SUPPLEMENTARY PROVISIONS OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS CONCERNING THE IMPOSITION OF PUNISHMENTS IN RESPECT OF OFFENSES OF TAX EVASION AND REFUSAL TO PAY TAX

The Standing Committee of the National People’s Congress

Order of the President of the People’s Repbulic China

No. 61

“Supplementary Provisions of the Standing Committee of the National People’s Congress Concerning the Imposition of Punishments in
Respect Of offenses of Tax Evasion and Refusal to Pay Tax” has been adopted at the 27th Meeting of the Standing Committee of the
Seventh National People’s Congress, and hereby promulgated, and will come into force on January 1, 1993.

President of the People’s Republic of China Yang Shangkun

September 4,1992

Supplementary Provisions of the Standing Committee of the National people’s Congress Concerning the Imposition of Punishments in Respect
of offenses of Tax Evasion and Refusal to Pay Tax

With a view to imposing punishments in respect of offenses of tax evasion and refusal to pay tax, the relevant supplementary provisions
to the Criminal Law have been formulated as follows:

“Evasion of tax” means that a taxpayer fails to pay or underpays the amount of tax payable through the adoption of the means of forging,
revising, concealing or destroying accounting books or supporting vouchers for the accounts without authorization, or of overstating
expenses or not stating or understating income in accounting books, or of filing fraudulent tax returns. Where the amount of tax
evaded accounts for more than ten percent of the amount of tax payable and is over Renminbi 10000 Yuan, or where the taxpayer evades
tax again after having been subject to administrative sanctions imposed by the tax authorities twice by reason of tax evasion, the
taxpayer shall be subject to imprisonment or confinement with hard labour for a term of not more than three years as well as a fine
of not more than five times the amount of tax evaded. Where the amount of tax evaded accounts for more than thirty percent of the
amount of tax payable and is over Renminbi 100000 Yuan, the taxpayer shall be subject to imprisonment for a term of over three years
but not more than seven years as well as a fine of not more than five times the amount of tax evaded.

Where a withholding agent fails to pay or underpays the tax which has been withheld or collected through the adoption of the means
specified in the preceding Paragraph, and where the amount of tax evaded accounts for more than ten percent of the amount of tax
payable and is over Renminbi 10000 Yuan, a punishment shall be imposed on the withholding agent in accordance with the provisions
stipulated in the preceding Paragraph.

Where the illegal acts specified in the preceding two Paragraphs have been committed several times and no punishment has been imposed,
a punishment shall be imposed based on the accumulated amounts.

Where a taxpayer who has failed to pay the amount of tax payable adopts the means of transferring or concealing the property, resulting
in failure on the part of the tax authorities to pursue the payment of the tax in arrears, and where the amount of the tax in arrears
is over Renminbi 10000 Yuan but under Renminbi 100000 Yuan, the taxpayer shall be subject to imprisonment or confinement with hard
labour for a term of not more than three years as well as a fine of not more than five times the amount of tax in arrears. Where
the amount of tax in arrears is over Renminbi 100000 Yuan, the taxpayer shall be subject to imprisonment for a term of over three
years but not more than seven years as well as a fine of not more than five times the amount of tax in arrears.

Where an enterprise or institution commits the offenses specified in Articles 1 or 2 hereof, a fine shall be imposed on the enterprise
or institution in accordance with the provisions set forth in Articles 1 or 2 hereof, and the persons in charge and other personnel
who assume direct responsibility shall be subject to imprisonment or confinement with hard labour for a term of not more than three
years.

Where a taxpayer offers a bribe to tax officials and fails to pay or underpays the amount of tax payable, an investigation into the
criminal liabilities of the taxpayer shall be conducted based on an offense of bribery, and the taxpayer shall be subject to a fine
of not more than five times the amount of tax which has not been paid or underpaid.

Where an enterprise or institution fraudulently obtains a tax refund through the adoption of deceptive means such as fraudulently
declaring the commodities it produces or operates as export goods, and where the amount of the tax refund which has been fraudulently
obtained is over Renminbi 10000 Yuan, a fine of not more than five times the amount of the tax refund which has been fraudulently
obtained shall be imposed on the enterprise or institution, and the persons in charge and other personnel who assume direct responsibility
shall be subject to imprisonment or confinement with hard labour for a term of not more than three years.

Where an entity or individual other than those as prescribed in the preceding Paragraph fraudulently obtains a tax refund for export
from the State, an investigation into the criminal liabilities of the entity or individual shall be conducted based on an offense
of fraud, and a fine of not more than five times the amount of the tax refund which has been fraudulently obtained shall be imposed
on the entity or individual. In addition to imposing a fine on an entity which has committed the offense specified in this Paragraph,
an investigation into the criminal liabilities of the persons in charge and other personnel who assume direct responsibility shall
be conducted based on an offense of fraud.

“Refusal to pay tax” means the refusal to pay tax by using violence or menace. A taxpayer who has refused to pay tax shall be subject
to imprisonment or confinement with hard labour for a term of not more than three years as well as a fine of not more than five times
the amount of tax the taxpayer has refused to pay. Where the case is serious, the taxpayer shall be subject to imprisonment for a
term of over three years but not more than seven years as well as a fine of not more than five times the amount of tax the taxpayer
has refused to pay.

In the case of refusal to pay tax by using violence which causes a person to suffer from serious injury or death, a serious punishment
shall be imposed based on an offence of assault or manslaughter, and a fine shall be imposed in accordance with the provisions set
forth in the preceding Paragraph.

Where the offenses specified herein are committed, the tax authorities shall pursue the payment of the amount of tax which has not
been paid or underpaid, or is in arrears, or a taxpayer has refused to pay, or has been fraudulently obtained. Where a taxpayer is
exempt from criminal punishment in accordance with the law, the tax authorities shall, in addition to pursuing the payment of the
amount of tax which has not been paid or underpaid, or is in arrears, or the taxpayer has refused to pay, or has been fraudulently
obtained, shall impose a fine of not more than five times the amount of tax which has not been paid or underpaid, or is in arrears,
or the taxpayer has refused to pay, or has been fraudulently obtained.

The present provisions shall enter into force as of January 1,1993.

The Standing Committee of the National People’s Congress
1992-09-04

MEASURES ON ADMINISTRATION OF EXAMINATION AND APPROVAL OF INTERNATIONAL SHIPPING AGENTS WITH FOREIGN INVESTMENT

19960909

The Ministry of Foreign Trade and Economic Cooperation

Measures on Administration of Examination and Approval of International Shipping Agents with Foreign Investment

the Ministry of Foreign Trade and Economic Cooperation

February 22, 1995

Article 1

These Measures are formulated in accordance with relevant laws and regulations of the State governing enterprises with foreign investment
as well as regulations concerning trade administration.

Article 2

International shipping agents” mentioned in the present Measures means enterprises with foreign investment that handle, on commission
of the consignors and consignees, international shipment and relevant business of import and export, in the name of their clients
or in their own names.

Article 3

The Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China (hereinafter called MOFTEC) shall be the
authority for examination and approval and administration of international shipping agents with foreign investment.

Article 4

The establishment of an international shipping agent with foreign investment shall be advantageous to the development of foreign trade
and fair competition.

Article 5

The establishment of an international shipping agent with foreign investment shall be in the form of either an equity joint venture
or a contractual joint venture.

Article 6

The minimum registered capital of an international shipping agent with foreign investment shall be:

(1)

US $ 1 million for ocean carriage;

(2)

US $ 800 thousand for air transport;

(3)

US $ 600 thousand for inland transport;

(4)

any shipping agent with foreign investment engaged in two or more kinds of business mentioned above shall, correspondingly, increase
the registered capital, depending on the specific requirements.

Article 7

The operation period of an international shipping agent with foreign investment shall not be longer than twenty years.

Article 8

An international shipping agent with foreign investment may, upon approval, be engaged in part or all of the following business:

International shipping business for import and export of a trade or non-trade nature through ocean, inland and air transport, including
such business as: goods collecting, space booking, space chartering, ship chartering, plane chartering, international multi-modal
transport, storage, LCL and FCL, document preparation, B/L issuing, declaration at customs, declaration for inspection, declaration
for test, insurance, settlement of transport overhead charges, etc.

Article 9

Chinese and foreign investors who apply for the establishment of international shipping agents with foreign investment shall, in addition
to the requirements by the laws and regulations of the State concerning enterprises with foreign investment, meet the following conditions:

(1)

Chinese and foreign investors who apply for the establishment of international shipping agents with foreign investment shall be enterprises
which are engaged in business relating to international transport of goods; and

(2)

the investors shall be of no less than three years’ experience in this business, with management personnel and an appropriate number
of clients.

Article 10

Application for the establishment of an international shipping agent with foreign investment shall, in accordance with the procedures
provided for by the state’s laws and regulations in force concerning enterprises with foreign investment be submitted to MOFTEC for
examination and approval. With its approval, MOFTEC shall issue the Certificate of Approval for Enterprises with Foreign Investment
and the Certificate of Approval for International Shipping Agents accordingly.

The Chinese partner shall go through the procedures with the department of administration for industry and commerce for registration
of enterprise legal person by providing the certificate of approval issued by MOFTEC.

Article 11

An international shipping agent with foreign investment may, according to the needs of business development, apply for the set-up
of branches and subsidiaries in other parts of China after one year’s operation an performance of all of the contributions by the
parties.

Application for the set-up of branches and subsidiaries shall, first, be submitted to the authorities for foreign economic relations
and trade of the places where the shipping agent is located for preliminary examination, and then for comments to the authorities
for foreign economic relations and trade in the places where the branches and subsidiaries are intended to be set up and finally
to MOFTEC for examination and approval with the proceeding approval.

An international shipping agent with foreign investment which applies for the set-up of branches and subsidiaries shall present the
following documents:

(1)

airport transmitted by the authority for foreign economic relations and trade of the place where the shipping agent is located and
a letter of approval by the authority for foreign economic relations and trade of the place where the branches and subsidiaries are
located;

(2)

a decision by the board of directors of the shipping agent for the set-up of branches and subsidiaries;

(3)

a report on business situation of the shipping agent and reasons for such setup and a feasibility study; and

(4)

a report of capital verification of the shipping agent.

An international shipping agent which applies for the set-up of branches and subsidiaries shall increase the registered capital accordingly,
and the business scope of the branches and subsidiaries shall not be greater than that of the shipping agent.

Article 12

The present Measures shall, apply to the international shipping agents set up in the mainland areas of the People’s Republic of China
with investment from companies, enterprises and other economic entities or individuals in Hong Kong, Macao and Taiwan.

