CIRCULAR OF STATE ADMINISTRATION OF TAXATION ON DISSEMINATING THE EXPORT TAX REFUND RATE LIBRARY OF 2007

Circular of State Administration of Taxation on Disseminating the Export Tax Refund Rate Library of 2007

Guo Shui Han [2007] No. 242

The competent departments of taxation in all provinces, autonomous regions, municipalities directly under the Central Government and
cities specially designated in the state plan:

In accordance with the current policy of export tax refund/exemption, State Administration of Taxation has, on the basis of Import
and Export Tax Regulations of 2007 issued by the customs (10-digit e-version), compiled the Export Tax Refund Rate Library of 2007
(No. 20070301A). Now it is distributed to the competent departments of taxation at various levels and hereby notified:

The Export Tax Refund Rate Library is under the “programme releasing” folder of FTP Communication Server (100.16.125.25) of the Department
of Import and Export Taxation Administration, State Administration of Taxation. The competent departments of taxation shall download
it and the administrator of the export refund examination system shall upgrade the original export refund rate library. Meanwhile,
the competent departments of taxation at various levels shall timely send the upgrade packages of export refund rate library (Foreign
Trade Enterprise Export Refund Application System 9.0 and Manufacturing Enterprise Export Refund Application System 7.0) to the exporting
enterprises.

II.

The competent departments of taxation at various levels shall timely report the problems found in the execution of the export tax
refund rate library to (the Department of Import and Export Taxation Administration of) the State Administration of Taxation. No
change or modification of export tax refund rate is allowed without the permission of the State Administration of Taxation.

State Administration of Taxation

February 28, 2007

State Administration of Taxation
2007-02-28

ANNOUNCEMENT NO.14, 2007 OF MINISTRY OF COMMERCE AND GENERAL ADMINISTRATION OF CUSTOMS ON PROMULGATING LIST OF COMMODITIES UNDER AUTOMATIC IMPORT LICENSING ADMINISTRATION

Announcement No.14, 2007 of Ministry of Commerce and General Administration of Customs on Promulgating List of Commodities under Automatic
Import Licensing Administration

[2007] No.14

In accordance with Measures for Administration on Commodities of Automatic Import Licensing, Ministry of Commerce adjusted List of
Commodities under Automatic Import Licensing Administration of 2007, canceling automatic import licensing administration of 338 tax
items including plastic materials. The canceled commodity list and the adjusted List of Commodities under Automatic Import Licensing
Administration of 2007 (List 1, List 2 and List 3) are now announced and shall take effect as from April 1.

Appendix

1: Canceled List of Commodities under Automatic Import Licensing Administration

2: Automatic Import Licensing Administration of 2007 (new)

Ministry of Commerce

General Administration of Customs

March 10, 2007

Ministry of Commerce and General Administration of Customs
2007-03-10

CIRCULAR OF THE MINISTRY OF COMMERCE ON CLARIFYING RELEVANT ISSUES CONCERNING THE INSPECTION OF DIRECT SELLING SERVICE NETWORK

Circular of the Ministry of Commerce on Clarifying Relevant Issues Concerning the Inspection of Direct Selling Service Network

Shang Zi Han [2007] No. 35

In accordance with Article 6 of the Measures for Administration of the Establishment of Direct Selling Service Network (Decree of
the Ministry of Commerce No. 20, 2006), administrative commercial departments of all provinces, autonomous regions, municipalities
directly under the Central Government shall, jointly with administrative commercial departments at or above the district/county level
where the service network is located, conduct examination on the service network that has been set up in accordance with the Regulations
on Direct Selling Administration, and shall report the result of the examination to the Ministry of Commerce for archival purpose
in a one-off manner. For the purpose of unifying the examination requirements and the format of the examination report after examination,
it is hereby notified as follows:

The administrative commercial departments at or above the district/county level where the service network is located shall offer suggestions

The administrative commercial departments at or above the district/county level where the service work is located shall carry out
examination on the service network in accordance with projects of service network approved by the Ministry of Commerce as well as
the Regulations on Direct Selling Administration. In principle, the reduction of the number of service network and the trans-district
or trans-county change of the address of service network both are cases where the establishment of service network failed to comply
with the project. In line with Article 11 of the Regulations on Direct Selling Administration, the enterprise shall be required
to report the revised project of service network in conformity with the original procedure, and examination in a one-off manner,
upon approval, shall be carried out in accordance with the new project. However, the decrease of service network caused by the reduction
of areas for direct selling made by the enterprise and the dismantling of service network that is inconsistent with the provisions
of the Regulations on Direct Selling Administration shall not be included herein. The administrative commercial departments at or
above the district/county level shall file a written report after examination to the administrative commercial departments at the
provincial level, and the format shall be designed by the latter.

The format of the letter of examination report by the administrative commercial departments at the provincial level

The administrative commercial departments at the provincial level, in accordance with the suggestions given by the administrative
commercial departments at or above the district/county level of all provinces, autonomous regions, municipalities directly under
the Central Government, shall submit the letter of examination report (see Appendix I for model format) to the Ministry of Commerce
and clarify the name and number of districts in districted cities. The letter of examination report given by the administrative commercial
departments at or above the district/county level shall be kept for record by the administrative commercial departments at the provincial
level and need not be submitted to the Ministry of Commerce.

The letter of examination report may only bear the official seal of the foreign investment division or the domestic trade division
under the administrative commercial departments at the provincial level, but shall bear such a statement as “This letter of examination
report has been examined by officials in charge of commerce of all provinces (autonomous regions, municipalities directly under the
Central Government)”.

The time limit for examination

The administrative commercial departments at the provincial level shall finish the examination within 30 working days as from the
day the enterprise files the application and write out a letter of examination report and submit it to the Ministry of Commerce.

Ministry of Commerce

March 21, 2007
Appendix:
Letter Concerning the Submission of Examination Report on XXX Enterprise Service Network

Ministry of Commerce:

XXX enterprise has filed an application for service network examination to the present department/committee/bureau within six months
as of the day of distribution of the document of approval.

Upon examination by the administrative commercial departments at the county/city/district level, XXXenterprise has completed the establishment
of service network in such places as XXX city or XXX county. It set up__ (number) service network in the present province (district/city)
in total which are all in conformity with the service network project approved by the Ministry of Commerce. The number, location
and function of the service network are in accordance with the requirements provided by Item 2 of Article 10 of the Regulations
on Direct Selling Administration and that by Article 3 of the Measures for Administration of the Establishment of Direct Selling
Service Network. To be specific, there are __districts such as XXX district and XXX district in XXX city.

(Where the district fails to finish the establishment of service network or that which does not comply with the service network project
approved by the Ministry of Commerce, a clear statement shall be added: upon examination by the administrative commercial departments
at the county/city/district level, XXX enterprise fails to complete the establishment of service network or fails to comply with
the service network project)

This letter of examination report has been examined by officials in charge of commerce of all provinces (autonomous regions, municipalities
directly under the Central Government), and is hereby submitted for record.

Appendix:

Form of Examined Service Network of XXX Enterprise (Omitted)

Administrative Commercial Departments at the Provincial Level (Seal)

Date:________________

Ministry of Commerce
2007-03-21

OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ON HOW TO DEAL WITH THE INCOME TAX ON THE GOVERNMENT SUBSIDES ACQUIRED BY FOREIGN-FUNDED ENTERPRISES AND FOREIGN ENTERPRISES

Official Reply of the State Administration of Taxation on How to Deal with the Income Tax on the Government Subsides Acquired by Foreign-funded
Enterprises and Foreign Enterprises

Guo Shui Han [2007] No. 408

State Taxation Bureau of Gansu Province:

We have received your Request for Instructions on Whether Netzsch (Lanzhou) Pumps Co., Ltd. Should Pay Enterprise Income Tax on Its
Income from Government Subsidies (Gan Guo Shui Fa [2006] No. 146). We hereby render a reply as follows:

The various forms of monetary assets or non-monetary assets gratuitously acquired from the government (hereinafter referred to as
government subsidies) by the agencies and offices set up by foreign-funded enterprises and foreign enterprises inside China (hereinafter
referred to as enterprises) shall be dealt with respectively in light of the following circumstances:

(1)

Subject to the laws, regulations and the provisions of the State Council, if the government subsides acquired by the enterprises are
exempted from enterprise income tax, such government subsides acquired by the enterprises shall be taken as investments, that is
to say, the assets of government subsides as accepted shall be assessed and may be depreciated or amortized in light of the taxation
treatments for investment assets, and the value of such government subsides are not calculated into the amount of taxable incomes
of the enterprises.

