banking sector whose business activities are not restricted by region (hereinafter referred to as national
financial institution) shall, when applying for initiating electronic banking business or for adding or modifying any type of electronic
banking service which are subject to examination and approval, file the application via its head office (company) to CBRC.

A financial institution in the banking sector that is required by the relevant provisions to carry out business activities only in
a certain city or region (hereinafter referred to as regional financial institution) shall, when applying for initiating electronic
banking business or for adding or modifying any type of electronic banking services that are subject to examination and approval,
file the application via its legal entity to the local dispatched office of CBRC.

A foreign- funded financial institution shall, when applying for initiating electronic banking business or for adding or modifying
a type of electronic banking in need of examination and approval, file the application via its head office (company) or its principal
reporting bank inside the territory of the People’s Republic of China to CBRC.

Article 25

CBRC or its dispatched office shall, within 3 months as of receipt of a financial institution’s complete set of application materials
for adding or modifying a type of electronic banking business in need of examination and approval, make a written decision on approval
or disapproval. If it decides to disapprove the application, it shall explain the reason therefor.

Article 26

In case of any other type of electronic banking service, the report system shall be applied to , and the financial institution does
not have to file an application when adding or modifying it, but shall, within one month before initiating this type of business,
submit relevant materials to CBRC or its dispatched office with reference to Article 23 of the relevant provisions.

Article 27

A financial institution in the banking sector that has realized the centralized data processing and system integration (hereinafter
referred to as centralized data processing) may, after being approved to initiate electronic banking business, authorize its branch
to provide partial or all electronic banking services. Its branch shall, before initiating relevant business, report to the local
dispatched office of CBRC.

For a financial institution in the banking sector that has not realized centralized data processing, if the electronic banking processing
system of its branch is independent from that of the headquarters, and the branch is managed as a regional financial institution
when initiating electronic banking business, such a branch shall bring the head office’s authorization document to apply or report
to the local dispatched office of CBRC in accordance with the relevant provisions. Any other branch that does not fall under the
foregoing circumstance needs only to bring the head office’s authorization document to report to the local dispatched office of CBRC
before initiating the relevant business.

After a foreign- funded financial institution is approved to initiate electronic banking business, its branch inside the territory
shall, if intending to initiate electronic banking business, bring the head office’s (company’s) authorization document to report
to the local dispatched office of CBRC.

Article 28

A financial institution that has initiated electronic banking business shall, if deciding to terminate all the electronic banking
services or some types of electronic banking services according to the plan, report to CBRC 3 months in advance regarding the reason
for terminating the electronic banking services and the solution to relevant problems, etc., and meanwhile make an announcement.

A financial institution shall, if deciding to terminate part of the electronic banking service according to the plan, report to CBRC
in advance of one month before terminating the business, and make an announcement.

A financial institution must, if terminating its electronic banking services or part of business types, take effective measures to
protect the lawful rights and interests of customers, and make an effective solution regarding the problems that may arise.

Article 29

A financial institution shall, when need to initiate electronic banking business anew or carry out the terminated types of business
anew after terminating its electronic banking services or part of services types, file the application or go through the procedures
anew in accordance with the relevant provisions.

Article 30

Where a financial institution needs to pause its electronic banking services according to the plan due to upgrading or adjustment,
etc. of the electronic banking system, it shall choose a proper time to do so, try to minimize the impacts to the customers, and
make an announcement on its web site 3 days in advance.

Where a financial institution pause the work of electronic banking services unplanned for more than 4 hours within normal working
hours or for more than 8 hours beyond normal working hours caused by any emergency or any incidental factor, it shall, within 24
hours after pause of the services, report the relevant information to CBRC, and shall, within 3 days after the accident has been
basically settled, report the causes, influences, remedial measures and settlement, etc. of the accident to CBRC.

Chapter III Risk Management

Article 31

A financial institution shall include the risk management of the electronic banking services into its overall framework of risk management,
and shall, according to the operational features of the electronic banking services, establish and improve its risk management system
for electronic banking, and the internal control system for the safety and stable operation of electronic banking.

Article 32

A financial institution’s risk management system and internal control system for electronic banking shall include clear management
framework, sound rules and strict internal authorization control mechanism, and shall be able to effectively identify, evaluate,
monitor and control the strategic risks, operational risks, legal risks, prestigious risks, credit risks, and market risks, etc.
that the electronic banking business faces.

Article 33

The prudential risk management principles and measures, etc. made by a financial institution regarding traditional business risks
shall be also applicable to electronic banking business, nevertheless, the financial institution shall make necessary and proper
amendments of the original risk management rules and procedures according to the changes of the environment and the operational
method of the electronic banking business.

Article 34

A financial institution’s board of directors and senior management team shall, according to its overall development strategy and actual
management situation, make the development strategy and feasible management and investment strategy for electronic banking, make
continuous comprehensive benefit analysis on the management of electronic banking, and scientifically evaluate the influences of
electronic banking business to its overall risks.

Article 35

A financial institution shall, when formulating a development strategy of electronic banking, strengthen the protection of intellectual
property rights on electronic banking business.

Article 36

A financial institution shall conduct the evaluation and classification to the importance of the different systems, risk facilities,
information and other resources of electronic banking and their influences to the safety of electronic banking business, formulate
a proper safety strategy, establish and improve the risk control procedures and safe operation rules, and take corresponding safe
management measures.

A financial institution shall check and test various safety control measures at regular intervals, adjust them at proper times when
required by the actual situation, and guarantee the sustainable, effective and timely updating of the safety measures.

Article 37

A financial institution shall guarantee the safety of the operational facilities , equipment, and the safety control facilities and
equipment for electronic banking. With respect to the important facilities, equipment and data of electronic banking, it shall take
proper protective measures.

(1)

The physical safety control of a tangible site must meet the requirements in the relevant laws, regulations and safety standards of
the state, and for the safety control of a tangible site without uniform safety standards, the financial institution shall guarantee
that the safety rules it has formulated could effectively cover the possible main risks it shall face;

(2)

An electronic banking system with an open network as the medium shall reasonably establish and use firewall, anti-virus software and
other safe products and technologies to guarantee the electronic banking to have enough anti-attack capacity, anti-virus capacity,
and intrusion prevention capacity;

(3)

For the access to, check of, maintenance of, and emergency response to important facilities and equipment, the financial institution
shall have a clear delimitation of powers, division of duties and operation flow, establish log file management rules, and truthfully
record and keep appropriate custody of relevant records;

(4)

The financial institution shall strictly control the power to access important technical parameters, establish a corresponding technical
parameter adjustment and modification mechanism, and guarantee that the mechanism can effectively prevent divulgence of relevant
technical parameters after the key staff members are replaced;

(5)

With respect to the key positions and staff members to manage the electronic banking, the financial institution shall adopt the post-shifting
and compulsory holiday rules, as well as establish strict internal supervision and management rules.

Article 38

A financial institution shall adopt proper encryption technologies and measures to guarantee the safety and confidentiality of transmission
of electronic transaction data, as well as the entirety, authenticity and undeniability of the transmitted transaction data.

The data encryption technology adopted by a financial institution shall conform to the relevant provisions of the state. The financial
institution shall, when required by the safety of electronic banking and on the basis of the development of scientific information
technology, check and evaluate the intensity of the adopted encryption technology and algorithm at regular intervals, and adjust
the encryption method at proper times, as well.

Article 39

A financial institution shall conclude an electronic banking service agreement or contract with customer, specifying the rights and
obligations of both parties.

