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ANNOUNCEMENT NO.7, 2007 OF MINISTRY OF COMMERCE ON STARTING ANTI-DUMPING INTERIM REVIEW ON IMPORTED ETHANOLAMINE

Announcement No.7, 2007 of Ministry of Commerce on Starting Anti-dumping Interim Review on Imported Ethanolamine

[2007] No.7

The Ministry of Commerce issued Announce No.57 of 2004 on November 14, 2004 to start levying anti-dumping duties on imported Ethanolamine
(hereinafter referred to as investigated products) originating in Japan, the US, Iran, Malaysia, Taiwan Region and Mexico. Among
the related enterprises, the anti-dumping duties rate on Ethanolamine from Oriental Union Chemical Corporation was 20%, NIPPON SHOKUBAI
CO.,LTD. adopted 74% as in the Others category.

The above-mentioned two enterprises applied to Ministry of Commerce for a dumping and dumping margins judicial review on the anti-dumping
measures implemented to each of the enterprises respectively and raised petition for amending the anti-dumping duty rate correspondingly.

In respond to the application, Ministry of Commerce made an examination on related issues and decided to start a judicial review,
as of the date when this announcement is issued, on the anti-dumping measures implemented on the investigated products from the above-mentioned
two enterprises during a period from January 1, 2006 to December 31, 2006.

The investigated products are listed under Tariff No. 29221100 and 29221200 in Customs Tariff of Import and Export of the People’s
Republic of China.

Interested parties can apply in written forms to respond to charges in the interim review within 20 days as of the date the Announcement
is issued.

To get the necessary information for the investigation, Ministry of Commerce will send out questionnaire to the interested parties
accordingly, the answer sheet of which shall be submitted within 37 days as of the date of issuance of the questionnaire.

The interested parties could raise written petition for holding a hearing, which could also be held initiatively by Ministry of Commerce
when necessary.

Ministry of Commerce could, when necessary, send out staff to relate countries for field examination and verification, before which
the countries and enterprises will get notice in advance.

Any form of obstruction against the investigation may result in an arbitration based on the available fact and information.

Address: No. 2, DongChangAn St., Beijing

Postcode: 100731

Bureau of Fair Trade for Imports and Exports, Ministry of Commerce:

Tel: 86-10-65198924￿￿65197655

Fax: 86-10-65198915￿￿65198172

Ministry of Commerce

February 1, 2007



 
Ministry of Commerce
2007-02-01

 






CIRCULAR OF THE MINISTRY OF COMMERCE ON ENTRUSTING HUIZHOU DAYAWAN ECONOMIC-TECHNOLOGICAL AREA TO EXAMINE, APPROVE AND ADMINISTER THE RELEVANT WORK ON FOREIGN-INVESTED ENTERPRISES IN SOME SERVICE TRADE SECTORS

Circular of the Ministry of Commerce on Entrusting Huizhou Dayawan Economic-Technological Area to Examine, Approve and Administer
the Relevant Work on Foreign-invested Enterprises in Some Service Trade Sectors

Shang Zi Han [2007] No. 20

Huizhou Dayawan Municipal People’s Government and Huizhou Dayawan Economic-Technological Area,

Pursuant to Some Opinions on Further Promoting the Development Level of National Economic and Technical Development Zones (Guo Ban
Fa [2005] No. 15) as forwarded by the General Office of the State Council to the Ministry of Commerce, the Ministry of Land and Resources
and the Ministry of Construction as well as the provisions of the Ministry of Commerce on the authorized examination, approval and
administration of foreign-funded enterprises, the Ministry of Commerce has finished the archival filing, examination and approval
of the management systems of all the national economic and technological development zones and the connected network for examination
and approval of foreign capital. The related matters are hereby notified as follows:

1.

Upon research, we hereby authorize the Management Committee of Huizhou Dayawan Economic-Technological Area to be responsible for examining,
approving and administrating the foreign-funded enterprises in related service trade sectors set up inside its zone for the purpose
of encouraging and supporting the national economic and technological development zones to vigorously develop the high value-added
service industries.

2.

The Management Committee of Huizhou Dayawan Economic-Technological Area shall, in strict accordance with the laws and regulations
on foreign investments as well as the related provisions on foreign-funded enterprises of non-vessel shipping, construction, printing,
construction engineering design, road transport, commerce and international freight forwarding (see appendix), carefully examine
and approve the related foreign-funded enterprises set up within its zone, and report the related problems found in the work to the
Ministry of Commerce in a timely manner. The Ministry of Commerce shall implement the inspection of the aforesaid examination, approval
and administration, and cancel the authorization to a national economic and technological development zone which commits illegal
examination and approval during the course of authorization.

3.

The Management Committee of Huizhou Dayawan Economic-Technological Area shall conduct a good job in examination and approval, archival
filing and statistical work in strict accordance with the requirements of the Ministry of Commerce for networking and online joint
annual inspection and by taking advantage of the networking certification system for foreign-funded enterprises. The related statistical
data shall be in line with the requirements so that the Ministry of Commerce can keep informed of the situation and strengthen supervision.

4.

Huizhou Dayawan Economic-Technological Area, the management system of which needs to be improved, has not set up an independent finance
department yet. Huizhou Dayawan Economic-Technological Area shall keep a close eye on and further resolve the problems in the management
system, keep a concise and efficient management system, and improve the level for examining, approving and administrating the foreign-funded
enterprises. Where any management system problem that may affect the work on examining, approving and administrating the foreign-funded
enterprises is found, this Ministry will withdraw the authorized power of examination, approval and administration immediately.

5.

This circular shall enter into force as of the promulgation date.

Ministry of Commerce

February 12, 2007
Appendix:
Related documents on entrusting the competent provincial departments of commerce to examine, approve and Administer foreign-funded
service trade Enterprises

1.

Circular of the Ministry of Commerce on Entrusting the Competent Provincial Departments of Commerce to Examine and Manage Foreign-funded
Non-vessel Shipping Enterprises (Shang Zi Han [2005] No. 89)

2.

Circular of the Ministry of Commerce on Entrusting the Provincial Administrative Departments of Commerce to Examine, Approve and Administer
the foreign-funded Construction Enterprises (Shang Zi Han [2005] No. 90)

3.

Circular of the Ministry of Commerce on Entrusting the Administrative Departments of Commerce at the Provincial Level to Examine and
Administer the Foreign-funded Printing Enterprises (Shang Zi Han [2005] No. 91)

4.

Circular of the Ministry of Commerce on Entrusting the Administrative Departments of Commerce at the Provincial Level to Examine and
Administer the Foreign-funded Designing Enterprises for Engineering Projects (Shang Zi Han [2005] No. 92)

5.

Circular of the Ministry of Commerce on Entrusting the Competent Provincial Departments of Commerce to Examine and Manage Some Foreign-funded
Road Transport Enterprises (Shang Zi Han [2005] No. 93)

6.

Circular of the Ministry of Commerce on Entrusting Local Departments to Check Foreign-funded Commercial Enterprises (Shang Zi Han
[2005] No. 94)

7.

Circular of the Ministry of Commerce about the related Issues on Entrusting National Economic and Technical Development Zones to Examine
and Approve foreign-funded Commercial Enterprises and International Freight Forwarding Enterprises (Shang Zi Han [2005] No. 102)

8.

