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                                                                    EXHIBIT 10.6

                    ASSETS AND LIABILITIES TRANSFER AGREEMENT

                                 BY AND BETWEEN

                 CHINA NETWORK COMMUNICATIONS GROUP CORPORATION

                                       AND

                         CHINA NETCOM CORPORATON LIMITED

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                    ASSETS AND LIABILITIES TRANSFER AGREEMENT

This Agreement is made and entered into on June 23, 2004 in Beijing, People's
Republic of China ("PRC") by and between the following parties:

      (1)   PARTY A: China Network Communications Group Corporation

            Address: No.156, Fuxingmennei Avenue, Xicheng District, Beijing, PRC

      (2)   PARTY B: China Netcom Corporation Limited

            Address: 1 Beihuandong Road, Economic and Technical Development
                     Zone, Beijing, PRC

WHEREAS,

      (1)   Party A is a state-owned enterprise duly incorporated and validly
            existing under the laws of PRC, and also an organization with
            investment authorized by the state and a pilot project for
            state-holding corporations; Party B is a foreign-invested enterprise
            duly incorporated and validly existing under the laws of PRC;

      (2)   In order to further implement the Telecommunications Reform Program
            by the State Council and to realize the merger between Party A and
            China Netcom (Holdings) Corporation Limited (hereinafter referred to
            as "Netcom Holdings") and overseas listing, it is necessary to carry
            out a series of restructuring for Netcom Holdings and its
            subsidiaries including Party B;

      (3)   Before the restructuring, Netcom Holdings holds the equities of
            Party B successively through China Netcom (Holdings) BVI Corporation
            Limited (hereinafter referred to as "BVI CORPORATION") and China
            Netcom Corporation (Hong Kong) Limited (hereinafter referred to as
            "HONG KONG CORPORATION");

      (4)   As a part and step of the restructuring, Party A has entered into an
            Agreement of Equity Transfer of China Netcom (Holdings) Corporation
            Limited on Apr 20, 2004 with four shareholders of Netcom Holdings,
            i.e., Chinese Academy of Sciences, The information and Network
            Center of State Administration of Radio, Film and Television, China
            Railways Telecommunications Center and Shanghai Alliance Investment
            Limited (hereinafter referred to as "FOUR SHAREHOLDERS"), pursuant
            to which the Four Shareholders shall respectively transfer 25% of
            their Netcom Holdings' equities to Party A. Upon completion of the
            transfer, Netcom Holdings shall become a wholly-owned subsidiary of
            Party A. And in turn, Party A shall receive 100% of Netcom Holdings'
            equities in BVI pursuant to Equity Transfer Agreement of BVI entered
            between Party A and Netcom Holdings, which will make BVI a
            wholly-owned subsidiary directly held by Party A;

      (5)   As another important part and step of the restructuring, it is
            necessary to restructure Party B entirely, and transfer all its
            assets, liabilities and relevant businesses to Party A (unless
            otherwise

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            specified in this Agreement). Upon completion of the equity transfer
            under section (4) and government approval, Party A shall ultimately
            inject the proposed listing assets, liabilities and businesses
            successively into Party B (hereinafter referred to "ASSETS
            INJECTION") through BVI and Hong Kong Company. The overseas public
            offering and listing shall be completed by Hong Kong Company;

      (6)   According to above restructuring requirements and based on the terms
            and conditions hereunder, Party B agrees to transfer to Party A and
            Party A agrees to receive from Party B the transferred assets and
            liabilities (as defined hereunder), and make agreements and
            arrangements concerning relevant rights and obligations in foregoing
            transfer.

Therefore, based on friendly consultation, both parties hereto agreed as
follows:

                             ARTICLE ONE DEFINITION

1.1   Unless otherwise stipulated by this Agreement, the following terms have
      the meanings set out below in this Agreement:

      AUDITED FINANCIAL REPORT           Annual Financial Report 2003 of Party B
                                         (See the Exhibit I hereto) prepared
                                         according to Chinese Accounting
                                         Standards and audited by
                                         PricewaterhouseCoopers Zhong Tian CPAs
                                         Corporation Limited, a recognized audit
                                         organization by both parties.

      TRANSFERRED ASSETS AND LIABILITIES (1) all assets and relevant liabilities
                                         and interests listed in the audited
                                         financial report of Party B, together
                                         with any other assets, rights,
                                         interests, liabilities,
                                         responsibilities and obligations
                                         (including any potential and contingent
                                         liabilities), which unlisted in the
                                         audited financial report but actually
                                         held or borne by Party B as of
                                         December, 31, 2003 except for the
                                         equities of Party B in China Netcom
                                         (Hong Kong) Operating Corporation
                                         Limited and all overseas assets held by
                                         Party B, and (2) all rights, interests,
                                         liabilities, responsibilities,
                                         obligations (including any potential
                                         and contingent liabilities) of Party B
                                         occurred between December, 31, 2003 and
                                         the Effective Date (as defined
                                         hereunder).

