PLAN FOR THE CONSULTATIVE ELECTION OF DEPUTIES OF TAIWAN PROVINCE TO THE NINTH NATIONAL PEOPLE’S CONGRESS

Category	STATE INSTITUTIONS	Organ of Promulgation	The Standing Committee of the National People’s Congress	Status of Effect	In Force
Date of Promulgation	1997-05-09	Effective Date	1997-05-09

Plan for the Consultative Election of Deputies of Taiwan Province to the Ninth National People’s Congress

(Approved at the 25th Meeting of the Standing Committee of the Eighth

National People’s Congress on May 9, 1997)

In accordance with the Resolution of the Fifth Session of the Eighth
National People’s Congress on the Number of Deputies to the Ninth National
People’s Congress and the Election of the Deputies, “for the time being 13
deputies of Taiwan Province will be elected among compatriots of Taiwan origin
in other provinces, autonomous regions and municipalities directly under the
Central Government and in the Chinese People’s Liberation Army.” The election
procedure is that the deputies will be elected in Beijing through consultation
among representatives sent by Taiwan compatriots in these provinces,
autonomous regions and municipalities directly under the Central Government
and in the Chinese People’s Liberation Army.

There are over 33,000 Taiwan compatriots across the country in the 31
provinces, autonomous regions and municipalities directly under the Central
Government and in the central Party, government and army institutions. It is
determined that 120 representatives will participate in the consultative
election conference. The number will be allocated on the basis of the
distribution of Taiwan compatriots including those in the army units
stationed in various localities and the standing committees of the people’s
congresses of the provinces, autonomous regions, and municipalities directly
under the Central Government shall be responsible for organizing consultation
for the election. The election should be completed before the end of
December in 1997.

The conference for consultative election will be convened in Beijing in
January of 1998 and will last about seven days.

The consultative election of deputies of Taiwan Province to the Ninth
National People’s Congress should be conducted in a spirit of democracy. In
the discussions on the candidates, consideration should be given to
representative personages in various fields and proper attention paid to the
candidates of the young and middle-aged, women and minority nationalities.

In line with the relevant stipulations of the Electoral Law of the
National People’s Congress and Local People’s Congresses at All Levels of the
People’s Republic of China, the deputies shall be elected by secret ballot
following the election procedure in differential numbers.

The conference for consultative election will be called by Zhang Kehui, a
member of the National People’s Congress Standing Committee.

Appendix: PLAN FOR THE ALLOCATION OF THE NUMBER OF REPRESENTATIVES TO
ATTEND THE CONFERENCE FOR THE CONSULTATIVE ELECTION OF DEPUTIES OF TAIWAN
PROVINCE TO THE NINTH NATIONAL PEOPLE’S CONGRESS

Unit Number
of compatriots Number of representatives

of the origin of Taiwan to take part in the

Province consultative conference

in
Beijing

Beijing Municipality 1,426 6

Tianjin Municipality 843 4

Hebei Province 769 3

Shanxi Province
129 1

Inner Mongolia

Autonomous Region 183 1

Liaoning Province 1,428 6

Jilin Province 292 2

Heilongjiang Province 395 2

Shanghai Municipality 1,354 6

Jiangsu Province 1,446 6

Zhejiang Province 1,635 6

Anhui Province 621 3

Fujian Province 12,043
15

Jiangxi Province 1,432 6

Shandong Province 496 2

Henan Province 527 3

Hubei Province 479 2

Hunan Province 587 3

Guangdong Province 2,569 9

Guangxi Zhuang

Autonomous Region 388 2

Hainan Province 2,951 9

Chongqing Municipality 296 1

Sichuan Province 424 2

Guizhou Province 174 1

Yunnan Province
340 2

Tibet Autonomous Region 0 0

Shaanxi Province 201 1

Gansu Province 112 1

Qinghai Province
64 1

Ningxia Hui

Autonomous Region 39 1

Xinjiang Uygur

Autonomous Region 168 1

Organs directly under the

Central Committee of the

Communist Party of China
4

State organs
6

Units of the People’s

Liberation Army stationed

in Beijing
2

Total 33,692 120

DECISION OF THE CENTRAL COMMITTEE OF THE COMMUNIST PARTY OF CHINA AND THE STATE COUNCIL CONCERNING PUBLIC HEALTH REFORM AND DEVELOPMENT

Category	PUBLIC HEALTH AND MEDICIME	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1997-01-15	Effective Date	1997-01-15

Decision of the Central Committee of the Communist Party of China and the State Council Concerning Public Health Reform and Development

(January 15, 1997)

That everyone enjoys health care and the continuous improvement in the
quality of health of the whole nation constitute an important objective of socialist modernization, an important hallmark of the improvement
in the
quality of people’s life, an important content of socialist spiritual
civilization and an important guarantee of sustainable socio-economic
development. The whole party and the whole society should pay great attention
to the cause of public health, protect and promote people’s health.

Since the founding of the People’s Republic of China, and especially since
the implementation of the policy of reform and opening up, great advancements
have been made in the cause of public health in our country and achievements
scored which have attracted worldwide attention. Public health ranks on a
considerable scale has been formed, public health service system has basically
taken shape and scientific and technical standards of public health have
witnessed rapid improvement. There has been marked improvement in the
production and supply of medicine and the cause of traditional Chinese
medicine and pharmacology has been inherited and expanded. Public health
reform has achieved results and has been gradually deepening and legislation
continuously stepped up. With the in-depth unfolding of the patriotic public
health movement, some diseases which seriously endanger people’s health are
under control or have been basically eradicated. The standards of people’s
health have been markedly raised with average life expectancy raised to 70
years from 35 years before the founding of the People’s Republic and infant
mortality reduced to 31.4%. from 200%.. In the past four decades or more,
public health work has played an important role in promoting the development
of socialist modernization of our country and the broad masses of public
health workers have made major contributions in the protection and promotion
of people’s health. Meanwhile, it should be noted that the growth of the
cause of public health at present cannot yet keep up with the requirement
of economic construction and social progress, regional imbalances exist in
the development of public health work, there are weak links in rural public
health, prevention and health care, imperfection in medicare system,
inadequacy in public health input, irrational resources allocation, excessive
rise in medical cost, there are still inadequacies in public health service
quality and attitude as desired by the people and public health work fail to
win sufficient attention of the whole society. Party committes and governments
at all levels should further step up their leadership over public health work
and public health reform needs urgent deepening.

In the next 15 years, public health work is entrusted with heavy tasks.
With the development of the economy, scientific and technological advancement
and improvement in the living standards of the people, they will have more
and higher requirements in respect of improved health services and quality
of life. With acceleration of the process of industrialization, urbanization
and aging of the population, health problems connected with ecological
environment and lifestyles will increasingly aggravate and rate of chronic
non-infectious diseases will increase. A number of infectious diseases and
endemic diseases still endanger people’s health and some new infectious
diseases pose a great threat to people’s health. All this calls for a big
development and improvement of the cause of public health in our country.

The period from the present to 2010 is an important one during which the
past shall be inherited and the future ushered in, and the cause of the older
generation carried forward and new ground broken in the building of socialism
with Chinese characteristics. To put into practice the spirit of the Fifth and
Sixth Plenary Sessions of the Fourteenth Central Committee of the Communist
Party of China and carry out the public health tasks put forth in the Five-Year Plan of National Socio-economic Development and Programme of Perpective Objectives in 2010 of the People’s Republic of
China> and ensure
the smooth realization of the splendid trans-century objectives, the Central
Committee of the Communist Party of China and the State Council hereby make
the following decision.

I.THE OBJECTIVES TO BE STRIVEN FOR AND GUIDING THOUGHT IN PUBLIC HEALTH
WORK

(1)The objectives to be striven for in public health work are as follows:
with Marxism-Leninism, Mao Zedong Thought and Deng Xiaoping’s theory of building socialism with Chinese characteristics as guidance,
adhering to the
Party’s basic line and policy and continuously deepening public health reform,
by the year 2000, a preliminary public health system including health services,
medicare security and public health law enforcement and supervision with
Chinese characteristics shall be established, with basic realization of primary health care enjoyed by everyone and further improvement
in health
standards of its nationals. By 2010, a complete public health system catering
for the requirements of the systen of socialist market economy and people’s
health shall be established throughout the country, with main national health
targets in economically developed regions reaching or being close to average
standards of medium developed countries in the world and the less developed
regions reaching the advanced standards of developing countries.

(2)The policy of public health work in the new period is as follows:put
the stress on the rural areas, put prevention first, pay equal attention to
Western medicine and traditional Chinese medicine, rely on science and
technology and education, mobilize the whole society to participate, render
service for people’s health and socialist modernization.

(3)Public health work in our country is a non-profit social undertaking
while the government pursues a certain welfare policy. The development of public health work must be in coordination with national
socio-economic
development, and the welfare level of security of people’s health must
correspond with the level of economic development. The government bears
important responsibilities in the development of public health work.
Governments at all levels should make efforts to increase public health input
and mobilize various circles of the society in an extensive way to raise
funds for the development of the cause of public health. Citizens themselves
should also, step by step, increase their own input for medicare. By the end
of the century, efforts will be made that total public health expenditure of
the whole society shall be approximately 5% of gross domestic product.

(4)Public health reform and development shall abide by the following basic
principles:

Adhere to the aims and purposes of serving the people, correctly handle
the relations between social benefit and economic performance and put social
benefit first. The tendency of seeking lopsided economic benefit to the
neglect of social benefit should be prevented.

Center round the improvement in the standards of people’s health, give
priority to the development and guarantee of basic health service, embody
social fairness and satisfy step by step the diversified requirements of the
masses of people.

Proceed from the state of the nation in the development of the cause of public health, allocate resources
rationally and put the stress on the
improvement in quality and efficiency. Put the stress on the strengthening
of public health in the rural areas, prevention and health care and
traditional Chinese medicine and pharmacology. Narrow the gap between regions
by giving guidance to different types of areas suiting local conditions.

Medical institutions run by the state and collectives shall constitute the
main body while those run by other social institutions and individuals serve
as a supplement.

