NOTICE OF THE STATE COUNCIL ON ADJUSTING THE PROPORTIONS OF REGISTERED CAPITAL IN FIXED ASSET INVESTMENT PROJECTS OF SOME INDUSTRIES

the State Council on Adjusting

Notice of the State Council on Adjusting the Proportions of Registered Capital in Fixed Asset Investment Projects of Some Industries

No. 13[2004] of the State Council

April 26, 2004

Since this year, the national economy has been maintaining a favorable momentum, the reform and opening has been further carried forward
steadily and the social undertakings have been developed in an all-around way. At the same time, those outstanding conflicts existing
in the economic operation have become increasingly apparent, which are embodied in such aspects as the over-increase in investment,
too many newly started projects, the under-construction scale being too large, and the irrational investment structure. There exists
blind investment in industries of steel, electrolytic aluminum and cement, there is serious phenomenon of low-quality repeated construction,
the increase rate of development and investment of real estate is too high and the development capital is excessively dependent on
bank loans. In order to strengthen the macro regulation, adjust and optimize the economic structure and promote a sound development
of the aforesaid industries, the State Council has decided to adjust the proportions of capital money of construction projects in
industries of steel, electrolytic aluminum, cement and real estate development as prescribed in the Notice of the State Council on
Piloting the System of Registered Capital on Fixed Asset Investment Projects (No. 35 [1996] of the State Council): (1) The proportion
of capital money of steel projects shall be raised from 25% or more to 40% or more; (2) The proportion of registered capital of projects
of cement, electrolytic aluminum and real estate development (excluding projects of affordable houses) shall be raised from 20% or
more to 35% or more.

The relevant provisions of this Notice shall go into effect as of the date of promulgation.

the State Council on Adjusting
2004-04-26

MEASURES FOR THE ADMINISTRATION OF SHORT-TERM FINANCING BILLS OF SECURITIES COMPANIES

the People’s Bank of China

Announcement of the People’s Bank of China

No. 12

For the purpose of promoting further development of money market and expanding the financing channels of securities companies, the
Measures for the Administration of Short-term Financing Bills of Securities Companies, which were formulated by the People’s Bank
of China in consultation with the China Securities Regulatory Commission and the China Banking Regulatory Commission, are hereby
promulgated and shall come into force as of November 1st, 2004.

the People’s Bank of China

October 18, 2004

Measures for the Administration of Short-term Financing Bills of Securities Companies

Chapter I General Provisions

Article 1

The present Measures are formulated according to the Law of the People’s Republic of China on the People’s Bank of China in order
to further promote development of the money market, expand financing channels of securities companies, regulate the issuance and
trading of short-term financing bills of securities companies and protect the legitimate rights and interests of the investors of
short-term financing bills.

Article 2

The “short-term financing bills of securities companies”(hereinafter referred to as “short-term financing bills”) as referred to in
the present Measures shall mean the financial bond issued by securities companies in the inter-bank bond market for the purpose of
short-term financing and for which both parties agree to repay both the principal and the corresponding interests within a time limit.

Article 3

The issuance and trading of short-term financing bills of securities companies shall be subject to the supervision and administration
of the People’s Bank of China.

Article 4

The People’s Bank of China shall authorize the National Inter-bank Funding Center (hereinafter referred to as the Inter-bank Funding
Center) to, through the electronic information system of the Inter-bank Financing Center, publicize the supervisory opinions of China
Securities Regulatory Commission (hereinafter referred to as the CSRC) on whether or not an issuer of short-term financing bills
meets the basic conditions for issuing short-term financing bills.

Article 5

The short-term financing bills of securities companies shall be issued and traded only in the inter-bank bond market.

Article 6

The issuance and trading of short-term financing bills of securities companies shall follow the principles of fairness, good faith
and self-discipline.

Every investor of short-term financing bills shall meet the requirements of prudent supervision of its own supervisory department
and be of the capability of identifying, judging and assuming risks. The risks of short-term financing bills shall be assumed by
the investor itself.

Article 7

The securities company issuing short-term financing bills shall repay the principal and interests on schedule.

Article 8

The securities company issuing short-term financing bills shall truly, exactly, completely and timely disclose the information according
to provisions of the present Measures.

Chapter II Issuance

Article 9

The securities company applying for issuing short-term financing bills shall meet the following fundamental conditions and obtain
approval from the CSRC:

(1)

Having acquired the membership of the National Inter-bank Funding Center for more than one year;

(2)

The issuer has, according to unified requirements of the norms, disclosed its detailed accounting information in the National Inter-bank
Funding Center for more than one year, and has no record of violation of information disclosure in the recent year;

(3)

The storage and management of transaction settlement funds of customers shall accord with the provisions of the CSRC, and the transaction
settlement funds of customers have not been embezzled during the recent year;

(4)

It should have a sound system of internal control and strictly separating administration of the entrusted businesses and the self-management
businesses thereof; there is a middle office to supervise and control the operational risks over front and back offices, and there
is no significant violation of laws and regulations during the last two years;

(5)

The method of market value shall be applied to evaluate the assets and debts, and a reasonable method shall be used to evaluate the
risks of stocks; and

(6)

Other conditions as provided for by the People’s Bank of China or the CSRC.

Article 10

The securities company with the competency to issue short-term financing bills approved by the CSRC shall submit the following materials
to the People’s Bank of China for archival filing if it plans to issue short-term financing bills in an inter-bank bond market:

(1)

A photocopy of the approval documents to become a membership of the National Inter-bank Funding Market;

(2)

A photocopy of the announcement of relevant information disclosure published by the Inter-bank Funding Center;

(3)

A photocopy of confirmation documents by the CSRC of the competency to issue short-term financing bills; and

(4)

Other documents required to be submitted by the People’s Bank of China.

The People’s Bank of China shall, within 10 working days from accepting the required materials for archival filing, confirm the receipt
of such materials in the form of a written archival filing notice and set the upper limit of short-term financing bills issued by
the securities company.

Article 11

A securities company that is to issue short-term financing bills shall designate a capital and credit rating institution to make credit
rating on it.

Article 12

A securities company that issues short-term financing bills shall, according to the related provisions, formulate relevant operation
rules, and establish and improve the systems of risk management and internal control.

Article 13

A securities company shall adopt the balance management system on the issuance of short-term financing bills, and the balance of short-term
financing bills to be repaid shall not exceed 60 per cent of its net capital. Within such limit, the securities company shall freely
confirm its issuance scale of short-term financing bills.

The People’s Bank of China shall regulate the upper limit of an issuer’s balance of short-term financing bills once every 6 months
pursuant to the information concerning the securities company’s net capital as provided by the CSRC, and announce the upper limit
of the balance in the national inter-bank bond market.

The People’s Bank of China shall be enpost_titled to regulating the upper limit of the ratio between the securities company’s balance of
short-term financing bills and its net capital in light of the market performance and the issuer’s situation.

Article 14

The maximum time limit of a short-term financing bill shall be 91 days. The securities companies that issue short-term financing bills
may freely determine the terms of their short-term financing bills within the said maximum time limit.

The People’s Bank of China shall be enpost_titled to regulating the upper limit of the time limit of short-term financing bills pursuant
to the market performance.

Article 15

The issuing period of short-term financing bills shall not exceed 3 working days, which starts from the bidding day of short-term
financing bills to the day when the relationship of debtor-creditor is established.

Article 16

The issuance of short-term financing bills shall be in the form of auction, and the interest rate or price of issuance shall be freely
determined by the two parties.

Article 17

The People’s Bank of China shall authorize the China Government Securities Depository Trust & Clearing Co., Ltd. (hereinafter referred
to as the CGSDTC) to be responsible for setting the issuing period of short-term financing bills. Prior to each issuance, the securities
company shall apply for setting the issuing period to the CGSDTC, which shall arrange for the issuance according to the sequence
of applications of securities companies. The application materials for issuing period shall include, but not be limited to the following
items:

(1)

a written notice of archival filing of the People’s Bank of China;

(2)

the scale of the planned issuance of short-term financing bills;

(3)

the time limit of the planned issuance of short-term financing bills;

(4)

the method to determine the interest rate of the planned issuance of short-term financing bills;

(5)

the balance of short-term financing bills to be repaid and its detailed information; and

(6)

other items as required by the People’s Bank of China.

The CGSDTC shall, within 2 working days from acceptance of the application documents according with the provisions of this Article,
determine the date of issuance and notify the issuer of it.

