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LETTER OF THE INTERNATIONAL TAXATION DEPARTMENT OF SAT ON RELATIVE ISSUES PERTINENT TO THE AUDITING TOOLS FOR THE DATA ON THE SETTLEMENT AND PAYMENT OF INCOME TAX OF FOREIGN-FUNDED ENTERPRISES AND FOREIGN ENTERPRISES

State Administration of Taxation

Letter of the International Taxation Department of SAT on Relative Issues Pertinent to the Auditing Tools for the Data on the Settlement
and Payment of Income Tax of Foreign-funded Enterprises and Foreign Enterprises

Ji Bian Han [2006] No.43

April 10, 2006

The administrations of state taxes of all the provinces, autonomous regions, municipalities directly under the Central Government,
and cities separately listed in the state plan, and administrations of local taxes of Guangdong Province and Shenzhen City,

In order to enhance the quality of settlement and payment data of income taxes of foreign-funded enterprises and foreign enterprises
(hereinafter referred to as enterprises), the auditing tools for the data on the settlement and payment of enterprise income taxes
(hereinafter referred to the “auditing tools”) have been revised and improved based on summarizing the specific problems found out
by each locality during the data audit process in the five-year (from 2000-2004). The letter notice on relative issues on the downloading
and using of the auditing tools is made as follows:

I.

Downloading Address. The newly revised auditing tools are put under the index of FTPlocalInternational Taxation Department. Each
locality shall download and use them in time.

II.

Installation Method. The method of installing the auditing tools is exactly like that of other standard Windows installation files.
Double click the installation file (tax_tools_setup.exe), and follow the instructions on the screen to finish the installation. The
system will acquiesce the installation index “..Program Files ax_tools”, and append the shortcut “settlement and payment tools
(2006 Edition)” on the desktop.

III.

Running of the Auditing Tools. When opening the auditing tools, you need to take two steps: selecting database and choosing a tax
authority.

1.

Selecting database. Double click the shortcut “settlement and payment tools (2006 Edition)”on the desktop, and enter into the “window
for opening database”, and the default index of the database is “My documents
elative data of income taxdata files”. Select the
settlement and payment database files in relevant ACCESS format, and the general default name of the files is “settlement.mdb”. Select
relevant database and then click the “Open” button.

Reopen the database through the “System/Open database” in the menu or through the button “Open” in the toolbar, and then select the
proper path and name of the database files in the pop-up dialog box, and click the button “Open”.

2.

Choosing a tax authority. After a database is chosen, the window of “Toggle among tax authorities” pops up automatically. Choose “All”
, “by provinces or municipalities”, “by prefectures or cities”, or “by districts or counties” in accordance with the scope of audit,
and then choose the target tax authority to be audited in the list of the tax authorities.

All: means to audit the data of all the enterprises available in the current database in the year 2005;

“By provinces or municipalities”: means to audit the data of the enterprises of different provinces and municipalities available in
the current database in the year 2005;

“By prefectures or cities”: means to audit the data of the enterprises of different prefectures and cities available in the current
database in the year 2005;

“By districts or counties”: means to audit the data of the enterprises of different districts and counties available in the current
database in the year 2005; and

The tax authorities in cities separately listed in the state plan and special economic zones shall be treated as those in the form
of “by provinces and municipalities”, and shall not be listed in the form of “by prefectures or cities”.

IV.

Functions and Operations. The working principle of the auditing tools shall be: to summarize and conclude the problems found out in
the work of auditing settlement and payment, and transform them to a series of logic judgment formulas, and then analyze and judge
the problems existing in the settlement and payment data by making use of these logic audit formulas. The object of audit is the
driving table in the system of settlement and payment and the essential information of the relative enterprises, and there is no
revision on the settlement and payment database in the data audit. The auditing tools mainly consist of data auditing test, inquiry
on information of accounts number, statistics on tax sources, inquiry on supplementary information, and other essential functions.
The methods of specific operations are as follows:

1.

Data Audit and Test

Click “false information test” in the menu “data test tools” or the button “data test” in the toolbar, the system will audit the current
settlement and payment data of the tax authorities in the year 2005 account by account, and the audit result will be listed in the
table, the contents of which consist of: serial number, identification number of the taxpayers, type A and B, enterprise name, existing
errors, existing disputed points, code of the tax authority taking in charge.

Click the “false information statistics” in the menu “data test tools” or the button “error statistics” in the toolbar, the system
shall make classified statistics on the false information in accordance with different tax authorities, but excluding the information
of disputed points.

Select any enterprise in the table, and click the button of “details of enterprises” in the toolbar, the system shall indicate the
information on account management of the enterprise, declaration information, adjustment information, to provide convenience for
tax staffs to check the error and the information with disputed points.

2.

Inquiry Account Management Information

Click the relative items under the menu of ” inquiry account management information”, the system will make statistics on the information
relevant to the number of accounts for opening business registered by enterprises in the year 2005 in accordance with the economic
type, and make statistics on the information relevant to the number of accounts registered by enterprises in accordance with different
investment countries, and inquire and output the information of the enterprises newly registered, newly set up, and newly written
off in the current year.

3.

Statistics on Tax Sources

Click the relative items under the menu of “statistics on tax sources”, the system may inquire and output the statistics form on the
preferential information of the enterprises under the current tax authorities, the statistics form on the tax sources in accordance
with different industries in the year 2005, and the statistics form on tax sources in accordance with different accounts, and its
function is equivalent to a set of ledgers for managing tax sources of foreign-related enterprises￿￿ income tax.

4.

Inquiry Supplementary Information

Click the relative items under the menu of “inquiry supplementary information”, the system may inquire and output the information
involving the tax of the enterprises doing related transaction in the year 2005 under the current tax authorities, and the prepayment
of the income tax (including loss-incurring enterprises), adjustment information on tax payment of enterprises, and details of the
tax rate, and etc..

5.

Print and Output

The function of print and output has been perfected in the upgraded examination tools. The audit or inquiry result may be output into
the EXCEL form through the button of “EXCEL output” in the menu “System” or the button of the “Output” in the toolbar.

