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CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON ISSUES CONCERNING FOREIGN EXCHANGE CONTROL RELATING TO THE RESTRUCTURING OF FOREIGN-FUNDED BANKS

Circular of the State Administration of Foreign Exchange on Issues concerning Foreign Exchange Control Relating to the Restructuring
of Foreign-funded Banks

Hui Fa [2007] No.15

The branches and foreign exchange departments of the State Administration of Foreign Exchange in each province, autonomous region
and municipality directly under the Central Government, as well as the municipal branches of the State Administration of Foreign
Exchange in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo:

According to the Regulation of the People’s Republic of China on the Administration of Foreign-funded Banks as promulgated by the
State Council on November 11, 2006, the related issues concerning foreign exchange control relating to the restructuring of the branches
of foreign banks are hereby notified as follows:

1.

Business qualification

A restructured solely foreign-funded bank shall succeed to the qualification of the original foreign bank branch that has been approved
for developing spot foreign exchange settlement and sale, forward foreign exchange settlement and sale, RMB and foreign currency
swap as well as other derivative business between RMB and foreign currencies, etc., and shall go through the registration alteration
formalities at the branch of the State Administration of Foreign Exchange (including foreign exchange department, hereinafter referred
to as foreign exchange branch) at the place where it is located. A branch of the solely foreign-funded bank shall succeed to its
own qualification for developing the related settlement and sale business as well as the derivative business between RMB and foreign
currencies as approved before the restructuring of bank, and shall go through the registration alteration formalities at the foreign
exchange branch of the place where it is located.

A restructured solely foreign-funded bank shall assume the membership of the original foreign bank branch in the foreign exchange
market. A solely foreign-funded bank that assumes the membership in the inter-bank spot foreign exchange market shall go through
the registration alteration formalities at China Foreign Exchange Trading Center; a solely foreign-funded bank that assumes the forward
foreign exchange trading qualification or the inter-bank RMB and foreign currency swap trading qualification shall go through the
registration alteration formalities at the State Administration of Foreign Exchange after reporting the alteration information to
China Foreign Exchange Trading Center for preliminary examination; a solely foreign-funded bank that assumes the qualification of
market maker for the transactions between RMB and foreign currencies in the inter-bank foreign exchange market shall submit the information
about alteration to the State Administration of Foreign Exchange for archival filing.

With respect to the restructuring of a foreign bank branch that has obtained the custodian qualification for QFII, the successor of
the custodial qualification shall be applied for approval to the State Administration of Foreign Exchange. If the successor is a
solely foreign-funded bank, it shall go through the registration alteration formalities at the State Administration of Foreign Exchange;
if the successor is a foreign bank branch reserved for developing the wholesale business of foreign exchange (hereinafter referred
to as book-keeping bank), it shall apply to the State Administration of Foreign Exchange for archival filing.

Where a solely foreign-funded bank is restructured from a foreign bank branch with QDII business qualification, it may directly succeed
to the QDII quota.

2.

Administration of Synthetic Positions in Foreign Exchange Settlement and Sale

The State Administration of Foreign Exchange and the branches thereof shall manage the synthetic positions in the foreign exchange
settlement and sale of solely foreign-funded banks by following the current management style. A solely foreign-funded bank may assume
the limit of synthetic position in foreign exchange settlement and sale of the original foreign bank branch. In case of any adjustment
to the limit of synthetic position in foreign exchange settlement and sale by any solely foreign-funded bank, it shall, according
to its own capital status, send an application to the foreign exchange branch of the place where it is located subject to the Circular
of the State Administration of Foreign Exchange on the Measures for Adjusting the Administration of Synthetic Positions in the Foreign
Exchange Settlement and Sale of Banks (Hui Fa [2005] No. 69), Circular of the Comprehensive Department of State Administration of
Foreign Exchange on Related Issues concerning the Verification of the Limit of Synthetic Positions in the Foreign Exchange Settlement
and Sale of Banks (Hui Zong Fa [2005] No.118) and other related provisions.

With respect to a book-keeping bank that did not practice uniform management on synthetic positions in foreign exchange settlement
and sale prior to the restructuring, it may assume the limit of synthetic position in foreign exchange settlement and sale of the
original foreign bank branch. As for a book-keeping bank that has practiced uniform management on synthetic position in foreign exchange
settlement and sale before the restructuring, it shall apply to the foreign exchange branch of the place where it is located for
re-examining the limit of synthetic position in foreign exchange settlement and sale along with the related materials.

3.

Transfer of foreign exchange capital and swap between RMB and foreign currencies

The transfer of foreign exchange working capital between a restructured solely foreign-funded bank and the branches thereof may be
handled by the bank independently. As for the swap of the (working) capital of a solely foreign-funded bank between RMB and foreign
currencies, it shall apply for approval to the foreign exchange branch of the place where it is located in advance pursuant to the
Circular of the State Administration of Foreign Exchange on the Banks’ Own Capital and the Principles and Procedure for the Examination
and Approval of Foreign Exchange Settlement and Sale of Financial Projects (Hui Fa [2004] No.61) and other related provisions. With
respect to any bank that has annually accumulated (working) capital swapped between RMB and foreign currencies in excess of the equivalent
amount of 500 million yuan (including 500 million yuan) shall apply to the foreign exchange branch for preliminary examination, and
then it shall be submitted to the State Administration of Foreign Exchange for approval.

4.