Article 18

The issuer shall publish a collecting prospectus for the current issuance of short-term financing bills through the China bond website
(www.chinabond.com.cn/) within 3 working days as of the date of issuance as determined by the CGSDTC. Written legal opinions shall
be issued by a law office for the prospectus, which shall have specific and clear contents, and shall explicitly stipulate the rights
and obligations of the parties of the short-term financing bills. The prospectus shall include, but not be limited to the following
items:

(1)

the basic information of the issuer;

(2)

the scale and time limit of short-term financing bills to be issued and the method adopted to determine the interest rate;

(3)

the guarantee situation of short-term financing bills to be issued;

(4)

the issuing period;

(5)

the time and form of repayment of the principal and interests;

(6)

liabilities of the issuer for breach of the contract;

(7)

objects of issuance;

(8)

points of attention regarding investment risks; and

(9)

other items as required to be published by the People’s Bank of China.

Article 19

After finishing the issuance of short-term financing bills, the issuer shall announce to the market such information as the actual
scale, actual interest rate and the time limit of issuance through China bond website (www.chinabond.com.cn/) within the first working
day following the day of registering the credits and debts. The CGSDTC shall summarize the issuance announcements regularly and report
the circumstances of issuance of short-term financing bills to the People’s Bank of China.

Article 20

No securities company may use the funds raised through issuing short-term financing bills for the following purposes:

(1)

making fixed asset investment and establishing network stations for business;

(2)

making investment in the secondary stock market;

(3)

providing financing for the securities trading of any client;

(4)

making long-term equity investment; or

(5)

any other uses as prohibited by the People’s Bank of China.

Chapter III Trading, Trusteeship, Settlement and Redemption

Article 21

The short-term financing bills may be traded in the national inter-bank bond market according to the Measures for Administration of
Bond Trading in the National Inter-bank Bond Market. The short-term financing bills may circulate and be transferred from the next
working day following the day of registering the credits and debts. The trading of short-term financing bills shall be carried out
through the electronic trading system of the Inter-bank Funding Center.

Article 22

The short-term financing bills shall be registered, entrusted and settled in the form of bookkeeping at the CGSDTC.

Article 23

The issuer shall cash the principal and interests of short-term financing bills on schedule in light of the stipulations of announcement
of issuance and shall not alter the date of redemption without permission.

Article 24

The deadline for transferring the ownership of short-term financing bills shall be 3 working days prior to their maturity. The issuer
shall transfer the full amount of principal and interests of short-term financing bills to be redeemed to an account specified by
the CGSDTC on the day when the short-term financing bills expire (extended if falling on holidays), and the CGSDTC shall pay the
principal and interests to the investors of short-term financing bills.

Article 25

In case the issuer fails to transfer the full amount of principal and interests of short-term financing bills to the account specified
by the CGSDTC on schedule, the CGSDTC shall announce such failure to investors through the China money website (www.chinamoney.com.cn)
and the China bond website (www.chinabond.com.cn/) at the end of the day when the short-term financing bills expire.

Chapter IV Information Disclosure

Article 26

The securities company, which issues short-term financing bills, shall be obliged to disclose information to the inter-bank bond market.

Article 27

The board of directors or the major principal of a securities company that issues short-term financing bills shall ensure the authenticity,
accuracy and integrity of disclosed information and assume corresponding legal liability.

Article 28

The securities company that issues short-term financing bills shall regularly disclose the following information through the electronic
information system of the Inter-bank Funding Center:

(1)

the balance sheets and net assets statements, the profit statements and profit distribution statements of previous year prior to January
20 of each year;

(2)

the balance sheets and net assets statements, the profit statements and profit distribution statements of the first six months of
current year prior to July 20 of each year; and

(3)

the annual financial statements and auditing reports audited by a qualified accounting company engaged in such relevant businesses
as securities and futures, including the full context of the auditing opinions, audited balance sheets, net assets statements, profit
statements, profit distribution statements and appendix of the financial statements prior to April 30 of each year.

Article 29

The issuer shall make an announcement timely under any of the following circumstances:

(1)

being expected to have difficulty in repaying interests or principal on schedule;

(2)

deduction of capital, merger, split-up, dissolution and application for bankruptcy;

(3)

alteration of stock rights; or

(4)

other circumstances that shall be announced as prescribed by the People’s Bank of China.

Article 30

The listed securities companies may be immune from regularly disclosure of the information stipulated in items (1) and (2) of Article
27 of the present Measures.

Chapter V Supervision and Administration

Article 31

The People’s Bank of China shall be enpost_titled to conducting dynamic inspection at any time on the issuance and trading of short-term
financing bills of a securities company and the use of raised funds.

Article 32

The People’s Bank of China may reset the upper limit of an issuer’s balance of short-term financing bills to be repaid at less than
50 percent of the original upper limit of the issuer’s balance of short-term financing bills to be repaid in case the issuer has
any of the following acts:

(1)

failing to redeem the full amount of principal and interests of short-term financing bills on schedule; or

(2)

failing to disclose information as required twice within 3 years.

Article 33

The People’s Bank of China may suspend the issuance of short-term financing bills of an issuer at the national inter-bank bond market
for six months if:

(1)

its balance of short-term financing bills to be repaid exceeds the upper limit set by the People’s Bank of China;

(2)

its raised funds of short-term financing bills are put into prohibitive uses;

(3)

it has failed twice in six months to repay the full amount of principal and interests of short-term financing bills on schedule; or

(4)

it has failed to disclose information as required three times in 3 years.

Article 34

The People’s Bank of China may prohibit an issuer from issuing short-term financing bills in the national inter-bank bond market if:

(1)

its membership in the Inter-bank Funding Center is cancelled;

(2)

it has disclosed false information;

(3)

the CSRC finds that the company falls short of any of the items (3), (4), (5) and (6) of Article 9 of the present Measures;

(4)

it is subject to a fine or more severe penalty imposed by the CSRC or other competent departments for businesses violating laws and
regulations;

(5)

two or more main financial indexes of it do not meet the supervisory requirements of the CSRC;

(6)

it has failed to repay the full amount of principal and interests of short-term financing bills three times within 1 year; or

(7)

it has failed to disclose information as required more than three times (not included) within 3 years.

Article 35

The CGSDTC shall, on each trading day, disclose the amount of held short-term financing bills, the list of investors who hold more
than 20 percent of the total entrusted amount of short-term financing bills and their respective holding ratios, at the end of the
previous trading day.

Article 36

The Inter-bank Funding Center shall be responsible for the routine monitoring of the trading of short-term financing bills, while
the CGSDTC shall be responsible for the routine monitoring of the settlement of short-term financing bills. The Inter-bank Funding
Center and the CGSDTC shall timely report any abnormal transaction and settlement to the People’s Bank of China.

Article 37

The Inter-bank Funding Center and the CGSDTC shall establish corresponding rules on trading, settlement and information disclosure
of short-term financing bills according to the present Measures.

Article 38

Any act, which occurs in the trading of short-term financing bills and is contrary to the present Measures, shall be subject to relevant
penalties as specified in the Measures for Administration of Bond Trading in the National Inter-bank Bond Market.

Article 39

Any director, senior manager and any other person directly in charge, who are responsible for disclosing false information, shall
be subject to the penalty as specified in Article 46 of the Law of the People’s Republic of China on the People’s Bank of China.

Chapter VI Supplementary Provisions

Article 40

The power to interpret the present Measures shall remain with the People’s Bank of China.

Article 41

The present Measures shall come into force as of November 1st, 2004.

the People’s Bank of China
2004-10-18

CIRCULAR OF THE MINISTRY OF FINANCE AND THE NATIONAL DEVELOPMENT AND REFORM COMMISSION ON PROMULGATING THE CANCELLATION OF 103 CHARGING ITEMS SUBJECT TO ADMINISTRATIVE EXAMINATION AND APPROVAL

the National Development and Reform Commission,the Ministry of Finance of the People’s Republic of China

Circular of the Ministry of Finance and the National Development and Reform Commission on Promulgating the Cancellation of 103 Charging
Items Subject to Administrative Examination and Approval.

No.87 [2004] of the Ministry of Finance

The relevant departments of the Central Committee of the Communist Party of China, all the ministries and commissions of the State
Council, the institutions directly under the State Council, and the finance offices or bureaus, development and reform commissions
and price bureaus of all the provinces, autonomous regions and municipalities directly under the Central Government:

For the purpose of carrying out the Administrative License Law and promoting law-based administration, we have made an overall clean-up
on the charging items subject to the national administrative examination and approval and etc. (including administrative license,
the same hereinafter) of the departments and entities under the Central Government according to the relevant provisions of the Notice
of the State Council on Printing and Distributing the Implementation Programs for Overall Pushing Forward the Law-based Administration
(No.10 [2004] of the State Council), the Implementation Opinions of the Office of the State Council on Carrying out the Implementation
Programs for Overall Pushing Forward the Law-based Administration (No.24[2004] of the Office of the State Council), the Decision
of the State Council on Canceling and Adjusting the Items Subject to Administrative Examination and Approval (III) (No.16 [2004]
of the State Council) and the Notice of the National Development and Reform Commission and the Ministry of Finance on Cleaning up
the Relevant Charges of Administrative Departments and Institutions (No.1196 [2004] of the National Development and Reform Commission),
and decide to promulgate the cancellation of 103 charging items subject to administrative examination and approval and etc. We hereby
notify the matters concerned as follows:

The following 84 charging items, which have been approved by the Ministry of Finance and the National Development and Reform Commission
(including the former State Planning Commission and the former State Price Bureau)but do not conform to the charges for administrative
examination and approval as prescribed by laws and administrative regulations, shall be promulgated for cancellation.

