REGULATIONS OF SHANGHAI MUNICIPALITY ON THE ADMINISTRATION OF THE CULTURE AND ENTERTAINMENT MARKET

CHAPTER II ORGANIZATION AND DUTIES

CHAPTER IV OPERATION AND MANAGEMENT

CHAPTER VI SUPPLEMENTARY PROVISIONS

   Article 1 These Regulations are formulated pursuant to relevant laws of the state and with the particular circumstances of this Municipality
taken into consideration, for the purpose of strengthening the administration of commercial culture and entertainment
establishments and commercial cultural and entertaining operation activities, ensuring the healthy development of the culture
and entertainment market, and enrichining the cultural life of the people.

   Article 2 The “commercial culture and entertainment establishments” in these Regulations refer to the following establishments that are
run for the purpose of making profits.

1. Dance halls and Karaoke halls;

2. Music tea house;

3. Video-games arcade;

4. Amusement hall or amusement park;

5. Billiards rooms; and

6. Other culture and entertainment establishments designated by the state or this Municipality.

“Commercial cultural and entertaining operation activities” in these Regulations refer to the followings:

1. Various kinds of commercial performances and shows in commercial culture and entertainment establishments, including fashion
shows;

2. Competition activities of a cultural and entertaining items that are financially helped and supported in the form of payments
of advertising fee or that charge fees on participants;

3. Various kinds of performing activities in commercial dining halls or restaurants; and

4. Intermediary activities of culture and entertainment broker organization and brokers.

   Article 3 These Regulations shall apply to the set-up of commercial culture and entertainment establishments, to engagement in operations
of commercial cultural and entertaining operation activities and to the administration of commercial and entertainment
establishment and cultural and entertaining operation activities in this Municipality.

   Article 4 The set-up of commercial culture and entertainment establishments and commercial cultural and entertaining operation
activities that are in compliance with the law shall be protected by the law.

All cultural and entertaining operation activities shall be civilized, healthy, benefiting, and secure.

Engagement in the cultural and entertaining operation activities that are detrimental to the interest of the state and the public
interest of the society shall be prohibited.

   Article 5 This Municipality shall adopt a licensing system for the set- up and commercial culture and entertainment establishments and for
the operation of cultural and entertaining operation activities.

CHAPTER II ORGANIZATION AND DUTIES

   Article 6 The municipal department for the administration of cultural affairs is the competent department responsible for the administration
of the culture and entertainment market. Its main duties are:

1. To implement and enforce relevant laws and regulations of the state and of this Municipality, and to be responsible for the
implementation of these Regulations;

2. To prepare a development plan for the culture and entertainment market of this Municipality, and to exercise macro-scale
regulation and control over it;

3. To be responsible for the supervision and administration of the culture and entertainment market of this Municipality;

4. To be responsible for testing and checking the administrative personnel and other working staff of the culture and
entertainment market;

5. To commend and reward those units and individual persons who have contributed considerably to the prosperity of the
culture and entertainment market; and

6. To punish acts that violate these Regulations.

The Municipal Social and Cultural Affairs Section, directly under the charge of the municipal department for the administration
of cultural affairs, shall be responsible for the specific administration of the culture and entertainment market of this
Municipality. It shall impose administrative penalties within its power delegated in accordance with these Regulations.

   Article 7 The district/county department for the administration of cultural affairs shall be responsible for administering the culture
and entertainment market of the district/county and shall be subject to the professional supervision and guidance of the municipal
department for the administration of cultural affairs. Its main duties shall be:

1. To implement and enforce relevant laws and regulations of the state and this Municipality;

2. To prepare the development plan for the culture and entertainment market of the district/county and to organize for the
implementation thereof, pursuant to the municipal development plan for the development of culture and entertainment market;

3. To be responsible for the supervision and administration of the commercial culture and entertainment establishments and
the commercial cultural and entertaining operation activities in the district/county;

4. To commend and reward those units and individual persons who have contributed considerably to the prosperity of the
culture and entertainment market; and

5. To punish acts that violate these Regulations.

   Article 8 The various levels of departments for public security, administration of industry and commerce, public health, price control,
finance, taxes, environmental protection and other relevant departments shall perform their respective duties according to
law, and assist and cooperate with the department for the administration of cultural affairs in implementing these Regulations.