Article 13

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

The Ministry of Foreign Trade and Economic Cooperation
1995-02-22

CIRCULAR OF THE STATE COUNCIL CONCERNING APPROVING AND TRANSMITTING THE JOINT PROPOSALS OF THE SECURITIES COMMISSION OF THE STATE COUNCIL AND THE CHINA SECURITIES SUPERVISORY AND REGULATORY COMMISSION ON FURTHER STRENGTHENING SUPERVISION AND MANAGEMENT OF THE OPTION MARKET

Category	BANKING	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1996-02-23	Effective Date	1996-02-23

Circular of the State Council Concerning Approving and Transmitting the Joint Proposals of the Securities Commission of the State Council and the China Securities Supervisory and Regulatory Commission on Further Strengthening Supervision and Management of the Option Market

The Circular
Appendix: JOINT PROPOSALS ON FURTHER STRENGTHENING SUPERVISION AND

(February 23, 1996)

The Circular

The State Council has approved the Joint Proposals on Further
Strengthening Supervision and Management of the Option Market submitted by the
Securities Commission of the State council and the China Securities
Supervisory and Regulatory Commission, and hereby transmits them to you for
the earnest implementation thereof.
Appendix: JOINT PROPOSALS ON FURTHER STRENGTHENING SUPERVISION AND
MANAGEMENT OF THE OPTION MARKET

Complying with the overall strategy of the State Council, the Securities
Commission of the State Council and the China Securities Supervisory and
Regulatory Commission (hereinafter abbreviated to CSSRC) have strengthened the
management and restructuring of the option market. After two years’ effort,
the tendency of disorderly development of the option market has to certain
extent been restrained, the market actions have been gradually regulated, the
competence of supervision and management has been further improved and the
pilot projects have been progressed to the right path. However, the option
market still suffers from some problems that should not been neglected. The
protruding problems are as follows: a few big clients, relying on their
capital strength, conspire to rig the market for staggering profits; a few
people embezzle public funds to speculate in futures for private profit at the
public expense, utilize bank loans or call money or collect capital under
disguise for forward business; some individual clients even commit financial
crimes in forward exchanges in violation of relevant regulations purposely.
Those offences not only obstruct other enterprises in lawful business
activities such as arbitrage transactions for value maintenance but also
disrupt the normal order of the option market and obstruct its healthy
development. To further restrain excessive speculations and strengthen the
supervision and regulation of the option market, following proposals are put
forward:

1. Enterprises and institutions owned by the state or dominated by state
capital stocks (hereinafter referred to as state-owned enterprises and
institutions) shall be allowed to develop arbitrage transactions for value
maintenance only on futures commodities that are relevant to the production
and business of the enterprises and institutions in question and should not
conduct speculation or malicious manipulation in forward transactions.
State-owned enterprises and institutions who are to engage in arbitrage
transactions for value maintenance shall show the forward exchange or futures
agent institutions documents of approval obtained from relevant authority in
charge or from the board of directors. Those who fails to show the document of
approval may not be accepted by the forward exchange as an institutional
member or by futures agent institutions as a client. In case a forward
exchange or a futures agent institution violates the abovementioned
stipulations, the CSSRC shall, in addition to investigation into the
responsibilities of the persons in charge, order a correction, a fine, a stop
of business for futures exchange or disqualification from being a trial
forward exchange or a futures transaction agent in light of the seriousness of
the offence. State-owned enterprises or institutions who arbitrarily conduct
forward transactions without approval of the authority in charge or board of
directors or suffer a loss in speculation in forward business shall have the
persons in charge assessed in terms of responsibilities.

2. Different kinds of banking institutions may not for itself or on
commission of others engage in forward business. Those banking institutions
who have begun forward business for itself shall within 40 business days after
the date of March 4, 1996 square the cash account for the business. Those
banking institutions who have begun forward business on commission of others
may not accept new clients ever from the date of March 4, 1996 and shall
within 40 business days thereafter conclude all agent business by squaring the
cash accounts or by transfer of the clients cash to other futures agent
institutions. All forward exchanges who have banking institutions as business
members thereof shall perform supervisory function so that those institutions
could within the prescribed time conclude forward business whether operated
for themselves or on commission of others, and shall deprive them of the
membership after matters concerning credits and liabilities are settled.
Futures agent institutions who have banking institutions as clients shall
perform supervisory functions so that those institutions could within the
prescribed time bring their accounts to a balance and shall cancel the
accounts after matters concerning credit and liabilities are settled.

Any banking institution may not make out letter of security on capital
intended for forward transactions. It is rigorously prohibited to use bank
loans or call money for forward business. Banking institutions at all levels
shall strengthen supervision and management to guard against the flow of
credit funds into the option market.

3. Futures agent companies may not engage in forward transactions for
themselves. Those who have begun such business for themselves shall within 40
business days from the date of March 4, 1996 square the account with the cash
held for forward business. In case a futures agent company continues the
forward transactions for itself against this stipulation, the CSSRC shall, in
addition to investigation into the responsibilities of the persons in charge,
order a correction, a fine, a stop of business for rectification, or
disqualification from being a forward business agent in light of the
seriousness of the offence.

4. With a view to reinforcing the supervision and management of the option
market, effectively preventing from, investigating and dealing with market
manipulation cases, the CSSRC may in accordance with relevant procedures make
inquiries into the accounts opened at the commercial banks or other banking
institutions by forward exchanges, futures agent institutions and clients.

5. All forward exchanges shall in consideration of their own individual
circumstances establish a system of “banning entrance into the market”. Those
institutions or individuals who have proved to have rigged the market or
committed fraudulent conducts in forward transactions and have therefore
caused serious consequence shall be publicized as “the persons banned from
entrance into the market” and be reported to the CSSRC, who shall then
circulate a notice among all forward exchanges. In addition to issue of an
order for squaring the forward business accounts, all forward exchanges,
futures agent institutions shall immediately stop accepting new directions for
forward transaction from “the person banned from entrance into the market”. If
the criminal law is violated, the case shall be transferred to the judicial
organs for assessment of criminal responsibilities. For those who have been
notified by the CSSRC as “persons banned from entrance into the market”, no
forward exchange or futures agent institution may open accounts for their
forward business within three years. In case a forward exchange or a futures
agent institution accepts a person banned from entrance into the market, the
CSSRC shall, in addition to investigation into the responsibilities of the
concerned persons in charge, order a correction, confiscation of illicit
gains, a fine, a stop of business for rectification, disqualification from
being a trial forward exchange or from developing forward agent business.

6. With a view to bringing into full play the functioning of the option
market for value maintenance through futures and prices identification, to
preventing from a large amount of capital being utilized on small commodity
futures, and to ridding the option market of the vicious circle of more and
more rampant speculation in smaller and smaller commodities futures, certain
kinds of staple commodities futures which are maturely developed in the
international market and that can most effectively perform the function of
value maintenance through futures should be selected in due course for trial
marketing by a few much standardized forward exchanges subject to strict
supervision and control.

RULES FOR THE IMPLEMENTATION OF THE BUSINESSES OF SETTLEMENT AND SALE OF AND PAYMENT IN FOREIGN EXCHANGE OF FOREIGN-CAPITAL BANKS

The People’s Bank of China

Rules for the Implementation of the Businesses of Settlement and Sale of and Payment in Foreign Exchange of Foreign-capital Banks

the People’s Bank of China

June 18, 1996

Chapter I General Provisions

Article 1

These Rules are formulated in accordance with the Regulations of the People’s Republic of China on Administration of Financial Institutions
with Foreign Investment and the Provisions on Administration of Settlement and Sale of and Payment in Foreign Exchange for the purposes
of improving the system of foreign exchange settlements and sales and standardizing the activities of foreign exchange settlements,
sales and payments of banks with foreign investment.

Article 2

Foreign-capital banks mentioned in these Rules refer to foreign capital banks, branches of foreign banks and Chinese-foreign equity
joint banks within Chinese territory approved by the People’s Bank of China and issued with a Licence to Engage in Foreign Exchange
Business by the State Administration of Foreign Exchange.

Article 3

Renminbi special accounts for settlement and sale of foreign exchange mentioned in these Rules refer to Renminbi special accounts
opened by foreign-capital banks in local branches of the People’s Bank of China and used for conducting the business operations of
settlement and sale of foreign exchange.

Article 4

Foreign-capital banks shall only be allowed to conduct such business operations as settlement and sale of and payment in foreign exchange
of enterprises with foreign investment, settlements under loans of non enterprises with foreign investment and other business operations
of settlement and sale of and payment in foreign exchange approved by the State Administration of Foreign Exchange, and shall implement
the provisions of the Provisions on Administration of Settlement and Sale of and Payment in Foreign Exchange.

Chapter II Administration of Renminbi Special Accounts for Settlement and Sale of Foreign Exchange

Article 5

A foreign-capital bank may, upon the approval of a local branch of the People’s Bank of China, open a Renminbi special account for
settlement and sale of foreign exchange at the local branch of the People’s Bank of China which is to be used for receiving and paying
Renminbi in the business operations of settlement and sale of foreign exchange.

Article 6

A foreign-capital bank which is to open a Renminbi special account for settlement and sale of foreign exchange shall meet the following
requirements:

(1)

It is authorized by the State Administration of Foreign Exchange to conduct import and export settlement operations;

(2)

It is a member of the China Transaction Center of Foreign Exchange after being approved by the China Transaction Center of Foreign
Exchange and reported to the State Administration of Foreign Exchange for the record.

Article 7

A foreign-capital bank which is to open a Renminbi special account for settlement and sale of foreign exchange shall submit the following
documents:

(1)

an application for opening a Renminbi special account for settlement and sale of foreign exchange;

(2)

the Licence to Engage in Foreign Exchange Business Operations issued by the State Administration of Foreign Exchange;

(3)

documents certifying the approval of its status as a member of the Foreign Exchange Transaction Center of China.

Article 8

A foreign-capital bank which is authorized to open a Renminbi special account for settlement and sale of foreign exchange may, by
selling 20 per cent of its registered foreign exchange capital funds or operation funds through the foreign exchange transaction
market among banks, buy Renminbi and have it deposited into the Renminbi special account for settlement and sale of foreign exchange
as working capital funds.

Article 9

Foreign Exchange bureaus shall exercise balance control over Renminbi special accounts for settlement and sale of foreign exchange
of foreign-capital banks. The daily capital balance of a Renminbi special account for settlement and sale of foreign exchange shall
not exceed the verified amount without approval. The balance exceeding the verified amount shall be converted into foreign exchange
through foreign exchange transactions among banks and shall not be lent in Renminbi. The State Administration of Foreign Exchange
shall, depending on the conditions of the settlement and sale of foreign exchange of a foreign-capital bank, verify and adjust the
balance of its Renminbi special account for settlement and sale of foreign exchange.

Article 10

Where a Renminbi special account for settlement and sale of foreign exchange is not enough to be settled due to the failure of transference
of Renminbi funds, a Chinese-funded financial institution which signs a daily lending agreement on settlement and sale of foreign
exchange with this foreign-capital bank and opens an account at the local branch of the People’s Bank of China may, by asking a local
financing intermediate institution engaged in inter-bank lending business to act as its agent, provide daily lending funds to the
foreign-capital bank within a period of 48 hours so as to ensure the normal transactions.

