PLAN FOR THE REORGANIZATION OF ARBITRATION ORGANS

Category	ARBITRATION	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1995-07-28	Effective Date	1995-07-28

Plan for the Reorganization of Arbitration Organs

Appendix I  Sample Text of the Articles of the Arbitration Commission
Chapter I  General Provisions
Chapter II  The Arbitration Commission
Chapter III  The Working Body
Chapter IV  Arbitrators
Chapter V  Financing
Chapter VI  Supplementary Provisions
Appendix II  Sample Text of the Interim Rules of Arbitration
Chapter I  General Provisions
Chapter II  Application and Acceptance
Chapter III  Composition of the Arbitration Tribunal
Chapter IV  Hearings and Adjudication
Chapter V  Supplementary Provisions

(Promulgated by the State Council on July 28, 1995)

1. Concerning the Principles of the Reorganization of Arbitration Organs

(1) Grasp the spirit of the Arbitration Law of the People’s Republic of
China (hereinafter referred to as the Arbitration Law) comprehensively and
accurately, and carrying out the reorganization of these arbitration organs
strictly according to the Arbitration Law.

(2) Embody the purpose of serving the people wholeheartedly and ensure
arbitration to solve economic disputes pursuant to the principles of fairness
and promptness.

(3) On the basis of the factual circumstances, reorganize the arbitration
organs according to necessity and possibility.

(4) Unify understanding, strengthen the leadership and arouse the positive
factors in all aspects in order to ensure the smooth transition of the
arbitration work.

2. On the Arbitration Commissions

(1) Only one unified arbitration commission may be established in any city
where the law provides for establishment of an arbitration commission, and no
special arbitration commission or arbitration tribunal shall be established
according to different specialties.

(2) The names of newly established arbitration commissions shall be
regulated; all arbitration commissions shall begin with the city name where
the arbitration commission is located (name of location + arbitration
commission), such as Beijing Arbitration Commission, Guangzhou Arbitration
Commission or Shenzhen Arbitration Commission.

(3) The arbitration commission shall be composed of one chairman, from two
to four vice chairmen and from seven to eleven commission members. Among
those, one or two persons shall be full-time commission personnel and the
others shall be part-time.

Membership in the arbitration commission shall be held by specialists and
persons with practical experience from colleges, scientific research
institutions or state agencies. The members of the arbitration commission may
or may not be arbitrators.

The members of the first session of an arbitration commission shall be
appointed by the people’s government of that city upon recommendation by
various departments such as of governmental legal affairs, economics and
trade, construction reformation, justice, the administration for industry and
commerce, science and technology or urban construction, and organizations such
as the trade promotion commission or the association of industry and commerce.

(4) One secretary general shall be instituted in each arbitration
commission. The post of secretary general may be held concurrently by a
full-time member of the arbitration commission.

(5) A working body which shall be responsible for handling the acceptance
of arbitration cases, processing arbitration documents, file management and
collection and management of arbitration fees shall be established under the
arbitration commission. The secretary general shall be responsible for the
routine duties of the working body.

The establishment of the working body and arrangement of personnel shall
comply with the principles of streamlining and high efficiency. During the
initial period of operation of the arbitration commission, it is not necessary
for the working body to have excessive personnel. The number of personnel may
be suitably increased with the increase of the arbitration work load.

The personnel of the working body shall possess good moral character and
professional skills and shall be appointed on the basis of competitive
selection.

3. Concerning the Arbitrators

(1) A full-time arbitrator shall not be established in the arbitration
commission.

(2) Arbitrators shall be appointed according to law by the
newly-established arbitration commission.

The arbitration commission shall, mainly from within its province,
autonomous region or municipality directly under the central government,
appoint arbitrators from among those who satisfy the conditions in the
provisions of Article 13 of the Arbitration Law.

The public servants and personnel of agencies of the public servant
system, if they satisfy the requirements described in Article 13 of the
Arbitration Law and have the approval of their units, may be appointed as
arbitrators, but they shall not allow the arbitration work to interfere with
their regular duties.

The arbitration commission shall establish a list of arbitrators according
to different specialties.

(3) In accordance with the arbitration rules, the arbitrators shall be
paid by the arbitration commission for handling arbitration cases. Unless they
deal with arbitration cases, the arbitrators shall not receive any payment or
other fees.

4. Concerning the Size, Funds and Site of Arbitration Commissions

During the initial period of the establishment of the arbitration
commission, the local people’s government of that city shall, according to the
relevant provisions on institutional organizations, arrange the establishment
of the staff, funds and sites for the arbitration commission. The arbitration
commission shall gradually establish a system of independent revenue and
expenditure.

5. Concerning the Merger of Newly Established Arbitration Commissions and
Existing Arbitration Organs

(1) As to the appointment of arbitrators or employment of personnel for
the working body, those in existing arbitration organs who satisfy the
requirements shall be considered first.

    (2) If parties concerned have formed an arbitration agreement before the
termination of an existing arbitration organ and make a supplementary
agreement to decide on a new arbitration commission after the termination of
the said existing arbitration organ, they may apply to the newly chosen
arbitration commission for arbitration according to the Arbitration Law; if
the parties fail to reach a supplementary agreement, the original arbitration
agreement shall be invalid.
Appendix I  Sample Text of the Articles of the Arbitration Commission
Chapter I  General Provisions

Article 1 These Articles are formulated according to the Arbitration Law
of the People’s Republic of China (hereinafter referred to as the Arbitration
Law) for the purpose of regulating the activities of this Arbitration
Commission, ensuring the fair and timely arbitration of the economic disputes
and protecting the lawful rights and interests of all parties involved.

Article 2 Contractual disputes and other disputes involving property
rights and interests occurring between equal citizens, corporations or other
organizations may apply to this Arbitration Commission for arbitration.

This Arbitration Commission will not accept applications for arbitration
of labor disputes or internal agricultural contract disputes of agricultural
collective economic organizations.

Article 3 This Arbitration Commission (hereinafter referred to as the
Arbitration Commission) is located in the city of….
Chapter II The Arbitration Commission

Article 4 The Arbitration Commission shall be composed of one chairman,
from two to four vice chairmen and from seven to eleven members. Among those,
one or two persons shall be the commission’s full-time personnel and the
others shall be part-time.

One secretary general shall be instituted in the Arbitration Commission.
The post of secretary general may be held concurrently by a full-time member
of the Arbitration Commission.

A list of the members of the Arbitration Commission shall be submitted to
the Chinese Arbitration Association for filing.

Article 5 The term of each session of the Arbitration Commission shall be
three years. Upon the expiration of the term, one third of members shall be
replaced.

The replacement of the members of next session of the Arbitration
Commission shall be completed two months before the expiration of the term of
the current Arbitration Commission; if it is not completed owing to special
circumstances, it shall be completed within three months from the expiration
of the term of the current Arbitration Commission.

The duties of the preceding session of the Arbitration Commission shall be
ended with the formation of the new session.

Article 6 The members of the new session of the Arbitration Commission
shall, upon the nominations of the chairman’s meeting of the preceding session
and in consultation with the relevant departments of the people’s government
of the city and the commerce chambers, be appointed by the people’s government
of the city.

Article 7 Meetings of the Arbitration Commission shall be presided over
by the chairman or a vice chairman who has been authorized by the chairman. A
meeting may be held when not less than two thirds of the members are present.
A decision to revise the Articles of the Arbitration Commission or to adjourn
the Arbitration Commission shall be passed by not less than two thirds of all
the members; other decisions shall be passed by not less than two thirds of
the present members.

Article 8 Meetings of the Arbitration Commission are mainly responsible
for the following:

(1) to consider important items such as the working policy or working plan
of the Arbitration Commission, and to make relevant decisions;

(2) to deliberate over and pass the annual working report and financial
report raised by the secretary general of the Arbitration Commission;

(3) to decide upon eligible candidates for the secretary general of the
Arbitration Commission and the persons to be in charge of specialist
consultation organs;

(4) to consider and pass the plan for the establishment of the working
body of the Arbitration Commission;

(5) to decide upon the appointment, dismissal or removal of arbitrators;

(6) to decide upon the withdrawal of the chairman if he acts as an
arbitrator;

(7) to revise the Articles of the Arbitration Commission;

(8) to make a decision concerning adjourning the Arbitration Commission;
and

(9) other duties described in the Arbitration Law, arbitration rules and
these Articles.

Article 9 The chairman’s meeting shall be composed of the chairman, vice
chairmen and the secretary general, and shall be responsible for handling
important routine duties of the Arbitration Commission during the periods when
the Arbitration Commission is not in session.

Article 10 The Arbitration Commission may establish specialist
consultation organs where necessary which shall provide consultative advice on
difficult problems for the Arbitration Commission and the arbitrators.

Specialist consultative organs shall institute one person in charge to be
held by a vice chairman of the Arbitration Commission.

Article 11 If the Arbitration Commission session makes a decision to
dissolve the Commission, and it is agreed to by the people’s government of the
city, the Arbitration Commission shall be terminated.
Chapter III The Working Body

Article 12 A working body shall be established under the Arbitration
Commission. Under the secretary general of the Arbitration Commission, the
working body shall be responsible for dealing with the routine duties of the
Arbitration Commission.

The working body shall be mainly responsible for the following:

(1) to directly deal with procedural affairs, such as the acceptance of
arbitration cases, processing of arbitration documents and file management;

(2) to collect and manage arbitration fees; and

(3) to deal with other matters designated by the Arbitration Commission.

Article 13 Decisions to employ personnel of the working body shall be
made by the chairman’s meeting of the Arbitration Commission.
Chapter IV Arbitrators

Article 14 A list of the arbitrators shall be proposed by the chairman’s
meeting of the Arbitration Commission. Upon deliberation and passage by the
Arbitration Commission meeting, the arbitrators shall be appointed by the
Arbitration Commission and a letter of appointment shall be issued.

The tenure of appointment of the arbitrators shall be three years, and may
be extended upon expiration.

Article 15 The Arbitration Commission shall draw up a list of arbitrators
according to different specialties.

The list of the arbitrators shall be submitted to the Chinese Arbitration
Association for filing.

Article 16 The arbitrators shall strictly abide by the arbitration rules
and shall ensure that all parties involved enjoy their rights as described in
the arbitration rules.

Article 17 The arbitrators shall treat both parties equally, and shall
not represent or take sides with any party.

Article 18 After accepting a case, the arbitrator shall make a serious
and thorough reading and examination of all the evidence and materials
submitted by the parties in preparation for hearing the case.

Article 19 When holding hearings, the arbitrator shall hear fully the
statements by the two parties and earnestly discern the facts.

Article 20 If the arbitrator is approved to meet with the party or his
agent by the arbitration tribunal or the Arbitration Commission, the meeting
shall be held at the office of the Arbitration Commission; without the
approval of the arbitration tribunal or the Arbitration Commission, the
arbitrator shall not meet with either party or their agents independently,
accept evidence or materials from either party or their agents or discuss
circumstances concerning the arbitration case with either party or their
agents independently.

Article 21 The arbitrators shall promptly meet after the termination of
the case hearings, and shall issue the award according to provisions.

Article 22 The arbitrators shall maintain the secrecy of the arbitration
process and shall not reveal such things as the case proceedings, status of
the arbitration tribunal’s decision or any trade secrets.

Article 23 The Arbitration Commission shall dismiss any of arbitrator
under any of the following circumstances:

(1) concealing circumstances which should be withdrawn and which thereby
affect the case hearings adversely;

(2) failing to attend the hearings without rational reasons; and

(3) other circumstances unbecoming with continued duty as an arbitrator.

Article 24 Any arbitrator who meets with either party or their agents
without approval, accepts dinner invitations or gifts from either party or
their agents, or, during arbitration, demands or accepts a bribe, commits
malpractice while in search of personal gain or twists the law in making an
award shall bear legal responsibility according to the law and shall be
removed by the Arbitration Commission.
Chapter V Financing

Article 25 The Arbitration Commission shall adopt an independent
accounting financial system.

Article 26 The financial resources of the Arbitration Commission include:

(1) assistance from the government;

(2) the arbitration fees handed in by parties involved;

(3) other legal income.

Article 27 When the Arbitration Commission terminates, its property shall
be liquidated. After liquidation, the remaining property shall belong to the
state.
Chapter VI Supplementary Provisions

Article 28 These Articles shall be explained by the Arbitration
Commission.

    Article 29  These Articles shall be effective as of the date of approval
by the people’s government of this city.
Appendix II  Sample Text of the Interim Rules of Arbitration
Chapter I  General Provisions

Article 1 These Interim Rules are formulated according to the relevant
provisions of the Arbitration Law of the People’s Republic of China
(hereinafter referred to as the Arbitration Law) and the Civil Procedure Law
of the People’s Republic of China (hereinafter referred to as the Civil
Procedure Law), for the purpose of ensuring the fair and timely arbitration of
economic disputes and protecting the lawful rights and interests of the
parties involved.

Article 2 Contractual disputes and other property rights and interests
disputes occurring between equal citizens, legal persons and other
organizations may apply to this Arbitration Commission for arbitration.

This Arbitration Commission does not accept arbitration applications
concerning labor disputes or internal agricultural contract disputes of
agricultural collective economic organization.

Article 3 A decision by the parties involved to adopt arbitration as the
means of settling a dispute must be agreed to by both parties voluntarily. If
there is no agreement to hold arbitration and one party applies for
arbitration, that party shall be refused by the Arbitration Commission.

Article 4 An agreement to hold arbitration shall include an arbitration
clause in a contract and any other written agreements to apply for arbitration
reached before or after the dispute.

An agreement to hold arbitration shall contain the following:

(1) expression of intent to apply for arbitration;

(2) the items to be discussed in arbitration;

(3) expression of intent to select this Arbitration Commission.

Article 5 The agreement to hold arbitration shall be independent, and the
alteration, dissolution, termination or invalidity of the contract does not
affect the force of the agreement.

The arbitration tribunal shall be enpost_titled to have the authority to affirm
the effectiveness of the agreement.

Article 6 Any party who disagrees with the effectiveness of the
arbitration agreement may apply to this Arbitration Commission for a decision
or may file a petition with the people’s court for adjudication. Where one
party applies to this Arbitration Commission to make a decision and another
party applies to the people’s court for adjudication, the people’s court shall
make an adjudication.

Any party who disagrees with the effectiveness of the arbitration
agreement shall raise the objection before the first hearings of the
arbitration tribunal; if the parties agree not to hold hearings, any
objections shall be raised before the submission of the first plea.
Chapter II Application and Acceptance

Article 7 Any party who applies for arbitration shall satisfy the
following requirements:

(1) possession of an agreement to hold arbitration;

(2) possession of an accurate arbitration application and the facts and
reasons;

(3) the application is within the scope of this Arbitration Commission.

Article 8 When applying for arbitration, the applicant shall submit the
arbitration agreement, application for arbitration and copies of these
documents.

Article 9 The following items shall be clearly stated in the application
letter for arbitration:

(1) the name, sex, age, profession, employer and address of the applicant
and the defendant; the name and address of the corporation or other
organization, and the name and position of the legal representative or the
chief person in charge;

(2) the arbitration petition and the related facts and reasons;

(3) any evidence and sources of evidence, and the name and address of any
witnesses.

Article 10 Within five days from receiving the application for
arbitration, this Arbitration Commission shall, considering the application
satisfies the acceptance requirements, accept it and notify the parties; the
Arbitration Commission may also accept the application at once and notify the
parties; if the application does not satisfy the acceptance requirements, this
Arbitration Commission shall notify the parties of the refusal in written form
and give the reasons.

After receiving the application letter for arbitration, this Arbitration
Commission may demand that the applying party provide supplementary materials
or make corrections within a specified period if the application for
arbitration does not satisfy the provisions of Article 9 of these Interim
Rules; if no additions or corrections are made when due, it shall be deemed
that the application has not been received.

Article 11 After receiving the application letter for arbitration, this
Arbitration Commission shall deliver these Interim Rules and the list of
arbitrators to the applicant within 15 days, and deliver a copy of the
application for arbitration, these Interim Rules and the list of arbitrators
to the defendant.

After receiving the copy of the application for arbitration, the defendant
shall submit a plea to the Arbitration Commission within 15 days. After
receiving the plea, the Arbitration Commission shall deliver a copy of the
plea to the applicant within 15 days. If the defendant fails to submit a plea,
it shall not affect the process of the arbitration procedure.

Article 12 The applicant may abandon or change the arbitration
application. The defendant may acknowledge or refute the arbitration
application, and shall be enpost_titled to file a counter-petition.

This Arbitration Commission shall, within 15 days from receiving the
application for counter-petition raised by the defendant, deliver a copy of
the application letter for counter-petition to the applicant.

The applicant shall submit a written plea to this Arbitration Commission
within 15 days from receiving the application letter for counter-petition; if
no written plea is raised, it shall not affect the process of the arbitration
procedure.

Article 13 One party may, if it is possible that the award cannot be
executed or be will executed only with great difficulties because of the
actions of another party or for other reasons, apply for property preservation.

If any party applies for property preservation, this Arbitration
Commission shall submit the application of the applicant to the people’s court
in accordance with the relevant provisions of the Civil Procedure Law.

If the application proves to be faulty, the applicant shall reimburse the
defendant any losses caused by the property preservation.

Article 14 A party or agent may authorize a lawyer or other agent with
carrying out the arbitration activities. The authorized lawyer or other agent
shall submit a letter of authorization to this Arbitration Commission before
engaging in arbitration activities.
Chapter III Composition of the Arbitration Tribunal

Article 15 The arbitration tribunal may be composed of three arbitrators
or one arbitrator. If it is composed of three, a chief arbitrator shall be
selected.

Article 16 If the parties agree that the arbitration tribunal shall be
composed of three arbitrators, they shall each choose an arbitrator or
authorize the chairman of this Arbitration Commission to appoint one
arbitrator each, the third arbitrator to be chosen jointly by both parties or
appointed by the chairman with the joint authorization of both parties. The
third arbitrator shall be the chief arbitrator.

If the parties agree that the arbitration tribunal is to be composed of
one arbitrator, he shall be chosen jointly by both parties or appointed by the
chairman with the joint authorization of both parties.

Article 17 If the parties fail to agree on the composition of the
arbitration tribunal or fail to select the arbitrators within 15 days from
receiving the notification of acceptance of arbitration, the arbitrators shall
be appointed by the chairman of this Arbitration Commission.

Article 18 After the establishment of the arbitration tribunal, this
Arbitration Commission shall, within five days after the establishment of the
arbitration tribunal, notify the parties in written form of the composition of
the arbitration tribunal, or may also notify the parties in written form of
the composition of the arbitration tribunal on the date of establishment.

Article 19 Any arbitrator who falls into any of the following categories
shall withdraw from the case; any party has the right to propose a withdrawal
application:

(1) those who are parties to the case or relatives of any party or their
agents;

(2) those who have a vested interest in the case;

(3) those who have other relations with either party or their agents which
may possibly affect a fair award;

(4) those who meet with either party or their agents on their own or
accept gifts or dinner invitations from either party or their agents.

Article 20 Any party who proposes a withdrawal application, shall state
the reasons and make an application before the first hearings. If the reasons
for the withdrawal are not known until after the first hearings, an
application may be raised before the termination of the final hearings.

Article 21 Whether the arbitrator is withdrawn or not shall be decided by
the chairman of this Arbitration Commission; when the chairman is acting as an
arbitrator, withdrawal shall be decided by a meeting of this Arbitration
Commission.

Article 22 If any arbitrator is unable to perform his or her duties
because of withdrawal or other reasons, a new arbitrator shall be chosen or
appointed according to the provisions of the Arbitration Law and these Interim
Rules.

