THE MEASURES FOR EXAMINING AND APPROVING THE ADVANCE RECOVERY OF INVESTMENTS BY FOREIGN PARTNERS OF CHINESE AND FOREIGN COOPERATIVE JOINT VENTURES

Ministry of Finance

Order of the Ministry of Finance

No.28

The Measures for Examining and Approving the Advance Recovery of Investment by Foreign Partners of Chinese and Foreign Cooperative
Joint Ventures, which have been discussed and adopted at the executive meeting of the Ministry of Finance and upon approval of the
Ministry of Commerce and the State Administration of Foreign Exchange, are hereby promulgated and shall come into force as of September
1, 2005.

Ministry of Finance Minister jin renqing

June 9, 2005

The Measures for Examining and Approving the Advance Recovery of Investments by Foreign Partners of Chinese and Foreign Cooperative
Joint Ventures

Article1

These Measures are formulated pursuant to the Law of the People’s Republic of China on Chinese and Foreign Cooperative Joint Ventures,
the Administrative License Law of the People’s Republic of China and the Detailed Rules for the Implementation of the Law of the
People’s Republic of China on Chinese and Foreign Cooperative Joint Ventures for the purpose of regulating the examination and approval
work relating to the advance recovery of investment by foreign partners of Chinese and foreign cooperative joint ventures (hereinafter
referred to as the advance recovery of investment).

Article2

These Measures shall be applicable to the matters relating to the advance recovery of investment by foreign partners of Chinese and
foreign cooperative joint ventures established within the territory of the People’s Republic of China.

Article3

The “advance recovery of investment” as mentioned in these Measures refers to an act by which the foreign partner of any Chinese and
foreign cooperative joint venture (hereinafter referred to as the joint venture) recovers its investment in advance within the cooperative
period by dividing capital arising from the depreciation of fixed assets and amortization of intangible assets and other ways according
to the prescriptions of laws and the stipulations of the contract.

Article4

The following requirements shall be met for a joint venture to recover investments in advance:

(1)

When the term of cooperation as stipulated in the joint venture contract expires, all fixed assets of the joint venture after liquidation
shall be handed to the Chinese partner free of charge;

(2)

The joint venture shall issue a letter of commitment promising that the payment of debts takes precedence to the advance recovery
of investments;

(3)

The foreign partner that recovers its investment in advance shall issue a letter of commitment promising that it will assume the joint
and several liability for the debts owed by the joint venture within the scope of advance recovery of investments;

(4)

The capital to the joint venture shall be virtually contributed according to law or the contract; and

(5)

The joint venture shall have a sound operational and financial standing, and without any uncovered deficit.

Article5

The organ for examining and approving the advance recovery of investments shall be the financial organ of a province, autonomous region,
municipality directly under the Central Government or city under separate state planning at the place of the enterprise (hereinafter
referred to as the financial organ).

Article6

When a joint venture applies for advance recovery of investment, it shall submit the following materials to the financial organ:

(1)

an application letter of the joint venture, which shall explain the total amount, term and method of the advance recovery of investment;

(2)

the approval certificate, industrial and commercial business license (original and duplicate) and its photocopy of the foreign-invested
enterprise;

(3)

photocopies of the joint venture contract and articles of association;

(4)

an asset assessment report on the joint venture as issued by Chinese certified accountants; and

(5)

the resolution of the board of directors or joint management setup of the joint venture on the scheme concerning the current advance
recovery of investment, the financial report on the current advance recovery of investment by the joint venture as audited according
to law, explanations about the joint venture’ due debts, and letters of commitment of the joint venture and the foreign partner.

Article7

The financial organ shall examine the materials as submitted by a joint venture, and notify the applicant of all necessary materials
and contents that need to be supplemented and corrected once and for all on the spot or within five days if the said materials are
incomplete or inconsistent with statutory forms. If the said notification fails to be made within the said time limit, the date of
receiving the materials shall be the date of acceptance.

Article8

In case the submitted materials are complete and consistent with statutory forms, or the joint venture that files an application has
submitted all supplementation and correction materials as required, the application shall be accepted.

In case the financial organ accepts or refuses an application, it shall issue a written voucher affixed with the special seal thereof
and the date to the joint venture that filed the application.

Article9

The financial organ shall make an examination and approval decision within 20 days upon receipt of a joint venture’s application.
If it can not make such a decision within 20 days, the said time limit may be extended upon approval of the principal of the financial
organ, but for not more than ten days, and the reasons for the extension shall be notified to the joint venture that filed the application.

Upon approval, the financial organ shall send a copy of its reply and the letters of commitment as submitted by the joint venture
and foreign investors to the commerce department and the foreign exchange administrative department at the corresponding level.

Article10

In case an application filed by a joint venture complies with statutory conditions and standards, the financial organ shall make a
written decision on approval of advance recovery of investment.

In case the financial organ makes a written decision on disapproving the administrative licensing, it shall give reasons and notify
the joint venture that filed the application of the right to apply for an administrative review or file an administrative lawsuit.

Article11

Any financial organ or any functionary thereof that neglects its or his duties shall assume legal liabilities pursuant to Articles
72, 73 and 74 of the Administrative License Law of the People’s Republic of China and other relevant laws and regulations.

Article12

In case a joint venture applies for the advance recovery of investment by disguising relevant information or providing false materials,
the financial organ shall not accept or approve its application, and shall give it a warning.

Article13

In case a joint venture obtains an approval of advance recovery of investment by such unjustifiable means as frauds or bribes, the
financial organ shall cancel its examination and approval decision according to law and give it administrative penalties.

Article14

In case a joint venture that files an application holds objection to the decision made by the financial organ on refusing to accept
the application or refusing to grant an administrative license or meting out an administrative sanction, it may apply for an administrative
review or file an administrative lawsuit.

Article15

The advance recovery of investment by a joint venture held by a company, enterprise or any other economic organization or individual
from the Hong Kong Special Administrative Region, Macao Special Administrative Region or Taiwan region or an overseas Chinese shall
be handled by reference to these Measures.

Article16

These Measures shall come into force as of September 1, 2005.