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NOTICE OF THE NATIONAL DEVELOPMENT AND REFORM COMMISSION AND THE STATE ADMINISTRATION OF TAXATION CONCERNING THE EXEMPTION OF BUSINESS TAXES FROM CREDIT GUARANTY INSTITUTIONS FOR SMALL/MEDIUM-SIZED ENTERPRISES






National Development and Reform Commission, State Administration of Taxation

Notice of the National Development and Reform Commission and the State Administration of Taxation concerning the Exemption of Business
Taxes from Credit Guaranty Institutions for Small/Medium-sized Enterprises

Fa Gai Qi Ye [2006] No. 563

The development and reform commissions, economic and trade commissions (economic commissions), small/medium-sized enterprise bureaus
and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities
specifically designated in the state plan and the Xinjiang production and construction corps:

For the purpose of carrying into effect the Law of the People’s Republic of China on Promoting Small/medium-sized Enterprises, the
Notice of the General Office of the State Council concerning Forwarding the Opinions of the State Economic and Trade Commission concerning
Encouraging and Promoting the Development of Small/medium-sized Enterprises (Guo Ban Fa [2000] No. 59) and the Notice of the National
Development and Reform Commission and the State Administration of Taxation about Doing a Better Job of the Exemption of Business
Taxes from Credit Guaranty Institutions for Small/Medium-sized Enterprises (Fa Gai Qi Ye [2004] No. 303 ) as well as the relevant
instructions and spirits of the principals of the State Council concerning promoting the development of credit guaranty institutions
for small/medium-sized enterprises, the relevant issues are hereby notified as follows on getting on with a better job in the exemption
of business taxes for credit guaranty institutions for small/medium-sized enterprises:

I.

Basic Requirements for Tax Exemption for a Credit Guaranty Institution

(1)

After the approval of the authorization department of the government (administrative department of the government with responsibility
for small/medium-sized enterprises), having been registered as an enterprise legal person in accordance with law and being an institution
that mostly provides guaranty services for small/medium-sized enterprises;

(2)

Not aiming at making profits and the charging rates for guaranty services being followed to the approval of the administrative department
of the local people’s government with responsibility for small/medium-sized enterprises as well as the price department of the people’s
government at the same level;

(3)

Having a sound internal management system, the capacity to provide guaranty for small/medium-sized enterprises, outstanding business
achievements, an improved mechanism of beforehand appraisal, ongoing supervision and follow-up recourse and disposal as well as a
registered capital over 20 million Yuan;

(4)

The accumulative guaranteed amount for the loans of small/medium-sized enterprises being occupied 80% of its accumulative guaranteed
amount in total, the guaranteed balance as provided for a single enterprise being no more than 10% of its total paid-in capital,
and the guaranteed amount in a single deal shall be no more than 40 million Yuan at the maximum;

(5)

The amplified proportion between the guarantee fund and the loan under guaranty being no less than 3 times as well as the compensatory
repayment being no more than 5% of the guarantee fund;

(6)

Being subject to the supervision and administration of the administrative department of the local government in charge of small/medium-sized
enterprises and submitting the situations of guaranty undertaking and financial statements to the said department in the light of
the relevant requirements;

A credit guaranty institution, whose term for enjoying the preferential policy of exempting business taxes has expired, may continue
to apply for reducing tax or tax exemption when still meeting the aforesaid requirements.

II.

Procedures for Taxes Exemption

If the credit guaranty institutions voluntarily apply for tax exemption, after the provincial administrative department of small/medium-sized
enterprises and the provincial taxation authorities carry out examination and make recommendation, the State Development and Reform
Commission and the State Administration of Taxation shall examine and approve, and distribute a name list of the institutions that
may enjoy tax exemption. The guaranty institutions on the name list shall go to the administrative tax authority to handle the relevant
formalities for tax exemption with the relevant documents. The relevant guaranty institutions may enjoy the policies for business
tax exemption after the local tax authority examine and approve, and handle the formalities for tax exemption in the light with the
name list as distributed by the State Development and Reform Commission and the State Administration of Taxation.

III.

Term of Tax Exemption

The term for business tax exemption is 3 years, which shall be computed as of the day when the tax authority in charge of guaranty
institutions goes through the formalities for tax exemption.

IV.

The administrative departments of small/medium-sized enterprises and local tax bureaus of all provinces, autonomous regions, municipalities
directly under the Central Government and the cities specifically designated in the state plan shall do a good job in their examination
and recommendation of credit guaranty institutions for small/medium-sized enterprises in accordance with the requirements of this
Notice and the principles of openness and impartiality,.

V.

The administrative departments of small/medium-sized enterprises and local tax bureaus of all provinces, autonomous regions, municipalities
directly under the Central Government and the cities specifically designated in the state plan shall scrutinize the implementation
and effectiveness of business tax exemption for credit guaranty institutions in the preliminary phase and adopt a dynamic administration
on the credit guaranty institutions for small/medium-sized enterprises that enjoy the policy for business tax exemption in accordance
with the real situations. For the credit guaranty institution that violates the relevant provisions and fails to meet the requirements
for tax deduction and exemption, it shall, upon discovery, be reported faithfully to the State Development and Reform Commission
and the State Administration of Taxation to revoke its qualification for further enjoying tax exemption.

VI.

The administrative departments of small/medium-sized enterprises of all provinces, autonomous regions, municipalities directly under
the Central Government and the cities specifically designated in the state plan in cooperation with local taxation bureaus shall
do well in the relevant work and submit the following materials in duplicate and written form to the Small/medium-sized Enterprise
Department of the State Development and Reform Commission and the Department of Circulation Tax Administration of the State Administration
of Taxation before June 15, 2006.

(1)

The achievements of, existing problems in and suggestion on the work relating to business tax exemption for credit guaranty institutions
for small/medium-sized enterprises in the preliminary four batches;

(2)

A name list of the credit guaranty institutions for small/medium-sized enterprises, which meet the requirements for tax exemption
(the name list shall have been publicized);

(3)

Registration Forms (see Appendix) as well as the photocopies of business licenses and constitutions of the credit guaranty institutions
for small/medium-sized enterprises, which meet the requirements for tax exemption;

(4)

A name list of the credit guaranty institutions for small/medium-sized enterprises, which fail to meet the requirements for tax exemption
in the preliminary four batches after examination as well as the reasons.

Contact entity: Department of Small/Medium-sized Enterprise of the National Development and Reform Commission

Linkman: Zhang Haiying

Contact No.: 68535638

Appendix: Registration Form of the Credit Guaranty Institutions for Small/Medium-sized Enterprises

State Development and Reform Commission

State Administration of Taxation

April 3, 2006 htm/e05058.htmAppendix

￿￿

￿￿

Appendix:

Registration Form of the Credit Guaranty Institutions for Small/medium-sized Enterprises

￿￿

￿￿￿￿Date of Filling in the Form                           

Name of a guaranty institution (full name)

 

Address

 

Nature of legal person

 

Examination opinions produced by the local administrative department of small/medium-sized enterprises of the city

Legal representative (person-in-charge)

 

Person-in-charge:             

Seal:                                 

Contact person

 

Address

 

Telephone

 

Fax

  

Time of establishment

 

Registered capital (in 10, 000 Yuan)

 

Guarantee fund (in 10, 000 Yuan)

Total amount

 

Monetary Capital

 

Examination opinions as produced by the local administrative department of Small/medium-sized enterprises of the province,
autonomous regions or municipalities directly under the Central Government

Practitioners

 

 

Range of guarantee premiums

 

 

Number of guaranteed enterprises

Accumulated number

 

Person-in-charge:               

Seal:                                      

Number of small/medium-sized enterprises

 

Guaranteed number at present

 

Loan under guaranty (in 10, 000 Yuan)

Accumulated amount

 

Guaranteed amount at present

 

Reserve funds for risk and compensatory repayment (in 10, 000 Yuan)

Accumulated withdrawal of reserve funds in total

   

Accumulated compensatory repayment

 

Accumulated losses incurred from compensation

 

Business income (in 10, 000 Yuan)

Accumulated amount

 

 

Income generated from guaranty premiums

 

Total Profits (in 10, 000 Yuan)

 

Accumulated tax return (10, 000 Yuan)

Business taxes

 

Income taxes

 

￿￿￿￿Seal of the Applicant Entity:                       Signature of the Person-in-charge:￿￿   ￿￿      ￿￿￿￿￿￿



