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                                                                     EXHIBIT 1.1

                             ARTICLES OF ASSOCIATION

                                       OF

                           PETROCHINA COMPANY LIMITED

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                                                                               .
                                                                               .
                                                                               .

                             ARTICLES OF ASSOCIATION
                          OF PETROCHINA COMPANY LIMITED

<TABLE>
<S>                                                                                                      <C>
Chapter 1    General Provisions....................................................................       1
Chapter 2    The Company's Objectives and Scope of Business........................................       2
Chapter 3    Shares and Registered Capital.........................................................       3
Chapter 4    Reduction of Capital and Redemption of Shares.........................................       6
Chapter 5    Financial Assistance for Acquisition of Shares........................................       8
Chapter 6    Share Certificates and Register of Shareholders.......................................       9
Chapter 7    Shareholders' Rights and Obligations..................................................      14
Chapter 8    Shareholders' General Meetings........................................................      17
Chapter 9    Special Procedures for Voting by a Class of Shareholders..............................      25
Chapter 10   Board of Directors....................................................................      27
Chapter 11   Secretary of the Board of Directors...................................................      31
Chapter 12   General Manager.......................................................................      32
Chapter 13   Supervisory Committee.................................................................      33
Chapter 14   Qualifications and Duties of the Directors, Supervisors, General Manager,
             Senior Deputy General Managers, Deputy General Managers and Other
             Senior Officers of the Company .......................................................      35
Chapter 15   Financial and Accounting Systems and Profit Distribution..............................      42
Chapter 16   Appointment of Auditors...............................................................      45
Chapter 17   Insurance.............................................................................      49
Chapter 18   Labour and Personnel Management Systems...............................................      49
Chapter 19   Trade Unions..........................................................................      49
Chapter 20   Merger and Division of the Company....................................................      49
Chapter 21   Dissolution and Liquidation...........................................................      50
Chapter 22   Procedures for Amendment of the Company's Articles of Association.....................      53
Chapter 23   Dispute Resolution....................................................................      54
Chapter 24   Notices ..............................................................................      55
Chapter 25   Supplementary ........................................................................      56
</TABLE>

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                           ARTICLES OF ASSOCIATION OF

                           PETROCHINA COMPANY LIMITED

        (Approved by Shareholders' Special Resolutions on 3 December 1999
          Amended by Shareholders' Special Resolutions on 10 March 2000
        Amended by Resolutions of the Fifth Meeting of the First Board of
                            Directors on 30 May 2000
           Amended by Shareholders' Special Resolutions on 8 June 2001
           Amended by Shareholders' Special Resolution on 26 May 2005)

                          CHAPTER 1: GENERAL PROVISIONS

Article 1.  The Company is a joint stock limited company established in
            accordance with the Company Law of the People's Republic of China
            (the Company Law), Securities Law of the People's Republic of China,
            State Council's Special Regulations Regarding the Issue of Shares
            Overseas and the Listing of Shares Overseas by Companies Limited by
            Shares (the Special Regulations) and other relevant laws and
            regulations of the State.


            The Company was established by way of promotion with the approval of
            the State Economic and Trade Commission of the People's Republic of
            China on 25 October 1999, as evidenced by approval document Guo Jing
            Mao Qi Gai [1999] no. 1024 of 1999. It is registered with and has
            obtained a business licence from the State Administration Bureau of
            Industry and Commerce on 5 November 1999. The Company's business
            licence number is: 1000001003252.

            The promoter of the Company is: China National Petroleum
            Corporation.

Article 2.  The Company's registered Chinese name: [CHINESE CHARACTERS]
            The Company's registered English name: PetroChina Company Limited.


Article 3.  The Company's address  :  16 Ande Road
                                      Dongcheng District
                                      Beijing
                                      China
            Telephone number       :  010-84886270
            Facsimile number       :  010-84886260
            Postal code            :  100011


Article 4.  The Company's legal representative is the Chairman of the board of
            directors of the Company.


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Article 5.  The Company is a joint stock limited company which has perpetual
            existence.


Article 6.  The Company's Articles of Association shall take effect from the
            date of establishment of the Company.


            From the date on which the Company's Articles of Association come
            into effect, the Company's Articles of Association constitute the
            legally binding document regulating the Company's organisation and
            activities, and the rights and obligations between the Company and
            each shareholder and among the shareholders inter se.


Article 7.  The Company's Articles of Association are binding on the Company and
            its shareholders, directors, supervisors, general manager, senior
            deputy general managers, deputy general managers, financial
            controller and other senior officers of the Company; all of whom
            may, according to the Company's Articles of Association, assert
            rights in respect of the affairs of the Company.


            A shareholder may take action against the Company pursuant to the
            Company's Articles of Association, and vice versa. A shareholder may
            also take action against another shareholder, the directors,
            supervisors, general manager, senior deputy general managers, deputy
            general managers, financial controller and other senior officers of
            the Company pursuant to the Company's Articles of Association.

            The actions referred to in the preceding paragraph include court
            proceedings and arbitration proceedings.

Article 8.  The Company may invest in other limited liability companies or joint
            stock limited companies. The Company's liabilities to an invested
            company shall be limited to the amount of its capital contribution
            to the invested company.


            Upon approval of the companies approving department authorised by
            the State Council, the Company may, according to its operating and
            management needs, operate as a holding company as prescribed in
            clause 2 of Article 12 of the Company Law.

                     CHAPTER 2: THE COMPANY'S OBJECTIVES AND
                                SCOPE OF BUSINESS

Article 9.  The Company's objectives are:


            To comply with the rules of the market; To continue to explore the
            modes of business operation which are suitable for the Company; To
            fully utilise

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            every resource of the Company; To place emphasis on the training of
            its employees and technological development; To provide the society
            with products which are competitive; To use its best endeavours to
            maximise its profits.

Article 10. The Company's scope of business shall be consistent with and subject
            to the scope of business approved by the authority responsible for
            the registration of the Company.

            The Company's scope of business includes: the exploration,
            production and sale of onshore oil and natural gas; the production
            and sale of refined, petrochemical and chemical products; the
            operation of oil and natural gas pipelines; the research and
            development for oil exploration and production technology and
            petrochemical technology; the sale of materials, equipment and
            machines necessary for production and construction of oil and gas,
            petrochemicals and pipelines (except those items required to be
            specifically authorized by the State); the import and export of
            crude oil and refined oil; the operation of, or to act as agent in,
            the import and export of various commodities and technologies
            (except the commodities or technologies which are required to be
            operated by companies designated by the State or are prohibited to
            import or export), the operation of processing with imported
            materials and the "Three Types of Processing plus Compensation
            Trade"; the operation of contra trade and transit trade; the
            operation of the oil exploration, development and production
            business under the overseas co-operation contracts of which China
            National Petroleum Corporation has assigned its interests.

            The Company may, according to the demand and supply in the domestic
            and international markets, the Company's ability to develop, and the
            requirements of the Company's business, adjust its scope of business
            in accordance with the laws .

            Subject to and compliance with laws and administrative regulations
            of the People's Republic of China ("PRC"), the Company has the power
            to raise and borrow money, which power includes (without limitation)
            the borrowing of money, the issue of debentures, the charging or
            mortgaging of part or whole of the Company's interests and to
            provide guarantees or mortgages for the debts of third parties
            (including, without limitation, the subsidiaries or associated
            companies of the Company) in all types of circumstances.

                                       3
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                    CHAPTER 3: SHARES AND REGISTERED CAPITAL

Article 11. There must, at all times, be ordinary shares in the Company. Subject
            to the approval of the companies approving department authorised by
            the State Council, the Company may, according to its requirements,
            create different classes of shares.

Article 12. The shares issued by the Company shall each have a par value of
            Renminbi one yuan. "Renminbi" means the legal currency of the PRC.

Article 13. Subject to the approval of the securities authority of the State
            Council, the Company may issue shares to Domestic Investors and
            Foreign Investors.

            "Foreign Investors" mean those investors who subscribe for the
            Company's shares and who are located in foreign countries and in the
            regions of Hong Kong, Macau and Taiwan. "Domestic Investors" mean
            those investors who subscribe for the Company's shares and who are
            located within the territory of the PRC.

Article 14. Shares which the Company issues to Domestic Investors for
            subscription in Renminbi shall be referred to as "Domestic-Invested
            Shares". Shares which the Company issues to Foreign Investors for
            subscription in foreign currencies shall be referred to as
            "Foreign-Invested Shares". Foreign-Invested Shares which are listed
            overseas are called "Overseas-Listed Foreign-Invested Shares".
            "Foreign currencies" mean the legal currencies of countries or
            districts outside the PRC which are recognised by the foreign
            exchange authority of the State and which can be used to pay the
            share price to the Company.

            Domestic-Invested Shares issued by the Company shall be referred to
            as "A Shares". Overseas-Listed Foreign-Invested Shares issued by the
            Company and which are listed in Hong Kong shall be referred to as "H
            Shares". H Shares as shares which have been admitted for listing on
            The Stock Exchange of Hong Kong Limited (the "Stock Exchange"), the
            par value of which is denominated in Renminbi and which are
            subscribed for and traded in Hong Kong dollars. H Shares can also be
            listed on a stock exchange in the United States in the form of
            American Depository Receipts.

Article 15. Subject to the approval of the companies approving department
            authorised by the State Council, the Company may issue a total of
            200,000 million ordinary shares, of which 160,000 million ordinary
            shares, representing 80% of the total number of ordinary shares
            which may be issued by the Company, were issued to the promoter of
            the Company at the time when the Company was established.

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Article 16. The Company shall issue 15,824,176,000 common shares after its
            incorporation. The promoter shall sell 1,758,242,000 shares of the
            Company held by it. After the issuance and sale of the shares as
            described above, the share capital structure of the Company
            comprises 175,824,176,000 common shares, of which 158,241,758,000
            common shares, which represent 90% of the Company's share capital,
            are held by the promoter of the Company, China National Petroleum
            Corporation in the form of state-owned shares; 17,582,418,000
            shares, which represent 10% of the Company's share capital are held
            by the H shares shareholders.

Article 17. The Company's board of directors may take all necessary action for
            the issuance of Overseas-Listed Foreign-Invested Shares and
            Domestic-Invested Shares after proposals for issuance of the same
            have been approved by the securities authority of the State Council.

            The Company may implement its proposal to issue Overseas-Listed
            Foreign-Invested Shares and Domestic-Invested Shares pursuant to the
            preceding paragraph within fifteen (15) months from the date of
            approval by the securities authority of the State Council.

Article 18. Where the total number of shares stated in the proposal for the
            issuance of shares include Overseas-Listed Foreign-Invested Shares
            and Domestic-Invested Shares, such shares should be fully subscribed
            for at their respective offerings. If the shares cannot be fully
            subscribed for all at once due to special circumstances, the shares
            may, subject to the approval of the securities authority of the
            State Council, be issued in separate branches.

Article 19. The registered capital of the Company shall be RMB[-]; if the issued
            shares are redeemed or new shares are issued, the registered capital
            of the Company shall be adjusted accordingly, and put on file with
            the companies approving department authorised by the State Council
            and the securities regulatory authority of the State Council.

Article 20. The Company may, based on its operating and development needs,
            authorise the increase of its capital pursuant to the Company's
            Articles of Association.

            The Company may increase its capital in the following ways:

            (1) by offering new shares for subscription by unspecified
            investors;

            (2) by issuing new shares to its existing shareholders;

            (3) by allotting bonus shares to its existing shareholders;

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            (4) by any other means which is permitted by law and administrative
            regulation.

            After the Company's increase of share capital by means of the
            issuance of new shares has been approved in accordance with the
            provisions of the Company's Articles of Association, the issuance
            thereof should be made in accordance with the procedures set out in
            the relevant laws and administrative regulations.

Article 21. Unless otherwise stipulated in the relevant laws or administrative
            regulations, shares in the Company shall be freely transferable and
            are not subject to any lien.

            Domestic-Invested Shares and Overseas-Listed Foreign-Invested Shares
            shall be purchased, sold, donated, inherited and mortgaged in
            accordance with the Chinese laws and the Company's Articles of
            Association. The transfer and transmission of the shares shall be
            registered in accordance with the relevant regulations.

            The Company has the power to sell the shares of a shareholder who is
            untraceable, if

            (a) during a period of 12 years at least three years dividends in
            respect of the shares in question have become payable and no
            dividend during that period has been claimed; and

            (b) on expiry of the 12 years the issuer gives notice of its
            intention to sell the shares by way of an advertisement approved by
            the securities authority of the State Council, and notifies the
            securities authority of the State Council and other relevant
            overseas securities regulatory committee of such intention.

                       CHAPTER 4: REDUCTION OF CAPITAL AND
                              REPURCHASE OF SHARES

Article 22. According to the provisions of the Company's Articles of
            Association, the Company may reduce its registered capital.

Article 23. The Company must prepare a balance sheet and an inventory of assets
            when it reduces its registered capital.

            The Company shall notify its creditors within ten (10) days of the
            date of the Company's resolution for reduction of capital and shall
            publish an announcement in a newspaper at least three (3) times
            within thirty (30) days of the date of such resolution. A creditor
            has the right within thirty (30) days of receipt of the notice from
            the Company or, in the case of a creditor

                                       6
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            who does not receive such notice, within ninety (90) days of the
            date of the first public announcement, to require the Company to
            repay its debts or to provide a corresponding guarantee for such
            debt.

            The Company's registered capital may not, after the reduction in
            capital, be less than the minimum amount prescribed by law.

Article 24. The Company may, in accordance with the procedures set out in the
            Company's Articles of Association and with the approval of the
            relevant governing authority of the State, repurchase its issued
            shares under the following circumstances:

            (1) cancellation of shares for the purposes of reducing its capital;

            (2) merging with another company that holds shares in the Company;

            (3) other circumstances permitted by laws and administrative
            regulations.

Article 25. The Company may repurchase shares in one of the following ways, with
            the approval of the relevant governing authority of the State:

            (1) by making a general offer for the repurchase of shares to all
            its shareholders on a pro rata basis;

            (2) by repurchasing shares through public dealing on a stock
            exchange;

            (3) by repurchasing shares outside of the stock exchange by means of
            an off-market agreement.

Article 26. The Company must obtain the prior approval of the shareholders in a
            general meeting (in the manner stipulated in the Company's Articles
            of Association) before it can repurchase shares outside of the stock
            exchange by means of an off-market agreement. The Company may, by
            obtaining the prior approval of the shareholders in a general
            meeting (in the same manner), release, vary or waive its rights
            under an agreement which has been so entered into.

