CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON POLICY ISSUES OF BUSINESS TAX CONCERNING FOREIGN-CAPITAL FINANCIAL INSTITUTIONS

The State Administration of Taxation

Circular of the State Administration of Taxation on Policy Issues of Business Tax Concerning Foreign-capital Financial Institutions

GuoShuiFa [2000] No.135

July 28,2000

Along with the increase of foreign investment and foreign financial enterprises in China (hereinafter referred to as “foreign-capital
financial institution”), and the expansion of the business scope, there are some problems rising gradually during the period of collecting
the business tax from these financial institutions, so some relevant problems are specified as follows to facilitate the implementation
of policies:

The issue to charge business tax on off-land bank business of a foreign-capital financial institution

According to Article 7 of the Implementation Rules of Interim Regulations for Business Tax in the People’s Republic of China and
the principle that the location of financial institutions shall be the occurring location of labor services as specified by relevant
stipulations of the Inform that Weather to Charge Business Tax on the Interests and rent Obtained by Foreign Enterprises in the People’s
Republic of China (GuoShuiFa [1997] No.035). For the foreign and internal financial institutions engaged in off-land bank business,
if the payable-tax labor services of business tax are provided in China, the interests income shall be charged business tax according
to relevant regulations.

As to the income of off-land business beyond the interests income of the foreign-capital financial institution, the location of the
institution shall be regarded as the occurring location of payable-tax labor services for business tax, comparing with the management
method of interests income to make the management easy.

So-called off-land bank business refers to the financial activities that the bank assimilates the capital of non-inhabitants and uses
the capital to services non-inhabitants. Off-land bank business includes: Foreign exchange saving, foreign exchange loan, daily interest
rates on short-term private loans of foreign exchange in same industry, international settlement, the issuing of large sum conveyable
deposition certificate, the guarantee of foreign exchange, consultation, business witness and other services approved by the State
Administration of Foreign Exchange.

II.

For the scope of business income that the foreign-capital financial institution gains in the special economic region

For the income that the foreign-capital financial institution gains in the special economic region, it may include the services income
for the foreign-capital financial institution to provide the individuals in the special economic region with the services of finance,
insurance and labor according to Article 1 and Article 2 of the Circular to Transmit the Circular of the State Council for Adjusting
the Tax Policy on the Industry of Finance and Insurance (CaiShuiZi [1997] No.045) of the Ministry of Finance and the State Administration
of Taxation .

The business income directly acquired by the insurance company with foreign investment through providing the units or individuals
in the special economic region with the insurance services shall be exempted from the business tax charging within five years starting
from the registration date according to Article 3 of the Circular for the State Council to Adjust the Tax Policy of Financial Insurance
Industry (GuoFa [1997] No.5).

III.

The issue to charge business tax on RMB transferring loan business

RMB business operated by approved bank of foreign capital shall be carried out according to the Circular of Relevant Issues to Charge
Sales tax on Financial Industry (CaiShuiZi [1995] No.79) of the Ministry of Finance and the State Administration of Taxation, i.e.
the RMB transferring loan business shall be handled as general loan business, and the total interests income shall be used to charge
business tax as turnover. The business among the foreign-capital financial institutions shall not be charged business tax temporarily.

IV.

The determination of financing and leasehold turnover

Shall be carried out in such way so that the expenditure of lending interests deducted from payable-tax turnover by the foreign-capital
financial institution (engaged in financing and leasehold business) shall be only limited to the expenditure of lending interests
of foreign exchange in foreign countries, while the expenditure of lending interests of foreign exchange/RMB in China must not deducted,
according to Article 2 of the Circular of Relevant Issues to Charge Business Tax on Financial Industry (CaiShuiZi [1995] No.79)
and relevant stipulations of the Circular of Relevant Issues to Use Financing Leasehold Business Tax to Calculate the Turnover (CaiShuiZi
[1999] No.183) of the Ministry of Finance and the State Administration of Taxation.

When self-holding capital is deposited into the bank in foreign countries and then is lent privately in daily interest rates on short-term,
for the case that whether it can be charged business tax as transferring loan business of foreign exchange

Some banks of foreign capital, during the operation, deposit 30% of self-holding capital into the People’s Bank according to relevant
regulations and the deposit the rest self-holding capital into concerned bank in foreign countries. Those banks loan privately in
daily interest rates on short-term when they grant of loans. In above loan, the part of deposition balance of self-holding capital
shall not be regarded as the “transferring loan business of foreign exchange” as said in Article 2 of the Circular of Relevant Issues
to Charge Business Tax on Financial Industry (Financial tax number: (1995)79), and it has the characteristics as said in Article
20 of the Implementation Rules of Interim Regulations for Business Tax in the People’s Republic of China. Therefore, in the case
that the bank of foreign capital loans privately in daily interest rates on short-term from concerned banks in foreign countries,
the loan equal to the part of deposited self-holding capital shall be charged business tax according to the sum of interests income.

VI.

This Circular shall enter into force on August 1, 2000, and the event that has been handled in the aspect of tax affairs before this
date may not be adjusted.

The State Administration of Taxation
2000-07-28

CIRCULAR OF THE GENERAL ADMINISTRATION OF CUSTOMS ON ADDING THE METHODS OF CUSTOMS SUPERVISION

The General Administration of Customs

Circular of the General Administration of Customs on Adding the Methods of Customs Supervision

ShuTong [2000] No.270

June 6, 2000

Guangdong Customs Bureau and all Customs directly under the General Administration of Customs:

In Accordance with the relevant provisions of the Circular of the General Office of the State Council on Transmitting the Comments
by the State Economic and Trade Commission and Other Relevant Government Agencies on Further Improving the Deposit Account System
for Processing Trade (GuoBanFa [1999] No.35) and in the Measures of Customs Supervision in Bonded Areas, the General Customs Administration
decides to specify a customs supervision code for finished products of processing trade produced in bonded areas and sold to non-bonded
areas with approval. Notified as follows are some relevant issues:

The customs supervisory method codes added are as follows:

Customs supervisory method code No. 0444: this supervisory method is applicable to finished products produced within bonded areas
with imported materials, sold domestically and tariffed as finished products, or “finished products produced with imported materials
in bonded areas.”

Customs supervisory method code No. 0445: this supervisory method is applicable to finished products produced within bonded areas
with customers’ materials, sold domestically and tariffed as finished products, or “finished products produced with customers’ materials
in bonded areas.”

Customs supervisory method code No. 0544: this supervisory method is applicable to finished products produced within bonded areas
with imported materials, sold domestically and tariffed as materials and parts, or “materials and parts produced with imported materials
in bonded areas.”

Customs supervisory method code No. 0545: this supervisory method is applicable to finished products produced within bonded areas
with customers’ materials, sold domestically and tariffed as materials and parts, or “materials and parts produced with customers’
materials in bonded areas.”

II.

Various customs bureaus shall not levy the interest for deferred tariff payment on products listed hereinabove.

III.

For the entry of the aforementioned products (including products with tariff exemption or reduction), enterprises shall fill in the
corresponding import declarations and export declarations The number of the Registration Manual shall be entered into the export
declaration under the item of “Record Number.”

IV.

The General Administration of Customs has adjusted the related data in the parameter database of its customs service system. All customs
bureaus please receive the data files according to the following instruction:

Name node: ZS31

User name: BULLETIN

Directory name:[.883APP]

File name: TRADE-MO.TXT “Trade Method Certificate”

TRADE.TXT “Codes of Trade Methods”

The circular will come into effect as of July 1, 2000. Please make timely announcement to the public.