Accounting items for foreign exchange settlement and sale

In accordance with the Interim Measures for the Administration of Foreign Exchange Settlement and Sale Operations by Designated Foreign
Exchange Banks (Decree No. 4, 2002 of the People’s Bank of China), a restructured solely foreign-funded bank shall establish independent
accounting items for foreign exchange settlement and foreign exchange sale, it shall respectively treat foreign exchange settlement
and sale for the clients, foreign exchange settlement and sale for self-purpose, sale of exceeding foreign exchange settlement and
sale position within the system, as well as sale of exceeding foreign exchange settlement and sale position in the market, and carry
out accounting treatment under the accounting item for foreign exchange settlement and that for foreign exchange sale separately.
A solely foreign-funded bank that fails to meet the aforesaid requirements by the end of the preparatory work of restructuring shall
comply with the requirements within two years as of its opening as approved by China Banking Regulatory Commission.

5.

Management on surplus quotas for short-term external debts and overseas guarantee

A restructured solely foreign-funded bank shall inherit the original foreign bank branch’s quotas for short-term external debts and
the quotas for offering financing guarantee for Chinese-invested enterprises outside the territory of China, and shall apply for
archival filing to the State Administration of Foreign Exchange and the foreign exchange branch of the place where it is located.
The registration of creditor’s rights, debts and overseas guarantees handled by the original foreign bank branch shall be altered
to be under the name of the solely foreign-funded bank accordingly. The bank shall apply for handling the registration alteration
of overseas debts to the State Administration of Foreign Exchange once and for all. With respect to the registration alteration of
overseas guarantee and domestic foreign exchange loans, the guarantor or the creditor bank shall apply for handling the alteration
to the foreign exchange branch of the place where it is located once and for all.

Where an bank outside the territory of China sets up an solely foreign-funded bank and a book-keeping bank within the territory of
China simultaneously, the surplus quotas that is for short-term external debts and for providing financing guarantee for Chinese-invested
enterprises outside the territory of China may be used by both the solely foreign-funded bank and the book-keeping bank, and the
solely foreign-funded bank shall assume the management duties accordingly.

When going through the registration alteration or filing of all the aforesaid businesses, an applicant shall submit a application
in written form, document as approved for the opening thereof by China Banking Regulatory Commission, the related documents as approved
for its qualification for carrying out such business by the State Administration for Foreign Exchange and other documents as required
by the State Administration for Foreign Exchange. All foreign exchange branches shall simplify the procedures for approving the registration
alteration.

As of the receipt of this Circular, all foreign exchange branches shall transmit it to the sub-bureaus and foreign-funded banks within
their respective jurisdictions. In case of any problem in the implementation of this Circular, please timely feed it back to the
State Administration of Foreign Exchange.

Tel:

Department of Balance of Payments: 010￿￿68402464, 68402311;

Fax: 010￿￿68402315, 68402303

Capital Account Management Department: 010￿￿68402247, 68402348;

Fax: 010￿￿68402208, 68402349

The State Administration of Foreign Exchange

March 20, 2007



 
The State Administration of Foreign Exchange
2007-03-20

 






CIRCULAR OF THE MINISTRY OF EDUCATION CONCERNING FURTHER REGULATING CHINESE-FOREIGN COOPERATION IN SCHOOL RUNNING

Circular of the Ministry of Education Concerning Further Regulating Chinese-Foreign Cooperation in School Running

Jiao Wai Zong [2007] No.14

The education department (commission) of each province, autonomous region and municipality directly under the Central Government,
and the Education Bureau of Xinjiang Production and Construction Corp.:

This Ministry has successively promulgated a series of regulatory documents since the Rules on Chinese-Foreign Cooperation in School
Running and the implementation measures took effect, which play an important role in strengthening the administration of Chinese-foreign
cooperation in school running.

However, some serious problems still exist there on which all local administrative education departments and all higher education
institutions shall lay great stress. Some regions and schools attach particular importance to the repetitive establishment of low-level
educational programs of business, management, computer, IT and other subjects (specialties) whose cost is relatively cheap without
considering their goals and operation capacity and carefully examining the qualification and school-running capacity of foreign parties;
some schools fail to scrupulously design the mode and teaching arrangement of Chinese-foreign cooperation school running, they have
a low proportion of superior education resources, especially those special series of lectures, introduced from foreign countries,
and also have a low proportion of courses given by foreign-party teachers, so it is very difficult to guarantee quality of school
running; some seek for economic benefits by not following the principle of bringing welfare to the general public in school running
of Chinese-foreign cooperation ; and some even lack the awareness of running schools in accordance with law and maintaining the education
sovereignty, damage the teachers and students’ legal rights and interests and even give rise to group incidents.

In light of the recent field inspection and review results of Chinese-foreign cooperative school running, the publicity of some institutions’
and programs’ enrolment is not true and the students are not enrolled in prescribed ways. In some programs which we incorporated
into the state enrolment plan for schools of higher education, some students are admitted by way of violating the related state policies;
in some programs awarding diploma and academic degree of foreign educational institutions, some students cannot get foreign diploma
and academic degree on schedule and some cannot get a visa for studying abroad; some higher vocational training educational programs
attract students by promising the enrollment by foreign universities for bachelor’s degree even master’s degree, but it is not easy
to address the issue on authentication of the academic diplomas got by students from foreign universities; some higher education
institutions need to be regulated further in terms of fee charging in Chinese-foreign cooperation; some higher education institutions,
especially some key ones, confuse the limits of policies on Chinese-foreign cooperative school running purposely on in giving preparatory
courses of foreign universities or similar courses; some higher education institutions fail to demonstrate the educational programs
built up by Chinese-foreign cooperation sufficiently, the cooperative agreements they concluded are not standard and precise, and
their accounting management is not n line with the related legal requirements or even in chaos. Some schools do not lay enough stress
on the enpost_titled rights of the Chinese parties, their management right in running institutions or programs cooperatively is not given
into full play and their due leadership and decision-making right are even weakened. The coordination and supervision functions of
some local administrative education departments are not discharged sufficiently, and the slack of law enforcement occurs from time
to time.