CHAPTER III APPLICATION AND EXAMINATION AND APPROVAL

   Article 9 To set up or operate a commercial culture and entertainment establishment and to engage in commercial cultural and entertaining
operation activities, one shall apply for approval to the department for the administration of cultural affairs. Without the
approval of the department for the administration of cultural affairs, no one shall be allowed to set up a commercial culture
and entertainment establishment, or engage in commercial cultural and entertaining operation activities.

   Article 10 To set up a commercial culture and entertainment establishment, the following requirements shall be met:

1. The person who is to be responsible for the establishment and other relevant personnel shall have obtained the Qualification
Certificate issued by the municipal department for the administration of cultural affairs;

2. The establishment shall have Operation premises and supporting facilities that conform to established standards;

3. The Operation premises shall be safe and reasonable in its architectural structure. Fire prevention and fire fighting
facilities shall be available and effective, and the qualification certificate with respect to fire prevention and fire fighting
shall have been obtained.

4. Facilities of public hygiene, ventilation, noise control, etc. shall meet relevant standards;

5. The establishment shall have the required amount of registered capital; and

6. The establishment shall have a set of necessary management Regulations.

   Article 11 To set up a commercial performing team, the following requirements shall be met:

1. Having a person to take charge of the team who is experienced with the Operation and qualified by the municipal department
for the administration of cultural affairs;

2. Having performers who have acquired the Performer’s Certificate issued by the municipal department for the administration
of cultural affairs;

3. Having the necessary musical instruments and programs for show; and

4. Having a set of necessary management system.

   Article 12 To set up a commercial fashion-show team, the following requirements shall be met:

1. Having a person to take charge of the team who has the required professional expertise and ability to manage;

2. Having a fixed office, a place for rehearsal, and the necessary equipment for performances;

3. Having performers who have acquired the Performer’s Certificate issued by the municipal department for the administration
of cultural affairs;

4. Having the required amount of funds; and

5. Having a set of necessary management system.

   Article 13 Persons performing in the commercial culture and entertainment establishments of this Municipality shall have artistic
and performing talents in one way or another, and shall have been qualified to acquire the Performer’s Certificate after
passing the test and check of the municipal department for the administration of cultural affairs.

If professional performers employed by artistic and performing troupes want to perform in commercial culture and entertainment
establishments, they shall procure permission from their employers, apply to the municipal department for the administration
of cultural affairs for approval, and acquire the Performer’s Certificate.

   Article 14 Anyone who sets up a culture and entertainment broker organization shall meet the following requirements:

1. Having a person to take charge of the team who has the required professional expertise and ability to manage, and having
employees who are familiar with the Operation;

2. Having a fixed office and facilities that are commensurate with the Operation scope;

3. Keeping separate accounting, carrying out autonomous operation, and assuming sole responsibility for profits and losses;

4. Having the required amount of registered capital; and

5. Having a set of necessary management system.

   Article 15 Culture and entertainment brokers shall have the required level of education and the required experience in the Operation
of culture and entertainment. Specific requirements with respect thereto shall be formulated by relevant departments
under the municipal government.

   Article 16 Those who intend to set up commercial culture and entertainment establishments or engage in commercial cultural
and entertaining operation activities shall complete formalities for examination and approval in accordance with the
following provisions:

1. Those who intend to set up commercial culture and entertainment establishments in hotels that are accredited with starts
shall apply to the municipal department for the administration of cultural affairs for approval. The municipal department
for the administration of cultural affairs shall make a decision with respect to the approval within 20 days after it
receives the application, and shall issue a Permit for Cultural Operation to those who meet the requirements.

2. Those who intend to set up commercial culture and entertainment establishments in other places shall apply for approval
to the local district/county department for the administration of cultural affairs. The district/county department for
the administration of cultural affairs shall make a decision with respect to the approval within 10 days after it receives
the application and shall submit the decision to the municipal department for the administration of cultural affairs for verification
and approval. The municipal department for the administration of cultural affairs shall make a written reply within
10 days after it receives the report submitted for verification and approval. The verified and approved applicants shall
receive the Permit for Cultural Operation issued by the district/county department for the administration of cultural affairs.