The audit or inquiry result may be printed or output directly through the module of “direct print” in the menu “System”.

V.

Strictly in the light of the provisions of Article 4 of the Circular of the State Administration of Taxation on Relative Issues pertinent
to Doing A Good Job in the Settlement and Payment of Income Taxes of Foreign-funded Enterprises and Foreign Enterprises (Guo Shui
Han [2006] No.101), each locality shall do a good job in the audit of settlement and payment data, for the purpose of ensuring the
accuracy of the settlement and payment data countrywide. This year, in the audit of settlement and payment, State Administration
of Taxation will lay emphasis on the quality of the data reported by each locality. Each locality shall strengthen the consciousness
of responsibility, and guarantee the quality of the data. Any locality that reports the data overdue, or reports disc data that is
unable to be read, or incomplete or has any error, which may affect the collection of the data countrywide, shall be circulated a
notice of criticism by the State Administration of Taxation.

Please carry out the aforesaid provisions accordingly.



 
State Administration of Taxation
2006-04-10

 






ANNOUNCEMENT NO.34, 2006 OF MINISTRY OF COMMERCE, PROMULGATING ARTICLE NAMES OF RELATED TEXTILES AND APPARELS, AND TAX NUMBER, TIME LIMIT FOR ADMINISTRATION AND RELATED REQUIREMENTS OF BRAZIL

Ministry of Commerce

Announcement No.34, 2006 of Ministry of Commerce, Promulgating Article Names of Related Textiles and Apparels, and Tax Number, Time
Limit for Administration and Related Requirements of Brazil

[2006] No. 34

In accordance with related articles of Ministry of Commerce of the People’s Republic of China and the Ministry of Development, Industry
and Foreign Trade of Federative Republic of Brazil MOU on Strengthening Cooperation in Trade and Investment, Brazil started its unilateral
import administration on silk, corduroy, polyester fiber, sweater and garment, knitted shirt and T-shirt, and coat, overcoat and
jacket, chemical fabric and embroidery originating from China from Apr 3, 2006 while China would not carry out export administration
on the said products. For domestic enterprises’ understanding of specifics of the import administration of Brazil on a part of textiles
and apparels and convenience of exporting related products, article names of related textiles and apparels, and tax number, time
limit for administration and related requirements of Brazil are now announced as follows:

1.

Article Names and Relevant Tax Number

(1)

Corduroy: 58012200, 58012300;

(2)

Embroidery: 58109100, 58109200, 58109900;

(3)

Knitted shirt and T-shirt: 61051000, 61052000, 61059000, 61061000, 61062000, 61069000, 61091000, 61099000;

(4)

Polyester fiber: 54023300;

(5)

Chemical fabric: 54075100, 54075210, 54075220, 54075300, 54075400, 54076100, 54072000, 54073000, 54074100, 54074200, 54074300, 54074400,
54077100, 54077200, 54077300, 54077400, 54078100, 54078200, 54078300, 54078400, 55151200, 55152100, 55159100, 55162100, 55162200,
55162300, 55162400, 54079100, 54079200, 54079300, 54079400, 54083100, 54083200, 54083300, 54083400, 54076900;

(6)

Coat, overcoat and jacket: 61013000, 61032300, 62011300, 62019300, 62032300, 62102000, 61023000, 61042300, 61043300, 62021300, 62029300,
62042300, 62043300, 62103000;

(7)

Sweater and garment: 61102000, 61179000, 61101100, 61101200, 61101900, 61103000, 61109000;

(8)

Silk: 50071010, 50071090, 50072010, 50072090, 50079000.

2.

Time Limit for Administration

From April of 2006 to December of 2008

3.

Related requirements

When exporting above products to Brazil, enterprises should first make sure whether the importers have already received related import
documents of approval of from Brazil government to avoid losses.

Ministry of Commerce

Apr 24, 2006



 
Ministry of Commerce
2006-04-24

 






CIRCULAR OF CHINA SECURITIES REGULATORY COMMISSION ON REPEALING THE INTERIM MEASURES FOR THE ADMINISTRATION OF CONVERTIBLE CORPORATE BONDS

China Securities Regulatory Commission

Circular of China Securities Regulatory Commission on Repealing the Interim Measures for the Administration of Convertible Corporate
Bonds

No. 42 [2006] of China Securities Regulatory Commission

Upon the approval of the State Council, the Interim Measures for the Administration of Convertible Corporate Bonds, which were permitted
by the State Council on March 8, 1997 and promulgated by the Securities Commission of the State Council on March 25, 1997, shall
be repealed on May 8, 2006.

China Securities Regulatory Commission

May 6th, 2006



 
China Securities Regulatory Commission
2006-05-06

 






ANNOUNCEMENT NO. 32, 2006 OF MINISTRY OF COMMERCE ON FINAL ARBITRATION OF ANTI-DUMPING INVESTIGATION ON PYROCATECHOL ORIGINATING FROM THE UNITED STATES AND JAPAN

Ministry of Commerce

Announcement No. 32, 2006 of Ministry of Commerce on Final Arbitration of Anti-dumping Investigation on Pyrocatechol Originating from
the United States and Japan

[2006] No. 32

In accordance with Anti-dumping Regulations of the People’s Republic of China, Ministry of Commerce released announcement on May 31,
2005, deciding to carry out anti-dumping investigation on pyrocatechol (hereinafter referred to as “investigated commodity”) originating
from the United States and Japan.

In line with investigation, Ministry of Commerce finally verdicts dumping of the investigated commodity, injures the domestic pyrocatechol
industry, and the existence of causality between dumping of the investigated commodity and the injury of domestic industry.

In accordance with related regulations of Anti-dumping Regulations of the People’s Republic of China, Tariff Committee of the State
Council decides to impose anti-dumping duties on pyrocatechol originating from the United States and t Japan as from May 22, 2006.

The tariff code of the investigated commodity is 29072910.

Rate of Anti-dumping Duties on Different Companies:

American companies:

RHODIA INC 4%;

Other American companies 46.81%

Companies in Japan 42.86%

In case importers cannot provide certificate of origin and the Customs cannot confirm the origin of the imported pyrocatechol either,
a maximum anti-dumping duties among the effective anti-dumping measures will be imposed on the imported investigated commodity.