(2)

Unless it is under the circumstance as prescribed in Item (1) of this Article, if the government subsides acquired by the enterprises
satisfies any of the following conditions, they may not be calculated into current losses and profits of the enterprises, but the
assets purchased or formed by the said government subsides shall be estimated, depreciated or amortized after deduction of the amount
of government subsides:

(a)

The assets from government subsidies are the non-current assets an enterprise owns for a long time; or

(b)

An enterprise has acquired government subsidies in the form of current assets, but it has used or must use such subsidies for purchase,
construction or improvement of non-current assets in accordance with the requirements for government subsidies.

(3)

Where the government subsidies acquired by an enterprise do not fall into the circumstances as provided in items (1) or (2) of this
Article, the amount of government subsidies shall be calculated into the current losses and profits of the enterprise, and the enterprise
income tax shall be paid by the enterprise.

Where the taxation treatment is dealt with in accordance with the present Reply, and the tax repayment or refund is involved, it shall
be dealt with under the Law of the People’s Republic of China on the Administration of Tax Collection and the detailed rules for
the implementation thereof.

The State Administration of Taxation

April 5, 2007

The State Administration of Taxation
2007-04-05

MEASURES FOR THE ADMINISTRATION OF LAUNDRY AND DYEING INDUSTRY

Decree of the Ministry of Commerce, State Administration for Industry and Commerce, State Environmental Protection Administration

No.5

Measures for the Administration of Laundry and Dyeing Industry is hereby announced and shall come into effect as of July 1, 2007 after
it has been deliberated and passed at the 10th executive conference of the Ministry of Commerce on December 20, 2006 with the approval
of State Administration for Industry and Commerce and State Environmental Protection Administration

Minister of the Ministry of Commerce Bo Xilai

Director of General Administration for Industry and Commerce Zhou Bohua

Director of State Environmental Protection Administration Zhou Shengxian

May 11, 2007

Measures for the Administration of Laundry and Dyeing Industry

Article 1

The Measures herein are formulated in accordance with the relevant state law, administrative regulations for the purpose of standardizing
the behavior of laundry and dyeing service, maintaining the lawful rights and interests of operators and consumers, preventing environmental
pollution, promoting the sound development of laundry and dyeing industry.

Article 2

The Measures herein shall apply to the laundry and dyeing operation within the territory of the People’s Republic of China.

“Laundry and Dyeing” mentioned in the Measures herein refers to such operation activities as washing, ironing, dyeing, and weaving
of clothes and washing, maintaining of leather-made products and clothes.

Article 3

The Ministry of Commerce shall undertake guidance, coordination, supervision and management of national laundry and dyeing industry,
various local authorities in charge of commerce shall be responsible for the guidance, coordination, supervision and management of
laundry and dyeing industry within its administrative region respectively.

The industrial and commercial authorities shall be responsible for regulating laundry and dyeing industry, supervising the quality
of service products and business operation, and for investigating and punishing in light of the laws such acts as infringing the
legal rights of interests of consumers.

The environmental protection authority shall undertake supervision and administration of such acts as affecting the environments in
the process of opening and operating the laundry and dyeing enterprise, investigating and punishing in light of the laws environmental
unlawful acts.

Article 4

To open washing and dyeing store and water washing factory shall accord with the relevant laws and standard requirement with respect
to safety, sanitary, environmental protection, water saving, energy saving.

The enclosure dry-cleaning making with purifying, recycling and dry-cleaning solvent functions shall be used in the newly build, altered,
or extended washing and dyeing stores.

The open dry-cleaning machine shall be phased out. The open dry-cleaning machine currently used shall be refitted to increase the
compressor cooling recycling system, and forcefully recycle the dry-cleaning solvent; where the open petroleum derivative solvent
dry-cleaning machine and drying machine is used, it shall be equipped with fire-proof and explosion-proof safety equipment.

Article 5

Environmental influence assessment shall be carried out upon the newly built, altered or extended washing and dyeing store and water
washing factory and can be put into use after it has passed the inspection and collection by environmental authority.

The operator who undertakes washing and dyeing shall register lawfully and withdraw the business license.

The operator shall, within 60 days after having acquired the business license, handle the record in the same level commerce authority
as the industrial and commercial administrative authority at the registration place.

Article 6

The operator shall have fixed business site, such equipments as washing, custody, and pollution prevention in par with its business
scale and accord with the relevant national regulations.

Article 7

The washing and dyeing store shall not use such dry-washing solvents as does not accord with the relevant national regulations. The
storage, usage and recycling site shall be equipped with leakage-proof condition, the dangerous chemical products shall accord with
the relevant administration of dangerous chemical products.

The laundering factory shall be encouraged to use phosphor-free and low phosphor washing products.

Article 8

The discharge of pollutant shall meet the requirement of pollutant discharge in national or local regulations. The new discharge
standard shall be implemented after it has been promulgated.

The residue, sewage containing dry-cleaning solvent generated in the process of dry cleaning shall be appropriately collected and
handled. The dangerous wastes shall be lawfully entrusted to the units holding the business license of dangerous wastes for handling
and disposal.

Where the sewage is discharged to urban sewage tubes to be treated together, it shall accord with the relevant water quality requirement
by the sewage treatment factory. Where the factory hereof is equipped with sewage treatment equipment, it shall carry out innocuity
treatment upon the generated sewage.

Such sewage as does mot accord with the standard shall not be discharged to river, lake, rain sewer, leakage pit, leakage well and
etc.

The noise zone in the laundering and water-washing factories shall accord with the relevant rules of the Standard of Noise at Boundary
of Industrial Enterprises GB12348-90.

Article 9

The operator shall formulate the system of safe production, environmental protection and sanitary management system in line with
the requirement of laws and regulations, provide effective protective products to the staff and undertake regular safe, environmental
protection, sanitary education training upon the staff.

Article 10

The employed staff shall observe professional ethics, abide by national laws and regulations, the washing and dyeing technical staff
shall have the relevant professional skills, shall be encouraged to obtain the qualification certificate issued by the relevant national
authority or the training qualification certificate issued by the relevant organizations and to work with the certificates hereof.

Article 11

The operator shall hang business license at the noticeable place of the business site and to expressly show service content, service
price and complaint telephone number and etc.

Article 12

The operator shall follow the principle of good faith in the process of operation and give real and clear reply to the relevant questions
raised by consumers, may not deceive and misguide consumers, may not conduct the following deceptions:

(1)

deceptive propaganda;

(2)

to undertake consumption default by using value card;

(3)

such deceptive acts as using “water washing”, ” iron” to work off dry wash;

(4)

to conceal the fact that the clothes have been damaged in the process of washing deliberately;

(5)

other deceptive acts against laws, and administrative regulations.

Article 13

The operator shall check seriously the received clothes and perform the following liabilities:

(1)

hint the consumer to check whether any carry-over is left and to confirm whether the attachment and decorates are complete;

(2)

hint the consumer the damageable, corruptive and expensive decorates or attachment to clarify service liabilities;

(3)

to explain to consumers new and old, dirty and clean, damage of clothes, quality of the cloth, performance variance and effect of
washing and dyeing;

(4)

to inform consumers the clothes which is really difficult to wash and dye or have hard besmirch and to confirm the effect of washing
and dyeing.

Article 14

The operator may undertake value-preserving washing in accordance with the willing of the consumers, i.e. the written washing agreement
made by the operator and consumers about cost of washing, value-preserving cost, value-preserving amount and service content.