For the purpose of further regulating Chinese-foreign cooperation in school running, the related issues are hereby notified as follows:

1.

To effectively enhance the sense of responsibility and emergency to maintain the stability of higher education institutions. Maintaining
the stability of higher education institutions is an requirement that is inevitable to build a socialist harmonious society and a
guarantee which is important for higher education undertaking to develop continuously, coordinately and soundly To run schools by
Chinese-foreign cooperation, it is necessary to further enhance political perspicacity responsibility, stick to maintaining education
policies’ seriousness, stability and consistency, stick to safeguarding students’ legitimate rights and interests, prevent and eliminate
the negative effects of student group incidents incurred by all kinds of factors on Chinese-foreign cooperation in school running,
and promote the Chinese-foreign cooperation in school running to develop soundly.

2.

To steadfastly adhere to the principle of for the public welfare in running schools. The related higher education institutions which
have cooperatively-run educational programs shall collect fees strictly according to the charging items stipulated by the state and
the charging rates approved by the people’s governments at the provincial level of the places where they are located, and make the
charging items and rates public to the society. It is necessary to rectify the guiding thoughts for school running, resist and correct
the wrong understanding and practices that running schools involving Chinese-foreign cooperation is taken as a means of bringing
about economic income to schools.

3.

To take the introduction of quality education resources of high quality as the core and examining the satisfaction of requirements
carefully by cooperatively-run programs before being approved. From now on, when conducting the examination and approval for a educational
institution or program involving Chinese-foreign cooperation that undertakes certificated higher education of the college or higher
level, the Ministry of Education shall take whether the foreign educational institution is famous or has famous subjects, specialties
or famous professors as the major basis, and, in principle, shall not approve the same kind of cooperative educational program which
a foreign educational institution has launched in China or of which the specialty is concentrated relatively in China and the charging
rates are obviously far beyond its cost on running schools.

4.

To make more efforts in researching policy and planning on development of running school of Chinese-foreign cooperation undertaking
higher vocational education in order to effectively take strengthening intension construction and improving quality of education
as the major tasks of the reform and development of higher vocational education. By the end of 2008, each region shall suspend accepting
the applications for archive-filing serial number submitted by educational institutions or programs involving Sino-foreign cooperation
of this category. During this period, all regions shall earnestly do a good job in formulating plans and making preparations for
the development planning for the cooperative school-running in higher vocational education of this region in terms of subjects, specialties,
choice of foreign countries, quantity and layout, etc, and submit a report to the Ministry of Education to provide schools with a
guidance for introducing educational resources of high quality from foreign countries, draw upon foreign parties’ good experiences
in the terms of subject and specialty arrangement, curriculum system reform, teaching content renewal and talent cultivation mode
innovation, etc., and reinforce their capability in cultivating high skilled talents in the fields of advanced manufacturing industry,
modern agriculture and modern service industry, especially, in the fields of energy, minerals, environmental protection and banking,
etc.

5.

To accurately hold the policy limit on Chinese-foreign cooperative school running. At present, some higher education institutions,
especially some key ones, provide so-called preparatory course of a certain foreign university of which some are actually foreign
language training. As the foreign university does not take part in the teaching activities conducted within the territory of China,
the Chinese party and foreign party sign a so-called agreement on mutual recognition of credits and promise that the students attending
preparatory courses have opportunities to continue studying at the foreign university and may, after finishing their study, get diplomas
of the university. The educational activity mentioned above is not an educational activity carried out by Chinese-foreign cooperation
and is not beneficial for improving the teaching quality of higher education institutions. All higher education institutions shall
put the emphasis of their work on the improvement of education quality, and no one may conduct any such educational activity, let
alone in the name of Chinese-foreign cooperative school running.

6.

To further strengthen supervision over and management of the whole process of Chinese-foreign cooperative school running according
to the spirit of governing education under law and standardized administration. At present, the major stress in work shall be to
administrate the general regulations and advertisements on recruiting students in a standardize manner and to supervise over such
links which are easy to cause contradictions as issuance of academic credentials and diplomats and educational systems. We shall
conduct an inspection by putting emphasis on the two aspects mentioned above, timely solve the problems found out and firmly and
reliably handle serious problems. Such policies shall be rigidly put into effect as that the general regulations or advertisement
on student recruiting of any educational institution or program involving Chinese-foreign cooperation shall be timely reported to
the organ in charge of the examination and approval for record and that the school-running report of any cooperatively-run educational
institution or program shall, within the prescribed time limit, be submitted to the organ in charge of the examination and approval,
etc.

7.

