<PAGE>
                                                                     Exhibit 4.2


                                                    [LINKLATERS & ALLIANCE LOGO]



--------------------------------------------------------------------------------




                                Dated 16 May 2002



                      CHINA MOBILE HONG KONG (BVI) LIMITED



                        CHINA MOBILE (HONG KONG) LIMITED



                     CHINA MOBILE COMMUNICATIONS CORPORATION








                          CONDITIONAL SALE AND PURCHASE
                                    AGREEMENT









                                                  LINKLATERS
                                                  10th Floor, Alexandra House
                                                  16-20 Chater Road
                                                  Hong Kong

                                                  Telephone: (852) 2842 4888
                                                  Facsimile: (852) 2810 8133

                                                  Ref: CCLL/CLLW/05380105301
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
CONTENTS                                                                 PAGE
<S>  <C>                                                                 <C>
1    INTERPRETATION                                                        2

2    SALE OF THE TARGET BVI SHARES AND PRICE                               8

3    CONDITIONS PRECEDENT                                                 12

4    PRE-COMPLETION UNDERTAKINGS                                          13

5    COMPLETION                                                           14

6    POST-COMPLETION UNDERTAKINGS                                         17

7    WARRANTIES                                                           17

8    LIMITATIONS ON CLAIMS                                                18

9    PURCHASER'S RIGHTS TO RESCISSION                                     18

10   WITHHOLDING TAX AND GROSSING UP                                      18

11   ENTIRE AGREEMENT                                                     19

12   VARIATION                                                            19

13   ASSIGNMENT                                                           19

14   ANNOUNCEMENTS                                                        19

15   COSTS                                                                20

16   CONFIDENTIALITY                                                      20

17   SEVERABILITY                                                         20

18   COUNTERPARTS                                                         20

19   WAIVER                                                               20

20   FURTHER ASSURANCE                                                    21

21   NOTICES                                                              21

22   GOVERNING LAW AND JURISDICTION                                       22

SCHEDULE 1 PART A  Details of the Target BVI Companies                    23
</TABLE>

                                      - i -
<PAGE>
<TABLE>
<CAPTION>
CONTENTS                                                                 PAGE
<S>  <C>                                                                 <C>
PART B  Details of the Target Companies                                   31

SCHEDULE 2 THE WARRANTIES Part A: General                                 39

Part B: Tax and Property Warranties                                       52

APPENDIX 1 Connected Transactions                                         54

APPENDIX 2 The Restructuring Agreements                                   56

APPENDIX 3 Form of Tax Indemnity                                          58

SIGNATURE PAGE                                                            64
</TABLE>

                                     - ii -
<PAGE>
THIS AGREEMENT is made on 16 May 2002

BETWEEN:

(1)   CHINA MOBILE HONG KONG (BVI) LIMITED a company incorporated under the laws
      of the British Virgin Islands whose registered office is at P.O. Box 957,
      Offshore Incorporation Centre, Road Town, Tortola, British Virgin Islands
      (the "VENDOR");

(2)   CHINA MOBILE (HONG KONG) LIMITED a company incorporated under the laws of
      Hong Kong whose registered office is at 60th Floor, The Center, 99 Queen's
      Road Central, Hong Kong, PRC (the "PURCHASER"); and

(3)   CHINA MOBILE COMMUNICATIONS CORPORATION a company incorporated under the
      laws of the PRC whose registered office is at 53A Xibianmennei Dajie,
      Xuanwuqu, Beijing, PRC (the "WARRANTOR").

WHEREAS:

(A)   Each of Anhui Mobile BVI, Jiangxi Mobile BVI, Chongqing Mobile BVI,
      Sichuan Mobile BVI, Hubei Mobile BVI, Hunan Mobile BVI, Shaanxi Mobile BVI
      and Shanxi Mobile BVI (each, as defined below and, together, the "TARGET
      BVI COMPANIES") is a private company limited by shares incorporated on
      10 May 2002 in the British Virgin Islands. Anhui Mobile BVI, Jiangxi
      Mobile BVI, Chongqing Mobile BVI, Sichuan Mobile BVI, Hubei Mobile BVI,
      Hunan Mobile BVI, Shaanxi Mobile BVI and Shanxi Mobile BVI are or will be
      the sole beneficial owners of Anhui Mobile, Jiangxi Mobile, Chongqing
      Mobile, Sichuan Mobile, Hubei Mobile, Hunan Mobile, Shaanxi Mobile and
      Shanxi Mobile (each as defined below), respectively.

(B)   The Vendor is the sole legal and beneficial owner of the entire issued
      share capital of each of the Target BVI Companies.

(C)   The Warrantor has effected certain reorganisations in relation to the
      mobile communications assets and businesses in each of Anhui, Jiangxi,
      Chongqing, Sichuan, Hubei, Hunan, Shaanxi and Shanxi, and each of the
      Target Companies (as defined below) became or will become a wholly-owned
      subsidiary of Anhui Mobile BVI, Jiangxi Mobile BVI, Chongqing Mobile BVI,
      Sichuan Mobile BVI, Hubei Mobile BVI, Hunan Mobile BVI, Shaanxi Mobile BVI
      and Shanxi Mobile BVI, respectively, through a series of transfers
      pursuant to a Transfer of Interests Agreement dated 15 May 2002 (the
      "REORGANISATION").

(D)   The Vendor has agreed to sell the entire issued share capital of each of
      the Target BVI Companies to the Purchaser for the consideration and upon
      the terms and conditions set out in this Agreement.

(E)   The Vendor and the Warrantor have agreed to make certain representations,
      warranties and undertakings in relation to the Target Companies Group (as
      defined below).

IT IS AGREED as follows:


1    INTERPRETATION

     1.1  In this Agreement, the following expressions shall have the following
          meanings:

          "ACCOUNTS" means in relation to the Target Companies:

          (a)  the combined audited balance sheets of the Target Companies as of
               the relevant Accounts Date in respect of that financial period;
               and

                                     - 2 -
<PAGE>
          (b)  the combined statements of income, owner's equity and cash flows
               of the Target Companies for the financial period ended on the
               relevant Accounts Date,

          together with any notes, reports or statements included in or annexed
          to them;

          "ACCOUNTS DATE" means 31 December 1999, 2000 or 2001, as the case may
          be;

          "ANHUI MOBILE" means [Company name in Chinese] (Anhui Mobile
          Communication Company Limited), a company established on 30 January
          2002 under the laws of the PRC;

          "ANHUI MOBILE BVI" means Anhui Mobile (BVI) Limited, a company
          incorporated in the British Virgin Islands;

          "APPRAISAL REPORT" means the appraisal report prepared by PRC
          appraisers in respect of the Target Companies;

          "BUSINESS DAY" means a day (excluding Saturdays) on which banks
          generally are open in Hong Kong and the PRC for the transaction of
          normal banking business;

          "CHINESE DEPOSITARY RECEIPTS" means transferable depositary receipts
          each representing a specified number of Shares which may be issued by
          the Purchaser to the public in the PRC and may be listed on a
          recognised stock exchange in the PRC;

          "CHONGQING MOBILE" means [Company name in Chinese] (Chongqing Mobile
          Communication Company Limited), a company established on 7 February
          2002 under the laws of the PRC;

          "CHONGQING MOBILE BVI" means Chongqing Mobile (BVI) Limited, a company
          incorporated in the British Virgin Islands;

          "CIRCULAR" means the shareholders' circular to be issued by the
          Company to its shareholders and containing, among other things, the
          details of the acquisition contemplated under this Agreement;

          "CLAIM" means any claim for breach of a Warranty;

          "COMPANIES ORDINANCE" means the Companies Ordinance, Chapter 32 of the
          Laws of Hong Kong;

          "COMPLETION" means completion of the sale and purchase of the Target
          BVI Shares under this Agreement pursuant to clause 5;

          "CONDITIONS PRECEDENT" means the conditions specified in clause 3.1;

          "CONNECTED TRANSACTIONS" means those transactions effected pursuant to
          the operating agreements as listed in Appendix 1;

          "CONSIDERATION SHARES" means the new Shares to be issued and allotted
          to the Vendor in accordance with Clause 2.2.1(b);

          "CONVERTIBLE NOTES" means the US$690 million convertible notes due
          2005 issued by the Purchaser in November 2000;

          "COSTS" means liabilities, losses, damages, costs (including legal
          costs) and expenses (including taxation), in each case of any nature
          whatsoever;

                                     - 3 -
<PAGE>
          "DEFERRED CONSIDERATION" means US$2,800 million, being the balance of
          the Total Price after payment of the Initial Consideration, which is
          calculated in accordance with Clause 2.2.2;

          "ENCUMBRANCE" means any claim, charge, mortgage, security, lien,
          option, equity, power of sale, hypothecation or third party rights,
          retention of title, right of pre-emption, right of first refusal or
          security interest of any kind;

          "FINANCIAL STATEMENTS" means the combined audited balance sheets of
          the Target Companies as of 31 December 1999, 2000 and 2001, and the
          related combined statements of income, owner's equity and cash flows
          for each of the years in the three-year period ended 31 December 2001;

          "HOLDING COMPANY" shall be construed in accordance with section 2 of
          the Companies Ordinance;

          "HONG KONG" means the Hong Kong Special Administrative Region of the
          PRC;

          "HUBEI MOBILE" means [Company name in Chinese] (Hubei Mobile
          Communication Company Limited), a company established on 1 February
          2002 under the laws of the PRC;

          "HUBEI MOBILE BVI" means Hubei Mobile (BVI) Limited, a company
          incorporated in the British Virgin Islands;

          "HUNAN MOBILE" means [Company name in Chinese] (Hunan Mobile
          Communication Company Limited), a company established on 6 February
          2002 under the laws of the PRC;

          "HUNAN MOBILE BVI" means Hunan Mobile (BVI) Limited, a company
          incorporated in the British Virgin Islands;

          "HK$" or "HK DOLLARS" means Hong Kong dollars, the lawful currency of
          Hong Kong;

          "INDEBTEDNESS" means any indebtedness in respect of all obligations to
          repay borrowed money, all indebtedness evidenced by notes, bonds, loan
          stock, debentures or similar obligations, acceptances or documentary
          credit facilities, all rental obligations under finance leases, and
          hire purchase contracts, any other transaction having the commercial
          effect of a borrowing or raising of money, the net amount of any
          liability under any swap, hedging or other similar treasury
          instrument, and all guarantees, sureties, indemnities,
          counter-indemnities or letters of comfort of obligations of others of
          the foregoing types;

          "INDEPENDENT SHAREHOLDERS" means the holders of shares in the
          Purchaser other than the Vendor and its Associates (as defined in the
          Listing Rules);

          "INITIAL CONSIDERATION" means such part of the Total Price to be paid
          by the Purchaser to the Vendor on Completion in accordance with Clause
          2.2.1;

          "INTELLECTUAL PROPERTY RIGHTS" means patents, trade marks, service
          marks, trade names, design rights, copyright (including rights in
          computer software), rights in know-how and other intellectual property
          rights, in each case whether registered or unregistered and including
          applications for the grant of any such rights and all rights or forms
          of protection having equivalent or similar effect anywhere in the
          world;

                                     - 4 -
<PAGE>
          "INTRA-GROUP GUARANTEES" means all guarantees, indemnities,
          counter-indemnities and letters of comfort of any nature whatsoever
          (a) given to any third party by any member of the Target Companies
          Group in respect of a liability of any Vendor Group Company, and/or
          (as the context may require) (b) given to any third party by any
          Vendor Group Company in respect of a liability of any member of the
          Target Companies Group;

          "INTRA-GROUP LOANS" means all debts outstanding between any member of
          the Target Companies Group and any Vendor Group Company;

          "JIANGXI MOBILE" means [Company name in Chinese] (Jiangxi Mobile
          Communication Company Limited), a company established on 31 January
          2002 under the laws of the PRC;

          "JIANGXI MOBILE BVI" means Jiangxi Mobile (BVI) Limited, a company
          incorporated in the British Virgin Islands;

          "LAST ACCOUNTS" means the Accounts of the Target Companies in respect
          of the financial period ended on the Last Accounts Date;

          "LAST ACCOUNTS DATE" means 31 December 2001;

          "LISTING RULES" means the Rules Governing the Listing of Securities on
          The Stock Exchange of Hong Kong Limited;

          "NOTES" means the US$600 million 7 7/8% notes due 2004 issued by the
          Purchaser in November 1999;

          "PRC" means the People's Republic of China;

          "PRC RELEVANT GOVERNMENTAL APPROVALS" means the approvals, consents
          and authorisations from all relevant regulatory authorities in the PRC
          including, but not limited to, the State Council, the State
          Development Planning Commission, the Ministry of Information Industry,
          the Ministry of Foreign Trade and Economic Cooperation, the Ministry
          of Finance, the Ministry of Land and Resources and the China
          Securities Regulatory Commission, which are necessary to effect the
          transactions contemplated by the Restructuring Agreements and this
          Agreement;

          "PROPERTIES" means the properties and land use rights stated in the
          Property Legal Opinions that are owned by the Target Companies;

          "PROPERTY LEGAL OPINIONS" means the legal opinions to be issued by
          Haiwen & Partners, PRC counsel for the purposes of the acquisition
          contemplated hereunder in relation to the properties and land use
          rights owned by the Target Companies;

          "RESTRUCTURING AGREEMENTS" means the agreements listed in Appendix 2
          pursuant to which the Warrantor transferred its business, assets and
          liabilities related to mobile communication services in Anhui, Hunan,
          Hubei, Jiangxi, Sichuan, Chongqing, Shaanxi and Shanxi to the
          respective Target Companies;

          "RMB" means Renminbi, the lawful currency of the PRC;

          "SCHEDULES" means Schedules 1 and 2 to this Agreement and Schedule
          shall be construed accordingly;

                                     - 5 -
<PAGE>
          "SHAANXI MOBILE" means [Company Name in Chinese] (Shaanxi Mobile
          Communication Company Limited), a company established on 3 February
          2002 under the laws of the PRC;

          "SHAANXI MOBILE BVI" means Shaanxi Mobile (BVI) Limited, a company
          incorporated in the British Virgin Islands;

          "SHANXI MOBILE" means [Company Name in Chinese] (Shanxi Mobile
          Communication Company Limited), a company established on 4 February
          2002 under the laws of the PRC;

          "SHANXI MOBILE BVI" means Shanxi Mobile Communication (BVI) Limited, a
          company incorporated in the British Virgin Islands;

          "SHARES" means ordinary shares of par value HK$0.10 each in the share
          capital of the Purchaser;

          "SICHUAN MOBILE" means [Company Name in Chinese] (Sichuan Mobile
          Communication Company Limited), a company established on 4 February
          2002 under the laws of the PRC;

          "SICHUAN MOBILE BVI" means Sichuan Mobile (BVI) Limited, a company
          incorporated in the British Virgin Islands;

          "SUBSIDIARY" and "SUBSIDIARIES" shall be construed in accordance with
          section 2 of the Companies Ordinance;

          "TARGET BVI COMPANIES" means Anhui Mobile BVI, Jiangxi Mobile BVI,
          Chongqing Mobile BVI, Sichuan Mobile BVI, Hubei Mobile BVI, Hunan
          Mobile BVI, Shaanxi Mobile BVI and Shanxi Mobile BVI, details of each
          of which are set out in Part A of Schedule 1;

          "TARGET BVI SHARES" means all the issued shares in the capital of each
          of the Target BVI Companies;

          "TARGET COMPANIES" means Anhui Mobile, Jiangxi Mobile, Chongqing
          Mobile, Sichuan Mobile, Hubei Mobile, Hunan Mobile, Shaanxi Mobile and
          Shanxi Mobile, details of each of which are set out in Part B of
          Schedule 1, and shall, in each case if the context so requires,
          include any predecessor entity or person carrying on the business of
          such Target Company, whether before or after the Reorganisation;

          "TARGET COMPANIES GROUP" means the Target BVI Companies and the Target
          Companies;

          "TAX INDEMNITY" means the Tax Indemnity to be entered into by the
          Vendor and the Warrantor in favour of the Purchaser on Completion, in
          the agreed form set out in Appendix 3;

          "TAX WARRANTIES" means the warranties set out in paragraphs 1.1 to 1.9
          in Part B of Schedule 2;

          "TOTAL PRICE" means US$8,573 million, being the total price payable by
          the Purchaser to the Vendor for the Target BVI Shares;

          "TRADEMARK LICENSING AGREEMENT" means the trademark licensing
          agreement dated 24 April 2002 between, inter alia, the Warrantor and
          the Purchaser;

                                     - 6 -
<PAGE>
          "TRANSFER OF INTERESTS AGREEMENT" means the transfer of interests
          agreement referred to in paragraph 17 of Appendix 2;

          "US$" or "US DOLLARS" means United States dollars, the lawful currency
          of the United States of America;

          "VENDOR GROUP COMPANY" means the Vendor, the Warrantor, any holding
          company from time to time of the Vendor (including the Warrantor) and
          any subsidiary from time to time of the Vendor or any of its holding
          company (but excluding the Purchaser, any of the Purchaser's
          subsidiaries, the Target BVI Companies and the Target Companies); and

          "WARRANTIES" means the representations and warranties set out in
          Schedule 2.