      Effective Date The date on which all prerequisites agreed herein are
      fulfilled

1.2   For the purpose of this Agreement, all headings are set only for the
      convenience of reading, in no

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      events shall they affect the interpretation of the terms and conditions
      herein.

                 ARTICLE TWO TRANSFER OF ASSETS AND LIABILITIES

2.1   Party B agrees to transfer to Party A and Party A agrees to receive from
      Party B the transferred assets and liabilities.

2.2   Both parties hereto agree that Party A shall not pay any cash
      considerations to Party B for receipt of the transferred assets and
      liabilities as a whole from Party B pursuant to this Agreement.

2.3   Both parties hereto agree that, in case that the prerequisite agreed in
      article 3.2 herein is fulfilled, the transferred assets and liabilities
      shall be owned or borne by Party A since Dec 31, 2003 (the long-term
      investments in transferred assets and liabilities shall be processed
      according to article 5.1 herein).

2.4   Based on foresaid article 2.3, for the purpose of transfer of the
      transferred assets and liabilities, Party A and Party B further agree
      that:

      2.4.1 All rights, interests, responsibilities, obligations, liabilities
            and any potential or contingent liabilities (if any) under the
            transferred assets and liabilities shall be enjoyed or borne by
            Party A;

      2.4.2 All rights, obligations and liabilities of Party B under any
            business contracts and other contracts entered into by Party B with
            any third party in connection with the transferred assets and
            liabilities shall be succeeded by Party A at the time the
            transferred assets and liabilities are transferred to Party A; Party
            A may further arrange its associated affiliates to succeed such
            contracts without written consent from Party B. Party B shall assist
            Party A and its associated affiliates with the necessary procedures
            in changing contract party with a related third party (except that
            it is otherwise agreed in item 2.4.5);

      2.4.3 Since the Effective Date, as for any suits, arbitrations, claims or
            other legal proceedings in connection with the transferred assets
            and liabilities or related contracts, regardless occurred before or
            after the Effective Date, Party A shall participate relevant suits,
            arbitrations or other legal proceedings as litigant and enjoy
            relevant rights as well as perform relevant obligations;

      2.4.4 If any prior authorizations, approvals, permissions, confirmations
            or exemptions from any third party that are necessary for the
            transfer of transferred assets and liabilities to Party A fail to
            complete before the Effective Date, Party A and Party B shall take
            all necessary actions in accordance with this Agreement to complete
            such procedures as soon as possible, provided however, all rights,
            interests, profits and all obligations, losses and claims arising
            from or in

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            connection with such assets and liabilities shall be assumed by
            Party A; and Party A shall make full and effective compensation for
            any resultant costs or losses suffered by Party B for any reason;

      2.4.5 In consideration of the requirement of the restructuring that after
            the transferred assets and liabilities has been transferred to Party
            A, part of the transferred assets and liabilities (such transferred
            assets and liabilities will be listed in assets evaluation report on
            assets injected to be submitted to State-owned Assets Supervision
            and Administration Commission of the State Council, hereinafter
            referred to as "BACK-INJECTED TRANSFERRED ASSETS AND LIABILITIES")
            will be injected back into Party B by Party A through assets
            injection, therefore, Party A and Party B agree that, the business
            contracts and other contracts entered into by Party B with third
            party, which will be resumed by Party B after assets injection, are
            unnecessary to change contract party with a related third party,
            provided however, this provision shall not affect or relieve the
            obligations and responsibilities that shall be undertaken by Party A
            in accordance with other articles contained herein.

2.5   For the transfer of bank loans in the transferred assets and liabilities,
      Party A further undertakes to Party B that:

      2.5.1 Party A shall make every effort and take all necessary actions
            (including but not limited to signing necessary consent letter to
            change loan name or entering loan renewal agreement with relevant
            loan bank) to impel relevant loan bank to issue written consent to
            transfer the transferred assets and liabilities under this Agreement
            and waive any guarantee Party B has provided for the bank loan
            (including but not limited to the security of pledge of right to
            charge tariff) before the Effective Date;

      2.5.2 Party A shall make every effort and take all necessary actions to
            obtain before the date of effectiveness all necessary written
            consents on the transfer of assets and liabilities by Party B to
            Party A from Netcom Holdings' creditors (including written consent
            from related loan banks of Netcom Holdings agrees to remove the
            security of pledge of right to charge tariff made by Party B for
            Netcom Holdings' loan).

                     ARTICLE THREE EFFECTIVENESS OF TRANSFER

3.1   Transfer agreed under article 2 herein shall become effective when the
      restructuring and list plan of Party A is approved by the State Council
      and relevant governmental authorities. If otherwise agreed in this
      Agreement, the other provisions shall prevail.

