PROMOTION OF PRIVATELY-RUN SCHOOLS LAW

Law of the People’s Republic of China on the Promotion of Privately-run Schools



	(Adopted at the 31st Meeting of the Standing Committee of the Ninth National People’s Congress on December 28, 2002 and promulgated by Order No. 80 of the President of the People’s Republic of China on December 28, 2002) Contents Chapter I General Provisions Chapter II Establishment Chapter III Organization and Activities of Schools Chapter IV Teachers and Educatees Chapter V School Assets and Financial Management Chapter VI Administration and Supervision Chapter VII Support and Reward Chapter VIII Alteration and Termination Chapter IX Legal Responsibility Chapter X Supplementary Provisions Chapter I General Provisions Article 1 This Law is enacted in accordance with the Constitution and the Education Law with a view to implementing the strategy of invigorating the country through science, technology and education, promoting the sound development of privately-run schools, and safeguarding the lawful rights and interests of the privately-run schools and the educatees. Article 2 This Law shall be applicable to activities conducted by public organizations or individuals, other than State organs, to establish and run schools and other institutions of education with non-governmental financial funds, which are geared to the need of society. In cases to which no provisions of this Law are applicable, the provisions in the Education Law and other laws concerning education shall apply. Article 3 Privately-run schools belong to public welfare undertakings and constitute a component part of the cause of socialist education. With regard to privately-run schools, the State applies the principles of enthusiastic encouragement, vigorous support, correct guidance, and administration according to law. People’s governments at all levels shall incorporate the undertakings of the privately-run schools into their plans of national economic and social development. Article 4 Privately-run policy schools shall abide by laws and regulations, implement the education of the State, guarantee the educational quality and devote their efforts to the training of various types of people for the cause of socialist development. Privately-run schools shall implement the principle of separating education from religion. No organizations or individuals may make use of religion to conduct activities designed to interfere with the educational system of the State. Article 5 Privately-run schools and government-run schools shall share equal legal status, and the State safeguards the autonomy of the privately-run schools. The State protects the lawful rights and interests of the sponsors, principals, teachers and staff members and educatees of privately-run schools. Article 6 The State encourages donations made for establishing and running schools. The State rewards and commends organizations and individuals that have made outstanding contributions to the development of the undertakings of privately-run schools. Article 7 The administrative department for education under the State Council shall be in charge of the overall planning, comprehensive coordination and macro-administration of the work relating to privately-run schools nationwide. The administrative department for labor and social security and the relevant departments under the State Council shall respectively be in charge of the work relating to the privately-run schools within the scope of their duties as defined by the State Council. Article 8 The administrative departments for education under the local people’s governments at or above the county level shall be responsible for the work relating to privately-run schools in their own administrative regions. The administrative departments for labor and social security and the relevant departments under the local people’s governments at or above the county level shall respectively be responsible for the work relating to privately-run schools within the scope of their duties. Chapter II Establishment Article 9 Public organizations that establish privately-run schools shall possess the qualifications of a legal person. Individuals that establish privately-run schools shall possess political rights and full capacity for civil conduct. A privately-run school shall have the qualifications of a legal person. Article 10 The establishment of a privately-run school shall meet the local need for educational development and the requirements provided for by the education Law and relevant laws and regulations. The standards for the establishment of privately-run schools shall, mutatis mutandis, conform to those for the establishment of government-run schools of the same grade and category. Article 11 The establishment of privately-run schools that provide education for academic credentials, pre-school education, training for preparing self-study examinations and other cultural education shall be subject to examination and approval by the administrative departments for education under the people’s governments at or above the county level within the limits of their powers defined by the State; the establishment of a privately-run school that mainly provides training for vocational skills, including training for vocational qualification, shall be subject to examination and approval by the administrative department for labor and social security under the people’s government at or above the county level within the limits of its powers defined by the State, which shall send a duplicate of the approval document to the administrative department for education at the same level for the record. Article 12 To apply for preparing to establish a privately-run school, the sponsor shall submit to the examination and approval authority the following materials: (1) an application, the contents of which mainly include: the sponsor, the aims of education, size of the student body, level of the school, forms of education, conditions for establishing and running the school, internal management system, raising of funds and their management and use, etc.; (2) name of the sponsors and their addresses or the post_title of the sponsor and its address; (3) source of the assets, amount of the funds and their effective certificates, in which the property rights are clearly stated; and (4) where the assets of the school are donated, an agreement on the donations, in which the names of the donators, the amount of the assets donated, their use and management, and the relevant effective certificates are clearly stated. Article 13 The examination and approval authority shall, within 30 days from the date it receives the application for preparing to establish a privately-run school, make a decision in writing on whether to approve it or not. If it approves the application, it shall issue a written approval for preparing to establish the school; and if it does not approve the application, it shall explain the reasons. The period of preparation for establishment of such a school shall not exceed three years; and if it exceeds three years, the sponsor shall renew its application. Article 14 To apply for official establishment of a privately-run school, the sponsor shall submit the following materials to the examination and approval authority: (1) the written approval for preparing to establish the school; (2) a report on the preparations made for the establishment; (3) articles of association of the school and the name lists of the component members of the first executive council, board of directors or other decision-making bodies of the school; (4) effective certificates of the assets of the school; and (5) qualification certificates of the principal, teachers, and book-keepers and accountants. Article 15 Where conditions for the establishment of a school are satisfied and the standards for establishment are reached, an application may directly be made for its official establishment, and the materials specified in Article 12 and subparagraphs (3), (4) and (5) of Article 14 of this Law shall be submitted. Article 16 Where an application for official establishment of a privately-run school is made, the examination and approval authority shall, within three months from the date it receives the application, make a decision in writing on whether to approve it or not, and sere the decision on the applicant; and where, in this regard, an application is made for the official establishment of a privately-run institution of higher education, the examination and approval authority may, within six months from the date it receives the application, likewise make a decision in writing on whether to approve it or not and serve the decision on the applicant. Article 17 The examination and approval authority shall issue a license for establishment of a school to the privately-run school for the official establishment of which it gives approval. Where the examination and approval authority does not approve the official establishment of a school, it shall explain the reasons. Article 18 Where a privately-run school obtains the license for establishment and, in accordance with the provisions of relevant laws and administrative regulations, registers with the registration authority, the latter shall immediately handle the matter in accordance with relevant regulations. Chapter III Organizations and Activities of Schools Article 19 A privately-run school shall set up an executive council, a board of directors or other forms of decision-making bodies of the school. Article 20 The executive council or the board of directors of the school shall be composed of the sponsors or their representatives, the principal, and the representatives of the teachers and staff members. More than one-third of the council members or directors shall, at least, have five years’ education or teaching experience each. The executive council or the board of directors of the school shall be composed of not less than five persons, with one of them serving as chairman of the council or board. The name list of the chairman and members of the council or the chairman of the board and directors shall be submitted to the examination and approval authority for the record. Article 21 The executive council or the board of directors of a school shall exercise the following functions and powers: (1) to appoint and dismiss the principal; (2) to amend the articles of association of the school and formulate rules and regulations of the school; (3) to make development plans and approve annual work plans; (4) to raise funds for running the school, and examine and verify the budgets and final accounts; (5) to decide on the size and the wage standards of the teachers and staff members; (6) to decide on the division, merging and termination of the school; and (7) to decide on other important matters. The functions and powers of other forms of decision-making bodies shall be defined in reference to the provisions of this Article. Article 22 The chairman of the executive council or the board of directors or the principal of a privately-run school shall serve as the legal representative of the school. Article 23 A privately-run school shall, in reference to the qualifications for the principal of a government-run school of the same grade and category, appoint its principal, and the age limit may appropriately be extended both ways, and the appointment shall be reported to the examination and approval authority for verification and approval. Article 24 The principal of a privately-run school shall be in charge of education, teaching and administration of the school, and exercise the following functions and powers: (1) to carry out the decisions made by the executive council, board of directors or any other form of decision-making body; (2) to put into execution the development plans, draw up the annual work plans and financial budgets, and formulate the rules and regulations of the school; (3) to appoint and dismiss staff members of the school, and give rewards and impose punishments; (4) to make arrangements for education, teaching and scientific research, and ensure the quality of education and teaching; (5) to be responsible for the daily work of school administration; and (6) other powers delegated by the executive council, the board of directors or any other form of decision-making body of the school. Article 25 A privately-run school may, on the basis of their classifications, the length of schooling and their academic performance and in accordance with the relevant regulations of the State, issue academic credentials, certificates for completing a course or qualification certificates of training to the students it enrolled. Students who receive training in vocational skills may be awarded vocational qualification certificates of the State when they are considered qualified by the vocational skills appraisal authority approved by the State. Article 26 A privately-run school shall, in accordance with law, ensure that the teachers and staff members participate in democratic management and supervision through the representative assembly of the teachers and staff members with the teachers as the main body, or through other forms. Teachers and staff members of a privately-run school shall, in accordance with the Trade Union Law, have the right to form trade union organizations to protect their lawful rights and interests. Chapter IV Teachers and Educatees Article 27 Teachers and educatees of privately-run schools shall enjoy equal legal status as the teachers and educatees of government-run schools shall. Article 28 Teachers appointed by privately-run schools shall possess the qualifications for teaching specified by the State. Article 29 Privately-run schools shall conduct ideological and moral education and professional training among teachers. Article 30 Privately-run schools shall guarantee the wages and welfare benefits for teachers and staff members according to law, and pay social insurance premiums for them. Article 31 The teachers and staff members of privately-run schools shall, in accordance with law, share equal rights with those of government-run schools in respect of professional training, appointment of posts, calculation of the length of service as a teacher or staff member, commendation and reward, and social activities. Article 32 Privately-run schools shall, in accordance with law, safeguard the lawful rights and interests of educatees. Privately-run schools shall, in accordance with the regulations of the State, establish the system for administration of students’ records and give rewards and sanctions to educatees. Article 33 Educatees of privately-run schools shall enjoy equal rights as those of government-run schools of the same grade and category in respect of admission into schools of a higher grade, employment, preferential treatment and being elected as advanced students. Chapter V School Assets and Financial Management Article 34 Privately-run schools shall, in accordance with law, establish financial and accounting systems and assets management system, and keep account books in accordance with the relevant regulations of the State. Article 35 Privately-run schools shall enjoy property rights of the legal persons in respect of the assets provided by sponsors to privately-run schools, State-owned assets, donated property and school accumulation. Article 36 During the period of existence of privately-run schools, all the assets shall, in accordance with law, be managed and used by the schools, and no organization or individual may take illegal possession of them. No organization or individuals may, in violation of laws or regulations, collect any fees from privately-run institutions of education. Article 37 The items and rates of fees to be collected by privately-run schools from educatees who receive education from academic credentials shall be worked out by the schools, submitted to relevant departments for approval and made public; and the items and rates of fees to be collected from other educatees shall be worked out by the schools concerned, submitted to relevant departments for the record and made public. The fees collected by privately-run schools shall be used mainly for educational and teaching activities and the improvement of schools conditions. Article 38 The use and the financial management of the assets for privately-run schools shall be subject to supervision by the examination and approval authority and relevant departments. Privately-run schools shall prepare their financial and accounting statements towards the end of each fiscal year, entrust public accounting firms to audit the statements according to law, and publish the audit results. Chapter VI Administration and Supervision Article 39 Administrative Departments for education and the relevant departments shall provide guidance to privately-run schools in respect of education and teaching and training among teachers. Article 40 Administrative departments for education and the relevant departments shall, in accordance with law, exercise supervision over and provide guidance to privately-run schools, in order to promote the enhancement of the quality of such schools; and they shall make arrangements or entrust public intermediary bodies with the arrangements for assessing the level and the quality of education of such schools, and make the results of the assessment known to the general public. Article 41 The general regulations and advertisements for student enrollment of privately-run schools shall be submitted to the examination and approval authority for the record. Article 42 Where a privately-run school infringes upon the lawful rights and interests of educatees, the educatees and their relatives shall have the right to make petition to the administrative department for education and any relevant department, and the said department shall handle it without delay. Article 43 The State supports and encourages public intermediary bodies to provide services to privately-run schools. Chapter VII Support and Reward Article 44 People’s governments at or above the county level may set up special funds for financing the development of privately-run schools and for rewarding and commending the collectives and individuals that have made outstanding contributions. Article 45 People’s governments at or above the county level may take such measures as financial aid and the lease or transfer of idle State-owned assets in support of privately-run schools. Article 46 Privately-run schools shall enjoy preferential taxation policy formulated by the State. Article 47 Civilian-run schools may, in accordance with the relevant laws and regulations of the State, accept donations afforded by citizens, legal persons or other organizations. The State, in accordance with relevant regulations, applies preferential taxation policy to citizens, legal persons or other organizations that donate property to privately-run schools, and bestows commendations on them. Article 48 The State encourages financial institutions to support the development of privately-run schools by means of credit. Article 49 Where a people’s government entrusts a privately-run school with the task of compulsory education, it shall, in accordance with the agreement of entrustment, appropriate the necessary amount of funds for education. Article 50 Where a privately-run school is constructed or expanded, the people’s government concerned shall give it preferential treatment in accordance with the regulations on the use of land for, and the construction of, public welfare undertakings. No land to be used for education may be used for other purposes. Article 51 After the cost of a privately-run school is deducted, the funds for its development are withheld and the sum of money for other necessary expenses is drawn in accordance with the relevant regulations of the State, the fund providers may obtain a reasonable amount of requital from the cash surplus of the school. Specific measures for obtaining reasonable amounts of requital shall be formulated by the State Council. Article 52 The State takes measures to support and encourage public organizations and individuals to establish and run privately-run schools for the development of education in minority nationality areas and in out-lying and poverty-stricken areas. Chapter VIII Alteration and Termination Article 53 The executive council or the board of directors of a privately-run school to be divided or merged into other schools shall, after financial settlement, apply to the examination and approval authority for approval. Where a privately-run school applies for division or merging, the examination and approval authority shall, within three months form the date it receives the application, give a reply in writing; and where the application is made for the division or merging of a privately-run institution of higher education, the examination and approval authority may, within six months from the date it receives the application, likewise give a reply in writing. Article 54 For alteration of the sponsor of a privately-run school, the matter shall be put forth by the sponsor and, after financial settlement and upon agreement by the executive council or the board of directors of the school, submitted to the examination and approval authority for verification and approval. Article 55 For alteration of the name, level, or category of a privately-run school, the matter shall be submitted by the executive council or the board of directors of the school to the examination and approval authority for approval. Where an application is made for the alteration of a privately-run school from one type to another, the examination and approval authority shall, within three months from the date it receives the application, give a reply in writing; and where the application is made for alteration to a privately-run institution of higher education, the examination and approval authority may, within six months from the date it receives the application, likewise give a reply in writing. Article 56 Where a privately-run school is found in one of the following circumstances, it shall be terminated: (1) it is required to be terminated according to the provisions of the articles of association of the school, and the termination is approved by the examination and approval authority; (2) the license for running the school is revoked; or (3) it cannot continue due to insolvency. Article 57 When a privately-run school is to be terminated, it shall make proper arrangements for the students in school. When a privately-run school providing compulsory education is to be terminated, the examination and approval authority shall assist the school to make arrangements for the students to continue their studies. Article 58 When a privately-run school is to be terminated, it shall make financial settlement according to law. Where a privately-run school requests termination itself, it shall make arrangements for the settlement; where it is abolished by the examination and approval authority according to law, the settlement shall be arranged by the authority; and where it is terminated because it cannot continue due to insolvency, the settlement shall be arranged by the People’s Court. Article 59 Property of a privately-run school shall be liquidated in the following order: (1) tuition fees and extras and other expenses paid by educatees that should be returned; (2) wages payable to the teachers and staff members and the social insurance premiums that should be paid; and (3) other debts that should be cleared off. The remaining property of a privately-run school after the debts mentioned above are cleared off shall be disposed of in accordance with the provisions of relevant laws and administrative regulations. Article 60 When a privately-run school is terminated, the license for running the school shall be taken back, its seals destroyed and its registration cancelled by the examination and approval authority. Chapter IX Legal Responsibility Article 61 Where, in conducting education activities, a privately-run school violates the provisions of the Education Law or the Teachers Law, it shall be punished in accordance with the relevant provisions of the Education Law or the Teachers Law. Article 62 Where a privately-run school commits one of the following acts, the examination and approval authority or the relevant department shall order it to rectify within a time limit and give it a disciplinary warning; if there are unlawful gains derived therefrom, they shall be confiscated after returning the fees collected; if the circumstances are serious, it shall be ordered to stop enrolling students and its license for running the school shall be revoked; and if a crime is constituted, it shall be investigated for criminal responsibility according to law: (1) dividing or merging the privately-run school without authorization; (2) altering the name, level, category and sponsor of the privately-run school without authorization; (3) publishing false general regulations of enrollment or advertisements for the purpose of defrauding money; (4) unlawfully issuing or forging academic credential, certificates of courses completed, certificates of training or vocational qualification certificates; (5) seriously affecting education and teaching due to haphazard administration, which exerts a bad influence on society; (6) obtaining the license for running the school by submitting false supporting documents or concealing important facts by other deceptive means; (7) forging, counterfeiting, dealing in, renting or lending its license for running the school; or (8) terminating the school in bad faith, illegally withdrawing its funds or misappropriating the funds for running the school. Article 63 Where the examination and approval authority or the relevant department commits one of the following acts, it shall be ordered by the authority at the higher level to rectify; if the circumstances are serious, the persons directly in charge and the other persons directly responsible shall be given administrative sanctions according to law; if economic losses are caused, it shall bear the responsibility to pay compensation according to law; and if a crime is constituted, it shall be investigated for criminal responsibility according to law: (1) failing to give a reply within the prescribed time limit to an accepted application for the establishment of a privately-run school; (2) giving approval to an application which does not conform to the conditions provided for in this Law; (3) causing serious consequences due to careless administration; (4) collecting fees in violation of the relevant regulations of the State; (5) infringing upon the lawful rights and interests of a privately-run school; or (6) abusing its powers or engaging in malpractices in other ways. Article 64 Where a public organization or individual establishes or runs a private school without authorization, it/he shall be ordered by the relevant administrative department of the people’s government at or above the county level to rectify within a time limit; if the school conforms to the conditions provided for in this Law or relevant laws regarding privately-run schools, it may go through the formalities of examination and approval; if fails to meet the conditions at the expiration of a prescribed time limit, it shall be ordered to stop running the school, and if economic losses are caused, it shall bear the responsibility to pay compensation. Chapter X Supplementary Provisions Article 65 The privately-run schools mentioned in this Law include other privately-run institutions of education established according to law. The principals mentioned in this Law include the principal administrative persons in charge of other privately-run institutions of education. Article 66 Measures for administration of profit-making privately-run training institutions registered with the administrative department for industry and commerce shall be separately formulated by the State Council. Article 67 Measures for schools established and run cooperatively by overseas organizations or individuals within the territory of the People’s Republic of China shall be formulated by the State Council. Article 68 This Law shall go into effect as of September 1, 2003. The Regulations on Schools Run by Different Sectors of Society issued by the State Council on July 31, 1997 shall be abolished at the same time.