This Ministry will adopt corresponding measures to further strengthen administrative supervision over school running of Chinese-foreign
cooperation, and the stress shall be laid on the acceleration of the construction of “two platforms” and “two mechanisms”, namely,
information platform for supervision work over school running of Chinese-foreign cooperation, which shall be on the basis of foreign-related
education supervision information net, platform for authenticating the certificates issued by Chinese-foreign cooperatively-run schools,
the mechanism for assessing quality of school running of Chinese-foreign cooperation which is built up in order to assess Chinese-foreign
cooperative school-running quality in some selected provinces and cities according to different major subjects, and the law enforcement
and penalty mechanism for Chinese-foreign cooperative school-running which is built up in order to reinforce the responsibilities
of school-running entities and the administrative departments of various levels as required. For the purpose of doing a better job
in the publicity of governmental affairs and information disclosure, this Ministry will gradually make public the list of approved
Chinese-foreign cooperative educational institutions and programs and other related information. At the beginning of January 2007,
information on some educational institutions and programs involving Chinese-foreign cooperation which undertake the higher diploma
education of college level or higher has been publicly put on the website and the foreign-related education supervision information
net of the Ministry of Education.

8.

The administrative education department, higher education institution in each region shall set forth and constitute the work plan
of further regulating Chinese-foreign cooperation in school running, clean up and rectify the regulation-violating behaviors currently
existing in school running of Chinese-foreign cooperation in a centralized way according to the spirit of the present Circular. They
shall find out the real situation and carry out inspection on Chinese-foreign cooperation in school running in order to keep informed
of the comprehensive situation, find out existing problems and rectify them properly and timely. The work plan and situation relating
to cleaning up and rectification shall be timely reported to this Ministry.

This Ministry will supervise and inspect each region and each higher education institution for the implementation of the present Circular,
and at a proper time organize an inspection team to supervise and inspect the implementation of the related work.

Ministry of Education

April 6, 2007



 
Ministry of Education
2007-04-06

 






ACCOUNTING STANDARDS FOR ENTERPRISES NO. 29 – – EVENTS AFTER THE BALANCE SHEET DATE

Ministry of Finance

Accounting Standards for Enterprises No. 29 – – Events after the Balance Sheet Date

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 the matters after the balance sheet date, as well as the disclosure of relevant information.

Article 2

The term “event after the balance sheet date” refers to an event, either favorable or unfavorable, that occurs between the balance
sheet date and the date when the financial statements are authorized for issuance. The date that the financial statements are authorized
for issuance refers to the date when the financial statements are authorized by the board of directors or equivalent governing body
for issuance.

The events after the balance sheet date include the adjusting events and non-adjusting events occurring after the balance sheet date.

The term “adjusting event after the balance sheet date” refers to an event after the balance sheet date that provides any new or further
evidence for the conditions that has existed on the balance sheet date.

The term “non-adjusting event after the balance sheet date” refers to an event that a condition occurs after the balance sheet date.

Article 3

Where any event after the balance sheet date indicates the going concern assumption is no longer appropriate, the enterprise should
not make the financial statements on the basis of going concern.

Chapter II Adjusting Events after the Balance Sheet Date

Article 4

An enterprise shall adjust its financial statements on the date of the balance sheet date for any adjusting event occurring in an
enterprise after the balance sheet date.

Article 5

The adjusting events occurring in an enterprise after the balance sheet date generally include:

(1)

Any litigations completed after the balance sheet date, wherein the court judgment confirms that the enterprise has any present obligation
which has existed on the balance sheet date, thus it is necessary to adjust the expected liability related to such litigation originally
recognized, or to recognize a new liability;

(2)

Any exact evidence obtained after the balance sheet date indicating that an asset is devalued on the balance sheet date, or that the
amount of a recognized devalue for that asset needs to be adjusted;

(3)

The cost of an asset purchased prior to the balance sheet date or the income generated from an asset sold prior to the balance sheet
date is further confirmed after the balance sheet date; and

(4)

Any fraud or error that is found in the financial statements after the balance sheet date.

Chapter III Non-adjusting Events after the Balance Sheet Date

Article 6

No enterprise may adjust the financial statements on the date of the balance sheet date for any non-adjusting event occurring in an
enterprise after the balance sheet date.

Article 7

The non-adjusting events occurring in an enterprise after the balance sheet date generally include:

(1)

Significant lawsuits, arbitrations or commitments occurring after the balance sheet date;

(2)

Any significant change in the asset price, tax policy or foreign exchange rate occurring after the balance sheet date;

(3)

Any severe loss on an asset resulted from a natural disaster after the balance sheet date;

(4)

The issuance of stocks or bonds, or any other huge amount borrowing from an outside party after the balance sheet date;

(5)

The capitalization of capital reserves after the balance sheet date;

(6)

Any significant loss occurring after the balance sheet date;

(7)

The important change in account policy after the balance sheet date ; and

(8)

Any enterprise combination or disposal of subsidiary after the balance sheet date;

Article 8

After the balance sheet date, the profits or dividends to be distributed and declared to be distributed upon deliberation and approval
under the profit distribution plan of an enterprise shall not be recognized as a liability on the balance sheet date, but shall be
separately disclosed in the notes.

Chapter IV Disclosure

Article 9

An enterprise shall, in its notes, disclose the following information related to the events after the balance sheet date:

(1)

The organ which authorizes the issuance of the financial statements, and the date on which the financial statements are authorized
to be issued.

According to the provisions of the relevant laws and administrative regulations, if the owner of an enterprise or any other party
has the power to revise the issued financial statements it shall disclose the relevant information.

(2)

The nature and content of each important non-adjusting event after the balance sheet date, as well as its effect on the financial
status and operating outcomes. If it is unable to make an estimate, an explanation shall be made.