3.2   Both parties hereto may waive in written the regulated conditions and
      prerequisites for the transfer in order to complete equity transfer under
      this Agreement as soon as possible.

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            ARTICLE FOUR REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

4.1   Both parties hereby make the following representations and warranties to
      each other:

      (1)   It is legal entity duly incorporated and validly existing under the
            laws of PRC;

      (2)   It has legally and effectively obtained all internal authorizations,
            approvals and consents necessary for performance of this Agreement;
            this Agreement has binding force over it and is enforceable;

      (3)   The transfer under article 2 herein shall come into force on
            condition that Party A should wholly-own, directly or indirectly
            pursuant to the laws of PRC, all equities of Party B in certain
            period.

4.2   As to transferred assets and liabilities, Party A agrees to make
      compensations for Party B on the following relevant matters and at any
      time enable Party B to obtain full, sufficient, timely, effective and
      adequate compensations:

      (1)   Any indictment, claims, lawsuits, losses, compensations, payments,
            expenses and costs suffered by Party B arising from the transfer of
            assets and liabilities (including but not limited to professional
            service charge and costs) to Party A and occurrence of any event
            before or after the date of effectiveness;

      (2)   Any indictment, claims, lawsuits, losses, compensations, payments,
            expenses and costs (including but not limited to professional
            service charge and costs) suffered by Party B after the date of
            effectiveness for failure in obtaining advance authorization,
            approvals, consents, confirmations or exemptions of any third party
            necessary for the transfer under item 2.4.4 before the date of
            effectiveness.

                          ARTICLE FIVE OTHER AGREEMENTS

5.1   As to Party B's equities in its long-term invested entities before the
      Effective Date (including the Effective Date), both parties agree that
      Party B shall transfer the equities as soon as possible to associated
      affiliates of Party A or a suitable third party. All proceedings from
      transfer shall be included into transferred assets and liabilities under
      this Agreement and be handed over to Party A timely by Party B. Party A
      hereby undertakes to Party B that it shall make every effort (including
      but not limited to impelling its associated affiliates or suitable third
      party to pass relevant resolutions or signing relevant agreements) to
      assist Party B to go through all procedures necessary for the transfer as
      soon as possible and make enough and effective compensation for Party B
      for any claims or losses suffered by Party B arising from the equities and
      its transfer.

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5.2   As to Party B's equities in China Netcom (Hong Kong) Operating Corporation
      Limited, Party A hereby warrants to Party B that it will make every effort
      (including but not limited to urging relevant overseas subsidiary to pass
      relevant resolutions and sign relevant agreements), before the date at
      which assets evaluation results on assets injected are approved by
      State-owned Assets Supervision and Administration Commission of the State
      Council, to assist Party B to transfer its equities, and make sufficient
      and effective compensations for Party B as to any claims or losses
      suffered by Party B arising from the equities and its transfer.

5.3   Both Parties agree that after the date of effectiveness, the Parties will
      carry out adequate consultation, coordination and cooperation on
      unfinished matters for careful arrangement of business, organizations and
      personnel integration concerned transfer of assets and liabilities under
      this Agreement.

                       ARTICLE SIX BREACH OF THE CONTRACT

6.1   Each Party shall be entitled to claim against the breach of any
      commitments and warrants or other clauses herein by the other Party. The
      alleged party shall be responsible for all direct or indirect losses,
      costs and liabilities suffered by the other party due to its breach of
      commitments and warrants or any other clauses herein.

                        ARTICLE SEVEN DISPUTE RESOLUTION

7.1   If any disputes develop among the Parties in respect of the validity,
      interpretations or performance of this Agreement, the parties should
      resolve the disputes in question through friendly negotiation first. If
      the negotiation in respect of the disputes fails within thirty (30) days
      as from the date when such dispute arose, any Party shall have the right
      resort to litigations to the People's Court with proper jurisdiction.

            ARTICLE EIGHT EFFECTIVENESS OF THIS AGREEMENT AND OTHERS

8.1   This Agreement shall come into effect once signed by both parties' legal
      representatives or authorized representatives and affixed with their
      official seals.

8.2   All amendments or supplements to this Agreement shall be effective only
      signed and officially sealed by the legal representatives or authorized
      representatives of both parties.

8.3   This Agreement represents the entire agreement between both parties on
      transfer of the transferred assets and liabilities and shall replace any
      written or oral agreement, contract and memorandum (if any) between both
      parties.

8.4   This Agreement is made into eight (8) duplicate originals. Each party
      holds two (2), and each original

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      shall have the same legal binding effect. The remains shall be kept by
      Party A to process relevant reporting or filing procedures.

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(Signature page)

China Network Communications Group Corporation (seal)

By: _____________________________________________
Legal Representative or Authorized Representative

China Netcom Corporation Limited (seal)

By: _____________________________________________
Legal Representative or Authorized Representative

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Appendix One: Audited Financial Reports

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