ANNOUNCEMENT NO.58, 2006 OF THE GENERAL ADMINISTRATION OF QUALITY SUPERVISION, INSPECTION AND QUARANTINE OF THE PEOPLE’S REPUBLIC OF CHINA ON EXPANDING THE ACCESS VARIETIES OF FRUIT, VEGETABLES AND AQUATIC PRODUCTS ORIGINATED FROM TAIWAN REGION

Announcement No.58, 2006 of the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic
of China on Expanding the Access Varieties of Fruit, Vegetables and Aquatic Products Originated from Taiwan Region

[2006] No. 58

In accordance with related regulations, as from May 1, 2006, the access varieties of fruit originated from Taiwan region to the mainland
are expanded from 18 to 22, namely pineapple, banana, sweetsop, pawpaw, carambola, mango, guava, wax apple, areca, tangerine, shaddock,
Chinese date, coconut, loquat, mei, plum, persimmon, peach, lemon, orange, dragon fruit, cantaloup. 11 varieties of vegetables are
accessible to the mainland, namely lettuce, towel gourd, Pak-choi, no-heading Chinese cabbage, balsam pear, taro, cabbage, cauliflower,
carrot, onion, horseradish. The aquatic products fished by original Taiwan fishermen shall be transported to Fujian. In light of
the mainland self-fishing of the fishing boats procedure, they shall be reported to inspection and quarantine departments for inspection
with the self-fishing License in mare liberum, trade contracts and invoices. Provision of Sanitation Certificate issued by department
of administration of Taiwan shall be exempted.

Specially announced hereby.

General Administration of Quality Supervision, Inspection and Quarantine

April 19, 2006

 
General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China
2006-04-19

 



OFFICIAL REPLY OF THE CHINA SECURITIES REGULATORY COMMISSION THE SETTING UP OF GUOTAI JUNAN FINANCIAL HOLDING CO., LTD. BY GUOTAI JUNAN SECURITIES CO., LTD. IN HONG KONG SAR

Official Reply of the China Securities Regulatory Commission the Setting up of Guotai Junan Financial Holding Co., Ltd. by Guotai
Junan Securities Co., Ltd. in Hong Kong SAR

Zheng Jian Ji Gou [2006] No. 82

Guotai Junan Securities Co., Ltd.,

Your application materials on the setting up of Guotai Junan Financial Holding Co., Ltd. in Hong Kong SAR have been received. After
examination, the following reply is hereby given.

1.

Your company is authorized to set up Guotai Junan Financial Holding Co., Ltd. in Hong Kong SAR.

2.

Your company shall, in accordance with the relevant provisions of the State, appropriate the capital and assign employees to Hong
Kong SAR. The resumes of those persons who are dispatched to Hong Kong SAR as well as the approval documents on dispatching them
to Hong Kong SAR shall be reported to this Commission for archival filing.

3.

Zhu Youyi is selected as the principal of Guotai Junan Financial Holding Co., Ltd without demurrer form our Commission. In the event
that any senior manager of your overseas institutions is to be changed, you shall report it to this Commission beforehand.

4.

The business management and risk control mechanism of your overseas institutions shall be further improved and perfected, your company
shall make monthly financial reports on overseas institutions to this Commission, and send a copy of all the information as required
to be submitted by the overseas securities regulatory institution to our Commission in a timely manner. Without authorization of
our Commission, your company may not conduct financing or provide guaranty for any overseas institution.

5.

Your company shall make a timely report to this Commission on the following significant matters: (1) the occurrence of an illegal
act or major loss; (2) any cheat or fraud act of an employee of any overseas institution, which involves a large amount of money
and has caused comparatively large economic losses; and (3) any other important matter that should be reported to the local regulatory
bureau in accordance with the provisions.

6.

The institution set up by your company in Hong Kong SAR shall rigorously comply with the laws of Hong Kong SAR and shall be supervised
by the securities regulatory organ of Hong Kong SAR.

China Securities Regulatory Commission

April 28, 2006



 
China Securities Regulatory Commission
2006-04-28

 






ANNOUNCEMENT NO. 24, 2006 OF MINISTRY OF COMMERCE ON ARBITRATION OF ANTI-DUMPING OF FOOD ADDICTIVES OF RIBONUCLEOTIDE ORIGINATING FROM JAPAN AND THE REPUBLIC OF KOREA

Ministry of Commerce

Announcement No. 24, 2006 of Ministry of Commerce on Arbitration of Anti-dumping of Food Addictives of Ribonucleotide Originating
from Japan and the Republic of Korea

[2006] No. 24

In accordance with Anti-dumping Regulations of the People’s Republic of China, Ministry of Commerce of the People’s Republic of China
released announcement on Nov 12, 2004, deciding to carry out anti-dumping investigation on food addictive of ribonucleotide (hereinafter
referred to as “investigated commodities”) originating from Japan and the Republic of Korea.

In line with investigation, Ministry of Commerce finally verdicts dumping of the investigated commodities, injures the domestic food
addictives of ribonucleotide industry, and the existence of causality between dumping of the investigated commodities and the injury
of domestic industry.

In accordance with Anti-dumping Regulations of the People’s Republic of China, Tariff Committee of the State Council decides to impose
anti-dumping duties on food addictives of ribonucleotide originating from Japan and the Republic of Korea as from May 12, 2006, the
tariff codes of which are 29349990 and 38249090 in Import and Export Tariff of the People’s Republic of China.

Rate of Anti-dumping Duties on Different Companies:

Companies in Japan 119%

Companies in Republic of Korea:

Daesang Corporation 25%

All others 119%

The duration of the anti-dumping duties on food addictives of ribonucleotide originating from Japan and the Republic of Korea is 5
years as from May 12, 2006.

Appendix: Ministry of Commerce’s Final Arbitration on Anti-dumping Investigation on Food Addictives of Ribonucleotide Originating
from Japan and the Republic of Korea

Ministry of Commerce

May 12, 2006



 
Ministry of Commerce
2006-05-12

 






REPLY OF THE STATE ADMINISTRATION OF TAXATION CONCERNING THE ISSUE OF COLLECTING BUSINESS TAX ON CONTRACTED LABOR SERVICES

Reply of the State Administration of Taxation concerning the Issue of Collecting Business Tax on Contracted Labor Services

Guo Shui Han [2006] No. 493

The Bureau of Local Taxation of Xinjiang Uygur Autonomous Region:

Your Request for the Instructions on Collecting Business Tax on Contracted Labor Services (Xin Di Shui Fa [2005] No. 169) has been
received, and the reply is hereby given as follows:

Where any construction and installation enterprise sublets part of the pure labor services of an engineering project it undertakes
to several construction enterprises, in which the construction and installation enterprise provides the construction technologies
and materials and takes charge of supervision over the quality of the project, and the labor services are provided by the employees
of the construction enterprises, and the construction enterprises uniformly settle the project money with the construction and installation
enterprise in accordance with their respective amount of work . In light of the relevant provisions on the current business tax,
the construction labor services provided by the construction enterprises belong to the taxable labor services provided to the construction
industry , so the business tax on their incomes shall be collected according to the tax item of “construction industry”.

State Administration of Taxation

May 24, 2006



 
State Administration of Taxation
2006-05-24

 






ANNOUNCEMENT NO.46, 2006 OF MINISTRY OF COMMERCE ON PROLONGING ANTI-DUMPING INVESTIGATION ON PBT

Ministry of Commerce

Announcement No.46, 2006 of Ministry of Commerce on Prolonging Anti-dumping Investigation on PBT

[2006] No. 46

Ministry of Commerce released announcement on June 6, 2005, deciding to carry out anti-dumping investigation on PBT originating from
Japan and Taiwan District with a tariff code of 39079900 in Import and Export Tariff of the People’s Republic of China.

For the particularity and complexity of this case, Ministry of Commerce decides to prolong the anti-dumping investigation to Sep 6,
2006 in line with item No. 26 of Anti-dumping Regulations of the People’s Republic of China.

