Laws of the People's Republic of China

Notice of the General Office of the National Development and Reform Commission and the General Office of the Ministry of Finance on the Print and Distribution of the Work Rules for the Preliminary Administration of Loan Projects of Foreign Governments (for Trial Implementation)

The development and reform commissions and the public finance departments (bureaus) of each province, autonomous region, municipality directly under the Central Government, city specifically designated in the state plan and Xinjiang Production and Construction Group, each relevant department of the General Office of the State Council, each relevant enterprise directly under the central authorities and each enterprise group specifically designated in the state plan:

For the purpose of intensifying the administration of loan projects of foreign governments (except for the loan projects of the Japanese Government) and regulating the relevant management work procedures, the Work Rules for the Preliminary Administration of Loan Projects of Foreign Governments (for Trial Implementation) are formulated jointly by the National Development and Reform Commission and the Ministry of Finance and are hereby printed and distributed to you for implementation.

Appendix: Work Rules for the Preliminary Administration of Foreign Government Loan Projects (for Trial Implementation)

General Office of the State Development and Reform Office of the State Council

General Office of the Ministry of Finance

October 9, 2006 Appendix: Work Rules for the Preliminary Administration of Foreign Government Loan Projects (for Trial Implementation)

Article 1

For the purpose of further regulating the administration of loan projects of foreign governments and elevating the benefits from the utilization of loans of foreign governments, and in accordance with the related rules and bylaws of the National Development and Reform Commission and the Ministry of Finance on the administration of loans of foreign governments and in combination of the related policies for foreign governments to offer the related aids for development, these Work Rules are formulated.

Article 2

The related preliminary administration of loan projects of foreign governments (except for the loan projects of the Japanese Government) shall be governed by these Rules.

Article 3

The Ministry of Finance shall be responsible for timely announcing the information about loans of foreign governments, publicizing such information as the scale, field, loan conditions, procurement conditions of the official loans for development provided to China by foreign governments. As to any particular requirement of a foreign party, the Ministry of Finance shall timely inform the related department.

Article 4

A project entity that plans to use any loan of the foreign government shall apply for being incorporated into the project planning prepared for loans of foreign governments to the provincial department of development and reform through the local department of development and reform where the project is located, and a copy shall be reported to the local department of public finance as well. The related departments of the State Council, enterprises directly under the central authorities and enterprise groups specifically designated in the state plan (hereinafter referred to as the "central project entities") may directly apply to the National development and Reform Commission for the incorporation into the project planning prepared for loans of foreign governments, and a copy shall be made to the Ministry of Finance as well.

Article 5

Where the provincial administrative department of development and reform receives a project entity's application, it shall solicit for the opinion of the provincial administrative department of public finance. After the application passes the preliminary examination conducted by both of the above-mentioned departments on the basis of their respective functions and duties, the provincial administrative department of development and reform shall apply for the incorporation into the project planning prepared for foreign governments' loans to the National Development and Reform Commission, and a copy shall be made and submitted to the provincial administrative department of finance as well.

Article 6

The National Development and Reform Commission shall carry out an examination on the project planning s prepared for loans of foreign governments reported by the provincial administrative department of development and reform and central project entities, distribute, on a quarterly basis, the project planning prepared for loans of foreign governments to the provincial administrative department of development and reform and related central project entities, set the external debt scale and make a copy for the Ministry of Finance. The provincial administrative department of development and reform shall inform the project entities and the related provincial administrative department of finance of the project planning prepared for loans of foreign governments. The valid term of the projects that have been included in the project planning prepared for loans of foreign governments' is 1 year as of the day of distribution. In case any project fails to get the incorporation into a checklist of projects prepared for loans of foreign governments (hereinafter referred to as the "checklist of prepared projects"), the project shall be deleted from the project planning prepared for loans of foreign governments automatically.

Article 7

where a project has been incorporated into the prepared project planning, the local project entity shall apply for the utilization of loans of foreign governments through the local administrative department of public finance, and a copy shall be made and submitted to the local administrative department of development and reform as well. The provincial administrative department of public finance shall carry out an appraisal on the project application. If a project has passed the appraisal, the provincial administrative department of public finance shall report the application for the utilization of loans of foreign governments to the Ministry of Finance, which shall be simultaneously submitted to the administrative department of development and reform as well. A central project entity may directly file an application with the Ministry of Finance for the utilization of loans of foreign governments to the Ministry of Finance, which shall be submitted to the National Development and Reform Commission concurrently as well.

