Document:

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                                                                   EXHIBIT 10.31

            SHANDONG RURAL TELECOMMUNICATION ASSET TRANSFER AGREEMENT

                                 BY AND BETWEEN
      SHANDONG PROVINCIAL STATE-OWNED ASSETS SUPERVISION AND ADMINISTRATION
                                   COMMISSION
                                       AND
                 CHINA NETWORK COMMUNICATIONS GROUP CORPORATION

                           DATED AS OF APRIL 26, 2004

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                                    CONTENTS

<TABLE>
<S>                                                                                                        <C>
1     DEFINITION......................................................................................     1

2     ASSET TRANSFER..................................................................................     2

3     CONSIDERATION FOR ASSET TRANSFER................................................................     2

4     UNDERTAKINGS AND WARRANTIES.....................................................................     4

5     FURTHER UNDERTAKINGS............................................................................     5

6     CONDITION PRECEDENT OF ASSET TRANSFER...........................................................     7

7     THE PARTIES' RESPONSIBILITIES FOLLOWING THE EXECUTION OF THIS AGREEMENT.........................     8

8     EFFECTIVENESS OF THIS AGREEMENT AND THE EFFECTIVENESS OF ASSET TRANSFER UNDER THIS AGREEMENT....     8

9     TERMINATION AND REVOKE OF THIS AGREEMENT........................................................     8

10    FORCE MAJEURE...................................................................................     8

11    MISCELLANEOUS...................................................................................     9
</TABLE>

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This Asset Transfer Agreement (hereinafter referred to as "this Agreement") is
made and entered into on April 20, 2004 in Beijing, People's Republic of China
(hereinafter referred to as "PRC") by and between the following two parties:

(1)   Shangdong Provincial State-owned Asset Supervision and Administration
      Commission (hereinafter referred to as "the "Transferor")

(2)   China Network Communications Group Corporation ("China Netcom Group" or
      "the Transferee")
      Registered address: Building C, No.156, Fuxingmennei Avenue, Xicheng
      District, Beijing, PRC
      Legal representative: Zhang Chun Jiang

WHEREAS:

(1)   In order to fully implement the Telecommunication System Reform Plan (GUO
      FA [2004] 36) promulgated by the State Council, the Transferor has in
      principle given their consent to the Restructuring and Listing Plan
      (hereinafter referred to as "China Netcom Group Restructuring and Listing
      Plan") submitted to the State Council by China Securities Regulatory
      Commission.

(2)   It is specified in document 12 of Shandong provincial government's meeting
      memorandum that the Shandong State-owned Asset Supervision and
      Administration Commission (Shandong SASAC) will be responsible for the
      execution of relevant agreements in respect of Shandong Rural
      Telecommunication Asset allocation, the Transferor enter into this
      Agreement with China Network Communication Group Corporation.

(3)   Pursuant to the requirements of China Netcom Group Restructuring and
      Listing Plan, the Transferor has agreed to transfer the Shandong Rural
      Telecommunication Asset it holds and China Netcom Group has agreed to
      receive the of Shandong Rural Telecommunication Asset Transfered to it by
      the Transferor.

      NOW, THEREFORE, for the purpose of restructuring China Netcom Group's
relevant assets and its overseas listing and after friendly consultation, the
two parties to this Agreement hereto agree as follows:

1     DEFINITION

      Unless otherwise provided by the terms and content of this Agreement, the
following terms have the meaning set out below:

SHANDONG RURAL                      The entire telecommunication assets
TELECOMMUNICATION ASSET             and interests of the rural
                                    areas in Shandong province held by
                                    Shandong provincial government, as confirmed
                                    by both parties to this Agreement.

"CNC BVI"                           Chine Netcom Group Corporation (BVI)
                                    Limited.

"CNC HK"                            China Netcom Group Corporation (Hong Kong)
                                    Limited. The company  registration
                                    number is 692041.

"LISTING"                           The global initial public offering of CNC HK
                                    and its listing on

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                                    Hong Kong or NY Stock Exchange.

"RESTRUCTURING ASSET INJECTION"     The restructuring of CNC HK
                                    for the purpose of listing and the injection
                                    of the would-be listed assets and equity
                                    interest approved by the State-owned Assets
                                    Supervision and Administration
                                    Commission into CNC BVI, CNC HK and
                                    eventually into CNC China.

