INTERIM PROVISIONS ON ADMINISTERING LOAN COMPANIES

Circular of China Banking Regulatory Commission Concerning the Printing and Distribution of the Interim Provisions on Administering
Loan Companies

Yin Jian Fa [2007] No. 6

Each banking regulatory bureau, state-owned commercial bank, joint stock commercial bank, China Postal Savings Bank, Beijing Rural
Commercial Bank, Shanghai Rural Commercial Bank, Tianjin Rural Cooperative Bank,

China Banking Regulatory Commission constituted the Interim Provisions on Administering Loan Companies for the purpose of doing well
in the pilot work of adjusting and relaxing the policies on the access of banking financial institutions to the rural areas. We hereby
print and distribute them to you, please abide hereby.

Each banking regulatory bureau shall forward the present Circular to the branches of banking regulatory bureaus, urban commercial
banks, rural commercial banks and rural cooperative banks within your respective jurisdictions.

China Banking Regulatory Commission

January 22, 2007

Interim Provisions on Administering Loan Companies
Chapter I General Rules

Article 1

In accordance with the Banking Supervision Law of the People’s Republic of China, Law of the People’s Bank of China on Commercial
Banks, Company Law of the People’s Republic of China and other laws and regulations, the present Provisions are constituted with
a view to protecting the legitimate rights and interests of loan companies and their clients, regulating the acts of loan companies,
intensifying the supervision and administration thereof, and ensuring the steady and sound operation of loan companies.

Article 2

The term “loan company” means the non-banking financial institutions set up by domestic commercial banks and rural cooperative banks
in rural areas upon approval of China Banking Regulatory Commission (hereinafter referred to as the CBRC) in accordance with the
related laws and regulations with exclusive purpose to provide credit services for farmers within jurisdiction of counties and for
the development of agriculture and rural economy.

A loan company is a limited liability company solely invested by a domestic commercial bank or rural cooperative company.

Article 3

A loan company is an enterprise with independent legal person status. It enjoys all property rights formed by its investments, enjoys
the civil rights and undertakes civil liabilities with all properties of the company.

The investors of a loan company have the right to enjoy the asset proceeds, make important resolutions and choose managers.

Article 4

A loan company shall abide by the business principles of safety, liquidity and benefits, operate independently, undertake the risks
by itself, assume profits and losses by itself and discipline itself.

Article 5

A loan company shall operate according to law, and its operation may not be interfered by any entity or individual.

Article 6

A loan company shall conform to the laws and administrative regulations of the state, shall fulfill the financial guidelines and
policies of the state, and shall be subject to the supervision and administration of the banking regulatory institutions according
to law

Chapter II Institution Establishment

Article 7

The name of a loan company shall be composed of the administrative division, brand name, industry involved and organization form,
among which the administrative division means the name of the administrative division at the county level.

Article 8

To set up a loan company, the following requirements shall be met:

(1)

Having the articles of association satisfying the related provisions;

(2)

Having registered capital of no less than 500, 000 Yuan, which shall be a lump-sum cash capital paid by the investor once for all;

(3)

Having professional and experienced senior managers;

(4)

Having professional and experienced employees;

(5)

Having the necessary organizational structure and management systems;

(6)

Having a business place, safety guarantee measures and other business-related facilities satisfying the related requirements; and

(7)

Other requirements as provisioned by the CBRC.

Article 9

To set up a loan company, the investor shall satisfy the following requirements:

(1)

Being a domestic commercial bank or rural cooperative bank;

(2)

Having a registered capital of no less than RMB 5 billion Yuan;

(3)

Having a sound corporate governance and a perfect and effective internal control system;

(4)

Its main supervisory indicators satisfy the supervisory requirements; and

(5)

Other prudent requirements as provisioned by the CBRC.

Article 10

The establishment of a loan company shall go through two phases, namely the preparatory establishment and the start of business.

Article 11

An applicant shall submit the following documents and materials for the preparatory establishment of a loan company:

(1)

An application for preparatory establishment;

(2)

A feasibility study report;

(3)

A preparatory establishment plan;

(4)

The name list and resumes of the persons in charge of the preparatory establishment;

(5)

The non-local investor shall submit the balance sheets and the profit and loss statements of the recent 2 years, and the written opinions
of the banking regulatory institution of the place where this investor is registered as well; and

(6)

Other materials as prescribed by the CBRC.