ADMINISTRATIVE RULES GOVERNING THE AUTO FINANCING COMPANY

Administrative Rules Governing the Auto Financing Company

Chapter I General Provisions

Article 1 The Administrative Rules Governing the Auto Financing Company (hereinafter referred to as the Rules) is stipulated in accordance
with relevant laws and regulations to serve the need of developing auto financing business and regulating the business activities
of the non-bank financial institutions engaging in auto financing business.

Article 2 Auto financing companies referred to in the Rules are defined as non-bank financial legal entities charted by the China Banking Regulatory
Commission in compliance with relevant laws, regulations and the Rules to provide loans for auto buyers and dealers in the mainland
of China.

Article 3 Auto financing companies are supervised and regulated by the China Banking Regulatory Commission.

Chapter II Incorporation, Change and Termination

Article 4 The establishment of an auto financing company shall be subject to the approval of the China Banking Regulatory Commission.

Without the approval of the China Banking Regulatory Commission, no individual or entity shall be allowed to establish an auto financing
company, or engage in auto financing business, or include in the name of a company such names as auto financing or auto loan
that indicate the company s engagement in auto financing business

Article 5 An investor of an auto financing company shall satisfy following requirements:

(a) It shall be a corporate legal entity incorporated in and outside China.

If the investor is a non-financial entity, its total assets of the previous year shall be no less than RMB4 billion yuan or an equivalent
amount in convertible currencies; its annual business revenue of the previous year shall be no less than RMB2 billion yuan or an
equivalent amount in convertible currencies.

If the investor is a non-bank financial institution, its registered capital shall be no less than RMB300 million yuan or an equivalent
amount in convertible currencies;

(b) It shall have sound business performance and remain profitable for the last three consecutive years;

(d) In case of the largest investor, it shall be an auto enterprise or a non-bank financial institution.

The auto enterprise refers to an enterprise that manufactures and sells the whole unit of an automobile.

The largest investor refers to the investor with the largest share of capital and its capital contribution accounting for no less
than 30 percent of the total equity of the auto financing company;

(e) It shall not invest in more than one auto financing company; and

(f) It shall satisfy other prudential supervisory requirements set forth by the China Banking Regulatory Commission.

Article 6 An auto financing company shall satisfy the following conditions in order to be incorporated:

a) the minimum amount of registered capital required by the Rules;

b) Articles of Association that complies with relevant laws including the Company Law of the People s Republic of China and the Rules;

c) senior management familiar with auto financing and other related business;

d) a sound organizational structure, management and risk control systems;

e) proper business premises, safety measures and other facilities for business operations; and

f) other conditions set out by the China Banking Regulatory Commission.

Article 7 The minimum registered capital of an auto financing company shall be no less than RMB500 million yuan or an equivalent amount in
convertible currencies. Registered capital shall be paid-in capital.

The China Banking Regulatory Commission shall have the power to adjust the minimum registered capital of an auto financing company
in line with the developments of auto financing business and the prudential requirements, but the adjusted floor shall not be lower
than the amount provided in this Article.

Article 8 The establishment of an auto financing company shall cover two stages, i.e. the preparation stage and the business commencement stage.
The Chinese text of all application documents for the preparation and the business commencement stages shall prevail.

Article 9 To apply for the preparation of a prospective auto financing company, the largest investor of the company shall act as the applicant
and submit the following documents to the China Banking Regulatory Commission:

(a) an application letter, including the auto financing company s name, location of incorporation, registered capital, business scope
and investors names and amounts of investment, etc.;

(b) a feasibility study on establishing the auto financing company, including a market analysis, a business plan, the organizational
structure, an assessment of the company s risk control capability, the proforma balance sheet and profits in the following three
years after the business commencement;

(d) basic information of each investor of the auto financing company, including name, legal representative, location of incorporation,
a photocopy of the business license and a summary of business performance, etc.;

(e) the investor s balance sheet, profit and loss statement and cash flow statement for the latest three years audited by qualified
auditing firms;

(f) name and resume of the person in charge of the preparation; and

(g) other documents required by the China Banking Regulatory Commission.

If the applicant is a foreign non-bank financial institution, it shall submit the consent of its home country supervisory authority
in writing. If the applicant is a non-financial entity, it shall submit the credit rating report of the previous year by a rating
agency.

Article 10 The China Banking Regulatory Commission, upon receiving a complete set of application documents for the preparation of an auto financing
company, shall provide its decision of approval or denial in writing within six months.

Article 11 The applicant shall, upon receiving the approval letter from the China Banking Regulatory Commission, complete the preparation within
six months. If the applicant has justification for prolonging the preparation stage beyond the prescribed period, it shall submit
a written application to the China Banking Regulatory Commission before the original deadline falls due, and may extend the preparation
stage for up to three months subject to the approval.

If the applicant fails to apply for business commencement upon the completion of the preparation stage or the extended preparation
stage, the original approval document for the preparation shall become void automatically.

During the preparation stage, the applicant shall not conduct any auto financing business.

Article 12 The applicant shall, before the deadline of the preparation stage or the extended preparation stage, apply for business commencement
to the China Banking Regulatory Commission with the following attachments:

(a) a report on completion of the preparation and an application letter for business commencement;

(b) a certification of paid-in capital issued by a qualified Chinese certifying agency, and a registration certificate issued by the
State Administration of Industry and Commerce;

(d) names and detailed resumes of proposed senior managerial personnel;

(e) name and capital contribution of each shareholder;

(f) proposed business rules and procedures and internal controls;

(g) verification documents on business premises and other business-related facilities issued by relevant authorities; and

(h) other documents required by the China Banking Regulatory Commission.

Article 13 The China Banking Regulatory Commission, upon receiving a complete set of business commencement application documents, shall provide
its decision of approval or denial of the application within three months. If the application is approved, the applicant shall receive
a written approval letter attached with a license to conduct financial business with the prescribed business scope. If the application
is denied, the applicant shall receive a written notice in which reasons for denial are provided.

The applicant shall, before commencing operations, register with the State Administration of Industry and Commerce with the presentation
of the license to conduct financial business, and receive a corporate legal entity business License.

The China Banking Regulatory Commission shall revoke the license to conduct financial business and issue a public notice of the revocation
if the auto financing company, after receiving the business license, fails without justification to open business within three months,
or, without approval, stops operation for six consecutive months after business commencement.

Article 14 An auto financing company shall not set up any branch or subsidiary.

Article 15 The appointment of the senior managerial personnel of an auto financing company shall be either subject to the qualification review
by the China Banking Regulatory Commission or filed with the China Banking Regulatory Commission for record.

The chairman of the board of directors, general manager and deputy general manager, executive directors, and chief financial officer
of an auto financing company are subject to the qualification view by the China Banking Regulatory Commission. The qualifications
of these senior managerial personnel and procedures relating to qualification review and filing for record shall be issued separately.

Article 16 An auto financing company, in case of any of the following changes, shall seek the approval of the China Banking Regulatory Commission:

(a) change of company name;

(b) change of registered capital;

(d) change of business scope;

(e) change of organizational structure;

(f) change of equity structure;

(g) revision of Articles of Association;

(h) change of senior managerial personnel;

(i) merger or split; and

(j) other changes that require the approval of the China Banking Regulatory Commission.

Article 17 The liquidation of an auto financing company whose operation is terminated because of dissolution, closure or bankruptcy, shall be
carried out in compliance with relevant laws and regulations.

Chapter III Business Scope and Supervision

Article 18 An auto financing company may conduct all or part of the following lines of Renminbi business with the approval of the China Banking
Regulatory Commission:

(a) taking deposits with maturity of no less than three months from its shareholders in the mainland of China;

(b) extending loans for auto purchase;

(c) extending loans to auto dealers for purpose of purchasing automobiles or facilities for operations (including the show-room construction,
purchase of spare parts and equipment repairs);

(d) transferring and selling auto loan receivables;

(e) borrowing from financial institutions;

(f) providing guarantee for auto purchase financing;

(g) agency business relating to auto purchase financing; and

(h) other loan business approved by The China Banking Regulatory Commission.