Public Security Departments

(1)

Cost of the pass for border administration areas

(2)

Cost of the pass for entry and exit of residents in border areas

(3)

Cost of the identity confirmation forms for settlement of foreigners

(4)

Cost of the employees’ cards on ship

(5)

Cost of travel certificates of Taiwan compatriots

(6)

Fees for annual examination of driving licenses

(7)

Fees for handling grave and serious traffic accidents

(8)

Cost of certificates for holding guns used for the discharge of official duties

(9)

Cost of certificates for holding guns for civilian use

(10)

Cost of licenses for storage of explosives

(11)

Cost of licenses for the use of explosives

(12)

Cost of licenses for the purchase of explosives

(13)

Cost of license for the transportation of explosives

(14)

Cost of licenses for working of a blaster

Departments of Development and Reform (Coal)

(15)

Cost of qualification certificates for operation of coals

Food and Drug Supervision Departments

(16)

Fees for the examination and approval of new biological products (merged into the fees for the examination and approval of new pharmaceuticals)

(17)

Fees for the registration of licenses for the export of special chemicals

(18)

Fees for the appraisal of licenses for enterprises undertaking the production of materials and containers for the use of drug packaging

Agriculture Departments

(19)

Fees for examination and approval for the export of pesticides

(20)

Fees for examination and approval of application for the test of pesticides

(21)

Fees for testing soil and fertilizer

(22)

Fees for registration of fertilizer and soil opsonins and opsonins for the growth of plants (including fees for registration certificates)

(23)

Fees for regional test of crop varieties

Departments of Industry and Commerce

(24)

Fees for checking the Trademark Registration Certificates

Departments of Information Industry

(25)

Wireless registration fees (including fees collected by other departments)

(26)

Cost of the licenses for operation of basic telecommunications service

(27)

Cost of the licenses for operation of trans-regional value-added telecommunication services

(28)

Cost of the licenses for operation of value-added telecommunications services

Departments of Science and Technology

(29)

Fees for the registration of technology contracts

(30)

Fees for the appraisal of technology awards (including fees collected by other departments)

Departments of State Land and Resources

(31)

Fees for the examination and approval of geological survey reports

(32)

Cost of approval documents for land used for construction

Mapping Departments

(33)

Cost of mapping employee’s cards

(34)

Cost of qualification certificates of mapping

10.

Departments of Tobacco Monopoly

(35)

Charges for the licenses of tobacco monopoly (including production, wholesale, retail and temporary charges)

11.

Administrations of Departments Directly under the CCCPC

(36)

Fees for appraisal of entities undertaking scientific research and production of code products for commercial use

(37)

Annual fees for franchising sale of code products for commercial use

12.

Talent Exchange Centers under the Departments of Personnel and Other Departments.

(38)

Fees for political examination on going abroad

13.

Commission of Science, Technology and Industry for National Defense

(39)

Fees for the licenses of nuclear materials

14.

People’s Banks of China

(40)

Charges for loan cards

15.

Competent Departments of Work Safety (Coal)

(41)

Cost of the licenses for operation of hazardous chemicals

(42)

Cost of the operation certificates (IC cards)of special operators

(43)

Fees for conformity certificates of safety production conditions of village and town coal mines

16.

Departments of Justice

(44)

Cost of practicing certificate of lawyers

(45)

Cost of practicing certificate of grass-root legal service practitioners

(46)

Cost of practicing certificate of notaries

(47)

Cost of practicing licenses of law firms

17.

Departments of Press and Publication

(48)

Cost of the licenses for publication of newspapers and periodicals

(49)

Cost of press cards

18.

Cultural Departments

(50)

Fees for performance licenses

19.

Forestry Departments

(51)

Cost of certificates of timber transportation

(52)

Cost of licenses for timber felling

(53)

Cost of licenses for domestication and breeding

(54)

Cost of special hunting and catching certificate

(55)

Cost of hunting certificate

20.

Departments of Population and Family Planning

(56)

Cost of the Certificates of Marriage and Bearing of Migrant Populations

21.

Administrative Departments of Civil Aviation

(57)

Cost of licenses for operation

(58)

Cost of licenses for safety inspection of civil aviation

(59)

Cost of conformity certificates for the use of safety inspection appliances

22.

Railway Departments

(60)

Fees for the licenses of transportation of liquefied petroleum gas railway tank trucks

23.

Construction Departments

(61)

Fees for the certificates of registered architects

(62)

Fees for the certificates of registered structural engineers

(63)

Fees for the certificates of registered urban planners

(64)

Fees for the certificates of real estate appraisers

(65)

Cost of the registration certificates of real estate brokers

(66)

Fees for the certificates of cost engineers

(67)

Fees for the certificates of supervision engineers

(68)

Charges for examination and license issuance of qualifications of survey and design of projects

(69)

Fees for the certificates of examination on qualification of construction enterprises

(70)

Fees for the construction supervision certificates (including certificates of supervision engineers and certificates of supervision
entities)

(71)

Fees for the qualification certificates of urban planning compilation

24.

Departments of Labor and Social Security

(72)

Cost of wages and funds management handbooks

25.

Education Departments

(73)

Cost of the determination letters for the qualification of intermediary service institutions for studying abroad at one’s own expenses

26.

Communication Departments

(74)

Cost of licenses for operation above and under water

27.

China Securities Regulatory Commissions

(75)

Fees for the examination of issuance

28.

General Administrations of Customs

(76)

Handling charges for the customs supervision over tax-free commodities

(77)

Handling charges for the customs supervision over goods in the export supervision warehouses

(78)

Handling charges for tax refund of imported goods

(79)

Fees for occupying inspection places by vehicles overtime

(80)

Fees for inspection of vehicles

29.

Health Departments

(81)

Fees for administration of medical institutions run by the local people

30.

Port Administration Departments (Local Governments)

(82)

Port administration (construction)fees

31.

Departments of Quality Inspection and Quarantine

(83)

Cost of the registration certificates of cotton quality inspectors

32.

Departments of Intellectual Property Rights

(84)

Expenditures for running schools by intellectual property training centers

II.

The following 7 charging items subject to administrative examination and approval, which have been approved by the Ministry of Finance
and the National Development and Reform Commission (including the former State Planning Commission and the former State Price Bureau),
shall be cancelled with the cancellation of the items subject to administrative examination and approval of the State Council (III)accordingly.

Public Security (Work Safety)Departments

(1)

Cost of the licenses for work safety of explosives (including fireworks and firecrackers)

(2)

Cost of the licenses for the sale of explosives (including fireworks and firecrackers)

Finance Departments

(3)

Fees for signing up and examination of registered accountants for their implementation of securities and futures and other relevant
businesses

Agriculture Departments

(4)

Cost of the licenses for veterinary drug preparations

Commerce Departments

(5)

Cost of the certificates for the export of special mechanical and electrical products

(6)

Cost of the certificates of export quotas of mechanical and electrical products

General Administrations of Customs

(7)

Handling charges for the registration and recording of customs declaration entities

III.

The following 12 charging items subject to examination and approval, which fall within the items charged by the relevant departments
by exceeding their powers of examination and approval, shall be promulgated for cancellation.

People’s Banks of China

(1)

Cost of the registration forms for import of mechanical and electrical products

Communications Departments

(2)

Cost of the Licenses for Waterage

(3)

Cost of the conformity certificates of construction and fire control

(4)

Cost of the licenses for fire control construction

(5)

Fees for examination on the fire control construction

(6)

Cost of the certificates for the administration of explosives

Tourism Departments

(7)

Cost of reports on the star-rated tourism hotels

(8)

Cost of the licenses for operation of travel agencies

(9)

Cost of the reports on the declaration of technology of travel agencies

(10)

Cost of the name lists of traveling groups going abroad

(11)

Cost of the certificates of team leader of outbound travel

(12)

Cost of the certificates of grade qualification of tour guides

IV.

The aforesaid charging items shall be cancelled with the cancellation of the items subject to the administrative examination and approval
of the State Council (III).The charging items examined and approved by the relevant departments by exceeding their powers shall be
corrected at once, and other charges shall be canceled as of January 1st, 2005 without exceptions.The relevant implementation departments
and entities that carry out the charging shall, pursuant to regulations, go through formalities for writing off the Charging License
at the competent price department which has issued the Charging License originally, and go through formalities for cancellation of
the documentations at the finance department which has issued the charging bills originally.And the balance of the relevant charging
funds shall be turned in to the state treasury or to a special finance account at the exact amount strictly in light of the channels
as prescribed formerly by the finance department.In case any provision of the relevant documents in the past is inconsistent with
this Notice, this Notice shall prevail without exceptions.

