REPLY OF THE STATE ADMINISTRATION OF TAXATION ON THE ISSUE REGARDING THE COLLECTION OF TAXES ON THE OPERATION MAINTENANCE AND CONSULTING SERVICE OF THE INFORMATION SYSTEM AS PROVIDED BY A FOREIGN ENTERPRISE WITHIN CHINA

the State Administration of Taxation

Reply of the State Administration of Taxation on the Issue Regarding the Collection of Taxes on the Operation Maintenance and Consulting
Service of the Information System as Provided by A Foreign Enterprise within China

Guo Shui Han [2005] No. 912

The local taxation bureau of Guangdong Province:

The Request of your bureau for Instructions on the Issue Regarding the Collection of Taxes on the Operation Maintenance and Consulting
Service of the Information System as Provided by a Foreign Enterprise within China has been received. It has been known that the
Epcos Germany has concluded an Agreement on IT Operation, Maintenance and Consulting Service with its subsidiaries all over the world
to provide operation, maintenance and consulting services for its information system as well as the relevant software for its subsidiaries
all over the world, including the Epcos (Zhuhai FTZ) Co. Ltd and the Epcos (Zhuhai) Co. Ltd (hereinafter referred to as “Chinese
users”), in Germany. As for the payment of expenses, the Epcos Germany is responsible for arranging its technicians to provide services
inside and outside the territory of China in a uniform manner and advancing the relevant expenses, and then collect service fees
from its users as well as software expenses therefrom for its advance payment. We hereby give our reply on the issue regarding the
taxation of service fees as collected by the Epcos Germany as well as the software expenses advanced by the Epcos Germany as follows:

The abovementioned business of the Epcos Germany are a kind of provision of support, maintenance and consulting services for the normal
operation of the established information systems of Chinese users, including the relevant software as transferred by it. The technical
services, for which the relevant technical service charge as provided for in the provisions in force shall be incorporated as royalties
to form the basis for the collection (withholding) of income tax, refers to labor services such as instructing, guiding and training
in the transfer of special techniques. Therefore, as for service charge as derived by the Epcos Germany from the abovementioned business,
the relevant taxes shall be collected in light of the different circumstances. As for the service charge from the services that are
provided outside the territory of China, the business tax and enterprise income tax may be exempted. As for the service charge from
services that are provided within the territory of China, the business tax and income tax shall be paid in accordance with the Interim
Regulations of the People’s Republic of China on Business Tax and the Law of the People’s Republic of China on the Income Tax of
Foreign-funded Enterprises and Foreign Enterprises as well as the relevant provisions of Articles 3 and 7 of the Agreement between
the People’s Republic of China and the Federal Republic of Germany on Taxation.

As for the fees of the software provided by an enterprise outside the territory of China to Chinese users, which are collected by
the Epcos Germany for its advanced payment, the business tax and enterprise income tax shall be respectively collected on such fees
as is levied on the incomes derived from the transfer of intangible assets and royalties in accordance with Article 7 of the Detailed
Rules for Implementing the Interim Regulations of the People’s Republic of China on Business Tax and Article 19 of the Law of the
People’s Republic of China on the Income Tax of Foreign-funded Enterprises and Foreign Enterprises. As for any technical transfer
that meets the requirements for exempting taxes from business income as prescribed in the Circular of the Ministry of Finance and
the State Administration of Taxation concerning the Taxation Issues on Implementing the Decision of the State Council of the Central
Government on Intensifying Technical Innovation, Developing High Technologies and Achieving Industrialization (Cai Shui Zi [1999]
No. 273), the business tax may be exempted in accordance with the provisions of the aforesaid Circular.

The enterprise shall define the aforesaid incomes accurately and reasonably, calculate and pay the relevant taxes. As for any income
that has been unreasonably defined or that cannot be defined according to the actual situation, the competent tax authority may adopt
the reasonable methods for determining the proportion so as to identify the taxable incomes.

the State Administration of Taxation

September 25, 2005

the State Administration of Taxation
2005-09-25

INTERIM MEASURES FOR THE ADMINISTRATION OF THE BASIC DATA OF INDIVIDUAL CREDIT INFORMATION

the People’s Bank of China

Order of the People’s Bank of China

No.3

According to the relevant laws and regulations such as the Law of the People’s Republic of China on the People’s Bank of China, the
People’s Bank of China has formulated the Interim Measures for the Administration of the Basic Data of Individual Credit Information,
adopted at the 11th president’s executive meeting of the People’s Bank of China on June 16, 2005, are hereby promulgated and shall
go into effect as of October 1, 2005.

President of the People’s Bank of China, Zhou Xiaochuan

August 18, 2005

Interim Measures for the Administration of the Basic Data of Individual Credit Information

Chapter I General provisions

Article 1

With a view of safeguarding the financial stability, preventing and lowering the credit risk of commercial banks, promoting the development
of individual credit business and safeguarding the security of individual credit information as well as the legal use thereof, the
present measures are formulated in accordance with the relevant laws and regulations such as the Law of the People’s Republic of
China on the People’s Bank of China.

Article 2

The People’s Bank of China shall be responsible for organizing commercial banks to establish the basic database of individual credit
information (hereinafter referred to as the individual information database), and establishing the credit service center and shall
perform the duties of the daily operation and management of the individual information database.

Article 3

The individual information database shall be used for collecting, processing and saving individual credit information, provide the
credit inquiry service for commercial banks and individuals and provide the relevant information services for the formulation of
monetary policies, financial administration and supervision as well as any other purpose as prescribed by laws or regulations.

Article 4

The term “individual credit information” as mentioned in the present Measures refers to basic individual information, individual information
on credit transactions and any other information that may reflect the individual credit status.

The term “basic individual information” as mentioned in the preceding paragraph refers to such information as the identity, career
and residential address of a natural person. The term “individual information on credit transactions” refers to the transaction records
as provided by commercial banks, which are formed in the credit activities of a natural person such as loans, credit cards, quasi-credit
cards and guaranty. The term “any other information that may reflect the individual credit status” refers to the relevant information
that reflects the individual credit information, apart from the information on credit transactions.

Article 5

The People’s Bank of China, commercial banks and the staff thereof shall keep secret the individual credit information as known in
the relevant work.

Chapter II Submission and Processing

Article 6

The commercial banks shall comply with the standards of the individual credit database and the relevant requirements thereof as announced
by the People’s Bank of China, and submit the individual credit information to the individual credit database in an accurate, complete
and timely manner.

Article 7

Any commercial bank may not provide any individual credit information to any individual credit database that fails to be established
upon the approval of the credit administration department or in any disguised form.

Article 8

The service credit center shall establish sound rules and regulations and apply to advanced technical means to ensure the security
of individual credit information.

Article 9

The credit service center shall, as the credit report requires, objectively process and keep the individual credit information as
submitted by commercial banks and may not illegally alter any original data.

Article 10

In case of any doubt about the information as reported by a commercial bank, the credit service center shall send a review notice
to the commercial bank concerned in a timely manner in accordance with the relevant procedures as prescribed.

The commercial bank concerned shall make a reply within 5 workdays as of the date of receipt of the review notice.

Article 11

Where a commercial bank finds that the individual credit information it has submitted is inaccurate, it shall timely report the matter
to the credit service center. The credit service center shall immediately make correction upon receiving the error-correcting report.

Chapter III Inquiry

Article 12

A commercial bank may inquire about the relevant individual credit report in the individual credit database when handling the following
businesses:

(1)

Examining an application for individual loan;

(2)

Examining an application for individual credit card or semi-credit card;

(3)

Examining an individual to be a guarantor;

(4)

Carrying out post-loan risk management for any individual loan as granted; or

(5)

Accepting the application of a legal person or any other organization for a loan or being a guarantor, which requires inquiring the
credit status of the legal-person and capital contributor.

Article 13

Apart from the provisions of item (4) of Article 12 of the present Measures, a commercial bank shall obtain a written authorization
from the inquired person before inquiring about the individual credit report. The written authorization may be obtained by means
of adding the relevant clause to the application for a loan, credit card, semi-credit card or guaranty.