Measures for the Administration of Foreign-funded International Freight Forwarding Enterprises (Decree No. 19, 2005 of the Ministry
of Commerce)



 
Ministry of Commerce
2007-02-12

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION CONCERNING THE RELATED MATTERS ON REGULATING AND INTENSIFYING THE ADMINISTRATION OF CONSOLIDATED DECLARATION AND PAYMENT OF INCOME TAX BY FOREIGN-RELATED ENTERPRISES

Circular of the State Administration of Taxation Concerning the Related Matters on Regulating and Intensifying the Administration
of Consolidated Declaration and Payment of Income Tax by Foreign-related Enterprises

Guo Shui Fa [2007] No.23

The state taxation bureaus of each province, autonomous region, municipality directly under the Central Government and city specifically
designated in the state plan, as well as the local taxation bureaus of Guangdong Province, Hainan Province and Shenzhen Municipality:

In accordance with the provisions of the Income Tax Law on Foreign-funded Enterprises and Foreign Enterprises (hereinafter referred
to as foreign-related enterprises) and the Detailed Rules thereof, in case a foreign-funded enterprise obtains incomes from the production
and operation of its branches within the territory of China or gains other incomes, , the head office of the enterprise shall, on
a consolidated basis, pay the income taxes thereon ; where a foreign enterprise sets up two or more business offices within the territory
of China, it may select one of them to declare and pay its income taxes on a consolidated basis. For the purpose of regulating and
intensifying the administration of consolidated declaration and payment of income taxes by foreign-related enterprises, the related
matters concerning the implementation are hereby prescribed as follows:

1.

Intensifying the administration on Confirming consolidated declaration

The tax authorities at the place where the head office of a foreign-funded enterprise or a foreign enterprise’s business office in
charge of the declaration and payment of income taxes on a consolidated basis (hereinafter referred to as consolidated taxpayer)
is located shall issue a Confirmation Letter on Consolidated Declaration and Payment of Income Tax by Foreign-funded Enterprises
(see Affix 1) after registering the tax category of the foreign-related enterprise income taxes paid by the consolidated taxpayer.

A foreign-funded enterprise branch or a foreign enterprise’s business office whose income tax is declared and paid on a consolidated
basis (hereinafter referred to as branch office) shall, when going through the formalities for the registration of income tax category,
attach a photocopy of the Confirmation Letter on Consolidated Declaration and Payment of Income Tax by Foreign-funded Enterprise
as issued by the competent tax authorities at the locality of the head office of the foreign-funded enterprise or that of the approval
document on approving the foreign enterprise business institution to make a consolidated declaration and payment of income tax as
produced by the tax authorities, and the branch offices are not required to separately declare the payment of income tax upon the
examination and confirmation of the competent tax authorities.

2.

Intensifying examination and the administration of archive-filing matters

A branch office shall, within two months as of the end of each year, submit the competent tax authorities at its locality such tax-related
issues that ought to be subject to examination and archive-filing as pre-tax deduction of property losses, additional deduction of
expenses for developing technologies, accelerated depreciation of fixed assets and accelerated amortization of intangible assets,
etc. . The competent tax authorities shall, within two months as of its receipt of the aforesaid materials, accomplish the examination
work and issue a Confirmation Letter on the Examination and Archive-filing Matters of Branch Offices (see Affix 2).

A consolidated taxpayer shall, when making annual declaration of income tax, submit the materials required under normal circumstance
and, meanwhile, attach the Confirmation Letter on the Examination and Archive-filing Matters of Branch Offices issued by the competent
tax authorities at the locality of t its subordinate branch office, if not , it may not deduct the corresponding pre-tax deductible
items from its pre-tax income.

3.

Intensifying coordination and cooperation

The competent tax authorities at the localities of the consolidated taxpayer and the branch office shall seriously implement the related
provisions in the Working Rules and Procedures for the Settlement of Tax Payments by Foreign-funded Enterprises and Foreign Enterprises
(Guo Shui Fa [2003] No.12 ), perform their respective duties and intensify mutual coordination and assistance.

The competent tax authorities at the locality the branch office shall, within 30 days as of its receipt of the Letter for Assistance
in Investigating the Tax Issues of Business Offices issued by the competent tax authorities at the locality the consolidated taxpayer,
take charge of investigating and verifying the related matters and send a reply on the investigating results to the competent tax
authorities at the locality of the consolidated taxpayer.

The competent tax authorities at the localities of the consolidated taxpayer and the branch office shall, in accordance with the procedures
and steps as prescribed in the Working Rules and Procedures on Joint Tax Auditing for Foreign-related Enterprise conduct trans-regional
joint tax auditing.

All the aforesaid provisions shall go into effect since the date when the 2006 settlement of income tax payments by foreign-related
enterprise commences. In case any previous provision conflicts with the present Circular, the latter shall prevail.

Affix:

1.

Confirmation Letter on Consolidated Declaration and Payment of Income Tax by Foreign-funded Enterprises

2.

Confirmation Letter on the Examination and Archive-filing Matters of Branch Offices

The State Administration of Taxation

February 28, 2007



 
The State Administration of Taxation
2007-02-28

 






ANNOUNCEMENT NO. 26, 2007 OF MINISTRY OF COMMERCE ON PROMULGATING EXPORT LICENCE APPLICATION STANDARDS AND RELATED ISSUES ON NATURAL SAND

Announcement No. 26, 2007 of Ministry of Commerce on Promulgating Export Licence Application Standards and Related Issues on Natural
Sand

[2007] No. 26

The mainland export enterprises qualified for the Export Licence Application Standards of Natural Sand could apply for the Export
Licence of Natural Sand (See Appendix for details) with designated licensing institutions of Ministry of Commerce.

The natural sand mentioned in this Announcement means the commodity under Tariff No. 25051000 and 25059000 in the 2007 Customs Tariff
of Import and Export of the People’s Republic of China.

This Announcement shall be put into effect as from March 25, 2007.

Appendix: Export Licence Application Standards and Related Issues on Natural Sand

Ministry of Commerce

March 12, 2007



 
The Ministry of Commerce
2007-03-12

 






ANNOUNCEMENT NO. 35, 2007 OF MINISTRY OF COMMERCE ON PROMULGATING LIST FOR ENTERPRISES QUALIFIED FOR EXPORT LICENSE APPLICATION STANDARDS FOR NATURAL SAND

Announcement No. 35, 2007 of Ministry of Commerce on Promulgating List for Enterprises Qualified for Export License Application Standards
for Natural Sand

[2007] No. 35

In accordance with Announcement No. 26, 2007 of Ministry of Commerce and General Administration of Customs, the List for Enterprises
Qualified for Export License Application Standards for Natural Sand is now promulgated.

Appendix: List for Enterprises Qualified for Export License Application Standards for Natural Sand

Ministry of Commerce

March 22, 2007
Appendix:
List for Enterprises Qualified for Export License Application Standards for Natural Sand

1.

GUANGDONG METALS & MINERALS IMPORT & EXPORT GROUP CORPORATION

2.

GUANGDONG DOUMEN METALS & MINERALS IMPORT & EXPORT GROUP CORPORATION

3.

GUANGDONG XINGUANG INTERNATIONAL GROUP

4.

ZHONSHAN QIXING INTERNATIONAL ECONOMIC & TECHNICAL COOPERATION CO., LTD

5.

SHENZHEN JINHE IMP. & EXP. CO., LTD

6.

ZHUHAI NANTIAN AGRICULTURAL IMP. & EXP. CO., LTD



 
Ministry of Commerce
2007-03-22

 






CIRCULAR OF THE MINISTRY OF EDUCATION CONCERNING FURTHER REGULATING CHINESE-FOREIGN COOPERATION IN SCHOOL RUNNING

Circular of the Ministry of Education Concerning Further Regulating Chinese-Foreign Cooperation in School Running

Jiao Wai Zong [2007] No.14

The education department (commission) of each province, autonomous region and municipality directly under the Central Government,
and the Education Bureau of Xinjiang Production and Construction Corp.:

This Ministry has successively promulgated a series of regulatory documents since the Rules on Chinese-Foreign Cooperation in School
Running and the implementation measures took effect, which play an important role in strengthening the administration of Chinese-foreign
cooperation in school running.