Expand opening up to the outside world, promote international exchange and
cooperation in the field of public health and actively make use of and draw on
advanced foreign science and technology and expertise in management.

Adhere to the principle of grasping the two links of socialist material
civilization and spiritual civilization and both should be tough. Strengthen
the building of professional ethics in health service and raise continuously
the ideological and moral quality and professional and technical levels of public health workers.

II.ACTIVELY PROMOTE PUBLIC HEALTH REFORM

(5)The aim of public health reform is to reinvigorate the cause of public
health, fully mobilize the enthusiasm of public health institutions and public
health workers, continuously improve the quality and efficiency of health
service and serve the cause of people’s health and socialist modernization
in a better way. Adapt to the development of socialist market economy, abide
by the inherent rules of the development of public health and establish step
by step the new mechanism of strong macro regulation and control and vigorous
micro operation.

(6)Reform the medicare system for urban workers and staff members.
Establish the medical insurance system based on the combination of unifiedly
raised social medical funds and individual accounts, expand step by step its
coverage and provide basic medicare for all urban workers. The level of medicare should correspond with the level of development
of social
productivity and the tolerance of the different sectors of society. The
insurance cost shall be rationally borne by the state, the employer unit and
the worker or staff member. Social medical insurance for workers and staff
members shall practise dependency administration. Strengthen in real earnest
administration and supervision of medical insurance fund. Establish the
mechanism of checks on medical institutions and patients, actively explore
scientific and rational mode of payment and effectively control the irrational
growth of medical cost.

Medical institutions and medical personnel who play an important role in
doing a good job of medicare system reform for workers and staff members
should actively participate in the reform, treat patients according to their
ailments, conduct rational examinations, prescribe medicine rationally so as
to curb waste. Meanwhile, the government should, in real earnest, solve the
problem of compensation for medical institutions.

During the “Nineth Five-Year Plan” period, social medical insurance system
for urban workers and staff members shall basically be set up on the basis of successful experiments and summing up experiences,
and actively develop
supplementary medical insurance in diverse forms.

(7)Reform public health management system. Departments of public health
administration at all levels shall transform their functions and stengthen
public health administration by applying laws and regulations, policies, plans
and guidances, information services and economic means.

Rationally allocate and fully exploit existing public health resources to
raise the rate of exploitation of public health resources. Regional public
health planning is an important means of the government in the macro
regulation and control of the development of the cause of public health. Its
goal is to satisfy the requirements of all residents in a region in basic
health service and it practises unified planning and rational allocation of
such public health resources as the medical institutions, hospital beds,
personnel, equipment and funds.

Municipal(prefectural) governments shall, in accordance with the guiding
principles and standards for public health resources allocation for regional
public health planning formulated by the Central People’s Government and the
provincial people’s governments, work out regional public health plans of the
localities and organize their implementation. Departments of public health
administration shall, in accordance with the regional public health plans,
conduct policy guidance, organize coordination and carry out supervision and
inspection with regard to the development of public health in their respective
regions; adjustments should be made step by step with regard to existing
public health resources, and new additions to public health resources shall be
subjected to strict examination and approval and management.

Public health institutions of enterprises which are an important component
part of public health resources, should actively explore and realize step by
step socialization of public health institutions of enterprises in the light
of the actual conditions in the process of deepening enterprise reform.

(8)Reform urban health service system, actively develop community health
service and form step by step health service networks with rational functions
and convenient for the masses. Grass-roots level public health institutions
should target at the communities and families, carry out prevention of diseases, diagnosis and treatment of commonly encounted diseases
and
frequently encounted diseases, recovery of the injured and disabled, health
education, planned parenthood technical service and health care for women,
children, the elderly and the disabled. Community medical service should be
integrated into medical insurance for workers and staff members and two-way
diagnosis transfer system established. Medical personnel should be diverted
in a planned way and medical personnel in society organized in setting up
health service networks in residential areas which should be integrated into
the community health service system.

Major urban hospitals shall mainly engage in the diagnosis and treatment
of emergent and serious cases and suspected and difficult cases, carry out
medical education and scientific research in combination with clinical
practice, continuously raise the level of medical science and technology.
They should also develop suitable techniques, provide guidance and training
for grass-roots medical personnel.

Social groups and individuals shall practise self-operations in running
medical institutions and be responsible for profits and losses. The government
shall actively provide guidance and examine and approve such institutions
according to law and carry out strict supervision and administration.

(9)Reform the operational mechanism of public health institutions. Public
health institutions should establish an operational mechanism which is
responsible and with incentives, restraints, competition and vitality by
way of reform and strict management.

Public health institutions shall practise and perfect the responsibility
system of the president of the hospital(director of the institute or station).
The independent operational and managerial powers of public health
institutions shall be further enlarged. Continue to deepen the reform of the
personnel system and distribution system, break egalitarianism by employing
correct policy guidance, ideological education and economic means to mobilize
the enthusiasm of the broad masses of public health workers.

Accelerate formulation of standards for the establishment of public health
institutions and authorized size of personnel, standardize financial input for
public health institutions, reform and perfect the price system of health
service. Adjust the revenue structure of medical institutions, reduce the
proportion of income accrued from medicine in the revenue of medical
institutions, rationally control the range of growth of medical expenses and
there shall be separate accounting and separate management of medical revenue
and expenditure and medicinal revenue and expenditure.

Under the prerequisite of guaranteed completion of basic health service,
medical institutions may engage in services related to their domain of profession, institutions of preventive health care may engage
in suitable
compensatory service to meet the social requirements of different tiers, and
in the meantime, supervision and administration should be reinforced.

III.STRENGTHEN PUBLIC HEALTH WORK IN THE RURAL AREAS FOR THE REALIZATION
OF THE GOALS OF PRIMARY PUBLIC HEALTH AND HEALTH CARE PLAN

(10)Public health in the rural areas concerns the overall interests of the
health of peasants and invigoration of rural economy to which Party committees
and governments at all levels should pay close attention and take strong
measures to strengthen it in good earnest.

Primary public health and health care plan has put forth the main tasks
and goals for rural public health work in different regions by the year 2000.
Implementation of the primary public health and health care plan is the key
in doing a good job of rural public health work. Governments at all levels
should integrate this work into the plan for national economic and social
development and practise management by objectives to create necessary
conditions for the building of well-to-do counties, xiangs(?) and villages.

(11)Actively, steadily and satisfactorily develop and perfect cooperative
medical service. Cooperative medical service plays an important role in
ensuring that peasants enjoy basic medical service, implementation of preventive health care tasks, and prevention of impoverishment
caused by
diseases. Establishment of cooperative medical service should abide by the
principle of being run by local people with some state subsidies and
voluntary participation. Individual input shall be the main source in fund-
raising with collective support and appropriate government support, raise
peasants’ awareness of self-health care and mutual assistance and mutual
support and mobilize peasants to actively participate through propagation
and education. The mode of cooperation, standards for fund-raising and
percentage of reimbursement shall be determined in the light of local
conditions and insurance level raised step by step. Preventive health care
compensatory system should continue as a form of cooperation. Scientific
management and democratic supervision of cooperative medical service shall
be enhanced to ensure that peasants reap actual benefits. Efforts should be
made to establish cooperative medical service in various forms in most rural
areas by the year 2000 and the extent of socialization increased step by step;
where conditions are ripe, transition to social medical insurance can be
effected step by step.

(12)Step up the building of rural public health organization and perfect
the county-, xiang- and village-level health service networks. The scale and
distribution of public health institutions shall be determined rationally and
their structure and functions adjusted. County-level hospitals should be
managed well in real earnest to upgrade their integrated services capabilities.
Continue to step up the building of county-level epidemic prevention organs,
maternal and infant health care institutions and rural and township health
centers. Strive to realize in the main the goal of “one without and three
matchings”, i.e., without condemned houses and with matching houses, staff
and equipment during the “Nineth Five-Year Plan” period. Rural and township
health centers should do well preventive health care, make efforts to upgrade
medical quality, and put the stress on strengthening the building of emergency
and maternity wards. Village-level public health institutions shall mainly be
run by collectives. Modes of operation and management of xiang and village
public health institutions may be determined in the light of actual local
conditions. Perfect channels of rural medical supplies to ensure safety and
effectiveness of medicine.

(13)Consolidate and upgrade the ranks of rural basic health workers.
Rationally solve the salary problem of rural health workers, the income of rural doctors in collectively-run village public health
institutions shall
be no lower than the level of income of local village cadres. 80% of rural
doctors shall reach the level of vocational high school by the year 2000
through various forms of training. Non public health technical personnel are
strictly forbidden to take up technical positions in public health.

Medical and public health colleges and schools should do well direction-
oriented admission of students and on-job training and train for the rural
areas public health technical personnel who are prepared to stay on in the
localities and apply the knowledge acquired. Preferential policies shall
be formulated to encourage intermediate college graduates and above to
work in county and xiang public health institutions.

(14)Establish the system of urban public health institutions rendering
support to their counterpart units in the rural areas and help rural public
health institutions raise their capabilities in services in the form of personnel training, technical guidance, mobile medical service
and equipment
support. Urban public health technical personnel must work for a period of six months and one year respectively in county or xiang
public health
institutions before their promotion to the positions of visiting physician
and assistant visiting physician.

(15)Great importance should be attached to public health work in poverty-
stricken areas and minority nationalities regions which should be done well.
Governments at all levels should incorporate assistance in public health to
poor areas into local plans of assistance to poor areas, arrange necessary
funds to assist poor areas, and help these areas mainly in building
infrastructure in public health, improving conditions for drinking water
and prevention of endemic diseases and infectious diseases. Support for
the development of public health work in those regions shall be important
contents of financial transfer payment. Developed regions shall be encouraged
to render assistance to their counterpart units in public health work in
poverty-stricken areas and minority nationalities regions.