1.2  In this Agreement, unless the context otherwise requires:

     (a)  references to persons shall include individuals, bodies corporate
          (wherever incorporated), unincorporated associations and partnerships;

     (b)  the headings are inserted for convenience only and shall not affect
          the construction of this Agreement;

     (c)  references to one gender include all genders;

     (d)  any reference to an enactment or statutory provision is a reference to
          it as it may have been, or may from time to time be, amended,
          modified, consolidated or re-enacted;

     (e)  any statement qualified by the expression "to the best knowledge of
          the Vendor and the Warrantor" or "so far as the Vendor and the
          Warrantor are aware" or any similar expression shall be deemed to
          include an additional statement that it has been made after due and
          careful enquiry and shall be deemed also to include the best of the
          knowledge of each Vendor Group Company;

     (f)  any reference to a document in the agreed form is to the form of the
          relevant document agreed between the parties and for the purpose of
          identification initialled by each of them or on their behalf (in each
          case with such amendments as may be agreed by or on behalf of the
          Vendor and the Purchaser); and

     (g)  references to any Hong Kong legal term for any action, remedy, method
          of judicial proceeding, legal document, legal status, court, official
          or any other legal concept shall, in respect of any jurisdiction other
          than Hong Kong, be deemed to include the legal concept which most
          nearly approximates in that jurisdiction to the Hong Kong legal term.

1.3  The Schedules and Appendices comprise schedules and appendices to this
     Agreement and form part of this Agreement.

                                     - 7 -
<PAGE>
2    SALE OF THE TARGET BVI SHARES AND PRICE

     2.1  The Vendor agrees to sell as legal and beneficial owner, and the
          Purchaser agrees to purchase, the Target BVI Shares. The Target BVI
          Shares shall be sold free from all Encumbrances, together with all
          rights attaching to them.

     2.2  The consideration for the purchase of the Target BVI Shares shall be
          the Total Price of US$8,573 million, which shall be satisfied by the
          payment of the Initial Consideration and the Deferred Consideration by
          the Purchaser in accordance with clauses 2.2.1 and 2.2.2 respectively.

          2.2.1  On Completion, the Purchaser shall pay to the Vendor the
                 Initial Consideration of US$5,773 million, comprising:-

                 (a)  US$3,150 million payable in cash, in Hong Kong dollars,
                      Renminbi or US dollars or a combination of the above
                      currencies as the Purchaser may in its absolute discretion
                      determine (where payment is made in Hong Kong dollars, the
                      amount paid shall be determined using the exchange rate of
                      US$1.00 to HK$7.7993 (being the exchange rate prevailing
                      at 12:00 noon (New York City time) on the day which is two
                      Business Days immediately prior to the date of this
                      Agreement (the "US$/HK$ EXCHANGE RATE")); where payment is
                      made in Renminbi, the amount paid shall be determined
                      using the exchange rate of US$1.00 to RMB8.2770 (being the
                      exchange rate prevailing at 12:00 noon (New York City
                      time) on the day which is two Business Days immediately
                      prior to the date of this Agreement (the "US$/RMB EXCHANGE
                      RATE")); and

                 (b)  US$2,623 million (the "SHARE CONSIDERATION") to be
                      satisfied by the allotment by the Purchaser to the Vendor
                      of such number of Shares, credited as fully paid,
                      calculated by dividing the Share Consideration by the
                      Consideration Share Price calculated as follows, and at
                      the US$/HK$ Exchange Rate set out in clause 2.2.1(a),
                      rounded down to the nearest whole number:

                      (i)   where the Average Daily VWAP is between HK$
                            HK$21.0134 (being 15 per cent. below the initial
                            price) and HK$28.4300 (being 15 per cent. above the
                            initial price), the Consideration Share Price shall
                            be HK$24.7217 (the "INITIAL PRICE"), being the
                            average closing price of the Shares as stated in the
                            daily quotation sheets of The Stock Exchange of Hong
                            Kong Limited for the thirty (30) Trading Days
                            immediately preceding the date of this Agreement;

                      (ii)  where the Average Daily VWAP is above (but not equal
                            to) HK$28.4300, the Consideration Share Price shall
                            be:

<TABLE>
                            <S>         <C>
                                           Average Daily VWAP - HK$24.7217 x 115%
                            HK$24.7217  +  --------------------------------------
                                                             2
</TABLE>

                                     - 8 -
<PAGE>
                             ; or

                      (iii)  where the Average Daily VWAP is below (but not
                             equal to) HK$21.0134, the Consideration Share Price
                             shall be:

<TABLE>
                             <S>         <C>
                                            HK$24.7217 x 85% - Average Daily VWAP
                             HK$24.7217  -  -------------------------------------
                                                              2
</TABLE>

                 For the purposes of this clause 2.2.1(b), the following
                 expressions shall have the following meanings:

                 "AVERAGE DAILY VWAP" means the simple arithmetic average Daily
                 VWAP for the 10 consecutive Trading Days immediately after the
                 date of this Agreement;

                 "DAILY VWAP" means in respect of a Trading Day, the
                 volume-weighted average price (VWAP) for the entire duration of
                 that Trading Day for the Shares as shown on the Bloomberg
                 Screen VOLUME AT PRICE Page as given by the ticker "941 HK
                 Equity VAP" and listed on the VWAP field, up to four decimal
                 places, but if for any reason such price does not so appear, or
                 if such page is unavailable, the VWAP shall be calculated by
                 dividing the turnover of all Shares traded on The Stock
                 Exchange of Hong Kong Limited on the Trading Day by the number
                 of Shares so traded, as shown on the daily quotation sheets of
                 The Stock Exchange of Hong Kong Limited in respect of the
                 Purchaser, up to four decimal places; and

                 "TRADING DAY" means a day on which Shares are generally traded
                 on The Stock Exchange of Hong Kong Limited.

          2.2.2  The Deferred Consideration shall be an amount equivalent to the
                 Total Price after deduction of the following:-

                 (a)  US$3,150 million as stated in clause 2.2.1 (a); and

                 (b)  the Share Consideration of US$2,623 million as stated in
                      clause 2.2.1(b).

     2.3  The Vendor hereby agrees with the Purchaser that the obligation of the
          Purchaser to pay the Deferred Consideration shall be subordinated to
          all payment obligations of the Purchaser under the Senior Debts as
          referred to in clause 2.6, including but not limited to the payment
          obligations of the Purchaser under the Notes and the Convertible
          Notes.

     2.4  Without prejudice to the provisions in clause 2.5, the Vendor and the
          Purchaser agree that the Deferred Consideration or the unpaid portion
          of the Deferred Consideration, together with unpaid accrued interest
          thereon, shall be paid in full by the date falling fifteen (15) years
          after the date of Completion, or if that date falls on a non-Business
          Day, then on the next Business Day.

     2.5

          2.5.1  The Purchaser may determine to make early payment of all or
                 part of the Deferred Consideration if either or both of the
                 following are satisfied:-

                                     - 9 -
<PAGE>
                 (a)  the early payment of the Deferred Consideration is made
                      out of net proceeds from the issue of Chinese Depositary
                      Receipts or RMB denominated bonds; or

                 (b)  the early payment of the Deferred Consideration will not
                      have any significant impact on the Purchaser's ability to
                      repay the principal and interest of any Senior Debts to
                      which the Deferred Consideration is subordinated.

          2.5.2  The Purchaser undertakes to use its reasonable endeavours,
                 subject to market conditions and receiving all necessary
                 regulatory and governmental approvals, to issue Chinese
                 Depositary Receipts and RMB denominated bonds (whether by
                 itself or through its subsidiaries) and agrees to make early
                 payment of the Deferred Consideration up to the amount
                 representing the net proceeds from the issue of the Chinese
                 Depositary Receipts and/or the RMB denominated bonds after such
                 proceeds are received. The Purchaser acknowledges that the
                 Vendor relied on this undertaking by the Purchaser in agreeing
                 to having the Deferred Consideration as part of the Total Price
                 and to the provisions relating to the payment mechanism for the
                 Deferred Consideration and otherwise as set out in clauses 2.3
                 to 2.9.

          2.5.3  Subject to either clause 2.5.1 or clause 2.5.2, the Purchaser
                 may make early payment of all or part of the Deferred
                 Consideration after Completion and in any amount in Hong Kong
                 dollars, Renminbi or US dollars (or other currencies as may be
                 agreed between the Vendor and the Purchaser ("OTHER
                 CURRENCIES")). Where payments are made in Hong Kong dollars,
                 RMB or Other Currencies, the amounts of Deferred Consideration
                 paid shall be determined using the US$/HK$ Exchange Rate or the
                 US$/RMB Exchange Rate as referred to in clause 2.2.1 or the
                 Reference Exchange Rate as referred to in clause 2.6,
                 respectively.

     2.6  For the purposes of clauses 2.3, 2.5, 2.6 and 2.7, the following
          expressions shall have the following meanings:

          "DEFERRED CONSIDERATION INTEREST RATE" means, for the period of the
          first two years commencing on the date of the Completion, 3.801 per
          cent. per annum (being the two-year US$-ISDA LIBOR Swap Rate in
          respect of the Interest Determination Date that falls on a day which
          is two Business Days prior to the date of this Agreement), and for
          each subsequent two-year period the US$-ISDA LIBOR Swap Rate in
          respect of the relevant Interest Determination Date. For the avoidance
          of doubt, if any part of the Deferred Consideration is unpaid after
          the fourteenth anniversary of the date of the Completion, the Deferred
          Consideration Interest Rate for such unpaid portion shall be that in
          respect of the Interest Determination Date that falls on 14 May 2016
          (or if that date falls on a non-Business Day, then on the next
          Business Day) irrespective of the remaining period within which the
          Deferred Consideration must be paid in full in accordance with clause
          2.4;

          "INTEREST DETERMINATION DATE" means each of the following dates (or if
          that date falls on a non-Business Day, then on the next Business Day):
          two Business Days prior to the date of this Agreement being 14 May
          2002, 14 May 2004, 14 May 2006, 14 May 2008, 14 May 2010, 14 May 2012,
          14 May 2014 and 14 May 2016;

                                     - 10 -
<PAGE>
          "INTEREST PAYMENT DATE" means, before the payment of the Deferred
          Consideration and any unpaid accrued interest thereon in full, each of
          the following dates (or if that date falls on a non-Business Day, then
          on the next Business Day): 16 November 2002, 16 May 2003, 16 November
          2003, 16 May 2004, 16 November 2004, 16 May 2005, 16 November 2005, 16
          May 2006, 16 November 2006, 16 May 2007, 16 November 2007, 16 May
          2008, 16 November 2008, 16 May 2009, 16 November 2009, 16 May 2010, 16
          November 2010, 16 May 2011, 16 November 2011, 16 May 2012, 16 November
          2012, 16 May 2013, 16 November 2013, 16 May 2014, 16 November 2014, 16
          May 2015, 16 November 2015, 16 May 2016, 16 November 2016 and 16 May
          2017;

          "REFERENCE EXCHANGE RATE" means the Federal Reserve noon-buying rate
          between US dollars and the relevant Other Currency which is quoted as
          of 12:00 noon (New York City time) on the day which is two Business
          Days immediately prior to the date of this Agreement on the relevant
          page on the website of the Federal Reserve Bank of New York
          (www.ny.frb.org) which displays the exchange rate between US dollars
          and the relevant Other Currency, but if no such exchange rate appears,
          the exchange rate shall be the selling rate between US dollars and the
          relevant Other Currency as quoted by The Hong Kong and Shanghai
          Banking Corporation at or about 12:00 noon (Hong Kong time) on the
          Business Day immediately prior to the date of this Agreement;

          "SENIOR DEBTS" means debts owed or owing by the Purchaser from time to
          time which are not subordinated to other debts owed by the Purchaser;
          and

          "US$-ISDA LIBOR SWAP RATE" means, in respect of an Interest
          Determination Date, the rate which is quoted as of 11:00 a.m. (New
          York City time) on that Interest Determination Date on the Reuters
          Screen ISDAFIX1 Page as being the rate for US dollar swaps with a
          maturity of two years, expressed as a percentage, but if for any
          reason such rate does not so appear, or if such page is unavailable,
          the rate shall be the arithmetic mean (rounded, if necessary upwards,
          to the next 1/16 per cent. per annum) of the respective two-year
          mid-market semi-annual swap rates (as quoted to the Vendor at its
          request) of Goldman Sachs International, Morgan Stanley Dean Witter
          and The Hong Kong and Shanghai Banking Corporation Limited at or about
          11:00 a.m. on that Interest Determination Date.

     2.7  The Purchaser shall pay interest to the Vendor on the Deferred
          Consideration. Interest shall accrue at the Deferred Consideration
          Interest Rate as referred to in clause 2.6 on the unpaid portion of
          the Deferred Consideration from the date of Completion until full
          payment of the Deferred Consideration, and shall be calculated on the
          basis of the actual number of days elapsed. Interest shall be paid on
          each of the Interest Payment Date and on the day on which the Deferred
          Consideration is paid in full. The Purchaser may pay the interest in
          Hong Kong dollars, Renminbi or US dollars as the Purchaser may in its
          absolute discretion determine or in other currencies as may be agreed
          between the Vendor and the Purchaser ("OTHER CURRENCIES"). Where
          payments are made in Hong Kong dollars, Renminbi or Other Currencies,
          the amount of interest payable shall be determined using the US$/HK$
          Exchange Rate or the US$/RMB Exchange Rate as referred to in clause
          2.2.1 or the Reference Exchange Rate as referred to in clause 2.6,
          respectively. No penalty or additional interest shall be payable by
          the Purchaser to the Vendor for early payment of the Deferred
          Consideration at any time after Completion.

                                     - 11 -
<PAGE>
     2.8  If the Purchaser does not pay the Deferred Consideration or any
          accrued interest payable when due under clauses 2.4 and 2.7, it shall
          pay interest on the overdue amount for the period beginning on its due
          date and ending on the date of its receipt by the Vendor ("RELEVANT
          PERIOD"). Interest under this clause 2.8 shall accrue daily at the
          rate of the Deferred Consideration Interest Rates applicable during
          the Relevant Period plus one percentage point, per annum and
          calculated on the basis of a year of 360 days. For the avoidance of
          doubt, the Purchaser's obligation to pay interest on the Deferred
          Consideration under and in accordance with clause 2.7 is not affected
          by this clause 2.8.

     2.9  The transfer of the Target BVI Shares shall take effect immediately
          upon Completion and the Purchaser shall be entitled to enjoy all
          rights attached to the Target BVI Shares on Completion free from all
          encumbrances irrespective of the Deferred Consideration payable by the
          Purchaser to the Vendor. The Vendor hereby irrevocably waives all
          rights, liens or other securities interest over the Target BVI Shares
          which the Vendor may have under law arising from the Deferred
          Consideration or otherwise with effect from Completion.