Article 19 An auto financing company, in case of extending loans to a natural person for auto purchase, shall observe relevant rules governing
the auto loans to individual buyers promulgated by the relative supervisory authority. In case of extending auto loans to a legal
entity or other organizations, an auto financing company shall observe relevant rules set out by General Provisions of Loans and
other regulations.

Article 20 An auto financing company, without the approval of relevant regulatory authorities, shall not issue bonds or borrow funds from overseas.
When an auto financing company s establishment and business operations involve currency exchange, outward repatriation of profits,
provision of auto loans for non-residents, capital management or other business transactions relating to foreign exchange administration,
the company shall be subject to relevant regulations to be jointly issued by relative regulatory authorities and the State Administration
of Foreign Exchange.

Article 21 An auto financing company shall meet the requirement on the capital to risk assets ratio, and the capital adequacy ratio shall not
be less than ten percent. The China Banking Regulatory Commission may increase the minimum requirement of capital adequacy ratio
of an individual company in line with the company s risk profile and risk management capability. Other requirements on risk control
and management relating to various kinds of assets shall be issued separately by the China Banking Regulatory Commission.

Article 22 An auto financing company shall adopt relevant accounting rules for financial institutions.

Article 23 An auto financing company shall compile in required format and submit to the China Banking Regulatory Commission the balance sheet,
the profit and loss Statement, the cash flow statement and other statements required by the China Banking Regulatory Commission,
and submit the financial statements of the previous year within three months after the end of each accounting year.

An auto financing company shall not provide false financial statements, or statements in which important facts are concealed.

Article 24 An auto financing company shall establish and improve various business management systems and internal controls in line with Guidelines
on Strengthening Internal Controls of Commercial Banks issued by the People s Bank of China, and report the systems to the China
Banking Regulatory Commission before their implementation.

Article 25 An auto financing company shall accept the on-site examination and the off-site surveillance by the China Banking Regulatory Commission.

Article 26 The China Banking Regulatory Commission may call the legal representatives or other senior managerial personnel of an auto financing
company for inquiries into problems discovered during regular examinations, and demand the company to correct within a prescribed
time frame.

Article 27 An auto financing company shall establish a system of external audit on a regular basis and submit to the China Banking Regulatory
Commission annual auditor s report signed by the company s legal representative within six months after the end of each accounting
year.

Article 28 An auto financing company, in case of encountering payment difficulties or other emergencies, shall take remedial actions, and promptly
report to the China Banking Regulatory Commission.

Article 29 The China Banking Regulatory Commission shall demand remedial actions by an auto financing company in case of the following circumstances:

(a) The company suffers from a loss in the current year of above 50 percent of the registered capital or losses in the last three
consecutive years of above 10 percent of the registered capital;

(b) The company is in payment difficulties; and

(c) The company faces other major operational risks that the China Banking Regulatory Commission deems necessary to issue an order
for corrective actions.

Article 30 The China Banking Regulatory Commission, after issuing an order for corrective actions to an auto financing company, may take the
following enforcement actions:

(a) demanding or prohibiting the change of the company s senior managerial personnel;

(b) suspending part of the company s business or prohibiting the company s engagement in new business lines;

(d) demanding the company to change its equity structure or implement other forms of restructuring;

(e) prohibiting the dividend distribution; and

(f) other enforcement actions that the China Banking Regulatory Commission deems necessary.

Article 31 An auto financing company, when receiving an order for remedial actions, shall not resume normal business operations until the following
conditions are met and are approved by the China Banking Regulatory Commission:

(a) Solvency is restored;

(b) Losses are covered; and

Article 32 The maximum time limit that an auto financing company is allowed for corrective actions shall not exceed one year. If the company
fails to meet the objectives of remedial actions within the prescribed time limit, its operation shall be terminated in accordance
with relevant laws and regulations.

Article 33 Auto financing companies may establish a trade association for self-regulation purposes. The activities of the trade association
are subject to the guidance and oversight of the China Banking Regulatory Commission.

Chapter IV Legal Liabilities

Article 34 Any establishment of an auto financing company or any auto financing business without the approval of the China Banking Regulatory
Commission shall be banned. If the case constitutes a crime, criminal liabilities shall be investigated. If the case dose not constitute
a crime, the China Banking Regulatory Commission shall confiscate the illegal earnings and impose a fine between one to five times
the illegal earnings. If no illegal earnings are involved, the China Banking Regulatory Commission shall issue an order for remedial
actions and impose a fine of no less than RMB100,000 yuan and no more than RMB500,000 yuan.

Article 35 The China Banking Regulatory Commission shall demand correction and impose a fine of RMB1000 yuan if a company, without the approval
of the China Banking Regulatory Commission, includes in its name such words as auto finance , auto loan , etc. that indicate
the company s engagement in auto financing business.

Article 36 In case of an auto financing company being found to engage in business activities beyond its prescribed business scope, the China
Banking Regulatory Commission shall issue a warning against the company, confiscate the illegal earnings and impose a fine in a range
of one to five times the illegal earnings. If no illegal earnings are involved, the China Banking Regulatory Commission imposes a
fine of no less than RMB100,000 yuan and no more than RMB500,000 yuan. If the case constitutes a crime, the criminal liabilities
shall be investigated.

Article 37 In case of an auto financing company being found in violation of relevant provisions of the Rules to provide false financial statements
or statements in which important facts are concealed, the China Banking Regulatory Commission shall issue a warning against the company,
and impose a fine of no less than RMB100,000 yuan and no more than RMB500,000 yuan. If the case constitutes a crime, the criminal
liabilities shall be investigated.

Article 38 In case of an auto financing company being found in violation of relevant provisions of the Rules to reject or impede the examinations
and oversight by the supervisor, the China Banking Regulatory Commission shall issue a warning against the company, and impose a
fine of no less than RMB10,000 yuan and no more than RMB30,000 yuan.

Article 39 An auto financing company, in case of being found in violation of the Rules, shall be punished in accordance with the provisions
of Article 34 to Article 38. If the violation is a serious one, the China Banking Regulatory Commission may ban the company s senior
managerial personnel from holding senior management position for one to ten years, or in some particular case, for life.

Article 40 An auto financing company, in case of being found in violation of other Chinese laws and regulations, shall be subject to enforcement
actions by relevant regulatory authorities.

Chapter V Supplementary Provisions

Article 41 The Rules is applicable to all auto financing companies incorporated in the mainland of China funded by investors from Hong Kong
Special Administrative Region, Macao Special Administrative Region and Taiwan province.

Article 42 The Rules enters into effect on October 3, 2003, and the power of the interpretation rests with the China Banking Regulatory Commission.

EDITOR:Victor

LAW OF THE PEOPLE’S REPUBLIC OF CHINA ON SECURITIES INVESTMENT FUND

Standing Committee of the National People’s Congress

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

No.9

The Law of the People’s Republic of China on Securities Investment Fund, which was adopted at the fifth meeting of the Standing Committee
of the Tenth National People’s Congress on October 28, 2003, is hereby promulgated and shall take effect as of June 1, 2004.

Hu Jintao, the President of the People’s Republic of China

October 28, 2003

Law of the People’s Republic of China on Securities Investment Fund ContentsChapter I General Provisions

Chapter II Fund Managers

Chapter III Fund Trustees

Chapter IV Raising of Fund

Chapter V Trading of Fund Shares

Chapter VI Subscription to and Redemption of Fund Shares

Chapter VII Fund Operations and Information Disclosure

Chapter VIII Alteration and Termination of the Fund Contract and Liquidation of Fund Property

Chapter IX Rights of the Fund Share Holders and the Exercise thereof

Chapter X Supervision and Administration

Chapter XI Legal LiabilitiesChapter XII Supplementary Provisions

Chapter I General Provisions

Article 1

The present Law is enacted with a view to regulating the activities concerning securities investment fund, to protect the legitimate
rights and interests of the investors and other relevant parties, and to promote the healthy development of securities investment
fund and securities market.

Article 2

The present Law shall apply to the securities investment activities conducted through the method of portfolio and through public offering
of fund shares to raise securities investment fund (hereinafter referred to as fund), which is managed by fund managers and entrusted
to fund trustees for the benefits of the fund share holders; the matters not covered by the present Law shall be governed by the
Trust Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, and other relevant laws and administrative
regulations.

Article 3

The rights and obligations of the fund managers, fund trustees and fund share holders shall be stipulated in the fund contracts in
accordance with the present Law.

The fund managers and fund trustees shall perform the duties of trusteeship in accordance with the present Law and the fund contract.
A holder of fund shares shall enjoy the benefits and bear the risks to the extent of the fund shares it holds.

Article 4

Those engaging in the activities involving securities investment fund shall adhere to the principles of free will, fairness and good
faith, and may not impair the state and public interests.

Article 5

A fund contract shall stipulate the operation method of the fund. A fund can be operated in a closed, open, or any other way.

A fund operated in a closed way (hereinafter referred to as closed fund) refers to the fund of which the ratified total fund shares
remains fixed during the valid term of the fund contract and of which the fund shares can be traded on the securities exchanges established
according to law, but can not be redeemed by the fund share holders through application.

A fund operated in an open way (hereinafter referred to as open fund) refers to the fund of which the total fund shares are unfixed
and of which the fund shares may be subscribed to or redeemed at the time and place stipulated in the fund contract.

The methods of offering, trading, subscription and redemption of the fund shares of other funds operated through other methods shall
be separately formulated by the State Council.

Article 6

Fund property shall be independent from the property owned by the fund manager and fund trustee. The fund manager and fund trustee
may not attribute any of the fund property into their own property.

The property and benefits obtained by the fund manager and fund trustee as a result of the management, utilization or any other use
of the fund shall be included into the fund property.

Where the fund manager or fund trustee goes into liquidation as a result of dissolution, cancellation, or declared bankruptcy according
to law, the fund property shall not be taken as their liquidation property.

Article 7

The credit rights of fund property may not be set off against the debts of the property owned by the fund manager and fund trustee;
and the credit rights and debts of different fund properties may not be set off against each other.

Article 8

The debts not arising out of the fund property may not be enforced against such fund property.

Article 9

The fund manager and fund trustee shall, in managing and utilizing the fund property, devote themselves to their duties and perform
the obligations of good faith, prudence and diligence.

Fund practitioners shall have obtained the qualifications for practice relating to funds, and shall abide by the laws, administrative
regulations, professional ethics, and code of conduct.

Article 10

Fund managers, fund trustees and fund share offering institutions may establish trade associations to strengthen self-regulation,
coordinate trade relationship, provide trade services, and promote the development of the trade.

Article 11

The securities regulatory department under the State Council shall supervise and regulate the activities concerning securities investment
fund according to law.

Chapter II Fund Managers

Article 12

Fund managers shall be assumed by the fund management companies established according to law.

To be a fund manager, the ratification of the securities regulatory department under the State Council is required.

Article 13

For establishment of a fund management company, the following conditions shall be satisfied and the approval of the securities regulatory
department under the State Council is required:

Having the articles of association which are in conformity with the present Law and the Company Law of the People’s Republic of China;

Having a registered capital of no less than 100 million RMB and all of the capital being paid-in monetary capital;

Principal shareholders having good business performance and public reputation in the securities business, securities investment consultation,
trust assets management or other financial assets management, having no record of violation of law within the last 3 years, and having
a registered capital of no less than 300 million RMB;

The number of persons with fund practice qualification reaching the statutory requirement;

Having business sites, security facilities and other facilities relating to fund management business that comply with the requirements;

Having sound internal auditing and monitoring system and risk control system;

Other conditions provided for by laws and administrative regulations and those provided for by the securities regulatory department
under the State Council and approved by the State Council.

Article 14

The securities regulatory department under the State Council shall, within 6 months from accepting the application for establishment
of a fund management company, make the examination pursuant to the conditions specified in Article 13 hereof and the principle of
prudent regulation, make the decision whether to grant the approval or not, and notify the applicant, and shall explain the reasons
if no approval is granted.

Where a fund management company is to establish any branch, modify its articles of association, or alter any other major matters,
it shall apply to the securities regulatory department under the State Council for approval. The securities regulatory department
under the State Council shall, within 60 days from the day of accepting the application, make the decision whether to grant approval
or not, and notify the applicant, and shall explain the reasons if no approval is granted.

Article 15

None of the following personnel may be a securities practitioner of a fund manager:

Those being given criminal penalties for the crime of bribery and embezzlement, malfeasance, or encroachment of property, or the crime
of undermining the socialist market economic order;

The directors, supervisors, factory directors, mangers and other senior executives who are personally liable for the bankruptcy and
liquidation due to poor management or the revocation of business license due to violation of law of the companies and enterprises
in which they hold office, provided that it has been less than 5 years since the day of the end of the bankruptcy liquidation or
of the revocation of business license;

Those with large amount of outstanding personal debts;

The practitioners of fund managers, fund trustees, securities exchanges, securities companies, securities registration and settlement
institutions, futures exchanges, futures brokerage companies and other institutions, and the state functionaries that have been dismissed
due to violations of law;

The lawyers, certified accountants, practitioners of assets evaluation institutions and assets verification institutions, and practitioners
of investment consultation institutions whose practice licenses have been revoked or who have been disqualified due to violations
of law;

Other personnel that may not engage in the fund business as provided for by any law or administrative regulation.

Article 16

The managers and other senior managerial personnel of a fund manager shall be familiar with the laws and administrative regulations
concerning securities investment, have the qualification for fund practice, and have worked in the field relevant to the position
they hold for more than 3 years.

