CIRCULAR OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION ON READJUSTING THE EXPORT REBATES RATE FOR SUCH PRODUCTS AS COAL TAR ETC.

Ministry of Finance, State Administration of Taxation

Circular of the Ministry of Finance and the State Administration of Taxation on Readjusting the Export Rebates Rate for such Products
as Coal Tar etc.

Cai Shui [2005] No.184

December 23, 2005

Departments (Bureaus) of Finance, Bureaus of State Taxes in all provinces, autonomous regions, and municipalities directly under the
Central Government, and cities specially designated in the state plan, and Bureau of Finance of the Xinjiang Production and Construction
Corps:

With the approval from the State Council, the export rebates rate for these products as follows shall be readjusted as of the date
of January 1, 2006:

Export rebates policy for coal tar, peltry, wet blue hides, wet leather and dry leather shall be abolished. Please see Annex I for
details.

II.

The export rebates rate for the 25 kinds of pesticides, disperse dye, mercury, tungsten, zinc, tin, antimony and their products, magnesium
metal and its primary products, disodium sulphate and paraffin wax as listed in the Rotterdam Convention on the Prior Informed Consent
Procedure for Certain Hazardous Chemicals and Pesticides in International Trade (PIC Convention), and the Stockholm Convention on
Persistent Organic Pollutants (POPS Convention) shall be readjusted to 5%. Please see Annex II for details.

This circular is hereby given.

Annexes:

Catalogue for Export-rebates-abolished Commodities

Catalogue for Commodities with a Readjusted Export Rebates Rate of 5% htm/e04659.htmNew Page 1

Annex I.

Catalogue for Export-Rebates-Abolished Commodities

Serial Number	Tariff Heading	Name of Commodity
1	2706	Tar and other mineral tar distilled from coal, lignite or peat, whether or not dehydrated or partly distilled, including refined tar
2	4101 4102 4103	Peltry subject to the antecedent tariff heading
3	4104 4105 4106	Leather subject to the antecedent tariff heading
4	4301	Raw fur

Annex II.

Catalogue for Commodities with a Readjusted Export Rebates Rate of 5%

Serial Number	Tariff Heading	Name of Commodity
1	28331100	Disodium sulphate
2	27122000 27101994	Paraffin wax
3	32041100	Disperse dyes and its essential
4	28054000	Mercury
5	81041100 81041900 81042000 81043000	Magnesium metal subject to the antecedent tariff heading
6	28418010 28418040 28259012 28259019.10 28259011 28418020 28418030 28499020 81011000.11 81011000.19 81011000.90 81019400 28259019.90	Tungsten and tungsten products subject to the antecedent tariff heading
7	80011000.10 80011000.90 80012020 80012010 80012090 80030000 80040000 80060000 80020000	All tins, tin products and waste tin particles subject to the antecedent tariff heading
8	79011100 79011200 79012000 79020000	Zinc, zinc alloy and waste zinc particles subject to the antecedent tariff heading
9	81101010 81101020 81109000 28258000 81102000	Antimony, antimony products and waste antimony particles subject to the antecedent tariff heading
		Pesticide
10	2918900010	2,4,5-Trichlorophenoxyacetic acid
11	2903590010	Aldrin , Heptachlor and Chlordane
12	2930909029	captafol and methamidophos
13	2918199020	Acaraben
14	2910900010	Dieldrin and endrin
15	2908909010	Dinitro-ortho-cresol (DNOC) and its salts
16	2903309020	Dibromoethane
17	2924199020	Fluoroacetamide subject to the antecedent tariff heading
18	2903510010 29035100101 29035100102	Lindane
19	2903510090	1,2,3,4,5,6-HCH
20	29036200	Hexachlorobenzene and DDT
21	2921430030	Chlordimeform
22	2924199010	Monocrotophos and Phosphamidon
23	2920100010	Methyl-parathion and Parathion
24	2908109010	Pentachlorophenol
25	2903590020	Camphechlor
26	2903590030	Dodecachloropentacyclo
27	2931000012	Chloroethane Benzene subject to the antecedent tariff heading
28	28429000	Mercury Arsenide and Mercury Rhodanate subject to the antecedent tariff heading
29	2851009090	Mercury Arsenide subject to the antecedent tariff heading
30	28342990	Mercuric Nitrate, Mercurous Nitrate and Mercuric Sulphate subject to the antecedent tariff heading
31	2826190090	Mercuric fluoride subject to the antecedent tariff heading
32	28121049	Mercuric chloride subject to the antecedent tariff heading
33	2812900090	Mercuric Iodide subject to the antecedent tariff heading
34	2931000029	Mercuric acetate and other organic mercury subject to the antecedent tariff heading
35	28380000	Mercuric thiocyanate, potassium mercuric thiocyanate and ammonium mercuric thiocyanate subject to the antecedent tariff heading
36	28274900	Mercury amide chloride and Mercurate-tetrachloro-dipotassium subject to the antecedent tariff heading
37	28275900	Mercuric bromide and mercuric iodide subject to the antecedent tariff heading
38	28259090	Mercuric oxide and mercurous oxide subject to the antecedent tariff heading

CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL ON DOING WELL RELATED WORKS OF CARRYING OUT AND IMPLEMENTING THE AMENDED COMPANY LAW AND SECURITIES LAW

General Office of the State Council

Circular of the General Office of the State Council on Doing Well Related Works of Carrying out and Implementing the Amended Company
Law and Securities Law

Guo Ban Fa [2005] No.62

People’s Governments in all provinces, autonomous regions, and municipalities directly under the Central Government, ministries and
commissions of the State Council, and organs directly under the State Council:

The amended Company Law of the People’s Republic of China and Securities Law of the People’s Republic of China has been adopted at
the 18th session of the Standing Committee of the 10th National People’s Congress of the People’s Republic of China on October 27,
2005, and will enter into force as of the date of January 1, 2006. The Company Law and Securities Law are important laws in building
and improving the socialist market economy system, and also fundamental laws in regulating the running of the capital market. In
order to guarantee the smooth implementation of these two Laws and with the approval from the State Council, this circular is hereby
formulated on relevant issues as follows:

It is imperative to fully understand the significance of implementing the amended Company Law and Securities Law. Based on the summarization
of the practices in recent years and in accordance with the change and operation rules in China’s current economic life, the amended
Company Law and Securities Law make relatively big readjustments, supplements and revisions on the former legal regimes for company
and securities, and conduct improvements and innovations on relevant regimes. Accommodating the objective requirements of the reality,
the amendment of these two laws is beneficial for the deepening of the economic system reform and the promotion of economic development,
and for the improvement of the socialist market economy system. A good implementation of these two amended Laws will play important
roles in the fostering of mature and perfect market subjects, in the regulation and promotion of the development of companies, in
the protection of lawful rights and interests of companies, shareholders, creditors, employees etc., in the enhancement of the quality
of the listed companies, and in the promotion of the stable and healthy development of the capital market. People’s Governments at
all levels in all places and relevant authorities of the State Council shall fully understand the significance of implementing the
amended Company Law and Securities Law and do well relevant works.