3    CONDITIONS PRECEDENT

     3.1  Completion of the sale and purchase of the Target BVI Shares shall be
          conditional upon the fulfilment of the following conditions:

          (a)  the passing of resolutions by the Independent Shareholders
               approving the transactions contemplated by this Agreement and the
               issue of the Consideration Shares to the Vendor upon Completion,
               and the Connected Transactions (other than Connected Transactions
               which The Stock Exchange of Hong Kong Limited has confirmed that
               no approval by the Independent Shareholders is required);

          (b)  the Purchaser having received adequate funding or financing to
               satisfy the cash portion of the Initial Consideration as referred
               to in clause 2.2.1;

          (c)  the granting by the Listing Committee of The Stock Exchange of
               Hong Kong Limited of listing of, and permission to deal in, the
               Consideration Shares to be issued by the Purchaser upon
               Completion;

          (d)  there having been no material adverse change to the financial
               conditions, business operations or prospects of any of the Target
               Companies Group;

          (e)  the receipt of the PRC Relevant Governmental Approvals; and

          (f)  the completion of the transactions contemplated in the respective
               Restructuring Agreements.

     3.2  Each of the Vendor and the Warrantor undertakes to use all reasonable
          endeavours to ensure that the Conditions Precedent set out in clauses
          3.1(d) and (e) are fulfilled as soon as reasonably practicable and in
          any event by 30 September 2002.

     3.3  The Purchaser undertakes to use all reasonable endeavours to ensure
          that the Conditions Precedent set out in clauses 3.1(a), 3.1(b),
          3.1(c) and 3.1(e) are fulfilled as soon as reasonably practicable and
          in any event by 30 September 2002.

                                     - 12 -
<PAGE>
     3.4  The Purchaser shall be entitled in its absolute discretion, by written
          notice to the Vendor, to waive any or all of the Conditions Precedent
          set out in clauses 3.1(b) and 3.1(d) either in whole or in part.

     3.5  If any of the Conditions Precedent has not been fulfilled (or waived)
          on or before the date specified in clauses 3.2 and 3.3 or such other
          date as the parties to this Agreement may agree in writing, this
          Agreement (other than clauses 14, 16 and 22) shall automatically
          terminate and no party shall have any claim of any nature whatsoever
          against the other parties under this Agreement (save in respect of its
          accrued rights arising from any prior breach of this Agreement).


4    PRE-COMPLETION UNDERTAKINGS

     4.1  Pending Completion, each of the Vendor and the Warrantor shall ensure
          that:

          (a)  each member of the Target Companies Group shall carry on its
               business in the ordinary and usual course and shall not make (or
               agree to make) any payment other than routine payments in the
               ordinary and usual course of trading;

          (b)  each member of the Target Companies Group shall take all
               reasonable steps to preserve and protect its assets;

          (c)  the Purchaser's representatives shall be allowed, upon reasonable
               notice and during normal business hours, access to the books and
               records of each member of the Target Companies Group (including,
               without limitation, all statutory books, minute books, leases,
               contracts, supplier lists and customer lists) together with the
               right to take copies;

          (d)  no member of the Target Companies Group shall do, allow or
               procure any act or omission which would constitute or give rise
               to a breach of any Warranty if the Warranties were to be repeated
               on or at any time before Completion by reference to the facts and
               circumstances then existing;

          (e)  prompt disclosure is made to the Purchaser of all relevant
               information which comes to the notice of the Vendor or the
               Warrantor in relation to any fact or matter (whether existing on
               or before the date of this Agreement or arising afterwards) which
               may constitute a breach of any Warranty if the Warranties were to
               be repeated on or at any time before Completion by reference to
               the facts and circumstances then existing;

          (f)  no dividend or other distribution shall be declared, paid or made
               by any member of the Target Companies Group;

          (g)  no share capital shall be allotted or issued or agreed to be
               allotted or issued by any member of the Target Companies Group;

          (h)  all transactions between each member of the Target Companies
               Group and each Vendor Group Company shall be on arm's length
               commercial terms and in their respective ordinary and usual
               course of business;

          (i)  otherwise than in the ordinary course of business, the amount of
               any Indebtedness owed by each member of the Target Companies
               Group or existing as at the date of this Agreement shall not be
               increased or extended

                                     - 13 -
<PAGE>
               and no new Indebtedness shall be entered into or assumed by any
               such company; and

          (j)  no action is taken by any member of the Target Companies Group or
               any Vendor Group Company which is inconsistent with the
               provisions of this Agreement or the consummation of the
               transactions contemplated by this Agreement.

     4.2  Pending Completion, each of the Vendor and the Warrantor shall ensure
          that the Target Companies Group consults fully with the Purchaser in
          relation to any matters which may have a material effect upon the
          Target Companies Group. Without the prior written consent of the
          Purchaser, the Target Companies Group shall not, and each of the
          Vendor and the Warrantor shall ensure that the Target Companies Group
          does not:

          (a)  enter into any contract or commitment (or make a bid or offer
               which may lead to a contract or commitment) having a material
               value or involving material expenditure or which is of a long
               term or unusual nature or which could involve an obligation of a
               material nature or which may result in any material change in the
               nature or scope of the operations of such member of the Target
               Companies Group;

          (b)  agree to any variation or termination of any existing contract to
               which that member of the Target Companies Group is a party and
               which may have a material effect upon the nature or scope of the
               operations of such member of the Target Companies Group;

          (c)  (whether in the ordinary and usual course of business or
               otherwise) acquire or dispose of, or agree to acquire or dispose
               of, any material business or any material asset; or

          (d)  enter into any agreement, contract, arrangement or transaction
               (whether or not legally binding) other than in the ordinary and
               usual course of business.


5    COMPLETION

     5.1  The sale and purchase of the Target BVI Shares shall be completed at
          60th Floor, The Center, 99 Queen's Road Central, Hong Kong (or such
          other place as the Vendor, the Purchaser and the Warrantor may agree
          upon) on:

          (a)  the third Business Day after the passing of the resolutions
               referred to in clause 3.1(a), or

          (b)  such other date as may be agreed between the Vendor and the
               Purchaser,

          whichever is later, following notification by the Purchaser to the
          Vendor of the fulfilment (or waiver) of all the Conditions Precedent.

     5.2  On Completion, the Vendor shall deliver (or cause to be delivered) to
          the Purchaser:

          (a)  duly executed transfers into the name of the Purchaser or such
               wholly-owned subsidiary of the Purchaser as notified by the
               Purchaser to the Vendor two days before Completion or their
               respective nominee in respect of all of the Target BVI Shares,
               together with the related share certificates evidencing the title
               and ownership of such shares;

                                     - 14 -
<PAGE>
          (b)  the certificates of incorporation, common seal, share register,
               share certificate book (with any unissued share certificates),
               business licence, the documents evidencing the PRC Relevant
               Governmental Approvals (as the case may be) and all minute books
               and other statutory books (which shall be written up to but not
               including Completion) of each member of the Target Companies
               Group;

          (c)  all such other documents (including any necessary waivers of
               pre-emption rights or other consents) as may be required to
               enable the Purchaser and/or such wholly-owned subsidiary of the
               Purchaser as notified by the Purchaser to the Vendor two days
               before Completion and/or their respective nominee to be vested
               with the full beneficial ownership of the Target BVI Shares and
               to enable the Purchaser and/or such wholly-owned subsidiary
               and/or their respective nominee to be registered as the holder(s)
               of the Target BVI Shares;

          (d)  a counterpart of the Tax Indemnity duly executed by the Vendor;

          (e)  a copy of a resolution of the board of directors (certified by an
               officer of the Vendor duly appointed by the Vendor as true and
               correct) of the Vendor, authorising the execution of and the
               performance by the Vendor of its obligations under this Agreement
               and each of the other documents to be executed by the Vendor;

          (f)  a certified copy of the Transfer of Interests Agreement pursuant
               to which the equity interest of each of the Target Companies is
               transferred from the Warrantor and the Vendor to each of the
               Target BVI Companies, respectively, through a series of
               transfers, duly executed by each of the parties thereto; and

          (g)  a legal opinion from Haiwen & Partners, PRC counsel, in form and
               substance acceptable to the Purchaser.

     5.3  On Completion, the Warrantor shall deliver (or cause to be delivered)
          to the Purchaser:

          (a)  a counterpart of the Tax Indemnity duly executed by the
               Warrantor; and

          (b)  all such other documents (including any necessary waivers of
               pre-emption rights or other consents) as may be required to
               enable the Purchaser and/or such wholly-owned subsidiary of the
               Purchaser as notified by the Purchaser to the Vendor two days
               before Completion and/or their respective nominee to be vested
               with the full beneficial ownership of the Target BVI Shares and
               to enable the Purchaser and/or such wholly-owned subsidiary
               and/or their respective nominee to be registered as the holder(s)
               of the Target BVI Shares.

     5.4  On Completion, the Vendor shall procure that resolutions of the board
          of directors of each Target BVI Company are passed to approve the
          registration of the transfers in respect of the Target BVI Shares
          referred to in clause 5.2.

     5.5  Against compliance by the Vendor and the Warrantor of their respective
          obligations under clauses 5.2, 5.3 and 5.4, the Purchaser shall:

                                     - 15 -
<PAGE>
          (a)  in satisfaction of its obligations under clause 2.2.1(a), cause
               the amounts set out in clause 2.2.1(a) to be paid on Completion
               or such later date as may be agreed between the Vendor and the
               Purchaser by electronic funds transfer (or such other modes of
               payment as may be agreed between the Vendor and the Purchaser) to
               the bank account(s) of the Vendor or such other party as the
               Vendor may direct, details of which shall be notified in writing
               to the Purchaser at least two Business Days prior to Completion;

          (b)  in satisfaction of its obligations under clause 2.2.1(b), cause
               the Consideration Shares to be allotted to the Vendor credited as
               fully paid, the Vendor's name to be entered in the register of
               members and a certificate in respect of the Consideration Shares
               to be delivered to the Vendor; and

          (c)  deliver to the Vendor a copy of the board minutes (certified by a
               duly appointed officer as true and correct) of the Purchaser
               authorising the execution and performance by the Purchaser of its
               obligations under this Agreement.

     5.6  If the Vendor or the Warrantor fails or is unable to perform any
          material obligations (including the transfer of all Target BVI Shares
          to the Purchaser or its nominees simultaneously upon Completion)
          required to be performed by the Vendor or the Warrantor (as the case
          may be) pursuant to clause 3.2, clause 5.2 and clause 5.3,
          respectively, by the last date on which Completion is required to
          occur, the Purchaser shall not be obliged to complete the sale and
          purchase of the Target BVI Shares and may, in its absolute discretion,
          by written notice to the Vendor and the Warrantor:

          (a)  rescind this Agreement without liability on the part of the
               Purchaser; or

          (b)  elect to complete this Agreement on that date, to the extent that
               the Vendor and the Warrantor are ready, able and willing to do
               so, and specify a later date on which the Vendor and the
               Warrantor shall be obliged to complete the outstanding
               obligations of the Vendor and the Warrantor; or

          (c)  elect to defer the completion of this Agreement by not more than
               90 days to such other date as it may specify in such notice, in
               which event the provisions of this clause 5.6 shall apply,
               mutatis mutandis, if the Vendor and/or the Warrantor fails or is
               unable to perform any such obligations on such other date,

          provided that clause 5.6(b) will not apply where the Vendor is unable
          or fails to effect transfer of all Target BVI Shares to the Purchaser
          or its nominee simultaneously upon Completion.

     5.7  Each of the Vendor and the Warrantor jointly and severally undertakes
          that it shall pay in cash to the Purchaser by way of indemnity all
          Costs which the Purchaser may suffer or incur and all Costs which the
          Purchaser has incurred in relation to the preparation and execution of
          this Agreement if the Vendor or the Warrantor breaches any of its
          obligations under this Agreement (including to effect the transfer of
          all Target BVI Shares to the Purchaser or its nominee simultaneously
          upon Completion).

                                     - 16 -
<PAGE>
6    POST-COMPLETION UNDERTAKINGS

     6.1  Within 60 Business Days following Completion or such other date to be
          agreed upon between the Vendor, the Purchaser and the Warrantor, each
          of the Vendor and the Warrantor undertakes to the Purchaser to use all
          reasonable endeavours to obtain the release of each member of the
          Target Companies Group from any Intra-Group Guarantees to which it is
          a party and, pending such release, to indemnify the relevant member of
          the Target Companies Group against all amounts paid by it to any third
          party pursuant to any such Intra-Group Guarantee in respect of any
          liability of any Vendor Group Company (and all Costs incurred in
          connection with such liability) included in the Last Accounts or
          arising after the Last Accounts Date.

     6.2  Within 60 Business Days following Completion or such other date to be
          agreed upon between the Vendor, the Purchaser and the Warrantor, the
          Purchaser undertakes to the Vendor to use all reasonable endeavours to
          obtain the release of each Vendor Group Company from any Intra-Group
          Guarantees to which it is a party and, pending such release, to
          indemnify the relevant Vendor Group Company against all amounts paid
          by it to any third party pursuant to any Intra-Group Guarantees in
          respect of any liability of any member of the Target Companies Group
          (and all Costs incurred in connection with such liability) included in
          the Last Accounts or arising after the Last Accounts Date.


7    WARRANTIES

     7.1  Each of the Vendor and the Warrantor jointly and severally represents,
          warrants and undertakes to the Purchaser in the terms of the
          Warranties (save that the Warranties set out in paragraphs 2.5 to 2.10
          of Part A, Schedule 2 are given by each of the Vendor and the
          Warrantor in respect of itself only) and that such Warranties are true
          and accurate. Each of the Vendor and the Warrantor acknowledges that
          the Purchaser has entered into this Agreement in reliance upon the
          Warranties.

     7.2  Each of the Vendor and the Warrantor jointly and severally undertakes
          (without limiting any other rights of the Purchaser in any way
          including its rights to damages in respect of a claim for breach of
          any Warranty on any other basis) that it shall pay in cash to the
          Purchaser (or, if so directed by the Purchaser, to the member of the
          Target Companies Group in question) (each an "INDEMNIFIED PERSON") by
          way of indemnity on demand a sum equal to the aggregate of (a) the
          amount which, if received by the Indemnified Person, would be
          necessary to put that Indemnified Person into the financial position
          which would have existed had there been no breach of the Warranty in
          question; and (b) all Costs suffered or incurred by the Indemnified
          Person, directly or indirectly, as a result of or in connection with
          such breach of Warranty.

     7.3  Each of the Vendor and the Warrantor agrees to waive the benefit of
          all rights (if any) which the Vendor or the Warrantor may have against
          any member of the Target Companies Group, or any present or former
          officer or employee of any such company, on whom the Vendor or the
          Warrantor may have relied in agreeing to any term of this Agreement
          and the Tax Indemnity and each of the Vendor and the Warrantor
          undertakes not to make any claim in respect of such reliance.

                                     - 17 -
<PAGE>
     7.4  Each of the Warranties shall be construed as a separate Warranty and
          (save as expressly provided to the contrary) shall not be limited or
          restricted by reference to or inference from the terms of any other
          Warranty or any other term of this Agreement.

     7.5  The Warranties shall be deemed to be repeated on Completion with
          reference to the facts and circumstances then existing.

     7.6  Each of the Vendor and the Warrantor undertakes to notify the
          Purchaser in writing promptly if it becomes aware of any circumstance
          arising after the date of this Agreement which would cause any
          Warranty (if the Warranties were repeated with reference to the facts
          and circumstances then existing) to become untrue or inaccurate or
          misleading in any respect which is material to the financial or
          trading position of any member of the Target Companies Group.


8    LIMITATIONS ON CLAIMS

     8.1  Subject to clause 8.2, the aggregate amount of the liability of each
          of the Vendor and the Warrantor for all Claims shall not exceed the
          Total Price.

     8.2  The limitation contained in clause 8.1 shall not apply to any breach
          of any Warranty which (or the delay in discovery of which) is the
          consequence of dishonest, deliberate or reckless mis-statement,
          concealment or other conduct by any Vendor Group Company or any
          officer or employee, or former officer or employee, of any Vendor
          Group Company.


