REGULATIONS ON CONTROL OF ADVERTISEMENT

   Article 1. These Regulations are formulated for the purpose of strengthening the administration of advertisement, promoting
the development of advertisement undertakings and utilizing advertisement as an effective medium to serve socialist
construction.

   Article 2. These Regulations shall apply to any advertisements published, broadcast, installed or posted in the People’s
Republic of China through such media or in such forms as the press, broadcasting, television, films, street nameplates, shop
windows, printed matters, neon lights, etc.

   Article 3. The content of an advertisement must be true to facts, sound, clear and easy to understand and must not cheat users and
consumers in any way.

   ARticle 4. Monopoly and unfair competition shall be prohibited in advertising operations.

   Article 5. The administrative organs controlling advertisements shall be the State Administration for Industry and Commerce
and local administrative departments for industry and commerce at various levels.

   Article 6. Units and self-employed industrialists or businessmen wishing to engage in advertising businesses (hereinafter
referred to as advertising operators) shall submit applications to administrative departments for industry
and commerce in accordance with these Regulations and the provisions of other relevant laws and regulations and go
through, according to different circumstances, such formalities as examination, approval or registration:

(1) For enterprises specializing in advertising business, Business Licences for Enterprises as Legal Persons shall be issued;

(2) For institutions concurrently engaged in advertising business, Licences for Advertising Operation shall be issued;

(3) For self-employed industrialists or businessmen capable of running advertising businesses, Business Licences shall
be issued;

(4) For enterprises concurrently engaged in advertising business, applications shall be filed with
the relevant departments for change of business scope registration.

   Article 7. The content of an advertisement to the published, broadcast, installed or posted shall be kept within the advertiser’s business
scope or the scope permitted by the State.

   Article 8. An advertisement that contains any of the following contents may not be published, broadcast, installed or posted:

(1) That violates the laws and regulations of the State;

(2) That impairs the national dignity of the State;

(3) That involves designs of the national flag, national emblem or national anthem or the music of the national
anthem of the People’s Republic of China;

(4) That is reactionary, obscene, superstitious or absurd;

(5) That is fraudulent;

(6) That depreciates products of the same kind.

   Article 9. News media shall provide clear indications for the advertisement they publish or broadcast. News media may not
publish or broadcast advertisements in the form of news reports nor collect fees for these reports. Journalists may
not solicit advertisements in the name of news coverage.

   Article 10. It shall be forbidden to advertise cigarettes through broadcast, television, newspapers or periodicals.

After approval by administrative departments for industry and commerce, it may be allowed to advertise famous wines
and liquors of good quality which have won prizes at the national, ministerial or provincial level.

   Article 11. Due certificates shall be presented in applying for publishing, broadcasting, installing or posting advertisements
in the following cases:

(1) For the commodity advertisements concerning standards of quality, certificates issued by administrative
departments in charge of standardization or by quality inspection agencies, authenticated to the qualified by
metrological verification, above the provincial municipality level shall be presented;

(2) For the advertisements which indicate commodities as prize-winners, certificates of award for the current
session or year or for successive sessions or years shall be presented and classes of prizes and prize-awarding
departments shall also be clearly indicated in the advertisements;

(3) For the advertisements which indicate post_titles of high quality commodities, certificates of high-quality products
issued-by the relevant departments shall be presented and clear indications shall also be made in the advertisements
as to when and by which departments the post_titles were conferred on;

(4) For the advertisements which indicate patent rights of commodities, patent licences shall be presented;

(5) For the advertisements which indicate registered trademarks of commodities, certificates of trademark
registration shall be presented;

(6) For the advertisements of the products which require production permits, production permits shall be presented;

(7) For the advertisements concerning culture, education and public health, certificates issued by the higher competent authorities
shall be presented;

(8) for the other advertisements which require due certification, papers issued by relevant government departments
or agencies authorized by them shall be presented.

   Article 12. Advertising operators shall check papers or certificates and examine the contents of advertisements while undertaking
advertising business or acting as advertising agents. They may not publish, broadcast, install or post any advertisements
which violate the provisions of these Regulations.

   Article 13. For the installation and posting of outdoor advertisements, local people’s governments shall organize the administrative
departments respectively in charge of industry and commerce, urban construction, environmental protection and public
security in jointly drawing up the plans, which shall be implemented under the supervision of the
administrative departments for industry and commerce.

Advertisements may not be installed or posted in controlled areas near government organs or cultural relics
under special protection, nor in areas where installation and posting of advertisements are prohibited by local
people’s governments.

   Article 14. Rates of charges for advertisements shall be fixed by advertising operators and reported to local administrative departments
for industry and commerce and to those in charge of price control for the record.

   Article 15. Rates of fees to be charged for acting as agents in advertising business shall be fixed by state administrative departments
for industry and commerce and those in charge of price control.

Rates of fees to be charged for the use of places and buildings for outdoor advertisements shall be fixed through consultations
by local administrative departments for industry and commerce with those in charge of price control and urban construction
and reported to local people’s governments for approval.

   Article 16. Advertising operators must, according to the relevant prescriptions of the State, set up bookkeeping records, pay taxes
according to law and subject themselves to the control and inspection by the administrative departments respectively
in charge of finance, auditing and industry and commerce.

   Article 17. In undertaking or acting as agents in advertising business, advertising operators shall sign with advertisers or those
who have entrusted them with the business written contracts that shall stipulate explicitly each party’s responsibilities.

   Article 18. Advertisers or advertising operators who have violated the provisions of these Regulations shall be given the following
penalties by administrative departments for industry and commerce according to the seriousness of the cases:

(1) Stopping advertising;

(2) Making public corrections as ordered;

(3) Circulating a notice of criticism;

(4) Confiscation of the illegal gains;

(5) Fines;

(6) Suspending business for consolidation;

(7) Revocation of the business licences or the licences for advertising operation.

If the violations of the provisions of these Regulations are so serious as to constitute crimes, criminal responsibilities
shall be investigated by judicial organs according to law.

   Article 19. If advertisers or advertising operators disagree with the penalties decided upon by administrative departments for industry
and commerce, they may apply for a reconsideration to the next higher administrative departments for industry
and commerce within 15 days after receiving penalty notices. If they still disagree with the decisions made after
reconsideration, they may bring a suit in a people’s court within 30 days after receiving the reconsideration decisions.

   Article 20. Advertisers or advertising operators who, in violation of the provisions of these Regulations, have caused losses
on the part of their users and consumers or committed other acts of infringement shall bear the responsibility for compensation.

With respect to claims for damages, the claimant may request the administrative departments for industry
and commerce above the county level for handling. If the parties concerned disagree with the decisions made by
administrative departments for industry and commerce, they may bring a suit in a people’s court. The claimant may also
directly bring a suit in a people’s court.

   Article 21. These Regulations shall be interpreted by the State Administration for Industry and Commerce. The rules for implementation
shall be formulated by the State Administration for Industry and Commerce.

   Article 22. These Regulations shall go into effect as of December 1, 1987. The Interim Regulations on Control of Advertisement
promulgated by the State Council on February 6, 1982 shall be abrogated as of the same date.