Document:

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                                                                    EXHIBIT 10.7

                      INTERCONNECTION SETTLEMENT AGREEMENT

                                 BY AND BETWEEN

                      CHINA NETCOM (GROUP) COMPANY LIMITED

                                       AND

                 CHINA NETWORK COMMUNICATIONS GROUP CORPORATION

<PAGE>

                      INTERCONNECTION SETTLEMENT AGREEMENT

      This Agreement is made and entered into on [-], 2004 in Beijing, People's
Republic of China ( "PRC") by and among the following two parties:

      Party A:                China Network Communications Group Corporation

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

      Legal representative:   Zhang Chun Jiang

      Party B:                China Netcom (Group) Company Limited

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

      Legal representative:   Zhang Chun Jiang

      WHEREAS,

      (1)   Party A is a state-owned enterprise duly incorporated and validly
            existing under the laws of PRC;

      (2)   Party B is a limited foreign funded enterprise duly incorporated and
            validly existing under the laws of PRC and is finally controlled by
            Party A.

      Based on fair and reasonable basis, following cooperative negotiation,
regarding relevant issues relating to interconnection settlement provided by
either Party to the other Party, it is hereby agreed by and between both parties
hereto as follows:

1.    BASIC PRINCIPLES

1.1   For the services and/or facilities provide by either Party to the other
      Party under this Agreement, the Party reserves the right to collect
      reasonable service fees based on the principle of fairness for such
      service and/or facilities it provides. The other Party shall make the
      payment for the services/or facilities provided.

1.2   The terms of services and/or facilities offered by one Party to the other
      under this Agreement shall not be worse than any other third party
      offering the same or similar services and/or facilities.

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1.3   Should either Party hereunder demand for more services and/or facilities
      hereunder from the other Party, the other Party shall make its utmost
      effort to provided such more services and/or facilities requested under
      the conditions no less favorable than that under which this Party may
      provide the same or similar services and/or facilities to a third Party.

1.4   The agreed services and/or facilities hereunder shall fully comply with
      the purposes agreed upon under this Agreement and the standard set by the
      State.

1.5   In the event of any breach of provision by either party under this
      Agreement that leads to any damage suffered by the other party, the party
      in default shall be liable for all immediate and full damages for
      breaching this Agreement. However, this Party shall not be held
      responsible for such losses in the event of Force Majeure.

1.6   Both parties shall provide all reasonable and essential assistance to the
      other party for the purpose of fulfilling the obligations set out in this
      Agreement.

1.7   It is agreed that both parties will take further actions to ensure the
      realization of the principles and provisions in this Agreement. It is
      further agreed that both parties will ensure that, Party B, being a
      subsidiary of a company to be listed or listed, China Netcom Group (Hong
      Kong) Limited (hereinafter "Listing Company"), shall comply with the
      Listing Rules of the Hong Kong Stock Exchange for connected transactions.

2.    INTERCONNECTION AND SETTLEMENT VARIETIES

2.1   The Parties agree to achieve the interconnections between various
      telecommunication networks of the Parties.

2.2   The Parties agree to settle domestic long distance voice service and
      international long distance voice service as is set forth in this
      Agreement.

3.    INTERCONNECTION TECHNICAL REGULATIONS AND STANDARDS, SHARE OF
      INTERCONNECTION COSTS AND ENGINEERING CONSTRUCTION

3.1   All foresaid connections shall be made in accordance with the
      interconnection technical regulations promulgated by national
      telecommunication regulatory authorities.

3.2   The Parties shall negotiate on the settlement of interconnection costs and
      engineering construction with reference to relevant regulations
      promulgated by national telecommunication regulatory authorities.

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4.    OBLIGATIONS OF THE PARTIES

4.1   The parties shall warrant that the communication quality between networks
      be not lower than the communication quality of the same service in their
      own networks.

4.2   Under the premise of technical feasibility, when required, either Party
      shall provide telecommunication services which has been provided for its
      own customers to the other Party's customer unconditionally with service
      quality guaranteed.

4.3   Party A shall be obliged to provide Party B's auditors with the accounting
      records of Party A and its connected persons for any connected
      transactions.