Article 12

The maximum preparatory establishment period for a loan company shall be 6 months as of the approval date. If the applicant meets
the requirements for the start of business within this period, it may apply for start of business.

For applying for the start of business of a loan company, the applicant shall provide the documents and materials as follows:

(1)

An application for starting business;

(2)

A report on work of the preparatory establishment;

(3)

A draft of the articles of association;

(4)

A capital verification report as issued by a statutory capital verification institution;

(5)

The archival materials of the candidate senior managers;

(6)

The evidential materials proving the ownership or use right of the business place;

(7)

The compliance certificates for the safety and fire control facilities of the business place as issued by the public security and
fire control departments; and

(8)

Other materials as requested by the CBRC.

Article 13

The application for the preparatory establishment of a loan company shall be accepted by the banking regulatory branch bureau or
by the banking regulatory bureau at the locality of the loan company, and shall be examined and decided by the banking regulatory
bureau. The banking regulatory bureau shall make a written decision on approval or disapproval within 4 months as of its receipt
of a compete set of the application materials or after it accepts the application.

The application for the start of business of a loan company shall be accepted, examined and decided by the banking regulatory branch
bureau or by the banking regulatory bureau at the locality of the loan company. The banking regulatory branch bureau or banking regulatory
bureau of the city where the loan company is located shall make a decision on approval or disapproval within 2 months as of the date
of acceptance.

Article 14

A loan company may, establish county-based branch companies in light of the development of its businesses. The establishment of a
branch company shall go through two phases, namely the preparatory establishment and the start of business.

The preparatory establishment plan of a branch company of a loan company shall be provided to the regulatory office for archival purposes.
In case no regulatory office is established, it shall be submitted to the banking regulatory branch bureau or to the banking regulatory
bureau at the locality of the branch company to be established for archival purposes. The application for start of business of a
branch company shall be accepted, examined and decided by the banking regulatory branch bureau or by the banking regulatory bureau
of the city at the locality of the branch company. The banking regulatory branch bureau or the banking regulatory bureau at the locality
of the branch company to be established shall, within 2 months as of the date of acceptance, make a decision on approval or disapproval.

Article 15

A loan company or its branch company approved to start business shall be granted a financial permit by the decision-making organ
and shall handle the registration formalities upon the strength of the financial permit in the administrative department for industry
and commerce so as to obtain a business license.

Chapter III Organizational Structure and Business Management

Article 16

A loan company is not required to set up the board of directors or board of supervisors, but shall set up a sound business management
mechanism and a supervision mechanism. The investor may appoint supervisors or employ an external institution for supervision.

Article 17

The business management group of a loan company shall be independently decided by the investor and shall be reported to the banking
regulatory branch bureau or the banking regulatory bureau at the locality of the loan company for archival filling.

Article 18

The articles of association of a loan company shall be drafted and modified by the investor and submitted to the banking regulatory
branch bureau or the banking regulatory bureau at the locality of the loan company to be examined and approved.

Article 19

The board of directors of a loan company shall take charge of preparing business operation policies and business development plans.
In case no board of directors is established in a loan company, the business operation policies and business development plans shall
be prepared by the business management group and shall be exercised upon approval of the investor.

Article 20

Upon approval of the banking regulatory branch bureau or the banking regulatory bureau at the locality of the loan company, a loan
company may conduct the following businesses:

(1)

various loans;

(2)

the instruments discount;

(3)

the assets transfer;

(4)

the settlement under loans; and

(5)

other asset businesses as approved by the CBRC. No loan company may draw on deposits of the general public.

Article 21

The operating fund of a loan company shall include paid-in capital and borrowed money from the investor.

Article 22

In case a loan company carries out business operations, it shall aim at serving the farmers, agriculture and development of rural
economy. The loans shall be mainly used to support the development of the farmers, agriculture and rural economy.

Article 23

A loan company shall follow the principle of small amount and dispersion, enlarge the coverage of loans and avoid the excessive centralization
of loans. The balance of loans granted to a same borrower by the loan company may not be more than 10% of the net assets of the loan
company. The credit balance of a single client as a group enterprise may not be more than 15% of the net assets of the loan company.

Article 24

A loan company shall intensify the management of loan risks, set up a scientific authorization and credit system, credit management
procedures and an internal control system, and improve the abilities to identify and control risks so as to improve the loan quality.