Where the clothes subject to value-preserving are damaged or lost, or directly undermine the quality of the original clothes after
washing, the operator shall compensate in accordance with the preserving amount agreed with the consumer.

Article 15

The operator shall issue service bill to consumers when offering service. The content of the service bill shall include: name of
clothes, quantity, color, damage or shortage, service content, price, date of delivery, period of custody, particulars agreed by
both parties, means of dispute settlement.

Article 16

The operators shall act the service code of launder and dyeing industry, operation regulations and quality standard and appoint designated
personnel to undertake quality inspection launder and dyeing.

Article 17

The operators shall standardize the clothes handing-over procedure to prevent loss or damage of clothes; dirty and clean clothes
shall be stored and paid respectively.

Article 18

The textile products of the medical unit shall be washed and processed in the specialized factory zone, special washing equipment
and be sanitized strictly.

The washed textile products after sanitation shall accord with the relevant national requirement.

Article 19

Where the washed clothes fail to meet the washing quality requirement or do not accord with the requirement reached with the consumers
in advance or the clothes are damaged or lost because of the responsibilities of the operators, the operator shall reprocess it in
light of different situation, refund the launder and dyeing fee or compensate the damage.

Where the quality of washed clothes fails to reach quality standard because the misguided washing mark or quality does not accord
with national and professional standard requirement rather than it is the fault of the operator, the operator shall be exempted from
the relevant responsibility.

Article 20

The authority in charge of commerce shall standardize and clean market order and promote the development of the industry herein by
formulating industrial development program, promotion policy, standard and comprehensive coordination, promoting the industrial development.

The authorities in charge of commerce shall guide and support launder and dyeing quality appraisal committee to carry out quality
appraisal work, guide the relevant professions to formulate solutions to consumption dispute and to maintain the lawful rights and
interests of the operators and consumers.

Article 21

The Laundry and Dye Industry Association shall accept the business guidance of the authorities in charge of commerce to strengthen
professional self-discipline, carry out such industrial promotion development works as faithful operation, organizing the implementation
standard, providing information consultation, pursuing technical training, mediating service disputes, and reflecting the opinions
and requirements of the operators.

Article 22

Should the operator violates the Measures herein which is prescribed in laws and regulations, the laws and regulations herein shall
prevail; otherwise, the Ministry of Commerce, the industrial and commercial authority and the environmental authority shall, in accordance
with Article 3 in the Measures hereinorder the violators herein to rectify its acts, should the violators have illegal income,
the violators herein may be fined below 3 times and the maximum fine shall not exceed 30,000 yuan, should the violators have no illegal
income. The violators may be charged less than 10,000 yuan and may be announced.

Article 23

The authorities in charge of commerce in all provinces, autonomous regions, and municipalities may, in accordance with the Measures
herein and the practical situation of the dyeing industry in its administrative region , enact the relevant implementation measures
with the relevant authorities.

Article 24

The definitions of the terms mentioned in the Measures herein:

Enclosure dry-cleaning machine: such dry cleaning machines as use Tetrachloroethylene or petroleum derivative solvent as dry-cleaning
solvent, equipped with solvent recycled cooling system, in the process of deodorization, the gas in machine and the work place don’t
exchange and waste gas doesn’t discharge directly.

Open dry cleaning machine: such dry cleaning machines as use Tetrachloroethylene or petroleum derivative solvent as dry-cleaning solvent,
use water-cooling recycling system to conduct deodorization by absorbing fresh air and discharging dry-cleaning solvent and gas mixture
discharged from the machine before opening the in-out gate.

Dyeing: only the redyeing and dyeing of other colors in the washing and dyeing stores,

Article 25

The Measures herein shall come into effect as of July 1, 2007.

Ministry of Commerce, State Administration for Industry and Commerce, State Environmental Protection Administration
2007-05-11

CIRCULAR OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION CONCERNING LOWERING THE EXPORT REBATE RATES FOR SOME COMMODITIES

Circular of the Ministry of Finance and the State Administration of Taxation concerning Lowering the Export Rebate Rates for Some
Commodities

Cai Shui[2007] No. 90

Each department (bureau) of public finance, and state taxation bureau of each province, autonomous region, municipality directly under
the Central Government and each city specifically designated in the state plan:

The export rebate rates for some commodities have been adjusted upon approval of the State Council. The related matters are hereby
noticed as follows:

Cancel the export tax rebates for the following commodities:

(1)

Endangered animals and plants, and their products;

(2)

The mineral products such as salt, solvent naphtha, cement, liquefied propane, liquefied butane and liquefied petroleum gas;

(3)

Fertilizer (not including urea and diammonium phosphate for which the tax rebates have been cancelled);

(4)

Chemical product such as chlorine, dyestuffs (excluding fine chemical products);

(5)

Metal carbides and activated carbon products;

(6)

Leather;

(7)

Some wood boards and one-off wood products;

(8)

Ordinary plain carbon welded pipe products (excluding petroleum casing pipes);

(9)

Simple products processed from nonferrous metals such as non-alloyed aluminum bars;

(10)

Segmented vessels and non-motor vessels.

See Appendix 1 for the names and HS codes of the specific commodities.

Lower the rates of export tax rebate for the following commodities:

(1)

The rate of export tax rebate for vegetable oil shall be lowered to 5%;

(2)

The rate of export tax rebate for some chemical products shall be lowered to 9% or 5%;

(3)

The rate of export tax rebate for plastic, rubber and their products shall be lowered to 5%;

(4)

The rate of export tax rebate for boxes shall be lowered to 11%, and the rate of export tax rebate for other leather and fur products
shall be lowered to 5%;

(5)

The rate of export tax rebate for paper products shall be lowered to 5%;

(6)

The rate of export tax rebate for garments shall be lowered to 11%;

(7)

The rate of export tax rebate for shoes, caps, umbrellas, and feather products, etc. shall be lowered to 11%;

(8)

The rate of export tax rebate for some stone materials, ceramic, glass, pearls, jewelries, precious metals and their products shall
be lowered to 5%;

(9)

The rate of export tax rebate for some steel products (petroleum casing pipes excluded) shall be lowered to 5%, but the oceanographic
engineering structures for domestic sale as stipulated in the “Circular of the Ministry of Finance and the State Administration of
Taxation Concerning the Application of VAT Rebate to Oceanographic Engineering Structures” (Cai Shui [2003] No. 46) shall still be
governed by the original rate of tax rebate;

(10)

The rate of export tax rebate for other base metals and their products (not including export rebates commodities which have been cancelled
or which are being cancelled, as well as aluminum foils, aluminum pipes and aluminum structures, etc.) shall be lowered to 5%;

(11)

The rate of export tax rebate for planers, slotting machines, cutting machines, and broaching machines, etc. shall be lowered to 11%,
and the rate of export tax debate for diesel engines, pumps, fans, exhaust valves and the parts thereof, rotary furnaces, coke furnaces,
sewing machines, staplers, golf carts, over-snow vehicles, motorcycles, bicycles, trailers, elevators and the parts thereof, faucets,
soldering machines, etc. shall be lowered to 9%;

(12)

The rate of export tax rebate for furniture shall be lowered to 11% or 9%;

(13)

The rate of export tax rebate for clocks, watches, toys and other miscellaneous products, etc. shall be lowered to 11%;

(14)

The rate of export tax rebate for some wood products shall be lowered to 5%;

(15)

The rate of export tax rebate for viscose fiber shall be lowered to 5%.

See Appendix 2 for the names and HS codes of the specific commodities.

The following commodities shall be duty free when exported:

Peanut kernels, canvas, decorative carved boards, postage stamps, duty stamps, etc.

See Appendix 3 for the names and HS codes of the specific commodities.

Implementation Time

The export rebate rates which have been adjusted for the commodities mentioned above shall be enforced as of July 1, 2007. The specific
implementation time shall be the date of export as indicated on the customs’ “Declaration Form for the Export of Goods (specially
used for export rebates)”.

