REGULATIONS CONCERNING THE ADMINISTRATION OF TRAFFIC SAFETY ON INLAND WATERS

   Article 1. These Regulations are formulated to improve the administration of traffic safety on inland waters, ensure
the safety of vessels, rafts, installations, human lives and property and thus facilitate the development of socialist construction.

   Article 2. These Regulations shall apply to all vessels, rafts, installations and personnel, and to the owners and operators of
vessels, rafts and installations (hereafter shortened to “owners” and “operators”) that navigate, berth, or operate
on the inland navigable waters of the People’s Republic of China.

The inland navigable waters mentioned in the previous paragraph shall also cover the waters under Chinese jurisdiction
in border rivers. However, if agreements have been concluded between the Chinese government and the governments
of other countries, the agreements shall prevail.

   Article 3. The harbour superintendencies set up by the communications departments at various levels shall be the competent
authorities responsible for exercising the unified supervision and control of traffic safety on inland waters.

   Article 4. Vessels must meet the following requirements before they are allowed to navigate:

(1) Holding technical certificates or documents verified as qualified by the vessel inspection departments after
the inspection whereon;

(2) Holding vessel nationality certificates, or vessel registration certificates or vessel licences;

(3) Holding insurance policies or insurance certificates as is required of vessels which must take out vessel
insurance according to the relevant stipulations of the State;

(4) Being manned with, according to the relevant State stipulations, crew members in charge of technical work, chief crewmen,
ferrymen and other crew members who are holding valid certificates of job qualification.

   Article 5. The captains, chief engineers, pilots, engineers and radio and telephone operators of power-driven vessels shall pass
examinations and hold valid certificates of job qualification.

The chief crewmen and ferrymen of non-motorized vessels shall pass examinations and hold qualification documents.

All other crew members must go through safety instructions and specialized technical training.

   Article 6. Bamboo and wooden rafts shall be fitted out with necessary equipment for safe navigation, lifesaving appliance and rafters
qualified for safe navigation. The fixed number of rafters to be provided shall stipulated by the competent department
in charge of forestry. Chief rafters shall have received special training by the department in charge of
forestry and hold qualification documents.

The administration of rafters for tourist rafts shall be stipulated by the competent authorities in conjunction with relevant
departments.

   Article 7. Installations shall be fitted out with safety equipment and personnel according to stipulations of the State.

   Article 8. Vessels shall, in accordance with stipulations of the State, pay harbour dues to the competent authorities.

   Article 9. Owners and operators must abide by these Regulations and the stipulations of the State concerning traffic safety.

   Article 10. Owners and operators must be responsible for the safety of the vessels, rafts and installations they own or operate and
shall perform the following obligations:

(1) Administration of vessels, rafts and installations shall be strengthened in terms of safety and technology
to keep them in good shape for navigation or good technical conditions;

(2) the relevant State stipulations must be accorded with in employing crew members, rafters or other personnel.
It is forbidden to employ captains, chief engineers, pilots, engineers, radio operators, telephone operators, chief
crewmen, ferrymen and rafters who do not hold valid certificates of job qualification or qualification documents;

(3) Technical training and safety instructions shall be strengthened for crew members, rafters and other
personnel; the employees may not be forced to operate against regulations;

(4) Vessels shall be properly dispatched according to the technical functions of vessels, the qualifications
of crew members, the conditions of the assigned navigation areas and also the hydrological and meteorological conditions;

(5) They shall be subject to the supervision, examination and administration of the competent organs.

   Article 11. In navigation, berthing and operations, vessels, rafts and installations must abide by the relevant laws, regulations and
other rules and regulations concerning harbour navigation of the People’s Republic of China.

   Article 12. Vessels of foreign nationality entering and leaving the inland harbours of the People’s Republic of China that are
open to foreign vessels must obtain the approval of the competent authorities and apply to be navigated by a Chinese
pilot in advance. While they are entering and leaving the harbours or navigating in inland rivers, foreign vessels
must be subject to the examination and supervision of the competent authorities.

   Article 13. Vessels of Chinese nationality entering and leaving inland harbours shall get port entry and departure visas or accept inspection.

   Article 14. When entering or leaving the harbours or passing through traffic control areas, crowded navigable areas and regions with
limited navigational capacities, vessels must observe the special provisions promulgated by the Ministry of Communications
of the People’s Republic of China or the competent authorities.

   Article 15. Except as specially permitted by the competent authorities, vessels and rafts are prohibited from entering or cutting across
restricted navigation zones.

   Article 16. Vessels shall not engage in transportation with overload. Vessels not equipped for carrying passengers are prohibited from
taking on passengers without permission.

   Article 17. Vessels engaged in towing navigation shall observe the relevant stipulations.

   Article 18. Vessels shall navigate in the approved navigation areas at a speed which is fast enough to ensure their own safety but not
so fast as to endanger the safety of other vessels, rafts and installations. Vessels shall navigate at the prescribed
speed in the areas where speed is restricted and during periods of high water levels in flood seasons.

