Laws of the People's Republic of China

    Article 1  In order to standardize the issue and transactions
of foreign capital stocks listed in China by joint-stock companies
and protect the lawful rights and interests of investors, these
Regulation are formulated in accordance with the relevant
provisions of the Company Law of the People's Republic of China
(hereinafter referred to as the Company Law).

    Article 2  With the approval of the Securities Commission of
the State Council, joint-stock companies (hereinafter referred to
as ``companies'' or ``company'') may issue foreign capital stocks
to be listed in China. If the face value of the foreign capital
stocks to be listed in China totals more than 30 million US dollars,
the Securities Commission of the State Council shall report to the
State Council for approval.

    The above-mentioned issuing foreign capital stocks to be listed
in China means issuing foreign capital stocks to be listed in China
either for establishing a company by way of solicitation or for
increasing capital of a company.

    The total value of the foreign capital stocks listed in China
authorized by the Securities Commission of the State Council shall
be controlled within the maximum amount prescribed by the state.

    Article 3  Foreign capital stocks issued by companies to
be listed in China shall be in the form of nominative stocks,
denominated in renminbi, subscribed in and marketed by foreign
currency, and listed and exchanged on stock exchanges in China.

    If companies that issue foreign capital stocks to be listed
in China issue stocks to investors within China (hereinafter
referred to as ``internal stocks''), the internal stocks shall be
in form of nominative stocks.

    Article 4  Investors in foreign capital stocks listed in
China shall be limited to:

    (1) natural persons, legal persons and other organizations
from foreign countries;

    (2) natural persons, legal persons or other organizations
from the Chinese regions of Hong Kong, Macau and Taiwan;

    (3) Chinese citizens living abroad; and

    (4) other investors in foreign capital stocks prescribed by
the Securities Commission of the State Council;

    Investors in foreign capital stocks listed in China shall
produce valid instruments as testimony to their identity
and qualification as investors when they subscribe for or market
foreign capital stocks.

    Article 5  Stockholders who hold the same category of foreign
capital stocks listed in China or internal stocks shall enjoy equal
rights and interests and perform equal duties according to the
Company Law.

    Companies may make specific stipulations in the company
constitution concerning stockholders' rights and duties.

    Article 6  The constitution of a company shall be binding
upon the company's stockholders, directors, supervisors, managers
and other high-ranking management personnel.

    Directors, supervisors, managers and other high-ranking
management personnel shall be honest, diligent, and loyal to the
company.

    Other high-ranking management personnel mentioned in the
first and second paragraphs of the present Article include
persons in charge of the company's financial affairs, the
secretary of the board of directors and other persons prescribed
as such by the company constitution.

    Article 7  The Securities Commission of the State Council and
the Chinese Securities Superintendency Administrative Committee
(hereinafter abbreviated as CSSAC), which is an affiliated
establishment of the former, shall exercise administration and
supervision over the issue, exchange and relevant business of
foreign capital stocks listed in China according to laws and
regulations.

    Article 8  Establishment of a company by way of solicitation
and application for issuing foreign capital stocks to be listed
in China shall satisfy the following requirements:

    (1) Use of the solicited capital shall conform with state
industrial policies;

    (2) State regulations on the establishment of investment
items in fixed assets shall be complied with.

    (3) State regulations on exploitation of foreign capital
shall be complied with;

    (4) The sponsor shall subscribe for a total of not less than
35 percent of the total volume of capital stock to be issued by
the company;

    (5) The total capital invested by the sponsor shall be not
less than 150 million renminbi yuan;

    (6) The shares to be issued to society shall account for over
25 percent of the total shares, or over 15 percent of the total
shares if the company intends to issue over 400 million renminbi
yuan as a total;

    (7) An enterprise that has been reorganized to establish a
company or the state-owned enterprise as the main sponsor of the
company shall have no history of serious offenses over the last
three years;

    (8) An enterprise that has been reorganized to establish a
company or the state-owned enterprise as the main sponsor of the
company shall have had a favorable balance over the last three
years; and

    (9) Other requirements prescribed by the Securities
Commission of the State Council.