After a new arbitrator has been chosen or appointed due to withdrawal of
the original arbitrator, either party may apply to begin the arbitration
procedure anew, whether or not permission shall be granted shall be decided by
the arbitration tribunal; the arbitration tribunal may itself decide whether
or not to

COMMERCIAL BANKING LAW

Category	BANKING	Organ of Promulgation	The Standing Committee of the National People’s Congress	Status of Effect	In Force
Date of Promulgation	1995-05-10	Effective Date	1995-07-01

Commercial Banking Law of the People’s Republic of China

Contents
Chapter I  General Provisions
Chapter II  Establishment and Organization of A Commercial Bank
Chapter III  Protection of Depositors
Chapter IV  Basic Principles for Loans and Other Businesses
Chapter V  Financial Accounting
Chapter VI  Supervision and Administration
Chapter VII  Takeover and Termination
Chapter VIII  Legal Liabilities
Chapter IX  Supplementary Provisions

(Adopted at the 13th Session of the Standing Committee of the Eighth

National People’s Congress on May 10, l995, promulgated by Order No.47 of
the President of the People’s Republic of China on May 10, 1995)
Contents

Chapter I General Provisions

Chapter ll Establishment and Organization of A Commercial Bank

Chapter lll Protection of Depositors

Chapter IV Basic principles for Loans and Other Businesses

Chapter V Financial Accounting

Chapter VI Supervision and Administration

Chapter VII Takeover and Termination

Chapter VIII Legal Liabilities

Chapter IX Supplementary Provisions
Chapter I General Provisions

Article 1 This Law is formulated to protect the legitimate rights and
interests of commercial banks, depositors and other clients, standardize the
behavior of commercial banks, improve the quality of funds, strengthen
supervision and administration, ensure safety and soundness of commercial
banking, maintain a normal financial order and promote the development of the
socialist market economy.

Article 2 The commercial banks referred to in this Law are bodies
corporate established in accordance with this Law and the Company Law of the
People’s Republic of China to receive money deposits from the public, extend
loans, provide settlement services and do other relevant businesses.

Article 3 A commercial bank may engage in some or all of the following
businesses:

(1) receiving money deposits from the public;

(2) extending short, medium and long-term loans;

(3) providing domestic and international settlement services;

(4) discounting bills;

(5) issuing financial bonds;

(6) acting as agent of issuing, cashing and underwriting government bonds;

(7) dealing in government bonds;

(8) inter-bank call-money business;

(9) dealing or acting as agent in foreign exchange transactions;

(10) providing L/c service and guarantee;

(11) acting as agent in collection and payment and insurance business;

(12) providing safe deposit box service;

(13) other businesses approved by the People’s Bank of China.

The business scope of a commercial bank is defined by the statute thereof
and reported to the People’s Bank of China for approval.

Article 4 A commercial bank operates independently, takes up
responsibility for all risks it may encounter and for its own profits and
losses it may bear, and exercises self-regulating mechanism on the management
principle of economic efficiency, safety and liquidity.

A commercial bank shall conduct its business in accordance with the law,
free from interference by any department or individual.

A commercial bank shall assume civil responsibilities independently with
its entire assets as a body corporate.

Article 5 A commercial bank shall abide by the principle of equality,
voluntariness, fairness, honesty and good faith in doing business with its
clients.

Article 6 A commercial bank shall protect its depositors’ legitimate
rights and interests from encroachment by any organization or individual.

Article 7 In doing credit business, a commercial bank shall strictly
examine the credibility of a borrower and persist in extending loans against
collateral in order to ensure recalling loans on time.

A commercial bank is protected by law to retrieve the principal and
interests of a loan from the borrower thereof in accordance with the law.

Article 8 A commercial hank shall abide by the relevant provisions of the
law and administrative decrees and regulations in doing business and shall not
impair the interests of the state or the public.

Article 9 A commercial bank shall abide by the principle of fair
competition in doing its business and refrain from unfair competition.

Article 10 A commercial bank shall be subject to supervision and
administration by the People’s Bank of China in pursuance of the law.
Chapter II Establishment and Organization of A Commercial Bank

Article 11 The establishment of a commercial bank shall require the
examination and approval by the People’s Bank of China.

No organization or individual shall receive money deposits from the public
or do any other businesses of a commercial bank or use the post_title of “bank”
without the approval of the People’s Bank of China.

Article 12 The establishment of a commercial bank shall satisfy the
following requirements:

(1) having its statute in pursuance of this Law and the Company Law of the
People’s Republic of China;

(2) having the minimum registered capital defined by this Law;

(3) having chairman of directors (president), general manager and other
senior managerial personnel with expertise and professional experience
required by their positions;

(4) having complete organization and management;

(5) having up-to-standard business site, safety measures and other
facilities relevant with the business thereof.

The People’s Bank of China in examining the application for the
establishment of a commercial bank should take into account the need for
economic growth and the competition of the banking industry.

Article 13 The minimum registered capital for the establishment of a
commercial bank shall be RMB one billion yuan (RMB 1,000,000,000 yuan). Of the
commercial banks, an urban cooperative commercial bank shall need a minimum
registered capical of RMB 100 million yuan (RMB 100,000,000 yuan) and a rural
cooperative commercial bank shall need a minimum registered capital of RMB 50
million yuan (RMB 50,000,000 yuan). Registered capital herein referred to
should be paid-up capital.

The People’s Bank of China may readjust the floor amount of the registered
capital necessary for the establishment of a commercial bank in the light of
economic development, but the amount shall not be lower than those specified
in the previous paragraph.

Article 14 The applicant shall apply to the People’s Bank of China for
the establishmemt of a commercial bank by submitting the documents and
information listed below:

(1) an application for the establishment of a commercial bank, specifying
the name, location, registered capital and business scope of the bank thereof;

(2) a feasibility study report;

(3) other documents and information required by the People’s Bank of China.

Article 15 The application having been examined to be in compliance with
the provisions of Article 14 of this Law, the applicant shall fill a formal
application form and submit the documents and information listed below:

(1) a draft of the statute of the commercial bank to be established;

(2) qualification documents of the senior managerial staff to be employed;

(3) a certificate of capital confirmation from a legitimate capital
confirmation authority;

(4) a list of the names, capital contributions and shares of the share
holders of the commercial bank;

(5) credit certificate and other relevant information of the share
holders, each holding more than ten percent of the registered capital of the
commercial bank;

(6) the guideline and plan for the operation of the commercial bank;

(7) information of the business site, safety measures and other facilities
relevant with the business of the commercial bank;

(8) other documents and information required by the People’s Bank of China.

Article 16 Having been approved for establishment, the commercial bank
shall be issued banking permit by the People’s Bank of China and with it
register with the Administration for Industry and Commerce for a business
license.

Article 17 The Company Law of the People’s Republic of China is
applicable to the form and structure of the organization of a commercial bank.

A commercial bank which was established prior to the promulgation of this
Law may follow the original provisions if its organizational form and
structure do not entirely conform with the Company Law of the People’s
Republic of China, and the time limit for the retention thereof shall be
decided by the State Council.

Article 18 A commercial bank solely owned by the state shall have a board
of supervisors. The Board of Supervisors shall be composed of representatives
of the People’s Bank of China and governmental departments, experts from other
relevant departments and representative of the staff of the bank. The way of
establishing the Board of Supervisors shall be defined by the State Council.

The Board of Supervisors shall execise control of the solely state-owned
commercial banks over the quality of credit funds, the ratio of assets and
liabilities, the hedging and appreciation of the state-owned assets and other
relevant matters of the bank and the behavior of its high ranking managerial
personnel violating the law, administrative decrees and regulations or statute
or acts damaging the interests of the bank.

Article 19 A commercial bank may set up its branches within and outside
the territory of the People’s Republic of China in keeping with its business
needs. A branch thereof shall be set up with the approval of the People’s Bank
of China. Branches of a commercial bank inside the People’s Republic of China
need not be set up in conformity with administrative divisions.

A commercial bank in setting up a branch within the territory of the
People’s Republic of China shall allocate to it a working capital in keeping
with the business scope thereof as is stipulated. The total sum of the working
capital to be allocated to all branches shall not exceed sixty percent of the
total capital of the commercial bank proper.

Article 20 For the establishment of a branch, the applying commercial
bank shall submit the documents and information listed below:

(1) an application for establishing a commercial bank branch whereby
should be specified the name, amount of working capital, business scope and
the locations of the headquarters and branch of the commercial bank;

(2) a financial report of the last two years of the applicant;

(3) certificates of qualifications of the senior managerial officials to
be appointed;

(4) the business guideline and plan;

(5) information related to the business site, safety measures and other
facilities relevant with the business thereof;

(6) other documents and information required by the People’s Bank of China.

Article 21 Having been approved to be established, a commercial bank
branch shall be granted a banking permit by the People’s Bank of China, and
with the permit shall register with the Administration for Industry and
Commerce and obtain a business license.

Article 22 A commercial bank shall apply to its branches a financial
system of unified accounting and centralized fund allocation and
level-by-level management.

The branch of a commercial bank shall not be qualified as a body corporate
and it shall do business within the scope authorized by the headquarters which
shall assume the civil responsibilities thereof.

Article 23 Having been approved to be established, a commercial bank and
its branches shall be announced to the public by the People’s Bank of China.

When a commercial bank or its branch has not started operation for over
six months from the date of being granted a business license without proper
reason or has automatically suspended operation for over six consecutive
months after starting its operation, the People’s Bank of China shall revoke
its banking permit and make a public announcement thereof.

Article 24 In the event of one of the changes listed below, a commercial
bank shall need to obtain the approval from the People’s Bank of China:

(1) change of the name of the commercial bank;

(2) change of the registered capital;

(3) change of the business sites of the head office and/or its branch(es)
of the bank;

(4) readjustment in business scope;

(5) change of share holders, each holding more than ten percent of the
total capital or total shares of the commercial bank;

(6) revision of the statute;

(7) other changes specified by the People’s Bank of China.

When a commercial bank needs to replace its chairman of the board of
directors, or general manager with a new one, the qualifications of the
appointee shall be reported to the People’s Bank of China for examination.

Article 25 The Company Law of the People’s Republic of China is
applicable to the split and merger of commercial banks.

The split or merger of commercial banks shall require the examination and
approval by the People’s Bank of China.

Article 26 A commercial bank shall use the banking permit pursuant to law
and administrative decrees and regulations. It is prohibited to counterfeit,
tamper with, transfer, lease or lend the banking permit.

Article 27 Anyone who has one of the following backgrounds shall not be
fit for high managerial positions in a commercial bank:

(1) having once been sentenced to punishment for the crimes of
embezzlement, bribery, illegal possession of property, misappropriation of
public property or disruption of social economic order, or having been
deprived of political rights for crimes;

(2) having served as a director of the board of directors, the director or
manager of a company which went bankrupt because of mismanagement and having
been personally responsible for the bankruptcy;

(3) Having been the legal representative of a company whose business
license had been revoked on account of violation of the law and having been
personally responsible thereof;

(4) Having failed to repay a fairly large debt already due.

Article 28 Any organization or individual intending to buy more than ten
percent of the shares of a commercial bank shall have to obtain the approval
from the People’s Bank of China.
Chapter III Protection of Depositors

Article 29 A commercial bank in its savings deposit business shall abide
by the principle of voluntariness in depositing, freedom of withdrawal,
interest on every deposit and keeping secret for the depositor.

With regard to savings deposits of individuals, a commercial bank has the
right to reject the demand of any deparment or individual for investigation,
freezing, withholding or transferring a savings deposit, unless it is
otherwise defined by the law.

Article 30 With regard to deposits of any organization, a commercial bank
has the right to reject the demand of any other organization or individual for
investigation; unless it is otherwise defined hy the law or administrative
decrees and regulations; it has the right to reject the demand of any other
organization or individual for freezing, withholding or transferring such a
deposit, unless it is otherwise defined by the law.

Article 31 A commercial bank shall fix its interest rates for deposits
pursuant to the ceiling and floor of interest rates defined by the People’s
Bank of China and make public announcement thereof.

Article 32 A commercial bank shall place a required reserve with the
People’s Bank of China and keep adequate standby reserve in accordance with
the stipulations by the People’s Bank of China.

Article 33 A commercial bank shall guarantee the payment of the principal
and interests of every deposit and shall not delay or refuse the payment
thereof.
Chapter IV Basic Principles for Loans and Other Businesses

Article 34 A commercial bank shall conduct its loan business in
accordance with the need for the development of the national economy and
social progress and under the guidance of the state industrial policy.

Article 35 A commercial bank shall conduct strict examination of the
usage, capability and form of repayment as well as other relevant matters of a
borrower in order to extend a loan.

A commercial bank shall implement a system in which the examination and
the actual extending of a loan are conducted by separate departments and the
examination and approval of a loan are conducted at different levels.

Article 36 A commercial bank shall extend a loan against a security, and
conduct strict examination of the repaying capability, the ownership and value
of the mortgage or pledge, and the feasibility of the realization of the
mortgage or pledge.

A borrower may be exempted from securities after the commercial bank has
conducted examination and found it to have a high credit rating and to have
the capability of repayment.

Article 37 A commercial bank shall sign a written contract with its
borrower on the extending of a loan. The contract shall specify the category,
usage, amount, rate of interest, date and form of repayment, default
liabilities and other matters deemed as necessary by the two parties.

Article 38 A commercial bank shall fix its interest rates for loans in
accordance with the ceiling and floor for the rates of interest for loans
fixed by the People’s Bank of China.

Article 39 A commercial bank in its loan business shall abide by the
regulations on the ratios of assets and liabilities listed below:

(1) the capital adequacy rate shall not fall short of eight percent;

(2) the ratio of the outstanding balance of loans to that of deposits
shall not exceed seventy-five percent;

(3) the ratio of the outstanding balance of liquid assets to that of
liquid liabilities shall not fall short of twenty-five percent;

(4) the ratio of the outstanding balance of loans to one borrower to that
of the capital of the bank shall not exceed ten percent;

(5) other stipulations by the People’s Bank of China on asset and
liability management.

When a commercial bank which was established prior to the promulgation of
this Law is found to have its ratios of assets and liability at variance with
the stipulations hereinbefore, it is required to conform to the stipulations
within a designated time limit. Concrete rules for the implementation shall be
defined by the State Council.

Article 40 A commercial bank shall not extend unsecuried loans to related
persons; and shall not provide related persons with securied loans on
conditions more favorable than those to a borrower of a similar loan.

The related persons mentioned in the previous paragraph refer to:

(1) the members of the board of directors, members of the board of
supervisors, managerial personnel and staff of the credit business department
of a commercial bank, and their close relatives;

(2) the company, enterprise or other economic organization wherein the
aforesaid persons have made investment or assumed senior managerial positions.

Article 41 No organization or individual may force a commercial bank to
extend a loan or provide guarantee for a loan. A commercial bank shall have
the right to refuse any organization’s or individual’s demand for a loan or
guarantee.

A commercial bank owned solely by the state should provide loans for
special projects approved by the State Council. Losses resulting from such
loans shall be compensated with appropriate measures taken by the State
Council. Concrete measures shall be defined by the State Council.

Article 42 A borrower shall repay the principal and interest of a loan on
schedule.

When a borrower fails to repay a secured loan, the commercial bank has the
right to be repaid the principal and interest of the loan or the priority of
getting paid with the collateral thereof. A commercial bank shall dispose of
the real estate or stocks on mortgage or pledge within a year from the date of
obtaining.

A borrower shall assume the responsibility for failure to repay the
unsecured loan falling due in accordance with the contract thereof.

Article 43 A commercial bank shall not engage in trust investment or
stock business, or invest in real estate not for its own use within the
People’s Republic of China.

A commercial bank shall not invest in non-bank financial institutions or
enterprises within the People’s Republic of China. A commercial bank which has
made investment in non-bank financial institutions or enterprises prior to the
promulgation of this Law shall be subject to other provisions stipulated by
the State Council.

Article 44 A commercial bank in handling settlements such as acceptance,
remittance and collection shall make timely cashing and entries pursuant to
relevant provisions without detaining bills or instruments or dishonoring them
in violation of regulations. The relevant provisions for the time limit for
bill acceptance and entries in accounting books should be made public.

Article 45 A commercial bank shall apply for approval for issuing
financial bonds or seeking loans outside China in accordance with the law and
administrative decrees.

Article 46 Inter-bank loan shall be subject to the time limit defined by
the People’s Bank of China and the maximum time for such financing shall not
exceed four months. It is prohibited to use call money to extend loans on
fixed assets or to make investment.

The call money for lending shall be only the idle fund after depositing
required reserve, leaving adequate standby reserve and repayment of loans
falling due to the People’s Bank of China. The call money for borrowing shall
be used to meet the position shortage in interbranch settlement and
interbranch remittance and temporary needs for turnover of funds.

Article 47 A commercial bank shall not receive money deposits or extend
loans by raising or lowering interest rates or by other unjustifiable means in
violation of regulations.

Article 48 An enterprise or undertaking may open a principal account with
a commercial bank of its own choice for day to day transfer and settlement of
accounts and cash receipt and payment, but it shall not open two or more
principal accounts.

No organization or individual shall deposit the fund of an organization in
an account opened in the name of an individual.

Article 49 A commercial bank shall fix its business hours to the
convenience of its clients and make public announcement thereof. A commercial
bank shall conduct its business during its announced business hours and shall
not suspend business or shorten its business hours at will.

Article 50 A commercial bank shall collect commission fees on handling
business and providing services in accordance with the stipulations of the
People’s Bank of China.

Article 51 A commercial bank shall preserve all the financial statements,
business contracts and other information for a specified period in accordance
with relevant state regulations.

Article 52 The staff of a commercial bank shall abide by the law,
administrative decrees and regulations and other rules for the administration
of various businesses and shall not have wrong conducts listed below:

(1) taking advantage of their positions to demand or accept bribes, or
violating relevant state regulations to accept commissions or service fees
under any pretext;

(2) taking advantage of their positions to commit embezzlement,
misappropriation or unlawful possession of the funds of the bank or of clients;

(3) providing loans or guarantee to relatives or friends in violation of
regulations;

(4) holding positions concurrently at other economic institution(s);

(5) other acts in violation of the law, administrative decrees and
regulations and rules in business management.

Article 53 The staff of a commercial bank shall not disclose state
secrets or commercial secrets which they come into possession during their
service in the bank.
Chapter V Financial Accounting

Article 54 A commercial bank shall establish and improve its financial
accouncing system in accordance with the law and the state unified accounting
standards as well as the relevant stipulations of the People’s Bank of China.

Article 55 A commercial bank shall, in accordance with relevant state
regulations, truthfully and in an all-round way record and reflect its
business activities and financial position, produce its annual financial
accounting report and timely submit its financial statements to the People’s
Bank of China and the treasury department. A commercial bank shall not
establish accounting books other than those legally specified.

Article 56 A commercial bank shall announce its business performance and
audited statement of the previous fiscal year within three months after the
end of every fiscal year in accordance with the stipulations of the People’s
Bank of China.

Article 57 A commercial bank shall retain a reserve against bad and
doubtful accounts and write off bad debts in pursuance of relevant state
regulations.