Article 11

The scopes of revenues and expenditures of a Renminbi special account for settlement and sale of foreign exchange of a foreign-capital
bank shall be as follows: Revenues: money in Renminbi derived from selling its foreign exchange capital funds or operation funds;
money in Renminbi allocated into the account by clients for buying foreign exchange; money in Renminbi derived from the sale of foreign
exchange through the foreign exchange market among banks. Expenditures: money in Renminbi due to clients for the settlement of foreign
exchange; money in Renminbi for buying foreign exchange through the foreign exchange market among banks.

Article 12

Foreign-capital banks conducting the business operations of settlement and sale of foreign exchange shall participate in the “Renminbi
bills clearance system in the same city” of the People’s Bank of China so as to establish a network of allocation of Renminbi between
foreign-capital banks and their clients and to conduct clearance of Renminbi funds.

Article 13

A foreign-capital bank participating in the “Renminbi bills clearance system in the same city” shall meet the following requirements:

(1) possessing staff members passing the examination of “Renminbi bills clearance in the same city”;

(2) possessing an agreement on daily lending RMB for settlement and sale of foreign exchange signed with a Chinese-funded financial
institution.

Article 14

Foreign-capital banks shall use Renminbi special payment vouchers of settlement and sale of foreign exchange uniformly printed and
produced by the People’s Bank of China to undertake the receipts and payments of funds in Renminbi special accounts of settlement
and sale of foreign exchange, and shall not have the special vouchers used in any other businesses.

Article 15

Foreign-capital Banks shall use their Renminbi special accounts of settlement and sale of foreign exchange in accordance with the
Measures for Administration of Bank Accounts (promulgated by the People’s Bank of China on October 9,1994), and shall not use them
for receiving or paying, depositing or transferring Renminbi for any other unit or individual, and shall not lease, lend or exchange
these Renminbi special accounts.

Chapter III Supplementary Provisions

Article 16

Foreign-capital banks shall, in accordance with the Interim Measures for Administration of Verification of Import Payment of Foreign
Exchange and other relevant provisions, undergo the relevant formalities of verification of import payment of foreign exchange for
their clients and render cooperation in the work in relation to the verification of export collection of foreign exchange.

Article 17

For the purpose of avoiding the risks of foreign exchange rates by clients with forward trade contracts, foreign-capital banks may,
upon approval, conduct the businesses of forward transactions between Renminbi and foreign exchange and other value-preservation
business in accordance with the relevant provisions.

Article 18

Foreign-capital banks shall every day submit their Daily Statement of Renminbi Special Accounts Balance for Settlement and Sale of
foreign exchange of Banks with Foreign Investment to the local branches of the State Administration of Foreign Exchange and the statements
required by the State Administration of Foreign Exchange. When the daily balance of account funds exceeds the amount of a special
account for settlement and sale of foreign exchange verified by the State Administration of Foreign Exchange, the bank shall report
the matter to the foreign exchange bureau on its initial.

Article 19

The foreign exchange bureaus shall, in accordance with the provisions, supervise and examine the business operations of settlement
and sale of and payment in foreign exchange and the uses of Renminbi special accounts for settlement and sale of foreign exchange
by foreign-capital banks with foreign investment.

Article 20

Where the relevant provisions of these Rules are violated, the foreign exchange bureau may, in accordance with the Regulations of
the People’s Republic of China on Foreign Exchange Control, give a warning, issue a notice of criticism, impose a fine or have the
business operations of settlement and sale of and payment in foreign exchange suspended.

Article 21

The State Administration of Foreign Exchange shall be responsible for the interpretation of these Rules.

Article 22

These Rules shall enter into force as of July 1, 1996. The Interim Provisions on Renminbi Special Accounts of Foreign-capital Banks
shall be repealed simultaneously.

The People’s Bank of China
1996-06-18

MEASURES FOR ADMINISTRATION OF GUARANTEES OVERSEAS BY INSTITUTIONS WITHIN THE CHINESE TERRITORY

The People’s Bank of China

Decree of the People’s Bank of China

No.3

According to the Guarantee Law of the People’s Republic of China and other relevant State administrative regulations governing foreign
exchange, the People’ bank of China has drew the Measures for Administration of Guarantees Overseas by Institutions within the Chinese
Territory, it is hereby promulgated and shall enter into force as of October 1,1996.

President of the People’s Bank of China: Dai Xianglong

September 25, 1996

Measures for Administration of Guarantees Overseas by Institutions within the Chinese Territory

Article 1

These Measures are formulated with a view to promoting foreign economic and technological cooperation, supporting the development
of foreign trade, promoting labour export, and import of foreign advanced technology, equipment and funds, smoothly carrying foreign
financial activities, standardizing activities of and improving the administration of guarantees to overseas entities in line with
“The Guarantee Law of the People’s Republic of China” and relevant State administrative regulations governing foreign exchange.

Article 2

Guarantees made overseas referred to in these Measures are guarantees in the forms of guarantee letters, stand-by letters of credit,
cashiers’ checks and drafts, mortgages by properties stipulated in Article 34 of the “Guarantee Law of the People’s Republic of
China”, hypothecation by moving properties stipulated in Section 1 of Chapter 4 of the “Guarantee Law of PRC” or by rights stipulated
in Article 75 of the above-mentioned “Guarantee Law” provided by institutions within Chinese territory (excluding financial institutions
with foreign investment inside China, hereinafter referred to as the guarantors) to institutions outside China or financial institutions
with foreign investment inside China (creditors or beneficiaries, hereinafter referred to as the creditors) with the pledges that
when the debtors (hereinafter referred to as the guaranteed) fail to repay the debts in line with the contracts, the guarantors shall
perform the obligation of repayment. Such guarantees include:

(1)

call money guarantee;

(2)

guarantees for the lease of call money;

(3)

guarantees for accounts under compensation trade;

(4)

guarantees for the contracted engineering projects outside China; and

(5)

guarantees for others with the nature of foreign debts

Guarantors should not provide such guarantees in the form of lien or deposits.

The guarantees provided to the financial institutions with foreign investment inside China is regarded as made overseas.

Article 3

The People’s Bank of China empowers the State Administration for Exchange Control and its subdivisions (hereinafter referred to as
the SAEC) to be responsible for the examination, approval, administration and registration of guarantees made overseas.

Article 4

Guarantors as stipulated in these Measures are:

(1)

financial institutions which have been empowered of making guarantees overseas (excluding financial institutions with foreign investment);
and

(2)

non-financial enterprise legal persons that have the capacity to pay off the debts, including Chinese enterprises and enterprises
with foreign investment.

State organs and institutions cannot provide guarantees overseas except for sub-lending of loans provided for by foreign governments
or international economic organizations.

Article 5

The combined balances of guarantees made overseas, forex guarantees within Chinese territory and foreign exchange debts of a financial
institution cannot exceed 20 times their forex funds.

The balance of guarantees made overseas provided by a non-financial institution legal person cannot exceed 50% of its net assets or
its forex revenue in the preceding year.

Article 6

Chinese enterprises can only provide such guarantees for the sub-divisions directly subordinate to it or for the foreign debts of
the investment of the Chinese side of a stock enterprise.

For providing guarantees overseas, the ratio between the net assets and total assets of a Chinese trade enterprise cannot be lower
than 15% in principle.

For providing guarantees overseas the ratio between the net assets and total assets of a Chinese non-trade enterprise cannot be lower
than 30% in principle.

Article 7

Guarantors should not provide guarantee for money-losing overseas enterprises.

Article 8

When providing guarantees for enterprises with foreign investment (excluding solely foreign-owned enterprises), the guarantors should
adhere to the principle of jointly undertaking risks and sharing profits, and at the same time, the use of foreign loans of the guaranteed
should accord with the State industrial policy, and the loans cannot be converted into Renminbi for use without approval.

Guarantors should not provide guarantees for registered capital of enterprises with foreign investment.

Apart from the enterprises with foreign investment, guarantors should not provide guarantees for the foreign debts of investment by
the foreign side of a enterprise with foreign investment.

Article 9

While examining and approving the guarantee provided to a trade enterprise outside China by a guarantor, the SAEC shall examine the
trade scope, the ratio between assets and debts, losses and benefits of the guaranteed, and then appraise and decide the ceiling
of guarantee the guaranteed shall receive.

While examining and approving a guarantee provided to a project contractor outside China by a guarantor, the SAEC shall examine the
amount and risks of the contracted project, the ratio between the assets and debts, losses and benefits of the guaranteed, and then
appraise and decide the ceiling of guarantee the guaranteed shall receive.

Article 10

Terms of reference for examining and approving guarantees overseas:

(1)

In providing guarantee overseas for Chinese enterprises and such guarantees within one year (including one year) for enterprises with
foreign investment, guarantors should report to the SAEC of its province, autonomous region, municipality directly under the Central
Government, municipality separately listed on the State plan or of the special economic zone for examination and approval; and

(2)

In providing guarantees of more than one year (excluding one year) to enterprises with foreign investment and to institutions outside
China, guarantors should report to the SAEC of its province, autonomous region, municipality directly under the Central Government,
municipality separately listed on the State plan or of the special economic zone for initial examination and then to the country’s
SAEC for examination and approval.

Article 11

Guarantors should provide part or all of the following materials to the SAEC in going through the formalities of reporting its deal
for approval:

(1)

the approved feasibility study report of the project to be guaranteed and other approved related documents;

(2)

the balance sheets (consolidated balance sheets if the guaranteed is a group company) as audited by certified accountants;

(3)

the profit and loss report of the guaranteed which has been audited by the certified accountants;

(4)

the letter of intent of the guarantee contract;

(5)

the major debt contract or letter of intent under the guaranteed project and other related documents;

(6)

relevant materials as stipulated in Articles 8 and 9 of these Measures; and

(7)

other materials as required by the SAEC.

Article 12

Guarantors can only provide guarantees overseas upon approvals by SAEC.

Article 13

In providing guarantee overseas, guarantors should conclude written contracts with the creditors and the guaranteed, agreeing on the
following rights and obligations of each party:

(1)

Guarantors have the right to supervise the funds and properties of the guaranteed;

(2)

After provision of guarantees, creditors and guaranteed should have the agreement of guarantors if they need to revise the guarantee
contract and the guarantors should report the revision to the SAEC for examination and approval; otherwise the guarantors should
automatically be relieved of their obligations;

(3)

After their providing guarantee overseas, the guarantors should, within the terms of validity of the contracts, perform their obligations
as stipulated in the contracts. Guarantors that have performed their obligations have the right to seek compensations from the guaranteed;

(4)

After providing guarantee overseas, guarantors concerned should automatically be relieved of their obligations if the creditors fail
to perform their obligations as set in the debt contracts within the term of validity of the guarantee contracts;

(5)

Guarantors have the right to ask the guaranteed to carry out the counter-guarantee measures or provide corresponding mortgages; and

(6)

Guarantors have the right to collect the agreed guarantee charges.