            An agreement for the repurchase shares referred to in the preceding
            paragraph includes (without limitation) an agreement to become
            liable to repurchase shares or an agreement to have the right to
            repurchase shares.

            The Company may not assign an agreement for the repurchase of its
            shares or any right contained in such an agreement.

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Article 27. Shares which have been legally repurchased by the Company shall be
            cancelled within the period prescribed by law and administrative
            regulation, and the Company shall apply to the original companies
            registration authority for registration of the change in its
            registered capital and make a public announcement.

            The aggregate par value of the cancelled shares shall be deducted
            from the Company's registered share capital.

Article 28. Unless the Company is in the course of liquidation, it must comply
            with the following provisions in relation to repurchase of its
            issued shares:

            (1) where the Company repurchases shares at par value, payment shall
            be made out of book surplus distributable profits of the Company or
            out of proceeds of a new issue of shares made for that purpose;

            (2) where the Company repurchases shares of the Company at a premium
            to its par value, payment up to the par value may be made out of the
            book surplus distributable profits of the Company or out of the
            proceeds of a new issue of shares made for that purpose. Payment of
            the portion in excess of the par value shall be effected as follows:

                  (i) if the shares being repurchased were issued at par value,
            payment shall be made out of the book surplus distributable profits
            of the Company;

                  (ii) if the shares being repurchased were issued at a premium
            to its par value, payment shall be made out of the book surplus
            distributable profits of the Company or out of the proceeds of a new
            issue of shares made for that purpose, provided that the amount paid
            out of the proceeds of the new issue shall not exceed the aggregate
            amount of premiums received by the Company on the issue of the
            shares repurchased nor shall it exceed the book value of the
            Company's capital common reserve fund account (including the
            premiums on the new issue) at the time of the repurchase;

            (3) the Company shall make the following payments out of the
            Company's distributable profits:

                  (i) payment for the acquisition of the right to repurchase its
            own shares;

                  (ii) payment for variation of any contract for the repurchase
            of its shares;

                  (iii) payment for the release of its obligation(s) under any
            contract for the repurchase of shares;

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            (4) after the Company's registered capital has been reduced by the
            aggregate par value of the cancelled shares in accordance with the
            relevant provisions, the amount deducted from the distributable
            profits of the Company for payment of the par value of shares which
            have been repurchased shall be transferred to the Company's capital
            common reserve fund account.

                       CHAPTER 5: FINANCIAL ASSISTANCE FOR
                              ACQUISITION OF SHARES

Article 29. The Company and its subsidiaries shall not, at any time, provide any
            form of financial assistance to a person who is acquiring or is
            proposing to acquire shares in the Company. This includes any person
            who directly or indirectly incurs any obligations as a result of the
            acquisition of shares in the Company (the "Obligor").

            The Company and its subsidiaries shall not, at any time, provide any
            form of financial assistance to the Obligor for the purposes of
            reducing or discharging the obligations assumed by such person.

            This Article shall not apply to the circumstances specified in
            Article 31 of this Chapter.

Article 30. For the purposes of this Chapter, "financial assistance" includes
            (without limitation) the following:

            (1) gift;

            (2) guarantee (including the assumption of liability by the
            guarantor or the provision of assets by the guarantor to secure the
            performance of obligations by the Obligor), compensation (other than
            compensation in respect of the Company's own default) or release or
            waiver of any rights;

            (3) provision of loan or any other agreement under which the
            obligations of the Company are to be fulfilled before the
            obligations of another party, or the change in parties to, or the
            assignment of rights under, such loan or agreement;

            (4) any other form of financial assistance given by the Company when
            the Company is insolvent or has no net assets or when its net assets
            would thereby be reduced to a material extent.

            For the purposes of this Chapter, "assumption of obligations"
            includes the assumption of obligations by way of contract or by way
            of arrangement (irrespective of whether such contract or arrangement
            is enforceable or not and irrespective of whether such obligation is
            to be borne solely by the

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            Obligor or jointly with other persons) or by any other means which
            results in a change in his financial position.

Article 31. The following actions shall not be deemed to be activities
            prohibited by Article 29 of this Chapter:

            (1) the provision of financial assistance by the Company where the
            financial assistance is given in good faith in the interests of the
            Company, and the principal purpose of which is not for the
            acquisition of shares in the Company, or the giving of the financial
            assistance is an incidental part of some larger purpose of the
            Company;

            (2) the lawful distribution of the Company's assets by way of
            dividend;

            (3) the allotment of bonus shares as dividends;

            (4) a reduction of registered capital, a repurchase of shares of the
            Company or a reorganisation of the share capital structure of the
            Company effected in accordance with the Company's Articles of
            Association;

            (5) the lending of money by the Company within its scope of business
            and in the ordinary course of its business, where the lending of
            money is part of the scope of business of the Company (provided that
            the net assets of the Company are not thereby reduced or that, to
            the extent that the assets are thereby reduced, the financial
            assistance is provided out of distributable profits);

            (6) contributions made by the Company to the employee share
            ownership schemes (provided that the net assets of the Company are
            not thereby reduced or that, to the extent that the assets are
            thereby reduced, the financial assistance is provided out of
            distributable profits).

                        CHAPTER 6: SHARE CERTIFICATES AND
                            REGISTER OF SHAREHOLDERS

Article 32. Share certificates of the Company shall be in registered form.

            The share certificate of the Company shall, aside from matters
            required by the Company Law and the Special Regulations, also
            contain other matters required to be stated therein by the stock
            exchange(s) on which the Company's shares are listed.

Article 33. Share certificates of the Company shall be signed by the Chairman of
            the Company's board of directors. Where the stock exchange(s) on
            which the Company's shares are listed require other senior
            officer(s) of the Company to sign on the share certificates, the
            share certificates shall also be signed by

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            such senior officer(s). The share certificates shall take effect
            after being sealed or imprinted with the seal of the Company. The
            share certificate shall only be sealed with the Company's seal under
            the authorisation of the board of directors. The signatures of the
            Chairman of the board of directors or other senior officer(s) of the
            Company may be printed in mechanical form.


Article 34. The Company shall keep a register of shareholders which shall
            contain the following particulars:


            (1) the name (title) and address (residence), the occupation or
            nature of each shareholder;

            (2) the class and quantity of shares held by each shareholder;

            (3) the amount paid-up on or agreed to be paid-up on the shares held
            by each shareholder;

            (4) the share certificate number(s) of the shares held by each
            shareholder;

            (5) the date on which each person was entered in the register as a
            shareholder;

            (6) the date on which any shareholder ceased to be a shareholder.

            Unless there is evidence to the contrary, the register of
            shareholders shall be sufficient evidence of the shareholders'
            shareholdings in the Company.

Article 35. The Company may, in accordance with the mutual understanding and
            agreements made between the securities authority of the State
            Council and overseas securities regulatory organisations, maintain
            the register of shareholders of Overseas-Listed Foreign-Invested
            Shares overseas and appoint overseas agent(s) to manage such
            register of shareholders. The original register of shareholders for
            holders of H Shares shall be maintained in Hong Kong.


            A duplicate register of shareholders for the holders of
            Overseas-Listed Foreign-Invested Shares shall be maintained at the
            Company's residence. The appointed overseas agent(s) shall ensure
            consistency between the original and the duplicate register of
            shareholders at all times.

            If there is any inconsistency between the original and the duplicate
            register of shareholders for the holders of Overseas-Listed
            Foreign-Invested Shares, the original register of shareholders shall
            prevail.

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               The Company shall make available at its Hong Kong representative
               office for inspection by the public and shareholders free of
               charge, and for copying by shareholders at reasonable charges,
               the following:-

               (1) a complete duplicate of the register of members;

               (2) a report showing the state of the issued share capital of the
               Company;

               (3) the latest audited Financial Statements and the Directors',
               Auditors' and Supervisors' Reports;

               (4) special resolutions of the Company;

               (5) reports showing the number and nominal value of securities
               repurchased by the Company since the end of the last financial
               year, the aggregate amount paid for such securities and the
               maximum and the minimum prices paid in respect of each class of
               securities repurchased (with a breakdown between domestic shares
               and foreign shares);

               (6) a copy of the latest annual examination report filed with the
               State Administration of Industry and Commerce; and

               (7) for shareholders only, copies of the minutes of meetings of
               shareholders' meetings.

Article 36.    The Company shall have a complete register of shareholders which
               shall comprise the following parts:


               (1) the register of shareholders which is maintained at the
               Company's residence (other than those share registers which are
               described in sub-paragraphs (2) and (3) of this Article);

               (2) the register of shareholders in respect of the holders of
               Overseas-Listed Foreign-Invested Shares of the Company which is
               maintained in the same place as the overseas stock exchange on
               which the shares are listed; and

               (3) the register of shareholders which are maintained in such
               other place as the board of directors may consider necessary for
               the purposes of the listing of the Company's shares.

Article 37.    Different parts of the register of shareholders shall not
               overlap. No transfer of any shares registered in any part of the
               register shall, during the continuance of that registration, be
               registered in any other part of the register.


                                       12
<PAGE>

               Amendments or rectification of the register of shareholders shall
               be made in accordance with the laws of the place where the
               register of shareholders is maintained.

Article 38.    All Overseas-Listed Foreign-Invested Shares shall be transferred
               by instrument in writing in any usual or common form or any other
               form which the directors may approve. The instrument of transfer
               of any share may be executed by hand without seal. If the
               shareholder is the recognised clearing house or its nominee
               defined by the Securities and Futures Ordinance (Chapter 571 of
               the Laws of Hong Kong), the share transfer form may be executed
               by hand or in mechanically-printed form.

               All Overseas-Listed Foreign-Invested Shares listed in Hong Kong
               which have been fully paid-up may be freely transferred in
               accordance with the Company's Articles of Association. However,
               unless such transfer complies with the following requirements,
               the board of directors may refuse to recognise any instrument of
               transfer and would not need to provide any reason therefor:

               (1) a fee of HK$2.50 per instrument of transfer or such higher
               amount as the board of directors may from time to time require
               but lesser than the amount agreed from time to time by the Rules
               Governing the Listing of Securities on the Stock Exchange of Hong
               Kong Limited ("LISTING RULES") has been paid to the Company for
               registration of the instrument of transfer and other documents
               relating to or which will affect the right of ownership of the
               shares;

               (2) the instrument of transfer only relates to Foreign-Listed
               Foreign-Invested Shares listed in Hong Kong;

               (3) the stamp duty which is chargeable on the instrument of
               transfer has already been paid;

               (4) the relevant share certificate(s) and any other evidence
               which the board of directors may reasonably require to show that
               the transferor has the right to transfer the shares have been
               provided;

               (5) if it is intended that the shares be transferred to joint
               owners, the maximum App.3 number of joint owners shall not be
               more than four (4); 1(3)

               (6) the Company does not have any lien on the relevant shares.

               If the Company refuses to register any transfer of shares, the
               Company shall within two (2) months of formal application for the
               transfer provide the transferor and transferee with a notice of
               refusal to register such transfer.

                                       13
<PAGE>

               The directors, supervisors, general manager, senior deputy
               general managers, deputy general managers, financial controller
               and other senior officers of the Company shall report the number
               of shares which they hold in the Company and may not transfer
               such shares during their term of office.

Article 39.    No change may be made in the register of shareholders as a result
               of a transfer of shares within thirty (30) days prior to the
               date of a shareholders' general meeting or within five (5) days
               before the record date for the Company's distribution of
               dividends.

Article 40.    When the Company needs to determine the rights attaching to
               shares in the Company for the purposes of convening a
               shareholders' meeting, for dividend distribution, for liquidation
               or for any other purpose, the board of directors shall decide on
               a date for the determination of rights attaching to shares in the
               Company. The shareholders of the Company shall be such persons
               who appear in the register of shareholders at the close of such
               determination date.

Article 41.    Any person aggrieved and claiming to be entitled to have his name
               (title) entered in or removed from the register of shareholders
               may apply to a court of competent jurisdiction for rectification
               of the register.

Article 42.    Any person who is a registered shareholder or who claims to be
               entitled to have his name (title) entered in the register of
               shareholders in respect of shares in the Company may, if his
               share certificate (the "original certificate") relating to the
               shares is lost, apply to the Company for a replacement share
               certificate in respect of such shares (the "Relevant Shares").

               Application by a holder of Domestic-Invested Shares, who has lost
               his share certificate, for a replacement share certificate shall
               be dealt with in accordance with Article 150 of the Company Law.

               Application by a holder of Overseas-Listed Foreign Shares, who
               has lost his share certificate, for a replacement share
               certificate may be dealt with in accordance with the law of the
               place where the original register of shareholders of holders of
               Overseas-Listed Foreign-Invested Shares is maintained, the rules
               of the stock exchange or other relevant regulations.

               The issue of a replacement share certificate to a holder of H
               Shares, who has lost his share certificate, shall comply with the
               following requirements:

               (1) The applicant shall submit an application to the Company in a
               prescribed form accompanied by a notarial certificate or a
               statutory declaration (i) stating the grounds upon which the
               application is made and the circumstances and evidence of the
               loss; and (ii) declaring that no other

                                       14
<PAGE>

               person is entitled to have his name entered in the register of
               shareholders in respect of the Relevant Shares.

               (2) The Company has not received any declaration made by any
               person other than the applicant declaring that his name shall be
               entered into the register of shareholders in respect of such
               shares before it decides to issue a replacement share certificate
               to the applicant.

               (3) The Company shall, if it intends to issue a replacement share
               certificate, publish a notice of its intention to do so at least
               once every thirty (30) days within a period of ninety (90)
               consecutive days in such newspapers as may be prescribed by the
               board of directors.

               (4) The Company shall, prior to publication of its intention to
               issue a replacement share certificate, deliver to the stock
               exchange on which its shares are listed, a copy of the notice to
               be published and may publish the notice upon receipt of
               confirmation from such stock exchange that the notice has been
               exhibited in the premises of the stock exchange. Such notice
               shall be exhibited in the premises of the stock exchange for a
               period of ninety (90) days.

               In the case of an application which is made without the consent
               of the registered holder of the Relevant Shares, the Company
               shall deliver by mail to such registered shareholder a copy of
               the notice to be published.