Article 10

Where an enterprise, after the balance sheet date, obtains any new or further evidence that affects the conditions existed on the
balance sheet date, it shall adjust the relevant information of disclosures.



 
Ministry of Finance
2006-02-15

 






ANNOUNCEMENT NO.10, 2007 OF MINISTRY OF COMMERCE ON TERMINATING ANTI-DUMPING INVESTIGATION ON IMPORTED BUTYL ALCOHOL

Announcement No.10, 2007 of Ministry of Commerce on Terminating Anti-dumping Investigation on Imported Butyl Alcohol

[2007] No.10

In accordance with Anti-dumping Regulations of the People’s Republic of China, Ministry of Commerce (hereinafter referred to as “investigating
authority”) released announcement on Oct 14, 2005, deciding to carry out anti-dumping investigation on imported butyl alcohol (hereinafter
referred to as “investigated commodity”) originating from Russia, the U.S, South Africa, Malaysia, EU and Japan. The tariff codes
of the investigated commodity are 29051300￿￿29051410￿￿29051420 and 29051430 in Import and Export Tariff of the People’s Republic
of China.

Ministry of Commerce carried out investigation on dumping and dumping profit margin, injury and injury extent as well as causality
between dumping and injury, and issued the preliminary arbitration (refer to appendix) in line with investigation results and item
No. 24 of the Anti-dumping Regulations of the People’s Republic of China. Related matters are now announced as follows:

1.

Preliminary arbitration

Ministry of Commerce confirmed the dumping of imported butyl alcohol originating from Russia, the U.S, South Africa, Malaysia, EU
and Japan in preliminary arbitration; the domestic butyl alcohol industry remained without substantial damage.

2.

Terminating anti-dumping investigation

In accordance with Article 27 of Anti-dumping Regulations of the People’s Republic of China, the investigating authority decides
to terminate investigation on imported butyl alcohol originating from Russia, the U.S, South Africa, Malaysia, EU and Japan as from
Mar 2, 2007 since the investigated commodity didn’t cause substantial damage on domestic industry.

Appendix: Preliminary Arbitration of Ministry of Commerce on Imported Butyl Alcohol Originating from Russia, the U.S, South Africa,
Malaysia, EU and Japan

Ministry of Commerce

Mar 2, 2007



 
Ministry of Commerce
2007-03-02

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON RELATED MATTERS CONCERNING OFFSET OF THE INPUT AMOUNT OF VAT TAX ON GOODS IMPORTED BY TAXPAYERS

Circular of the State Administration of Taxation on Related Matters Concerning Offset of the Input Amount of VAT Tax on Goods Imported
by Taxpayers

Guo Shui Han [2007] No. 350

The Bureaus of state taxation in each province, autonomous region, municipality directly under the Central Government, and city specifically
designated in the state plan:

Recently we received a question from some areas: whether or not the money returned or refunded by an overseas supplier to a domestic
importer or the difference occurs because the actual payment for any imported goods is lower than the declared import price should
be transferred out as an import tax amount after the taxpayer declares the import goods. The related matters are hereby specified
as follows:

It is provided in Article 8 of the Interim Regulation of the People’s Republic of China on Value Added Tax that the value added tax
(VAT) on the tax payment voucher obtained by a taxpayer from the customs office may be credited against the output tax amount. Therefore,
the tax payment voucher a taxpayer acquires from the customs for its imported goods is the unique proof of the computation of the
VAT input tax amount, and the price difference as well as the money returned or refunded by an overseas supplier may not be transferred
out as input tax amount.

Where a taxpayer has transferred out the aforesaid money or price difference as input tax amount before the announcement of this Circular,
it may be re-included under the item of “Payable tax – Payable VAT – Input Tax Amount” and be credited against output tax amount.

The State Administration of Taxation

March 22, 2007



 
The State Administration of Taxation
2007-03-22

 






CIRCULAR OF THE FOREIGN FUND DEPARTMENT UNDER THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE ON REPORTING LICENSE USE STATUS OF FOREIGN-FUNDED ENTERPRISES

Circular of the Foreign Fund Department under the State Administration for Industry and Commerce on Reporting license Use Status of
Foreign-funded Enterprises

All foreign fund offices under Administration for Industry and Commerce of each province, autonomous region and municipality directly
under the Central Government:

As annual examination and exchange of new-version business license for foreign-funded enterprises are ongoing all over the country
for now, you are required to report the following information to this Department in the unit of province immediately after receiving
this Circular so as to make a plan as a whole of the printing and distribution of licenses of foreign-funded enterprises and guarantee
license exchange can be done as usual during the annual examination period.

(1)

The actual number of foreign-funded enterprises with a status of legal person and branches thereof as well as the growth rate for
the last two years.

(2)

The actual number of enterprises from foreign countries (regions) and the permanent representative offices thereof that engage in
production and operation in China as well as the growth rate for the last two years.

(3)

The drawing methods for each kind of licenses of foreign-funded enterprises (drawing uniformly by each province, autonomous region
and municipality directly under the Central Government or self-drawing by an authorized administration).

(4)

Cancellation rate of each kind of license in the process of use.

(5)

Stock situation of the new-version business license.

You shall, prior to April 30, gather the aforesaid items and fill them in the Statistics of License Use of Foreign-funded Enterprises.
In the case of self-drawing by authorized administration, the above-mentioned Statistics shall be attached separately, and then reported
to the Foreign Fund Department under the State Administration for Industry and Commerce via electronic documents.