"CNC HK PRE-LISTING                 The net assets value of CNC
NET ASSETS VALUE"                   HK as of [December 31,2003],
                                    audited by PricewaterhoueCoopers
                                    Zhong Tian CPAs Limited Company in
                                    accordance with China GAAP and giving effect
                                    to the pro forma Restructuring Asset
                                    Injection.

"CHC HK'S STATE SHAREHOLDERS"       CAS, INC-SARFT, CRTC, Shanghai Alliance,
                                    Shandong Provincial State-owned Assets
                                    Supervision and Administration Commission
                                    (or the Transferor's other designated
                                    entities recognized by Chinese governmental
                                    regulatory authorities) as CNC HK's
                                    shareholders and their designated overseas
                                    companies recognized by Chinese governmental
                                    regulatory authorities (as the case may be)
                                    and CNC BVI.

"STATE-OWNED ASSETS                 The State-owned Assets Supervision
SUPERVISION AND                     and Administration Commission of
ADMINISTRATION                      the State Council
COMMISSION"

"MINISTRY OF COMMERCE"              The Ministry of Commerce of the PRC

"TRUST SHARES"                      The shares of CNC HK corresponding
                                    to the equity interest beneficially owned by
                                    the Transferor (or other entities designated
                                    by it and recognized by Chinese governmental
                                    regulatory authorities) through overseas
                                    trust arrangement.

2     ASSET TRANSFER

2.1   Pursuant to the Request for Instruction to the Issues Regarding the
      Adjustment of Rural Telecommunication System and the State Council's
      feedback thereof, the Transferor has agreed to transfer and the Transferee
      has agreed to receive Shandong Rural Telecommunication Asset in accordance
      with the terms and conditions of this Agreement.

2.2   China Netcom Group will own the entire Shandong Rural Telecommunication
      Asset and the interests thereof after giving effect to the asset
      transfer.

3     CONSIDERATION FOR ASSET TRANSFER

3.1   Pursuant to the Request for Instruction to the Issues Regarding the
      Adjustment of Rural Telecommunication System, both parties have
      unanimously agreed that China Netcom Group will recognize the shareholding
      of the Transferor (or the Transferor's other designated entities
      recognized by Chinese governmental regulatory authorities) in CNC HK in
      the amount of RMB 1,618 billion.

3.2   Both parties have unanimously agreed that the value of RMB 1,618 billion
      described in Section 3.4 serves only as the calculation basis for the
      number of CNC HK shares transferred to the Transferor (or the Transferor's
      other designated entities recognized by Chinese governmental regulatory
      authorities) by CNC BVI (See Section 3.3 for the

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      calculation method). China Netcom Group has no obligation to acquire the
      Shandong Rural Telecommunication Asset held by the Transferor in other
      manners other than that stipulated in this Agreement.

3.3   As consideration for the receiving by the Transferee of the asset
      transferred to it, the Transferee will transfer the Trust Shares to the
      Transferor (or the Transferor's other designated entities recognized by
      Chinese governmental regulatory authorities) through the Transferor's
      designated directors in CNC BVI after the Effective Date. The details of
      such arrangement is as follows:

      3.3.1 The Transferor (or the Transferor's designated overseas companies
            holding the shares of CNC HK and recognized by Chinese governmental
            regulatory authorities) has entered into a Declaration of Trust with
            CNC BVI and an agreement specifying the trust obligation [this
            agreement is entered into by three parties which are CNC BVI, China
            Netcom Group and the Transferor (or their designated overseas
            companies holding the shares of CNC HK and recognized by Chinese
            governmental regulatory authorities)]. (Please see Appendix for the
            text of this agreement. Such agreements are collectively referred to
            as the "Overseas Agreement" hereinafter referred to as.)

      3.3.2 Through the foregoing arrangement, the Transferor (or the
            Transferor's other designated entities recognized by Chinese
            governmental regulatory authorities) becomes the beneficial owners
            of the Trust Shares and owns the corresponding voting rights, the
            right to receive CNC HK dividend, the right to receive the proceeds
            from the sale of CNC HK shares attaching to such Trust Shares and
            other rights set forth in the Overseas Agreement as described in
            Section 3.3.1 and assumes the obligations set forth in the
            above-mentioned agreements.