Article 17

The selection or change of the managers and other senior managerial personnel of a fund manager shall be submitted to the securities
regulatory department under the State Council for examination in accordance with the conditions for holding such office provided
for by the present Law and other relevant laws and administrative regulations.

Article 18

The directors, supervisors, managers and other practitioners of a fund manager may not hold any position in the fund trustee or other
fund managers, and may not conduct any securities transactions and other activities that impair the fund property and the interests
of the fund share holders.

Article 19

A fund manager shall perform the following duties:

Raising the fund according to law and handling or entrusting other institutions recognized by the securities regulatory department
under the State Council to handle the offering, subscription, redemption and registration of fund shares;

Making fund records;

Applying separate management and separate account books to different fund properties it manages to make securities investment;

Determining the scheme on distribution of fund proceeds according to the stipulations of the fund contract and distributing profits
to the holders of fund shares in good time;

Making fund accounting and preparing the fund financial accounting report;

Preparing midterm and annual fund reports;

Calculating and publicizing the net value of the fund assets and determining the prices for subscription and redemption of the fund
shares;

Handling the relevant information disclosures related to the management of the fund property;

Convening the fund share holders’ meeting;

10)

Keeping the records, account books, statements and other relevant materials of the fund property management;

11)

Exercising litigation rights or carrying out other legal action in the name of the fund manager for the interests of the fund share
holders;

12)

Other duties provided for by the securities regulatory department under the State Council.

Article 20

A fund manager may not conduct any of the following acts:

Mixing its own property or the property of others with the fund property to make securities investment;

Treating different fund properties it manages unfairly;

Seeking benefits for any third party other than the fund share holders by using the fund property;

Unlawfully promising the fund share holders to make benefits or bear losses;

Any other acts prohibited by the securities regulatory department under the State Council in accordance with the relevant provisions
of the laws and administrative regulations.

Article 21

With respect to a fund manager under any of the following circumstances, the securities regulatory department under the State Council
shall, according to its powers, order that fund manager to make rectification or disqualify it as a fund manager:

Having committed any serious violations of laws or rules;

No longer meeting the conditions provided for in Article 13 hereof;

Other circumstances provided for by laws and administrative regulations.

Article 22

Under any of the following circumstances, the duties of a fund manager shall terminate:

Being disqualified for fund management;

Being dismissed by the fund share holders’ meeting;

Being dissolved, or cancelled, or declared bankruptcy according to law;

Other circumstances stipulated in the fund contract.

Article 23

Where the duties of a fund manager terminate, the fund share holders’ meeting shall appoint a new fund manager within 6 months; before
the appointment of the new fund manager, the securities regulatory department under the State Council shall designate a temporary
fund manager.

A fund manager shall, upon termination of its duties, keep in good conditions the materials of fund management and process the formalities
for handover of the business in good time, the new fund manger or temporary fund manager shall take over the business in good time.

Article 24

A fund manager shall, upon termination of its duties, retain an accounting firm to audit the fund property, publicize the auditing
results and put on record with the securities regulatory department under the State Council.

Chapter III Fund Trustees

Article 25

Fund trustee shall be assumed by a commercial bank which was established according to law and has obtained the qualification for fund
trust.

Article 26

To apply for the qualification for fund trust, a commercial bank shall satisfy the following conditions and be ratified by the securities
regulatory department and the banking regulatory department under the State Council:

Its net assets and capital adequacy complying with the relevant provisions;

Having set up a specialized department of fund trust;

The number of the full-time personnel with fund practice qualification reaching the statutory requirement;

Having the conditions for safe keeping of the fund property;

Having safe and high efficient clearing and settlement system;

Having business sites, security facilities and other facilities relating to fund trust business that meet the requirement;

Having sound internal auditing and monitoring system and risk control system;

Satisfying other conditions provided for by laws and administrative regulations and the conditions provided for by the securities
and banking regulatory departments under the State Council and approved by the State Council.

Article 27

Articles 15 and 18 shall apply to the practitioners of the specialized fund trust department of a fund trustee.

Articles 16 and 17 shall apply to the managers and other senior managerial personnel of the specialized fund trust department of a
fund trustee.

Article 28

A fund trustee and a fund manager may not be the same party, and may not make capital contribution to or hold the shares of each other.

Article 29

A fund trustee shall perform the following duties:

Keeping the fund property safely;

Opening capital accounts and securities accounts of the fund property pursuant to the provisions;

Setting up separate accounts for different fund properties under its trust and ensuring the completeness and independence of the fund
properties;

Keeping the records, account books, statements and other relevant materials of the fund trust business;

Handling the clearing and settlement at the investment orders of the fund manager pursuant to the stipulations of the fund contract;

Handling the information disclosures relating to the fund trust business activities;

Presenting opinions on the fund financial accounting report and the midterm and annual fund reports;

Checking and examining the net value of the fund assets and the subscription and redemption prices of the fund shares calculated by
the fund manager;

Convening the fund share holders’ meeting pursuant to the provisions;

10)

Supervising the investment operations of the fund manager pursuant to the provisions;

11)

Other duties provided for by the securities regulatory department under the State Council.

Article 30

Where a fund trustee finds out that any investment order of a fund manager is in violation of any of the laws, administrative regulations
or other relevant provisions, or the stipulations of the fund contract, it shall refuse to execute such order, notify the fund manager
immediately and report to the securities regulatory department under the State Council in good time.

Where a fund trustee finds out that any investment order of a fund manager which has taken effect according to the transaction procedures
is in violation of the laws, administrative regulations or other relevant provisions, or the stipulations of the fund contract, it
shall notify the fund manager immediately and report to the securities regulatory department under the State Council in good time.

Article 31

The provisions of Article 20 hereof shall apply to fund trustees.

Article 32

With respect to a fund trustee under any of the following circumstances, the securities and banking regulatory departments under the
State Council shall, according to their powers, order it to make rectification or disqualify it as a fund trustee:

Having committed any serious violation of laws and rules;

No longer meeting the conditions provided for in Article 26 hereof;

Other circumstances provided for by laws and administrative regulations.

Article 33

The duties of a fund trustee shall be terminated under any of the following circumstances:

Being disqualified as a fund trustee;

Being dismissed by the fund share holders’ meeting;

Being dissolved, cancelled, or declared bankruptcy according to law; or

Other circumstances stipulated in the fund contract.

Article 34

Upon termination of the duties of a fund trustee, the fund share holders’ meeting shall appoint a new fund trustee within 6 months;
and before the appointment of the new fund trustee, the securities regulatory department under the State Council shall designate
a temporary fund trustee.

A fund trustee shall, upon termination of its duties, keep in good conditions the fund property and fund trust business materials
and process the formalities for handover of the property and business in good time, the new fund trustee or temporary fund trustee
shall take over the property and business in good time.

Article 35

A fund trustee shall, upon termination of its duties, retain an accounting firm to audit its fund property pursuant to the provisions,
publicize the auditing results, and report to the securities regulatory department under the State Council for archival purposes
at the same time.

Chapter IV Raising of Fund

Article 36

A fund manager shall, when offering fund shares and raising fund pursuant hereto, submit the following documents to and get ratification
from the securities regulatory department under the State Council:

An application report;

A draft fund contract;

A draft fund trust agreement;

A draft prospectus;

Qualification certificates of the fund manager and fund trustee;

Financial accounting reports, which have been audited by accounting firms, of the fund managers and fund trustees of the last 3 years
or since their establishment;

Letters of legal opinion issued by law firms; and

Other documents to be submitted as provided for by the securities regulatory department under the State Council.

Article 37

A fund contract shall include the following contents:

Purpose for raising the fund and the name of the fund;

Names and domiciles of the fund manager and fund trustee;

Method of fund operation;

Total fund shares and the valid term of the fund contract in the case of a closed fund, or the minimum total shares to be raised in
the case of an open fund;

Principles for determining the date of offering of fund shares, the prices and expenses;

Rights and obligations of the fund share holders, fund manager and fund trustee;

Procedures and rules for the convening of, and deliberation and voting on the fund share holders’ meeting;

The procedures, time and place of the offering, trading, subscription and redemption of fund shares, the calculation method of expenses,
and the time and method of payment of redemption price;

Principles for the distribution of fund proceeds and the method of execution of such principles;

10)

Methods of drawing and paying and proportions of the administrative fees and trust fees as the remuneration of the fund manager and
fund trustee;

11)

Methods of drawing and paying other expenses relating to the management and utilization of fund property;

12)

Directions of and restrictions on investment of fund property;

13)

Calculation method and publicizing method of the net value the fund assets;

14)

Methods of handling where the fund raised fails to meet the statutory requirements;

15)

Causes and procedures for avoidance and termination of the fund contract, as well as the liquidation method of the fund property;

16)

Dispute settlement methods;

17)

Other matters agreed upon by the parties.

Article 38

The prospectus of a fund shall include the following contents:

Name of the ratification document for the application for fund raising and the date of ratification;

Basic information of the fund manager and fund trustee;

Summary of the fund contract and fund trust agreement;

Date of offering, prices, expenses, and period of offering of the fund shares;

Method of offering the fund shares and the names of the offering institution and registration institution;

Names and domiciles of the law firms issuing letters of legal opinion and the accounting firms auditing the fund property;

Methods of drawing and paying and proportions of the remuneration of the fund manager and fund trustee and other relevant expenses;

Contents of risk warning; and

Other contents provided for by the securities regulatory department under the State Council.

Article 39

The securities regulatory department under the State Council shall, within 6 months from the day of accepting an application for fund
raising, make the examination pursuant to the laws and administrative regulations, the provisions of the securities regulatory department
under the State Council, and the principle of prudence, make the decision to grant ratification or not and notify the applicant;
and shall explain the reasons if ratification is not granted.

Article 40

Fund shares may be offered only after the application for fund raising has been ratified.

Article 41

The offering of fund shares shall be the responsibility of the fund manager; and the fund manager may entrust another agency recognized
by the securities regulatory department under the State Council to handle the offering on its behalf.

Article 42

A fund manager shall publicize the prospectus, fund contract and other relevant documents 3 days prior to the offering of the fund
shares.

The documents specified in the preceding paragraph shall be true, accurate and complete.

Publicity and promotion of the fund raising shall be in conformity with the relevant laws and administrative regulations and shall
not involve any acts specified in Article 64 hereof.

Article 43

A fund manager shall start raising fund within 6 months from the day of receiving the ratification document. If the fund raising starts
after that 6 months and no substantial alterations have happened to the ratified matters, the fund manager shall report to the securities
regulatory department under the State Council for archival purposes; and if there is any substantial alteration, it shall file a
new application with the securities regulatory department under the State Council.

The fund raising shall be finished within the fund raising period ratified by the securities regulatory department under the State
Council. The fund raising period shall be calculated starting from the day of offering the fund shares.

Article 44

Upon expiration of the fund raising period, in the case of a closed fund, if the total amount of fund shares raised reaches 80% or
more of the ratified scale, or in the case of an open fund, if the total amount of fund shares raised reaches the minimum amount
ratified, and if the number of the fund share holders meets the provisions of the securities regulatory department under the State
Council, the fund manager shall, within 10 days from the expiration of the fund raising period, retain a statutory capital verification
agency to make capital verification, and shall, within 10 days from receiving the capital verification report, submit the report
to the securities regulatory department under the State Council, put on record the fund and make a public announcement.

Article 45

The capital raised during the fund raising period shall be deposited in a special account, and nobody may use such capital before
the end of the fund raising.

Article 46

The fund contract is concluded when an investor pays for the fund shares it subscribes to; and the fund contract takes effect after
the fund manager put on record the fund with the securities regulatory department under the State Council pursuant to Article 44
hereof.

Upon the expiration of the fund raising period, if the conditions specified in Article 44 are not satisfied, the fund manager shall
assume the following liabilities:

Covering with its own property the debts and expenses incurred as a result of the fund raising;

Returning the money that the investors have paid, plus the interest accruing thereon at the current deposit rate, within 30 days after
the expiration of the fund raising period.

Chapter V Trading of Fund Shares

Article 47

Fund shares of a closed fund may be traded on the securities exchange upon application of the fund manager and ratification of the
securities regulatory department under the State Council.

The securities regulatory department under the State Council may authorize the securities exchange to ratify the trading of fund shares
on the market pursuant to the statutory conditions and procedures.

Article 48

The following conditions shall be satisfied for the listing and trading of fund shares:

The raising of fund complies with the provisions hereof;

The valid term of the fund contract is 5 years or more;

The capital raised is no less than 200 million RMB;

There are no less than 1,000 fund share holders;

Other conditions set forth in the listing rules of fund shares.

Article 49

The listing and trading rules of fund shares shall be formulated by the securities exchange and be submitted to the securities regulatory
department under the State Council for ratification.

Article 50

After the listing of fund shares, if any of the following circumstances occurs, the securities exchange shall terminate its listing
and report to the securities regulatory department under the State Council for archival purposes:

The conditions for listing prescribed in Article 48 hereof are not long met;

The fund contract expires;

The fund share holders’ meeting decides to terminate the listing prior to the due date;

Other circumstances under which the listing shall be terminated as stipulated in the fund contract or provided for in the listing
rules of fund shares.

Chapter VI Subscription and Redemption of Fund Shares

Article 51

The subscription, redemption and registration of an open fund shall be handled by the fund manager; and the fund manager may entrust
another agency recognized by the securities regulatory department under the State Council to handle the matters on its behalf.

Article 52

A fund manager shall handle the subscription and redemption of fund shares every workday; if there are otherwise stipulations in the
fund contract, such stipulations shall be observed.