E-mail: wz@saic.gov.cn

Contact person: Wang Junfeng, Comprehensive Office under the Foreign Fund Department

Tel: 010-68057996 or 010-88650408

Appendix: Statistics of License Use of Foreign-funded Enterprises (omitted)

The Foreign Fund Department under the State Administration for Industry and Commerce

April 10, 2007



 
The State Administration for Industry and Commerce
2007-04-10

 






REPLY OF THE STATE COUNCIL ON APPROVING THE ADJUSTED LIST OF DUAL-USE BIOLOGICAL PRODUCTS AND RELATED FACILITIES AND TECHNOLOGIES SUBJECT TO EXPORT CONTROL

Reply of the State Council on Approving the Adjusted List of Dual-use Biological Products and Related Facilities and Technologies
Subject to Export Control

Guo Han [2006] No. 59

The Ministry of Commerce,

The State Council approves the Adjusted List of Dual-use Biological Products and Related Facilities and Technologies Subject to Export
Control, and it shall be promulgated for implementation in the name of the Ministry of Commerce.

Attachment: Adjusted List of Dual-use Biological Products and Related Facilities and Technologies Subject to Export Control (Omitted)

The State Council

July 8, 2006



 
The State Council
2006-07-08

 






CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING THE RELATED MATTERS ON ADMINISTERING SHORT-TERM FOREIGN DEBTS OF FINANCIAL INSTITUTIONS IN 2007

Circular of the State Administration of Foreign Exchange Concerning the Related Matters on Administering Short-term Foreign Debts
of Financial Institutions in 2007

Hui Fa [2007] No. 14

The branches and foreign exchange administration offices of the State Administration of Foreign Exchange in each province, autonomous
region, and municipality directly under the Central Government, and the municipal branches of the State Administration of Foreign
Exchange in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo, and all the headquarters of the designated Chinese-funded foreign exchange
banks:

For the purpose of rigorously controlling the short-term foreign debt scale, promoting the international balance of payments and maintaining
the safety of the national economic and financial, the related matters on administering short-term foreign debts of financial institutions
in 2007 are hereby notified as follows:

1.

The administration of short-term foreign debt balance quotas (hereinafter referred to as short-term foreign debt quotas) shall apply
to the following foreign debts of financial institutions:

(1)

Usance letters of credit that has been accepted but not yet paid with a term of over 90 days (excluding 90 days);

(2)

Deposits of overseas institutions as well as deposits of overseas individuals whose balance in the foreign exchange account at a same
bank with a legal person status is more than an equivalent value of USD 500,000;

(3)

Overseas loans, overseas inter-bank borrowings, current businesses with overseas inter-bank and subordinated institutions thereof
(as the debtor) as well as overseas agency payments by various settlement methods with a term of less than one year (including one
year) ; and

(4)

Short-term foreign debts in other forms.

2.

The short-term foreign debt quotas of financial institutions in 2007 will be reduced by the decrease State Administration of Foreign
Exchange (SAFE). The short-term foreign debt quotas for Chinese-funded banks in 2007 shall be decreased to 30% of their respective
quotas as determined upon confirmation in 2006, and short-term foreign debt quotas for non-bank financial institutions and foreign-funded
banks in 2007 shall be decreased to 60% of their respective quotas as determined upon confirmation in 2006.

3.

A financial institution shall decrease its short-term foreign debt balance according to the following requirements:

(1)

By June 30, 2007, a Chinese-funded bank shall reduce its short-term foreign debt balance to 45% or less of the quota as determined
in 2006, and with regard to a non-bank financial institution or foreign-funded bank, its short-term foreign debt balance shall be
reduced to 85% or less of the quota as determined in 2006.

(2)

By September 30, 2007, a Chinese-funded bank shall reduce its short-term foreign debt balance to 40% or less of the quota as determined
in 2006, and with respect to a non-bank financial institution or foreign-funded bank, its short-term foreign debt balance shall be
reduced to 75% or less of the quota as determined in 2006.

(3)

By December 31, 2007, a Chinese-funded bank shall reduce its short-term foreign debt balance to 35% or less of the quota as determined
in 2006, and with regard to a non-bank financial institution or foreign-funded bank, its short-term foreign debt balance shall be
reduced to 65% or less of the quota as determined in 2006.

(4)

By March 31, 2008, a Chinese-funded bank shall reduce its short-term foreign debt balance to 30% or less of the quota as determined
in 2006, and with respect to a non-bank financial institution or foreign-funded bank, its short-term foreign debt balance shall be
reduced to 60% or less of the quota as determined in 2006.

4.

The short-term foreign debt quota for a Chinese-funded or foreign-funded bank newly established, or a Chinese-funded bank newly launching
foreign exchange business shall be determined upon verification as no more than two times its foreign exchange operating fund or
its capital.

5.

After a branch of a foreign-funded bank is converted into a bank with a legal person statue in China, the short-term foreign debt
quota of the original short-term foreign debt quota management bank or the original domestic branch shall be inherited by this bank
with a legal person status, and its headquarters shall submit such quota to the SAFE or the SAFE branch or management department
at the registration place (hereinafter referred to as the “SAFE branch”) for archival filing.

In case a foreign-funded bank has simultaneously established both a bank with a legal person status and a branch conducting wholesale
business of foreign exchange within the territory of China, the subsidiary bank shall take charge of managing short-term foreign
debts, and the short-term foreign debt quota shall be jointly used by the bank with a legal person status and the branch conducting
wholesale business of foreign exchange.