Article 14

A commercial bank shall establish an internal authorization system of inquiring about the individual credit report for post-loan risk
management and work out the procedures for the inquiry management.

Article 15

The credit service center may, according to an individual’s application, provide the paid individual credit report of the applicant.

The credit service center shall formulate the corresponding handling procedures and verify the identity of the relevant applicant.

Chapter IV Treatment of Demurrals

Article 16

In case an individual believes that there is a mistake in the credit information in his credit report (hereinafter referred to as
the information with demurral), he may file a written application of demurral directly with the credit service center or through
the credit administration department of the People’s Bank of China at his locality.

The credit administration department of the People’s Bank of China shall, within 2 workdays from the date of receipt of the application,
forward the demurral to the credit service center.

Article 17

The credit service center shall carry out an internal verification within 2 workdays from the date of receipt of the demurral application.

If the credit service center finds out that the information with demurral is caused in the procedures of handling the information
of the individual credit database, it shall immediately make correction and examine the existing problem in the handling procedures
or operating procedures of the individual credit database.

Article 18

If the credit service center does not find any problem in the handling procedures of the individual credit database through internal
verification, it shall immediately inform, in writing, the commercial bank that has provided the relevant information to make verification.

Article 19

A commercial bank shall, within 10 workdays from the date of receipt of the verification notice, give a written reply on the verification
to the credit service center. In case there does exist any mistake in the information with demurral, the bank shall take the following
measures:

(1)

Submitting the corrected information to the credit service center;

(2)

Examining the procedures for submitting the individual credit information; and

(3)

Conducting an examination on the other succeeding individual credit information that has submitted at late time and in the case of
any mistake, submitting the corrected information.

Article 20

The credit service center shall, within 2 workdays from the date of receipt of the corrected information newly reported by a commercial
bank, correct the information with demurral.

For any information with demurral that does have a mistake but cannot be corrected due to technical reasons for the time being, the
credit service center shall mark the said information particularly as distinguished from any other information with demurral.

Article 21

If the existing mistake in information with demurral cannot be confirmed upon verification, the credit service center may not alter
the relevant individual credit information according to the requirements of the applicant.

Article 22

The credit service center shall, within 15 workdays from the date of receipt of an application of demurral, give a written reply to
the applicant who has filed the demurral or the credit administration department of the People’s Bank of China that has forwarded
the application of demurral, and shall, upon the correction of the information with demurral, provide the corrected credit report
at the same time.

For the information with demurral that does have a mistake but cannot be corrected due to any technical reason for the time being,
the credit service center shall give an explanation in its written reply and shall, upon the correction of the information with demurral,
provide the corrected credit report.

Article 23

The credit administration department of the People’s Bank of China that has forwarded the application of demurral shall, within 2
workdays from the date of receipt of the said written reply and the corrected credit report from the credit service center, forward
the documents to the applicant concerned who has filed the demurral.

Article 24

For any information with demurral that cannot be verified, the service credit center shall allow the applicant who has filed the demurral
to append a personal statement of no more than 100 words to the information with demurral. The personal statement may not cover any
content that is irrelevant to the information with demurral and the applicant shall be responsible for the authenticity thereof.

The credit service center shall keep properly the original archive of the personal statement and incorporate the personal statement
into the credit report of the demurrer.

Article 25

The credit service center shall mark the information that is in the demurral treatment process.

Chapter V Security Management

Article 26

A commercial bank shall, in accordance with the relevant provisions of the People’s Bank of China, establish a internal management
system and formulate operating instructions in such aspects as report, inquiry, use, demurral treatment and security management of
credit information and shall report them to the People’s Bank of China for the record.

Article 27

A commercial bank shall establish a user management system, specifying the duties of administrators, data submission users and inquiry
users as well as the operating instructions.

No one may concurrently hold the posts of an administrator, data submission user or inquiry user.

Article 28

An administrator of a commercial bank shall, according to the operating instructions, open corresponding account for an authorized
person. An administrator may not directly make any inquiry about individual credit information.

An administrator shall intensify the daily administration of the inquiry users and data submission users at the same level as well
as the administrators at a lower level. In case the staff of inquiry user is transferred, the user account shall be terminated immediately.

Article 29

The administrator, data submission users and inquiry users of commercial banks shall be reported to the credit administration department
of the People’s Bank of China and the credit service center for the record.

In the case of any alteration of the staff as prescribed in the preceding paragraph, a commercial bank shall report it to the credit
administration department of the People’s Bank of China and the credit service center for the record within 2 workdays.

Article 30

A commercial bank shall establish a password control system for administrators and inquiry users and shall periodically check the
implementation of the password control.

Article 31

A commercial bank shall establish a management system for the security of individual credit information so as to ensure that only
internal authorized personnel may have access to the individual credit report, and may not use the individual credit report for any
other purpose except those as prescribed by Article 12 of the present Measures.

Article 32

The credit service center shall establish the management system and formulate operating instructions in such aspects as the collection,
processing, storage, inquiry, demurral treatment, user management and security management, specify the duties of all posts, improve
the internal control system and guarantee the normal operation of the individual credit database and the security of individual credit
information.

Article 33

The credit service center and the personnel thereof may not violate the provisions of any law or regulation or the present Measures
by altering, damaging, divulging or unlawfully using any individual credit information and may not viciously collude with any natural
person, legal person or any other organization to provide any false credit report.

Article 34

The credit service center shall establish a supervision system concerning the internal operation of and external access to the individual
credit database to supervise the operations conducted by users of the individual credit database as well as commercial banks and
prevent any illegal invasion into the individual credit database.

Article 35

The credit service center shall establish a spare system to prevent system disasters and take necessary safeguarding measures to prevent
any loss of data.

Article 36

The credit service center shall record all the inquiries conducted by commercial banks and shall timely feed them back to commercial
banks.

Article 37

A commercial bank shall frequently examine the inquiries of the individual credit database to ensure that all inquiries comply with
the provisions of the present Measures and shall periodically report the results of the examination on inquiries to the People’s
Bank of China and the credit service center.

The credit service center shall periodically verify the inquiries of the individual credit database made by commercial banks.

Chapter VI Penalties Provisions

Article 38

Where a commercial bank fails to establish the relevant management system and formulate operational instructions according to the
present Measures, the People’s Bank of China shall order it to correct. Where a commercial bank fails to correct within the time
limit, it shall be given a warning and fined 30, 000 yuan.

Article 39

Under any of the following circumstances, a commercial bank shall be ordered to correct and be fined 10, 000 yuan but no more than
30, 000 Yuan. If a crime is involved, the case shall be transferred to the judicial organ according to law:

(1)

Violating the present Measures by failing to submit the individual credit information in an accurate, complete and timely manner;

(2)

Violating the provisions of Article 7 of the present Measures;

(3)

Inquiring about the individual credit data beyond the power;

(4)

Misusing the inquiry result for any other purposes other than those as prescribed by the present Measures;

(5)

Violating the provisions on demurral treatment; or

(6)

Violating the requirements of security management of the present Measures.

Article 40

Where a commercial bank is under any of the following circumstances as prescribed by Articles 38 and 39, the People’s Bank of China
may suggest that the relevant commercial bank shall give a disciplinary punishment to the director of board, senior management personnel
and any other person as held directly liable. If a crime is involved, the case shall be transferred to the judicial organ according
to law.

Article 41

Where a staff member of the credit service center is under any of the following circumstances, he shall be given an administrative
punishment. If a crime is involved, he shall be transferred to the judicial organ according to law:

(1)

Violating the provisions of the present Measures by altering, damaging, divulging or illegally using the individual credit information;
or

(2)

Viciously colluding with any natural person, legal person or any other organization to provide false credit report.