3. Those who intend to organize and set up commercial performing troupes or commercial teams for fashion shows shall apply to
the municipal department for the administration of cultural affairs for approval. The municipal department for the administration
of cultural affairs shall make a decision with respect to the approval within 15 days after it receives the application,
and shall issue a Performance Permit to those who meet the requirements.

4. Those who intend to establish culture and entertainment broker or organization or those individual persons who intend
to engage in cultural or entertaining brokerage activities as individual persons shall apply to the municipal department
for the administration of cultural affairs for approval. The municipal department for the administration of cultural
affairs shall make a decision with respect to the approval within 30 days after it receives the application, and shall issue
a Permit for Cultural Operation to those who meet the requirements.

Those who have been approved and have acquired the Permit for Cultural Operation shall apply for a Operation license to the local
office of the State Administration of Industry and Commerce in accordance with relevant stipulations of the state.
Those among them who apply for approval to set up commercial cultural and entertainment establishments shall, at the same
time, apply to the departments for public security and for public health for permission with respect to public security and
public sanitation.

   Article 17 Those units and individual persons who have set up commercial culture and entertainment establishments or are engaged in commercial
cultural and entertaining operation activities shall complete the formalities for registration of alteration or cancellation
to the relevant administrative authorities in the same procedure as they did when they applied for approval to start Operation,
if they want to alter their mode or scope of business, their business address or legal representative, or if they want
to terminate the business.

CHAPTER IV OPERATION AND MANAGEMENT

   Article 18 Commercial culture and entertainment establishments shall exhibit their Permit for Cultural Operation in a conspicuous place.

The person in charge of a commercial culture and entertainment establishment and relevant employees shall carry
with them their Qualification Certificate when they are on the job.

The performing teams, fashion show teams and the performers shall carry with them the Performance Permit and the Performer’s
Certificate when they perform in commercial culture and entertainment establishments.

   Article 19 Commercial culture and entertainment establishments shall not invite for performance performing teams that have no Performance
Permit, nor performers who have no Performer’s Certificate.

Commercial culture and entertainment establishments shall not assign jobs to relevant employees such as the person in
charge of the commercial culture and entertainment establishments, and acoustic engineers, etc., who have no Qualification
Certificate.

   Article 20 Permits for Cultural Operation, Performance Permits, Performer’s Certificates and Qualification Certificates shall not
be lent, leased, altered or counterfeited.

Permits for Cultural Operation, Performance Permits, Performer’s Certificates and Qualification Certificates shall
be checked and verified annually.

   Article 21 For performances in commercial culture and entertainment establishments, the parties concerned shall conclude in writing
a performance contract setting forth the programs to be performed, the time of the performance, the number of performances,
the terms and conditions for profit distribution and the liabilities for breach of the contract. A copy of such contract shall
be submitted to the municipal or district/county departments for the administration of cultural affairs for the record.

   Article 22 Commercial culture and entertainment establishments shall not overreach their capacity in selling tickets or in receiving patrons.
The specific standards for determining the capacity of commercial culture and entertainment establishments shall be prescribed
by the municipal department for the administration of cultural affairs.

   Article 23 Commercial culture and entertainment establishments shall use laser disks and other audio visual products published and distributed
by audio visual publishers approved by the state.

The types of machines and the content of the games and amusement used in video-games arcade and amusement hall or park shall be
reported to the municipal department for the administration of cultural affairs for examination and verification.

   Article 24 Gambling and salacious activities shall be prohibited in commercial culture and entertainment establishments.

Commercial dance halls and video-games arcade shall be prohibited from receiving minors.

Assignment of commercial culture and entertainment establishments on contractual basis shall be prohibited.

   Article 25 Commercial culture and entertainment establishments shall act in compliance with the laws and regulations of the state and of
this Municipality with respect to price control, and shall quote the prices in express terms.

   Article 26 Performing teams or individual persons from other provinces, the autonomous regions and other municipalities that come to
this municipality for commercial cultural and entertaining operation activities shall bring along their approval
documents issued by the department for the administration of culture and entertainment of the province, the autonomous
region or the municipality in which they are registered, to the department for the administration of cultural affairs of this
Municipality to complete the formalities for conducting commercial cultural and entertaining operation activities therewith.