Article 8

After receiving an application from the provincial administrative department of finance and a central project entity, the Ministry of Finance shall carry out an examination on the basis of the requirements for the project field of the loan country as well as applicable quota of the loan, and incorporate the projects that meet all the requirements into the checklist of prepared projects. The Ministry of Finance shall, on a quarterly basis, distribute a checklist of prepared projects to the provincial administrative departments of finance, central project entities and re-loaning banks, and submit the checklist of prepared projects to the National Development and Reform Commission The provincial administrative department of public finance shall, at the same time, submit the checklist of prepared projects to the provincial administrative department of development. The valid term of any project that has been incorporated into the checklist of prepared projects, is 1 year as of the day of distribution. The project shall be deleted from the checklist of prepared projects automatically if the formalities for examination and approval, verification or archival filing of any project fail to be concluded within 1 year.

Article 9

After receiving the checklist of prepared projects from the Ministry of Finance, the provincial administrative department of finance and central project entities shall organize, guide or supervise the borrower in its designating the related purchasing agent company, and re-loaning bank to carry out the preliminary re-loaning work. in light with the relevant provisions of the Ministry of Finance on the bidding of procurement proxy companies of loan projects of foreign governments

Article 10

In case a project has been incorporated into the checklist of prepared projects, the related project entity shall handle the formalities for examination and approval, verification and archival files with the state or provincial administrative department of development and reform in light of the related procedures. The provincial administrative department of development and reform shall, submit the project approval documents to the Financial Department of the Ministry of Finance and the provincial administrative department of public finance. The National Development and Reform Commission shall submit the project approval documents to the Ministry of Finance.

Article 11

In case a project has been incorporated into the checklist of prepared projects and has concluded the formalities for examination and approval, verification and archival filing with the department of development and reform, the Ministry of Finance shall submit it to the related foreign government and loaning institution at an appropriate time and shall inform the provincial administrative department of public finance and the related central project entity of the feedback opinions of examination or appraisal on the related project, which shall be simultaneously submitted to the National Development and Reform Commission as well. The provincial administrative department of public finance shall submit the related opinions to the provincial administrative department of development and reform at the same time.

Article 12

In case a project that the Ministry of Finance has raised to a foreign government and if the foreign government has no different opinion, the local project entity shall report to the National Development and Reform Commission about the application for project funds through the provincial administrative department of development and reform. An application report on project funds shall be submitted to the National Development and Reform Commission by a central project entity.

Where the State Council or the National Development and Reform Commission carries out examination and approval on the feasibility report of projects, the related application for project funds need not be examined and approved separately.

Article 13

After an application report on project funds has been examined and approved, The National Development and Reform Commission shall make a reply to it and submit it to the Ministry of Finance, for which the provincial administrative department of development and reform shall circulate it to the provincial administrative department of public finance. The valid term of an application report of project funds shall be 2 years as of the day of approval. The approval document shall be invalidated automatically if no re-loaning agreement is signed within 2 years.

Article 14

After the approval of an application report on project funds or any feasibility research report that has been examined and approved by the State Council or the National Development and Reform Commission, the project entity or purchasing agent company shall, in accordance with the approval contents as well as the specific requirements put forward by the foreign government in the project appraisal, carry out related bidding and purchase procurement in accordance with the related rules, bylaws and work procedures of loans of foreign governments. The re-loaning bank shall conclude the loan agreement and sign a re-loaning agreement with the borrower in accordance with the related provisions. In case any project for which the provincial administrative department of public finance makes repayment or offers a guaranty, the related formalities for the re-loaning agreement shall be handled upon the confirmation of the debts or guaranty liabilities by the provincial administrative department of public finance.

Article 15

Before a re-loaning agreement enters into force, in the case of any project alteration, the relevant formalities shall be handled respectively under the following circumstances:

(1)

In case a project entity is split up, merged or acquired or the project is carried out by any other entity, the reply documents related to the project that has been listed into the project planning prepared for loans of foreign governments shall be invalidated automatically. The project entity shall, upon alteration and under the provisions of these Work Rules, handle the related formalities again.

(2)

In case a project has been listed into the project planning prepared for loans of foreign governments, the adjustment plan shall be reported to the National Development and Reform Commission for approval where the scale of external debts is expanded or the purpose of use of capital is adjusted. As to any project that has been listed into the project planning prepared for loans of foreign governments, where the project category , the loaning country, re-loaning bank or the loan amount is adjusted, it shall be examined and approved by the provincial administrative department of public finance and thereafter, the adjustment plan shall be submitted to the Ministry of Finance for approval;

(3)

In case an application report of project funds is approved yet if the loaning country is changed, any expansion of the external debt or any alteration of the purpose of capital use, the adjustment plan shall be reported to the National Development and Reform Commission for approval under the procedures as prescribed herein and shall be reported to the Ministry of Finance through the provincial administrative department of finance and the related formalities shall be handled after being approved by the Ministry of Finance.

In case a central project entity goes through any of the above-mentioned alteration, it shall file an application with the National Development and Reform Commission and the Ministry of Finance for handling the related formalities.

Article 16

These Work Rules shall be carried out as of November 9, 2006.