However, some serious problems still exist there on which all local administrative education departments and all higher education
institutions shall lay great stress. Some regions and schools attach particular importance to the repetitive establishment of low-level
educational programs of business, management, computer, IT and other subjects (specialties) whose cost is relatively cheap without
considering their goals and operation capacity and carefully examining the qualification and school-running capacity of foreign parties;
some schools fail to scrupulously design the mode and teaching arrangement of Chinese-foreign cooperation school running, they have
a low proportion of superior education resources, especially those special series of lectures, introduced from foreign countries,
and also have a low proportion of courses given by foreign-party teachers, so it is very difficult to guarantee quality of school
running; some seek for economic benefits by not following the principle of bringing welfare to the general public in school running
of Chinese-foreign cooperation ; and some even lack the awareness of running schools in accordance with law and maintaining the education
sovereignty, damage the teachers and students’ legal rights and interests and even give rise to group incidents.

In light of the recent field inspection and review results of Chinese-foreign cooperative school running, the publicity of some institutions’
and programs’ enrolment is not true and the students are not enrolled in prescribed ways. In some programs which we incorporated
into the state enrolment plan for schools of higher education, some students are admitted by way of violating the related state policies;
in some programs awarding diploma and academic degree of foreign educational institutions, some students cannot get foreign diploma
and academic degree on schedule and some cannot get a visa for studying abroad; some higher vocational training educational programs
attract students by promising the enrollment by foreign universities for bachelor’s degree even master’s degree, but it is not easy
to address the issue on authentication of the academic diplomas got by students from foreign universities; some higher education
institutions need to be regulated further in terms of fee charging in Chinese-foreign cooperation; some higher education institutions,
especially some key ones, confuse the limits of policies on Chinese-foreign cooperative school running purposely on in giving preparatory
courses of foreign universities or similar courses; some higher education institutions fail to demonstrate the educational programs
built up by Chinese-foreign cooperation sufficiently, the cooperative agreements they concluded are not standard and precise, and
their accounting management is not n line with the related legal requirements or even in chaos. Some schools do not lay enough stress
on the enpost_titled rights of the Chinese parties, their management right in running institutions or programs cooperatively is not given
into full play and their due leadership and decision-making right are even weakened. The coordination and supervision functions of
some local administrative education departments are not discharged sufficiently, and the slack of law enforcement occurs from time
to time.

For the purpose of further regulating Chinese-foreign cooperation in school running, the related issues are hereby notified as follows:

1.

To effectively enhance the sense of responsibility and emergency to maintain the stability of higher education institutions. Maintaining
the stability of higher education institutions is an requirement that is inevitable to build a socialist harmonious society and a
guarantee which is important for higher education undertaking to develop continuously, coordinately and soundly To run schools by
Chinese-foreign cooperation, it is necessary to further enhance political perspicacity responsibility, stick to maintaining education
policies’ seriousness, stability and consistency, stick to safeguarding students’ legitimate rights and interests, prevent and eliminate
the negative effects of student group incidents incurred by all kinds of factors on Chinese-foreign cooperation in school running,
and promote the Chinese-foreign cooperation in school running to develop soundly.

2.

To steadfastly adhere to the principle of for the public welfare in running schools. The related higher education institutions which
have cooperatively-run educational programs shall collect fees strictly according to the charging items stipulated by the state and
the charging rates approved by the people’s governments at the provincial level of the places where they are located, and make the
charging items and rates public to the society. It is necessary to rectify the guiding thoughts for school running, resist and correct
the wrong understanding and practices that running schools involving Chinese-foreign cooperation is taken as a means of bringing
about economic income to schools.

3.

To take the introduction of quality education resources of high quality as the core and examining the satisfaction of requirements
carefully by cooperatively-run programs before being approved. From now on, when conducting the examination and approval for a educational
institution or program involving Chinese-foreign cooperation that undertakes certificated higher education of the college or higher
level, the Ministry of Education shall take whether the foreign educational institution is famous or has famous subjects, specialties
or famous professors as the major basis, and, in principle, shall not approve the same kind of cooperative educational program which
a foreign educational institution has launched in China or of which the specialty is concentrated relatively in China and the charging
rates are obviously far beyond its cost on running schools.

4.

To make more efforts in researching policy and planning on development of running school of Chinese-foreign cooperation undertaking
higher vocational education in order to effectively take strengthening intension construction and improving quality of education
as the major tasks of the reform and development of higher vocational education. By the end of 2008, each region shall suspend accepting
the applications for archive-filing serial number submitted by educational institutions or programs involving Sino-foreign cooperation
of this category. During this period, all regions shall earnestly do a good job in formulating plans and making preparations for
the development planning for the cooperative school-running in higher vocational education of this region in terms of subjects, specialties,
choice of foreign countries, quantity and layout, etc, and submit a report to the Ministry of Education to provide schools with a
guidance for introducing educational resources of high quality from foreign countries, draw upon foreign parties’ good experiences
in the terms of subject and specialty arrangement, curriculum system reform, teaching content renewal and talent cultivation mode
innovation, etc., and reinforce their capability in cultivating high skilled talents in the fields of advanced manufacturing industry,
modern agriculture and modern service industry, especially, in the fields of energy, minerals, environmental protection and banking,
etc.

5.

To accurately hold the policy limit on Chinese-foreign cooperative school running. At present, some higher education institutions,
especially some key ones, provide so-called preparatory course of a certain foreign university of which some are actually foreign
language training. As the foreign university does not take part in the teaching activities conducted within the territory of China,
the Chinese party and foreign party sign a so-called agreement on mutual recognition of credits and promise that the students attending
preparatory courses have opportunities to continue studying at the foreign university and may, after finishing their study, get diplomas
of the university. The educational activity mentioned above is not an educational activity carried out by Chinese-foreign cooperation
and is not beneficial for improving the teaching quality of higher education institutions. All higher education institutions shall
put the emphasis of their work on the improvement of education quality, and no one may conduct any such educational activity, let
alone in the name of Chinese-foreign cooperative school running.

6.

To further strengthen supervision over and management of the whole process of Chinese-foreign cooperative school running according
to the spirit of governing education under law and standardized administration. At present, the major stress in work shall be to
administrate the general regulations and advertisements on recruiting students in a standardize manner and to supervise over such
links which are easy to cause contradictions as issuance of academic credentials and diplomats and educational systems. We shall
conduct an inspection by putting emphasis on the two aspects mentioned above, timely solve the problems found out and firmly and
reliably handle serious problems. Such policies shall be rigidly put into effect as that the general regulations or advertisement
on student recruiting of any educational institution or program involving Chinese-foreign cooperation shall be timely reported to
the organ in charge of the examination and approval for record and that the school-running report of any cooperatively-run educational
institution or program shall, within the prescribed time limit, be submitted to the organ in charge of the examination and approval,
etc.

7.

This Ministry will adopt corresponding measures to further strengthen administrative supervision over school running of Chinese-foreign
cooperation, and the stress shall be laid on the acceleration of the construction of “two platforms” and “two mechanisms”, namely,
information platform for supervision work over school running of Chinese-foreign cooperation, which shall be on the basis of foreign-related
education supervision information net, platform for authenticating the certificates issued by Chinese-foreign cooperatively-run schools,
the mechanism for assessing quality of school running of Chinese-foreign cooperation which is built up in order to assess Chinese-foreign
cooperative school-running quality in some selected provinces and cities according to different major subjects, and the law enforcement
and penalty mechanism for Chinese-foreign cooperative school-running which is built up in order to reinforce the responsibilities
of school-running entities and the administrative departments of various levels as required. For the purpose of doing a better job
in the publicity of governmental affairs and information disclosure, this Ministry will gradually make public the list of approved
Chinese-foreign cooperative educational institutions and programs and other related information. At the beginning of January 2007,
information on some educational institutions and programs involving Chinese-foreign cooperation which undertake the higher diploma
education of college level or higher has been publicly put on the website and the foreign-related education supervision information
net of the Ministry of Education.

8.