In the electronic banking service agreement, a financial institution shall fully disclose to customer the risks it might face when
using electronic banking to make transactions, the risk control measures the financial institution has taken, the risk control measures
that the customer ought to take, and the assumption of liabilities for relevant risks.

Article 40

A financial institution shall adopt proper measures and technologies to identify and verify the authentic and effective identities
of the customers of electronic banking services, and shall, pursuant to the relevant agreement concluded with each certain customer,
effectively manage the customer’s working powers, fund transfer or transaction amount limit, etc.

Article 41

A financial institution shall establish a corresponding mechanism, search, monitor and settle the activities of defrauding customer’s
information by imitating or intentionally establishing telephone, web site, short message number, etc. similar to those of the financial
institution.

A financial institution shall, after finding any illegal activity of imitating electronic banking, report the offence to the public
security department, and report to CBRC. Meanwhile, the financial institution shall timely remind its customers through its web site,
telephone voice prompt system or short message platform.

Article 42

A financial institution shall use uniform telephone numbers, domain names and short message numbers, etc. of electronic banking services
as much as possible, and shall specify the lawful avenues for the customer to start up electronic banking, the way of responding
to unexpected incidents, and the method of contact, etc. in the agreement with the customer

When a financial institution in the banking sector that has realized centralized data processing carries out online bank business,
its head office (company) and the branches shall use a uniform domain name; when a financial institution in the banking sector that
has not realized centralized data processing carries out online bank business, its head office (company) shall establish a uniform
access website, and establish links to its branches’ web sites on its homepage.

Article 43

A financial institution shall establish an intrusion detection system and an intrusion protection system for electronic banking, monitor
and control the operation of electronic banking in real time, scan loopholes of the electronic banking system at regular intervals,
and establish a mechanism of distinguishing, handling and reporting illegal intrusions.

Article 44

A financial institution shall, when using the electronic signature or electronic certification, on customer information or transaction
information for its electronic banking, comply with the relevant laws and regulations of the state.

A financial institution shall, when using a third party certification system, evaluate the third party certification institution at
regular intervals, guarantee the safety, reliability and public credibility of the relevant certification.

Article 45

A financial institution shall, at regular intervals, evaluate the sufficiency of electronic banking resources that customers may use,
and take necessary measures to guarantee smooth connection of circuits, and the usability of the electronic banking services to customers.

Article 46

A financial institution shall make a plan on continuity of electronic banking, and guarantee the continuous normal operation of electronic
banking business.

The financial institution shall, when making the continuity plan of electronic banking business, fully consider the influences of
the third party service provider to the continuity of the business, and shall take proper precautionary measures.

ANNOUNCEMENT NO.8, 2006 OF THE GENERAL ADMINISTRATION OF CUSTOMS OF THE PEOPLE’S REPUBLIC OF CHINA

General Administration of Customs

Announcement No.8, 2006 of the General Administration of Customs of the People’s Republic of China

[2006] No. 8

In accordance with Anti-dumping Regulations of People’s Republic of China, the Customs Tariffs Committee of the State Council decided
to impose anti-dumping duties on imported Benzofuranol originating from Japan, EU and the U.S., which shall last 5 years as from
February 12, 2006. Announcement No. 7, 2006 was issued for this case (See Appendix 1 for details). Matters of concern are listed
as follows:

As from February 12, 2006, besides imposing duties and value added tax on the imported Benzofuranol originating from the Japan, EU
and the U.S. (under item 29329910 in Import and Export Tariffs of PRC), the Customs shall impose anti-dumping duties and value-added
tax in the import process in line with different supporters.

See Appendix 1 for specific description of the products under anti-dumping measures.

Any unit applying for importing Benzofuranol shall submit certificate of place of origin to the Customs. If the place of origin is
one of Japan, EU and the U.S., invoice of the original manufacturer shall be provided.

For any unit applying for importing Benzofuranol originating from FMC Corporation in the U.S. and Pesticide Co., Ltd, Japan, anti-dumping
duties shall be exempted because of a Price Protocol between the Ministry of Commerce of PRC and the above-mentioned companies.

Issues concerned imposition of anti-dumping duties shall be conducted in accordance with Announcement No. 9, 2001 of the General Administration
of Customs of the People’s Republic of China and Decree No. 111 of the General Administration of Customs of the People’s Republic
of China.

The anti-dumping deposit in cash that is paid after the implementation of the temporary anti-dumping measures shall be transferred
to anti-dumping duties.

The Customs shall punish the forging behavior in accordance with related regulation.

Any similar product for import could apply to Ministry of Commerce for the arbitration on whether it is under the temporary anti-dumping
measures. The Customs shall act accordingly.

Appendix:

(1)

Announcement No.7 of Ministry of Commerce, 2006 (omitted)

(2)

Anti-dumping Deposit Ratio Table (omitted)

General Administration of Customs of the People’s Republic of China

February 10, 2006

General Administration of Customs
2006-02-10

ACCOUNTING STANDARDS FOR ENTERPRISES NO. 12 – DEBT RESTRUCTURING

The Ministry of Finance

Accounting Standards for Enterprises No. 12 – Debt Restructuring

Cai Kuai [2006] No.3

February 15, 2006

Chapter I General Provisions

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 debt restructuring, and disclosing of the relevant information,.

Article 2

The term “debt restructuring” refers to an event in which the terms of a debt are given in as a result of a mutual agreement between
a debtor and a creditor or a judgment of a court when the debtor gets into a financial problem.

Article 3

The manners of debt restructuring mainly include:

(1)

The liquidation of a debt by asset;

(2)

The conversion of a debt into capital;

(3)

The modification of other terms of a debt such as deduction of principal or interest of a debt, excluding the two manners aforesaid
;

(4)

A combination of the three aforesaid manners .

Chapter II Accounting Treatment of Debtors

Article 4

When a debt is liquidated by cash, the debtor shall include the difference between the book value of the debt to be restructured and
the actual cash payment into the current profits and losses.

Article 5

When a debt is liquidated by a non-cash asset, the debtor shall include the difference between the book value of the debt to be restructured
and the fair value of the non-cash asset transferred into the current profits and losses.

The difference between fair value of the non-cash asset transferred and its book value shall be included in the current profits and
losses.

Article 6

When a debt is converted into capital, the debtor shall recognize the total par value of shares, to which the creditor becomes enpost_titled
for waiver of the credit, as stock of capital (or paid-in capital) and shall recognize the difference between the total amount of
the fair value of the shares and the stock of capital (or paid-in capital) as capital reserve.

The difference between the book value of the debt to be restructured and total amount of the fair value of the shares shall be included
in the current profits and losses.

Article 7

Where other terms of a debt are modified, the debtor shall regard the post-modification fair value of the debt as the entry value
of the restructured debt, and shall include the difference between the book value of the debt to be restructured and the entry value
of the restructured debt in the current profits and losses.

If the post-modification terms of a debt concern any contingent payment and if the contingent payment meets the conditions for the
recognition of expected liabilities as prescribed in the Accounting Standards for Enterprises No. 13 – Contingencies, the debtor
shall recognize the contingent sum payable as expected liability, and shall include the difference between the book value of the
debt to be restructured and the aggregate amount of the entry value of the restructured debt and the expected amount of liability
in the current profits and losses.

The term “contingent sum payable” refers to the payable sum in the light of the occurrence of a future event that is uncertain.

Article 8

Where a debt restructuring is made by a combination of the liquidation of a debt by assets, the liquidation of a debt by non-cash
asset, the conversion of a debt into capital, and the modification of other terms of a debt, the debtor shall offset, one by one,
the cash paid, the fair value of the non-cash asset transferred, and the fair value of the shares to which the creditor becomes enpost_titled,
against the book value of the debt to be restructured, then handle it in accordance with Article 7 of these Standards.