Article 14

After providing guarantee overseas, guarantors should go to the local SAEC to go through the formalities of guarantee registration.

After providing guarantee overseas, non-financial institutions should, within 15 days beginning from dates when guarantee contracts
are concluded, go to the local SAEC to fill out the “Guarantee Overseas Registration Form”; collect the “Guarantee Overseas Registration
Book”; draw and remit the forex needed by the guarantee contracts upon the check and approval of the local SAEC, and correspondingly
reduce the balances of the guarantee and debts.

Financial institutions should fill out the “Guarantee Overseas Feedback Form” within 15 days following the end of each month and report
the debt of preceding month every month.

Article 15

If an extension is needed upon the expiration of a guarantee, the guarantor should go to the local SAEC to go through the formalities
of extension 30 days prior to the expiration of the debts and the SAEC shall examine and approve according to the terms of reference
set in Article 10 of these Measures.

Article 16

Non-financial institution guarantors should return the “Foreign Guarantee Registration Book” to the original issuing SAEC and handle
the writing-off formalities within 15 days beginning from the date when the debts under the guarantee account are due, the guarantee
obligations are completed or other cases that lead to the suspension of the guarantee contracts. Financial institution guarantors
should go through the writing-off formalities.

Article 17

If a guarantor provides guarantee overseas without approval, foreign guarantee contract it concludes is invalid.

If a guarantor provides guarantee overseas without approval or without registration after it has done so, the SAEC shall, according
to the cases, issue a warning, or a criticism by way of issuing a notice, suspend or cancel the guarantee business of the guarantor.

Article 18

These Measures apply to the counter-guarantees overseas.

Article 19

These Measures shall enter into force as of October 1, 1996. “Measures for the Administration of Foreign Exchange Guarantees by Resident
Institutions In China” promulgated on September 26, 1991 are nullified at the same time. The SAEC is enpost_titled to interpret these
Measures.

The People’s Bank of China
1996-09-25

CIRCULAR OF THE GENERAL ADMINISTRATION OF CUSTOMS ON THE LEFTOVER TARIFF ISSUES CONCERNING UNEVALUATED EQUIPMENT IMPORTS BY FOREIGN INVESTORS OF PROJECTS OF PROCESSING WITH CUSTOMERS’ MATERIALS

The General Customs Administration

Circular of the General Administration of Customs on the Leftover Tariff Issues Concerning Unevaluated Equipment Imports by Foreign
Investors of Projects of Processing with Customers’ Materials

ShuShui[1998]No.315

June 5, 1998

Guangdong Customs and all customs and universities and colleges directly under the General Administration of Customs:

The State Council made the decision on the first half of 1997 to extend the period for deferred tariff payment of non-evaluated equipments
imported after April 1, 1996 by foreign investors of projects of processing with customers’ materials to December 31, 1997. The tariff
can be paid by installments in 5 years calculated from January 1, 1998 with an annual payment of 20 % of the total amount. With the
approval of the State Council, the General Administration of Customs and the Ministry of Finance decide, in order to encourage the
development of processing trade and ensure policy continuity, that the aforementioned equipments shall enjoy tariff exemption treatment
according to the Circular of the State Council on Adjusting the Tariff Policy of Equipment Imports (GuoFa [1997] No. 37).

Relevant customs please conduct examination on non-evaluated equipments enjoying deferred tariff payment (including bail payment)
treatment upon receiving this Circular. Except for goods listed in the Catalogue of Imported Goods of Foreign Invested Projects Enjoying
No Tariff Exemption, cases involving other goods defined hereinabove shall be wound up as tariff exemption ones with relevant procedures
duly handled. All competent customs shall intensify follow-up supervision in accordance with relevant provisions concerning equipments
with tariff exemption or reduction.

It is hereby notified.

The General Customs Administration
1998-06-05

INTERIM MEASURES FOR TRIAL IMPLEMENTATION OF TRAVEL AGENCIES WITH CHINESE AND FOREIGN INVESTMENT

e0108219981029the State Council20020101

The National Tourism Administration, the Ministry of Foreign Trade and Economic Cooperation

Interim Measures for Trial Implementation of Travel Agencies with Chinese and Foreign Investment

Decree [1998] No.11 of the National Tourism Administration, the Ministry of Foreign Trade and Economic Cooperation

(Approved by the State Council on October 29,1998, Promulgated by Decree No.11 of the National Tourism Administration and the Ministry
of Foreign Trade and Economic Cooperation on December 2,1998)

Article 1

These Measures are formulated in accordance with the Law of the People’s Republic of China on Chinese and Foreign Equity Joint Ventures
and the Regulations on Administration of Travel Agencies as well as other relevant laws and regulations for the purposes of further
expanding the opening up of tourist industry and promoting the development of tourist industry.

Article 2

These Measures are applicable to travel agencies with Chinese and foreign investment (hereinafter referred to as joint investment
travel agencies) that are established within the Chinese territory by foreign companies or enterprises and Chinese companies or enterprises.

Article 3

In applying for establishing a joint investment travel agency, the Chinese joint venture partner shall meet the following requirements:

(1)

It is an international travel agency;

(2)

Its average rate of outside contacts exceeded 30,000 persons per year during the 3 years before the application;

(3)

Its gross sales in the travel business per year exceeded 50,000,000 yuan during the 3 years before the application;

(4)

It is a regular member of the Chinese Tourism Association.

Article 4

In applying for establishing a joint investment travel agency, the foreign joint venture partner shall meet the following requirements:

(1)

It is a travel agency with international travel operations or an enterprise that owns a wholly-funded travel agency with international
travel operations;

(2)

Its annual gross sales in the travel business exceed US$50,000,000;

(3)

It has acceded to an international or a domestic computer reservation network or has built its own computer reservation system;

(4)

It is a regular member of its home country’s tourism association.

Article 5

A joint investment travel agency to be established shall meet the following requirements:

(1)

Its registered capital shall be no less than RMB 5,000,000 yuan;

(2)

It shall take the form of a limited liability company;

(3)

The proportion of the Chinese joint venture’s investment to the registered capital shall be no less than 51%;

(4)

Its legal representative shall be appointed by the Chinese side;

(5)

It has business premises, facilities and staff that are commensurate with demands; and

(6)

The duration of joint venture shall be no longer than 20 years.

Article 6

A joint investment travel agency shall, in accordance with the provisions on operating inbound tourism by international travel agencies,
pay a deposit in guarantee of travel agency quality.

Article 7

The examining and approving procedures for joint investment travel agencies are:

(1)

Chinese joint venture partner shall submit to the departments of tourism administration of the provinces (autonomous regions, municipalities
under the Central Government) or municipalities separately listed on the State plan in the localities where they are located the
project proposals, feasibility study reports and other documents for establishing a travel agency joint investment. The provincial
departments of tourism administration shall, after their preliminary examination, transfer and report thereon to the National Tourism
Administration.

Where the Chinese joint venture partner are enterprises directly under the Central Government, their competent departments shall,
after their preliminary examination, transfer and report thereon to the National Tourism Administration.

The National Tourism Administration shall, in accordance with the relevant laws and regulations of the State on tourism administration;
examine and approve the submitted documents.

(2)

Chinese joint venture partner shall, after obtaining the reply of approval of the National Tourism Administration, submit to the provincial
competent departments of foreign economic and trade in the localities where they are located the contracts, articles of association
and other documents of the joint investment travel agencies to be established. The provincial competent departments of foreign economic
and trade shall, after their preliminary examination, transfer and report thereon to the Ministry of Foreign Trade and Economic Cooperation.

Where the Chinese joint venture partners are enterprises directly under the Central Government, their competent departments shall,
after their preliminary examination, transfer and report thereon to the Ministry of Foreign Trade and Economic Cooperation.

The Ministry of Foreign Trade and Economic Cooperation shall, in accordance with the relevant laws and regulations of the State on
foreign investment, examine and approve the submitted documents.

(3)

For the projects for which establishment has been approved, the Chinese joint venture partner shall undertake the formalities of registration
and taxation registration in accordance with the provisions on the basis of the Approval Certificate for Enterprise with Foreign
Investment issued by the Ministry of Foreign Trade and Economic Cooperation and the License for Operating Business of Travel Agency
issued by the National Tourism Administration.

Article 8

The following documents shall be submitted in applying for establishing a travel agency with joint investment:

(1)

materials certifying the qualification of the Chinese joint venture partner, including: a copy of its business license, the License
for Operating Business of Travel Agency, annual business examination reports for the previous 3 years before the application and
the testimonial of regular membership of the relevant tourism association;

(2)

materials certifying the qualification of the foreign joint venture partner, including: a copy of its registration certificate, a
certificate of credit worthiness issued by its banker, papers certifying its financial position issued by an accounting firm, a certificate
of access to a network issued by the relevant computer company, a certificate of regular membership of the home country’s tourism
association and the annual report of the year before the application;

(3)

project proposal for the joint investment travel agency;

(4)

feasibility study report for the joint investment travel agency;

(5)

the contract and articles of association of the joint investment travel agency;

(6)

other materials whose submission is required by laws, regulations or the examining and approving authority.

Article 9

Each foreign joint venture may invest to establish only one joint investment travel agency within the Chinese territory.

Article 10

No joint investment travel agency is allowed to establish branches during the trial period.

Article 11

A joint investment travel agency may operate both inbound and domestic travel businesses.

Article 12

A joint investment travel agency is not allowed, for the time being, to operate its business for Chinese citizens to travel to a foreign
country, the Hong Kong Special Administrative Region, Macao and Taiwan.

Article 13

Where operating special travel programs and programs for travel to special regions, a joint investment travel agency shall report
same to the National Tourism Administration and the relevant departments for approval.

Article 14

A joint investment travel agency shall not organize and arrange any programs which include obscenity, gamble, drug-taking or any other
programs which are hazardous to social morality and physical and mental health of the people; nor shall it organize any programs
which are injurious to the State interests and national dignity of the People’s Republic of China; nor shall it organize any programs
which contain features that are forbidden by China’s laws and regulations.

Article 15

Engagement of tourist guides within the Chinese territory by joint investment travel agencies shall be conducted in accordance with
the relevant provisions of the State.

Article 16

Joint investment travel agencies shall subject themselves to the administration of tourism administration departments.

Article 17

Joint investment travel agencies must submit statements on finance, accounting and statistics to tourism administration departments
and other relevant departments in accordance with the relevant provisions, and accept business inspection.

Article 18

The income and expenditure in foreign exchange of a joint investment travel agency shall be dealt with in accordance with the relevant
measures on enterprises foreign investment.

Article 19

Joint investment travel agencies must abide by the laws and regulations of the People’s Republic of China, and subject themselves
to the jurisdiction of China’s laws and regulations. Their appropriate business activities and lawful rights and interests shall
be protected by China’s laws and regulations.

Joint investment travel agencies that commit any acts violating China’s laws and regulations shall be dealt with according to the
relevant laws and regulations.