II.

It is imperative to deeply carry out the works of study and publicity, and strengthen the training of affairs. The amended Company
Law and Securities Law make relatively complete revisions on the registered capital system of the company, the management structure
of the company, the protection of the rights of the shareholders, the financial and accounting system, the merger and divide system
etc., adding up provisions on such fields as the negation of juristic personality, the norms on the association relations, the cumulative
voting, the independent director etc. The amended Securities Law strengthens the internal control system of the securities company,
consolidates the regulatory power of the securities supervisory and managerial authorities, improves the legal responsibilities for
activities in violation of securities laws and regulations, adds up such new mechanisms as the securities issuing and listing recommendation,
the protective funds for securities investors, the pre-disclosure of securities issuing and transactions etc., so as to create conditions
for the stable advance of diversified operation in the financial industry, for the creation of securities derivatives, for the advance
of futures trading of securities, for the widening of channels for capital’s entering into the market as stipulated, and for the
gradual carrying-out of securities financing etc. These innovations in the system need wide and deep studies and publicities so that
the whole society can understand and master them. The Legislative Affairs Office shall, in cooperation with other authorities, formulate
concrete programs for study and publicity, and strengthen, by means of organizing various kinds of lectures and symposiums etc.,
the training of relevant personnel so as to change the functions and working styles of the governments to administering according
to law. The press and media shall conduct publicities on the backgrounds, the main contents, and the significance of implementation
of the amended Company Law and Securities Law and on the various authorities’ effective measures for carrying out and implementing
these two Laws so as to make positive guidance on the hotspot issues in the society.

III.

It is imperative to earnestly do well the linkage of relevant works before and after the amendment of the Company Law and Securities
Law. The amendment of these two Laws concerns the readjustment of relevant managerial systems and of duties among authorities, and
the linkage work shall be well done so as to prevent the disjointing of relevant managerial works.

First, the work of company registration and record shall be timely readjusted. In accordance with the amended Company Law and Securities
Law, the establishment of incorporated companies needs no longer the approvals from the authorities authorized by the State Council
or the provincial people’s governments, while in case that the public distribution of shares is concerned, the approval from the
China Securities Regulatory Commission is required. And the State Administration for Industry and Commerce shall, targeting on the
aforesaid changes, revise the provisions for company registration and record and strengthen the administration of registration and
record.

Second, the administration on the distribution of securities shall be strict. In accordance with the provision in the amended Securities
Law that public distribution of securities shall all and singular need the examination and approval from the securities regulatory
authorities of the State Council or the authorities authorized by the State Council, the China Securities Regulatory Commission and
the authorities authorized by the State Council shall, targeting on the present actual situations, accelerate the study and making
of relevant provisions, specify the conditions and procedures for examination and approval, and establish relevant systems on the
registration, custody and settlement of securities. And the rush for overissuing securities shall be prevented before the promulgation
of relevant match-up provisions. The China Securities Regulatory Commission shall temporarily deny other applications for the public
distribution of securities except the existing ones, and the authorities for industry and commerce at all levels shall also deny
the related applications for registration and record. With regard to those who illegally purchase and sell the illegally-distributed
securities or who provide services of transaction through agent, transfer, and custody etc. to the illegally-distributed securities,
such authorities as the China Securities Regulatory Commission, the Ministry of Public Security, the State Administration for Industry
and Commerce etc. shall, in cooperation with the local people’s governments, investigate and prosecute them according to law.

Third, the administration on securities exchange shall be strengthened. In accordance with the amended Securities Law, the publicly
issued securities according to law may be transferred at other stock exchanges approved by the State Council besides being listed
for transactions at the Shanghai Stock Exchange and Shenzhen Stock Exchange. In light of the previous experiences and lessons, the
advance of the building of multilevel capital markets shall be promoted under the unified leadership of the State Council in an organized
and gradual way. Without the approval from the State Council, the local people’s governments at all levels and relevant authorities
of the State Councils shall not establish stock exchanges or provide the service of securities transfer utilizing the existing transaction
platforms. The China Securities Regulatory Commission shall, in cooperation with relevant authorities of the State Council, accelerate
the studies on the programs for building a multilevel capital market system, and submit them to State Council for implementation
after approval.

IV.

The organizational leadership for the implementation work shall be strengthened, and relevant administrative laws and regulations
shall be timely formulated or cleared. The local people’s governments at all levels and relevant authorities of the State Council
shall strengthen their organizational leadership for the implementation work, enforce strictly the provisions in the amended Company
Law and Securities Law, do well works of their own and enhance the coordination and cooperation among them. The China Securities
Regulatory Commission shall enhance its cooperation with relevant authorities of the State Council, carry out its law-enforcing powers
and measures entrusted by the law, strengthen supervision and administration on the capital markets together with relevant authorities,
and adopt effective measures to prevent and reduce market risks so as to construct a good environment for the development of capital
markets. The State-owned Assets Supervision and Administration Commission of the State Council and other authorities in charge of
the supervision and administration of the state-owned assets shall, in accordance with the provisions in the amended Company Law,
further improve the management structures of the wholly state-owned companies and the state-owned holding companies and actively
advance the shareholding reform of the state-owned enterprises.

Relevant authorities of the State Council shall, in accordance with the amended Company Law and Securities Law, accelerate the drafting
of administrative laws and regulations concerning the supervision and administration of the listed companies, securities companies
and the financial holding companies, and the risk treatment of the securities companies, and submit them to the State Council for
examination and deliberation as soon as possible; and they shall advance relevant programs for the securities credit exchange system
in a proper time, so as to create conditions for the capital’s entering into the market as stipulated. The Legislative Affaires Office
shall organize relevant authorities to conduct special screening of the existing administrative regulations and rules related to
the Company Law and Securities Law, and the administrative regulations and rules, if conflicting with the amended Company Law and
Securities Law, shall be revised or cancelled. The State Administration for Industry and Commerce and other relevant authorities
shall accelerate the revision on the Administrative Regulation of the People’s Republic of China on the Registration of Companies
and other administrative regulations and rules, and conduct a comprehensive clearance of the administrative regulations and rules
related to the registration of companies. The Ministry of Finance shall further revise and improve the financial system of the enterprises
and the national accounting system. The National Development and Reform Commission shall, in cooperation with the People’s Bank of
China, the China Securities Regulatory Commission and other authorities, study and improve the legal system concerning the enterprise
bond. The Legislative Affaires Office, the Ministry of Public Security, the State Administration for Industry and Commerce, the China
Securities Regulatory Commission and other authorities shall actively communicate with relevant authorities, and cooperate with them
in the relevant revisions or legislations and judicial interpretations on the provisions in the Criminal Code related to companies
and securities crimes, so as to readjust the provisions related to the prosecution against the economic crimes as soon as possible.
People’s governments in all provinces, autonomous regions, and municipalities under direct control of the Central Government shall
also improve relevant governmental regulations in accordance with the relevant provisions in the amended Company Law and Securities
Law.