      3.3.3 Pursuant to the terms and conditions of the Overseas Agreement, CNC
            BVI is the nominal owner of the Trust Shares in CNC HK's register of
            shareholders as the trustee for the Transferor (or the Transferor's
            designated overseas companies recognized by Chinese governmental
            regulatory authorities.

      THE FOREGOING IS COLLECTIVELY REFEREED TO AS "OVERSEAS TRUST ARRANGEMENT".

3.4   The handling of all legal procedures related to CNC BVI's transfer of the
      CNC HK Trust Shares it holds to the Transferor (or the Transferor's other
      designated entities recognized by Chinese governmental regulatory
      authorities) specified in Section 3.2 (, including the legal procedures
      related to the Overseas Trust Arrangement described in Section 3.2) shall
      begin after China Netcom Group has injected into CNC HK the
      would-be-listed assets and will be completed during CNC HK's pre-listing
      period.

      The number of Trust Shares that CNC BVI has transferred to CAS, INC-SARFT,
      CRTC and Shanghai Alliance (or the Transferor's designated overseas
      companies recognized by Chinese governmental regulatory authorities)
      separately is calculated as follows:

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        The number of       RMB 1.618 billion             The number of CNC HK
      Trust Shares that    --------------------   x       ordinary shares as of
        CNC BVI shall                                     the time when the
       transfer to the                                    transfer of the shares
      Transferor (or the                                  specified in Section
      Transferor's other   CNC HK's pre-listing           3.2 occurs
         designated        net assets value
          entities
        recognized by
           Chinese
        governmental
         regulatory
        authorities)

4     UNDERTAKINGS AND WARRANTIES

4.1   Each party to this Agreement severally or jointly undertakes and warrants
      to the other party to this Agreement as follows:

      4.1.1 Undertakings and warranties by the Transferor

            (a)   The Transferor has all the powers and authorization to execute
                  this Agreement and performs its obligations under this
                  Agreement;

            (b)   The Transferor has severally obtained all internal approvals,
                  authorizations and consents required for the execution of this
                  Agreement;

            (c)   The signing representative of the Transferor has obtained all
                  necessary internal authorization for the execution of this
                  Agreement and other actions;

            (d)   The Transferor has agreed to actively cooperate with relevant
                  government authorities in matters related to applications and
                  approvals for the purpose of facilitating the asset transfer
                  under this Agreement;

            (e)   All documentation and information related to the asset
                  transfer under this Agreement provided by the Transferor to
                  the Transferee and the approval authorities are true, accurate
                  and valid;

            (f)   Currently the transferred Shandong Rural Telecommunication
                  Asset is subject to no security interest or any other third
                  party rights (including but not limited to the right of first
                  refusal);

            (g)   The Transferor will take necessary actions to expedite the
                  satisfaction of the "condition precedent" specified in Section
                  6.2.

      4.1.2 Undertakings and warranties by the Transferee

            (a)   The Transferee has all the powers and authorization to execute
                  this Agreement and performs its obligations under this
                  Agreement;

            (b)   The Transferee has obtained all internal approvals,
                  authorizations and consents required for the execution of this
                  Agreement;

            (c)   The signing representative of the Transferee has obtained all
                  necessary internal authorization for the execution of this
                  Agreement and other actions;

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            (d)   The Transferee has agreed to actively cooperate with relevant
                  government authorities in matters related to applications and
                  approvals for the purpose of facilitating the asset Transfer
                  under this Agreement;

            (e)   All documentation and information related to the asset
                  Transfer under this Agreement provided by the Transferee to
                  the Transferor and the approval authorities are true, accurate
                  and valid;

            (f)   The Transferee will take necessary actions to expedite the
                  satisfaction of the "condition precedent" specified in Section
                  6.2.

4.2   Both parties herein undertakes to the other party to this Agreement that,
      if the falsity, inaccuracy or incompleteness of its warranties or the
      consequences caused by reasons related to its warranties or the content of
      its warranties during the period when such warranties are given till the
      date when CNC BVI transfers part of its CNC HK shares to the Transferor
      (or the Transferor's other designated entities recognized by Chinese
      governmental regulatory authorities) has resulted in any responsibility,
      obligation, loss, damage, injury, fine, penalty, claim, recourse,
      litigation, fee, spending and expenditure borne by the other party (no
      matter whether all such losses have been caused by the other party's acts
      or omissions or other reasons), it will be responsible for fully
      indemnifying the other party for all such losses.