               (5) If, by the expiration of the 90-day period referred to in
               paragraphs (3) and (4) of this Article, the Company has not have
               received any challenge from any person in respect of the issuance
               of the replacement share certificate, it may issue a replacement
               share certificate to the applicant pursuant to his application.

               (6) Where the Company issues a replacement share certificate
               pursuant to this Article, it shall forthwith cancel the original
               share certificate and document the cancellation of the original
               share certificate and issuance of a replacement share certificate
               in the register of shareholders accordingly.

               (7) All expenses relating to the cancellation of an original
               share certificate and the issuance of a replacement share
               certificate shall be borne by the applicant and the Company is
               entitled to refuse to take any action until reasonable security
               is provided by the applicant therefor.

Article 43.    Where the Company issues a replacement share certificate pursuant
               to the Company's Articles of Association and a bona fide
               purchaser acquires or becomes the registered owner of such
               shares, his name (title) shall not be removed from the register
               of shareholders.


                                       15
<PAGE>

Article 44.    The Company shall not be liable for any damages sustained by any
               person by reason of the cancellation of the original share
               certificate or the issuance of the replacement share certificate
               unless the claimant is able to prove that the Company has acted
               in a deceitful manner.


                       CHAPTER 7: SHAREHOLDERS' RIGHTS AND
                                   OBLIGATIONS

Article 45.    A shareholder of the Company is a person who lawfully holds
               shares in the Company and whose name (title) is entered in the
               register of shareholders.


               A shareholder shall enjoy rights and assume obligations according
               to the class and amount of shares held by him; shareholders who
               hold shares of the same class shall enjoy the same rights and
               assume the same obligations.

               In the case of the joint shareholders, if one of the joint
               shareholders is deceased, only the other existing shareholders of
               the joint shareholders shall be deemed as the persons who have
               the ownership of the relevant shares. But the board of directors
               has the power to require them to provide a certificate of death
               as necessary for the purpose of modifying the register of
               shareholders, or any of the joint shareholders of the shares,
               only the joint shareholders ranking first in the register of
               shareholders have the right to accept certificates of the
               relevant shares, receive notices of the Company, attend and vote
               at shareholders' general meetings of the Company. Any notice
               which is delivered to the shareholder shall be considered as all
               the joint shareholders of the relevant shares who have been
               delivered.

Article 46.    The ordinary shareholders of the Company shall enjoy the
               following rights:


               (1) the right to receive dividends and other distributions in
               proportion to the number of shares held;

               (2) the right to attend or appoint a proxy to attend
               shareholders' general meetings and to vote thereat;

               (3) the right of supervisory management over the Company's
               business operations and the right to present proposals or to
               raise queries;

               (4) the right to transfer shares in accordance with laws,
               administrative regulations and provisions of the Company's
               Articles of Association;

               (5) the right to obtain relevant information in accordance with
               the provisions of the Company's Articles of Association,
               including:

                   (i) the right to obtain a copy of the Company's Articles of
                   Association, subject to payment of costs;

                                       16
<PAGE>

                   (ii) the right to inspect and copy, subject to payment of a
                   reasonable fee:

                        (a)  all parts of the register of shareholders;

                        (b)  personal particulars of each of the Company's
                             directors, supervisors, general manager, senior
                             deputy general managers, deputy general managers,
                             financial controller and other senior officers,
                             including:

                             (aa)  present and former name and alias;

                             (bb)  principal address (place of residence);

                             (cc)  nationality;

                             (dd)  primary and all other part-time occupations
                                   and duties;

                             (ee)  identification documents and the numbers
                                   thereof;

                        (c)  report on the state of the Company's share capital;

                        (d)  reports showing the aggregate par value, quantity,
                             highest and lowest price paid in respect of each
                             class of shares repurchased by the Company since
                             the end of the last accounting year and the
                             aggregate amount paid by the Company for this
                             purpose;

                        (e)  minutes of shareholders' general meetings;

               (6) in the event of the termination or liquidation of the
               Company, the right to participate in the distribution of surplus
               assets of the Company in accordance with the number of shares
               held;

               (7) other rights conferred by laws, administrative regulations
               and the Company's Articles of Association.

Article 47.    The ordinary shareholders of the Company shall assume the
               following obligations:

               (1) to comply with the Company's Articles of Association;

                                       17
<PAGE>

               (2) to pay subscription monies according to the number of shares
               subscribed and the method of subscription;

               (3) other obligations imposed by laws, administrative regulations
               and the Company's Articles of Association.

Article 48.    In addition to the obligations imposed by laws and administrative
               regulations or required by the listing rules of the stock
               exchange on which the Company's shares are listed, a controlling
               shareholder (as such term is defined in the following Article)
               shall not exercise his voting rights in respect of the following
               matters in a manner prejudicial to the interests of all or part
               of the shareholders of the Company:

               (1) to relieve a director or supervisor of his duty to act
               honestly in the best interests of the Company;

               (2) to approve the expropriation by a director or supervisor (for
               his own benefit or for the benefit of another person) of the
               Company's assets in any way, including (without limitation)
               opportunities which are beneficial to the Company;

               (3) to approve the expropriation by a director or supervisor (for
               his own benefit or for the benefit of another person) of the
               individual rights of other shareholders, including (without
               limitation) rights to distributions and voting rights (save
               pursuant to a restructuring which has been submitted for approval
               by the shareholders in a general meeting in accordance with the
               Company's Articles of Association).

Article 49.    For the purpose of the foregoing Article, a "controlling
               shareholder" means a person who satisfies any one of the
               following conditions:

               (1) a person who, acting alone or in concert with others, has the
               power to elect more than half of the board of directors;

               (2) a person who, acting alone or in concert with others, has the
               power to exercise or to control the exercise of 30 % or more of
               the voting rights in the Company;

               (3) a person who, acting alone or in concert with others, holds
               30 % or more of the issued and outstanding shares of the Company;

               (4) a person who, acting alone or in concert with others, has de
               facto control of the Company in any other way.

                                       18
<PAGE>

                        CHAPTER 8: SHAREHOLDERS' GENERAL
                                    MEETINGS

Article 50.    The shareholders' general meeting is the organ of authority of
               the Company and shall exercise its functions and powers in
               accordance with law.

Article 51.    The shareholders' general meeting shall have the following
               functions and powers:

               (1) to decide on the Company's operational policies and
               investment plans;

               (2) to elect and replace directors and to decide on matters
               relating to the remuneration of directors;

               (3) to elect and replace supervisors who represent the
               shareholders and to decide on matters relating to the
               remuneration of supervisors;

               (4) to examine and approve the board of directors' reports;

               (5) to examine and approve the supervisory committee's reports;

               (6) to examine and approve the Company's proposed annual
               preliminary and final financial budgets;

               (7) to examine and approve the Company's profit distribution
               plans and loss recovery plans;

               (8) to decide on the increase or reduction of the Company's
               registered capital;

               (9) to decide on matters such as merger, division, dissolution
               and liquidation of the Company;

               (10) to decide on the issue of debentures by the Company;

               (11) to decide on the appointment, dismissal and
               non-reappointment of the accountants of the Company;

               (12) to amend the Company's Articles of Association;

               (13) to consider motions raised by shareholders who represent 5 %
               or more of the total number of voting shares of the Company;

               (14) to decide on other matters which, according to law,
               administrative regulation or the Company's Articles of
               Association, need to be approved by shareholders in general
               meetings;

                                       19
<PAGE>

               (15) matters which the shareholders in a general meeting may
               authorise the board of directors to carry out on its behalf or
               which they may sub-delegate to the board of directors.

Article 52.    The Company shall not, without the prior approval of shareholders
               in a general meeting, enter into any contract with any person
               (other than a director, supervisor, general manager, senior
               deputy general manager, deputy general manager, financial
               controller or other senior officer) pursuant to which such person
               shall be responsible for the management and administration of the
               whole or any substantial part of the Company's business.

Article 53.    Shareholders' general meetings are divided into annual general
               meetings and extraordinary general meetings. Shareholders'
               general meetings shall be convened by the board of directors.
               Annual general meetings are held once every year and within six
               (6) months from the end of the preceding financial year.

               The board of directors shall convene an extraordinary general
               meeting within two (2) months of the occurrence of any one of the
               following events:

               (1) where the number of directors is less than the number
               stipulated in the Company Law or two-thirds of the number
               specified in the Company's Articles of Association;

               (2) where the unrecovered losses of the Company amount to
               one-third of the total amount of its share capital;

               (3) where shareholder(s) holding 10 % or more of the Company's
               issued and outstanding voting shares request(s) in writing for
               the convening of an extraordinary general meeting;

               (4) whenever the board of directors deems necessary or the
               supervisory committee so requests.

Article 54.    When the Company convenes a shareholders' general meeting,
               written notice of the meeting shall be given forty-five (45) days
               before the date of the meeting to notify all of the shareholders
               whose names appear in the share register of the matters to be
               considered and the date and place of the meeting. A shareholder
               who intends to attend the meeting shall deliver to the Company
               his written reply concerning his attendance at such meeting
               twenty (20) days before the date of the meeting.

                                       20
<PAGE>

Article 55.    When the Company convenes a shareholders' annual general meeting,
               shareholder(s) holding 5% or more of the total voting shares of
               the Company shall have the right to propose new motions in
               writing, and the Company shall place such proposed motions on the
               agenda for such annual general meeting if they are matters
               falling within the functions and powers of shareholders in
               general meetings.


Article 56.    The Company shall, based on the written replies which it receives
               from the shareholders twenty (20) days before the date of the
               shareholders' general meeting, calculate the number of voting
               shares represented by the shareholders who intend to attend the
               meeting. If the number of voting shares represented by the
               shareholders who intend to attend the meeting amount to more than
               one-half of the Company's total voting shares, the Company may
               hold the meeting; if not, then the Company shall, within five (5)
               days, notify the shareholders by way of public announcement the
               matters to be considered at, and the place and date for, the
               meeting. The Company may then hold the meeting after publication
               of such announcement.


               A shareholders' extraordinary general meeting shall not decide on
               any matter not stated in the notice for the meeting.

Article 57.    A notice of a meeting of the shareholders of the Company shall
               satisfy the following criterion:


               (1) be in writing;

               (2) specify the place, date and time of the meeting;

               (3) state the matters to be discussed at the meeting;

               (4) provide such information and explanation as are necessary for
               the shareholders to make an informed decision on the proposals
               put before them. Without limiting the generality of the
               foregoing, where a proposal is made to amalgamate the Company
               with another, to repurchase the shares of the Company, to
               reorganise its share capital, or to restructure the Company in
               any other way, the terms of the proposed transaction must be
               provided in detail together with copies of the proposed
               agreement, if any, and the cause and effect of such proposal must
               be properly explained;

               (5) contain a disclosure of the nature and extent, if any, of the
               material interests of any director, supervisor, general manager,
               senior deputy general manager, deputy general manager, financial
               controller or other senior officer in the proposed transaction
               and the effect which the proposed transaction will have on them
               in their capacity as shareholders in so far as it is different
               from the effect on the interests of shareholders of the same
               class;

                                       21
<PAGE>

                  (6) contain the full text of any special resolution to be
                  proposed at the meeting;

                  (7) contain a conspicuous statement that a shareholder
                  entitled to attend and vote at such meeting is entitled to
                  appoint one (1) or more proxies to attend and vote at such
                  meeting on his behalf and that a proxy need not be a
                  shareholder;

                  (8) specify the time and place for lodging proxy forms for the
                  relevant meeting.

Article 58.       Notice of shareholders' general meetings shall be served on
                  each shareholder (whether or not such shareholder is entitled
                  to vote at the meeting), by personal delivery or prepaid
                  airmail to the address of the shareholder as shown in the
                  register of shareholders. For the holders of Domestic-Invested
                  Shares, notice of the meetings may also be issued by way of
                  public announcement.


                  The public announcement referred to in the preceding paragraph
                  shall be published in one (1) or more national newspapers
                  designated by the securities authority of the State Council
                  within the interval of forty-five (45) days to fifty (50) days
                  before the date of the meeting; after the publication of such
                  announcement, the holders of Domestic-Invested Shares shall be
                  deemed to have received the notice of the relevant
                  shareholders' general meeting. Such public announcement shall
                  be published in Chinese and English in accordance with Article
                  182.

Article 59.       The accidental omission to give notice of a meeting to, or the
                  failure to receive the notice of a meeting by, any person
                  entitled to receive such notice shall not invalidate the
                  meeting and the resolutions adopted thereat.


Article 60.       Any shareholder who is entitled to attend and vote at a
                  general meeting of the Company shall be entitled to appoint
                  one (1) or more persons (whether such person is a shareholder
                  or not) as his proxies to attend and vote on his behalf, and a
                  proxy so appointed shall be entitled to exercise the following
                  rights pursuant to the authorisation from that shareholder:


                  (1) the shareholders' right to speak at the meeting;

                  (2) the right to demand or join in demanding a poll;

                  (3) the right to vote by hand or on a poll, but a proxy of a
                  shareholder who has appointed more than one (1) proxy may only
                  vote on a poll.

                  If the shareholder is the recognized clearing house defined by
                  the Securities and Futures Ordinance (Chapter 571 of the Laws
                  of Hong Kong), such

                                       22
<PAGE>

                  shareholder is entitled to appoint one or more persons as his
                  proxies to attend on his behalf at a general meeting or at any
                  class meeting, but, if one or more persons have such
                  authority, the letter of authorization shall contain the
                  number and class of the shares in connection with such
                  authorization. Such person can exercise the right on behalf of
                  the recognized clearing house (or its attorney) as if he is
                  the individual shareholder of the Company.

Article 61.       The instrument appointing a proxy shall be in writing under
                  the hand of the appointor or his attorney duly authorised in
                  writing, or if the appointor is a legal entity, either under
                  seal or under the hand of a director or a duly authorised
                  attorney. The letter of authorization shall contain the number
                  of the shares to be represented by the attorney. If several
                  persons are authorized as the attorney of the shareholder, the
                  letter of authorization shall specify the number of the shares
                  to be represented by each attorney.

Article 62.       The instrument appointing a voting proxy and, if such
                  instrument is signed by a person under a power of attorney or
                  other authority on behalf of the appointor, a notarially
                  certified copy of that power of attorney or other authority
                  shall be deposited at the residence of the Company or at such
                  other place as is specified for that purpose in the notice
                  convening the meeting, not less than twenty-four (24) hours
                  before the time for holding the meeting at which the proxy
                  propose to vote or the time appointed for the passing of the
                  resolution.