Article 53

A fund manager shall pay for the redemption on time, except under any of the following circumst

THE DECISION OF THE MINISTRY OF JUSTICE ON AMENDING THE ADMINISTRATIVE MEASURES FOR THE REPRESENTATIVE OFFICES OF THE LAW FIRMS OF HONG KONG, MACAO BASED IN THE MAINLAND

Ministry of Justice

Order of the Ministry of Justice of the People’s Republic of China

No. 84

The Decision of the Ministry of Justice on Amending the Administrative Measures for the Representative Offices of the Law Firms of
Hong Kong, Macao Based in the Mainland was adopted at the ministerial executive meeting on November 27th, 2003. It is hereby promulgated
and shall enter into force as of January 1st, 2004.

Zhang Fusen, Minister of the Ministry of Justice

November 30th, 2003

The Decision of the Ministry of Justice on Amending the Administrative Measures for the Representative Offices of the Law Firms of
Hong Kong, Macao Based in the Mainland

With a view to promoting the Hong Kong and Macao to establish closer economic and trade relationship with the Mainland, encouraging
and regulating the legal practitioners of Hong Kong and Macao to offer the prescribed legal services, the Administrative Measures
for the Representative Offices of the Law Firms of Hong Kong, Macao Based in the Mainland (hereinafter referred to as the Administrative
Measures) are amended and supplemented, in accordance with the Mainland and Hong Kong Closer Economic Partnership Arrangement and
the Mainland and Macao Closer Economic Partnership Arrangement and their attachments approved by the State Council, as follows:

A paragraph is added after the second paragraph in Article 15 of the Administrative Measures, the content of which is supplemented
as: “A representative office and the representatives may, in accordance with the joint operation agreement reached between the law
firm of Hong Kong or Macao that it belongs to and a law firm in the mainland, cooperate with the lawyers of the law firm in the mainland
and engage in relevant joint businesses.” The third paragraph in the original text is changed as the fourth paragraph, the content
of which is amended as: “No representative office or representative may engage in any legal service or profit-making activity other
than those as provided for in Paragraphs 1 through 3 of this Article.”

II.

Article 19 of the Administrative Measures is amended as: “A representative of a representative office shall have resided in the mainland
for no less than 2 months each year. Whoever fails to do so shall not be registered next year.” A paragraph is added as the second
paragraph, the content of which is supplemented as: “Where a representative is established in Guangzhou or Shenzhen, its representatives
aren’t subject to the limitations on the minimum residence period in the mainland as prescribed in the preceding paragraph.”

III.

The present Decision shall enter into force as of January 1st, 2004.

Ministry of Justice
2003-11-30

SUPPLEMENTARY PROVISIONS TO THE PROVISIONS ON THE ADMINISTRATION OF FOREIGN-FUNDED MUNICIPAL PLANNING ENTERPRISES

e03037

Ministry of Construction, Ministry of Commerce

Decree of the Ministry of Construction and the Ministry of Commerce

No. 123

Supplementary Provisions to the Provisions on the Administration of Foreign-funded Municipal Planning Enterprises were adopted after
deliberation at the 24th executive meeting of the Ministry of Construction and the executive meeting of the Ministry of Commerce,
which are hereby promulgated and shall come into force as of January 1st, 2004.

Wang Guangtao, Minister of the Ministry of Construction

Lv Fuyuan, Minister of the Ministry of Commerce

December 19th, 2003

Supplementary Provisions to the Provisions on the Administration of Foreign-Funded Municipal Planning Enterprises

With a view to promoting the development of the economic & trade relations between the Mainland and Hong Kong/Macao and to encouraging
Hong Kong service providers and Macao service providers to establish urban planning service enterprises, the following supplementary
provisions are formulated in accordance with the Mainland and Hong Kong Closer Economic Partnership Arrangement and the Mainland
and Macao Closer Economic Partnership Arrangement and the Provisions on the Administration of the Foreign-funded Municipal Planning
Enterprises (Decree No. 116 issued by the Ministry of Construction and the Ministry of Foreign Trade and Economic Cooperation):

Hong Kong service providers and Macao service providers are allowed to establish solely funded urban planning service enterprises
in the Mainland as of January 1, 2004.

Other provisions governing the establishment of urban planning service enterprises in the Mainland by Hong Kong or Macao service providers
shall be implemented in accordance with the Provisions on the Administration of Foreign-funded Urban Planning Service Enterprises.

The terms “Hong Kong service providers” and “Macao service providers” as mentioned in the present Supplementary Provisions shall be
consistent with the definitions and meet the relevant requirements as respectively provided in the Mainland and Hong Kong Closer
Economic Partnership Arrangement and the Mainland and Macao Closer Economic Partnership Arrangement.

The responsibility to interpret the present Supplementary Provisions shall remain with the Ministry of Construction and the Ministry
of Commerce according to their respective functions.

The present Supplementary Provisions shall come into force as of January 1st, 2004.

Ministry of Construction, Ministry of Commerce
2003-12-19

AMENDMENT OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS TO THE CONSTITUTION

Amendment of the Standing Committee of the National People’s Congress to the Constitution of the PRC

(Effective Date:–Ineffective Date:)

At its Seventh meeting, the Standing Committee of the Ninth National People’s Congress, having discussed the proposal of the Central
Committee of the Communist Party of China on amending parts of the Constitution of the People’s Republic of China, has worked out
in accordance with the provisions in Article 64 of the Constitution the present Draft Amendment to the Constitution and hereby submits
it to the Second Session of the Ninth National People’s Congress for examination:

The seventh paragraph of the Preamble to the Constitution, which reads: “Both the victory in China’s New-Democratic Revolution and
the successes in its socialist cause have been achieved by the Chinese people of all nationalities, under the leadership of the Communist
Party of China and guidance of Marxism-Leninism and Mao Zedong Thought, by upholding truth, correcting errors and surmounting numerous
difficulties and hardships. China is at the primary stage of socialism. The basic task of the nation is to concentrate its effort
on socialist modernization in line with the theory of building socialism with Chinese characteristics. Under the leadership of the
Communist Party of China and the guidance of Marxism- Leninsm and Mao Zedong Thought, the Chinese people of all nationalities will
continue to adhere to the people’s democratic dictatorship and the socialist road, persevere in reform and opening to the outside
world, steadily improve socialist institutions, develop socialist democracy, improve the socialist legal system and work hard and
self-reliantly to modernize the country’s industry, agriculture, national defense and science and technology step by step to turn
China into a socialist country that is prosperous, powerful, democratic and culturally advanced,” is revised as follows: “Both the
victory in China’s New- Democratic Revolution and the successes in its socialist cause have been achieved by the Chinese people of
all nationalities, under the leadership of the Communist Party of China and guidance of Marxism- Leninism and Mao Zedong Thought,
by upholding truth, correcting errors and surmounting numerous difficulties and hardships. China will be in the primary stage of
socialism for a long time to come. The basic task of the nation is to concentrate its effort on socialist modernization along the
road of building socialism with Chinese characteristics. Under the leadership of the Communist Party of China and the guidance of
Marxism-Leninism, Mao Zedong Thought and Deng Xiaoping Theory, the Chinese people of all nationalities will continue to adhere to
the people’s democratic dictatorship and the socialist road, persevere in reform and opening to the outside world, steadily improve
socialist institutions, develop the socialist market economy, develop socialist democracy, improve the socialist legal system and
work hard and self- reliantly to modernize the country’s industry, agriculture, national defense and science and technology step
by step to turn China into a socialist country that is prosperous, powerful, democratic and culturally advanced.”

2. A new paragraph is added to Article 5 of the Constitution as the first paragraph, which provides: “The People’s Republic of China
governs the country according to law and makes it a socialist country ruled by law.”

3. Article 6 of the constitution, which reads: “The basis of the socialist economic system of the People’s Republic of China is socialist
public ownership of the means of production, namely, ownership by the whole people and collective ownership by the working people.
The system of socialist public ownership supersedes the system of exploitation of man by man; it applies the principle of ‘From each
according to his ability, to each according to his work'”, is revised as follows: “The basis of the socialist economic system of
the people’s Republic of China is socialist public ownership of the means of production, namely, ownership by the whole people and
collective ownership by the working people. The system of socialist public ownership supersedes the system of exploitation of man
by man; it applies the principle of ‘from each according to his ability, to each according to his work’.” “In the primary stage of
socialism, the state upholds the basic economic system under which the public ownership is dominant and diverse forms of ownership
develop side by side and keeps to the distribution system under which distribution according to work is dominant and diverse modes
of distribution coexist.”

4. The first paragraph of Article 8 of the Constitution, which reads: “In rural areas the responsibility system, the main form of
which is household contract that links remuneration to output, and other forms of cooperative economy, such as producers, supply
and marketing, credit and consumers’ cooperatives, belong to the sector of socialist economy under collective ownership by the working
people. Working people who are members of rural economic collectives have the right, within the limits prescribed by law, to farm
plots of cropland and hilly land allotted for their private use, engage in household sideline production and raise privately owned
livestock”, is revised as follows: “The rural collective economic organizations apply the dual operation system characterized by
combination of centralized operation with decentralized operation on the basis of operation by households under a contract. In rural
areas, all forms of Cooperative economy, such as producers’ supply and marketing, credit and consumers’ cooperatives, belong to the
sector of socialist economy under collective ownership by the working people. Working people who are members of rural economic collectives
have the right, within the limits prescribed by law, to farm plots of cropland and hilly land allotted for their private use, engage
in household sideline production and raise privately owned livestock.”

5. Article 11 of the Constitution, which reads: “The individual economy of urban and rural working people, operating within the limits
prescribed by law, is a complement to the socialist public economy. The state protects the lawful rights and interests of the individual
economy.” “The state guides, assists and supervises the individual economy by administrative control.” “The state permits the private
sector of the economy to exist and develop within the limits prescribed by law. The private sector of the economy is a complement
to the socialist public sector of the economy. The State protects the lawful rights and interests of the private sector of the economy,
and exercises guidance, supervision and control over the private sector of the economy”, is revised as follow:” The Non-public sectors
of the economy such as the individual and private sectors of the economy, operating within the limits prescribed by law, constitute
an important component of the socialist market economy.” “The state protects the lawful rights and interests of the individual and
private sectors of the economy, and exercises guidance, supervision and control over the individual and private sectors of the economy.”

6. Article 28 of the Constitution, which reads: “The state maintains public order and suppresses treasonable and other counter- revolutionary
activities; it penalizes criminal activities that endanger public security and disrupt the socialist economy as well as other criminal
activities; and it punishes and reforms criminals”, is revised as follows: “The State maintains public order and suppresses treasonable
and other criminal activities that endangers state security; it penalizes criminal activities that endanger public security and disrupt
the socialist economy as well as other criminal activities; and it punishes and reforms criminals.”

REGULATION ON THE CUSTOMS’ PROTECTION OF INTELLECTUAL PROPERTY RIGHT

Regulation of the PRC on the Customs’ Protection of Intellectual Property Right

CHAPTER I GENERAL PRINCIPLE CHAPTER II RECORD CHAPTER III APPLICATION CHAPTER IV PROCEDURE FOR INVESTIGATION AND PUNISHMENT CHAPTER
V LEGAL RESPONSIBILITY CHAPTER VI ATTACHMENT

Article 1 This regulation is formulated in accordance with concerned laws of the People’s Republic of China, in order to enforce the customs’
Protection of intellectual property right, promote exchange of foreign economy, trade, technology and culture, safeguard social public
interests.

Article 2 This regulation is applicable to intellectual property including copyright, patent and the right to exclusive use of Trade Marks,
which is relating to imported or exported goods and protected by the laws and administrative regulations of the people’s Republic
of China.

Article 3 Import or export of the goods is forbidden, as long as they infringe the intellectual property right protected by the laws and administrative
regulations of the people’s Republic of China (called infringing goods for short following).

Article 4 The customs of the People’s Republic of China enforce the protection of the intellectual property right relating to imported or exported
goods, exercise concerned power stimulated by the customs law of the People’s Republic of China.

Article 5 Consignees of imported goods or consigners of exported goods and their agent (called consignees or consigners by a joint name following)
shall declare honestly to the Customs the state of intellectual property relating to imported or exported goods and submit concerned
documents for verifying.

Article 6 If intellectual property right owners and their agents (called intellectual property owners by a joint name following) require the
customs to enforce the protection of their intellectual property relating to imported or exported goods, they shall report their
intellectual property right to the Customs for the record and file an application with the Customs to take protection measures when
they consider it necessary.

Article 7 When the Customs enforce the protection of intellectual property right, they shall keep the trade secrets of concerned parties.

Article 8 Intellectual property right owners shall submit written applications to the Customs when they apply for the records of the Customs’
protection of intellectual property right.

The application shall include:

(1) The name or the surname and personal name, registration place or nationality, domicile, legal representative and principal business
place of intellectual property owners.

(2) Registrative number, content and period of validity of registered trademark, number, content and period of validity of patent
of concerned content of copyright.

(3) Name and place of production of the goods relating to intellectual property.

(4) Persons authorized or licensed to use the intellectual property.

(5) The circumstances of principal importing or exporting customs, importer or exporter, principal features, prices of the goods relating
to intellectual property.

(6) The circumstances of the producer, importer or exporter, principal importing or exporting customs principal features, prices of
the known infringing goods.

(7) Other circumstances that the Customs General considers necessary to illustrate.

When the application is submitted, following documents shall be enclosed:

(1) Copy of identification card, transcript of registration certificate or copy attested by registration organs of intellectual property
owner.