Chapter III Accounting Treatments of the Creditor

Article 9

When a debt is liquidated by cash, the creditor shall include the difference between the book balance of the debt to be restructured
and the cash received in the current profits and losses. If the creditor has made provision for the impairment of the credit, he
shall first offset the aforesaid difference against the impairment provision, then include the shortfall in the current profits and
losses.

Article 10

When a debt is liquidated by non-cash asset, the creditor shall recognize the fair value of the non-cash asset received as the entry
value and shall handle the difference between the book balance of the debt to be restructured and the fair value of the non-cash
asset received in accordance with Article 9 of these Standards.

Article 11

When a debt is converted into capital, the creditor shall recognize the fair value of the shares to which it becomes enpost_titled as investment
to the debtor and shall handle the difference between the book balance of the debt to be restructured and the fair value of the shares
in accordance with Article 9 of these Standards.

Article 12

When other terms of a debt are modified, the creditor shall recognize the fair value of the credit after the modification of other
terms of the debt as the book value of the restructured debt and shall handle the book balance of the debt to be restructured and
the book value of the restructured debt in accordance with Article 9 of these Standards.

If the post-modification terms of the debt concern any contingent sum receivable, the creditor shall not recognize the contingent
sum receivable, nor he include it in the book value of the restructured debt.

The term “contingent sum receivable” refers to the receivable sum in the light of the occurrence of a future event that is uncertain.

Article 13

Where a debt restructuring is made by a combination of the liquidation of a debt by assets, the liquidation of a debt by non-cash
asset, the conversion of a debt into capital and the modification of other terms of a debt, the creditor shall offset, one by one,
the cash received, the fair value of the non-cash asset received, and the fair value of the shares to which the creditor becomes
enpost_titled, against the book balance of the debt to be restructured, then handle it in accordance with Article 12 of these Standards.

Chapter IV Disclosure

Article 14

The debtor shall, in its notes, disclose the information concerning debt restructuring as follows:

(1)

The manners of debt restructuring;

(2)

The total amount of the gains of debt restructuring, which is confirmed;

(3)

The increment amount of stock capital (or pain-in capital) due to debt-to-capital conversion;

(4)

The contingent sum payable; and

(5)

The methods and basis for the ascertainment of the fair value of the non-cash asset transferred in a debt restructuring, the fair
value of the shares converted by the debt, and the fair value of the debt after the modification of other terms of the debt.

Article 15

A creditor shall, in its notes, disclose the information concerning debt restructuring as follows:

(1)

The manners of debt restructuring;

(2)

The total amount of the loss of debt restructuring, which is recognized;

(3)

The increment amount of investment and the proportion to the total shares of the debtor due to credit-to-share conversion;

(4)

The contingent sum receivable; and

(5)

The methods and basis for the confirmation of the fair value of the non-cash asset received in a debt restructuring, the fair value
of the shares converted by the credit, and the fair value of the credit after the modification of other terms of the debt.

The Ministry of Finance
2006-02-15

NOTICE OF THE STATE TAXATION ADMINISTRATION ON RELEVANT ISSUES CONCERNING THE IMPLEMENTATION OF THE INTEREST CLAUSES IN TAX AGREEMENTS

the State Taxation Administration

Notice of the State Taxation Administration on Relevant Issues concerning the Implementation of the Interest Clauses in Tax Agreements

Guo Shui Han [2006] No. 299

To the bureaus of state taxation and local taxation of all provinces, autonomous regions, municipalities directly under the Central
Government, and cities under separate state planning, and Yangzhou Institute of Taxation,

As prescribed in the interest clauses of the agreements concluded between China and other countries on the avoidance of double taxation
(hereinafter referred to as agreements), the interest obtained by the residents of the signatory country within China shall be obliged
to pay taxes in China, with the tax rate generally not higher than 10%, with only a few exceptions with tax rate lower or higher
than 10%. Not withstanding the aforesaid taxation provisions, some agreements prescribe that the interest obtained by the financial
institutions or other organizations of the central bank or government of one of the signatory countries shall be exempted from tax
in the other country in order to encourage the flow of funds between both countries, and some agreements further list the names of
tax-exemption banks or financial institutions in the interest clauses, protocols or exchange letters. For the purpose of guaranteeing
the correct implementation of the provisions in the agreement on levying tax on or exempting tax from interest income, notice on
relevant issues is made as follows:

Where the interest clauses in an agreement prescribe that the interest obtained from China by the financial institution or other organization
of the central bank or government of the signatory country shall be exempted from tax in China, the said bank (institution) may file
an applications to the competent taxation authority at the locality where the interest occurs for relevant agreement-based treatments
after signing a loan contract. The competent taxation authority where the interest occurs shall go through the procedures on the
exemption of interest income tax. When applying for exemption from the interest income tax, the taxpayer shall attach the proof document
issued by the competent taxation authority of the signatory country on its status as a bank or financial institution owned by the
government as well as a counterpart of the relevant loan contract.

II.

Where any relevant clause of an agreement, protocols, meeting minutes or exchange letter, etc. has specified the signatory country’s
banks and financial institutions that shall be exempted from interest income tax in China, each taxpayer shall go through the procedures
for exemption of interest income tax in accordance with Article 1 of the present Notice, and only needs to attach a counterpart
of the relevant contract.

III.

When receiving the request of a taxpayer for exemption of interest income tax under the agreement, the local competent department
of taxation where interest occurs is requested to correctly implement the agreement, and handle the procedures as soon as possible.
In case that it is hard to clarify whether the taxpayer may enjoy the abovementioned agreement-based treatments, and any difficulty
or objection arises in the implementation process due to the change of the name or there structuring, etc. of a listed bank during
the implementation process, the matter shall be reported to the State Taxation Administration level by level for confirmation.

IV.

The present Notice shall come into force as of the date of promulgation. The Notice of the State Taxation Administration on the Relevant
Issues concerning Exemption of Tax from Interest Income for Implementing Tax Agreements (Guo Shui Fa [1996] No. 029) shall be repealed
simultaneously.

Appendix: Table of Relevant Provisions in Interest Clauses of Tax Agreements

State Taxation Administration

March 1, 2006 AppendixTable of Relevant Provisions in Interest Clauses of Tax Agreementshtm/e04789.htmAppendix

