These measures are approved at the first internal conference of the Ministry of Commerce on January 21, 2005, and shall take effect as of February 3, 2005.

Article 1 For the purposes of promoting healthy development of foreign invested leasing trade, regulating business activities of it, preventing business risk, theses measures are formulated in accordance with Contract Law of the PRC, Company Law of PRC, Foreign Capital Enterprises Law of PRC, Chinese-Foreign Joint Venture Enterprises Law of PRC, Chinese-Foreign Cooperation Enterprises Law of PRC and other relative laws and regulations.

Article 2 The said Measures apply to foreign invested enterprises established for leasing or financing leasing business by foreign companies, enterprises and other economic organizations (hereinafter referred to as ¡°foreign investor¡±) in China in the forms of Sino-foreign joint venture, Sino-foreign cooperation and solely foreign-owned enterprises.

Article 3 Foreign invested leasing trade may be in the form of limited liability company or joint-stock limited company.

Foreign invested enterprises engaged in leasing business are foreign invested leasing companies. Foreign invested enterprises engaged in financing leasing business are foreign invested financing leasing companies.

Article 4 Foreign invested leasing companies and foreign invested financing leasing companies should abide by the provisions of related laws, regulations and rules of the PRC. Their legitimate business activities and legal rights and interests are under the protection of Chinese law.

Ministry of Commerce is the competent administration department and approval authority for foreign invested leasing trade.

Article 5 Leasing business in terms of these measures means the business that a leaser let a lessee use his leased property so as to reap profits and collect rent from the lessee.

Financing leasing business in terms of these measures means a leaser buys leased property and provides it to a lessee and collects rent from the lessee according to the lessee¡¯s choice of a seller and leased articles.

Foreign invested financing leasing companies may develop financing leasing business in forms of direct-leading, subletting, back-leasing, lever leasing, trust leasing and joint leasing, etc.

Article 6 Leased property in term of these measures include:

1. All kinds of movable property, such as the equipment of production, communication, medical treatment, scientific research, examination and inspection, engineering machinery and office;

2. All means of transport, such as aircraft, automobile, ship, etc.;

3. The intangible property like software and techniques attached to movable property and means of transport in terms of Item 1 and 2 of the said Article, but the value of attached intangible property must not exceed one second of the value of leased property.

Article 7 Total property of foreign investors of foreign invested leasing companies and foreign invested financing leasing companies must not less than 5 million USD.

Article 8 Foreign invested leasing company should meet following requirements:

1. Registered capital accords with relevant provisions of Company Law.

2. Accord with relevant provisions about registered capital and total sum of investment of foreign invested enterprises;

3. The business term of a foreign invested leasing company in the form of a limited liability company usually do not exceed 30 years.

Article 9 Foreign invested financing leasing companies should meet following requirements:

1. Registered capital is no less than 10 million USD;

2. Business term of a foreign invested financing leasing company in the form of limited liability company usually do not exceed 30 years;

3. Have relevant professionals, senior managers should have relevant professional qualifications and business experience of no less than 3 years;

Article 10 Following materials should be submitted to approval authorities for establishing a foreign invested leasing company and foreign invested financing leasing company:

1. Letter of application;

2. Feasibility report signed by all investment parties;

3. Contract and regulations (foreign capital enterprise only submits regulations);

4. Bank credit certification, registration certificate (copy) and Identity of legal representative (copy);

5. The auditing report in the recent one year of all investment parties audited by accountant firm;

6. The name list of board of directors and director-appointing letter of all investment parties;

7. Qualification certificate of senior managers;

8. Prior approval notice of enterprise¡¯s name provided by industrial and commercial administrations;

Whoever applies for establishing joint-stock limited company should submit other materials in accordance with relevant requirements.