After the aforesaid charging items are cancelled, the relevant departments and entities shall perform the duties of administrative
examination and approval or issue expenses as needed for issuance of licenses and certificates according to laws, administrative
regulations and the provisions of the State Council.The finance department at the corresponding level shall give guaranty through
departmental budget or the channels of outlay approved by the finance department.The finance departments at all levels shall guarantee
the expenditures as needed by the relevant departments and entities to perform administrative examination and approval matters according
to law.

VI.

All the localities and the relevant departments shall strictly carry out the provisions of this Notice and Document No.1196 [2004]
of the National Development and Reform Commission, and earnestly implement the charging items promulgated for cancellation, and report
the situations of their own districts and departments on the implementation of the cancellation of charging items and the amount
of money involved to the Ministry of Finance and the National Development and Reform Commission for archival filing.

the Ministry of Finance of the People’s Republic of China

the National Development and Reform Commission

November 24, 2004

the National Development and Reform Commission,the Ministry of Finance of the People’s Republic of China
2004-11-24

CIRCULAR OF THE CUSTOMS TARIFF COMMISSION OF THE STATE COUNCIL CONCERNING OFFERING ZERO TARIFF TREATMENT TO PART OF THE COMMODITIES OF SENEGAL AND AFGHANISTAN

Circular of the Customs Tariff Commission of the State Council concerning Offering Zero Tariff Treatment to Part of the Commodities
of Senegal and Afghanistan

Shui Wei Hui [2006] No.15

The General Administration of Customs:

Recently, the Government of China has separately signed the exchange of letters with the Government of the Islamic Republic of Afghanistan
and the Government of the Republic of Senegal concerning offering zero tariff treatment to part of the commodities exported thereby
to China. In accordance with the decision of the State Council, the preferential tax rate of zero tariffs shall be offered to the
following least developed countries as of July 1, 2006:

The zero tariffs shall be offered to part of the commodities native to the Republic of Senegal. The scope of specific commodities
is the same as that of commodities to which China has offered zero tariff treatment to the Republic of Benin and other 26 African
countries. Please see the Table of Preferential Tax Rates of Import Tariffs, the attached table of the Rules of the People’s Republic
of China for the Import and Export Tariffs (2006).

II.

The zero tariffs shall be offered to part of the commodities native to the Islamic Republic of Afghanistan. The scope of specific
commodities is the same as that of commodities to which China has offered the zero tariff treatment to Yemen and other three Asia-Pacific
countries. Please see the Table of Import Preferential Tariff Items and Rates (for Yemen and Other Three Countries), the attached
table 5 f to the Circular of the Customs Tariff Commission of the State Council concerning Regulating the Tariff Rates for Autos
and Other Commodities and Implementing the Related Agreement Rates and Preferential Rates.

The Customs Tariff Commission of the State Council

June 26, 2006

the Customs Tariff Commission of the State Council
2006-06-26

SUPPLEMENTARY NOTICE OF THE MINISTRY OF FINANCE ON RELEVANT ISSUES CONCERNING THE LEVY OF SPECIAL PROFIT CHARGE ON CRUDE OIL

Supplementary Notice of the Ministry of Finance on Relevant Issues concerning the Levy of Special Profit Charge on Crude Oil

Cai Qi No. 183 [2006]

Departments (Bureaus) of public finance of all provinces, autonomous regions, municipalities directly under the Central government
and cities under separate state planning, relevant ministries and commissions under the State Council, relevant departments directly
under the State Council, China National Petroleum Corporation, China Petrochemical Corporation, China National Offshore Oil Corporation,

After the issuance of the Notice of Ministry of Finance on Printing and Distributing the Measures for the Administration on the Levy
of Special Profit Charge on Crude Oil (Cai Qi No.72[2006], hereinafter referred to as “the Measures”), some oil exploitation enterprises
have made some suggestion on overall and accurate implementation of the Measures. And hereby supplementary notice on relevant issues
concerning the levy of special profit charge on crude oil is noticed:

As for the levy scope of special profit charge on crude oil

No matter whether the crude oil, exploited within the land areas of the People’s Republic of China or the sea areas under its jurisdiction,
is sold within the territory of China or not, special profit charge on it shall be paid in accordance with the relevant provisions.
The value-added tax for crude oil , charge for using the mining area and conservation oil of the state, paid to the state by the
Chinese-foreign cooperative oilfield in accordance with the relevant provisions, may not be levied the special profit charge on crude
oil .

As for the main bodies paying special profit charge on crude oil of joint venture cooperative enterprises

As to the payment of special profit charge on crude oil by a joint venture cooperative enterprise, an application for declaration
shall be made to the financial authority uniformly by the party having the license for oil exploration and exploitation among the
two parties of the joint venture cooperative enterprise. The financial authority shall, after verifying the submitted report form
of special profit charge on crude oil, confirm in writing the sum of special profit charge on crude oil that shall be paid by each
party of the enterprise. The enterprise shall, in light of the sum confirmed in the written notice, fill in a “Common Payment Book”
and pay it directly.

As for relevant issues on the calculation of special profit charge on crude oil of Chinese-foreign cooperative oilfield

All parties of Chinese-foreign cooperative oilfield shall, on the basis of the price of shares set on schedule by all cooperative
parties, calculate the special profit charge on crude oil. Special profit charge on crude oil may not be recovered as corresponding
cost in the joint account book of the parties of the cooperative enterprise.

Other relevant issues

(1)

The special profit charge on crude oil shall be paid in RMB;

(2)

The special profit charge on crude oil, which shall be paid by each party of the cooperative oilfield, shall be listed separately
when the application for payment is made. The late fee and fine, which shall be collected additionally due to the delay of application
or payment in a fixed period of time , shall be separately born by relevant responsible parties.

(3)

Petroleum exploitation enterprises shall, when applying for special profit charge on crude oil that shall be paid, provide their price
implementation document for selling crude oil in each month. The Chinese-foreign oilfield shall provide the definite document for
the price of shares determined by all cooperative parties.

The Ministry of Finance of the People’s Republic of China

June 30, 2006

Ministry of Finance
2006-06-30

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE RELATED TAXATION ISSUES CONCERNING SOHU’S SPONSORSHIP OF THE 29TH OLYMPIC GAMES

Circular of the State Administration of Taxation on the Related Taxation Issues Concerning Sohu’s Sponsorship of the 29th Olympic
Games

Guo Shui Han [2006] No. 771

The state taxation bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central
Government and cities specifically designated in the state plan:

Upon research, the related taxation issues concerning the sponsorship of cash equivalents to the 29th Olympic Games by Sohu.com Inc,
Beijing Sohu Now Era Technology and Beijing Sohu Internet Information (hereinafter collectively referred to as “Sohu”) are hereby
notified as follows:

With respect to the Sohu’s sponsorship expenditure of cash equivalents affirmed according to the market price to Beijing Organizing
Committee, it shall be totally deducted from the taxable incomes when calculating the enterprise income tax in light of the spirit
as prescribed in Paragraph 4, Article 2 of the Circular of the Ministry of Finance, the General Administration of Taxation, General
Administration of Customs on Several Issues Concerning the Tax Policies for the 29th Olympic Games (Cai Shui [2003] No. 10).

The business tax shall be exempted for all the internet services and information technology consultation occurred during Sohu’s sponsorship
of cash equivalents to Beijing Organizing Committee.

The State Administration of Taxation

October 15, 2006

The State Administration of Taxation
2006-08-15

REPLY OF THE STATE ADMINISTRATION OF TAXATION CONCERNING THE TAX EXEMPTION OF HONG KONG OCEAN PARK, GUANGZHOU REPRESENTATIVE OFFICE

Reply of the State Administration of Taxation Concerning the Tax Exemption of Hong Kong Ocean Park, Guangzhou Representative Office

Guo Shui Han [2007] No.273

The State Taxation Bureau of Guangdong:

We have received your Request for Instructions upon Matters about the Tax Exemption of Hong Kong Ocean Park, Guangzhou Representative
Office (Yue Guo Shui Fa [2006] No.260), and make a reply as follows:

The Guangzhou Representative Office of Hong Kong Ocean Park was set up in 2006, and mainly undertakes the liaison and consultation
work on the head office’s related e business. A certificate produced by the Hong Kong Tax Authority proves that the head office,
Hong Kong Ocean Park, is a non-profitable institution. In accordance with the provisions of the Circular of the State Administration
of Taxation Concerning the Related Matters about Reinforcing the Collection and Administration of Taxes on the Permanent Establishments
of Foreign Enterprises (Guo Shui Fa [1996] No.165) and the Circular of the State Administration of Taxation Concerning the Related
Matters about the Tax Administration of the Permanent Establishments of Foreign Enterprises (Guo Shui Fa [2003] No.28), as regards
the business activities conducted by Hong Kong Ocean Park, Guangzhou Representative Office, business tax and enterprise income tax
shall be exempted as long as they fall within the scope as prescribed in Item (2), Paragraph 2 of Article 1 of the Document (Guo
Shui Fa [1999] No.165).