5.    NETWORKS MANAGEMENT AND MAINTENANCE

5.1   Either Party shall give notice to the other Party six (6) months prior to
      its enlargement and reconstruction of its network, which may negatively
      affect the communication of other Party's customers.

5.2   Except for Force Majeure, either Party shall give notice to the other
      Party thirty (30) days prior to its adjustment of route system, relay
      circuit, signaling mode, station data and software version, which may
      negatively affect the communication of other Party's customers.

5.3   When required, either Party shall, in a timely manner, cooperate with the
      other Party when the latter adjusts the route system, relay circuit,
      signaling mode, station data and software version to ensure the
      communication quality between networks.

5.4   The Parties agree to perform maintenance on their own networks to assure
      the normal operation of the whole networks according to the applicable
      regulations promulgated by national telecommunication regulatory
      authorities from time to time.

5.5   Should there be any communication breakdown and problems, the Parties
      shall take effective measures to resume communication.

6.    SETTLEMENT PRINCIPLES AND METHODS BETWEEN NETWORKS

6.1   Settlement relationships for domestic long distance voice service: Party A
      and Party B make settlement with each other, except for domestic long
      distance voice service between Party A's subsidaries in Heilongjiang,
      Jilin, Shanxi and Inner Mongolia and Party B's subsidaries in Beijing,
      Tianjin, Henan, Hebei, Shandong and Liaoning.

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      Settlement price for domestic long distance voice service: settlement
      based on voice termination - operator from whose network calls are
      originated makes settlement to the operator from whose network calls are
      terminated. The price is RMB 0.06/minute if calls are terminated in the
      network of Party A or Party B and RMB 0.09/minute if terminated in
      networks other than in those of Party A and Party B.

6.2   Settlement relationship for international long distance voice service:
      settlement between Party A and Party B.

      Settlement principle for international long distance voice service (see
      Appendix to this Agreement for detailed price):

      (1)   Outgoing international calls: Party A shall be responsible for any
            charges which Part B shall pay to overseas telecommunications
            operators. Incomes of Party A shall be distributed between Party A
            and Party B based on estimated cost proportion of Party A and Party
            B in provision of outgoing international long distance voice service
            after the amount of payment made by Party B to overseas
            telecommunications operators has been deducted from the total
            income.

      (2)   Incoming international calls: Incomes of Party B receivedfrom
            overseas telecommunication operators shall be distributed between
            Party A and Party B based on estimated cost proportion of Party A
            and Party B in provision of incoming international long distance
            voice service after the amount of payment toParty A (RMB 0.06/minute
            when calls are terminated in Party A's network; RMB 0.09 when calls
            are terminated in other operator's network) has been deducted from
            the total income. The above-mentioned rate shall be subject to
            adjustment at any time according to applicable standards, fixed
            tariffs and policies published by relevant Chinese regulatory
            authorities.

6.3   Data processing and checking principles

      Billing and settlement center of Party B shall be responsible for data
      processing. If the difference between the bill of the center and billing
      data of both parties (billing data difference = difference between the
      relevant two parties/the averaged data of the relevant two parties *100%)
      is equal to or lower than 3%, the bill of the center shall prevail. If the
      difference is higher than 3%, a preliminary settlement shall be made based
      on the bill data of the center. The parties shall submit a written request
      for dispute arbitration to operational management department of Party B
      within 10 working days from the 20th of each month.

      Operational management department of Party B shall give a written disposal
      suggestion within 3 months upon receipt of the written dispute arbitration
      request. The settled amount that needs

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      adjustment shall be adjusted in the statement of account of next month.

6.3   Settlement Procedures

      Place of settlement: Beijing, China

      Settlement period, commence date and termination date: once per month,
      settlement and billing period (based on the ending time of calls) is from
      0:00 (inclusive) of 21st of the previous month to 0:00 (exclusive) of 21st
      of this month. Since there are quite a number of uncertainties in the
      international business settlement characterized by the committed period.
      Within the settlement period, the internal settlement of international
      service shall be made on the basis of the completion of settlement with
      overseas telecommunication operators. Interconnection settlement will
      begin from 0:00 of December 21, 2003.

      Method of payment: the payer party of the month shall pay the net
      settlement amount to the payee party of the month.

