Laws of the People's Republic of China

(1) International financial institutions' loans: mean loans provided by International Monetary Fund, the World Bank, Asia Development Bank, UN Agricultural Development Foundation and other international or regional financial institutions;

(2) Foreign government loans: mean official aid loans provided by foreign governments;

(3) Foreign banks and non-banking financial institutions' loans: mean loans provided by banks, banking groups and other non-banking financial institutions outside China's territory;

(4) Buyer's credit: means loans provided by foreing banks through issuing export credit to Chinese importers or banks for purchasing equipment from foreign exporters;

(5) Foreign enterprises' loans: mean loans provided non-financial institutions abroad;

(6) Issuance of foreign currency bonds: means bonds with par value foreign currency issued at the money market abroad by domestic institutions;

(7) International financial leasing: means financial leasing provided by foreign leasing companies for domestic institutions;

(8) Deferred payment: means financing provided by foreign exporter for Chinese importer that enables Chinese importer to pay three months after the goods entered into China's territory;

(9) Debts to be repaid directly with foreign exchange through compensation trade: mean the debts that have to be repaid in foreign currency as stipulated in compensation trade agreement, or that have to be repaid in foreign currency instead of in goods upon approval. This includes the debts to be repaid with foreign exchange earnings generated from exports.

a. foreign currency deposited by foreign institutions or individuals at domestic financial institutions;

b. loans provided by foreign banks or Sino-foreign joint venture banks located in China for domestic enterprises including foreign invstment enterprises.

1. the debts that has been transferred home by various means by institutions that are registered outside China's territory and have to be repaid by domestic institutions;

2. foreign debts owed by Chinese institutions resided abroad that are not registered outside China's territory;

3. loans borrowed by foreign investent enterprises in the names of foreign partners for capital or equipment input rather than equity contribution and that have to be repaid by the enterprises under the contracts between the foreign partners and the enterprises or under other documents with legal binding force;

4. the guarantees provided by Chinese parties for the debts owed by foreign parties and have to be repaid by Chinese parties;

5. the debts owed by wholly foreign-owned enterprises to their parent companies.

(1) The borrowing unit shall go, within 15 days as of the signing of the agreement on the first loan, through the procedures of registration at the local department of foreign exchange control and obtain a card for regular registration of foreign debt (hereinafter referred to as "registration card").

(2) When changes occur in the newly signed loan agreement or drawing money from the borrowed funds and repayment of the debts, the borrowing unit shall fill in the "Foreign Debt Contract Information Form" and "Foreign Debt Change Feedback Form" (hereinafter referred to as "feedback form") separately on a month-by-month basis, and report to the registration department in the last five days of each month;

(3) When the borrowing unit needs to open a foreign exchange account, it shall, on the strength of the registration card and the document of approval for opening a bank account issued by the registration department, go to through the procedures for opening special account for foreign debts (hereinafter referred to as "special account") at the designated opening bank (hereinafter referred to as "opening bank") and send the note of acknowledgement to the registration department the next day.

(1) Within 15 days as of the signing of the loan agreement, the borrowing unit shal, on the strength of the copy of the loan agreement and document of approval for borrowing foreign loan (foreign investment enterprises do not need the document of approval), go through the procedures for registration at the registration department and obtain a card for registration by each transaction.

(2) When the loan transferred home, the borrowing unit shall, on the strength of the notice of remittance and the registration card, go through the procedures for opening a special account and entering into the account at the opening bank.

(3) When the debts are due and shall be repaid with interest, the borrowing unit shall, on the strength of the registration card and the notice of payback with interest, go to the registration department in advance to obtain the document of approval for payback with interest. After then, the borrowing unit shall, on the strength of the document of approval and the registration card, go through the procedures for payback with interest from the special account at the opening bank.

(4) After going through the procedures for receipt, payment and opening an account, the borrowing unit shall, based on the receipt and payment certificate issued by the opening bank, fill in the feedback form and send it together with a xeroxed copy of the deposit certificate to the registration department the next day.

(5) The unit that borrows spot exchange not transferred home and calls for remittance abroad of the principal with interest (herein referred to as "the non-transferred home debt") shall fill in the feedback form after the debt occurred and send the xeroxed copy of the feedback form to the registration department the next day. When the debts are due and must be repaid with interest, the borrowing unit shall, on the strength of the document of endorsement issued by the registration department, go to the opening bank for opening a special foreign exchange account for repayment of foreign debts with interest (hereinafter referred to as "special account for payback with interest") and go through the procedures for remittance abroad the borrowed money with interest.

(6) The domestic unit that deposit loans abroad upon approval by the State Administration of Foreign Exchange Control and its branches shall report monthly changes of deposits through the feedback form to the original registration department.

(7) The domestic units that borrow money from foreign-owned banks or Sino-foreign joint venture banks resided in China do not need to open another account, but the borrowing units must go through the procedures for registration and forward the feedback form in accordance with the relevant regulations.

(8) If the borrowing unit that obtains the registration card in its locality needs to open an account and repay the loan with interest at a bank in another locality, it shall, on the strength of the registration card issued by the registration department in the original locality, go through the procedures for endorsement of payback with interest at the registration department in another locality, and the opening bank shall send the xeroxed copy of the document of payment to the original registration department three days after the clearance of the procedures.

(1) The domestic banks that are approved to handle foreign exchange;

(2) The banks that are able to help the registration department fulfill the task of supervising and monitoring foreign debts;

(3) The opening banks designated by the Sate Administration of Foreign Exchange Control and its brancches according to the needs of business.

(1) Supervise the use of account and ensure that foreign exchange funds entered into the special account and the special account for payback with interest are confined to the amount of funds as stated on the registration card; the foreign exchange funds transferred or deposited from other accounts are limited to use as the payment of equipment, labor and payback with interest as required by borrowing project and other uses as approved by the registration department.

(2) Go through the procedures for transfer and payment of the debts on the strength of the registration card and document of approval and, after the procedures are fulfilled, send the receipt and payment certificate to the registration department the next day as required.

(3) Supervise and ensure that all foreign debts registered by each transaction go through the special account and the special account for payback with interest when they are transferred home and repaid with interest.

(1) Intentionally not to go through the procedures for registration of foreign debts or delay in doing so;

(2) Refuse to send the feedback form to the department of foreign exchange, conceal or give false information in the feedback form or delay in sending this form twice;

(3) Forge and alter the registration card;

(4) Open or retain the special account and the special account for payback with interest without authority, and the foreign debts are repaid not through these two accounts. For these cases both the borrower and the opening bank shall be fined.