The original rebate rate shall be permitted to continue to apply to the export enterprise if it has signed a vessel export contract
relating to cancelled export rebates before July 1, 2007, and brought the export contract (original copy and counterpart) to the
taxation authority responsible for export rebate taxes for registration and archival filing before July 20, 2007, the export tax
rebate treatment shall be considered as having been cancelled in case it fails to handle the procedures for archival filing before
July 20, 2007.

For the export equipment and building materials involved in a long-term foreign contracted engineering project for which an export
enterprise eligible for foreign contracted engineering won the bid before July 1, 2007 or in a contract for long-term foreign contracted
engineering including an unchangeable price which the enterprise concluded before July 1, 2007, the original export tax rebate rate
shall be permitted to continue applying to the enterprise if the effective bid-winning certificate (original copy and duplicate),
or the concluded contract for long-term foreign contracted engineering (original copy and duplicate) and the list of engineering
estimation had been bought by the enterprise to the taxation authority responsible for export tax rebates for registration and archival
filing before July 20, 2007. The adjusted export tax rebate policies shall apply if it fails to handle the procedures for archival
filing before July 20, 2007.

Appendixes:

1. List of Commodities the Export Rebates of Which Are Cancelled (omitted)

2. List of Commodities the Export Rebate Rates of Which Are Lowered (omitted)

3. List of Commodities Which Will be Duty Free (omitted)

The Ministry of Finance

The State Administration of Taxation

June 19, 2007

The Ministry of Finance, the State Administration of Taxation
2007-06-19

PUBLIC SERVANTS LAW

Law of the People’s Republic of China on Public Servants

Order of the President of the People’s Republic of China

No. 35

The Law of the People’s Republic of China on Public Servants, adopted at the 15th Meeting of the Standing Committee of the Tenth
National People’s Congress of the People’s Republic of China on April 27, 2005, is hereby promulgated and shall go into effect
as of January 1, 2006.

Hu Jintao

President of the People’s Republic of China

April 27, 2005

(Adopted at the 15th Meeting of the Standing Committee of the Tenth National People’s Congress on April 27, 2005)

Contents

Chapter I　General Provisions

Chapter II　Qualifications, Duties and Rights of Public Servants

Chapter III　Posts and Ranks

Chapter IV　Recruitment and Employment

Chapter V　Assessment

Chapter VI　Post Appointment and Removal

Chapter VII　Post Promotion and Demotion

Chapter VIII　Rewards

Chapter IX　Penalties

Chapter X　Training

Chapter XI　Exchange and Avoidance

Chapter XII　Salary, Welfare and Insurance

Chapter XIII　Resignation and Dismissal

Chapter XIV　Retirement

Chapter XV　Appeal and Accusation

Chapter XVI　Position Appointment

Chapter XVII　Legal Responsibility

Chapter XVIII　Supplementary Provisions

Chapter I　General Provisions

Article 1　This Law is enacted in accordance with the Constitution and for the purpose of regularizing the administration of public
servants, safeguarding their lawful rights and interests, improving supervision over them, building up a contingent of public servants
with high quality, promoting a diligent and clean government and enhancing its efficiency.

Article 2　For the purposes of this Law, public servants are workers who perform official duties according to law, are members of
the administrative establishment of the State, and whose salaries and welfare benefits are paid by the government.

Article 3　This Law is applicable to the duties and rights as well as the administration of public servants.

Where there are other provisions contained in the laws governing the election, appointment and removal of, and the supervision over,
the leading persons among public servants, and the duties and rights and the administration of judges, procurators, etc., those provisions
shall be applicable.

Article 4　In application of the public servant system, Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the important
thought of “Three Represents” shall be upheld as the guidance, the basic line for the primary stage of socialism shall be implemented,
the cadre line and policy of the Communist Party of China shall be carried out, and the principle that cadres are under the administration
of the Party shall be adhered to.

Article 5　Public servants shall be administered in adherence to the principles of openness, equality, competition and selection
on the basis of merits, and in compliance with the statutory limits of authority, requirements, standards and procedures.

Article 6　Public servants shall be administered in adherence to the principle of laying equal stress on supervision and restriction
on the one hand and on encouragement and safeguard on the other.

Article 7　Public servants shall be appointed in adherence to the principles of appointing people on their merits and people with
both political integrity and professional competence, with stress placed on practical achievements in work.

Article 8　The State administers public servants by grouping them in different categories in order to improve administrative efficiency
and raise the level of scientific management.

Article 9　When performing their official duties according to law, public servants shall be protected by law.

Article 10　The department in charge of public servants at the central level shall be responsible for the comprehensive administration
of public servants nationwide. The local departments in charge of public servants at or above the county level shall be responsible
for the comprehensive administration of public servants within the areas under their respective jurisdictions. The department in
charge of public servants at a higher level shall direct the administration of public servants conducted by such department at a
lower level. The departments in charge of public servants at various levels shall direct the administration of public servants conducted
by the various organs at the same level.

Chapter II　Qualifications, Duties and Rights of Public Servants

Article 11　A public servant shall meet the following qualifications:

(1) holding the nationality of the People’s Republic of China;

(2) having reached the age of 18;

(3) upholding the Constitution of the People’s Republic of China;

(4) being a person of good morality;

(5) being physically qualified for normal performance of duties;

(6) having the education and ability commensurate with the requirements of the post; and

(7) having other qualifications specified by law.

Article 12　Public servants shall perform the following duties:

(1) exemplarily observing with the Constitution and laws;

(2) conscientious by performing their duties in compliance with the specified limits of authority and procedures and endeavoring
to increase their work efficiency;

(3) wholeheartedly serving the people and accepting supervision by the people;

(4) safeguarding the security, honor and interests of the State;

(5) being faithful in the discharge of their duties, diligently fulfilling their responsibilities, and abiding by and implementing
the decisions made and the instructions given by higher authorities in accordance with law;

(6) guarding State secrets and job secrets ;

(7) abiding by discipline, faithfully adhering to professional ethics and exemplarily observing public morality;

(8) being clean and upright, and impartial and honest in their ways; and

(9) performing other duties provided for by law.

Article 13　Public servants shall have the following rights:

(1) being provided with the working conditions necessary for the performance of their duties;

(2) being free from being removed from office, demoted and discharged, and free from disciplinary action, unless on statutory grounds
and through statutory procedures;

(3) getting salaries, remunerations, and enjoying welfare benefits and insurance;

(4) having access to training;

(5) putting forward criticisms and proposals regarding the work of their organs and the leading persons;

(6) lodging appeals and accusations;

(7) applying for resignation; and

(8) enjoying other rights provided for by law.

Chapter III　Posts and Ranks

Article 14　The State practices the system of categorized posts among public servants.

The posts held by public servants shall, according to the nature and characteristics of the post and administrative needs, be categorized
as comprehensive administration, professional skills and administrative law enforcement. Where separate administration is required
for a post due to its specific characteristics, the State Council may, in accordance with this Law, set up an additional category
for such post. The scope covered by the different categories of posts shall be prescribed by the State separately.

Article 15　The State establishes an order of posts held by public servants on the basis of the categories of such posts.

Article 16　The posts of public servants are divided into leading and non-leading posts.

The levels of the leading posts include: chief and deputy at the central level, chief and deputy at the provincial and ministerial
level, chief and deputy at the department and bureau level, chief and deputy at the county and division level, chief and deputy at
the township and section level.

The levels of non-leading posts are set up at or below the department and bureau level.

Article 17　The leading posts under the category of comprehensive administration shall be established in accordance with the Constitution,
relevant laws, levels of posts and institutions.

The non-leading posts under the category of comprehensive administration include: inspector, deputy inspector, analyst, associate
analyst, senior section member, junior section member, section member and office clerk.

The order of posts for the public servants under the categories other than the category of comprehensive administration shall be
prescribed separately by the State in accordance with this Law.

Article 18　The various government departments shall set up specific posts for the public servants thereof in accordance with the
established functions, institutional echelons, limits of the authorized size, number of posts and structural proportion, and define
the official duties and responsibilities as well as the qualifications for holding a post.

Article 19　The posts of public servants shall correspond with the relevant ranks. The corresponding relations between the posts
and ranks of public servants shall be defined by the State Council.