The State Administration of Taxation

March 6, 2007

The State Administration of Taxation
2007-03-06

NOTICE OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION ON EDUCATION TAX POLICIES

Ministry of Finance, State Administration of Taxation

Notice of the Ministry of Finance and the State Administration of Taxation on Education Tax Policies

CaiShui [2004] No.39

February 5, 2004

The finance offices or bureaus, the administrations of state taxation and local taxation of all provinces, autonomous regions, municipalities
directly under the Central Government, and cities directly under state planning, and the finance bureau of Sinjiang Production and
Construction Corporations:

With a view to further promoting the development of education, and upon the approval of the State Council, we hereby make the following
notice on the relevant tax policies concerning education:

On business tax, value-added tax and income tax

Business tax shall be exempted on the income gained from educational labor services provided by the schools, which engage in the education
for academic credentials.

Business tax shall be exempted on the income gained from the labor services provided by students who take part in work-study program.

Business tax shall be exempted on the income gained by schools for their undertaking business of technology development and technology
transfer, and the relevant business of technology consultation and service.

Business tax shall be exempted on the income gained from providing nursing services by nurseries or kindergartens.

Business tax and enterprise income tax shall be exempted on the income gained from holding classes for advanced study, training classes
by colleges and universities, secondary schools and elementary schools (excluding their subordinate entities), which are funded by
governments, on condition that all the income be owned by the schools.

Business tax and enterprise income tax shall be exempted on the income gained from undertaking the service items (excluding the advertisement
industry, sauna bath, rubdown, oxygen public house) as prescribed in the tax items of “service industry” of the Interim Regulations
on Business Tax by the enterprises, which are funded and managed by the government-funded vocational schools, and whose main purpose
is to provide place of practice for the in-school students, and the business income of which is owned by the schools.

The enterprises established by special education schools may enjoy the preferential policies of value-added tax and enterprise income
tax of the state granted to the welfare enterprises by referring to the standards for the welfare enterprises.

The donations to education by taxpayers through the non-profit public organizations or state organs within the territory of China
may be fully deducted before paying enterprise income tax and individual income tax.

Enterprise income tax shall be exempted temporarily on the income of technical services gained by colleges and universities and various
vocational schools from technology transfer, technology training, technology consultation, technology services, and technology contract
for serving various industries.

10.

No enterprise income tax shall be collected for the fees, which are collected by schools upon approval and included into the finance
budget management or management of special account of capital outside the finance budget. And no enterprise income tax shall be levied
upon financial appropriate funds gained by schools, and special subsidy income gained from the department in charge and the upper
level entities for their enterprise development.

11.

Individual income tax shall be exempted on the income gained by an individual from his/her education savings deposit interests. And
individual income tax shall be exempted on the scholarships in education granted by the people’s governments at the provincial level,
all the ministries and commissions of the State Council, and the entities at or above the army corps of the Chinese People’s Liberation
Army, as well as those granted by foreign organizations and international organizations. Individual income tax shall not be paid
temporarily for shares or proportions of capital contribution gained by an individual as awards when the college or university he/she
is working for transfers the positional technological achievements and grants personal awards in the form of share rights such as
shares or proportion of capital contributions, etc.. But individual income tax shall be paid according to law for dividends gained
from shares or proportion of capital contributions or income gained from transfer of share rights or proportion of capital contribution.

II.

On house tax, urban land use tax and stamp tax

House tax and urban land use tax shall be exempted on house property or land for self-use of various schools, nurseries or kindergartens
whose expenditures are allocated and funded by government and those run by enterprises. And stamp tax shall be exempted on book documents
issued by property owners for his property donation to schools.

III.

On tax on occupation of cultivated land, contract tax, agriculture tax and agricultural special local product tax

The tax on occupation of cultivated land shall be exempted on the cultivated land requisitioned by schools or kindergartens upon approval.
The specific scope of land use by the schools, which enjoy tax exemption shall include: land used for teaching houses, laboratories,
playgrounds, libraries, offices and dining rooms and dormitories of the teachers, students, and employees of the full-time colleges
or universities, high schools and elementary schools (including the schools funded by departments or enterprises). Tax shall not
be exempted on the cultivated land occupied by schools for their undertaking of non-agricultural production and management. And the
employee night schools, study classes, training centers and correspondence schools do not fall within the scope of tax exemption.

Contract tax shall be exempted on the land and houses that are used for teaching and scientific research, and whose ownerships are
undertaken by state organs, institutions, public organizations or military entities. Those used for teaching refer to the classroom
(or teaching buildings) and other land or houses used directly for teaching. Those used for scientific research refer to the sites
for scientific test and other land or houses used directly for scientific research. Contract tax on houses and land that are used
for teaching, and whose ownerships are undertaken by schools and educational institutions, to whom have been issued the license for
running a school upon the examination and approval of the administrative departments of education of the people’s governments at
or above the county level, and which were established by enterprise or institutional organizations, public organizations and other
individual or citizens personally facing to society by using the non-financial educational expenditures of the state.

Agriculture tax shall be exempted on the land used by agriculture academies for scientific test. The agricultural special local product
tax shall be exempted on agricultural special local product income gained from scientific test made by the agriculture academies
during the period of test.

IV.

On customs duty

Import duties and import value-added taxes shall be exempted on the teaching apparatus, books, documents and general articles for
study use directly used for education of various vocational schools, high schools, secondary schools, elementary schools and kindergartens,
which are donated by overseas donators gratuitously. The foregoing donations shall not include the 20 kinds of commodities, which
are not exempted from import duty as clarified by the state. Other relevant matters concerned shall be handled in accordance with
the Interim Measures for the Exemption of Import Tax on Donations for Supporting the Poor and Charity Donations.

The import duty and import value-added tax, and excise shall be exempted on the articles (excluding 20 commodities that are not exempted
from import duty as clarified by the state) that cannot be produced domestically, and which are imported within reasonable quantity
and without the purpose of seeking profit and used directly for scientific research and teaching by full-time colleges or universities
above the junior college level with the academic credentials recognized by the Ministry of Education, and other schools approved
by the Ministry of Finance together with the relevant departments of the State Council. The specific provisions on the scope of articles
used for scientific research and teaching shall abide by the Interim Measures for the Exemption of Import Duty on Articles Used for
Scientific Research and Teaching as approved by the State Council.

The following preferential tax policies shall be cancelled:

The provisions on exemption of income tax on the income gained from undertaking production and management by enterprises established
by schools as prescribed in paragraphs 1 and 3 of Article 8 of the Notice on Some Preferential Policies of Enterprise Income Tax
(CaiShuiZi [1994] No.001) promulgated by the Ministry of Finance and the State Administration of Taxation. Of which, the finance
revenue increased due to cancellation of the preferential income tax policies shall be shared by the Central Finance and local finance,
shall be included into special finance budget, and shall still be used fully for education. The subsidy funds that shall be owned
by the Central Finance shall be listed into a special item of Central education, and used for improving the conditions for running
secondary or elementary schools nationwide, especially in rural areas, and subsidizing students whose family have economic difficulties.
The subsidy funds that shall be owned by local finance shall be listed into a provincial special item of education, and used mainly
for improving the conditions for running secondary or elementary schools of the local regions and subsidizing rural students of middle
schools and elementary schools whose family have economic difficulties.

The provisions of Paragraphs 1 and 3 of Article 3 of the Notice on Collection of Circulation Tax on Enterprises Established by Schools
(GuoShuiFa [1994] No.156), that is, value-added tax shall be exempted on the taxable goods that are produced by enterprises established
by schools, and used for teaching and scientific research of the corresponding schools; and business tax shall be exempted on the
taxable labor services that are provided by enterprises established by schools for serving the teaching or scientific research of
the corresponding schools.

VI.

This Notice shall be implemented as of January 1,2004. In case any previous provisions are not in conformity with this Notice, this
Notice shall prevail.