9    PURCHASER'S RIGHTS TO RESCISSION

     The Purchaser may by written notice given to the Vendor and the Warrantor
     at any time prior to Completion rescind this Agreement without liability on
     the part of the Purchaser if any fact, matter or event (whether existing or
     occurring on or before the date of this Agreement or arising or occurring
     afterwards) comes to the notice of the Purchaser at any time prior to
     Completion which:

     (a)  constitutes a breach by the Vendor or the Warrantor of this Agreement
          (including, without limitation, any breach of the pre-Completion
          undertakings in clause 4); or

     (b)  would constitute a breach of any Warranty if the Warranties were
          repeated on or at any time before Completion by reference to the facts
          and circumstances then existing; or

     (c)  affects or is likely to affect in a materially adverse manner the
          business, financial position or prospects of the Target Companies
          Group taken as a whole.


10   WITHHOLDING TAX AND GROSSING UP

     10.1  Each of the Vendor and the Warrantor shall pay all sums payable by it
           under this Agreement free and clear of all deductions or withholdings
           unless the law requires a deduction or withholding. If a deduction or
           withholding is so required the Vendor or the Warrantor shall pay such
           additional amount as will ensure that the net amount the payee
           receives equals the full amount which it would have received had the
           deduction or withholding not been required.

                                     - 18 -
<PAGE>
     10.2  If any tax authority charges taxation on any sum paid by the Vendor
           or the Warrantor under or pursuant to this Agreement, then the Vendor
           or the Warrantor shall pay such additional amount as will ensure that
           the total amount paid, less the tax chargeable on such amount, is
           equal to the amount that would otherwise be payable under this
           Agreement.


11   ENTIRE AGREEMENT

     This Agreement and the Tax Indemnity constitute the entire agreement and
     understanding between the parties in connection with the sale and purchase
     of the Target BVI Shares. This Agreement and the Tax Indemnity supersede
     all prior agreements or understandings in connection with the subject
     matter hereof which shall cease to have any further force or effect. No
     party has entered into this Agreement in reliance upon any representation,
     warranty or undertaking which is not set out or referred to in this
     Agreement and the Tax Indemnity.


12   VARIATION

     12.1  No variation of this Agreement (or of any of the legally binding
           agreements referred to in this Agreement) shall be valid unless it is
           in writing and signed by or on behalf of each of the parties to it.
           The expression "VARIATION" shall include any variation, supplement,
           deletion or replacement however effected.

     12.2  Unless expressly agreed, no variation shall constitute a general
           waiver of any provisions of this Agreement, nor shall it affect any
           rights, obligations or liabilities under or pursuant to this
           Agreement which have already accrued up to the date of variation, and
           the rights and obligations of the parties under or pursuant to this
           Agreement shall remain in full force and effect, except and only to
           the extent that they are so varied.


13   ASSIGNMENT

     No party shall be entitled to assign the benefit of any provision of this
     Agreement without the prior written approval of the other parties.


14   ANNOUNCEMENTS

     14.1  Except as required by law or by any stock exchange or governmental or
           other regulatory or supervisory body or authority of competent
           jurisdiction to whose rules the party making the announcement or
           disclosure is subject, whether or not having the force of law, no
           announcement or circular or disclosure in connection with the
           existence or subject matter of this Agreement shall be made or issued
           by or on behalf of any of the Vendor Group Companies or any member of
           the Target Companies Group or any of them without the prior written
           approval of the Purchaser (such approval not to be unreasonably
           withheld or delayed), or by or on behalf of the Purchaser without the
           prior written approval of the Vendor and the Warrantor (such approval
           not to be unreasonably withheld or delayed).

     14.2  Where any announcement or disclosure is made in reliance on the
           exception in clause 14.1, the party making the announcement or
           disclosure will so far as

                                     - 19 -
<PAGE>
           practicable consult with the other parties in advance as to the form,
           content and timing of the announcement or disclosure.


15   COSTS

     Each of the parties shall bear its own Costs incurred in connection with
     the negotiation, preparation and completion of this Agreement and the Tax
     Indemnity.


16   CONFIDENTIALITY

     Each of the Vendor and the Warrantor undertakes with the Purchaser that it
     shall keep confidential (and to ensure that its directors, officers,
     employees, agents and professional and other advisers keep confidential)
     any information in its possession (whether before or after the date of this
     Agreement):

     (a)  in relation to the subscribers, business, assets or affairs of the
          Target Companies Group (including any data held by the Target
          Companies Group); or

     (b)  which relates to the contents of this Agreement (or any agreement or
          arrangement entered into pursuant to this Agreement),

     provided that the undertakings contained in this clause 16 shall not apply
     to any information which is in or has entered the public domain (which
     shall include any public filing or disclosure requirements of the United
     States Securities and Exchange Commission or under applicable laws)
     otherwise than as a result of publication or disclosure by the Vendor or
     the Warrantor or their respective directors, officers, employees, agents
     and professional and other advisers without the prior written consent of
     the Purchaser.

     Each of the Vendor and the Warrantor shall not use for its own business
     purposes or disclose to any third party any such information (collectively,
     "CONFIDENTIAL INFORMATION") without the consent of the Purchaser.


17   SEVERABILITY

     If any provision of this Agreement is held to be invalid or unenforceable,
     then such provision shall (so far as it is invalid or unenforceable) be
     given no effect and shall be deemed not to be included in this Agreement
     but without invalidating any of the remaining provisions of this Agreement.
     The parties shall then use all reasonable endeavours to replace the invalid
     or unenforceable provisions by a valid and enforceable substitute provision
     the effect of which is as close as possible to the intended effect of the
     invalid or unenforceable provision.


18   COUNTERPARTS

     This Agreement may be executed in any number of counterparts and by the
     parties to it on separate counterparts, each of which is an original but
     all of which together constitute one and the same instrument.


19   WAIVER

     19.1  No failure or delay by any parties hereto in exercising any right or
           remedy provided by law under or pursuant to this Agreement shall
           impair such right or remedy or operate or be construed as a waiver or
           variation of it or preclude its exercise at any subsequent time and
           no single or partial exercise of any such right or remedy shall

                                     - 20 -
<PAGE>
           preclude any other or further exercise of it or the exercise of any
           other right or remedy.

     19.2  The rights and remedies of the parties hereto under or pursuant to
           this Agreement are cumulative, may be exercised as often as such
           party considers appropriate and are in addition to its rights and
           remedies under general law.


20   FURTHER ASSURANCE

     Each of the Vendor and the Warrantor agrees to perform (or procure the
     performance of) all further acts and things, and execute and deliver (or
     procure the execution and delivery of) such further documents, as may be
     required by law or as the Purchaser may reasonably require, whether on or
     after Completion, to implement and/or give effect to this Agreement and the
     transaction contemplated by it and for the purpose of vesting in the
     Purchaser the full benefit of the assets, rights and benefits to be
     transferred to the Purchaser under this Agreement.


21   NOTICES

     21.1  Any notice or other communication to be given by one party to any
           other party under, or in connection with, this Agreement shall be in
           writing and signed by or on behalf of the party giving it. It shall
           be served by sending it by fax to the number set out in clause 21.2,
           or delivering it by hand, or sending it by pre-paid recorded delivery
           or registered post, to the address set out in clause 21.2 and in each
           case marked for the attention of the relevant party set out in clause
           21.2 (or as otherwise notified from time to time in accordance with
           the provisions of this clause 21). Any notice so served by hand, fax
           or post shall be deemed to have been duly given:

           (a)  in the case of delivery by hand, when delivered;

           (b)  in the case of fax, upon confirmation of transmission;

           (c)  in the case of prepaid recorded delivery or registered post, at
                10:00 a.m. on the fifth Business Day following the date of
                posting,

           provided that in each case where delivery by hand or by fax occurs
           after 6:00 p.m. on a Business Day or on a day which is not a Business
           Day, service shall be deemed to occur at 9:00 a.m. on the next
           following Business Day.

           References to time in this clause are to local time in the country of
           the addressee.

     21.2  The addresses and fax numbers of the parties for the purpose of
           clause 21.1 are as follows:

<TABLE>
           <S>                    <C>
           THE VENDOR:
           Address:               60th Floor
                                  The Center
                                  99 Queen's Road Central
                                  Hong Kong

           Fax:                   (852) 2511 9092

           For the attention of:  The Directors
</TABLE>

                                     - 21 -
<PAGE>
<TABLE>
           <S>                    <C>
           THE PURCHASER:

           Address:               60th Floor
                                  The Center
                                  99 Queen's Road Central
                                  Hong Kong

           Fax:                   (852) 2511 9092

           For the attention of:  Legal Counsel
</TABLE>

<TABLE>
           <S>                    <C>
           THE WARRANTOR:

           Address:               53A Xibianmennei Dajie
                                  Xuanwuqu
                                  Beijing
                                  PRC

           Fax:                   (8610) 6360 4943

           For the attention of:  The Authorised Representative
</TABLE>

     21.3  A party may notify any other party to this Agreement of a change to
           its name, relevant addressee, address or fax number for the purposes
           of this clause 21, provided that, such notice shall only be effective
           on:

           (a)  the date specified in the notice as the date on which the change
                is to take place; or

           (b)  if no date is specified or the date specified is less than five
                Business Days after the date on which notice is given, the date
                following five Business Days after notice of any change has been
                given.

     21.4  All notices under or in connection with this Agreement shall be in
           the English language.


22   GOVERNING LAW AND JURISDICTION

     22.1  This Agreement and the relationship between the parties shall be
           governed by, and interpreted in accordance with, the laws of Hong
           Kong.

     22.2  Any dispute arising out of or in connection with this Agreement shall
           be resolved by arbitration in Hong Kong International Arbitration
           Centre by a single arbitrator in accordance with the UNCITRAL
           Arbitration Rules in force from time to time. The parties agree that
           the arbitral award will be final and binding.

AS WITNESS this Agreement has been signed on behalf of the parties the day and
year first before written.

                                     - 22 -
<PAGE>
                                   SCHEDULE 1
                                     PART A
                       DETAILS OF THE TARGET BVI COMPANIES

(1)   ANHUI MOBILE BVI

<TABLE>
<S>   <C>                                 <C>
1     NAME:                               Anhui Mobile (BVI) Limited

2     DATE OF INCORPORATION:              10 May 2002

3     PLACE OF INCORPORATION:             British Virgin Islands

4     CLASS OF COMPANY:                   International Business Company

5     REGISTERED NUMBER:                  495321

6     REGISTERED OFFICE:                  P.O. Box 957
                                          Offshore Incorporations Centre
                                          Road Town, Tortola
                                          British Virgin Islands

7     DIRECTORS:                          Wang Xiaochu
                                          Li Zhenqun
                                          Ding Donghua

8     REGISTERED SHAREHOLDER:             China Mobile Hong Kong (BVI) Limited

9     AUTHORISED CAPITAL:                 HK$10,000.00 divided into 10,000 shares of HK$1.00 each

10    ISSUED CAPITAL:                     One share of HK$1.00 each

11    MORTGAGES AND CHARGES:              None
</TABLE>

                                     - 23 -
<PAGE>
(2)  JIANGXI MOBILE BVI

<TABLE>
<S>   <C>                               <C>
1     NAME:                             Jiangxi Mobile (BVI) Limited

2     DATE OF INCORPORATION:            10 May 2002

3     PLACE OF INCORPORATION:           British Virgin Islands

4     CLASS OF COMPANY:                 International Business Company

5     REGISTERED NUMBER:                495320

6     REGISTERED OFFICE:                P.O. Box 957
                                        Offshore Incorporations Centre
                                        Road Town, Tortola
                                        British Virgin Islands

7     DIRECTORS:                        Wang Xiaochu
                                        Li Zhenqun
                                        Ding Donghua

8     REGISTERED SHAREHOLDERS:          China Mobile Hong Kong (BVI) Limited

9     AUTHORISED CAPITAL:               HK$10,000.00 divided into 10,000 shares of HK$1.00 each

10    ISSUED CAPITAL:                   One share of HK$1.00 each

11    MORTGAGES AND CHARGES:            None
</TABLE>

                                     - 24 -
<PAGE>
(3)  CHONGQING MOBILE BVI

<TABLE>
<S>   <C>                                 <C>
1     NAME:                             Chongqing Mobile (BVI) Limited

2     DATE OF INCORPORATION:            10 May 2002

3     PLACE OF INCORPORATION:           British Virgin Islands

4     CLASS OF COMPANY:                 International Business Company

5     REGISTERED NUMBER:                495324

6     REGISTERED OFFICE:                P.O. Box 957
                                        Offshore Incorporations Centre
                                        Road Town, Tortola
                                        British Virgin Islands

7     DIRECTORS:                        Wang Xiaochu
                                        Li Zhenqun
                                        Ding Donghua

8     REGISTERED SHAREHOLDERS:          China Mobile Hong Kong (BVI) Limited

9     AUTHORISED CAPITAL:               HK$10,000.00 divided into 10,000 shares of HK$1.00 each

10    ISSUED CAPITAL:                   One share of HK$1.00 each

11    MORTGAGES AND CHARGES:            None
</TABLE>

                                     - 25 -
<PAGE>
(4)  SICHUAN MOBILE BVI

<TABLE>
<S>   <C>                               <C>
1     NAME:                             Sichuan Mobile (BVI) Limited

2     DATE OF INCORPORATION:            10 May 2002

3     PLACE OF INCORPORATION:           British Virgin Islands

4     CLASS OF COMPANY:                 International Business Company

5     REGISTERED NUMBER:                495322

6     REGISTERED OFFICE:                P.O. Box 957
                                        Offshore Incorporations Centre
                                        Road Town, Tortola
                                        British Virgin Islands

7     DIRECTORS:                        Wang Xiaochu
                                        Li Zhenqun
                                        Ding Donghua

8     REGISTERED SHAREHOLDERS:          China Mobile Hong Kong (BVI) Limited

9     AUTHORISED CAPITAL:               HK$10,000.00 divided into 10,000 shares of HK$1.00 each

10    ISSUED CAPITAL:                   One share of HK$1.00 each

11    MORTGAGES AND CHARGES:            None
</TABLE>

                                     - 26 -
<PAGE>
(5)  HUBEI MOBILE BVI

<TABLE>
<S>   <C>                                 <C>
1     NAME:                               Hubei Mobile (BVI) Limited

2     DATE OF INCORPORATION:              10 May 2002

3     PLACE OF INCORPORATION:             British Virgin Islands

4     CLASS OF COMPANY:                   International Business Company

5     REGISTERED NUMBER:                  495325

6     REGISTERED OFFICE:                  P.O. Box 957
                                          Offshore Incorporations Centre
                                          Road Town, Tortola
                                          British Virgin Islands

7     DIRECTORS:                          Wang Xiaochu
                                          Li Zhenqun
                                          Ding Donghua

8     REGISTERED SHAREHOLDERS:            China Mobile Hong Kong (BVI) Limited

9     AUTHORISED CAPITAL:                 HK$10,000.00 divided into 10,000 shares of HK$1.00 each

10    ISSUED CAPITAL:                     One share of HK$1.00 each

11    MORTGAGES AND CHARGES:              None
</TABLE>

                                     - 27 -
<PAGE>
(6)  HUNAN MOBILE BVI

<TABLE>
<S>   <C>                               <C>
1     NAME:                             Hunan Mobile (BVI) Limited

2     DATE OF INCORPORATION:            10 May 2002

3     PLACE OF INCORPORATION:           British Virgin Islands

4     CLASS OF COMPANY:                 International Business Company

5     REGISTERED NUMBER:                495323

6     REGISTERED OFFICE:                P.O. Box 957
                                        Offshore Incorporations Centre
                                        Road Town, Tortola
                                        British Virgin Islands

7     DIRECTORS:                        Wang Xiaochu
                                        Li Zhenqun
                                        Ding Donghua

8     REGISTERED SHAREHOLDERS:          China Mobile Hong Kong (BVI) Limited

9     AUTHORISED CAPITAL:               HK$10,000.00 divided into 10,000 shares of HK$1.00 each

10    ISSUED CAPITAL:                   One share of HK$1.00 each

11    MORTGAGES AND CHARGES:            None
</TABLE>

                                     - 28 -
<PAGE>
(7)  SHAANXI MOBILE BVI

<TABLE>
<S>   <C>                               <C>
1     NAME:                             Shaanxi Mobile (BVI) Limited

2     DATE OF INCORPORATION:            10 May 2002

3     PLACE OF INCORPORATION:           British Virgin Islands

4     CLASS OF COMPANY:                 International Business Company

5     REGISTERED NUMBER:                495326

6     REGISTERED OFFICE:                P.O. Box 957
                                        Offshore Incorporations Centre
                                        Road Town, Tortola
                                        British Virgin Islands