Article 20

Where the provisions of these Measures are violated, the tourism administration departments shall impose punishments in accordance
with the Regulations on Administration of Travel Agencies and the Rules for Implementation of the Regulations on Administration of
Travel Agencies.

Article 21

During the period of implementation of these Measures, the Interim Measures for Examining and Approving the Establishment of First
Category Travel Agencies with Chinese and Foreign Investment within the State Tourist and Holiday Resorts remain in effective.

Article 22

The establishment of joint investment travel agencies by investors from the Hong Kong Special Administrative Region, Macao or Taiwan
together with those from within the mainland shall be handled by reference to these Measures.

Article 23

The National Tourism Administration and the Ministry of Foreign Trade and Economic Cooperation shall be responsible for the interpretation
of these Measures.

Article 24

These Measures enter into force as of the date of promulgation.

The National Tourism Administration, the Ministry of Foreign Trade and Economic Cooperation
1998-12-02

INTERIM REGULATIONS ON COLLECTION AND PAYMENT OF SOCIAL INSURANCE PREMIUMS

The State Council

Order of the State Coucil of the People’s Republic of China

No.259

“Interim Regulations on Collection and Payment of Social Insurance Premiums” is adopted at the thirteenth Executive Meeting of the
State Council on January 14, 1999, and is hereby promulgated. This law will enter into force as of its promulgation.

Premier of the State Council: Zhu Rongji

January 22,1999

Interim Regulations on Collection and Payment of Social Insurance Premiums

Chapter I General Provisions

Article 1

These Regulations are formulated to strengthen and regularize collection and payment of social insurance premiums, and to ensure the
granting of social insurance compensation.

Article 2

These Regulations are applicable to collection and payment of basic pensions, basic medical insurance premiums and unemployment insurance
premiums (hereinafter collectively referred to “social insurance premiums”).

A unit or an individual paying premiums mentioned in these Regulations refers to the unit or individual who shall pay social insurance
premiums according to the provisions of relevant laws, administrative regulations and of the State Council.

Article 3

The collection and payment scope of basic pensions: State-owned enterprises, collectively owned enterprises in cities and towns, enterprises
with foreign investment, privately owned enterprises in cities and towns and other enterprises in cities and towns as well as their
staff and workers, and institutions managed as enterprise as well as their staff and workers.

The collection and payment scope of basic medical insurance premiums: State-owned enterprises, collectively owned enterprises in cities
and towns, enterprises with foreign investment, privately owned enterprises in cities and towns and other enterprises in cities and
towns as well as their staff and workers, State organs and their functionaries, institutions and their staff and workers, private
non-enterprise unit as well as their staffs and workers, social organizations and their full-time staff.

The collection and payment scope of unemployment insurance premiums: State-owned enterprises, collectively owned enterprises in cities
and towns, enterprises with foreign investment, privately owned enterprise in cities and towns and other enterprises in cities and
towns as well as their staff and workers, institutions as well as their staff and workers.

The people’s governments of provinces, autonomous regions and municipalities directly under the Central Government, according to the
actual local situations, may provide for the incorporation of individual industrial and commercial businesses in cities and towns
into the collection and payment scope of basic pensions and basic medical insurance, and may provide for the incorporation of social
organizations and their full-time staff, private non-enterprise units and their staffs and workers, as well as individual industrial
and commercial businesses in cities and towns with employees and their employees into the collection and payment scope of unemployment
insurance.

The base and rate of social insurance premiums shall be set fixed in accordance with relevant laws and administrative regulations
as well as provisions of the State Council.

Article 4

Units and individuals paying premiums shall promptly pay social insurance premiums in full amount.

Social insurance premiums collected and paid shall be incorporated into social insurance funds and only used for their special purposes.
No unit and individual may misappropriate these premiums.

Article 5

The administrative department of labor security under the State Council is responsible for the nationwide administration, supervision
and checkup of the collection and payment of social insurance premiums. The administrative departments of labor security of the people’s
governments at or above the county level are responsible for the administration, supervision and checkup of the collection and payment
of social insurance premiums within their respective administrative areas.

Article 6

Social insurance premiums shall be collected in a way that three kinds of social insurance premiums are collected centrally and uniformly.
The people’s governments of provinces, autonomous regions, and municipalities directly under the central Government shall prescribe
the collecting agencies. They may collect by taxation departments, or by social insurance agencies established by the administrative
department of labor security according to the provisions of the State Council (hereinafter referred to as social insurance agencies).

Chapter II Administration of Collection and Payment

Article 7

Units paying premiums must carry out social insurance registration with local social insurance agencies to participate in social insurance.

The registration items include: name and domicile of the unit, its business place, type of the unit, its legal representative or person
in charge, its bank account number and other items prescribed by the administrative department for labor security of the State Council.

Article 8

Units paying premiums which have already participated in social insurance before the enforcement of these Regulation shall, within
6 months of the date of enforcement of these Regulation, carry out social insurance registration with the local social insurance
agencies, and the said agencies shall issue them a social insurance registration certificate.

Units paying premiums which have not participated in social insurance before the enforcement of these Regulation, within 30 days of
the date of enforcement of these Regulations, and units paying premiums which are established after the enforcement of these Regulations,
within 30 days of the date of their establishment, shall apply for social insurance registration at the local social insurance agencies
on the basis of their business licenses, registration certificates or other such relevant certificates. After verification, the social
insurance agencies shall issue them a social insurance registration certificate.

Social insurance registration certificate may not be forged or altered.

The form of social insurance registration certificate shall be determined by the administrative department of labor security of the
State Council.

Article 9

If the social insurance registration items of a unit paying premiums change or the unit paying premiums is terminated according to
law, procedures for change or cancellation of the social insurance registration shall be carried out with the social insurance agency
within 30 days of the date of the change or termination.

Article 10

Units paying premiums shall, on a monthly basis, report to the social insurance agency the amount of social insurance premiums payable
and, after assessment by the social insurance agency, pay their social insurance premiums within the prescribed time period.

If a unit paying premiums fails to report the amount of social insurance premiums payable according to provisions, the social insurance
agency `shall provisionally set the amount payable at 110 per cent of the premium amount paid in the preceding month. If it did not
make a premium payment in the preceding month, the social insurance agency shall provisionally set the amount payable according to
the unit’s business situations, its number of staff and workers and other such relevant circumstances. After a unit paying premiums
has retroactively carried out its reporting procedures and paid the social insurance premiums according to the sum assessed, the
social insurance agency shall settle the accounts according to provisions.

Article 11

If the people’s government of a province, an autonomous region or a municipality directly under the Central Government has determined
that the tax authorities shall levy and collect social insurance premiums, the social insurance agency shall promptly provide the
tax authorities with the relevant information of the social insurance registration, changes of registration, cancellation of registration
and premium payment reports of the unit paying premiums.

Article 12

Units and individuals paying premiums shall pay their social insurance premiums in cash and in full.

The social insurance premiums payable by individuals paying premiums shall be withheld from their wages and paid for them by their
work units.

Social insurance premiums may not be reduced or exempted.

Article 13

If a unit paying premium fails to pay its own social insurance premiums or to withhold and pay those of its staff and workers according
to provisions, the administrative department of labor security or tax authority shall order it to pay within a prescribed time limit;
if it has still not paid at the end of the time limit, in addition to paying the sum owned, it shall pay a late-payment fine of 0.2
per cent per day, counting from the date when the amount became overdue. Late-payment fines shall be consolidated into the social
insurance funds.

Article 14

Social insurance premiums collected shall be deposited into a dedicated public finance account for social security funds opened by
the public finance authorities with a State-owned commercial bank.

The social insurance funds established shall respectively be basic old age insurance funds, basic medical insurance funds, and unemployment
insurance funds according to the pooling scope for the risk concerned. Separate and independent accounts shall be maintained for
each type of social insurance funds.

No taxes of fees shall be calculated or levied on social insurance funds.

Article 15

If the people’s government of a province, an autonomous region or a municipality directly under the Central Government has determined
that the tax authorities shall levy and collect social premiums, the tax authorities shall promptly provide the social insurance
agencies with information of the premium payments of units and individuals paying premiums. The social insurance agencies shall consolidate
the relevant matters and submit them to the administrative departments of labor security.

Article 16

Social insurance agencies shall establish premium payment records. Of such records, those that pertain to basic old age insurance
and basic medical insurance shall contain a record of the personal accounts, according to provisions. Social insurance agencies shall
be responsible for maintaining premium payment records and ensuring their completeness and security. Social insurance agencies shall
issue statements to individuals paying premiums concerning their basic old age insurance and basic medical insurance personal accounts
at least once a year.

Units and individuals paying premiums are enpost_titled to access their premium payment records according to provisions.

Chapter III Supervision and Examination

Article 17

Unit paying premiums shall announce to their staff and workers on a annual basis details of the units’ social insurance premium payments
for the whole year, and accept the supervision of their staff and workers.

Social insurance agencies shall periodically inform the public on details of the levy and collection of social insurance premiums,
and accept the supervision of the society.

Article 18

According to the provisions of the people’s governments of provinces, autonomous regions and municipalities directly under the Central
Government on collecting agencies of social insurance premiums, when an administrative department of labor security or a tax authority
conducts an examination of the premium payments of a unit according to law, the unit being examined shall provide such information
relevant to the payment of social insurance premiums as employment details, payrolls and financial statements, etc., and truthfully
report the situation. The unit examined may not refuse the examination or make false or deceptive reports. The administrative department
of labor security or the tax authority may make a written record of, audio tape, videotape, photograph or photocopy materials; however,
they shall maintain the confidentiality of the unit paying premiums.

When conducting the duties indicated in the preceding paragraph, the personnel of the administrative department of labor security
or the tax authority shall produce their proof of carrying out official business.

Article 19

When an administrative departments of labor security or a tax authority investigates cases of the illegal acts related to the collection
and payment of social insurance premiums, the relevant departments and units shall provide support and cooperation.

Article 20

Subject to authorization by the administrative departments of labor security, social insurance agencies may conduct examination and
investigation related to the collection and payment of social insurance premiums.

Article 21

Any organization or individual has the right to report illegal acts related to the collection and payment of social insurance premiums.
The administrative department of labor security or the tax authority shall promptly investigate the report, handle it according to
provisions, and maintain the confidentiality of the person making the report.

Article 22

Payments into and out of the social insurance fund shall be subject to separate administration and shall be supervised by the public
finance departments according to law.

The auditing departments shall supervise the payments into and out of the social insurance fund according to law.

Chapter IV Penalty Provisions

Article 23

If a unit paying premiums fails to carry out social insurance registration, change its registration or cancel its registration according
to provisions, or fails to report the amount of social insurance premiums payable according to provisions, the administrative department
of labor security shall order it to correct situation within a prescribed time limit; in serious cases, a fine of not less than 1,000
yuan and not more than 5,000 yuan may be imposed on the person in charge who are directly responsible and other directly responsible
persons; in particularly serious cases, a fine of not less than 5,000 yuan and not more than 10,000 yuan may be imposed on the person
in charge who are directly responsible and other directly responsible persons.

