(Approved by the State Council on September 2, 1997 and promulgated by Decree No. 2 of the Ministry of Foreign Trade and Economic Cooperation and the State Administration for Industry and Commerce on September 29, 1997)

In order to strengthen the administration of investment contributions made by investors of foreign investment enterprises (including those foreign investment enterprises established by purchasing assets or stocks of internal enterprises), these Supplementary Provisions are hereby formulated as follows to the Several Provisions Concerning the Investment Made by the Various Parties to Chinese-foreign Equity Joint Ventures.

1. Any foreign investor who establishes a foreign investment enterprise by purchasing assets or stocks of an internal enterprise(s) shall pay fully purchasing charges within three months as of the date the business licence of the said foreign investment enterprise is issued. If extension of payment is required due to special circumstances, after approved by the examining and approving authorities, more than 60% of the total amount of the purchasing charges shall be paid within six months as of the date the business licence is issued, and within one year the total amount shall be paid up; the distribution of profit shall be made in proportion as the actual payment of investment contributions. Unless the total amount of the purchasing charges has been paid up, any holding investor may not have the enterprise¡¦s decision-making power, nor he may in the form of a combination statement incorporate rights and interests or assets of the said enterprise into his accounting statement.

2. Investors in a Chinese-foreign equity joint venture must simultaneously pay up their respective investment contributions according to the percentage and deadline stipulated in the contract. If any of them cannot do so, the case shall be reported to the original examining and approving authorities for approval and the distribution of profit be made according to the percentage of the actual payment of his investment contributions. With regard to the holding (including relatively holding) investor in a Chinese-foreign equity joint venture, before the actual payment of his investment contributions attains his total amount of his subscribed payment, he shall not obtain the enterprise's decision-making power, nor he can in the form of a combination statement incorporate rights and interests or assets of the said enterprise into his accounting statement.

3. Chinese-foreign contractual joint ventures and solely foreign invested enterprises shall be handled with reference with these Provisions.