Company: CAAS
Filing Date: 2025-08-04
Form Type: 424B3
Source: 0001104659-25-073486
Chunk: 87

Company: China Automotive Systems, Inc.
Filing Date: 2025-08-04
Form: 424B3
Chunk 87
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 the SAFE Circular 13, when setting up a
new FIE, investors should register with banks for direct domestic investment and direct overseas investment.

Loans by the Foreign Companies to Their PRC Subsidiaries

A loan made by foreign investors as shareholders
in an FIE is considered foreign debt in China and is regulated by various laws and regulations, including the PRC Regulation on Foreign
Exchange Administration, the Interim Provisions on the Management of Foreign Debts, the Statistical Monitoring of Foreign Debt Tentative
Provisions, the Detailed Rules for the Implementation of Provisional Regulations on Statistics and Supervision of Foreign Debt,
and the Administrative Measures for Registration of Foreign Debt. Under these rules and regulations, a shareholder loan in the form
of foreign debt made to a PRC entity does not require the prior approval of SAFE. However, such foreign debt must be registered with
and recorded by SAFE or its local branches within fifteen business days after entering into the foreign debt contract. Pursuant to these
rules and regulations, the balance of the foreign debts of an FIE cannot exceed the difference between the total investment and
the registered capital of the FIE.

On January 12, 2017, the PBOC promulgated
the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing,
or PBOC Notice No. 9. Pursuant to PBOC Notice No. 9, within a transition period of one year from January 12, 2017, FIEs
may adopt the currently valid foreign debt management mechanism, or the mechanism as provided in PBOC Notice No. 9, at their own
discretions. PBOC Notice No. 9 provides that enterprises may conduct independent cross-border financing in Renminbi or foreign currencies
as required. Pursuant to PBOC Notice No. 9, the outstanding cross-border financing of an enterprise (the outstanding balance drawn,
here and below) will be calculated using a risk-weighted approach and cannot exceed certain specified upper limits. PBOC Notice No. 9
further provides that the upper limit of risk-weighted outstanding cross-border financing for an enterprise is 200% of its net assets,
or the Net Asset Limits. Enterprises must file with SAFE in its capital item information system after entering into the relevant cross-border
financing contracts and prior to three business days before drawing any money from the foreign debts.

Based on