7.    REPRESENTATIONS AND WARRANTS

      Each party represents and warrants to the other party that:

      (1)   It has the power and authority (including but not limited to any
            approval, consents or permission granted by the government
            departments ) to sign this Agreement;

      (2)   No provision in this Agreement violates the constitutive documents
            or the laws and regulations of PRC;

8.    FORCE MAJEURE

      If any unforeseeable Force Majeure incident whose occurrence and impact
      cannot be prevented or avoided has affected or has led to the fail of the
      either party in performing this Agreement in accordance with the agreed
      terms, the affected Party shall immediately inform the other Party within
      fifteen (15) days after the said incident, and provide the other Party
      details of the incident and effective certification documents explaining
      why all or part of the related obligations under this Agreement and the
      relevant appendixes can not be performed, or need to performed in a
      prolonged time frame. Based on the extent of the influence of such
      incidents on the performance of such affected obligations, the parties
      shall negotiate to decide whether or not to terminate, postpone or
      partially exempt the performance of such obligations.

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9.    CONFIDENTIALITY

      With the exception of requests by the legal or governmental departments or
      any other relevant securities regulatory authorities or for the purpose of
      the Listing Company seeking listing, unless with written approval by the
      other party, neither party can make public announcements nor supply or
      reveal any business information regarding this Agreement of the other
      party to any companies, enterprises, organizations or individuals,.

10.   TRANSFER

      Without the written approval of the other party, neither party may
      transfer any single right and obligation as agreed upon under this
      Agreement.

11.   NON-WAIVER

      Unless otherwise specified by law, the failure or delay of exercising the
      right, power or privilege as endowed by this Agreement on the part of
      either Party A or Party B cannot be deemed as the waiver of such rights,
      power or privileges. Besides, the partial exercise of such rights, power
      or privileges should not hinder the exercise of such rights, power or
      privileges of this Party in the future.

12.   NOTICES

12.1  All notices required to be delivered pursuant to this Agreement shall be
      in writing, and delivered to the address as stated at the beginning part
      of this Agreement, or to addresses or facsimile numbers designated by one
      Party to the other Parties in writing from time to time.this Agreement.

12.2  Any notice above shall be delivered either by hand, registered mail, or
      facsimile. Any notice shall be deemed to have been delivered at the time
      of actual receipt if delivered by hand; on the date of return receipt if
      delivered by registered mail; and at the time of transmission if delivered
      by facsimile.

13.   GOVERNING LAWS

      This Agreement shall be governed, interpreted and implemented in
      accordance with laws of the People's Republic of China.

14.   DISPUTES RESOLUTION

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

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      has the right to resort to litigation at the people's court which has
      jurisdiction over where Party B situates.

15.   EFFECTIVENESS OF AGREEMENT AND OTHERS

15.1  This Agreement shall come into effect once signed by the legal
      representatives or authorized representatives of both Parties and affixed
      with their official seals. This Agreement shall be effective till June 30,
      2007. If Party B wishes to renew this Agreement and notifies Party A with
      3 month's notice, this Agreement shall be renewed automatically for
      another 3 years on the same terms. There are no limits on the number of
      renewal.

15.2  Upon the agreement of both parties, both parties can amend this Agreement
      or enter into supplementary agreement to this Agreement. The amendments or
      supplementary agreements of this Agreement shall come into effect once
      signed by the legal representatives or authorized representatives of both
      Parties and affixed with their official seals.

15.3  This Agreement is severable, that is, if any provision of this Agreement
      is held to be illegal or unenforceable at any time, the effectiveness and
      performance of other provisions of this Agreement shall not be affected.

15.4  This Agreement is made into six (6) duplicate originals. Each party holds
      three (3) copies, and each copy shall have the same legal binding effect.

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<PAGE>

Signature page:

      CHINA NETWORK COMMUNICATIONS GROUP CORPORATION (SEAL)

      By: __________
      Legal Representative or Authorized Representative

      CHINA NETCOM (GROUP) COMPANY LIMITED (SEAL)

      By: __________
      Legal Representative or Authorized Representative

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<PAGE>

APPENDIX: SPECIFIC SETTLEMENT PRICES FOR INTERNATIONAL LONG DISTANCE VOICE
SERVICE

(1)   Outgoing international calls (including outgoing INMARSAT calls originated
      from China and incoming international calls reverse settlement): Party A
      shall make settlement to Party B, RMB [M+(N-M)*R]/minute, if N<M, RMB M
      /minute.