All the authorities in all places, after receiving this Circular and in accordance with their actual circumstances, shall formulate
concrete measures and implement it earnestly. And the important issues and problems occurring in the process of implementation shall
be timely reported to the State Council.

The General Office of the State Council

December 23, 2005

General Office of the State Council
2005-12-23

CIRCULAR OF CHINA SECURITIES REGULATORY COMMISSION AND CHINA BANKING REGULATORY COMMISSION ON REGULATING THE EXTERNAL GUARANTIES PROVIDED BY LISTED COMPANIES

China Securities Regulatory Commission, China Banking Regulatory Commission

Circular of China Securities Regulatory Commission and China Banking Regulatory Commission on Regulating the External Guaranties Provided
by Listed Companies

Zheng Jian Fa [2005] No.120

Listed companies and financial institutions in the banking sector,

With a view to regulating the external guaranties provided by listed companies as well as the examination and approval of financial
institutions in the banking sector on the loans as guaranteed by listed companies and effectively preventing the risks arising from
the external guaranty of listed companies and the credit risks of financial institutions, and in accordance with the provisions of
such laws and regulations as the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China,
the Law of the People’s Republic of China on Banking Regulation and Supervision, and the Guaranty Law of the People’s Republic of
China, relevant issues concerning the external guaranty as provided by listed companies are hereby notified as follows:

We should regulate the external guaranty as provided by listed companies and strictly control the risks arising therefrom.

(1)

Any guaranty as provided by a listed company shall be subject to the deliberation of the board of directors or the shareholders’ meeting;

(2)

The authority of the shareholders’ meeting or the board of directors regarding the examination and approval of an external guaranty
as well as the responsibility assuming system in the case of any violation of the said authority of examination and approval or the
procedures for examination and deliberation shall be stated in the articles of association of a listed company;

(3)

A external guaranty subject to the examination and approval of the shareholders’ meeting may not be submitted to the shareholders’
meeting for examination and approval until the board of directors has reviewed the external guaranty. A external guaranty that shall
be subject to the examination and approval of the shareholders’ meeting shall include but not be limited to the following circumstances:

Any guaranty as provided after the total amount of guaranties provided by a listed company and its controlling subsidiaries exceeds
50% of the net assets upon the latest auditing;

A guaranty as provided to a guaranteed party whose asset-liability ratio is higher than 70%;

A guaranty, the amount of which exceeds 10% of the net asset upon the latest auditing; and

A guaranty as provided to the shareholder, actual controller or the related party.

Where the shareholders’ meeting deliberates on a guaranty to be provided to a shareholder, or an actual controller or a related party,
the shareholder, actual controller or related associated party may not take part in the voting. A resolution on the external guaranty
shall be subject to approval of shareholders with half or more of the voting rights held by shareholders present at the meeting.

(4)

As to a external guaranty subject to the examination and approval of the board of directors, it shall be subject to approval of 2/3
of the directors present at the meeting of the board of directors upon deliberation, and a resolution shall be made thereafter;

(5)

A guaranty subject to the examination and approval of the board of directors or the shareholders’ meeting of a listed company shall
be timely disclosed in a newspaper for information disclosure as designated by China Securities Regulatory Commission. The content
as disclosed shall include the resolution of the board of directors or the shareholders’ meeting as well as the total amount of external
guaranty of a listed company and its controlling subsidiaries to other parties and the total amount of guaranties provided by the
listed company to its controlling subsidiaries until the day when the information is disclosed.

(6)

Where a listed company undertakes the provision of loan guaranty , it shall submit such materials as the articles of association,
the original of the resolution of the board of directors or the shareholders’ meeting with respect to the guaranty and the designated
newspaper, on which the relevant issues concerning the guaranty are published.

(7)

As to the guaranty provided by a controlling subsidiary of a listed company, the aforesaid provisions shall be referred to. The controlling
subsidiary shall timely inform the listed company of performing the information disclosure obligations after its board of directors
or its shareholders’ meeting makes the relevant resolution.

We should regulate the examination and approval of loan guaranties by financial institutions in the banking sector and effectively
prevent the credit risks arising from the loans guaranteed by listed companies and granted by financial institutions.

(1)

All the financial institutions in the banking sector shall, in strict compliance with such laws and regulations as the Guaranty Law
of the People’s Republic of China, the Company Law of the People’s Republic of China, and the Interpretation of the Supreme People’s
Court on Some Issues Concerning the Application of the Guaranty Law of the People’s Republic of China, reinforce the examination
of the application for loan as guaranteed by a listed company, effectively prevent the relevant credit risks and shall timely upload
the information on loans and guaranties into the credit management system.

(2)

All financial institutions in the banking sector shall, according to this Circular, the articles of association of the listed company
concerned as well as other relevant provisions, seriously examine the following matters:

Completeness and compliance with relevant laws and regulations of the application materials submitted by the listed company for the
loan it guarantees;

Performance of the listed company in respect of the procedures for the examination and approval of the board of directors or the shareholders’
meeting on its external guaranty;

Performance of information disclosure obligations of the listed company;

Guaranty capability of the listed company; and

Other matter concerning the accommodator’s creditworthiness and payment capability.

(3)

Financial institutions in the banking sector shall, according to such provisions as the Guidance for Commercial Banks on the Fulfillment
of Credit Authorization Work, improve the internal control system so as to control credit risks.

(4)

As to application for loans as guaranteed by a controlling subsidiary of a listed company, the above provisions shall be referred
to.

We should strengthen the supervision and coordination and intensify the responsibility prosecution for any rule-breaking provision
of external guaranty by listed companies.

(1)

The China Securities Regulatory Commission and branches thereof and the China Banking Regulatory Commission and the branches thereof
shall strengthen supervision and coordination, share information with each other, jointly establish a supervision and coordination
mechanism, jointly intensify the prosecution of the violation of an listed company by concealing information on guaranty or providing
a guaranty illegally or the violation of a financial institution in the banking sector by unlawfully granting a loan, and affix legal
liabilities to the parties concerned according to law.

(2)

A listed company or any senior manager thereof such as director, supervisor or manager which violates the provisions of this Circular,
shall be ordered to make rectification and correction by the China Securities Regulatory Commission, and shall be punished according
to law. If a suspected crime is involved in the case, it shall be transferred to the judicial organ.

(3)

Where a financial institution in the banking sector violates laws or regulations, the relevant institution and the parties concerned
shall be punished by the China Banking Regulatory Commission. If a suspected crime is in the case, they shall be subjected to legal
liabilities by means of transferring the case to the judicial organ.

Other Matters

(1)

All listed companies shall revise and improve their articles of association according to the aforesaid provisions. All financial institutions
in the banking sector shall incorporate the guaranty provided by the listed companies into the uniform credit granting system, and
shall, in strict accordance with the relevant provisions, carry out examination and approval as well as administration with respect
to guaranties.