   Article 27 When performing teams or individual persons from foreign countries, Hong Kong Special Administrative Region, Macao Region
and Taiwan Region come to perform at the culture and entertainment establishments of this Municipality, the sponsors
of such activities shall bring along with them the approval documents issued by relevant departments of the state to complete
the formalities for acquiring the Performance Permit with the municipal department for the administration of cultural affairs.

   Article 28 Units not having the Permit for Cultural Operation that want to engage in cultural and entertaining operation activities
on a temporary basis shall apply to the municipal department for the administration of cultural affairs for a Temporary
Permit for Cultural Operation.

   Article 29 Advertisements of performances released by commercial culture and entertainment establishments shall be truthful, lawful, and
healthy in content. Deceptive and misleading information that aimed-cheating the audience shall be prohibited.

The contents of performance advertisements to be released by units and individual persons engaged in the cultural and entertaining
operation activities shall be verified and approved by the municipal department for the administration of cultural affairs.

   Article 30 The municipal department for the administration of cultural affairs shall disqualify the culture and entertainment
broker organizations and brokers, if they have conducted no Operation activities within a year, and shall revoke
their Permit for Cultural Operation. The Administrative department of Industry and Commerce shall cancel their registration.

   Article 31 To hold all-Shanghai or interdistrict/county competition activities of cultural and entertaining items that are financially
helped and supported in the form of payments of advertising fee, or that charge application fees on participants, the sponsoring
units shall apply for approval to the municipal department for the administration of cultural affairs. To hold within
a district/county competition activities of cultural and entertaining items, the sponsoring units shall apply for
approval to the department for the administration of cultural affairs of the district/county. Such competition shall not be
held before approval is obtained after examination and verification. Among the competitions, those that are financially helped
and supported in the form of payments of advertising fee must complete the formalities of application, examination and approval
at the Administration of Industry and Commerce.

The proceeds from the financial help and support in the form of payments of advertising fee shall be included in the income of
the sponsoring units and managed in accordance with relevant provisions of the State.

   Article 32 No commercial cultural and entertaining operation activities shall be held in public libraries, museums, primary and secondary
schools, premises for children’s activities and other places designated by this Municipality.

   Article 33 Units and individual persons that engage in cultural and entertaining operation activities shall submit to the municipal
or district/county department for the administration of cultural affairs their Operation statements and reports for the record.

   Article 34 Inspectors of the culture and entertainment market shall inspect the commercial culture and entertainment establishments
and commercial cultural and entertaining operation activities with respect to their compliance with these Regulations.

The inspectors shall show their inspection certificates when performing their official duty.

   Article 35 Departments for the administration of cultural affairs shall commend and reward the units or individual persons that have
made contributions either in reporting about or in assisting in the investigation and prosecution of cases involving
illegal commercial cultural and entertaining operation activities.

   Article 36 Any of the following acts that violates the provisions of these Regulations, the Municipal Social and Cultural Affairs Section
or the district/county administrative department of cultural affairs shall give a warning, and may impose a fine of not less
than RMB 500 yuan and not more than RMB 50,000 yuan on units (including self-employed workers), a fine of not less
than RMB 50 yuan and not more than RMB 5,000 yuan on individual persons, and confiscate the unlawful gains and illegal property,
if there is any:

1. Failure to carry as required the Performance Permit, the Performer’s Permit, or the Qualification Certificate;

2. Commercial culture and entertainment establishments assign jobs to those in charge of a commercial culture and entertainment
establishment, acoustic engineers, or other relevant working staff, who have no Qualification Certificate;

3. Overreaching one’s capacity in selling tickets or receiving patrons;

4. Exhibiting laser disks and other audio visual products published and distributed by audio visual publishers that have not been
approved by the state.

5. The types of video games machines and the types of amusement machines, the games, and the contents of the games
have not been examined and verified by the municipal department for the administration of cultural affairs.

6. Commercial dance halls or video-games arcades that games receive minors in violation of these Regulations;

7. Making unauthorized changes in the Operation scope, Operation address or legal representative; or

8. Making unauthorized changes in the structure and arrangement of the Operation premises without complying with the requirements
for Operation operations.

Acts in violation of the preceding Section that are serious may be ordered in the meantime by the municipal or district/county
department for the administration of cultural affairs may give an order to suspend Operation and/or revoke the Permit for
Cultural Operation or the Performance Permit, in addition to the above penalties.