5     FURTHER UNDERTAKINGS

      In respect of the consideration payment arrangement specified in Section
      3.2, the Transferor (or the Transferor's other designated entities
      recognized by Chinese governmental regulatory authorities) has further
      undertaken as follows:

5.1   With reference to relevant stipulations of the Provisional Measures on
      Administration for Selling-down State-owned Shares and Raising Social
      Security Fund (hereinafter referred to as the "Selling-down Measures"),
      the Transferor (or the Transferor's other designated entities recognized
      by Chinese governmental regulatory authorities), as a CNC HK State
      Shareholder, shall fulfill its relevant obligations attached to state
      shareholders in CNC HK's initial public offering and has agreed, together
      with other CNC HK's shareholders such as China Netcom Group, Chinese
      Academy of Science, the State-owned Assets Supervision and Administration
      Commission, Information Network Center of State Administration of Radio,
      Film and Television, China Railroad Communication Center, and Shanghai
      Alliance Investment Limited, , to jointly instruct the trustee of the
      Trust Shares to sell a certain amount of CNC HK shares and contribute all
      of the proceeds to the national social security fund. The number of CNC HK
      shares the Transferor (or the Transferor's other designated entities
      recognized by Chinese governmental regulatory authorities) shall sell
      severally in accordance with the foregoing undertakings is calculated as
      follows:

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 The number      The number of CNC HK Trust Shares                   The
of shares to     directly or indirectly owned by the              number of
 be sold by  =   Transferor (or the Transferor's other          x  additional
    the          designated entities recognized by             x 10% new shares
 Transferor      Chinese governmental regulatory authorities)       issued
  (or the        -------------------------------------------       upon CNC
Transferor's
   other         The number of the total CNC HK shares               HK's
 designated      owned by all the state shareholders of            listing
  entities       CNC HK directly or indirectly
 recognized
 by Chinese
governmental
 regulatory
authorities)

5.2   Notwithstanding the foregoing, if Chinese governmental regulatory
      authorities has further requirements regarding CNC HK state shareholders'
      selling-down of CNC HK shares and contribution to the national social
      security fund, the Transferor shall complete relevant legal procedures as
      requested by Chinese governmental regulatory authorities. Following the
      listing of CHC HK, if during the period when the (or the Transferor's
      designated overseas companies recognized by Chinese governmental
      regulatory authorities) remains the holder of CNC HK shares, the
      Transferor shall be obliged to go on performing its obligations of selling
      down state-owned shares in accordance with the requirements of the
      Selling-down Measures (the number of shares the Transferor shall sell is
      calculated according to the method set forth in Section 5.1).

5.3   The Transferor (or the Transferor's other designated entities recognized
      by Chinese governmental regulatory authorities), as CNC HK's state
      shareholder, shall not transfer the CNC HK shares it has acquired in
      accordance with the arrangement described in Section 3.2 (excluding the
      shares sold in accordance with in Section 5.1 and Section 5.2) within two
      years following the listing of CNC HK (hereinafter referred to as "Shares
      Lock-up Period) and shall enter into the Lock-up Agreement.

5.4   After the Lock-up Period, the Transferor (or the Transferor's other
      designated entities recognized by Chinese governmental regulatory
      authorities) can sell the CNC HK shares it holds upon the satisfaction of
      the following conditions:

      5.4.1 Compliance with the prevailing applicable laws and regulations, or
            policies governing foreign capital's entry into Chinese
            telecommunication industry;

      5.4.2 Approvals from Chinese supervisory authorities (including but not
            limited to the State-owned Assets Supervision and Administration
            Commission or the local state-owned assets supervision and
            administration authorities that have relevant powers, as well as the
            Ministry of Commerce) for the transfer by the Transferor (or the
            Transferor's other designated entities recognized by Chinese
            governmental regulatory authorities) the CNC HK shares it holds
            (including but not limited to the number, manner and price of the
            share transfer) have been obtained.