(2)

The term “financial institutions in the banking sector” as mentioned in the present Circular shall be defined according to that as
used in the Law of the People’s Republic of China on Banking Regulation and Supervision. The term “external guaranty” as mentioned
herein shall mean the guaranty provided by a listed company to others, including the guaranty provided by a listed company to its
controlling subsidiary. The term “the total amount of the external guaranty of a listed company and its controlling subsidiaries”
as mentioned herein shall mean the sum of the total amount of guaranties provided by a listed company to other parties and the total
amount of guaranty provided by its controlling subsidiaries to other parties, including the guaranty provided by a listed company
to its controlling subsidiaries.

(3)

This Circular shall apply to all listed financial companies.

(4)

Where the Circular on the Relevant Issues concerning the Provision of Guaranty by Listed Companies to Other Parties( Zheng Jian Gong
Si Zi [2000] No. 61 ) and the Circular on Some Issues concerning the Fund Flow Between a Listed Company and its Associated Parties
as well as the Guaranties Provided by a Listed Company (Zheng Jian Fa [2000] No. 56 ) has any conflict with the provisions of this
Circular, this Circular shall prevail.

(5)

The present Circular shall go into effect as of January 1, 2006.

China Securities Regulatory Commission, China Banking Regulatory Commission
2005-12-23

MINISTRY OF COMMERCE ANNOUNCEMENT NO. 58, 2005 ON STARTING ANTI-DUMPING INVESTIGATION ON IMPORTED OCTANOL

Ministry of Commerce Announcement No. 58, 2005 on Starting Anti-dumping Investigation on Imported Octanol

Announcement [2005] No.58 of the Ministry of Commerce

Ministry of Commerce announced an anti-dumping investigation on imported Octanol (octyl alcohol) originating in ROK, Saudi Arabia,
Japan, EU and Indonesia (hereinafter referred to as “investigated product “) on September 15, 2005.

In respond to an appeal from domestic industry on July 15, 2005, Ministry of Commerce examined related issues and evidence. Since
the examination shows the appeal is in line with Article 11 , 13 and 17 and includes related contents and evidence of Article 14
and 15 of Anti-dumping Regulations of the People’s Republic of China, Ministry of Commerce decided to start an anti-dumping investigation
on the investigated product as of September 15, 2005.

The period of investigation on dumping is from March 31, 2004 to March 31, 2005. The investigation on injury to domestic industry
is from January 1, 2001 to March 31, 2005.

The investigated product is classified under Code 29051600 in Import and Export Tariffs of General Administration of Customs of the
People’s Republic of China.

Interested parties can apply to Bureau of Fair Trade for Imports and Exports or Bureau of Industry Injury Investigation of Ministry
of Commerce for responding to charges within 20 days as of the date the Announcement is issued.

At the same time, the related exporters and producers should provide the quantity and amount of the product exported to mainland China
during March, 2004 to March, 2005. Registration Form on Dumping Investigation can be downloaded from http//gpj.mofcom.gov.cn.

Besides, the interested parties should provide explanation materials on production capacity, output, storage, construction plans,
and quantity and amount of the product exported to mainland China during the period of investigation on injury to domestic industry.
Registration form on Industry Injury Investigation can be downloaded from http//www.cacs.gov.cn.

If the interested parties are not registered responding to charges within the fixed time, Ministry of Commerce shall have the right
to refuse their materials and make adjudication according to the available materials.

Interested parties can submit their written opinions to Ministry of Commerce in 20 days as of the date when the Announcement is issued
if they have objections to the production margin, qualification of the applicants, investigated countries and other issues.

Interested parties can look up the unclassified version of the application handed in by the applicants at Open Information Look-up
Office of Ministry of Commerce during the above-mentioned period.

Investigation measures can be conducted by questionnaire, sampling, hearing and examination on the spot.

The investigation begins on September 15, 2005 and last 1 year normally. In case of special situation, it could be extended to March
15, 2007.

Address of Ministry of Commerce:

Address: No. 2, DongChangAn St., Beijing

Postcode: 100731

Bureau of Fair Trade for Imports and Exports:

Tel86-10-65198747, 65198740, 65197354

Fax: 86-10-65198164, 65198497

Address: No. 82, DongAnMen St. Beijing

Postcode: 100747

Bureau of Industry Injury Investigation:

Tel86-10-85226852, 85226855, 85226853

Fax: 86-10-85226854

Ministry of Commerce

September 15, 2005

Ministry of Commerce
2005-09-15

REPLY OF THE PEOPLE’S BANK OF CHINA CONCERNING ISSUING FINANCIAL SECURITIES BY CHINA MERCHANTS BANK

Reply of the People’s Bank of China Concerning Issuing Financial Securities by China Merchants Bank

Yin Fu [2005] No. 75

The China Merchants Bank:

We have received your Request for Instructions on Issuing Financial Securities by China Merchants Bank (Zhao Yin Fa [2005] No. 434).
In accordance with the Provisions on Issuing Financial Securities in the Nationwide Inter-bank Securities Market (Zhong Guo Ren Min
Yin Hang Ling [2005] No. 1, hereinafter referred to as the Management Measures), we hereby reply as follows:

We approve you to issue 15 billion Yuan of financial securities in the nationwide inter-bank securities market. 10 billion Yuan shall
be issued in the first period, of which, 5 billion Yuan is of 3-year term and 5 billion Yuan is of 5-year term. The issuance of all
financial securities shall be concluded before June 30, 2006.

In line with the relevant provisions of the Management Measures, your Bank shall file the relevant documents with the People’s Bank
for archival within 5 workdays before the issuance of financial securities of each period and shall do a good job in the security
issuance of each period as well as the relevant information disclosure according to the requirements of the People’s Bank of China.

Your Bank shall report the security issuance to the People’s Bank of China within 10 workdays as of the date of the conclusion of
each period of financial security issuance.

After your financial security issuance is concluded, the securities shall, in accordance with the relevant provisions of the People’s
Bank of China, be allowed to circulate and be traded in the nationwide inter-bank securities market.

The People’s Bank of China

October 9, 2005

The People’s Bank of China
2005-10-09

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

MEASURES GOVERNING THE QUALIFICATION FOR SECURITIES INVESTMENT FUND CUSTODIAN

China Banking Regulatory Commission, China Securities Regulatory Commission

Order of President of China Banking Regulatory Commission and President of China Securities Regulatory Commission

No. 26

Measures Governing the Qualification for Securities Investment Fund Custodian are hereby promulgated and shall come into force as
of January 1, 2005.

President of China Securities Regulatory Commission Shang Fulin

President of China Banking Regulatory Commission Liu Mingkang

November 29, 2004

Measures Governing the Qualification for Securities Investment Fund Custodian

Article 1

The present Measures are formulated according to the Law on Securities Investment Funds, Law on Banking Regulation and other relevant
laws and regulations with a view to standardizing the management of the qualifications as a securities investment fund custodian,
maintaining the competitive order in the securities investment fund custody sector, protecting the legitimate rights and interests
of investors and parties concerned and promoting the healthy development of securities investment funds.