The tax rates on the interest under the agreements with the following countries shall be lower or higher than 10%.	The loan interest of the financial institutions owned by the state (central) bank or government under the agreements with the following countries shall be exempted from tax.	The tax-exemption banks or financial institutions listed in the agreements or protocols with the following countries.	The agreements with the following countries have no provisions on the exemption of tax from interest.
Singapore: 7% (limited to banks or financial institutions) Kuwait: 5% Austria: 7% (limited to banks or financial institutions) Israel: 7% (limited to banks or financial institutions) Jamaica: 7.5% United Arab Emirates:7% Cuba: 7.5% Venezuela: 5%(limited to banks or financial institutions) Brazil: 15%	Japan, USA, France, UK, Belgium, Malaysia, Norway, Denmark, Finland, Canada, New Zealand, Italy, Czech, Poland, Bulgaria, Pakistan, Kuwait, Switzerland, Romania, Brazil, Mongolia, Hungary, Malta, Luxemburg, Korea, Russia, India, Mauritius, White Russia, Vietnam, Ukraine, Armenia, Jamaica, Lithuan, Latvia, Uzbekistan, Serbia, Estonia, Sudan, Egypt, Ireland, South Africa, the Philippines, Moldova, Croatia, United Arab Emirates, Papua New Guinea, Bengal, Macedonia, Seychelles, Cuba, Kazakhstan, Indonesia, Tunis, Kirghizia, Bahrein Islands, Sri Lanka, Albania, Georgia	Japan: Bank of Japan, Export & Import Bank of Japan, Overseas Economic Cooperation Fund, International Cooperation Agency France: Bank of France, French Bank for Foreign Trade, COFACE Germany: the German Federal Bank, the Credit Institute for Reconstruction, the German Finance Company for Investment in Developing Countries, Euler HermesKreditversicherungs-AG Malaysia: the Bank Negara Malaysia Singapore: the Monetary Authority of Singapore, the Government of Singapore Investment Corporation Pte. Ltd., the Head Office of the Development Bank of Singapore Finland: the Finnish Export Credit Ltd., the Finnish Fund for Industrial Development Cooperation Ltd. Canada: the Bank of Canada, the Canadian Export Development Corporation Sweden: the Bank of Sweden, the Swedish Export Credit Guarantee Board, the National Debt Office, the Swedish Fund for Industrial Cooperation with Developing Countries Thailand: the Bank of Thailand, the Exim Bank of Thailand, the Government Savings Bank, the Government Housing Bank The Netherlands: the Netherlands Bank (Central Bank), Netherlands Finance Company for Developing Countries, Netherlands Investment Bank for Developing Countries Pakistan: the State Bank of Pakistan Austria: the Austrian Nation Bank, the Austrian Control Bank Corporation Korea: the Bank of Korea, the Korea Development Bank, the Korea Export-Import Bank Vietnam: Vietcom Bank Turkey: Central Bank of the Republic of Turkey, Turkish Exim Bank, the Development Bank of Turkey Iceland: Central Bank of Iceland, the Industrial Loan Fund, the Industrial Development Fund Laos: the Bank of Lao, the Bank for Foreign Trade of Lao Portugal: General Deposits Bank, National Overseas Bank, Investment, Trade and Tourism of Portugal Barbados: Central Bank of Barbados Oman: the Central Bank of Oman, the State General Reserve Fund, the Omani Development Bank Venezuela: the Central Bank of Venezuela	Australia, Cyprus, Spain, Slovenia

Note:
1. For countries other than those listed in Column1 of the table, the tax rate on the interest under the agreements shall be 10%;
and
2. The tax arrangement between the Mainland of China and Hong Kong has no interest clauses. For the interest income obtained by residents
of Hong Kong from the Mainland of China, relevant provisions of the domestic law shall be observed. Article 11 of the tax arrangement
between the Mainland of China and Macao shall be an interest clause, and shall apply to the interest income obtained by residents
of Macao from the Mainland of China.

CIRCULAR OF THE STATE COUNCIL ON ACCELERATING THE STRUCTURE ADJUSTMENT OF THE INDUSTRIES WITH PRODUCTION CAPACITY REDUNDANCY

State Council

Circular of the State Council on Accelerating the Structure Adjustment of the Industries with Production Capacity Redundancy

Guo Fa [2006] No.11

The people’s governments of all provinces, autonomous regions and municipalities directly under the Central Government, all the ministries
and commissions of the State Council and the institutions directly under the State Council:

It is a major and arduous task in the “11th Five-Year Plan” period to promote the strategic adjustment to the economic structure as
well as to elevate the international competitiveness of all industries. At present, it has been a predominant problem on the economy
development in parts of industries to make blind investments and low-level expansions that they have caused production capacity redundancy.
If it is not solved in a timely manner, the problem may further aggravate the conflict on the irrational industrial structure and
thus impede a sustainable, fast, balanced and sound development of the economy. In order to speed up and promote the structure adjustment
in those industries with production capacity redundancy, we hereby notify the relevant issues as follows:

The Importance and Urgency of Speeding up and Promoting the Structure Adjustment of the Industries with Production Capacity Redundancy

In recent years, the incessant upgrading of the consumption structure as well as the speeding up of the industrialization and urbanization
process have motivated a fast growth of such industries as iron &steel, cement, electrolytic aluminum and automobiles. As a result
of the extensive growth pattern of our economy, imperfect institution and mechanism, such problems as blind investment and low-level
expansion have arisen in the fast development of the foregoing industries. In 2004, the state adopted, in a timely manner, a series
of macro control measures so that the blind expansions in some industries has been preliminarily kept within limits, the over-increase
of investment has shrunk and the relevant goals concerning the mergence and recombination, readjustment, closure and bankruptcy
of enterprises as well as the elimination of laggard production capacities thereof have been fulfilled.

However, as a whole, the problem of production capacity redundancy in some industries caused by an over-investment has not been solved
at all.. There is an obvious redundancy in the production capacity of such industries as iron & steel, electrolytic aluminum, calcium
carbide, ferroalloy, coke and automobiles. For such industries as cement, coal, power and textile, although there is a balance between
their production and demand for the time being, their ongoing construction scale is so large that there is a potential of production
capacity redundancy. Under such circumstances, new projects still are introduced in the foregoing industries in some regions and
enterprises, that will definitely further aggravate the conflict of the production capacity overwhelming the demand. Furthermore,
except for the gross redundancy in such industries, there exit other serious problems concerning irrational enterprise organizational
structure, industrial technical structure and product structure. At present, the unfavorable aftermaths caused by the production
capacity redundancy of some industries, have visualized in such forms as decline of product prices, increase of inventory, decrease
of enterprise profit margin and increase of losses. If such situation is not prevented from spreading, the conflict rooting in the
binding force of resource scarcity will pop up further, the issue of structural imbalance will be worsen off, there will witness
an obvious increase in enterprise bankruptcy as well as in unemployment. So we shall resolutely make efforts to solve all the problems
as soon as possible. We shall adequately realize that, to accelerate the structure adjustment of those industries with production
capacity redundancy, is not only an objective requirement to consolidate and advance the achievement in macro control but also an
important and arduous task in this regard as well as is not only an urgent requirement to effectively shift the socio-economic development
onto a track of scientific development but also an important measure to maintain the current economic growth in a stable, comparatively
fast and sustainable way..

Though the production capacity redundancy in some industries has caused a negative impact on the socio-economic development, it, at
the same time, offers an opportunity to promote the structure adjustment. Only under such condition that the market supply exceeds
the market demand, and that the market competition is consequently aggravating, may the enterprises be willing to or rather be compelled
to adjust their structure and eliminate their laggard production capacity. The state has, in the process of implementing the macro
control, accumulated the relevant experience to coordinate the industrial policies with other economic policies so as to form comparatively
perfect standard system for market access, which provide definite institutional standards and means to promote the industrial structure
adjustment and eliminate the laggard production capacity. All regions and relevant departments shall further build up and carry
out the scientific development concept, further advance their understanding in the necessity and urgency of an overall and sound
development as well as transition of economic growth pattern, intensify their predictability, avoid any aimlessness, elevate their
initiation and self-consciousness, improve the occasion and turn harm to profit so as to accelerate the structure adjustment of the
industries with production capacity redundancy.

II.

General Requirements and Principles to Promote the Structure Adjustment of the Industries with Production Capacity Redundancy

The general requirements to accelerate the structure adjustment of the industries with production capacity redundancy are: we shall,
under the guidance of the scientific development concept, in virtue of the market, improve the occasion, control the increased
capacity, optimize the structure, give differential treatment, and support the superior and eliminate the inferior so as to step
forward substantially in the current year and achieve effective outcomes through years of efforts. The following principles shall
be carried out in the specific work:

(1)

We shall give full play to the fundamental role of the market in allocating resources. We shall, based on the market orientation,
utilize the restrictions on the market and resources to intensify the reversed transmission of the pressure for easing monetary condition
so as to promote the gross balance and structural optimism. We shall adjust and rationalize the relationship on prices of resource
products so as to better bring into play the regulation function of the price leverage in adjustment and thus promote enterprises’
independent innovation and structural adjustment initiatively.

