INTERIM REGULATIONS ON ADMINISTRATION OF ENTERPRISE BONDS

   Article 1. These regulations are hereby formulated to strengthen the administration of enterprise bonds, provide guidance
conducive to the rational flow of capital, make effective use of idle capital of society, ensure the capital
raised is invested in the county’s priority projects, and to protect the lawful rights and interests of the parties concerned.

   Article 2. These regulations are applicable to bonds issued by State-owned enterprises which have a legal person status in China.

   Article 3. Subscription and purchase of enterprise bonds shall follow the principles of voluntary participation, respecting the
mutual benefits of the parties involved and the bonds to be issued shall be secured bonds.

Arbitrary allocation of subscription quotas of enterprise bonds is prohibited.

   Article 4. The People’s Bank of China is the administrative authority in charge of the issuance of enterprise bonds. All enterprise
bond issues are subject to approval by the People’s Bank of China.

   Article 5. An enterprise bond is a negotiable security issued according to the legal procedures by an enterprise which has entered
into an agreement with the bondholder to repay him/her the principal plus interest on the bond he/she possesses within
the stipulated time limit.

   Article 6. Bond certificate (coupon) shall state clearly the following items:

(1) The name and address of the bond-issuing enterprise;

(2) The face value of the bond;

(3) The coupon rate offered;

(4) The maturity date and the methods of redemption of the bond to be issued;

(5) The form of interest payment;

(6) The date of issue and the serial number of the bond to be issued;

(7) The logo of the bond-issuing enterprise and the signature of a legal representative from the bond-issuing enterprise, and

(8) The document number and the date of issue of the certificate issued by the approval authority concerning the bond issue.

   Article 7. Format of the bond certificate is subject to approval by the People’s Bank of China.

   Article 8. Bondholders are enpost_titled to receive repayment of the principal plus interest of the bonds on maturity. However, bondholders
to an enterprise are not allowed to engage in the operation and management of the said enterprise.

   Article 9. Bondholders are not liable to the management of the enterprise that issues the bond.

   Article 10. Enterprise bond is transferable acceptable as collateral for mortgage and can be inherited.

   Article 11. Subject to approval by the authorities, an enterprise may, taking into consideration of the particulars of its investment
project(s) and the market demand situation, issue enterprise bonds which promise to repay the bondholders
with products manufactured by the enterprise at a value equivalent to the principal plus interest of the bonds to be issued.

   Article 12. The People’s Bank of China shall, in cooperation with such government departments as the State Planning office and the finance
office, work out the annual bond-issuing quotas (targets) for the country as a whole. They shall inform all provinces,
autonomous regions, municipalities under the central government and special cities under provincial governments
of their decisions for implementation.

   Article 13. The People’s Bank of China shall exercise unified control over the issuance of enterprise bonds. Bond issue applications
for enterprises at different levels shall be subject to the examination and approval by the bank or its branches at
the respective levels.

   Article 14. Any enterprises, which seek public issue of enterprise bonds, shall prepare a memorandum to be issued to the public.

The memorandum shall include the following items: a brief introduction to the business and management of
the bond-issuing enterprise, the net value of the enterprise’s assets, the purpose of the bond issue, a forecast on
the enterprise’s future result, the total face value of the bonds to be issued and the forms of repayment of the principal
plus interest and the risk liability.

   Article 15. The following documents shall be submitted to the People’s Bank of China or its branches by the enterprise which applies
to the bank for approval to issue enterprise bonds:

(1) An application for the bond issue;

(2) Business license;

(3) Certificate showing the approval from the superior department in charge for the bond issue;

(4) Approval documents for the fixed assets investment of the enterprise from the planning departments concerned;

(5) Memorandum for the bond issue;

(6) Financial and accounting reports of the enterprise for the two fiscal years and the three-month period prior to
the application which (reports) have been certified by the superior department in charge of the enterprise or by an accounting
office, and

(7) Any other information as requested by the People’s Bank of China.

   Article 16. The total face value of the bonds to be issued by an enterprise shall not exceed the net value of its assets.

   Article 17. An enterprise can issue enterprise bonds to raise capital for its fixed asset investment, provided its investment items
have been examined and approved by the relevant departments in charge and included in the State-controlled fixed assets
investment plan.

   Article 18. The coupon rate offered for any enterprise bonds shall not be higher than 40% of the prevailing interest rate paid to
fixed savings deposits of the same maturity period by individuals.

   Article 19. To purchase enterprise bonds, a State-owned enterprise can only use its self-generated or allocated funds, the
autonomy over the disposal of which is allowed by the State authorities.

To purchase enterprise bonds, a public institution can only use that part of its funds, the autonomy over the disposal
of which is allowed by the State authorities.

   Article 20. Institutional units and individuals shall pay tax on interest income earned from their enterprise bonds according
to the relevant laws of the State.

   Article 21. An enterprise may issue enterprise bonds with or without banks or other financial institutions to act as its agents.

An organization that acts as an agent for an enterprise in the issue of the latter’s bonds shall be paid a commission equal
to a certain percentage of the total face value of the bonds issued.

Organization that acts as an agent for an enterprise in the sale of its bonds is not liable for the business operations
of the said enterprise.

   Article 22. Subject to approval by the People’s Bank of China, all specialized banks and other financial organizations may handle
the transfer business of enterprise bonds.

   Article 23. Non-financial institutions and individuals are not allowed to engage in the business of either the transfer or sale of the
enterprise bonds in the capacity of agents.

   Article 24. The People’s Bank of China has the right to examine and supervise the use of the capital of enterprises and public
institutions which have issued or purchased enterprise bonds.

   Article 25. The People’s Bank of China and its branches have the right to punish the bond-issuing enterprises which are found to have
violated the second clause of Article 3, Article 4, Article 7, Article 11, Article 15 or Article 17 of these regulations in the
following ways:

(1) To order the bond-issuing enterprise to stop its illegal activities and refund the capital thus raised;

(2) To freeze the capital raised through the bond issue;

(3) To inform the financial institution to which the bond-issuing enterprise has opened an account to stop
providing loans to the enterprise; and

(4) To impose a fine on the bond-issuing enterprise, the ceiling of which shall be 50% of the amount of the capital
the enterprise raised from the bond issue.

The above punishments can be executed simultaneously.

   Article 26. The People’s Bank of China and its branches have the right to punish the financial institutions, non-financial
institutions or individuals which/who are found to have violated Article 22 and Article 23 of these regulations in the following
ways:

(1) To order them to stop their illegal business undertakings;

(2) To confiscate the income which is collected through their illegal business undertakings, and

(3) To impose a fine,the ceiling of which shall be 5% of the amount of funds involved in their illegal business undertakings.

The above punishments can be executed simultaneously.

   Article 27. The responsible person(s) of the units which are punished according to Article 25 or Article 26 of these regulations shall
be held responsible for his/her administrative and economic obligations.

   Article 28. Personnel of units that are in charge of a bond issue who are found to have violated the stipulations of these regulations
because of dereliction of duties or graft or deception shall be given administrative disciplinary punishments and they may
be fined.

   Article 29. The right of interpreting these regulations is vested with the People’s Bank of China, which shall be responsible for
the drafting of the detailed rules for implementing these regulations.

   Article 30. These regulations shall enter into force on the date of promulgation.