      M: actual settlement price for outgoing international calls of various
      each directions, adjusted based on openly committed period. In each
      direction, M=settled amount corresponding to non-committed
      volume/non-committed volume of outgoing calls in this direction

      N: average retail price charged on customers who make outgoing
      international calls, subsidiaries of Party B accounted respectively,
      adjusted once each quarter;

      R: costs allocation ratio for Party B, adjusted or confirmed yearly by the
      Parties based on their respective costs for outgoing international call
      services.

(2)   Incoming international calls (including outgoing international calls
      reverse settlement): Party B shall make settlement to Party A, RMB
      [Y+(X-Y)*R]/minute, if X<Y, RMB Y /minute.

      X: average settle unit price for incoming international calls, adjusted
      yearly;

      Y: settlement price for incoming international calls terminated in local
      networks (RMB 0.06/minute in the Parties' networks, RMB 0.09 /minute in
      other networks, adjusted or confirmed yearly by the Parties);

      R: cost allocation ratio for Party B, adjusted yearly by the Parties based
      on their respective costs for incoming international call services.

                                       9<PAGE>

                                                                    EXHIBIT 10.8

                           PROPERTY LEASING AGREEMENT

                                 BY AND BETWEEN

                 CHINA NETWORK COMMUNICATIONS GROUP CORPORATION

                                       AND

                      CHINA NETCOM (GROUP) COMPANY LIMITED

                                       1
<PAGE>

                           PROPERTY LEASING AGREEMENT

      This Agreement is made and entered into on [-], 2004 in Beijing, People's
Republic of China ( "PRC") by and among the following two parties:

      China Network Communications Group Corporation (Party A)

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

      Legal representative: Zhang Chun Jiang

      China Netcom (Group) Company Limited (Party B)

      Address: Building C, No. 156, Fuxingmenwai Avenue, Xicheng District,
               Beijing, PRC

      Legal representative: Zhang Chun Jiang

      In this Agreement, the term "Tenant" and "Lessor" may refer to Party A or
Party B or both Party A and Party B (the terms include branches, subsidiaries,
affiliates and enterprises or units controlled by Party A and/or Party B, the
same as below), for this Agreement.

      Pursuant to the Contract Law of the PRC as well as relevant provisions of
other laws and regulations, for the purpose of clarifying their respective
rights and obligations, Party A and Party B, through cooperative negotiation,
hereby enter into this Agreement as follows:

                   ARTICLE ONE SCOPE AND PURPOSE OF THE LEASE

1.    Due to the demand of business operations, Party A and Party B agree to
      lease to each other the Properties owned by their branches, subsidiaries,
      affiliates and enterprises or units controlled by both parties
      (hereinafter collectively referred to as "Subsidiary Companies"). Party A
      and Party B confirm that such subsidiary companies, enterprises and units
      have agreed to entrust Party A or Party B to exercise the leasing rights
      of the Properties defined hereunder.

      Party A agrees to lease to Party B the Properties owned by Party A
      hereunder (hereinafter referred to as "Properties of Party A"); and Party
      B is willing to lease the Properties of Party A and pay the consideration
      accordingly as provided hereunder. Party B agrees to lease to Party A the
      Properties owned by Party B hereunder (hereinafter referred to as
      "Properties of Party B"); and Party A is willing to lease the Properties
      of Party B and pay the consideration accordingly as provided hereunder.

2.    The scope of the Properties of Party A and the Properties of Party B as
      referred to in the foregoing article shall be defined in the Appendix of
      this Agreement. Party A and Party B may make adjustment once a year to the
      scope of the Properties of Party A and the Properties of Party B as
      defined in the Appendix in accordance with the actual circumstances.

3.    Both parties agree that the Properties of Party A or the Properties of
      Party B they have leased shall only be used by them within the permitted
      scope to legally engage in business operational activities, and neither
      party may lease the other party's Properties to a third party without the
      other party's written consent, and this sub-leasing party shall still be
      liable for the liabilities and obligations hereunder.

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                          ARTICLE TWO TERMS OF LEASING

1.    The agreed lease term of the Properties hereunder is the same as that of
      this Agreement, subject to item 2 of this Article.