Article 2

To undertake the business of securities investment fund (hereinafter referred to as the “fund”) custody, a commercial bank must obtain
the qualification to perform as a fund custodian after verification and approval by China Securities Regulatory Commission (CSRC)
and China Banking Regulatory Commission (CBRC).

No commercial bank without the qualification as a fund custodian may engage in the business of fund custody.

Article 3

A commercial bank, which applies for the qualification as a fund custodian (hereinafter referred to as “applicant”) must meet the
following requirements:

(1)

during the last three fiscal years, its net assets at the end of the year shall not be lower than 2 billion Yuan and its capital adequacy
ratios shall all be up to the standard as provided for by the regulatory authority;

(2)

having a special fund custody department which shall be independent of its other business departments;

(3)

the person to perform as a senior officer of the fund custody department shall meet the statutory requirements; and there shall be
at least five persons to engage in fund liquidation, accounting, investment supervision, information disclosure and internal auditing
and control, who shall have the qualifications of being employed in the fund sector;

(4)

having the conditions to keep the safety of fund property under it custody;

(5)

having a highly effective clearing and accounting system;

(6)

The fund custody department shall have a fixed place necessary for the conducting of business of and is equipped with an independent
security monitoring system ;

(7)

the fund custody department shall be equipped with an independent technical system for custody business including of network system,
application system and systems for security and protection and data back-up;

(8)

having a sound internal auditing and monitoring system and a risk control system;

(9)

having no record of major illegal or irregular acts during the last three years; and

(10)

other requirements as may be provided for by laws or regulations or by CSRC or CBRC with the approval of the State Council.

Article 4

An applicant, to ensure the safety of the fund property under its custody, must have the following conditions and abilities:

(1)

equipments and facilities required for conducting the fund custody business;

(2)

to open separate account books for each fund and to keep fund assets under its custody integrated and independent;

(3)

to strictly separate and keep its owned assets and fund assets under its custody;

(4)

to supervise the investment operation of fund managers according to law;

(5)

to carry out the instructions of fund managers in disposing of and distributing fund assets according to law;

(6)

to lawfully check and examine the net assets, net value of a fund unit and prices for fund subscription and repurchase as determined
by a fund manager;

(7)

to properly keep the records, account books, statements and other materials concerning its fund custody business; and

(8)

to have a sound internal custody system.

Article 5

The applicant must have a sound clearing and accounting system, which must accord with the following provisions:

(1)

funds involved in the securities transactions occurring in the system must be able to be transferred within two hours;

(2)

it must be able to receive data from relevant stock exchanges in a safe manner;

(3)

it must be able to be connected with the systems of the relevant institutions in a safety manner, such as systems of fund managers,
fund registration institutions and securities registration and clearing institutions; and

(4)

in such system, the liquidation and accounting must be able to be conducted in time through proper implementing of the investment
instructions of the fund managers according to law.

Article 6

The applicant shall have its place, security and precaution facilities and other facilities and relevant systems for its fund custody
business accord with the following provisions:

(1)

the business place of the fund custody department must be relatively independent with an entrance guarding system equipped;

(2)

there must be separate rooms for the posts with access to fund transaction data, where no unconcerned person may enter without permission;

(3)

there must be a sound secret-keeping system for fund transaction data;

(4)

there must be a reliable fund custody data back-up system; and

(5)

there must be a fund custody emergency program to cope with emergencies.

Article 7

The applicant shall submit to CSRC the following application documents with copies thereof to CBRC simultaneously:

(1)

an application;

(2)

special capital verification reports on its net assets and capital adequacy ratio as rendered by an accounting firm with qualifications
for conducting securities-related business;

(3)

a certificate certifying the establishment of a fund custody department;

(4)

provisions concerning the internal structure establishment and post responsibilities;

(5)

basic information of the persons to assume senior officers and staff members of the fund custody department, including the application
materials for assuming senior officers of the persons to assume senior officers , the names, career records, copies of certificates
certifying the qualification of being an employee in the fund sector, professional training and posts of the persons to be the staff
members;

(6)

a report on the conditions for the safety of the fund property under its custody;

(7)

a report on the test of its fund clearing and accounting system;

(8)

a plan for the business place, a design blue print for the security and monitoring system and a report on the installation and test;

(9)

a design blue print for the fund custody business back-up system, an emergency-disposing plan and a report on the test of the ability
to meet emergencies;

(10)

its relevant business rules and regulations, including rules and regulations concerning business management, operation procedures,
fund accounting and auditing, fund liquidation management, information disclosure, internal auditing and monitoring, internal control
and risk management, information system management, security and file management, reporting of major suspicious transactions and
emergency measures and other rules and regulations as may be required for a fund custodian;

(11)

a commercial plan for the development of its fund custody business; and

(12)

other documents as may be required by CSRC and CBRC.

Article 8

CSRC shall, within five working days from the receipt of application documents, make a decision on whether or not to accept the application.
If all application documents have been submitted completely and accord with the legal forms, a certificate of acceptance shall be
issued to the applicant. Otherwise, the applicant shall be notified once for all of those required to be added or corrected.

Article 9

CSRC shall, within 20 working days from acceptance of the application, make a decision on whether or not to grant an administrative
license. In the case of a decision of granting, CSRC shall send the decision to CBRC for its permission; or else, the applicant shall
be notified of the decision accompanied with the reasons explained for such decision indicated, upon which the administrative licensing
procedure shall be terminated.

CBRC shall, within 20 working days from the receipt of the decision sent for its permission, make a decision on whether or not to
permit. In the case of permission, CSRC and CBRC shall jointly sign an approval document and CSRC shall issue a fund custody business
license; or else, the applicant shall be notified of the decision with reasons indicated, upon which the administrative licensing
procedure shall be terminated.

Article 10

Before making a decision to grant an administrative license, CSRC and CBRC shall jointly make a verification on the spot of the preparations
for the establishment of a fund custody department of the applicant.

The verification on the spot shall be carried out by at least two persons.

The time taken for the verification on the spot shall not be calculated into the period of the time mentioned in the preceding article.

Article 11

A commercial bank, which has obtained the qualification as a fund custodian, shall be a fund custodian.

Every fund custodian shall promptly apply for the qualification of being a senior officer for persons to be senior officers of its
fund custody department and the qualification of being employed in the fund sector for persons to be staff members of its fund custody
department, and go through corresponding employment formalities.

Article 12

Every fund custodian shall, in conducting business , keep lawful, honesty and faithful, diligent and devoted, and effectively perform
its statutory and contractual functions and duties.

Article 13

Every fund custodian shall take proper measures according to law to ensure that its fund custody business and selling business on
a commission basis shall be independent of each other and effectively safeguard the integrity and independence of fund assets under
its custody.