Ministry of Commerce of the People’s Republic of China

June 5, 2006



 
Ministry of Commerce
2006-06-05

 






SOME OPINIONS OF THE STATE COUNCIL CONCERNING THE REFORM AND DEVELOPMENT OF THE INSURANCE INDUSTRY

Some Opinions of the State Council concerning the Reform and Development of the Insurance Industry

Guo Fa [2006] No. 23

The people’s governments of all provinces, autonomous regions and municipalities directly under the Central Government, all ministries
and commissions of the State Council and the institutions directly subordinate to the State Council:

Since the reform and opening up, especially the 16th Party Congress, remarkable achievements have been made in the reform and development
of the insurance industry in China. The insurance operations have grown rapidly, the service scope has been continuously broadened,
the market system has been increasingly perfected, the laws and regulations have been gradually improved, the supervisory level have
been continuously enhanced, and the risks have been effectively prevented and avoided, which makes the overall strength obviously
reinforce This is playing an important role in promoting the reform, guaranteeing the economy, stabilizing the society, benefiting
the people and etc. However, since the insurance industry has a late start, a weak base and a narrow coverage, its functions are
not fully exerted, and it does not adapt to the requirements for building a well-off society in an all-round way and constructing
a harmonious socialistic society, to establish a sound socialistic market economy, or to the new situations of economic globalization,
financial integration and opening up to the external in an all-round way. Now facing the future, the development of insurance industry
stands on a new historical starting point with huge development potentiality and space. With the purpose of fully implementing the
scientific development view, clarifying the guiding ideology, objectives, tasks, policies and measures for the reform and development
of the insurance industry for a period in future, accelerating the reform and development of the insurance industry, and promoting
the construction of a socialistic harmonious socialistic society, we hereby propose the following opinions:

I.

Fully recognizing the important significance of accelerating the reform and development of the insurance industry

Insurance has the function of economic compensation, financing and social management. It is a basic means of risk management under
market economy conditions, it is also an important part of the financial system and the social security system, and it plays an important
role in building a harmonious socialistic society. Accelerating the reform and development of the insurance industry can help respond
to the risks of disasters and accidents, and guarantee the safety of the people’s lives and properties as well as the stable operation
of economy. Every year, the people of China suffer a huge life and property loss due to natural disasters and various traffic products
and other accidents. Because of the restrictions in aspects of system, mechanism and etc., only a low proportion of enterprises and
families buy insurances, and only a small part of losses from disasters and accidents can be compensated through insurance, which
is not beneficial to timely resuming the work and living order and meanwhile increases financial and affair burdens of the government.
Accelerating the reform and development of the insurance industry and building a market-based mechanism of compensating losses from
disasters and accidents will play an irreplaceable important role improving the disaster prevention and salvation system, enhancing
the capabilities of the whole society to prevent risks and promoting the rapid and healthy development of the economy.

Accelerating the reform and development of the insurance industry helps to improve the social security system and meet the masses’
multi-level demands for social security. At present, China is within a key period of improving socialistic market economy, the ageing
progress of the population speeds up, the people’s living standards improve and the demands for social security become increasingly
intense. Accelerating the reform and development of the insurance industry and encouraging and inducing the masses to buy insurances
of commercial endowment or health, etc. will be of important realistic significance to improving the social security system, enhancing
the level of social security of the whole society, enlarging the demands of resident consumptions and realizing social stability
and harmony.

Accelerating the reform and development of the insurance industry will help optimize the allocation of financial resources and improve
socialistic market economy. The financial system of China develops unevenly with excessive indirect financing, which has infected
the efficiency of allocating financial resources and obstructed the diffusion and elimination of financial risks. The beginning 20
years of the present century are an important period of great strategic opportunity for China to speed up its development, so the
core function of finance in modern economy is even more prominent. Accelerating the reform and development of the insurance industry,
exerting the important functions of insurance in allocating financial resources and promoting the coordinative development of currency
market, capital market and insurance market will be of important significance to improve the financial system and the socialistic
market economy.

Accelerating the reform and development of the insurance industry is beneficial to social management, innovations in public service
and the improvement of the efficiency of government administration. With the deepening of the reform of administration system, the
governments must integrate various social resources, make full use of market mechanisms and means, and continuously improve the social
management and public services. Accelerating the reform and development of the insurance industry, actively adopting the insurance
mechanism in social management, coordinating various interest relations, effectively eliminating social contradictions and disputes
and propelling public service innovations will be an important promotion to improving the socialistic economic compensation mechanism,
further transforming government functions and enhancing the efficiency of government administration.

II.

The guiding ideology, overall objective and major tasks of accelerating the reform and development of the insurance industry

With the advancement of the economic and social development of China and the continuous improvement of the socialistic market economy,
the masses’ recognition on insurance has been further deepened, masses’ demands for insurance have become increasingly intense, insurance
has come to play a more prominent role, and the base and conditions for its development has become increasingly mature. Accelerating
the reform and development of the insurance industry has become necessary for promoting the construction of the harmonious socialistic
society.

The guiding ideology of accelerating the reform and development of the insurance industry shall be: with Deng Xiaoping Theory and
the important thoughts of “Three Represents” as guidelines, adhering to the human-oriented and all-roundly coordinated sustainable
scientific development view, being based on the overall situation of reform, development and stability to focus on the resolving
of the contradictions between the insurance industry and the economic and social development or the living demands of the people,
deepen the reform, speed up the development, try to make it greater and stronger, develop a Chinese-characteristic insurance industry,
fully exert the functions of insurance as an economic “roll booster” and social “stabilizer”, so as to serve the construction of
a well-off society in an all-round way and a harmonious socialistic society.

The overall objective shall be: to build up a modern insurance industry with a sound market system, wide service scope, credible and
regulated operation, sufficient repayment capacity and strong synthetical competitive strength, which unifies the development speed,
quality and efficiency. Surrounding this objective, the major tasks should be: to broaden insurance service scope, to actively develop
the property insurance, life insurance, reinsurance and insurance intermediary market and to improve the insurance market system;
to continue to deepen the reform of the system and mechanisms, improve the corporate governance structure, enhance the quality and
level of opening to the external, and enhance the international competitive strength and the capacity of maintaining sustainable
development; to propel independent innovations, adjust and optimize the structure, to transform the way of growth, and continuously
advance the service level; to reinforce the management of the use of insurance funds, enhance the level of using funds, and to providing
fund supports for national economic construction; to reinforce and improve the supervision, prevent and avoid risks, and concretely
protect the lawful rights and interests of the insured; to improve the regulations and policies, propagandize and permeate insurance
knowledge, speed up the establishment of the insurance credit system, impel the honesty and credibility construction, and build a
favorable developing environment.

III.

Advancing experiments actively and steadily, and developing multi-form and multi-avenue agricultural insurances.

We shall carefully summarize the experience from experiments, study and make supporting policies, explore to establish an agricultural
insurance development mode suitable for the situation of our country, regard agricultural insurance as an innovation to support agriculture,
and bring it into the agricultural support and protection system. We shall exert the positivity of the Central Government, local
governments, insurance agents, leading enterprises, farmer households and other aspects, exert the function of the agricultural departments
in promoting agricultural insurance legislation, inducing farmers to buy insurances, coordinating the relations of all parties concerned,
promoting the agricultural insurance development and etc., and we shall enlarge the coverage of agricultural insurance and stepwise
establish a agricultural insurance system of multi-form operation and with multi-avenue supports.

We shall clarify the business scope of policy-based agricultural insurance, provide policy support and promote the development of
agricultural insurance in our country. We shall change the singular mode of agricultural disaster relief with post-disaster financial
subsidies, and stepwise establish an agricultural risk prevention and relief mechanism combining the policy-based agricultural insurance
with financial subsidies. We shall explore the methods, breeds and proportions of subsidies provided by the central and local finance
to farmers who have bought insurances, provide proper management subsidies to the policy-based agricultural insurance run by insurance
agents, and stepwise establish a mechanism of long effect for the development of agricultural insurance. We shall improve the multi-level
mechanism for transferring and sharing the risks of great agricultural disasters, and explore an agricultural reinsurance system
supported by both central and local finances.

We shall explore and develop various agricultural insurance organizations of mutual or cooperative mechanism, and encourage leading
enterprises to imburse farmer households who buy agricultural insurance. We shall support insurance agents to develop agricultural
insurance products with moderate security, low premiums and exoteric certificate of insurance, and build up service networks and
sales channels suitable for agricultural insurance. We shall support agricultural insurance agents to launch characteristic agricultural
and other agriculture-involved insurance business, and advance the lever of agricultural insurance service .

IV.

Make overall plans on developing urban and rural commercial endowment insurance and health insurance, and improve the multi-level
social security system.

We shall adapt ourselves to the new situation of improving the socialistic market economy and building a new socialistic countryside,
make great efforts to develop commercial endowment insurance and health insurance and other life insurance business to satisfy the
demands of urban and rural masses for insurance security.