Article 42

Where any other staff member of the People’s Bank of China has any act in violation of the present Measures, which causes divulgence
of individual credit information, he shall be given an administrative punishment, and if a crime is involved, the case shall be transferred
to the judicial organ according to law.Chapter VII. Supplementary Provisions

Article 43

The term “commercial banks” as mentioned in the present Measures refers to the commercial banks, urban credit cooperatives, rural
credit cooperatives as well as any other financial institutions that specialize in credit business as approved by the banking regulatory
commission of the State Council.

Article 44

The power to interpret the present Measures shall be vested in the People’s Bank of China.

Article 45

The present Measures shall go into effect as of October 1, 2005.

the People’s Bank of China
2005-08-18

CIRCULAR OF THE PEOPLE’S BANK OF CHINA FOR THE INDUSTRIAL AND COMMERCIAL BANK OF CHINA AND OTHER 11 FINANCIAL INSTITUTIONS TO UNDERTAKE UNDERWRITING OF SHORT-TERM FINANCING BONDS

Circular of the People’s Bank of China for the Industrial and Commercial Bank of China and Other 11 Financial Institutions to Undertake
Underwriting of Short-term Financing Bonds

Yin Fa [2005] No. 133
May 25, 2005

The Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications,
CITIC Industrial Bank, China Everbright Bank, China Minsheng Bank, China Merchants Bank, CITIC Securities Co. Ltd., Guotai Junan
Securities Co. Ltd., and China International Capital Corporation Limited,

We have received your application materials for undertaking the underwriting of short-term financing bonds have been received. According
to the related provisions of the Measures for the Administration on Short-term Financing Bonds (Decree [2005] No. 2 of the People’s
Bank of China) and the Procedures for the Underwriting of Short-term Financing Bonds (see the Announcement No. 10, 2005 of the People’s
Bank of China), we hereby render our circular as follows,

It is approved that Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank
of Communications, CITIC Industrial Bank, China Everbright Bank, China Minsheng Bank, China Merchants Bank, CITIC Securities Co.
Ltd., Guotai Junan Securities Co. Ltd., and China International Finance Corporation Limited may undertake the underwriting of short-term
financing bonds.

It is approved that ndustrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, and
China Everbright Bank may undertake the leading underwriting of short-term financing bonds.

You shall fulfill obligations according to the Measures for the Administration on Short-term Financing Bonds and the Procedures for
the Underwriting of Short-term Financing Bonds.

You are requested to contact the National Inter-bank Funding Center and China Government Securities Depository Trust & Clearing
Co. Ltd., and well make the related preparations.

The People’s Bank of China
2005-05-25

AMENDMENT V OF CRIMINAL LAW OF THE PEOPLE’S REPUBLIC OF CHINA

Standing Committee of National People’s Congress

Order of President of the People’s Republic of China

No. 32

Amendment V of Criminal Law of the People’s Republic of China, which was adopted at the 14th meeting of the Standing Committee of
the 10th National People’s Congress of the People’s Republic of China on February 28, 2005, is promulgated hereby and comes into
force as of the date of its promulgation.

President of the People’s Republic of China, Hu Jintao

February 28, 2005

Amendment V of Criminal Law of the People’s Republic of China

An article is added after Article 177 of Criminal Law as one paragraph of Article 177 : Whoever hampers the management of credit
cards should be sentenced to less than three year’s imprisonment or detention, and imposed a fine together or separately from more
than 10 thousand yuan to less than 100 thousand yuan. If the amount is huge or there are other serious circumstances, more than three
year’s or less than ten year’s imprisonment should be sentenced, and a fine from more than 20 thousand yuan to 200 thousand yuan
should be imposed in one of following circumstances:

“(1) know very well that the credit cards are forged ones, but still hold and transport them, or know very well that the credit cards
are forged blank ones, but still hold and transport them, and the amount is huge;

“(2) Hold others’ credit card illegally and the amount is huge;

“(3) Obtain credit cards by cheating with forged identification card;

“(4) Sell, buy or provide others with forged credit cards, or obtain credit cards by cheating with forged identification cards.

“Stealing, purchasing and providing the information of others’ credit cards illegally shall be punished in accordance with the provision
of above section.

“If the staffs of the banks or other financial organs make use of the convenience of their duties to commit a crime in term of Paragraph
(2), they shall be punished sternly.”

Article 196 of the Criminal Law is changed as: whoever swindles with credit cards and the amount is big shall be sentenced to less
than five year’s imprisonment or detention, and imposed a fine from more than 20 thousand yuan to less than 200 thousand yuan, If
the amount is huge or there are some other serious circumstances, more than five year’s or less than ten year’s imprisonment shall
be sentenced, and a fine from more than 50 thousand yuan to 500 thousand yuan shall be imposed. If the amount is extremely huge and
there are other extremely serious circumstances, more than ten year’s imprisonment or life imprisonment should be sentenced, and
a fine of more than 50 thousand yuan and less than 500 thousand yuan shall be imposed or the property shall be confiscated in one
of following circumstances.

“(1) Use forged credit cards, or obtain credit cards by cheating with false identification cards;

“(2) Use invalid credit cards;

“(3) Use other’s credit card under one’s name;

“(4) Overdraft with evil intention.

“Overdraft with evil intention as referred to in preceding paragraph means credit card holders’ activities of overdraft beyond the
fixed limit or term, and refusing to return after the bank’s pressing for payment for the purposes of illegal possession.

“Stealing credit card and using it shall be punished in accordance with Article 264 of this Law.”

One paragraph is added in Article 369 of Criminal Law as Paragraph 2, the Article is changed as following: “Whoever destroys weaponry,
military facilities and military communications shall be sentenced to less than three year’s imprisonment, detention or control.
Whoever destroys important weaponry, military facilities and military communications shall be sentenced to more than three year’s
or less than ten year’s imprisonment, if the circumstance is extremely serious, more than ten year’s imprisonment, life imprisonment
or death penalty shall be sentenced.

“Whoever commits an unpremeditated crime as preceding paragraph and causes serious consequence shall be sentenced to less than three
year’s imprisonment or detention, if an extremely serious consequence is caused, more than three year’s or less than seven year’s
imprisonment shall be sentenced.

“Whoever commits a crime as the same as preceding two paragraphs in time of war shall be punished sternly.”

This amendment shall be implemented as of the date of its promulgation.

Standing Committee of National People’s Congress
2005-02-28

REPLY OF THE SUPREME PEOPLE’S COURT TO THE REQUEST FOR LETTERS ON AFFIRMING THE FORCE OF AN ARBITRAL AGREEMENT

Reply of the Supreme People’s Court to the Request for Letters on Affirming the Force of an Arbitral Agreement

Min Si Ta Zi [2005] No. 52

Beijing Higher People’s Court:

We have received your Request for Letters on the Case Involving the Application of Hangzhou Top Leader Textile Co., Ltd. for Invalidity
of an Arbitral Agreement and hereby make a reply upon deliberation as follows:

We agree to your opinions on treatment. Article 17 of the Sales Contract as signed between Hangzhou Top Leader Textile Co., Ltd.
and Forward Machinery Industrial Corporation prescribes: In the event of any dispute occuring in the operation of this Contract,
both parties concerned shall settle it through a friendly negotiation. If any negotiation cannot succeed, the dispute shall be presented
to Beijing Economy & Trade Arbitration Commission for final ruling.” This is a case in relation to Hong Kong, wherein both parties
concerned cannot decide the law applicable to the force of the arbitration clause or to specify a place of arbitration, so the lex
fori, namely, the law of the Mainland China, shall be applied to determine the effectiveness of the arbitration clause. There is
no such arbitration institution as demanded as condition by the parties concerned in Beijing. Although there are 3 arbitration institutions
in Beijing, namely, Beijing Arbitration Commission, China International Economy & Trade Arbitration Commission as well as China
Marine time Arbitration Commission, still the true intent of the parties concerned fail to speculated therefrom. In case one party
concerned has applied with the people’s court to for making sure the invalidity of the arbitration clause, it could be thought that
both parities cannot conclude any supplement agreement concerning the arbitration institution. In accordance with the provisions
of Articles 16 and 18 of the Arbitration Law of the People’s Republic of China, the arbitration clause shall be regarded as invalid.