Article 11 Foreign invested leasing company and foreign invested financing leasing company should be established in accordance with following procedures:

1. For establishing a foreign invested leasing company in the form of limited liability, all materials stipulated in Article 10 of these measures should be submitted by the investors to the competent provincial commercial administration department where the enterprise will be established. The competent provincial commercial administration department should make a decision whether or not the application is approved within 45 working days at the receipt of all application materials. Approval Certificate for Foreign Invested Enterprises will be issued to the company meeting with the approval. To the company who does not meet with the approval, reasons should be given in writing. The competent provincial commercial administration department should submit the approval document to Ministry of Commerce for the record within seven days after the approval of establishing foreign invested leasing company. The establishment of foreign invested leasing company in the form of joint-stock limited liability company should be handled in accordance with relevant regulations.

2. For establishing a foreign invested financing leasing company, the investors should submit all materials stipulated in Article 10 of these measures to the competent provincial commercial administration department where the enterprise will be established. The competent provincial administration department should submit the application and the comments of preliminary examination to Ministry of Commerce after preliminary examination of the submitted application papers within 15 working days at the receipt of all application papers. Ministry of Commerce should make the decision whether or not the application is approved within 45 working days at the receipt of all application papers. Approval Certificate of Foreign Invested Enterprises will be issued to the enterprise approved to establish a leasing company. Reasons should be given in writing to the enterprises if their application is not approved.

3. Established foreign invested enterprises applying for leasing business should meet the requirements stipulated in these measures and change relevant business range in accordance with laws according to the procedures stipulated in Item 1 of the said Article.

Article 12 Foreign invested leasing company and foreign invested financing leasing company should go through the formalities of registration for the record in industrial and commercial administrations within 30 working days at receipt of Approval Certificate of Foreign Invested Enterprises.

Article 13 Foreign invested leasing company may be engaged in following business:

1. Leasing business;

2. Buy leased property inside or outside the country;

3. Settlement and maintenance of the scrap value of leased property;

4. Other business approved by approval authorities.

Article 14 Foreign invested financing leasing company may be engaged in following business:

1. Financing leasing business;

2. Leasing business;

3. Buy leased property inside and outside the country;

4. Settlement and maintenance of the scrap value of leased property;

5. Consultation and guarantee for leasing business;

6. Other business approved by approval authorities.

Article 15 If a foreign invested financing company imports leased property subject to the management of special policy relating to quota, license and etc. according to lessee¡¯s choice, the formalities of applying and obtaining should be handled by leaser or financing leasing company in accordance with relevant regulations.

Foreign invested leasing companies import leased property should be handled in accordance with relevant current regulations of importing equipment of foreign invested enterprises.

Article 16 For the purposes of avoiding risk, ensuring business safety, the risk property of a foreign invested financing leasing company usually does not exceed ten times of the total sum of net property. The risk property should be determined by surplus property (deducting cash, bank deposit, treasury bond and trusted leased property from the total property of the enterprise).

Article 17 Foreign invested financing leasing company should submit to Ministry of Commerce the business situation report of last year and financial report of last year audited by accountant office of last year before March 31 every year.

Article 18 Leasing Trade Commission of China Foreign Invested Enterprises Association is a trade organization to carry out trade self-discipline management of foreign invested leasing trade. Foreign invested leasing companies and foreign invested financing leasing companies are invited to attend the commission.

Article 19 If any foreign invested leasing company or foreign invested financing leasing company violate Chinese laws, regulations and rules, it will be punished in accordance with relevant regulations.

Article 20 If the companies, enterprises and other economic organizations in Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan region establish foreign invested leasing companies and foreign invested financing leasing companies in the mainland, they may execute it in the light of these measures.

Article 21 The competent provincial commercial administration department in terms of these measures means competent commercial administration department of all provinces, autonomous regions, municipalities under the Central Government, cities specifically designated in the state plan and Xinjiang Production and Construction Corp.

Article 22 The interpretation of these measures shall be vested in the Ministry of Commerce.

Article 23 These Measures shall come into effect as of March 5, 2005. Decree No. 3 of former MOFTEC of Temporary Measures on Approval and Management of Foreign Invested Leasing Companies shall be repealed simultaneously.