(2)

We shall employ the economic and legal means as well as necessary administrative means in a comprehensive manner. We shall strengthen
the guidance of industrial policies, support of credit policies, adjustment of the policies for finance and taxes so as to promote
the industrial structure adjustment. We shall enhance and strictly implement the relevant standards for market access concerning
environmental protection, security, techniques, lands and comprehensive utilization of resources so as to guide the orientation of
market investment. We shall improve and strictly implement the relative laws and regulations and regulate the acts of both enterprises
and the government.

(3)

We shall insist on giving differential treatment and promote the support for the superior and elimination of the inferior. We shall,
in accordance with the specific situation in an industry, region or enterprise, offer classified guidance as well as relative protection
and restriction. We shall keep on the combination of supporting the superior and eliminating the inferior, the combination of upgrading
and restructuring and eliminating the fall-behind, the combination of merger and recombination and closure and bankruptcy. We shall
utilize and digest the present production capacity in a reasonable manner and further optimize the structure and allocation of enterprises.

(4)

We should improve the system guarantee that ensures a continuous structure adjustment. We shall combine the solving of current
problems and long-term problems, accelerate the progress of reform, eliminate the obstacles in institution or mechanism on the way
of structure adjustment, and promote the structure adjustment in the industries with production capacity redundancy in an orderly
manner so as to promote a continuous, fast and sound development of the economy.

III.

Key Measures for Promoting the Structure Adjustment in the Industries of Production Capacity Redundancy

To promote the structure adjustment in the industries with production capacity redundancy, the key is to give full play to the fundamental
role of the market in allocating resources and fully exert the market strength to promote the competition as well as the support
for the superior and the elimination of the inferior. The people’s governments at any level shall, in the process of structure
adjustment, play the role of not only regulating the market order by means of further promoting the reform so as to create the relevant
conditions to exert the function of the market mechanism but also employing the relevant economic, legal and necessary administrative
means in a comprehensive manner to intensify the guidance and make positive promotion. In 2006, we shall, by means of restructuring,
reforming and eliminating and etc. , accelerate the structure adjustment progress in the industries with production capacity redundancy.

(1)

We shall effectively prevent any rebound of the fixed-asset investment, which is a key prerequisite to promote smoothly the structure
adjustment in the industries with production capacity redundancy. If the investment is inflated again, the fall-behind production
capacity will be revival, and consequently the conflict caused by the gross redundancy and unreasonable structure will be more
and more thorny rather than be solved. We shall continue carrying out the policies of the Central Government for macro control
and strictly keeping watch on the strobes of land and credit, strictly control the investment scale of fixed assets so as to create
the necessary prerequisites of and a favorable environment for the structure adjustment in the industries with production capacity
redundancy.

(2)

We shall strictly control those newly initiated projects. We shall, in accordance with the relevant laws and regulations, formulate
more strict standards concerning environment, security, energy consumption, water consumption, comprehensive utilization of resources
as well as quality, techniques and scale and elevate the threshold for access. We shall give different treatments to projects under
construction and those under the planning of construction and continue the relative straightening-out and rectification. As to any
project that fails to meet the relevant requirements of the state for market access concerning the relevant planning, industrial
policies, policies for land supply, environmental production and work safety, the construction thereof shall be stopped in accordance
with law. In the case of refusal to carry out any relevant order, we shall employ the relevant economic, legal means as well as
necessary administrative means to conduct it and investigate the liabilities of relevant personnel. As is the general principle,
we shall not grant any approval for the setting up a new steel plant and shall implement strict examination and approval on a project
concerning the relocation of a steel plant or concerning the elimination through selection on laggard production capacity of a steel
plant. We shall elevate the standards for well-sizes in coal exploration and clarify the resource recovery rate as well as the requirements
for work safety. As to a newly established automobiles & complete vehicle production enterprise as well as any investment project
concerning the production of trans-category products by a current enterprise, both the requirements for the industrial policies and
the requirements for independent brand and independent development of products shall be met. Where any current enterprise sets up
a factory in a different place, its production and sales volume shall be not less than 80% of the approved production capacity, as
required. We shall elevate our efficiency in utilizing foreign investment and prohibit the access of any foreign investment with
poor techniques and security, high energy-consumption and heavy pollution.

(3)

We shall eliminate the laggard production capacity through selection. We shall, in accordance with law, close down those small-sized
enterprises that destroy resources, pollute the environment and fail to meet the relevant requirements for work safety, eliminate
through selection the laggard production capacity by stages and batches and dispose of the laggard production equipments by means
of destruction. We shall, gradually, eliminate through selection the laggard production capacity of cement such as vertical kiln,
close or eliminate small open furnaces of calcium carbide or those with a production capacity of not more than 10, 000 tons; eliminate,
as soon as possible, ferroalloy submerged arc furnaces with a power of not more than 5, 000 kilovolt/ampere (except special ferroalloy),
ferroalloy blast furnaces with a volume of not more than 100 cubic meters; iron-smelting blast furnaces with a volume of not more
than 300 cubic meters and steel-smelting converters and electronic furnaces with a production capacity of not more than 20 tons.
We shall eliminate thoroughly the facilities concerning indigenous coking and improved coking; stop the use of mini petrol engines
and condensing coal-fired mini-set of 50, 000 kilowatts gradually and eliminate those small coal mines that fail to meet the requirements
for scale as prescribed in the industrial policies and standards for work safety.

(4)

We should promote the technical innovation. We shall support large-sized enterprises’ projects concerning technique innovation according
to the relevant industrial policies, of high technical level and conducive to industrial upgrading. We shall put emphasis on elevating
the technical level, improving the varieties, protecting the environment, ensuring the security, debasing the consumption and elevating
comprehensive utilization, so as to carry out reforms and innovation in the traditional industries. We shall promote the project
of taking the place of smaller thermal power generators with larger ones and applying coal instead of petrol as well as any other
project alike. We shall support automobile enterprises in their building a research and development system and develop, in the
light of assimilating the relevant techniques as introduced, those techniques with independent intellectual property right. We shall
support the development of key textile techniques, research and development of the whole-set equipments and the public innovation
platform of clustered industries as well as independent costume brands. We shall support the major technical innovation of large-sized
iron & steel conglomerates as well as their new product projects, accelerate the development of grain-oriented cold rolled silicon
steel sheets, elevate the production of automobile sheets, and promote the domestic production of large-sized cold/hot continuous
rolling sets. We shall also support the construction of coal mines with high production and efficiency as well as the technical
innovation concerning the security of coal mines.

(5)

We shall promote the merger and recombination. We shall, in accordance with the market principles, encourage those large-size enterprise
groups with competitive strength to carry out trans-regional and trans-industrial merger and recombination by employing their assets,
resources, brands as well as the market mechanism and promote the centralization of industry and the macro-scale and large bases.
We shall promote the joint recombination between a predominant large-sized iron & steel enterprise and other iron & steel enterprises
in the same region so as to form several iron & steel enterprise groups with an annual production capacity of not less than 30 million
tons. We shall encourage large-sized cement enterprise groups to make merger, recombination and combination over middle/small-sized
cement plants so as to enhance its influence on the regional market. We shall break through the production and business allocation
of current carbonization enterprises, carry out merger and combination between carbonization enterprises and iron & steel enterprises
and chemical industrial enterprises and therefore develop them towards those featured by integration of production and application,
on-scale business operation, diversification of products and comprehensive application of resources. We shall support large-sized
coal enterprise to acquire, merge, recombine and re-construct a batch of small coal mines so as to realize the integration of resources,
elevate the mining return extraction rate and work safety level.