Request for Instructions of the Higher People’s Court of Beijing Municipality on the Case Involving the Application of Hangzhou Top
Leader Textile Co., Ltd. for Invalidity of an Arbitral Agreement

Jing Gao Fa Fa [2005] No. 309
November 23, 2005

The Supreme People’s Court:

This Court has got from the No. 2 Intermediate People’s Court of Beijing Municipality a Request for letters on the Invalidity of an
Arbitral Agreement in an Arbitration Case No. M20050287 as Accepted by China International Economy & Trade Arbitration Commission.
After check and examination, the demands of Hangzhou Top Leader Textile Co., Ltd. for making sure the Invalidity of the arbitration
clause in a the contract it has concluded with Forward Machinery Industrial Corporation abide by the provisions of paragraph 2, Article
16 and Article 18 of the Arbitration Law of China and therefore the said arbitration clause shall be regarded as invalid. In accordance
with the Circular of the Supreme People’s Court on the Relevant Issues Concerning the Dealing with of Foreign-related Arbitration
and Arbitration of a Foreign Country by the People’s Court (Fa Fa [1995] No. 18), we hereby present the following questions to you:

Basic Information of the Parties

Applicant (Respondent in the arbitration): Hangzhou Top Leader Textile Co., Ltd.

Respondent Respondent (Applicant in the arbitration): Forward Machinery Industrial Corporation (Hong Kong)

Basic Case

On November 24, 2003, Hangzhou Top Leader Textile Co., Ltd. signed with Forward Machinery Industrial Corporation a sales contract
No. ET-0321A, of which, Article 17 stipulates “In the event of any disagreement in the performance of this Contract, both parties
concerned shall settle it through a friendly negotiation. It shall be submitted to Beijing International Economic and Trade Arbitration
Commission for final ruling if any negotiation cannot solve.

Opinions on Treatment

In accordance with the Provisions of paragraph 2, Article 16 and Article 18 of the Arbitration Law of the People’s Republic of China,
the “Beijing Economy & Trade Arbitration Commission” as selected by both parties concerned does not exist, and so the regulation
in this aspect is not specified. Both relative parties cannot present any evidence proving that they have reached any agreement on
the arbitration institution. Thus, this court accords with the treatment opinions which are worked out by the No. 2 Intermediate
People’s Court of Beijing Municipality that this arbitration clause shall be invalid.

Please reply to us whether or not the aforesaid opinions are right.

The Supreme People’s Court
2005-12-01

SEVERAL OPINIONS OF SDRC, MOF, MLR, PBC AND SEPA CONCERNING PREVENTING THE HAPHAZARD INVESTMENT IN COPPER SMELTING INDUSTRY

General Office of the State Council

Notice of the General Office of the State Council on Transmitting Several Opinions of State Development and Reform Commission, the
Ministry of Finance, the Ministry of Land and Resources, People’s Bank of China and State Environmental Protection Administration
concerning Preventing the Haphazard Investment in Copper Smelting Industry

Guo Ban Fa [2005] No. 54

To people’s government of all provinces, autonomous regions and municipalities directly in the Central Government, all ministries
and commissions of the State Council and its directly affiliated departments:

Several Opinions of State Development and Reform Commission, the Ministry of Finance, the Ministry of Natural Resources, People’s
Bank of China and State Environmental Protection Administration concerning Preventing the Haphazard Investment in Copper Smelting
Industry has been approved by the State Council and hereby is transmitted to you for strict implementation.

General Office of the State Council

November 3, 2005

Several Opinions of SDRC, MOF, MLR, PBC and SEPA concerning Preventing the Haphazard Investment in Copper Smelting Industry

Copper smelting is an important raw material industry. Recent years, driven by periodically rapid growth of copper and influence of
surge of copper price and lure of profitable interest, some local authorities and enterprise, regardless of the external conditions
such as market, resource and etc, hazardously invested in copper industry, which resulted in a series of troubles. First, copper
smelting capability increased quickly, the national raw copper smelting in 2004 reached 1.63 million ton, the import of copper concentrate
amounted to 2.88 million ton, the total capability for the copper smelting projects under construction or to be constructed added
up to 2.05 million ton. It is estimated that the smelting capability will reach 3.7 million ton at the end of 2007, largely exceeded
the estimated guarantee capability of national copper concentrate and the possibly available capability of copper concentrate in
international market; second, the disordered market, excessive competition, scramble for raw material would result in plunge of copper
smelting interest, wasted investment and financial risk as well as hidden troubles; third, the newly-established copper smelting
industry are generally in small-scale and high energy consumption, serious environmental pollution, which are unfavorable to structural
adjustment and upgrading. In order to prevent the tendency of haphazard investment in copper smelting industry and to promote the
sustained and sound development of copper industry, the following opinions are hereby raised:

To get done with the clearance and rectification of projects earnestly

The earnest clearance and rectification upon the copper smelting projects under construction and to be constructed shall be undertaken
promptly around China. The copper smelting projects in contravention of the provisions of industrial policy, investment administration,
environmental impact assessment, land administration and etc. shall not be approved for construction. Where the registered copper
smelting project has the single system less than 0.1 million annually or fails to employ such advanced, low-energy-consumption, up-to-the-standard-of-environmental-protection,
and high comprehensive utilization rate technologies as flash smelting, ISA smelting, Noranda smelting, or fails to fulfill such
external conditions as supply of copper concentrate, transportation and etc. or the proportion of self-owned mine materials is less
than 1/4, it shall cease to be constructed and the rationality and feasibility of the project shall be studied once again. Should
the project has been operated without submitting environmental impact statement to administrative department in charge of environmental
protection, the project under construction shall be ceased and the operating project shall be stopped. Should land for project construction
has been utilized without the approval in accordance with the relevant provisions, it shall be ceased. Where the project has, after
clearance and rectification, met the access qualifications, it shall be listed as a qualified enterprise.

To strengthen the administration of industrial policy orientation and market access.

The relevant department of the State Council shall carry out the scientific development outlook in an around way, target at taking
a new road to industrialization, accelerate the formulation and perfection of copper industrial policy, outline the access standard
for copper smelting industry, nail down the development orientation and regional layout of copper industry and guide the orderly
development of the industry hereof. The relevant department of the State Council shall strengthen the study and analysis upon the
performance of copper industry, at home and abroad and promptly issue information including the performance of raw material market,
production capability and price fluctuation to guide the investment act of local authorities and enterprises. The relevant department
of the State Council shall also, in accordance with laws, rules and the relevant industrial policies to undertake strict market access
administration. The copper smelting projects having violated the industrial policy and the relevant provisions after investment mechanism
reform shall not be approved for construction. In case that new industrial polices are issued by the central government, they shall
prevail.

To adjust the relevant economic policies

In order to effectively control the investment scale and to improve investment efficiency, the proportion of copper smelting project
shall be improved from 20% or more to 35% or more. The relevant tax exemption policy applicable to import of copper smelting equipment
shall be controlled strictly, for those construction projects lack of conformity with relevant provisions, without effective record
and approval from the administrative authority in charge of environmental protection, the relevant authorities shall not issue Confirmation
for the Domestic or Foreign-funded Projects Encouraged by the State. In the course of studying out the import tax policy in the 11th
Five-Year Plan, the relevant authorities shall plan as a whole the policy concerning value-added tax of crude copper import.

To strengthen credit administration

Financial institutions shall, in accordance with requirements of state macro control and industrial policy, rationally arrange credit
fund, incessantly optimize orientation for the credit fund investment, hedge against credit risk. Financial institutions shall render
continuous support to the copper smelting projects in conformity with national industrial policy and market access, shall not extend
credit to those inconsistent with national industrial policy and qualification of market access as well as those having failed to
be put on record in accordance with the prescribed procedures, and shall withdraw appropriately the credit which has been extended.