The posts and ranks of public servants provide the basis for determining their salaries and other benefits.

The rank of a public servant shall be determined on the basis of the post he holds, his political integrity and professional competence,
his achievements in work, and his educational qualifications and seniority. A public servant remaining at the same post may be promoted
in rank according to State regulation.

Article 20　The State shall establish ranks corresponding with relevant posts in light of the working characteristics of the people’s
police as well as public servants of the Customs and diplomatic missions abroad.

Chapter IV　Recruitment and Employment

Article 21　Public servants for non-leading posts at or below the level of senior section member and at other levels of corresponding
posts shall be recruited and employed through open examination, strict review, competition on an equal footing and selection on the
merits.

When recruiting public servants in accordance with the provisions of the preceding paragraph, the authorities of the national autonomous
regions may, in accordance with law and relevant regulations, give appropriate considerations to the ethnic people who register for
examination.

Article 22　The department in charge of public servants at the central level shall be responsible for making arrangements for recruitment
and employment of public servants for the government departments at the central level and the departments and institutions directly
under them. The department in charge of public servants at the provincial level shall be responsible for making arrangements for
recruitment and employment of public servants of the various local government departments, and where necessary, the department in
charge of public servants at the provincial level may authorize the department in charge of public servants at the level of a city
divided into districts to make such arrangements.

Article 23　A person who registers for examination of public servants shall, in addition to the qualifications specified in Article
11 of this Law, meet the qualifications required for the post he intends to hold as specified by the department in charge of public
servants at or above the provincial level.

Article 24　The following persons shall not be recruited as public servants:

(1) persons on whom criminal punishment has been imposed due to committing a crime;

(2) persons who have been discharged from public employment; and

(3) other persons who are not to be recruited as public servants, as prescribed by law.

Article 25　Public servants shall be recruited and employed within the limits of the authorized size, and when there are vacancies
of corresponding posts to be filled up.

Article 26　Before recruiting and employing public servants, a public notice of entrance examination shall be issued. In a public
notice of entrance examination shall be clearly stated the posts, the number of public servants needed, the qualifications for examinees,
the application materials required to be submitted and other matters for attention.

Recruiting departments shall take measures to facilitate citizens’ registration for examination.

Article 27　Recruiting departments shall examine the applications for registration for examination in accordance with the qualifications
required of the examinees. The application materials submitted by examinees shall be true and accurate.

Article 28　The examination for recruitment and employment of public servants shall be conducted in the forms of written examination
and interviews. The contents of the examinations shall be specified in accordance with the basic ability required of public servants
and the different categories of posts.

Article 29　Recruiting departments shall, on the basis of the examination results, decide on the candidates for review and reexamine
their qualifications for registration for examination, conduct review and arrange for their physical check-up.

The items of and standards for physical check-up shall be based on the requirements of the posts. The specific measures in this regard
shall be formulated by the government department at the central level in charge of public servants, in conjunction with the health
administration department under the State Council.

Article 30　Recruiting departments shall, on the basis of the examination results, and the results of the review and physical check-up,
make a name list of the persons to be recruited, and make it known to the public.

At the expiration of the period for such publicity, the recruiting department at the central level shall submit the name list of
the persons to be recruited to the department in charge of public servants at the central level for the record; and the various local
recruiting departments shall submit the name lists of the persons to be recruited to the departments in charge of public servants
at the provincial level or at the level of a city divided into districts for examination and approval.

Article 31　Upon approval by the department in charge of public servants at or above the provincial level, simplified procedures
or other methods for test and appraisal may be adopted for recruiting public servants for special posts.

Article 32　The trial period for a newly recruited public servant shall be one year. If he is qualified at the expiration of the
trial period, he shall be employed; otherwise, his recruitment shall be cancelled.

Chapter V　Assessment

Article 33　Assessment of public servants shall be conducted in compliance with the limits of authorized administration, and in
an all-round way, covering their political integrity, ability, diligence, achievements and incorruptibility, with special attention
paid to actual achievements in work.

Article 34　The assessment of public servants shall be divided into routine and regular assessments. Regular assessments shall made
on the basis of routine assessment.

Article 35　Regular assessment of the public servants who are non-leading members shall be made annually. The public servants themselves
shall firstly give their summaries in light of the duties and responsibilities of their posts and relevant requirements. After listening
to the opinions from the masses, the leading person in charge shall make a proposal concerning the grades of the assessment, and
then the leading person of the department or an authorized appraisal committee shall decide on the grades of the assessment.

The regular assessment of the leading persons shall be conducted by the department in charge in accordance with relevant regulations.

Article 36　The results of regular assessment are divided into four grades, namely, excellent, competent, basically competent, and
not competent.

Public servants themselves shall be informed of the results of the regular assessment in writing.

Article 37　The results of regular assessment shall serve as the basis for adjustment of the posts, ranks and salaries of public
servants as well as for rewards, training and dismissal of public servants.

Chapter VI　Post Appointment and Removal

Article 38　The election system and appointment system shall be applied among public servants in respect of their posts.

The tenure system shall, in accordance with the State regulations, be applicable in respect of the posts of leading persons.

Article 39　A public servant to whom the election system is applicable shall take the post he is elected to when the result of election
comes into effect; and he shall not renew the term of office at the expiration of his term of office, or if he resigns, or is removed
or dismissed from office during his term of office, the post shall be terminated accordingly.

Article 40　Where a public servant under the appointment system passes the examination conducted at the expiration of his trial
period, or there is a change in connection to his post, or he ceases to hold the public service post, or other circumstances necessitate
his appointment or removal, he shall accordingly be appointed or removed within the limits of authorized administration and through
the statutory procedures.

Article 41　Public service posts shall be appointed within the authorized size and number of the posts, and when there are the necessary
vacancies to be filled up.

Article 42　For a public servant to hold a concurrent post outside his own department due to the need of work, the matter shall
be subject to approval by the department concerned, and he shall not receive any remuneration for such post.

Chapter VII　Post Promotion and Demotion

Article 43　A public servant to be promoted to a higher office shall meet the requirements and qualifications in terms of ideological
and political quality, work capability, educational level and work experience.

Promotion of public servants to higher posts shall be done level by level. For a public servant who is especially excellent or there
is a special need for work, he may be promoted by breaking conventions or by skipping one level in accordance with relevant regulations.

Article 44　Where a public servant is promoted to a leading post, the following procedures shall be used:

(1) on the basis of democratic recommendation, deciding on the candidate for review;

(2) arranging for review, studying and setting forth proposals for the post to be assigned to, and deliberating on them within a
certain scope, where necessary;

(3) discussing and deciding on the candidate within the limits of authorized administration; and

(4) completing the formalities for appointment in accordance with relevant regulations.

For promoting a public servant to a non-leading post, the procedures specified in the preceding paragraph shall be followed mutatis
mutandis.

Article 45　When there is a vacancy for a leading post at or below the level of the chief of the department or bureau in the body
set up within a department, the candidate for the vacancy may be selected through competition among people working within the department
or system.

When there is a vacancy for a leading post at or below the level of the chief of the department or bureau or for a non-leading post
at or above the level of associate analyst and other corresponding levels, a candidate for such a vacancy may be selected openly
from among people in the community.

Candidates for beginners of judges and procurators may be decided on through open selection from among people in the community, that
is, from among the persons who have passed the unified judicial examinations conducted by the State and are qualified for such posts.

Article 46　When a public servant is to be promoted to a leading post, the publicity system prior to his assumption of the post
and the trial system shall be carried out in accordance with relevant regulations.

Article 47　If a public servant is determined to be incompetent through regular assessment, he shall be demoted to a post at the
next lower level in compliance with the prescribed procedures.

Chapter VIII　Reward

Article 48　A public servant or a collective of public servants that has fulfilled the official duties outstandingly, or has made
remarkable achievements and contributions, or has performed other outstanding meritorious deeds shall be rewarded. The principle
of combining moral encouragement with material reward, taking former as the main form, shall be applied.