Article 58 The fiscal year of a commercial bank begins on the first of
January and ends on the thirty-first of December of the Gregorian calendar.
Chapter VI Supervision and Administration

Article 59 A commercial bank shall formulate its business rules,
establish and improve its business management, the system of cash control and
its security system in accordance with the stipulations of the People’s Bank
of China.<

NEGOTIABLE INSTRUMENTS LAW

Category	BANKING	Organ of Promulgation	The Standing Committee of the National People’s Congress	Status of Effect	In Force
Date of Promulgation	1995-05-10	Effective Date	1996-01-01

Negotiable Instruments Law of the People’s Republic of China

Contents
Chapter I  General Provisions
Chapter II  Bills of Exchange
Chapter III  Promissory Notes
Chapter IV  Cheques
Chapter V  The Applicable Laws Pertaining Negotiable Instruments in Cases
Chapter VI  Legal Responsibility
Chapter VII  Supplementary Provisions

(Adopted at the 13rd meeting of the Standing Committee of the Eighth

National People’s Congress, and promulgated by Order No.49 of the President
of the People’s Republic of China on May 10, 1995)
Contents
Chapter I  General Provisions
Chapter II  Bills of Exchange

Section 1 Issue

Section 2 Endorsement

Section 3 Acceptance

Section 4 Guaranty

Section 5 Payment

   Section 6  Right of Recourse
Chapter III  Promissory Notes
Chapter IV  Cheques
Chapter V  The Applicable Laws Pertaining Negotiable Instruments in Cases

           Involving Foreign Elements
Chapter VI  Legal Responsibility
Chapter VII  Supplementary Provisions

Chapter I  General Provisions

Article 1 This Law is formulated for the purpose of standardizing
actions concerning negotiable instruments, protecting the legal rights of
parties using negotiable instruments, maintaining economic order in society
and promoting the development of the socialist market economy.

Article 2 This Law applies to all transactions concerning negotiable
instruments within the territory of the People’s Republic of China.

The term “negotiable instrument” as used in this Law denotes “bill
of exchange”, “promissory note” and “cheque”.

Article 3 Activities concerning instruments shall abide by the laws
and administrative regulations and shall not harm public interests.

Article 4 When creating an instrument, the issuing party shall endorse
it according to statutory conditions and bear liability for the instrument
according to the items specified therein.

When exercising his rights with regard to an instrument, the bearer shall
endorse the instrument and present it according to statutory procedures.

Other debtors endorsing the instrument shall bear liability for the
instrument according to the items specified therein.

The instrument right as referred to in this Law denotes the right of the
bearer to claim the specified amount in payment from the debtor including the
right to claim for payment and the right of recourse.

Liability for negotiable instruments as referred to in this Law denotes
the obligation of the debtor to pay the sum specified in the instrument to the
bearer.

Article 5 A party to an instrument may authorize an agent to endorse the
instrument but must specify the principal-agent relationship on the instrument.

A person without power of agency who endorses an instrument in the
capacity of agent shall bear liability for the instrument; an agent who goes
beyond the limits of his power of agency shall undertake liability for the
part of the instrument overstepping the limits of his powers.

Article 6 The endorsement of an instrument by a person with no capacity
for civil conduct or with limited capacity for civil conduct is invalid, but
this does not influence the validity of other endorsements of the instrument.

Article 7 The endorsement of an instrument shall be by signature, seal or
both signature and seal.

The endorsement of an instrument by a legal person or other organization
which makes use of instruments shall be the official seal of the legal person
or organization accompanied by the endorsement of its legal representative or
its authorized agent.

The signature on an instrument must be the name of the party concerned.

Article 8 The sum of money on an instrument shall be specified in both
Chinese characters and Arabic numerals; the two figures must be the same, if
the two figures are not the same, the instrument shall be null and void.

Article 9 Items specified in an instrument must conform to the provisions
of this Law.

The sum, date and payee recorded in an instrument must not be altered.
Instruments which have been altered are invalid.

Other items in an instrument may be altered by the person who originally
wrote them, as proof alterations must be endorsed by the aforementioned.

Article 10 The issue, acquisition and transfer of an instrument shall
be made in good faith and shall constitute a real transaction and reflect the
credit-debit relationship.

An instrument can only be acquired in consideration of payment, the
corresponding value of which must be agreed by the two parties to the
instrument.

Article 11 Acquisition of an instrument through taxation, inheritance or
legacy which may be realized in accordance with law without payment, shall not
be subject to being in consideration of payment. However, the bearers’ rights
on the instrument shall not exceed those of prior parties.

Prior parties refers to other debtors of an instrument who endorsed it
prior to its endorsement by a specific signatory or bearer.

Article 12 In cases where an instrument was acquired through fraudulence,
theft or coercion, or in cases where the bearer acquired an instrument through
malice while he knew well that the aforementioned circumstances existed, the
bearer shall not enjoy the instrument right.

In cases where the bearer through gross negligence acquires an instrument
which does not comply with the provisions of this Law, then the bearer shall
not enjoy the instrument right.

Article 13 A debtor of an instrument shall not oppose the bearer on the
basis of a dispute between the issuer and the debtor himself or between the
any prior parties to the bearer and the debtor himself. However the exception
is in cases where the bearer acquired the instrument with the foreknowledge
that such opposition existed.

A debtor of an instrument may oppose a bearer who had a direct
credit-debit relationship with him and did not perform the stipulated
obligation.

Opposition as referred to in this Law denotes the act whereby the debtor
of an instrument refuses to carry out his obligations to the creditor in
accordance with the provisions of this Law.

Article 14 Items specified in an instrument must be genuine and cannot
be forged or altered. Those who forge or alter the endorsement or other items
in an instrument shall bear legal responsibility.

Endorsements on an instrument which have been forged or altered shall
have no impact on the other genuine endorsements thereon.

Where other items in the instrument have been altered, persons who
endorsed the instrument before it was altered shall be liable for the items
originally specified in the instrument, persons who signed after it was
altered shall be liable for the items specified after the instrument was
altered. In cases where it cannot be determined whether the instrument was
endorsed before or after it was altered, it shall be treated as an instrument
which was endorsed before being altered.

Article 15 Where an instrument has been lost, the person who has lost the
instrument may promptly notify the payer of the instrument to suspend payment,
except in cases where the payer is not specified in the instrument or when the
payer or his agent cannot be identified.

The payer shall temporarily cancel payment when he receives notification
of the loss of the instrument.

The person losing the instrument shall in accordance with the law apply
to the people’s court for the publication of a public notice asserting his
claim or he can bring an action in the people’s court within three days of
notifying the payee to suspend payment or after the loss of the instrument.

Article 16 The procedure by which the bearer of the instrument exercises
his rights or preserves his rights against the debtor shall be carried out
in the business premises of the party concerned during business hours or
at their place of residence if no business premises exist.

Article 17 Rights to an instrument shall cease to be valid if not
exercised within the following time limits:

1. The rights of the bearer of the instrument over the issuer and the
acceptor of the instrument cease to be valid two years after the date of
maturity of the instrument. Bills or notes payable on sight become invalid
two years after the date of issue;

2. The rights of the bearer of a cheque over the issuer cease to be valid
six months after the date of issue;

3. The bearer’s right of recourse over prior parties ceases to be valid
six months after the date of non-acceptance or non-payment;

4. The bearer’s right of re-recourse over prior parties ceases to be
valid three months after the date of settlement or the commencement of a
lawsuit.

The date of issue and the date of maturity of an instrument shall be set
in accordance with the law by the parties to the instrument.

Article 18 A bearer who has lost his rights on instrument because of the
expiration of his rights or because the items recorded in the instrument are
not comprehensive may still enjoy civil rights, and may request that the payer
or the acceptor refunds the amount equivalent to that part of the instrument
not yet paid.
Chapter II Bills of Exchange

Section 1 Issue

Article 19 A bill of exchange is an instrument signed by the issuer,
authorizing the payer to unconditionally pay a certain sum of money to the
payee or the bearer when the bill is presented or at a specified time.

Bills can be classified into bankers’ bills and commercial bills.

Article 20 Issue refers to the act of the issuer signing and issuing
the instrument and delivering it to the payee.

Article 21 The issuer of the bill must have an authentic relationship
with the payer authorizing payment and must possess reliable funds with which
to pay the sum in the bill.

Bills without consideration shall not be signed or issued to defraud
money from banks or other parties of an instrument.

Article 22 A bill must specify the following items:

1. The word “bill”;

2. Authorization of unconditional payment;

3. A fixed sum;

4. The name of the payer;

5. The name of the payee;

6. The date of issue;

7. The endorsement of the issuer.

A bill shall be null and void if any of the above-mentioned items are not
specified therein.

Article 23 The date of payment, place of payment and place of issue, if
specified on the bill, shall be legible and unambiguous.

A bill is payable on sight if the date of payment is not specified.

The place of payment, if not specified on a bill, shall be the business
premises, domicile or habitual residence of the payer.

The place of issue, if not specified on a bill, shall be the business
premises, domicile or habitual residence of the issuer.

Article 24 Items relating to the issue of a bill other than those
stipulated by this Law may be specified on a bill, but such items shall have
no effect on the validity of the bill.

Article 25 The date of payment may be specified in either one of the
following forms:

1. Payable on sight;

2. Payable on a fixed date;

3. Payable during a fixed period after the date of issue;

4. Payable during a fixed period after the date of receipt.

The date of payment as specified in the preceding paragraph shall be the
date of maturity of the bill.

Article 26 The issuer who signs and issues the bill shall bear
liability for its acceptance and payment.

In the event of non-acceptance or non-payment of the bill, the bearer
shall be reimbursed the sum and expenses as stipulated in Articles 70 and 71
of this Law.

Section 2 Endorsement

Article 27 The bearer may transfer his rights to the bill to other
persons or authorize other persons to exercise some of his rights to the bill.

When the issuer writes the term “non-transferable” on the bill, then
it cannot be transferred.

The bearer must endorse and hand over the bill when exercising his rights
as stipulated in the first paragraph of this article.

Endorsement refers to the act of putting relevant items in writing and
endorsing the back of the bill or an allonge.

Article 28 The person endorsing the bill may use an allonge and attach it
to the bill if there is not enough space in the bill for the items.

The first person to write on the allonge shall endorse the conjuncture
of the bill and the allonge.

Article 29 An endorsement shall be signed by the person making it and
the date of endorsement shall be specified.

An undated endorsement shall be deemed to have been added to the bill
before its date of maturity.

Article 30 The name of the person endorsing the bill must be specified
when the bill is endorsed so that the rights to the bill are transferred or
to authorize another person to exercise some of the rights to the bill.

Article 31 There shall be an uninterrupted series of endorsement in a
bill which is transferred by means of endorsement. The bearer must prove his
rights to the bill by an uninterrupted series of endorsement; a person to
whom a bill is transferred by means other than endorsement or who acquires a
bill by other legal means shall provide evidence in accordance with the law
showing his rights to the bill.

“An uninterrupted series of endorsement” as referred to in the preceding
paragraph denotes that, in the course of the transfer of an instrument, the
endorsement of the person endorsing the transfer of the bill shall be made by
the immediate prior endorsee to acquire the bill.

Article 32 When the bill is transferred by means of endorsement, the
subsequent party shall be liable for the authenticity of the endorsement
made by the immediate prior party.

“The subsequent party” denotes other debtors of an instrument who endorse
it after its endorsement by a specific party.

Article 33 No conditions can be attached to endorsements. Any conditions
attached to endorsements shall have no effect on the bill.

Any endorsements purporting to transfer a part of the amount payable,
or to transfer the bill to two or more people separately, shall be null and
void.

Article 34 When the endorser writes the term “non-transferable” on the
bill and his subsequent party reendorses and transfers it, the original
endorser shall not bear any responsibility for any guarantees made to the
subsequent party’s endorsee.

Article 35 Where an endorsement contains the word “by procuration”, the
endorsee shall be enpost_titled to exercise mandated rights to the bill on the
endorser’s behalf. However, the endorsee shall not transfer the rights to the
bill by means of re-endorsement.

A bill may be pledged; when the bill is pledged, the endorsement shall
contain the term “value in pledge”. The endorsee may exercise the rights to
the bill when realizing the right of pledge according to law.

Article 36 A bill cannot be transferred by means of endorsement when
acceptance or payment has been refused or when the time limit for presentation
in order to receive payment has expired, if the bill has been endorsed and
transferred, the endorser shall bear liability for the bill.

Article 37 After the bill has been endorsed and transferred, the endorser
shall be liable for guaranteeing the acceptance and payment of the bill held
by the subsequent party. In cases of non-acceptance or non-payment of the
bill, the endorser shall compensate the bearer with the sum and expenses as
stipulated in Articles 70 and 71 of this Law.

Section 3 Acceptance

Article 38 Acceptance denotes the act whereby payer of the bill promises
to pay the sum of money in the bill at its maturity.

Article 39 Where a bill is payable on a fixed date or within a fixed
period after the date of issue, the bearer shall present the bill to the
payer for acceptance before the bill’s date of maturity.

Presenting the bill for acceptance denotes the act whereby the bearer
presents the bill to the payer and demands a promise of payment from the
payer.

Article 40 Where a bill is payable during a fixed period after
presentation, the bearer shall present the bill to the payer for acceptance
within one month of the date of issue.

Where a bill has not been presented for acceptance within the prescribed
period, the bearer shall lose the right of recourse against prior parties.

Where a bill is payable on sight, it does not need to be presented for
acceptance.

Article 41 The payer shall accept or refuse the bill within three days
of receiving the bill as presented for acceptance.

On receiving of a bill presented for acceptance by the bearer, the payer
shall make out a receipt to the bearer. The receipt shall be signed and the
date on which the bill was presented shall be written thereon.

Article 42 When accepting a bill, the payer shall write the word
“accepted” and the date of acceptance on the front of the bill and sign it;
after seeing a bill which is payable during a fixed period, the date of
payment shall be specified at the time of acceptance.

Where the date of acceptance is not specified on the bill, it shall be
the last day of the period prescribed by the first paragraph of the preceding
article.

Article 43 When accepting a bill, the payer shall accept it
unconditionally; if conditions have been added, this is deemed to be a
refusal.

Article 44 When the payer has accepted the bill, he shall bear the
liability of paying it at maturity.

Section 4 Guaranty

Article 45 The responsibility of guaranteeing the payment of a bill shall
be borne by the guarantor.

The guarantor shall be someone other than the debtor of the bill.

Article 46 The guarantor must specify the following items on the bill
itself or on an allonge:

1. The word “guaranteed”;

2. The name and address of the guarantor;

3. The name of the person to whom the guaranty is given;

4. The date of guaranty;

5. The endorsement of the guarantor.

Article 47 When the guarantor has not specified Item 3 of the preceding
article on the bill itself or on an allonge, in cases where the bill has
already been accepted, the person who accepted the bill is he to whom the
guaranty is given; in cases where the bill has not yet been accepted, the
guaranty is given to the issuer.

When the guarantor has not specified Item 4 of the preceding article on
the bill itself or on an allonge, the date of guaranty shall be the date of
issue.

Article 48 No conditions can be attached to the guaranty; if there
should be any conditions attached, these will not affect the liability of
guaranty on the bill.

Article 49 The guarantor shall be responsible for guaranteeing the
bearers’ rights to the bill when the bearer has acquired the bill
legitimately. This is with the exception of cases when the debt of the person
receiving the guaranty is invalid because of the absence of certain items
from the bill.

Article 50 Where a bill is guaranteed, the guarantor and the person to
whom the guaranty is given shall undertake joint liability to the bearer. In
cases where the guaranteed bill has not been paid at its maturity, the bearer
is enpost_titled to demand payment from the guarantor, who shall pay the bill in
full.

Article 51 In cases where there are two or more guarantors, they shall
undertake joint liability.

Article 52 After the guarantor has paid the debt as stipulated in the
bill, the guarantor may exercise his right of recourse as enjoyed by the
bearer against the person to whom the guaranty is given and his prior parties.

Section 5 Payment

Article 53 The bearer shall present the bill for payment within the
following time limits:

1. A bill payable on sight should be presented to the payer within one
month of the date of issue;

2. A bill payable on a fixed date, within a fixed period after the date
of issue or within a fixed period after being seen shall be presented for
acceptance within 10 days of the date of maturity.

In cases where the bearer has not presented the bill for payment within
the prescribed period as stipulated in the preceding paragraph, the person
accepting the bill or the payer shall remain liable for the payment of the
bill after the bearer has explained the situation.

Presentation for payment made to the payer by an authorized bank or
clearing system for instruments shall be deemed as presentation by the bearer.

Article 54 The payer must pay the bill in full on the day when the
bearer presents the bill for payment in accordance with the provisions of the
preceding article.

Article 55 The bearer shall sign the bill and give it to the payer after
receiving payment. In cases where the bearer authorizes a bank to receive
payment on his behalf, the bill may be deemed as having been signed for when
the authorized bank has credited the collected sum to the bearer’s account.

Article 56 The bank authorized by the bearer to receive payment shall be
liable only for crediting the sum on the bill to the bearer’s account
according to the items specified in the bill.

The bank authorized by the payer to make payment shall be liable only
for paying the sum on the bill from the payer’s account according to the
items specified in the bill.

Article 57 When paying a bill, the payer or his agent shall check the
continuity of the series of endorsement, as well as checking the legitimacy
of the identification of the person presenting the bill, or the validity of
that person’s certificates.

In cases where the payer or his agent make a payment out of malice or
with gross negligence, they alone shall bear liability.

Article 58 In cases where the payer pays a bill before maturity which is
payable on a fixed day or on sight within a fixed period, he alone shall bear
liability.

Article 59 When the sum on a bill is expressed in a foreign currency,
the sum payable shall be paid in Renminbi according to the market rate of
exchange on the day of payment.

Where parties to a bill have stipulated the currency in which the bill is
to be paid, the latter agreement shall be followed.

Article 60 Once the payer pays the bill in full, all debtors shall be
discharged from liability.

Section 6 Right of Recourse

Article 61 When the payment of a bill has been refused at its date of
maturity, the bearer may exercise the right of recourse against the endorsers,
the issuer and other debtors of the bill.

Before the maturity of a bill, the bearer may also exercise the right of
recourse under any of the following circumstances:

1. In cases when the payment of the bill has been refused;

2. In cases when the acceptor or the payer dies or flees;

3. In cases when the acceptor or the payer has been declared bankrupt
according to the law or has been ordered to cease business activities due to
their violations of the law.

Article 62 When exercising the right of recourse, the bearer shall be
able to provide proof that acceptance or payment was refused.

In cases when the bearer’s presentation of the bill for acceptance or
payment has been refused, the acceptor or the payer must provide proof of
their refusal or a statement noting their reasons for non-payment or
non-acceptance. Otherwise, the acceptor or the payer shall bear the civil
liabilities arising therefrom.

Article 63 In cases when the bearer is unable to obtain proof of refusal
to accept or pay the bill because of the death or flight of the acceptor or
payer or other causes, the bearer may procure other relevant proof according
to the law.

Article 64 In cases when the acceptor or the payer has been declared
legally bankrupt by the people’s court, relevant judicial documents from the
people’s court shall be valid as proof of refusal to accept or pay the bill.

In cases when the acceptor or the payer has been ordered to cease business
activities because of his violations of the law, the punitive decision of the
relevant administrative authorities shall be valid as proof of refusal to
accept or pay the bill.

Article 65 When the bearer cannot provide proof of refusal to accept or
pay the bill or a statement noting reasons for non-payment or any other lawful
proof within the prescribed period, he shall lose the right of recourse
against his prior parties. However, the acceptor or the payer shall still
remain liable to the bearer.

Article 66 The bearer shall give written notice of the refusal to accept
or pay to his prior party within three days of receiving relevant
certification denoting non-acceptance or non-payment; the prior party shall
notify his prior party of the notice he has received within three days of
receiving the notice. The bearer may also provide written notice to all
debtors of the bill at the same time.

In cases when the bearer has failed to provide written notice in
accordance with the time specifications noted in the preceding paragraph,
the bearer may still exercise his right of recourse. Any party who fails
to give notice within the prescribed period shall be liable to compensate
his prior parties or the issuer for the losses caused by his delayed notice,
but the sum of the damages shall not exceed the sum of the bill.