Where it is necessary for a foreign-funded bank to adjust short-term foreign debt quotas for different regions because of the merger
or split-up, etc., the institution needing to increase the quota shall apply to the local SAFE branch, who shall examine and approve
the application together with other related SAFE branches, and then report it to the SAFE for archival filing.

6.

Before a branch of a foreign-founded bank in China is converted into a bank with a legal person status, the funds from its overseas
parent bank for its the capital increase may be deposited into a special account which is opened in a domestic bank upon this branch’s
application to the local SAFE branch on behalf of the foreign bank. Such funds are not subject to the management of short-term foreign
debt quotas of such domestic bank, but they may only be used as overseas short-term capital by such domestic bank and not for any
other purpose.

7.

The SAFE will determine upon verification the short-term foreign debt quotas of the following financial institutions:

(1)

Policy banks and nationwide commercial banks with a legal person status (including foreign-funded banks with a legal person status
converted from foreign bank branches, see the affixed forms 1 and 2); and

(2)

Foreign bank branches implementing the centralized management on short-term foreign debt quotas (see affixed Form 1).

8.

Within the regional quotas (see affixed form 3) determined upon verification by the SAFE, each SAFE branch shall determine the short-term
foreign debt quotas of the following financial institutions within its jurisdiction:

(1)

Regional Chinese-funded banks (those that have not been listed into affixed Form 2);

(2)

Foreign-funded bank branches not implementing the centralized management of short-term foreign debts and regional foreign-funded banks
with a legal person status (hereinafter referred to as regional foreign-funded banks, that are, those that have not been listed into
affixed form 1); and

(3)

Non-bank financial institutions that have not been listed into any affixed form.

9.

A department and some staff members shall be designed by a financial institution to be responsible for managing and registering its
short-term foreign debts, as well as reporting them to the SAFE for archival filing.

10.

A financial institution shall conduct careful statistics on and comprehensive report of the short-term foreign debt data (see annex)
according to the relevant provisions on the statistical monitoring of foreign debts.

Chinese-funded financial institutions shall, uniformly by their headquarters through the SAFE foreign debt statistical monitoring
system (the bank version), report the foreign debt data on usance letters of credit, deposits of non-resident, overseas inter-bank
borrowing and overseas agency payments. The foreign-funded bank with a legal person status upon restructuring and its branches conducting
wholesale business of foreign exchange shall, uniformly by the subsidiary bank through the SAFE foreign debt statistical monitoring
system (the bank version), report the foreign debt data. A foreign bank branch that has not been restructured shall keep its original
foreign debt data submission method.

A financial institution shall report the data on usance letters of credit subject to the following three types based on currencies;
(1) usance letters of credit within a term of 90 days or less in the same currency; (2) usance letters of credit within a term of
over 90 days up to one year in the same currency; and (3) usance letters of credit with a term of over one year.

The data on overseas deposits not governed by foreign debt quotas shall be reported in the system at the same time.

11.

The SAFE and branches thereof shall deliver the short-term foreign debt quotas to the financial institutions under their respective
jurisdictions prior to March 31, 2007, and rigorously administer and supervise the borrowing of short-term foreign debts and the
implementation of quotas.

12.

The demands for short-term foreign exchange financing of a domestic financial institution may be satisfied through currency market
lending and swap, etc.

13.

The present Circular shall go into effect as of April 1, 2007. All SAFE branches shall promptly forward the present Circular to the
sub-branches and foreign-funded banks under their jurisdiction after they receive it. All designated Chinese-funded foreign exchange
banks shall promptly forward the present Circular to their branches. Any problem encountered during the implementation shall be fed
back to the SAFE in a timely manner.

Annex: Instructions on the Adjustment of the Submission Methods of Foreign Debt Data (Omitted)

Form 1: Form of the Verification of Short-term Foreign Debt Quotas for the Short-term Foreign Debt Management Banks of Foreign-funded
Financial Institutions in 2007 (Omitted)

Form 2: Form of the Verification of Short-term Foreign Debt Quotas for Chinese-funded Financial Institutions in 2007 (Omitted)

Form 3: Form of the Verification of Short-term Foreign Debt Quotas of Various Regions in 2007 (Omitted)

The State Administration of Foreign Exchange

March 2, 2007



 
The State Administration of Foreign Exchange
2007-03-02

 






CIRCULAR OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION CONCERNING THE TAX MATTERS ABOUT THE RESTRUCTURING OF FOREIGN BANK BRANCHES INTO SOLELY FOREIGN-INVESTED BANKS

Circular of the Ministry of Finance and the State Administration of Taxation Concerning the Tax Matters about the Restructuring of
Foreign Bank Branches into Solely Foreign-invested Banks

Cai Shui [2007] No. 45

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

The Regulations of the People’s Republic of China on Administrating Foreign-invested Banks (Order No. 478 of the State Council) promulgated
by the State Council on November 11, 2006 and the detailed rules for the implementation thereof provided that: where the related
conditions are met, a foreign bank may set up a solely foreign-invested bank within China, and a foreign bank branch set up within
China may be restructured into a solely foreign-invested bank (or the subsidiary bank thereof). During the process of restructuring,
the solely foreign-invested bank (or the subsidiary bank thereof) shall inherit the creditor’s rights and debts of the former foreign
bank branch. As regards the related tax matters about the restructuring of foreign bank branches into solely foreign-funded banks
(or the subsidiary banks thereof), it is the principle that the business activities before and after the restructuring should be
taken as continuous business activities. The related specific tax treatments are hereby informed as follows:

1.