                  If the appointor is a legal person, its legal representative
                  or such person as is authorised by resolution of its board of
                  directors or other governing body may attend any meeting of
                  shareholders of the Company as a representative of the
                  appointor.

Article 63.       Any form issued to a shareholder by the directors for use by
                  such shareholder for the appointment of a proxy to attend and
                  vote at meetings of the Company shall be such as to enable the
                  shareholder to freely instruct the proxy to vote in favour of
                  or against the motions, such instructions being given in
                  respect of each individual matter to be voted on at the
                  meeting. Such a form shall contain a statement that, in the
                  absence of specific instructions from the shareholder, the
                  proxy may vote as he thinks fit.

                  The Company has the right to request a proxy who attends a
                  shareholders' meeting to provide evidence of his or its
                  identity.

                  If a shareholder which is a legal person appoints its legal
                  representative to attend a meeting on its behalf, the Company
                  has the right to request such legal representative to produce
                  evidence of his or its identity and a notarially certified
                  copy of the resolutions of such shareholder's board of
                  directors in respect of the appointment of the proxy or the
                  power of

                                       23
<PAGE>

                  attorney executed by such other organisation which has the
                  capacity to appoint the proxy.

Article 64.       A vote given in accordance with the terms of a proxy shall be
                  valid notwithstanding the death or loss of capacity of the
                  appointor or revocation of the proxy or the authority under
                  which the proxy was executed, or the transfer of the shares in
                  respect of which the proxy is given, provided that the Company
                  did not receive any written notice in respect of such matters
                  before the commencement of the relevant meeting.

Article 65.       Resolutions of shareholders' general meetings shall be divided
                  into ordinary resolutions and special resolutions.

                  An ordinary resolution must be passed by votes representing
                  more than one-half of the voting rights represented by the
                  shareholders (including proxies) present at the meeting.

                  A special resolution must be passed by votes representing more
                  than two-thirds of the voting rights represented by the
                  shareholders (including proxies) present at the meeting.

Article 66.       A shareholder (including a proxy), when voting at a
                  shareholders' general meeting, may exercise such voting rights
                  as are attached to the number of voting shares which he
                  represents. Each share shall have one (1) vote.

                  Where any shareholder, under the Listing Rules, is required to
                  abstain from voting on any particular resolution or restricted
                  to voting only for or only against any particular resolution,
                  any votes cast by or on behalf of such shareholder in
                  contravention of such requirement or restriction shall not be
                  counted.

Article 67.       At any shareholders' general meeting, a resolution shall be
                  decided on a show of hands unless voting by way of a poll is
                  required under the Listing Rules or the listing rules of any
                  other stock exchanges on which the shares of the Company are
                  listed or demanded by the following persons before or after
                  any vote by a show of hands:

                  (1) by the chairman of the meeting;

                  (2) by at least two (2) shareholders present in person or by
                  proxy entitled to vote thereat;

                  (3) by one (1) or more shareholders present in person or by
                  proxy and representing 10 % or more of all shares carrying the
                  right to vote at the meeting, before or after a vote is
                  carried out by a show of hands.

                                       24
<PAGE>

                  Unless voting by way of a poll is required under the Listing
                  Rules or the listing rules of any other stock exchanges on
                  which the shares of the Company are listed or so demanded, the
                  chairman may declare that a resolution has been passed on a
                  show of hands and the record of such in the minutes of the
                  meeting shall be conclusive evidence of the fact that such
                  resolution has been passed. There is no need to provide
                  evidence of the number or proportion of votes in favour of or
                  against such resolution.

                  The demand for a poll may be withdrawn by the person who
                  demands the same.

Article 68.       A poll demanded on the election of the chairman of the
                  meeting, or on a question of adjournment of the meeting, shall
                  be taken forthwith. A poll demanded on any other question
                  shall be taken at such time as the chairman of the meeting
                  directs, and any business other than that upon which a poll
                  has been demanded may be proceeded with, pending the taking of
                  the poll. The result of the poll shall be deemed to be a
                  resolution of the meeting at which the poll was demanded.


Article 69.       On a poll taken at a meeting, a shareholder (including a
                  proxy) entitled to two (2) or more votes need not cast all his
                  votes in the same way.


Article 70.       In the case of an equality of votes, whether on a show of
                  hands or on a poll, the chairman of the meeting at which the
                  show of hands takes place or at which the poll is demanded
                  shall be have a casting vote.


Article 71.       The following matters shall be resolved by an ordinary
                  resolution at a shareholders' general meeting:


                  (1) work reports of the board of directors and the supervisory
                  committee;

                  (2) profit distribution plans and loss recovery plans
                  formulated by the board of directors;

                  (3) removal of members of the board of directors and members
                  of the supervisory committee, their remuneration and manner of
                  payment;


                  (4) annual preliminary and final budgets, balance sheets and
                  profit and loss accounts and other financial statements of the
                  Company;

                  (5) matters other than those which are required by the laws
                  and administrative regulations or by the Company's Articles of
                  Association to be adopted by special resolution.

                                       25
<PAGE>

Article 72.       The following matters shall be resolved by a special
                  resolution at a shareholders' general meeting:


                  (1) the increase or reduction in share capital and the issue
                  of shares of any class, warrants and other similar securities;

                  (2) the issue of debentures of the Company;

                  (3) the division, merger, dissolution and liquidation of the
                  Company;

                  (4) amendment of the Company's Articles of Association;

                  (5) any other matters considered by the shareholders in
                  general meeting, and resolved by way of an ordinary
                  resolution, to be of a nature which may have a material impact
                  on the Company and should be adopted by a special resolution.

Article 73.       Shareholders who request for the convening of an extraordinary
                  general meeting or a class meeting shall comply with the
                  following procedures:


                  (1) Two (2) or more shareholders holding in aggregate 10 % or
                  more of the shares carrying the right to vote at the meeting
                  sought to be held shall sign one (1) or more counterpart
                  requisitions stating the object of the meeting and requiring
                  the board of directors to convene a shareholders'
                  extraordinary general meeting or a class meeting thereof. The
                  board of directors shall as soon as possible proceed to
                  convene the extraordinary general meeting of shareholders or a
                  class meeting thereof after receipt of such requisition(s).
                  The amount of shareholdings referred to above shall be
                  calculated as at the date of deposit of the requisition(s).

                  (2) If the board of directors fails to issue a notice of such
                  a meeting within thirty (30) days from the date of receipt of
                  the requisition(s), the requisitionists may themselves convene
                  such a meeting (in a manner as similar as possible to the
                  manner in which shareholders' meetings are convened by the
                  board of directors) within four (4) months from the date of
                  receipt of the requisition(s) by the board of directors.

                  Any reasonable expenses incurred by the requisitionists by
                  reason of failure by the board of directors to duly convene a
                  meeting shall be repaid to the requisitionists by the Company
                  and any sum so repaid shall be set-off against sums owed by
                  the Company to the defaulting directors.

Article 74.       The Chairman of the board of directors shall convene and chair
                  every shareholders' general meeting. If the Chairman is unable
                  to attend the meeting for any reason, the vice-chairman of the
                  board of directors shall convene and chair the meeting. If
                  both the Chairman and vice-chairman of the board of directors
                  are unable to attend the meeting, then the board of

                                       26
<PAGE>

                  directors may designate a director to convene and chair the
                  meeting. If no chairman of the meeting has been so designated,
                  shareholders present shall choose one (1) person to act as the
                  chairman of the meeting. If for any reason, the shareholders
                  shall fail to elect a chairman, then the shareholder
                  (including a proxy) holding the largest number of shares
                  carrying the right to vote thereat shall be the chairman of
                  the meeting.

Article 75.       The chairman of the meeting shall be responsible for
                  determining whether a resolution has been passed. His
                  decision, which shall be final and conclusive, shall be
                  announced at the meeting and recorded in the minute book.

Article 76.       If the chairman of the meeting has any doubt as to the result
                  of a resolution which has been put to vote at a shareholders'
                  meeting, he may have the votes counted. If the chairman of the
                  meeting has not counted the votes, any shareholder who is
                  present in person or by proxy and who objects to the result
                  announced by the chairman of the meeting may, immediately
                  after the declaration of the result, demand that the votes be
                  counted and the chairman of the meeting shall have the votes
                  counted immediately.

Article 77.       If votes are counted at a shareholders' general meeting, the
                  result of the count shall be recorded in the minute book.

Article 78.       The minutes, shareholders' attendance lists and proxy forms
                  shall be kept at the Company's place of residence.

Article 79.       Copies of the minutes of proceedings of any shareholders'
                  meeting shall, during business hours of the Company, be open
                  for inspection by any shareholder without charge. If a
                  shareholder requests for a copy of such minutes from the
                  Company, the Company shall send a copy of such minutes to him
                  within seven (7) days after receipt of reasonable fees
                  therefor.


                    CHAPTER 9: SPECIAL PROCEDURES FOR VOTING
                           BY A CLASS OF SHAREHOLDERS

Article 80.       Those shareholders who hold different classes of shares are
                  class shareholders.

                  Class shareholders shall enjoy rights and assume obligations
                  in accordance with laws, administrative regulations and the
                  Company's Articles of Association.

                                       27
<PAGE>

Article 81.       Rights conferred on any class of shareholders ("class rights")
                  may not be varied or abrogated save with the approval of a
                  special resolution of shareholders in a general meeting and by
                  holders of shares of that class at a separate meeting
                  conducted in accordance with Articles 83 to 87.

Article 82.       The following circumstances shall be deemed to be variation or
                  abrogation of the rights attaching to a particular class of
                  shares:

                  (1) to increase or decrease the number of shares of that
                  class, or to increase or decrease the number of shares of a
                  class having voting or equity rights or privileges equal or
                  superior to those of shares of that class;

                  (2) to exchange all or part of the shares of that class for
                  shares of another class or to exchange or to create a right to
                  exchange all or part of the shares of another class for shares
                  of that class;

                  (3) to remove or reduce rights to accrued dividends or rights
                  to cumulative dividends attached to shares of that class;

                  (4) to reduce or remove preferential rights attached to shares
                  of that class to receive dividends or to the distribution of
                  assets in the event that the Company is liquidated;

                  (5) to add, remove or reduce conversion privileges, options,
                  voting rights, transfer or pre-emptive rights, or rights to
                  acquire securities of the Company attached to shares of that
                  class;

                  (6) to remove or reduce rights to receive payment payable by
                  the Company in particular currencies attached to shares of
                  that class;

                  (7) to create a new class of shares having voting or equity
                  rights or privileges equal or superior to those of the shares
                  of that class;

                  (8) to restrict the transfer or ownership of shares of that
                  class or to increase the types of restrictions attaching
                  thereto;

                  (9) to allot and issue rights to subscribe for, or to convert
                  the existing shares into, shares in the Company of that class
                  or another class;

                  (10) to increase the rights or privileges of shares of another
                  class;

                  (11) to restructure the Company in such a way so as to result
                  in the disproportionate distribution of obligations between
                  the various classes of shareholders;

                  (12) to vary or abrogate the provisions of this Chapter.

                                       28
<PAGE>

Article 83.       Shareholders of the affected class, whether or not otherwise
                  having the right to vote at shareholders' general meetings,
                  have the right to vote at class meetings in respect of matters
                  concerning sub-paragraphs (2) to (8), (11) and (12) of Article
                  82, but interested shareholder(s) shall not be entitled to
                  vote at such class meetings.


                  "(An) interested shareholder(s)", as such term is used in the
                  preceding paragraph, means:

                  (1) in the case of a repurchase of shares by way of a general
                  offer to all shareholders of the Company or by way of public
                  dealing on a stock exchange pursuant to Article 25, a
                  "controlling shareholder" within the meaning of Article 49;

                  (2) in the case of a repurchase of shares by an off-market
                  agreement pursuant to Article 25, a holder of the shares to
                  which the proposed agreement relates;

                  (3) in the case of a restructuring of the Company, a
                  shareholder who assumes a relatively lower proportion of
                  obligation than the obligations imposed on shareholders of
                  that class under the proposed restructuring or who has an
                  interest in the proposed restructuring different from the
                  general interests of the shareholders of that class.

Article 84.       Resolutions of a class of shareholders shall be passed by
                  votes representing more than two-thirds of the voting rights
                  of shareholders of that class represented at the relevant
                  meeting who, according to Article 83, are entitled to vote
                  thereat.


Article 85.       Written notice of a class meeting shall be given to all
                  shareholders who are registered as holders of that class in
                  the register of shareholders forty-five (45) days before the
                  date of the class meeting. Such notice shall give such
                  shareholders notice of the matters to be considered at such
                  meeting, the date and the place of the class meeting. A
                  shareholder who intends to attend the class meeting shall
                  deliver his written reply in respect thereof to the Company
                  twenty (20) days before the date of the class meeting.


                  If the shareholders who intend to attend such class meeting
                  represent more than half of the total number of shares of that
                  class which have the right to vote at such meeting, the
                  Company may hold the class meeting; if not, the Company shall
                  within five (5) days give the shareholders further notice of
                  the matters to be considered, the date and the place of the
                  class meeting by way of public announcement. The Company may
                  then hold the class meeting after such public announcement has
                  been made.

Article 86.       Notice of class meetings need only be served on shareholders
                  entitled to vote thereat.

                                       29
<PAGE>

                  Class meetings shall be conducted in a manner which is as
                  similar as possible to that of shareholders' general meetings.
                  The provisions of the Company's Articles of Association
                  relating to the manner for the conduct of shareholders'
                  general meetings are also applicable to class meetings.


Article 87.       Apart from the holders of other classes of shares, the holders
                  of the Domestic-Invested Shares and holders of Overseas-Listed
                  Foreign-Invested Shares shall be deemed to be holders of
                  different classes of shares.


                  The special procedures for approval by a class of shareholders
                  shall not apply in the following circumstances:


                  (1) where the Company issues, upon the approval by special
                  resolution of its shareholders in a general meeting, either
                  separately or concurrently once every twelve (12) months, not
                  more than 20% of each of its existing issued Domestic-Invested
                  Shares and Overseas-Listed Foreign-Invested Shares; or


                  (2) where the Company's plan to issue Domestic-Invested Shares
                  and Overseas-Listed Foreign-Invested Shares at the time of its
                  establishment is carried out within fifteen (15) months from
                  the date of approval of the securities authority of the State
                  Council.


