<PAGE>

                                                                     EXHIBIT 1.2

                             ARTICLES OF ASSOCIATION

                                       OF

                           PETROCHINA COMPANY LIMITED

<PAGE>
                                                                               .
                                                                               .
                                                                               .

                             ARTICLES OF ASSOCIATION
                          OF PETROCHINA COMPANY LIMITED

<TABLE>
<S>               <C>                                                                                             <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 31 August 2005
        Amended by Shareholders' Special Resolution on 1 November 2006)

                          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.

                  MP1

                  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 NAME]
                  The Company's registered English name: PetroChina Company
                  Limited.

                  MP2

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

                  MP3

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

                  MP4

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

                  MP5

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

                  MP5

                  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.

                  MP6

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.

                  MP7

                  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.

                  MP8

                  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:

                  MP9

                  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.

                  MP10

                  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 sale
                  of chemical fertilizers; warehousing and transportation of
                  petroleum and petrochemical products; the operation of
                  convenient stores and other auxiliary facilities affiliated to
                  the service stations as well as the provision of the ancillary
                  services; the operation of oil and natural gas pipelines, and
                  the provision of relevant engineering and technological
                  development and consultancy services as well as the oil and
                  gas related IT services; the provision of services in
                  connection with the lease of buildings and equipment as well
                  as the provision of water, electricity and heat supply; 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.

                  MP11

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.

                  MP12

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<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.

                  MP13

                  "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.

                  MP14, App.39

                  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.

                  MP15, App.39

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Article 16.       The Company shall issue 15,824,176,000 common shares after
                  its incorporation. The promoter shall sell 1,758,242,000
                  shares of the Company held by it. After the issuance and sale
                  of the shares as described above, the share capital structure
                  of the Company comprises 175,824,176,000 common shares, of
                  which 158,241,758,000 common shares, which represent
                  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.

                  MP16, App.39

                  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.

                  MP17

                  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.

                  MP18

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.

                  MP19

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<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.

                  MP20

                  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.

                  MP21 App.31(2)

                  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.

                  MP22

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

                  MP23, App.37(1)

                  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:

                  MP24

                  (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:

                  MP25

                  (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.

                  MP26

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<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.

                  MP27

                  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:

                  MP28

                  (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").

                  MP29

                  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:

                  MP30

                  (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:

                  MP31

                  (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.

                  MP32

                  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.

                  MP33, C.1 Zheng Jian Hai Han [1995] No. 1 App.32(1)

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

                  MP34

                  (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.

                  MP35, C.2 Zheng Jian Hai Han [1997] No. 1 App.13 Pt.D 1(b)

                  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:

                  MP36

                  (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.

                  MP37

                  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.

                  C.12 Zheng Jian Hai Han [1995] No. 1

                  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;

                  App.31(1)

                  (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);

                  App.31(3)

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

                  App.31(2)

                  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.

                  MP38

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.

                  MP39

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.

                  MP40

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").

                  MP41, App.37(1)

                  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.

                  MP42

                                       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.

                  MP43

                       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.

                  MP44, App.39

                  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:

                  MP45

                  (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:

                  MP46

                  (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:

                  MP47

                  (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:

                  MP48

                  (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.

                  MP49

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

                  MP50

                  (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.

                  MP51

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.

                  MP52

                  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.

                  MP53

                                       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.

                  MP54

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.

                  MP55

                  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:

                  MP56

                  (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.

                  MP57, App.37(1) & 7(3)

                  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.

                  MP58

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:

                  MP59

                  (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.

                  MP60

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.

                  MP61

                  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.

                  MP62

                  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.

                  MP63

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

                  MP64

                  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.

                  MP65

                  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:

                  MP66

                  (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.

                  MP67

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.

                  MP68

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.

                  MP69

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

                  MP70

                  (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;

                  App.34(3)

                  (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:

                  MP71

                                       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:

                  MP72

                  (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.

                  MP73

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.

                  MP74

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.

                  MP75

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

                  MP76

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

                  MP76

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.