&nbsp

BUDGET LAW

Budget Law of the People’s Republic of China

(Adopted at the Second Session of the Eighth National People’s Congress on March 22, 1994 and promulgated by Order
No. 21 of the President of the People’s Republic of China on March 22, 1994)

Contents

Chapter I General Provisions

Chapter II Functions and Powers for Budget Management

Chapter III Scope of Budgetary Revenues and Expenditures

Chapter IV Budget Compilation

Chapter V Examination and Approval of Budgets

Chapter VI Budget Implementation

Chapter VII Budget Adjustment

Chapter VIII Final Accounts

Chapter IX Supervision

Chapter X Legal Responsibility

Chapter XI Supplementary Provisions

Chapter I

General Provisions

Article 1 This Law is formulated in accordance with the Constitution with a view to strengthening the distribution and supervisory
function of budget, improving the budget management of the State, intensifying the macroscopic regulation and control of the State,
and ensuring the sound development of economy and society.

Article 2 The State shall establish budget at each level of the government, namely, at the five levels: the Central Government;
the provinces, autonomous regions and municipalities directly under the Central Government; the cities divided into districts and
autonomous prefectures; the counties, autonomous counties, cities not divided into districts, and municipal districts; the townships,
nationality townships and towns.

Townships, nationality townships and towns where conditions do not permit the establishment of budget, subject to the determination
by the people’s governments of the respective provinces, autonomous regions or municipalities directly under the Central Government,
may temporarily not establish budget.

Article 3 Budget at various levels shall maintain a balance between revenues and expenditures.

Article 4 The budget of the Central Government (hereinafter simplified as the central budget) consists of the budgets of its
different departments (including the units directly under them, similarly hereinafter).

The central budget includes revenues turned over by the local governments to the Central Government and revenues refunded or subsidies
granted by the Central Government to the local governments.

Article 5 The local budget consists of the general budgets of the various provinces, autonomous regions and municipalities
directly under the Central Government.

A local general budget at any level consists of the budget of the government at the corresponding level (hereinafter simplified as
budget at the corresponding level) and the totalized general budget at the next lower level. Where the next lower level has only
the budget of the government at the corresponding level, the totalized general budget at the next lower level means the budget of
the government at the corresponding level. In the absence of the budget at the next lower level, the general budget means the budget
of the government at the corresponding level.

The budget of a local government at any level consists of the budgets of the various departments at the corresponding level (including
the units directly under them, similarly hereinafter)

The budget of a local government at any level includes revenues turned over by the governments at lower levels and revenues refunded
or subsidies granted by the governments at higher levels.

Article 6 The budget of a department consists of the budgets of the units subordinate to it.

Article 7 The budget of a unit refers to the budget for revenues and expenditures of a State organ, social organization or
any other unit which is listed in the budget of a department.

Article 8 The State practises a system of tax division between the Central and local governments.

Article 9 The budget approved by the people’s congress at the corresponding level shall not be altered without going through
the procedures prescribed by law.

Article 10 A budgetary year begins on January 1 and ends on December 31 according to the Gregorian calendar.

Article 11 The budgetary revenues and expenditures take Renminbi yuan as the calculating unit.

Chapter II

Functions and Powers for Budget Management

Article 12 The National People’s Congress examines the central and local draft budgets and the reports on the implementation
of the central and local budgets, approves the central budget and the report on the implementation of the central budget and
alters or annuls inappropriate resolutions made by the Standing Committee of the National People’s Congress on budget and final accounts.

The Standing Committee of the National People’s Congress supervises the implementation of the central and local budgets, examines
and approves the adjustment plan for the central budget, examines and approves the final accounts of the Central Government, annuls
administrative rules and regulations, decisions, or orders of the State Council on budget or final accounts, which contravene the
Constitution or laws, and annuls local regulations or resolutions made by the people’s congresses or their standing committees
of the provinces, autonomous regions or municipalities directly under the Central Government on budget or final accounts,
which contravene the Constitution, laws or administrative rules and regulations.

Article 13 A local people’s congress at or above the county level examines the draft general budget at the corresponding level
and the report on the implementation of the general budget, approves the budget and the report on its implementation at the corresponding
level, alters or annuls inappropriate resolutions made by the standing committee of the people’s congress at the corresponding
level on budget or final accounts and annuls inappropriate decisions and orders made by the government at the corresponding
level on budget or final accounts.

The standing committee of a local people’s congress at or above the county level supervises the implementation of the general budget
at the corresponding level, examines and approves the adjustment plan for the budget at the corresponding level, examines and approves
the final accounts of the government at the corresponding level (hereinafter simplified as the final accounts at the corresponding
level), and annuls inappropriate decisions, orders and resolutions made by the government at the corresponding level or by the people’s
congress at the next lower level and its standing committee on budget or final accounts.

The people’s congress of a township, nationality township or town which has established budget examines and approves the budget
at the corresponding level and the report on the implementation of the budget at the corresponding level, supervises the implementation
of the budget at the corresponding level, examines and approves the adjustment plan for the budget at the corresponding level, examines
and approves the final accounts at the corresponding level, and annuls inappropriate decisions and orders made by the
government at the corresponding level on budget or final accounts.

Article 14 The State Council compiles the drafts of the central budget and final accounts, makes report to the National People’s
Congress on the drafts of central and local budgets, submits for the record to the Standing Committee of the National People’s
Congress reports on the totaled budgets submitted for the record by the governments of provinces, autonomous regions and municipalities
directly under the Central Government, organizes the implementation of the central and local budgets, makes decisions to draw on
reserve funds of the central budget, works out the adjustment plan for the central budget, supervises the implementation of
the budgets of the departments of the Central Government and of the local governments, alters or annuls inappropriate decisions
and orders made by the departments of the Central Government or by the local governments on budgets or final accounts, and makes
report to the National People’s Congress or its Standing Committee on the implementation of the central and local budgets.

Article 15 A local government at or above the county level compiles the draft budget and draft final accounts at the corresponding
level, makes report on the draft general budget at the corresponding level to the people’s congress at the corresponding level, submits
for the record the totalized general budget submitted by the next lower level to the standing committee of the people’s congress
at the corresponding level for the record, organizes the implementation of the general budget at the corresponding level, makes decisions
to draw on reserve funds of the budget at the corresponding level, works out the adjustment plan for the budget at the corresponding
level, supervises the budget implementation by the departments at the corresponding level and by the government at the next lower
level, alters or annuls inappropriate decisions and orders made by the departments at the corresponding levels and the government
at the next lower level on budget or final accounts, and makes report to the people’s congress at the corresponding level
or its standing committee on the implementation of the general budget at the corresponding level.

The government of a township, nationality township or town compiles the draft budget and draft final accounts at the corresponding
levels, makes report to the people’s congress at the corresponding level on the draft budget, organizes the implementation of the
budget at the corresponding level, makes decisions to draw on reserve funds of the budget at the corresponding level, works out the
adjustment plan for the budget at the corresponding level, and makes report to the people’s congress at the corresponding level on
the implementation of the budget at the corresponding level.

Article 16 The financial department under the State Council compiles the specific draft of the central budget and draft
of the final accounts, practically organizes the implementation of the central and local budgets, puts forward proposals for drawing
on reserve funds of the central budget, works out the specific adjustment plan for the central budget, and regularly reports
to the State Council on the implementation of the central and local budgets.

The financial department of a local government at any level compiles the specific drafts of budget and final accounts at the corresponding
level, practically organizes the implementation of the general budget at the corresponding level, puts forward proposals for drawing
on reserve funds of the budget at the corresponding level, works out the specific adjustment plan for the budget at the corresponding
level, and regularly reports to the government at the corresponding level and the financial department of the government at the next
higher level on the implementation of the general budget at the corresponding level.

Article 17 The various departments compile the drafts of their own budgets and final accounts, organize and supervise the budget
implementation by their own departments, and regularly report to the financial departments of the governments at the corresponding
levels on their budget implementation.

Article 18 The various units compile the drafts of their own budgets and final accounts, turn over budgetary revenues
as prescribed by the State, manage the budgetary expenditures, and accept supervision of the relevant departments of
the State.

Chapter III

Scope of Budgetary Revenues and Expenditures

Article 19 A budget consists of budgetary revenues and budgetary expenditures.

The budgetary revenues include:

(1) tax receipts;

(2) receipts from the State-owned assets that should be turned over in accordance with relevant regulations;

(3) receipts from special items; and

(4) receipts from other sources.

The budgetary expenditures include:

(1) expenditure for economic construction;

(2) expenditure for the development of undertakings in education, science, culture, public health and physical culture;

(3) the administrative expenditure of the State;

(4) expenditure for national defence;

(5) expenditure for various subsidies; and

(6) other expenditures.

Article 20 The budgetary revenues are divided into the central budgetary revenues, the local budgetary revenues and the
budgetary revenues shared by the central and local governments.

The budgetary expenditures are divided into the central budgetary expenditures and the local budgetary expenditures.

Article 21 Specific measures for the division of items for revenue and expenditure between the central budget and
the local budget, the turning-over of revenues by the local governments to the Central Government and the refundment of revenues
or the grant of subsidies by the Central Government to the local governments shall be prescribed by the State Council and reported
to the Standing Committee of the National People’s Congress for the record.

Article 22 The budgetary revenues shall be used in a manner of overall consideration and arrangement. The establishment of
any fund for a specific purpose, where really necessary, shall be subject to the approval by the State Council.

Article 23 No government at a higher level may allocate, beyond its budget, any budgetary funds of the government at a lower
level. No government at a lower level may use or intercept budgetary funds belonging to the government at a higher level.

Chapter IV

Budget Compilation

Article 24 The governments, departments and units at various levels shall compile their respective draft budgets within the
period of time prescribed by the State Council.

Article 25 The central budget and the budgets of local governments at various levels shall be compiled with reference
to the actual implementation of the previous year’s budget and to the estimation of the current year’s revenues and expenditures.

Article 26 The central budget and the budgets of local governments at various levels shall be compiled according to the
dual budget system.

Measures for the compilation of the dual budget system and rules for the implementation thereof shall be formulated by the State
Council.

Article 27 The public budget of the Central Government shall not contain deficit.

Partial funds for construction investment indispensable to the central budget may be raised in form of domestic and foreign
loans, provided that loans shall be in a rational scale and structure.

The funds needed for the servicing of the debts already raised in the central budget shall be managed in accordance with the provisions
of the preceding paragraph.

Article 28 The local budgets at various levels shall be compiled according to the principles of keeping expenditures
within the limits of revenues and maintaining a balance between revenues and expenditures, and shall not contain deficit.

The local governments may not issue local government bonds, except as otherwise prescribed by laws or the State Council.

Article 29 The compilation of the budgetary revenues at various levels shall be in keeping with the growth rate of the gross
national product.

Revenues which must be listed in the budget in accordance with relevant regulations, may not be concealed or incompletely listed,
and the abnormal receipts in the previous year may not be taken as the basis for the compilation of the budgetary revenues.

Article 30 The guiding principle of practising strict economy and building up the country through thrift and hard work shall
be followed in compiling the budgetary expenditures at various levels.

The budgetary expenditures at various levels shall be compiled by making overall plans and taking all factors into consideration
while securing priorities; and budgetary expenditures for various purposes shall be properly arranged under the precondition that
the reasonable requirements of government public expenditures be secured.

Article 31 Necessary funds shall be arranged in the central and relevant local budgets to assist the developing areas such
as areas of regional national autonomy, old revolutionary bases and outlying and poverty-stricken areas, in developing undertakings
of economy and culture.

Article 32 Reserve funds in government budgets at various levels shall be established at a ratio of 1% to 3% of the budgetary
expenditures at the corresponding level for coping with the relief for natural calamities and other unexpected expenditures
in the implementation of the current year’s budgets.

Article 33 Budgetary circulating funds shall be established in government budgets at various levels as prescribed
by the State Council.

Article 34 The balance of the previous year’s government budget at any level may be used in the next year for the expenditure
of the previous year’s carry-over projects; any surplus thereof may be used as a supplement to the budgetary circulating funds; any
further surplus may be used as budgetary expenditures essential to the next year.

Article 35 The State Council shall give timely instructions regarding the compilation of the next year’s draft budgets.

The concrete matters relating to the compilation of draft budgets shall be arranged by the financial department
under the State Council.

Article 36 The governments of the provinces, autonomous regions and municipalities directly under the Central Government
shall, within the period of time defined by the State Council, submit the general draft budgets at the corresponding levels
to the State Council for examination, verification and totalization.

Article 37 The financial department under the State Council shall, one month before the annual session of the National People’s
Congress, submit the main contents of the draft central budget to the Financial and Economic Committee of the National People’s Congress
for preliminary examination.

The financial departments under the governments of the provinces, autonomous regions, municipalities directly under the Central Government,
cities divided into districts or autonomous prefectures shall, one month before the sessions of the people’ congresses at the corresponding
levels, submit the main contents of the draft budgets at the corresponding levels for preliminary examination to the relevant special
committees of the people’s congresses at the corresponding levels, or to the relevant working committees of the standing committees
of the people’s congresses at the corresponding levels in accordance with the decisions made by the councils of chairmen of the standing
committees of the people’s congresses at the corresponding levels.

The financial departments under the governments of the counties, autonomous counties, and cities not divided into districts or municipal
districts shall, one month before the sessions of the people’s congresses at the corresponding levels, submit the main contents of
the draft budgets at the corresponding levels for preliminary examination to the standing committees of the people’s congresses at
the corresponding levels.

Chapter V

Examination and Approval of Budgets

Article 38 The State Council shall, when the National People’s Congress is in session, make a report to the Congress on the
draft central and local budgets.

The local governments at various levels shall, when the people’s congresses at the corresponding levels are in session, make reports
to the congresses on their respective draft total budgets.

Article 39 The central budget shall be examined and approved by the National People’s Congress.

The budgets of the local governments at various levels shall be examined and approved by the people’s congresses at the corresponding
levels.

Article 40 The government of a township, nationality township or town shall report without delay its budget approved
by the people’s congress at the corresponding level to the government at the next higher level for the record. A local government
at or above the county level shall report without delay its budget approved by the people’s congress at the corresponding level and
the totalized budget submitted for the record by the government at the next lower level to the government at the next higher
level for the record.

A local government at or above the county level shall, after totalizing the budgets submitted for the record by the governments at
the next lower level in accordance with the provisions of the preceding paragraph, report the totalized budgets to the standing committee
of the people’s congress at the corresponding level for the record. The State Council shall, after totalizing the budgets submitted
for the record by the governments of the provinces, autonomous regions and municipalities directly under the Central Government in
accordance with the provisions of the preceding paragraph, submit the totalized budgets to the Standing Committee of the National
People’s Congress for the record.

Article 41 In case the State Council or a local government at or above the county level judges that the budget submitted for
the record by the government at the next lower level in accordance with the provisions of Article 40 of this Law, contravenes laws
or administrative rules and regulations, or contains other inappropriatenesses, and that the resolution approving the budget
has to be cancelled, the said government shall submit the matter to the standing committee of the people’s congress at the
corresponding level for deliberation and decision.

Article 42 After the approval of the budgets of the governments at various levels by the people’s congresses at the corresponding
levels, the financial departments of the governments at the corresponding levels shall without delay give an official written reply
regarding their budgets to the departments at the corresponding levels. The departments at various levels shall without delay give
an official written reply regarding their budgets to their subordinate units.

Chapter VI

Budget Implementation

Article 43 The implementation of the budgets of governments at various levels shall be organized by the governments at the
corresponding levels, and the financial departments of the governments at the corresponding levels shall be in charge of the concrete
work.

Article 44 After the beginning of a budgetary year and before the approval of the draft budgets of the governments
at various levels by the people’s congresses at the corresponding levels, the governments at the corresponding levels may first arrange
their expenditures according to the amount of the budgetary expenditures in the corresponding period of the previous year. Upon the
approval of the respective budgets by the people’s congresses at the corresponding levels, the approved budgets shall be implemented.

Article 45 The departments responsible for collecting budgetary revenues must, in accordance with the provisions of the laws
or administrative rules and regulations, collect in time and in full amount the budgetary revenues that ought to be collected, and
may not, in violation of the provisions of the laws or administrative rules and regulations, carry out unauthorized reduction of,
or exemption from collection of budgetary revenues that ought to be collected or postpone the collection thereof,
and may not intercept, detain or misappropriate the budgetary revenues.

Article 46 The departments or units which have the obligation to turn over budgetary revenues must, in accordance with
the laws, administrative rules and regulations and the provisions of the financial department under the State Council, turn over
in time and in full amount the budgetary funds that ought to be turned over to the State Treasury (hereinafter simplified as the
Treasury), and may not intercept, detain, misappropriate or default the turnover .

Article 47 The financial departments of the governments at various levels must, in accordance with the laws, administrative
rules and regulations and the provisions of the financial department under the State Council, allocate in time and in
full amount the funds for budgetary expenditures and strengthen the management of and supervision over the budgetary expenditures.

The expenditures of the governments, departments and units at various levels must comply with their respective budgets.

Article 48 The Treasury must be established in any budget at or above the county level; it shall also be established for any
township, nationality township or town where conditions permit.

The business of the Central Treasury shall be managed by the People’s Bank of China and the business of the local Treasuries shall
be managed in accordance with the relevant provisions of the State Council.

The Treasuries at various levels must, in accordance with the relevant provisions of the State, manage promptly and accurately the
collection, allocation, retainment and turnover of the budgetary revenues, and the appropriation of the budgetary expenditures.

The power to dispose of the funds of the Treasuries at various levels is vested in the financial departments of the governments at
the corresponding levels. Except as otherwise provided by the laws or administrative rules and regulations, no departments, units
or individuals shall, without the authorization of the financial departments of the governments at the corresponding levels, have
the right to draw on any funds from the Treasuries or dispose in any other forms of the funds already put in the Treasuries.

The governments at various levels shall strengthen the management of and supervision over the Treasuries at the corresponding levels.

Article 49 The governments at various levels shall strengthen the leadership over the budget implementation, support the budgetary-revenue
collecting departments such as the financial departments, taxation and customs authorities to arrange budgetary revenues
according to law and support the financial departments to strictly manage budgetary expenditures.

The financial departments, taxation and customs authorities shall in the course of budget implementation strengthen the analysis
of the budget implementation and shall, whenever discovering any problems, promptly suggest that the governments at the corresponding
levels adopt measures to settle them.

Article 50 Departments or units shall strengthen the management of the budgetary revenues and expenditures, and may not intercept
or draw on the budgetary revenues which ought to be turned over, nor treat any non-budgetary expenditures as budgetary expenditures.

Article 51 The plan to draw on the budget reserve funds of a government at any level shall be made by the financial department
of the government at the corresponding level and be submitted to the government at the corresponding level for a decision.

Article 52 The budgetary circulating funds of the governments at various levels shall be managed by the financial departments
of the governments at the corresponding levels, and shall be used for the fund-circulating purpose in budget implementation, and
may not be diverted to any other use.

Chapter VII

Budget Adjustment

Article 53 Budget adjustment refers to any partial alteration of the central budget already approved by the National People’s
Congress or of the local budgets at the various levels already approved by the local people’s congresses at the corresponding levels,
which is made due to expenditure increase or revenue reduction necessitated by special circumstances in the implementation
of the respective budget, thus making total expenditures exceed total revenues in the original approved balanced budget
or making an increase of the debts to be borrowed as compared with the original approved budgets.

Article 54 The governments at various levels shall, with regard to indispensable budget adjustments, work out plans for budget
adjustments. The adjustment plan of the central budget must be submitted to the Standing Committee of the National People’s Congress
for examination and approval. The budget adjustment plans of the local governments at or above the county level must be submitted
to the standing committees of the people’s congresses at the corresponding levels for examination and approval. The budget adjustment
plans of the governments of townships, nationality townships or towns must be submitted to the people’s congresses at the corresponding
levels for examination and approval. No budget adjustment shall be made without due approval.

Article 55 In case budget adjustments are not approved, the governments at various levels shall not make any decisions
making total expenditures exceed total revenues in the original approved balanced budgets or making an increase of the debts to be
borrowed as compared with the original approved budget.