   Article 19. The berthing of vessels and rafts shall not obstruct other vessels and rafts from navigating normally or endanger
the safety of installations and dykes.

Except for unmanned tug boats, there must be adequate number of crew members on duty on board the vessels lying at
anchor to ensure the vessels’ safety.

   Article 20. Manned or towed bamboo and wooden rafts in navigable rivers shall observe the relevant stipulations formulated by the
competent authorities in conjunction with the competent department in charge of forestry.

   Article 21. The competent authorities shall have the right to forbid a vessel, raft or installation from leaving the harbour, or order
it to stop navigation, cease operations or sail to the designated sport, under any one of the following circumstances:

(1) It has violated relevant laws, regulations or other rules and regulations of the People’s Republic of China;

(2) It is in a condition not suitable for navigation or towing;

(3) It is involved in a traffic accident and the formalities have not been completed;

(4) It has not paid the fees that are due, nor has it submitted a suitable guarantee therefor, to the competent authorities
or relevant department; or

(5) It will in any may jeopardize traffic safety.

   Article 22. When vessels, rafts and installations are involved in accidents that jeopardize or may jeopardize traffic safety,
the competent authorities has the right to handle the matter by adopting compulsory measures.

   Article 23. When vessels, rafts and installations store, load, unload and transport dangerous goods, they must abide by the provisions
of the State concerning the control of dangerous goods and their transport.

   Article 24. When vessels load and unload dangerous goods at harbours or carry them into or out of harbours, they shall report
to the local competent authorities for approval in advance according to the relevant provisions of the State.

   Article 25. The setting-up or removal of urban ferries shall be approved by the organs designated by local people’s governments.
The setting-up or removal of other ferries shall be approved by the people’s governments at the county level
or above. It is forbidden to set up or remove ferries or ferry passengers before the approval is obtained.

   Article 26. Departments of ferry administration shall strengthen safety control of ferries. The competent authorities shall strengthen supervision
and direction for this purpose.

   Article 27. Administrative departments for navigation channels and navigational aids shall strengthen administration and
maintenance of navigational channels and navigational aids, keep channels unblockcked and navigational aids distinct and
effective.

   Article 28. No objects adversely affecting the efficacy of navigational aids may be erected around them. Strong lights that hinder
navigational safety or any lights that may mix up with navigational aids on both sides of navigational lanes,
shall be properly screened.

   Article 29. Without the approval of the competent authorities or administrative departments for navigation lanes, no units
or individuals may remove navigational aids. If navigational aids have been removed or damaged, it must be immediately
reported to the competent authorities or administrative departments for navigational lanes.

   Article 30. Applications annexed by illustrations shall be made to the harbour superintendencies for approval before the coastlines of the
harbour areas may be used. Without the examination and approval of the competent authorities, no installations may be constructed
on the coastlines of the harbour areas.

   Article 31. Approval shall be sought from the competent authorities and navigational warnings or notices be issued before
restricted navigation-zones may be set up and surface or underwater construction, sports competitions and other
activities affecting traffic safety may be carried out.

Before a restricted military navigation zone is designated, agreement shall be reached through consultation with the competent
authorities, which shall then issue navigational warnings or notices.

   Article 32. The designation and adjustment of traffic control zones, anchorages and berthing areas must be submitted, with the consent
of the local people’s governments, by the competent authorities, to organs at higher levels for approval.

   Article 33. It is forbidden to set up fixed fishing nets and fishing nets cutting across rivers or to grow water plants in habitual navigational
lances. The competent authorities shall order the owners of these unauthorized fishing nets and water plants
to eliminate them or have them eliminated by coercion.

   Article 34. It is forbidden to dump gravel and trash into navigational lances.

   Article 35. If vessels, installations or objects which obstruct safe navigation sink in navigable waters, the owners or operators
must set up marks according to the relevant provisions and report to the competent authorities.

   Article 36. Sunken and drifting objects that may affect the safety of navigation and constitute potential threats shall be gotten
away with by the owners or operators before a deadline set by the competent authorities. If these objects are not duly cleared
away, the competent authorities shall have the right to take coercive measures to that end, and all the costs thereof
shall be born by the owners or operators of the sunken or drifting objects.

The provisions of the previous paragraph of this Article shall not affect the rights of owners and operators of sunken
or drifting objects to demand compensation from third parties.

   Article 37. Without the approval of the competent authorities, sunken ships and objects in the navigable waters may not be salvaged or dismantled.

   Article 38. After installations are moved or scrapped, sunken ships and objects salvaged or cleared away, and the rounding-off work of
the surface or underwater construction handled, no objects may be left to hinder the safety of navigation, berthing and operations.

   Article 39. Vessels, rafts, installations and personnel shall promptly report to the competent authorities if they discover any of the
following situations:

(1) If navigational lanes change;

(2) If there are objects hindering safe navigation;

(3) If navigational aids are damaged or abnormal, moved or lost;

(4) If there is any other situation hindering safe navigation.