(6)

We shall intensify the coordination between the policies for credit, lands, construction, environmental protection and security and
the relevant industrial policies. We shall earnestly implement the Decision of the State Council on Promulgating and Implementing
the Interim Provisions on Promoting the Industrial Structure Adjustment (Guo Fa [2005] No.40) and make efforts to detail the measures
formulated to implement all the policies. For the relevant development planning of as well as industrial policies for such industries
as iron & steel, electrolytic aluminum and automobiles, we shall intensify the implementation of these policies, strengthen the
examination thereover and improve them in practice as well. For any industrial development planning or industrial policy that has
not been promulgated, we shall make efforts to formulate and perfect it as soon as possible. Such departments as financial institutions
and state land resources, environmental protection and security supervision shall, in the light of the requirements of the state’s
macro control as well as the relevant industrial policies strictly, optimize the credit system and the structure of land supply,
support those projects and enterprises, which meet the relevant state industrial policies and requirements for market access in the
supply of land and loans, and simultaneously, shall prevent changing up and down radically in the credit industry and positively
support any merger or recombination bringing favorable market prospects, producing good benefits and conducive to the formation of
a scale economy. For any project or enterprise that fails to meet the concerning state industrial policies, land supply policies
and requirements for market access or which has been clearly eliminated by a state order, no loan or land shall be provided thereto
and the departments in charge of urban planning, construction, environmental protection and security supervision shall not conduct
the relevant formalities therefore. We shall firmly stop any act of attraction of investment by unlawfully lowering the land price
or playing down the standards for environmental protection or security, or any act of blindly initiating a project. We shall improve
the relevant policies and measures for restricting the export of those products of high energy-consumption, heavy pollution or resource
products.

(7)

We shall further carry out the reform in such aspects as the administrative administration, investment system, pricing mechanism and
market exit mechanism. We shall, in accordance with the requirements for establishing a socialist market economic system, further
promote the reform in the administrative administration and investment system, implement conscientiously to separate government
function from enterprise management, improve and strictly carry out the system concerning the check and archival filing of enterprise
investment so as to achieve the goal of enterprises making their own decisions about investment, undertaking by themselves the relevant
risks and banks carrying out independent credit assessment. We shall promote the price reform for resource products in an active
and stable manner, improve the pricing mechanism that reflects the market demand and supply as well as the scarcity of resources
and set up and improve an ecological compensation mechanism. We shall establish and perfect an enterprise exit mechanism and formulate
as well as promulgate the relevant policies for reform concerning personnel arrangement, land use, asset disposal and guaranty for
the employees’ rights and interests, which shall be conducive to promoting the merger and recombination of enterprises and to enterprises’
exiting the market and conducive to maintaining employees’ legitimate rights and interests. We shall accelerate the setting up and
improvement of the relevant system of laws and regulations that preserve a fair market competition and break the regional blockade
as well as regional protection.

(8)

We shall improve the industrial information release system. The relevant departments shall improve the relative statistical and monitoring
system and do well in the follow-up analysis on the dynamic operation of those industries with production capacity redundancy. We
shall set up, as soon as possible, the relevant indicators to measure the production capacity redundancy as well as the data collection
system and set up, in a well-planned and step-by-step manner, an information release system so as to offer guidance regularly for
investment prediction in the market. We shall intensify the guidance for information concerning the industrial development and bring
into fully play the function of the industrial associations, do well in the market research and disclose, at a proper time, the information
on the supply and demand of products, current production capacity, ongoing construction scale, development tendency, raw material
supply and price fluctuation. Simultaneously, we shall pay close attention to the production and investment of other relative industries
and the development of their market supply and demand so as to find and solve any up-coming problem and prevent the emergence of
serious production capacity redundancy in any other industry.

The task of accelerating the readjustment in the industries with production capacity redundancy involves many aspects, concerns strong
policy orientation, and is difficult and complicated. All regions and relevant departments shall build up the concept of the overall
situation, strengthen the organization and leadership, carry out close coordination and do well in an active and orderly manner.
They shall correctly conduct the relation between reform, development and stability and, on the basis of the real situation of a
specific region or entity, improve the supporting measures, earnestly solve any difficulty or problem incurred during any merger,
bankruptcy or recombination of enterprises, do a good job do well in the personnel arrangement and asset preservation, minimize the
losses so as to avoid any societal instability. All regions and relevant departments shall report the implementation of the present
Circular to the State Council in time. The National Development and Reform Commission shall, together with the relevant departments,
make efforts to formulate the specific policies and measures and do well in the relevant implementation.

The State Council

March 12, 2006

State Council
2006-03-12

CIRCULAR OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION OF THE PEOPLE’S REPUBLIC OF CHINA ON ADJUSTING AND IMPROVING THE POLICY ON EXCISE DUTIES

the Ministry of Finance, the State Administration of Taxation

Circular of the Ministry of Finance and the State Administration of Taxation of the People’s Republic of China on Adjusting and Improving
the Policy on Excise Duties

Cai Shui [2006] No. 33

Departments (Bureaus) for Finance of all provinces, autonomous regions, municipalities directly under the Central Government and cities
specifically designated in the state plan, State Administration of Taxation, Bureau for Finance of Xinjiang Production and Construction
Group,

In order to fit in with the needs of objective development of the society, improve further the excise duty system, with the approval
of the State Council, the item, rate and corresponding policies of excise duties shall be readjusted. Relative points are hereby
informed as follows:

About new added tax items:

(1)

Golf ball and its equipments, high-grade wrist watch, pleasure boat, throwaway wooden chopsticks, wooden floor are newly added items.
The applicable tax rate is:

The tax rate for golf ball and its equipments is 10 percent;

The tax rate for high-grade wrist watch is 20 percent;

The tax rate for pleasure boat is 10 percent;

The tax rate for throwaway wooden chopsticks is 5 percent;

The tax rate for wooden floor is 5 percent.

(2)

Cancel the tax items of petrol, diesel oil, add the tax item of processed oil. Petrol and diesel oil are changed to the specific items
under the tax item of processed oil (the tax rate is still the same). In addition, five specific items are newly added, they are
naphtha, solvent oil, lubricating, fuel oil and aviation kerosene.

The applicable tax rate of above newly added specific items is:

(a) Naphtha, unit tax is 0.2 yuan / litre;

(b) Solvent oil, unit tax is 0.2 yuan / litre;

(d) Fuel oil, unit tax is 0.1 yuan / litre;

(e) Aviation kerosene, unit tax is 0.1 yuan / litre.

The conversion standard for measuring unit of above newly added specific items is:

(a) Naphtha, 1T= 1,385L;

(b) Solvent oil, 1T = 1,282L;

(d) Fuel oil, 1T = 1,015L;

(e) Aviation kerosene, 1T = 1,246L.

The conversion standard for measuring unit shall be set by Ministry of Finance and State Administration of Taxation.

About taxpayer

An unit and individual that produce, manufacture as consignment and import above newly added consumer goods in the territory of the
People’s Republic of China is a taxpayer for excise duties and shall apply for paying excise duties according to Temporary Regulations
of the People’s Republic of China for Excise duties (Regulations in short below).