Article 24

If a unit paying premiums violates relevant financial, accounting or statistics laws or administrative regulations or relevant State
regulations, or forges, alters or intentionally destroy relevant account books or documents, or fails to keep accounts, thereby making
it impossible to determine the base number for the collection and payment of social insurance premiums, it shall not only be subjected
to administrative penalties, disciplinary punishment and/or criminal prosecution in accordance with the provisions of the relevant
laws and administrative regulations, but it shall also make payment in accordance with Article 10 of these Regulations. If it delays
payment, the administrative department of labor security or the tax authority shall decide to impose a late-payment fine in accordance
with Article 13 of these Regulations and impose a fine of not less than 5,000 yuan and not more than 20,000 yuan on the person in
charge who are directly responsible and other directly responsible persons.

Article 25

Units or individuals paying premiums dissatisfied with the penal decisions of the administrative departments of labor security or
tax authorities may apply for reconsideration of the cases according to law. If the units or individuals are dissatisfied with the
decisions made upon reconsideration, thy may file suits according to law.

Article 26

If a unit paying premiums refuses to pay its social insurance premiums or late-payment fines after the time limit for payment thereof
has expired, the administrative department of labor security or the tax authority shall apply to the people’s court to enforce payment
according to law.

Article 27

If personnel of an administrative department of labor security, social insurance agency or tax authority abuse their powers, practise
favoritism or graft, or neglect their duties, resulting in the loss of social insurance premiums, the administrative department of
labor security or the tax authority shall pursue the recovery of the lost social insurance premiums; if a comical offence is constituted,
criminal liability shall be pursued according to law; if no criminal offence is constituted, administrative punishment shall be imposed
according to law.

Article 28

If any unit or individual misappropriates social insurance funds, the recovery of the misappropriated funds shall be pursued, and
any illegal income shall be confiscated and consolidated with the social insurance funds; if a comical offence is constituted, criminal
liability shall be pursued according to law; if no criminal offence is constituted, the persons in charge directly responsible and
other directly responsible persons shall be subjected to administrative punishment according to law.

Chapter V Supplementary Provisions

Article 29

The people’s’ governments of provinces, autonomous regions and municipalities directly under the Central Government, according to
the actual local conditions, may determine that these regulations shall apply to the collection and payment of work-related injury
insurance and maternity insurance premiums within their respective administrative areas.

Article 30

The tax authorities and social insurance agencies may not make any appropriations from the social insurance funds to cover expenses
incurred in their levy and collection of social insurance premiums. Funding for the necessary expenses shall be included in the budget
and appropriated form public finance.

Article 31

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

The State Council
1999-01-22

CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE AND THE MINISTRY OF FOREGIN TRADE AND ECONOMIC COOPERATION CONCERNING TRANSMITTING THE INTERIM MEASURES ON EXAMINATION OF EXPORT RECEIPTS OF FOREIGN EXCHANGE

The State Administration of Foreign Exchange, the Ministry of Foreign Trade and Economic Cooperation

Circular of the State Administration of Foreign Exchange and the Ministry of Foregin Trade and Economic Cooperation Concerning Transmitting
the Interim Measures on Examination of Export Receipts of Foreign Exchange

HuiFa [1999] No.103

March 23, 1999

(The Circular is omitted here) Attachment:Interim Measures on Examination of Export Receipts of Foreign Exchange

Chapter I General Provisions

Article 1

In order to perfect the Measures over export receipts of foreign exchange, to supervise and urge the full collection and timely verification
of export receipts, to prevent the activities such as evasion and arbitrage of foreign exchange, and to maintain the balance of payments,
theses Measures is set up based on relevant provisions stipulated in “Foreign Trade Law of the People’s Republic of China”, “Regulations
on Foreign Exchange Administration of the People’s Republic of China” and “Measures on Administration of Verification of Export Receipts
Collection of Foreign Exchange”.

Article 2

Theses Measures is applicable to every kind of enterprises enpost_titled with exports and imports right (hereinafter referred to as exports
and imports enterprises), which are including of foreign trade companies (including Chinese-foreign joint venture companies of foreign
trade), production enterprises and science institutes enpost_titled with self-exports and imports, commerce and commodity companies, external
contract labor enterprises, enterprises for doing processing trade, enterprises for doing bordering trade, and enterprises for doing
small amount of traveling goods.

Article 3

The examination of export receipts of foreign exchange will combine quarterly examination with annual assessment. The results of examination
will implement the system of circulation and publication. The coverage of circulation is MOFTEC departments, banks and taxation departments.

Article 4

SAFE and its branches and sub-branches (including Beijing, Chongqing Foreign Exchange Department, hereinafter referred to as SAFE)
are responsible for conducting the examination, and the arrangement and enforcement of the assessment as well.

Chapter II Indicators for Examination

Article 5

Ratio of export receipts of foreign exchange is the key indicator of examination.

Ratio of export receipts of foreign exchange is referred as the ratio between the collected and verified amount of export receipts
of foreign exchange and the amount of export receipts of foreign exchange that should have been collected and verified in the examination
duration. The equation is as follows: Ratio of export receipts of foreign exchange = {[the collected and verified amount of export
receipts of foreign exchange (i.e., the summation of a) collected and verified amount of export receipts, b) verified amount of export
receipts that is not in cash and c) the approved balanced amount for verification of export receipts)]/the amount of export receipts
of foreign exchange that should have been verified in the examination duration} X 100%.

Article 6

The amount of export receipts that should have had been verified in previous examination duration will not be counted in the amount
of export receipts that should have been verified in this examination duration.

Meanwhile, the hereby following verified amount of export receipts will not be counted in the verified amount of export receipts in
this examination duration:

the export receipts verified in this examination duration that should have had been verified in previous examination duration;

the export receipts do not reach their anticipated date of collection of export receipts;

the difference that the actual collection of exports exceeds the value of exports (i.e. the turnover of export).

Article 7

It is primary condition for rating the situation of export receipts of foreign exchange for export and import enterprises that ratio
of surrendered verification forms of export receipts should not be below certain pre-announced criterion.

Ratio of surrendered verification forms of export receipts is referred as the ratio of the surrendered number of counterfoils of verification
forms of export receipts that receive in the examination duration and the extraction of the number of verification forms of export
receipts that receive in the examination duration and the cancelled number of verification forms of export receipts (excluding the
number of reported lost forms). The equation is as follows:

Ratio of surrendered verification forms of export receipts = {the surrendered number of counterfoils of verification forms of export
receipts that receive in the examination duration / [the number of verification forms of export receipts that receive in the examination
duration – the cancelled number of verification forms of export receipts (excluding the amount of reported lost forms)]} X 100%.

Chapter III Measures of Examination

Article 8

The examination will be separated into quarterly examination and annually assessment. The examination duration for quarterly examination
is for one quarter and will be conducted within the first ten days of May, August and November of each year. The examinations will
be concentrated on the ratio of export receipts of foreign exchange in the first, second and third quarters of this year and the
fourth quarter of last year, as well as the ratio of surrendering verification forms of export receipts in the first and the second
quarters of this year. The examination duration for annual assessment is one year. The assessment will be conducted in February of
each year and concentrated on the ratio of surrendered verification forms of export receipts in the fourth quarter of the year before
last year and the first, second and third quarters of last year, as well as the ratio of export receipts of foreign exchange for
the whole last year (see attachment 1).

Article 9

The criteria for examination are as follows:

The criterion for examination of ratio of export receipts is at 70 per cent and is separated into four categories:

(1)

this ratio is at or above 95 per cent;

(2)

this ratio is between 70 per cent (including 70 per cent) and 95 per cent;

(3)

this ratio is between 50 per cent (including 50 per cent) and 70 per cent;

(4)

this ratio is below 50 per cent.

The criterion for examination of ratio of surrendered verification forms of export receipts is at 80 per cent.

Article 10

In annual assessment, the grades of export receipts for export and import enterprises will be rated according to the results of examination.

The enterprise will be rated as “honorable enterprise for collection of export receipts” if its ratio of export receipts is at or
above 95 per cent.

The enterprise will be rated as “ordinary enterprise for collection of export receipts” if its ratio of export receipts is between
70 per cent (including 70 per cent) and 95 per cent.

The enterprise will be rated as “risky enterprise for collection of export receipts” if its ratio of export receipts is between 50
per cent (including 50 per cent) and 70 per cent.

The enterprise will be rated as “high-risky enterprise for collection of export receipts” if its ratio of export receipts is below
50 per cent.

The primary condition for the above assessment is that ratio of surrendered verification forms of export receipts should be above
80 per cent. Otherwise, all the enterprises will be rated as “high-risky enterprise for collection of export receipts” if the ratio
of surrendered verification forms of export receipts is below 80 per cent.

Article 11

The criteria for examining export receipts could be adjusted, complied with the change of situation at different moments, by SAFE
and MOFTEC.

Article 12

The examination of export receipts will be conducted with the responsibilities taking by different levels.

Head offices of SAFE and MOFTEC are responsible for the quarterly examination and annual assessment of export receipts of central
export and import enterprises.

Branches or sub-branches of SAFE and their same level MOFTEC departments are responsible for the quarterly examination and annual
assessment of export receipts of their domiciled export and import enterprises.

Article 13

Within 15 days in the same month for conducting the examination, branches and sub-branches of SAFE are supposed to fill in the examination
form of export receipts of export and import enterprises and regional statistics table of examination of export receipts, and to
report them to higher level branches as well as to report the examination form of export receipts of export and import enterprises
to the same level MOFTEC departments.

The provincial SAFE branches are supposed to summarize their and their domiciled sub-branches’ examination forms of export receipts
of export and import enterprises and regional statistics tables of examination of export receipts, and to report the summarized examination
form of export receipts of export and import enterprises and regional statistics table of examination of export receipts to head
office of SAFE within 20 days in the same month for conducting the examination. Meanwhile, they are supposed to transmit the electronic
data of these two forms to head office of SAFE through the internal communication network of SAFE as well. Furthermore, they are
supposed to report the forms to the same level MOFTEC departments.

Article 14

The circulation and publication of the results of examination and assessment are as follows:

Head offices of SAFE and MOFTEC are responsible for the circulation of the examination forms of export receipts of central export
and import enterprises on quarterly basis. They are also responsible for the circulation of the names, which including regional and
central enterprises, of “honorable enterprises for collection of export receipts” and “high-risky enterprises for collection of export
receipts” based on annual assessment and make them public through media.

Provincial branches of SAFE and MOFTEC are responsible for circulating the examination forms of export receipts of domiciled export
and import enterprises on quarterly basis. They are also responsible for circulating the names of domiciled “honorable enterprises
for collection of export receipts” and “high- risky enterprises for collection of export receipts” based on annual assessment and
making them public through media.