The reward to a collective of public servants shall be applicable to an organization set up in accordance with the order of establishment
or to a working team formed for the fulfillment of a special task.

Article 49　A public servant or a collective of public servants that meets one of the following conditions shall be rewarded:

(1) being loyal to official duties, enthusiastic in work and having made remarkable achievements;

(2) observing rules of discipline, performing official duties with honesty, being honest and upright, being fair in handling matters,
and playing an outstandingly exemplary role;

(3) bringing about remarkable economic or social benefits through invention and innovation in work or by putting forward rationalization
proposals;

(4) having made outstanding contributions to the enhancement of unity of the nationalities and to the maintenance of social stability;

(5) having attained outstanding successes in protecting public property and economizing on the use of resources and property of the
country;

(6) having performed meritorious services in preventing or obviating accidents, thus protecting the interests of the State and the
people from losses or reducing such losses;

(7) having made contributions by disregarding personal safety under special circumstances such as emergency rescue and disaster relief;

(8) having performed meritorious deeds in fighting against violations of laws and rules of disciplines;

(9) having won honor and interests for the country in foreign exchanges; or

(10) having had other outstanding achievements.

Article 50　Rewards include: a Citation; a Citation for Merit, Third Class; a Citation for Merit, Second Class; a Citation for Merit,
First Class; and conferring of an honorary post_title.

A public servant or a collective of public servants rewarded shall be commended and be given monetary awards in one lump sum or other
material benefits.

Article 51　Rewarding of a public servant or a collective of public servants shall be subjected to decision or approved in compliance
with the specified limits of authority and procedures.

Article 52　Under one of the following conditions, the reward given to a public servant or a collective of public servants shall
be revoked:

(1) obtaining the reward through fraud and deception;

(2) concealing grave mistakes when applying for the reward or seriously going against the prescribed procedures; or

(3) other conditions under which the reward should be revoked in accordance with the provisions of laws and regulations.

Chapter IX]　Penalties

Article 53　Public servants shall observe discipline and are not allowed to commit any of the following acts:

(1) spreading views impairing the reputation of the country, or organizing or participating in activities aimed at opposing the country,
such as assemblies, marches and demonstrations;

(2) organizing or joining illegal organizations, organizing or participating in strikes;

(3) neglecting duties and adversely affecting the work;

(4) refusing to implement the decisions and orders made by the higher authorities according to law;

(5) suppressing criticism and resorting to retaliation;

(6) misleading and cheating the leadership and the public by means of fraud and deception;

(7) committing corruption, offering or accepting bribes, and seeking personal gains or benefits for another person by taking advantage
of official position;

(8) violating financial and economic discipline and wasting the resources and property of the country;

(9) abusing powers and infringing upon the lawful rights and interests of citizens, legal persons or other organizations;

(10) disclosing State secrets or job secrets;

(11) impairing the honor and interests of the country in foreign exchanges;

(12) participating in or supporting activities such as pornography, drug-taking, gambling and superstition;

(13) violating professional ethics and social morals;

(14) engaging or participating in profit-making activities, and concurrently holding a post in an enterprise or other profit-making
organizations;

(15) being absent from work without leave or failing to return to work without justifiable reasons after finishing work-related mission
or at the expiration of leave; and

(16) committing other acts in violation of rules of discipline.

Article 54　If a public servant, when performing official duties, deems that a decision or an order made by higher authorities is
erroneous, he may put forward a proposal to the higher authorities for correcting or revoking the decision or order. If the higher
authorities refuse to change the decision or order, or demands immediate implementation, he shall implement the decision or order,
and the higher authorities shall be accountable for the outcome of the implementation, while the public servant shall bear no responsibility
for it. However, if he implements a decision or an order which is obviously against the law, he shall bear due responsibility according
to law.

Article 55　If a public servant should bear disciplinary liability due to his violation of law or rules of discipline, a disciplinary
action shall be taken against him in accordance with this Law; and if the circumstances in which the rules of discipline are violated
are minor and he has mended his ways after criticism and education, he may be exempted from such action.

Article 56　Disciplinary actions include: warning, recording of a demerit, recording of a serious demerit, demotion, removal from
office and discharge from public employment.

Article 57　A disciplinary action taken against a public servant shall be based on clear facts, verified evidence, accurate determination
of the nature of the case, proper handling, lawful procedures and complete formalities.

If a public servant violates discipline, the department imposing disciplinary actions shall make the decision to initiate an investigation
into the circumstances of the violation, and inform the public servant himself of the facts ascertained through investigation and
the basis on which a disciplinary action is to be taken against him. The public servant shall have the right to make a statement
and explain himself.

If a department imposing disciplinary actions deems that a disciplinary action should be taken against a public servant, it shall
make a decision to such an effect within the prescribed time limit and in compliance with the limits of authorized administration
and the prescribed procedures. The public servant himself shall be informed of such decision in writing.

Article 58　During the period of being subjected to disciplinary action, a public servant shall not be promoted to a higher post
or rank; and if, he is subjected to the recording of a demerit or a serious demerit, or is demoted to a lower rank, or removed from
office, he shall not be promoted to a higher grade of the salary scale.

The periods of disciplinary actions are: 6 months for the warning; 12 months for the recording of a demerit; 18 months for the recording
of a serious demerit; and 24 months for the demotion to a lower rank or removal from office.

A public servant who is removed from office shall be demoted in rank in accordance with relevant regulations.

Article 59　If a public servant who is subjected to a disciplinary action other than the discharge from public employment has shown
repentance during the period of disciplinary action, and has ceased violation of discipline, the department deciding on such action
shall, at the expiration of the period of the disciplinary action, lift the action and inform the public servant himself of the lift
in writing.

After a disciplinary action is lifted, promotion to a higher grade of the salary scale, a higher rank or post shall no longer be
affected by the former disciplinary action. However, the lift of a disciplinary action for demotion to a lower rank or removal from
office shall not thus be deemed as the reinstatement in the former rank or post.

Chapter X　Training

Article 60　A department shall conduct training among public servants on the basis of classified grades and categories and in light
of the requirements of official duties of public servants and the need for enhancing the quality of public servants.

The State sets up institutions specializing in training for public servants. A department may, in light of need, entrust other training
institutions with the training of public servants as well.

Article 61　A department shall conduct training for the newly recruited persons who have just taken their posts during the trial
period; training for the public servants who have been promoted to leading posts shall be arranged before they take the posts or
within one year after they have taken the leading posts; special professional training shall be arranged for the public servants
engaged in special work; and in-service training for all public servants shall be arranged in order to update their knowledge and
increase their work capability. And among the public servants who hold professional and technical posts, professional and technical
training for them shall be arranged in accordance with the requirements for continued education among professional and technical
persons.

The State shall, in a planned manner, improve training among reserve leading persons.

Article 62　Training of public servants shall

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE EFFECTIVENESS OF THE EXCHANGE OF LETTERS FOR MUTUAL EXEMPTION OF TAX ON INTERNATIONAL TRANSPORT INCOME BETWEEN CHINA AND TURKEY

State Administration of Taxation

Circular of the State Administration of Taxation on the Effectiveness of the Exchange of Letters for Mutual Exemption of Tax on International
Transport Income between China and Turkey

Guo Shui Fa [2006] No.5

The administrations of state taxation and local taxation of all the provinces, autonomous regions, municipalities directly under the
Central Government, and cities specifically designated in the state plan, and Yangzhou Institute of Taxation,

The Exchange of Letters between the Government of the People’s Republic of China and the Government of the Republic of Turkey for
mutual exemption of value-added tax, business tax or other taxes of the similar nature on international transport income from the
other party of contracting state of air transport enterprises in one contracting state was signed by the authorized representatives
of both governments, and became effective on November 18, 2005, and is hereby printed and distributed to you. Please implement accordingly.