The administrative education department, higher education institution in each region shall set forth and constitute the work plan
of further regulating Chinese-foreign cooperation in school running, clean up and rectify the regulation-violating behaviors currently
existing in school running of Chinese-foreign cooperation in a centralized way according to the spirit of the present Circular. They
shall find out the real situation and carry out inspection on Chinese-foreign cooperation in school running in order to keep informed
of the comprehensive situation, find out existing problems and rectify them properly and timely. The work plan and situation relating
to cleaning up and rectification shall be timely reported to this Ministry.

This Ministry will supervise and inspect each region and each higher education institution for the implementation of the present Circular,
and at a proper time organize an inspection team to supervise and inspect the implementation of the related work.

Ministry of Education

April 6, 2007



 
Ministry of Education
2007-04-06

 






ANNOUNCEMENT NO. 23, 2007 OF MINISTRY OF COMMERCE

Announcement No. 23, 2007 of Ministry of Commerce

[2007] No. 23

Mixture mentioned in the Article 7 of Provisions on the Administration of the Import and Export of Precursors and Chemicals Used
in Production of Narcotic Drugs and Psychotropic Substances (hereinafter referred to as “the Provisions”) means:

1.

Commodity that contains one of the four precursors and chemicals used in production of narcotic drugs and psychotropic substances,
namely toluene, acetone, butanone, sulphuric acid, with a proportion of more than 40% (excluded) and commodity with a hydrochloric
acid proportion of more than 10%(excluded).

2.

Commodity that contains other precursors and chemicals used in production of narcotic drugs and psychotropic substances, other than
the above-mentioned 5 categories, listed in the Provisions on the Administration of the Import and Export of Precursors and Chemicals
Used in Production of Narcotic Drugs and Psychotropic Substances.

Compound medicine formulation with the precursors and chemicals used in production of narcotic drugs and psychotropic substances are
not included.

When importing or exporting the above-mentioned mixture, the operators shall apply the permission in accordance with the Provisions.

Commodity that contains one of the five precursors and chemicals used in production of narcotic drugs and psychotropic substances,
namely toluene, acetone, butanone, sulphuric acid, hydrochloric acid with a proportion of no more than the above-mentioned regulations
shall not be considered as the “mixture” mentioned in the Article 7 . And the operators could apply permission without the Provisions
while importing or exporting the commodity.

Ministry of Commerce

May 16, 2007



 
Ministry of Commerce
2007-05-16

 






MEASURES FOR EVALUATING AND PROTECTING BRANDS IN THE COMMERCIAL FIELD (FOR TRIAL IMPLEMENTATION)

Circular of the Ministry of Commerce on Printing and Distributing the Measures for Evaluating and Protecting Brands in the Commercial
Field (for Trial Implementation)

Shang Fa Fa [2006] No.703

The competent administrations of commerce in each province, autonomous region, municipality directly under the Central Government,
city specifically designated in the state plan and Xinjiang Production and Construction Corps.:

In order to implement the spirit of the 16th National Congress of the CPC and the Central Economic Working Conference of 2006 and
carry out the Outline of the Eleventh Five-year Plan for the National Economic and Social Development, the Ministry of Commerce boosts
the work of brand construction in the commercial field in an all-round way by taking ￿￿Brand-oriented March￿￿ as the cut-in point
and through establishing four systems, that is , evaluation, promotion, improvement and protection of brand. This is an important
measure for the Ministry of Commerce to carry out the scientific view of development in the commercial field and build an innovation-oriented
country, an inevitable choice to transfer the growth mode of trade and elevate the international competitiveness of the industries,
and an objective demand to enlarge domestic demand and improve the people’s quality of life at the same time.

Evaluation and protection of brand is an important component part of the work of brand construction in the commercial field. In order
to regulate the activities of brand evaluation in the commercial field and enhancing brand protection, the Ministry of Commerce instituted
the Measures for Evaluating and Protecting Brands in the Commercial Field (for Trial Implementation) and hereby prints and distributes
the Measures to you for your earnest compliance and implementation.

The Ministry of Commerce

January 8, 2007

Measures for Evaluating and Protecting Brands in the Commercial Field (for Trial Implementation)

Article 1

The present Measures are formulated For the purpose of promoting the transformation of trade growth mode, effectively increasing
trade efficiency, promoting the implementation of brand strategies as well as regulating and enforcing evaluation and protection
of brands in the commercial field.

Article 2

The Ministry of Commerce shall, within its scope of powers endowed by the State Council, be in charge of uniformly carrying out the
work in respect of evaluation and protection of brands in the commercial field.

Article 3

The competent administrations of commerce in each province, autonomous region, municipality directly under the Central Government,
city specifically designated in the state plan and Xinjiang Production and Construction Corps (hereinafter referred to as local competent
administrations of commerce), national industrial associations and import-export chambers (hereinafter referred to as industrial
organizations) shall be in charge of the work of applying and recommending the related brands of the local places and the same industries
under the provisions of the present Measures and carry out the work regarding promotion, improvement, protection and social investigation
of brands within their respective scope of powers.

Article 4

Evaluation of brands in the commercial field shall be based on the market performances of a brand in both domestic and overseas markets,
represent the recognition, selection, use, appraisement and feedback of its users and embody its capacities of market competition
and value creation as well as the potential of long-term development.

Article 5

Evaluation of brands in the commercial field shall take the voluntary application of an enterprise as the premise, employ the mechanism
of application by enterprises, model evaluation through model, assessment by experts, confirmation by market and issuance by governments,
as well as abide by the principles of science, impartiality, objectiveness and selection of the best.

Article 6

When applying for a brand in the commercial field, the following conditions shall be met:

(1)

the applicant enterprise is set up within the territory of China in accordance with law and legally exists, participates of its own
free will and agrees to comply with all provisions and requirements of the Ministry of Commerce concerning evaluation and protection
of brands;

(2)

the brand under application is created within the territory of China, its ownership belongs to the applicant enterprise, it has been
used for three years or more, has been registered as a trademark or has obtained the legal protection of equal validity in the major
markets domestically and overseas, and the place for its first registration as a trademark is China;

(3)

the brand under application is a brand of enterprise, product or service with relatively strong market competitiveness, influence
and fairly high popularity, whose quality has reached the leading level of China or the advanced level of the world, who has relatively
strong capacities of independent innovation and sustainable development and has obtained recognition of the market, general public
and vast number of users;

(4)

the economic and social performances of the applicant enterprise is good, both the gross incomes from sales and the brand’s capacity
of making profits (the proportion of the net profit on the sales of products and services under the brand to the gross cost for sales)
rank top in this industry;

(5)

the related brand products and services and the applicant enterprise itself comply with the provisions of the related state laws and
regulations on industry, safety, sanitation, environmental protection and social liability etc..

Article 7

The Ministry of Commerce shall carry out evaluation of brands regularly; issue a notice concerning evaluation of brand in the commercial
field in advance specifying the scope, procedures and period for the current evaluation.

Article 8

An applicant enterprise shall fill in the application papers according to the facts, supply actual, valid and integrated materials
for evidences and necessary channels for verification, and submit them to the competent administration of commerce of its locality
or to the related industrial organizations within the fixed period.

The local competent administrations of commerce or industrial organizations shall examine and verify the authenticity, validity and
integrity of the application materials of the participating brands in the current places or industries, propose its recommending
opinions and submit the application materials to the Ministry of Commerce within the provisioned time limit.

Article 9

The Ministry of Commerce may, according to the demands of the evaluation work, entrust professional institutions to conduct verification,
sorting out and comprehensive measurement and calculation on all indices and data of the participating brands, set up several expert
working groups to verify and evaluate the participating brands and entrust professional fact-finding organs and public media to carry
out social investigation on the participating brands.

Article 10

The Ministry of Commerce shall publicize the list of brands to be evaluated to the general public, grant corresponding brand post_titles
and use rights of brand marks to enterprises in accordance with the publication situation and publicize the related situation to
the general public.