We shall actively develop insurance businesses of endowment for individuals and entities, encourage and support qualified enterprises
to set up multi-level pension plans through commercial insurance and to improve the security for employees. We shall fully exert
the professional advantages of insurance institutions in actuarial analysis, investment, account management , pension payment and
other aspects ., and encourage them to actively participate in enterprise annuity business, broaden and supplement endowment insurance
service scope. We shall endeavor to promote the development of health insurance, and support relevant insurance institutions to invest
in medical institutions. We shall make great efforts to develop commercial endowment insurance, health insurance and accidental injury
insurance suitable for farmers. We shall establish the contraceptive operation insurance and rural family endowment insurance system
for family planning, and shall actively explore effective methods for insurance institutions to take part in new rural cooperative
medical care management, and propel the healthy development of new rural cooperative medical care.

V.

Making great efforts to develop liability insurance, and improving production safety security and emergency responding mechanism.

We shall fully exert the important functions of insurance in preventing disasters and reducing and in dealing with disasters and accidents,
and bring insurance into the disaster and accident prevention and relief system. We shall continuously intensify the risk management
capacities of insurance institutions, utilize the insurance mechanism which unifying pre-insurance prevention and after-the-event
compensation, fully exert the incentive and restrictive functions of the insurance premium rate leverage, reinforce before-the-event
risk prevention, reduce disasters and accidents and promote t safe production and emergency response management.

We shall adopt methods such as market-oriented operation, policy-based guidance, government propelling, legislative compulsion and
etc. to develop the insurance businesses in aspects of safe production liability, construction engineering liability, product liability,
public liability, practicing liability, board director’s liability, environment pollution liability and etc. We shall carry out experiments
of compulsory liability insurance in coal mining and other industries, and after having accumulated enough experience, stepwise extend
compulsory liability insurance to the highly dangerous industries, public gathering places, domestic and abroad travel and etc. We
shall improve the risk deposit system for safe production in highly dangerous industries, and explore in normative management and
operation through professional insurance agents, so as to further improve the compulsory liability insurance system for motor vehicles
traffic accidents. We shall establish uniform medical treatment liability insurance after experiments, and propel the insurance industry
to take part in “safe construction”.

VI.

Propelling independent innovations, advancing the level of service.

We shall improve the insurance innovation mechanism with insurance enterprises as the subjects and market demands as the guidance,
and in draught insurance innovation mechanism combining with independent innovation. We shall develop high technological insurance
for industries such as aviation, space flight, bio-medicine and etc., and provide risk guaranty for independent innovations. We shall
steadily develop consumption credit guaranty insurance for houses and automobiles and etc., and promote the consumption growth. We
shall actively propel insurance business in the fields of construction project, project financing and etc., support and develop export
credit insurance, so as to promote foreign trade and investment. We shall make great efforts to develop various property and life
insurance products that meet the demands of the people of different classes, different occupations and in different areas, optimize
product structure and broaden the service scope.

We shall utilize modern information technology to increase the content of science and technology of insurance products, develop new
service methods such as online insurance and etc., and advance the service level comprehensively. Enhance the insurance actuarial
capacities, and determine the insurance premiums rate scientifically. We shall endeavor to make insurance clauses exoteric and insurance
service normative, and we shall reinforce the education and trainings of insurance sales staff so as to advance the sales service
level. We shall fully exert the positive functions of insurance intermediary institutions in insurance underwriting, claim handling,
risk management, product development, and etc. so as to provide more professional and convenient insurance services. And we shall
speed up the development of reinsurance industry reinsurance business, and promote the coordinative development of reinsurance market
and direct insurance market. We shall make overall plans on regional development of the insurance industry, and advance the insurance
service level in minority areas and under-developed areas.

We shall encourage the development of professional insurance agents in the fields of commercial endowment insurance, health insurance
and liability insurance and etc. We shall support the development of qualified insurance agents into insurance share-controlling
(group) companies with international competitive strength , through restructuring, merger, or acquisition and etc. Additionally,
we shall steadily carry out the experiments in comprehensive operation of insurance agents, explore wider and deeper cooperation
between the insurance industry and the banking or securities industry, so that multiple and comprehensive financial and insurance
services could be provided.

VII.

Advance the level of utilization of insurance funds, support the construction of national economy, deepen the reform of the insurance
fund utilization system, propell the professional, regularized and market-based operation of insurance funds, and advance the level
of utilization of insurance funds. Establish an effective risk control and pre-warning mechanism, adopt comprehensive risk management
and guarantee the safety of assets.

Insurance asset management companies shall erect the consciousness of long-term investment, and earnestly well manage insurance assets
according to the requirement of unifying safety, liquidity and profitability. Qualified insurance asset management companies shall
be allowed to stepwise enlarge the scope of asset management, and explore a mechanism for independent trusteeship of insurance funds.

On the premise that the risks are controllable, direct and indirect investment of insurance funds into capital market should be encouraged
so as to stepwise increase the investment proportion, steadily enlarge the scale and varieties of asset-backed securities invested
with insurance funds and carry out experiments on investing insurance funds into real property and venture capital enterprises. Insurance
funds being converted into shares of commercial banks or being invested overseas should be supported. According to the demand of
national economy development continuously broaden the channels and scope of utilization of insurance funds, and fully exert the advantages
of long term and stability of insurance funds, so as to provide fund supports to national economy construction.

VIII.

Deepen the system reform, advancing the level of opening up and intensifying the capacity of sustainable development.

We shall further improve the management structure of insurance agents, regulate the powers and duties of shareholders’ meetings, boards
of directors, boards of supervisors and managers, and form a balancing mechanism between the authority institution, the decision-making
institution, the supervisory institution and the managers. We shall strengthen the construction of internal control system and the
risk management, reinforce the management and control responsibilities of legal entities, improve and fulfill the system of investigating
insurance management liability. We shall transform the operation mechanism, establish a scientific assessment system and explore
normative stock right-based, option-based and other incentive mechanisms. Furthermore, we shall implement the strategy of revitalizing
the industry by depending on talented people, deepen the reform of the system on talented people, optimize the structure of talented
people, and construct a high-quality group of talented people.

We shall make overall plans on domestic development and opening up, make full use of two markets and two resources, and enhance the
competitive strength and developing capacity of insurance industry under the conditions of all-round opening up . We shall earnestly
perform the commitments of China for accession to the WTO, promote Chinese and foreign insurance agents to exploit their respective
advantages for mutual benefits, to cooperate with each other for a win-win situation and to develop together. Additionally, we shall
support qualified domestic insurance agents to set up business institutions outside the territory of China, to provide insurance
services for the strategy of “Going Out”. Furthermore, we shall extensively develop international insurance exchanges, and actively
participate in making international insurance rules. We shall intensify the cooperation with overseas institutions especially with
the insurance supervision institutions of surrounding countries and regions, and reinforce trans-territorial insurance business supervision.

IX.

Strengthen and improve the supervision and management, as well as preventing and eliminating risks.

We shall persist in making the prevention of risks as the lifeline for the healthy development of insurance industry, and continuously
improve the modern insurance supervision system supported with repayment capacity, corporate governance structure and market-based
acts supervision. We shall also strengthen the supervision and management on repayment capacity, establish a dynamic repayment capacity
supervision index system, improve the actuarial system, and unify financial statistical indicators and performance evaluation standards.
By referring to the international practices, we shall study and formulate accounting rules in light of the features of the insurance
industry, guarantee the accounting data to be true, timely and transparent, and improve the scientificity and sanction of the supervision
on repayment capacity. In addition, we shall deeply propel the supervision on the governance structure of insurance agents, regulate
connected transactions, reinforce the disclosure of information and improve transparency. At the same time, we shall reinforce the
supervision on market-based acts, enhance on-site and off-site inspections, severely investigate and punish the illegal and rule-breaking
acts in insurance business, and improve the pertinence and validity of the supervision on market-based acts.

We shall, pursuant to the requirements of being highly standardized and being regularized, intensify insurance market accession and
establish a market-based withdrawal mechanism, and shall implement classified supervision, support the superior and restrict the
inferior. As well, we shall improve the capital supplement mechanism in the insurance industry, and shall improve the insurance guaranty
fund system, and stepwise realize the market-oriented and professional operation. Otherwise, we shall establish and improve the information
system for insurance supervision and improve the efficiency of supervision.

