Laws of the People's Republic of China

    Article 1  These Provisions are formulated in accordance with the
Law of the People's Republic of China on Chinese-Foreign Equity Joint
Ventures and other pertinent laws and regulations in order to protect the
lawful rights and interests of the various parties to Chinese-foreign equity
joint ventures (hereinafter referred to as the "joint ventures"), and to
maintain the social economic order.

    Article 2  The investments contributed by the various parties to a
joint venture in accordance with the stipulations of the contract of the said
joint venture must be the cash owned by the parties themselves as well as the
physical goods, the industrial property rights, the proprietary technology and
etc. that are owned by the parties themselves and have not been used to
establish any security interests.

    In cases where physical goods, industrial property rights and proprietary
technology are used as investments at the evaluated price, the investor shall
present valid documents attesting their proprietary rights and their right of
disposal.

    Article 3  No party to a joint venture may use the loans, rented equipment
or other assets it has obtained in the name of the joint venture, or the
assets of persons other than the parties as its own investment contribution to
the joint venture; nor may it use the assets or rights and interests of the
joint venture, or the assets or rights and interests of the other parties
to the joint venture as the warranty for its investment contribution to the
joint venture.

    Article 4  The various parties to a joint venture shall set the time
limit in their joint venture contract for paying up their respective
investment contributions to the joint venture, and they shall pay fully their
respective investment contributions within the time limit stipulated in the
joint venture contract. The investment contribution certificates issued by the
joint venture in accordance with the pertinent stipulations shall be submitted
to the original examining and approving authorities and the relevant
administrative department for industry and commerce for the record.

    If the joint venture contract stipulates that investment contributions
shall be paid up in one lump, the various parties to the said joint venture
shall make the full payment of their respective investment contributions
within six months from the date the business licence is signed and issued.

    If the joint venture contract stipulates that investments shall be paid
by instalments, the first instalment paid by the various parties shall not be
less than 15% of the total amount of their respective investment contributions
and be paid within three months as of the date the business licence is signed
and issued.

    Article 5  In the event that the various parties to a joint venture fail
to make the full payment of their respective investment contributions within
the time limit prescribed in Article 4, the joint venture shall be considered
to be dissolved of its own accord, and the approval certificate for the joint
venture shall automatically cease to be effective. The joint venture shall go
through the procedures for cancellation of registration with the
administrative department for industry and commerce, and hand in its business
licence for cancellation; if a joint venture fails to go through the
procedures for cancellation of registration or to hand in its business licence
for cancellation, the administrative department for industry and commerce
shall revoke its business licence and announce this publicly.

    Article 6  After the various parties to a joint venture have paid the
first instalment of their respective investment contributions, if they fail to
pay or to pay fully any of the remaining instalments three months beyond the
deadline as stipulated in the joint venture contract, the administrative
department for industry and commerce shall, in conjunction with the original
examining and approving authorities, issue a notice to the various parties to
the said joint venture, enjoining them to pay the full amount due within one
month.

    In the event that the various parties to the said joint venture still fail
to make the full payment of their respective investment contributions in
accordance with the time limit prescribed in the notice mentioned in the
preceding paragraph, the original examining and approving authorities have the
right to revoke the approval certificate for the said joint venture. After the
approval certificate has been revoked, the said joint venture shall go through
the procedures for cancellation of registration with the administrative
department for industry and commerce, hand in its business licence for
cancellation, and settle claims and debts. If it fails to go through the
procedures for cancellation of registration or to hand in its business licence
for cancellation, the administrative department for industry and commerce has
the right to revoke its business licence and to announce this publicly.

    Article 7  The failure of one of the parties to a joint venture to make
the payment, or the full payment, of its investment contribution on time in
accordance with the stipulations of the joint venture contract constitutes a
breach of the contract. The observant party (parties) shall urge the
defaulting party to make the payment, or the full payment, of its investment
contribution within one month. If the defaulting party still fails to do so
before the deadline, this shall be considered as the abandonment by the
defaulting party of all its rights as stipulated in the joint venture contract
and its withdrawal from the joint venture of its own accord. The observant
party (parties) shall, within one month from the date when the defaulting
party's prescribed payment is overdue, make an application to the original
examining and approving authorities for the approval to dissolve the said
joint venture, or for the approval to find another joint venture party to
assume the defaulting party's rights and obligations as stipulated in the
joint venture contract. The observant party (parties) may, according to law,
claim compensation from the defaulting party for the economic losses caused by
the latter's failure to make the payment, or the full payment, of its
investment contribution.

    If the defaulting party mentioned in the preceding paragraph has paid
part of its prescribed investment contribution, this part of investment
payment shall be liquidated by the joint venture.

    In the event that the observant party (parties) fails (fail) to make an
application to the original examining and approving authorities, in accordance
with the provisions of the first paragraph of this Article, for the approval
to dissolve the joint venture, or for the approval to find another joint
venture party, the examining and approving authorities have the right to
revoke the approval certificate issued to that joint venture. After the
approval certificate has been revoked, the said joint venture shall go through
the procedures for cancellation of registration with the administrative
department for industry and commerce, and hand in its business licence for
cancellation; if it fails to go through the procedures for registration
cancellation or to hand in its business licence for cancellation, the
administrative department for industry and commerce has the right to revoke
its business licence and to announce this publicly.

    Article 8  With respect to any joint venture which obtained its business
licence before the date these Provisions become effective, if the various
parties or any one of these parties have (has) failed to make the payment of
the respective investment contributions in accordance with the time limits
stipulated in the joint venture contract, they (it) shall, within two months
as of the date these Provisions become effective, make the full payment of the
prescribed investment contributions in accordance with the provisions of the
contract.

    In the event that the various parties or any one of the parties still
fail(s) to make the full payment of the respective investment contributions
within the time limit prescribed in the preceding paragraph, the case may be
handled in accordance with the provisions in Article 5 through Article 7 of
these Provisions.

    Article 9  With respect to any joint venture which obtained its business
licence before the date these Provisions become effective, if the various
parties to that joint venture have not stipulated in their joint venture
contract the respective time limits for making their respective investment
contributions, and they have not made the full payment, the various parties
shall, within two months as of the date these Provisions become effective and
in accordance with these Provisions, conclude and sign a supplementary
agreement to their joint venture contract prescribing the time limits for the
various parties to the joint venture to make the payment of their respective
investment contributions, and submit this supplementary agreement to the
original examining and approving authorities for examination and approval;
after they have obtained the approval, they shall submit their case to the
administrative department for industry and commerce for the record.

    In the event that a joint venture mentioned in the preceding paragraph
fails to establish itself or to start its operations after six full months
since the date of the issuance of its business licence owing to the failure of
its various parties to conclude and sign a supplementary agreement to their
joint venture contract within two month prescribed in the preceding paragraph,
prescribing the time limits for making their respective investment
payments, and the failure to pay full their respective investment
contributions, the original examining and approving authorities have the right
to revoke the approval certificate issued to that joint venture. After the
approval certificate has been revoked, the said joint venture shall go through
the procedures for cancellation of registration with the administrative
department for industry and commerce, and hand in its business licence for
cancellation. If the said joint venture fails to go through the procedures for
cancellation of registration or to hand in its business licence for
cancellation, the administrative department for industry and commerce has the
right to revoke its business licence and to announce this publicly.

    Article 10  The investment payment made by the various parties to a
Chinese-foreign contractual joint venture shall be handled with reference to
these Provisions.

    Article 11  These Provisions shall go into effect as of March 1, 1988.