As from May 22, 2006, importers should pay relevant anti-dumping duties for import of pyrocatechol originating from the United States
and Japan. The formula for counting of anti-dumping duties:

Amount of anti-dumping duty= duty-paying value * rate of anti-dumping duty

The duration of the anti-dumping duties on pyrocatechol originating from the United States and Japan is 5 years as from May 22, 2006.

Appendix: Ministry of Commerce’s Final Arbitration on Anti-dumping Investigation on Pyrocatechol Originating from the United States
and Japan(Omitted)

Ministry of Commerce

May 22, 2006



 
Ministry of Commerce
2006-05-22

 






ANNOUNCEMENT NO. 32, 2006 OF THE GENERAL ADMINISTRATION OF CUSTOMS ON THE CIRCUMSTANCES OF THE PROTECTION OF CUSTOMS FOR THE ARCHIVAL FILING OF THE SLOGAN AND MASCOTS OF THE 29TH OLYMPIC GAMES

Announcement No. 32, 2006 of the General Administration of Customs on the Circumstances of the Protection of Customs for the Archival
Filing of the Slogan and Mascots of the 29th Olympic Games

[2006] No. 32
May 31, 2006

The Organization Committee of the 29th Olympic Games recently submitted an application to the General Administration of Customs for
the archival filing of the slogan and mascots of the 29th Olympic Games and has obtained an approval. The archival filing information
is hereby announced as follows:

The right holder: The Organization Committee of the 29th Olympic Games

The name of right:

1.

Slogan of the 29th Olympic Games (see Annex 1)

2.

Mascots of the 29th Olympic Games (see Annex 2)

Anyone who illegally imports or exports any goods infringing on the exclusive right of the aforesaid Olympic marks without the permission
of the right holder shall be followed to investigation and punishment by the customs according to the Regulation on the Protection
of Olympic Marks and other relevant laws and regulations.

Annexes:

1.

Slogan of the 29th Olympic Games

2.

Mascots of the 29th Olympic Games (Omitted)

Annex 1:
Slogan of the 29th Olympic Games

Tong Yi Ge Shi Jie, Tong Yi Ge Meng Xiang

One World, One Dream



 
General Administration of Customs
2006-05-31

 






NOTIFICATION NO.13, 2006 OF FOREIGN ASSISTANCE PROJECT BID BOARD OF THE MINISTRY OF COMMERCE

Notification No.13, 2006 of Foreign Assistance Project Bid Board of the Ministry of Commerce

Tong Gao [2006] No.13

Foreign Assistance Project Bid Board of the Ministry of Commerce held the 13th regular meeting on June 8, 2006. Matters of concern
and resolutions are notified as follows:

1.

The tender mode of Egypt Suez Economic Zone One-step Investment Service Building Construction assistance project was discussed. Because
of the emergency of the project, the Bid Board determined to have tender discussion with China State Construction Engineering Corporation
about the t project, which has advantages and good performance in Egypt. Specific matters of concern shall be notified later.

2.

The bid-winning enterprise of Cuba Medical Treatment and Sanitation Materials assistance project was examined and approved. The
Bid Board opened sealed tenders on June 1, 2006. In all, 9 tender enterprises including China National Electronics Import and Export
Corporation, Tianjin Machinery Import & Export Corporation, Shanghai Automobile Import & Export Co., Ltd., Suzhou Hengrun
Import & Export Corp., Ltd., China National Pharmaceutical Foreign Trade Corporation , China Meheco Corporation, Henan Cereals,
Oil & Foodstuff Imp. & Exp. Group Corp., XY Group Co., Ltd. and Suntime International Techno-Economic Cooperation (Group)
Co., Ltd. submitted the tender documents on time. The Bid Board, according to the reviewing results with best price versus performance
ratio measures after quantifying the tender price, the quantity of the goods, supply and quality assurance, packing, transport and
the quantity of tender documents, determined to confer bid to Suzhou Hengrun Import & Export Corp. Ltd.

3.

The tender mode of Federated States of Micronesia Second Passenger-cargo Vessel assistance project was re-studied. The Bid Board
opened sealed tenders on June 6, 2006. Henan Light Industrial Products Imp. & Exp. Group Co., Ltd., Tianjin Machinery Import
& Export Corporation has submitted tender documents on time. But the tender was void after review because of the significant
deficiency. Since the Wuhan Nanhua High-speed Ship Engineering Co., Ltd. chosed by Henan Light Industrial Products Import & Export
Group Co., Ltd. has carried the task of building First Passenger-cargo Vessel assistant to Federated States of Micronesia successfully,
which has the ability to carry the task before the end of the year, and the vessel should be delivered before the end of the year,
the Bid Board determined to have tender discussion with Henan Light Industrial Products Import & Export Group Co., Ltd. about
the project and appointed Wuhan Nanhua High-speed Ship Engineering Co., Ltd. to be the supplier. Specific matters of concern shall
be notified later.

4.

The tender mode of Vanuatu Palm Planting Technology Cooperation Project was discussed. The Bid Board determined to have tender discussion
with China National Machinery & Equipment Import & Export Corporation about the project. Specific matters of concern shall
be notified later.

Foreign Assistance Project Bid Board of the Ministry of Commerce

June 8, 2006



 
Foreign Assistance Project Bid Board of the Ministry of Commerce
2006-06-08

 






REPLY OF THE CHINA BANKING REGULATORY COMMISSION CONCERNING LAUNCHING THE BUSINESS OF INTER-BANK ENTRUSTED LOANS AMONG FINANCIAL INSTITUTIONS BY THE AGRICULTURAL DEVELOPMENT BANK OF CHINA

Reply of the China Banking Regulatory Commission concerning Launching the Business of Inter-bank Entrusted Loans among Financial Institutions
by the Agricultural Development Bank of China

Agricultural Development Bank of China:

The Request for Letters on Launching the Business of Inter-bank Entrusted Loans by the Agricultural Development Bank of China (Nong
Fa Yin Fa [2005] No. 333) has been received. Upon consideration, a reply hereby is given as follows:

1.