Article 14

Fund custodians shall communicate with each other and may not engage in any unfair competition or monopolize the market;

Article 15

Where an applicant conceals relevant facts or provides false application materials, CSRC and CBRC shall not accept its application
or grant any administrative license, and shall give the applicant a warning; and the applicant may not apply for the qualification
as a fund custodian during the period of a year.

Where any applicant has obtained the qualification as a fund custodian by means of fraud or bribery or any other unwarrantable methods,
CSRC shall, in consultation with CBRC, revoke the applicant’s qualification as a fund custodian, and give the applicant a warning
and a fine with its fund custody business license nullified by CSRC; CBRC may, pursuant to different circumstances, charge the applicant
to give a disciplinary sanction to the person in charge who is directly responsible and other persons directly responsible, or give
such persons warnings or fines, or prohibit them from employment in the banking sector for a specified period of time or for their
lifetime; the applicant may not again apply for the qualification as a fund custodian in three years; those suspected of committing
a crime shall be transferred to the judicial organ for investigation for the criminal liabilities.

Article 16

CSRC and CBRC shall make supervision and administration on the fund custody business commercial banksaccording to law.

Article 17

In the case of non-compliance with the requirements as provided for in Articles 3 to 6 of the present Measures, the fund custodian
concerned must promptly report it to CSRC and CBRC and make corrections within a specified time limit.

If the fund custodian fails to report such non-compliance in time, CSRC and CBRC shall charge it to make corrections and give a warning
and fine to the person in charge who is directly responsible and other persons directly responsible; CBRC may charge the fund custodian
to give disciplinary sanctions to the person in charge who is directly responsible and other persons directly responsible; if the
consequences are serious, CSRC may, in addition, suspend or revoke such persons’ qualifications of being senior officers or being
employed in the fund sector, and CBRC may, in addition, prohibit such persons from employment in the banking sector for a specified
period of time or for their lifetime.

Article 18

In the case of non-compliance with the requirements as provided for in Articles 3 to 6 of the present Measures, if the fund custodian
concerned fails to correct such non-compliance, CSRC shall, in consultation with CBRC, suspend or revoke its qualification as a fund
custodian and shall nullify its fund custody business license; as to the person in charge who is directly responsible and other persons
directly responsible, CSRC shall, in consultation with CBRC, give them fines, and may suspend or revoke such persons’ qualifications
of being senior officers or being employed in the fund sector in addition; and CBRC may, in addition, prohibit such persons from
employment in the banking sector for a specified period of time or for their lifetime; those suspected of committing a crime shall
be transferred to the judicial organ for investigation of their criminal liabilities.

Article 19

The present Measures shall be applicable to domestic Chinese-funded commercial banks not to any foreign-funded commercial bank.

Article 20

The present Measures shall come into force as of January 1, 2005.

China Banking Regulatory Commission, China Securities Regulatory Commission
2004-11-29

MEASURES FOR THE ADMINISTRATION OF IMPORT AND EXPORT COAL INSPECTIONS

Decree of the State Administration of Quality Supervision, Inspection and Quarantine

No. 90

Measures for the Administration of Import and Export Coal Inspections, which have been deliberated and adopted by the executive meeting
of the State Administration of Quality Supervision, Inspection and Quarantine on May 30, 2006, are hereby promulgated, and shall
enter into force as of August 1, 2006.
Director General Li Changjiang

June 26, 2006

Measures for the Administration of Import and Export Coal Inspections
Chapter I General Provisions

Article 1

In order to regulate import and export coal inspections, safeguard the health and safety of the people, protect the environment,
improve the quality of import and export coal, and promote the development of coal trade, these Measures are formulated subject to
the Law of the People’s Republic of China concerning Import and Export Commodity Inspection (hereinafter referred to as the Commodity
Inspection Law), the detailed rules for the implementation thereof, as well as other related laws and regulations.

Article 2

These Measures apply to the inspection, surveillance of import and export coal.

Article 3

The State Administration of Quality Supervision, Inspection and Quarantine (hereinafter referred to as the SAQSIQ) shall be responsible
for the inspections of import and export coal in China.

The entry and exit inspection and quarantine institutions established by the SAQSIQ in all localities (hereinafter referred to as
the inspection and quarantine institutions) shall implement inspections and surveillances of import and export coal in accordance
with the division of their respective functions,.

Article 4

An inspection and quarantine institution shall carry out port inspections and surveillances to import coal, and implement the supervision
in the place of origin with the port inspections and surveillance to export coal.

Chapter II Import Coal Inspections

Article 5

The inspection and quarantine institution at the port of discharge shall take charge of inspecting the import coal.

Article 6

A consignee of import coal or its agent shall report to the inspection and quarantine institution at the port of discharge for inspection
in accordance with related provisions of the SAQSIQ before discharging the import coal.

Import coal shall be discharged at a place that meets the requirements for inspection upon the surveillance of the inspection and
quarantine institution at the port.

Article 7

An inspection and quarantine institution shall conduct the inspection on the import coal in terms of safety, health, or environmental
protection, as well as the related quality, quantity, and weight, and shall issue a certificate pursuant to the inspection result
within 10 working days.

The import coal that has not been inspected or fails to pass the inspection shall not be sold or used.

Article 8

In case of the quality problems found in any import coal, the consignee or its agent shall be ordered by the inspection and quarantine
institution to dispose of them effectively under surveillance; as to unqualified issues in safety, health, or environmental protection,
it shall be handled under related provisions of the Regulation for the Implementation of the Commodity Inspection Law, and shall
be timely reported to the SAQSIQ.

Chapter III Inspections of Export Coal

Article 9

The inspection and quarantine institutions at the locality of the export coal production enterprises (hereinafter referred to as
the inspection and quarantine institution in the place of origin) shall be responsible for the categorized administration and daily
surveillance of the export coal production enterprises under their respective jurisdictions.

The inspection and quarantine institution at the port of export shall be in charge of the inspection on the export coal at the said
port.

Article 10

Export coal production enterprises shall adopt a system of categorized administration. The inspection and quarantine institution
at the place of origin shall examine the quality credibility, production and processing techniques, technical conditions of production,
quality guaranty capacity, etc. subject to the standards after receiving the voluntary application of an export coal production enterprise.
The said inspection and quarantine institution shall also classify the export coal production enterprises into four categories, namely
A, B, C and D, and carry out separate surveillance according to different requirements.

Article 11

In accordance with the principle of free will, an export coal production enterprise may apply to the local inspection and quarantine
institution for categorized administration, and shall submit the materials at the time of filing the application as follows:

(1)

an application letter for categorized administration;

(2)

a copy of the business license;

(3)

the work safety permit;

(4)

the certificate document on the quality management system;

(5)

an ichnography of the mining area (station);

(6)

the instruction of the production processing; and

(7)

other materials required by the SAQSIQ.