7     DIRECTORS:                        Wang Xiaochu
                                        Li Zhenqun
                                        Ding Donghua

8     REGISTERED SHAREHOLDERS:          China Mobile Hong Kong (BVI) Limited

9     AUTHORISED CAPITAL:               HK$10,000.00 divided into 10,000 shares of HK$1.00 each

10    ISSUED CAPITAL:                   One share of HK$1.00 each

11    MORTGAGES AND CHARGES:            None
</TABLE>

                                     - 29 -
<PAGE>
(8)  SHANXI MOBILE BVI

<TABLE>
<S>   <C>                               <C>
1     NAME:                             Shanxi Mobile Communication (BVI) Limited

2     DATE OF INCORPORATION:            10 May 2002

3     PLACE OF INCORPORATION:           British Virgin Islands

4     CLASS OF COMPANY:                 International Business Company

5     REGISTERED NUMBER:                495327

6     REGISTERED OFFICE:                P.O. Box 957
                                        Offshore Incorporations Centre
                                        Road Town, Tortola
                                        British Virgin Islands

7     DIRECTORS:                        Wang Xiaochu
                                        Li Zhenqun
                                        Ding Donghua

8     REGISTERED SHAREHOLDERS:          China Mobile Hong Kong (BVI) Limited

9     AUTHORISED CAPITAL:               HK$10,000.00 divided into 10,000 shares of HK$1.00 each

10    ISSUED CAPITAL:                   One share of HK$1.00 each

11    MORTGAGES AND CHARGES:            None
</TABLE>

                                     - 30 -
<PAGE>
                                     PART B
                         DETAILS OF THE TARGET COMPANIES

(1)  ANHUI MOBILE

<TABLE>
<S>   <C>                           <C>
1     NAME:                         Anhui Mobile Communication Company Limited

2     PLACE OF INCORPORATION:       Anhui, PRC

3     NATURE:                       Limited liability company

4     SCOPE OF BUSINESS:            engaging in the construction and investment
                                    of mobile telecommunication networks;
                                    engaging in the operation of mobile
                                    telecommunication business (including voice,
                                    data and multimedia); engaging in IP phone
                                    business; operating computer networks and
                                    international internet and engaging in
                                    value-added business relating to mobile
                                    telecommunication business; engaging in
                                    system integration, settlement and clearing
                                    of roaming, technological development,
                                    technological service, advertising business,
                                    maintenance and installation of equipment
                                    and projects construction etc. in relation
                                    to mobile telecommunication business;
                                    engaging in sale or lease of mobile
                                    communication terminal equipment and their
                                    accessories and spare parts and providing
                                    after-sale services.

5     REGISTERED OFFICE:            Youdian Building, No. 303 Huaihe Road,
                                    Hefei, Anhui Province, PRC

6     REGISTERED CAPITAL:           RMB10,000,000

7     TAX RESIDENCE:                Anhui Province, PRC

8     SUBSIDIARIES:                 None

9     MORTGAGES AND CHARGES:        None
</TABLE>

                                     - 31 -
<PAGE>
(2)  JIANGXI MOBILE

<TABLE>
<S>   <C>                           <C>
1     NAME:                         Jiangxi Mobile Communication Company Limited

2     PLACE OF INCORPORATION:       Jiangxi, PRC

3     NATURE:                       Limited liability company

4     SCOPE OF BUSINESS:            engaging in the construction and investment
                                    of mobile telecommunication networks;
                                    engaging in the operation of mobile
                                    telecommunication business (including voice,
                                    data and multimedia); engaging in IP phone
                                    business; engaging in system integration,
                                    settlement and clearing of roaming,
                                    technological development, technological
                                    service, advertising business maintenance
                                    and installation of equipment and projects
                                    construction etc. in relation to mobile
                                    communication business; engaging in sale or
                                    lease of mobile telecommunication terminal
                                    equipment and their accessories and spare
                                    parts; providing after-sale services;
                                    operating other businesses as approved or
                                    consented by the State in accordance with
                                    market development and demand.

5     REGISTERED OFFICE:            Jinyuan Building, Taoyuan Xiao District,
                                    Nanchang, Jiangxi Province, PRC

6     REGISTERED CAPITAL:           RMB10,000,000

7     TAX RESIDENCE:                Jiangxi Province, PRC

8     SUBSIDIARIES:                 None

9     MORTGAGES AND CHARGES:        None
</TABLE>

                                     - 32 -
<PAGE>
(3)  CHONGQING MOBILE

<TABLE>
<S>   <C>                         <C>
1     NAME:                       Chongqing Mobile Communication Company Limited

2     PLACE OF INCORPORATION:     Chongqing, PRC

3     NATURE:                     Limited liability company

4     SCOPE OF BUSINESS:          engaging in the construction and investment
                                  of mobile telecommunication networks;
                                  engaging in the operation of mobile
                                  telecommunication business (including voice,
                                  data and multimedia); engaging in IP phone
                                  business; operating computer networks and
                                  international internet and engaging in
                                  value-added business relating to mobile
                                  telecommunication business; engaging in
                                  system integration, settlement and clearing
                                  of roaming, technological development,
                                  technological service, equipment maintenance
                                  in relation to mobile telecommunication
                                  business; engaging in sale or lease of
                                  mobile telecommunication terminal equipment
                                  and their accessories and spare parts.

5     REGISTERED OFFICE:          No. 134, Yuzhou Road, Jiulongpo District,
                                  Chongqing Municipality, PRC

6     REGISTERED CAPITAL:         RMB10,000,000

7     TAX RESIDENCE:              Chongqing Municipality, PRC

8     SUBSIDIARIES:               None

9     MORTGAGES AND CHARGES:      None
</TABLE>

                                     - 33 -
<PAGE>
(4)  SICHUAN MOBILE

<TABLE>
<S>   <C>                           <C>
1     NAME:                         Sichuan Mobile Communication Company Limited

2     PLACE OF INCORPORATION:       Sichuan, PRC

3     NATURE:                       Limited liability company

4     SCOPE OF BUSINESS:            operating mobile communication, IP phone,
                                    computer networks, international internet
                                    and engaging in value-added business
                                    relating to mobile telecommunication
                                    business; engaging in system integration,
                                    settlement and clearing of roaming in
                                    relation to mobile telecommunication
                                    business; engaging in sale or lease of
                                    mobile telecommunication terminal equipment
                                    and their accessories and spare parts;
                                    engaging in the maintenance, installation
                                    and construction of mobile telecommunication
                                    equipment; engaging in mobile
                                    telecommunication technological service.

5     REGISTERED OFFICE:            No. 19 Qingyang Zheng Street, Chengdu,
                                    Sichuan Province, PRC

6     REGISTERED CAPITAL:           RMB10,000,000

7     TAX RESIDENCE:                Sichuan Province, PRC

8     SUBSIDIARIES:                 None

9     MORTGAGES AND CHARGES:        None
</TABLE>

                                     - 34 -
<PAGE>
(5)  HUBEI MOBILE

<TABLE>
<S>   <C>                           <C>
1     NAME:                         Hubei Mobile Communication Company Limited

2     PLACE OF INCORPORATION:       Hubei, PRC

3     NATURE:                       Limited liability company

4     SCOPE OF BUSINESS:            engaging in the operation of phone business;
                                    operating computer networks and
                                    international internet and engaging in
                                    value-added business relating to mobile
                                    telecommunication business; engaging in
                                    system integration, settlement and clearing
                                    of roaming, technological development,
                                    technological service, maintenance and
                                    installation of equipment and projects
                                    construction etc. in relation to mobile
                                    telecommunication business; engaging in sale
                                    or lease of mobile telecommunication
                                    terminal equipment and their accessories and
                                    spare parts and providing after-sale
                                    services.

5     REGISTERED OFFICE:            No. 10 Jiangxing Road, Jianghan District,
                                    Wuhan, Hubei Province, PRC

6     REGISTERED CAPITAL:           RMB10,000,000

7     TAX RESIDENCE:                Hubei Province, PRC

8     SUBSIDIARIES:                 None

9     MORTGAGES AND CHARGES:        None
</TABLE>

                                     - 35 -
<PAGE>
(6)  HUNAN MOBILE

<TABLE>
<S>   <C>                           <C>
1     NAME:                         Hunan Mobile Communication Company Limited

2     PLACE OF INCORPORATION:       Hunan, PRC

3     NATURE:                       Limited liability company

4     SCOPE OF BUSINESS:            engaging in the construction and investment
                                    of mobile telecommunication networks;
                                    engaging in the operation of mobile
                                    telecommunication business (including voice,
                                    data and multimedia); engaging in IP phone
                                    business; operating computer networks and
                                    international internet and engaging in
                                    value-added business relating to mobile
                                    telecommunication business; engaging in
                                    system integration, settlement and clearing
                                    of roaming, technological development,
                                    technological service, installation of
                                    equipment and projects construction etc. in
                                    relation to mobile telecommunication
                                    business; engaging in sale or lease of
                                    mobile telecommunication terminal equipment
                                    and their accessories and spare parts and
                                    providing after-sale services; engaging in
                                    the design, production of advertisements,
                                    distribution of outdoor advertisements;
                                    engaging in television, broadcast,
                                    publication, printed material and gift
                                    advertising agency.

5     REGISTERED OFFICE:            No. 169 Furongnan Road, Tianxin District,
                                    Changsha, Hunan Province, PRC

6     REGISTERED CAPITAL:           RMB10,000,000

7     TAX RESIDENCE:                Hunan Province, PRC

8     SUBSIDIARIES:                 None

9     MORTGAGES AND CHARGES:        None
</TABLE>

                                     - 36 -
<PAGE>
(7)  SHAANXI MOBILE

<TABLE>
<S>   <C>                           <C>
1     NAME:                         Shaanxi Mobile Communication Company Limited

2     PLACE OF INCORPORATION:       Shaanxi, PRC

3     NATURE:                       Limited liability company

4     SCOPE OF BUSINESS:            engaging in the construction and investment
                                    of mobile telecommunication networks;
                                    engaging in the operation of mobile
                                    telecommunication business; engaging in IP
                                    phone business; operating computer networks
                                    and international internet and engaging in
                                    value-added business relating to mobile
                                    telecommunication business; engaging in
                                    system integration, settlement and clearing
                                    of roaming, technological development,
                                    technological service, advertising business,
                                    maintenance and installation of equipment
                                    and projects construction etc. in relation
                                    to mobile telecommunication business;
                                    engaging in sale or lease of mobile
                                    telecommunication terminal equipment and
                                    their accessories and spare parts and
                                    providing after-sale services; other
                                    business as approved or consented by the
                                    State.

5     REGISTERED OFFICE:            No.5 Nan Erhuan Road Xiduan, Xian, Shaanxi
                                    Province, PRC

6     REGISTERED CAPITAL:           RMB10,000,000

7     TAX RESIDENCE:                Shaanxi Province, PRC

8     SUBSIDIARIES:                 None

9     MORTGAGES AND CHARGES:        None
</TABLE>

                                     - 37 -
<PAGE>
(8)  SHANXI MOBILE

<TABLE>
<S>   <C>                           <C>
1     NAME:                         Shanxi Mobile Communication Company Limited

2     PLACE OF INCORPORATION:       Shanxi, PRC

3     NATURE:                       Limited liability company

4     SCOPE OF BUSINESS:            engaging in the construction and investment
                                    of mobile telecommunication networks;
                                    engaging in the operation of mobile
                                    telecommunication business; engaging in IP
                                    phone business; operating computer networks
                                    and international internet and engaging in
                                    value-added business relating to mobile
                                    telecommunication business; engaging in
                                    system integration, settlement and clearing
                                    of roaming, technological development,
                                    technological service, and equipment
                                    maintenance in relation to mobile
                                    telecommunication business; engaging in sale
                                    or lease of mobile telecommunication
                                    terminal equipment and their accessories and
                                    spare parts and providing after-sale
                                    services of the above businesses.

5     REGISTERED OFFICE:            No. 39 Shuangtaxi Street, Taiyuan, Shanxi
                                    Province, PRC

6     REGISTERED CAPITAL:           RMB10,000,000

7     TAX RESIDENCE:                Shanxi Province, PRC

8     SUBSIDIARIES:                 None

9     MORTGAGES AND CHARGES:        None
</TABLE>

                                     - 38 -
<PAGE>
                                   SCHEDULE 2
                                 THE WARRANTIES
                                 PART A: GENERAL

1    INFORMATION

     1.1  All information relating to the Target Companies Group provided to the
          Purchaser or its representatives and advisers for the purposes of
          inclusion in the Circular or preparation of the Financial Statements
          and the Appraisal Report is true, accurate and not misleading and does
          not contain an untrue statement of a material fact or omit to state a
          material fact required to be stated therein or necessary to make the
          statements therein not misleading.

     1.2  Save as already disclosed in writing to the Purchaser, there are no
          other facts or matters which might reasonably be expected to have a
          material adverse effect on the financial or trading position or
          prospects of any member of the Target Companies Group.


2    CORPORATE MATTERS

     THE TARGET COMPANIES GROUP

     2.1  (a)  All of the Target BVI Shares are fully-paid or properly credited
               as fully-paid and the Vendor is the sole legal and beneficial
               owner of them free from all Encumbrances. The Target BVI Shares
               constitute the entire issued share capital of each of the Target
               BVI Companies.

          (b)  The information in respect of each of the Target BVI Companies
               set out in Part A of Schedule 1 is true and accurate and not
               misleading.

          (c)  Each of the Target BVI Companies has been duly incorporated and
               is validly existing under the laws of the British Virgin Islands,
               with legal right, power and authority (corporate and other) to
               own, use, lease and operate its properties and conduct its
               business in the manner presently conducted and as described in
               the Circular, and is duly qualified to transact business in any
               jurisdiction in which it owns or leases properties or conducts
               any business and such qualification is required, or is subject to
               no material liability or disability by reason of the failure to
               be so qualified in any such jurisdiction; the Memorandum of
               Association and Articles of Association of each Target BVI
               Company comply with the requirements of applicable laws of the
               British Virgin Islands and are in full force and effect.

     2.2  (a)  The Target BVI Companies are, or will by Completion be, the sole
               legal and beneficial owner of the whole of the registered capital
               of each of the Target Companies, respectively, free from all
               Encumbrances.

          (b)  The information in respect of each of the Target Companies set
               out in Part B of Schedule 1 is true and accurate and not
               misleading.

          (c)  Each of the Target Companies is (or a valid application has been
               made for it to be registered as) a wholly-foreign owned
               enterprise with limited liability and has been duly organised and
               is validly existing under the laws of the PRC, and its business
               licence is in full force and effect; the Articles of

                                     - 39 -
<PAGE>
               Association of each Target Company comply with the requirements
               of applicable PRC law and are in full force and effect; each
               Target Company has all consents, approvals, authorizations,
               orders, registrations, clearances and qualifications of or with
               any court, governmental agency or body having jurisdiction over
               each Target Company or any of its properties in each jurisdiction
               in which the ownership or lease of property by it or the conduct
               of its business (as described in the Circular) requires such
               qualification, except for such consents, approvals,
               authorizations, orders, registrations, clearances and
               qualifications the absence of which is disclosed in the Circular
               or which is not material to such Target Company, and has the
               legal right and authority to own, use, lease and operate its
               assets and to conduct its business in the manner presently
               conducted and as described in the Circular.

     2.3  Save for the unlisted equity securities in the PRC as disclosed in the
          Accounts and the interest of the Target BVI Companies in the Target
          Companies at Completion, no member of the Target Companies Group (that
          is, the Target BVI Companies and the Target Companies) owns or has any
          interest of any nature whatsoever in any shares, debentures or other
          securities issued by any undertaking.

     2.4  No Target BVI Company carries on any business other than holding the
          respective Target Companies, or owns any asset other than the shares
          of the respective Target Companies at Completion or has any
          liabilities.


     THE VENDOR AND THE WARRANTOR

     2.5  Each of the Vendor and the Warrantor is duly incorporated or
          established and is validly existing under the laws of its jurisdiction
          of incorporation, with full power and authority to own, lease and
          operate its properties and assets and to execute and perform its
          obligations under this Agreement and the Tax Indemnity.