(2) Copy of registration certificate of registered trademark, copy of announcement of transfer of registered trademark approved by
Trademark Bureau or use of trademark license contract entered in the records of Trademark Bureau, copy of patent certificate, transcript
of transfer of patent contract registered and announced by Patent Bureau, copy of use of patent license contract or certificate or
proof of copyright.

(3) Other documents that the Customs General consider necessary to be enclosed.

Article 9 The Customs shall notice the applicant whether the application is admitted to enter in the records within thirty days after receiving
all of the applying documents. If the Customs admit the record, they shall give record certificate of the customs’ protection of
intellectual property; If not, they should illustrate the reasons.

Article 10 The period of validity of the Customs’ protection of intellectual property right shall be seven years, counted from the day the record
is admitted by the Customs General.

Subject to the validity of intellectual property, intellectual property owner may apply for a renewal of record within six months
before the period of validity of the record the customs’ protection of intellectual property right expires. The period of validity
for each renewal of record shall be seven years.

The record of the customs’ protection of intellectual property right shall be invalid of no application for renewal has been filed
before the period of validity of the record of the customs’ protection of intellectual property expires or the legal protection period
of the right to exclusive use of trademark, patent or copyright expires.

Article 11 If the circumstances of the recorded intellectual property have changed, the intellectual property owner shall go through the formalities
of the change or cancel of record within ten days after the day when the authorities of intellectual authorities approve the change.

Article 12 Intellectual property right owners who have entered in the record of the Customs may submit to the Customs located in importing or
exporting place the application to take protection measures of intellectual property right when they find that the goods which are
suspected of infringing is to enter or leave the country.

Article 13 One shall submit written application of he require the customs to take protection measures of intellectual property.

The application shall include:

(1) Name of the intellectual property applied for protection, number of the Customs’ record.

(2) Name of the suspected infringer domicile legal representative, principal business place.

(3) Circumstances of the name, size of the suspected infringing goods.

(4) Circumstances of the port time, conveyance and consignee or consignor.

(5) concerned infringing proof.

(6) Measures the applicant requires the Customs to take.

(7) Other circumstances that the Customs consider necessary to submit.

Article 14 If the applicant requires the Customs to detain the suspected infringing goods, the applicant should submit guarantees equal to C.I.F.
of imported goods or F.O.B. of exported goods.

Article 15 If the intellectual property owner who requires the Customs to take protection measures of the intellectual property right hasn’t
enter in the records of the Customs General, he shall go through the formalities of the record of intellectual property in accordance
with Article 8 of these regulations when he applies with the customs.

Article 16 If the application isn’t in conformity with the relevant provisions of this chapter, the Customs will not accept it.

CHAPTER IV PROCEDURE FOR INVESTIGATION AND PUNISHMENT

Article 17

17. 1 If Customs, upon the petition of trademark or patent holder, decides to seize goods suspected of infringing the trademark or
patent, Customs must file a Customs Detaining Receipt and serve it on either the consignee or consignor of the goods and also notify
the petitioner in writing.

17. 2 The consignee or consignor of the seized goods has seven (7) days from the date of being served the Customs Detaining Receipt
to raise an objection to the customs seizure. The objection must be submitted in writing and explain the reasons they feel that their
goods do not violate any intellectual property rights. If no objection is filed within this seven (7) day period, the Customs Department
may conduct an investigation and depending on the outcome of the investigation, is enpost_titled to treat the seized goods as violating
a trademark or patent and deal with the goods accordingly. If the consignee or consignor submits an objection, Customs must immediately
notify the petitioner in writing that an objection has been made.

17. 3 The petitioner has fifteen (15) days from the date the written notification from the Customs Department is served, (as per Article
17. 1), to apply to the appropriate agency to deal with and commence an intellectual property infringement action in the People’s
Court.

Article 18

18. 1 Customs has the right to detain goods suspected of infringing intellectual property rights registered with them. If goods are
detained, the Customs Department must serve either the consignee or consignor with a Customs Detaining Receipt and also notify the
intellectual property owner in writing. If the intellectual property owner submits a written petition for intellectual property protection
within three (3) days following the Customs Department’s written notification of the detained goods, the matter will be handled in
accordance with Article 17 of this regulation.

Article 19

19. 1 A consignee or consignor of detained goods who maintains that his goods do not infringe any intellectual property rights, may
apply for clearance of the goods. A bailment bond in the amount equal to two (2) times the CIA import value of the goods or two (2)
times the FOB export value of the goods.

Article 20

20. 1 If Customs detains goods suspected of violating intellectual property rights under the procedure described in Articles 17

MEASURES FOR THE HANDLING OF INCOME TAXES IN THE DEBT RESTRUCTURING OF ENTERPRISES

The State Administration of Taxation

Measures for the Handling of Income Taxes in the Debt Restructuring of Enterprises

Decree [2003] No.6 of State Administration of Taxation

January 23, 2003

Article 1

In order to strengthen the administration of income tax in the debt restructuring of enterprises, and to prevent the loss of tax revenue,
these Measures are enacted in accordance with the Provisional Regulations of the People’s Republic of China on Enterprise Income
Tax and the implementation rules thereof.

Article 2

Debt restructuring as used in these Measures refers to all the mattes involving modification of debt terms between the creditor (enterprise)
and the debtor (enterprise).

Article 3

Debt restructuring can be done in any or all of the following methods:

Paying off the debts by cash lower than the assessable cost of the debts;

Paying off the debts by non-cash assets;

Transferring the debts to capital, including debt-equity swap of state-owned enterprises;

Modifying other debt terms, such as extending the repayment period, extending the repayment period and collecting extra interests,
extending the repayment period and reducing the capital or interest of the debts etc;

Mixed restructuring by combining two or more of the aforesaid methods.

Article 4

Where the debtor (enterprise) pays off the debts by non-cash assets, except that the enterprise is restructured or there are otherwise
liquidation provisions, the handling of income tax shall be divided into two economic operations, namely, the transferring of the
non-cash assets at fair value, and the paying off of debts with the amount equivalent to the fair value of the non-cash assets. The
debtor (enterprise) shall confirm the transfer income (or loss) of the relevant assets; for the non-assets acquired by the creditor
(enterprise), the assessable cost shall be determined according to the fair value of the relevant assets (including the taxes relating
to the transfer of assets), and thus to calculate the expenses for depreciation of fixed assets, the expenses for amortization of
intangible assets or the sale cost carried forward etc that shall be deducted before payment of the enterprise income tax.

Article 5

In the debt restructuring of transferring debts to capital, except that the enterprise is restructured or there are otherwise liquidation
provisions, the debtor (enterprise) shall confirm the balance between the book value of the restructured debts and the fair value
of the equity enjoyed by the creditor for giving up the creditor’s rights as the income of debts restructuring, and include that
income in the taxable income of the current period. The creditor (enterprise) shall confirm the fair value of the equity it enjoyed
as the assessable cost of the investment.

Article 6

In the debt restructuring in which the creditor’s concessions to the debtor include paying off the debts by cash or non-cash assets
lower than the assessable cost of the debts etc, the debtor shall confirm the balance between the assessable cost of the restructured
debts and the amount of the cash paid or the fair value of the non-cash assets as the income of debt restructuring, and include that
income in the taxable income of the current period. The creditor shall confirm the balance between the assessable cost of the restructured
debts and the cash or fair value of the non-cash assets received as the loss of debt restructuring of the current period to offset
the taxable income.

Article 7

In the debt restructuring by modifying other debt terms, the debtor shall write down the assessable cost of the restructured debts
to future payable amount, and the amount written down shall be confirmed as the income of debt restructuring of the current period.
The creditor shall write down the assessable cost of the credits to future receivable amount, and the amount written down shall be
confirmed as the loss of debt restructuring of the current period.

Article 8

If an enterprise’s income of asset transfer or of debt restructuring confirmed as a result of paying off debts by non-case assets
or of the creditor’s concessions is of considerably large amount, and it is really difficult to pay the tax once-off, the tax may
be evenly included in the payable income of each year within a period no longer than 5 tax years.

Article 9

In debt restructuring between associated parties that include such concession terms as one party shall transfer profits to the other
party, if there are reasonable business needs and any of the following conditions is met, the tax may be handled respectively pursuant
to Articles 4 to 8 of these Measures upon approval of the tax authorities:

As supported by a court ruling;

There is an agreement of consent all of the creditors;

In case of approved debt-equity swap of state-owned enterprise.

Article 10

If the debt restructuring including concession terms between associated parties is not in conformity with the conditions provided
in Article 9 of these Measures, the creditor may not, as a general principle, confirm the concession as restructuring loss, but
as donation, and the debtor shall confirm the donation income. If the debtor is a shareholder of the creditor, the concession of
the creditor shall be assumed as the distribution to the shareholders by the enterprise, and be handled according to Item 2) of Article
1 of the Notice of the State Administration of Taxation on Several Issues of Income Tax on Equity Investment of Enterprises (GuoShuiFa
[2002] No.118).

Article 11

The fair value as used in these Measures refers to the fair purchase value of the transactions between independent enterprises.

Article 12

These Measures shall enter into force on March 1, 2003.

The State Administration of Taxation
2003-01-23

CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON IMPROVING THE ADMINISTRATION OF FOREIGN EXCHANGE IN FOREIGN DIRECT INVESTMENTS

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on Improving the Administration of Foreign Exchange in Foreign Direct Investments

HuiFa [2003] No.30

March 3, 2003

Branches and foreign exchange administration departments under the State Administration of Foreign Exchange in provinces, autonomous
regions and municipalities directly under the Central Government, and branch administrations of Shenzhen, Dalian, Qingdao, Xiamen,
Ningbo; and headquarters of Chinese-capital designated banks of foreign exchange:

In order to adapt to the new international investment trend, introduce overseas investments through multiple channels, continuously
perfect the administration on foreign exchanges in foreign investments and further improve the environment for foreign investments,
some issues concerning the administration of foreign exchange in foreign direct investments is hereby circularized:

Administration of the Accounts of and Capital Contributions by Foreign Investors

A foreign investor who makes direct investment or engages in activities relevant to direct investment in China without establishing
enterprise with foreign investment in China may apply to the administration of foreign exchange in the locality of the project to
open a special foreign investor’s foreign exchange account in the name of the investor. A foreign investor is permitted to open only
one special foreign exchange account of multiple currencies at a bank except for otherwise approved by administration of foreign
exchange. This kind of accounts shall be classified into following four categories based on the uses:

(1)

Investment accounts. After obtaining non-legal person business license, foreign investors who engage in construction contracting,
joint exploration, development and exploitation of natural resources or venture capital investment may apply to open investment accounts
to deposit foreign exchange funds relevant to payment therefor.

(2)

Acquisition accounts. Foreign investors who plan to establish enterprises with foreign investment in China may, if it is necessary
to purchase land use right and attached real properties thereon, machinery and equipment or other assets in China at initial stage,
apply to open the acquisition accounts after the asset purchase contracts come into force, in order for depositing funds for paying
for acquisition.

(3)

Expense accounts. Foreign investors who plan to establish enterprises with foreign investment in China may, if it is necessary to
conduct market research, planning and preparatory works for establishment of institutions in China at initial stage, open the expense
account upon obtaining the notice for advance examination and approval of the company name from the administrations of industry and
commerce, in order for depositing foreign exchange funds for payments.

(4)

Security accounts. Prior to making investments in China, if the foreign investors are required to provide to domestic institutions
security funds in accordance with relevant stipulations and contract provisions, they may apply to open security fund accounts within
the time period prescribed by the contracts in order to deposit and pay foreign exchange security funds. In applying to open special
foreign exchange accounts, the foreign investors shall provide to the administrations of foreign exchange documents certifying the
truthfulness and legality of the investments, and the administrations of foreign exchange shall decide upper limits on the amounts
at the relevant accounts, the extended deposit duration and scope of settlements, etc. and shall conduct routine supervision (see
Attachment 1). Funds to the special foreign exchange accounts of the foreign investors shall be input in the form of exchange instead
of cash deposit. Settlements and transfers of funds in the accounts shall be verified by the administrations of foreign exchange
on a case-by-case basis (see Attachment 2 and 3). Where a foreign investor has established an enterprise with foreign investment
in China, any balance remained in the special foreign exchange account in the form of acquisition, expense and security accounts
may be transferred to the capital account of the enterprise. On strength of relevant approval documents issued by the administration
of foreign exchange, funds settled and transferred under the above accounts shall be regarded as the capital contribution of the
foreign investor and capital verification may be conducted accordingly. Where the foreign investor has not established an enterprise
with foreign investment in China, the foreign investor may go through the procedures for sales/purchases of foreign exchange in respect
of the balance and remit it abroad on strength of relevant approval documents issued by the administration of foreign exchange.

Where foreign investors make capital contributions to enterprises with foreign investment in China from funds in offshore accounts
opened with banks authorized by People’s Bank of China to conduct offshore businesses, the transfers of foreign exchange funds from
offshore accounts to the capital accounts of the enterprises in China shall not require approvals of administration of foreign exchange.
However, when the enterprises with foreign investment go through the procedures for capital verification inquiry, the banks receiving
the remittances shall mark with “offshore funds” in the response letter to the inquiry letter in respect of the funds. Where a foreign
investor makes capital contribution to an enterprise with foreign investment from non-resident individual exchange account opened
at a bank in China, the administration of foreign exchange shall issue relevant approval documents (see Attachment 4) on foreign
exchange businesses under capital items after verifying relevant submitted documents inerrant. Based on the approval documents, the
bank shall carry out transfer of the fund from the non-resident individual exchange account to the capital account of enterprise
with foreign investment in China, and the enterprise shall go through the procedures of capital verification as well as registration
of foreign investment/exchange. Upon obtaining consent from the State Administration of Foreign Exchange, a branch with large business
volume may grant the power of examination and approval on transfer of the above funds to designated foreign exchange banks that shall
perform relevant duties such as examination, statistics, supervision and report for the record etc. Designated foreign exchange banks
authorized with the above power shall implement strict internal control system and shall have been no record of grossly violating
foreign exchange regulations in latest three years. When the enterprise with foreign investment go through the capital verification
inquiry procedures, the bank receiving the fund shall mark with “non-resident individual transfer in China” in the response letter
to the inquiry letter in respect of the fund.