                         CHAPTER 10: BOARD OF DIRECTORS

Article 88.       The Company shall have a board of directors. The board of
                  directors shall consist of thirteen (13) directors. The board
                  of directors shall have one (1) Chairman, two (2)
                  Vice-chairman(s) and twelve (10) directors, of which three (3)
                  independent (non-executive) directors.


                  The board of directors shall have nine (9) outside directors,
                  who shall not hold office within the Company.

Article 89.       Directors shall be elected at the shareholders' general
                  meeting each for a term of three (3) years. At the expiry of a
                  director's term, the term is renewable upon re-election.


                  The period for lodgement of notices in writing to the Company
                  of the intention to propose a person for election as a
                  director and of such person's consent to be elected shall be
                  at least 7 days and which shall commence no earlier than the
                  day after the despatch of the notice of the general meeting
                  convened to consider such election and shall end no later than
                  7 days prior to the date of such general meeting.

                                       30
<PAGE>

                  The Chairman and the Vice-chairman shall be elected and
                  removed by more than one-half of all of the members of the
                  board of directors. The term of office of each of the Chairman
                  and the Vice-chairman is three (3) years, which term is
                  renewable upon re-election.

                  Subject to compliance with all relevant laws and
                  administrative regulations, the shareholders' general meeting
                  may by ordinary resolution remove any director before the
                  expiration of his term of office. However, the director's
                  right to claim for damages which arises out from his removal
                  shall not be affected thereby.

                  The Directors shall not be required to hold qualifying shares.

Article 90.       The board of directors is accountable to the shareholders in
                  general meeting and exercises the following functions and
                  powers:

                  (1) to be responsible for the convening of the shareholders'
                  general meeting and to report on its work to the shareholders
                  in general meetings;

                  (2) to implement the resolutions passed by the shareholders in
                  general meetings;

                  (3) to determine the Company's business plans and investment
                  proposals;

                  (4) to formulate the Company's annual preliminary and final
                  financial budgets;

                  (5) to formulate the Company's profit distribution proposal
                  and loss recovery proposal;

                  (6) to formulate proposals for the increase or reduction of
                  the Company's registered capital and for the issuance of the
                  Company's debentures;

                  (7) to draw up plans for the merger, division or dissolution
                  of the Company;

                  (8) to decide on the Company's internal management structure;

                  (9) to appoint or remove the Company's general manager and to
                  appoint or remove the senior deputy general managers, deputy
                  general managers and other senior officers (including the
                  financial controller(s) of the Company) and, based on the
                  recommendations of the general manager, to decide on their
                  remuneration;

                                       31
<PAGE>

                  (10) to formulate the Company's basic management system;

                  (11) to formulate proposals for any amendment of the Company's
                  Articles of Association;

                  (12) to exercise any other powers conferred by the
                  shareholders in general meetings.

                  Other than the board of directors' resolutions in respect of
                  the matters specified in sub-paragraphs (6), (7) and (11) of
                  this Article which shall be passed by the affirmative vote of
                  more than two-thirds of all the directors, the board of
                  directors' resolutions in respect of all other matters may be
                  passed by the affirmative vote of a simple majority of the
                  directors.

Article 91.       The board of directors shall not, without the prior approval
                  of shareholders in a general meeting, dispose or agree to
                  dispose of any fixed assets of the Company where the aggregate
                  of the amount or value of the consideration for the proposed
                  disposition, and the amount or value of the consideration for
                  any such disposition of any fixed assets of the Company that
                  has been completed in the period of four (4) months
                  immediately preceding the proposed disposition, exceeds 33 %
                  of the value of the Company's fixed assets as shown in the
                  latest balance sheet which was tabled at a shareholders'
                  general meeting.

                  For the purposes of this Article, "disposition" includes an
                  act involving the transfer of an interest in assets but does
                  not include the usage of fixed assets for the provision of
                  security.

                  The validity of a disposition by the Company shall not be
                  affected by any breach of the first paragraph of this Article.

Article 92.       The Chairman of the board of directors shall exercise the
                  following powers:

                  (1) to preside over shareholders' general meetings and to
                  convene and preside over meetings of the board of directors;

                  (2) to check on the implementation of resolutions passed by
                  the board of directors at directors' meetings;

                  (3) to sign the securities certificates issued by the Company;

                  (4) to exercise other powers conferred by the board of
                  directors.

                  When the Chairman is unable to exercise his powers, such
                  powers shall be exercised by the Vice-chairman who has been
                  designated by the Chairman to exercise such powers on his
                  behalf.

                                       32
<PAGE>

Article 93.       Meetings of the board of directors shall be held at least four
                  times every year and shall be convened by the Chairman of the
                  board of directors. Where there is an urgent matter, an
                  extraordinary meeting of the board of directors may be held if
                  it is so requested by more than one-third of the directors,
                  the Chairman of the board of directors or the Company's
                  general manager.

Article 94.       Notice of meetings and extraordinary meetings of the board of
                  directors shall be delivered in person, by facsimile, by
                  express delivery service or by registered mail. The time limit
                  for the delivery of notice of meetings and extraordinary
                  meetings of the board of directors shall be at least fourteen
                  (14) days and ten (10) days respectively before the meeting.

Article 95.       Notice of a meeting shall be deemed to have been given to any
                  director who attends the meeting without protesting against,
                  before or at its commencement, any lack of notice.

Article 96.       Any regular or extraordinary meeting of the board of directors
                  may be held by way of telephone conferencing or similar
                  communication equipment so long as all directors participating
                  in the meeting can clearly hear and communicate with each
                  other. All such directors shall be deemed to be present in
                  person at the meeting.

Article 97.       Meetings of the board of directors shall be held only if more
                  than half of the directors (including any alternate director
                  appointed pursuant to Article 98 of the Company's Articles of
                  Association) are present.

                  Each director shall have one (1) vote. Unless otherwise
                  provided for in the Company's Articles of Association, a
                  resolution of the board of directors must be passed by more
                  than half of all of the directors of the Company. A resolution
                  of the board of directors relating to connected transactions
                  shall be signed by independent (non-executive) directors
                  before coming into effect.

                  Where there is an equality of votes cast both for and against
                  a resolution, the Chairman of the board of directors shall
                  have a casting vote.

                  A director shall not vote on any board resolution in which he
                  or any of his associates has a material interest nor shall he
                  be counted in the quorum present at the same board meeting.
                  The relevant transaction shall be dealt with by way of a board
                  meeting and not by way of circulation of written board
                  resolution. If an independent non-executive director (and
                  whose associates) has no material interests in the
                  transaction, he should be present at such board meeting. In
                  this Article, "associate" has the same meaning as defined in
                  the Listing Rules. If any stock exchange where the shares of
                  the Company are listed sets out more stringent rules in
                  relation to the matters in relation to which any director
                  should abstain from voting, the

                                       33
<PAGE>

                  directors should comply with the more stringent rules.

Article 98.       Directors shall attend the meetings of the board of directors
                  in person. Where a director is unable to attend a meeting for
                  any reason, he may by a written power of attorney appoint
                  another director to attend the meeting on his behalf. The
                  power of attorney shall set out the scope of the
                  authorisation.

                  A Director appointed as a representative of another director
                  to attend the meeting shall exercise the rights of a director
                  within the scope of authority conferred by the appointing
                  director. Where a director is unable to attend a meeting of
                  the board of directors and has not appointed a representative
                  to attend the meeting on his behalf, he shall be deemed to
                  have waived his right to vote at the meeting.

Article 99.       In respect of any matter which needs to be determined by the
                  board of directors at an extraordinary meeting of the board of
                  directors and where the board of directors has already sent
                  out written notice of matters to be decided at such meeting
                  and the number of directors who have signified their consent
                  thereto reaches the amount set out in Article 97, a valid
                  resolution shall be deemed to be passed and there is no need
                  to hold a board of directors' meeting.

Article 100.      The board of directors shall keep minutes of resolutions
                  passed at meetings of the board of directors. The minutes
                  shall be signed by the directors present at the meeting and
                  the person who recorded the minutes. The directors shall be
                  liable for the resolutions of the board of directors. If a
                  resolution of the board of directors violates the laws,
                  administrative regulations or the Company's Articles of
                  Association and the Company suffers serious losses as a result
                  thereof, the directors who participated in the passing of such
                  resolution are liable to compensate the Company therefor.
                  However, if it can be proven that a director expressly
                  objected to the resolution when the resolution was voted on,
                  and that such objection was recorded in the minutes of the
                  meeting, such director may be released from such liability.

                       CHAPTER 11: SECRETARY OF THE BOARD
                                  OF DIRECTORS

Article 101.      The Company shall have one (1) secretary of the board of
                  directors. The secretary shall be a senior officer of the
                  Company.

Article 102.      The secretary of the Company's board of directors shall be a
                  natural person who has the requisite professional knowledge
                  and experience, and shall be appointed by the board of
                  directors. His primary responsibilities are to ensure that:

                                       34
<PAGE>

                  (1) to organise board meetings and general meetings of the
                  Company, and to ensure that the Company has complete
                  organisation documents and records;

                  (2) minutes of the meetings of the board of directors shall be
                  circulated to all directors for their signature and records
                  within 14 days after the board meeting is held and be made
                  available for inspection;

                  (3) the Company prepares and delivers, in accordance with law,
                  those reports and documents required by competent authorities
                  entitled thereto;

                  (4) the Company's registers of shareholders are properly
                  maintained, and that persons entitled to receive the Company's
                  records and documents are furnished therewith without delay.

Article 103.      A director or other senior officer of the Company may also act
                  as the secretary of the board of directors. The certified
                  public accountancy firm which has been appointed by the
                  Company to act as its auditors shall not act as the secretary
                  of the board of directors.

                  Where the office of secretary is held concurrently by a
                  director, and an act is required to be done by a director and
                  a secretary separately, the person who holds the office of
                  director and secretary may not perform the act in a dual
                  capacity.

                           CHAPTER 12: GENERAL MANAGER

Article 104.      The Company shall have a general manager, senior deputy
                  general managers, deputy general managers, financial
                  controller. The general manager proposed by the Chairman of
                  the board of directors shall be appointed or dismissed by the
                  board of directors. Senior deputy general managers, deputy
                  general managers and financial controller proposed by the
                  general manager shall be appointed or dismissed by the board
                  of the directors. A member of the board of directors may act
                  concurrently as the general manager, senior deputy general
                  managers, deputy general managers, financial controller or
                  other senior officers.

Article 105.      The general manager shall be accountable to the board of
                  directors and shall exercise the following functions and
                  powers:

                  (1) to be in charge of the Company's production, operation and
                  management and to organise the implementation of the
                  resolutions of the board of directors;

                                       35
<PAGE>

                  (2) to organise the implementation of the Company's annual
                  business plan and investment proposal;

                  (3) to draft plans for the establishment of the Company's
                  internal management structure;

                  (4) to draft the Company's basic management system;

                  (5) to formulate concrete rules and regulations for the
                  Company;

                  (6) to propose the appointment or dismissal by the board of
                  directors of the Company's senior deputy general managers,
                  deputy general managers, financial controller and other senior
                  officers ;

                  (7) to appoint or dismiss management personnel other than
                  those required to be appointed or dismissed by the board of
                  directors;

                  (8) other powers conferred by the Company's Articles of
                  Association and the board of directors.

Article 106.      The general manager shall attend meetings of the board of
                  directors. The general manager, who is not a director, does
                  not have any voting rights at board meetings.

Article 107.      The general manager and senior deputy general managers, deputy
                  general managers and financial controller performing their
                  functions and powers, shall act honestly and diligently and in
                  accordance with laws, administrative regulations and the
                  Company's Articles of Association.

                        CHAPTER 13: SUPERVISORY COMMITTEE

Article 108.      The Company shall have a supervisory committee.

Article 109.      The supervisory committee shall compose of seven (7)
                  supervisors. One of the members of the supervisory committee
                  shall act as the chairman. Each supervisor shall serve for a
                  term of three (3) years, which term is renewable upon
                  re-election and re-appointment.

                  The election or removal of the chairman of the supervisory
                  committee shall be determined by two-thirds or more of the
                  members of the supervisory committee.

                  The chairman shall serve for a term of three (3) years, which
                  term is renewable upon re-election and re-appointment.

                                       36
<PAGE>

Article 110.      The supervisory committee shall comprise of four (6)
                  supervisors who shall represent the shareholders, and who
                  shall be elected or removed by the shareholders in general
                  meetings, and one (1) supervisor who shall represent the
                  employees of the Company and who shall be elected or removed
                  democratically thereby.

Article 111.      The directors, general manager, senior deputy general
                  managers, deputy general managers and financial controller
                  shall not act concurrently as supervisors.

Article 112.      Meetings of the supervisory committee shall be held at least
                  once every year, and shall be convened by the chairman of the
                  supervisory committee.

Article 113.      The supervisory committee shall be accountable to the
                  shareholders in a general meeting and shall exercise the
                  following functions and powers in accordance with law:

                  (1) to review the Company's financial position;

                  (2) to supervise the directors, general manager, senior deputy
                  general managers, deputy general managers, financial
                  controller and other senior officers to ensure that they do
                  not act in contravention of any law, regulation or the
                  Company's Articles of Association;

                  (3) to demand any director, general manager, senior deputy
                  general manager, deputy general manager, financial controller
                  or any other senior officer who acts in a manner which is
                  harmful to the Company's interest to rectify such behaviour;

                  (4) to check the financial information such as the financial
                  report, business report and plans for distribution of profits
                  to be submitted by the board of directors to the shareholders'
                  general meetings and to authorise, in the Company's name,
                  publicly certified and practising accountants to assist in the
                  re-examination of such information should any doubt arise in
                  respect thereof;

                  (5) to propose to convene a shareholders' extraordinary
                  general meeting;

                  (6) to represent the Company in negotiations with or in
                  bringing actions against a director;

                  (7) other functions and powers specified in the Company's
                  Articles of Association.

                  Supervisors shall attend meetings of the board of directors.

                                       37
<PAGE>

Article 114.      Meetings of the supervisory committee shall be held only if
                  three (3) or more supervisors are present. Resolutions of the
                  supervisory committee shall be passed by the affirmative vote
                  of more than two-thirds of all of its members.

Article 115.      All reasonable fees incurred in respect of the employment of
                  professionals (such as, lawyers, certified public accountants
                  or practising auditors) which are required by the supervisory
                  committee in the exercise of its functions and powers shall be
                  borne by the Company.