5.5   The Transferor (or the Transferor's other designated entities recognized
      by Chinese governmental regulatory authorities), as the state shareholder
      of CNC HK, is required to fulfill other obligations attached to state
      shareholders during the period it holds CNC HK shares. The Transferor (or
      the Transferor's other designated entities recognized by Chinese
      governmental regulatory authorities) should consult China Netcom Group
      before proceeding with the Chinese application and approval procedures
      required for the transfer of CNC HK Trust Shares. In addition, China
      Netcom Group (or CNC BVI) has the right of first refusal in respect of the
      transfer of part or the entire Trust Shares of CNC HK by the Transferor
      (or the Transferor's other designated entities recognized by Chinese
      governmental regulatory authorities) to an independent third party based
      on the same prices.

5.6   Upon the completion of the legal procedures (including the legal
      procedures related to the Overseas Trust Arrangement) in respect of the
      transfer of part of the CNC HK shares in the

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      manner specified in this Agreement by CNC BVI to the Transferor (or the
      Transferor's other designated entities recognized by Chinese governmental
      regulatory authorities), the Transferor (or other entities designated by
      it and recognized by Chinese governmental regulatory authorities) has
      agreed to appoint CNC BVI as the trustee for the management of the Trust
      Shares. China Netcom Group has agreed to procure CNC BVI to confirm that
      the Transferor (or the Transferor's other designated entities recognized
      by Chinese governmental regulatory authorities) is the beneficial owner of
      the Trust Shares. The aforesaid Overseas Trust Arrangement shall include
      the following key points:

      5.6.1 Pursuant to laws applicable to the trust arrangement, the Transferor
            (or the Transferor's other designated entities recognized by Chinese
            governmental regulatory authorities), as the beneficiary, has agreed
            to receive CNC BVI as the trustee for the Trust Shares and has
            entered into a Declaration of Trust and an agreement specifying the
            rights and obligations attaching to the trust to set forth the
            rights and obligations of both parties;

      5.6.2 The Transferor (or the Transferor's other designated entities
            recognized by Chinese governmental regulatory authorities) shall
            entrust CNC BVI with relevant legal procedures in respect of the
            transfer of Trust Shares;

      5.6.3 China Netcom Group herein confirms that the corresponding voting
            rights, the right to receive CNC HK dividend, the right to receive
            the proceeds from the sale of CNC HK shares attaching to the Trust
            Shares and other rights set forth in the Overseas Agreement as
            described in Section 3.3.1 shall be enjoyed by the Transferor
            severally;

      5.6.4 If the Transferor (or the Transferor's other designated entities
            recognized by Chinese governmental regulatory authorities) intends
            to create any lien over the Trust Shares, it should abide by
            relevant regulations related to the sale of shares, meaning that all
            conditions required for the sale of shares must be satisfied before
            any lien can be created over the Trust Shares (including but not
            limited to obtaining approval from relevant Chinese regulatory
            authorities, [including the State-owned Assets Supervision and
            Administration Commission and the Ministry of Commerce], for such
            lieu creation). Upon satisfaction of the condition specified by this
            Section, CNC BVI shall proceed with relevant lieu creation
            procedures per the Transferor's requirement.

6     CONDITION PRECEDENT OF ASSET TRANSFER

6.1   Both parties have agreed to make their best effort severally or jointly to
      expedite the completion of all governmental approval and registration
      procedures required for the transfer of Shandong Rural Telecommunication
      Asset.

6.2   Unless both parties to this Agreement have expressed their waiver of any
      of the following conditions in writing, the effectiveness of the transfer
      of Shandong Rural Telecommunication Asset under this Asset Transfer
      Agreement is conditional upon the full satisfaction of the following
      conditions:

      6.2.1 The Sate Council has approved the China Netcom Group Restructuring
            and Listing Plan;

      6.2.2 The Ministry of Commerce has granted the Transferor (or the
            Transferor's other designated entities recognized by Chinese
            governmental regulatory authorities) its permission to receive part
            of the CNC HK shares held by CNC BVI and which are transferred to it
            in the manner specified in Section 3.3.

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6.3   Both parties have unanimously agreed that the Effective Date of the
      transfer of Shandong Rural Telecommunication Asset is December 31, 2003
      if the aforesaid conditions are fully satisfied. Commencing from January
      1, 2004, all the profits and losses from Shandong Rural Telecommunication
      Asset shall be enjoyed or borne by China Netcom Group and the management
      of the entire assets and financial affairs will be transferred to China
      Netcom Group Shandong Telecommunication Company.