You are granted to launch the business of inter-bank entrusted loans among financial institutions. You should not undertake any relevant
credit risk for the trustor or do so in a disguised form for the purpose of launching this business.

2.

The scope of trustors for you to launch the business of inter-bank entrusted loans among financial institutions shall be restricted
to policy banks, commercial banks and rural credit cooperative institutions. You must catty out the report system to extend entrusted
loans to the enterprises that have opened accounts, and you shall, within 10 days as of the said business is launched, make a report
to this Commission. The entrusted loans business shall be restricted to providing financial services for the field of “three problems
of agriculture”.

3.

You shall intensify the management of this business, set up and improve internal control system and operational procedures, and report
related risks and problems faced in implementation of this business to this Commission in a timely manner.

The China Banking Regulatory Commission

June 21, 2006



 
The China Banking Regulatory Commission
2006-06-21

 






MEASURES FOR THE ADMINISTRATION OF PILOT MARGIN TRADING OF SECURITIES COMPANIES

Circular of China Securities Regulatory Commission on Promulgating the Measures for the Administration of Pilot Margin Trading of
Securities Companies

Zheng Jian Fa [2006] No.69

All the securities companies:

For the purpose of regulating the pilot margin trading of securities companies, we have formulated the Measures for the Administration
of Pilot Margin trading of Securities Companies, which are hereby promulgated and shall enter into force as of August 1, 2006.

China Securities Regulatory Commission

June 30, 2006

Measures for the Administration of Pilot Margin Trading of Securities Companies
Chapter I General Provisions

Article 1

The present Measures are formulated in order to regulate the pilot margin trading of securities companies, prevent the risks of securities
companies, safeguard the legitimate rights and interests of securities investors and the social public interests, perfect the securities
dealing mechanisms and the stable and healthy development of the securities market.

Article 2

As regards developing the pilot margin trading, a securities company shall be in compliance with the provisions of the laws, administrative
regulations and the present Measures, enhance the internal control, strictly prevent and control the risks, and earnestly maintain
the safety of customer assets.

The term “Margin trading as mentioned herein refers to such business activity whereby the securities company lends customers capital
to purchase listed securities or lends them listed securities to sell, and collects the collaterals.

Article 3

As regards developing the pilot margin trading, a securities company must be approved by China Securities Regulatory Commission (hereinafter
referred to as CSRC). No securities company can lend the capital or listed securities to its customers or provide any convenience
or services for margin trading between its customers or between its customers and any other person without approval by the CSRC.

Article 4

Under the principle of prudential surveillance, the CSRC shall approve those securities companies that meet the conditions prescribed
in the present Measures to develop the pilot margin trading; and shall, in accordance with the pilot situation and the requirements
for developing the securities market, gradually approve other securities companies meeting the prescribed conditions to engage in
the margin trading.

Article 5

The CSRC and its representative offices shall implement surveillance and administration of the pilot margin trading of securities
companies subject to the laws, administrative regulations and the present Measures.

The Securities Association of China, stock exchanges, and securities depository and clearing institutions shall conduct the self-discipline
management of the pilot margin trading of securities companies pursuant to their own articles of association and rules.

Chapter II Approval of Business Operations

Article 6

Where a securities company applies for engaging in the pilot margin trading, it shall meet the following requirements:

(1)

It has engaged in the securities brokerage business for three years or more, and has been appraised by the Securities Association
of China as an innovative pilot securities company;

(2)

It has sound corporate governance, effective internal control, and can effectively identify, control and prevent business operation
risks and internal management risks;

(3)

Neither the company nor any of its directors, supervisors or senior managers has been subjected to administrative sanctions or criminal
penalties within recent two years for illegal or irregular business operations, and none of them has been under the investigation
of the CSRC or under the rectification because of being suspected of any illegal or irregular act;

(4)

It has sound financial status, has all of its risk control indicators meeting the provisions in recent two years, and has all net
capital for each recent six months above 1.2 billion yuan or more;

(5)

It has the assets of customer to be safe and intact, has had the verification for its scheme of third party depository of customer
transaction settlement funds by the CSRC, and has made clear arrangements for the implementation of the said scheme;

(6)

It has completed the centralized management of transactions, settlements, customer accounts and risk surveillance and control, and
has specified the signs for historical irregular accounts and put them under centralized control; and

(7)

It has established practical and feasible schemes for implementing the pilot margin trading as well as internal management rules,
and has necessary professionals, technical systems, capital and securities for performing the pilot margin trading.

Article 7

Where a securities company applies for the pilot margin trading, it shall submit the following materials to the CSRC, and send a
copy thereof to the CSRC representative office at the locality of its registration:

(1)

an application form for the pilot margin trading;

(2)

the decision of the shareholders’ meeting (the general assembly of shareholders) in respect of engaging in the margin trading;

(3)

the scheme for implementing the pilot margin trading, the text rules of internal management, and the criteria for choosing customers
as formulated under Article 12 of the present Measures;

(4)

the explanations on carrying out the scheme for the third party depository of customer transaction settlement funds;

(5)

the roster and qualification certificates of senior managers and professionals responsible for the margin trading; and

(6)

other documents required to be submitted by the CSRC.

The legal representative of a securities company and its main principals for business management shall sign their names on the application
form for the pilot margin trading, and promise the truthfulness, accuracy and completeness of the application materials, and bear
corresponding legal responsibilities for the false records, misleading statements or major omissions in application materials, if
any.

Article 8

The CSRC representative office shall issue the written opinions to the CSRC concerning whether or not to approve the applicant to
implement the pilot margin trading within 10 working days as of the receipt of the application materials as prescribed in the preceding
Article.

The CSRC shall, subject to the legal procedures and the conditions prescribed in the present Measures, examine the application materials,
organize specialists to evaluate the scheme for carrying out the pilot margin trading as submitted by the applicant, make a decision
on approval or disapproval, and notify the result to the applicant in written form.

Under same conditions, the securities companies with higher net capital will be approved preferentially for the pilot margin trading.