IV.DO A GOOD JOB OF PREVENTIVE HEALTH CARE IN REAL EARNEST, CONDUCT
IN-DEPTH PATRIOTIC HEALTH MOVEMENT

(16)Governments at all levels shall be fully responsible for public health
and preventive health care, step up the building of preventive health care
institutions by providing necessary input and ensuring the required funds
for the prevention and control of major diseases. Preventive health care
institutions should do a good job of preventive health care of social groups.
Medical institutions should also actively engage in preventive health care
in close association with their own professional fields. Carry out publicity
and motivation among masses, take integrated measures and concentrate efforts
to eradicate or control a number of infectious diseases and endemic diseases
which seriously threaten people’s health;step up prevention and control of diseases spread through blood; actively carry out prevention
and treatment
of such chronic non-infectious diseases as cardiovascular and cerebral-vascu-
lar diseases and tumors. Enhance contingency powers in dealing with injuries
and diseases caused by accidents and outbreak of epidemics. Attach importance
to surveillance of occurences and spreading of infectious diseases in and
outside the country.

(17)Earnestly do a good job of food hygiene, environmental hygiene,
occupational hygiene, radiation hygiene and school hygiene. Improve the
sanitary conditions of places of living, production, work, learning and
entertainment, step up surveillance and monitoring of environmental hygiene
and prevention and treatment of occupational diseases, protect people’s
rights to health. It is not allowed to seek economic growth one-sidedly
at the expense of environmental pollution and endangering people’s health.

(18)Health education is an important content of citizens’ quality
education. Great importance should be attached to health education to enhance
the consciousness of health and self-healthcare capability of the broad masses
of people, and actively promote “health education action of 900 million
peasants”. Popularize knowledge of medical science. Educate and guide the
masses to break away from superstition and old customs and take part in
national fitness activities, promote rational nutrition, nurture good health
habits and civilized way of life, cultivate health and psychological quality.
Publicize and promote in a big way voluntary blood donation.

(19)Protect the health of major human groups in accordance with law.
Enhance maternal and infant health care, upgrade population quality
of new births, reduce infant mortality and mortality of women in pregnancy,
and realize the goals set in the Children in 1990s> and the .
Actively carry out health care for the elderly, prevention and treatment of old-age diseases, prevention of injuries and disabilities
and recovery of the disabled.

(20)Patriotic public health movement is a good form of our country
in mobilizing the masses to take part in health work. Activities to create
hygienic cities should continue to be carried out in cities to upgrade the
level of modernized management, enhance the awareness of citizens in public
health and civility and promote the building of civil cities. In the rural
areas, priority should continue to be given to reconstruction of water supply
and renovation of lavatories to push ahead improvement in environmental
hygiene, prevention and reduction of occurences of diseases to promote the
building of civil villages and towns. Both urban and rural areas should
persevere in carrying out activities of “four eradications”, i.e.,
eradication of mosquitoes, flies, rats and cockroaches.

V.LAYING EQUAL STRESS ON TRADITIONAL CHINESE MEDICINE AND WESTERN
MEDICINE, DEVELOPING TRADITIONAL CHINESE MEDICINE AND PHARMACOLOGY

(21)Traditional Chinese medicine and pharmacology which constitute fine
traditional culture of the Chinese nation is an important component part of the cause of public health of our country with unique
characteristics and
advantages. The traditional medicine and pharmacology and modern medicine and
pharmacology of our country which are mutually complementary, jointly shoulder
the task of protecting and promoting people’s health. Party committees and
governments at all levels should earnestly implement the policy of laying
equal stress on traditional Chinese medicine and Western medicine, strengthen
leadership of the work of traditional Chinese medicine and pharmacology,
increase input step by step to create good material conditions for the
development of traditional Chinese medicine and pharmacology. Medical
personnel, Chinese and Western style, should enhance unity, learn from each
other, complement each other, achieve mutual improvement and promote the
integration of traditional Chinese medicine and Western medicine.

The medicine and pharmacology of all nationalities constitute component
parts of traditional medicine and pharmacology of the Chinese nation and
efforts should be made to discover, compile, summarize and improve upon
them to give them full play in the protection of people’s health of all
nationalities.

(22)Correctly handle the relationhip between inheritance and innovation.
On the one hand, features and advantages of traditional Chinese medicine and
pharmacology should be earnestly inherited;on the other, there should be
creative spirit in actively employing modern science and technology, promote
the development of the theory and practice of traditional Chinese medicine
and pharmacology to realize the modernization of traditional Chinese medicine
and pharmacology. Persevere in the policy of “Let hundred flowers bloom, let
hundred thoughts contend” and bring about prosperity in academic research of traditional Chinese medicine and pharmacology.

Medical institutions of traditional Chinese medicine should step up the
building of disciplines with special features, improve technical equipment,
expand areas of service so as to continuously satisfy the requirements of masses for traditional Chinese medicine. Attention should
be paid to give
full play to the advantages and role of traditional Chinese medicine and
pharmacology in rural health work.

Actively train all types of specialized personnel in traditional Chinese
medicine in an effort to train famed new-generation physicians of traditional
Chinese medicine. Seriously sum up experiences in running seats of higher
learning of traditional Chinese medicine and pharmacology and manage well
existing seats of higher learning of traditional Chinese medicine and pharmaco-
logy by continuously deepening reform. Continue to do a good job of inheriting
the academic tho

LETTER OF THE MINISTRY OF FINANCE CONCERNING THE ISSUE ON THE STANDARD WITH WHICH THE ENTERPRISES WITH FOREIGN INVESTMENT WORK OUT THE ACCOUNTANT REPORT FORMS

The Ministry of Finance

Letter of the Ministry of Finance Concerning the Issue on the Standard with which the Enterprises with Foreign Investment Work out
the Accountant Report Forms

CaiKuaiBianZi [1997] No.39

October 13, 1997

The enterprises with foreign investment set up in China should work out the accountant report forms according to the Accountant System
of the People’s Republic of China on Enterprises with Foreign Investment. The provisions that working out accountant report forms
simultaneously according to the Chinese accountant rules and international accountant rules or accountant rules of the external listing
place in the Obligatory Provisions for the Rules of Companies Listed Outside printed and distributed by the Securities Commission
of the State Council and the State Economic Restructuring Office are only applicable to the companies listed outside our country
with regards to the accountant reports form. The companies not listed outside our country (the enterprises with foreign investment
included) should work out the accountant report forms according to the relevant Chinese accountant systems.

The Ministry of Finance
1997-10-13

CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION ON THE UNIFIED ANNUAL CHECK, CHANGE OF THE APPROVAL CERTIFICATE AND IMPLEMENTATION OF THE CODE OF IMPORTS AND EXPORTS ENTERPRISES TO THE ENTERPRISE WITH FOREIGN INVESTMENT BY THE DEPARTMENTS OF FOREIGN TRADE AND ECONOMIC COOPERATION

The Ministry of Foreign Trade and Economic Cooperation

Circular of the Ministry of Foreign Trade and Economic Cooperation on the Unified Annual Check, Change of the Approval Certificate
and Implementation of the Code of Imports and Exports Enterprises to the Enterprise with Foreign Investment by the Departments of
Foreign Trade and Economic Cooperation

WaiJingMaoZiZongHanZi [1997] No.640

December 2, 1997

The commissions (departments,bureaus) of foreign trade and economic cooperation of various provinces, autonomous regions and municipalities
directly under the Central Government, municipalities separately listed on the State plan, Harbin, Changchun, Shenyang, Wuhan, Nanjing,
Guangzhou, Xi’an, and Shenzhen bureau of Merchants:

In order to undertake the work of the unified annual check and change of the approval certification and implementation of the enterprises
code of imports and exports for the enterprises with foreign investment and enterprises invested by compatriots of HK, Macao and
overseas with the spirit of Circular on implementing the unified annual check for the enterprises with foreign investment in 1998(WaiJingMaoZiFa
[1997] No.637) and Circular on using the certificate of new version (WaiJingMaoZiZongHanZi [1997] No.531) and Rules for the implementation
on management measures of the code of imports and exports enterprises of PRC(WaiJingMaoBanFa [1997] No.498). The following should
be clarified:

The undertaking of the unified annual check and change of the approval certification and implementation of the enterprises code of
imports and exports for the enterprises is the important measure to intensify the macro-control of the foreign enterprises by the
government and increase efficiency and improve the investment environment. The departments of foreign trade and economic cooperation
at all levels should pay much attention and coordinate with the related departments and finish the assignments.

The hereinabove works closely and the joining work should be done. Three above-mentioned jobs are in close relations each other do
the work of linking up well The related program is the following: the enterprises that have not obtained the code of national organization
from the technique supervision departments should obtain the code (the procedures for obtaining the code of the national organization
are notified later) and fill it in the 9 back blanks of the enterprise code column of unified annual check report and fill the area
code of the registered area in the 4 front blanks. After filling the code of enterprises and contents of report, it can be applied
for annual check according to related regulations. The enterprise code of annual check report submitted to the different departments
should be unanimous with all the other contents.

III

The enterprises awarded the certificate of approval by the Ministry of Foreign Trade and Economic Cooperation awards enterprises of
(including the enterprises of which contract terms have been examined and approved by the Ministry of Foreign Trade and Economic
Cooperation and the enterprises of which contract terms have been examined and approved by the relevant organization of ministries
and commissions directly under the State Council awarded enterprise of certificate of approval by the Ministry of Foreign Trade and
Economic Cooperation) should participate in the unified annual check. of the local departments of foreign trade and economic cooperation
of corresponding province level ( include municipality separately listed on the State plan, Harbin, Changchun, Shenyang, Wuhan, Nanjing,
Guangzhou, Chengdu, Xi’ an) the enterprises should fill in and summit the report of the annual check report according to above-mentioned
procedures. After annual check is qualified by the local departments of foreign trade and economic cooperation, the annual check
qualified will be notified to enterprise (format referred to attachment II) with which the enterprise can apply for the transfer
of the authorized certificate and obtain the code of imports and exports enterprise officially.