7     THE PARTIES' RESPONSIBILITIES FOLLOWING THE EXECUTION OF THIS AGREEMENT

7.1   If the condition precedent specified in Section 6.2 is not fully satisfied
      by [August 1], 2004, upon unanimous agreement and for the purpose of
      expediting the asset transfer under this Agreement, both parties to this
      Agreement have agreed to waive the conditions precedent that can not be
      satisfied or take remedial actions in accordance with the stipulations set
      forth in Section 7.2;

7.2   If the China Netcom Group Restructuring and Listing Plan approved by the
      State Council do not include the direct holding of CNC HK shares, both
      parties to this Agreement have agreed to enter into other agreements for
      the purpose of expediting the listing of CNC HK.

8     EFFECTIVENESS OF THIS AGREEMENT AND THE EFFECTIVENESS OF ASSET TRANSFER
      UNDER THIS AGREEMENT

8.1   This Agreement shall come into effect once executed by the legal
      representatives or authorized representatives of the parties and affixed
      with their official seals.

8.2   The Transferor shall assist in the state-owned assets ownership conversion
      registration in respect of Shandong Rural Telecommunication Asset once
      this Agreement comes into effect.

9     TERMINATION AND REVOKE OF THIS AGREEMENT

9.1   If agreement among the parties and confirmed in writing, this Agreement
      can be terminated any time for such reasons: (i) compulsory stipulation of
      laws and regulations; (ii) government supervisions; (iii) the occurrence
      of Force Majeure events specified in Section 10; (iv) the occurrence of
      events that will result in the unfulfilling of the purpose of this
      Agreement.

9.2   After this Agreement is terminated pursuant to the stipulations in Section
      9.1, both parties to this Agreement shall return to the other party the
      interests or other properties it has acquired from such other party in
      accordance with the principle of good faith.

10    FORCE MAJEURE

10.1  The parties have agreed that the following events will constitute Force
      Majeure:

      10.1.1  Objective situations that are unforeseeable, unavoidable and that
              cannot be overcome at the time this Agreement is executed and that
              will result in the failure of fulfilling this Agreement or timely
              fulfillment of this Agreement.

      10.1.2  Changes in Chinese policies and laws that result in the failure of
              fulfilling this Agreement.

10.2  Other events that occur to the parties or any party other than that
      described in the previous Section, including but not limited to the
      changes in management, organizational structure

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      and etc are not Force Majeure events specified in this Section.

10.3  In the event of Force Majeure that causes any party to fail to perform its
      obligation under this Agreement, this party is not liable for breach of
      agreement. However, this affected party shall provide to the other party
      relevant evidences certified by the notary within [10] working days after
      the occurrence of the Force Majeure event.

11    MISCELLANEOUS

11.1  CONFIDENTIAL RESTRICTION

      In relation to the confidential and proprietary information (hereinafter
      referred to as "Confidential Information") disclosed by any party to
      another party with respect to its businesses, financial status and other
      confidential affairs for the purpose of asset transfer under this
      Agreement, the receiver shall: (i) keep the confidential information under
      confidentiality; (ii) not disclose above Confidential Information (except
      for the information disclosure as required by Section 11.2 under this
      Agreement) to any persons or entities other than its employees and
      professional advisors that need access to the Confidential Information to
      perform their duties.

11.2  INFORMATION DISCLOSURE

      In respect of this asset transfer, each party has agreed and undertaken to
      duly perform its information disclosure obligation under this Agreement in
      accordance with relevant regulations and laws to practically protect the
      interests of each party. Upon the completion of the asset transfer
      procedure, each party shall continue to duly perform its information
      disclosure obligation in accordance with relevant regulations and laws.

11.3  GOVERNING LAWS

      The formation, effectiveness, interpretation and performance of this
      Agreement and dispute resolution shall be governed by the laws of PRC
      (excluding Hong Kong Special Administrative Region for the purpose of this
      Agreement).

11.4  DISPUTE RESOLUTION

      Any disputes arising from the execution, performance and interpretation of
      this Agreement shall be first resolved by sincere negotiation.

11.5  EXPENSES AND TAXATION

      11.5.1  Each party shall share equally the expenses arising out of the
              transfer of Shandong Rural Telecommunication Asset, such as
              approval and registration expenses that required to be paid and
              charged by governmental regulatory authorities in accordance with
              relevant laws and regulation.