    Article 9  A company that intends to add capital and applies
for issue of foreign capital stocks to be listed in China shall
satisfy the following requirements in addition to those
stipulated in Items 1, 2 and 3 of Article 8 of the present
Regulations:

    (1) The company shall have solicited sufficient shares at
last issue; the use of the obtained capital shall have conformed
with the use determined at the time of solicitation and the use
of the capital shall have resulted in good economic benefits;

    (2) The general net assets of the company shall be not less
than 150 million renminbi yuan;

    (3) The company shall not have committed any serious offenses
in the time between the last issue of stocks to the filing of the
current application for issue of stocks;

    (4) The company shall have maintained a favorable balance
over the last three years (An original enterprise which was
reorganized to establish a company or the state-owned company as
the main sponsor of the company may be taken into calculation); and

    (5) Other requirements prescribed by the Securities
Commission of the State Council.

    A company established by way of solicitation shall in addition
comply with stipulations of Item 6 of Article 8 of the present
Regulations when the company adds capital for the first time and
applies for the issuing of foreign capital stocks to be listed in
China.

    Article 10  Whoever applies for issuing of foreign capital
stocks to be listed in China shall go through the following
procedures:

    (1) The sponsoring person or company shall file an
application with the people's government of province,
autonomous region or municipality directly under the central
government, or relevant departments of the State
Council in charge of enterprises, which may then recommend it
to the Securities Commission of the State Council;

    (2) The Securities Commission of the State Council shall
consult with relevant departments of the State Council in the
selection of companies that should be entitled to issue foreign
capital stocks listed in China;

    (3) The selected company shall submit the instruments listed
in Articles 11 and 12 of the present Regulations to the CSSAC for
examination; and

    (4) A company considered by the CSSAC to meet requirements
shall then be reported for approval to the Securities Commission
of the State Council or to the State Council according to the
stipulations of the first paragraph of Article 12 of the present
Regulations. Only with approval can the company begin to issue
foreign capital stocks to be listed in China.

    Article 11  For establishment of a company by way of
solicitation and application for the issue of foreign capital
stocks listed in China, the following instruments shall be
submitted to the CSSAC:

    (1) a written application;

    (2) the name of the sponsor, volume of shares to be
subscribed for by the sponsor, category of the capital invested
and certificate of verification of the capital;

    (3) a resolution made in a meeting of sponsors in favor of
public issue of foreign capital stocks listed in China;

    (4) an instrument of approval of the departments authorized
by the State Council or of the people's governments to establish
the company;

    (5) a recommendation made by the people's governments of the
province, autonomous regions or municipality directly under the
central government or by relevant departments of the State Council
in charge of enterprises;

    (6) a Notice of Advance Examination and Approval of the
Enterprise Name issued by a company registration department;

    (7) a draft of the constitution of the company;

    (8) details for raising capital by floating stocks;

    (9) a feasibility report on use of capital; an approval
instrument made out by relevant authorities concerning the
establishment of investment items in fixed assets if capital
raised is to be invested in fixed assets subject to necessary
approval from relevant authorities;

    (10) a report on the financial affairs of the original
enterprise or the state-owned enterprise as the main sponsor over
the last three years that has already been audited by a
registered accountant and the office to which the accountant is
attached; and an audit report signed and sealed by at least two
registered accountants and the office to which the accountants
are affiliated;

    (11) an assets assessment report signed and sealed by at
least two professional assessors and the office to which the
assessors are attached; and an instrument of confirmation and an
instrument of approval regarding the state-owned title of stocks
made out by the management authorities of state assets in the
event state-owned assets are involved;

    (12) a document of legal opinions signed and sealed by at
least two lawyers and the office to which the two lawyers are
affiliated;

    (13) a sale contracting plan and agreement governing the
issue of stocks; and

    (14) other instruments required by the CSSAC.

    Article 12  A company that intends to add capital and apply
for the issue of foreign capital stocks listed in China shall
submit the following instruments to the CSSAC:

    (1) a written application;

    (2) a resolution of a stockholders' meeting in favor of
public issue of foreign capital stocks listed in China;

    (3) an instrument of approval in favor of adding capital and
issuing new stocks made out by departments authorized by the
State Council or people's governments of the province, autonomous
region or municipality directly under the central government;

    (4) an instrument of recommendation of the people's
government of the province, autonomous region or municipality
directly under the central government or relevant departments of
the State Council in charge of enterprises;

    (5) a business license of the company issued by a company
registration organ;

    (6) a draft of the constitution of the company;

    (7) details for raising capital by floating shares;

    (8) a feasibility report on use of capital; and an approval
instrument made out by the relevant authorities concerning the
establishment of investment items in fixed assets if the capital
raised is to be invested in fixed assets subject to necessary
approval from relevant authorities;

    (9) a report on the financial affairs of the company of over
the last three years which has been audited by a registered
accountant and the office to which the accountant is affiliated;
and an audit report signed and sealed by at least two registered
accountants and the office to which the accountants are
affiliated;

    (10) a document of legal opinions signed and sealed by at
least two lawyers and the office to which the lawyers are
affiliated;

    (11) a sales contracting plan and an agreement governing the
issue of stocks; and

    (12) other instruments required by the CSSAC.