We shall regulate the insurance organization forms of self-managed industrial insurance, mutual cooperation insurance and etc., rectify
and regulate the conducts of launching insurance by industries or enterprises themselves, and make them subject to uniform insurance
supervision. In addition, we shall study and stepwise execute the consolidated supervision over the insurance share-controlling (group)
companies, and shall improve the supervision and coordination mechanism between the insurance industry and other financial industries,
prevent financial risks from being shifted between different industries and maintain the economic and financial safety of the state.

We shall speed up the construction of the insurance credit system, and cultivate the culture of insurance honesty and credibility.
We shall reinforce the honesty and credibility education of practitioners, intensify the mechanism of punishment on dishonesty, and
earnestly resolve the problems of misleading acts and difficulties in dealing with compensations. In addition, we shall reinforce
the construction of self-disciplinary organizations in the insurance industry, establish a mechanism for rapid settlement of insurance
disputes, and earnestly protect the lawful rights and interests of the insured.

X.

Further improve regulations and policies, and construct a good developing environment.

In order to accelerate the reform and development of the insurance industry, we shall persist in exerting the basic functions of the
market in the allocation of resources, and on the other hand strengthen the macro-control and policy guidance by the governments,
and strengthen the potence in policy supports. We shall, on the basis of the character of different kinds of risks and according
to the principle of differentiated treatment, explore proper tax preferences for policy-based insurance business involving national
interest and people’s livelihood, and encourage the masses and enterprises to buy insurances actively. In addition, we shall, in
light of the situation of China and in combination with the taxation reform, improve and promote the taxation policies for development
of the insurance industry. Furthermore, we shall continue improving the policies and measures on the practice of insurance sales
staff and on guaranty of their interests. We shall establish an insurance system for the risks of huge disasters, which is supported
by the state finance, amend and improve the insurance law, accelerate the construction of agricultural insurance laws and regulations.
We shall study and propel the legislation in aspects of commercial endowment, health insurance, liability insurance, insurance asset
management and etc., and improve the system of insurance regulations and rules. We shall include insurance education into high school
and primary school courses, exert the obverse propagandizing and guiding functions of the news media, disseminate insurance knowledge,
and enhance people’s consciousness on risks and insurance.

All regions and all departments should fully recognize the important significance of accelerating the reform and development of the
insurance industry, intensify the communication, coordination and cooperation, endeavor to learn insurance, understand insurance
and use insurance, and enhance the capacities of utilizing the insurance mechanism to promote the construction of a harmonious socialistic
society. We shall include the insurance industry into the local or industrial development planning for overall consideration, earnestly
carry out all the regulations and policies, and create a good environment for the reform and development of the insurance industry.
The administrative sectors should persist in exercising the administrative powers according to law, and earnestly maintain the management
autonomy as well as other lawful rights and interests of insurance enterprises. The CIRC shall continue enhancing its capacities
and level in leading the development of the insurance industry and the prevention of risks, earnestly perform its duties, strengthen
classified guidance and propel the fulfillment of policies. Through the common efforts of the whole society, we shall realize the
rapid and healthy development of insurance industry, so as to promote the construction of a harmonious socialistic society.

The State Council

June 15, 2006



 
The State Council
2006-06-15

 






REPLY OF THE STATE ENVIRONMENTAL PROTECTION ADMINISTRATION ON THE RELATED ISSUES CONCERNING IMPOSING EFFLUENT FEES OF WASTEWATER

Reply of the State Environmental Protection Administration on the Related Issues concerning Imposing Effluent Fees of WasteWater

Huan Han [2006] No.256

The Environmental Protection Bureau of Hubei Province:

Your Request for Instructions on the Relevant Issues concerning Imposing Effluent Fees of Wastewater (E Huan Bao Wen [2006] No.69)
has been received. Upon study, it is replied as follows:

Paragraph 3 of Article 19 of the Law concerning the Prevention and Treatment of Water Pollution prescribes that: “Facilities for
centralized treatment of urban waste water shall, in accordance with the provisions of the State, provide paid services of wastewater
treatment to the pollutant-discharging entities and impose the fees for wastewater treatment to ensure the normal operation of the
aforesaid facilities.”

The Circular of the former State Development Planning Commission, the Ministry of Construction and the State Environmental Protection
Administration on Printing and Distributing the Opinions concerning Propelling the Industrialization Development of Urban Wastewater
and Garbage Treatment (Ji Tou Zi [2002] No.1591) clearly prescribes that: “The fees imposed for the treatment of urban wastewater
and garbage shall be specially used for the operation, maintenance and project construction of the facilities for the centralized
treatment of urban wastewater and garbage. The fees for treatment of urban wastewater and garbage imposed by a city that has not
set up the facilities for centralized treatment of urban wastewater and garbage yet can be used for the investment in the initial
work of the project for treatment of urban wastewater and garbage and the relevant supporting projects, however, the facilities for
the centralized treatment of urban wastewater and garbage shall be set up within three years and be placed in operation.”

Article 2 of the Regulation on the Administration of Collection and Use of Effluent Fees (Order No.369 of the State Council) provides
that: “The units and individual industrial and commercial households directly discharging pollutants to the environment shall pay
effluent fees in accordance with the present Regulation”. The Reply of on the Request for Instructions about the Relevant Issues
concerning Imposing Fees for Excessive Discharge of Pollutants (No.141[2005] of the Legal Affairs Office of the State Council) clearly
prescribes that: “If a pollutant-discharging entity discharges wastewater to the urban drainpipe network and if the wastewater enters
into the urban wastewater treatment plant, it shall pay fees for wastewater treatment; if the wastewater does not enter into the
urban wastewater treatment plant, it shall pay fees for discharge of pollutant or excessive discharge of pollutant.”

In accordance with the aforesaid provisions, if a city that has started imposing effluent fees fails to build up a wastewater treatment
plant within 3 years and does not provide paid any services of wastewater treatment for the pollutant-discharging entities that have
paid effluent fees for wastewater treatment, the local environmental protection department shall impose effluent fees for discharge
of wastewater or for excessive discharge of wastewater fee in accordance with the standards prescribed by the State from the entities
that directly discharge wastewater to the environment.

State Environmental Protection Administration

June 27, 2006



 
State Environmental Protection Administration
2006-06-27

 






MEASURES FOR THE EXAMINATION AND APPROVAL OF THE MEMBERSHIP OF THE GOVERNMENT BOND UNDERWRITING SYNDICATES

Order of the Ministry of Finance, People’s Bank of China and China Securities Regulatory Commission

No. 39

The Measures for the Examination and Approval of the Membership of the Government Bond Underwriting Syndicate, which have been deliberated
and adopted by the Ministry of Finance, People’s Bank of China and China Securities Regulatory Commission, are hereby promulgated
and shall come into force as of the date of promulgation.
Minister of Finance Jin Renqing

Governor of the People’s Bank of China Zhou Xiaochuan

Chairman of China Securities Regulatory Commission Shang Fulin

July 4, 2006

Measures for the Examination and Approval of the Membership of the Government Bond Underwriting Syndicates
Chapter I General Provisions

Article 1

In order to regulate the examination and approval of the membership of the government bond underwriting syndicates, safeguard the
legitimate rights and interests of the applicants and the members of the government bond underwriting syndicates and promote the
smooth issuance of government bonds as well as the stable development of the market, these Measures are formulated subject to relevant
provisions of the State Council.

Article 2

The present Measures apply to the examination and approval of the membership of the government bond underwriting syndicates.

Article 3

Government bond hereof referred to in the present Measures is the certificate bond, book-entry government bond and other government
bonds issued by the Ministry of Finance on behalf of the Central Government within the territory of China.

Article 4

Members of government bond underwriting syndicates hereof referred to in the present Measures are the commercial banks, securities
companies, insurance companies, trust investment companies and other financial institutions within the territory of China, which
comply with the particular qualifications and engage in government bond underwriting business upon approval.

Article 5

The government bond syndicates may include certificate bond underwriting syndicate, book-entry government bond underwriting syndicate
and other government bond underwriting syndicate, which are established in light of the species of the government bonds.

The members of the book-entry government bond underwriting syndicate may be divided into Class A members and Class B members.

Article 6

Commercial banks or other deposit financial institutions within the territory of China, and the China Postal Savings and Remittance
Bureau may apply for membership of a certificate bond underwriting syndicate.

Commercial banks or other deposit financial institutions within the territory of China, and securities companies, insurance companies,
trust investment companies or other non-depositing financial institutions may apply for membership of a book-entry government bond
underwriting syndicate.