Chapter IV Rewarding and Punishment

Article 15

SAFE and MOFTEC are supposed to take the responsibility for conducting the rewarding or punishment on enterprises with different grades
for collection of export receipts:

“Honorable enterprises for collection of export receipts” will enjoy privilege treatment and simplified procedures in the course of
administrative regulations;

The banking credits to “risky enterprises for collection of export receipts” and “high-risky enterprise for collection of export receipts”
should be subject to much more strict standards of banks;

Giving the warning to “risky enterprises for collection of export receipts”;

MOFTEC or its authorized department in charge of foreign trade could suspend the enpost_titlement of export and import if the enterprise
is rated as “high-risky enterprise for collection of export receipts” for one year and rated as “risky enterprise for collection
of export receipts” continuously for two years.

Article 16

SAFE and MOFTEC are supposed to track major investigations on “risky enterprises for collection of export receipts” and “high-risky
enterprises for collection of export receipts”. SAFE and MOFTEC will give the punishments to these enterprises according to relevant
provisions if the enterprises are clarified as guilty.

Article 17

The Measures on enterprises with foreign investment are complied with the above mentioned provisions. SAFE and MOFTEC could punish
the enterprises legislatively if the enterprises disobey “Regulations on Foreign Exchange Administration of the People’s Republic
of China” and its relevant regulations.

Article 18

The rewarding and punishments given by SAFE to the quarterly examination results could refer to 1, 2 and 3 in Article 15 and Article
16 and Article 17 .

Chapter V Supplementary Provisions

Article 19

It is SAFE and MOFTEC that are responsible for the interpretation of theses Measures.

Article 20

Theses Measures is prevailing one if previous provisions are not consistent with it.

Article 21

Theses Measures enter into force as of May 1, 1999.

The State Administration of Foreign Exchange, the Ministry of Foreign Trade and Economic Cooperation
1999-03-23

CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION ON PRINTING AND DISTRIBUTING THE INTERIM MEASURES FOR THE MANAGEMENT OF EXAMINATION AND APPROVAL OF PROCESSING TRADE

The Ministry of Foreign Trade and Economic Cooperation

Circular of the Ministry of Foreign Trade and Economic Cooperation on Printing and Distributing the Interim Measures for the Management
of Examination and Approval of Processing Trade

WaiJingMaoGuanFa [1999] No.314

May 27, 1999

Foreign Trade and economic cooperation departments (commissions, bureaus) of the various provinces, autonomous regions, municipalitie
directly under the Central Government and municipalities separately listed on the State plan, offices of special Commissioners assigned
to the various localities by MOFTEC and the administration of quota and License affairs:

In order to carry out the Circular of the State Economic and Trade Commission and other departments on the Opinions of the of further
Perfecting the bank Deposit Account System for Processing Trade (GuoBanFa [1999] No. 35) transmitted by the General Office of the
State Council, and after consulting with the Customs General Administration, the Ministry has worked out the Interim Measures for
the Management of Examination and Approval of Processing Trade. These Measures are printed and distributed to you, Please abide by.

Send to: General Office of the State Council, State Economic and Trade Commission, General Administration of Customs, Ministry of
Finance, State Administration of Taxation commission, Bank of China, international cooperation offices of special Commissioners assigned
to the various localities by MOFTEC, the administration of quota and License affairs, all import and export chamber of commerce,
association of Foreign Investment Enterprises, EDI Center of MOFTEC Attachment:Interim Measures for the Management of Examination and Approval of Processing Trade

Chapter I General Provisions

Article 1

In accordance with the Foreign Trade Law of the People’s Republic of China, the Customs Law of the People’s Republic of China, the
Written Reply of the State Council on Trying out the bank Deposit Account System to Imported Materials for Processing Trade (GuoHan
[1995] No.109) and the Circular of the State Economic and Trade Commission and other departments on the Opinions Further Perfecting
the Bank Deposit Account System for Processing Trade Transmitted by the General Office of the State Council hereinafter referred
to as GuoBanFa [1999] No. 35 these Measures have been worked out for the purpose of further strengthening the management of processing
trade, maintaining the normal operation order and guaranteeing the healthy development of the processing trade.

Article 2

Processing trade mentioned in these Measures refers to the business activity in which after all of or part of the imported raw materials,
subsidiary materials, spare Parts, components and packing materials (hereinafter referred to as the imported materials) in bond are
processed or assembled by domestic enterprises, the finished products are re-exported, and it also includes processing of materials
provided by foreign clients and processing of imported materials.

Processing of materials provided by foreign clients refers to the processing trade in which foreign clients provide the imported materials
and are responsible for selling the finished products, and operation enterprises collect the processing charge without paying for
the imported materials with foreign exchange or processing charge.

Processing of imported materials refers to such processing trade in which the operation enterprises Pay for the import of relevant
materials and export the finished products.

Article 3

The operation enterprises mentioned in these Measures refer to all types of import and export enterprises and enterprises with foreign
investment which are responsible for signing import or export contracts for processing trade with foreign clients, as well as the
service companies which have obtained the operation license for processing of materials provided by foreign clients and are dealing
in processing and assembling trade with foreign clients.

The processing enterprises mentioned in these Measures refer to those manufacturing enterprises that are authorized by the operation
enterprises to take the responsibility of processing or assembling imported materials and are the corporate bodies, and those factories
that are not the corporate bodies, but are established by the operation enterprises and are implementing a relatively independent
accounting system, and have obtained the business certificates (licenses)for industry and commerce.

Article 4

Before starting to be engaged in the processing trade, the operation enterprises must report the proposal to the competent department
of foreign economic relations and trade for examination and approval. The Ministry of Foreign Trade and Economic Cooperation (hereinafter
referred to as the MOFTEC) shall be responsible for the examination and approval of the processing trade of the whole country.

Chapter II Examination and Approval Organs and Examination and Approval by Different Levels

Article 5

The competent departments of foreign economic relations and trade at provincial level shall be responsible for the administration,
examination and approval of the processing trade in the respective localities, and in light of the specific requirements, they shall
grant some competent departments of foreign economic relations and trade at district (municipal) or county (municipal) levels the
power for examining and approving of the processing trade, which must be reported in advance to the MOFTEC for file.

Article 6

The competent departments of foreign economic relations and trade at various levels (called examination and approval organs for processing
trade for short, the same in the following article) which have been authorized to have the power for examining and approving of processing
trade shall engrave the special purpose seals for examination and approval of processing trade in accordance with the uniform specifications
and patterns set by the MOFTEC, which shall be reported by the competent departments of foreign economic relations and trade at provincial
level to the MOFTEC for file.

Article 7

The name lists of examination and approval organs for processing trade at various levels and the special purpose seals (seal modes)
for the examination and approval of processing trade shall be sent by the MOFTEC to the Customs General Administration for file.

Article 8

The examination and approval organs for processing trade at various levels shall satisfy the requirement for examining and approving
of processing trade with computer management systems, be equipped with the corresponding computer management facilities, enter the
China International E-Commerce Net, and be networked with the MOFTEC.

Article 9

The processing trades in which the imported materials are such goods as cotton, sugar, vegetable oil, wool, natural rubber, crude
oil, end oil, etc. that are under the state aggregate balance management of import in processing trade shall be examined and approved
of by the examination and approval organs for processing trade at provincial level where the operation enterprises (including the
head offices of the previous ministries or commissions and the subsidiary companies) are registered. The examination and approval
organs for processing trade at provincial level shall not delegate the power for examination and approval.

Other processing trades shall be examined and approved by the examination and approval organs for processing trade where the operation
enterprises (including the head offices of the previous ministries or commissions and the subsidiary companies) are registered.

Chapter III Documents and Materials for Report

Article 10

The operation enterprise shall provide the following certificates and materials when applying for the development of processing trade.

(1)

Written application reports provided by the operation enterprise and Application Form for Processing Trade (see Attachment 1 for
specific form) with the official seal of the operation enterprise.

(2)

Documents approving of the operation enterprise’s right for dealing in import and export (or the ratification certificate for enterprises
with foreign investment) and the business license (the duplicate) for industry and commerce.

(3)

The original of the certificate for proving the processing enterprise’s production capability (see Attachment 3 for specific form)
issued by the competent department of foreign economic relations and trade above county level where the operation enterprise is registered,
and the business license for industry and commerce of the processing enterprise (the duplicate).

(4)

Import and export contracts signed by the operation enterprise with foreign clients (the original).

(5)

The original of the processing agreement (contract) signed by the operation enterprise with the processing enterprise.

(6)

Other certificates and materials regarded necessary by the examination and approval organ.

Article 11

In the case where the operation enterprise or the processing enterprise is the enterprise with foreign investment, besides the certificates
or documents stipulated by Article 10 of these Measures, the relevant enterprise shall provide contracts and regulations which are
approved by the competent department of foreign economic relations and trade and can specify its operation scope and scale, as well
as the certificates which can acknowledge that the relevant enterprise has been established and put into operation, the funds from
the investors’ part have been put in order, and it has passed the annual joint check.

Article 12

Besides the certificates and documents required to be issued by Article 10 and Article 11 of these Measures, the relevant enterprise
dealing in processing of the following specified goods shall provide other certificates and materials at the same time in accordance
with the following provisions:

(1)

Documents issued by the State Environmental Protection Bureau for approving of import of materials shall, in accordance with the
relevant provisions, be provided for the processing trade in which the imported materials are waste metals or articles.

(2)

Documents issued by the relevant departments for approving of import of materials or export of finished products shall, in accordance
with the relevant provisions, be provided for the processing trade in which the imported materials or finished products for export
are poisonous chemicals and chemicals for both military and civilian purposes.

Chapter IV Examination and Approval of Processing Trade (Contracts)

Article 13

In their examination and approval operations, the examination and approval organs at various levels shall, in strict accordance with
the provisions stipulated in Article 10 , Article 11 and Article 12 of these Measures, examine and verify the relevant documents
and materials provided by the operation enterprises, strictly forbid the “three withouts ” (without factory, without processing equipment,
without workers) enterprises to be engaged in the processing trade and prevent these enterprises from participating in such illegal
activities as smuggling, etc. in the name of dealing in processing trade.

Article 14

The Approval Certificate for Processing Trade (see Attachment 2 for the specific form) is the valid document by which departments
such as the Customs, etc. handle the relevant formalities for bank guarantee deposit accounting of processing trade. In the case
where the operation enterprises can provide the relevant certificates and materials as stipulated and have the capacity for re-export
after processing, the examination and approval organs for processing trade shall examine and verify the relevant certificates and
materials, and issue to them the Approval Certificate for Processing Trade with the special purpose seal for examination and approval
of processing trade.

Article 15

The examination and approval organs shall earnestly fill out the Detailed List for Application for Filing of Imported Materials and
the Detailed List for Filing of Finished Products for Export and Consumption of the Corresponding Imported Materials (see Attachment
2 for the specific form) with the special purpose seals for examination and approval of processing trade.