To strengthen supervision and administration on environmental protection

State Environmental Protection Administration shall, in accordance with the Environmental Protection Law of the People’s Republic
of China as well as the relevant laws and rules, undertake supervision and inspection upon the fulfillment of environment protection
standard by the current copper smelting enterprises, issue regularly the name list of those enterprises having not be up to standard
and the local people’s government shall be responsible for harnessing those enterprises hereof within the prescribed time limit and
suspend or even close down those enterprise having still not reached the prescribed standard after the harness. The backward production
capability shall be washed out more quickly, in accordance with the related industrial policy and the standard of environmental protection,
the closed blast furnace no more than 15 m2 in size shall be washed out promptly, reverberator, electric furnace and the closed blast
furnace ranging from 15-10 ?O (10 ?Oexcluded) shall be washed out prior to the end of 2006 and all the closed blast furnace shall
be washed out prior to the end of 2007.

To strengthen the restructuring of copper smelting industry

The mainstay of copper smelting industry shall be encouraged to cooperated with small and medium-sized mines and enterprises to ensure
the supply of raw materials and avoid the construction of smelting projects by unqualified mines and enterprises; the mainstay of
copper smelting industry shall be supported to cooperated with geology survey enterprises to increase the reserved resources; the
up-to-standard enterprises shall be supported to implement reform, restructuring and transformation continuously so as to realize
their complimented advantages and to improve the their industrial concentration and improve their international competitiveness.
Copper smelting industry shall seriously study variation of domestic and foreign market and cash in on two kinds of resources. The
mainstay of copper smelting industry shall be supported to purchase copper concentrate by means of coalition bargaining. The role
of agency such as trade society shall be given full play. All the regions and relevant departments shall, in accordance with the
spirit of the Opinion, mobilize the earnest clearance upon the construction projects of construction projects as soon as possible
and submit the result hereof and the proposal for treatment to the State Council prior to the end of 2005 and make a copy for the
State Development and Reform Commission.

General Office of the State Council
2005-11-03

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE ISSUE CONCERNING PRE- TAX DEDUCTIONS OF THE TAXPAYERS’ DONATIONS TO CHINESE EDUCATIONAL FOUNDATION FOR SENIOR PROCURATORS

the State Administration of Taxation

Circular of the State Administration of Taxation on the Issue Concerning Pre- tax Deductions of the Taxpayers’ Donations to Chinese
Educational Foundation for Senior Procurators

Guo Shui Han [2005] No. 952

The state taxation bureaus, local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central
Government and cities specifically designated in the state plan:

The Chinese Educational Foundation for Senior Procurators is a national professional social organization established upon the approval
of the Ministry of Civil Affairs for the purpose of raising money to support educational undertakings for Chinese public prosecutors,
especially the procuratorial education and trainings in the poverty-stricken areas of the Central-Western Regions. In accordance
with the relevant provisions of the Interim Regulation of the People’s Republic of China on Enterprise Income Tax, Individual Income
Tax Law of the People’s Republic of China and the Regulation for the Implementation thereof, a taxpayer’s donations to Chinese Educational
Foundation for Senior Procurators, the amount of donations which is less than 3% of the taxable annual income of enterprise income
tax or less than 30% of the taxable income of income tax declared by an individual, shall be permitted to be deducted prior to tax
payment.

State Administration of Taxation

October 13, 2005

the State Administration of Taxation
2005-10-13

MEASURES FOR THE IMPLEMENTATION OF THE REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON THE ADMINISTRATION ON PRODUCTION LICENSE FOR INDUSTRIAL PRODUCTS

State Administration of Quality Supervision, Inspection and Quarantine

Order of the State Administration of Quality Supervision, Inspection and Quarantine

No.80

The Measures for the Implementation of the Regulations of the People’s Republic of China on the Administration on Production License
for Industrial Products, which were adopted through discussion at the executive meeting of the State Administration of Quality Supervision,
Inspection and Quarantine on August 31st, 2005, are hereby promulgated, and shall come into force as of November 1st, 2005. The Measures
for the Administration on Production License for Industrial Products as promulgated by the State Administration of Quality Supervision,
Inspection and Quarantine on March 27, 2002 shall be abolished simultaneously.

The Director General Li Changjiang

September 15, 2005

Measures for the Implementation of the Regulations of the People’s Republic of China on the Administration on Production License for
Industrial Products

Chapter I General Provisions

Article 1

The present Measures are formulated according to the Regulations of the People’s Republic of China on the Administration on Production
License for Industrial Products (hereinafter referred to as the Administration Regulations)

Article 2

The state shall adopt the administration system of production license to important industrial products.

Article 3

The present Measures shall be abided by when undertaking the production or sale of or using during business activities any product
subject to the production license administration within the territory of the People’s Republic of China.

No enterprise that has not obtained a production license may produce any product subject to production license administration. No
entity or individual may sell or use during business activities any product without obtaining a production license.

Article 4

The administration of production license for industrial products shall adhere to the principles of science and justness, openness
and transparency, legitimacy in procedures, facilitating people and high efficiency.

Article 5

The State Administration of Quality Supervision, Inspection and Quarantine (hereinafter referred to as the SAQSIQ) shall take charge
of the unified administration of production licenses for industrial products nationwide, and for the products subject to the production
license administration, unify the product catalogue, the examination requirements, the certificate symbols and the supervision and
administration.

The SAQSIQ shall establish a National Office of Production License for Industrial Products (hereinafter referred to as the National
License Office) to take charge of the routine work of the administration on production license for industrial products nationwide,
formulate detailed implementation rules for the issuance of license for products, verify the examination institutions of products
subject to production licensing for industrial products (hereinafter referred to as the examination institution), appoint production
inspection institutions to undertake the task of inspection on license issuance, and manage the qualification of checkers, and the
examination and approval for license issuance uniformly, and other work.

Article 6

The quality and technical supervision bureaus of a province, autonomous region, and municipality directly under the Central Government
(hereinafter referred to as the provincial quality and technical supervision bureaus) may, in case it is necessary, take charge of
the work of examination and issuance of production license for some of the products. And the concrete product catalogue shall be
determined and publicized by the SAQSIQ.

Article 7

A provincial quality and technical supervision bureaus shall take charge of the work of supervision and administration on production
license for industrial products within its own administrative region, and shall, in accordance with the Administration Regulations
and the provisions of the SAQSIQ, conduct the work for the examination and issuance of production license for some products.

A provincial quality and technical supervision bureaus shall establish an office of production license for industrial products (hereinafter
referred to as the provincial license office) to take charge of the routine work of the administration on production license for
industrial products within its own administrative region.

The local quality and technical supervision bureaus at or above the county level shall take charge of the supervision and inspection
on the production license within their own administrative regions.

Article 8

The examination organ shall, upon the entrustment of the SAQSIQ, undertake the drafting of detailed implementation rules for the issuance
of license for relevant products, organizing on-site examination and technical training to checkers, and other work.

Article 9

Any institution or personnel undertaking the production license work shall make administration by law, perform his duties faithfully,
serve the people warm-heartedly, and reinforce supervision and administration strictly.

Article 10

The SAQSIQ and the provincial quality and technical supervision bureaus shall plan the information construction of production license
work uniformly, publicize production licensing items, so as to facilitate the consultation of the general public and the application
of enterprises for handling licenses and realize the examination and approval through internet step by step.

Chapter II Production Licensing Procedures

Section I Application and Acceptance

Article 11

An enterprise shall meet the following qualifications for obtaining a production license:

Possessing a business license;

Having professional technicians qualified for the products it produces;

Having the production conditions and means of inspection and quarantine, which are suitable for the products it produces;

Having technical documents and technique documents matching the products it produces;

Having sound and effective quality control system and responsibility system;

Its products can meet the relevant national standards, industrial standards and requirements for ensuring personal health and personal
and property safety; and

According with the provisions of state industrial policies, and not being a project of backward techniques, with high energy consumption,
environmental pollution, or waste of resources, and etc., which are to be stated out by public proclamation of the state and prohibited
from being invested in and constructed.

In case there are otherwise provisions by any law or administrative regulation, such provisions shall be accorded with as well.