In addition to making capital contributions in a way of freely convertible currencies, imported equipments and other material items,
intangible properties and RMB-denominated profits etc., foreign investors may contribute to the registered capitals of enterprises
with foreign investment in the following ways with approval from administrations of foreign exchange:

(1)

The enterprises with foreign investment increase the enterprise capitals by transferring the development funds and reserve funds
(or capital public reserves and surplus reserves) etc. into the registered capitals;

(2)

The enterprises with foreign investment increase the enterprise capitals by transferring their unallocated profits, dividends payable
and interests accrued therefrom etc. to registered capitals;

(3)

The enterprises with foreign investment increase capitals by transferring of the principals and current interests of registered foreign
debts of the foreign parties into registered capitals; or

(4)

The foreign investors make reinvestments in the way of properties gained through early recouped investments or assets derived from
liquidation, stock equity transfer or reduction of registered capitals from enterprises with foreign investment in which they have
invested. Where the foreign investors make capital contributions in any of the above ways, the administrations of foreign exchange
shall issue relevant approval documents (see Attachment 5 and 6) on foreign exchange businesses under capital item after verifying
relevant submitted documents and their authentications. Based on the approval documents, the banks shall carry out relevant transfers
of the funds in China, and the enterprises shall go through the procedures for capital verification inquiry as well as registrations
of foreign investments and foreign exchanges.

Where foreign investors and investment-type enterprises with foreign investment acquire stock equities of domestic enterprises, they
shall pay considerations (i.e. the prices paid by foreign parties to Chinese parties for buying the stock equities of the latter
which may be in form of foreign exchange funds owned by the foreign investors and investment-type enterprises with foreign investment,
RMB-denominated profits from other enterprises with foreign investment in which they have invested and other assets legally obtained)
for purchases of the stock equities in accordance with the provisions of laws, regulations and stipulations of transfer contracts
reached between the two parties, and make foreign investments and foreign exchange registrations on receipt of foreign exchange for
equity transfers with the administrations of foreign exchange at the localities of the transferors by themselves or by the transferors
under their authorizations. Where payment of considerations of equity purchases are made in a lump sum, the foreign investment and
foreign exchange registrations in respect of the proceeds earned through the transfers shall be made within 5 days of receipt of
the considerations and where payments thereof is made by installments, foreign investment and foreign exchange registrations shall
be made in respect of each of the installments within 5 days of receipt of each installment. Before foreign investors have paid in
full the considerations for share transfers, their ownership equity in the acquired enterprises shall be fixed in accordance with
the ratio that has actually been paid and foreign exchange businesses such as stock equity transfers, reduction of registered capitals,
liquidation and profit remittances shall be handled accordingly. The administrations of foreign exchange shall handle foreign investment
and foreign exchange registrations on receipt of foreign exchange for equity transfers and shall issue relevant certificates (see
Attachment 7) after verifying relevant documents submitted by foreign investors and their authentications. The certificates on foreign
investments and foreign exchange registrations on receipt of foreign exchange for equity transfers are valid documents certifying
that the considerations payable by foreign parties for stock equity transfers have been received, and they shall also serve as important
bases for the acquired enterprises to make foreign investment and foreign exchange registrations. All Branches and Foreign Exchange
Administration Offices shall summarize and report to the State Administration on monthly basis the data on foreign investments and
foreign exchange registrations on receipt of foreign exchange for equity transfers (including number and amount registered) and the
data on inflow of other types of foreign investments in the form of Report on Foreign Investment and Foreign Exchange Registration
(see Attachment 8) as newly issued. The former form o the Report on Foreign Investment and Foreign Exchange Registration shall cease
to be used from the date of entering into force of the Circular.

Where non-investment type enterprises with foreign investment establish enterprises or acquire enterprises in China in accordance
with Interim Provisions on Investments in China by Enterprises with Foreign Investment promulgated jointly by the Ministry of Economic
and Trade Cooperation and the State Administration for Industry and Commerce, the invested enterprises with no foreign capitals are
permitted exempt from going through the procedures for foreign investment and foreign exchange registration and capital verification
and request for certificate for foreign exchange. The administration of foreign exchange shall on strength of Enterprise Legal Person
Business License, which has been issued by the administrations of industry and commerce to the invested enterprise and which is marked
with “with investment from enterprise with foreign investment”, treat the invested enterprise as an enterprise with foreign investment
in its raising of funds from abroad. The administrations of foreign exchange shall not approve transfers of foreign exchange funds
within China between the non-investment type enterprises with foreign investment and the enterprises they invested, and between different
enterprises invested by the non-investment type enterprises. In case of special circumstances in which this type of transfer within
China is necessarily required, the branches and the foreign exchange administration departments shall report to the State Administration.

A domestic enterprise to which the ratio of foreign investor’s capital contribution is below 25% shall complete foreign exchange registration
of enterprise with foreign investment and go through the procedures for verification inquiry as well as foreign investment and foreign
exchange registration in accordance with relevant provisions on strength of an approval certificate for enterprise with foreign investment
which is issued by foreign economic and trade department and is mark with “ratio of foreign investment below 25%” as well as a foreign
investment business license issued by department in charge of administration of industry and commerce and marked with “ratio of foreign
investment below 25%”.

II.

Capital Verification Inquiry and Foreign Investment and Foreign Exchange Registration The capital verification inquiries of enterprise
with foreign investment and foreign investment and foreign exchange registrations shall be handled in accordance with the following
principles:

In establishing enterprise with foreign investment, if the foreign exchange capital contributed by a foreign investor exceeds the
upper limit of the capital account of the enterprise, once such excess is no more than 1% of the upper limit and no more than $10,000
US equivalent in absolute value, the administration of foreign exchange shall handle the capital verification inquiry as well as
foreign investment and foreign exchange registration based on the actual amount contributed. If the amount of foreign exchange contributed
to the enterprise for stock equity participation is in excess of the sum reached by multiplying its ratio of equity with the amount
of registered capital of the enterprise due to appreciation of the enterprise’s capital, the excess shall be included into the upper
limit of the capital account of the enterprise. The principle set forth in the above paragraph shall still apply to the entry of
foreign exchange fund in excess of the limit.

Where a foreign investor who contributes investment in tangible assets the enterprise with foreign investment entrusts an accounting
firm to make inquiry with administration of foreign exchange, if there is inconsistency between the value of such assets as appraised
by an appraisal institution under the commodities inspection administration and the value declared in the Customs Declaration when
importing such assets, the administration of foreign exchange shall adopt the value as appraised by the former for the purpose of
capital verification inquiry and foreign investment and foreign exchange registration.

Where a foreign investor who contributes only intangible assets to an enterprise with foreign investment entrusts an accounting firm
to make inquiry with administration of foreign exchange, it shall list the contributed intangible assets in the Schedule attached
to the Letter of Inquiry on Foreign Party’s Capital Contribution, based on which the administration of foreign exchange shall make
foreign investment and foreign exchange registration for the contribution of the intangible assets and shall indicate in the Response
Letter to the Letter of Inquiry on Foreign Party’s Capital Contribution that “the intangible assets of the foreign party has been
registered with the number of registration XXXX. This letter is only valid for certificating that it has been registered.”

Where a foreign investor makes investment or equity participation at a premium, or where the value of in-kind contribution made by
the foreign investor is appraised at a value higher than the declared value to the Customs, or where due to fluctuation of exchange
rate or other similar causes, the actual amount contributed to the enterprise with foreign investment exceeds the amount of registered
capital of the enterprise with foreign investment, the administration of foreign exchange shall register the registered capital of
the enterprise as well as its actual amount of contribution due to the premium.

Where the enterprise that “processes raw documents on clients’ demands, assembles parts for the clients and process according to the
clients’ samples or engages in compensation trade” who intends to transform into enterprise with foreign investment entrusts accounting
firms to make inquiry with administration of foreign exchange, it shall submit relevant documents to the administration of foreign
exchange, and after examination and confirmation that the equipment to be invested for the transformation is imported goods for which
payment abroad has not been made, the administration of foreign exchange shall issue Response Letter to the Letter of Inquiry on
Foreign Party’s Capital Contribution in accordance with the value specified in the appraisal report on value of commodities and make
foreign investment and foreign exchange registration(see Attachment 9).

Where the name of the foreign investor to a enterprise with foreign investment is inconsistent with the name of the overseas payer
who made payment for the investment, the administration of foreign exchange shall handle capital verification inquiry and make foreign
investment and foreign exchange registration for it but indicate that “there is inconsistency between the payer and the investor”
in the Response Letter to the Letter of Inquiry on Foreign Party’s Capital Contribution.

For easy queries from different localities, the administration of foreign exchange shall indicate the names of relevant contract persons
and their telephone numbers when issuing approval documents for capital item foreign exchange business to enterprises with foreign
investment.

Where any designated foreign exchange bank is found to open accounts for enterprises without permission, making entry of capital in
excess of limits etc in violation of provisions on account administration, the administration of foreign exchange shall impose sanctions
on it in accordance with provisions of Provisions of Administration of Domestic Foreign Exchange Account. Where any enterprise is
found to forge or alter documents or documents such as approval documents for capital item foreign exchange business, letters of
response that administration of foreign exchange issues for designated foreign exchange banks, Customs declaration for imported goods
etc., the administration of foreign exchange shall transfer such case to judicial organs for handling. If it is found that the accounting
firm failed to make capital verification inquiry or the inquiry is made incompliant with prescribed procedures after it issues the
capital verification report to enterprises, the administration of foreign exchange shall order such accounting firm to go through
the capital verification inquiry procedures as remedial measures and notify its violation to the association of certified public
accountants of its locality. No further inquiries from such accounting firm shall be accepted before the association of certified
public accountants of its locality makes formal punishment decision to it. The Branches and Foreign Exchange Administration Offices
shall report the names of the accounting firms that acted in violation of regulations again after having been punished to the State
Administration who shall announce the names at the website of the State Administration of Foreign Exchange and other media and shall
make recommendations to enterprises to be prudent in their choice of accounting firms. In the course of going through capital verification
inquiry procedures as remedial measures by accounting firms failed to make the inquiry or the inquiry was made not in compliance
with prescribed procedures, if it is found that the capital verification report issued by it is a false verification report, the
administration of foreign exchange shall transfer the case to judicial organs to handle and shall notify the administration of industry
and commerce at its locality.

III.

Administration of Registered Capital Reduction of Enterprise with Foreign Investment and Adjustment to Some Administration Business

Where a foreign investor’s capital contribution to a enterprise with foreign investment is reduced, which involves sale/purchase of
foreign exchange, the administration of foreign exchange shall issue approval document for foreign exchange business under capital
item (see Attachment 10) after examination on relevant documents submitted by the enterprise, based on which the foreign investor
shall go through the procedures of the purchase, payment and remittance abroad of exchanges in respect of the reduced capital. Where
the reduction is for the purpose of reducing losses on the accounting books of the enterprise with foreign investment, or that the
amount reduced is the unpaid capital contribution of the foreign investor, the administration of foreign exchange shall not grant
approval to the foreign investor to re-invest such amount in China or to pay the amount out of china by the enterprise with foreign
investment.

The mechanism of paid-up capital prescribed by Company Law of the People’s Republic of China shall apply to the capital contributions
to be made by foreign parties in companies limited-by-shares with foreign investment and fund management companies with foreign participations.
When companies falling into the two categories makes application to administration of foreign exchange to open enterprise with foreign
investment capital account, they do not need to present the enterprise legal person business licenses for enterprises with foreign
investment issued by the administration of industry and commerce. By presenting respective approval certificates for companies limited-by-shares
with foreign investment issued by foreign economic and trade department, the enterprise with foreign investment approval certificate
issued by foreign economic and trade department and approval for commencement of business issued by CSRC, the company limited-by-shares
with foreign investment and fund management company with foreign participation may go through relevant procedures. Relevant provisions
on documents to be provided by companies falling into the above two categories for establishment of capital accounts and making enterprise
with foreign investment foreign exchange registrations shall still be implemented.

During the course of handling foreign exchange business, if the administration of foreign exchange needs to examine capital verification
report of the enterprise with foreign investment, the Response Letter to the Letter of Inquiry on Foreign Party’s Capital Contribution
shall be examined simultaneously in the case that capital verification report is issued after May 1, 2002. If auditing report of
enterprise with foreign investment needs to be examined in the course of handling foreign exchange business, the administration of
foreign exchange shall simultaneously examine the Foreign Exchange Balance Sheet of the enterprise with foreign investment in the
case that the auditing report is issued after the year of 2002.