Annex:

I. Letter of the Finance Minister of Republic of Turkey Kemal Unakitan Addressed to the Director General Xie Xuren of the State Administration
of Taxation of the People’s Republic of China (translation)

II. Reply Letter of the Director General Xie Xuren of the State Administration of Taxation of the People’s Republic of China Addressed
to the Finance Minister of the Republic of Turkey Kemal Unakitan (translation)

State Administration of Taxation

January 12, 2006 Annex: ILetter of the Finance Minister of Turkey Addressed to the Director General Xie Xuren of the State Administration of Taxation of the
People’s Republic of China (translation)

Mr. Xie Xuren

Director of the State Administration of Taxation of the People’s Republic of China

Your Excellency,

I am honored to refer to the issue of exemption of tax on the profits and incomes obtained from undertaking international transport
by the air transport enterprises of both countries, and suggest making the following arrangements on behalf of the Government of
the Republic of Turkey:

According to the Agreement of the Republic of Turkey and the People’s Republic of China on Avoidance of Double Tax Collection and
Prevention of Evasion of Taxes, which was signed on May 23rd, 1995, the income tax shall be exempted in another contracting state.
on the profits and incomes obtained from another contracting state through undertaking international transport business by the air
transport enterprises of one contracting state . Value-added tax, business tax or any other tax of the similar nature shall be exempted
in another contracting state on the income obtained from another contracting state through undertaking international transport business
by the air transport enterprises of one contracting state.

I am honored to suggest that this Letter and the Letter of Reply acknowledged by Your Excellency on behalf of the government of the
People’s Republic of China’s acceptance of the aforesaid suggestions proposed by the Government of the Republic of Turkey shall constitute
an agreement between the governments of both countries.

Finance Minister of the Republic of Turkey

Kemal Unakitan (Signature)

October 21, 2005 Annex: IIReply Letter of the Director General Xie Xuren of the State Administration of Taxation of the People’s Republic of China Addressed
to the Finance Minister of Turkey (Translation)

Kemal Unakitan, finance minister of the Republic of Turkey,

Your Excellency,

I am honored to acknowledge the receipt of your Letter dated October 21, 2005, which reads as follows,

According to the Agreement of the Republic of Turkey and the People’s Republic of China on Avoidance of Double Tax Collection and
Prevention of Evasion of Taxes, which was signed on May 23rd, 1995, the income tax shall be exempted in another contracting state
on the profits and incomes obtained from another contracting state through undertaking international transport business by the air
transport enterprises of one contracting state. Value-added tax, business tax or any other tax of the similar nature shall be exempted
in another contracting state on the income obtained from another contracting state through undertaking international transport business
by the air transport enterprises of one contracting state..

I am honored to confirm and accept the said suggestions on behalf of the government of the People’s Republic of China and refer to
that the said agreement shall come into effect from the date of this Letter of Reply.

Director General of the People’s Republic of China

Xie Xuren (Signature)

November 18, 2005

State Administration of Taxation
2006-01-12

CIRCULAR OF THE MINISTRY OF COMMERCE ON ENTRUSTING THE COMPETENT DEPARTMENTS OF COMMERCE AT PROVINCIAL LEVEL TO EXAMINE AND ADMINISTRATE THE FOREIGN-FUNDED DESIGNING ENTERPRISES FOR CONSTRUCTION PROJECTS

Ministry of Commerce

Circular of the Ministry of Commerce on Entrusting the Competent Departments of Commerce at Provincial Level to Examine and Administrate
the Foreign-funded Designing Enterprises for Construction Projects

Shang Zi Han [2005] No. 92

The competent departments of commerce of all provinces, autonomous regions, municipalities directly under the Central Government,
cities under separate state planning and Xinjiang Production and Construction Corps,

In light of the requirements of the State Council for simplifying the administrative examination and approval system and for the purpose
of simplifying the procedures for examining the contracts and articles of association of foreign-funded enterprises, improving efficiency
and accelerating the absorption of foreign investment within the sector of service trade, we hereby circulate a notice on the relevant
issues as follows on entrusting the competent departments of commerce of all provinces, autonomous regions, municipalities directly
under the Central Government, cities under separate state planning and Xinjiang Production and Construction Corps (hereinafter referred
to as the competent departments of commerce at provincial level) and the administrative commissions of national economic and technical
development zones to examine and administrate the foreign-funded designing enterprises for construction projects:

The competent departments of commerce at provincial level and the administrative commissions of national economic and technical development
zones are entrusted to examine and administrate the foreign-funded designing enterprises for construction projects.

II.

All the entrusted departments and institutions shall strictly enforce the relevant standards for the qualification of foreign-funded
enterprises, earnestly carry out the relevant examination on the application for the establishment or alteration of foreign-funded
designing enterprises for construction projects in accordance with the Provisions on the Administration of Foreign-funded Designing
Enterprises for Construction Projects ([2002] No. 114 of the Ministry of Construction and the Ministry of Foreign Trade and Economic
Cooperation) as well as other laws and regulations on foreign investment, and handle the relevant matters according to the procedures
and requirements as prescribed in the aforesaid provisions upon soliciting the opinions of the competent administrative department
of construction. The entrusted departments and institutions shall report the problems as arising in the process of examination and
approval, if any, to the Ministry of Commerce in a timely manner. In the case of any rule-breaking examination and approval in the
duration of entrustment, the Ministry of Commerce shall circulate a notice of criticism or even withdraw its entrustment in light
of the real situation.

III.

All the entrusted departments and institutions shall be capable of getting connected to the Ministry of Commerce through the network
so as to issue the Approval Certificate for Foreign-funded Enterprises thereon and carrying out an joint online annual examination
and shall a good job in the examination and approval, archival filing and statistical work through the network-based certificate
issuance system for foreign-funded enterprises. The relevant statistical data shall meet the relevant requirements so that the Ministry
of Commerce may get informed of the relevant situation and strengthen its supervision. The Ministry of Commerce will carry out trainings
on the local competent departments of commerce as well as the administrative commissions of national economic and technical development
zones in the near future and clarify the specific issues in the process of examination and approval.

IV.

The entrusted administrative commissions of national economic and technical development zones shall adopt a simple and efficient administration
system in pursuant to the Circular of the General Office of the State Council on Forwarding Several Opinions of the Ministry of Commerce
and Other Departments on Promoting the Further Development of National Economic and Technical Development Zones (Guo Ban Fa [2005]
No. 15). After the national economic and technical development zones go through the archival filing of administrative system, personnel
trainings and networking inspection and acceptance, the Ministry of Commerce will separately handle the relevant formalities for
entrustment in a batch-by-batch manner.

The present Entrustment shall come into force as of March 31, 2006.

Ministry of Commerce of the People’s Republic of China

January 22, 2006

Ministry of Commerce
2006-01-22

NOTICE OF THE MINISTRY OF FINANCE ON PRINTING AND DISTRIBUTING THE RULES FOR THE BID INVITATION OF ACCOUNTING FIRMS FOR THE AUDIT ENTRUSTMENT

the Ministry of Finance

Notice of the Ministry of Finance on Printing and Distributing the Rules for the Bid Invitation of Accounting Firms for the Audit
Entrustment

Cai Hui [2006] No.2

To the departments (bureaus) of finance of all provinces, autonomous regions and municipalities directly under the Central Government,
Shenzhen City Bureau of Finance, relevant ministries, commissions of and institutions directly under the State Council and enterprises
under central administration,

For the purpose of regulating the activities relating to the bid invitation of accounting firms for the audit entrustment, promoting
the fair competition in the industry of certified public accountants and protecting the lawful rights and interests of tenderees
and bidding firms, the Ministry of Finance has formulate the Rules for the Bid Invitation of Accounting Firms for the Audit Entrustment,
which are now printed and distributed to you. The Rules shall come into force as of the date of March 1, 2006.

Annex: Rules for the Bid Invitation of Accounting Firms for the Audit Entrustment

Ministry of Finance (Seal)

January 1, 2006 Annex:Rules for the Bid Invitation of Accounting Firms for the Audit Entrustment

Article 1

For the purpose of regulating the activities relating to the bid invitation of accounting firms (hereinafter referred to as the firms)
for the audit entrustment, promoting the fair competition in the industry of certified public accountants and protecting the lawful
rights and interests of tenderees and bidding firms, these Rules are formulated according to the Bidding Law of the People’s Republic
of China, the Law of the People’s Republic of China on Certified Public Accountants and other relevant laws.