Attachment:Draft Announcement

In accordance with the circular of the General Administration of Customs, for the settlement of issues concerning the entry for finished
products of processing trade produced in bonded areas and to be sold domestically, the following supervisory method codes are added:
Supervisory method code No. 0444 code, applicable to finished products produced within bonded areas with imported materials, sold
domestically and tariffed as finished products, or “finished products produced with imported materials in bonded areas”; supervisory
method code No. 0445, which is applicable to finished products produced within bonded areas with customers’ materials, sold domestically
and tariffed as finished products, or “finished products produced with customers’ materials in bonded areas”; supervisory method
code No. 0544, which is applicable to finished products produced within bonded areas with imported materials, sold domestically and
tariffed as materials and parts, or “materials and parts produced with imported materials in bonded areas”; supervisory method code
No. 0545, which is applicable to finished products produced within bonded areas with customers’ materials, sold domestically and
tariffed as materials and parts, or “materials and parts produced with customers’ materials in bonded areas.”

Enterprises making customs declaration please fill in the relevant declaration forms for their imports and exports according to the
Requirements of the Customs of the People’s Republic of China for Filling Import and Export Customs Declarations and the requirements
made in this Announcement.

This Announcement shall enter into force as of July 1, 2000, and this is hereby notified.

The General Administration of Customs
2000-06-06

CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION CONCERNING THE RELEVANT ISSUES ON STRENGTHENING THE EXAMINATION AND APPROVAL OF SUGAR IMPORT FOR PROCESSING TRADE

The Ministry of Foreign Trade and Economic Cooperation

Circular of the Ministry of Foreign Trade and Economic Cooperation Concerning the Relevant Issues on Strengthening the Examination
and Approval of Sugar Import for Processing Trade

WaiJingMaoGuanFa [2000] No.154

March 15, 2000

Commissions (departments, bureaus) of foreral Government and municipalities separately listed on the State plan:

In order to carry out the instructions of the State Council on administration of sugar for use in processing trade, and in line with
the Interim Measures for the Examination and Approval of Processing Trade (WaiJingMaoGuanFa [1999] No.314, hereinafter referred to
as No.314 document), the circular on strengthening the examination and approval of sugar import for processing trade is hereby publicized
as follows:

The import of raw sugar for processing trade shall be approved by the Ministry of Foreign Trade and Economic Cooperation together
with the State Bureau of Light Industry (see attached table for commodity code).

All kinds of companies engaged in processing trade with imported raw sugar as the raw material shall hand in relevant documents to
the competent authority in charge of foreign trade and economic cooperation at provincial level in the light of the requirements
of Document No. 314. After auditing, the provincial authority shall submit its report, the certificate of the throughput of the processing
trade companies (the enterprises with foreign investment shall submit their annual inspection certificate), the import and export
contracts and duplicated copy of the processing agreement, etc. to the Ministry of Foreign Trade and Economic Cooperation and the
State Bureau of Light Industry.

The Ministry of Foreign Trade and Economic Cooperation audits the documents submitted by the provincial foreign trade and economic
authority, and goes through procedures to give a written reply after taking into consideration of the opinions of the State Bureau
of Light Industry.

The provincial authority in charge of foreign trade and economic cooperation signs and issues the certificate of approval to processing
trade business against the written reply of the Ministry of Foreign Trade and Economic Cooperation.

The provincial authority in charge of foreign trade and economic cooperation examines and approves the import of the granulated sugar
and soft sugar for processing trade in accordance with the existing regulations.

The Circular enters into force on the date of issuance. Contracts with approved import of raw sugar, which has registered on the customs
registration book, before the effective date of the Circular, can be executed till the termination of the contracts.

Attachment:

Catalogue of Controlled Imported Raw Sugar for Processing Trade (omitted)

The Ministry of Foreign Trade and Economic Cooperation
2000-03-15

PROVISIONAL REGULATIONS ON CONSUMPTION TAX

Provisional Regulations of the People’s Republic of China on Consumption Tax

(State Council: 13 December 1993)

Whole Doc.Article 1

All units and individuals engaged in the production, subcontractingfor processing or the importation of consumer goods prescribed
by theseRegulations (hereinafter referred to as ‘taxable consumer goods’) withinthe territory of the People’s Republic
of China are taxpayers ofConsumption Tax (hereinafter referred to as ‘taxpayers’) and shall payConsumption Tax in accordance
with these Regulations.Article 2

The taxable items, tax rates (tax amounts) of Consumption Tax shallbe determined in accordance with the attached to these Regulations.

Any adjustments to the Consumption Tax taxable items, tax rates (taxamounts) shall be determined by the State Council.Article
3

For taxpayers dealing in taxable consumer goods with different taxrates, the sales amounts and sales volumes for the taxable
consumer goodsshall be accounted for separately. If the sales amounts and sales volumeshave not been accounted for separately or
if the taxable consumer goodswith different tax rates are combined into a whole set of consumer goodsfor sales, the higher tax
rate shall apply.Article 4

Taxable consumer goods produced by the taxpayer shall be subject totax upon sales. For self-produced taxable consumer
goods for thetaxpayer’s own use in the continuous production of taxable consumer goods,no tax shall be assessed; tax shall
be assessed when the goods aretransferred for other use.

For taxable consumer goods sub-contracted for processing, the taxshall be collected and paid by the sub-contractor upon
delivery to thecontractor. For taxable consumer goods, sub-contracted for processing usedby the contractor for the continuous
production of taxable consumer goods,the tax paid can be credited in accordance with the regulations.

Imported taxable consumer goods shall be subject to tax upon importdeclaration.Article 5

The computation of tax payable for Consumption Tax shall followeither the rate on value or the amount on volume method.
The formulas forcomputing the tax payable are as follows:

The tax payable computed under the rate on value method

= Sales amount x Tax rate.

The tax payable computed under the amount on volume method

= Sales volume x Tax amount per unit.

For taxable consumer goods sold by taxpayers where the sales amountsare computed in foreign currencies, the taxable amounts
shall be convertedinto Renminbi according to the exchange rates prevailing in the foreignexchange market.Article 6

The “sales amount” as stipulated in Article 5 of these Regulationsshall be the total consideration and other charges receivable
from thebuyer for the taxable consumer goods sold by the taxpayer.Article 7

Self-produced taxable consumer goods for the taxpayer’s own use thatshall be subject to tax in accordance with the stipulations
of the firstparagraph in Article 4 of these Regulations shall be assessed according tothe selling price of similar consumer goods
produced by the taxpayer. Ifthe selling price of similar consumer goods is not available, the taxshall be assessed according
to the composite assessable value. Theformula for computing the composite assessable value is as follows:

(Cost + profit)

Composite assessable value = ————————–

(1-Consumption Tax rate)Article 8

Taxable consumer goods sub-contracted for processing shall beassessed according to the selling price of similar consumer
goods of thesub-contractor. If the selling price of similar consumer goods is notavailable, the tax shall be assessed according
to the composite assessablevalue. The formula for computing the composite assessable value is asfollows:

(Cost of material + Processing fee)

Composite assessable value = ————————————-

(1 – Consumption Tax rate)Article 9

Imported taxable consumer goods which adopt the rate on value methodin computing the tax payable shall be assessed according
to the compositeassessable value. The formula for computing the composite assessable valueis as follows:

customs dutiable value + Customs Duty

Composite assessable value = ————————————–

(1 – Consumption Tax rate)Article 10

Where the taxable value of the taxable consumer goods of the taxpayeris obviously low and without proper justification, the taxable
value shallbe determined by the competent tax authorities.Article 11

For taxpayers exporting taxable consumer goods, the Consumption Taxshall be exempt, except as otherwise determined by the State
Council. Themeasures for exemption of exported taxable consumer goods shall beregulated by the State Administration for
Taxation.Article 12

Consumption Tax shall be collected by the tax authorities.Consumption Tax on the importation of taxable consumer
goods shall becollected by the customs office on behalf of the tax authorities.

Consumption Tax on taxable consumer goods brought or mailed intoChina by individuals shall be levied together with Customs
Duty. Thedetailed measures shall be formulated by the Tariff Policy Committee ofthe State Council together with the relevant
departments.Article 13

Taxpayers selling taxable consumer goods and self-producing taxableconsumer goods for their own use, except otherwise as determined
by theState, shall report and pay tax to the local competent tax authoritiesgoverning the taxpayers.