In case a decision is made in violation of the provisions of the preceding paragraph, the people’s congress or the standing committee
of the people’s congress at the corresponding level or the governments at higher levels shall order a change or annulment of the
decision.

Article 56 Changes in budgetary revenues and expenditures caused by funds returned or subsidies granted by governments
at higher levels in the course of budget implementation shall not be regarded as budget adjustments. The local governments at or
above the county level shall, on receipt of returned funds or subsidies, report the relevant situations to the standing committees
of the people’s congresse

CIVIL AVIATION LAW OF THE PEOPLE’S REPUBLIC OF CHINA

The Standing Committee of the National People’s Congress

Order of the President of the People’s Republic of China

No.56

The Civil Aviation Law of the People’s Republic of China which has been adopted by the 16th Meeting of the Standing Committee of the
Eighth National People’s Congress on October 30, 1995 is promulgated now, and shall enter into force as of March 1, 1996.

President of the People’s Republic of China Jiang Zemin

October 30, 1995

Civil Aviation Law of the People’s Republic of China ContentsChapter I General Provisions

Chapter II Nationality of Civil Aircraft

Chapter III Rights of Civil Aircraft

Section 1 Basic Principles

Section 2 Ownership and Mortgage of Civil Aircraft

Section 3 Civil Aircraft Liens

Section 4 Lease of Civil Aircraft

Chapter IV Airworthiness Management of Civil Aircraft

Chapter V Airmen

Section 1 Basic Principles

Section 2 Crew

Chapter VI Civil Airport

Chapter VII Air Navigation

Section 1 Airspace Management

Section 2 Flight Management

Section 3 Flight Support

Section 4 Essential Documents for Flight

Chapter VIII Public Air Transport Enterprise

Chapter IX Public Air Transport

Section 1 Basic Principles

Section 2 Transport Documents

Section 3 Liability of the Carrier

Section 4 Special Provisions Governing Air Transport Performed by Actual Carrier

Chapter X General Aviation

Chapter XI Search and Rescue and Accident Investigation

Chapter XII Liability for Damage to Third Parties on the Surface

Chapter XIII Special Provisions Governing Foreign Civil Aircraft

Chapter XIV Application of Law to Foreign-related Matters

Chapter XV Legal Liability

Chapter XVI Supplementary Provisions

Chapter I General Provisions

Article 1

This Law is enacted with a view to safeguarding the national sovereignty of territorial airspace and the rights of civil aviation,
to ensuring the conduct of civil aviation activities in a safe and orderly manner, to protecting the lawful rights and interests
of the parties concerned in civil aviation activities, and to promoting the development of civil aviation industry.

Article 2

The airspace above the land territory and territorial waters of the People’s Republic of China is the territorial airspace of the
People’s Republic of China. The People’s Republic of China has complete and exclusive sovereignty over its territorial airspace.

Article 3

The competent civil aviation authority under the State Council exercises unified supervision and administration over civil aviation
activities in the whole country: issues regulations and decisions concerning civil aviation activities within the scope of its authority
in accordance with laws and the decisions of the State Council.

The regional civil aviation administrative organs set up by the competent civil aviation authority under the State. Council supervise
and administer the civil aviation activities in their respective regions in accordance with the authorizations of the competent civil
aviation authority under the State Council.

Article 4

The State supports the development of civil aviation industry, and encourages and supports the progress of scientific research and
education in the field of civil aviation and the improvement of civil aviation science and technology.

The State supports the development of civil aircraft manufacturing industry so as to provide safe, advanced, economical and suitable
civil aircraft or civil aviation activities.

Chapter II Nationality of Civil Aircraft

Article 5

“Civil aircraft” as referred to in this Law means aircraft other than those used in flight missions of military, customs and police
services.

Article 6

A civil aircraft performed its nationality registration with the competent civil aviation authority under the State Council of the
People’s Republic of China according to law has the nationality of the People’s Republic of China, and shall be issued a nationality
registration certificate by the competent civil aviation authority under the State Council.

The competent civil aviation authority under the State Council shall set up a Civil Aircraft Nationality Register of the People’s
Republic of China to exclusively record matters concerning nationality registration of civil aircraft.

Article 7

The following civil aircraft shall perform nationality registration of the People’s Republic of China:

(1)

The civil aircraft of a State organ of the People’s a Republic of China;

(2)

The civil aircraft of a corporate enterprise set up in accordance with the law of the People’s Republic of China; if such corporate
enterprise has foreign investment in its registered capital, its organizational structure and composition of personnel, and the proportion
of contribution of Chinese investor shall conform to the provisions of administrative rules and regulations;

(3)

Other civil aircraft, the registration of which is approved by the competent civil aviation authority under the State Council.

Where a civil aircraft was leased form abroad, the lessee being in conformity with the provisions of the preceding paragraph, and
the crew of the civil aircraft is provided by the lessee, the latter may apply for the nationality registration of the People’s Republic
of China, provided that the original nationality registration of such aircraft has been cancelled.

Article 8

A civil aircraft which has acquired the nationality of the People’s Republic of China according to law shall display the specified
nationality mark and registration mark.

Article 9

A civil aircraft shall not possess dual nationality. Application for the nationality registration of the People’s Republic of China
shall not be filed for a civil aircraft which has not cancelled its nationality of a foreign country.

Chapter III Rights of Civil Aircraft

Section 1 Basic Principles

Article 10

The rights to a civil aircraft as referred to in this Chapter include the rights to the airframe engines, propellers, radio apparatus
of the civil aircraft and all other articles intended for use in such civil aircraft, no matter whether they are installed thereon
or separated temporarily therefrom.

Article 11

The person enpost_titled to the rights of a civil aircraft shall register the following rights respectively with the competent civil aviation
authority under the State Council.

(1)

The ownership of the civil aircraft;

(2)

The right for the acquisition and possession of the civil aircraft through an act of purchase;

(3)

The right to possess the civil aircraft in accordance with a lease contract covering a lease term of six months or over;

(4)

Mortgage of the civil aircraft.

Article 12

A register of the rights of civil aircraft shall be maintained by the competent civil aviation authority under the State Council.
Matters registered concerning the Rights of one and the same civil aircraft shall be recorded in the same register of rights.

Matters registered concerning the rights of civil aircraft any be made available to the public for inquiry, reproduction or extraction.

Article 13

Unless a civil aircraft was the subject of a forced auction sale in accordance with the law, the nationality registration of such
civil aircraft or the registration of rights thereof shall not be transferred abroad before the registered rights of such aircraft
are compensated or before the consent of the person enpost_titled to the aforesaid rights is given.

Section 2 Ownership and Mortgage of Civil Aircraft

Article 14

The acquisition, transference and extinction of the ownership of a civil aircraft shall be registered with the competent civil aviation
authority under the State Council; no acquisition, transference or extinction of the ownership of the civil aircraft shall act against
a third party unless registered.

The transference of the ownership of a civil aircraft shall be made by a contract in writing.

Article 15

Where a State-owned civil aircraft is authorized by the State to be operated, administered or utilized by a legal person, the provisions
of this Law concerning the owner of civil aircraft shall be applicable to such legal person.

Article 16

The mortgage of a civil aircraft shall be established by registering the mortgage of the civil aircraft with the competent civil aviation
authority under the State Council jointly by the mortgagee and the mortgagor; no mortgage may act against a third party unless registered.

Article 17

Once a mortgage is established on a civil aircraft, the ownership of the mortgaged civil aircraft shall not be transferred without
the consent of the mortgagee.

Section 3 Civil Aircraft Liens

Article 18

A civil aircraft lien is the right of the claimant, subject to the provisions of Article 19 of this Law, to take priority in compensation
against the owner and lessee of the civil aircraft with respect to the civil aircraft which gave rise to the said claim.

Article 19

The following obligatory rights shall be enpost_titled to civil aircraft liens:

(1)

Remuneration for rescuing the civil aircraft;

(2)

Necessary expenses incurred for the custody of the civil aircraft.

With respect to the obligatory rights specified in the preceding paragraph, that arising later shall be satisfied first.

Article 20

The creditor of the civil aircraft liens specified in Article 19 of this Law shall register his obligatory rights with the competent
civil aviation authority under the State Council within three months commencing from the date of the end of rescue or custody.

Article 21

For the common interests of creditors, the expenses incurred in enforcing the decision of the People’s Court and in the course of
auction sale shall be deducted and paid first from the proceeds of the auction sale of the civil aircraft.

Article 22

A civil aircraft lien shall have priority over the mortgage of a civil aircraft.

Article 23

Where the obligatory rights provided in Article 19 of this Law are transferred, the civil aircraft liens attached thereto shall be
transferred accordingly.

Article 24

A civil aircraft lien shall be enforced by the People’s Court by arresting the civil aircraft that gave rise to the said civil aircraft
lien.

Article 25

A civil aircraft lien shall be terminated at the expiry of three months commencing from the date of the end of rescue or custody;
except that the creditor has registered his obligatory rights according to the provisions of Article 20 of this Law and that the
case is under one of the following circumstances:

(1)

The creditor and debtor have reached agreement on the amount of the said obligatory rights;

(2)

The legal action concerning the obligatory rights has started.

A civil aircraft lien shall not be extinguished because of the transference of the ownership of the civil aircraft; except that the
civil aircraft was the subject of a forced auction sale in accordance with law.

Section 4 Lease of Civil Aircraft

Article 26

A civil aircraft lease contract, including financing lease contract and other lease contracts, shall be made in writing.

Article 27

The “financing lease of civil aircraft” means that the lessor acquires a civil aircraft pursuant to the selection of the lessee with
respect to supplier and civil aircraft, and leases it to the lessee, who shall pay rental periodically.

Article 28

During the period of financing lease the lessor shall be legally enpost_titled to the ownership of the civil aircraft, and the lessee shall
be legally enpost_titled to the rights of possession, utilization and earnings of the civil aircraft.

Article 29

During the period of financing lease, the lessor shall ensure the lessee to possess and use the civil aircraft without interference;
the lessee shall take proper care of the civil aircraft and keep it in the condition in which it was delivered, subject to fair wear
and tear and to any modification of the civil aircraft agreed by the lessor.

Article 30

When the financing lease contract, comes to an end, the lessee, unless exercising a right to purchase the civil aircraft or to hold
the civil aircraft on lease for a further period in accordance with the contract, shall return the civil aircraft to the lessor in
the condition specified in Article 29 of this Law.

Article 31

The supplier in the financing lease of a civil aircraft shall not be liable to both the lessor and the lessee at the same time in
respect of the same damage.

Article 32

During the period of financing lease, the lessee may transfer the right of the possession of the civil aircraft as well as other rights
under the lease contract only with the consent of the lessor and without jeopardizing the interests of third parties.

Article 33

In the case of a financing lease, or other leases covering a period of six months or longer, the lessee shall register his right of
possession of the civil aircraft with the competent civil aviation authority under the State Council; no such lease may act against
a third party unless registered.

Chapter IV Airworthiness Management of Civil Aircraft

Article 34

Application shall be filed with the competent civil aviation authority under the State Council for type certificate for the designing
of civil aircraft and its engines, propellers and on-board equipment. A type certificate shall be issued accordingly if found qualified.

Article 35

Application shall be filed with the competent civil aviation authority under the State Council for production certificate and maintenance
certificate for the production and maintenance of civil aircraft and its engines, propellers and on-board equipment. A certificate
or certificates shall be issued accordingly if found qualified.

Article 36

Where a civil aircraft and its engines, propellers and on-board equipment produced by a foreign manufacturer are imported into China
for the first time, such foreign manufacturer shall file an application with the competent civil aviation authority under the State
Council for type validation certificate. A type validation certificate shall be issued if found qualified.

Where a civil aircraft and its engines, propellers and on-board equipment, for which a type certificate has been issued in a foreign
country, are produced for the first time in China, the holder of the type certificate shall file an application with the competent
civil aviation authority under the State Council for type validation certificate. A type validation certificate shall be issued if
found qualified.

Article 37

A civil aircraft possessing the nationality of the People’s Republic of China may fly only if it holds an airworthiness certificate
issued by the competent civil aviation authority under the State Council.

Application shall be filed with the competent civil aviation authority under the State Council by the manufacturer for export airworthiness
certificate with respect to the export of civil aircraft and its engines,propellers and on-board equipment. An export airworthinees
certificate shall be issued if found qualified.

A foreign civil aircraft on lease may fly only after the competent civil aviation authority under the State Council has examined and
rendered valid its airworthiness certificate issued by the State in which the nationality of such aircraft was originally registered,
or has issued a new airworthinees certificate therefor.

The regulations for the airworthiness of civil aircraft shall be formulated by the State Council.

Article 38

The owner and lessee of a civil aircraft shall use the aircraft in accordance with the scope of use prescribed in airworthiness certificate,conscientiously
carry out the maintenance of the aircraft and ensure its airworthiness.

Chapter V Airmen

Section 1 Basic Principles

Article 39

“Airmen” as referred to in this Law means the following flight personnel and ground personnel engaged in civil aviation activities:

(1)

Flight personnel, including pilots, navigators, flight engineers, flight radio operators and cabin attendants;

(2)

Ground personnel, including civil aircraft maintenance personnel, air traffic controllers, flight dispatchers and aeronautical radio
station operators.

Article 40

An airman may perform the duty specified in his licence only if be bas received professional training, and has been qualified through
examination and issued a licence by the competent civil aviation authority under the State Council.

Flight personnel and air traffic controllers shall, before obtaining licences, also be subject to the check of the physical examination
unit approved by the competent civil aviation authority under the State Council, and obtain the physical examination certificate
issued by the competent civil aviation authority under the State Council.

Article 41

Flight personnel shall in performing flight missions, carry on their persons licences and physical examination certificates and be
subject to the check of the competent civil aviation authority under the State Council.

Article 42

Airmen shall be subject to the periodical or non-periodical inspection and examination of the competent civil aviation authority under
the State Council. Only those qualified in inspection and examination may continue to perform the duties specified in their licences.

Flight personnel shall also take part in periodical training of emergency procedures.

Flight personnel who have exceeded the time limit of interruption in flight prescribed by the competent civil aviation authority under
the State Council shall be subject to inspection and examination; with the exception of cabin attendants, flight personnel shall
also go through instruction flight. Only those qualified through inspection, examination and instruction flight may continue to perform
the duties specified in their licenses.

Section 2 Crew

Article 43

The crew of a civil aircraft is composed of a pilot-in-command and other flight personnel. The pilot-in-command shall be a pilot possessing
the technique and experience of independently piloting that type of civil aircraft.

The composition of a crew and the number of its members shall conform to the regulations of the competent civil aviation authority
under the State Council.

Article 44

The pilot-in-command is responsible for the operation of the civil aircraft, and shall strictly perform his duties to protect the
safety of the civil aircraft and persons and property carried therein.

The pilot-in-command issues orders within the scope of his functions and powers, and the orders shall be implemented by the persons
carried by the civil aircraft.

Article 45

The pilot-in-command shall carry out necessary inspection of the civil aircraft before flight; no civil aircraft shall takeoff unless
inspected.

Where and when a pilot-in-command discovers that the civil aircraft, airport and weather conditions do not conform to the requirements
prescribed and cannot ensure flight safety, he has the right to refuse takeoff.

Article 46

The pilot-in-command bas the right to take necessary and appropriate measures in flight, under the prerequisite of ensuring flight
safety, against any acts which may destroy the civil aircraft,interfere with the order on board and jeopardize the safety of persons
or property therein, and any other acts jeopardizing flight safety.

In case of extraordinary circumstances in flight, the pilot-in-command shall have authority as to the disposition of the civil aircraft
so as to ensure the safety of the aircraft and the persons therein.

Article 47

The pilot-in-command has the right to ask for a change of crew member(s) in order to ensure flight safety if he discovered that the
crew member(s) are not suitable for performing the flight mission.

Article 48

In case a civil aircraft is in distress, the pilot-in-command has the right to take all necessary measures, and direct the crew members
and other persons on board the aircraft to take rescue measures.In case of emergency which necessitates evacuation from the civil
aircraft in distress, the pilot-in-command must take measures first to organize passengers to leave the civil aircraft safely; no
crew member shall leave the civil aircraft unless authorized by the pilot-in-command; the pilot-in-command shall be the last to leave
the aircraft.

Article 49

In case an accident occurred to a civil aircraft, the pilot-in-command shall report in time the state of the accident accurately to
the competent civil aviation authority under the State Council directly or through air traffic control unit.

Article 50

When a pilot-in-command received SOS signals from a ship or another aircraft, or discovered, a ship or an aircraft and the persons
therein in distress, he shall report the state of distress in time to the nearest air traffic control unit and give possible, rational
assistance.

Article 51

In case a pilot-in-command is unable to perform his duties in flight due to one reason or another, the pilot holding a post next only
to him shall act on his behalf, the owner or lessee of the civil aircraft shall assign a new pilot-in-command to take over before
the aircraft takes off at the next place of stop.

Article 52

In the case of a civil aircraft with only one pilot and without the need to have other flight personnel, the provisions of this Section
concerning the pilot-in-command shall be applicable to such pilot.

Chapter VI Civil Airport

Article 53

“Civil airport” as referred to in this Law means a defined area, including any subsidiary buildings, installations and equipment,
intended to be used for the takeoff, landing, taxiing, parking and other activities of civil aircraft.

The civil airport refereed to in this Law does not include temporary airfield.

The provisions for the management of airports used by both military and civil air operations shall be separately formulated by the
State Council and the Central Military Commission jointly.

Article 54

The construction and utilization of civil airports shall be subject to overall arrangement and rational distribution, and the efficiency
of airport utilization shall be raised.

The plan of distributions and construction of civil airports in the whole country shall be formulated jointly by the competent civil
aviation authority under the State Council and other departments concerned under the State Council, and shall be implemented after
being approved in accordance with the procedures prescribed by the State.

The People’s Governments of provinces, autonomous regions and municipalities directly under the central government shall formulate
the civil airport construction plans of their own administrative areas on the basis of the national plan of civil airport distribution
and construction, and incorporate such plans in the national economic and social development programs at their respective levels
after being approved in accordance with the procedures prescribed by the State.

Article 55

The civil airport constriction plan shall be coordinated with city construction planning.

Article 56

The constriction, modification and extension of civil airport shall conform to the plan of civil airport distribution and construction
formulated according to law and to the standards of civil airport,and shall be subject to the approval of the competent authority
concerned and implemented in accordance with State regulations.

A construction project of civil airport not conforming to the plan of civil airport distribution and construction formulated according
to law shall not be approved.

Article 57

With respect to the construction and extension of civil airport, an announcement shall be issued by the local People’s Government
at county or higher level of the place where the civil airport is locate.

The announcement prescribed in the preceding paragraph shall be published in main local newspapers, and posted in areas around the
airport to be constructed or extended.

Article 58

The following activities are prohibited within the limits of civil airport defined according to law and within the airport obstacle
clearance protection zone defined according to State regulations:

(1)

The construction of buildings or facilities that will possibly affect flight safety by emitting large amount of smoke, dust, flames
and waste gas in the air;

(2)

The construction of buildings or facilities that will affect flight safety such as shooting range and storage of strong explosives;

(3)

The construction of buildings or facilities that do not meet the requirements of obstacle clearance of the airport;

(4)

The installation of lights, signs or objects that will affect the use of airport visual navaid;

(5)

The growing of plants that will affect flight safety or affect the use of airport navaid;

(6)

The keeping and setting free of birds and other objects that will affect flight safety;

(7)

The construction of buildings and facilities that will affect the electromagnetic environment of the airport.

Herding of livestock within the limits of civil airport defined according to law is prohibited.