    Article 13  The interval between a company's issue of foreign
capital stocks listed in China and the issue of internal stocks
may be less than 12 months.

    Article 14  Companies shall employ registered accountants who
meet state standards; accountants and their affiliated offices
shall audit and review a company's financial reports.  

    Article 15  Companies shall conduct business accounting and
formulate financial reports according to corresponding state
regulations.

    Companies that make adjustments to a financial report
released to investors in foreign capital stocks listed in
China so as to adapt to accounting rules of other countries or
regions shall give an explanation for any corresponding
differences in the report.

    Article 16  Companies that issue foreign capital stocks
listed in China shall release information to the public
according to law and shall formulate concrete provisions in
their constitutions with regard to where and how to release
the information.

    Article 17  Documents of information released by companies
that issue foreign capital stocks listed in China shall be
written in Chinese. If it is necessary to supply a version in a
foreign language, the version shall be in a commonly used foreign
language. If differences in interpretations occur between the
Chinese version and the foreign-language version, the Chinese
version shall be taken as the standard.

  Article 18  Companies that issue foreign capital stocks
listed in China shall commission a securities exchange
agency in China established with the approval of the People's
Bank of China according to law and with the consent of the CSSAC
to serve as the main contracted seller or one of the main
contracted sellers.

    Article 19  Companies that issue foreign capital stocks
listed in China shall open a foreign exchange account with
a bank within China which is qualified to handle foreign exchange
business. To open a foreign exchange account, companies shall go
through the state procedures governing the control of foreign
exchange.

    The main contracted seller of foreign capital stocks listed
in China shall, within the time allotted in the sale
contract, transfer the money raised to the foreign exchange
account of the company issuing foreign stocks listed in
China.

    Article 20  Commissions for the marketing of foreign capital
stocks shall be managed by a securities exchange agency
established with the approval of the People's Bank of China
according to law and the consent of the CSSAC.

    Article 21  Stockholders of foreign capital stocks listed
in China may entrust an agent with the exercise of stockholder's
rights. When exercising the stockholder's rights, the agent shall
produce valid instruments proving his qualifications as an agent.

    Article 22  Owners of rights and interests in foreign capital
stocks listed in China may register their stocks under the name
of the persons of nominal ownership of stocks.

    Owners of rights and interests in foreign capital stocks
listed in China shall release information about changes in
ownership.

    Article 23  The exchange, management, settlement of exchange
transactions, clearance of accounts, transfer of ownership, and
registration relating to business of foreign capital stocks
listed in China shall conform with the law, administrative
regulations and corresponding rules of the Securities Commission
of the State Council.

    Article 24  Subject to approval of the Securities Commission
of the State Council, foreign capital stocks listed in China or
their derivatives may be circulated or transferred out of China.

    The above-mentioned ``derivatives'' refer to vouchers for the
subscription rights and for rights of stocks deposition out of
China.    

    Article 25  Companies' payments of dividends and/or other
items to stockholders of foreign capital stocks listed in
China shall be priced and declared in renminbi but made in
foreign currency. The management of foreign currency capital
raised by companies and the obtainment of foreign exchanges for
payment of dividends shall comply with the relevant procedures of
the state governing control of foreign exchanges.  

    If it is stipulated in the company constitution that foreign
currencies be exchanged and payment of dividends to stockholders
be made by a company entrusted therewith, it shall be so done in
accordance with the constitution.

    Article 26  Dividends of foreign capital stocks listed
in China and/or other profits may be remitted abroad subject
to taxation according to law.

    Article 27  The Securities Commission of the State Council
may, according to the present Regulations, formulate detailed
rules and regulations for the implementation thereof.

    Article 28  The present Regulations shall come into effect as
of the date of promulgation. Both the Procedures of Shanghai
Municipality Governing the Control of Special Stocks in Renminbi,
which was promulgated by the People's Bank of China and the
People's Government of Shanghai Municipality on November 22,
1991, and the Interim Procedures of Shenzhen Municipality
Governing the Control of Special Stocks in Renminbi, which was
promulgated by the people's government of Shenzhen Municipality
on December 5, 1991 are henceforth annulled.