Article 116.      A supervisor shall carry out his duties honestly and
                  faithfully in accordance with laws, administrative regulations
                  and the Company's Articles of Association.

           CHAPTER 14: THE QUALIFICATIONS AND DUTIES OF THE DIRECTORS,
          SUPERVISORS, GENERAL MANAGER, SENIOR DEPUTY GENERAL MANAGERS,
                            DEPUTY GENERAL MANAGERS,
                FINANCIAL CONTROLLER AND OTHER SENIOR OFFICERS OF
                                   THE COMPANY

Article 117.      A person may not serve as a director, supervisor, general
                  manager, senior deputy general manager, deputy general
                  manager, financial controller or any other senior officer of
                  the Company if any of the following circumstances apply:

                  (1) a person who does not have or who has limited capacity for
                  civil conduct;

                  (2) a person who has been sentenced for corruption, bribery,
                  infringement of property or misappropriation of property or
                  other crimes which destroy the social economic order, where
                  less than a term of five (5) years has lapsed since the
                  sentence was served, or a person who has been deprived of his
                  political rights and not more than five (5) years have lapsed
                  since the sentence was served;

                  (3) a person who is a former director, factory manager or
                  manager of a company or enterprise which has been dissolved or
                  put into liquidation as a result of mismanagement and who was
                  personally liable for the winding up of such company or
                  enterprise, where less than three (3) years have elapsed since
                  the date of completion of the insolvent liquidation of the
                  company or enterprise;

                                       38
<PAGE>

                  (4) a person who is a former legal representative of a company
                  or enterprise the business licence of which was revoked due to
                  violation of law and who are personally liable therefor, where
                  less than three (3) years have elapsed since the date of the
                  revocation of the business licence;

                  (5) a person who has a relatively large amount of debts which
                  have become overdue;

                  (6) a person who is currently under investigation by judicial
                  organs for violation of criminal law;

                  (7) a person who, according to laws and administrative
                  regulations, cannot act as a leader of an enterprise;

                  (8) a person other than a natural person;

                  (9) a person who has been convicted by the competent authority
                  for violation of relevant securities regulations and such
                  conviction involves a finding that such person has acted
                  fraudulently or dishonestly, where not more than five (5)
                  years have lapsed from the date of such conviction.

Article 118.      The validity of an act carried out by a director, general
                  manager, senior deputy general manager, deputy general
                  manager, financial controller or other senior officer of the
                  Company on its behalf shall, as against a bona fide third
                  party, shall not be affected by any irregularity in his
                  office, election or any defect in his qualification.

Article 119.      In addition to the obligations imposed by laws, administrative
                  regulations or the listing rules of the stock exchange on
                  which shares of the Company are listed, each of the Company's
                  directors, supervisors, general manager, senior deputy general
                  managers, deputy general managers and other senior officers
                  owes a duty to each shareholder, in the exercise of the
                  functions and powers of the Company entrusted to him:

                  (1) not to cause the Company to exceed the scope of business
                  stipulated in its business licence;

                  (2) to act honestly and in the best interests of the Company;

                  (3) not to expropriate the Company's property in any way,
                  including (without limitation) usurpation of opportunities
                  which benefit the Company;

                                       39
<PAGE>

                  (4) not to expropriate the individual rights of shareholders,
                  including (without limitation) rights to distribution and
                  voting rights, save and except pursuant to a restructuring of
                  the Company which has been submitted to the shareholders for
                  approval in accordance with the Company's Articles of
                  Association.

Article 120.      Each of the Company's directors, supervisors, general manager,
                  senior deputy general managers, deputy general managers,
                  financial controller and other senior officers owes a duty, in
                  the exercise of his powers and in the discharge of his duties,
                  to exercise the care, diligence and skill that a reasonably
                  prudent person would exercise in comparable circumstances.

Article 121.      Each of the Company's directors, supervisors, general manager,
                  senior deputy general managers, deputy general managers,
                  financial controller and other senior officers shall exercise
                  his powers or perform his duties in accordance with the
                  fiduciary principle; and shall not put himself in a position
                  where his duty and his interest may conflict. This principle
                  includes (without limitation) discharging the following
                  obligations:

                  (1) to act honestly in the best interests of the Company;

                  (2) to act within the scope of his powers and not to exceed
                  such powers;

                  (3) to exercise the discretion vested in him personally and
                  not to allow himself to act under the control of another and,
                  unless and to the extent permitted by laws, administrative
                  regulations or with the informed consent of shareholders given
                  in a general meeting, not to delegate the exercise of his
                  discretion;

                  (4) to treat shareholders of the same class equally and to
                  treat shareholders of different classes fairly;

                  (5) unless otherwise provided for in the Company's Articles of
                  Association or except with the informed consent of the
                  shareholders given in a general meeting, not to enter into any
                  contract, transaction or arrangement with the Company;

                  (6) not to use the Company's property for his own benefit,
                  without the informed consent of the shareholders given in a
                  general meeting;

                  (7) not to exploit his position to accept bribes or other
                  illegal income or expropriate the Company's property in any
                  way, including (without limitation) opportunities which
                  benefit the Company;

                  (8) not to accept commissions in connection with the Company's
                  transactions, without the informed consent of the shareholders
                  given in a general meeting;

                                       40
<PAGE>

                  (9) to comply with the Company's Articles of Association, to
                  perform his official duties faithfully, to protect the
                  Company's interests and not to exploit his position and power
                  in the Company to advance his own interests;

                  (10) not to compete with the Company in any way, save with the
                  informed consent of the shareholders given in a general
                  meeting;

                  (11) not to misappropriate the Company's funds or to lend such
                  funds to any other person, not to use the Company's assets to
                  set up deposit accounts in his own name or in the any other
                  name or to use such assets to guarantee the debts of a
                  shareholder of the Company or any other personal liabilities;

                  (12) not to release any confidential information which he has
                  obtained during his term of office, without the informed
                  consent of the shareholders in a general meeting; nor shall he
                  use such information otherwise than for the Company's benefit,
                  save that disclosure of such information to the court or other
                  governmental authorities is permitted if:

                        (i) disclosure is made under compulsion of law;

                        (ii) public interests so warrants;

                        (iii) the interests of the relevant director,
                  supervisor, general manager, senior deputy general manager,
                  deputy general manager or other senior officer so requires;

                  (13) strictly comply with the relevant laws and regulations
                  and the relevant rules of the stock exchanges on which the
                  shares of the Company are listed in respect of dealings with
                  the securities of the Company.

Article 122.      Each director, supervisor, general manager, deputy general
                  manager, financial controller and other senior officer of the
                  Company shall not direct the following persons or institutions
                  ("associates") to act in a manner which he is prohibited from
                  so acting:

                  (1) the spouse or minor child of the director, supervisor,
                  general manager, senior deputy general manager, deputy general
                  manager, financial controller or other senior officer;

                  (2) the trustee of the director, supervisor, general manager,
                  senior deputy general manager, deputy general manager,
                  financial controller or other senior officer or of any person
                  described in sub-paragraph (1) above;

                                       41
<PAGE>

                  (3) the partner of that director, supervisor, general manager,
                  senior deputy general manager, deputy general manager,
                  financial controller or other senior officer or any person
                  referred to in sub-paragraphs (1) and (2) of this Article;

                  (4) a company in which that director, supervisor, general
                  manager, senior deputy general manager, deputy general
                  manager, financial controller or other senior officer, whether
                  alone or jointly with one (1) or more of the persons referred
                  to in sub-paragraphs (l), (2) and (3) of this Article and
                  other directors, supervisors, general manager, senior deputy
                  general managers, deputy general managers, financial
                  controller and other senior officers, has de facto controlling
                  interest;

                  (5) the directors, supervisors, general manager, senior deputy
                  general managers, deputy general managers and other senior
                  officers of a company which is being controlled in the manner
                  set out in sub-paragraph (4) above.

Article 123.      The fiduciary duties of the directors, supervisors, general
                  manager, senior deputy general managers, deputy general
                  managers, financial controller and other senior officers of
                  the Company do not necessarily cease with the termination of
                  their tenure. The duty of confidentiality in respect of trade
                  secrets of the Company survives the termination of their
                  tenure. Other duties may continue for such period as the
                  principle of fairness may require depending on the amount of
                  time which has lapsed between the termination and the act
                  concerned and the circumstances and the terms under which the
                  relationship between the relevant director, supervisor,
                  general manager, senior deputy general manager, deputy general
                  manager and the senior officer on the on hand and the Company
                  on the other hand was terminated.

Article 124.      Subject to Article 48, a director, supervisor, general
                  manager, senior deputy general manager, deputy general
                  manager, financial controller or other senior officer of the
                  Company may be relieved of liability for specific breaches of
                  his duty with the informed consent of the shareholders given
                  at a general meeting.

Article 125.      Where a director, supervisor, general manager, senior deputy
                  general manager, deputy general manager, financial controller
                  or other senior officer of the Company is in any way, directly
                  or indirectly, materially interested in a contract,
                  transaction or arrangement or proposed contract, transaction
                  or arrangement with the Company, (other than his contract of
                  service with the Company), he shall declare the nature and
                  extent of his interests to the board of directors at the
                  earliest opportunity, whether or not the contract, transaction
                  or arrangement or proposal therefor is otherwise subject to
                  the approval of the board of directors.

                  Unless the interested director, supervisor, general manager,
                  senior deputy general manager, deputy general manager,
                  financial controller or other

                                      42
<PAGE>

                  senior officer discloses his interests in accordance with the
                  preceding sub-paragraph of this Article and the contract,
                  transaction or arrangement is approved by the board of
                  directors at a meeting in which the interested director,
                  supervisor, general manager, senior deputy general manager,
                  deputy general manager or other senior officer is not counted
                  as part of the quorum and refrains from voting, a contract,
                  transaction or arrangement in which that director, supervisor,
                  general manager, deputy general manager or other senior
                  officer is materially interested is voidable at the instance
                  of the Company except as against a bona fide party thereto who
                  does not have notice of the breach of duty by the interested
                  director, supervisor, general manager, deputy general manager,
                  financial controller or other senior officer.

                  For the purposes of this Article, a director, supervisor,
                  general manager, Senior deputy general manager, deputy general
                  manager financial controller or other senior officer of the
                  Company is deemed to be interested in a contract, transaction
                  or arrangement in which his associate is interested.

Article 126.      Where a director, supervisor, general manager, senior deputy
                  general manager, deputy general manager, financial controller
                  or other senior officer of the Company gives to the board of
                  directors a notice in writing stating that, by reason of the
                  facts specified in the notice, he is interested in contracts,
                  transactions or arrangements which may subsequently be made by
                  the Company, that notice shall be deemed for the purposes of
                  the preceding Article to be a sufficient declaration of his
                  interests, so far as the content stated in such notice is
                  concerned, provided that such notice shall have been given
                  before the date on which the question of entering into the
                  relevant contract, transaction or arrangement is first taken
                  into consideration by the Company.


Article 127.      The Company shall not pay taxes for or on behalf of a
                  director, supervisor, general manager, senior deputy general
                  manager, deputy general manager, financial controller or other
                  senior officer in any manner.


Article 128.      The Company shall not directly or indirectly make a loan to or
                  provide any guarantee in connection with the making of a loan
                  to a director, supervisor, general manager, deputy general
                  manager, financial controller or other senior officer of the
                  Company or of the Company's holding company or any of their
                  respective associates.


                  The foregoing prohibition shall not apply to the following
                  circumstances:

                  (1) the provision by the Company of a loan or a guarantee in
                  connection with the making of a loan to its subsidiary:

                                      43
<PAGE>

                  (2) the provision by the Company of a loan or a guarantee in
                  connection with the making of a loan or any other funds
                  available to any of its directors, supervisors, general
                  manager, senior deputy general managers, deputy general
                  managers, financial controller and other senior officers to
                  meet expenditure incurred or to be incurred by him for the
                  purposes of the Company or for the purpose of enabling him to
                  perform his duties properly, in accordance with the terms of a
                  service contract approved by the shareholders in a general
                  meeting;

                  (3) if the ordinary course of business of the Company includes
                  the lending of money or the giving of guarantees, the Company
                  may make a loan to or provide a guarantee in connection with
                  the making of a loan to any of the relevant directors,
                  supervisors, general manager, senior deputy general managers,
                  deputy general managers, financial controller and other senior
                  officers or their respective associates in the ordinary course
                  of its business on normal commercial terms.

Article 129.      Any person who receives funds from a loan which has been made
                  by the Company acting in breach of the preceding Article
                  shall, irrespective of the terms of the loan, forthwith repay
                  such funds.


Article 130.      A guarantee for the repayment of a loan which has been
                  provided by the Company acting in breach of Article 128(1)
                  shall not be enforceable against the Company, save in respect
                  of the following circumstances:


                  (1) the guarantee was provided in connection with a loan which
                  was made to an associate of any of the directors, supervisors,
                  general manager, senior deputy general managers, deputy
                  general managers, financial controller and other senior
                  officers of the Company or of the Company's holding company
                  and the lender of such funds did not know of the relevant
                  circumstances at the time of the making of the loan; or

                  (2) the collateral which has been provided by the Company has
                  already been lawfully disposed of by the lender to a bona fide
                  purchaser.

Article 131.      For the purposes of the foregoing provisions of this Chapter,
                  a "guarantee" includes an undertaking or property provided to
                  secure the obligor's performance of his obligations.


Article 132.      In addition to any rights and remedies provided by the laws
                  and administrative regulations, where a director, supervisor,
                  general manager, senior deputy general manager, deputy general
                  manager, financial controller or other senior officer of the
                  Company breaches the duties which he owes to the Company, the
                  Company has a right:


                                      44
<PAGE>

                  (1) to demand such director, supervisor, general manager,
                  senior deputy general manager, deputy general manager,
                  financial controller or other senior officer to compensate it
                  for losses sustained by the Company as a result of such
                  breach;

                  (2) to rescind any contract or transaction which has been
                  entered into between the Company and such director,
                  supervisor, general manager, senior deputy general manager,
                  deputy general manager, financial controller or other senior
                  officer or between the Company and a third party (where such
                  third party knows or should have known that such director,
                  supervisor, general manager, deputy general manager or other
                  senior officer representing the Company has breached his
                  duties owed to the Company);

                  (3) to demand such director, supervisor, general manager,
                  senior deputy general manager, deputy general manager or other
                  senior officer to account for profits made as result of the
                  breach of his duties;

                  (4) to recover any monies which should have been received by
                  the Company and which were received by such director,
                  supervisor, general manager, senior deputy general manager,
                  deputy general manager, financial controller or other senior
                  officer instead, including (without limitation) commissions;
                  and

                  (5) to demand repayment of interest earned or which may have
                  been earned by such director, supervisor, general manager,
                  senior deputy general manager, deputy general manager,
                  financial controller or other senior officer on monies that
                  should have been paid to the Company.