About cancellation of tax items

Cancel the tax item of skin and hair care articles. List the tax item of high-grade skin care cosmetics originally subject to the
tax item of skin and hair care articles under the tax item of cosmetics

About adjustment of tax rate

(1)

Adjust the tax of cars

Cancel the specific item of Volkswagen, rover, small buses under the tax item of cars. Specific items of passenger vehicle and medium
commercial buses are listed separately under the tax item of cars.

Passenger vehicle

(a) Cylinder capacity (displacement, the same below) lower than 1.5L, the tax rate is 3 percent;

(b) Cylinder capacity higher than 1.5L to 2.0L (including 2.0L), the tax rate is 5 percent;

(d) Cylinder capacity higher than 2.5L to 3.0L (including 3.0L), the tax rate is 12 percent;

(e) Cylinder capacity higher than 3.0L to 4.0L (including 4.0L), the tax rate is 15 percent;

(f) Cylinder capacity higher than 4.0L, the tax rate is 20 percent.

Tax rate for medium and light commercial buses is 5 percent.

(2)

Adjust tax rate of motorcycle.

The tax rate for motorcycle shall be set according to different displacement and grade:

Cylinder capacity lower than 250ml(including 250ml), the tax rate is 3 percent;

Cylinder capacity higher than 250ml, the tax rate is 10 percent.

(3)

Adjust tax rate of tyre.

Reduce the tax rate of tyre from 10 percent to 3 percent.

(4)

Adjust the tax rate of spirit.

Tax rate for both rice wine and tuber wine is uniformly set as 20 percent. Quota tax rate is 0.5 yuan / jin (500g) or 0.5 yuan /500ml.
The measuring unit for quota tax shall be set according to the weight of actual sold product. If the measuring unit of the actual
sold product is marked for size, 500ml shall be converted to 1 jin, shall not be converted according to the degree of wine.

About tax base on a complete set bases

A taxpayer who sells taxable consumer goods produced on one’s own together with purchased or own produced non-taxable consumer goods
on a complete set bases, the tax base shall be total sales of a complete set product (excluding value added tax).

About tax of using one’s own produced naphtha for successive production of this enterprise

A production enterprise that uses one’s own produced naphtha for successive production of petrol and other taxable consumer goods
does not need to pay excise duties, for successive production of ethylene and other non-payable consumer goods or others, pay excise
duties while transferring the use of them.

About deduction of paid-up tax

The excise duties that have been paid for the materials are allowed to be deducted from payable excise duties:

(1)

Golf club that is produced by using the recalled tax-paid club head, body and handle as materials in the form of purchasing from others
or processing deal.

(2)

Throwaway wooden chopsticks that are produced by using recalled tax-paid throwaway wooden chopsticks as materials in the form of purchasing
from others or processing deal.

(3)

Wooden floor that is produced by using recalled tax-paid wooden floor as materials in the form of purchasing from others or processing
deal.

(4)

The taxable consumer goods that are produced by using recalled tax-paid naphtha as materials in the form of purchasing from others
or processing deal.

(5)

Solvent oil that is produced by using recalled tax-paid solvent oil as materials in the form of purchasing from others or processing
deal.

Measures for management of tax deduction of tax-paid excise duties shall be worked out separately by State Administration of Taxation.

About nationwide average rate of cost profit of newly added and adjusted tax

Nationwide average rate of cost profit of newly added and adjusted tax is set as follows:

(1)

10 percent for Golf ball and equipment;

(2)

20 percent for high-grade wrist watch;

(3)

10 percent for pleasure boat;

(4)

5 percent for throwaway wooden chopsticks;

(5)

5 percent for wooden floor;

(6)

8 percent for passenger vehicle;

(7)

5 percent for medium and light commercial vehicle.

About export

Policy for tax rebate (exemption) for export of taxable consumer goods shall be handled according to adjusted tax rate, regulations
and relative rules.

10.

About tax deduction and exemption

(1)

The excise duties of naphtha, Solvent oil, Lubricating, Fuel oil will be collected at 30 percent of the amount of taxable income.
It defers to collect excise duties of Aviation kerosene.

(2)

Redial tyre is exempted from excise duties.

11.

Other corresponding issues

(1)

After the implementation of this circular, the taxable consumer goods subject to newly added, cancelled or adjusted tax rate that
are returned back due to quality problems shall be implemented in accordance with the provisions of detailed rules of the regulation.
The concrete measures shall be worked out separately by the State Administration of Taxation.

(2)

It doesn’t need to pay an overdue tax for the taxable consumer goods subject to the tax range as prescribed in this circular stored
by the commercial enterprises before March 31, 2006.

(3)

To the excise duties that any unit or individual has not paid, the competent taxation authority shall clear the tax in time in accordance
with Tax Collection Management Law of the People’s Republic of China and its detailed implementation rules.

(4)

The calculation of the amount of tax drawback for the export enterprises to purchase taxable consumer goods takes the tax amount clarified
in the payment book for excise duties collection (special for export goods) as standard.

(5)

If the taxable export consumer goods purchased by export enterprises before March 31, 2006 will be exported after April 1, 2006, and
the payment book for excise duties collection (special for export goods) was obtained, the tax drawback may still be handled according
to the original tax rate. The implementation time shall take the issuing date of the payment book for excise duties collection (special
for export goods) as standard.

12.

About the implementation time

This circular shall be implemented as of April 1, 2006. Following documents or regulations shall be abolished simultaneously.

(1)

Article 4 and 11 of About Distributing Circular for Annotation of Collection Range of Excise Duties ([1993] 153).

(2)

About Distributing Supplementary Circular for Annotation of Collection Range of Excise Duties (State Taxation [1994].026).

(3)

About Reply to Collection of Excise duties from CH1010 Mini Van and Etc.( [1994] 303)

(4)

Article 4 of Circular of State Administration of Taxation on Some Problems on Tax Collection of Excise duties ([1997] 84)

(5)

Article 1 and 2 of Reply of State Administration of Taxation to Collecting Excise Duties from Some Oil Products. ([2004] 1078

(6)

Reply of State Administration of Taxation to Collection of Excise duties from wagon car refitted from “Pika” ([2005] 217).

(7)

Reply of State Administration of Taxation to Collection of Excise Duties of MeiBaoLian Pure Stay and Etc. ([2005] 1231).

Appendix: Annotation of Newly Added and Adjusted Excise Duties(Omitted)

Ministry of Finance of the People’s Republic of China

State Administration of Taxation

March 20, 2006

the Ministry of Finance, the State Administration of Taxation
2006-03-20

ANNOUNCEMENT NO. 27, 2006 OF MINISTRY OF COMMERCE AND GENERAL ADMINISTRATION OF CUSTOMS, ON ADJUSTING PART OF LIST OF COMMODITIES SUBJECT TO AUTOMATIC IMPORT LICENSES ADMINISTRATION

Ministry of Commerce, General Administration of Customs

Announcement No. 27, 2006 of Ministry of Commerce and General Administration of Customs, on Adjusting Part of List of Commodities
Subject to Automatic Import Licenses Administration

[2006] No. 27

With the approval of State Council, as from April 1, 2006, the consumption taxes and tax rates shall be adjusted. Some commodity codes
concerning Automatic Import Licenses Administration have been adjusted and are promulgated (see Appendix for detail). The unadjusted
part shall still follow Announcement No. 101 and 106, 2005 of Ministry of Commerce and General Administration of Customs.

As from April 1, all the license institutions and import enterprises shall issue and apply Automatic Import Licenses in line with
the adjusted commodity codes.

The enterprises with Automatic Import Licenses, which were issued before April 1 and were concerned with the adjusted commodity codes,
shall reapply for the Automatic Import Licenses. The validity of former one lasts until April 30, 2006.