Article 12

An inspection and quarantine institution shall investigate the application materials after receiving an application. In case of unqualified
applications under examination, the inspection and quarantine institution shall notify the enterprise of all the contents to be supplemented;
as regards the qualified application, it shall organize an on-site assessment within 10 working days, and shall determine the category
of categorized administration applicable to the enterprise within 20 working days as of the assessment on the spot.

Article 13

An enterprise of Category A shall meet the following requirements:

(1)

It shall be an enterprise engaging in the production of clean coal;

(2)

It shall rigidly observe the laws and regulations of the state and related provisions of the SAQSIQ;

(3)

It shall have a sound quality management system, have passed the ISO9000 quality system certification or have quality guaranty capacity
accordingly;

(4)

It shall be equipped with enough effective percussion caps and ironware cleaning devices;

(5)

The coal preparation process can ensure the stability of the quality of the export coal;

(6)

It was not involved in any major quality accident in terms of safety, health, or environmental protection within recent 2 years of
exporting coal;

(7)

The matters of the export coal in terms of safety, health, or environmental protection meet related compulsory requirements of the
state on technical norms.

Article 14

An enterprise of Category B shall meet the requirements as follows:

(1)

It shall be an enterprise engaging in the production of clean coal, or an export coal production enterprise engaging in the processing
of self-produced coal, or an export coal production enterprise partially engaging in coal washing;

(2)

It shall rigidly observe the laws and regulations of the state and related provisions of the SAQSIQ;

(3)

It shall have a moderately sound quality management system;

(4)

It shall be equipped with enough effective percussion caps and ironware cleaning devices;

(5)

It was not involved in any major quality accident in terms of safety, health, or environmental protection within 1 year of exporting
coal;

(6)

The matters of the export coal in terms of safety, health, or environmental protection meet related compulsory requirements of the
state on technical norms.

Article 15

An enterprise of Category C shall meet the requirements as follows:

(1)

It shall be a coal distribution station purchasing coal and processing it for export, or an enterprise engaging in the production
of clean coal, or an export coal production enterprise engaging in the process of self-produced coal, or an export coal production
enterprise partially engaging in coal washing, which has not been appraised to fall within Category A or B;

(2)

It shall rigidly observe the laws and regulations of the state and related provisions of the SAQSIQ;

(3)

It shall have sound quality management system, and shall be equipped with enough effective percussion caps and ironware cleaning devices;

(4)

The mining sites that supplies coal to it shall have passed the survey and approval by the inspection and quarantine institution in
the place of origin, and the emphasis of the survey and approval shall be the percussion cap’s quality indicators in terms of safety,
health, or environmental protection; and

(5)

The matters of the export coal in terms of safety, health, or environmental protection meet related compulsory requirements of the
state on technical norms.

Article 16

An enterprise that fails to apply to the inspection and quarantine institution for categorized administration, or application of
which does not include in Category A, B or C shall be automatically listed as an enterprise of Category D.

Article 17

An inspection and quarantine institution in the place of origin shall make special random inspections and tests on the export coal
production enterprises under related provisions of the SAQSIQ, and publicize the result of the random inspection and tests. The proportion
of random inspections on an enterprise of Category A shall be restricted at 5% to 15% of the groups in which it files an application;
the proportion of random inspections on an enterprise of Category B shall be restricted at 16% to 45% of the groups in which it files
an application; the proportion of random inspections on an enterprise of Category C shall be restricted at 46% to 100% of the groups
in which it files an application; and the proportion of random inspections on an enterprise of Category D shall be 100%.

The SAQSIQ shall uniformly formulate the contents of the special random inspection and test and shall organize the said inspection
for implementation.

Article 18

Before each batch of export coal is shipped and consigned, an export coal production enterprise shall declare to the inspection and
quarantine institution in the place of origin under the export contract or the export plan distributed by the competent department,
as well as the enterprise’s bill of conformity from self-inspection. The inspection and quarantine institution in the place of origin
shall, on the basis of daily surveillance, issue a Document on the Change of Certificate for Exit Goods in accordance with related
provisions.

The valid term of a Document on the Change of Certificate for Exit Goods shall be 6 months. In case of expiration, the export coal
production enterprise or operation enterprise may apply to the inspection and quarantine institution for renewal. The inspection
and quarantine institution may extend the valid term of the Document on the Change of Certificate for Exit Goods for the corresponding
batch by 3 months after confirming the said Document inerrable upon examination.

Article 19

An export coal operation enterprise shall apply to the inspection and quarantine institution at the port under related provisions
of the SAQSIQ for inspection before the export coal arrives at the port for discharge, and shall provide the Document on the Change
of Certificate for Exit Goods during inspection. Where it fails to provide the said Document, the inspection and quarantine institution
at the port shall not accept the application for inspection.

An export coal operation enterprise shall provide related information about coal blending plan, stacks, and means of loading, etc
when applying for inspection of export coal blending.

Article 20

The export coal shall be discharged under the surveillance of the inspection and quarantine institution at the port at a place qualified
for inspection after being carried from the place of origin to the port.

The export coal operation enterprise shall separately pile the export coal entering the site at the port by varieties, and set clear
marks, instead of mixing up the different varieties of coal.

Article 21

The quantity on the Document on the Change of Certificate for Exit Goods shall be written off by the inspection and quarantine institution
at the port.

Article 22

The inspection and quarantine institution at the port shall inspect the matters of export coal in terms of safety, health, or environmental
protection, and the quality, quantity, weight, etc. and shall issue a certificate on the basis of the inspection result within 10
working days.

Article 23

As regards quality problems in export coal, the export coal operation enterprise shall be ordered by the inspection and quarantine
institution at the port to settle the said problems effectively under surveillance. Any export coal that involves a serious quality
problem in terms of safety, health, or environmental protection and is unable to be settled effectively shall not be exported.

Chapter IV Surveillance

Article 24

An inspection and quarantine institution at the place of origin shall be responsible for the daily surveillance of the export coal
production enterprises within its jurisdiction.

An inspection and quarantine institution at the port shall be in charge of surveilling the import and export coal at the port.

Article 25

The contents of daily surveillance conducted by an inspection and quarantine institution in the place of origin on an export coal
production enterprise shall include:

(1)

information about the enterprise abiding by the laws and regulations of the state as well as related provisions of the SAQSIQ;

(2)

information about the quality credibility of the enterprise;

(3)

operation of the its quality management system;

(4)

equipment and operation of the percussion caps and ironware cleaning devices;

(5)

production and processing information;

(6)

the special random inspection and tests;

(7)

survey of the quality problems; and

(8)

other information requiring for inspection.

The inspection and quarantine institution in the place of origin shall establish a filing of surveillance of coal production enterprises
on the basis of the information on daily surveillance.

Article 26

The inspection and quarantine institution in the place of origin shall evaluate the export coal production enterprises under categorized
administration annually.