Ministry of Finance, State Administration of Taxation
2004-02-05

CIRCULAR OF THE MINISTRY OF CONSTRUCTION ON PRINTING AND DISTRIBUTING THE INTERIM PROVISIONS OF CONSTRUCTION PROJECT DESIGN OF FOREIGN ENTERPRISES WITHIN THE TERRITORY OF THE PEOPLE’S REPUBLIC OF CHINA

The Ministry of Construction

Circular of the Ministry of Construction on printing and distributing the Interim Provisions of Construction Project Design of Foreign
Enterprises within the Territory of the People’s Republic of China

JianShi [2004] No. 78

May 10, 2004

Construction departments of all provinces and autonomous regions, construction commissions of municipalities directly under the Central
Government (Beijing Municipal Commission of Urban Planning), construction departments of relevant ministries under the State Council,
relevant enterprises under the State-Owned Assets Supervision and Administration Commission of the State Council, Project Administration
of PLA General Logistics Capital Barracks Department, the Construction Bureaus of Xinjiang Production and Construction Corporation:

The Interim Provisions of Construction Project Design of Foreign Enterprises in the Territory of the People’s Republic of China are
hereby printed and distributed to you. Please comply with and implement them.

Annex: Interim Provisions of Construction Project Design of Foreign Enterprises within the Territory of the People’s Republic of China

Annex:Interim Provisions of Construction Project Design of Foreign Enterprises within the Territory of the People’s Republic of China

Article 1

These Provisions are enacted in accordance with the Construction Law of the People’s Republic of China, the Regulation on the Administration
of the Survey and Design of Construction Projects, the Regulation on the Quality Administration of Construction Projects, the Measures
for Survey and Design Bidding of Construction Projects, other laws, regulations and rules with a view to regulate the management
of foreign enterprises undertaking construction project design activities within the territory of the People’s Republic of China.

Article 2

The term “foreign enterprises” in these Provisions refers to the enterprises that are registered out of the territory of the People’s
Republic of China and are engaged in construction project design.

Article 3

Foreign enterprises that offer services of drawing up initial designs of construction projects (basic design), construction drawing
design (detailed design) and other relevant designs within the territory of the People’s Republic of China in forms of trans-border
payment shall abide by the Provisions.

The Provisions do not apply to designs before initial designs of construction projects (basic design).

Article 4

Foreign enterprises to assume construction project designs within the territory of the People’s Republic of China shall select at
least one Chinese designing enterprise with construction project design qualification endorsed by construction administrations (hereinafter
referred to as Chinese designing enterprise) for cooperative design between foreign and Chinese enterprises (hereinafter referred
to as cooperative design), and undertake designing business within the business scope of the selected Chinese designing enterprise(s).

Article 5

Construction designing contracts of cooperative designing project shall be signed by Chinese designing enterprises or jointly signed
by both Chinese and foreign designing enterprises of the cooperative design with construction entities. The contracts shall clearly
stipulate the rights and obligations of each party. Construction designing contracts shall be written in Chinese version.

Article 6

Construction entities shall conduct qualification examination for foreign enterprises in advance and only those that meet the qualifications
can participate in cooperative design.

Article 7

Whilst examining designing qualification of foreign enterprises, construction units have the right to require foreign enterprises
to offer the following valid certification materials that can meet the needs of construction projects. The certification materials
shall include Chinese version and the version in official language of the country where the foreign enterprises are located.

(1)

Business registration certifications approved and issued by governmental administrations of the countries where the enterprises are
located;

(2)

Creditability certifications and enterprise insurance certifications issued by financial institutions of the countries where the enterprises
are located;

(3)

Certifications for Construction design achievements of the enterprises issued by governmental administrations or relevant trade organizations
and notary institution of the countries where the enterprises are located;

(4)

Designing permission certifications issued by governmental administrations or relevant trade organizations of the countries where
the enterprises are located;

(5)

ISO9000 series quality standard certificate issued by international organization;

(6)

Resume, identification certificates, education certificates of the highest level and employment registration certifications of all
technological participants of the Chinese project;

(7)

Letter of intent of cooperative design with Chinese enterprises; and

(8)

Other relevant materials.

Article 8

Foreign enterprises shall sign cooperative design agreements to clearly stipulate the rights and obligations of each party in accordance
with Chinese relevant laws and regulations with the selected Chinese designing enterprises.

Cooperative design agreements shall cover:

(1)

Enterprise names, registration locations and the names, nationalities, identification registration number, address and contact methods
of the legal persons of each party of the cooperative project;

(2)

The names, location and scales of the cooperative project;

(3)

Cooperative scope, time limit and methods and requirements of designing content, depth, quality and progress;

(4)

The division of designing tasks, rights and obligation of each party;

(5)

Fee makeup, distribution and tax payment obligation;

(6)

Responsibilities of agreement violation and dispute settlements;

(7)

Conditions for agreement effective and agreement date and place; and

(8)

Other issues agreed by each party.

Article 9

Construction design contracts (duplicate), cooperative design agreement (duplicate) and materials listed in Article 7 of the Regulations
(copies) shall be submitted to construction administrations of provincial level for the archival purpose.

Article 10

Foreign design enterprises shall undertake construction project designs in accordance with compulsory norms of project construction
and working rules of construction design files issued by the Chinese Government.

Article 5 of Supervision Rules of Project Construction Compulsory Norms Implementation (Decree No 81 of Ministry of Construction)
shall prevail when there are no corresponding compulsory norms.

Article 11

In accordance with Construction Law of the People’s Republic of China, Urban Planning Law of the People’s Republic of China and other
relevant laws, cooperative designing files that must be submitted to relevant departments of Chinese Government shall meet the following
requirements:

(1)

The files shall have Chinese version;

(2)

The files shall conform to relevant rules of construction design;

(3)

The files shall adopt China’s official measurement units;

(4)

Enterprises names of each party and construction names shall be listed on the cover of initial design (basic design) files, and the
first page shall include enterprise names and legal persons, major technologists of each party and the person in charge of the project
and their seals;

(5)

The drawings of construction drawing design (detailed design) files shall include enterprise names of each party of the cooperative
design and signatures of project designers. Other affairs shall be performed in accordance with China’s relevant drawing rules of
construction design files; and

(6)

Initial design (basic design) files and construction drawing design (detailed design) can be validated only after being examined,
signed and sealed by China’s registered architects, registered engineers and persons who have obtained registered employment qualifications
and Chinese enterprises’ official seals shall be included.

When there is no project design registration employment system in some certain specialties, the documents shall be valid after examination
and signing-in these documents by technologists in charge of Chinese side and Chinese enterprises’ official seals shall be included.

Article 12

Foreign design enterprises that undertake construction project design within Chinese territory shall be paid in accordance with China’s
designing fee standards and shall pay tax according to relevant laws to Chinese Government.

When design files offered by foreign enterprises that need examinations and confirmation from Chinese design enterprises in light
with China’s norms and rules, relevant fees shall be paid through negotiation in accordance with international practices or real
workload.

Article 13

Designing organizations from Hong Kong, Macao Special Administrative Region and Taiwan region shall refer to the Provisions.

Article 14

Foreign enterprises in violation with the Provisions shall be imposed a punishment by Chinese Government in accordance with relevant
laws, regulations and rules. Their practices shall be publicized in relevant media and announce to governments and relevant industrial
organizations of the countries where the enterprises locate.

Article 15

Foreign enterprises are forbidden to participate in classified projects, disaster relief and rescue project and other projects that
Chinese Government have not promised to open to foreign countries.

Article 16

The Provisions shall be implemented 30 days as of the day of promulgation.

The Ministry of Construction
2004-05-10

NOTICE OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON ISSUES CONCERNING THE MANAGEMENT OF INTERNAL OPERATION OF FOREIGN EXCHANGE FUNDS OF TRANSNATIONAL COMPANIES

Notice of the State Administration of Foreign Exchange on Issues Concerning the Management of Internal Operation of Foreign Exchange
Funds of Transnational Companies

No. 104 [2004] of the State Administration of Foreign Exchange
October 18, 2004

The branches and the foreign exchange administrative departments of the State Administration of Foreign Exchange (hereinafter referred
to as the branches or FEADs) of all provinces, autonomous regions and municipalities directly under the Central Government,the branches
of the State Administration of Foreign Exchange in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo, and all designated Chinese-funded
foreign exchange banks:

With the view of optimizing the allocation of foreign exchange resources, facilitating and supporting the utilization of foreign exchange
funds and business operations of the transnational companies, the following issues concerning the management of internal operation
of foreign exchange funds of transnational companies are notified hereby according to the Regulation of the People’s Republic of
China on Foreign Exchange and other relevant laws and regulations:

Fundamental Definitions and Management Principles

(1)

The term “transnational company” as mentioned in the present Notice refers to an enterprise group concurrently possessing of member
companies both at home and abroad and one of whose member companies at home exercises the global or regional (including China) investment
management function. Such an enterprise group may be a Chinese-invested holding enterprise group (namely Chinese-invested transnational
company) or a foreign-invested holding enterprise group (namely foreign-invested transnational company).

The term “member companies” as mentioned in the present Notice refers to all companies with independent juridical person qualification
within an enterprise group and with the relationship of one’s holding of the shares of another or held by it.

This Notice shall not apply to transnational financial institutions.