   Article 37 For any of the following acts that violate the provisions of these Regulations, the Municipal Social and Cultural Affairs Section
or the district/county department for the administration of cultural affairs shall confiscate the unlawful gains and
the illegal property, and impose a fine of not less than RMB 1,000 yuan and not more than RMB 100,000 yuan on units, and
a fine of not less than RMB 200 yuan and not more than RMB 20,000 yuan on individual persons:

1. Setting up or operating a commercial culture and entertainment establishment or engage in commercial cultural and
entertaining operation activities without the required permits;

2. Engaging performing teams or performers that hold no Performance Permit or the Performer’s Certificate;

3. Lending, leasing, altering or counterfeiting the Permit for Cultural Operation, the Performance Permit, the Performer’s Certificate
or the Qualification Certificate;

4. Out of town performing teams or individual persons from the provinces, the autonomous regions and other directly-administered
municipalities come to this Municipality for commercial cultural and entertaining operation activities without completing
the formalities with the municipal department for the administration of cultural affairs; or

5. Arranging, without official approval, for performances by performing teams or individual persons from foreign countries, Hong
Kong Special Administrative Region, Macao Region and Taiwan Region at the culture and entertainment establishments of this
Municipality.

To acts that violate the provisions of the preceding Section and are serious, the municipal or district/county department
for the administration of cultural affairs may give an order to suspend Operation and/or revoke the Permit
for Cultural Operation, the Performance Permit or the Performer’s Certificate, in addition to the above penalties.

   Article 38 If the operation of the commercial cultural and entertainment establishments have been assigned on contractual basis, the municipal
or district/county department for the administration of cultural affairs shall temporarily attach or revoke the Permit for
Cultural Operation.

   Article 39 Those who perform or exhibit works that are reactionary, obscene or salacious in content, or engage in gambling, in salacious
activities or other activities in commercial cultural and entertaining premises in violation of the Regulations of the People’s
Republic of China on Public Security Administration and Imposition of Punishment shall be pursued by the department for
public security in accordance with the law, and shall be prosecuted for criminal liability if the wrong constitutes a
crime.

   Article 40 When the department for the administration of cultural affairs or the Municipal Social and Cultural Affairs Section imposes
administrative penalties on units and individual persons that violate these Regulations, it shall provide a letter of administrative
penalty. For the collected fines and confiscated proceeds, it shall provide a receipt of fines and confiscated proceeds
uniformly printed by the municipal finance department. The collected fines and confiscated proceeds shall be turned
over to the State Treasury.

Within 7 days after the municipal or district/county department for the administration of cultural affairs makes the decision
to revoke the Permit for Cultural Operation, it shall send a copy of such decision to the relevant administrative departments.

   Article 41 If the party concerned refuses to accept as final a specific administrative act done by the department for the administration
of cultural affairs or the Municipal Social and Cultural Affairs Section, he/she may apply for administrative review or institute
a legal action in accordance with the Regulations on Administrative Review or the Administrative Litigation Law of the
People’s Republic of China.

If, upon the expiration of the prescribed period of time, the party concerned has neither applied for administrative review
or instituted a legal action with respect to a decision of administrative penalty made by the department for the administration
of cultural affairs or the Municipal Social and Cultural Affairs Section, nor has it performed the administrative decision,
the department for the administration of cultural affairs or the Municipal Social and Cultural Affairs Section may apply
to the People’s Court for enforcement.

   Article 42 All members of the working staff of the departments for the administration of cultural affairs and the Municipal Social and Cultural
Affairs Section shall be loyal to their duties and be honest in performing their duties, and shall enforce the law
impartially. Those who neglect their duties, abuse their powers, or commit fraudulent acts for personal gains shall be given
disciplinary sanctions by his work unit or the department in charge thereof. If what they have done constitutes a crime,
those whose wrongful acts constitute a crime shall be prosecuted for the criminal liability in accordance with law.

CHAPTER VI SUPPLEMENTARY PROVISIONS

   Article 43 Amusement machines mentioned in these Regulations shall mean the machines for games that are examined and checked by the approval
of the municipal department for the administration of cultural affairs, and are allowed to be used by minors.

 &nb

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