Suspending and Terminating the Listings of Loss-making Listed Companies Implementing Measures

Implementing Measures for the suspension or termination of the listings of companies due to a circumstance as specified in Article 157 or 158 of the Company Law, other than the circumstances specified in the Measures, will be formulated separately.

The restoration or termination of the listings of companies whose listings on stock markets are currently suspended (Companies) shall be handled in accordance with the following provisions:

1. Companies shall publish their year 2000 annual reports before April 30 2001. If a Company fails to publish its year 2000 annual report before this date, the China Securities Regulatory Commission (the CSRC) will terminate the said Company's listing.

2. Companies that made a profit in 2000 may, after publishing their annual reports, apply for restoration of their listings in accordance with Part Three of the Measures. If a Company's application is approved by the CSRC, its listing shall be restored in accordance with the procedure stipulated in Part Three of the Measures. If its application is not approved, the Company may apply to the stock exchange for a six month grace period counting from the date its application was rejected. If the Company fails to apply for the restoration of its listing within 45 days of the date of publication of its annual report, the CSRC will terminate its listing.

3. If a Company made a loss in 2000 or if a registered accountant issues an audit report with a negative or no opinion on its financial report, it may, within 45 days from the date of publication of its annual report, apply to the stock exchange for a six month grace period counting from the date of publication of its annual report in accordance with the procedure stipulated in Article 9 of the Measures. If the Company decides not to apply for a grace period or the stock exchange does not receive an application for a grace period from the Company within the 45 day period, the Company's listing will be terminated pursuant to Part Four of the Measures.

4. The 2001 interim reports of Companies that are granted a grace period under Article 2 or 3 above must be audited. Companies that make an interim profit shall, with reference to Article 2 of the Measures, be granted an additional six month grace period counting from the date of publication of their interim reports. Companies that post interim losses will have their listing terminated pursuant to Part Four of the Measures. Companies that are granted a further grace period and make a profit in 2001 may apply for restoration of their listings pursuant to Part Three of the Measures. If a Company makes a loss in 2001 or if a registered accountant issues an audit report with a negative or no opinion on its financial report, its listing will be terminated pursuant to Part Four of the Measures.

5. Other Measures related to the restoration and termination of listings shall be carried out in accordance with the relevant provisions of the Measures.

China Securities Regulatory Commission

February 22 2001

Suspending and Terminating the Listings of Loss-making Listed Companies Implementing Measures

PART ONE: GENERAL PROVISIONS

Article 1: These Measures have been formulated pursuant to the Company Law and the Securities Law in order to promote the healthy development of the market in securities and protect the lawful rights and interests of investors.

Article 2: These Measures shall govern the suspension, restoration and termination of the listings of listed companies that make consecutive losses.

Article 3: The China Securities Regulatory Commission (the CSRC) legally delegates to stock markets the authority to render decisions on suspending the listings of listed companies that make consecutive losses.

An application for the restoration of the listing of a Company whose listing has been suspended shall be subject to the examination of the Listing Review Committee of the CSRC (the Listing Committee) and the approval of the CSRC.

The decisions to terminate the listings of Companies whose listings have been suspended shall be rendered by the CSRC.

PART TWO: SUSPENSION OF LISTING

Article 4: If a listed company has posted consecutive losses for the most recent two years and its board of directors anticipates a third consecutive year of losses, it shall publish a risk alert announcement and publish a minimum of three risk alert announcements before the publication of its annual report so as to alert investors to the investment risk.

Article 5: If a listed company posts losses for three years in a row, the stock exchange shall suspend the trading in its shares from the date of publication of the company's annual report for the third year (or, if the company fails to publish an annual report, from the last date for the publication of the annual report as provided for in the Securities Law) and within five working days from the suspension of trading in the company's shares render a decision on whether to suspend the company's listing. If the stock exchange decides to suspend the company's listing, it shall notify the company, publish an announcement to that effect and report the suspension to the CSRC for its records.

Article 6: Within two working days of the date of receipt of the stock exchange's decision to suspend its listing, a listed company shall publish an Announcement of Suspension of Listing in the newspaper(s) and on the website(s) designated by the CSRC. The announcement shall contain the following particulars:

(1) the class, symbol, securities code and date of commencement of suspension of the shares the listing of which has been suspended;

(2) the main contents of the decision to suspend the listing rendered by the stock exchange;

(3) the opinion of the company's board of directors on whether it can attempt to have the listing restored, the specific measures to be taken to have the listing restored and information on the attendance and vote taken at the meeting of the board of directors; and

(4) other particulars required by the CSRC and the stock exchange.