Article 25

A loan company shall, according to the related provisions of the state, set up a prudent and normative asset classification system
and an asset supplement and restraint mechanism, correctly classify the quality of assets, make enough provisions for non-performing
assets, ruefully reflect the situation of its business performances, and guarantee that its capital adequacy ratio is not less than
8% at any time and its adequacy ratio of provision for asset losses not less than 100%.

Article 26

A loan company shall set up a sound internal audit system, check and access the implementation of internal control system as well
as modify and perfect the poor links of internal control so as to guarantee compliance business operations.

Article 27

A loan company shall adopt the uniform accounting system for financial enterprises of the state and set up a sound financial and
accounting system in accordance with the related provisions of the state.

Article 28

A loan company shall truthfully record and reflect its business activities and financial status in an all-round manner and prepare
annual accounting statements, which shall be audited by a qualified accounting firm that are employed by the investor. The audit
report shall be reported to the banking regulatory branch bureau or the banking regulatory bureau at the locality of the loan company
for archival filling.

Article 29

A loan company shall report the accounting statements, statistical statements and other materials to the local banking regulatory
branch bureau or to the banking regulatory bureau at the locality of the loan company and shall be responsible for the authenticity,
accuracy and completeness of such statements and materials.

Article 30

A loan company shall set up an information release system and release the information about its annual business operations, important
events, etc in a timely manner.

Chapter IV Supervision

Article 31

The business operations conducted by a loan company shall be under the supervision of the banking regulatory institution and shall
be integrated into the statements of the investor for supervision.

Article 32

A banking regulatory institution shall conduct persistent and dynamic supervision over capital adequacy ratio, bad loan ratio, risk
management, internal control, risk concentration, and affiliated transactions, etc. of loan companies.

Article 33

A banking regulatory institution shall, in accordance with the capital adequacy status and asset quality status of a loan company,
take the following supervisory measures in a timely manner:

(1)

In case the loan company’s capital adequacy ratio is above 8% and its bad loan ratio is below 5%, the banking regulatory institution
may lesson the inspection frequency and encourage its steady and sound development;

(2)

In case the loan company’s capital adequacy ratio is below 8% but above 4% or its bad loan ratio is above 5%, the banking regulatory
institution shall strengthen the non-on-site supervision and on-the-spot inspections and urge it to supplement its capital and improve
the asset quality within a time limit;

(3)

In case the loan company’s capital adequacy ratio decreases below 4% or its bad loan ratio is above 15%, the banking regulatory institution
shall promptly order it to change the senior managers, cease all business operations, restructure within a time limit, etc.; and

(4)

In case the loan company fails to restructure effectively within the time limit and its capital adequacy ratio is below 2%, the banking
regulatory institution shall order the investor to take it over, or cancel it in a timely manner.

Article 34

The local banking regulatory institution shall, according to the related laws and regulations, check and access the capital adequacy
status, asset quality and validity of the internal control of loan companies, urge them to perfect their capital replenishment mechanism,
loan management system and internal control, and strengthen the risk management.

Article 35

A banking regulatory institution has the power to request an investor to intensify the supervision and inspection over the loan company
it invests in, audit its asset quality on a regular basis, assess the loan authorization and credit system, credit management procedures
and internal control system, and has the power to request the investor to supple capital in accordance with the operation status
of the loan company so as to guarantee the steady and sound operation of the loan company.

Article 36

In case a loan company violates the present Provisions, the banking regulatory institution has the power to give it a warning of
risks, make an interview, conduct supervisory inquiries, order it to cease its business operations, or take other measures so as
to urge it to promptly make a rectification and avoid the asset risks.

Article 37

In case a loan company or any of its employees goes against any law or regulation of the state during the process of business operation
and management, it or he shall be punished according to the Banking Supervision Law of the People’s Republic of China, Law of the
People’s Republic of China on Commercial Banks and other related laws and administrative regulations. Where any crime is constituted,
criminal liabilities shall be investigated.

Article 38

In case a loan company or any of its employees is dissatisfied with the punishment decision as provided for by the banking regulatory
institution, it or he may file an application for an administrative review or file an administrative lawsuit with the people’s court.

Chapter V Change and Termination of Institutions

Article 39

In case a loan company plans to change any of the following items, it shall be subject to the approval of the banking regulatory
branch bureau or the banking regulatory bureau at the locality of the loan company:

(1)

to change its name;

(2)

to change its registered capital;

(3)

to change its dwelling place;

(4)

to amend its articles of association; or

(5)

any other modification items as provisioned by the CBRC.