      11.5.2  The taxes arising out of the transfer of Shandong Rural
              Telecommunication Asset and the stipulations of Section 3, which
              are to be collected individually from each party in accordance
              with laws and regulations, shall be assumed by the taxpayer
              against whom the taxes are levied.

11.6  WAIVER

      The failure or delay of exercising the rights under this Agreement or any
      other contracts or agreements in connection with this Agreement of any
      party hereto shall not be deemed as the waiver of such rights; any sole or
      partial exercise of such rights shall not hinder the full exercise of such
      rights in the future.

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11.7  AMENDMENTS AND SUPPLEMENT

      This Agreement shall not be amended or supplemented orally and may be
      amended or supplemented only upon endorsement on written documents by each
      party. Any supplements to this Agreement shall be deemed as indivisible
      parts of this Agreement.

11.8  SEVER ABILITY

      The invalidity of any Sections hereto shall not affect the validity of any
      other Sections of this Agreement.

11.9  ENTIRE AGREEMENT

      This Agreement, together with all the appendices hereto, constitutes the
      entire agreement of the parties with respect to the subject matter hereof
      and supersedes prior agreements entered into among the parties, which are
      different from this Agreement.

11.10 NOTIFICATION

      Any notices as required by this Agreement sent by any party hereto to
      another shall be written in Chinese and sent by registered mail, or by fax
      confirmed by a registered mail immediately to relevant parties. Notices
      required to be sent by this Agreement shall be deemed as received after
      [3] days of the date of postmark if by registered mail, and the sending
      date if by fax. All notices shall be addressed to the addresses first
      listed above until the recipient issues a written notice to the other
      party notifying the change of address.

11.11 COUNTERPARTS OF THIS AGREEMENT

      This Agreement is made in ten counterparts, each party keeps one. The
      other eight counterparts will be used for approval processing and
      conversion registration procedures.

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(This page contains no body text)

TRANSFEROR:

Shandong Provincial State-owned Assets Supervision and Administration Commission
(seal) Legal representative or Authorized representative (signature):

TRANSFEREE:

China Network Communications Group Corporation (seal)
Legal representative or Authorized representative (signature):

                                       11<PAGE>

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

                                                                   EXHIBIT 10.32

                   TELECOMMUNICATION ASSETS TRANSFER AGREEMENT

                                 BY AND BETWEEN

                 CHINA NETWORK COMMUNICATIONS GROUP CORPORATION

                                       AND

               JITONG NETWORK COMMUNICATIONS STOCK COMPANY LIMITED

<PAGE>

                   TELECOMMUNICATION ASSETS TRANSFER AGREEMENT

THIS AGREEMENT is made and entered into on June 10, 2004 in Beijing, People's
Republic of China ("PRC") by and between the following two parties:

(1) PARTY A:  CHINA NETWORK COMMUNICATIONS GROUP CORPORATION

(2) PARTY B:  JITONG NETWORK COMMUNICATIONS STOCK COMPANY LIMITED

WHEREAS:

(1)   Party A is an organization established with investment authorized by the
      State and a pilot project for state-holding corporations, and Party B is a
      limited stock company which is wholly owned directly and indirectly by
      Party A;

(2)   Currently, Party B owns the main telecommunication assets and their
      related liabilities and rights (except for those debts borne by the head
      office of Party B as confirmed by both parties hereto) ("Such
      Telecommunication Assets") which are listed in the Audit Report taking May
      31, 2003 as the benchmark day ("Audit Report") prepared by ShineWing
      Certified Public Accountants - an auditing institution accepted by both
      parties;

(3)   In the [Reply of The State Council on Establishment of China Network
      Communications Group Corporation], it's required that: "To avoid the
      internal competition between subsidiaries of the Group Corporation, and
      based on the needs of business development and market demand, China
      Network Communications Group Corporation shall, with compliance with
      relevant laws and regulations, consolidate the businesses and adjust the
      assets of the telecommunication and information service companies that are
      wholly owned, controlled or participated by the Group Corporation".
      According to this requirement, Such Telecommunication Assets shall be
      transferred to the possession of Party A;

(4)   Based on following terms and conditions of this Agreement, Party B agrees
      to transfer to Party A, and Party A agrees to receive from Party B, Such
      Telecommunication Assets.