Article 59

Before the issue of announcement concerning the constriction and extension of a civil airport, the buildings, structures, trees, lights
and other obstacles existing within the limits of the civil airport defined according to law and within the airport obstacle clearance
protection zone defined in accordance with State regulations that might affect light safety shall be removed within prescribed time
limit; the damage caused thereby shall be compensated, or other remedial measures shall be taken according to law.

Article 60

After the issue of announcement concerning the constriction and extension of a civil airport, the buildings, structures, trees, lights
and other obstacles that affect flight safety built, planted or put up by any unit of individual within the limits of the civil airport
defined according to law and within the airport obstacle clearance protection zone defined in accordance with State regulations in
violation of this Law and the provisions of relevant administrative rules and regulations shall be removed by the order of the local
People’s Government at county or higher level of the place where the airport is located; the damage caused thereby shall be borne
by the person who built, planted of put up such obstacles.

Article 61

In accordance with the relevant regulations, of the State, movement obstacle lights and marks shall be installed on high buildings
or facilities outside the civil airport and its obstacle clearance protection zone defined according to State regulations that will
possibly affect flight safety, and shall be kept in normal condition.

Article 62

A civil airport may be opened to traffic only if it holds an airport operating licence.

A civil airport may apply for an airport operating licence if it meets the following conditions and has been checked and accepted
as qualified according to State regulations:

(1)

It has available a movement area, a terminal area, a working area and service facilities and personnel corresponding to its operation;

(2)

It has available air traffic control, communication, navigation and meteorological facilities and personnel that can ensure flight
safety;

(3)

It has available security protection conditions conforming to State regulations;

(4)

In has an emergency plan to deal with extra-ordinary circumstances and corresponding facilities and personnel;

(5)

It has available other conditions specified by the competent civil aviation authority under the State Council.

An international airport shall also have the conditions for operating international air transport and be provided with customs and
other port inspection organs.

Article 63

A civil airport operating licence shall be applied for by airport administrative organ to the competent civil aviation authority under
the State Council, and shall be issued after being examined and approved by the competent civil aviation authority under the State
Council.

Article 64

The establishment of an international airport shall be reported by the competent civil aviation authority under the State Council
for the examination and approval of the State Council.

The opening to traffic of an international airport shall be announced to the public by the competent civil aviation authority under
the State Council; the data of an international airport shall be exclusively provided by the competent civil aviation authority under
the State Council.

Article 65

A civil airport shall take measures to ensure the safety of personnel and property in the airport in accordance with the provisions
of the competent civil aviation authority under the State Council.

Article 66

A civil airport used by civil aircraft for the purpose of transporting passengers and cargo shall be equipped with necessary facilities
to provide good service to passengers, shippers and consignees in accordance with the standards provided by the competent civil aviation
authority under the State Council.

Article 67

A civil airport administrative organ shall protect well the environment of the civil airport in accordance with the provisions of
the laws and administrative rules and regulations concerning environment protection.

Article 68

A use’s charge and a service charge shall be paid for the use of civil airport and its navaid by a civil aircraft; the rates of user’s
charge and service charge shall be formulated jointly by the competent civil aviation authority under the State Council and the finance
department and the competent authority of prices under the State Council.

Article 69

Where a civil airport is abandoned or used for other purposes, the civil airport administrative organ shall go through the formalities
of reporting and approval in accordance with State regulations.

Chapter VII Air Navigation

Section 1 Airspace Management

Article 70

The State exercises unified management over the airspace.

Article 71

In delineating the airspace, consideration shall be given to the requirements of both civil aviation and the security of national
defence and to public interest for the rational, full and effective utilization of the airspace.

Article 72

The detailed method of airspace management shall be formulated jointly by the State Council, and the Central Military Commission.

Section 2 Flight Management

Article 73

Responsibility for the control of aircraft operating within a defined, controlled airspace shall be vested in a single air traffic
control unit.

Article 74

The approval of an air traffic control unit shall be obtained for a civil aircraft to conduct flight activities in a controlled airspace.

Article 75

A civil aircraft in flight shall follow the air route and fly at the altitude specified by the air traffic control unit; permission
shall be obtained from the air traffic control unit if a deviation from the air route or a change in flight altitude specified is
necessary fo

PROVISIONS OF THE MINISTRY OF CONSTRUCTION AND THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION CONCERNING THE ESTABLISHMENT OF FOREIGN-FUNDED CONSTRUCTION ENTERPRISES (FFCES)

20021201

The Ministry of Foreign Trade and Economic Cooperation, the Ministry of Construction

Provisions of the Ministry of Construction and the Ministry of Foreign Trade and Economic Cooperation Concerning the Establishment
of Foreign-Funded Construction Enterprises (FFCEs)

JianJian [1995] No.533

September 18, 1995

Article 1

These Provisions are formulated to suit the needs of the country’s opening to the outside world, strengthen government administration
over FFCEs and protect the market order of the building industry.

Article 2

FFCEs referred to in these Provisions are those Chinese-foreign equity joint or contractual joint ventures engaging in civil engineering,
pipe, line and equipment installation and architectural furnishing projects including those of newly construction, expansion and
reconstruction. The setting up of solely foreign-owned construction ventures is not permitted for the time being.

Article 3

The setting up of FFCEs should observe the Law of the People’s Republic of China on Chinese-foreign Joint Equity Ventures, the Law
of the People’s Republic of China on Chinese-foreign Contractual Ventures, the Provisions on Administration of Business Classification
of Construction Enterprises and other relevant laws, regulations and rules.

Article 4

The project proposals and feasibility study reports for the setting up of FFCEs shall be examined and approved by the administrative
departments in charge of construction. The scope of engineering work contracted by FFCEs shall be fixed in accordance with the Provisions
on the Control of Business Classification of Construction Enterprises and the Criteria for the Business Classification of Construction
Enterprises, both issued by the Ministry of Construction. Contracts and articles of association of FFCEs shall be examined and approved
by the departments in charge under the Ministry of Foreign Trade and Economic Cooperation (MOFTEC).

Article 5

The examination and approval of the setting up of FFCEs shall be undertaken by separate departments concerned at different levels.
The application for the setting up of first-class FFCEs will be examined by the Ministry of Construction and approved by the MOFTEC.
Projects of secondary and lower classes will be examined by construction administrative departments at the provincial level and approved
by MOFTEC.

The setting of a FFCE with the Chinese partner being an enterprise directly under a department of the State Council shall be examined
and approved by the Construction Ministry and MOFTEC.

Article 6

The setting up of a FFCE should follow the following procedures:

(1)

The Chinese partner in a project submits the project proposal and feasibility study report and other relevant documents to the department
in charge of construction which, upon finding the project qualified, will issue a Document on the Results of Examination and Confirmation
of the Setting Up of the FFCEs to the applicants.

(2)

The Chinese partner, while presenting the Document on the Results of Examination and Confirmation of the Setting Up of the FFCEs,
submits the contract for the setting up of the articles of association and other relevant documents to the department in charge of
foreign trade and economic cooperation which, upon finding the project qualified, will issue a Certificate of Approval of the FFCEs
to the applicant.

(3)

The Chinese partner goes to the office in charge of industrial and commercial administration for the registration of the legal person
of the enterprise by presenting the Document and Certificate specified in (1) and (2) with other relevant documents.

(4)

The FFCE enterprises, having obtained the license for business, shall perform the examination and certification of its business classification
at the department in charge of construction administration.

Article 7

The setting up of a FFCE should be qualified with following conditions, apart from being conformed to the stipulations of relevant
laws and regulations.

(1)

The Chinese partner in the proposed enterprise has to be a construction enterprise with a second class or above business certificate.
The foreign partner has to be a construction enterprise of legal person status with relatively high levels of technological and management
capacities and good reputation.

(2)

The proposed enterprise should be able to introduce into the country or adopt internationally advanced building technologies and equipment
and give training to Chinese employees in engineering and management.

(3)

Requirements for registered capital: The minimum registered capital for a first class enterprise is U.S.$10 million, for a second
class enterprise, U.S. $5 million and for a third class enterprise U.S.$ 1.6 million. The minimum registered capital for a first
class architectural furnishing enterprise is U.S.$2 million, for a second class, U.S.$ 1.5 million and a third class, U.S.$ 600,000.

Article 8

In the application for the setting up of FFCEs, the Chinese partner should, in accordance with the stipulations of Article 5 of the
Provisions, supply the following documents to the department in charge of construction administration:

(1)

Paper of application for setting up the FFCE.

(2)

The Chinese partner’s business classification certificate.

(3)

Remarks of examination from the department in charge of the Chinese partner (except the Chinese enterprise is not directly under any
department).

(4)

Project proposal for the setting up of the proposed enterprise.

(5)

Feasibility study report compiled jointly by all partners.

(6)

Certificates of business registration of all participants in the project.

(7)

Credit certificates of all the participants.

(8)

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE TAXATION ON INCOME GAINED DURING ESTABLISHMENT OF ENTERPRISES WITH FOREIGN INVESTMENT

The State Administration of Taxation

Circular of the State Administration of Taxation on the Taxation on Income Gained During Establishment of Enterprises with Foreign
Investment

GuoShuiFa [1995] No.140

July 24, 1995

The state tax bureaus of various provinces, autonomous regions, municipalities directly under the Central Government and municipalities
separately listed on the State plan:

This is to specify what to do with the income tax about the non-productive income gained by a manufacturing enterprise with foreign
investment during its launching, which has been recently inquired about:

According to Article 4 of the Income Tax Law of the People’s Republic of China on Enterprises with Foreign Investment and Foreign
Enterprises of the People’s Republic of China (hereinafter referred to as the Tax Law), the non-productive income gained by a manufacturing
enterprise with foreign investment during its launching, with concerned cost, charges and loss detracted, should count as taxable
income according to the tax rate stated in Articles 5 and 7 of the Tax Law. But the year may not be counted as the year of preferential
treatment in tax reduction or exemption.

The State Administration of Taxation
1995-07-24

COMMERCIAL BANK LAW OF THE PEOPLE’S REPUBLIC OF CHINA

e03294

The Standing Committee of the National People’s Congress

Order of the President of the People’s Republic of China

No.47

Adopted by the Standing Committee of the Eighth National People’s Congress in l995

President of the People’s Republic of China: Jiang Zemin

May 10, 1995

Commercial Bank Law of the People’s Republic of China

Chapter I General Provisions

Article 1

This Law is formulated to protect the legitimate rights and interests of commercial banks, depositors and other clients, standardize
the behavior of commercial banks, improve the quality of funds, strengthen supervision and administration, ensure safety and soundness
of commercial bank, maintain a normal financial order and promote the development of the socialist market economy.

Article 2

The commercial banks referred to in this Law are bodies corporate established in accordance with this Law and the Company Law of the
People’s Republic of China to receive money deposits from the public, extend loans, provide settlement services and do other relevant
businesses.

Article 3

A commercial bank may engage in some or all of the following businesses:

(1)

receiving money deposits from the public;

(2)

extending short, medium and long-term loans;

(3)

providing domestic and international settlement services;

(4)

discounting bills;

(5)

issuing financial bonds;

(6)

acting as agent of issuing, cashing and underwriting government bonds;

(7)

dealing in government bonds;

(8)

inter-bank call-money business;

(9)

dealing or acting as agent in foreign exchange transactions;

(10)

providing L/c service and guarantee;

(11)

acting as agent in collection and payment and insurance business;

(12)

providing safe deposit box service;

(13)

other businesses approved by the People’s Bank of China.

The business scope of a commercial bank is defined by the statute thereof and reported to the People’s Bank of China for approval.

Article 4

A commercial bank operates independently, takes up responsibility for all risks it may encounter and for its own profits and losses
it may bear, and exercises self-regulating mechanism on the management principle of economic efficiency, safety and liquidity.

A commercial bank shall conduct its business in accordance with the law, free from interference by any department or individual.

A commercial bank shall assume civil responsibilities independently with its entire assets as a body corporate.

Article 5

A commercial bank shall abide by the principle of equality, voluntariness, fairness, honesty and good faith in doing business with
its clients.

Article 6

A commercial bank shall protect its depositors’ legitimate rights and interests from encroachment by any organization or individual.

Article 7

In doing credit business, a commercial bank shall strictly examine the credibility of a borrower and persist in extending loans against
collateral in order to ensure recalling loans on time.

A commercial bank is protected by law to retrieve the principal and interests of a loan from the borrower thereof in accordance with
the law.

Article 8

A commercial hank shall abide by the relevant provisions of the law and administrative decrees and regulations in doing business and
shall not impair the interests of the state or the public.

Article 9

A commercial bank shall abide by the principle of fair competition in doing its business and refrain from unfair competition.

Article 10

A commercial bank shall be subject to supervision and administration by the People’s Bank of China in pursuance of the law.

Chapter II Establishment and Organization of A Commercial Bank

Article 11

The establishment of a commercial bank shall require the examination and approval by the People’s Bank of China.

No organization or individual shall receive money deposits from the public or do any other businesses of a commercial bank or use
the post_title of “bank” without the approval of the People’s Bank of China.

Article 12

The establishment of a commercial bank shall satisfy the following requirements:

(1)

having its statute in pursuance of this Law and the Company Law of the People’s Republic of China;

(2)

having the minimum registered capital defined by this Law;

(3)

having chairman of directors (president), general manager and other senior managerial personnel with expertise and professional experience
required by their positions;

(4)

having complete organization and management;

(5)

having up-to-standard business site, safety measures and other facilities relevant with the business thereof.

The People’s Bank of China in examining the application for the establishment of a commercial bank should take into account the need
for economic growth and the competition of the banking industry.

Article 13

The minimum registered capital for the establishment of a commercial bank shall be RMB one billion yuan (RMB 1,000,000,000 yuan).
Of the commercial banks, an urban cooperative commercial bank shall need a minimum registered capital of RMB 100 million yuan (RMB
100,000,000 yuan) and a rural cooperative commercial bank shall need a minimum registered capital of RMB 50 million yuan (RMB 50,000,000
yuan). Registered capital herein referred to should be paid-up capital.

The People’s Bank of China may readjust the floor amount of the registered capital necessary for the establishment of a commercial
bank in the light of economic development, but the amount shall not be lower than those specified in the previous paragraph.

Article 14

The applicant shall apply to the People’s Bank of China for the establishment of a commercial bank by submitting the documents and
information listed below:

(1)

an application for the establishment of a commercial bank, specifying the name, location, registered capital and business scope of
the bank thereof;

(2)

a feasibility study report;

(3)

other documents and information required by the People’s Bank of China.

Article 15

The application having been examined to be in compliance with the provisions of Article 14 of this Law, the applicant shall fill
a formal application form and submit the documents and information listed below:

(1)

a draft of the statute of the commercial bank to be established;

(2)

qualification documents of the senior managerial staff to be employed;

(3)

a certificate of capital confirmation from a legitimate capital confirmation authority;

(4)

a list of the names, capital contributions and shares of the share holders of the commercial bank;

(5)

credit certificate and other relevant information of the share holders, each holding more than ten percent of the registered capital
of the commercial bank;

(6)

the guideline and plan for the operation of the commercial bank;

(7)

information of the business site, safety measures and other facilities relevant with the business of the commercial bank;

(8)

other documents and information required by the People’s Bank of China.

Article 16

Having been approved for establishment, the commercial bank shall be issued banking permit by the People’s Bank of China and with
it register with the Administration for Industry and Commerce for a business license.

Article 17

The Company Law of the People’s Republic of China is applicable to the form and structure of the organization of a commercial bank.

A commercial bank which was established prior to the promulgation of this Law may follow the original provisions if its organizational
form and structure do not entirely conform with the Company Law of the People’s Republic of China, and the time limit for the retention
thereof shall be decided by the State Council.

Article 18

A commercial bank solely owned by the state shall have a board of supervisors. The Board of Supervisors shall be composed of representatives
of the People’s Bank of China and governmental departments, experts from other relevant departments and representative of the staff
of the bank. The way of establishing the Board of Supervisors shall be defined by the State Council.

The Board of Supervisors shall exercise control of the solely state-owned commercial banks over the quality of credit funds, the ratio
of assets and liabilities, the hedging and appreciation of the state-owned assets and other relevant matters of the bank and the
behavior of its high ranking managerial personnel violating the law, administrative decrees and regulations or statute or acts damaging
the interests of the bank.

Article 19

A commercial bank may set up its branches within and outside the territory of the People’s Republic of China in keeping with its business
needs. A branch thereof shall be set up with the approval of the People’s Bank of China. Branches of a commercial bank inside the
People’s Republic of China need not be set up in conformity with administrative divisions.

A commercial bank in setting up a branch within the territory of the People’s Republic of China shall allocate to it a working capital
in keeping with the business scope thereof as is stipulated. The total sum of the working capital to be allocated to all branches
shall not exceed sixty percent of the total capital of the commercial bank proper.

Article 20

For the establishment of a branch, the applying commercial bank shall submit the documents and information listed below:

(1)

an application for establishing a commercial bank branch whereby should be specified the name, amount of working capital, business
scope and the locations of the headquarters and branch of the commercial bank;

(2)

a financial report of the last two years of the applicant;

(3)

certificates of qualifications of the senior managerial officials to be appointed;

(4)

the business guideline and plan;

(5)

information related to the business site, safety measures and other facilities relevant with the business thereof;

(6)

other documents and information required by the People’s Bank of China.

Article 21

Having been approved to be established, a commercial bank branch shall be granted a banking permit by the People’s Bank of China,
and with the permit shall register with the Administration for Industry and Commerce and obtain a business license.

Article 22

A commercial bank shall apply to its branches a financial system of unified accounting and centralized fund allocation and level-by-level
management.

The branch of a commercial bank shall not be qualified as a body corporate and it shall do business within the scope authorized by
the headquarters which shall assume the civil responsibilities thereof.

Article 23

Having been approved to be established, a commercial bank and its branches shall be announced to the public by the People’s Bank of
China.

When a commercial bank or its branch has not started operation for over six months from the date of being granted a business license
without proper reason or has automatically suspended operation for over six consecutive months after starting its operation, the
People’s Bank of China shall revoke its banking permit and make a public announcement thereof.

Article 24

In the event of one of the changes listed below, a commercial bank shall need to obtain the approval from the People’s Bank of China:

(1)

change of the name of the commercial bank;

(2)

change of the registered capital;

(3)

change of the business sites of the head office and/or its branch(es) of the bank;

(4)

readjustment in business scope;

(5)

change of share holders, each holding more than ten percent of the total capital or total shares of the commercial bank;

(6)

revision of the statute;

(7)

other changes specified by the People’s Bank of China.

When a commercial bank needs to replace its chairman of the board of directors, or general manager with a new one, the qualifications
of the appointee shall be reported to the People’s Bank of China for examination.

Article 25

The Company Law of the People’s Republic of China is applicable to the split and merger of commercial banks.

The split or merger of commercial banks shall require the examination and approval by the People’s Bank of China.

Article 26

A commercial bank shall use the banking permit pursuant to law and administrative decrees and regulations. It is prohibited to counterfeit,
tamper with, transfer, lease or lend the banking permit.

Article 27

Anyone who has one of the following backgrounds shall not be fit for high managerial positions in a commercial bank:

(1)

having once been sentenced to punishment for the crimes of embezzlement, bribery, illegal possession of property, misappropriation
of public property or disruption of social economic order, or having been deprived of political rights for crimes;

(2)

having served as a director of the board of directors, the director or manager of a company which went bankrupt because of mismanagement
and having been personally responsible for the bankruptcy;

(3)

having been the legal representative of a company whose business license had been revoked on account of violation of the law and having
been personally responsible thereof;

(4)

having failed to repay a fairly large debt already due.

Article 28

Any organization or individual intending to buy more than ten percent of the shares of a commercial bank shall have to obtain the
approval from the People’s Bank of China.