Article 2

The tenderees shall abide by the Bidding Law of the People’s Republic of China for the audit entrustment of firms by way of bid invitation,
which shall conform to these Rules.

Article 3

The principles of openness, fairness, equity and good faith shall be followed for the bidding activities.

No entity or individual may violate the laws or administrative regulations, restrict or exclude firms from participating in the bidding
or illegally interpose the bidding in any form.

When undertaking and conducting the audit work by way of bidding, a firm shall abide by the audit rules and professional ethics, fulfill
obligations and accomplish the bid winning project in strict accordance with the agreement on the audit work.

Article 4

The following procedures shall be observed when conducting the bid invitation of firms for the entrustment of audit work:

(1)

Bid invitation, which includes the determination of the way of bid invitation, the issuance of bid invitation announcements (in the
case of public bid invitation) or issuance of bid invitation letters (in the case of selective bid invitation), the formulation of
bid invitation documents and the delivery of bid invitation documents to potential bidding firms;

(2)

Bid opening;

(3)

Bid evaluation; and

(4)

Determination of the bid winning firm, issuance of the bid winning notice and conclusion of the agreement on the audit work with the
bid winning firm.

Article 5

Generally, a tenderee shall entrust a firm by way of public bid invitation.

If a bid invitation project is under any of the following circumstances, the method of selective bid invitation may be adopted:

(1)

There is particularity , meaning the firm can only be chosen from a limited scope; or

(2)

There is an emergency, meaning the entrustment cannot be accomplished by the way of public bid invitation within the prescribed time
limit.

Article 6

Where the way of public bid invitation is adopted, a bid invitation announcement shall be publicized. Where the way of selective bid
invitation is adopted, the bid invitation letters shall be sent out to at least three firms.

The bid invitation announcement and the bid invitation letters shall state the name and address of the tenderee, the quality, quantity,
implementation site and time of the bid invitation project as well as the measures for obtaining bid invitation documents, etc.

Article 7

A tenderee may request the potential firms to provide relevant qualification certificates and performance conditions in the bid invitation
announcement or the bid invitation letters, and carry out the qualification examination of potential bidding firms according to the
requirements of the project for bid invitation.

A tenderee shall make full use of the industrial information as publicized by the fiscal department and the association of certified
public accountants, and implement the provisions of the Ministry of Finance on the audit administration during the process of qualification
examination,.

Article 8

A tenderee shall formulate bid invitation documents according to the characteristics of bid invitation project and the requirements.
The bid invitation documents shall include:

(1)

The introduction of the bid invitation project;

(2)

The standards for the qualification examination of bidding firms;

(3)

The requirements on the quotes for bidding;

(4)

The standards for bid evaluation; and

(5)

The main articles of the agreement on the audit work to be concluded.

Article 9

A tenderee shall make explicit disclosure of the information about the bid invitation project in the bid invitation documents in order
to facilitate the determination of the workload, the formulation of the work schemes, the presentation of reasonable quotes and the
formulation of bidding documents by the bidding firms, which shall include the organizational structure, industry, operational type,
distribution and financial information (such as the assets scale and structure, debts, annual revenues and other relevant financial
indicators) of the entities to be audited.

Article 10

A tenderee shall conform to the requirements of the bid invitation project and reasonably determine the evaluation items, set down
the standards for evaluation and design the weight of the score of each evaluation item in the total score by the way of comprehensively
considering the work schemes, personnel situation, relevant work experiences, records of professional ethics and quality control
level, degree of commercial responses and quotes of bidding firms. The weight of the score as reported by any bidding firm shall
not be more than 20%.

The specific design of bid evaluation standards may be determined by referring to the attached Reference Table for the Evaluation
Items and the Design of their Weights.

Article 11

Where the time limit to complete the corresponding work for a bid invitation project needs to be determined, the tenderee shall reasonably
determine the time limit by taking into account the particularity of the industrial services of certified public accountants, and
state it in the bid invitation documents.

Article 12

A tenderee may organize the potential bidding firms for discussions and answering questions according to the specific conditions of
the bid invitation project. Where the potential bidding firms need to consult the detailed materials about the bid invitation project,
the tenderee shall offer convenience if possible.

Article 13

A tenderee shall consider the particularity of the industrial services of certified public accountants when determining the time limit
for the bidding firms to formulate bidding documents, and the time limit shall generally be not less than 20 days from the day when
the bid invitation documents are sent out to the expiry date for the bidding firms to submit bidding documents.

Article 14

A tenderee shall open the bids publicly and invite all the bidding firms to participate in the bid opening.

Article 15

A tenderee shall organize a bid appraisal committee to be responsible for bid appraisal.

The bid appraisal committee shall be composed of representatives of the tenderee and experts familiar with the industry of certified
public accountants Anyone that has interests with a tenderer shall not be a member of the bid appraisal committee for the relevant
project.

The members of a bid appraisal committee (hereinafter referred to as the judges) shall be an odd number of 5 persons or more, of which
the experts familiar with the industry of certified public accountants shall be no less than two thirds of all the members generally.

The name list of judges shall be kept unannounced before the bid winning results are determined.

Article 16

A tenderee shall take measures necessary to guarantee that the bids are evaluated under a strictly confidential circumstance. No entity
or individual may illegally intervene in or influence the process or result of bid appraisal.

Article 17

The judges shall give scores for bidding firms according to the standards for bid appraisal.

The bid appraisal committee shall rank all the bidding firms according to their scores and recommend the bid winning candidate firms
according to the ranking.

Article 18

The bid appraisal committee shall work out a written bid appraisal report to the tenderee after completing the bid appraisal,.

The tenderee shall determine the bid winning firm according to the written bid appraisal report as worked out and the bid winning
candidate firms as recommended by the bid appraisal committee, or may authorize the bid appraisal committee to directly determine
the bid winning firm.

Article 19

After the bid winning firm is determined, the tenderee shall send out a bid winning notice to the bid winning firm, and notify the
bid winning result to all the bidding firms that fail the bidding.

Article 20

A tenderee shall conclude an agreement on the audit work with the bid winning firm on the basis of the bid invitation documents and
the bidding documents of the bid winning firm within 30 days after the bid winning notice is sent out.

The tenderee shall not require the bid winning firm to alter the substantial contents of the bid invitation project, enhance the technical
requirements of the bid invitation project, reduce the fees for the entrusted matter or seek for commissions from the bid winning
firm for any excuse.

The tenderee shall not conclude any other agreement with the bid winning firm that is contrary to the substantial contents of the
agreement on the audit work.

Article 21

The Ministry of Finance and the fiscal departments of all the provinces, autonomous regions and municipalities directly under the
Central Government shall supervise the audit-related bidding activities and deter and deal with illegal and irregular acts during
the course of audit-related bidding activities according to the law.

Article 22

The entrustment of firms for other authentication and relevant services by the tenderees by way of bid invitation shall be conducted
by reference to these Rules.

Article 23

The power to interpret these Rules shall remain with the Ministry of Finance.

Article 24

These Rules shall come into force as of March 1, 2006.

Annex: Reference Table for the Appraisal Items and the Design of Their Weights htm/e04794.htmAnnex

Annex:

Reference Table for the Appraisal Items and the Design of Their Weights

Appraisal Items	Weight Scope
Work Plan	20%-30%
Personnel Situation	20%-30%
Relevant Work Experiences	15%-25%
Records of Professional Ethics and Quality Control Level	10%-15%
Degree of Commercial Responses	5%
Quote	10%-20%

Annotation: As to the appraisal of quotes, the standards for appraisal shall be the absolute value of the discrepancy between the
quote and average quote, and the lower the absolute value of the discrepancy is, the higher the score will be.

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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

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CONSTITUTION ACT, 1982 – page 11

CONSTITUTION ACT, 1982 – page 10

CONSTITUTION ACT, 1982 – page 9

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CONSTITUTION ACT, 1982 – page 7