Article 11

In case an enterprise, which has obtained a brand post_title as granted by the Ministry of Commerce, seriously injures the rights and
interests of the consumers, has any great quality problem or safety accident, severely impairs intellectual property right of any
other person, seriously disrupts the market order or obtains the brand post_title by illegal means such as falsification, the Ministry
of Commerce shall revoke the related brand post_title of the enterprise and may not accept its application for participating in evaluation
of brands for one to three years.

Article 12

Activities of brand evaluation in the commercial field shall accept supervision of all circles in the society. No entity or individual
may, by taking advantage of this opportunity, charge any fee against any participating enterprise or conduct any profit-making activity.

Article 13

When any organ or personnel participating in the brand evaluation work of the Ministry of Commerce conducts the evaluation work,
it/he shall follow the related provisions and procedures, and shall bear the obligation of keeping confidential the business and
technical secrets for the participating enterprises.

Article 14

Any entity or individual, when finding any violation of laws or regulations in the work of brand evaluation in the commercial field,
may complain or pick up it to the Ministry of Commerce or the local competent administrations of commerce. The complainant or informer
shall provide materials in written form, show the authentic identity and provide necessary materials for evidence.

Article 15

In case of any infringement upon the right to enterprise post_title, right to the exclusive use of a registered trademark, patent right,
copyright or any other intellectual property right of a brand granted by the Ministry of Commerce, any act of unfair competition
against a brand granted by the Ministry of Commerce or any dispute over domain name of a brand granted by the Ministry of Commerce,
it shall be dealt with under the related laws and regulations of the state.

Cooperating with the administrative departments concerned, the Ministry of Commerce shall intensify its efforts in protecting the
brands granted by the Ministry of Commerce under the provisions of the preceding paragraph and transfer any entity or individual
to the judicial authority for disposal under law, in case it/he is suspected of being involved in any crime.

Article 16

In case any import goods injures any intellectual property right of any brand granted by the Ministry of Commerce and harms the foreign
trade order, the Ministry of Commerce shall, under the Foreign Trade Law of the People’s Republic of China, take such measures as
prohibition from importation.

In case the patent right, trademark right or copyright of any brand granted by the Ministry of Commerce is injured in any economy
and technology trade exhibition, trade fair, exposition, exhibition or any other activity, the Ministry of Commerce shall, in conjunction
with the related departments, dispose it under the Measures for Protecting Intellectual Property Rights During Exhibitions.

Article 17

The Ministry of Commerce shall set up and perfect a pre-warning system for protecting overseas intellectual property rights so as
to intensify the overseas protection of the brands granted by the Ministry of Commerce.

Article 18

By cooperating with the business offices of the embassies located abroad, the Ministry of Commerce shall set up an overseas service
platform for intellectual property rights and provide service of public information consultation for the overseas protection of the
brands granted by the Ministry of Commerce.

Article 19

The Ministry of Commerce shall encourage and help enterprises to handle trademark registration, patent application or copyright registration
relevant to the brands granted by the Ministry of Commerce in other countries and regions, and shall take proper measures to support
the enterprises to protect their lawful rights and interests in other countries and regions by legal means.

Article 20

In case any intellectual property right of a brand granted by the Ministry of Commerce is injured or the brand suffers any unfair
competition, the enterprise may complain or pick up it to the related department, the local service center for protection of intellectual
property or the Ministry of Commerce. The local service center or the Ministry of Commerce shall transfer it to the related department
and keep track on and feed back the disposal of the case.

In case any intellectual property right of a brand granted by the Ministry of Commerce is injured abroad, the enterprise may response
the situation to the business office of the embassy located in this foreign country, the Ministry of Commerce or the overseas commercial
complaint service center for Chinese enterprises under the Ministry of Commerce.

Article 21

An enterprise, which obtains a brand granted by the Ministry of Commerce, shall actively carry out intellectual property construction,
increase its input in intellectual property, actively protect its lawful rights and interests, enforce management on brands and maintain
the image of the brand granted by the Ministry of Commerce.

Article 22

In case a brand granted by the Ministry of Commerce is transferred, pledged, evaluated and contributed as investment, it shall be
fairly evaluated by an evaluation organ that is correspondingly qualified and the transaction shall be reported to the Ministry of
Commerce for record within 30 days as of the conclusion of corresponding contract.

In case the actual control power of the enterprise that obtains a brand granted by the Ministry of Commerce is transferred as a result
of merger or acquisition, the related parties shall report this situation to the Ministry of Commerce.

Article 23

The brand mark as mentioned in Article 10 shall belong to the Ministry of Commerce. A brand enterprise may use this mark on the
products and services on which a brand post_title has been granted and their packages, decorations, instructions, ads, and other related
materials. Any brand mark may be forged, sold or falsely used by any entity or individual.

Article 24

In case any entity or individual charges any fee or carries out any profit-making activity in the name of brand evaluation in the
commercial field with violation of the provisions of Article 12 , the Ministry of Commerce shall warm it/him and order him/ it to
make corrections within a fixed time limit; if the circumstance is serious, the related department shall impose administrative or
criminal punishment upon him/it under law.

Article 25

In case any organ or person participating in the work of brand evaluation conducted by the Ministry of Commerce fails to abide by
the related provisions and procedures of brand evaluation with violation of the provisions of Article 13 , his/ its qualification
for participating in evaluation work shall be revoked. In case any organ or person commits any fraud for selfish purposes, abuses
the authority or neglects its/his duties, an administrative punishment shall be given to him/it under law; if a crime is constituted,
criminal liabilities shall be investigated under law.

Article 26

If a transaction of brand is not evaluated or reported to the Ministry of Commerce for record with violation of the provisions in
Article 22 , the Ministry of Commerce shall give an admonition to the violator and order the related parties to make corrections;
if the circumstance is serious, the corresponding brand post_title shall be canceled.

Article 27

In case any entity, with violation of the provisions in Article 23 , extends the use scope without authorization or uses a brand
mark granted by the Ministry of Commerce on other products, services and their packages, decorations, instructions, ads, and the
related materials, the Ministry of Commerce shall give an admonition to it and order it to make corrections within a fixed time limit;
if it fails to do so, its corresponding brand post_title shall be canceled.

In case any entity, with violation of the provisions in Article 23 , forges, sells or falsely uses any brand mark granted by the Ministry
of Commerce, the Ministry of Commerce shall give an admonition to it or impose upon it a fine of not more than 30,000 Yuan, order
it to make corrections within a fixed time limit and subject it to corresponding legal liabilities under law.

Any application for participating in brand evaluation in the commercial, which is field by an entity within two years as of the occurrence
of its illegal act, may not be accepted.

Article 28

In case any entity or individual refuses to accept the administrative punishment made by the Ministry of Commerce, it/he may apply
for administrative review under laws or initiate an administrative lawsuit before a people’s court.

Article 29

The present Measures shall enter into force as of its printing and distribution.



 
The Ministry of Commerce
2007-01-08

 






MEASURES ADMINISTERING FINANCE LEASING COMPANIES

Decree of China Banking Regulatory Commission

No. 1

The Measures for Administering Finance Leasing Companies have been adopted at the 55th chairmen’s meeting on December 28, 2006, are
hereby promulgated and shall go into effect on March 1, 2007.
Chairman Liu Mingkang

January 23, 2007

Measures Administering Finance Leasing Companies
Chapter I General Rules

Article 1

For the purpose of promoting the healthy development of the finance leasing industry of our country and strengthening the supervision
over and administration of finance leasing companies, the present Measures are constituted in accordance with the Banking Supervision
Law of the People’s Republic of China, the Company Law of the People’s Republic of China and other laws and regulations.

Article 2

The “finance leasing companies” as mentioned in the present Measures means the non-banking financial institutions mainly engaging
in the finance leasing business upon approval of China Banking Regulatory Commission (CBRC) .