Chapter III Protection of Depositors

Article 29

A commercial bank in its savings deposit business shall abide by the principle of voluntariness in depositing, freedom of withdrawal,
interest on every deposit and keeping secret for the depositor.

With regard to savings deposits of individuals, a commercial bank has the right to reject the demand of any department or individual
for investigation, freezing, withholding or transferring a savings deposit, unless it is otherwise defined by the law.

Article 30

With regard to deposits of any organization, a commercial bank has the right to reject the demand of any other organization or individual
for investigation; unless it is otherwise defined by the law or administrative decrees and regulations; it has the right to reject
the demand of any other organization or individual for freezing, withholding or transferring such a deposit, unless it is otherwise
defined by the law.

Article 31

A commercial bank shall fix its interest rates for deposits pursuant to the ceiling and floor of interest rates defined by the People’s
Bank of China and make public announcement thereof.

Article 32

A commercial bank shall place a required reserve with the People’s Bank of China and keep adequate standby reserve in accordance with
the stipulations by the People’s Bank of China.

Article 33

A commercial bank shall guarantee the payment of the principal and interests of every deposit and shall not delay or refuse the payment
thereof.

Chapter IV Basic Principles for Loans and Other Businesses

Article 34

A commercial bank shall conduct its loan business in accordance with the need for the development of the national economy and social
progress and under the guidance of the state industrial policy.

Article 35

A commercial bank shall conduct strict examination of the usage, capability and form of repayment as well as other relevant matters
of a borrower in order to extend a loan.

A commercial bank shall implement a system in which the examination and the actual extending of a loan are conducted by separate departments
and the examination and approval of a loan are conducted at different levels.

Article 36

A commercial bank shall extend a loan against a security, and conduct strict examination of the repaying capability, the ownership
and value of the mortgage or pledge, and the feasibility of the realization of the mortgage or pledge.

A borrower may be exempted from securities after the commercial bank has conducted examination and found it to have a high credit
rating and to have the capability of repayment.

Article 37

A commercial bank shall sign a written contract with its borrower on the extending of a loan. The contract shall specify the category,
usage, amount, rate of interest, date and form of repayment, default liabilities and other matters deemed as necessary by the two
parties.

Article 38

A commercial bank shall fix its interest rates for loans in accordance with the ceiling and floor for the rates of interest for loans
fixed by the People’s Bank of China.

Article 39

A commercial bank in its loan business shall abide by the regulations on the ratios of assets and liabilities listed below:

(1)

the capital adequacy rate shall not fall short of eight percent;

(2)

the ratio of the outstanding balance of loans to that of deposits shall not exceed seventy-five percent;

(3)

the ratio of the outstanding balance of liquid assets to that of liquid liabilities shall not fall short of twenty-five percent;

(4)

the ratio of the outstanding balance of loans to one borrower to that of the capital of the bank shall not exceed ten percent;

(5)

other stipulations by the People’s Bank of China on asset and liability management.

When a commercial bank which was established prior to the promulgation of this Law is found to have its ratios of assets and liability
at variance with the stipulations hereinbefore, it is required to conform to the stipulations within a designated time limit. Concrete
rules for the implementation shall be defined by the State Council.

Article 40

A commercial bank shall not extend unsecured loans to related persons; and shall not provide related persons with secured loans on
conditions more favorable than those to a borrower of a similar loan.

The related persons mentioned in the previous paragraph refer to:

(1)

the members of the board of directors, members of the board of supervisors, managerial personnel and staff of the credit business
department of a commercial bank, and their close relatives;

(2)

the company, enterprise or other economic organization wherein the aforesaid persons have made investment or assumed senior managerial
positions.

Article 41

No organization or individual may force a commercial bank to extend a loan or provide guarantee for a loan. A commercial bank shall
have the right to refuse any organization’s or individual’s demand for a loan or guarantee.

A commercial bank owned solely by the state should provide loans for special projects approved by the State Council. Losses resulting
from such loans shall be compensated with appropriate measures taken by the State Council. Concrete measures shall be defined by
the State Council.

Article 42

A borrower shall repay the principal and interest of a loan on schedule.

When a borrower fails to repay a secured loan, the commercial bank has the right to be repaid the principal and interest of the loan
or the priority of getting paid with the collateral thereof. A commercial bank shall dispose of the real estate or stocks on mortgage
or pledge within a year from the date of obtaining.

A borrower shall assume the responsibility for failure to repay the unsecured loan falling due in accordance with the contract thereof.

Article 43

A commercial bank shall not engage in trust investment or stock business, or invest in real estate not for its own use within the
People’s Republic of China.

A commercial bank shall not invest in non-bank financial institutions or enterprises within the People’s Republic of China. A commercial
bank which has made investment in non-bank financial institutions or enterprises prior to the promulgation of this Law shall be subject
to other provisions stipulated by the State Council.

Article 44

A commercial bank in handling settlements such as acceptance, remittance and collection shall make timely cashing and entries pursuant
to relevant provisions without detaining bills or instruments or dishonoring them in violation of regulations. The relevant provisions
for the time limit for bill acceptance and entries in accounting books should be made public.

Article 45

A commercial bank shall apply for approval for issuing financial bonds or seeking loans outside China in accordance with the law and
administrative decrees.

Article 46

Inter-bank loan shall be subject to the time limit defined by the People’s Bank of China and the maximum time for such financing shall
not exceed four months. It is prohibited to use call money to extend loans on fixed assets or to make investment.

The call money for lending shall be only the idle fund after depositing required reserve, leaving adequate standby reserve and repayment
of loans falling due to the People’s Bank of China. The call money for borrowing shall be used to meet the position shortage in interbranch
settlement and interbranch remittance and temporary needs for turnover of funds.

Article 47

A commercial bank shall not receive money deposits or extend loans by raising or lowering interest rates or by other unjustifiable
means in violation of regulations.

Article 48

An enterprise or undertaking may open a principal account with a commercial bank of its own choice for day to day transfer and settlement
of accounts and cash receipt and payment, but it shall not open two or more principal accounts.

No organization or individual shall deposit the fund of an organization in an account opened in the name of an individual.

Article 49

A commercial bank shall fix its business hours to the convenience of its clients and make public announcement thereof. A commercial
bank shall conduct its business during its announced business hours and shall not suspend business or shorten its business hours
at will.

Article 50

A commercial bank shall collect commission fees on handling business and providing services in accordance with the stipulations of
the People’s Bank of China.

Article 51

A commercial bank shall preserve all the financial statements, business contracts and other information for a specified period in
accordance with relevant state regulations.

Article 52

The staff of a commercial bank shall abide by the law, administrative decrees and regulations and other rules for the administration
of various businesses and shall not have wrong conducts listed below:

(1)

taking advantage of their positions to demand or accept bribes, or violating relevant state regulations to accept commissions or service
fees under any pretext;

(2)

taking advantage of their positions to commit embezzlement, misappropriation or unlawful possession of the funds of the bank or of
clients;

(3)

providing loans or guarantee to relatives or friends in violation of regulations;

(4)

holding positions concurrently at other economic institution(s);

(5)

other acts in violation of the law, administrative decrees and regulations and rules in business management.

Article 53

The staff of a commercial bank shall not disclose state secrets or commercial secrets which they come into possession during their
service in the bank.

Chapter V Financial Accounting

Article 54

A commercial bank shall establish and improve its financial accounting system in accordance with the law and the state unified accounting
standards as well as the relevant stipulations of the People’s Bank of China.

Article 55

A commercial bank shall, in accordance with relevant state regulations, truthfully and in an all-round way record and reflect its
business activities and financial position, produce its annual financial accounting report and timely submit its financial statements
to the People’s Bank of China and the treasury department. A commercial bank shall not establish accounting books other than those
legally specified.

Article 56

A commercial bank shall announce its business performance and audited statement of the previous fiscal year within three months after
the end of every fiscal year in accordance with the stipulations of the People’s Bank of China.

Article 57

A commercial bank shall retain a reserve against bad and doubtful accounts and write off bad debts in pursuance of relevant state
regulations.

Article 58

The fiscal year of a commercial bank begins on the first of January and ends on the thirty-first of December of the Gregorian calendar.

Chapter VI Supervision and Administration

Article 59

A commercial bank shall formulate its business rules, establish and improve its business management, the system of cash control and
its security system in accordance with the stipulations of the People’s Bank of China.

Article 60

A commercial bank shall establish and improve its systems of examining and checking deposits, loans and settlement, bad and doubtful
accounts and other business activities.

A commercial bank shall conduct regular examination and checks on its branches.

Article 61

A commercial bank shall periodically submit to the People’s Bank of China balance sheets, profit and loss statements and other financial
statements and information.

Article 62

The People’s Bank of China is authorized to exercise examination of and supervision over the deposits, loans, settlements and bad
and doubtful accounts of a commercial bank at any time in accordance with the provisions of Chapter III, Chapter IV and Chapter V
of this Law. The personnel in charge of the examination and supervision should produce legitimate certificates at the time of conducting
examination and supervision. A commercial bank shall provide financial accounting information, business contracts and other information
about its business and management at the request of the People’s Bank of China.

Article 63

A commercial bank is subject to the audit control by the auditing authorities in accordance with the audit law and regulations.

Chapter VII Takeover and Termination

Article 64

When a commercial bank is in or is liable to be in a credit crisis thus seriously threatening the interests of the depositors, the
People’s Bank of China may take over the said bank.

The purpose of the takeover is to take necessary measures with regard to the commercial bank taken over in order to protect the interests
of the depositors and help the commercial bank resume its normal operation. The debtor-creditor relationship of the commercial bank
existing before the takeover remains unchanged.

Article 65

The People’s Bank of China shall determine a takeover and organize its implementation. The People’s Bank of China shall specify the
following contents in its takeover decision:

(1)

the name of the commercial bank to be taken over;

(2)

the reason(s) for the takeover;

(3)

the organization of the takeover;

(4)

the time limit of the takeover.

The decision for the takeover shall be made public by the People’s Bank of China.

Article 66

A takeover begins on the day of implementation of the takeover decision.

The organization in charge of the takeover shall begin exercising the power over the management of the commercial bank from the day
of implementing the takeover decision.

Article 67

On expiration of the term of the takeover, the People’s Bank of China may determine to prolong the takeover, but the term shall not
exceed two years to the maximum.

Article 68

Takeover shall be terminated in any of the following cases:

(1)

that the term of the takeover expires or the prolonged term of takeover determined by the People’s Bank of China expires;

(2)

that prior to the expiration of the term of takeover, the commercial bank has recovered its capacity of normal operation; or

(3)

that prior to the expiration of the term of takeover, the commercial bank has been merged or declared bankrupt in accordance with
the law.

Article 69

When a commercial bank splits, or merges with another one, or dissolves on reasons for dissolution pursuant to the statute of the
bank, it shall submit an application to the People’s Bank of China with reasons for the dissolution and a plan for liquidation, including
repaying the principals and interests of deposits. It shall be dissolved with the approval from the People’s Bank of China.

A liquidation group shall be formed to conduct liquidation and repayment of the principals and interests of deposits shall be made
in time according to the plan for liquidation when a commercial bank is to be dissolved. The People’s Bank of China shall oversee
the liquidation through.

Article 70

When a commercial bank is closed down by order on account of its banking permit having been revoked, the People’s Bank of China shall
lose no time to form a liquidation group to conduct liquidation and repay the principals and interests of deposits in time according
to the plan for liquidation in accordance with the law.

Article 71

When a commercial bank is incapable of repaying its mature debts, may, with the consent of the People’s Bank of China, be declared
bankrupt by the People’s Court. When a commercial bank is declared bankrupt in accordance with the law, the People’s Court may organize
the People’s Bank of China and other relevant departments and personnel to form a liquidation group to conduct liquidation.

At the time of bankruptcy liquidation, a commercial bank shall give priority to paying the principal and interests of savings deposits
after paying the liquidation fees and its staff wages and labor insurance fees in arrears.

Article 72

A commercial bank shall be terminated on account of dissolution, being closed down by order or declared bankrupt.

Chapter VIII Legal Liability

Article 73

A commercial bank shall assume the responsibility of paying interest accrued and other civil responsibilities of compensation for
damages to the property of depositors or other clients under one of the situations listed below:

(1)

delaying or refusing repayment of the principal and interests of a deposit with no proper reason;

(2)

refusing to cash checks and to debit or credit accounts in violation of regulations regarding bill acceptance and other settlements
or intentionally delaying

CIRCULAR OF THE MINISTRY OF CIVIL AFFAIRS, THE STATE PLANNING COMMISSION, THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION ON STRICTLY CONTROLLING THE ESTABLISHMENT OF THE SERVICES FACILITIES OF FUNERAL AND INTERMENT THROUGH ABSORBING FOREIGN CAPITAL

The Ministry of Civil Affairs, the State Planning Commission, the Ministry of Foreign Trade and Economic Cooperation

Circular of the Ministry of Civil Affairs, the State Planning Commission, the Ministry of Foreign Trade and Economic Cooperation on
Strictly Controlling the Establishment of the Services Facilities of Funeral and Interment through Absorbing Foreign Capital

MinShiFa [1995] No. 6

February 6, 1995

The people’s governments of various provinces, autonomous regions and municipalities directly under the Central Government:

Recently, the institutions of funeral and interment under the local departments of civil affairs have absorbed the foreign fund to
establish the services facilities of funeral and interment, which play a role in realizing the long-cherished wish of being buried
in their country of overseas Chinese and compatriots of HongKong, Macao, Twain and releasing the tight place for storing ash and
accelerating the development of undertakings of funeral and interment. But without gaining approval,some departments and institutions
with no relation of funeral and interment enter into partnership with foreign businessman and build the operational cemeteries. These
cemeteries cover the large cultivated land, which are set up in either the forest section or the scenic spot area or even city area.
The blind constructions interfere and damage the reform of funeral and interment and harm the land administration and city constructions
and result in bad effect and disobey the provisions such as “the departments of civil affairs are in charge of administrating the
funeral and interment” in Interim Provisions of the State Council for Administrating Funeral and Interment(GuoFa [1995] No.18), “the
operational cemetery is one of facilities of funeral and interment services and should be established directly by the departments
of funeral and interment” in Report on Intensifying the Cemetery Management issued by the Ministry of Civil Affairs with approval
of The State Council on April,1994 (MinZi [1988] No.15) and “the set-up of the operational cemetery by absorbing the foreign fund
should be approved by the Ministry of Civil Affairs” in Interim Measures for Administration of the Cemeteries issued by the Ministry
of Civil Affairs in August, 1992.

Circular on the Related Issues of Establishing the Chinese-foreign Equity Joint Cemeteries(MinShiHan [1992] No.370) and Circular on
Issues that Need Pay Attention to During Establishing the Operational Cemeteries at Present (MinShiHan [1993] No.9) issued successively
by the Ministry of Civil Affairs emphasize that the establishment of funeral and interment services facilities by absorbing the foreign
fund should be unified planning and ratified by the Ministry of Civil Affairs.

Due to the less land and more population, each inch land should be cherished. Establishment of the operational cemetery is a measure
for dealing with the ashes (remains) now and will be replaced by more civilized, advanced and scientific means .Therefore, establishing
the operational cemetery through absorbing foreign fund should be planned rationally and restricted strict in view of practice. Whereas
the problems occur thereof, approved by leader of the State Council,the following should be clarified in order to guarantee the healthy
development of funeral and interment undertakings:

The service trade of funeral and interment belongs to the special trade in which the foreign investment are not encouraged to use
in general.If setting up this kind of project in special requirement,it will be controlled strictly.

According to the spirit of Circular on Establishing the Chinese-foreign Equity Joint Cemetery issued by the Ministry of Civil Affairs,the
people’s governments of various provinces,autonomous regions and municipalities directly under the Central Government should make
the feasible long-term development plan of funeral and interment undertakings and consider in unison absorbing foreign capital and
building the services facility of funeral and interment,such as cemetery,etc..

The Ministry of Civil Affairs is in charge of the funeral and interment service trade. Establishment of the facilities of funeral
and interment by absorbing the foreign fund, which belongs to the below-norm project, should be approved its project recommendation
and feasibility report by the Ministry of Civil Affairs. The applying institutions should summit the project recommendation and feasibility
report and examination reports of the departments of land management and city construction. The project recommendation and feasibility
report approved by the Ministry of Civil Affairs should be made a copy for State Development Planning Commission on record.The above-norm
project should be checked and examined by State Development Planning Commission according to the present regulations. The contract
and rules of the project whose project propose and feasibility report have been approved by the Ministry of Civil Affairs or State
Development Planning Commission should be ratified by the Ministry of Foreign Trade and Economic Cooperation. Any other departments
and units can’t examine and approve without authorization.

The foreign investment project that has been set up without the approval of the Ministry of Civil Affairs or the State Development
Planning Commission should be examined and approved again according to Provision 3 of this circular.

The Ministry of Civil Affairs, the State Planning Commission, the Ministry of Foreign Trade and Economic Cooperation
1995-02-06

INTERIM PROVISIONS ON GUIDING FOREIGN INVESTMENT DIRECTION

Category	FOREIGN ECONOMIC RELATIONS AND TECHNOLOGICAL COOPERATION	Organ of Promulgation	The State Council	Status of Effect	With An Amendment Existing
Date of Promulgation	1995-06-20	Effective Date	1995-06-20

Interim Provisions on Guiding Foreign Investment Direction

Appendix: Catalogue for the Guidance of Foreign Investment Industries
Catalogue for the Encouragement of Foreign Investment Industries
Restricted Foreign Investment Enterprises
Prohibited Foreign Investment Industries

(Approved by the State Council on June 7, 1995, and promulgated by Decree

No.5 of the State Planning Commission, the State Trade and Economy Commission
and the Ministry of Foreign Trade and Economic Cooperation on June 20, 1995)
(Editor’s Note: For the revised text, see Catalogue for the Guidance of
Foreign Investment Industries promulgated on December 31, 1997, and effective
as of the same date)

Article 1 These provisions are formulated according to the related
legal provisions on foreign investment and requirements of industrial
policies of the state, in order to guide the direction of foreign investment,
to make foreign investment direction in accordance with the plan of the
national economy and social development of our country, and beneficial
to the protection of the legitimate rights and interests of the investors.

Article 2 These provisions shall apply to the projects of Chinese-foreign
joint ventures, Chinese-foreign cooperative enterprises, wholly foreign
-owned enterprises, as well as to other forms of foreign investment
projects (hereafter referred to as “foreign investment projects”) within
the territory of China.

Article 3 The State Planning Commission in conjunction with the
concerned departments of the State Council shall compile at regular
intervals and revise in time the Catalogue for the Guidance of Foreign
Investment Industries according to these provisions and the development
of the country’s economy and technology.

Catalogue for the Guidance of Foreign Investment Industries shall
be the basis for the guidance of examination and approval of foreign
investment projects.

Article 4 Foreign investment projects shall be classified into four
categories: encouraged, permitted, restricted and prohibited projects.

Foreign investment projects belonging to encouraged, restricted and
prohibited categories are listed in the Catalogue for the Guidance of
Foreign Investment Industries. Those do not belong to the above three
categories are permitted foreign investment projects which are not to be
listed in the Catalogue for the Guidance of Foreign Investment Industries.

The Catalogue for the Guidance of Foreign Investment Industries may
list foreign investment projects such as wholly foreign-owned enterprises
that are not allowed or enterprises in which the State assets shall take
the holding or leading position.

Article 5 Those foreign investment projects under the following
circumstances shall be listed as encouraged foreign investment projects:

(1) Projects for new agricultural technology and comprehensive
agricultural development and for industrial construction in energy,
transportation and key raw materials;

(2) Projects of new high technology, advanced technology which can
improve performance of products, save energy and raw materials, and increase
tech-economic efficiency of enterprise or produce new equipments or
new materials that meet the demands of the market but the domestic
production capacity is deficient;

(3) Projects that meet the demands of the international market, and
can promote the quality of products, enter into new markets, expand overseas
sales, and increase exportation;

(4) Projects adopting new technology and equipments for comprehensive
utilization of resources and renewable resources, and for prevention of
environment pollution;

(5) Projects that can make full use of the man power and resource
advantage in the Mid-west regions and are in accordance with the state’s
industrial policies; or

(6) Other projects that are encouraged by laws and administrative
regulations of the state.