Article 133.      The Company shall, with the prior approval of shareholders in
                  a general meeting, enter into a contract in writing with a
                  director or supervisor wherein his emoluments are stipulated.
                  The aforesaid emoluments include:


                  (1) emoluments in respect of his service as director,
                  supervisor or senior officer of the Company;

                  (2) emoluments in respect of his service as director,
                  supervisor or senior officer of any subsidiary of the Company;

                  (3) emoluments in respect of the provision of other services
                  in connection with the management of the affairs of the
                  Company and any of its subsidiaries;

                  (4) payment by way of compensation for loss of office, or as
                  consideration for or in connection with his retirement from
                  office.

                                      45
<PAGE>

                  No proceedings may be brought by a director or supervisor
                  against the Company for anything due to him in respect of the
                  matters mentioned in this Article except pursuant to the
                  contract mentioned above.

Article 134.      The contract concerning the emoluments between the Company and
                  its directors or supervisors should provide that in the event
                  that the Company is acquired, the Company's directors and
                  supervisors shall, subject to the prior approval of
                  shareholders in a general meeting, have the right to receive
                  compensation or other payment in respect of his loss of office
                  or retirement. For the purposes of this paragraph, the
                  acquisition of the Company includes any of the following:


                  (1) an offer made by any person to the general body of
                  shareholders;

                  (2) an offer made by any person with a view to the offeror
                  becoming a "controlling shareholder" within the meaning of
                  Article 49.

                  If the relevant director or supervisor does not comply with
                  this Article, any sum so received by him shall belong to those
                  persons who have sold their shares as a result of such offer.
                  The expenses incurred in distributing such sum on a pro rata
                  basis amongst such persons shall be borne by the relevant
                  director or supervisor and shall not be paid out of such sum.

      CHAPTER 15: FINANCIAL AND ACCOUNTING SYSTEMS AND PROFIT DISTRIBUTION

Article 135.      The Company shall establish its financial and accounting
                  systems in accordance with laws, administrative regulations
                  and PRC accounting standards formulated by the finance
                  regulatory department of the State Council.


Article 136.      At the end of each fiscal year, the Company shall prepare a
                  financial report which shall be examined and verified in a
                  manner prescribed by law.


Article 137.      The board of directors of the Company shall place before the
                  shareholders at every annual general meeting such financial
                  reports which the relevant laws, administrative regulations
                  and directives promulgated by competent regional and central
                  governmental authorities require the Company to prepare.


Article 138.      The Company's financial reports shall be made available for
                  shareholders' inspection at the Company twenty (20) days
                  before the date of every shareholders' annual general meeting.
                  Each shareholder shall be entitled to obtain a copy of the
                  financial reports referred to in this Chapter.


                                      46
<PAGE>

                  The Company shall deliver or send to each shareholder of
                  Overseas-Listed Foreign-Invested Shares by prepaid mail at the
                  address registered in the register of shareholders the said
                  reports not later than twenty-one (21) days before the date of
                  every annual general meeting of the shareholders.

Article 139.      The financial statements of the Company shall, in addition to
                  being prepared in accordance with PRC accounting standards and
                  regulations, be prepared in accordance with either
                  international accounting standards, or that of the place
                  outside the PRC where the Company's shares are listed. If
                  there is any material difference between the financial
                  statements prepared respectively in accordance with the two
                  accounting standards, such difference shall be stated in the
                  financial statements. In distributing its after-tax profits,
                  the lower of the two amounts shown in the financial statements
                  shall be adopted.


Article 140.      Any interim results or financial information published or
                  disclosed by the Company must also be prepared and presented
                  in accordance with PRC accounting standards and regulations,
                  and also in accordance with either international accounting
                  standards or that of the place overseas where the Company's
                  shares are listed.


Article 141.      The Company shall publish its financial reports twice every
                  fiscal year, that is, the interim financial report shall be
                  published within sixty (60) days after the expiration of the
                  first six (6) months of each fiscal year; the annual financial
                  report shall be published within one hundred and twenty (120)
                  days after the expiration of each fiscal year.


Article 142.      The Company shall not keep accounts other than those required
                  by law.


Article 143.      The Company's after-tax profit shall be allocated in
                  accordance with the following order:

                  (1) compensation of losses;

                  (2) allocation of ten percent of its after-tax profit to the
                  statutory common reserve fund;

                  (3) allocation of five percent to ten percent of its after-tax
                  to the statutory common welfare fund;

                  (4) allocation to the discretionary common reserve fund upon
                  approval by resolution of the shareholders' general meeting;

                  (5) payment of dividends in respect of ordinary shares.

                  The Company shall not allocate dividends or carry out other
                  allocations in

                                      47
<PAGE>

                  the form of bonuses, before the Company has compensated for
                  its losses and made allocations to the statutory common
                  reserve fund and the statutory common welfare fund.

Article 144.      Capital common reserve fund includes the following items:


                  (1) premium on shares issued at a premium price;

                  (2) any other income designated for the capital common reserve
                  fund by the regulations of the finance regulatory department
                  of the State Council.

Article 145.      The common reserve fund of the Company shall be applied for
                  the following purposes:

                  (1) to compensate losses;

                  (2) to expand the Company's production and operation;

                  (3) to convert the common reserve fund into capital in order
                  to increase its capital. The Company may convert its common
                  reserve fund into capital with the approval of shareholders in
                  a general meeting. When such conversion takes place, the
                  Company shall either distribute new shares in proportion to
                  the existing shareholders' number of shares, or increase the
                  par value of each share, provided, however, that when the
                  statutory common reserve fund is converted to capital, the
                  balance of the statutory common reserve fund may not fall
                  below 25 % of the registered capital.

Article 146.      The Company's statutory common welfare fund is used for the
                  collective welfare of the Company's employees.

Article 147.      Dividend shall be paid twice a year. The final dividends of
                  the Company shall be decided by the shareholders by way of an
                  ordinary resolution. The shareholders may by way of an
                  ordinary resolution authorize the board of directors to decide
                  the interim dividends.

Article 148.      The Company may distribute dividends in the form of:

                  (1) cash;

                  (2) shares.

                  If any shareholder has not claimed his dividends six years
                  after such dividends has been declared, such shareholder is
                  deemed to forfeit his right to claim such dividends. The
                  Company shall not exercise its power to forfeit the unclaimed
                  dividends until after the expiry of the applicable limitation
                  period.

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<PAGE>

Article 149.      The Company shall calculate, declare and pay dividends and
                  other amounts which are payable to holders of
                  Domestic-Invested Shares in Renminbi. The Company shall
                  calculate and declare dividends and other payments which are
                  payable to holders of Overseas-Listed Foreign-Invested Shares
                  in Renminbi, and shall pay such amounts in the local currency
                  of the place in which such Overseas-Listed Foreign-Invested
                  Shares are listed (if such shares are listed in more than one
                  place, then the currency of the principal place on which such
                  shares are listed as determined by the board of directors).

Article 150.      The Company shall pay dividends and other amounts to holders
                  of Foreign-Invested Shares in accordance with the relevant
                  foreign exchange control regulations of the State. If there is
                  no applicable regulation, the applicable exchange rate shall
                  be the average closing rate for the relevant foreign currency
                  announced by the Peoples' Bank of China during the week prior
                  to the announcement of payment of dividend and other amounts.

Article 151.      The Company shall appoint receiving agents for holders of the
                  Overseas-Listed Foreign-Invested Shares. Such receiving agents
                  shall receive dividends which have been declared by the
                  Company and all other amounts which the Company should pay to
                  holders of Overseas-Listed Foreign-Invested Shares on such
                  shareholders' behalf.

                  The receiving agents appointed by the Company shall meet the
                  relevant requirements of the laws of the place at which the
                  stock exchange on which the Company's shares are listed or the
                  relevant regulations of such stock exchange.

                  The receiving agents appointed for holders of Overseas-Listed
                  Foreign-Invested Shares listed in Hong Kong shall each be a
                  company registered as a trust company under the Trustee
                  Ordinance of Hong Kong.

                       CHAPTER 16: APPOINTMENT OF AUDITORS

Article 152.      The Company shall appoint an independent firm of accountants
                  which is qualified under the relevant regulations of the State
                  to audit the Company's annual report and review the Company's
                  other financial reports.

                  The first auditors of the Company may be appointed before the
                  first annual general meeting of the Company at the inaugural
                  meeting. Auditors so appointed shall hold office until the
                  conclusion of the first annual general meeting.

                  If the inaugural meeting does not exercise the powers under
                  the preceding paragraph, those powers shall be exercised by
                  the board of directors.

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<PAGE>

Article 153.      The auditors appointed by the Company shall hold office from
                  the conclusion of the annual general meeting of shareholders
                  at which they were appointed until the conclusion of the next
                  annual general meeting of shareholders.

Article 154.      The auditors appointed by the Company shall enjoy the
                  following rights:

                  (1) a right to review to the books, records and vouchers of
                  the Company at any time, the right to require the directors,
                  general manager, senior deputy general managers, deputy
                  general managers and other senior officers of the Company to
                  supply relevant information and explanations;

                  (2) a right to require the Company to take all reasonable
                  steps to obtain from its subsidiaries such information and
                  explanation as are necessary for the discharge of its duties;

                  (3) a right to attend shareholders' general meetings and to
                  receive all notices of, and other communications relating to,
                  any shareholders' general meeting which any shareholder is
                  entitled to receive, and to speak at any shareholders' general
                  meeting in relation to matters concerning its role as the
                  Company's accountancy firm.

Article 155.      If there is a vacancy in the position of auditor of the
                  Company, the board of directors may appoint an accountancy
                  firm to fill such vacancy before the convening of the
                  shareholders' general meeting. Any other accountancy firm
                  which has been appointed by the Company may continue to act
                  during the period during which a vacancy arises.

Article 156.      The shareholders in a general meeting may by ordinary
                  resolution remove the Company's auditors before the expiration
                  of its term of office, irrespective of the provisions in the
                  contract between the Company and the Company's auditors.
                  However, the accountancy firm's right to claim for damages
                  which arise from its removal shall not be affected thereby.

Article 157.      The remuneration of an accountancy firm or the manner in
                  which such firm is to be remunerated shall be determined by
                  the shareholders in a general meeting. The remuneration of an
                  accountancy firm appointed by the board of directors shall be
                  determined by the board of directors.

Article 158.      The Company's appointment, removal or non-reappointment of an
                  accountancy firm shall be resolved by the shareholders in a
                  general meeting. Such resolution shall be filed with the
                  securities authority of the State Council.

                  Where a resolution at a general meeting of shareholders is
                  passed to appoint as auditor a person other than an incumbent
                  auditor, to fill a casual vacancy in the office of auditor, to
                  reappoint as auditor a retiring auditor who was

                                      50
<PAGE>

                  appointed by the board of directors to fill a casual vacancy
                  or to remove an auditor before the expiration of his term of
                  office, the following provisions shall apply:

                  (1) A copy of the appointment or removal proposal shall be
                  sent (before notice of meeting is given to the shareholders)
                  to the firm proposed to be appointed or proposing to leave its
                  post or the firm which has left its post in the relevant
                  fiscal year (leaving includes leaving by removal, resignation
                  and retirement).

                  (2) If the auditor leaving its post makes representations in
                  writing and requests the Company to give the shareholders
                  notice of such representations, the Company shall (unless the
                  representations have been received too late) take the
                  following measures:

                        (a) in any notice of the resolution given to
                  shareholders, state the fact of the representations having
                  been made; and

                        (b) attach a copy of the representations to the notice
                  and deliver it to the shareholders in the manner stipulated in
                  the Company's Articles of Association.

                  (3) If the Company fails to send out the auditor's
                  representations in the manner set out in sub-paragraph (2)
                  above, such auditor may (in addition to his right to be heard)
                  require that the representations be read out at the meeting.

                  (4) An auditor which is leaving its post shall be entitled to
                  attend the following shareholders' general meetings:

                        (a) the general meeting at which its term of office
                  would otherwise have expired;

                        (b) the general meeting at which it is proposed to fill
                  the vacancy caused by its removal; and

                        (c) the general meeting which convened as a result of
                  its resignation,

                  and to receive all notices of, and other communications
                  relating to, any such meeting, and to speak at any such
                  meeting which it attends on any part of the business of the
                  meeting which concerns it as former auditor of the Company.

Article 159.      Prior notice should be given to the accountancy firm if the
                  Company decides to remove such accountancy firm or not to
                  renew the appointment thereof. Such accountancy firm shall be
                  entitled to make representations at

                                      51
<PAGE>

                  the shareholders' general meeting. Where the accountancy firm
                  resigns from its position as the Company's auditors, it shall
                  make clear to the shareholders in a general meeting whether
                  there has been any impropriety on the part of the Company.

                  An accountancy firm may resign its office by depositing at the
                  Company's legal address a resignation notice which shall
                  become effective on the date of such deposit or on such later
                  date as may be stipulated in such notice. Such notice shall
                  contain the following statements:

                  (1) a statement to the effect that there are no circumstances
                  connected with its resignation which it considers should be
                  brought to the notice of the shareholders or creditors of the
                  Company; or

                  (2) a statement of any such circumstances.

                  Where a notice is deposited under the preceding sub-paragraph,
                  the Company shall within fourteen (14) days send a copy of the
                  notice to the relevant governing authority. If the notice
                  contains a statement under the preceding sub-paragraph (2), a
                  copy of such statement shall be placed at the Company for
                  shareholders' inspection. The Company should also send a copy
                  of such statement by prepaid mail to every shareholder of
                  Overseas-Listed Foreign Shares at the address registered in
                  the register of shareholders.

                  Where the auditor's notice of resignation contains a statement
                  in respect of the above, it may require the board of directors
                  to convene a shareholders' extraordinary general meeting for
                  the purpose of receiving an explanation of the circumstances
                  connected with its resignation.