For taxable consumer goods sub-contracted for processing, theConsumption Tax due shall be paid to the local competent
tax authoritieswhere the sub-contractors are located.

For imported taxable consumer goods, the tax shall be reported andpaid by the importers or their agents to the customs offices
where theimports are declared.Article 14

The Consumption Tax assessable period shall be one day, three days,five days, ten days, fifteen days or one month. The
actual assessableperiods of the taxpayers shall be separately determined by the competenttax authorities according to the magnitude
of the tax payable of thetaxpayers; tax that cannot be assessed in regular periods can be assessedon a transaction-by-transaction
basis.

Taxpayers that adopt one month as an assessable period shall reportand pay tax within ten days following the end of the
period. If anassessable period of one day, three days, five days, ten days or fifteendays is adopted, the tax shall be prepaid
within five days following theend of the period, and a monthly return shall be filed with any balance oftax due settled within
ten days from the first day of the following month.Article 15

Taxpayers importing taxable consumer goods shall pay tax within sevendays after the completion and issuance of the tax payment
certificates bythe customs office.Article 16

The collection and administration of Consumption Tax shall beconducted in accordance with the relevant regulations of
the (Law of thePeople’s Republic of China on Tax Collection an Administration) and theseRegulations.Article 17

The collection of Consumption Tax from foreign investment enterprisesand foreign enterprises shall be conducted in accordance
with theresolutions of the Standing Committee of the National People’s Congress.Article 18

The Ministry of Finance shall be responsible for the interpretationof these Regulations and for the formulation of the Detailed
Rules andRegulations for the Implementation of these Regulations.Article 19

These Regulations shall come into effect from January 1, 1994. Therelevant regulations of the State Council regarding the
collection ofConsumption Tax prior to the promulgation of these Regulations shall berepealed on the same date.

CONSUMPTION TAXABLE ITEMS AND TAX RATES (TAX AMOUNTS) TABLE

————————————————————————

Taxable Items Scope of charge Tax Unit Tax Rate/Amount

————————————————————————

I. Tobacco

1. Grade A cigarettes Including Imported 45%

cigarettes

2. Grade B cigarettes 40%

3. Cigars 40%

4. Cut tobacco 30%

II. Alcoholic drinks and

alcohol

1. White spirits made from

cereal 25%

2. White spirits made from 15%

potatoes

3. Yellow spirits ton 240 yuan

4. Beer ton 220 yuan

5. Other alcoholic drinks 10%

6. Alcohol 5%

III. Cosmetics Including cosmetics sets 30%

IV. Skin-care and hair-care

products 17%

V. Precious jewelry and Including all kinds of

precious jade and gold, silver, jewelry, and 10%

stones precious stone ornaments

VI. Firecrackers and fire-works 15%

VII. Gasoline litre 0.2 yuan

VIII. Diesel oil litre 0.1 yuan

IX. Motor vehicle tyres 10%

X. Motorcycles

XI. Motor cars 8%

1. Those with a cylinder 8%

capacity (i. e. emission

capacity) of more than

2200ml (including

2200ml)

Those with a cylinder 5%

capacity of between

1000-2200ml

(including 1000ml)

Those with a cylinder 3%

capacity of less than

1000ml

2. Cross-country vehicles

(four-wheel drive)

Those with a cylinder 5%

capacity of more than

2400ml (including

2400ml)

Those with a cylinder 3%

capacity of less than

2400ml

3. Minibuses and vans less than 22 seats

Those with a cylinder

capacity of more than 5%

2000ml (including

2000ml)

Those with a cylinder 3%

capacity of less than

2000ml

OFFICERS IN ACTIVE SERVICE LAW

Law of the People’s Republic of China on Officers in Active Service

(Adopted at the 3rd Meeting of the Standing Committee of the Seventh National People’s Congress on September 5, 1988,
promulgated by Order No. 8 of the President of the People’s Republic of China on September 5, 1988, amended for the first time in
accordance with the Decision on Amending the Regulations of the Chinese People’s Liberation Army on the Military Service of Officers
in Active Service adopted at the 7th Meeting of the Standing Committee of the Eighth National People’s Congress on May 12, 1994,
and amended for the second time in accordance with the Decision on Amending the Regulations of the Chinese People’s Liberation Army
on the Military Service of Officers in Active Service adopted at the 19th Meeting of the Standing Committee of the Ninth National
People’s Congress on December 28, 2000)

Contents

Chapter I General Provisions

Chapter II Basic Requirements for Officers and Their Sources and Training

Chapter III Appraisal of Officers and Their Appointment and Removal

Chapter IV Exchange of and Withdrawal by Officers

Chapter V Awards and Penalties for Officers

Chapter VI Material and Other Benefits for Officers

Chapter VII Officers’ Retirement from Active Service

Chapter VIII Supplementary Provisions

Chapter I

General Provisions

Article 1 This Law is formulated for the purpose of building a contingent of revolutionary, younger, better educated and professional
officers in active service to facilitate the People’s Liberation Army’s fulfillment of the tasks assigned by the State.

Article 2 Officers in active service in the People’s Liberation Army (hereinafter referred to as officers in short) are servicemen
who hold posts at or above the platoon level or specialized technical posts at or above the junior level and who have been granted
military ranks at corresponding levels.

By the nature of the posts they hold, officers are classified as operational officers, political officers, logistics officers, armaments
officers and specialized technical officers.

Article 3 Officers constitute part of the State functionaries.

Officers shall perform the sacred functions and responsibilities entrusted to them by the Constitution and laws, and they shall,
in public activities, enjoy the status and honor commensurate with their functions and responsibilities.

The State guarantees the lawful rights and interests of officers in accordance with law.

Article 4 In the selection and use of officers, the principles of appointing people on their merits, stressing both political
integrity and professional competence, attaching importance to actual performance, and exchanging officers when appropriate shall
be adhered to, democratic supervision exercised, and public comments respected.

Article 5 On the principle of giving preferential treatment to servicemen, the State determines the various kinds of material
and other benefits for officers.

Article 6 Officers who meet the provisions on retiring from active service as specified in this Law shall retire from active
service.

Article 7 The General Political Department of the People’s Liberation Army shall be responsible for managing the affairs concerning
the officers of the entire Army, and the political departments of units at or above the regiment level shall be responsible for managing
the affairs concerning the officers of their respective units.

Chapter II

Basic Requirements for Officers and Their Sources and Training

Article 8 Officers shall meet the following basic requirements:

(1) being loyal to the motherland and to the Communist Party of China, cherishing firm revolutionary ideals and conviction, serving
the people wholeheartedly, and devoting themselves to the cause of national defense;

(2) observing the Constitution, laws and regulations, implementing the principles and policies of the State and the rules and regulations
of the Army, and obeying orders and commands;

(3) possessing, as required for performing their own duties competently, sufficient understanding of theories and policies, modern
military, scientific, general and specialized knowledge, and the ability to organize and direct work, having received training in
schools or academies and corresponding academic credentials, and being in good health; and

(4) cherishing the soldiers, setting good examples with their own conduct, being fair and upright, being honest and clean in performing
their duties, working hard, and fearing no sacrifice.

Article 9 The sources of officers are as follows:

(1) graduates of schools or academies in the Army, who are originally selected from among outstanding soldiers and graduates of regular
secondary schools to study therein;

(2) graduates of regular institutions of higher education;

(3) civilian cadres in the Army;

(4) specialized technicians and other persons recruited from outside the Army.

When needed in times of war, soldiers, enlisted reserve officers, and persons in non-military departments may be directly appointed
as active officers.

Article 10 The People’s Liberation Army shall apply a system whereby its members are promoted as officers only after they have
received training in schools or academies.