Appendix: Adjusted List of Commodities Subject to Automatic Import Licenses Administration (omitted)

Ministry of Commerce

General Administration of Customs

March 31, 2006

Ministry of Commerce, General Administration of Customs
2006-03-31

CIRCULAR OF THE PEOPLE’S BANK OF CHINA CONCERNING THE ADJUSTMENT OF THE RMB LOAN INTEREST RATES OF FINANCIAL INSTITUTIONS

Circular of the People’s Bank of China concerning the Adjustment of the RMB Loan Interest Rates of Financial Institutions

Yin Fa [2006] No. 134

Shanghai Headquarters, all branches and business management departments of the People’s Bank of China, all central sub-branches in
all provincial cities (capitals) and the Central Sub-branch in Shenzhen Municipality of the People’s Bank of China, all policy banks,
state-owned commercial banks, joint stock commercial banks, and the China Postal Savings and Remittance Bureau,

The People’s Bank of China decides to increase the benchmark interest rates for the loans granted by financial institutions as of
April 28, 2006. The relevant matters are hereby notified to you as follows,

The interest rates for the loans granted by financial institutions shall be increased, among which the one-year loan interest rate
shall be increased by 0.27 %, from the present 5.58% to 5.85%. The loan interest rates for other loans shall also be adjusted accordingly
(For the details, please see Attachment 1). The floating methods for the loan interest rates shall remain unchanged.

II.

The interest rates for the loans of the individuals’ house accumulation funds shall be increased properly (For the details, please
see Attachment 1).

III.

The interest rates for the saving deposits in financial institutions shall remain unchanged. And the interest rates for the loans
granted by the People’s Bank of China to the financial institutions, the deposit reserve interest rates and the excessive reserve
deposit interest rates of financial institutions shall also remain unchanged.

IV.

The interest rates for the preferential loans (For the details, please see Attachment 2) increases correspondingly. The criterions
on the subsidies for the interest differences of preferential loans and the subsidizing methods shall remain unchanged.

Shanghai Headquarter and all branches (business management departments) of the People’s Bank of China, the central sub-branches of
the People’s Bank of China in all provincial cities (capitals), and the Central Sub-branch in Shenzhen Municipality of the People’s
Bank shall timely forward this Circular to the urban (rural) commercial banks, urban and rural credit cooperatives, foreign-funded
banks conducting RMB loan business, and other financial institutions within their respective jurisdictions, and urge them to timely
execute it. Meanwhile, they shall investigate into and research the responses and problems posed by all sides after the adjustment
of the interest rates, and report them to the Monetary Policy Department of the Headquarter of People’s Bank of China in a timely
manner.

(Fax: 010-66012765)

Attachments:

Form of Adjustments of the Loan Interest Rates of Financial Institutions

Form of Adjustments of the Interest Rates for Preferential Loans

The People’s Bank of China

April 27, 2006

The People’s Bank of China
2006-04-27

ANNOUNCEMENT NO.37, 2006 OF THE MINISTRY OF COMMERCE, THE STATE ENVIRONMENTAL PROTECTION ADMINISTRATION OF THE PEOPLE’S REPUBLIC OF CHINA

Announcement No.37, 2006 of the Ministry of Commerce, the State Environmental Protection Administration of the People’s Republic of
China

In accordance with related regulations of Administrative Measures on Import and Export of Ozone-Depleting Substances (ODSs, No.278,
2003) jointly released by State Environmental Protection Administration, the former Ministry of Foreign Trade and Economic Cooperation
and General Administration of Customs, the gross volume of import quotas of controlled chlorofluorocarbons (CFCs) and the detergent
TCA in 2006 and related matters are now announced as follows for purposes of making good to the international conventions, phasing
out the production and consumption of ODSs and encouraging the use of ODSs substitutes.

In line with principle of gradually cutting down the consumption of ODSs year by year and actual status of domestic productions and
consumption of ODSs, the gross volume of import quotas of the dispersant of MDI CFC-11 (trichlorofluoromethane) and the detergent
TCA in 2006 are 380 and 2,200 ton (please refer to Appendix for details).

For the time being, 70 percent of the gross volume of import quotas of the dispersant of MDI CFC-11 (trichlorofluoromethane) and
the detergent TCA will be distributed, and the other 30 percent will be distributed in accordance with actual demands of both domestic
and overseas markets in September of 2006.

Enhancing administration on quotas licensing of CFCs and controlling the gross volume of exports of CFC11, CFC12 and Halon 1301.
Enterprises shall submit the declaration forms of export and the duplicates to National Office of Import and Export Administration
of Ozone-Depleting Substances for registration immediately after finishing the contracts.

In accordance with Administrative Measures on Import and Export of Ozone-Depleting Substances and Regulations on Strengthening Administration
on Import and Export of Ozone-Depleting Substances (No.85, 2000), enterprises applying for import quotas of CFCs and the detergent
TCA shall put forward applications to National Office of Import and Export Administration of Ozone-Depleting Substances and then
applying for import and export license to license-releasing organs authorized by Ministry of Commerce with Notice of Examination
and Approval of Import and Export of Controlled Ozone-Depleting Substances released by Office of Import and Export Administration.

Appendix: Form of Gross Volume of Import Quotas of Controlled Ozone-Depleting Substances in 2006 (omitted)

Ministry of Commerce

State Environmental Protection Administration

May 9, 2006

Ministry of Commerce, State Environmental Protection Administration
2006-05-09

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Probate

MEASURES FOR THE ADMINISTRATION OF TAX DEDUCTION OR EXEMPTION (FOR TRIAL IMPLEMENTATION)

REPLY OF THE STATE ADMINISTRATION OF TAXATION ON RELEVANT ISSUES CONCERNING THE TERM FOR RECOVERING OVERDUE TAXES

THE INTERIM MEASURES FOR THE ADMINISTRATION OF THE EXPORT OF TEXTILE PRODUCTS

THE MEASURES GOVERNING ELECTRONIC BANKING

ANNOUNCEMENT NO.8, 2006 OF THE GENERAL ADMINISTRATION OF CUSTOMS OF THE PEOPLE’S REPUBLIC OF CHINA

ACCOUNTING STANDARDS FOR ENTERPRISES NO. 12 – DEBT RESTRUCTURING

NOTICE OF THE STATE TAXATION ADMINISTRATION ON RELEVANT ISSUES CONCERNING THE IMPLEMENTATION OF THE INTEREST CLAUSES IN TAX AGREEMENTS

CIRCULAR OF THE STATE COUNCIL ON ACCELERATING THE STRUCTURE ADJUSTMENT OF THE INDUSTRIES WITH PRODUCTION CAPACITY REDUNDANCY

CIRCULAR OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION OF THE PEOPLE’S REPUBLIC OF CHINA ON ADJUSTING AND IMPROVING THE POLICY ON EXCISE DUTIES

ANNOUNCEMENT NO. 27, 2006 OF MINISTRY OF COMMERCE AND GENERAL ADMINISTRATION OF CUSTOMS, ON ADJUSTING PART OF LIST OF COMMODITIES SUBJECT TO AUTOMATIC IMPORT LICENSES ADMINISTRATION

CIRCULAR OF THE PEOPLE’S BANK OF CHINA CONCERNING THE ADJUSTMENT OF THE RMB LOAN INTEREST RATES OF FINANCIAL INSTITUTIONS

ANNOUNCEMENT NO.37, 2006 OF THE MINISTRY OF COMMERCE, THE STATE ENVIRONMENTAL PROTECTION ADMINISTRATION OF THE PEOPLE’S REPUBLIC OF CHINA

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