Article 9

A securities company that has obtained the approval shall apply to the company registration department for alteration registration
of the business scope, and apply to the CSRC for re-issuing a Permit for Business Operations of Securities Business in accordance
with relevant provisions.

A securities company can implement the pilot margin trading after obtaining a Permit for Business Operations of Securities Business
as reissued by the CSRC.

Chapter III Rules for Business Operations

Article 10

Where a securities company carries out the pilot margin trading, it shall, in its own name, separately open a special securities
lending account, a customer credit transaction guaranty securities account, a credit transaction securities delivery account and
a credit transaction capital delivery account at securities depository and clearing institutions.

The special securities lending account shall be used for recording down the securities that are held by the securities company, planned
to lend to customers, and returned by the customers, and the said account can not be used for securities dealings; the customer credit
transaction guaranty securities account shall be used for recording down the securities that the customer submits to the securities
company as the guarantee to the creditor’s rights incurred from the margin trading with the customer; the credit transaction securities
delivery account shall be used for securities settlement for the margin trading of the customer; and the credit transaction capital
delivery account shall be used for capital settlement for the margin trading of the customer.

Article 11

Where a securities company carries out the pilot margin trading, it shall, in its own name, separately open a special capital financing
account and a customer credit transaction guaranty capital account at a commercial bank.

The special capital financing account shall be used for depositing the capital that the securities company plans to lend to the customer
and that the customer plans to return; and the customer credit transaction capital securities account shall be used for depositing
the capital that the customer submits to the securities company as the guarantee to the creditors’ rights incurred from the margin
trading with the customer.

Article 12

A securities company shall, before performing the margin trading with any customer, conduct the credit investigation, and know the
status, property, incomes, securities investment experiences and risk preferences of the customer, and record down and keep them
in written form or by e-mail.

A securities company shall not conduct the margin trading with those customers that fail to provide the relevant information as required,
that engage in the securities dealings in the said securities company for less than half a year, or transaction settlement funds
of whose have not been incorporated into the third party depository, or the securities investment experiences of whose are insufficient,
or who lack risk affordability or have records of serious breach of contract, or who are the shareholders or related representatives
of the said securities company.

A securities company shall formulate specific standards for choosing customers as required by provisions in the preceding Paragraph.

Article 13

A securities company shall, before conducting the margin trading with any customer, sign a margin contract including the necessary
provisions as prescribed by the Securities Association of China, and clearly stipulate the following matters:

(1)

the means for calculating the quota, term, interest rate (charging rate), and interests (expenses) of the margin trading;

(2)

the guaranty bonds proportion, the guaranty maintenance proportion, types and the conversion rates of securities that can be used
as guaranty bonds, and the scope of secured creditors’ rights;

(3)

the notification mode and the term for supplementing guaranty bonds;

(4)

the means for the customer to compensate debts, and the right of the securities company on disposing of the collaterals;

(5)

the disposal of rights and interests attached to the securities bought and sold in the margin trading; and

(6)

other relevant matters.

A customer can only sign a margin contract with one securities company and borrow the capital or securities from the same securities
company.

Article 14

A margin contract shall stipulate that the securities in the customer credit transaction guaranty securities account and the capital
in the customer credit transaction guaranty capital account of the securities company are the trust property of the securities company
for guaranteeing the creditors’ rights of the customer incurred from the margin trading.

The term of margin trading stipulated between the securities company and a customer shall not be longer than the maximum term as prescribed
by the stock exchange, and shall not be renewed. The interest rate of capital financing shall not be lower than the base interest
rate of financial institutions for the same term as prescribed by the People’s Bank of China.

Article 15

A securities company shall, before signing a margin contract with any customer, assign a special person to explain to the customer
about the operational rules and the contents of the contract, and give a risk presentation letter concerning the margin trading to
the customer for signature and confirmation.

Article 16

A securities company shall, after signing a margin contract with a customer and on the basis of the application of the customer,
open a real-name credit securities account for him in accordance with the provisions of the securities depository and clearing institution.
The credit securities account for the customer to engage in the trading of listed securities at a stock exchange can only be a same
account. The name or post_title of the account opener of the customer credit securities account shall be consistent with that of the common
securities account of the customer.

A customer credit securities account is a second-tier account of the customer credit transaction guaranty securities account of the
securities company, and can be used for recording down the detailed data for the guaranty securities that the customer entrusts the
securities company to hold.

A securities company shall entrust the securities depository and clearing institution to modify the data in the customer credit securities
account pursuant to the settlement and delivery results, and etc.

Article 17

A securities company shall sign a customer credit capital depository agreement with its customer and the commercial bank with reference
to the mode of third party depository of customer transaction settlement funds. The securities company shall, after signing a margin
contract with a customer, notify the commercial bank to open a real-name credit capital account for the customer under the customer’s
application. Only one credit capital account can be opened to a customer.

A customer credit capital account is a second-tier account of the customer credit transaction guaranty capital account of the securities
company, and can be used for recording down the detailed data of the guaranty capital given by the customer for depository.

The commercial bank shall modify the data on the customer credit capital account pursuant to the settlement and delivery results,
and etc. as provided by the securities company.

Article 18

Where a securities company lends any capital to any customer, it can only use the capital in the special capital financing account;
and where a securities company lends any securities to any customer, it can only use the securities in the special securities lending
account.

The securities bought or sold by the customer in the margin trading shall not exceed the scope as prescribed by the stock exchange.

A customer shall, when signing a margin contract with a securities company, declare all the securities accounts of himself and his
related representatives to the securities company. During the term of securities lending, if the customer or any of his related representatives
purchases the same securities as those he has borrowed, the customer shall declare it to the securities company within 3 trading
days as of the date of the said purchase. The securities company shall monthly report the information as declared by the customer
to the relevant stock exchange.

A customer, planning to sell the same securities as those it holds and has borrowed during the period of securities lending, shall
observe the provisions as prescribed by the stock exchange, and shall not manipulate the market by selling the said securities against
the provisions.