Article 40

A loan company shall apply for dissolution in the case of any of the following circumstances:

(1)

The business term as described in the articles of association expires, or any other dissolution cause as indicated in the articles
of association arises;

(2)

The shareholders make a resolution of dissolution; or

(3)

It is necessary for it to dissolve owing to merger or split-up.

Article 41

With regard to the dissolution of a loan company, its investor shall conduct in accordance with the Law of the People’s Republic
of China on Commercial Banks, Company Law of the People’s Republic of China and related administrative regulations.

Article 42

In case a loan company is to be terminated as a result of dissolution or being cancelled, it shall hand back the financial permit
to the issuing organ, go through the deregistration formalities in the administrative department for industry and commerce in a timely
manner, and shall make an announcement.

Chapter VI Supplementary Rules

Article 43

The term “rural areas” as mentioned in the present Provisions mean the counties (cities) and areas at and below the county (city)
level in the central-and-western regions, northeast regions and Hainan Province, as well as the poverty counties of other provinces
(autonomous regions and municipalities) as ascertained by the state and the poverty counties as ascertained by the provinces and
the areas below the county level.

Article 44

In case a foreign-funded financial institution intends to set up a loan company in a rural areas, it shall comply with the present
Provisions.

Article 45

In the case of other matters not included in the present Provisions, they shall be governed by the Banking Regulatory Law of the
People’s Republic of China, Law of the People’s Republic of China on Commercial Banks, Company Law of the People’s Republic of China
as well as other laws, rules and regulations.

Article 46

The CBRC shall be responsible for interpreting the present Provisions.

Article 47

The present Provisions shall go into effect as of the promulgation date.

China Banking Regulatory Commission
2007-01-22

ANNOUNCEMENT NO. 2, 2007 OF MINISTRY OF COMMERCE, ON PRELIMINARY ARBITRATION ON THE ANTI-DUMPING INVESTIGATION ON SULFAMETHOXAZOLE

Announcement No. 2, 2007 of Ministry of Commerce, on Preliminary Arbitration on the Anti-dumping Investigation on Sulfamethoxazole

[2007] No. 2

Ministry of Commerce issued an announcement on June 16, 2006 to start an anti-dumping investigation on the imported Sulfamethoxazole
(hereinafter referred to as the investigated products) originating from India.

In accordance with Article 24 of Anti-dumping Regulations of People’s Republic of China, Ministry of Commerce made the preliminary
arbitration that dumping of the investigated products had taken place, which had caused material injury to China’s industry and there
was a casual relationship between the dumping and the injury.

The Sulfamethoxazole is listed under Tariff No. 29350030 in Customs Tariff of Import and Export of the People’s Republic of China.

In accordance with Article 28 and 29 of Anti-dumping Regulations of People’s Republic of China, Ministry of Commerce decided to take
anti-dumping measures by deposit in security as of February 1st , 2007.

Deposit in security rates are as follows:

Companies of India:

Virchow Laboratories Limited and Andhra Organics Limited 15.2%

All Others 37.7%

The relevant interested parities could apply written comments, with related evidence, to Ministry of Commerce for consideration within
20 days as of the date this announcement is issued.

Appendix: Preliminary Arbitration of Ministry of Commerce on Anti-dumping Investigation on Imported Sulfamethoxazole Originating from
India

Ministry of Commerce

February 1, 2007

Ministry of Commerce
2007-02-01

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

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

Shang Zi Han [2007] No. 22

Huheaote Municipal People’s Government and Huheaote Economic-Technological Area,

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

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

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

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

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

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

Ministry of Commerce

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

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

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

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

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

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

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

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

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

Ministry of Commerce
2007-02-12

CIRCULAR OF 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

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German Laws

Act on Proceedings in Family Matters and in Matters of Non-contentious Jurisdiction

Act on Occupational Physicians, Safety Engineers and Other Occupational Safety Specialists

INTERIM PROVISIONS ON ADMINISTERING LOAN COMPANIES

ANNOUNCEMENT NO. 2, 2007 OF MINISTRY OF COMMERCE, ON PRELIMINARY ARBITRATION ON THE ANTI-DUMPING INVESTIGATION ON SULFAMETHOXAZOLE

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

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

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

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

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

MEASURES FOR THE ADMINISTRATION OF LAUNDRY AND DYEING INDUSTRY

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

PUBLIC SERVANTS LAW

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