Article 7

The examination and approval of the membership of the book-entry government bond underwriting syndicate shall be implemented by the
Ministry of Finance and jointly with the People’s Bank of China and China Securities Regulatory Commission (hereinafter referred
to as the CSRC), and shall solicit opinions from China Banking Regulatory Commission (hereinafter referred to as the CBRC) and China
Insurance Regulatory Commission (hereinafter referred to as the CIRC).

The examination and approval of the membership of the certificate bond underwriting syndicate shall be implemented by the Ministry
of Finance and jointly with the People’s Bank of China and shall solicit opinions from the CBRC.

Article 8

To establish a government bond underwriting syndicate shall abide by the principle of openness, fairness and impartiality, and select
the superior and eliminate the inferior on the basis of overall stability of the members. The number of members of the certificate
bond underwriting syndicate shall not be more than 40 in principle; the book-entry government bond underwriting syndicate 60, of
which the number of Class A members shall not be more than 20.

Article 9

The validity period of membership of a government bond underwriting syndicate shall be three years. After the expiration, the membership
shall be subject to a new examination and approval in accordance with the present Measures.

Chapter II Qualification Conditions

Article 10

An applicant shall meet the basic conditions as follows:

(1)

being a legal established financial institution within the territory of China;

(2)

engaging in business subject to relevant laws, having no record of serious violation in its business activities within the three recent
years and having a sound credit standing;

(3)

having sound and stable financial status; its capital adequacy ratio, solvency or net capital status and other indicators reaching
the surveillant standards; and having a fairly strong risk control capacity;

(4)

having a department which is exclusively in charge of the government bond businesses and having a sound control system for government
bond investment and risk;

(5)

its information management system has reached a fairly high level; and

(6)

being able to and being voluntary to perform all the obligations as described in Chapter VI of the present Measures.

Article 11

Where an applicant applies for the membership of the certificate bond underwriting syndicate, it shall observe the requirements as
follows:

(1)

It is in compliance with the requirements as described in Article 10 of the present Measures;

(2)

It is a deposit financial institution with not less than RMB 300 million of registered capital or with a total asset of RMB ten billion
or more; and

(3)

It has 40 or more business branches.

Article 12

Where an applicant applies for the membership of Class B of the book-entry bond underwriting syndicate, it shall meet the requirements
as follows:

(1)

It is in compliance with the requirements as provided in Article 10 of the present Measures; and

(2)

It is a deposit financial institution with registered capital no less than RMB 300 million or with total asset of RMB 10 billion or
more, or a non-deposit financial institution with registered capital of RMB 800 million.

Article 13

Where an applicant applies for the membership of Class A of the book-entry bond underwriting syndicate, it shall not only comply
with the requirements as described in Article 12 of the present Measures, but also rank among the top 25 in the comprehensive evaluation
of the book-entry bond business of the last year.

Chapter III Application, Examination and Approval

Article 14

The Ministry of Finance shall, jointly with the People’s Bank of China and CSRC, take charge of the examination and approval of the
membership of government bond underwriting syndicates. The closing date of the submission of applications for the membership of government
bond underwriting syndicates and other relevant information shall be publicized in advance in order to ensure sufficient time for
the applicants to prepare the application materials.

An applicant shall bring forward an application before the closing date and shall submit the application materials as follows:

(1)

An application form;

(2)

A brief introduction about this institution;

(3)

Copies for the legal person business license and the financial business permit;

(4)

A copy of the audit report on the final accounting of revenue and expenditure of the last year; and

(5)

Information about underwriting and transaction of the government bond in the last 2 years.

Where an applicant applies for the membership of the certificate bond underwriting syndicate, it shall respectively submit the application
materials to the Ministry of Finance and the People’s Bank of China. Where an applicant applies for the membership of the book-entry
bond underwriting syndicate, an applicant shall submit the application materials to the Ministry of Finance.

Article 15

The Ministry of Finance shall examine the application materials for the membership of book-entry underwriting syndicate, and shall,
jointly with the People’s Bank of China, examine the applications materials for the membership of certificate bond underwriting syndicate.
It shall respectively dispose the application materials pursuant to different conditions as follows:

(1)

When the application materials are incomplete or its format are not in consistent with the statutory form, the applicant shall be
notified, on the spot or within five days, of the contents to be supplemented and corrected once and for all. If it fails to do so,
it shall be deemed that the application have been accepted on the day when the application materials is received; or

(2)

When the application materials are complete and its format are in consistent with the statutory form, or if the applicant has submitted
all supplemental and correction application materials as required, the application for examination and approval shall be accepted.

Where the Ministry of Finance accepts or rejects an application for the examination and approval of the membership of a government
bond underwriting syndicate, it shall issue a certificate in written form with the special seal and an indication of the date.

Article 16

The Ministry of Finance shall solicit opinions from the CBRC and the CIRC in terms of the important business activities, financial
risk status, performances in the financial market, and whether or not there is any record of severe violation in the business activities
in recent three years.

Article 17

The Ministry of Finance shall convene meetings on the examination and approval of the membership of the certificate bond underwriting
syndicate, and perform the examination on the application materials of the applicants jointly with the People’s Bank of China.

The Ministry of Finance shall convene meetings on the examination and approval of the membership of the book-entry bond underwriting
syndicate, and perform the examination on the application materials of the applicants jointly with the People’s Bank of China and
CSRC.

Article 18

The Ministry of Finance shall, jointly with the People’s Bank of China and CSRC, select the superior of the members of the government
bond underwriting syndicates on the basis of the actually paid-up capital, asset scale, business performances, inter-industry ranking
and comprehensive ranking of government bond businesses and other relevant circumstances.

Article 19

The applicant shall be notified of the right to request for a hearing before the decision on the examination and approval of membership
of a government bond underwriting syndicate has been made by the Ministry of Finance, the People’s Bank of China and CSRC.

The hearing shall be implemented subject to the Measures for the Implementation of Hearing of Administrative Licensing by Finance
Organs (Order No. 21 of the Ministry of Finance).

Article 20

The Ministry of Finance shall, jointly with the People’ Bank of China, make a decision in written form on approval or disapproval
of the membership of the certificate bond underwriting syndicate within 45 days after the closing date for the acceptance of application
materials, or jointly with the People’s Bank of China and CSRC, make a decision in written form on approval or disapproval of the
membership of the book-entry bond underwriting syndicate.

A decision on approval of the membership of a government bond underwriting syndicate shall be promulgated to the general public after
it has been made.

If a decision on disapproval of the membership a government bond underwriting syndicate has been worked out, an explanation shall
be made and the applicant shall be notified of the right to administrative reconsideration or administrative lawsuit.

Article 21

A qualification certificate shall be issued to all the members of the certificate bond underwriting syndicate by the Ministry of
Finance and the People’s Bank of China. A qualification certificate shall be issued to all the members of the book-entry underwriting
syndicate by the Ministry of Finance, People’s Bank of China and CSRC.

Article 22

An applicant that refuses to accept the decision on rejection of its application or the decision on disapproval of the membership
of the government bond underwriting syndicate may apply for an administrative reconsideration or bring an administrative litigation
in the people’ court.

Chapter IV Withdrawal and Addition

Article 23

A member of a government bond underwriting syndicate may apply for withdrawal.

Article 24

The Ministry of Finance shall, jointly with the People’s Bank of China and/ or CSRC, work out a decision on approval or disapproval
of the applicant’s withdrawal from the government bond underwriting syndicate within 30 days after the receipt of an application
for withdrawal, and promulgate it to the general public.

The withdrawal applicant as a member of government bond underwriting syndicate shall continue its obligations and enjoy the corresponding
rights before obtaining an approval.

Article 25

If any member of a government bond underwriting syndicate commits any of the following acts, it shall withdraw from the government
bond underwriting syndicate in light of the primary agreement on the underwriting of government bonds:

(1)

A member of a government bond underwriting syndicate commits any severe violation of law, or it can not sustain the performance of
the obligations of a member of the government bond underwriting syndicate due to its bad financial status;

(2)

A member of the certificate bond underwriting syndicate fails to perform the prescribed obligation of underwriting the minimum or
higher proportion of government bonds, or it commits such acts as being reluctant to sell, selling by exceeding the plan, entrusting
any other institution to sell, or failing to actively promote and publicize the sale of the government bonds; or

(3)

If any member of the book-entry government bond underwriting syndicate fails to bid for or underwrite the government bonds at the
minimum or higher proportion as prescribed in the primary agreement on the underwriting of government bonds for 4 times in accumulation,
or makes any seriously inappropriate bid, or dominates the secondary market, etc.