2.    The Lessor may immediately terminate the agreed lease of the Properties
      hereunder if the Tenant commits any of the following:

      1)    The Tenant, at its own discretion, sublease or sublend the
            Properties of the Lessor to other parties without the prior consent
            of the Lessor (except when the Properties are subleased or sub-lent
            to the subsidiaries or affiliated companies of the Tenant);

      2)    The Tenant violates the purpose of usage as agreed by both parties
            for the leasing, or uses the leased Properties to conduct any
            illegal activities and do harm to the public interests.

3.    If, in accordance with Article Ten, the Tenant does not exercise the right
      of renewal but is unable to return the Properties to the Lessor upon the
      expiration of this Agreement due to its business operations, the Lessor
      shall extend the term to a period as deemed appropriate and is entitled to
      claiming rental from the Tenant for an amount negotiated and agreed by
      both parties.

                   ARTICLE THREE RENTAL AND METHOD OF PAYMENT

1.    Party A and Party B agree that the actual rental for the Properties leased
      to each other shall be determined by both parties in the Appendix to this
      Agreement based on the market price or the depreciation and maintenance
      cost and with reference to the rental standard set by the local price
      authorities while taking into consideration the actual needs of the
      parties (not exceeding the market price).

      Party A and Party B agree that both parties may sign separate execution
      documents with regard to the leasing issues of certain Properties of Party
      A or certain Properties of Party B with the purpose of specifying the
      applicable terms and conditions relating to such leased Properties,
      provided that the execution documents shall comply with the principles,
      compendium and terms and conditions set forth hereunder.

2.    The foregoing rental shall be reviewed once a year while Party A and Party
      B shall negotiate to determine whether the rental needs to be adjusted as
      well as the actual amount of the rental after such adjustment.

3.    The rental shall be settled once each quarter and the settlement date is
      the last day of each quarter. When the last day of the quarter happens to
      be Saturday, Sunday or public holiday, the settlement date shall be
      postponed to the first working day immediately after the holiday.

4.    All tax burdens incurred by the leasing of the Properties of Party A or
      the Properties of Party B, and management fees and other charges levied by
      the state and local governments against the Properties of Party A and the
      Properties of Party B shall be borne by the Lessor, unless otherwise
      specified hereunder.

 ARTICLE FOUR THE REPAIR AND MAINTENANCE OF THE PROPERTIES DURING THE LEASE TERM

      The repair and maintenance of the Properties during the lease term is the
Lessor's obligation, and all costs incurred for this purpose shall be borne by
the Lessor. When performing necessary renovation to the

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leased Properties, unless otherwise specified by this Agreement, the Tenant
shall consult the Lessor for any renovation involving the alterations to the
main structure of the leased Properties and shall not proceed with the
renovation until a written agreement is entered into. However, unless with valid
reasons, the Lessor shall not refuse or delay the alterations to the main
structure of the Properties requested by the Tenant. Regarding alterations,
additions that do not involve the main structure of the Properties, the Tenant
may perform such alterations and additions on its own and at its own expense
without notice to and consent from the Lessor. Any additions or value added to
the Properties as a result of renovation, alterations or additions made by the
Tenant or the Lessor during the lease term shall belong to the Lessor.

                        ARTICLE FIVE CHANGE OF THE LESSOR

1.    If the Lessor transfers the title of the leased Properties to a third
      party, this Agreement shall remain in force and effective to the new owner
      of the title of the Properties.

2.    When the Lessor sells the ownership of the leased Properties, the Lessor
      shall notify the Tenant three months before the sale. The Tenant shall
      have the preferential right under the same conditions.

         ARTICLE SIX THE REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES

1.    Both Party A and Party B hereby represent and warrant to the other party
      that both parties are established, registered and existing companies or
      organizations in accordance with the laws of the PRC and have full powers
      and authorizations (including the legal, the company's internal and other
      powers and authorizations):

      1)    The powers and authorizations to own, lease, rent and operate its
            assets;

      2)    The powers and authorizations to sign and implement this Agreement.