” Unified annual check report” index instruction (referred to attachment III)have already been printed and distributed from administrative
department for industry and commerce to the enterprises with foreign investment along with ” unified annual check report”. Again
enclosed , Please the departments of the Ministry of Foreign Trade and Economic Cooperation at all levels verify conscientiously
“the unified annual check report ” according to the index requested in unified annual check report.

Attachment I:Code of Administrative Area of the People’s Republic of China

(Gb/T2260-1995)

the code of provinces and cities

Beijing 1100

Tianjin 1200

Hebei Province 1300

Shanxi Province 1400

Inner Mongolia Autonomous Region 1500

Liaoning Province 2100

Shenyang 2101

Dalian 2102

Jilin Province 2200

Changchun 2201

Heilongjiang Province 2300

Harbin 2301

Shanghai 3100

Jiangsu Province 3200

Naning 3201

Zhejiang Province 3300

Ningbo 3302

Anhui Province 3400

Fujian Province 3500

Xiamen 3502

Jiangxi Province 3600

Shandong Province 3700

Qingdao 3702

Henan Province 4100

Hubei Province 4200

Wuhan 4201

Hunan Province 4300

Guangdong Province 4400

Guangzhou 4401

Shenzhen 4403

Zhuhai 4404

Shantou 4405

Guangxi Zhuang Autonomous Region 4500

Hainan Province 4600

Sichuan 5100

Chengdu 5101

Chongqing 5102

Guizhou Province 5200

Yunnan Province 5300

Xizang Autonomous Region 5400

Shanxi Province 6100

Xi’an 6101

Gansu Province 6200

Qinghai Province 6300

Ningxia Hui tribe autonomous region 6400

Xinjiang Uygur Autonomous Region 500

Attachment II:Qualified notice of the unified annual check and verification (format)

____ Corporation:

Your company of the unified annual check has been verified qualified by my committee (department, bureau). Please hold this to inform
the foreign trade and economic cooperation department for exchanging the authorized certificate.

____ Committee (department, bureau) of foreign trade and economic cooperation the economics and trade entrusts

Year, month and day

Attachment III:“Unified Annual Check Report” indexes

the report year of ” Unified Annual Check Report ” is 1997 , From January 1st, 1997 to December 31st, 1997 is a current period.

Basic information of the enterprise (Table one)

Enterprise code: Fills in “the import and export enterprise code” (13 digits). The principle of “Import and export enterprise code”
is: The first 4-digit code is the administrative area code of registered place of enterprise under “Code of Administrative Area of
the People’s Republic of China” ( Sees attachment I);The latter 9-digit code is the code of national organizations and agencies issued
by The State Bureau of Technical Supervision or its authorized organization. The hyphen symbol “-” between the last two digits of
“The national organizations and agencies code” should not be filled in.

Investor name: If the investment parties surpass 3 party besides the China or the foreign, the attached report can be made .

Code of country (district): Input by the organs that fill out the report.

Trade: Fill in the trade of the main business scope ratified in accordance with the law.

Trade code: fill in the 4-digit code of medium and small kind according to national standard” trade classification and code of national
economy “(GB/T4757-94) issued by the State Bureau of Technical Supervision. Among them the trading company with foreign investment
in bonded area fills out in” 6390″(other wholesale business not included), the investment company fills out in” 9990″(other kinds
of trades not included), other enterprises should fill in 4 trade codes corresponding with core business.

Enterprise category: except “investment company” , Other 5 kind of types only can be chosen one kind to fill in a form.

Number of employees: it means that all personnel work and obtain remuneration or the business income in enterprises.

Foreign personnel population: it refers to those who are foreign citizens and total amount of overseas Chinese and Hong Kong, Macao
and Taiwan personnel working and paid remuneration in this enterprise

Authorized date: Refers to the date when the enterprise first time receives “the authorized certificate” in the foreign economics
and trade department.

Registration date: Refers to the date when the enterprise first time receives “the business license” in the industry and commerce
administration department.

Date of going into operation openly: the date when the production enterprise starts producing ( Including trial of production) the
date when the unproductive enterprise does business ( Including trial business)

business deadline: Fill in the concrete operation life (such as 30 years, 50 years) that” business license” stipulates, don’t fill
in the time of beginning and end; the ones that have not been stipulated the deadline of business fill in ” long-term”.

Situation of business operation: Among the 3 types of preparation for establishment, going into operation and business closure can
only be chosen one. The business that partially put into operation and partially under construction should be applied to the 2nd
type.

name, person in charge, address, registration number of branch(office), attached paper is allowed for many branch offices.

Funds and operation information of the current year (form two)

Amount of money involved in all data of this form and filled in the report should be supposed to be precise by” one hundred dollars”
or” one hundred Yuan RMB”, Namely keep two digits after the decimal point, after which the amount of money is round up. For example:
“880168” dollar, with regards of ten thousand dollars as unit of the amount of money should be filled in as” more than 88.02″

In table two the index divided into Chinese party and foreign party. If the enterprise has several Chinese parties or several foreign
parties, fill in the figure of total.

The Chinese party invested by the state-owned property which refers to the accumulated amount converted by the state-owned property
of all previous years such as cash and the material, the industry property right, the non-patent technology, the land employment
right and so on The Chinese investors more than two should be computed together.

The reason for in arrears investment: State with the terse characters.

sales( business ) income: The income of main business in the profit and loss table of enterprise.

turnover: Refers to the turnover of service business of enterprise.

Tax total amount: Refers to tax total of different kinds that the enterprise should pay to the tax affairs institution and the customs.

Customs duty: Refers to the sum of duty total the enterprise pay the customs.

total amount of profit: The profit enterprise realizes or the loss the enterprise this year occurs, It is used “-” to express the
loss.

Net profit: Reflect net amount of profit that income-producing enterprise realizes deducting from the income tax.

Gross assets: The sum of assets total reflect fixed asset, assets liquidity the project under construction, the intangible assets
and other properties of the enterprise.

Debt total amount: The sum total of debts reflect the current liability and the long-term debts of the enterprise

Long-term debt: it refers to the debt in a period of operating cycle of year whose maturity is one year above or more than one year.
Generally, it includes long-term liability, company debt payable, financing and leasing the state-run assets payable, and etc.

The reason for loss and the non- political production: Indicates with the succinct writing.

Whether financial annual report and quarterly report have been submitted: Fill in “have already submitted the financial annual report
and the quarterly report” or “have not submitted annual report and quarterly report yet”.

The situation of handling the problems in the financial annual report: Fill in “completely handled”, “partly handled” or “not handled
yet”.

contract deadline: Fill in the concrete fixed number of years (specify 5 years, 10 years and so on), it is not necessary to fill in
the beginning and end time of contract .

The foreign exchange form (Table three ).

amount of money involved in all data of this form and report should be supposed as precisely as” one hundred”, keeping two digits
after the decimal point, with two of decimal point the amount of money round up, For example: “880168” American dollar in the table
should be filled in “88. 02 ” regarding ten thousand American dollars as the amount unit.

Foreign exchange account:

respectively fill in the account numbers and remaining sum total amount of the same category account according to the account category,
in view of the account declaration of enterprise.

balance of the foreign exchange

(1)

receivable amount of exports in foreign exchange: the amount of which enterprise should receive foreign exchange in the same year,including
the amount of which the enterprise should be supposed to receive in same year for the exports last year and the amount of which the
enterprise should be supposed to receive in the same year for the exports of the same year.

(2)

the amount cancelled after verification: the amount of which has been cancelled after verification in the foreign exchange bureau
in the same year

(3)

the total amount of foreign exchange earnings: actual foreign exchange earnings of the same year, Including the amount cancelled after
verification and actually receivable income of the non-trade and the no-capital item .

(4)

the amount of imports paid in foreign exchange: the actual amount of which the enterprise pays for imports of same year.

(5)

the amount of the foreign exchange expenditure: the actual amount for imports and the amount of expenditure for non-trade and the
no-capital item of the same year.

foreign loan

(1)

loan of this term : Referred the foreign loan borrowed, appropriated and used this year.

(2)

The balance of foreign loan at the beginning of term: Referred to the remaining sum of foreign loan at the end of last year.

(3)

The balance of foreign loan at the end of term: Referred to the remaining sum of foreign loan at the end of the same year.

(4)

the principal and interest of foreign loan not payable beyond due time : Refers to the principal and interest of foreign loan that
must have reimbursed on or before the due time according to the stipulation of the contract have not been reimbursed yet and the
extension of loan has not been handled.

(5)

the amount of foreign loan of this term: referred to the loan newly borrowed.

The financial situation of foreign exchange should be made a report and filled according to the rights and obligations.

The foreign exchange trading:

the column of “Purchase of exchange” is divided into current and capital items according to employment of foreign exchange payment,
the column of “Settlement of exchange” is divided into current and capital items according to the source of foreign exchange earnings.

The column of profit and reinvestment should be made a report and filled in the rights and obligations.

This column should be filled in by the investment company:

the column should be filled in by the investment company; allocating the amount of money of fund of investment in it refers to the
amount of foreign exchange allocated for stockholding investment in the boundaries.

The Ministry of Foreign Trade and Economic Cooperation
1997-12-02

OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ON THE CITY MAINTENANCE AND CONSTRUCTION TAX PAID BY THE ENTERPRISES WITH FOREIGN INVESTMENT

The State Ministry of Taxation

Official Reply of the State Administration of Taxation on the City Maintenance and Construction Tax Paid by the Enterprises with Foreign
Investment

GuoShuiHan [1997] No.477

August 22, 1997

The local tax bureau of Danlian:

Request for an Instruction on Whether Additional Tax Should be Paid on a Commission Basis by the Chinese-foreign Equity Joint Ventures,
Chinese-foreign Contractual Joint Ventures and Foreign-capital Enterprises together with Sales Tax (DaDiShuiHan [1997] No.15) has
been received and learned. After study, the opinion of your party that the city maintenance and construction tax and the additional
education fee accompanied by sales tax should be levied under the provisions of the sales tax. It means that taxpayers who pay the
sales tax prescribed by the provisions of the sales tax should also pay the city maintenance and construction tax and the additional
education fee.