THEREFORE, based on the principles of fairness and mutual benefit, and through
friendly

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<PAGE>

negotiations, both parties hereto agreed to the following:

                   I TRANSFER OF SUCH TELECOMMUNICATION ASSETS

1.1   Party B agrees to transfer to Party A, and Party A agrees to receive from
      Party B, Such Telecommunication Assets.

1.2   The parties hereto hereby confirm: the date of transferring of ownership
      of Such Telecommunication Assets is May 31, 2003. From this date, the
      ownership of Such Telecommunication Assets will be transferred into
      possession of Party A, and any profits or losses arising from Such
      Telecommunication Assets shall be taken or borne by Party A since then.

1.3   Party A undertakes that: Party A will provide repayment guarantee for the
      debts borne by the head office of Party B which are confirmed by both
      parties. Should Party B fail to pay off such due debts upon their
      maturities, Party A will be responsible for the repayment on behalf of
      Party B.

1.4   Based on the clause (1) and (3) in the recital (WHEREAS) section and the
      clause 1.3 of this Agreement, Party A does not need to pay to Party B the
      consideration for its receipt of Such Telecommunication Assets.

                 II REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

2.1   Party A and Party B represents and warrants respectively to each other
      that:

      (1)   It is an independent legal entity incorporated and validly existing
            under applicable laws;

      (2)   It has obtained any and all internal or external authorizations,
            approvals and consents to sign and execute this Agreement, and this
            Agreement is binding upon it and enforceable.

2.2   Party B warrants and undertakes to Party A that:

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<PAGE>

      (1)   Such Telecommunication Assets is legally owned by Party B, and Party
            B has not bound on Such Telecommunication Assets any mortgage,
            pledge, lien or any other third-party rights;

      (2)   There is neither any litigation, arbitration or regulatory penalty
            against or in connection with Such Telecommunication Assets, nor any
            threats of such litigation, arbitration or regulatory penalty;

      (3)   Transferring of Such Telecommunication Assets from Party B to Party
            A according to this Agreement will not constitute a breach to any
            contracts or agreements entered by Party B or a disobedience of any
            applicable laws, administrative rules or regulations, and will not
            violate any third-party rights;

      (4)   The ownership of Such Telecommunication Assets is legitimate without
            any disputes;

      (5)   For any claims against Party A that are caused by Party A's receipt
            of Such Telecommunication Assets, Party B agrees to indemnify Party
            A completely, timely and sufficiently;

      (6)   Any and all consents, permissions or approvals from any third party
            required for the transfer of the Such Telecommunication Assets have
            already been obtained.

                               III INDEMNIFICATION

3.1   Should Party B breach any of its warranties and undertakings or any other
      terms and conditions under this Agreement, Party A shall be entitled to
      claim for indemnity from Party B. Party B agrees to indemnify Party A for
      any and all direct or indirect losses, expenses and liabilities suffered
      by Party A that are caused by Party B's breach to any of its warranties
      and undertakings or any other terms and conditions of this Agreement.

                              IV DISPUTE RESOLUTION

4.1   In case of disputes as to the power, interpretation or implementation of
      this agreement,

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<PAGE>

      both parties shall seek to settle the matters of dispute by friendly
      negotiation. If the matters of dispute cannot be settled by negotiation
      within thirty (30) days from the day the matters of dispute arise, either
      party has the right to resort to litigation at the people's court with
      appropriate jurisdiction.

                        V EFFECTIVENESS AND MISCELLANEOUS

5.1   This Agreement shall come into effect and be binding upon both parties
      hereto once signed by the legal representatives or authorized
      representatives of the Parties and affixed with their official seals.

5.2   All amendments or supplements to this Agreement shall come into effect
      only upon being signed by the legal representatives or authorized
      representatives of both parties and affixed with their official seals.

5.3   This Agreement is made into four (4) duplicate originals. Each party holds
      two (2) copies, and each copy shall have the same legal binding force.

(No clause below)

                                       4
<PAGE>

(Signature page)

CHINA NETWORK COMMUNICATIONS GROUP CORPORATION (OFFICIAL SEAL)

Signature of Legal Representative or Authorized Representative:

JITONG NETWORK COMMUNICATIONS STOCK COMPANY LIMITED (OFFICIAL SEAL)

Signature of Legal Representative or Authorized Representative:

                                       5

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