Article 16

The examination and approval organs shall conduct the examination and approval of processing trade in strict accordance with uniform
state standard for consumption per unit worked out and announced in turn by the General Customs Administration and the State Economic
and Trade Commission together with the State Bureau of Engineering Industry concerned. In the case where there is no uniform state
standard for consumption per unit, the examination and approval organs shall strictly examine and verify the consumption per unit
reported by the enterprises, and examine and approve of the processing trade after asking for the opinions of the competent department
for production and the competent Customs. The Customs shall put the relevant case on file according to the Approval Certificate for
Processing Trade issued by the examination and approval organs. In the case where the consumption per unit is found to be inconsistent
with the standard during Customs supervision, the Customs shall inform the original examination and approval organ of the opinion
by mail, the original examination and approval organ shall be responsible for the adjustment, and the Customs shall go through the
formalities for alteration of the relevant items.

Article 17

The examination and approval organs for processing trade must earnestly examine and verify the Certificate Testifying the Production
Capacity of the Processing Enterprises for Processing Trade during their examination and approval operations. The Certificate Testifying
the Production Capacity of the Processing Enterprises for Processing Trade is valid for one year.

The competent department of foreign economic relations and trade above county level where the processing enterprise is registered
shall issue the Certificate Testifying the Production Capacity of the processing Enterprises for processing Trade after strict examination
of the production capacity and management situation of the processing enterprise, and if necessary, shall solicit the opinions of
the competent department for production.

Article 18

The State has classified the imported goods for processing trade into those which are forbidden, those which are restricted and those
which are permitted, and the enterprises engaged in processing trade into the categories A, B, C and D (the specific classification
principles and classified catalogues shall be announced later to the outside and undergo dynamic adjustment in accordance with the
provisions of the document GuoBanFa [1999] No. 35 ); the State manages the processing trade in restricted goods and the processing
trade conducted by the C type enterprises under the “real transfer” of the bank guarantee deposit accounting system.

The examination and approval organs for processing trade shall strictly examine and verify the imported goods in processing trade
and the type of the enterprises, in case of processing trade in the restricted goods or conducted by the C type enterprises, the
examination and approval organs for processing trade shall add words “real transfer” in the remark column of the Approval Certificate
for Processing Trade.

Article 19

Examination and approval organs for processing trade at various levels shall not permit the D type enterprises in processing trade
(including the operation enterprises and the processing enterprises) to be engaged in processing trade or permit any operation enterprises
to be engaged in the processing trade in which the imported materials are forbidden goods.

Article 20

Enterprises under category A shall not implement the bank deposit account system in their processing trade, however, their processing
trade contracts shall be reported in advance to the examination and approval organs for examination and approval.

Chapter V Alteration of Approval Certificate and Postponement of Examination and Approval

Article 21

The duration for the countermarketing of the finished products for export stipulated in the Approval Certificate for Processing Trade
shall be in principle examined and approved of in accordance with the period of validity for the export contract of the relevant
enterprise, and in general the duration shall not exceed one year. The duration for the countermarketing of finished products in
processing trade for sugar, cotton, vegetable oil, wool and natural rubber shall not exceed six months in principle.

Article 22

An operation enterprise shall process and countermarket the finished products, and go through formalities for cancellation after verification
within the period set by the Approval Certificate for Processing Trade. In the case where Prolongation of the deadline for countermarketing
of the finished products is necessary due to objective factors, the operation enterprise shall, within the allotted time for countermarketing
of finished products, report the case to the original examination and approval organ for approval, and the Customs shall handle the
formalities for postponement by the approval document.

Article 23

In general, the duration of postponement for each time shall not exceed twice, and the period for each postponement shall not exceed
six months.

Article 24

An operation enterprise must deal in processing and export in accordance with the provisions of the Approval Certificate for Processing
Trade, and in the case where there is the need for alteration of part of the items due to objective factors, the relevant operation
enterprise shall report the case to the original examination and approval organ for approval within the period stipulated by the
Approval Certificate for Processing Trade, and the Customs shall handle the alteration formality according to the approval document.

Chapter VI Management of Quota and Licenses

Article 25

The imported materials for processing trade, in principle, shall not be under the quota and license management, except for that otherwise
stipulated.

Article 26

The State exercises control of aggregate balance and quota license over the import of sugar, cotton, vegetable oil, wool, natural
rubber, crude oil and end oil, etc. for processing trade. The aggregate quota shall be fixed by the State Council, and the specific
measures for management of distribution shall be implemented in accordance with the relevant provisions.

Article 27

The import quota for processing trade shall be valid during the current year, and shall not be used beyond the year. Offices of staff
specially appointed by the MOFTEC and the Quota License Bureau shall be responsible for issuing the import licenses for processing
trade in accordance with the import quota for processing trade and the Approval Certificate for Processing Trade issued by the examination
and approval organs for processing trade at provincial level.

The period of validity of an import license for processing trade shall not exceed the allotted time for countermarketing of finished
products stipulated by the Approval Certificate for Processing Trade, and in the case where the period of validity of the import
license needs to be carried over to the next year, it shall not exceed the end of February of the next year.

Article 28

Offices of staff specially appointed by the MOFTEC shall, through China International E-Commerce Net, report day by day the data concerning
import licenses issued for processing trade to the Quota License Bureau which is responsible for providing the MOFTEC with the data
concerning the issuance of import licenses for processing trade of the whole country (including their data about the issuance of
import licenses for processing trade). The MOFTEC shall carry out regular of nonregular examination of the issuance of the import
licenses, and such issuance acts as those in excess of authority, without quota or in excess of quota which have violated the relevant
provisions shall be strictly forbidden.

Article 29

An operation enterprise shall, in accordance with the export quota and the Approval Certificate for Processing Trade, apply for the
export license for the finished products in processing trade which are under the control of export quota, and the Customs shall check
the finished products before acceptance by the valid export license.

Article 30

In the case where the imported materials or the finished products for export in the Processing trade are Poisonous chemicals and chemicals
for both military and civilian purposes, the Customs shall handle the formalities for putting the case on file in accordance with
the Approval Certificate for Processing Trade and the approval documents for import of materials or export of finished products issued
by the relevant departments.

Chapter VII Supervision of Statistics and Tracking Management T

Article 31

Examination and approval organs for processing trade at various provincial levels shall day by day collect the data concerning the
examination and approval of the local processing trade and cancellation of the due processing trade after verification, which shall
be reported to the MOFTEC through China International E-Commerce Net.

Article 32

Examination and approval organs for processing trade at various levels shall strengthen the supervision and tracking management of
the cancellation of the local processing trade after verification, and demand that operation enterprises shall, within 30 days after
export cancellation after verification, submit the letter of notice for cancellation after verification issued by the Customs to
the original examination and approval organ for cancellation and file. Reasons for that an enterprise fails to go through formalities
for cancellation and file within the allotted time shall be thoroughly investigated, and approval of the enterprise concerned to
carry out processing trade shall be suspended.

Article 33

The MOFTEC shall carry out regular or non-regular check onthe examination and approval of the processing trade in various places,
and such examination and approval acts as those in excess of authority, without quota or in excess of quota which have violated the
relevant provisions shall be strictly forbidden.

Article 34

Examination and approval organs for processing trade at various level shall actively cooperate with such departments as the Customs,
taxation, bank and foreign exchange, etc. in order to strengthen the inter-departmental information exchange and coordination and
to enhance the overall supervision of processing trade.

Chapter VIII Supplementary Provisions

Article 35

All of the imported materials in bond for processing trade shall be processed and re-exported. In the case where the imported materials
in bond (or the finished products of the imported materials) need to de sold domestically or used for production of products for
domestic sale due to some special reasons, the case shall be handled in accordance with the relevant provisions of the Interim Measures
for Examination and Approval of Imported Materials in Bond for Processing Trade for Domestic Sale.

Article 36

The State permits the carry-over to deep processing and re-export business in processing trade. But operation enterprises must report
in advance the relevant case to the competent department of foreign economic relations and trade for approval. Specific management
measures shall be worked out later.

Article 37

The bank deposit account system is not necessary to be implemented for the processing trade conducted by the enterprises in bonded
areas, instead, the Measures for Supervision by the Customs in Bonded Areas shall be implemented for the case.

Article 38

Operation enterprises may organize by themselves the import under the item of processing trade (not including crude oil or end oil)
which shall not be restricted by the provisions concerning the management of import under normal trade with division of labor.

Article 39

The MOFTEC shall circulate a notice of criticism for the examination and approval organ that has violated these Measures, and shall
suspend or cancel its power over examination and approval of processing trade; the MOFTEC shall circulate a notice of criticism for
the organ issuing certificates and suspend or cancel its right for issuing certificates for import.

Article 40

The MOFTEC shall circulate a notice of criticism for the processing enterprise in violation of these Measures and inform the Customs
that its violation of the relevant provisions once be recorded. And if the case is serious, the management right of the enterprise
concerned for processing trade shall be suspended or cancelled; in the case where criminal law is violated, the case shall be handed
over to the judicial departments for settlement.

Article 41

These Measures shall come into effect as of the date June 1, 1999.

Article 42

These Measures shall be subject to the interpretation by the MOFTEC. Five documents issued before this (see Attachment 4 for the detailed
list) such as the Circular of the Ministry of Foreign Trade and Economic Cooperation on Issuing the Provisions about Relevant Matters
concerning External Processing and Assembling ([89] No. 212 issued by MOFTEC), etc. shall be annulled at the same time; in the case
where the provisions of other documents issued before this are inconsistent with these Measures, these Measures shall be taken as
the standard.

Attachment I: Application Form of Approval Certificate for Processing Trade (omitted)

Attachment II: Approval Certificate for Processing Trade (omitted)

Attachment III: Certificate Testifying the Production Capacity of the Processing Enterprises for Processing Trade

Attachment IV: Catalogue of Five Documents to Be Annulled Since June 1(5 Documents in All)

1. Circular of the Ministry of Foreign Trade and Economic Cooperation on Issuing the Provisions about Relevant Matters concerning
External Processing and Assembling ([89] No. 212 issued by MOFTEC)

2. Circular on Entrusting the Competent Departments of Foreign Economic Relations and Trade of Provinces, Autonomous Regions, Municipalities
Directly under the Central Government and cities with Independent Planning with Examination, Approval and Management of Processing
of Materials Provided by Foreign Clients Conducted by Corporations Directly under Ministries and Commissions ([1997] No. 798 issued
by the MOFTEC)

3. Circular on Unified Use of the Processing Trade (Contracts) Approval Certificates ([1998] No. 21 issued by the MOFTEC)

4. Catalogue of Classified Guidance on Items about Processing and Assembling of Materials Provided by Foreign Clients ([1998] No.
193 issued by the MOFTEC)

5. Circular on Relevant Matters Concerning the Examination and Approval of Processing Trade ([1999] No. 64 issued by the MOFTEC)

The Ministry of Foreign Trade and Economic Cooperation
1999-05-27

1...207208209...212 Page 208 of 212

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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