Article 26

If any member withdraws from a government bond underwriting syndicate, the primary agreement on the underwriting of government bonds
shall be terminated by the Ministry of Finance.

Where any institution withdraws from a government bond underwriting syndicate, it shall return its qualification certificate.

Where any institution withdraws from a government bond underwriting syndicate, it shall not apply for participating in a government
bond underwriting syndicate within 2 years as of the withdrawal.

Article 27

When the number of members of a government bond underwriting syndicate is no more than that as prescribed in Article 8 of the present
Measures, the Ministry of Finance may, jointly with the People’s Bank of China and CSRC, make a decision on adding the members of
the government bond underwriting syndicate as required in the issuance of government bonds, and shall promulgate the said decision
to the general public timely.

Article 28

The application, examination and approval of the membership of the government bond underwriting syndicate shall be implemented as
prescribed in Chapter III of the present Measures when adding a member of a government bond underwriting syndicate.

Chapter V Rights of Members of Government Bond Underwriting Syndicates

Article 29

A member of a government bond underwriting syndicate shall have the basic rights as follows:

(1)

Negotiating with the Ministry of Finance on the terms and contents of the primary agreement on the underwriting of government bonds;

(2)

Bringing forward suggestions and advice on the issuance form and management measures for the government bonds;

(3)

Participating in the issuance of government bonds, and directly underwriting government bonds from the Ministry of Finance;

(4)

Obtaining commissions from the government bonds subject to the document on the issuance government bonds;

(5)

Obtaining timely the information on the issuance of government bonds by the prescribed channels;

(6)

Participating in the pilot innovation of government bonds; and

(7)

Taking the priority to participate in the inspection and training of government bond business.

Article 30

A member of the certificate bond underwriting syndicate shall have the rights as follows:

(1)

The rights as specified in Article 29 of the present Measures;

(2)

Participating in the meeting on the analysis of financing of certificate government bonds;

(3)

Taking the priority to obtain the membership of the book-entry bond underwriting syndicate.

Article 31

A Class B member of the book-entry bond underwriting syndicate shall have the rights as follows:

(1)

The rights as prescribed in Article 29 of the present Measures; and

(2)

Participating in the process of issuance and competitive pricing of the book-entry bonds.

Article 32

A Class A member of the book-entry bond underwriting syndicate shall have the following rights:

(1)

The rights as specified in Article 31 of the present Measures;

(2)

Participating in the quarterly meeting on the analysis of financing of the book-entry government bonds; and

(3)

Underwriting additional government bonds within the range as described for the amount of the successful bid for the government bonds
of the current period of this institution.

Chapter VI Obligations for Members of Government Bond Underwriting Syndicates

Article 33

A member of a government bond underwriting syndicate shall perform the basic obligations as follows:

(1)

Participating in the activities of issuance of government bonds continuously, and making payments in full amount to the Ministry of
Finance for the issuance of government bonds timely.

(2)

Publicizing and distributing the government bonds properly and safeguarding the credit standing of government bonds;

(3)

Submitting the information on the issuance and sale of government bonds periodically;

(4)

Paying attention in the work of redemption of government bonds in order to ensure that the investors can receive the repayments for
the principal of the government bonds, and the interests thereof in a timely manner; and

(5)

Observing the laws, regulations of the state as well as the industrial self-discipline norms, accepting the surveillance and inspection
by the government bond supervisory departments, and submitting the information on the severe violation committed by this institution
or the bad financial status of this institution timely.

Article 34

A member of the certificate bond underwriting syndicate shall perform the obligations as follows:

(1)

The obligations as specified in Article 33 of the present Measures;

(2)

The certificate bonds of each period shall be underwritten at the minimum or higher proportion as prescribed by the Ministry of Finance
and the People’s Bank of China. The specific underwriting proportions for different institutions shall be studied and determined
by the Ministry of Finance and the People’s Bank of China subject to the voluntary applications of the members of certificate bond
underwriting syndicate, the type of the institution, the balance and increase of savings deposits, and the number of business organs
of the institutions as well. Once the minimum underwriting rate is decided, it will be remained for 3 years in principle. It may
be adjusted upon approval of the Ministry of Finance and the People’s Bank of China upon special circumstances;

(3)

Performing the promotion and propaganda for the issuance of government bonds, publicizing the address and contact telephone number
of the organs for the sale of government bonds, setting up obvious marks for the sale of government bonds, preparing publicity materials
and equip on-spot consultants in the sale organs;

(4)

Establishing a credit trust system controlled uniformly by legal person and a uniform network for the sale of government bonds, realizing
that the government bonds may be bought and accepted in this institution and in any of its branches and that the sale amounts are
adjusted automatically; and

(5)

Establishing inner rewards and punishment system for the sale of government bonds.

Article 35

A class B member of the book-entry bond underwriting syndicate shall perform the obligations as follows:

(1)

The obligations as described in Article 33 of the present Measures;

(2)

Opening a communication line which is exclusively linked to the book-entry bond bid system;

(3)

Participating in the bids of book-entry bonds continuously, making rational bids within the a reasonable price band and maintaining
the regular order of issuance of government bonds;

(4)

Any bid for the government bonds shall not be made between members of a government bond underwriting syndicate. Credits of self-operating
government bonds shall be registered in the self-operating account. Credits of self-operating government bonds on a commissioned
basis shall be registered in the client account.

(5)

Participating in the bid and underwriting of government bonds of each period within the range as described in the primary agreement
on the underwriting of government bonds; and

(6)

Participating in the government bond transactions actively and safeguarding the regular order of the government bond market.

Article 36

A Class A member of a book-entry government bond underwriting syndicate shall perform the obligations as follows:

(1)

The obligations as specified in Article 35 of the present Measures; and

(2)

Submitting reports on the analysis of operation of government bond market quarterly, and bringing forward suggestions on the improvement
of issuance of government bonds and the development of government bond market.

Chapter VII Surveillance, Inspection and Punishment

Article 37

The Ministry of Finance shall, jointly with the People’s Bank of China and the CSRC, take charge of the supervision and inspection
on the applications for the membership of government bond underwriting syndicates, and other relevant activities regarding the government
bond business carried out by members of government bond underwriting syndicates.

Article 38

If any applicant applies for the membership of government bond underwriting syndicate by concealing the relevant information or by
submitting false materials, its membership of government bond underwriting syndicate shall be rejected or disapproved by the Ministry
of Finance, the People’s Bank of China and the CSRC, and a warning will be delivered.

Article 39

If any member of a government bond underwriting syndicate obtains the membership of a government bond underwriting syndicate by means
of cheating, bribery or any other illegal means, its membership shall be revoked by the Ministry of Finance, the People’s Bank of
China and the CSRC, and an administrative sanction shall be delivered subject to relevant laws.

Article 40

When any member of the government bond underwriting syndicate fails to perform the obligations as described in the present Measures
and the circumstances are not serious, it shall be ordered by the Ministry of Finance, the People’s Bank of China and the CSRC to
make a correction within a time limit.

Article 41

If a member of a government bond underwriting syndicate commits any of the circumstances referred to in Article 25 of the present
Measures, the Ministry of Finance shall, jointly with the People’s Bank of China and/or CSRC, inform it to withdraw from the government
bond underwriting syndicate in accordance with the stipulations in the primary agreement on the underwriting of government bonds.

Chapter VIII Supplementary Provisions

Article 42

The National Council for Social Security Fund and China Postal Savings and Remittance Bureau may apply for being special members
of the book-entry bond underwriting syndicate, while such members are not allowed to engage in distributing government bonds.

Article 43

When the Ministry of Finance on behalf of the Central Government issues other government bonds that are mainly geared to individuals
in underwriting form, the measures for the examination and approval of members of the government bond underwriting syndicate shall
be dealt with reference to the procedures in the present Measures for the examination and approval of members of the certificate
bond underwriting syndicate.

Article 44

The present Measures shall enter into force as of the date of promulgation. The Measures for the Administration of the People’s Republic
of China for the Primary Self-operating Underwriters of Government Bonds (Cai Guo Zhai Zi [1993] No. 100) and the Measures for the
Implementation for the Examination and Confirmation of the Qualifications for the Primary Self-operating Underwriters of Government
Bonds (Cai Guo Zhai Zi [1993] No. 100) promulgated by the Ministry of Finance, People’s Bank of China and the CSRC on December 31,
1993 shall be annulled as of the same date.