Operational, political, logistics and armaments officers shall be promoted to the next higher commanding post only after they have
received training in the appropriate schools, academies, or other training institutions. Officers who hold commanding posts at or
below the battalion level shall be ones who have received training in schools or academies for junior commanders; officers who hold
commanding posts at the regiment or division level shall be ones who have received training in schools or academies for intermediate
commanders; and officers who hold commanding posts at or above the corps level shall be ones who have received training in schools
or academies for senior commanders.

Officers who serve in headquarters shall be one who have received training in appropriate schools or academies.

Specialized technical officers shall be promoted to the next higher specialized technical posts only after they have received training
in specialized technical schools or academies corresponding to their specialties, or after they have completed the specified continued
education by other means when training offered by institutions of education cannot meet the need.

Chapter III

Appraisal of Officers and Their Appointment and Removal

Article 11 Leading cadres and political departments at various levels shall, in line with their division of responsibilities,
appraise officers governed by them.

The appraisal shall be conducted in a comprehensive way by the leaders together with the rank and file, in compliance with the basic
requirements for officers and the criteria, procedures and methods for the appraisal of officers formulated by the Central Military
Commission, with stress on actual performance. The results of the appraisal are divided into three grades — excellent, qualified,
and unqualified, and shall be taken as the main basis for appointing or removing officers. The officers concerned shall be notified
of the results of the appraisal.

The appointment and removal of officers shall be preceded by appraisals; no appointment or removal may be made without an appraisal.

Article 12 The authority for the appointment and removal of officers is prescribed as follows:

(1) officers from the Chief of the General Staff and the Director of the General Political Department down to those at the level
of division commander shall be appointed or removed by the Chairman of the Central Military Commission;

(2) officers at the level of deputy division commander (or brigade commander) and the level of regiment commander (or deputy brigade
commander) and senior specialized technical officers shall be appointed or removed by the Chief of the General Staff, the Director
of the General Political Department, the Director and the Political Commissar of the General Logistics Department, the Director and
the Political Commissar of the General Armaments Department, the commanders and political commissars of the major military commands
and of the various services and arms, or the heads of units equivalent to the major military commands; officers at the level of regiment
commander (or deputy brigade commander) in units equivalent to quasi major military commands shall be appointed or removed by the
heads of those units;

(3) officers at the level of deputy regiment commander and the level of battalion commander and intermediate specialized technical
officers shall be appointed or removed by the commanders and political commissars of corps or the heads of units at the corps level
which have the power to make such appointments and removals; officers serving as battalion commanders in an independent division
shall be appointed or removed by the commander and political commissar of the independent division; and

(4) officers at or below the level of deputy battalion commander and junior specialized technical officers shall be appointed or
removed by the commander and the political commissar of a division (or brigade) or the head(s) of a unit at the division (or brigade)
level which has the power to make such appointments and removals.

The appointment and removal of officers described in the preceding paragraph shall be conducted in accordance with the procedures
prescribed by the Central Military Commission.

Article 13 While emergency missions like battles or rescue or relief operations are being carried out, leading cadres at higher
levels shall have the power to tentatively remove officers on their staff who disobey orders, refuse to perform their duties or are
incompetent, and to assign other servicemen to take over their posts for the moment; when vacancies of officer posts appear because
of other reasons, they, too, shall have the power to assign servicemen to fill in the vacancies tentatively.

The tentative removal of officers or assignment of servicemen to replace them made in accordance with the provisions of the preceding
paragraph shall be reported as soon as possible to the higher authorities that have the power of appointment and removal for examination
and decision in order to complete the procedure for appointment or removal.

Article 14 The maximum age for operational, political, logistics and armaments officers in combat troops in peacetime shall
be:

(1) 30 for officers at the platoon level;

(2) 35 for officers at the company level;

(3) 40 for officers at the battalion level;

(4) 45 for officers at the regiment level;

(5) 50 for officers at the division level;

(6) 55 for officers at the corps level; and

(7) 63 for officers at the level of deputy commander of the major military command and 65 for officers at the level of commander
of the major military command.

The maximum age for officers at battalion or regiment level aboard naval vessels shall be 45 and 50 respectively; the maximum age
for flying officers at the regiment level shall be 50.

The maximum age for a small number of the officers at the division or corps level in combat troops may be appropriately extended,
provided this is necessitated by work and approved by the authorities with the prescribed power for appointment and removal. However,
the maximum age extension for officers at the division level and at the level of corps commander shall be not more than five years
while the maximum age extension for officers at the level of deputy corps commander shall be not more than three years.

Article 15 For officers in units other than combat troops, the maximum age for those at or below the level of deputy regiment
commander and those at the level of the major military command shall be determined in accordance with the provisions of the first
paragraph of Article 14 of this Law; the maximum age for those at the level of regiment commander, at the division level, at the
level of deputy corps commander, and at the level of corps commander shall be 50, 55, 58, and 60 respectively.

Article 16 The maximum age for specialized technical officers in peacetime shall be:

(1) 40 for junior specialized technical officers;

(2) 50 for intermediate specialized technical officers; and

(3) 60 for senior specialized technical officers.

The maximum age for a small number of the senior specialized technical officers may be appropriately extended, but the extension
shall be not more than five years, provided this is necessitated by work and approved by the departments which have the prescribed
authority for appointment and removal.

Article 17 The minimum term of office for the principal commanders at the levels of platoon, company, battalion, regiment,
division (brigade), and corps in peacetime shall be three years.

Article 18 The minimum term of office for chiefs of sections, subdivisions, divisions, bureaus and departments in headquarters
or academies and schools and officers holding leading posts at corresponding levels shall be determined with reference to the provisions
of Article 17 of this Law.

The minimum term of office at each grade of post for officers serving as staff officers, clerical workers, secretaries, assistants,
instructors, etc. in headquarters or academies and schools shall be three years.

Article 19 The minimum term of office for specialized technical officers in peacetime shall be determined in accordance with
the relevant regulations of the Central Military Commission.

Article 20 Officers may be promoted to the next higher level by filling vacancies available in the authorized size of the staff
on the strength of their political integrity and professional competence, but only after they have completed their minimum term of
office.

Officers who are outstanding in political integrity and professional competence and who have distinguished themselves in performing
their duties may be promoted ahead of time, provided this is necessitated by work; those who are exceptionally outstanding may be
promoted by skipping a grade.

Article 21 Officers to be promoted to the next higher level shall have the qualifications required by the posts they are to
hold, including the record of assignments, educational level, and training received in academies or schools. The specific qualifications
shall be prescribed by the Central Military Commission.

Article 22 Officers shall be appointed within the authorized size of the staff and in accordance with the authorized grading
of posts.

Article 23 Officers whom appraisals prove to be unqualified for their posts shall be transferred to posts at lower levels or
to other jobs, and their material and other benefits shall be redetermined accordingly.

Article 24 The maximum term of office for commanders and deputy commanders at or equivalent to the level of division, corps,
or major military command in peacetime shall be ten years. Those who have completed their maximum term of office shall be relieved
of their posts.

Article 25 To meet the needs in the building of national defense, the Army may send officers to non-military departments to
fulfill the tasks assigned by the Army.

Article 26 Officers may be transferred to posts as civilian cadres in the Army in accordance with the regulations of the Central
Military Commission.

Chapter IV

Exchange of and Withdrawal by Officers

Article 27 Officers shall be exchanged between different posts or different units. Specific measures shall be prescribed by
the Central Military Commission in accordance with this Law.

Article 28 Officers who have completed the following terms of office at one post shall be exchanged:

(1) in combat troops, four years for principal commanders at or below the division level and five years for principal commanders
at the corps level;

(2) in units other than combat troops, five years for principal commanders at or below the corps level; and

(3) in headquarters, four years for chiefs of sections, subdivisions and divisions and officers holding leading posts at corresponding
levels; five years for chiefs of bureaus and departments and officers holding leading posts at corresponding levels. But a small
number of highly specialized officers and officers specially necessitated by work are exceptions.