Article 7: During the suspension of the listing of its shares, a listed company shall perform the relevant obligations of a listed company in accordance with the law.

Article 8: Within 45 days after a company has had its listing suspended, it may apply to the stock exchange for a grace period so as to extend the term of the suspension of its listing. The grace period shall be 12 months counting from the date of suspension of the company's listing.

Article 9: If a company intends to apply to the stock exchange for a grace period, it shall pass a resolution on applying for a grace period, and explain to the stock exchange its near-term prospects for profitability and the specific measures it is taking.

Article 10: The stock exchange shall render its decision on whether to grant the company a grace period, notify the company thereof and announce the decision within three working days of the date of receipt of the company's application. The company shall announce the main contents of this decision within two working days of the date of receipt of the aforementioned notice from the stock exchange.

Article 11: During the suspension of a company's listing, the stock exchange may provide a special share transfer service to investors, the method for which shall be stipulated by the stock exchange.

PART THREE: RESTORATION OF LISTING

Article 12: If a company whose listing has been suspended makes a profit during the first fiscal year in its grace period, it may, after the publication of its annual report, apply to the CSRC for the restoration of its listing.

Article 13: After accepting a company's application for the restoration of its listing, the CSRC shall forward the application to the Listing Committee for examination and render its decision on whether to grant its approval within three months.

Article 14: During the time of a company's application for the restoration of its listing, the stock exchange shall suspend the special transfer service for the company's shares and extend the company's grace period by a corresponding amount of time.

Article 15: Within two working days after receipt of the stock exchange's decision to restore its listing, a company shall publish an Announcement of Restoration of Listing in the designated newspaper(s) and on the designated website(s). The announcement shall contain the following particulars:

(1) the class, symbol and securities code of the shares whose listing is being restored;

(2) the main contents of the CSRC's decision to restore the listing of the shares;

(3) the analysis of and projections on the company's business position prepared by the company's board of directors; and

(4) other particulars required by the CSRC and the stock exchange.

Article 16: The listing of and trading in a company's shares shall be restored on the first trading day after the publication of the Announcement of Restoration of Listing.

PART FOUR: TERMINATION OF LISTING

Article 17: If a company whose listing has been suspended makes a further loss during the first fiscal year in its grace period, or if a registered accountant issues an audit report with a negative or no opinion on its financial report, the CSRC shall decide to terminate the company's listing.

The stock exchange shall suspend the transfer service for the company's shares from the date of publication of the company's annual report.

Article 18: The CSRC shall decide to terminate a company's listing if:

(1) the company decides not to apply for a grace period;

(2) the company fails to apply for a grace period within 45 days of the date of the suspension of its listing or its application for a grace period is not approved by the stock exchange;

(3) the company referred to in Article 17 has not published an annual report by the expiration of its grace period; or

(4) the company's application for restoration of its listing is not approved by the CSRC.

Article 19: If a company anticipates that the circumstance mentioned in Article 17 will arise, it shall publish a risk alert announcement in a timely manner and publish a minimum of three risk alert announcements before the publication of its annual report so as to alert investors to the investment risk. If the above-mentioned circumstance is borne out by an audit, the company shall make a report to the CSRC and the stock exchange and publish an announcement within two working days from the receipt of the annual audit report.

Article 20: Within two working days after receipt of the stock exchange's decision to terminate its listing, a company shall publish an Announcement of Termination of Listing in the designated newspaper(s) and on the designated website(s). The announcement shall contain the following particulars:

(1) the class, symbol, securities code and date of termination of listing of the shares the listing of which has been terminated;

(2) the main contents of the CSRC's decision; and

(3) matters concerning the registration, transfer and management of the shares after the termination of the listing.

Article 21: Within one month of the termination of its listing, a company shall publish an announcement in the designated newspaper(s) and on the designated website(s) setting forth the company's financial position over the years, details on serious violations of laws or regulations by senior management personnel of the company and details on current material claims, debts and court actions. The company's board of directors shall explain in detail the reasons that led to the company's current state, in particular, the relevant transactions with affiliates and the relevant claims and debts that led to the company's losses.

Article 22: If a company fails to perform the obligation stipulated in the preceding Article within the specified time limit, its shareholders may legally demand that the company perform the aforementioned obligation.

Article 23: Transfers of the shares of a company whose listing has been terminated shall comply with the Company Law, the Securities Law and relevant laws and regulations.

PART FIVE: SUPPLEMENTARY PROVISIONS

Article 24: These Measures shall be implemented as of the date of issue. The specific Measures for the restoration and termination of the listing of companies whose listing was suspended before the implementation hereof will be formulated separately by the CSRC.