 
The Ministry of Finance￿￿People’s Bank of China￿￿China Securities Regulatory Commission
2006-07-04

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON SOME ISSUES CONCERNING TAX REFUND OR EXEMPTION ON EXPORTED GOODS

Circular of the State Administration of Taxation on Some Issues concerning Tax Refund or Exemption on Exported Goods

Guo Shui Fa [2006] No. 102

The state bureaus of tax in all provinces, autonomous regions and cities specifically designated in the state plan:

In response to some problems reflected in the process of export refund (exemption), after research, the relevant problems are hereby
noticed as follows:

1.

The following goods exported by enterprises shall be deemed domestic cargo to calculate or withdraw output tax or impose value-added
tax, except otherwise provided.

(1)

It is expressly prescribed in the national laws that the value-added tax of the cargo shall be refunded (or exempted);

(2)

The export enterprise fails to declare tax refund (or exemption) for the cargos within the prescribed time limit;

(3)

The export enterprise fails to make up completely the relevant certificate to the tax authorities within the prescribed time limit,
albeit it has declared tax refund (or exemption);

(4)

The export enterprise fails to declare the issue of Certificate of Agent Export Cargo within the prescribed time limit;

(5)

Other outsourcing cargos, which shall be deemed original products except the aforesaid 4 kinds of cargos, shall be deemed original
products exported by producers.

Formula to calculate output tax of the aforesaid cargos exported by common tax payers by general trade means:

Volume of output tax= FOB of export goods￿￿price of foreign exchange equivalent of RMB￿￿1+rate of statutory value-added tax) ￿￿ate
of statutory value-added tax

Formula to calculate the volume of tax payable paid by general taxpayer of the aforesaid goods paid by general taxpayer by means of
reexportation of processing imported material and paid by small-scale taxpayer shall be:

Tax payable = (FOB of export goods ￿￿price of foreign exchange equivalent of RMB) ￿￿1+ leviable rate) ￿￿leviable rate

Where the output tax of the aforesaid export products needs calculating and withdrawing and the tax exemption calculated by the manufacturer
in accordance with prescriptions is not allowed to be exempted and deducted tax volume has been transferred to cost account, the
difference between tax leviable rate and refund rate as well as the sum which has been transferred to export refund payable may be
transferred to account of input tax.

Where the aforesaid goods exported by enterprises is dutiable consumption goods and the export enterprise is manufacturers, the export
enterprise shall, in accordance with the current policy concerning tax imposition, calculate the paid consumption tax, except otherwise
stated; where the export enterprise is foreign trade enterprise, it shall not refund consumption tax.

2.

Where such export goods of the export enterprise as calculate the paid value-added tax, consumption tax in accordance with Article
1 of the Circular, it may not handle tax refund. Where the tax exemption has been calculated, the manufacturer shall net off and
adjust the tax exemption; where the export refund has been handled, the foreign trade enterprise shall, within the month of tax declaration,
make a supplementary payment of the refund tax.

3.

Where the auditing period of the newly happened export enterprise and small-sized export enterprise is 12 months, the goods exported
during the period of checking shall, in accordance with the consolidated method to calculate tax exemption, offset and refund, on
monthly basis, calculate the volume of tax exemption and tax payable. The tax authority may, in accordance with the current provision,
handle the procedure of warehouse transfer upon accurate volume of tax exemption after exemption. The tax payable after its auditing
has proved accurate shall not handle canceling stock temporarily. The monthly accumulated tax payable of the small-scale export enterprise
may handle lump ￿Csum tax refund in January of the next year; as for the newly arisen tax payable of the enterprises, the volume
of tax payable of the aforesaid months may, after accurate auditing, be refund to the enterprise at a lump-sump. The exemption-yet-not-refund
tax imposition measure during the original auditing period shall cease operating.

4.

After export enterprise has acted as an agent of other enterprises to export, it shall, within 60days and on strength on goods declaration
(for the special purpose of export refund), agent export agreement, apply to the tax authority for issuing Certificate of Agent Export
Goods and transfer it to agent export enterprise in time. Where the agent export enterprise fails to issue the Certificate hereof
because of such special reasons as incomplete documents, the agent export enterprise shall, within 60days, raise reasonable reasons
in written form and, after having been approved by the municipal and the above tax authority, may postponed 30days to apply for the
issue of agent export certificate.

Where the export enterprise fails to declare tax refund within the limited period and has to apply for postponement because of the
postponed issue of certificate of agent export, the agent export enterprise and the tax authorities in charge of tax refund shall
handle it in accordance with Article 6 of the Circular of the State Administration of Taxation on the Relevant Issues regarding
Those Export Enterprises that Fail to Declare the Tax Refund (Exemption) of Exported Goods within the Prescribed Term(Guo Shui Fa
No. 68).

The agent export enterprise shall, within 180 days as of the declaration of goods (the date of export noted in the export goods declaration
(for the special use of export refund)), submit the instrument of collection verification and writing-off of export (except the forward
collection) to the tax authorities, which sign the certificate of agent export. The tax authority which signs agent export certificate
shall inform the local tax authority where the agent enterprise is located in time, once it has found that the agent export enterprise
fails to provide the instrument of collection verification and writing-off of export to the tax authorities hereof and that error
exists herein. The local tax authorities of agent enterprises shall impose tax upon the goods in line with the standard of domestic
sales.

5.

The enterprises engaged in the production of processing imported materials shall handle Registration Declaration of Processing with
Imported Material in the month when material is imported and apply for verification and writing-off procedures in the next value-added
tax declaration period after having acquired the certificate of verification and writing-off from the tariff authorities. Where the
enterprise fails to apply for it, the tax authorities shall handle it after having given punishment to it in accordance with Article
62 of Law of the People’s Republic of China Concerning the Administration of Tax Collection.

6.

Export refund (exemption) policy shall be implemented upon equipment and parts and components of equity equipment exported by the
enterprises (including the equipment purchased by the enterprises who performs the extension of value-added tax before they perform
the policy hereof). Where the equipment, parts and components are purchased by such enterprises as perform the extension of value-added
tax deduction scope by means of equity investment off bound after the implementation of the extension of value-added tax deduction
scope, they shall implement tax exemption, deduction and refund rather than individual tax refund.

Where the outsourcing parts and components are exported by enterprises by means of equity investment, their value-added tax shall
be calculated in accordance with the special invoice of value-added tax for the purchased equipments, components and parts; the tax
refund (exemption) of the self-use old equipment exported by enterprises by means of equity investment shall be calculated in accordance
with the following formula:

Refundable tax volume=sum listed in the special invoice of value-added tax (exclude the tax volume) ￿￿epreciated value of equipment/initial
value of equipment￿￿applicable refund rate

depreciated value of equipment= initial value of equipment-withdrawn depreciated value

The self-use old equipment exported by the enterprises by means of equity equipment shall, in accordance with the period of depreciation
recorded in the tax authority in charge and prescribed in Regulations of the People’s Republic of China on Enterprise Income Tax,
calculate and withdraw depreciation and calculate the depreciation value of equipment. The tax authority shall, after having received
the refund declaration of self-use old equipment, fill Verification Form of Depreciation of Old Equipment (as shown in the appendix)
and submit it to the tax authority in charge and handle tax refund after the auditing proves accurate.

7.

Where the bid of electromechanical products won by domestic enterprises or won by foreign enterprises and then subcontracted to domestic
enterprises are listed in Catalogue of Import Commodities of Foreign. Invested Projects not Exempt from Duties, they shall not enjoy
tax exemption; tax refund (exemption) of other electromechanical products shall be handled in accordance with the relevant prescriptions.

8.

Export enterprises shall handle export tax refund (exemption) in accordance with the relevant prescription in Circular of the State
Administration of Taxation on Printing and Distributing the Measures for the Administration of Tax Refund (Exemption) of Exported
Goods (for Trial Implementation)(Guo Shui Fa[2005]NO. 51). Where the exported goods before the handling of confirmation procedures
have declared tax refund within the tax refund period, tax refund may be granted; where it goes beyond the time limit of tax refund,
tax authorities shall deem it domestic sale products to impose tax.

9.

The Circular shall come into force as of July 1, 2006; the execution date shall be subject to the export date in the declaration
of exported goods.

Appendix: Verification Form of Depreciation of Old Equipment (omitted)

State Administration of Taxation

July 12, 2006



 
The State Administration of Taxation
2006-07-12

 






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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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