Officers holding leading posts at the division and corps levels and having worked consecutively in the same unit for 25 years and
30 years respectively shall be exchanged.

Officers holding other posts shall also be exchanged as required.

Article 29 Officers working in the areas where conditions are hard shall be exchanged to other areas in accordance with the
relevant regulations of the Central Military Commission.

Article 30 For officers having matrimonial relationship, lineal blood relationship, collateral blood relationship within three
generations, or close marriage relationship, one of them shall not hold a post directly under the leadership of the other or a post
of two levels lower under the leadership of the other, nor shall they hold posts in the same unit where both are directly subordinate
to the same leader, nor shall one hold a post in the unit led by the other.

Article 31 No officer may hold the post of the principal commander of the military subcommand (or garrison command at the division
level) or the department of the people’s armed forces of the county, municipality or district under the jurisdiction of the municipal
government in his or her native place. But officers specially necessitated by work are exceptions.

Article 32 When officers perform the duties involving their own interests or the interests of the people having such relationships
with them as listed in Article 30 of this Law, they shall withdraw. But officers carrying out combat tasks or other urgent tasks
are exceptions.

Chapter V

Awards and Penalties for Officers

Article 33 Officers who have made significant contributions or achieved outstanding successes in battle or in army building
and those who have made considerable contributions to the State and the people in other fields of endeavor shall be awarded in accordance
with the relevant regulations of the Central Military Commission.

The awards shall fall into the following categories: Honorable Citation; Citation for Merit, Class III; Citation for Merit, Class
II; Citation for Merit, Class I; and conferment of honorable post_titles and other awards instituted by the Central Military Commission.

Article 34 Officers who have violated military discipline shall be given disciplinary sanctions in accordance with the regulations
of the Central Military Commission.

The disciplinary sanctions shall fall into the following categories: disciplinary warning; serious disciplinary warning; recording
of a demerit; recording of a serious demerit; demotion to a lower post, grade, or rank; dismissal from post; disciplinary discharge
from the military service and other disciplinary sanctions prescribed by the Central Military Commission.

Article 35 Officers who have been dismissed from posts shall be appointed to new posts in the light of the specific circumstances
under which they have made mistakes; for those who are not to be appointed to new posts, their grades of posts and material and other
benefits shall be redetermined.

Article 36 Officers whose actions against the law constitute criminal offences shall be investigated for criminal responsibility
in accordance with law.

Chapter VI

Material and Other Benefits for Officers

Article 37 A system linking salary to post and military rank and a regular salary increase system shall be instituted for officers,
who shall, in accordance with the relevant regulations of the State and the Army, enjoy allowances and subsidies which shall be duly
adjusted with the development of the national economy. The specific scales and measures shall be prescribed by the Central Military
Commission.

Officers shall continue to draw their salaries, when they, in accordance with the relevant regulations, receive off-service training,
take vacation, receive medical treatment or recuperate, or when they wait for new assignments after being relieved of their duties.

Article 38 Officers shall enjoy free medical care. The relevant departments shall do a good job of providing medical and health
services for officers and make proper arrangements for their medical treatment and recuperation.

Officers shall enjoy servicemen insurance in accordance with the relevant regulations of the State and the Army.

Article 39 Officers’ housing shall be guaranteed by a system under which public apartments are combined with self-owned houses.
Officers may reside in public apartments or buy their own houses in accordance with regulations, and they shall enjoy appropriate
housing subsidies and preferential treatment.

Article 40 Officers shall be enpost_titled to vacation. Leading cadres at higher levels shall arrange annual vacation for officers
in accordance with regulations.

Officers of units carrying out combat duties shall suspend their vacation.

When the State issues an order of mobilization, officers on vacation who are required to return to their units in response to the
order shall terminate their vacation of their own accord and return to their units immediately.

Article 41 Officers’ family members shall enjoy the preferential treatment of the State and the society in respect of coming
to reside with the officers, getting employed or transferred to other jobs and in respect of education for children.

Officers who are qualified to take along with them their family members, i.e., their spouses and their children who have not come
of age or who do not have the ability to live by themselves, may do so after obtaining approval from the political departments at
or above the division (or brigade) level, and those family members who are from the countryside may have their rural domicile registrations
changed to urban ones.

When the units are shifted to other places for garrison duties or when the officers are assigned posts in other places, the officers’
family members who reside with them may be transferred along with them.

An officer who has reached the age of 50 but who has no son or daughter living with him or her may have one working son or daughter
transferred to the place where he or she is stationed. If the son or daughter to be thus transferred is married, his or her spouse
and his or her children who have not come of age or who do not have the ability to live by themselves may be transferred along with
him or her.

The employment and transfer of jobs for officers’ family members who reside with the officers and for officers’ children and their
children’s spouses who are transferred to the places where the officers are stationed shall be handled in accordance with the relevant
regulations of the State Council and the Central Military Commission.

Article 42 The affairs of the family members who reside with the officers shall be handed over to the government after the
officers’ death in action or because of illness. Specific measures shall be formulated by the State Council and the Central Military
Commission.

Chapter VII

Officers’ Retirement from Active Service

Article 43 The minimum term of active service for operational, political, logistics and armaments officers in peacetime shall
be:

(1) Eight years for officers at the platoon level;

(2) 10 years for officers at the level of deputy company commander, and 12 years for officers at the level of company commander;

(3) 14 years for officers at the level of deputy battalion commander, and 16 years for officers at the level of battalion commander;
and

(4) 18 years for officers at the level of deputy regiment commander, and 20 years for officers at the level of regiment commander.

Article 44 The minimum term of active service for specialized technical officers in peacetime shall be:

(1) 12 years for junior specialized technical officers;

(2) 16 years for intermediate specialized technical officers; and

(3) 20 years for senior specialized technical officers.

Article 45 No officers who have not completed their minimum term of active service in peacetime may retire from active service.
However, those who fall into any of the following categories shall retire from active service ahead of time:

(1) being unable to carry on work regularly because of wound, illness, or disability;

(2) being appraised as unqualified for their posts and unsuitable for other arrangements;

(3) having made serious mistakes and being unsuitable for remaining in active service;

(4) being transferred from the Army to non-military departments; or

(5) having to retire from active service as a result of the readjustment and streamlining of the structure and organization of the
Army.

Officers who have not completed their minimum term of active service in peacetime, whose applications for retiring from active service
ahead of time have been rejected and who insist on early retirement despite persuasion may be allowed to do so after they are demoted
to a lower post (or grade) by way of disciplinary sanction or after they are deprived of their status as officers.

Article 46 Officers who have reached the maximum age for active service in peacetime shall retire from active service.

The maximum age for officers in active service in peacetime shall be:

(1) 50 for officers at the level of regiment commander;

(2) 55 for officers at the division level;

(3) 58 for officers at the level of deputy corps commander, and 60 for officers at the level of corps commander; and

(4) the maximum age for officers in active service holding other posts shall be the same as the maximum age for their posts.

Article 47 Officers who have not reached the maximum age for active service in peacetime shall retire from active service if
they fall into any of the following categories:

(1) having to retire from active service after completing their maximum terms of office;

(2) being unable to carry on work regularly because of wound, illness, or disability;

(3) being not in a position to be reappointed because of limitations on the size of the staff;

(4) being transferred from the Army to non-military departments; or

(5) having to retire from active service because of other reasons.

Article 48 Officers’ retirement from active service shall be subject to approval by the same authorities that have the power
to approve their appointment and removal.

Article 49 After retiring from active service, officers shall be transferred to civilian jobs with the government assigning
them jobs and posts or assisting them to get jobs and providing them with retirement pay; some of them may be treated as demobilized
servicemen or as pensioners.

After retiring from active service, officers holding posts at or above the division level or senior specialized technical posts shall
be treated as pensioners; some of them may be transferred to civilian jobs, or other arrangements may be made for them.