                              CHAPTER 17: INSURANCE

Article 160.      The different types or items of the Company's insurance shall
                  be decided at a meeting of the board of directors in
                  accordance with the relevant insurance law in China.

               CHAPTER 18: LABOUR AND PERSONNEL MANAGEMENT SYSTEMS

Article 161.      The Company may at its discretion employ and dismiss
                  employees based on the business development needs of the
                  Company and in accordance with the requirements of the laws
                  and administrative regulations of the State.

Article 162.      The Company may formulate its labour and payroll systems and
                  payment methods in accordance with the relevant laws and
                  regulations of the State,

                                      52
<PAGE>

                  the Company's Articles of Association and the economical
                  benefits of the Company.

Article 163.      The Company shall endeavour to improve its employee benefits
                  and to continually improve the working environment and living
                  standards of its employees.

Article 164.      The Company shall provide medical, retirement and unemployment
                  insurance for its employees and put in place a labour
                  insurance system, in accordance with the relevant laws and
                  regulations of the State.

                            CHAPTER 19: TRADE UNIONS

Article 165.      The Company's employees may form trade unions, carry on trade
                  union activities and protect their legal rights. The Company
                  shall provide the necessary conditions for such activities.

                 CHAPTER 20: MERGER AND DIVISION OF THE COMPANY

Article 166.      In the event of the merger or division of the Company, a plan
                  shall be presented by the Company's board of directors and
                  shall be approved in accordance with the procedures stipulated
                  in the Company's Articles of Association. The Company shall
                  then go through the relevant approval process. A shareholder
                  who objects to the plan of merger or division shall have the
                  right to demand the Company or the shareholders who consent to
                  the plan of merger or division to acquire such dissenting
                  shareholders' shareholding at a fair price. The contents of
                  the resolution of merger or division of the Company shall
                  constitute special documents which shall be available for
                  inspection by the shareholders of the Company.

                  Such special documents shall be sent by mail to holders of
                  Overseas-Listed Foreign-Invested Shares.

Article 167.      The merger of the Company may take the form of either merger
                  by absorption or merger by the establishment of a new company.

                  In the event of a merger, the merging parties shall execute a
                  merger agreement and prepare a balance sheet and an inventory
                  of assets. The Company shall notify its creditors within ten
                  (10) days of the date of the Company's merger resolution and
                  shall publish a public notice in a newspaper at least three
                  (3) times within thirty (30) days of the date of the Company's
                  merger resolution.

                  At the time of merger, rights in relation to debtors and
                  indebtedness of each

                                      53
<PAGE>

                  of the merged parties shall be assumed by the company which
                  survives the merger or the newly established company.

Article 168.      Where there is a division of the Company, its assets shall be
                  divided up accordingly.


                  In the event of division of the Company, the parties to such
                  division shall execute a division agreement and prepare a
                  balance sheet and an inventory of assets. The Company shall
                  notify its creditors within ten (10) days of the date of the
                  Company's division resolution and shall publish a public
                  notice in a newspaper at least three (3) times within thirty
                  (30) days of the date of the Company's division resolution.

                  Debts of the Company prior to division shall be assumed by the
                  companies which exist after the division in accordance with
                  the agreement of the parties.

Article 169.      The Company shall, in accordance with law, apply for change in
                  its registration with the companies registration authority
                  where a change in any item in its registration arises as a
                  result of any merger or division. Where the Company is
                  dissolved, the Company shall apply for cancellation of its
                  registration in accordance with law. Where a new company is
                  established, the Company shall apply for registration thereof
                  in accordance with law.


                     CHAPTER 21: DISSOLUTION AND LIQUIDATION

Article 170.      The Company shall be dissolved and liquidated upon the
                  occurrence of any of the following events:


                  (1) a resolution for dissolution is passed by shareholders at
                  a general meeting;

                  (2) dissolution is necessary due to a merger or division of
                  the Company;

                  (3) the Company is legally declared insolvent due to its
                  failure to repay debts as they become due; and

                  (4) the Company is ordered to close down because of its
                  violation of laws and administrative regulations.

Article 171.      A liquidation committee shall be set up within fifteen (15)
                  days of the Company being dissolved pursuant to sub-paragraph
                  (1) of the preceding Article, and the composition of the
                  liquidation committee of the Company shall be determined by an
                  ordinary resolution of shareholders in a general meeting.


                                      54
<PAGE>

                  Where the Company is dissolved under sub-paragraph (3) of the
                  preceding Article, the People's Court shall in accordance with
                  the provisions of relevant laws organise the shareholders,
                  relevant organisations and relevant professional personnel to
                  establish a liquidation committee to carry out the
                  liquidation.

                  Where the Company is dissolved under sub-paragraph (4) of the
                  preceding Article, the relevant governing authorities shall
                  organise the shareholders, relevant organisations and
                  professional personnel to establish a liquidation committee to
                  carry out the liquidation.

Article 172.      Where the board of directors proposes to liquidate the Company
                  for any reason other than the Company's declaration of its own
                  insolvency, the board shall include a statement in its notice
                  convening a shareholders' general meeting to consider the
                  proposal to the effect that, after making full inquiry into
                  the affairs of the Company, the board of directors is of the
                  opinion that the Company will be able to pay its debts in full
                  within twelve (12) months from the commencement of the
                  liquidation.


                  Upon the passing of the resolution by the shareholders in a
                  general meeting for the liquidation of the Company, all
                  functions and powers of the board of directors shall cease.

                  The liquidation committee shall act in accordance with the
                  instructions of the shareholders' general meeting to make a
                  report at least once every year to the shareholders' general
                  meeting on the committee's income and expenses, the business
                  of the Company and the progress of the liquidation; and to
                  present a final report to the shareholders' general meeting on
                  completion of the liquidation.

Article 173.      The liquidation committee shall, within ten (10) days of its
                  establishment, send notices to creditors and shall, within
                  sixty (60) days of its establishment, publish a public
                  announcement in a newspaper at least three (3) times.


                  A creditor shall, within thirty (30) days of receipt of the
                  notice, or for creditors who have not personally received such
                  notice, within ninety (90) days of the date of the first
                  public announcement, report its rights to the liquidation
                  committee. When reporting his rights, the creditor shall
                  provide an explanation of matters which are relevant thereto
                  and shall provide evidential material in respect thereof. The
                  liquidation committee shall register the creditor's rights.

Article 174.      During the liquidation period, the liquidation committee shall
                  exercise the following functions and powers:


                                       55
<PAGE>

                  (1) to sort out the Company's assets and prepare a balance
                  sheet and an inventory of assets respectively;

                  (2) to send notify the creditors or to publish public
                  announcements;

                  (3) to dispose of and liquidate any unfinished businesses of
                  the Company;

                  (4) to pay all outstanding taxes;

                  (5) to settle claims and debts;

                  (6) to deal with the surplus assets remaining after the
                  Company's debts have been repaid;

                  (7) to represent the Company in any civil proceedings.

Article 175.      After it has sorted out the Company's assets and after it has
                  prepared the balance sheet and an inventory of assets, the
                  liquidation committee shall formulate a liquidation plan and
                  present it to a shareholders' general meeting or to the
                  relevant governing authority for confirmation.

                  The company's assets shall be distributed in accordance with
                  law or regulation. If there is no applicable law, such
                  distribution shall be carried out in accordance with a fair
                  and reasonable procedure determined by the liquidation
                  committee.

                  Any surplus assets of the Company remaining after its debts
                  have been repaid in accordance with the provisions of the
                  preceding paragraph shall be distributed to its shareholders
                  according to the class of shares and the proportion of shares
                  held.

                  During the liquidation period, the Company shall not commence
                  any new business activities.

Article 176.      If after putting the Company's assets in order and preparing a
                  balance sheet and an inventory of assets in connection with
                  the liquidation of the Company, the liquidation committee
                  discovers that the Company's assets are insufficient to repay
                  the Company's debts in full, the liquidation committee shall
                  immediately apply to the People's Court for a declaration of
                  insolvency.

                  After a Company is declared insolvent by a ruling of the
                  People's Court, the liquidation committee shall transfer all
                  matters arising from the liquidation to the People's Court.

Article 177.      Following the completion of the liquidation, the liquidation
                  committee shall

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                  prepare a liquidation report, a statement of income and
                  expenses received and made during the liquidation period and a
                  financial report, which shall be verified by a Chinese
                  registered accountant and submitted to the shareholders'
                  general meeting or the relevant governing authority for
                  confirmation.

                  The liquidation committee shall, within thirty (30) days after
                  such confirmation, submit the documents referred to in the
                  preceding paragraph to the companies registration authority
                  and apply for cancellation of registration of the Company, and
                  publish a public announcement relating to the termination of
                  the Company.

                      CHAPTER 22: PROCEDURES FOR AMENDMENT
                    OF THE COMPANY'S ARTICLES OF ASSOCIATION

Article 178.      The Company may amend its Articles of Association in
                  accordance with the requirements of laws, administrative
                  regulations and the Company's Articles of Association.

Article 179.      The Company's Articles of Association shall be amended in the
                  following manner:

                  (1) The Directors shall propose the manner in which the
                  Company's Article of Association shall be amended;

                  (2) The foregoing proposal shall be furnished to the
                  shareholders in writing and a shareholders' meeting shall be
                  convened;

                  (3) The amendments shall be approved by votes representing
                  more than two-thirds of the voting rights represented by the
                  shareholders present at the meeting.

Article 180.      Amendment of the Company's Articles of Association which
                  involve the contents of the Mandatory Provisions of
                  Overseas-Listed Companies' Articles of Association (signed by
                  the Securities Committee of the State Council and the Economic
                  Reform Committee of the State on 27 August 1994) ("Mandatory
                  Provisions") shall become effective upon receipt of approvals
                  from the securities authority of the State Council and the
                  companies approving department authorised by the State
                  Council. If there is any change relating to the registered
                  particulars of the Company, application shall be made for
                  change in registration in accordance with law.

                         CHAPTER 23: DISPUTE RESOLUTION

Article 181.      The Company shall abide by the following principles for
                  dispute resolution:

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                  (1) Whenever any disputes or claims arise between: holders of
                  the Overseas-Listed Foreign-Invested Shares and the Company;
                  holders of the Overseas-Listed Foreign-Invested Shares and the
                  Company's directors, supervisors, general manager, senior
                  deputy general managers, deputy general managers, financial
                  controller or other senior officers; or holders of the
                  Overseas-Listed Foreign-Invested Shares and holders of

                        Domestic-Invested Shares, in respect of any rights or
                  obligations arising from these Articles of Association, the
                  Company Law or any rights or obligations conferred or imposed
                  by the Company Law and special regulations (including other
                  relevant laws) or any other relevant laws and administrative
                  regulations concerning the affairs of the Company, such
                  disputes or claims shall be referred by the relevant parties
                  to arbitration.

                        Where a dispute or claim of rights referred to in the
                  preceding paragraph is referred to arbitration, the entire
                  claim or dispute must be referred to arbitration, and all
                  persons who have a cause of action based on the same facts
                  giving rise to the dispute or claim or whose participation is
                  necessary for the resolution of such dispute or claim, shall,
                  where such person is the Company, the Company's shareholders,
                  directors, supervisors, general manager, senior deputy general
                  managers, deputy general managers, financial controller or
                  other senior officers of the Company, comply with the
                  arbitration.

                        Disputes in respect of the definition of shareholders
                  and disputes in relation to the register of shareholders need
                  not be resolved by arbitration.

                  (2) A claimant may elect for arbitration to be carried out at
                  either the China International Economic and Trade Arbitration
                  Commission in accordance with its Rules or the Hong Kong
                  International Arbitration Centre in accordance with its
                  Securities Arbitration Rules. Once a claimant refers a dispute
                  or claim to arbitration, the other party must submit to the
                  arbitral body elected by the claimant.

                        If a claimant elects for arbitration to be carried out
                  at Hong Kong International Arbitration Centre, any party to
                  the dispute or claim may apply for a hearing to take place in
                  Shenzhen in accordance with the Securities Arbitration Rules
                  of the Hong Kong International Arbitration Centre.

                  (3) If any disputes or claims of rights are settled by way of
                  arbitration in accordance with sub-paragraph (1) of this
                  Article, the laws of the PRC shall apply, save as otherwise
                  provided in the laws and administrative regulations.

                  (4) The award of an arbitral body shall be final and
                  conclusive and

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                  binding on all parties.

                               CHAPTER 24: NOTICE

Article 182.      Unless otherwise provided, the Company shall, where it is
                  making a public announcement in the prescribed or approved
                  manner, issue or deliver any notice or announcement in at
                  least one (1) national newspaper which has been appointed by
                  the securities authority of the State Council. And, where
                  possible, to publish such notice or announcement in English
                  and in Chinese on the same day in a major Chinese and a major
                  English newspaper in Hong Kong respectively.

Article 183.      Unless otherwise provided in these Articles of Association,
                  notices, information or written statement issued by the
                  Company to holders of Overseas-listed shares shall be
                  personally delivered to the registered address of each of such
                  shareholders, or sent by mail to each of such shareholders.

                  Notices to be issued to holders of Domestic-invested shares
                  shall have to be released in any one or more newspapers
                  appointed by the securities authority of the State Council,
                  all holders of Domestic-invested shares shall be deemed to
                  have received such notices once they are published.

Article 184.      All notices which are to be sent by mail shall be clearly
                  addressed, postage pre-paid, and shall be put in envelopes
                  before being posted by mail. Such letters of notice shall be
                  deemed to have been received by shareholders five (5) days
                  after the date of despatch.

Article 185.      Any notices, document, information or written statement from
                  the shareholders or directors to the Company shall be
                  delivered personally or sent by registered mail to the legal
                  address of the Company.

Article 186.      Shareholders or directors of the Company who want to prove
                  that certain notices, documents, information or written
                  statements have been sent to the Company shall provide
                  evidential materials showing that such notices, documents,
                  information or written statements have been sent to the
                  Company by normal methods within designated times, and that
                  the mailing address is correct and the postage is fully paid.

                            CHAPTER 25: SUPPLEMENTARY

Article 187.      In these Articles of Association, references to "accountancy
                  firm" shall have the same meaning as "auditors".

Article 188.      The Company's Articles of Association are written in Chinese
                  and English.

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                  Both text shall be equally valid. If there is any discrepancy
                  between the two versions, the Chinese version of the Articles
                  of Association shall prevail.

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