The name of a finance leasing company shall include words “finance leasing”. Unless it is otherwise prescribed by any law or regulation,
no entity or individual may engage in the finance leasing business or use the words “finance leasing” in its name without approval
of the CBRC.

Article 3

The term “finance leasing” as mentioned in the present Measures means such trading activities by which the lessor leases the objects
that are obtained from the supplier in accordance with the lessee’s choice or affirmation of the object and supplier to the lessee
for the stipulated occupation or use .

The leased objects applicable to the finance leasing business shall be fixed assets.

Article 4

The term “business of sale and rent-back” as mentioned in the present Measures means such business by which the lessee sells its
self-owned articles to the lessor, meanwhile, signs a finance leasing contract with the lessor, and then rents the said articles
back from the lessor. The business of sale and rent-back is a means of finance leasing in which the lessee and the supplier are identical.

Article 5

The expression “relationship of associated parties and associated transaction ” as mentioned in the present Measures means the relationship
of associated parties and associated transaction satisfying the relevant provisions in the accounting standards for business enterprises.

Article 6

The CBRC and its dispatched institutions shall impose supervision and administration on the finance leasing companies in accordance
with law.

Chapter II Establishment, Alteration and Termination of Institutions

Article 7

For applying for the establishment of a finance leasing company, the following requirements shall be satisfied:

(1)

having contributors satisfying the requirements of the present Measures;

(2)

having the minimum registered capital as provisioned in the present Measures;

(3)

having the articles of association in line with the Company Law of the People’s Republic of China and the present Measures;

(4)

having directors and senior managers satisfying the post holding qualification requirements as specified by the CBRC, as well as qualified
staff members knowing well the finance leasing business;

(5)

having perfect systems for corporate governance, internal control, business operation and risk prevention, etc.;

(6)

having qualified business places, safety measures and other facilities in relation to business operations; and

(7)

satisfying other requirements as specified by the CBRC.

Article 8

The contributors of a finance leasing company are sorted into the principal contributors and ordinary contributors. The former means
a contributor who has contributed 50% or more of the registered capital of the finance leasing company to be set up, and the latter
means those contributors other than the principal contributors.

The principal contributor shall, as the applicant, file an application to the CBRC for the establishment of a finance leasing company.

Article 9

The principal contributor of a finance leasing company shall satisfy any of the following requirements:

(1)

a commercial bank with independent legal person status as registered at home or abroad shall also satisfy the following requirements:

I.

its capital adequacy ratio satisfies the requirements of the finance supervisory organ in the place where the commercial bank is registered
and is not below 8%;

II.

its year-end assets for the recent one year is not below RMB 80 billion Yuan or any freely convertible currency with equivalent value;

III.

it has consecutively made profits for the recent two years;

IV.

it complies with the laws and regulations of its registration place, and has not been involved in any major case or committed any
serious illegal or irregular act within the recent two years;

V.

it possesses good corporate governance structure and internal control mechanism as well as perfect risk management system ; and

VI.

it satisfies the other prudential requirements as specified by the CBRC.

(2)

a lease company as registered at home or abroad shall also satisfy the requirements as follows:

I.

its year-end assets for the recent one year is not below RMB 10 billion Yuan or any freely convertible currency with equivalent value;

II.

it has consecutively made profits for the recent two years; and

III.

it conforms to the laws and regulation of its registration place, and has not been involved in any major case or committed any serious
illegal or irregular act within the recent two years.

(3)

a large-scale enterprise, which is registered within the territory of China and whose main business is to produce products fit for
finance leasing business, shall also satisfy the requirements as follows:

I.

its year-end assets for the recent one year is not below RMB 50 billion Yuan or freely convertible currency with equivalent value;

II.

it has consecutively made profits for the recent two years; and

III.

its year-end ratio of net assets for the recent one year is not below 30%;

IV.

its incomes from main businesses account 80% or more of all its business incomes;

V.

it possesses good credit records; and

VI.

it complies with the laws and regulations of its registration place, and has not been involved in any significant case or committed
any serious illegal or irregular act within the recent two years.

(4)

other financial institutions that are recognized by the CBRC to be the principal contributor.

Article 10

A general contributor of a finance leasing company shall conform to the related provisions of the CBRC on the investment into and
subscription of the shares of financial institutions. Any contributor satisfying the requirements for the principal contributor may
act as an ordinary contributor of a finance leasing company.

Article 11

The minimum registered capital of a finance leasing company is RMB 100 million Yuan or any freely convertible currency with equivalent
value, and the registered capital shall be the paid-in money.

The CBRC may adjust the minimum registered capital of finance leasing companies on the basis of the demand for the development of
the finance leasing business.

Article 12

The establishment of a finance leasing company covers two phases: preparatory establishment and start of business. The Chinese version
of the application materials for preparatory establishment or start of business presented by an applicant shall prevail. The acceptance
of materials and procedures for examination and approval shall be conducted in accordance with provisions on implementing administrative
licensing as prescribed by the CBRC.

Article 13

For applying for the preparatory establishment of a finance leasing company, an applicant shall submit the documents as follows:

(1)

an application form for preparatory establishment, which shall cover the name, registration place, registered capital, contributors
and their contributions and business scope, etc. of the finance leasing company to be set up;

(2)

a feasibility study report, which shall cover the market prospect analysis, future business development programs, organizational management
structures, risk control ability analysis of the company to be set up , as well as a prediction of the assets scale debts and profits,
etc. for the three years after the company starts business operations;

(3)

the (draft) of the articles of association of the finance leasing company to be set up;

(4)

the basic information on contributors, including the name, legal representative, registration place, photocopy of business license,
business situation of each contributor, as well as the capital contribution agreement. In case a contributor is an overseas financial
institution, it shall provide an opinion letter issued by the finance supervisory institution of its registration place;

(5)

annual audit reports audited by qualified intermediary institutions of the contributors for the recent two years; and

(6)

other documents as required by the CBRC to be submitted.

Article 14

After the preparatory establishment of a finance leasing company has been accomplished, the applicant shall apply for business start
and shall submit the following documents to the CBRC:

(1)

a report on preparatory establishment work, and an application form for business start;

(2)

a capital assessment certificate issued by a qualified domestic intermediary institution, and a registration letter issued by the
administrative department for industry and commerce on advance approval of finance leasing company’s name;

(3)

a shareholders brochure , and the amount and proportion of their contributions;

(4)

articles of association of the finance leasing company, which shall at least cover the name, business place, nature of institution,
registered capital, scope of business, organizational form, operation and management, termination and liquidation, etc. of the institution;

(5)

the name list, specific resumes and certification materials on post holding qualification of the senior managers to be appointed;

(6)

bylaws for the businesses to be operated, and risk control rules;

(7)

materials about the business place and other facilities in relation to business; and

(8)

other documents as required by the CBRC.

Article 15

A finance leasing company may, upon approval of CRBC, establish a branch. The specific requirements for the establishment of branches
shall be separately provisioned by the CBRC.

Article 16

The CBRC shall carry out the post holding qualification approval system to directors and senior managers of finance leasing companies.

Article 17

A finance leasing company shall report to the CBRC for approval any of the following changes:

(1)

change of name;

(2)

change of organizational form;

(3)

adjustment of business scope;

(4)

change of registered capital;

(5)

change of stock rights;

(6)

modification of articles of association;

(7)

change of registration place or business place;

(8)

change of directors or senior managers;

(9)

merger or division; or

(10)

any other matter prescribed by the CBRC.

Article 18

A finance leasing company may be dissolved upon approval of the CBRC under any of the following circumstances:

(1)

The business term as prescribed in its articles of association expires or any other cause for dissolution as specified by its articles
of association arises;

(2)

The (general) assembly of shareholders makes a resolution on dissolution;

(3)

The dissolution is required by virtue of the merger or division of the company;

(4)

The company’s business license is revoked, the company is ordered to be closed down or is canceled ; or

(5)

Any other statutory cause.