Article 12

An examination organ shall, upon the entrustment of the SAQSIQ, and in pursuance of the characteristics of the relevant products,
developing conditions of certain industry and the relevant policies of the state, organize the drafting of detailed implementation
rules for products.

The SAQSIQ shall, in accordance with the relevant provisions of the Administration Regulations, approve and publicize the detailed
implementation rules for products. The special provisions in the detailed implementation rules for products, when necessary, shall
be formulated and promulgated by the SAQSIQ together with the relevant departments of the State Council.

The provincial license offices and the examination organs shall, in accordance with the provisions of the detailed implementation
rules for products, take charge of organizing or cooperating with the work for the publicity and implementation of the detailed implementation
rules for products.

Article 13

The provincial quality and technical supervision bureaus shall, in light of the arrangement for the progress of the issuance of production
licenses, inform the production enterprises within their own administrative regions by ways of publishing on newspapers or internet
websites, and shall take charge of the work of enterprise application. The examination organs shall actively provide assistance to
well do the relevant work.

Article 14

An enterprise, when producing the products listed in the catalogue, shall file an application to the provincial quality and technical
supervision bureaus at the place where it is located.

In case any product being produced by an enterprise is listed into the catalog, the enterprise shall apply for obtaining a production
license within the time as prescribed by the SAQSIQ.

Article 15

After receiving an application filed by an enterprise, the provincial quality and technical supervision bureaus shall grant the acceptance
if the application materials meet the requirements of the detailed implementation rules, and shall send a Letter of Determination
on the Acceptance of Application for Administrative License (See Attachment I) to the enterprise within 5 days as of the day of accepting
the application of the enterprise.

Article 16

After receiving an application by an enterprise, the provincial quality and technical supervision bureaus may, in case the application
materials fail to meet the requirements of the detailed implementation rules and may meet the requirements after supplementation,
send a Letter of Notification on Supplementing Application Materials for Administrative License (See Attachment II) to the enterprise
on the spot or within 5 days to notify the enterprise once for all. If it fails to notify the enterprise at the expiration of the
time limit, the day when the application materials are received shall be regarded as the day of acceptance.

After receiving an application by an enterprise, which fails to meet the requirements of the Administrative License Law and the Administration
Regulations, the provincial quality and technical supervision bureaus shall make a decision on rejecting the application, and issue
a Letter of Determination on Rejecting the Application for Administrative License (See Attachment III).

Article 17

No provincial quality and technical supervision bureaus or any other department may add any additional requirement on any enterprise
in its effort to obtain a production license.

Section II Examination and Determination

Article 18

After a provincial quality and technical supervision bureaus has accepted the application by an enterprise, the provincial license
office or the examination organ shall conduct an examination on the enterprise, which shall include the on-site examination on the
enterprise and the inspection on the products. If it is found to be unqualified in either the examination or inspection, the enterprise
shall be determined as failing the examination.

Article 19

Where the examination shall be organized by a provincial quality and technical supervision bureaus as provided for by the detailed
implementation rules, the provincial license office shall, within 30 days as of accepting the application of an enterprise, finish
the on-site examination on the enterprise and the selection and seal of the samples, and inform the enterprise subject to inspection
of the conclusion of the on-site examination in written form.

Where the examination shall be organized by an examination organ as provided for by the detailed implementation rules, the provincial
license office shall submit all the application materials to the examination organ within 5 days as of the day of accepting the application
of the enterprise. The examination organ shall, within 30 days as of the day of accepting the application of the enterprise, finish
the on-site examination on the enterprise and the selection and seal of the samples, and inform the enterprise subject to inspection
of the conclusion of the on-site examination in written form, and notify the provincial license office at the same time.

Article 20

In case any enterprise does not pass the on-site inspection, the spot examination on its products shall not be carried out any longer,
and the enterprise examination shall be terminated.

Article 21

The examination organ or provincial license office shall formulate an on-site examination plan for enterprises and notify the enterprises
five days before the examination.

If the examination is organized by an examination organ as provided for by the detailed implementation rules, a copy of the on-site
examination plan for enterprises shall be sent to the provincial license office at the place where the enterprises are located at
the same time.

Article 22

The examination organ or a provincial license office shall assign 2-4 examiners to constitute an examination group, which shall conduct
on-site examination on enterprises, and the enterprises shall provide assistance.

Article 23

The examination group shall, pursuant to the requirements of the detailed implementation rules, conduct on-site examinations on enterprises,
and the time for the inspection shall be 1-3 days in general. The examination group shall take charge of the result of on-site examination
on enterprises, and shall apply the group leader responsibility system.

Article 24

Where an enterprise has passed the on-site examination, the examination group shall seal the samples in light of the requirements
of the detailed implementation rules, and inform the enterprise of the name list of the inspection institutions that will undertake
the task of inspection on the production license for products and the contact information for the enterprise to make a selection
by itself.

If an enterprise has passed the examination and it is necessity to send samples for inspection, the enterprise shall be informed to
serve the samples to the inspection institution within 7 days as of the day of sealing the samples. If it is necessity to make an
on-site inspection, the checkers shall notify the enterprise to choose an inspection institution by itself to conduct the on-site
inspection.

Article 25

The inspection institution shall complete the inspection within the time as provided for by the detailed implementation rules, and
shall issue an inspection report.

Article 26

Where the examination is organized by a provincial license office, it shall submit the application materials to the examination organ
within 30 days as of the day of accepting the application of an enterprise. And the examination organ shall gather the application
materials within 40 days as of the day of accepting the application of the enterprise and submit them to the National License Office.

Where the examination is organized by an examination organ, it shall gather the application materials within 40 days as of the day
of accepting the application of an enterprise and submit them to the National License Office.

Article 27

The SAQSIQ shall, within 60 days as of the day of accepting the application of an enterprise, make a decision on whether or not to
grant to it a license. If the enterprise meets the conditions for license issuance, the SAQSIQ shall issue a certificate of production
license within 10 days as of the day of making a decision on granting a license; if the enterprise does not satisfy the conditions
for license issuance, it shall issue a Letter of Determination on Not Granting An Administrative License (See the Attachment IV)
to the enterprise within 10 days as of the day of making the decision.

Article 28

Pursuant to the provisions of Article 18 of the present Measures, if a provincial license office or an examination organ determines
that an enterprise fails to pass the examination, it shall report it to the SAQSIQ in written form in a timely manner, and the SAQSIQ
shall issue to the enterprise a Letter of Determination on Not Granting An Administrative License.

Article 29

The SAQSIQ shall make public the name list of enterprises that have obtained a license to the general public on internet or newspapers
and periodicals or in other ways. Meanwhile, it shall also provide a report on the license issuance of the relevant products to the
department of national development and reform, the competent department of health and the administrative department of industry and
commerce.

Article 30

The valid period of a production license shall be five years. Where an enterprise continues production at the expiry of the valid
period, it shall, six months before the expiry of the production license, file an application for changing the license to the provincial
quality and technical supervision bureaus at the place where it is located.

Article 31

Where an enterprise needs to add any item after obtaining a production license, it shall go through the formalities for adding items
in pursuance of the procedures as prescribed in the detailed implementation rules. If the enterprise satisfies the conditions, it
may change the certificate of production license but with the valid period of the license unchanged.

Article 32

Where, during the valid period of a production license, the detailed implementation rules are revised due to any big change of relevant
laws and regulations, product standards and technical requirements of the state, the National License Office shall organize, when
necessary, on-site examinations and product inspections.

Article 33

Where, during the valid period of a production license, there occurs any big change on the production conditions, means of inspection,
production technology or techniques of an enterprise (including the alteration of the production address, and the major technical
renovation on production lines), the enterprise shall file an application to the provincial quality and technical supervision bureaus
at the place where it is located in a timely manner. And the examination organ or the provincial license office shall re-organize
an on-site examination and product inspection according to the provisions of the detailed implementation rules.

Article 34

The provincial license offices, examination organs and the National License Office shall file the relevant materials for obtaining
a production license submitted by enterprises in a timely manner. And the general public shall have the right to consult such materials.
The archival materials of an enterprise shall be kept for five years.