                  MP77

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

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

                  MP78

                  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.

                  MP79

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:

                  MP80

                  (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.

                  MP81

                                       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.

                  MP82

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.

                  MP83

                  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.

                  MP84

                  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.

                  App. 13 Pt. D 1(f)

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

                  MP85 C.3 Zheng Jian Hai Han [1995] No. 3

                  (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

                  App.13 Pt.D 1f(i)

                  (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.

                  App.13 Pt.D 1f(ii)

                         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.

                  MP86

                  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.

                  MP87, C.4 Zheng Jian Hai Han [1995] No. 1 App.34(3)-4(5)

                  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:

                  MP88

                  (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.

                  MP89

                  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:

                  MP90

                  (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.

                  MP91

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.

                  MP92

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.

                  MP93, App.34(1)

                  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.

                  MP94

                  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.

                  MP95

                       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.

                  MP96

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:

                  MP97

                  (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.

                  MP98

                  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.

                  MP99

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

                  MP100

                  (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.

                  MP101

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.

                  MP102

                        CHAPTER 13: SUPERVISORY COMMITTEE

Article 108.      The Company shall have a supervisory committee.

                  MP103

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.

                  MP104, C.5 Zheng Jian Hai Han [1995] No. 1 App.13 Pt.D 1(d)(i)

                  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.

                  MP105

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

                  MP106

Article 112.      1 Meetings of the supervisory committee shall be held at
                  least once every year, and shall be convened by the chairman
                  of the supervisory committee.

                  MP107

                                       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:

                  MP108

                  (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.

                  MP109, C.6 Zheng Jian Hai Han [1995] No. 1 App.13 Pt.D
                  1(d)(ii)

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.

                  MP110

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.

                  MP111

           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:

                  MP112

                  (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.

                  MP113

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:

                  MP114

                  (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.

                  MP115

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:

                  MP116

                  (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:

                  MP117

                  (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.

                  MP118

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.

                  MP119

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.

                  MP120

                  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.

                  MP121

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.

                  MP122

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.

                  MP123

                  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.

                  MP124

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:

                  MP125

                  (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.

                  MP126

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:

                  MP127

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

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

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

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

                  (5) to demand repayment of interest earned or which may have
                  been earned by such director, supervisor, general manager,
                  senior deputy general manager, deputy general

                                       44
<PAGE>

                  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:

                  MP128

                  (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:

                  MP129

                  (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.

                  MP130

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.

                  MP131

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.

                  MP132

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.

                  MP133, C.7 Zheng Jian Hai Han [1995] No. 1 App.35

                  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.

                  MP134

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.

                  MP135

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.

                  MP136

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

                  MP137

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:

                  MP138

                  (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:

                  MP139

                  (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.

                  MP140, C.8 Zheng Jian Hai Han [1995] No. 1 App.13 Pt.D 1(c)

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

                                       48
<PAGE>

                  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.

                  MP141

                  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.

                  MP142

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

                  MP143

                  (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.

                  MP144

                                       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.

                  MP145

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.

                  MP146

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.

                  MP147, C.9 Zheng Jian Hai Han [1995] No. 1 App.13 Pt.D 1(e)(i)

                  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.

                  MP148, C.10 Zheng Jian Hai Han [1995] No. 1 App.13 Pt.D
                  1(e)(ii)-(e)(iv)

                  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

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<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.

                  MP149

                  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.

                  MP150, App.37(1)

                  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.

                  MP151, App.37(1)

                  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.

                  MP152

                     CHAPTER 21: DISSOLUTION AND LIQUIDATION

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

                  MP153

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                  (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.

                  MP154

                  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.

                  MP155

                  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.

                  MP156, App.37(1)

                  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:

                  MP157

                  (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.

                  MP158

                  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.

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<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.

                  MP159

                  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.

                  MP160

                  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.

                  MP161

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.

                  MP162

                         CHAPTER 23: DISPUTE RESOLUTION

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

                  MP163

                  (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.

                  C.11 Zheng Jian Hai Han [1995] No. 1

                        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