Article 19

Where a securities company implements the margin trading and sends out orders of securities trading and transfer under the customer’s
authorization, it shall ensure the truthfulness and accuracy of the said orders. Where a mistake of the securities company brings
on the wrong orders so as to the losses customer, the customer may request compensation from the securities company according to
laws, however, it shall not affect the business operations of the stock exchange or the securities depository and clearing institution
that are being performed or have been performed.

Article 20

The proportion of the margin amount of all the customers, a single customer or a single securities to the net capital and other risk
control indicators of a securities company shall be in accordance with the provisions of the CSRC.

Article 21

A customer that buys securities by financing from a securities company shall repay it with the capital from selling of the securities
or by direct repayment.

A customer that sells the securities by securities lending from a securities company shall repay it with the securities to be bought
or by direct repayment.

Article 22

Where a transaction of the securities is suspended, which is bought or sold by the customer in the margin trading, and the resumption
day of the transaction is later than the expiry date of the debts incurred from the margin trading, the term for margin trading shall
be postponed, unless it is otherwise prescribed by the margin contract.

Article 23

If the transaction of the securities is to be terminated, which is bought or sold by the customer in the margin trading, and the
last transaction day is later than the expiry date of the debts incurred from the margin trading, the term for margin trading shall
expire at the transaction day before the last one, unless it is otherwise prescribed by the margin contract.

Chapter IV Guarantee to Creditor’s Rights

Article 24

Where a securities company lends the capital or securities to the customer, it shall collect a certain proportion of guaranty bonds
from the customer, which can be substituted by the securities.

Article 25

The said guaranty bonds, all of the securities bought by the customer by financing and all of the capital acquired from the selling
of the borrowed securities shall be separately deposited into the customer credit transaction guaranty securities account and the
customer credit transaction guaranty capital account by the securities company as the collaterals for the creditor’s rights incurred
from the margin trading of the aforesaid customer.

Article 26

The proportion of the value of collaterals submitted by the customer to his debts shall be calculated day by day by the securities
company, and when the aforesaid proportion is lower than the minimum guaranty maintenance proportion, the customer shall be notified
to make up the balance within a certain term.

The securities company shall deal with the collaterals as stipulated at once, unless the customer makes up the balance or pay debts
in time.

Article 27

The proportion of guaranty bonds, the types and conversion rates of securities that can be used as guaranty bonds as prescribed by
Article 24 of the present Measures, and the minimum guaranty maintenance proportion and the term for the customer to make up the
balance as prescribed in Article 26 shall be stipulated by the stock exchange.

A securities company can formulate specific provisions on the aforesaid matters on the basis of meeting the provisions of the stock
exchange.

Article 28

The securities in the customer credit transaction guaranty securities account of the securities company or the capital in the customer
credit transaction guaranty capital account may not be used by anyone but in case of the following circumstances:

(1)

the settlement of margin trading for the customer;

(2)

the collection of the capital or securities that shall be returned by the customer;

(3)

the collection of interests, fees or taxes that shall be paid by the customer;

(4)

the disposal of collaterals subject to the provisions in the present Measures or the stipulations with the customer;

(5)

the collection of default fines that shall be paid by the customer;

(6)

the withdrawal of remaining securities or capital after the principal and interests, taxes, expenses and default fines has been paid
by the customer; or

(7)

other circumstances as prescribed by the laws, regulations or the present Measures.

Article 29

Where the proportion of the collaterals value deposited by the customer to his debts exceeds the percentage as prescribed by the
stock exchange, the collaterals can be withdrawn by the customer subject to the provisions of the stock exchange and the stipulations
in the margin contract.

Article 30

Where the judicial department adopts the measures of property preservation or compulsory implementation to the rights and interests
in the customer credit securities account or the credit capital account, the securities company shall deal with the collaterals and
fulfill the creditor’s rights incurred from the margin trading with the customer, and assist the implementation of judicial department.

Chapter V Disposal of Rights and Interests

Article 31

In accordance with the records in the customer credit transaction guaranty securities account of a securities company, the securities
depository and clearing institution shall confirm the fact that the securities company is entrusted to hold the securities, and register
the securities company in the roster of securities holders as a nominal holder.

Article 32

As regards the securities recorded in the customer credit transaction guaranty securities account, a securities company shall, in
its own name, exercise the rights of securities issuers for the interests of customers. Where a securities company exercises the
rights of securities issuers, the opinions of customers shall be first solicited and be implemented accordingly.

The term “rights of securities issuers” as mentioned in the preceding Paragraph means the rights incurred due to the holding of securities,
such as requesting to convene a securities holders’ meeting, participating in the securities holders’ meeting, submitting proposals,
voting, subscribing the allotted shares, requesting to distribute investment proceeds, etc.

Article 33

A securities depository and clearing institution entrusted by a securities issuer to distribute investment proceeds shall register
the distributed securities in the customer credit transaction guaranty securities account of the securities company, and modify the
detailed data on the said customer credit securities account accordingly.

A securities depository and clearing institution entrusted by a securities issuer to distribute investment proceeds in cash shall
register the distributed capital in the customer credit transaction guaranty capital account of the securities company, and shall
notify the commercial bank to modify the detailed data in the said customer credit capital account after the capital is transferred
to the account.

Article 34

After the customer borrows the securities but before the customer returns the securities, where a securities issuer distributes investment
proceeds, allots or gratuitously distributes securities to securities holders or issues any of the securities to which the securities
holders have the preemptive right, the customer shall, when repaying the debts, give the securities or capital equal to the interests
that may be gotten from the borrowed securities to the securities company subject to the stipulations in the margin contract.

Article 35

A securities company may not merge the stocks holding through its customer credit transaction guaranty securities account into its
self-owned stocks, and it is not required to perform such corresponding obligations as information reporting, information revealment
or tender offer for the alteration of the amount of stocks in the aforesaid account.

Where the total amount of stocks of a listed company or the rights and interests held by a customer and its coordinated actors in
the common securities accounts and the credit securities accounts amounts to the prescribed proportion, the customer shall perform
such corresponding obligations as information reporting, information revealment or tender offer.