Section III Supervision and Inspection of the Examination Work

Article 35

The National License Office shall organize the supervision and inspection on the quality of the enterprise examination work.

Where the on-site examination on an enterprise is organized by a provincial license office, the National License Office shall organize
the examination organ to conduct a spot test; where the on-site examination on an enterprise is organized by an examination organ,
the National License Office shall organize the provincial license office to conduct a spot test.

Article 36

When conducting a supervision and inspection, the supervision and inspection plan shall be made, which shall include the constitution
of the inspection group, the specific time for inspection, the enterprise to be inspected and other contents.

Article 37

The provincial quality and technical supervision bureaus at the place where an enterprise is located shall be informed of the inspection
plan beforehand, and shall provide assistance in the inspection work.

Article 38

After finishing the supervision and inspection work, the inspection group shall work out a written report and handling suggestion,
and report them to the National License Office.

Article 39

The National License Office shall make a supervision and inspection on whether or not the inspection process and inspection report
of an inspection institution is objective, just and timely through consulting the inspection report, comparing the inspection conclusions
and in other ways.

Section IV Production Licensing on Group Companies

Article 40

A group company and its subsidiaries, branches or production bases (hereinafter jointly referred to as the subordinated entities),
which have the legal person status, may apply for a production license independently; if any of these entities has no legal person
status, it cannot apply for a production license independently in the name of their subordinated entities.

All the subordinated entities, no matter whether or not they have the status of a legal person, may file an application for obtaining
a production license along with the group company.

Article 41

When any subordinated entity applies for a production license along with its group company, it shall file an application to the provincial
quality and technical supervision bureaus at the place where the group company is located. If the on-site examination on the enterprise
is organized by a provincial license office as required, the provincial license office at the locality of the group company may appoint
an examination group directly, or may entrust in written form the provincial license office at the place where the subordinated entity
is located to organize the examination. The provincial license office at the place where the group company is located shall take
charge of reporting the relevant materials according to the prescribed procedures.

Article 42

Where, after a group company has obtained a production license, any of its newly established subordinated entities needs to apply
for a production license along with the group company, the newly established subordinated entity may change its certificate of production
license after passing the examination but with the valid period of the production license unchanged.

Article 43

Where a subordinated entity applies for a production license along with its group company, the subordinated entity that has been examined
and its group company shall pay the examination fees and the production inspection fees respectively. And the fees for public notice
shall be collected pursuant to the number of the certificates issued.

Article 44

The procedures for obtaining a certificate by a group company shall be applicable by analogy to the application of other economic
communities and the subordinated entities for obtaining production licenses.

Section V Archival Filing for Processing under Entrustment

Article 45

The entrusting enterprise which undertakes the processing of any product subject to the production license administration upon entrustment
and the entrusted enterprise, shall apply for archival filing respectively to the provincial license office at their localities.

Article 46

The entrusting enterprise shall be an enterprise engaging in lawful operation. And the enterprise being entrusted shall hold a lawful
and effective production license.

Article 47

The entrusting enterprise and the entrusted enterprise shall, when applying for archival filing to the provincial license office at
their localities, provide the following materials:

The photocopies of the business licenses of the entrusting enterprise and the entrusted enterprise;

The photocopy of the production license of the entrusted enterprise;

The photocopy of the notarized contract of processing under entrustment;

The contract of processing under entrustment shall clarify that the entrusting enterprise shall take charge of the sale of all the
products; and

The format of marking on the products processed under entrustment.

Article 48

A provincial license office shall, within 5 days after receiving the application for archival filing of processing under entrustment,
make necessary verification, and put on archives of the enterprise that meets conditions. For the enterprise that does not meet the
conditions, it shall not put on archives and shall explain the reasons.

Article 49

An entrusted processing enterprise shall perform its commitment for archival filing, and shall not alter the entrustment contract
and the way of marking the products at will.

Article 50

No one may charge fees to any enterprise for putting on archives of the processing under entrustment.

Chapter III Administration on Checkers

Article 51

A checker shall not undertake the work for on-site examination on enterprises until he/she has obtained the corresponding qualification.

Article 52

The checkers shall include the examiners for the registration of production license for industrial products (hereinafter referred
to as the examiners), senior examiners and technical experts.

Article 53

An examiner shall meet the following conditions:

Being at the age of 65 or below;

Having a junior college degree or above or middle technical post_title or above;

Being familiar with the production techniques, quality standards for production and quality control system of relevant products; and

Having undertaken the quality work for five full years.

Article 54

The National License Office shall make examination and registration on the personnel trained by provincial license offices or examination
organs, and issue to an approved examiner a registration certificate with the valid period of three years.

Article 55

Within 3 months before the expiry of the valid period of a registration certificate, the examiner shall apply for changing the registration
certificate as required, and shall comply with the following conditions:

Being at the age of 65 or below;

Having completed at least 6 on-site examinations on enterprises with a production license for industrial products within the valid
period of the certificate;

Having participated in at least 15 hours relevant work training on the production license for industrial products each year; and

Observing the behavior criterions on examiners, and having no illegal act or act violating regulations.

Where a senior examiner meets the conditions as prescribed in the preceding paragraph within the valid period of the certificate,
and acts as the leader of an examination group for at least three times, he/she may change for a registration certificate of a senior
examiner as required; if he/she only meets the conditions as prescribed in the preceding paragraph, he/she may change for a certificate
of an examiner.

Article 56

The provincial license offices or examination organs shall take charge of the work of organizing the application for changing certificates
at the expiry of the tenure of an examiner. And the National License Office shall take charge of changing the certificates for personnel
who meet the conditions for changing the certificate.

Article 57

Where an examiner applies for upgrading to a senior examiner, he/she shall meet the following conditions:

Having completed on-site examinations on enterprises with a production license for at least 10 times and acting as the leader of an
examination group for more than 6 times within the valid period of the registration certificate;

Having participated in the relevant work training on production license for more than 20 hours each year; and

Observing the behavior criterions on examiners, and having no illegal act or act violating regulations.

Article 58

Any personnel who applies for upgrading shall file an application to the provincial license office or the examination organ. The National
License Office shall make examination on the applicants for upgrading reported by the provincial license office or the examination
organ, and issue a registration certificate of a senior examiner to an examiner who meets the requirements for upgrading and upon
the approval of the National License Office. And the valid period of the certificate shall be three years.

Article 59

The technical experts shall refer to the relevant personnel, who have not obtained the registration certificate of an examiner, but
may provide technical advice to the on-site examinations on the enterprises with a production license when necessary.

Article 60

Any person who applies for the qualification of a technical expert shall meet the following conditions:

Having a bachelor’s degree of college or above or a senior technical post_title;

Having undertaken the relevant professional work for 10 full years; and

Being familiar with the professional knowledge on relevant products and being the technical authority of the relevant fields.

Article 61

A provincial license office or an examination organ may, when necessary, file an application to the National License Office for putting
on archives the technical experts who may participate in the on-site examination work of enterprises upon the approval of the National
License Office.

Article 62

Where a technical expert participates in an on-site examination on an enterprise, he/she shall not act as a member of the examination
group, and may not take part in drawing examination conclusions.

Article 63

The registration certificate holder shall properly keep its certificate, and shall apply for a new one in a timely manner in case
the certificate is lost or damaged.

Article 64

A checker shall carry out on-site examinations on enterprises in accordance with the provisions of the detailed implementation rules
for products. When conducting an examination, the checker shall show the relevant certificate to the enterprise under examination.

Article 65

When conducting an on-site examination on any enterprise, a checker may not create difficulties for the enterprise, and may not seek
for or take the property of the enterprise or figure for other illicit interests.

Chapter IV Administration on Examination Organs

Article 66

An examination organ shall meet the following basic conditions:

Having a sound management system and an effective operating mechanism;

Having staff members suitable for carrying out the work of examination on relevant products;

Having a suitable place of business and office facilities;

Having mastered the relevant laws and regulations and provisions on production license, and knowing the mechanism and procedures for
production license;

Knowing the present situation of the industry concerned and the national industrial policies of relevant products; and

Having no acts of undertaking the production, sale, and supervision over the manufacture and sale of the relevant products.