Article 19

A finance leasing company may apply to the court for bankruptcy upon approval of the CBRC under any of the following circumstances:

(1)

It can not pay its due debts, and apply for bankruptcy as initiated by itself or as required by the creditor; or

(2)

It is liquidated by virtue of dissolution or revocation, and the liquidation group finds that the assets of the finance leasing company
are not enough to pay off its debts and the company should apply for bankruptcy.

Article 20

If a finance leasing company fails to pay off its due debts and its assets are not enough to pay off all the debts or it clearly
lacks the solvency, the CBRC may apply for the reorganization or bankruptcy liquidation of this finance leasing company to the people’s
court.

Article 21

In case a finance leasing company is terminated by virtue of bankruptcy, revocation or bankruptcy announcement, liquidation shall
be handled in accordance with relevant laws and regulations of the State.

Chapter III Business Scope

Article 22

A finance leasing company may, upon approval of the CBRC, engage in all or part of the following businesses in RMB or any foreign
currency:

(1)

to conduct finance leasing business;

(2)

to absorb time deposits with the term of one year or longer from its shareholders;

(3)

to accept the guaranty bonds for lease from the lessee;

(4)

to transfer receivable payment for lease to commercial banks;

(5)

to issue financial bonds upon approval;

(6)

to conduct inter-bank lending;

(7)

to borrow money from financial institutions;

(8)

to borrow foreign exchanges from abroad;

(9)

to sell off and dispose of the scrap value of leased objects;

(10)

to conduct economic consultancy; and

(11)

other businesses as approved by the CBRC.

Article 23

Any finance leasing company is prohibited from absorbing deposits from any bank shareholder.

Article 24

If the business of a finance leasing company involves in any matter about foreign exchange control, it shall observe provisions on
foreign exchange control of the State.

Chapter IV Business Rules

Article 25

With respect to corporate governance, a finance leasing company shall set up an organizational framework mainly composed of the (general)
assembly of shareholders, the board of directors, the board of supervisors and senior managers, classify their respective duties
clearly, guarantee their independent operation and effective check and balance as well as form a scientific and efficient policy-making,
incentive and constraint mechanism.

Article 26

A finance leasing company shall, in accordance with the principles of full scale, prudence, effectiveness and independence, set up
and perfect the rules for internal control, and submit them to the CBRC or its dispatched institution for archival filing.

Article 27

The associated transaction of a finance leasing company shall, in accordance with the commercial principle, be carried out on terms
not more favorable than similar transactions conducted with non-associated parties.

Article 28

A finance leasing company shall constitute rules for managing associated transaction, which shall specifically include:

(1)

supervision over and management of associated transaction by the board of directors or the business decision-making body;

(2)

duties and personnel composition of the associated transaction control committee;

(3)

collection and management of the information about associated parties;

(4)

rules for reports, commitments, identification and confirmation of associated parties;

(5)

types, price fixing polices, examining and approving procedures and standards for associated transaction;

(6)

withdrawal system;

(7)

internal audit and supervision;

(8)

information release;

(9)

punishment measures; and

(10)

other contents as required by the CBRC.

Article 29

Any major associated transactions of a finance leasing company shall be subject to approval of the board of directors. The “major
associated transaction” means a single transaction conducted between the finance leasing company and an associated party with transaction
amount of not less than 5% of the net capital of the finance leasing company, or any transaction, after which, the trading balance
of the finance leasing company and the connected party is not less than 10% of the net capital of the finance leasing company.

Article 30

When the board of directors of a finance leasing company, the operation decision-making institution of a finance leasing company
without a board of directors or an associated transaction control committee votes on or makes a decision about an associated transaction,
the persons related to the associated transaction shall withdraw.

Article 31

For the business of sale and rent-back, a specific subject matter is required, and the subject matter shall comply with the present
Measures.

Article 32

The subject matter of the business of sale and rent-back shall be actually owned by the lessee and the lessee shall have the right
to dispose of it. A finance leasing company may not accept any property under mortgage, involved in any ownership dispute or sealed
or seized by the judicial organ or with any other flow as the subject matter of the business of sale and rent-back.

Article 33

A finance leasing company shall, in the business of sale and rent-back, have the price fixing basis that is reasonable and does not
violate accounting standards as the reference for the purchase price of targets, and may not purchase anything of low value at high
prices.

Article 34

A finance leasing company, which engages in the business of sale and rent back, shall actually obtain the ownership of corresponding
targets. If the subject matter is a property whose transfer of ownership should be registered at the registration organ in accordance
with any law or regulation of the State, the finance leasing company shall make corresponding registration.

Chapter V Supervision and Administration

Article 35

A finance leasing company shall conform to the following supervisory indicators:

(1)

Capital adequacy ratio. The net capital of a finance leasing company may not be below 8% of the risk weighted assets;

(2)

Finance concentration ratio to a single client. The financing balance of a finance leasing company to a single lessee may not be more
than 30% of its net capital. For the calculation of the financing balance to a client, the guaranty bonds provided by the lessee
when granting credits may be deducted;

(3)

Correlation degree of single clients. The financing balance of a finance leasing company to an associated party may not be more than
30% of its net capital;

(4)

Correlation degree of group clients. The financing balance of a finance leasing company to all the connected parties may not be more
than 50% of its net capital; and

(5)

Inter-bank lending proportion. The capital balance of inter-bank lending of a finance leasing company to all the associated parties
may not be more than 100% of its net capital.

The CBRC may, on the basis of the demand of supervisory work, properly adjust the aforesaid indicators.

Article 36

A finance leasing company shall make information disclosure in accordance with related accounting standards for business enterprises
and the related provisions of the CBRC.

Article 37

For risk assets, a finance leasing company shall conduct the five-grade classification system.

Article 38

A finance leasing company shall, in accordance with related provisions, constitute rules for bad debt provisions, and prepare the
bad debt provisions in a timely and sufficient manner, otherwise, it may not distribute profits.

Article 39

A finance leasing company shall, in accordance with the legal provisions, prepare balance sheets, profit and loss statements and
other statements as required by the CBRC and report them to the CBRC. The legal representative and other direct handlers of a finance
leasing company shall be responsible for the authenticity of the statements as provided.

Article 40

A finance leasing company shall, within 4 months as of the end of each accounting year, submit to the CBRC or its dispatched institution
a report on associated transaction for the previous accounting year. The report shall include associated parties, trade type, trading
volume and targets, trading price, price fixing methods, proceeds and losses from transactions, as well as the nature and proportion
of rights and interests of associated parties in the transactions, etc.

Article 41

A finance leasing company shall set up a regular external audit system, and shall, within 4 months as of the end of each accounting
year , submit to the CBRC and its dispatched institution the annual audit report as signed by its legal representative .

Article 42

If a finance leasing company goes against the related provisions in the present Measures, the CBRC may order it to make corrections
within a fixed period; if it fails to do so within the fixed period, or its act seriously endangers its stable operation or damages
lawful rights and interests of clients, the CBRC may, by considering the specific situations, adopt such supervisory measures as
business suspension or restriction of shareholders’ rights, etc. in accordance with the Banking Supervision Law of the People’s Republic
of China and other laws and regulations.

Article 43

If a finance leasing company has fell in or may fall in a credit crisis, which seriously damages the lawful rights and interests
of clients, the CBRC may conduct the trusteeship to it or urge it to reorganize, and have the right to revoke it for the serious
circumstances.

Article 44

If a finance leasing company goes against any related provision in the present Measures, the CBRC may punish it in accordance with
the Banking Supervision Law of the People’s Republic of China and other laws and regulations. Where the finance leasing company is
dissatisfied with the punishment decision, it may apply for administration review or lodge an administrative lawsuit to the people’s
court.

Chapter VI Supplementary Rules

Article 45

The CBRC shall be responsible for the interpretation of the present Measures.