After retiring from active service, officers holding posts at or below the regiment level or junior or intermediate specialized technical
posts shall be transferred to civilian jobs, or other arrangements may be made for them.

After retiring from active service, officers who are assigned jobs and posts or who are assisted to get jobs and provided with retirement
pay by the government shall receive vocational training arranged by the government where necessary.

Officers who have basically lost their ability to work before reaching the maximum age for active service shall be treated as pensioners
after retiring from active service.

Officers who have been in active service for 30 years or more, or who have been in active service and have worked for the State for
a total of 30 years or more, or who are aged 50 or more, and who are at or above the division level may be treated as pensioners,
provided they are released from active service upon approval of their applications for retirement by the competent authorities; and
those who are at the regiment level and are not suitable for transference to civilian jobs or for other arrangements may be treated
as pensioners, provided their retirement from active service is approved by the competent authorities.

Article 50 Officers who have reached the maximum age for active service may leave their posts to rest if they meet the relevant
State requirements for doing so. Upon approval, some may do so before they reach the maximum age while others may stay longer in
active service due to the need of work or for other reasons.

Article 51 The specific administrative measures for the arrangements to be made for the officers after they retire from active
service shall be prescribed by the State Council and the Central Military Commission.

Arrangements for officers who have left their posts to rest and officers at or above the corps level who have retired from active
service shall be made and their affairs administered in accordance with the relevant regulations of the State Council and the Central
Military Commission.

Chapter VIII

Supplementary Provisions

Article 52 The General Political Department of the People’s Liberation Army shall, in accordance with this Law, formulate measures
for the implementation of this Law, which shall come into force upon approval by the State Council and the Central Military Commission.

Article 53 This Law shall be

CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION CONCERNING IMPORTING EQUIPMENT BY ENTERPRISES WITH FOREIGN INVESTMENT

The Ministry of Foreign Trade and Economic Cooperation

Circular of the Ministry of Foreign Trade and Economic Cooperation Concerning Importing Equipment by Enterprises with Foreign Investment

WaiJingMaoZiFa [2000] No.478

November 8, 2000

All committees (departments or bureaus) of foreign trade and economic cooperation in provinces, autonomous regions, municipalitie
directly under the Central Government and municipalities separately listed on the State plan :

In the spirit of encouraging foreign investment by the State Council, the General Administration of Customs has issued the Circular
Concerning the Import Tax Policy for Further Promoting Foreign Investment (ShuShui [1999] No.791). After consulting with the General
Administration of Customs, certain issues concerning equipment import by enterprises with foreign investment involving encouraged
and restricted Group B projects, research and development center for foreign investment, and export-oriented and advanced technology
enterprises with foreign investment are notified as follows:

Certificates for importing upgrade equipment, technology and accessories by enterprises with foreign investment that involve encouraged
and restricted Group B projects

(1)

Enterprises with foreign investment involved in the encouraged and restricted Group B projects, which are engaged in updating and
repairing original equipment with free capital outside of their total committed investment, shall have their certificate for the
import of upgrade equipment, technology and accessories issued by those authorities which have granted the original project confirmation
letter. Certificates to change items specified for the enterprise, such as capital increase, shall be issued by the authorities in
charge of approval and examination. Projects invested at below the specified amount shall be approved and examined by the relevant
provincial authorities.

For the format of the certificate, see Attachment 1 (ShuShui [1999] No.791); items mentioned below shall take the same form.

(2)

Enterprises with foreign investment established with approval before December 31, 1997 engaging in encouraged, restricted Group B
projects, that are involved in the upgrade or repair of original equipment with free capital outside of their total committed investment,
shall have their certificates for the import of upgrade equipment, technology and accessories issued by the original authorities
in charge of foreign trade and economic cooperation under whose approval the enterprises were established (For local projects, the
certificates shall be issued by the provincial authorities in charge of foreign trade and economic cooperation).

Certificates for the import of equipment, technology and accessories by a research and development center with foreign investment

(1)

Research and development centers with foreign investment (including internal research and development centers of enterprises with
foreign investment), which had been established under relevant statutes with the approval of authorities in charge of trade and economic
cooperation, shall have the same authorities issue the letter of confirmation as a foreign-invested project encouraged by the state.
The form is included in the attachment, and shall be filled out with reference to the requirements of Attachment 4 of the Urgent
Notice of the General Administration of Customs for Implementing the State Council’s Circular Concerning the Adjustment of Tax Policies
on Equipment Import (ShuShui [1997] No.1062).

(2)

Research and development centers with foreign investment (including internal research and development centers of enterprises with
foreign investment) involved in the upgrade and repair of original equipment with free capital outside of their total committed investment,
shall have the certificates for the import of upgrade equipment, technology and accessories issued by those authorities which granted
the original project confirmation letter.

(3)

Research and development centers with foreign investment invested with legal person status, shall have the quota of foreign exchange
used to import duty-free equipment be appraised and decided on the basis of their total committed investment and amount of free capital.

(4)

Research and development centers with foreign investment , established with non-legal person status by enterprises with foreign investment
involved in permitted or restricted Group A projects, shall in principle be considered a branch of such enterprises. The quota of
foreign exchange used to import duty-free equipment shall be appraised and decided according to the approved operating capital of
such branches. The authorities in charge of examination and approval shall, once and for all, appraise and decide the inventory and
amount of money used for the import of duty-free equipment of the internal research and development centers of such enterprises.
The provincial authorities in charge of examination and approval will issue project confirmations, and certificates for the import
of upgrade equipment, technology and accessories. In their applications, enterprises shall enumerate the financial budget, inventory
and quota of foreign exchange allocated for the research and development center, and submit audited financial statements for the
previous year.

Certificates for the import of upgrade equipment, technology and accessories by export-oriented and advanced technology enterprises
with foreign investment

Export-oriented and advanced technology enterprises with foreign investment involved in the upgrade and repair of original equipment
with free capital outside of their total committed investment, shall have the Certificate for the Export of Products of Enterprises
with Foreign Investment or the Certificate for Advanced Technology Enterprises, issued by MOFTEC or the authorities in charge of
foreign trade and economic and cooperation in the provinces and special economic zones.

If the aforementioned enterprises are categorized as belonging to two or more types of enterprises within the five categories, such
enterprises can choose the form in which they apply and receive the certificates for the import of upgrade equipment, technology
and accessories.

Criteria for appraising and accepting imported equipment

Upgrade equipment, technology and accessories imported by the enterprises with foreign investment for their own production with free
capital outside of their total committed investment, shall be designated as “jointly-invested, jointly-operated equipment” or as
“foreign-invested equipment.” These imports shall administered according to the regulations concerning import under investment, and
checked by customs against “Specialized Audit of Enterprise with Foreign Investment Imported Items” sealed by MOFTEC or the provincial
authorities in charge of foreign trade and economic cooperation onto the Imported Equipment List The import license for items restricted
from import can be handled with the approval of the above-stated authorities.

All departments in charge of foreign trade and economic cooperation shall seriously handle the issuance of project confirmation letters
and import licenses according to regulations stipulated in supplementary notices. The power for examination and approval shall not
be transferred to lower levels. If any questions arise during this process, please report to the MOFTEC division of foreign investment.

The circular shall come into force as of the date of promulgation. The above-mentioned imported goods, which have arrived at the ports
but have not yet gone through the customs procedures of registration and examination before the promulgation of this circular, shall
be handled by procedures stated within this circular.