In order to further improve the efficiency in supervision on capital settlement and facilitate the operation of investment capital
by enterprises, the documents required to be examined by banks in accordance with operating procedures to be followed by authorized
banks in settlement of capital in foreign exchange which is stipulated in the Circular of State Administration of Foreign Exchange
Concerning Reform on Ways of Management of Settlement of Capital by Foreign Investment (HuiFa [2002] No. 59) shall be simplified
into the following three ones:

(1)

A written application of the enterprise, indicating the account number of the capital account of the enterprise, situation of capital
entry, currency for settlement, amount and usage etc.);

(2)

The Foreign Exchange Registration Certificate;

(3)

Other supplementary documents required in light of the circumstances. Other examination requirements shall as usual be in accordance
with relevant provisions of the Circular of State Administration of Foreign Exchange Concerning Reform on Ways of Management of Settlement
of Capital by Foreign Investment (HuiFa [2002] No. 59) and the operating procedures.

Where a Chinese-foreign cooperative enterprise pays in form of depreciation of fixed assets or amortization of intangible assets to
the foreign party for early recouping of its investment amount (including fixed returns), the examination on “guarantee letter” provided
in Operating Procedures for Management of Foreign Exchange Business under Capital Item (HuiFa [2001] No. 38) is hereby amended as
follows:

(1)

If the Chinese-foreign cooperative enterprise has outstanding debts (bank loan or shareholder’s loan from foreign investor), the
foreign investor shall provide guarantee letter in corresponding amount from a foreign-invested financial institution in China;

(2)

If the outstanding debt of the Chinese-foreign cooperative enterprise is shareholder’s loan provided by foreign investor, a guarantee
letter issued by the foreign investor stating that it unconditionally undertakes joint and severally liability with the contractual
joint venture may be in lieu of the above letter of guarantee issued by the financial institutions.

(3)

If the Chinese-foreign cooperative enterprise has no debts, no letter of guarantee shall be provided by the foreign investor. Other
examination requirements shall as usual be in accordance with relevant provisions of the Operating procedures for Administration
of Foreign Exchange Business under Capital Item.

IV.

Othe Matters

The term “administration of foreign exchange ” mentioned in this Circular refers to the State Administration of Foreign Exchange,
various branches, foreign exchange administration departments and Sub-branches within their jurisdictions.

All branches and foreign exchange administration departments are required to transmit the following parts involving bank operations
to the designated foreign exchange banks within their jurisdiction:

(1)

Article 1 , 2 and 3 of Part I, Administration of the Accounts of and Capital Contributions by Foreign Investors, as well as Attachments
1 to 6 of this Circular;

(2)

Article 1 and Paragraph 1, Article 8 of Part II, Capital Verification Inquiry and Foreign Investment and Foreign Exchange Registration;
and

(3)

Article 4 of Part III, Administration of Registered Capital Reduction of Enterprise with Foreign Investment and Adjustment to Some
Administration Business.

This Circular shall enter into force as of April 1, 2003. If there is any question in the implementation, please contact the Capital
Item Administration Department of the State Administration of Foreign Exchange through the telephone number 010-68402254.

Attachments:

1. Examination and approval on open, alteration and cancellation of foreign investor’s special foreign exchange account(omitted);

2. Examination and approval on settlement of funds in foreign investor’s special foreign exchange account (four categories in all)
(omitted);

3. Examination and approval on transfer of funds from foreign investor’s special foreign exchange account (four categories in all)
to enterprise with foreign investment’s capital in China (omitted);

4. Examination and approval on transfer of foreign exchange funds from non-resident individual exchange account opened with banks
in China by foreign investors to capital account of enterprise with foreign investment (omitted);

5. Examination and approval on transferring of development fund, reserve fund (or capital public reserve and surplus reserve), unallocated
profits, dividends payable and interests accrued therefrom, principal and accrued interest of registered foreign debt of the foreign
parties etc. into registered capital of the enterprise (omitted);

6. Examination and approval on reinvestment to be made by foreign investors by property gained through early recouped investment or
assets derived from liquidation, stock equity transfer or reduction of registered capital from enterprise with foreign investment
in which they have invested (omitted);

7. Registration on foreign investment and foreign exchange in respect of proceeds of foreign exchange paid as consideration by foreign
investors for purchase stock equity of Chinese party (omitted);

8. Report on foreign investment and foreign exchange registration in the region on yearly and monthly basis (form) (omitted);

9. Examination and approval on capital verification inquiry and Examination and approval on for the enterprises that “process raw
documents on clients’ demands, assemble parts for the clients and process according to the clients’ samples or engage in compensation
trade” who intends to transform into enterprise with foreign investment (omitted);

10. Examination and approval on reduction of registered capital by foreign parties in the enterprise with foreign investment (omitted).

The State Administration of Foreign Exchange
2003-03-03

CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING ADMINISTRATION OF FOREIGN EXCHANGE OF FUND MANAGEMENT COMPANIES WITH FOREIGN SHARES

Circular of the State Administration of Foreign Exchange Concerning Administration of Foreign Exchange of Fund Management Companies
with Foreign Shares

HuiFa [2003] No.44
March 29, 2003

For the purpose of regulating the administration on foreign exchange of fund management companies with foreign shares, this Circular
is hereby issued to you concerning administration of foreign exchange of the fund management companies with foreign shares:

“Fund management companies with foreign shares” mentioned in this Circular shall include the fund management companies which corporate
form are changed through acquirement by transfer of or through subscribing stock equity of a domestic fund management company by
foreign shareholders, or the fund management companies established through joint capital contribution by foreign shareholders and
domestic shareholders.

II.

No fund management company with foreign shares shall open foreign exchange account before obtaining approval from the China Securities
Regulatory Commission (hereinafter referred to as the “CSRC”) for granting commencement of its business.

(I)

Where the CSRC has granted approval for commencement of business to a fund management company established through joint capital contribution
by domestic shareholders and foreign shareholders, the company may apply to local administration of foreign exchange for opening
foreign exchange capital account at a domestic designated bank of foreign exchange by presenting the following documents and materials:

A written application to open account;

Joint venture agreement/contract;

The approval document from the CSRC for granting commencement of its business.

The Approval Certificate of Foreign Investment Enterprise issued by the foreign economic and trade department;

The Notice for Advance Examination and Approval of an Enterprise Name issued by the administration of industry and commerce of the
State; and

Other documents and materials required by the Administration of Foreign Exchange.

(II)

A fund management company with foreign shares which corporate nature has been changed through subscribing the stock equity of an already
established domestic fund management company by foreign shareholders may apply to local administration of foreign exchange to open
foreign exchange capital account at a domestic-designated foreign exchange bank by presenting the necessary documents including subscription
agreement/contract, approval documents of CSRC and approval certificate of foreign economic and trade department.

III.

Verification on input of capital fund from foreign shareholders into a fund management company with foreign shares shall be conducted
in accordance with this Circular of Ministry of Finance and the State Administration of Foreign Exchange on Further Strengthening
Capital Verifications on Enterprises with Foreign Investment and on Improving the System of Foreign Investment and Foreign Exchange
Registration (CaiKuai [2002] No.1017).

IV.

The scope of income for a foreign exchange capital account of the fund management company with foreign shares shall be the capital
contribution remitted by foreign shareholders. The scope of expenditure shall be payment under current account and other foreign
exchange payments approved by the administration of foreign exchange.

In case a fund management company with foreign shares needs to settle the exchange at the foreign exchange capital account, it shall
make application to the local administration of foreign exchange by presenting the following documents and materials, and handle
settlement procedures at a designated foreign exchange bank based on approval documents of the administration of foreign exchange:

(I)

A written application for settlement;

(II)

Vouchers representing usage of the settled fund or description of the same;

(III)

Bank statements of the foreign exchange capital account in current period of the company; and

(IV)

Other documents required by the administration of foreign exchange.

VI.

In the case a fund management with foreign shares needs to pay profits to foreign shareholders, it shall make applications to the
administration of foreign exchange at its locality by presenting the following documents and materials, and handle purchase and payment
of exchange procedures at designated foreign exchange bank on basis of approval documents of the administration of foreign exchange:

(I)

A written application for purchase and payment of exchange;

(II)

Tax payment receipt and tax declarations form;

(III)

Auditing report issued by an accounting firm on profits and profits distribution at the year of realization of profit of the company;

(IV)

Resolution passed by the board of directors of the company on profit distribution;

(V)

Bank statements of the foreign exchange capital account in current period of the company.

(VI)

Other materials required by the administration of foreign exchange.

ithin four months after the expiry of each fiscal year, the fund management with foreign shares that fails to purchase and remit outside
country the exchanges to pay profits to foreign shareholders due in that year shall report to the administration of foreign exchange
for record. The record documents of the administration of foreign exchange shall be the necessary document for purchase or remittance
of profits to foreign shareholders thereafter.

VII.

Where the corporate nature is changed through stock transfer from a domestic fund management company to foreign shareholders, such
fund management company shall report to the administration of foreign exchange for record at its locality within five working days
after obtaining formal approval documents from the CSRC. Where the transferor is a domestic organization, it shall make application
to the administration of foreign exchange at its locality, within five working days after receiving the foreign exchanges from the
transferee, and present the documents including written application, transfer agreement, approval document of the CSRC and approval
certificate of foreign economic and trade department.

VIII.

Where transfer of stock equity of a fund management company with foreign shares is approved by CSRC and foreign economic and trade
department, it shall report to the administration of foreign exchange at its locality record within five working days of obtaining
approval documents from the foreign economic and trade department. Where stock equity is transferred from foreign shareholders to
domestic organizations and the transferee needs to pay to the foreign investor for the transfer, it shall apply to the administration
of foreign exchange at its locality for approval of purchase and payment of exchange by presenting the following documents and materials:

(I)

A written application for purchase and payment of exchange;

(II)

The stock equity transfer agreement;

(III)

Approval documents from the CSRC and foreign economic and trade department granting approval to the transfer;

(IV)

Bank statements on all foreign exchange account of the transferee;

(V)

If proceeds are accrued by the transfer on part of the foreign party, the transferee shall present tax payment receipt on withholding
income tax.

(VI)

Other materials required by the administration of foreign exchange.

IX.

Where the foreign shareholder of a fund management company with foreign shares has obtained approval from the CSRC and foreign economic
and trade department to reduce or withdraw its investment therein, the company shall apply to the administration of foreign exchange
at its locality for approval of purchase and payment of exchange by presenting the following documents and materials:

(I)

A written application for purchase of exchange;

(II)

Resolution passed by the board of directors of the company on reduction (withdrawal) of investment by foreign party;

(III)

Approval documents from the CSRC and foreign economic and trade department granting approval to the reduction (withdrawal) of investment;

(IV)

Latest capital verification report and auditing report of the company issued by an accounting firm;

(V)

Bank statement of foreign exchange capital account of the company;

(VI)

If proceeds are accrued by the reduction (withdrawal) of investment on part of the foreign party, tax payment receipt on withholding
income tax shall be presented.

(VII)

Other materials required by the administration of foreign exchange.

Fund management companies with foreign shares shall only conduct businesses specified by CSRC. Without approval of the State Administration
of Foreign Exchange, they shall not conduct any foreign exchange business under capital items such as financing from abroad or providing
guarantees to foreign parties etc.

XI.

The State Administration of Foreign Exchange and its branches shall have the power to make on-site investigations to the foreign exchange
capital account of fund management companies with foreign shares and to their settlement and payment of exchange. Fund management
companies with foreign shares shall actively render assistance to relevant investigations and shall not provide false information.

XII.

Where a fund management company with foreign shares acts in breach of this Circular and other regulations on administration of foreign
exchange, the State Administration of Foreign Exchange and its branches may impose sanctions on it in accordance with the Regulations
of the People’s Republic of China on Administration of Foreign Exchange and other regulations on foreign exchange control.

XIII.

This Circular shall enter into force as of May 1, 2003. The State Administration of Foreign Exchange shall be responsible for the
interpretation of this Circular.

The State Administration of Foreign Exchange
2003-03-29

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Constitution

The basic law

Concluding and Transitional Provisions

PROMOTION OF PRIVATELY-RUN SCHOOLS LAW

ADMINISTRATIVE RULES GOVERNING THE AUTO FINANCING COMPANY

LAW OF THE PEOPLE’S REPUBLIC OF CHINA ON SECURITIES INVESTMENT FUND

THE DECISION OF THE MINISTRY OF JUSTICE ON AMENDING THE ADMINISTRATIVE MEASURES FOR THE REPRESENTATIVE OFFICES OF THE LAW FIRMS OF HONG KONG, MACAO BASED IN THE MAINLAND

SUPPLEMENTARY PROVISIONS TO THE PROVISIONS ON THE ADMINISTRATION OF FOREIGN-FUNDED MUNICIPAL PLANNING ENTERPRISES

AMENDMENT OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS TO THE CONSTITUTION

REGULATION ON THE CUSTOMS’ PROTECTION OF INTELLECTUAL PROPERTY RIGHT

MEASURES FOR THE HANDLING OF INCOME TAXES IN THE DEBT RESTRUCTURING OF ENTERPRISES

CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON IMPROVING THE ADMINISTRATION OF FOREIGN EXCHANGE IN FOREIGN DIRECT INVESTMENTS

CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING ADMINISTRATION OF FOREIGN EXCHANGE OF FUND MANAGEMENT COMPANIES WITH FOREIGN SHARES

CONSTITUTION ACT, 1982 – page 22

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

CONSTITUTION ACT, 1982 – page 17

CONSTITUTION ACT, 1982 – page 16

CONSTITUTION ACT, 1982 – page 12

CONSTITUTION ACT, 1982 – page 11

CONSTITUTION ACT, 1982 – page 10

CONSTITUTION ACT, 1982 – page 9

CONSTITUTION ACT, 1982 – page 8

CONSTITUTION ACT, 1982 – page 7