(2)

The term “internal operation of foreign exchange funds” as mentioned in the present Notice refers to an investment financing approach
of a transnational company by lending of foreign exchange funds among the domestic member companies or between a domestic member
company and an overseas member company in order to decrease financial costs and increase the fund utilization efficiency according
to he provision of the present Notice foreign exchange.

(3)

The lending of foreign exchange funds between two member companies may be conducted by a finance company established upon the approval
of the financial competent department according to the Measures for the Administration of Financial Companies of Enterprise Groups.
It may also be conducted by authorizing a designated bank for foreign exchange business to grant loans according to the General Principles
on Loans. Where a domestic member company of a transnational company intends to lend foreign exchange funds to an overseas member
company and the requirements as stipulated in the present Notice are met, it may do so by way of direct lending.

A domestic member company of a transnational company shall abide by the relevant provisions of China on the Management of Foreign
Debts when it borrows foreign exchange funds from an overseas member company and repays the principal and interests of the aforesaid
fund.

(4)

Where a member company of a transnational company lends foreign exchange funds to another, both parties shall stipulate on the lending
interest rate pursuant to the rate of commercial loans of the same period in the international financial market. Such lending interest
rate shall not be abnormally high or low.

(5)

The foreign exchange funds used for internal operation of a transnational company shall be confined to the self-owned foreign exchange
funds which refer to the funds coming from the capital fund account or current foreign exchange account of the domestic member companies
of a transnational company and can be disposed of freely.

(6)

The funds of entrustment lending by a transnational company within China shall not be used for the settlement of foreign exchangeor
be used as a pledge of RMB loan.

(7)

Where a domestic member of a Chinese-invested transnational company lends any foreign exchange fund to any overseas member company,
the balance of foreign exchange lending shall not exceed 20 % of the owner’s rights and interests.

Where a domestic member company of a foreign-invested transnational company lends money to any overseas member company, the balance
of foreign exchange lending shall not exceed the aggregate amount of the part of profit in the previous year that has been distributed
but hasn’t been remitted abroad to foreign investors plus the undistributed enterprise profit that shall be taken by foreign investors
in proportion to their investment.

(8)

When engaging in internal operation of foreign exchange funds, the transnational company shall stick to the principle of payment according
to income. Without permission, it shall not deduct or offset the domestic and overseas the account receivable and the account payable
or make any net settlement.

(9)

When engaging in internal operation of foreign exchange funds, a transnational company shall comply with the present Notice and other
provisions concerning the management of foreign exchange and shall be subject to the administration, supervision and inspection of
the State Administration of Foreign Exchange (hereinafter referred to as the SAFE) and its branches and FEADs.

Qualifications for Internal Operation of Foreign exchange funds of Transnational Companies

(1)

In order to engage in entrustment lending of foreign exchange funds within China, the domestic member companies of a transnational
company shall meet the following requirementsforeign exchange:

(a)

Both the entrusting lender and the borrower shall have been lawfully set up upon registration, and their registered capitals have
been fully paid in due time; and

(b)

The principal and proceeds of the previous entrustment lending of foreign exchange funds between the entrusting lender and the borrower
of domestic member companies foreign exchange have been repaid in the promissory time limit.

(2)

In order to engage in lending of foreign exchange funds to the overseas member companies, the domestic member company of a transnational
company shall meet the following requirements besides the requirements as mentioned in the first paragraph of Article 2 :

(a)

A Chinese-invested transnational company shall have at least 3 member companies abroad;

(b)

A foreign-invested company shall have at least 3 member companies within China; and

(c)

The domestic member company of a China-invested transnational company, whch exercises the global and regional investment management
function of the transnational company, shall have invested at least 5 million dollars in total into the overseas counterpart(s)which
were rated as Class II or higher in the latest joint annual inspection over overseas investments;

(d)

As for a domestic member company of a foreign-funded transnational company that provides the lending funds, the ratio of its foreign
exchange receivable of the previous year to its total foreign exchange asset shall be lower than the normal or average level of the
foreign-funded enterprises of the same industry of the previous year; the amount of bank foreign exchange settlement conducted by
the company in the previous year shall be bigger than its foreign exchange purchase amount; or the margin between the purchase amount
and the settlement amount of the bank shall be lower than the normal or average level of the foreign-funded enterprises of the same
industry of the previous year; the rights and interests of the owner shall not be less than US$ 30 million and the ratio of net asset
to the total asset shall not be less than 20 %;

(e)

As for a member that has been allowed to lend foreign exchange funds to its overseas counterparts, it shall have taken back the principal
and proceeds of the previous fund lent abroad within the promissory time limit.

The Application for Internal Operation of Foreign exchange Funds of Transnational Companies

(1)

Where a transnational company plans to engage in entrusted foreign exchange lending within China, the domestic member company as the
entrusting lender shall file an application to the bank where its capital account or current foreign exchange account is opened.
After the opening bank examines the qualifications of the domestic member company of the transnational company pursuant to requirements
of the present Notice, if it accepts the application, it shall, as the entrusted bank, sign a contract on foreign exchange entrustment
lending with the entrusting lender and the borrower.

The entrusted bank shall, according to the requirements for the “creditors” as mentioned in the Notice of the State Administration
of Foreign Exchange on Reforming the Foreign Exchange Administration of Domestic Foreign Exchange Loans (No. 125 of the State Administration
of Foreign Exchange [2002]), perform the corresponding duties for the operation, supervision and reporting for the record of the
entrusted lending business.

(2)

Where a transnational company plans to engage in entrusted outbound foreign exchange lending, after concluding a lending agreement,
its domestic member company that offers the lending funds shall submit the following materials to the SAFE for examination and approval
via the local branch or FEAD:

(a)

An application (See Attachment 1);

(b)

The lending agreement concluded by the lender and overseas borrower, or by the lender, overseas lender and the entrusted financial
institution within China;

Where the overseas borrower plans to use the foreign exchange funds it borrows to invest in the operation of stocks, bond, futures
etc., the lending agreement shall clearly stipulate that the lender entrusts the overseas borrower to make investments;

(c)

The lender’s financial audit report on the foreign exchange incomes and expenses during the recent year;

(d)

The latest capital verification report of the lender;

(e)

The descriptions about the overseas lending and repayment that has been done;

(f)

In addition, a Chinese-invested transnational company shall offer the name list of its overseas member companies, a copy of the approval
certificate issued by the commerce competent department of every overseas member company, financial accounting statement of the recent
year of the overseas borrower(s) and the joint inspection report over the overseas investments directly related to the overseas borrower(s);
and

(g)

In addition, a foreign-invested transnational company shall offer the name list of its domestic member companies, a copy of foreign
exchange register certificate of every domestic member company and a letter issued by the overseas holding parent company for guaranteeing
the safety of the lending funds (for ensuring full repayment of the principal of the loan offered by the domestic lender and further
investment operation by using such lending funds).

After the branch or FEAD receives the materials submitted by the lender, it shall complete the preliminary examination within 10 working
days and shall report it to the SAFE. After the SAFE receives the aforesaid integrated application materials and confirms them inerrant
upon examination, it shall, within 20 working days, issue an approval to the lender and shall send a copy to the branches or FEADs
where the lender and the enterprises participating in the lending are located. Upon the strength of the approval document, the branches
or FEADs, where the lender and the enterprises participating in the lending are located, shall respectively issue documents of approval
of opening bank account, domestic transfer or overseas payment of foreign exchange under capital foreign exchange business to the
lender and the enterprises participating in the lending.

Procedures for the Internal Operation of Foreign Exchange Funds of Transnational Company

(1)

After a entrustment lending agreement is concluded among the domestic member company which serves as the entrusting lender of a transnational
company, the domestic member company which serves as a borrower and the entrusted bank, the entrusted bank may, pursuant to the Notice
of the State Administration of Foreign Exchange on Reforming the Foreign Exchange Administration of Domestic Foreign Exchange Loans
(No. 125 of the State Administration of Foreign Exchange[2002]), open an foreign exchange loan exclusive account for the borrower,
go through the formalities for transferring the lending funds, repayment of the principal interests. No approval of the SAFE is required
when the entrusted bank conducts transfer of lending funds or repayment funds between the entrusting lenders’ capital account or
current foreign exchange account and the borrower’s foreign exchange loan exclusive account.

The entrusted bank shall regularly report to the local branch or FEAD the changes of the domestic credits of the transnational company
by referring to the formats and contents of Attachments 1-4 (inserting a column post_titled “entrusting lender” after the final column
of each statement as shown in Attachments 1-3; inserting a sub-item post_titled “domestic entrusting lending” for each item under “Credit”
Item in Attachment 4) as listed in the Notice of the State Administration of Foreign Exchange on Reforming the Foreign Exchange Administration
of Domestic Foreign Exchange Loans (No. 125 of the State Administration of Foreign Exchange[2002]) foreign exchange.