Attachment: Project Confirmation Letter for Research and Development Center with Foreign Investment (format)(omitted)

The Ministry of Foreign Trade and Economic Cooperation
2000-11-08

MEASURES FOR MANAGING INTERNET INFORMATION SERVICES

SUPPLEMENTARY CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION CONCERNING THE RELEVANT QUESTIONS ON STANDARD RULES GOVERNING THE ISSUANCE OF IMPORT CERTIFICATES TO ENTERPRISES WITH FOREIGN INVESTMENT

The Ministry of Foreign Trade and Economic Cooperation

Supplementary Circular of the Ministry of Foreign Trade and Economic Cooperation Concerning the Relevant Questions on Standard Rules
governing the Issuance of Import Certificates to Enterprises with Foreign Investment

WaiJingMaoZiTongJinHanZi [2000] No.540

July 26, 2000

Commissions (departments, bureaus) of foreign trade and economic cooperation in various provinces, autonomous regions, municipalities
directly under the Central Government and municipalities separately listed on the State plan:

The designated ports for the import of cars as the investment or for the own-use of enterprises with foreign investment in Article
4 of the Circular on Issues concerning Standard Rules Governing the Issuance of Import Certificates to Enterprises with Foreign
Investment(WaiJingMaoZiTongJinHanZi [2000] No.498) refer to Tianjin New Harbor, Manzhouli, Dalian, Shanghai, Huangpu (old harbor)
and Huanggang of Shenzhen.

All provincial departments in charge of foreign trade and foreign investment and import permit issuing departments must strictly follow
the regulations of the circular when handling examination and approval procedures.

Supplementary Circular is hereby given.

The Ministry of Foreign Trade and Economic Cooperation
2000-07-26

INTERIM PROVISIONS OF THE MINISTRY OF CONSTRUCTION ON UTILIZING FOREIGN CAPITAL IN MUNICIPALITY PUBLIC UTILITIES

The Ministry of Construction

Interim Provisions of the Ministry of Construction on Utilizing Foreign Capital in Municipality Public Utilities

JianZong [2000] No.118

May 27,2000

Article 1

In order to guide and standardize the work of utilizing foreign capital in municipality public utilities, expand the scope of utilizing
foreign capital, and improve the level of utilizing foreign capital, these Provisions are stipulated in accordance with State laws,
regulations, guidance and policies of utilizing foreign capital.

Article 2

The so-called “municipality public utilities” includes municipal supply of water, heat and gas, public transportation, drainage, disposal
of filthy water, construction of roads and bridges, city appearance and environmental sanitation, training management and garden
afforestation, etc.

Article 3

The so-called “utilizing foreign capital” in these Provisions includes getting foreign loans and absorbing foreign investment.

Getting foreign loans includes getting foreign government loans, international financial loans and international commercial loans;

Absorbing foreign investment includes absorbing foreign direct investment (including Chinese-foreign equity joint ventures, Chinese-foreign
contractual joint ventures, foreign-capital enterprises, foreign invested stock enterprises and cooperative development) and other
foreign investments (including foreign businessman purchasing Chinese shares and others).

Article 4

Utilizing foreign capital in municipality public utilities must conform to the State policy of industry and the long-term and mid-term
plans of construction.

Absorbing foreign investment shall abide by “Interim provisions on guiding foreign investment” and “Catalogue of guidance on foreign
investment enterprises”.

Article 5

Foreign capital utilized in municipality public utilities shall be mainly in the new construction, the improvement and expansion of
municipality public utilities, increasing utilities supply capacity, improving the level of technology and equipment of municipality
public utilities as well as the level of enterprises management. Every enterprises and projects shall combine the introduction of
capital with the introduction of techniques and management. The backward or eliminated technology, skill, materials or equipment
are not allowed to use.

Article 6

The Ministry of Construction is responsible for drawing up the State plan of utilizing foreign capital in municipality public utilities.
The plan shall be reported and sent to relevant authorities and incorporated into the State plan of utilizing foreign capital.

The administrative authority of construction in each provincial government is responsible for drawing up the plan of utilizing foreign
capital in municipality public utilities with that administrative region. The plan shall be reported and sent to the Ministry of
Construction in August of each year, and be incorporated into the plan of utilizing foreign capital within that region.

The administrative authority of construction in each prefectural government is responsible for drawing up the plan of utilizing foreign
capital in municipality public utilities within that administrative region.

Municipality public utility enterprises are responsible for proposing the enterprises’ projects of utilizing foreign capital.

Article 7

Besides the relevant State provisions on the powers and procedures of examination and approval, following stipulations shall be abide
by when examining and approving the projects of utilizing foreign capital in municipality public utilities:

For the project which shall be examined and approved by relevant authorities of the State Council, the administrative authorities
of construction of provincial governments shall submit the project proposal to the Ministry of Construction; After the Ministry of
Construction has written the examination and approval opinions, the project shall be examined and approved by relevant authorities
of the state Council.

For the project which shall be examined and approved by relevant authorities of the provincial governments, the administrative authorities
of construction of prefectural governments shall submit the project proposal to the administrative authorities of construction of
provincial governments; After the administrative authorities of construction of provincial governments have written the examination
and approval opinions, the project shall be examined and approved by relevant authorities of the provincial governments.

Besides the mandatory contents of a project proposal, the project proposal of utilizing foreign capital shall include: the present
conditions of utilizing foreign capital within the area or the industry, the selection of the mode of utilizing foreign capital and
the reasons for such selection, the amount of foreign capital being utilized, plan of utilizing foreign capital, prediction of the
capacity of compensating or repaying the foreign capital, etc.

Article 8

The preparation work at former stage must be done well when applying for the projects utilizing foreign loans. The study report of
feasibility of the project must be evaluated by corresponding qualified consultant agency. The domestic mating capital must be fully
prepared, and the channel of collecting capital must be clear.

Article 9

For the approval of project of utilizing foreign loans, the use of foreign loans must conform to the scope and functions which are
stipulated in the loan agreements signed by the two parties. Neither units nor individuals are allowed to direct the loans to other
purpose or change the functions of the loans for any reasons or in any forms.

Article 10

The administrative authorities of construction of the provincial and prefectural governments where the projects of utilizing foreign
loans being located shall direct the construction unit to handle with the work of transferring the loan, and establish the reserves
of repaying. For the foreign loans borrowed by the State untidily and returned by the locality, the repayment of the principal and
interest shall be incorporated into local fiscal year budget plan .

Article 11

For the project absorbing foreign direct investment, the selection of foreign partner shall be undertaken by bidding or inviting the
foreigners to compete the bids. The Chinese party shall entrust relevant consultant agency to investigate and evaluate the intended
foreign partners’ social reputation, legitimacy and capacity of undertaking the project, including its credit and fiscal status,
financing ability, technology and management level, etc. Only after the consultant agency has provided the written evaluation report
confirming the foreign partners’ capacity of undertaking such project can the Chinese party determine the foreign cooperative partner.

Article 12

Based on absorbing foreign direct investment, the Chinese party shall entrust qualified asset evaluation agency to evaluate the asset
provided by the two parties(including tangible asset and intangible asset); The feasibility of the cooperative conditions raised
by foreign party shall be expounded and proved scientifically and reasonably, and the personality level (charging level) of the product
as well as inhabitants’ endurance shall be considered fully.

Article 13

The two parties must strictly abide by the state regulations when starting foreign direct investment project. The Chinese party is
not permitted to break the whole project into parts or examine and approve ultra vires; In the agreement or contract signed by the
two parties, the Chinese party is not allowed to ensure foreign party the fixed rate of return in any forms, set up the minimum price
formula, or make account and check in foreign currency. Nor can the Chinese party allow foreigners to withdraw their capital; No
units or departments are allowed to provide foreign ensure in any form; nor can they be entrusted by the joint ventures to run or
manage the joint ventures. For the supply of water, gas and other public utilities in big and middle cities, the Chinese party must
control more than 50% of the total supply capacity.

Article 14

For the project absorbing foreign direct investment, the main articles of the agreement or contracts signed by two parties shall conform
to the State stipulations. The agreement or contract signed by the two parties must be examined by the administrative authorities
of construction of provincial governments with written opinion, then submitted to competent authority of foreign economic and trade
at the Central or provincial government for examination and approval.