Article 46

The present Measures shall go into effect as of March 1, 2007.



 
China Banking Regulatory Commission
2007-01-23

 






CIRCULAR OF THE NATIONAL DEVELOPMENT AND REFORM COMMISSION AND THE STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING THE REGULATION OF THE ARCHIVAL FILING ADMINISTRATION OF ALIENING BAD CLAIMS TO FOREIGN PARTIES BY FINANCIAL INSTITUTIONS

Circular of the National Development and Reform Commission and the State Administration of Foreign Exchange Concerning the Regulation
of the Archival Filing Administration of Aliening Bad Claims to Foreign Parties by Financial Institutions

Fa Gai Wai Zi [2007] No.254

The development and reform commissions, economy and trade commissions (economy commission) and the branch bureaus of foreign exchange
control of each province, autonomous region, municipality directly under the Central Government, city specifically designated in
the state plan and Xinjiang Production and Construction Corps.:

For the purpose of regulating the administration of foreign debts formed in the alienation of bad claims to overseas investors by
domestic financial institutions, effectively protecting the lawful rights and interests of investors, improving the disposing efficiency
of non-performing assets, actively avoiding and removing the foreign debts risks formed in the disposal process and promoting the
sound and orderly development of China’s bad assets disposal market, we hereby inform the related matters as follows:

1.

In case a domestic financial institution assumes foreign debts resulted from its alienation of bad claims to an overseas investor,
the domestic financial institution shall report such case to the National Development and Reform Commission and the State Administration
of Foreign Exchange and put it under the administration of foreign debts according to the provisions of the Interim Measures for
Administering Foreign Debts (Order No.28 of the National Development Planning Commission, the Ministry of Finance and the State Administration
of Foreign Exchange) by analogy.

2.

The National Development and Reform Commission shall, in collaboration with the State Administration of Foreign Exchange, administer
the foreign debts formed from the alienation of bad claims to foreign parties by domestic financial institutions in accordance with
China’s foreign debt structure, balance of payment position, scale of bad claims and the development of the disposal market.

3.

A domestic financial institution aliening bad claims to foreign parties shall submit the plan of aliening bad claims to foreign parties
of the next year to the National Development and Reform Commission prior to November 30 of each year, which shall cover the basic
information on the existing bad claims, the bad claims it intends to alien to foreign parties in the next year and the forecasting
on the recovery of the bad claims it intends to alien.

4.

According to the Regulation on Financial Asset Management Companies (Order No.297 of the State Council) and the related provisions
of the Ministry of Finance and China Banking Regulatory Commission, etc, a domestic financial institution shall conform to the principles
of openness, impartiality and fairness in aliening bad claims to foreign parties. Prior to an act of aliening bad claims to foreign
parties, a domestic financial institution shall publicize an explicit disposal announcement at a news media of economic or comprehensive
category at the provincial level or above. By principle, all alienations shall be conducted in public ways such as bidding, auction
and public price competition, etc, and the alienation price shall be paid off by the related overseas investors once and for all.

5.

The bad claims to be aliened to foreign parties may not involve in any claim with the Chinese government of any level or its administrative
department as the debtor or guaranteed by it, any claim of any enterprise falling within the prohibited category of the Catalogue
of Industries for Guiding Foreign Investment or involving any industry of national security, or any other claim forbidden by laws
and regulations from being aliened to foreign parties.

6.

No overseas investor concerned with the alienation of bad claims may viciously release information to the outside or conduct any behavior
that infringes upon China’s foreign debt service credibility, or recover debts from the Chinese government of any level or its the
administrative department in any way.

7.

A domestic financial institution shall, within 20 workdays as of the conclusion of an agreement on aliening bad claims to foreign
parties, submit the related information (in triplicate) about the alienation of bad claims to the National Development and Reform
Commission for archival filling and send copies to the Ministry of Commerce and China Banking Regulatory Commission simultaneously.
The archival materials shall cover the following items:

(1)

circumstances about the bad claims to be aliened to foreign parties (paper principal, total amount of interest, regional distribution);

(2)

agreement on the alienation to foreign parties;

(3)

photocopy of the disposal announcement as publicized in news media;

(4)

attested registration certificate of the overseas investor, the related written commitment of the overseas investor and the documentary
evidences on the credit status and performance of the overseas investor. In case any bad claim is purchased by an overseas investor
in the form of foreign special-purpose company and it fails to abundantly testify the credit and performance situations of the overseas
investor, the documentary evidences on the holding parent company shall be presented;

(5)

notarial paper on the alienation process issued by the notary organ (brief statement on the bad claims, alienation mode, major domestic
and overseas investors that take part in the alienation, the related quotations);

(6)

legal letter issued by law firm; and

(7)

other materials as requested by the National Development and Reform Commission.

8.

In case the National Development and Reform Commission holds that the archival filing materials are incomplete or fail to meet the
related requirements, it shall, within 5 workdays after it receives the materials, inform the related domestic financial institution
aliening bad claims to foreign parties once and for all and require it to define and make up the related explanations and documents
or adjust the content concerned. In case a domestic financial institution still fails to provide complete archival filing materials
within 20 workdays since it is notified or aliens bad claims by violating the provisions of the present Circular, the National Development
and Reform Commission shall issue a notice of refusing to archive to the domestic financial institution aliening bad claims to foreign
parties and state the reasons. The National Development and Reform Commission shall prepare an archival filing confirmation letter
to the domestic financial institution that aliens bad claims to foreign parties within 20 workdays after receiving the complete archival
filing materials.

9.

A domestic financial institution aliening bad claims to foreign parties shall submit the related documents on the exchange issues
concerned in the alienation and the archival filing confirmation letter issued by the National Development and Reform Commission
to the State Administration of Foreign Exchange within 15 workdays after receiving the archival filing confirmation letter issued
by the National Development and Reform Commission. After the State Administration of Foreign Exchange examines and approves the exchange,
the domestic financial institution aliening bad claims shall go through exchange settlement formalities at the appointed branch bureau
of foreign exchange control, while the overseas investor accepting the bad claims or its agency shall go through the formalities
for the archival filing registration of the alienation of bad claims.

10.

In case a bad claim is disposed in manners of overseas investment, it shall be conducted according to the Interim Measures for Examining
and Approving Overseas Investment Projects (Decree No.21 of the National Development and Reform Commission) and the related provisions
on the administration of foreign exchange.

11.

The National Development and Reform Commission and the State Administration of Foreign Exchange shall cancel the archival filing confirmation
or archival filing registration of aliening bad claims to foreign parties, in case an overseas investor or a domestic financial institution
aliening bad claims to foreign parties obtains archival filing confirmation letter or conduct archival filing registration of debts
alienation by illegal means like providing false materials.

12.

In case any overseas investor viciously releases information to the outside, conducts any behavior that infringes China’s foreign
debt service credibility, engages in such illegal criminal activities as money laundering through transactions of bad claims or does
any other activity that seriously violates the present Circular, once it is ascertained, the National Development and Reform Commission
shall, in collaboration with the State Administration of Foreign Exchange, prohibit the overseas investor from purchasing any domestic
bad credit. The overseas investor shall be aliened to and punished by the judicial organ in the case of the constitution of any crime.

13.

In case an investor from Hong Kong SAR or Macao SAR, or Taiwan Region takes part in the disposal of bad claims of the inland, it shall
be governed by the present Circular by analogy.

14.

The National Development and Reform Commission and the State Administration of Foreign Exchange shall be responsible for interpreting
the present Circular. In case any previous provision conflicts with the present Circular, the present Circular shall prevail.

15.

The provisions mentioned above shall go into effect as of April 1, 2007.

National Development and Reform Commission

State Administration of Foreign Exchange

February 1, 2007



 
The National Development and Reform Commission, the State Administration of Foreign Exchange
2007-02-01

 






123...16Page 2 of 16

CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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