Chapter VI Surveillance and Administration

Article 36

A stock exchange can formulate restrictive provisions on the proportion of buying or selling amount of each single security to the
market turnover and on the selling price of the borrowed securities in the margin trading.

Article 37

In accordance with the business operational rules, a stock exchange shall take measures and conduct initial-stage check of the orders
for margin trading, and it shall refuse those trading orders in which the types of securities dealings or the selling price of the
borrowed securities fails to meet the provisions.

Where the proportion of buying or selling amount of a single security in the margin trading to the market turnover reaches the prescribed
maximum percentage, the stock exchange can suspend the acceptance of the orders for buying or selling the aforesaid type of securities
in the margin trading.

Article 38

When any abnormality occurs in the margin trading, which has already harmed or may harm the market stability and it is necessary
to suspend the trading, the stock exchange shall, in accordance with the business operational rules, suspend all or part of the margin
trading and publicize the information.

Article 39

In accordance with the business operational rules, a securities depository and clearing institution shall supervise over the securities
transfer in the margin trading and the capital transfer in the credit transaction capital delivery account of the securities company.
Those orders on securities or capital transfer that violate the provisions shall be refused; and if any abnormality has been found,
the securities company shall be required to make explanations, and then relevant information shall be submitted to the CSRC and the
CSRC representative office at the locality where the said securities company is registered.

Article 40

A commercial bank that is responsible for the customer credit capital depository shall refuse those capital transfer orders of the
securities company that violate the provisions in accordance with the stipulations in the contract on customer credit capital depository;
and if any abnormality has been found, the securities company shall be required to make an explanation, and relevant information
shall be submitted to the CSRC and the CSRC representative office at the locality where the said securities company is registered.

Article 41

A securities company shall deliver reconciliation statements to the customer by the methods as stipulated in the margin contract,
and provide the inquiry services concerning the data of the credit securities account and the credit capital account to them.

A securities depository and clearing institution shall provide the inquiry services concerning data of the credit securities account
to the customer. A commercial bank that is responsible for the customer credit capital depository shall provide inquiry services
concerning data of the credit capital account to the customer subject to the stipulations in the contract on customer credit capital
depository.

Article 42

In accordance with the provisions of the stock exchange, a securities company shall submit to the stock exchange about the information
on the margin trading of the current day after the market is closed every day. The stock exchange shall collect and make statistics
of the information submitted by securities companies, and publicize before the market opens on the next trading day.

Article 43

A securities company shall submit the following information in written form for the current month to the CSRC representative office
at the locality of its registration and the stock exchange within 10 days upon conclusion of each month:

(1)

the number of accounts opened by the customers for the margin trading;

(2)

the balance of margin trading for all the customers as well as the said balance for the top ten customers;

(3)

the types and amount of collaterals submitted by the customers;

(4)

the number of the customers for mandatory buy-in, and the trading amount for mandatory buy-in;

(5)

the value of relevant risk control indicator; and

(6)

the profit status of the margin trading.

Article 44

The CSRC and its representative offices, the Securities Association of China, stock exchanges and securities depository and clearing
institutions shall perform surveillance or self-discipline administrative duties in the margin trading of securities companies subject
to relevant provisions, and can request a securities company to provide the information and materials concerning the margin trading.

Article 45

A CSRC representative office shall implement off-site and on-site inspections over the customer selection, contracts conclusion,
determination of credit-granting quota, collection and management of collaterals, notice on the supplementation of collateral and
disposal of collateral, etc, involved in the margin trading of securities companies and their branches as required by the jurisdiction
monitoring accountability system.

Article 46

Where a securities company or any of its branches violates any of the provisions in pilot margin trading, it shall be deterred and
be ordered to make corrections within a time limit by the CSRC representative office, in case of failing to make corrections or serious
circumstances, the CSRC shall, pursuant to the specific circumstances, take such surveillant measures such as giving a warning, giving
a public warning, ordering penalty to relevant persons who are held to be responsible, ordering relevant branches to stop the margin
trading, or canceling the approval on the margin trading.

A securities company or any of its branches that engages in the margin trading without approval shall be applied sanctions subject
to Article 205 of the Securities Law.

Chapter VII Supplementary Provisions

Article 47

Stock exchanges, securities depository and clearing institutions and the Securities Association of China shall formulate business
operational rules and self-discipline rules for the margin trading in accordance with the present Measures, and implement the said
rules after submit to the CSRC for approval.

Article 48

The present Measures shall enter into force as of August 1, 2006.



 
China Securities Regulatory Commission
2006-06-30

 






ANNOUNCEMENT ON PUNISHMENT FOR THE UNPAID BID-WINNING EARNEST MONEY ON ENTERPRISES OF SECOND BIDDING IN 2006 FOR QUANTITY OF EXPORT LICENSE OF TEXTILES EXPORTED TO EU AND THE U.S

Announcement on Punishment for the Unpaid Bid-winning Earnest Money on Enterprises of Second Bidding in 2006 for Quantity of Export
License of Textiles Exported to EU and the U.S

The List of Enterprises of Second Bidding in 2006 for Quantity of Export License of Textiles Exported to EU and the U.S. , which failed
to pay the bid-winning earnest money, is now publicized (See Appendix).

In accordance with related regulations in Measures on Export Commodity Quota Bidding and Detailed Rules for the Implementation of
Bidding for Quantity of Export License of Textiles, the Tendering Committee would draw back the bid-winning quantity of the above-mentioned
enterprises and call off their bidding qualification on related categories in 2006 and 2007.

If any dissidence exists, please bring forward written opinions to the Tendering Committee within 10 days as from the promulgation
of this announcement. The enterprises also have the rights of statement and argument.