     2.6  The execution, delivery and performance by each of the Vendor and the
          Warrantor of this Agreement and the Tax Indemnity has been duly
          authorised by it and this Agreement and the Tax Indemnity constitute a
          legal, valid and binding obligation of the Vendor or the Warrantor
          enforceable in accordance with its terms, subject to the laws of
          bankruptcy and other similar laws affecting the rights of creditors
          generally.

     2.7  All regulatory, corporate and other approvals (including shareholder
          approvals) and authorisations required by the Vendor and the Warrantor
          for the execution and delivery of this Agreement and the Tax Indemnity
          and any agreement or instrument contemplated hereby, the performance
          of the terms hereof and thereof and the sale of the Target BVI Shares
          have been obtained, are unconditional and are in full force and
          effect.

     2.8  All consents, approvals and authorisations of any court, government
          department or other regulatory body required with respect to the
          Vendor and the Warrantor for the execution of this Agreement and the
          Tax Indemnity and the performance of its terms have been obtained and
          are unconditional and in full force and effect.

     2.9  The execution and delivery by the Vendor and the Warrantor of this
          Agreement and the Tax Indemnity, and the performance and completion of
          the transactions herein contemplated: (a) will not infringe any
          applicable laws or regulations; (b) will not

                                     - 40 -
<PAGE>
           result in any breach of the terms of, or constitute a default under,
           its constitutional documents and business licence (as applicable) or
           any instrument, agreement or governmental, regulatory or other
           judgement, decree or order to which the Vendor or the Warrantor is a
           party or by which it or its property is bound; and (c) will not
           conflict with any of the certificates, licences or permits of the
           Vendor or the Warrantor that enable it to carry on the business or
           operations now operated by it.

     2.10  Each of the Vendor and the Warrantor is not: (a) in breach of the
           terms of, or in default under, any instrument, agreement or order to
           which it is a party or by which it or its property is bound to an
           extent which is material in the context of the transactions herein
           contemplated; (b) involved in or the subject of any current or
           pending investigation or proceedings (whether administrative,
           regulatory or otherwise), whether in the PRC or elsewhere.


3    FINANCIAL MATTERS

     FINANCIAL STATEMENTS

     3.1  (a)  The Financial Statements give a true and fair view of the state
               of affairs and financial results of the Target Companies for the
               periods and as at the dates stated therein.

          (b)  Without limiting the generality of paragraph (a):

               (i)    the Accounts of the Target Companies either make full
                      provision for or disclose all liabilities (whether actual,
                      contingent or disputed and including financial lease
                      commitments and pension liabilities), all outstanding
                      capital commitments and all bad or doubtful debts of the
                      Target Companies as at the Accounts Dates, in each case in
                      accordance with applicable accounting principles;

               (ii)   the Accounts of the Target Companies for each of the
                      periods ended on the Accounts Dates were prepared under
                      the historical convention, complied with the requirements
                      of all relevant laws and regulations then in force and
                      with all statements of standard accounting practice (or
                      financial reporting standards) and applicable accounting
                      principles then in force;

               (iii)  the rate of depreciation adopted by the Target Companies
                      in its Accounts for each of the periods ended on the
                      Accounts Dates was sufficient for each of the fixed assets
                      of the Target Companies to be written down to nil by the
                      end of its useful life;

               (iv)   except as stated in its Accounts, no changes in the
                      accounting policies were made by any of the Target
                      Companies in any of the periods ended on the Accounts
                      Dates; and

               (v)    the results shown by the Accounts of the Target Companies
                      for each of the periods ended on the Accounts Dates were
                      not (except as therein disclosed) affected by any
                      extraordinary or exceptional item or by any other factor
                      rendering such results for all or any of such periods
                      unusually high or low.

                                     - 41 -
<PAGE>
     3.2  None of the financial information provided to the Purchaser or its
          representatives and advisers is misleading in any material respect nor
          materially over-state the value of the assets nor materially
          under-state the liabilities of any Target Company as at the dates to
          which they were drawn up and do not materially over-state the profits
          of any Target Company in respect of the periods to which they relate.


     POSITION SINCE LAST ACCOUNTS DATE

     3.3  (a)  Since the Last Accounts Date and compared to the Last Accounts,
               there has been no material adverse change in the financial or
               trading position or in the prospects of any Target Company and no
               event, fact or matter has occurred which is likely to give rise
               to any such change.

          (b)  Since the Last Accounts Date and compared to the Last Accounts:

               (i)     the business of each Target Company has been carried on
                       in the ordinary and usual course and no Target Company
                       has made or agreed to make any payment other than
                       routine payments in the ordinary and usual course of
                       trading;

               (ii)    no dividend or other distribution has been declared,
                       paid or made by any Target Company;

               (iii)   there has been no material change in the level of
                       borrowing or in the working capital requirements of any
                       Target Company;

               (iv)    all transactions between each Target Company and any
                       Vendor Group Company have been on an arm's length basis
                       and commercial terms;

               (v)     save for the Restructuring Agreements, the Connected
                       Transactions and the Trademark Licensing Agreement, no
                       contract, liability or commitment (whether in respect of
                       capital expenditure or otherwise) has been entered into
                       by any Target Company which is of a long term or unusual
                       nature or which involved or could involve an obligation
                       of a material nature or magnitude;

               (vi)    save as provided in the Restructuring Agreements or in
                       the usual and ordinary course of business of the Target
                       Companies, no Target Company has (whether in the
                       ordinary and usual course of business or otherwise)
                       acquired or disposed of, or agreed to acquire or dispose
                       of any material business or any material asset having a
                       value in excess of RMB50,000,000;

               (vii)   no debtor has been released by any Target Company on
                       terms that it pays less than the book value of its debt
                       and no material debt owing to any Target Company has
                       been deferred, subordinated or written off or has proved
                       to any extent irrecoverable;

               (viii)  no change has been made in terms of employment and any
                       benefits in kind payable to employees and other
                       employment related matters by any Target Company or any
                       Vendor Group Company (other than those required by law)
                       which could materially


                                     - 42 -
<PAGE>
                       increase the total costs attributable to employment and
                       employee benefits of the Target Companies;

               (ix)    there has been no material increase or decrease in the
                       levels of debtors or creditors or in the average
                       collection or payment periods for the debtors and
                       creditors respectively;

               (x)     no Target Company has repaid any borrowing or
                       indebtedness in advance of its stated maturity;

               (xi)    there has been no material reduction in the cash balances
                       of any Target Company;

               (xii)   no resolution of the members of any Target Company has
                       been passed whether in general meeting or otherwise
                       (other than resolutions relating to the routine business
                       of annual general meetings);

               (xiii)  the business of each Target Company has not been
                       affected by any abnormal factor not affecting to a
                       similar extent generally all companies carrying on
                       similar businesses; and

               (xiv)   no Target Company has agreed to any variation or
                       termination of any existing contract to which that
                       Target Company is a party and which may have a material
                       effect upon the nature or scope of the operations of
                       such Target Company.


     WORKING CAPITAL

     3.4  Having regard to existing bank and other financial facilities, each
          Target Company has sufficient working capital available to it as at
          the date of this Agreement to enable it to continue to carry on its
          business in its present form and at its present level of turnover and
          for the purpose of performing in accordance with their terms all
          orders, projects and other obligations and discharging all liabilities
          which ought properly to be discharged during the period of 12 months
          after Completion.


     ACCOUNTING AND OTHER RECORDS

     3.5  (a)  The books of account and other records of each Target Company:

               (i)    are up-to-date and have been maintained in accordance with
                      all applicable laws and generally accepted accounting
                      practices on a proper and consistent basis;

               (ii)   comprise complete and accurate records of all information
                      required to be recorded therein;

               (iii)  are in its possession or under its control together with
                      all documents of title and executed copies of all existing
                      agreements to which the relevant Target Company is a
                      party.

          (b)  All accounts, documents and returns required by law to be
               delivered or made by any Target Company to any government
               authority or regulatory body or any other authority have been
               duly and correctly delivered or made.

                                     - 43 -
<PAGE>
4    DEBT POSITION

     DEBTS OWED TO THE TARGET COMPANIES

     4.1  There are no debts owing to any Target Company other than;

          (i)  the Intra-Group Loans; and

          (ii) trade debts incurred in the ordinary and usual course of
               business which do not exceed 120% of the trade debts as set out
               in the Last Accounts.


     DEBTS OWED BY THE TARGET COMPANIES

     4.2  (a)  No Target Company has outstanding any borrowing or indebtedness
               in the nature of borrowing (including, without limitation, any
               indebtedness for moneys borrowed or raised under any acceptance
               credit, bond, note, bill of exchange or commercial paper, finance
               lease, hire purchase agreement, trade bills (other than those on
               terms normally obtained), forward sale or purchase agreement or
               conditional sale agreement or other transaction having the
               commercial effect of a borrowing) other than:

               (i)  the Intra-Group Loans; and

               (ii) moneys borrowed from or otherwise owed to third parties
                    which do not exceed 120% of the money borrowed from or
                    otherwise owed to third parties as set out in the Last
                    Accounts.

          (b)  No Target Company has received any notice to repay under any
               agreement relating to any borrowing or indebtedness in the nature
               of borrowing which is repayable on demand.

          (c)  There has not occurred any event of default or any other event or
               circumstance which would entitle any person to call for early
               repayment under any agreement relating to any borrowing or
               indebtedness of any Target Company or to enforce any security
               given by any Target Company (or, in either case, any event or
               circumstance which with the giving of notice and/or the lapse of
               time and/or a relevant determination would constitute such an
               event or circumstance).


5    REGULATORY MATTERS

     5.1  (a)  Each Target Company has, or will by Completion have, obtained all
               licences, permissions, authorisations and consents required for
               carrying on its business effectively in the places and in the
               manner in which such business is now carried on.

          (b)  The licences, permissions, authorisations and consents referred
               to in paragraph (a) are (or will by Completion be) in full force
               and effect, not limited in duration or subject to any unusual or
               onerous conditions, have been (or will by Completion have been)
               complied with in all respects.

          (c)  To the best knowledge of the Vendor and the Warrantor, there are
               no circumstances which indicate that any of the licences,
               permissions, authorisations or consents referred to in paragraph
               (a) will or are likely to be revoked or not renewed, in whole or
               in part, in the ordinary course of events

                                     - 44 -
<PAGE>
               (whether as a result of the acquisition of the Target BVI Shares
               by the Purchaser or otherwise).

     5.2  (a)  Each Target Company has conducted its business and corporate
               affairs in accordance with its business licence and with all
               applicable laws and regulations (whether of the PRC or any other
               jurisdiction).

          (b)  No Target Company is in default of any order, decree or judgment
               of any court or any governmental or regulatory authority (whether
               of the PRC or any other jurisdiction).

6    THE REORGANISATION AND THE ASSETS

     THE REORGANISATION

     6.1  The property and other assets transferred into the Target Companies
          pursuant to the Reorganisation comprise all the assets necessary for
          the carrying on of the business carried on or to be carried on by the
          Target Companies in the manner it is presently conducted and as
          described in the Circular and the liabilities assumed by the Target
          Companies pursuant to the Reorganisation represent the only
          liabilities of the Target Companies and are fully, fairly and
          accurately provided for in, the Financial Statements.

     6.2  The events and transactions contemplated by the Reorganisation do not
          contravene any provision of applicable law, rule or regulation and do
          not contravene the Articles of Association, other constitutional
          documents or the business licence of the Target Companies or
          contravene the terms or provisions of, or constitute a default under,
          any indenture, mortgage, deed of trust, loan agreement, note, lease or
          other agreement or instrument binding upon the Target Companies that,
          singly or in the aggregate, is material to the Target Companies, or
          any judgement, rule or regulation, order or decree of any governmental
          body, agency or court having jurisdiction over the Target Companies
          and will not result in the creation or imposition of any Encumbrance
          or other restriction upon any assets of the Target Companies.

     6.3  All consents, approvals, authorisations, orders, registrations and
          qualifications required in the PRC in connection with the events and
          transactions contemplated by the Reorganisation have been (or will by
          Completion have been) made or unconditionally obtained in writing
          (including, without limitation, all PRC Relevant Governmental
          Approvals), and no such consent, approval, authorisation, order,
          registration or qualification has been withdrawn or is subject to any
          condition precedent which has not been fulfilled or performed.

     6.4  There are no legal or government proceedings pending against any of
          the Target Companies in the PRC challenging the effectiveness or
          validity of the events and transactions contemplated by the
          Reorganisation and, to the best knowledge of the Vendor and the
          Warrantor, no such proceedings are threatened or contemplated by any
          governmental agencies in the PRC or elsewhere.



     OWNERSHIP

     6.5  (a)  For the purpose of this Warranty 6.5, assets shall not include
               the Properties, to which the provisions of Part B of this
               Schedule shall apply.

                                     - 45 -
<PAGE>
          (b)  Each of the assets included in the Last Accounts of each Target
               Company or acquired by it since the Last Accounts Date (other
               than assets disposed of in the ordinary course of business and
               pursuant to the Reorganisation) is the absolute property of that
               Target Company. Save as disclosed in the Last Accounts, those
               assets are not the subject of any security interest or any
               assignment, equity, option, right of pre-emption, royalty,
               factoring arrangement, leasing or hiring agreement, hire purchase
               agreement, conditional sale or credit sale agreement, agreement
               for payment on deferred terms or any similar agreement or
               arrangement (or any agreement or obligation, including a
               conditional obligation, to create or enter into any of the
               foregoing).


     POSSESSION AND THIRD PARTY FACILITIES

     6.6  (a)  All of the assets owned by each Target Company, or in respect of
               which any Target Company has a right of use, are in the
               possession or under the control of that Target Company.

          (b)  Where any assets are used but not owned by any Target Company or
               any facilities or services are provided to any Target Company by
               any third party, there has not occurred any event of default or
               any other event or circumstance which may entitle any third party
               to terminate any agreement or licence in respect of the provision
               of such facilities or services (or any event or circumstance
               which with the giving of notice and/or the lapse of time and/or a
               relevant determination would constitute such an event or
               circumstance).


     ADEQUACY OF ASSETS

     6.7  (a)  The assets of each Target Company and the facilities and services
               to which each Target Company has a contractual right include all
               rights, properties, assets, facilities and services necessary or
               desirable for the carrying on of the business of that Target
               Company in the manner in which it is currently carried on.

          (b)  The assets of each Target Company and the facilities and services
               to which the relevant Target Company has a contractual right
               include all assets, facilities and services necessary to enable
               such Target Company to conduct its business after Completion in
               the same manner in all material respects as it was conducted
               immediately prior to the transfer of such business to the
               relevant Target Company pursuant to the Reorganisation.

          (c)  Save as otherwise provided in the Connected Transactions and the
               Trademark Licensing Agreement, no Target Company depends in any
               material respect upon the use of assets owned by, or facilities
               or services provided by, any Vendor Group Company.


     CONDITION

     6.8  All the plant, machinery, systems, equipment and vehicles used by each
          Target Company:

                                     - 46 -
<PAGE>
          (a)  are in a good state of repair and have been regularly and
               properly maintained in accordance with appropriate technical
               specifications, safety regulations and the terms and conditions
               of any applicable agreement;

          (b)  are capable of being efficiently and properly used for the
               purposes for which they were acquired or are retained;

          (c)  are not dangerous, inefficient, obsolete or in need of renewal or
               replacement.


     INSURANCES

     6.9  (a)  The insurances for the business, undertakings, properties and
               other assets of each Target Company are in full force and effect
               and there are no circumstances which could render any of such
               insurances void or voidable and all due premiums in respect
               thereof have (if due) been paid.

          (b)  No claim is outstanding by any Target Company under any such
               policy of insurance and, to the best knowledge of the Vendor and
               the Warrantor, there are no circumstances likely to give rise to
               such a claim.


7    INTELLECTUAL PROPERTY RIGHTS

     REGISTERED RIGHTS

     7.1  (a)  Each of the Target Companies is the sole legal owner of all
               Intellectual Property Rights registered or sought to be
               registered in any jurisdiction which are held or beneficially
               owned by such Target Company.

