Company: CAAS
Filing Date: 2025-07-25
Form Type: F-4/A
Source: 0001104659-25-070492
Chunk: 88

Company: China Automotive Systems, Inc.
Filing Date: 2025-07-25
Form: F-4/A
Chunk 88
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. 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 the foregoing, if we provide funding to
our wholly or majority foreign-owned subsidiaries through shareholder loans, the balance of such loans (i) cannot exceed the difference
between the total investment and the registered capital of the subsidiaries and we will need to register such loans with SAFE or its local
branches in the event that the currently valid foreign debt management mechanism applies, or (ii) will be subject to the risk-weighted
approach and the Net Asset Limits and we will need to file the loans with SAFE in its information system in the event that the mechanism
as provided in PBOC Notice No. 9 applies. Pursuant to PBOC Notice No. 9, after a transition period of one year from January 11,
2017, the PBOC and SAFE would determine the cross-border financing administration mechanism for the FIEs after evaluating the overall
implementation of PBOC Notice No. 9. As of the date hereof, neither the PBOC nor SAFE has promulgated and made public any further
rules, regulations, notices, or circulars in this regard. It is uncertain which mechanism will be adopted by the PBOC and SAFE in the
future and what statutory limits will be imposed on us when providing loans to our PRC Subsidiaries.

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Offshore Investment

Under the Circular on Relevant Issues Concerning
Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose
Vehicles, or SAFE Circular 37, effective on July 4, 2014, PRC residents are required to register with the local SAFE branch prior
to the establishment or control of an offshore special purpose vehicle, which is defined