Article 67

Any entity that meets the conditions as provided for in Article 66 may apply to the National License Office for working as an examination
organ on relevant products, and submit the following materials:

the written application for working as an examination organ on relevant products;

the certificate of organization code of the application institution, business license of the legal person or the registration certificate
of the legal person of a social body;

the basic information on the application entity;

the industrial development level of the relevant products, enterprise distribution, and the basic information on the prod

REPLY OF THE PEOPLE’S BANK OF CHINA CONCERNING THE RULES FOR SETTLING SECURITY TRANSACTIONS BY CHINA GOVERNMENT SECURITIES DEPOSITORY TRUST & CLEARING CO. LTD.

Reply of the People’s Bank of China concerning the Rules for Settling Security Transactions by China Government Securities Depository
Trust & Clearing Co. Ltd.

China Government Securities Depository Trust & Clearing Co. Ltd.,

We have received your Request for Instructions on the Promulgation of the Rules for Settling Security Transactions by China Government
Securities Depository Trust & Clearing Co. Ltd. (Zhong Zhai Zi [2005] No. 64). Your Company is hereby approved to promulgate
the Rules for the Settlement of Security Transactions by China Government Securities Depository Trust & Clearing Co. Ltd in accordance
with such relevant provisions as the Measures for Administrating Security Transactions in the National Inter-Bank Securities Market
(Yin Fa [2000] No. 2) and the Circular on Such Relevant Issues on the Establishment of Proxy Security Settlement Business (Yin Fa
[2000] No. 325).

In accordance with the relevant provisions of the People’s Bank of China in respect of the inter-bank securities market, your Company
shall formulate relevant business rules and operating procedures, intensify the establishment of the internal control system, handle
the security settlement affairs strictly according to the relevant provisions, improve the internal system of the inspection and
examination for settlement business and prevent settlement risks effectively.

Your Company shall constantly improve the system and the relevant operating procedures, supply market members with convenient and
highly-effective account check services and effectively safeguard the legitimate rights and interests of the market members.

In formulating fee charging measures for the relevant business operations, your Company shall adhere to the principle of no profit
making and shall fully and publicly solicit the market members’ opinions. The charging of relevant operational fees shall be implemented
after being reported to the People’s Bank for archival.

It is hereby replied.

The People’s Bank of China

August 16, 2005

The People’s Bank of China
2005-08-16

MINISTRY OF FINANCE AND STATE ADMINISTRATION OF TAXATION NOTICE ON THE PROCEDURES FOR THE EXAMINATION AND APPROVAL OF FOREIGN-CAPITAL ENTERPRISES’ IMPLEMENTATION OF THE ENTERPRISE INCOME TAX POLICIES FOR SOFTWARE AND INTEGRATED CIRCUIT ENTERPRISES

Ministry of Finance, State Administration of Taxation

Ministry of Finance and State Administration of Taxation Notice on the Procedures for the Examination and Approval of Foreign-capital
Enterprises’ Implementation of the Enterprise Income Tax Policies for Software and Integrated Circuit Enterprises

Cai Shui [2005] No. 109

The finance departments (bureaus), state taxation bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities
directly under the Central Government and the cities specifically designated in the state plan, the Finance Bureau of Xinjiang Production
and Construction Corps:

With a view of implementing the Administrative License Law of the People’s Republic of China, carrying out the spirits of administrative
examination and approval system reform and improving the efficiency of taxation administration, the relevant procedures relating
to foreign-capital enterprises’ implementation of the provisions as specified in Article 1 (6) and Article 2 (2) of the Notice
of the Ministry of Finance, State Administration of Taxation and General Administration of Customs about the Relevant Tax Policies
for Encouraging the Development of Software and Integrated Circuit Industry (No. 25 [2000] of the Ministry of Finance) are hereby
notified as follows:

The implementation of the provisions in Article 1 (6) and Article (2) of Doc. 25 [2000] of the Ministry of Finance that “a foreign-capital
enterprise with an investment above USD 30 million shall be reported to the State Administration of Taxation for approval; a foreign-capital
enterprise with an investment less than USD 30 million shall be examined and approved by the competent tax organ” shall be stopped.
When an enterprise files an income tax return, it may, by itself, determine the number of years for the depreciation or amortization
of the software or productive equipment that accord with the provisions in Article 1 (6) and Article (2) of the Doc. No. 25 (2000)
of the Ministry of Finance. However, once the number of years of depreciation or amortization is selected and determined, no change
may be made arbitrarily.

When the local competent tax organ conducts an annual income tax audit, it may require the enterprises to provide the relevant factual
evidence or materials (including on-the-spot investigations), for which the provisions in Article 1 (6) and Article 2 (2) of Doc.
No. 25 [2000] Ministry of Finance are applicable to these enterprises. Once it is determined upon audit that an enterprise doesn’t
conform to the provisions in Article 1 (6) and Article 2 (2) of Doc. No. 25 [2000] Ministry of Finance, the competent tax organ
may handle the tax-related affairs in accordance with the relevant provisions in the Law of the People’s Republic of China on the
Administration of Tax Collection.

Ministry of Finance

State Administration of Taxation

July 1, 2005

Ministry of Finance, State Administration of Taxation
2005-07-01

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2005

AMENDMENT TO THE CRIMINAL LAW OF THE PEOPLE’S REPUBLIC OF CHINA

DONATIONS FOR PUBLIC WELFARE LAW

REPLY OF THE STATE ADMINISTRATION OF TAXATION ON THE ISSUE REGARDING THE COLLECTION OF TAXES ON THE OPERATION MAINTENANCE AND CONSULTING SERVICE OF THE INFORMATION SYSTEM AS PROVIDED BY A FOREIGN ENTERPRISE WITHIN CHINA

INTERIM MEASURES FOR THE ADMINISTRATION OF THE BASIC DATA OF INDIVIDUAL CREDIT INFORMATION

CIRCULAR OF THE PEOPLE’S BANK OF CHINA FOR THE INDUSTRIAL AND COMMERCIAL BANK OF CHINA AND OTHER 11 FINANCIAL INSTITUTIONS TO UNDERTAKE UNDERWRITING OF SHORT-TERM FINANCING BONDS

AMENDMENT V OF CRIMINAL LAW OF THE PEOPLE’S REPUBLIC OF CHINA

REPLY OF THE SUPREME PEOPLE’S COURT TO THE REQUEST FOR LETTERS ON AFFIRMING THE FORCE OF AN ARBITRAL AGREEMENT

SEVERAL OPINIONS OF SDRC, MOF, MLR, PBC AND SEPA CONCERNING PREVENTING THE HAPHAZARD INVESTMENT IN COPPER SMELTING INDUSTRY

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE ISSUE CONCERNING PRE- TAX DEDUCTIONS OF THE TAXPAYERS’ DONATIONS TO CHINESE EDUCATIONAL FOUNDATION FOR SENIOR PROCURATORS

MEASURES FOR THE IMPLEMENTATION OF THE REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON THE ADMINISTRATION ON PRODUCTION LICENSE FOR INDUSTRIAL PRODUCTS

REPLY OF THE PEOPLE’S BANK OF CHINA CONCERNING THE RULES FOR SETTLING SECURITY TRANSACTIONS BY CHINA GOVERNMENT SECURITIES DEPOSITORY TRUST & CLEARING CO. LTD.

MINISTRY OF FINANCE AND STATE ADMINISTRATION OF TAXATION NOTICE ON THE PROCEDURES FOR THE EXAMINATION AND APPROVAL OF FOREIGN-CAPITAL ENTERPRISES’ IMPLEMENTATION OF THE ENTERPRISE INCOME TAX POLICIES FOR SOFTWARE AND INTEGRATED CIRCUIT ENTERPRISES

CONSTITUTION ACT, 1982 – page 22

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