          (b)  No act has been done or omitted to be done and no event has
               occurred or is likely to occur which may render any of such
               Intellectual Property Rights subject to revocation, compulsory
               licence, cancellation or amendment or may prevent the grant or
               registration of a valid Intellectual Property Right pursuant to a
               pending application.


     INFRINGEMENT

     7.2  (a)  None of the operations of any Target Company infringe, or are
               likely to infringe, any rights held by any third party or involve
               the unauthorised use of confidential information disclosed to any
               Target Company (or any Vendor Group Company) in circumstances
               which might entitle a third party to make a claim against a
               Target Company.

          (b)  No claim has been made by any third party which alleges any
               infringing act or process which would fall within paragraph (a)
               above or which otherwise disputes the right of any Target Company
               to use any Intellectual Property Rights relating to its business
               and the Vendor and the Warrantor are not aware of any
               circumstances (including any act or omission to act) likely to
               give rise to such a claim.

          (c)  There exists no actual or threatened infringement by any third
               party of any intellectual Property Rights held or used by a
               Target Company (including misuse of confidential information) or
               any event likely to constitute such an infringement nor has a
               Target Company (or any Vendor Group Company)

                                     - 47 -
<PAGE>
               acquiesced in the unauthorised use by any third party of any such
               Intellectual Property Rights.


     INTELLECTUAL PROPERTY LICENCES

     7.3  No Target Company is in default under any licence, sub-licence or
          assignment granted to it in respect of any Intellectual Property
          Rights used by any Target Company.


     LOSS OF RIGHTS

     7.4  No Intellectual Property Rights owned or used by a Target Company and
          no licence of Intellectual Property Rights of which a Target Company
          has the benefit will be lost, or rendered liable to any right of
          termination or cessation by any third party, by virtue of the
          acquisition by the Purchaser of the Target BVI Shares.


     RECORDS AND SOFTWARE

     7.5  (a)  All the accounting records and systems (including but not limited
               to computerised accounting systems) of the Target Companies are
               recorded, stored, maintained or operated or otherwise held by a
               Target Company and are not wholly or partly dependent on any
               facilities or systems which are not under the exclusive ownership
               or control of a Target Company.

          (b)  Each Target Company is licensed to use all software necessary to
               enable it to continue to use its computerised records for the
               foreseeable future in the same manner in which they have been
               used prior to the date of this Agreement and does not share any
               user rights in respect of such software with any other person.


8    CONTRACTUAL MATTERS

     MATERIAL CONTRACTS

     8.1  Save for the Restructuring Agreements, the Connected Transactions and
          the Trademark Licensing Agreement, there is not outstanding any
          agreement or arrangement to which any Target Company is a party:

          (a)  which, by virtue of the acquisition of the Target BVI Shares by
               the Purchaser or other performance of the terms of this
               Agreement, will result in:

               (i)   any other party being relieved of any obligation or
                     becoming entitled to exercise any right (including any
                     right of termination or any right of pre-emption or other
                     option); or

               (ii)  any Target Company being in default under any such
                     agreement or arrangement or losing any benefit, right or
                     licence which it currently enjoys or in a liability or
                     obligation of any Target Company being created or
                     increased;

          (b)  to which any Vendor Group Company is a party or in which any
               Vendor Group Company or any connected person (as defined under
               the Listing


                                     - 48 -
<PAGE>
               Rules) is interested or from which any such person takes benefit,
               whether directly or indirectly;

          (c)  entered into otherwise than by way of a bargain at arm's length
               and on commercial terms;

          (d)  which establishes any guarantee, indemnity, suretyship, form of
               comfort or support (whether or not legally binding) given by any
               Target Company in respect of the obligations or solvency of any
               third party;

          (e)  pursuant to which any Target Company has sold or otherwise
               disposed of any company or business in circumstances such that it
               remains subject to any liability (whether contingent or
               otherwise) which is not fully provided for in its Last Accounts;

          (f)  which, upon completion by a Target Company of its work or the
               performance of its other obligations under it, is likely to
               result in a loss for that Target Company which is not fully
               provided for in its Last Accounts or which either is not expected
               to make a normal profit margin or involves an abnormal degree of
               risk;

          (g)  which establishes any joint venture, consortium, partnership or
               profit (or loss) sharing agreement or arrangement to which any
               Target Company is a party;

          (h)  any power of attorney given by any Target Company or any other
               authority which would enable any person not employed by any
               Target Company to enter into any contract or commitment on behalf
               of any Target Company;

          (i)  which involves or is likely to involve (i) material expenditure
               by any Target Company or (ii) material obligations or
               restrictions of any Target Company of an unusual or exceptional
               nature or magnitude and not in the ordinary and usual course of
               business;

          (j)  which establishes any material agency, distributorship,
               marketing, purchasing, manufacturing or licensing agreement or
               arrangement to which any Target Company is a party;

          (k)  which is a currency and/or interest rate swap agreement, asset
               swap, future rate or forward rate agreement, interest cap, collar
               and/or floor agreement or other exchange or rate protection
               transaction or combination thereof or any option with respect to
               any such transaction or any other similar transaction to which
               any target Company is a party;

          (l)  which is any other agreement or arrangement having or likely to
               have a material effect on the financial or trading position or
               prospects of any Target Company;

          (m)  which is a bid, tender, proposal or offer which, if accepted,
               would result in any Target Company becoming a party to any
               agreement or arrangement of a kind described in paragraphs (a) to
               (l) above.

                                     - 49 -
<PAGE>
     DEFAULTS

          8.2  (a)  No Target Company is in default under any agreement to which
                    it is a party and there are no circumstances likely to give
                    rise to any such default.

               (b)  No party with whom any Target Company has entered into any
                    agreement or arrangement is in default under such agreement
                    or arrangement and there are no circumstances likely to give
                    rise to any such default.


9    LITIGATION AND INVESTIGATIONS

     LITIGATION

     9.1  (a)  Except as plaintiff in the collection of debts arising in the
               ordinary course of business, no Target Company is a plaintiff or
               defendant in or otherwise a party to any material litigation,
               arbitration or administrative proceedings which are in progress
               or threatened or pending by or against or concerning any Target
               Company or any of its assets.

          (b)  No governmental or official investigation or inquiry concerning
               any Target Company is in progress or pending.

          (c)  The Vendor and the Warrantor are not aware of any circumstances
               which are likely to give rise to any such proceeding,
               investigation or inquiry as is referred to in paragraph (a) or
               paragraph (b).


10   DIRECTORS AND EMPLOYEES

     EMPLOYEES

     10.1  No Target Company has entered into any arrangements regarding any
           future variation in any contract of employment in respect of any of
           its directors and employees or any agreement imposing an obligation
           on the Target Company to increase the basis and/or rates of
           remuneration and/or the provision of other benefits in kind to or on
           behalf of any of its directors or employees at any future date.


     COMPLIANCE

     10.2  Each Target Company has in relation to each of its employees (and so
           far as relevant to each of its former employees) complied in all
           material respects with all statutes, regulations, codes of conduct,
           collective agreements, terms and conditions of employment, orders and
           awards relevant to their conditions of service or to the relations
           between it and its employees (or former employees, as the case may
           be) or any recognised trade union.


     INCENTIVE SCHEMES

     10.3  No Target Company has in existence any share incentive scheme, share
           option scheme or profit sharing scheme for all or any of its
           directors or employees.


     PAYMENTS ON TERMINATION

     10.4  Except to the extent (if any) to which provision or allowance has
           been made in the Last Accounts of each Target Company:

                                     - 50 -
<PAGE>
          (a)  no outstanding liability has been incurred by any Target Company
               for breach of any contract of employment or for services or for
               long service or redundancy payments, protective awards,
               compensation for dismissal or for any other liability accruing
               from the termination of any contract of employment or for
               services, and no such liability will be incurred by any Target
               Company as a result of the Reorganisation or the acquisition of
               the Target BVI Shares by the Purchaser or other performance of
               the terms of this Agreement and the Restructuring Agreements;

          (b)  no gratuitous payment has been made or benefit given (or promised
               to be made or given) by any Target Company in connection with the
               actual or proposed termination or suspension of employment, or
               variation of any contract of employment, of any present or former
               director or employee of any Target Company.

11   INSOLVENCY ETC.

     11.1  No order has been made, petition presented or meeting convened for
           the purpose of considering a resolution for the winding up of any
           member of the Target Companies Group or for the appointment of any
           provisional liquidator. No petition has been presented for an
           administration order to be made in relation to any member of the
           Target Companies Group, and no receiver (including any administrative
           receiver) has been appointed in respect of the whole or any part of
           any of the property, assets and/or undertaking of any member of the
           Target Companies Group.

     11.2  No composition in satisfaction of the debts of any member of the
           Target Companies Group, or scheme of arrangement of its affairs, or
           compromise or arrangement between it and its creditors and/or members
           or any class of its creditors and/or members, has been proposed,
           sanctioned or approved.

     11.3  No distress, distraint, charging order, garnishee order, execution or
           other process has been levied or applied for in respect of the whole
           or any part of any of the property, assets and/or undertaking of any
           member of the Target Companies Group.

     11.4  No events or circumstances analogous to any of those referred to in
           Warranties 11.1 to 11.3 have occurred in any jurisdiction outside the
           PRC.

     11.5  No circumstances exist which are likely to give rise to the
           occurrence of any events or circumstances described in Warranties
           11.1 to 11.4 if the Warranties were to be repeated at any time on or
           before Completion.

                                     - 51 -
<PAGE>
                       PART B: TAX AND PROPERTY WARRANTIES

1    TAX

     1.1  Each of the Target Companies has all necessary tax registration
          certificates which are in full force and effect and no Target Company
          has established any place of business or carried on any business and
          has not made any filing with any tax authority in any part of the
          world other than the PRC.

     1.2  Each of the Target Companies has complied in all material respects
          with all statutory provisions, rules, regulations, orders and
          directions concerning profits or enterprise income tax, foreign
          enterprise income tax, value-added tax, business tax and stamp duty
          (and any similar applicable tax or taxation in the PRC).

     1.3  No tax authority has agreed to operate any special arrangement (being
          an arrangement which is not based on a uniform application of the
          relevant legislation whether expressly provided for in the relevant
          legislation or operated by way of extra statutory concession or
          otherwise) in relation to any of the Target Companies.

     1.4  Each of the Target Companies has duly, within all appropriate time
          limits, made all returns, given all notices and supplied all
          information required to be supplied to all relevant tax authorities,
          All such information was when provided and remain complete and
          accurate and all such returns and notices were when provided and
          remain complete and accurate and were made on a proper basis.

     1.5  No Target Company has received any notice or allegation from any tax
          authorities that it has not complied with any relevant legal
          requirement relating to registration or notification for taxation
          purposes and no Target Company is involved in any dispute or
          investigation with any tax authority and there are no facts or matters
          which it reasonably believes will cause any such dispute or
          investigation or any liability for taxation (present or future).

     1.6  Each of the Target Companies:

          (a)  has paid or accounted for all taxation (if any) due to be paid or
               accounted for by it before the date of this Agreement;

          (b)  is not under any liability to pay any penalty or interest in
               connection with any taxation referred to in paragraph (a);

          (c)  has made all deductions and withholdings in respect or on account
               of taxation which it is required or entitled by any relevant
               legislation to make from any payments made by it including,
               without limitation, interest annuities or other annual payments,
               royalties, rent, remuneration payable to employees or
               sub-contractors or payments to a non-resident and where
               appropriate each Target Company has accounted in full to the
               relevant fiscal authority for any taxation so deducted or
               withheld; and

          (d)  has taken all necessary steps to obtain any repayment of or
               relief from taxation available to it.

     1.7  All sums due and payable to any taxation authority in respect of
          emoluments paid and benefits provided to the employees of the Target
          Companies at the date of this

                                     - 52 -
<PAGE>
          Agreement have been paid and all such deductions and retentions as are
          required under the laws of the PRC have been made.

     1.8  All remuneration, compensation payments, payments on retirement or
          removal from an office or employment and other sums paid or payable to
          employees or officers or former employees or officers of each Target
          Company and all interest, annuities, royalties, rent and other annual
          payments paid or payable by each Target Company (whether before or
          after the date hereof) pursuant to any obligation in existence at the
          date hereof are and will (on the basis of the taxation legislation in
          force at the date hereof) be deductible for incomes tax purposes
          either in computing the profits of each Target Company or as a charge
          on the income of such Target Company.

     1.9  Each of the Target Companies has made or caused to be made the returns
          which ought to be made by or in respect of each Target Company for any
          taxation purposes and no returns are the subject of any dispute with
          any tax authority.


2    PROPERTY

     2.1  The Target Companies have valid title to all of the Properties and
          valid title to all material personal property owned by them, in each
          case free and clear of all Encumbrances, defects or any other
          restrictions except such as are described in the Property Legal
          Opinions or such as do not materially affect the value of such
          property and do not interfere with the use made and proposed to be
          made of such property by the Target Companies.

     2.2  The Target Companies do not own, operate, manage or have any other
          right or interest, directly or indirectly, in any other material real
          property of any kind save for those described in the Property Legal
          Opinions and the telecommunications services agreements referred to in
          paragraphs 1 to 8 of Appendix 1.

                                     - 53 -
<PAGE>
                                   APPENDIX 1
                             CONNECTED TRANSACTIONS

1    Telecommunications Services Agreement between Anhui Mobile and Anhui
     Communication Services Company.

2    Telecommunications Services Agreement between Jiangxi Mobile and Jiangxi
     Communication Services Company.

3    Telecommunications Services Agreement between Chongqing Mobile and
     Chongqing Communication Services Company.

4    Telecommunications Services Agreement between Sichuan Mobile and Sichuan
     Communication Services Company.

5    Telecommunications Services Agreement between Hubei Mobile and Hubei
     Communication Services Company.

6    Telecommunications Services Agreement between Hunan Mobile and Hunan
     Communication Services Company.

7    Telecommunications Services Agreement between Shaanxi Mobile and Shaanxi
     Communication Services Company.

8    Telecommunications Services Agreement between Shanxi Mobile and Shanxi
     Communication Services Company.

9    Transmission Tower Sales, Installation and Maintenance Agreement between
     the Purchaser and Hubei Communication Services Company.

10   Letters of Consent between the Warrantor, Anhui Mobile, Anhui Communication
     Services Company and the relevant banks regarding the assignment of loans
     from Anhui Communication Services Company to Anhui Mobile.

11   Letters of Consent between the Warrantor, Jiangxi Mobile, Jiangxi
     Communication Services Company and the relevant banks regarding the
     assignment of loans from Jiangxi Communication Services Company to Jiangxi
     Mobile.

12   Letters of Consent between the Warrantor, Chongqing Mobile, Chongqing
     Communication Services Company and the relevant banks regarding the
     assignment of loans from Chongqing Communication Services Company to
     Chongqing Mobile.

13   Letters of Consent between the Warrantor, Sichuan Mobile, Sichuan
     Communication Services Company and the relevant banks regarding the
     assignment of loans from Sichuan Communication Services Company to Sichuan
     Mobile.

14   Letters of Consent between the Warrantor, Hubei Mobile, Hubei Communication
     Services Company and the relevant banks regarding the assignment of loans
     from Hubei Communication Services Company to Hubei Mobile.

15   Letters of Consent between the Warrantor, Hunan Mobile, Hunan Communication
     Services Company and the relevant banks regarding the assignment of loans
     from Hunan Communication Services Company to Hunan Mobile.

                                     - 54 -
<PAGE>
16   Letters of Consent between the Warrantor, Shaanxi Mobile, Shaanxi
     Communication Services Company and the relevant banks regarding the
     assignment of loans from Shaanxi Communication Services Company to Shaanxi
     Mobile.

17   Letters of Consent between the Warrantor, Shanxi Mobile, Shanxi
     Communication Services Company and the relevant banks regarding the
     assignment of loans from Shanxi Communication Services Company to Shanxi
     Mobile.

18   Principle Agreement for Indirect Loans between the Warrantor and the
     Purchaser.

19   Agreement for the Use of Spectrum and Number Resources between the
     Warrantor and the Purchaser.

20   Inter-provincial Long Distance Transmission Lines Leasing Fee Sharing
     Agreement between the Warrantor and the Purchaser.