Article 27

The inspection and quarantine institution in the place of origin shall conduct dynamic administration over the export coal production
enterprises subject to the annual evaluating result, surveillance filing information and the feedback of the inspection and quarantine
institution at the port, and upgrade or degrade them under related provisions of the SAQSIQ.

Article 28

As regards an export coal production enterprise under any of the following circumstances, it shall be ordered to make a rectification
within a time limit by the inspection and quarantine institution in the place of origin, and the issuance of Documents on the Change
of Certificate for Exit Goods to the said enterprise shall be suspended during the period for rectification, and it shall be submitted
to the SAQSIQ:

(1)

It is found to have any dishonest act;

(2)

It refuses to accept or intentionally evades the surveillance;

(3)

The percussion caps and ironware cleaning devices are found to be incompletely equipped or to work under an unusual state;

(4)

Any quality problem in terms of safety, health, or environmental protection arises, and the circumstance is serious;

(5)

The unqualified groups found from the special random inspection and tests exceed 5% of the groups under application.

The inspection and quarantine institution in the place of origin shall, after investigation, resume the issuance of the Document on
the Change of Certificate for Exit Goods to the enterprise complying with the related provisions of SAQSIQ after the rectification.

Article 29

An export coal production enterprise and an operation enterprise shall perfect the quality management rules, improve the quality
guaranty system, enhance the consciousness of quality and good faith, accept the surveillance of inspection and quarantine institution,
and ensure the quality of export coal to meet the compulsory requirements of the technical norms of the state in terms of safety,
health, or environmental protection.

Article 30

An inspection and quarantine institution at the port shall surveil the impunity removal and quality inspection, etc. of the import
and export coal at the port in accordance with the compulsory requirements of the related technical norms of the state,.

Article 31

The SAQSIQ and the inspection and quarantine institutions shall take effective measures, simplify procedures, and facilitate import
and export as required to facilitate foreign trade.

When handling the procedures for applying for inspection of import and export coal and accepting the inspection surveillance, the
form of electronic data documents shall be taken to the qualified enterprises.

Article 32

An inspection and quarantine institution at the port shall establish a rapid information transmission mechanism with the inspection
and quarantine institution in the place of origin, and carry out electronic transmission of information.

The inspection and quarantine institution at the port and the inspection and quarantine institution in the place of origin shall exchange
information with each other on the export coal inspection surveillance every 3 months, and shall timely communicate with each other
concerning the major issues arising out of the inspection surveillance.

The inspection and quarantine institution in the place of origin shall timely publicize the information on the classification and
appraisal of the export coal production enterprises within its jurisdiction to the inspection and quarantine institution at the port.

Article 33

A quality analysis of the import and export coal shall be made by the inspection and quarantine institution at the port once every
half year, and shall be submitted to the SAQSIQ. A copy of the quality analysis of the export coal shall be submitted to the related
inspection and quarantine institution in the place of origin.

Article 34

An inspection and quarantine institution shall timely report to the SAQSIQ the quality problems in terms of the safety, health, or
environmental protection of import and export coal that have aroused strong responses within or outside China.

The SAQSIQ shall publish a pre-warning circular concerning the information of the import coal relating to serious problems on safety,
health, or environmental protection.

Article 35

An inspection and quarantine institution shall, subject to related provisions of the Commodity Inspection Law, punish the acts of
forging, altering or imitating the Document on the Change of Certificate for Exit Goods and other acts violating related provisions
of the Commodity Inspection Law.

Article 36

When an inspection and quarantine institution and its staff perform their duties, they shall follow the law, maintain the interests
of the state, strictly enforce the law pursuant to legal powers and legal procedures, and accept surveillance.

The inspection and quarantine staff shall accept business trainings and evaluation at regular intervals, and may not perform their
duties on their positions unless passing the evaluation.

The inspection and quarantine staff shall be devoted to their duties, render services in a civilized manner, and follow professional
disciplines, and shall not abuse their official capacities or advance private interests.

Article 37

An inspection and quarantine staff member that violates the Commodity Inspection Law by divulging any commercial secret he has access
to shall be given an administrative sanction subject to related laws, and his illegal proceeds, if any, shall be recovered; if any
crime has been committed, criminal liability shall be investigated according to law.

Where any inspection and quarantine staff member abuses his official capacity, deliberately creates difficulties, commits irregularities
for private interests, forges inspection results, or neglects his duties, delays in making an inspection or issuing a certificate,
he shall be given an administrative sanction subject to related laws; if any crime has been committed, criminal liability shall be
investigated according to law.

Chapter V Supplementary Provisions

Article 38

As regards the coal loaded in the place of origin, for which the means of transport is not changed, and which is carried by the original
means of transport directly for export, the inspection in the place of origin as well as the port check and inspection surveillance
shall be conducted subject to the Regulation for the Implementation of the Commodity Inspection Law.

Article 39

As regards the export coal production enterprises under categorized administration by the inspection and quarantine institution before
these Measures are promulgated, the inspection and quarantine institution shall still conduct surveillance on the enterprises in
light of the original surveillance category of categorized administration.

Article 40

These Measures are subject to the interpretation of the SAQSIQ.

Article 41

These Measures shall take effect as of August 1, 2006. Measures for the Administration of Export Coal Inspections promulgated by
the former State administration for entry-exit inspection and quarantine (Order No. 18 of the State Administration of Inspection
and Quarantine) shall be abolished simultaneously.

The State Administration of Quality Supervision, Inspection and Quarantine
2006-06-26

123...14 Page 2 of 14

Uncategorized

CIRCULAR ON RELEVANT ISSUES IN IMPLEMENTING THE CATALOGUE PROHIBITED FOR PROCESSING TRADE

INTERIM MEASURES FOR THE ADMINISTRATION OF WITHHOLDING AND DECLARATION OF INDIVIDUAL INCOME LAW FOR ALL TAXPAYERS AND IN FULL...

CIRCULAR OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION ON READJUSTING THE EXPORT REBATES RATE FOR SUCH PRODUCTS AS COAL TAR ETC.

CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL ON DOING WELL RELATED WORKS OF CARRYING OUT AND IMPLEMENTING THE AMENDED COMPANY LAW AND SECURITIES LAW

CIRCULAR OF CHINA SECURITIES REGULATORY COMMISSION AND CHINA BANKING REGULATORY COMMISSION ON REGULATING THE EXTERNAL GUARANTIES PROVIDED BY LISTED COMPANIES

MINISTRY OF COMMERCE ANNOUNCEMENT NO. 58, 2005 ON STARTING ANTI-DUMPING INVESTIGATION ON IMPORTED OCTANOL

REPLY OF THE PEOPLE’S BANK OF CHINA CONCERNING ISSUING FINANCIAL SECURITIES BY CHINA MERCHANTS BANK

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

MEASURES GOVERNING THE QUALIFICATION FOR SECURITIES INVESTMENT FUND CUSTODIAN

MEASURES FOR THE ADMINISTRATION OF IMPORT AND EXPORT COAL INSPECTIONS

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