The State Ministry of Taxation
1997-08-22

CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION ON THE ADMINISTRATION OF FOREIGN INVESTMENT COMPANIES BY THE ON-LINE FOREIGN INVESTMENT ADMINISTRATION SYSTEM

The Ministry of Foreign Trade and Economic Cooperation

Circular of the Ministry of Foreign Trade and Economic Cooperation on the Administration of Foreign Investment Companies by the On-line
Foreign Investment Administration System

WaiJingMao ZiSanHanZi [1997] No.300

July 4, 1997

The commissions (departments, bureaus) of foreign trade and economic cooperation of Beijing, Shanghai, Jiangsu, Zhejiang, Guangzhou,
Shenzhen, Shangdong, Hainan, Liaoning, Fujian, Henan, Guangdong:

In accordance with relevant regulations in the Interim Provisions on the Establishment of Foreign Investment Companies, all the Ministry
of Foreign Trade and Economic Cooperation (MOFTEC) approval documents require timely submission of the Annual Reports by the companies
concerned. From now on, the On-line Foreign Investment Administration System comes into force replacing the requirement in MOFTEC
approval documents for the Annual Reports to keep abreast with the performance of the approved foreign investment companies (and
their parent companies) as well as their invested enterprises in China. Detailed provisions are hereby publicized as follows:

All foreign investment companies approved by MOFTEC shall register themselves in the MOFTEC network and complete the input and transmission
of the required information, which must be identical with the annual reports. See Annex for specific information required.

All foreign investment companies and their invested enterprises in China (including projects in China invested by their parent companies),
upon approval by MOFTEC and reception of Approval Certificate, shall timely input the required information as specified in the network
system and transmit it to the website of the Department of Foreign Investment Administration of MOFTEC according to the requirements
provided in the approval letter (including instructions on changes of the contracts and articles of association). Foreign investment
companies shall input such information as their annual business and investment performance, year-end summary and China development
strategy within 15 days after the last day of the fiscal year of the companies concerned in accordance with the requirements in the
network system.

Starting from June 15, 1997, foreign investment companies shall go through the network registration procedures in the Department of
Foreign Investment Administration of MOFTEC and newly established foreign investment companies shall be accorded with the Approval
Certificate after handling the registration procedures.

The Department of Foreign Investment Administration of MOFTEC shall be accountable to the foreign investment companies for keeping
the reported information of business secrets in nature confidential.

The On-line Foreign investment Administration System of the Department of Foreign Investment Administration of MOFTEC has been officially
put into use and by now many companies have completed network registration and information input. Please notify all unregistered
foreign investment companies within your province or municipality to transmit all necessary information to the Department in line
with the requirements in the network system the net before July 30. In case the companies are not equipped with the hardware for
direct network transmission, they can submit floppy disks to the Department of Foreign Investment Administration.

E-mail Address of Department of Foreign Investment Administration of MOFTEC: fiadept@ciet.cn.net

Correspondence Address: 2 Dongchangan Street, Beijing, China

Post code: 100731

Contact Person: Zhu bing Tel.: 65197360 Fax: 65197302

The Ministry of Foreign Trade and Economic Cooperation
1997-07-04

DECISION OF THE NATIONAL PEOPLE’S CONGRESS ON THE HONG KONG SPECIAL ADMINISTRATIVE REGION BASIC LAW

Decision of the National People’s Congress on the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic
of China

Important Notice: This English document is coming from “LAWS AND REGULATIONS OF THEPEOPLE’S REPUBLIC OF CHINA GOVERNING
FOREIGN-RELATED MATTERS” (1991.7)which is compiled by the Brueau of Legislative Affairs of the StateCouncil of the People’s
Republic of China, and is published by the ChinaLegal System Publishing House.In case of discrepancy, the original version in Chinese
shall prevail.

Whole Document DECISION OF THE NATIONAL PEOPLE’S CONGRESS ON THE BASIC LAW OF THEHONG KONG SPECIAL ADMINISTRATIVE REGION
OF THE PEOPLE’S REPUBLIC OF CHINA(Adopted at the Third Session of the Seventh National People’sCongress on April 4, 1990)The
Third Session of the Seventh National People’s Congress adopts theBasic Law of the Hong Kong Special Administrative Region of
the People’sRepublic of China, including Annex I: Method for the Selection of theChief Executive of the Hong Kong Special
Administrative Region, Annex II:Method for the Formation of the Legislative Council of the Hong KongSpecial Administrative
Region and Its Voting Procedures, Annex III:National Laws to Be Applied in the Hong Kong Special AdministrativeRegion, and
the designs of the regional flag and regional emblem of theHong Kong Special Administrative Region. Article 31 of the Constitution
ofthe People’s Republic of China provides: “The state may establish specialadministrative regions when necessary. The systems to
be instituted inspecial administrative regions shall be prescribed by law enacted by theNational People’s Congress in the light
of the specific conditions.” TheBasic Law of the Hong Kong Special Administrative Region is constitutionalas it is enacted in accordance
with the Constitution of the People’sRepublic of China and in the light of the specific conditions of HongKong. The
systems, policies and laws to be instituted after theestablishment of the Hong Kong Special Administrative Region shall
bebased on the Basic Law of the Hong Kong Special Administrative Region. TheBasic Law of the Hong Kong Special Administrative Region
of the People’sRepublic of China shall be put into effect as of July 1, 1997.

ANTI-DUMPING AND ANTI-SUBSIDY REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA

ADMINISTRATIVE SUPERVISION LAW

Law of the People’s Republic of China on Administrative Supervision



	(Adopted at the 25th Meeting of the Standing Committee of the Eighth National People’s Congress on May 9, 1997 and promulgated by Order No. 85 of the President of the People’s Republic of China on May 9, 1997) Contents Chapter I General Provisions Chapter II Supervisory Organs and Supervisors Chapter III Functions and Duties of Supervisory Organs Chapter IV Jurisdiction of Supervisory Organs Chapter V Procedure for Supervision Chapter VI Legal Responsibility Chapter VII Supplementary Provisions Chapter I General Provisions Article 1 This Law is enacted in accordance with the Constitution, in order to strengthen the supervision, guarantee the smooth implementation of government decrees, maintain administrative discipline, facilitate the building of an honest and clean government, improve administration and raise administrative efficiency. Article 2 Supervisory organs are organs that exercise the function of supervision on behalf of the people’s governments, supervising in accordance with this Law administrative organs and public servants of the State and other persons appointed by administrative organs of the State. Article 3 Supervisory organs shall exercise their functions and powers in accordance with law and shall be subject to no interference from any administrative departments, public organizations or individuals. Article 4 Supervision shall be enforced in adherence to the principles of seeking truth from facts, laying stress on evidence, investigation and study, and applying laws and rules of administrative discipline to people on an equal footing. Article 5 In supervision, education shall be combined with punishment, and supervision and inspection shall be conducted for the purpose of improving work. Article 6 Supervision shall be enforced by relying on the general public. Supervisory organs shall institute an informing system, under which all citizens shall have the right to bring to supervisory organs accusations or expositions against any administrative organs or public servants of the State or any persons appointed by State administrative organs that violate laws or are derelict in their duties. Chapter II Supervisory Organs and Supervisors Article 7 The supervisory organ under the State Council shall be in charge of supervision throughout the country. A supervisory organ of a local people’s government at or above the county level shall be responsible for supervision in its administrative area, and shall be responsible and report its work to the people’s government to which it belongs and to the supervisory organ at the next higher level. Supervision shall be enforced mainly under the guidance of the supervisory organ at a higher level. Article 8 A supervisory organ of a people’s government at or above the county level may, where necessary and with the approval of the people’s government to which it belongs, have supervisory bodies or supervisors in departments under the government. The supervisory bodies and supervisors dispatched by the supervisory organs shall be responsible and report their work to the supervisory organs that dispatch them. Article 9 A supervisor shall abide by laws and observe rules of discipline, be faithful to their duties, enforce laws impartially, remain honest and upright and keep secrets. Article 10 A supervisor shall be familiar with supervision and shall have received an appropriate education and acquired sufficient professional knowledge. Article 11 The chief or deputy chief of a supervisory organ of a local people’s government at or above the county level shall be appointed or dismissed from office with the consent of the supervisory organ at the next higher level before the decision on the appointment or dismissal is submitted for approval. Article 12 A supervisory organ shall apply a system of supervision over the supervisors’ performance of their official duties and observance of the rules of discipline. Article 13 A supervisor, in performing his official duties in accordance with law, shall be protected by law. No organization or individual may refuse to undergo supervision, or obstruct the supervisors’ performance of their official duties, or retaliate against supervisors. Article 14 A supervisor shall withdraw when he himself or his close relatives have an interest in the matter of supervision he is handling. Chapter III Functions and Duties of Supervisory Organs Article 15 The supervisory organ under the State Council shall exercise supervision over the following government departments and persons: (1)the various departments under the State Council and the public servants of the State working in such departments; (2)other persons appointed by the State Council and the various departments under it; and (3)the people’s governments of the provinces, autonomous regions and municipalities directly under the Central Government and the leading members of such governments. Article 16 The supervisory organ of a local people’s government at or above the county level shall exercise supervision over the following government departments and persons: (1) the various departments under the people’s government to which it belongs and the public servants of the State working in such departments; (2) other persons appointed by the people’s government to which it belongs and by the various departments under this government; and (3) the people’s government at the next lower level and its leading members. The supervisory organ of the people’s government of a county, autonomous county, city not divided into districts or a municipal district shall, in addition, exercise supervision over the public servants of the State working in the people’s governments of townships, nationality townships and towns under the jurisdiction of the people’s government to which it belongs as well as other persons appointed by the governments of these townships, nationality townships and towns. Article 17 A supervisory organ at a higher level may handle matters of supervision that are under the supervision of a supervisory organ at a lower level and may, when necessary, handle such matters that are under the jurisdiction of the supervisory organs at the various lower levels. Where a dispute over jurisdiction arises between supervisory organs, it shall be settled by a supervisory organ at a higher level above both the disputing parties. Article 18 A supervisory organ shall perform the following duties in order to fulfill its function of supervision: (1) to inspect the problems of the administrative organs of the State that occur in the course of their observing and enforcing laws and rules and regulations as well as government decisions and decrees; (2) to accept and handle accusations and expositions against administrative organs or public servants of the State or other persons appointed by such organs that violate rules of administrative discipline; (3) to investigate and handle violations of rules of administrative discipline committed by administrative organs or public servants of the State or other persons appointed by such organs; (4) to accept and handle complaints presented by public servants of the State or other persons appointed by administrative organs of the State who refuse to accept decisions on administrative sanctions made by the competent administrative organs, and other complaints to be accepted and handled by supervisory organs as prescribed by laws and administrative rules and regulations; and (5) to perform other duties as prescribed by laws and administrative rules and regulations. Chapter IV Jurisdiction of Supervisory Organs Article 19 A supervisory organ shall have the right to take the following measures to perform its official duties: (1) to require the departments and persons under supervision to provide documents, data, financial accounts and other materials relevant to the matters under supervision for examination and duplication; (2) to require the departments and persons under supervision to explain or clarify questions concerning the matters under supervision; and (3) to order the departments and persons under supervision to cease violating laws, rules and regulations and rules of administrative discipline. Article 20 In investigating violations of the rules of administrative discipline, a supervisory organ may adopt the following measures in light of actual conditions and needs: (1) to temporarily seize and seal up documents, data, financial accounts and other relevant materials which may be used as proof of violations of the rules of administrative discipline; (2) to order the units and persons suspected of being involved in a case not to sell off or transfer any property relevant to the case during the period of investigation; (3) to order the persons suspected of violating the rules of administrative discipline to explain and clarify questions relevant to the matters under investigation at a designated time and place; however, no such persons may be taken into custody or detained in disguised form; and (4) to propose to the competent authorities that they suspend the persons suspected of seriously violating the rules of administrative discipline from execution of their official duties. Article 21 In investigating violations of the rules of administrative discipline, such as graft, bribery and misappropriation of public funds, a supervisory organ may inquire about the deposits of the suspected units and persons at banks or other banking institutions, with the approval of the leading members of a supervisory organ at or above the county level. When necessary, it may request the People’s Court to adopt preservation measures to freeze the deposits of such persons at banks or other banking institutions in accordance with law. Article 22 In handling cases of violating the rules of administrative discipline, a supervisory organ may request the authorities of public security, auditing, taxation and the Customs, the administrative departments for industry and commerce and other authorities to extend assistance. Article 23 A supervisory organ may, on the basis of findings from examinations and investigations, make a supervisory recommendation under any of the following situations; (1) Where the parties concerned refuse to enforce the laws or rules and regulations or violate the laws or rules and regulations as well as the decisions or decrees of the people’s government, which should be set right; (2) Where the decisions, decrees or instructions issued by departments under the people’s government to which it belongs or by the people’s governments at lower levels contravene the laws or rules and regulations or State policies and should be modified or revoked; (3) Where the interests of the State or the collective or the lawful rights and interests of citizens are impaired and remedial measures need be taken; (4) Where decisions on employment, appointment, dismissal from office, reward or punishment are obviously inappropriate and should be rectified; (5) Where the parties concerned should be given administrative penalties in accordance with relevant laws or rules and regulations; or (6) Other situations for which a supervisory recommendation is needed. Article 24 A supervisory organ may, on the basis of findings from examinations and investigations, make a supervisory decision or recommendation under any of the following situations: (1) Where the parties concerned violate the rules of administrative discipline and should be given administrative sanctions in accordance with law, such as administrative warning, the recording of a demerit , the recording of a major demerit , demotion, dismissal from office or discharge; or (2) Where the parties concerned take money or property in violation of the rules of administrative discipline, which should be confiscated, recovered, or returned or compensated under orders. A supervisory decision or recommendation for the situation mentioned in sub-paragraph (1) of the preceding paragraph shall be made in accordance with the State regulations on the limits of authority and procedure for personnel management. Article 25 A supervisory decision made by a supervisory organ in accordance with law shall be implemented by the departments and persons concerned. A supervisory recommendation made by a supervisory organ in accordance with law shall be adopted by the departments concerned, unless they have justifiable reasons not to do so. Article 26 A supervisory organ shall have the right to inquire of the units and individuals involved in the matters under supervision. Article 27 Leading members of a supervisory organ may attend as observers relevant meetings of the people’s government to which it belongs, and supervisors may attend as observers meetings concerning the matters under supervision held by the departments under supervision. Article 28 A supervisory organ may, in accordance with relevant regulations, award the persons who have rendered meritorious services in accusing or exposing serious violations of laws and the rules of discipline. Chapter V Procedures of Supervision Article 29 A supervisory organ shall conduct inspection in accordance with the following procedure: (1) to register the matters that need inspection; (2) to formulate plans for inspection and organize their implementation; (3) to submit reports on the results of inspection to the people’s government to which it belongs or the supervisory organ at a higher level; and (4) to make a supervisory decision or recommendation, on the basis of the findings from inspection. For the registration of a consequential matter for inspection, a supervisory organ shall report the matter to the people’s government to which it belongs and the supervisory organ at the next higher level for the record. Article 30 A supervisory organ shall investigate and handle violations of the rules of administrative discipline in accordance with the following procedure: (1) to conduct preliminary examination of the matters that require investigation and handling, and to register the matters for which it believes that there are facts to prove the violations of the rules of administrative discipline and that the parties concerned should be investigated for their responsibility for violating the rules of administrative discipline; (2) to make arrangements for investigation to collect relevant evidence; (3) to handle cases for which there is evidence to prove the violation of the rules of administrative discipline and the parties concerned should be given administrative sanctions or handled otherwise; and (4) to make a supervisory decision or recommendation. For the registration of a consequential and complicated case, a supervisory organ shall report the matter to the people’s government to which it belongs and the supervisory organ at the next higher level for the record. Article 31 Where through investigation into a registered case the supervisory organ believes that there are no facts to prove the violation of the rules of administrative discipline or that there is no need to investigate the parties concerned for their responsibility for violation of the rules of administrative discipline, it shall quash the case and notify the investigated units and the authorities above them or the investigated persons and their units of the matter. For the quashing of a consequential and complicated case, a supervisory organ shall report the matter to the people’s government to which it belongs and to the supervisory organ at the next higher level for the record. Article 32 A case registered by a supervisory organ for investigation shall be closed within six months from the date of registration. Where the period for handling a case need be extended due to special reasons, it may be extended appropriately, but it may not exceed one year at the maximum. And the matter shall be reported to the supervisory organ at the next higher level for the record. Article 33 A supervisory organ shall, in the course of inspection and investigation, hear the statements and explanations made by the departments or persons under supervision. Article 34 Major supervisory decisions and recommendations made by a supervisory organ shall be submitted to the people’s government to which it belongs and to the supervisory organ at the next higher level for consent. Major supervisory decisions and recommendations made by the supervisory organ under the State Council shall be submitted to the State Council for consent. Article 35 Supervisory decisions or recommendations shall be delivered in writing to the units or persons concerned. Article 36 The units or persons concerned shall notify the supervisory organ within 30 days from the date of receiving the supervisory decision or recommendation of how such decision has been implemented or of how such recommendation has been dealt with. Article 37 Where a public servant of the State or any other person appointed by an administrative organ of the State refuses to accept a decision made by the competent administrative organ on imposing administrative sanctions on him, he may lodge a complaint to the supervisory organ within 30 days from the date of receiving such decision. The supervisory organ on its part shall, within 30 days from the date of receiving the complaint, make a decision after review of the decision. If he still refuses to accept the decision made after the review, he may, within 30 days from the date of receiving the decision, apply to the supervisory organ at the next higher level for check. The supervisory organ at the next higher level shall, within 60 days from the date of receiving the application, make a decision after checking the decision. During the period of review or check, implementation of the decision originally made shall not be suspended. Article 38 If, after the review conducted upon receiving the complaint against the decision made by the competent administrative organ on imposing administrative sanctions, the supervisory organ believes that the original decision is inappropriate, it may propose to the organ that made the decision to modify or revoke its decision; it may also, within the scope of its functions and powers, directly decide to modify or revoke such decision. Complaints about other matters to be accepted and handled by supervisory organs, as provided for by laws and administrative rules and regulations, shall be governed by such laws and administrative rules and regulations. Article 39 Whoever refuses to accept a supervisory decision may, within 30 days from the date or receiving the decision, apply to the organ that made the decision for reexamination; the supervisory organ on its part shall, within 30 days from the date of receiving the application for reexamination, make a decision after reexamination. If he still refuses to accept the decision made after reexamination, he may, within 30 days from the date of receiving the decision, apply to the supervisory organ at the next higher level for check, which shall, within 60 days from the date of receiving the application for check, make a decision after the check. During the period of reexamination or check, implementation of the decision originally made shall not be suspended. Article 40 Where a supervisory organ at a higher level considers a supervisory decision made by a supervisory organ at a lower level inappropriate, the former may instruct the latter to modify or revoke this decision or, when necessary, the former may also directly decide to modify or revoke the decision. Article 41 The decisions made by a supervisory organ at a higher level after check and the decisions made by the supervisory organ under the State Council after review or reexamination shall be final. Article 42 Whoever has any objections to a supervisory recommendation may, within 30 days from the date of receiving the recommendation, raise his objections to the supervisory organ that made the recommendation, the supervisory organ on its part shall, within 30 days from the date of receiving the objections, give a reply. If he still has objections to the reply, the supervisory organ shall submit the matter to the people’s government to which it belongs or to the supervisory organ at the next higher level for a decision. Article 43 Where a supervisory organ, in the course of handling matters under supervision, finds that the matters under investigation do not fall within the scope of functions and duties of the supervisory organ, it shall transfer them to the unit that has the authority to handle them. In the case of a criminal suspect, the matter shall be transferred to a judicial organ, which shall handle the case according to law. The unit or organ that accepts the matter transferred shall notify the said supervisory organ of how the matter is handled. Chapter VI Legal Responsibility Article 44 Where departments or persons under supervision violate the provisions of this Law by committing any of the following acts, the competent authorities or supervisory organ shall order them to mend their ways and circulate a notice of criticism against the departments and shall, in accordance with law, impose administrative sanctions on the persons who are directly in charge and the other persons who are directly responsible for the violation: (1) to withhold the truth, provide false evidence or conceal, transfer, alter or destroy evidence; (2) to deliberately delay providing documents, data, financial accounts or other materials or information relevant to the matters under supervision or refuse to provide them; (3) to sell off or transfer suspect property during the period of investigation; (4) to refuse to explain or clarify the questions raised by the supervisory organ; (5) to refuse to implement the supervisory decision or refuse to adopt the supervisory recommendation without justifiable reasons; or (6) to have committed any other acts in violation of the provisions of this Law, where the circumstances are serious. Article 45 Whoever retaliates against or frames up any complainants, accusers, exposers or supervisors shall be given administrative sanctions in accordance with law; if the act constitutes a crime, he shall be investigated for criminal responsibility in accordance with law. Article 46 If a supervisor abuses his power, commits malpractices for selfish ends, neglects his duties or divulges secrets, he shall be given administrative sanctions in accordance with law; if his act constitutes a crime, he shall be investigated for criminal responsibility in accordance with law. Article 47 If a supervisory organ or supervisor exercises its or his functions and powers in violation of laws, infringing upon the lawful rights and interests of a citizen, legal person or any other organization and thus causing damage thereto, it or he shall make compensation in accordance with law. Chapter VII Supplementary Provisions Article 48 This Law shall go into effective as of the date of its promulgation. The Regulations of the People’s Republic of China on Administrative Supervision promulgated by the State Council on December 9, 1990 shall be repealed at the same time.

REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON FOREIGN EXCHANGE CONTROL

Regulations of the People’s Republic of China on Foreign Exchange Control

Order No.211, 1997 of the State Council
January 14, 1997

(Promulgated by Order No.193 of the State Council of the People’s Republic of China on January 29, 1996and amended in accordance
with the Decision of the State Council on Revising the Regulation of the People’s Republic of China on Foreign Exchange Control on
January 14, 1997)

Chapter I General Provisions

Article 1

For purposes of strengthening foreign exchange control, maintaining the balance of international payments, and promoting the healthy
development of the national economy, the present regulations are hereby formulated.

Article 2

The foreign exchange control authority of the State Council and their branches (hereinafter referred to as the foreign exchange control
authorities) shall fulfill the duty of controlling foreign exchanges according to law and be responsible for implementation of the
present Regulations.

Article 3

The foreign exchanges mentioned in the present Regulations refer to the following means of payments and assets expressed in foreign
currencies and used for international liquidation:

(1)

Foreign currencies, such as paper money and coins.

(2)

Foreign currency pay orders, such as bills, bank deposits, and postal savings deposits.

(3)

Foreign currency negotiable securities, such as government bonds, company bonds, and stocks.

(4)

Special drawing rights and European Currency Units. And

(5)

Other foreign exchange assets.

Article 4

The present Regulations shall apply to the foreign exchange receipts and payments and business activities of domestic institutions
and individuals, foreign institutions in China, and foreigners in China.

Article 5

The state has no restriction to the current international payment and transfer of foreign exchange.

Article 6

The State shall carry out the system of the statistics and reports on international receipts and payments. Any unit and individual
concerning international payment activities shall do the statistics and reports on international receipts and payments.

Article 7

The circulation and use for quoting prices and settling accounts of foreign currencies shall be prohibited in the People’s Republic
of China.

Article 8

All units and individuals have the right to report and expose behaviors and activities violating regulations on foreign exchange
control.

The units and individuals that have performed meritorious service through accusation and exposure of violation against regulations
on foreign exchange control or assisting relevant departments in handling such cases shall be maintained confidential and granted
rewards by the foreign exchange control authorities.

Chapter II Foreign Exchanges on Current Accounts

Article 9

The domestic institutions shall bring home the current account incomes of foreign exchanges instead of depositing them abroad without
authorization violating the related regulations of the State.

Article 10

The domestic institutions shall sell the current account incomes of foreign exchanges to designated banks in light of the State Council
regulations on the management of buying, selling and paying foreign exchanges, or open a foreign exchange account in designated banks
upon approval.

Article 11

The current expenditures of foreign exchanges of domestic institutions shall be paid with foreign exchanges bought from designated
banks with valid vouchers and commercial bills, in accordance with the State Council regulations on the management of buying, selling
and paying foreign exchanges.

Article 12

The check-off formalities on collection of foreign exchange from exports and payment of foreign exchanges for imports shall be gone
through by the domestic institutions according to the State regulations on the management of the check-off of foreign exchange earnings
from exports and the management of the check-off of foreign exchange expenditures for imports.

Article 13

Individual owners of foreign exchanges can hold the present foreign exchanges by themselves, deposit them in banks, or sell them
to designated banks of foreign exchanges.

The principle of voluntary to deposit, freedom to withdraw, payment of interests to deposits, and keeping secret for depositors shall
be carried out for the deposition of foreign exchanges by individuals.

Article 14

The purchase of foreign exchange by individuals for private purposes shall be granted without exceeding the specific limit. Individuals
may apply to the foreign exchange control authority for buying foreign exchange over the limit for private purposes, and the application
for such purchase shall be approved by the foreign exchange control authority if it is proved to be true.

When they come into or go out of China, individuals, who carry foreign exchanges with them, shall go through declaration procedures
with the Customs. Those, who go out of China carrying more than prescribed amounts of foreign exchanges, shall also produce valid
documents to the Customs.

Article 15

After they have emigrated but income is derived from possession of assets in China, individuals shall remit or carry foreign exchange
abroad upon the presentation of the specified certifying documents and valid vouchers at the designated banks of foreign exchange.

Article 16

Without approval from the foreign exchange control authority, the foreign exchange pay orders, foreign exchange negotiable securities,
and other forms of foreign exchange assets held by citizens residing in China shall not be carried or sent abroad.

Article 17

The legitimate income in RMB of foreign institutions and personnel in China, if it needs to be remitted abroad, shall be granted
upon the presentation of the related certificate documents and credence at the designated banks of foreign exchange.

Article 18

The foreign exchanges of foreign organizations and individuals entering into China received or taken from abroad can be kept by themselves,
deposited in banks, and also sold to banks designated of foreign exchange. They can also be remitted or carried abroad on the basis
of the valid vouchers.

Chapter III Foreign Exchanges on Capital Account

Article 19

The domestic enterprises’ foreign exchange incomes of capital account shall be brought back to the homeland unless otherwise provisioned
by the State Council.

Article 20

The domestic enterprises’ foreign exchange incomes of capital account shall be deposited into bank accounts, which are opened with
designated banks of foreign exchange according to the relevant State regulations. If they want to sell foreign exchange to the designated
banks of foreign exchange, they shall be approved by the foreign exchange control authorities.

Article 21

If a domestic enterprise makes investment in a foreign country, before it applies to competent department for examination and approval,
the source of its foreign exchange funds shall be examined by the foreign exchange control authorities. After being approved, the
relevant remitting procedures shall be gone through according to the stipulations of the State Council on the management of foreign
exchanges used for investment in foreign countries.

Article 22

The borrowing of foreign loans shall be handled by the government departments approved by the State Council or the financial institutions
and enterprises approved by the foreign exchange control authority of the State Council according to relevant regulations of the
State.

The borrowing of foreign loans by foreign-funded enterprises shall be reported to the foreign exchange control authority for records.

Article 23

If the financial institutions issue the foreign exchange bonds in foreign countries, they shall be approved by the foreign exchange
control authority under the State Council and handled according to relevant State regulations.

Article 24

Foreign-oriented guarantees can be provided only by financial institutions and enterprises satisfying conditions stipulated by State
regulations and shall be approved by the foreign exchange control authority.

Article 25

The State shall carry out a foreign debt registration system.

The registration of foreign debts shall be carried out by domestic institutions according to State Council rules on the statistics
compiling and monitoring of foreign debts.

The statistics compiling and monitoring of the whole country’s foreign debts shall be taken charge of by the foreign exchange control
authority under the State Council, which shall publicize the country’s situation in terms of foreign debts.

Article 26

Foreign-funded enterprises terminated according to law shall be liquidated in accordance with related State regulations. The Renminbi
left to the foreign investor after payment of taxes can be remitted by buying foreign exchanges from designated banks of foreign
exchange for being or carried abroad. The foreign exchanges belonging to the Chinese investor shall be sold entirely to designated
banks of foreign exchange.

Chapter IV The Foreign Exchange Business of Financial Institutions

Article 27

Financial institutions, which can handle the foreign exchange businesses shall be approved by the foreign exchange control authority,
and obtain licenses for handling foreign exchange businesses.

Any unit or individual may not handle the foreign exchange businesses without approval of the foreign exchange control authority.
The financial institutions, which are approved to handle foreign exchange businesses, may not go beyond their approved scope of businesses.

Article 28

Financial institutions handling foreign exchange businesses shall open foreign exchange accounts for their clients and handle relevant
foreign exchange businesses in accordance with the relevant State regulations.

Article 29

Financial institutions handling foreign exchange businesses shall pay reserve funds for foreign exchange savings deposits according
to the relevant State regulations, abide by the stipulations on the management of foreign exchange asset-liability rations, and set
up bad debts reserves.

Article 30

Designated Banks of foreign exchange shall use their own funds to handle the settlement of foreign exchange accounts, for Renminbi
is needed.

Proportional management shall be exercised over the foreign exchanges used by designated banks of foreign exchange as working capital,
the specific proportions shall be verified by the People’s Bank of China in accordance with actual conditions.

Article 31

Financial institutions handling foreign exchange businesses shall be subject to the examination and supervision of the foreign exchange
control authority.

Financial institutions handling foreign exchange businesses shall submit balance sheets, statements of losses and gains, and other
financial accountant statements sheets and data to the foreign exchange control authority.

