PROPOSALS OF THE SECURITIES COMMITTEE OF THE STATE COUNCIL ON PROCEDURES OF ISSUING, SELLING AND SUBSCRIBING STOCKS FOR

The Securities Committee of the State Council has made the following proposals on the procedures of issuing, selling of and subscribing
stocks for the year of 1993 with a view to ensuring the smoothgoing of stock deals according to the “Circular on Further Strengthening
the Macro-Control of the Securities Markets” issued by the State Council and “The Interim Provisions on the Management of the Issuing
and Trading of Stocks”:

   Article 1.1 The issuing and selling of stocks must be made under a greater transparency to achieve the principles of openness, fair and just
and prevent malpractices for personal gains to ensure social stability.

   Article 1.2 The trans-regional issuing of stocks must be submitted to the Securities Committee of the State Council for approval.

   Article 1.3 For selling the stocks, the application forms for subscribing may be issued unlimitedly with the limited amount of real stocks to
be distributed through drawing at a later time or limitedly according to the amounts of bank deposits of the subscribers. The use
of other methods of distribution which are deemed as better than the first two is subject to the approval by the Securities Committee
of the State Council.

   Article 1.4 The stocks should be issued in financial developed cities which are accommodated with telecommunications, computer and transport
facilities, a certain number of financial organizations (including securities management organizations) and member organizations
of the Shanghai and Shenzhen stock exchanges.

   Article 1.5 The people’s governments of various provinces autonomous reigons, municipalities under the direct administration of the central
government and cities covered by central planning should formulate concrete plans for executing these proposals and work out actual
scheme of execution.

   Article 1.6 Places which have not fulfilled the purchasing of treasury bonds are not allowed to sell application forms or issue stocks.

   Article 2.1 After the issuing is completed within a limited time, drawing of actual stocks should be made openly according to the amount of
application forms that has been issued and the actual amount of stocks planned to be sold. Those who win the lots will then go through
the actual stock subscription procedures according to regulations.

   Article 2.2 To avoid long lining-up and paper waste, the application forms may be sold over the counter designated by the governments at various
levels to facilitate people of various communities or through pre-registration in certain working units at the same time.

   Article 2.3 Each application form can only buy stocks issued by an enterprise or at most the stocks of several enterprises issued in the same
locality and the same year, and the forms must be enpost_titled with the name or names of the stock issuing enterprises.

   Article 2.4 Costs of the application forms which cover expenses for printing and commissions for underwriters must be charged to the buyers
and accounted for independently by the underwriting organizations. The balance in the sales of application forms must be turned over
to the State coffer for use in social welfare undertakings.

   Article 2.5 Amount of stocks contained in each application form should not be less than 500 or more than 1,000 in integer multiples of 100.
No unit or individual is allowed to transfer or resell the forms at prices higher than the actual value subscribed therein.

   Article 3.1 Through consultation between the governments and branches of the People’s Bank at all levels, application forms may be allocated
according to a certain ratio of the bank deposits of residents with the real amount of stocks to be sold through drawing and winners
of lots will go through the subscription procedures according to regulations. If special accounts for deposits are served, the drawing
can also be made on the numbers of the special accounts. Other methods may also be employed.

   Article 3.2 In adopting the method according to bank deposits, effective measures should be taken to prevent the movement of large amount of
funds from area to area.

   Article 4.1 Before the date of selling stock applications forms, underwriting organizations should be responsible for making public in newspapers
or magazines the outline prospectus and matters concerning the date and place of the selling of the application forms.

   Article 4.2 During the period of selling the applications forms, the underwriting organizations should make public the prospectus at all selling
points or in other forms.

   Article 4.3 Underwriting organizations are not allowed to sell application forms before the prescribed date or to reserve by any form application
forms for their own units during or after the selling period.

Neither are they allowed to sell application forms in places other than approved (people outside the city are not restricted to buy
application forms in places where the application forms are sold).

They are not allowed to entrust organizations which have no right to act as agents to sell application forms.

   Article 4.4 If an underwriting organization violates the above provisions and relevant laws and regulations during the process of underwriting,
it will be punished or even be disqualified for further underwriting business according to the seriousness of the case.

   Article 4.5 Drawing of application forms should be made openly in prescribed date and procedures and under the supervision of notary public.

After the period of issuing of stocks ends, the application forms remaining unsold should be recovered and destroyed by the underwriting
organizations. After the period of underwriting ends, the stocks remaining unsold shall be handled according to the provisions of
the underwriting agreement.