<PAGE>

                                                                     EXHIBIT 1.2

                             ARTICLES OF ASSOCIATION

                                       OF

                           PETROCHINA COMPANY LIMITED

<PAGE>
                                                                               .
                                                                               .
                                                                               .

                             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>

<PAGE>

                           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
  Amended by Resolutions of the Special Board Committee dated August 31, 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.


                                        1

<PAGE>

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 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


                                        2

<PAGE>

               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 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.

                    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.


                                        3

<PAGE>

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.


                                        4

<PAGE>

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 approximately 90% of the Company's
               share capital, are held by the promoter of the Company, China
               National Petroleum Corporation; 17,582,418,000 shares, which
               represent approximately 10% of the Company's share capital are
               held by the H shares shareholders.

               In September 15, 2005, the Company placed 3,516,482,000 H Shares
               to its existing shareholders (including 287,712,182 shares placed
               to the social security fund and 31,968,000 additional H Shares
               sold by the social security fund in connection with the fully
               exercised rights of the management to acquire shares). In such
               placement, the Company issued 3,196,801,818 new shares and the
               promoter sold 319,680,182 shares held by it. Following the
               placement as described above, the share capital structure of the
               Company comprises 179,020,977,818 common shares, of which
               157,922,077,818 common shares, which represent approximately
               88.21% of the Company's share capital, are held by China National
               Petroleum Corporation; 21,098,900,000 shares, which represent
               approximately 11.79% 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
               RMB179,020,977,818; 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.


                                        5

<PAGE>

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;

               (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


                                        6

<PAGE>

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 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.


                                        7

<PAGE>

               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.

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;


                                        8

<PAGE>

                    (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;

               (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


                                        9

<PAGE>

               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 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


                                       10

<PAGE>

               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 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.


                                       11

<PAGE>

               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.

               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


                                       12

<PAGE>

               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.

               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 number of joint owners shall not be more than
               four (4);

               (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


                                       13

<PAGE>

               transferor and transferee with a notice of refusal to register
               such transfer.

               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


                                       14

<PAGE>

               the circumstances and evidence of the loss; and (ii) declaring
               that no other 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;

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


                                       17

<PAGE>

               (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;

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


                                       21

<PAGE>

               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 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


                                       22

<PAGE>

               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 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


                                       23

<PAGE>

               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.

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


                                       25

<PAGE>

               (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 directors may designate
               a director to convene and chair the meeting. If no chairman of
               the meeting has been so designated, shareholders present shall


                                       26

<PAGE>

               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.

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


                                       27

<PAGE>

               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.

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.


                                       28

<PAGE>

               "(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.

               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.


                                       29

<PAGE>

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.

               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.


                                       30

<PAGE>

               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;

               (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.


                                       31

<PAGE>

               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.

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


                                       32

<PAGE>

               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
               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


                                       33

<PAGE>

               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:

               (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;


                                       34

<PAGE>

               (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;

               (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,


                                       35

<PAGE>

               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.

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.


                                       36

<PAGE>

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.

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


                                       37

<PAGE>

               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;

               (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;


                                       38
<PAGE>
               (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;

               (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;


                                       39

<PAGE>

               (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;

               (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:


                                       40

<PAGE>

                    (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;

               (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


                                       41

<PAGE>

               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 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,


                                       42

<PAGE>

               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:

               (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


                                       43

<PAGE>

               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:

               (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


                                       44

<PAGE>

               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.

               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.


                                       45

<PAGE>

                      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.

               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


                                       46

<PAGE>

               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 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.


                                       47

<PAGE>

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.

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


                                       48

<PAGE>

               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.

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.


                                       49

<PAGE>

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 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.


                                       50

<PAGE>

               (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 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


                                       51

<PAGE>

               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 , 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


                                       52

<PAGE>

               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 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:


                                       53

<PAGE>

               (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.

               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.


                                       54

<PAGE>

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:

               (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.


                                       55

<PAGE>

               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 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.


                                       56

<PAGE>

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:

               (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


                                       57

<PAGE>

               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 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


                                       58

<PAGE>

               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. 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.


                                       59