21   Inter-provincial Interconnection and Domestic and International Roaming
     Settlement Agreement between the Warrantor and the Purchaser.

22   Agreement for the Sharing and Settlement of Revenue from Prepaid
     Value-adding Cards between the Warrantor and the Purchaser.

23   Supplemental Agreement for the Sharing and Settlement of Revenue from
     Prepaid Value-Adding Cards between the Warrantor and the Purchaser.

24   Supplemental Agreement (in relation to agreements 19 to 23 above) between
     the Warrantor, the Purchaser and the Target Companies.

                                     - 55 -
<PAGE>
                                   APPENDIX 2
                          THE RESTRUCTURING AGREEMENTS

1    Investment Agreement dated 15 May 2002 between the Warrantor, Anhui Mobile
     and Anhui Communication Services Company, pursuant to which the Warrantor
     injected all interests, assets, liabilities, personnel and businesses in
     relation to the mobile telecommunications services in Anhui into Anhui
     Mobile.

2    Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
     Anhui Mobile and Anhui Communication Services Company to confirm the rights
     and obligations in respect of the interests, assets, liabilities, personnel
     and businesses transferred under the Investment Agreement.

3    Investment Agreement dated 15 May 2002 between the Warrantor, Jiangxi
     Mobile and Jiangxi Communication Services Company, pursuant to which the
     Warrantor injected all interests, assets, liabilities, personnel and
     businesses in relation to the mobile telecommunications services in Jiangxi
     into Jiangxi Mobile.

4    Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
     Jiangxi Mobile and Jiangxi Communication Services Company to confirm the
     rights and obligations in respect of the interests, assets, liabilities,
     personnel and businesses transferred under the Investment Agreement.

5    Investment Agreement dated 15 May 2002 between the Warrantor, Chongqing
     Mobile and Chongqing Communication Services Company, pursuant to which the
     Warrantor injected all interests, assets, liabilities personnel and
     businesses in relation to the mobile telecommunications services in
     Chongqing into Chongqing Mobile.

6    Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
     Chongqing Mobile and Chongqing Communication Services Company to confirm
     the rights and obligations in respect of the interests, assets,
     liabilities, personnel and businesses transferred under the Investment
     Agreement.

7    Investment Agreement dated 15 May 2002 between the Warrantor, Sichuan
     Mobile and Sichuan Communication Services Company, pursuant to which the
     Warrantor injected all interests, assets, liabilities, personnel and
     businesses in relation to the mobile telecommunications services in Sichuan
     into Sichuan Mobile.

8    Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
     Sichuan Mobile and Sichuan Communication Services Company to confirm the
     rights and obligations in respect of the interests, assets, liabilities,
     personnel and businesses transferred under the Investment Agreement.

9    Investment Agreement dated 15 May 2002 between the Warrantor, Hubei Mobile
     and Hubei Communication Services Company, pursuant to which the Warrantor
     injected all interest, assets, liabilities, personnel and businesses in
     relation to the mobile telecommunications services in Hubei into Hubei
     Mobile.

10   Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
     Hubei Mobile and Hubei Communication Services Company to confirm the rights
     and obligations in respect of the interests, assets, liabilities, personnel
     and businesses transferred under the Investment Agreement.

                                     - 56 -
<PAGE>
11   Investment Agreement dated 15 May 2002 between the Warrantor, Hunan Mobile
     and Hunan Communication Services Company, pursuant to which the Warrantor
     injected all interests, assets, liabilities, personnel and businesses in
     relation to the mobile telecommunications services in Hunan into Hunan
     Mobile.

12   Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
     Hunan Mobile and Hunan Communication Services Company to confirm the rights
     and obligations in respect of the interests, assets, liabilities, personnel
     and businesses transferred under the Investment Agreement.

13   Investment Agreement dated 15 May 2002 between the Warrantor, Shaanxi
     Mobile and Shaanxi Communication Services Company, pursuant to which the
     Warrantor injected all interests, assets, liabilities, personnel and
     businesses in relation to the mobile telecommunications services in Shaanxi
     into Shaanxi Mobile.

14   Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
     Shaanxi Mobile and Shaanxi Communication Industrial Company to confirm the
     rights and obligations in respect of the interests, assets, liabilities,
     personnel and businesses transferred under the Investment Agreement.

15   Investment Agreement dated 15 May 2002 between the Warrantor, Shanxi Mobile
     and Shanxi Communication Services Company, pursuant to which the Warrantor
     injected all interests, assets, liabilities, personnel and businesses in
     relation to the mobile telecommunications services in Shanxi into Shanxi
     Mobile.

16   Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
     Shanxi Mobile and Shanxi Communication Services Company to confirm the
     rights and obligations in respect of the interests, assets, liabilities,
     personnel and businesses transferred under the Investment Agreement.

17   Transfer of Interests Agreement between the Warrantor, China Mobile (Hong
     Kong) Group Company Limited, the Vendor, Anhui Mobile BVI, Jiangxi Mobile
     BVI, Chongqing Mobile BVI, Sichuan Mobile BVI, Hubei Mobile BVI, Hunan
     Mobile BVI, Shaanxi Mobile BVI and Shanxi Mobile BVI.

                                     - 57 -
<PAGE>
                                   APPENDIX 3
                              FORM OF TAX INDEMNITY





                          Dated                     2002



                      CHINA MOBILE HONG KONG (BVI) LIMITED



                        CHINA MOBILE (HONG KONG) LIMITED



                     CHINA MOBILE COMMUNICATIONS CORPORATION










                                  TAX INDEMNITY

                                     - 58 -
<PAGE>
THIS DEED OF TAX INDEMNITY is made on                               2002

BETWEEN:

(1)  CHINA MOBILE HONG KONG (BVI) LIMITED a company incorporated under the laws
     of the British Virgin Islands whose registered office is at PO Box 957,
     Offshore Incorporation Centre, Road Town, Tortola, British Virgin Islands
     (the "VENDOR");

(2)  CHINA MOBILE (HONG KONG) LIMITED a company incorporated under the laws of
     Hong Kong whose registered office is at 60th Floor, The Center, 99 Queen's
     Road Central, Hong Kong (the "PURCHASER"); and

(3)  CHINA MOBILE COMMUNICATIONS CORPORATION a company incorporated under the
     laws of the PRC whose registered office is at 53A Xibianmennei Dajie,
     Xuanwuqu, Beijing, PRC (the "WARRANTOR").

WHEREAS:

(A)  By a Conditional Sale and Purchase Agreement dated 16 May 2002 (the
     "AGREEMENT") made between the Vendor, the Warrantor and the Purchaser, the
     Vendor has agreed to sell and the Purchaser has agreed to purchase the
     Target BVI Shares (as defined in the Agreement) on the terms and conditions
     therein contained.

(B)  It is a term of the Agreement that the Vendor and the Warrantor deliver to
     the Purchaser this Deed of Tax Indemnity on Completion (as defined in the
     Agreement).

NOW THIS DEED WITNESSES as follows:

1    INTERPRETATION

     1.1  In this Deed, unless the context requires otherwise:

          (a)  words and expressions and other rules of interpretation defined,
               used or set out in the Agreement have the same meanings and
               application in this Deed;

          (b)  "TAXATION" means and includes all forms of tax, levy, duty,
               charge, impost, fee, deduction or withholding of any nature now
               or hereafter imposed, levied, collected, withheld or assessed by
               any taxing or other authority in any part of the world and
               includes any interest, additional tax, penalty or other charge
               payable or claimed in respect thereof,

          (c)  "CLAIM" means any assessment, notice, demand, letter or other
               document issued or action taken by or on behalf of any person,
               authority or body whatsoever and of whatever country from which
               it appears that any member of the Target Companies Group is
               liable or is sought to be made liable to make any payment or is
               deprived or is sought to be deprived of any relief or allowance
               or credit or right to repayment of taxation;

          (d)  "EVENT" includes (without limitation) the death of any person,
               any action, omission or transaction whether or not any member of
               the Target Companies Group is a party thereto and includes
               completion of the sale of the Target BVI Shares to the Purchaser
               and references to the result of events on or before the date
               hereof shall include the combined result of two or more events
               one or more of which shall have taken place before the date
               hereof;

                                     - 59 -
<PAGE>
          (e)  references to income or profits or gains earned, accrued or
               received shall include income or profits or gains deemed to have
               been or treated as or regarded as earned, accrued or received for
               the purposes of any legislation;

          (f)  references to a Claim shall include any Claim whether made before
               or after the date hereof and whether satisfied or unsatisfied at
               the date hereof and shall also include:

               (i)   the loss of any relief, allowance or credit granted by or
                     pursuant to any legislation or otherwise for taxation
                     purposes which could but for the Claim in question have
                     been available to the Purchaser or any member of the
                     Target Companies Group whether or not the said loss
                     results in any taxation being payable at the time of such
                     loss; and

               (ii)  the nullifying or cancellation of a right to repayment of
                     taxation which would have been so available or is at the
                     date hereof assumed by the Vendor, the Warrantor or the
                     Purchaser to be available;

               and in such a case the amount of taxation which could otherwise
               have been relieved, allowed or credited by the relief, allowance
               or credit so lost or the amount of repayment which would
               otherwise have been obtained shall be treated as an amount of
               taxation for which a liability has arisen;

          (g)  references to the Agreement shall be construed as references to
               the Agreement as amended or supplemented from time to time.

     1.2  The expressions the VENDOR, THE WARRANTOR, the TARGET COMPANIES GROUP
          and the PURCHASER shall, where the context permits, include their
          respective successors and assigns.


2    INDEMNITY

     Subject as hereinafter provided, each of the Vendor and the Warrantor
     hereby jointly and severally undertakes to indemnify and keep indemnified
     the Purchaser (for itself and as trustee for the Target Companies Group)
     against any loss or liability suffered by the Purchaser or any member of
     the Target Companies Group including, but not limited to, any diminution in
     the value of the assets of or shares in any member of the Target Companies
     Group, any payment made or required to be made by the Purchaser or any
     member of the Target Companies Group and any costs and expenses incurred as
     a result of or in connection with any Claim falling on any member of the
     Target Companies Group resulting from or by reference to any income,
     profits or gains earned, accrued or received on or before the date hereof
     or any event on or before the date hereof whether alone or in conjunction
     with other circumstances and whether or not such taxation is chargeable
     against or attributable to any other person, firm or company.


3    EXCEPTIONS

     The indemnities given by this Deed do not cover any Claim to the extent
     that provision or reserve in respect thereof has been made in the Last
     Accounts or to the extent that payment or discharge of such Claim has been
     taken into account therein.

                                     - 60 -
<PAGE>
4    COSTS AND EXPENSES

     The indemnities given by this Deed shall cover all costs and expenses
     incurred by the Purchaser or any member of the Target Companies Group in
     connection with any Claim, and any penalties, fines or interest payable by
     the Purchaser or any member of the Target Companies Group relating to any
     Claim for which the Vendor or the Warrantor is liable under this Deed.


5    REIMBURSEMENT

     In the event that any Claim which is the subject of an indemnity hereunder
     is or has been discharged (whether by payment or by the loss of any relief,
     allowance, credit or right to repayment of taxation) or suffered by any
     member of the Target Companies Group, the indemnity given hereunder shall
     take effect as a covenant by the Vendor and the Warrantor forthwith to
     reimburse the relevant member of the Target Companies Group (through the
     Purchaser) for any amount so paid or to compensate the relevant member of
     Target Companies Group for any loss of relief, allowance, credit or right
     to repayment so suffered.


6    CONDUCT OF CLAIMS

     If the Purchaser becomes aware of a Claim relevant for the purposes of this
     Deed, it shall as soon as reasonably practicable give notice thereof to the
     Vendor and the Warrantor and shall (subject to the Purchaser and the Target
     Companies Group being indemnified to the Purchaser's satisfaction against
     any liability, costs, damages or expenses which may be incurred thereby)
     take such action and procure that the Target Companies Group shall take
     such action as the Vendor and the Warrantor may reasonably request to
     avoid, resist, dispute, defend, compromise or appeal against the Claim,
     provided that neither the Purchaser nor any member of the Target Companies
     Group shall be required to take any steps which would require any admission
     of guilt or liability relating to matters connected with the Claim in
     question or which would affect the future conduct of the business of the
     Purchaser or any member of the Target Companies Group or affect the rights
     or reputations of any of them nor shall they be required to take any such
     action unless the Vendor and the Warrantor shall have produced to them a
     leading barrister's opinion that such action is reasonable.


7    SET-OFF AND DEDUCTIONS

     All payments to be made by the Vendor and the Warrantor under this Deed
     shall be made in full without set-off or counterclaim or any restriction or
     condition and free and clear of any present or future taxes, duties,
     charges or other deductions or withholdings of any nature. If any deduction
     or withholding is required to be made from any such payment the Vendor and
     the Warrantor shall, together with such payment, pay such additional amount
     as is necessary to ensure that the recipient receives the full amount due
     hereunder.


8    WAIVER AND SEVERABILITY

     No failure or delay by the Purchaser or any member of the Target Companies
     Group in exercising any right, power or remedy under this Deed shall
     operate as a waiver thereof, nor shall any single or partial exercise of
     the same preclude any further exercise thereof or the exercise of any other
     right, power or remedy. If at any time any provision of this Deed is or
     becomes illegal, invalid or unenforceable in any respect, the legality,
     validity and enforceability of the remaining provisions of this Deed shall
     not be affected or impaired thereby.

                                     - 61 -
<PAGE>
9    ASSIGNMENT

     The Purchaser and any member of the Target Companies Group may assign its
     respective rights and benefits under this Deed.


10   NOTICES

     Each notice, demand or other communication given or made hereunder shall be
     in writing and delivered or sent to the relevant party at its address or
     telex number or fax number set out in the Agreement. The provisions of
     clause 21 of the Agreement shall apply to this Deed as though they have
     been fully set out herein.


11   GOVERNING LAW AND JURISDICTION

     11.1  This Deed shall be governed by and construed in accordance with the
           laws of Hong Kong.

     11.2  Any dispute arising out of or in connection with this Deed shall be
           resolved by arbitration in Hong Kong International Arbitration Centre
           by a single arbitrator in accordance with the UNCITRAL Arbitration
           Rules in force from time to time. The parties agree that the arbitral
           award will be final and binding.

IN WITNESS WHEREOF this Deed has been executed on the day and year first above
written.




<TABLE>
<S>                                                      <C>
THE COMMON SEAL OF                                       )

CHINA MOBILE HONG KONG (BVI) LIMITED                     )

was affixed hereto in the presence of:                   )
</TABLE>





---------------------------------            -----------------------------------
[NAME OF DIRECTOR]                           [NAME OF DIRECTOR]
Director                                     Director






<TABLE>
<S>                                                      <C>
THE COMMON SEAL OF                                       )

CHINA MOBILE (HONG KONG) LIMITED                         )

was affixed hereto in the presence of:                   )
</TABLE>





---------------------------------            -----------------------------------
[NAME OF DIRECTOR]                           [NAME OF DIRECTOR]
Director                                     Director

                                     - 62 -
<PAGE>
<TABLE>
<S>                                                       <C>
SIGNED, SEALED AND DELIVERED                              )

BY                                                        )

a duly authorised representative on behalf of             )

CHINA MOBILE COMMUNICATIONS CORPORATION                   )
</TABLE>

                                     - 63 -
<PAGE>
                                 SIGNATURE PAGE

<TABLE>
<S>                                                <C>   <C>
SIGNED by WANG XIAOCHU                             )

for and on behalf of                               )     /s/ Wang Xiaochu

CHINA MOBILE HONG KONG (BVI) LIMITED               )

in the presence of:                                )




/s/ Celia Lam



SIGNED by WANG XIAOCHU                             )

for and on behalf of                               )     /s/ Wang Xiaochu

CHINA MOBILE (HONG KONG) LIMITED                   )

in the presence of:                                )



/s/ Celia Lam



SIGNED by XUE TAOHAI                               )

for and on behalf of                               )     /s/ Xue Taohai

CHINA MOBILE COMMUNICATIONS CORPORATION            )

in the presence of:                                )



/s/ Celia Lam
</TABLE>

                                     - 64 -