   Article 40. The competent authorities shall be responsible for uniformly issuing and administering inland water navigational
warnings and navigational notices.

   Article 41. Vessels, rafts and installations that are in distress shall adopt all effective measures to organize self-help and
promptly report to the nearest competent authorities as well as their owners or operators the time and scene of the
accident, the extent of damage, the assistance required and the cause of the accident.

   Article 42. Vessels, rafts, installations or personnel in the vicinity of the scene of an accident that have received distress signals,
shall do their best to rescue the personnel and report promptly to the nearest competent authorities the situation
at the scene.

   Article 43. The vessels, rafts and installations involved in a collision shall, under circumstances where there is no danger to
their own safety, do their best to offer assistance and may not leave the scene of the accident without authorization.

   Article 44. Upon receipt of a report calling for rescue, the competent authorities must immediately organize a rescue operation.
Departments concerned and vessels, rafts, installations and personnel in the vicinity of the scene of the accident
shall follow the unified directions of the competent authorities.

   Article 45. Vessels, rafts and installations involved in traffic accidents shall present accident reports and related materials
to the competent authorities and subject themselves to investigations and handling of the matter.

Traffic accidents involving bamboo and wooden rafts shall be investigated and handled by the competent
authorities in conjunction with the departments in charge of forestry.

   Article 46. The competent authorities shall, upon receipt of accident reports, organize investigations. The parties involved in the accidents
and persons concerned must, during investigation by the competent authorities, provide truthful information relating
to the accidents.

   Article 47. If a traffic accident gives rise to a civil dispute, the parties involved may apply to the competent authorities for
conciliation. If the parties do not apply for conciliation or conciliation is not successful, they may bring a suit
before the people’s court. Parties to a case involving foreign interests may also, based on a written agreement,
submit the case to an arbitration institution concerning foreign related matters for arbitration.

   Article 48. Those units or individuals that have done remarkably in ensuring traffic safety by preventing or reducing personnel
casualties and by preventing or reducing property losses shall be commended or awarded by the competent authorities or by
their units.

   Article 49. With respect to the persons who have violated the provisions of these Regulations or who are held liable
for traffic accidents, the competent authorities may impose one or a number of the following penalties:

(1) a warning;

(2) withholding or revoking the licences or certificates;

(3) a fine.

   Article 50. If a party does not accept the penalty (penalties) imposed by the competent authorities, he may within 15 days from
the date of receiving the notice of the penalty (penalties), bring a suit before the people’s court; failure to bring
a suit or comply with the penalty (penalties) within this period shall lead to petition by the competent authorities
to the people’s court for compulsory enforcement.

   Article 51. Those punishable according to the relevant provisions concerning public security administration for violations
of these Regulations shall be dealt with by public security organs; as for those criminally liable, the judicial
organs shall in accordance with the law pursue their criminal liabilities.

   Article 52. The following terms as used in these Regulations are defined as follows:

“Inland navigable waters” refers to the navigable waters in the rivers, lakes, reservoirs and canals as well as
harbours within the People’s Republic of China.

“Vessels” refers to all types of displacement or non-displacement ships, boats and mobile platforms.

“Installations” refers to all types of structures, installations, pipelines and electric cables, on the surface or underwater,
fixed or floating, and fixed platforms as well.

“Operations” refers to loading and unloading, exploration, exploitation, survey, construction, dredging, demolition,
salvage, rescue, fishing, aquatic breeding, diving, scientific experimentation and other surface or
underwater construction carried out in navigable waters and their shorelines.

“Traffic accidents” refers to collision, running aground, running on rocks, damage through contact, damage by waves,
windstorm, fire and other accidents happening to vessels, rafts and installations.

   Article 53. Vessels of foreign nationality entering and leaving the inland rivers shall observe, in addition to these Regulations,
the relevant provisions of the People’s Republic of China concerning administration of vessels of foreign nationality.

   Article 54. The internal administration of zones under military control and military vessels as well as public security vessels shall be
separately prescribed by the relevant departments of the State according to these Regulations.

   Article 55. The internal administration such as registration and inspection of fishing vessels, examination and issuing
of certificates for crew members of fishing vessels and investigation and handling of traffic accidents among fishing
vessels shall be separately prescribed according to these Regulations by the State fisheries administration and fishing
ports superintendency departments in conjunction with the competent authorities.

   Article 56. The traffic safety control of the waters at urban scenic spots and gardens and of the waters exclusively used by factories,
mines and other enterprises as approved by the people’s governments of the provinces, autonomous regions
and municipalities directly under the Central Government shall be separately prescribed according to these Regulations
by the competent departments or the factories, mines and enterprises concerned.

   Article 57. These Regulations shall be interpreted by the Ministry of Communications, which shall also formulate the rules for the
implementation.

   Article 58. These Regulations shall become effective as of January 1, 1987.