Tel: 010-67739327￿￿67739213￿￿67739209

Fax: 010-67719297￿￿67719300

Appendix: List of Enterprises with Unpaid Bid-winning Earnest Money

Tendering Committee for Textile Export of Ministry of Commerce

July 11, 2006



 
Tendering Committee for Textile Export of Ministry of Commerce
2006-07-11

 






SOME PROVISIONS OF THE SUPREME PEOPLE’S COURT ON THE SERVICE OF JUDICIAL DOCUMENTS OF FOREIGN-RELATED CIVIL OR COMMERCIAL CASES

Some Provisions of the Supreme People’s Court on the Service of Judicial Documents of Foreign-related Civil or Commercial Cases

Fa Shi [2006] No. 5

(Adopted at the 1394th meeting of the Judicial Committee of the Supreme People’s Court on July 17th, 2006)

In order to regulate the service of judicial documents of foreign-related civil or commercial cases, the present Provisions are formulated
according to the provisions of the Civil Procedure Law of the People’s Republic of China (hereinafter referred to as Civil Procedure
Law) and in combination with trial practices.

Article 1

Where the people’s court hears foreign-related civil or commercial cases and serves judicial documents to the addressee who has no
domicile within the territory of the People’s Republic of China, the present Provisions shall be applicable.

Article 2

The term “judicial documents” which is mentioned in the present Provisions shall refer to the duplicates of the bills of complaint,
duplicates of appeals, duplicates of counterclaims, duplicates of pleadings, authorizations, summons, judgments, intermediation documents,
ruling documents, orders of payment, written decisions, notices, certificates, receipts of service and other judicial documents.

Article 3

Where the addressee is a natural person, legal representative or major principal of an enterprise or any other organization within
the territory of the People’s Republic of China, the people’s court may serve the judicial documents to the natural person or the
legal representative or major principal.

Article 4

Except that the addressee definitely indicates in the authorization that its litigation agent has no right to receive judicial documents
on its behalf, the litigation agent entrusted by the addressee shall be the litigation agent who is enpost_titled to receive judicial
documents on the addressee’s behalf which is prescribed in Item 4 of Article 247 of the Civil Procedure Law, and the people’s court
may serve judicial documents to the litigation agent.

Article 5

Where serving judicial documents to the addressee, the people’s court may serve to the representative agency established within the
territory of the People’s Republic of China by the addressee

Where the addressee has any branch office or business agent within the territory of the People’s Republic of China, the people’s court
may, upon the authorization of the addressee, serve judicial documents to the branch office or the business agent.

Article 6

Where serving judicial documents to the addressee without domicile within the territory of the People’s Republic of China, if any
judicial assistance agreement has been concluded between the country in which the addressee locates and the People’s Republic of
China, the people’s court may serve in the ways as specified in the judicial assistance agreement; if the country in which the addressee
locates is a member country of the Convention on the Service Abroad of Judicial and Extra-judicial Documents in Civil and Commercial
Matters,, the people’s court may serve in the ways as specified in the Convention.

Where the country in which the addressee locates has concluded any judicial assistance agreement with the People’s Republic of China,
and is also a member country of the Convention on the Service Abroad of Judicial and Extra-judicial Documents in Civil and Commercial
Matters, the people’s court may perform according to the provisions of the judicial assistance agreement.

Article 7

Where the judicial documents are served according to any judicial assistance agreement or the Convention on the Service Abroad of
Judicial and Extra-judicial Documents in Civil and Commercial Matters, or through diplomatic ways, if no certificate on the receipt
of service is received upon the expiration of six months since the date when the competent department of China forwards the judicial
documents to the competent department of the country in which the addressee locates, and it can’t confirm the successful service
according to various circumstances, it shall be deemed as that the documents can not be served in this way.

Article 8

Where the country in which the addressee locates permits service by post, the people’s court may serve through post.

When serving by post, the receipt of service shall be attached. In case the addressee does not sign on the receipt of the service
but sign on the receipt of the mail, it shall be deemed as that the judicial documents have been served, and the date of receipt
signed by the addressee shall be regarded as the date of service.

Where no certificate on the receipt of service is received upon the expiration of six months since the date of post, and it can’t
confirm the successful service according to various circumstances, it shall be deemed as that the documents could not be served by
post.

Article 9

Where the people’s court serves judicial documents by the way of public announcement prescribed in Item 7 of Article 247 of the
Civil Procedure Law, the content of the announcement shall be published at the newspapers and periodicals which are publicly circulated
both at home and abroad.

Article 10

Besides the above-mentioned ways of service as prescribed in the present Provisions, the people’s court may serve upon the addressee
by fax, e-mail and other appropriate ways by which the receipt may be confirmed.

Article 11

Besides the way of public announcement, the people’s court may simultaneously adopt many ways to serve, while the date of service
shall be determined according to the first way in which the service is achieved.

Article 12

Where the people’s court serves judicial documents to the addressee’s legal representative, major principal, litigation agent, representative
agency or branch office or business agent that is enpost_titled to receive service, which is within the territory of the People’s Republic
of China, the way of service by leaving it at the addressee’s place may be applicable.

Article 13

Where the addressee does not perform the signing procedure in the judicial documents served by the people’s court, if there is any
of the following circumstances, the service shall be deemed as successful:

1.

The addressee has mentioned the content of the served judicial documents in written form to the people’s court;

2.

The addressee has performed according to the content of the served judicial documents;

3.

Other circumstances under which the service can be deemed as successful.

Article 14

Where it is necessary to forward the judicial documents served by the people’s court through the superior people’s court according
to relevant provisions, the application form for forwarding shall be attached.

The superior people’s court shall, within 7 workdays, forward the judicial documents after the receipt of judicial documents that
are applied to be forwarded by the lower-class people’s court.

Where the superior people’s court deems that the judicial documents applied to be forwarded by the lower-class people’s court do not
comply with relevant provisions and need to be supplemented or corrected, it shall send them back to the people’s court that files
the application for forwarding within 7 workdays.

Article 15

Where it is necessary to provide the translated versions of the judicial documents according to the relevant provision when served
by the people’s court, the people’s court that has accepted the case shall entrust a translation institution within the territory
of the People’s Republic of China to have them translated.

The translated version shall not be affixed with the seal of the people’s court, but shall be signed by or affixed with the seal of
the translation institution or the translator to prove the consistency between the translated text and the original text.

Article 16

The present Provisions shall come into force as of the date of its promulgation.



 
Supreme People’s Court
2006-07-17

 






1...80818283Page 81 of 83

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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