Business Tax and Value-added Tax

When the foreign bank branches are restructured, as regards the transfer of enterprise property rights or stock rights to the restructured
solely foreign-invested banks (or the subsidiary banks thereof), no business tax or value-added tax may be levied .

2.

Enterprise Income Tax

(1)

. As regards assets transfer

Where a foreign bank branch is restructured into a solely foreign-invested bank (or the subsidiary bank thereof), all assets thereof
shall be transferred in light of their respective book value and in accordance with the Circular of the State Administration of Taxation
Concerning the Tax upon the Incomes Generated from the Transfer of Stock Rights by Foreign-invested Enterprises and Foreign Enterprises
(Guo Shui Han [1999] No. 207).

(2)

. As regards making up losses

The business losses suffered by a foreign bank branch in the years before its restructuring may be made up continuously by the restructured
solely foreign-invested bank (or the subsidiary bank thereof), and the fixed number of years for making up losses shall be calculated
continuously after the year when the former foreign bank branch suffered the losses according to the fixed number of years as provided
for in Article 11 of the Income Tax Law of the People’s Republic of China on Foreign-invested Enterprises and Foreign Enterprises
(hereinafter referred to as the Foreign-invested Enterprise Income Tax Law).

(3)

As regards the item of tax preferences

If the preferential tax reduction and exemption treatments for a certain term have not been enjoyed by a foreign bank branch in accordance
with the provisions in the Foreign-invested Enterprise Income Tax Law before its restructuring, or if the term has not expired, the
corresponding restructured solely foreign-invested bank (or the subsidiary bank thereof) may enjoy them until the term expires. If
the term has expired, the restructured solely foreign-invested bank (or the subsidiary bank thereof) may not enjoy them again.

(4)

As regards consolidated payment of taxes

In accordance with Article 5 of the Detailed Rules for Implementing the Foreign-invested Enterprise Income Tax Law, after a foreign
bank branch is restructured into a subsidiary bank of a solely foreign-invested bank, the headquarters of the solely foreign-invested
bank shall pay enterprise income tax on a consolidated basis.

3.

Stamp Tax

In accordance with the Circular of the Ministry of Finance and the State Administration of Taxation Concerning Related Policies on
the Stamp Tax in the Process of Enterprise Restructuring (Cai Shui [2003] No.183), after the restructuring of a foreign bank branch
into a solely foreign-invested bank (or the subsidiary bank thereof), if the capital book accounts and taxable contracts, have been
affixed with the tax stamps in the foreign bank branch, tax stamps will not be affixed with in the restructured solely foreign-invested
bank (or the subsidiary bank thereof) again.

4.

Deed Tax

In accordance with the Circular of the Ministry of Finance and the State Administration of Taxation Concerning Related Policies on
the Deed Tax in the Process of Enterprise Restructuring (Cai Shui [2003] No.183), the deed tax may be exempted if the house property
rights a foreign bank branch owns before the restructuring are transferred to the solely foreign-invested bank (or the subsidiary
bank thereof) set up after the restructuring.

5.

Where a foreign bank branch is restructured into a solely foreign-invested bank (or the subsidiary bank thereof), in case the transfer
is not carried out on the basis of book value, tax shall be levied pursuant to the current related tax law.

The Ministry of Finance

The State Administration of Taxation

March 26, 2007



 
The Ministry of Finance, The State Administration of Taxation
2007-03-26

 






CIRCULAR OF THE GENERAL OFFICE OF THE MINISTRY OF COMMERCE CONCERNING THE CERTIFYING AUTHORITIES’ CONSOLIDATE PRINTING OF THE INTERIM EXPORT CERTIFICATE OF TEXTILE PRODUCTS IN ENGLISH VERSION

Circular of the General Office of the Ministry of Commerce concerning the Certifying Authorities’ Consolidate Printing of the Interim
Export Certificate of Textile Products in English Version

Shang Ban Pei Han [2007] No. 1

The authorities mainly responsible for commerce in all provinces, autonomous regions, municipalities, cities specifically designated
in the state plan, Xinjiang Production and Construction Corp and such cities as Harbin, Changchun, Shenyang, Xi’an, Nanjing. Wuhan,
and Guangzhou:

In order to strengthen the certification and issuing of the interim export certificate of textile products and the administration
of the certification, guarantee of the normal export of enterprises, and save the government’s cost, the particulars relevant to
the certifying authorities’ consolidate printing of the interim certificate of textile products in English version is notified as
follows:

1.

The enterprise printing terminal in the application and withdrawal system of interim export certificate of textile products shall
be closed as of April 30, 2007 and the interim export license of all the products shall be uniformly printed and transferred by the
certificate issuing authority.

2.

All the certificate issuing authorities shall make the relevant preparation and take corresponding measures against the possible occasions
in a bid to substantially guarantee that the certification of interim export license of textile products can be carried out smoothly
and orderly.

3.

All the certifying authorities shall withdraw all the unused blank certificates independently printed by the enterprises.

4.

All the certifying authorities may connect with the Bureau of Quota License of the Ministry of Commerce.

Contact person: Jiang Sheng(deputy division chief) Li Wanhong(responsible person)

Tel.: 010-84095551-7620/7623

Fax: 010-84095015

The General Office of the Ministry of Commerce

April 11, 2007



 
General Office of the Ministry of Commerce
2007-04-11

 






123...7Page 1 of 7

CONSTITUTION ACT, 1982 – page 22

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

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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