(2)

As to a transnational company’s entrustment lending of foreign exchange funds within China, if the term of the loan expires or the
borrower requests for making repayment by installments or ahead of schedule, the entrusted bank shall supervise and assist the entrusting
lender and borrower to repay the loans by following steps: First, transfer the repayment of foreign exchange funds to the original
capital account till the amount of repayment is equal to the amount transferred out of the original capital account. Then, according
to the principle of proportioning the interests to the principal, transfer the remaining part of the principal and interest of the
loan into the current foreign exchange account, out of which the original fund is transferred. Where the repayment is made at the
expiration of the loan, the steps mentioned above shall be achieved within 20 working days as of the day when the lending period
expires. As to the repayment by installments or ahead of schedule, the formalities mentioned above shall be timely achieved as well
in light of the time limit and way as stipulated by three parties.

(3)

When applying for engaging in overseas lending of foreign exchange funds, the transnational company shall submit the following materials
to the local branch and FEAD for opening an overseas lending exclusive account:

(a)

An application for opening a bank account; and

(b)

The document issued by the SAFE for approving its overseas lending.

After the local branch or FEAD confirms the materials mentioned above as inerrant, it shall issue the lender an approval document
for opening a bank account. The bank shall go through the formalities for opening an account for the lender upon the strength of
the aforesaid approval document. The income of the overseas lending exclusive account shall be limited to the foreign exchange funds
transferred to this account from capital account or current foreign exchange account of the lender or other domestic member companies
with approval of the branch or FEAD, the repayment of the principal and interest of the fund lent abroad and the deposit offered
by the overseas controlling parent company for the fulfillment of contract; the expense shall be limited to funds of the overseas
lending with approval of the SAFE and funds transferred back from the corresponding capital account or current foreign exchange account.

(4)

A transnational company may, within 6 months as of the day when the SAFE approves it to engage in overseas lending, remit foreign
exchange funds in approved amount abroad in a lump sum or several times with approval of the local branch or FEAD.

(5)

The time limit for each overseas foreign exchange loan of a transnational company shall not exceed two years. Where the term of the
loan expires or the overseas borrower requests for making repayment by installments or ahead of schedule, the overseas borrower shall
remit the foreign exchange funds for repayment to the original overseas lending exclusive account. With approval of the branch or
FEAD, it first shall transfer foreign exchange funds for repayment back to the original capital account till the amount of repayment
is equal to the amount transferred out of the original capital account; then, pursuant to the principle of proportioning the interests
to the principal, transfer the remaining part of principal and interest of the loan into the current foreign exchange account out
of which the original funds are transferred. If it is necessary to extend the term of the loan, the lender shall file an application
to the local branch or FEAD within 1 month prior to the expiry date.

(6)

Where a domestic member company of a transnational company grants loans to its overseas counterparts, or grants loans and entrusts
its overseas companies to make investment by using the loans, the total amount of the rights and interests generated from the overseas
loans as calculated on the last day of annual calculation shall not be less than the corresponding total amount of the principals
of the overseas loans.

(7)

Where a transnational company grants loans oversea by using foreign exchange funds, the domestic member company lender shall establish
a special ledger for the operation of overseas funds, manage the funds uniformly and conduct the accounting in a centralized way,
and shall formulate a monthly Statement of Changes of Foreign Exchange Fund Positions of Overseas Lending Special Accounts and Statement
of Operation of Overseas Lending Funds (See Attachment 2).

(8)

Where the repayment funds for the domestic and overseas entrusting foreign exchange loans and overseas loans of a transnational company
are remitted or transferred to the capital accounts of the domestic member enterprises, the maximum quota of the capital account
shall not be occupied. When the banks, into which the repayments are remitted or transferred, reply the letters of requests for bank
confirmation, they shall give a clear indication of the words “Repayment Funds” in the column of “Remarks”. No accounting firms may
undertake capital verification business of foreign-funded enterprises on the strength of such kind of replies to letters of requests
for bank confirmation.

Supervision

(1)

Every branch or FEAD shall, pursuant to the statements submitted by banks within its jurisdiction, insert a sub-item “Domestic Entrustment
Lending” under each item “Domestic and Overseas Loans” in the Monthly Statement of Flow and Exchange under Capital Projects and Subordinate
Projects, and submit a statement to the SAFE every month.

A transnational company, which engages in internal operation of overseas loans, shall gather the information on the overseas loans
of its domestic member companies in June each year and submit it to the SAFE via the local branch or FEAD for examination. The information
gathered shall include the following:

(a)

A report on the overseas lending of foreign exchange funds and the operation circumstance of all domestic member companies of the
transnational company during the previous 12 months by the end of May of the current year (See Attachment 3 for the reference format);

(b)

The previous 12-month Statement of Changes of Foreign Exchange Funds Positions of Overseas Lending Special Account and Statement of
Operation of Overseas Lending Funds of the domestic lending member company of the transnational company;

(c)

The previous 12-month audit report on the domestic foreign exchange lending member company of the transnational company; and

(d)

The previous 12-month capital verification report of the domestic member company of the transnational company engaging in overseas
lending (no capital verification reports are required if no capital verification was conducted during the previous year).

(2)

Where the SAFE, within 30 working days after the SAFE receives the complete set of the materials mentioned above, finds upon examination
that the overseas lending conducted by the domestic member company of a transnational company falls short of the qualification requirements
as prescribed in the Article 2 of the present Notice or the rights and interests derived from overseas loans fail to meet the requirements
as mentioned in Article 4 (6), it shall be enpost_titled to disqualify the domestic member company of the transnational company from
lending foreign exchange funds abroad. The domestic member company which is disqualified from lending foreign exchange funds abroad
shall, within 20 working days, takes back the principal and proceeds of overseas loans into the overseas lending special account.
Furthermore, if a foreign-invested transnational company fails to satisfy the requirements as mentioned in Article 4 (6) of the
present Notice in getting repayment of loans, the overseas holding parent company who has issued the letter for guaranteeing the
safety of the lending funds shall perform the guaranty liability within 20 working days after the domestic member company was disqualified
from lending foreign exchange funds abroad. Where a transnational company fails to timely submit the materials as required in Article
5 (2) to the SAFE in light of requirements, it shall be given punishment according to Article 5 (3).

Other Items

(1)

Where a transnational company violates this Notice in its internal operation of foreign exchange funds, it shall be punished by the
branch or FEAD pursuant to Regulation of the People’s Republic of China on Foreign Exchange.

(2)

As to a domestc enterprise group without any member company oversea, the entrustment lending for foreign exchange funds between its
domestic member companies shall be conducted by referring to this Notice.

(3)

The power to interpret this Notice shall remain with the SAFE.

(4)

This Notice shall come into force as of November 1, 2004.

Attachments:

Application of Transnational Companies for Granting Overseas Foreign exchange Loans (for reference of the format)(omitted)

Statement of Changes of Foreign exchange Fund Positions of Overseas Lending Special Accounts and Statement of Operation of Overseas
Lending Funds (for reference of the format)(omitted)

Report on Overseas Foreign exchange Loans and Operation (for reference of the format)(omitted)

the State Administration of Foreign Exchange
2004-10-18

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REGULATION ON CUSTOMS STATISTICS OF THE PEOPLE’S REPUBLIC OF CHINA

CIRCULAR OF THE MINISTRY OF COMMERCE OF THE PEOPLES REPUBLIC OF CHINA, ON RELEVANT ISSUES OF ISSUING THE EXPORT...

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MEASURES FOR THE ADMINISTRATION OF SHORT-TERM FINANCING BILLS OF SECURITIES COMPANIES

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SUPPLEMENTARY NOTICE OF THE MINISTRY OF FINANCE ON RELEVANT ISSUES CONCERNING THE LEVY OF SPECIAL PROFIT CHARGE ON CRUDE OIL

CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE RELATED TAXATION ISSUES CONCERNING SOHU’S SPONSORSHIP OF THE 29TH OLYMPIC GAMES

REPLY OF THE STATE ADMINISTRATION OF TAXATION CONCERNING THE TAX EXEMPTION OF HONG KONG OCEAN PARK, GUANGZHOU REPRESENTATIVE OFFICE

NOTICE OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION ON EDUCATION TAX POLICIES

CIRCULAR OF THE MINISTRY OF CONSTRUCTION ON PRINTING AND DISTRIBUTING THE INTERIM PROVISIONS OF CONSTRUCTION PROJECT DESIGN OF FOREIGN ENTERPRISES WITHIN THE TERRITORY OF THE PEOPLE’S REPUBLIC OF CHINA

NOTICE OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON ISSUES CONCERNING THE MANAGEMENT OF INTERNAL OPERATION OF FOREIGN EXCHANGE FUNDS OF TRANSNATIONAL COMPANIES

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