Article 32

Financial institutions, which terminate foreign exchange businesses, shall apply to the foreign exchange control authority. Those
approved to stop their foreign exchange businesses shall implement liquidation of their foreign exchange claims and obligations according
to law and hand in their licenses for handling foreign exchange businesses.

Chapter V Exchange Rates of Renminbi And Foreign Exchange Market

Article 33

A unitary and well-managed floating exchange rate system that is based on market supply and demand will be carried out to the exchange
rates of Renminbi.

The People’s Bank of China shall publish the exchange rates of Renminbi against major foreign currencies in accordance with the prices
fixed at inter- bank foreign exchange market.

Article 34

Transactions at foreign exchange market shall be subject to the principle of openness, fairness, impartialness, and honesty.

Article 35

The currencies and forms of transaction at foreign exchange market shall be stipulated and adjusted by the foreign exchange control
authority under the State Council.

Article 36

Designated banks of foreign exchange and other financial institutions designated to handle foreign exchange businesses shall be the
dealers of inter-bank foreign exchange market.

Designated banks of exchange and other financial institutions designated to handle foreign exchange businesses shall fix the prices
of the foreign exchanges traded between their clients and handle foreign exchange transactions in accordance with the exchange rates
and the floating range respectively published and specified by the People’s Bank of China.

Article 37

The foreign exchange control authority under the State Council shall exercise supervision and management of foreign exchange market
across the whole country according to law.

Article 38

The People’s Bank of China shall carry out regulation according to law, of foreign exchange market in light of the requirements of
the country’s monetary policies and changes at the foreign exchange market.

Chapter VI Liabilities

Article 39

Those who commit one of the following acts of foreign exchange evasion shall be ordered to recall their foreign exchanges within
fixed periods of time, forced to exchange the money by the foreign exchange control authority, and shall be fined amounting to more
than 30 per cent and below five times of the foreign exchange they have evaded. Where a crime is constituted, the criminal liabilities
shall be assumed:

(1)

Without authorization, depositing the foreign exchanges in abroad in violating the State provisions.

(2)

Failing to sell foreign exchanges to designated banks of foreign exchange, as required by State provisions.

(3)

Remitting or carrying foreign exchanges out of the country in violating the State provisions.

(4)

Carrying or mailing foreign exchange deposit certificates and foreign exchange negotiable securities out of the country without permission
of foreign exchange control authority. Or

(5)

other actions of foreign exchange evasion.

Article 40

Those who commit one of the following acts of illegal foreign exchange arbitrage shall be given a warning, forced to exchange the
money by the foreign exchange control authority, and shall be fined more than 30 per cent and below three times the foreign exchanges
arbitraged. If a crime is constituted, criminal liabilities shall be assumed:

(1)

Payment for imports that ought to be paid with foreign exchanges in Renminbi or in barter, or in other similar means in breaking the
State provisions.

(2)

Payment for the expenditures of a third party in Renminbi, who spent in China, for repayment from this party in foreign exchanges.

(3)

Investment in China in Renminbi or with materials bought in China by overseas investors without approval of the foreign exchange control
authority.

(4)

Purchase of foreign exchanges with faked, invalid certificates, contracts, bills or other deceptive means from designated banks of
foreign exchange.

(5)

Other actions of illegal foreign exchange arbitrage.

Article 41

The illegal incomes, which are gained by handling foreign exchange businesses without approval of the foreign exchange control authority,
shall be confiscated by the foreign exchange control authority and this business shall be outlawed, or be affixed with criminal liabilities
if crimes are constituted.

If financial institutions handling foreign exchange business handle foreign exchange businesses beyond their approved scope of businesses,
they shall be ordered by the foreign exchange control authority to make corrections, their illegal incomes if any shall be confiscated
and be asked to pay fines amounting to one to five times of the illegal incomes, be imposed with fines between 100,000 and 500,000
Yuan if they do not have any illegal incomes. They shall be ordered by the foreign exchange control authority to make rectification
and consolidation or their business licenses shall be revoked if they involve in serious cases or fail to make corrections within
fixed periods of time. If crimes are constituted, they shall be affixed with criminal liabilities.

Article 42

If designated banks of foreign exchange fail to handle foreign exchange settlement and sales according to State regulations, they
shall be ordered by the foreign exchange control authority to make corrections, criticized, and their illegal incomes shall be confiscated
and fined at between 100,000 and 500,000 Yuan. If the cases are serious, they shall be banned from handling foreign exchange settlement
and sale businesses.

Article 43

If they go against the management of the exchange rates of Renminbi, the management of interest rates of foreign exchange deposits,
or the management of foreign exchange market, financial institutions handling foreign exchange businesses shall be ordered by the
foreign exchange control authority to make corrections, criticized, and their illegal incomes shall be confiscated if any and fined
at one to five times of their illegal incomes, fined at between 100,000 and 500,000 Yuan if they do not gain any illegal incomes,
ordered by the foreign exchange control authority to make rectification and consolidation or their foreign exchange business licenses
shall be revoked if the cases are serious.

Article 44

Domestic institutions with one of the following acts of violation against the management of foreign debts shall be warned, criticized
and fined between 100,000 and 500,000 Yuan by the foreign exchange control authority. If crimes are constituted, the criminal liabilities
shall be affixed with:

(1)

Unauthorized handling the loans from foreign counties.

(2)

Unauthorized issuing the foreign exchange bonds in foreign countries against the State regulations.

(3)

Unauthorized providing foreign-oriented guarantees against the relevant State regulations. Or

(4)

Other acts against the management of foreign debts.

Article 45

Domestic institutions committing one of the following acts of illegal use of foreign exchanges shall be ordered to make corrections,
and forced to sell their foreign exchanges by the foreign exchange control authority. The illegal incomes shall be confiscated, fined
at the amount equal to or less than the amount of foreign exchanges illegally used. If crimes are constituted, the criminal liabilities
shall be affixed with:

(1)

Pricing and settlement of accounts in domestic in foreign currencies.

(2)

Using the foreign exchanges as mortgages without approval.

(3)

Altering the purpose of the use of foreign exchanges without approval. Or

(4)

Other acts of illegal use of foreign exchanges.

Article 46

Those who buy or sell foreign exchanges privately, under disguise, or for profiteering purpose shall be warned and forced to sell
their foreign exchanges by the foreign exchange control authority, their illegal incomes shall be confiscated and fined at above
30 percent and below three times their illegally traded foreign exchanges. If crimes are constituted, the criminal liabilities shall
be affixed with.

Article 47

Domestic institutions, which open foreign exchange bank accounts at home or abroad without authorization and against stipulations
on the management of foreign exchange bank accounts; and lend, collusively use or transfer their foreign exchange bank accounts;
or change the scope of use of their foreign exchange bank accounts without approval, shall be ordered to make corrections by the
foreign exchange control authority, criticized, and fined between 50,000 and 300,000 Yuan and their foreign exchange bank accounts
shall be revoked.

Article 48

Domestic institutions, which fabricate, alter, lend, transfer, or repeated use import and export check-off sheets against stipulations
on the management of foreign exchange check-offs, or fail to go through check-off procedures, shall be warned and criticized by the
foreign exchange control authority, fined between 50,000 and 300,000 Yuan and their illegal incomes shall be confiscated. If crimes
are constituted, the criminal liabilities shall be affixed.

Article 49

If a financial institution handling foreign exchange businesses violates stipulations in articles 28 and 30 of the present Regulations,
it shall be ordered to make corrections, criticized, and fined between 50,000 and 300,000 Yuan by the foreign exchange control authority.

Article 50

The party who has objections against the decision of punishment made by the foreign exchange control authority can apply for reconsideration
within 15 days after receiving the notice of the decision of punishment to a foreign exchange control authority at a higher level.
A decision of re-consideration shall be made by the foreign exchange control authority within two months after its receipt of an
application for re-discussion. If it has also objections to the decision of re-consideration, the party can lodge a lawsuit in a
people’s court according to law.

Article 51

Domestic institutions that violate stipulations on the management of foreign exchanges, besides to be given the punishment according
to the present Regulations, shall have their members in directly charge and persons directly responsible disciplined. If crimes are
constituted, the criminal liabilities shall be affixed with

Chapter VII Supplementary Provisions

Article 52

For the purposes of the present Regulations:

(1)

“Domestic institutions ” mean the enterprise and institutional units, State organs, social groups, and armed units within the territory
of the People’s Republic of China, including foreign-funded enterprises.

(2)

“Designate banks of foreign exchange” mean banks approved to handle businesses of foreign exchange settlement and sale by the foreign
exchange control authority.

(3)

“Individuals” mean Chinese citizens and foreigners who have resided within the territory of the People’s Republic of China for one
full year.

(4)

“Foreign representative offices in China” mean foreign diplomatic and consulate organizations resided in China, China offices of international
organizations, representative offices of foreign businesses in China, and business organs set up in China by foreign non- governmental
organizations.

(5)

“Foreigners coming into China” mean the permanent residents of foreign representative offices in China, foreigners coming to China
for short stays, foreigners employed in China, and foreign students studying in China.

(6)

“Current accounts” mean items of transactions taking place frequently in international payments, including trade incomes and expenditures,
incomes from and expenditures on labor services, and unitary transfers.

(7)

“Capital account” means the increase and decrease of the assets and liabilities arising from the inflow and outflow of capital in
international payments, including direct investment, various loans, and securities investment.

Article 53

Rules for the management of foreign exchanges in bonded zones shall be separately constituted by the foreign exchange control authority
under the State Council.

Article 54

Rules for the management of foreign exchanges in border trade and border free markets shall be separately constituted by the foreign
exchange control authority under the State Council according to the principles of the present Regulations.

Article 55

The present Regulations shall enter into force as of April 1, 1996. The Interim Regulations of the People’s Republic of China concerning
the Management of Foreign Exchanges promulgated by the State Council on December 18, 1980 and their rules shall be abolished simultaneously.

The State Council
1997-01-14

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2003

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REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON FOREIGN EXCHANGE CONTROL

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