Article 15

For the projects utilizing international financial organizations loan or foreign government loan which has signed contracts or put
on production, in order to absorb foreign direct investment, it shall be approved firstly by the unit of approving the former feasibility
study report of the loan project (including cleaning the claim and debts relationship of foreign loans with domestic loan transferring
agency), then consented by foreign loan agency through consultation with State authorities or financial institutions,. After the
examination and approval in accordance with the procedure of examining and approving foreign investment, the Chinese party can sign
contracts with foreigners.

Article 16

The design of the project utilizing foreign capital must be undertaken by the designing unit which has undertaken similar special
project design tasks and has corresponding designing certificates.

Article 17

The bidding system and project supervisory system must be carried out in the construction of the project of utilizing foreign capital.

Article 18

Project entity responsibility system shall be carried out in the project utilizing foreign capital. In accordance with the principle
of the uniform of responsibility, authority and interest, project entity shall be responsible for the accomplishment of the project,
utilizing of foreign capital, running maintenance after the accomplishment of the project, and the repay of the foreign capital.

Article 19

The administrative authorities of construction at each levels shall set up the statistics record system of utilizing foreign capital,
and incorporate the statistics of utilizing foreign capital into the statistics system of city construction.

After the project contract of utilizing foreign capital has been signed, the competent authorities of the project-constructing unit
shall submit the copy of the contract or agreement to the administrative authorities of construction of prefectural government for
record. The administrative authorities of construction of prefectural government shall report the circumstances of contract signing
to the administrative authorities of construction of provincial government.

The administrative authorities of construction of provincial government shall submit the local statistics report of utilizing foreign
capital in city construction to the Ministry of Construction.

The present contract or agreement of utilizing foreign capital in the municipalities directly under the Central Government shall be
submitted to the Ministry of Construction directly by the administrative authorities of construction of the municipalities’ governments.

Article 20

The administrative authorities of construction of the local government at or above the county level is responsible for the supervision
and management on utilizing foreign capital in local construction.

Article 21

Where foreign capital is utilized in well-known scenic spot, these Provisions may be consulted.

Article 22

The Ministry of Construction shall be responsible for the interpretation of these Provisions.

Article 23

These Provisions shall enter into force as of the date of promulgation.

The Ministry of Construction
2000-05-27

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION CONCERNING THE EXAMINATION AND APPROVAL OF THE PRE-INCOME-TAX DEDUCTION OF ASSET LOSS OF ENTERPRISES WITH FOREIGN INVESTMENT

The State Administration of Taxation

Circular of the State Administration of Taxation Concerning the Examination and Approval of the Pre-income-tax Deduction of Asset
Loss of Enterprises with Foreign Investment

GuoShuiFa [2000] No.46

March 13, 2000

Pursuant to the Law of the People’s Republic of China on Income Tax of Enterprises with Foreign Invesment and Foreign Enterprises
and the corresponding Detailed Measures for implementation as well as the Law of the People’s Republic of China on the Administration
of Taxation (Hereinafter referred to as Taxation Law) and the corresponding Detailed Measures for implementation, the relevant issues
concerning the examination and approval of the deduction of asset losses prior to the levy of income tax for inventory shortages
and destruction of fixed assets or flexible assets, losses arising from write-off and bad debt, and unusual loss caused by natural
disaster, civil lawsuit and other unexpected accidents of enterprises with foreign investment hereinafter referred to as enterprises
are stipulated as follows:

After examination and approval by competent taxation authorities, asset loss of enterprises may be deducted from the current calculation
of enterprises’ income tax. Without examination and approval by competent taxation authorities, asset losses shall not be deducted
by enterprises before income tax collection.

After the occurrence of asset losses and the determination of their value, enterprises shall apply in writing to the competent local
taxation authorities for the deduction of asset loss before the levy of income tax. The application shall set out the type, level,
and period of deduction. The certificates of asset losses examined and approved by competent departments and authorities concerned
and other related materials shall be attached to the application. After examination and approval by taxation authorities, deduction
of approved losses from the current taxable income can be conducted.

If enterprises can verify that asset losses did have occurred but cannot confirm the amount of loss before the current report of taxable
income, they can also apply to the local taxation authorities in accordance with the provision as mentioned in the previous paragraph.
The deduction shall be conducted on the basis of the estimated amount examined and approved by taxation authorities. After loss amount
has been confirmed, the difference between actual amount and estimated amount shall be adjusted concurrently.

In the event that enterprises have not reported promptly to the local taxation authorities about the asset loss pursuant to the stipulations
of two preceding paragraphs on the condition that such failure to report has not outlasted the time limit as provided in Article
30 of the Law of the People’s Republic of China on the Administration of Taxation, such losses may, after the examination and approval
of the competent taxation authorities, be deducted from the current taxable income; if such failure has outlasted the time limit
as stipulated in Article 30 of the Law of the People’s Republic of China on the Administration of Taxation, local tax authorities
shall not accept such applications.

If enterprises make a fraudulent reports, or report of any losses higher than the actual losses or deduct any asset losses before
income tax is levied without approval, competent taxation authorities shall make adjustments and punish the enterprise according
to Article 40 of the Law of the People’s Republic of China on the Administration of Taxation.

For asset losses suffered by the institutions or business sites established by foreign enterprises within the territory of the People’s
Republic of China engaged in production, this Circular shall apply concerning taxation.

This Circular shall enter into force on April 1, 2000. Competent taxation authorities in all provinces, autonomous regions and municipalitie
directly under the Central Government and cities directly under State planning may, pursuant to relevant laws, regulations and this
Circular and taking the specific circumstances into account, formulate detailed measures for implementation regarding the time limit
for application, procedure of examination and approval, power of examination and approval, and other related issues. The measures
for examination and approval stipulated by the local taxation authorities before this Circular enter into force shall be amended
perfected in accordance with this Circular commencing from April 1, 2000.

The State Administration of Taxation
2000-03-13

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2006

CIRCULAR OF THE GENERAL ADMINISTRATION OF CUSTOMS AND THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION CONCERNING NECESSARY CERTIFICATES...

OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ON GRANTING THE REFUND FOR THE EXPORT BEET PULPS

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON POLICY ISSUES OF BUSINESS TAX CONCERNING FOREIGN-CAPITAL FINANCIAL INSTITUTIONS

CIRCULAR OF THE GENERAL ADMINISTRATION OF CUSTOMS ON ADDING THE METHODS OF CUSTOMS SUPERVISION

CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION CONCERNING THE RELEVANT ISSUES ON STRENGTHENING THE EXAMINATION AND APPROVAL OF SUGAR IMPORT FOR PROCESSING TRADE

PROVISIONAL REGULATIONS ON CONSUMPTION TAX

OFFICERS IN ACTIVE SERVICE LAW

CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION CONCERNING IMPORTING EQUIPMENT BY ENTERPRISES WITH FOREIGN INVESTMENT

MEASURES FOR MANAGING INTERNET INFORMATION SERVICES

SUPPLEMENTARY CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION CONCERNING THE RELEVANT QUESTIONS ON STANDARD RULES GOVERNING THE ISSUANCE OF IMPORT CERTIFICATES TO ENTERPRISES WITH FOREIGN INVESTMENT

INTERIM PROVISIONS OF THE MINISTRY OF CONSTRUCTION ON UTILIZING FOREIGN CAPITAL IN MUNICIPALITY PUBLIC UTILITIES

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION CONCERNING THE EXAMINATION AND APPROVAL OF THE PRE-INCOME-TAX DEDUCTION OF ASSET LOSS OF ENTERPRISES WITH FOREIGN INVESTMENT

CONSTITUTION ACT, 1982 – page 22

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

CONSTITUTION ACT, 1982 – page 17

CONSTITUTION ACT, 1982 – page 16

CONSTITUTION ACT, 1982 – page 12

CONSTITUTION ACT, 1982 – page 11

CONSTITUTION ACT, 1982 – page 10

CONSTITUTION ACT, 1982 – page 9

CONSTITUTION ACT, 1982 – page 8

CONSTITUTION ACT, 1982 – page 7