PROVISIONS REGARDING THE SUPERVISION AND CONTROL OF AND THE LEVY AND EXEMPTION OF TAX ON GOODS IMPORTED AND EXPORTED BY THE CHINESE-FOREIGN CONTRACTUAL JOINT VENTURES

The General Administration of Customs, the Ministry of Finance and the Ministry of Foreign Trade and Economic Cooperation

Provisions Regarding the Supervision and Control of and the Levy and Exemption of Tax on Goods Imported and Exported by the Chinese-foreign
Contractual Joint Ventures

the General Administration of Customs, the Ministry of Finance and the Ministry of Foreign Trade and Economic Cooperation

January 31, 1984

Article 1

These Provisions are specially formulated in order to encourage foreign companies, enterprises, and other economic organisations or
individuals to come to China to run the Chinese-foreign contractual joint ventures, to introduce advanced technology and equipment
and to invest in the trades and industries to whose development the State needs to give priority.

Article 2

The Chinese-foreign contractual joint ventures shall, on the strength of the approval documents of the various ministries and commissions
of the State Council or of the departments in charge of the provinces, municipalities directly under the Central Government and autonomous
regions, the business licences issued after verification by the departments of administration for industry and commerce and the contracts
(or agreements, the same below) signed by both cooperative parties and approved for implementation, register with the Customs in
their locality or in the locality in charge of the matter (hereinafter referred to as the “Customs in charge”) for the record.

Article 3

When the goods of Chinese-foreign contractual joint ventures are imported or exported, declaration shall be made to the Customs of
the place of import or export on the strength of contracts registered with and stamped by the Customs in charge and by completing
the “Customs Declaration of Import (Export) Goods”. With regard to the goods for which the State stipulates that application must
be made to obtain import (export) licences, the import (export) licences shall also be submitted to the Customs and are to be examined
by the Customs.

Article 4

With respect to materials imported by Chinese-foreign contractual joint ventures in accordance with approved contracts as the investment
or additional investment of the foreign business, tax is to be levied or exempted according to the following stipulations:

(1)

Machines equipment, spare parts and materials directly used in exploration and development operations and spare parts and materials
needed to be imported for the manufacture of machinery and equipment for use in exploitation operations, imported for the Chinese-foreign
cooperative exploitation of offshore petroleum, are to be exempted from customs duties and consolidated industrial and commercial
tax on importation in accordance with the “Provisions of the Customs General Administration and the Ministry of Finance of the People’s
Republic of China Concerning the Levying of and Exemption from Customs Duties and the Levying of Consolidated Industrial and Commercial
Tax on the Import and Export of Goods by Chinese-foreign Joint Ventures Exploiting Offshore Oil” approved by the State Council.

(2)

Advanced machinery and equipment that China is unable to supply and materials needed for building factories (sites) and installing
and reinforcing the machinery and equipment imported in accordance with the stipulations of the contracts by any Chinese-foreign
contractual joint ventures in the areas of basic construction for energy development, railways, highways and harbours, and industry,
agriculture, forestry, animal husbandry, aquatic breeding, deep sea fisheries, scientific research, education, medicine and health
are to be exempted from customs duties and consolidated industrial and commercial tax on importation.

(3)

For building materials, auxiliary equipment for building hotels, interior electrical equipment which form part of the building project,
and other necessities imported for the Chinese-foreign cooperative construction of tourist hotels, customs duties and consolidated
industrial and commercial tax on importation are to be exempted or reduced in accordance with the “Provisions Regarding the Levy
and Exemption of Tax on Materials Imported for the Construction of Tourist Hotels by Absorbing Overseas Chinese Capital and Foreign
Capital” approved by the State Council.

(4)

Customs duties and consolidated industrial and commercial tax on importation shall be levied according to regulations on goods imported
for Chinese-foreign cooperative commercial, food and beverage, photography and other service businesses, maintenance centres, vocational
training, passenger and cargo transport, offshore fisheries and other trades and industries.

(5)

Customs duties and consolidated industrial and commercial tax on importation shall be levied according to regulations on articles
for daily use, office supplies, nonproductive means of transport, and goods whose import is restricted by the State imported by foreign
businesses as investment, except those which conform to the “Provisions Regarding the Levy and Exemption of Tax on Materials Imported
for the Construction of Tourist Hotels by Absorbing Overseas Chinese Capital and Foreign Capital” for which tax reduction or exemption
is to be granted.

Article 5

With regard to the machinery and equipment and other materials that Chinese-foreign contractual joint ventures are permitted to import
with tax exemption or reduction under the stipulations of items 1, 2 and 3 of Article 4 , application procedures for tax reduction
or exemption shall be handled in advance with the Customs in charge. The Customs in charge is to issue certificates of tax reduction
or exemption after verification, and the Customs of the place of import is to grant tax reduction or exemption on the strength of
the certificates.

Article 6

Raw materials, components, spare parts, supplementary materials and packing materials (hereinafter called imported materials and articles)
specifically imported from abroad by Chinese-foreign contractual joint ventures to process products for sale abroad are to be exempted
from customs duties and consolidated industrial and commercial tax on importation; with respect to the portion for substandard products
and those that cannot be exported for other reasons that is, kept in the country, tax shall be levied according to regulations, and
the control measures are to be handled in a unified manner in accordance with the control provisions of the Customs on importing
materials for processing and bonded factories.

Article 7

Tax shall be levied according to the regulations at the time of import on materials and articles imported by Chinese-foreign contractual
joint ventures upon approval for processing products for domestic sale.

Article 8

Export customs duties shall be paid according to regulations on the commodities exported by Chinese-foreign contractual joint ventures
on which export customs duties should be levied.

Article 9

Good of Chinese-foreign contractual joint ventures imported with tax reduction or exemption must not be sold or transferred without
authorization; if it is required to sell or transfer them, approval shall be obtained from the original examination and approval
organ, and procedures of making up the tax handled with the Customs in charge in accordance with the provisions.

Article 10

If there are circumstances of violation of these Provisions by Chinese-foreign contractual joint ventures, they are to be handled
in accordance with the relevant stipulations of the “Interim Customs Law of the People’s Republic of China”.

Article 11

These Provisions shall enter into force on February 1, 1984.