Article 6 Those foreign investment projects under the following
circumstances shall be listed as restricted foreign investment projects:

(1) Projects involving technology that has been developed within or
has been introduced into the country, and the production capacity can
meet the demands of the domestic market;

(2) Projects for experiment industries of the state to introduce
foreign investment or industries under the monopolized sales of the state;

(3) Projects for exploring or mining rare or precious mineral resources;

(4) Projects involving industries that need the state’s overall
planning; or

(5) Other projects that are restricted by laws and administrative
regulations of the state.

Foreign investment projects belonging to the restricted category are
separately classified into Restricted Foreign Investment Group A or
Restricted Foreign investment Group B according to the industrial policies
and the need for macroeconomic control of the state.

Article 7 Those foreign investment projects under the following
circumstances shall be listed as prohibited foreign investment projects:

(1) Projects that endanger the safety of the state or damage social
and public interests;

(2) Projects that pollute or damage the environment, destroy natural
resources or impair the health of human beings;

(3) Projects that occupy large amounts of land, unfavorable to the
protection and development of land resources, or endanger the safety of
military facility and its performance;

(4) Projects that utilize the unique craftsmanship or technology of
the country to make products; or

(5) Other projects that are prohibited by laws and administrative
regulations of the state.

The foreign investment projects stipulated in the previous paragraph
are not allowed to be sponsored by any company, enterprise, other economic
organization or individual.

Article 8 Encouraged foreign investment projects apart from the
preferential terms stipulated in the relevant laws or administrative
regulations of the state, may enlarge their scope of business operations
with approval, if they are engaged in the construction and operation of
infrastructure facilities related to energy or transportation (coal,
electric power, local railway, highway, port) which need a large amount
of investment and a long payoff period.

Article 9 Restricted foreign investment projects must comply with the
relevant laws and administrative regulations of the state, as well as the
following provisions:

(1) Chinese-foreign joint venture projects belonging to the restricted
category must have the operation termination period of the enterprises
agreed upon; and

(2) In Restricted Foreign Investment Projects (group A), the fixed assets
invested by the Chinese party shall be the funds of his or her own or
assets owned by the Chinese party.

Article 10 Encouraged or permitted foreign investment projects shall
be submitted for examination and approval, or put on file according to the
existing procedures and measures.

Projects belonging to the restricted foreign investment (Group A) shall
be submitted for examination and approval or put on file according to the
existing procedures and measures. Among the restricted foreign investment
projects (group A), those whose investment is lower than the competence limit
stipulated by the State Council and therefore are not subject to examination
or approval by the State Council, shall be examined and approved respectively
by the planning departments or departments in charge of enterprises’ technical
transformation in the provinces, autonomous regions, municipalities directly
under the Central Government, or cities of direct planning by the State
according to the construction nature of the projects. The authority of
examination and approval of this category of projects shall not be allowed
to be delegated to the lower levels.

For restricted foreign investment projects (Group B), whose investment
is lower than the competence limit stipulated by the State Council and
therefore are not subject to examination or approval by the State Council,
the projects shall be subject to approval and examination by the relevant
industry administrative departments of the State Council; and the feasibility
study reports of these projects shall, according to the nature of
construction projects, be subject to examination and approval respectively by
the planning departments or departments in charge of enterprises’ technical
transformation in the provinces, autonomous regions, municipalities directly
under the Central Government, or cities of direct planning by the State, and
shall be submitted to the State Planning Commission or the State Trade and
Economy Commission for the record. The authority of examination and approval
of this category of projects shall not be allowed to be delegated to the
lower levels. Projects with an investment at or above the competence limit
stipulated by the State Council shall be submitted for examination and
approval according to the existing procedures and measures.

Foreign investment projects that involve issues of quota or license
shall apply to the competent departments of foreign trade and economic
cooperation for quota or license.

If laws or administrative regulations have otherwise provisions
concerning the procedures and measures of examination and approval of foreign
investment projects, those provisions of laws or administrative regulations
shall be followed.

Article 11 Restricted foreign investment projects (Group A) within the
category provided in subparagraph 1 of Article 6, may be deemed as permitted
foreign investment projects, and not subject to the restriction of Article 9
of these provisions with approval, if the export sales of products amount
to over 70 percent of the total sales of products. Restrictions may be
appropriately eased to the above mentioned foreign investment projects that
can really make full use of the advantage of resources in the Mid-west
regions, and conform to the industry policies of the state.

Article 12 Examination and approval organs of higher levels shall cancel
the foreign investment projects that are examined and approved in violation of These Provisions within 30 days after receiving the
recorded files of the
concerned projects. The contracts and articles of association shall be
invalid. The enterprise registration organs shall not register these projects,
or shall cancel the registration. And the Customs shall not handle import or
export formalities for these projects.

Article 13 The relevant parties of foreign investment projects, who have
obtained approval of project proposals through swindle or other illicit
means, shall be investigated for legal responsibility in the light of the
seriousness of the cases according to law. The examination and approval
organs shall cancel the approval of the projects, and relevant competent
organs shall deal with these projects correspondingly according to law.

Article 14 The work personnel of examination and approval organs, who
abuse their power, engage in malpractices for personal gains, neglect their
duties, or examine and approve certain projects beyond their competence, shall
be given administrative sanctions. If the circumstances of a case are so
serious as to constitute a crime, they shall be investigated for their
criminal responsibility according to law.

Article 15 Investment projects sponsored by overseas Chinese and
investors from regions of Hong Kong, Macao, and Taiwan shall be handled
by reference of These Provisions.

Article 16 These provisions shall be implemented by the State Planning
Commission, in conjunction with the State Trade and Economy Commission, and
the Ministry of Foreign Trade and Economic Cooperation.

Article 17 These provisions shall enter into force on the date of
promulgation.

Appendix: Catalogue for the Guidance of Foreign Investment Industries
Catalogue for the Encouragement of Foreign Investment Industries

I. Agriculture, forestry, husbandry, fishery and related industries

1. Cultivation and development of wasteland, waste mountain, flood land
(except those with military facilities), as well as improvement of
low-yielding field and forest

2. Development of fine high-yielding and new varieties of crops such
as grain, cotton, oil crops, sugar crops, fruit trees, vegetables, flowers
and plants, forage grass

3. Serial production of soiless cultivation of vegetables, flowers
and plants

4. Planting of forest trees and introduction of fine seeds of forest
trees

5. Breeding of good strains of domestic animals and aquatic fingerlings
(not including the good strains of the rare ones of our country)

6. Cultivation of famous aquatic products and deep-sea fishery

7. New varieties of effective and safe agricultural chemicals and
pesticides (80 percent death rate, safe to people, animals and crops)

8. High-density fertilizers (urea, synthetic ammonia and ammonium
superphosphate)

9. New technologies for the production of agricultural films, and
development of new products (fibre film, photolysis film, multifunctional
film and raw materials)

10. Antibiotics for animals (special antibiotics for animals,
antibiotics for external and internal parasites of animals, new antibiotics
for animals), antiscolic for domestic animals

11. Development of full valence mixed feed, additives, and feed
protein resources

12. New technology and equipment for the storage, preservation, and
processing of vegetables, fruits, meat products, and aquatic products

13. Forestry chemicals and new technology and products for the
comprehensive utilization of “sub-quality, small and firewood” lumber
in the forest area

14. Construction and management of comprehensive utilization of
irrigation works (daily water supply over 300,000 tons, or over
250,000 kilowatts installed capacity, with the state assets taking
the holding or leading position)

15. Water-saving irrigation equipment production

16. Agricultural mechanical equipment, farm tools and related spare parts

II. Light Industry

1. Design, processing, and manufacture of molds for non-metal products

2. Commodity pulp

3. Post ornament and processing of leather

4. Non-mercury alkali-manganese battery, lithium-ion battery,
hydrogen-nickel battery

5. High-tech involved special industrial sewing machine

6. Ployimide film

7. Enzyme preparation, raw material for synthetic detergent
(straight-chain alkylbenzene)

8. Synthetic spices, single icon spices

9. Research and popularization of the applied technology of freon
substitution

III. Textile Industry

1. Special chemical fibers such as compound super thin, anti-contractive,
anti-electrostatic, anti-inflammable, high emulation chemical fibers, and
arylon, spandex, and carbon fibre

2. Textile printing and dyeing as well as post arrangement and processing

3. High emulation chemical fibre cloth

4. Oils for textile

5. Special textiles for industry

IV. Communication and Transportation as well as Post & Telecommunications
Industries

1. Equipment and technology for railway transportation: the design and
manufacture of locomotives and main parts, the design and manufacture of
wiring and equipment, related technology and equipment manufacture for
high-speed railway, manufacture of the equipment for communications signal
and transportation safety monitoring, manufacture of electric railway
equipment and instrument

2. Construction and management of local railway, bridge, tunnel, and
ferry facilities (wholly foriegn-owned enterprises are not allowed)

3. Highway and port mechanical equipment and their design and
manufacture technologies

4. Construction and management of city subway and light track (with
the state assets taking the holding or leading position)

5. Construction and management of highway, independent bridge and tunnel,
and port facilities (for public wharfs, the state assets will take the
holding or leading position)

6. Construction and management of civil airport (with the state assets
taking the hold or leading position)

7. Manufacture of 900 megahertz honey-comb mobile communications
equipment

8. Manufacture of over quintic synchronized fiber, microwave
communications system, and measure equipment

9. Manufacture of ATM switchboard equipment

V. Coal Industry

1. Design and manufacture of coal mining and transportation equipment

2. Design and manufacture of complete set of equipment of coal
gasification

3. Manufacture of high-density water-coal equipment and additives

4. Comprehensive development and utilization of low-heat valve fuel
and accompanying resources

5. Comprehensive development and utilization of coal

VI. Power Industry

1. Construction and management of heat power station (including routine
heat power station and clean coal burning technology power station)

2. Construction and management of hydropower station (with
250,000 kilowatts installed capacity, and the state assets taking the
holding or leading position)

3. Construction and management of nuclear power station (with the state
assets taking the holding or leading position)

4. Construction and management of new energy power station (including
solar energy, wind energy, magnetic energy, earth heat energy and tide
energy, etc.)

VII. Ferrous Metallurgical Industry

1. Sponge iron (using coal as the reducing agent technology)

2. Powder metallurgy (iron ore)

3. Over 200,000-ton short-flow and 500,000-ton iron and steel combined
production line

4. Cold-rolled silicon steel plates, galvanized plate, tin-plating
plate, stainless steel plate

5. Hot and cold-rolled steel sheet

6. Tubes for bearing, oil; seamless steel tube; tube for high-pressure
furnace

7. Wheel and hoop of locomotives and vehicles

8. Superhigh power electrode, acicular coke

9. High alumina vitriol earth, hard clay mine and grog

10. Iron mine concentration

11. Deep processing of hard coke and coke oil

12. High and Pure magnesia (wholly foreign-owned enterprises are not
allowed)

13. Fine quality refractory material and special protection slag for
continuous casting, steel wrapping, and combined blow steel smelting

VIII. Non-Ferrous Metal Industry

1. Monocrystalline silicon (with diameters over 5 inches),
multicrystalline silicon

2. Hard alloy, tin compound, Sb compound

3. Non-ferrous compounds, new type alloys

4. Copper, lead, tin mine opening (wholly foreign-owned enterprises
are not allowed)

5. Aluminum mine opening (wholly foreign-owned enterprise are not
allowed) and alumina (over 300,000 tons)

6. Rare metal application

IX. Petroleum, Petrochemical and Chemistry Industries

1. Ironic caustic soda and new organic chlorine serial products

2. Ionic caustic soda manufacture

3. Comprehensive utilization of ethylene (with an annual output of
over 300,000 tons), acrylene and C4–C9 products

4. Project plastic products and plastic alloys

5. Synthetic rubber (liquid styrene-butadiene rubber, butyl rubber,
isoamyl rubber, ethyl rubber, butadiene neoprene rubber, butadiene rubber,
acrylic rubber, chlorinated rubber)

6. Fine chemistry: new products and technology of dye, intermediate,
catalytic agent, auxiliary and pigment, processing technology for the
commercialization of dye (pigment) commodities, electronics, high-tech
chemicals for paper-making, food additives, feed additives, leather
chemical products, oilwell auxiliaries, surface active agent, water
treatment agent, adhesive, inorganic fibre, inorganic powder agent feeder
and equipment

7. Chroridized titanium dioxide

8. Chemical products using coal as raw materials

9. Supporting raw materials for synthesized materials (bisphenol-A,
styrene-butadiene rubber cream, pyridine, 4.4′ diphenylmethane group,
diisocranene)

10. Basic organic chemical raw material: comprehensive utilization of
the derived products of benzene, mythylbenzene, dimethylobenzene(O-, M-, P-)

11. Comprehensive utilization of exhaust gas, discharge liquid,
waste slag

12. Construction and management of oil and air delivery pipes, as well
as oil depot and oil wharf (with state assets taking the holding or
leading position)

X. Mechanical Industry

1. Manufacture and welding robot and effective welding and assembling
production line equipment

2. High temperature resistant insulation material (with F, H insulation
class) and insulation products

3. Manufacture of steel sheet continuous casting and rolling machine,
large hot and cold continuous rolling equipment, city gas and industrial
non-polluting gas producing furnace

4. Manufacture of equipment of the trolley car for mining, loading and
transporting in the well, 100 or over tons of mechanical power-driven dump
truck for mining, mobile crusher, double input and output coal grinder,
3,000 m3/h or over bucket excavator, 5 m3 or over mining loader, total
cross-section lane entry-driving machine

5. Manufacture of container loading and unloading bridge, tube
delivering machine

6. Manufacture of 30,000 m3 and over large complete set of vacuum
equipment

7. Manufacture of multi-color off-set printing machine

8. Manufacture of 4,500 meter high or over desert, sea oil-drilling
equipment, 70 megapar oil and gas oil blowout preventer, 105 megapar or
over pressing crack equipment, 50-ton or over well-excavator

9. Manufacture of turbine compressor, methylamine pump and combined
powder machine for the complete set of equipment for an annual production
of 300,000 tons or over of synthetic amine, 480,000 tons or over of urea,
300,000 tons or over ethylene (with state assets taking the holding or
leading position)

10. Manufacture of complete sets equipment of electronics, new knitting
machine, new paper (including pulp) making machine

11. Manufacture of large delicate scientific measure instrument

12. Safety monitoring instrument and equipment (vibration, noise,
poisonous matter, dust density monitoring, prediction of gas leak, shock
earth volt)

13. New meter spare parts and material (mainly new switches and function
material for meters such as intelligent sensors, electrical adapters,
flexible circuit plate, fiber switch, and proximity switch)

14. Manufacture of delicate, effective, large digital controlled lathe
and functional spare parts

15. Hydraulic pressure spare parts, pneumatic components, sealing
equipment

16. Standard parts for precision die, precision cavity mould, and mould

17. Manufacture of 250,000 ton/day city sewage disposal equipment,
industrial sewage film treatment equipment, up-flow anaerobic sulfide floor
equipment, and other biological sewage disposal equipment, production
equipment slab making equipment of powder coal dust (50,000-100,000 ton/year),
recycling equipment for waste plastics, equipment for desulphurization and
denigration equipment, large high-temperature resistant, acid resistant bag
dust remover

18. Manufacture of large road construction machinery

19. Manufacture of large (external diameter 200-430 mm) delicate and
special bearings

20. Manufacture of car-related spare parts: complete brakes, complete
drive rod, acceleration, steering knuckle, fuel pump of diesel engine,
piston (including piston ring), valve, hydraulic tappet, carton shaft,
booster, filter (3 filter), aluminum radiator, diaphragm clutch, even speed
carton joint, shock absorber, car air conditioning system, safety ball, seat
adjustor, car lock, backview mirror, glass lifter, compound meter, motor,
lights, bulb, car fastener, bearing

21. Manufacture of car moulds (including strike mould, plastics filling
mould, mould-pressing mould, etc.) clippers (welding clipper, testing
clippers, etc.)

22. Car casting body

23. Car technology research center, and design and development institute

24. Special purpose cars such as desert car for petroleum industry and
special cars for airport

XI. Electronics Industry

1. Manufacture of large integrated circuit

2. New electronic spare parts (including slice spare parts) and electric
and electronic spare parts

3. Manufacture of fiber parts, sensitive spare parts and sensor

4. Manufacture of large and medium sized computer

5. Manufacture of over 32-bit (not including 32-bit) advanced
microcomputers

6. Manufacture of key spare parts of fax machine (heat sense printing
head, image sensor, etc.)

7. Compatible digital TV, HDTV, digital tape video recorder, laserdisk
player

8. Semi-conductor, fiber material

9. New displayer (color liquid crystal parts and plate displayer)

10. CAD, CAT, CAM, CAE and other computer application systems

11. Manufacture equipment, and instrument for electronics, and
industrial mould

12. Manufacture of hydrological data collection instrument and equipment

13. Satellite communication rare route from TES and PES as well as
manufacture of key parts

14. SDH fibre communication system, cross linking equipment, and network
management equipment manufacture

15. Software development and production (including computer,
communications programs, etc.)

16. Manufacture of equipment of air communication control system

17. Development and manufacture of high capacity lazerdisk, disk
memory and parts

18. Development and manufacture of new printing devices (lazerprinter,
etc.)

XII. Building Materials and Equipment and Other Non-metal Mineral Product
Industry

1. Floating glass production line with a daily melting capacity of
500 tons or over

2. High sanitation porcelain line with an annual production of
500,000 pieces

3. New building

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2001

DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS CONCERNING THE SUPPRESSION OF THE FALSIFICATION, COUNTERFEITING, AND ILLEGAL...

CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL CONCERNING HALTING THE DEVELOPMENT OF PYRAMID RETAILING

PLAN FOR THE REORGANIZATION OF ARBITRATION ORGANS

COMMERCIAL BANKING LAW

NEGOTIABLE INSTRUMENTS LAW

BUDGET LAW

CIVIL AVIATION LAW OF THE PEOPLE’S REPUBLIC OF CHINA

PROVISIONS OF THE MINISTRY OF CONSTRUCTION AND THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION CONCERNING THE ESTABLISHMENT OF FOREIGN-FUNDED CONSTRUCTION ENTERPRISES (FFCES)

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE TAXATION ON INCOME GAINED DURING ESTABLISHMENT OF ENTERPRISES WITH FOREIGN INVESTMENT

COMMERCIAL BANK LAW OF THE PEOPLE’S REPUBLIC OF CHINA

CIRCULAR OF THE MINISTRY OF CIVIL AFFAIRS, THE STATE PLANNING COMMISSION, THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION ON STRICTLY CONTROLLING THE ESTABLISHMENT OF THE SERVICES FACILITIES OF FUNERAL AND INTERMENT THROUGH ABSORBING FOREIGN CAPITAL

INTERIM PROVISIONS ON GUIDING FOREIGN INVESTMENT DIRECTION

CONSTITUTION ACT, 1982 – page 22

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

CONSTITUTION ACT, 1982 – page 17

CONSTITUTION ACT, 1982 – page 16

CONSTITUTION ACT, 1982 – page 12

CONSTITUTION ACT, 1982 – page 11

CONSTITUTION ACT, 1982 – page 10

CONSTITUTION ACT, 1982 – page 9

CONSTITUTION ACT, 1982 – page 8

CONSTITUTION ACT, 1982 – page 7