2.    The Lessor hereby represents and warrants to the Tenant as follows:

      1)    The Lessor is the only lawful owner of the leased Properties and has
            the exclusive right to lease the said Properties to the Tenant for
            considerations in accordance with the provisions of this Agreement;

      2)    The leased Properties, when delivered to the Tenant for use, are in
            good conditions with structures complete and adequate for the Tenant
            to use them for the purposes set forth in this Agreement;

      3)    The Lessor undertakes that the Tenant has the right to terminate
            this Agreement at any time if the foregoing warranty contains any
            untrue statement. Meanwhile, the Lessor agrees to undertake the
            indemnify obligation for any economic loss and damages incurred to
            the Tenant by such untruth.

3.    The Tenant hereby represents and warrants to the Lessor as follows:

      1)    The Tenant shall pay the relevant rental to the Lessor in accordance
            with Article Three of this Agreement. IF the Tenant fail to pay the
            said rental, the Tenant shall, for each 1 day (calendar day, and the
            same applies below) late, pay a late charge penalty of 0.05% of the
            outstanding balance to the Lessor.

      2)    During the lease term, the Tenant shall abide by the relevant laws
            and regulations of the PRC and it shall be the Tenant's sole
            responsibility to bear the consequences of security, fire and

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            environment protection issues.

4.    Party A warrants to providing Party B's auditors with the accounting
      records of Party A and its connected persons for any connected
      transactions.

5.    It is agreed that both parties will take further actions to ensure the
      realization of the principles and provisions in this Agreement. It is
      further agreed that both parties will ensure that, Party B, being a
      subsidiary of a company to be listed or listed, China Netcom Group (Hong
      Kong) Limited, shall comply with the Listing Rules of the Hong Kong Stock
      Exchange for connected transactions.

                           ARTICLE SEVEN FORCE MAJEURE

      If any unforeseeable Force Majeure incident whose occurrence and impact
cannot be prevented or avoided has affected or has led to the fail in performing
this Agreement in accordance with the agreed terms, the affected Party shall
immediately inform the other Party by written notice within fifteen (15) days
after the said incident, and provide the other Party details of the incident and
effective certification documents explaining why all or part of the related
obligations under this Agreement and the relevant appendixes can not be
performed, or need to performed in a prolonged time frame. Such certification
documents shall be issued by the notary organization located in the region where
the incident has occurred. Based on the extent of the influence of such
incidents on the performance of such affected obligations, the parties shall
negotiate to decide whether or not to terminate, postpone or partially exempt
the performance of such obligations.

                        ARTICLE EIGHT BREACH OF CONTRACT

1.    The failure of a party to perform the obligations set forth by this
      Agreement shall be deemed in violation of the contract. The delinquent
      Party shall correct this noncompliance within five (5) days upon receiving
      from the other Party a detailed notice of such violation. If after five
      (5) days, such violation of Agreement has not been corrected, the
      delinquent Party should compensate the other Party for all direct and
      foreseeable losses caused by such breach of contract.

2.    If the Tenant's use of the leased Properties is prolonged due to the
      errors or mistakes of the Lessor, the agreed lease term of the Properties
      hereunder shall be extended accordingly.

               ARTICLE NINE GOVERNING LAWS AND DISPUTES RESOLUTION

1.    The execution, power, interpretation, implementation and disputes
      resolution of this Agreement are subject to the protection and
      jurisdiction of the law of the People's Republic of China.

2.    Both parties shall seek to settle matters of dispute arising from the
      implementation of this agreement or in connection with this agreement by
      cooperative negotiation. If the matters of disputes cannot be settled by
      negotiation, either party has the right to resort to litigation at the
      people's court which has the jurisdiction over the matter.

                ARTICLE TEN EFFECTIVENESS OF AGREEMENT AND OTHERS

1.    This Agreement shall come into effect once signed by the legal
      representatives or authorized

                                       5
<PAGE>

      representatives of both Parties and affixed with their official seals.
      This Agreement shall be effective till June 30, 2007. If Party B wishes to
      renew this Agreement and notifies Party A with 3 month's notice, this
      Agreement shall be renewed automatically for another 3 years on the same
      terms. There is no limits on the number of renewal.

2.    The supplementary agreements, side agreements, and documents drawn
      according to the principles of this Agreement are parts of this Agreement.
      Both parties agree that any changes, revisions or amendments to this
      Agreement shall come into effect by written agreements entered into by
      both parties and shall become indivisible parts of this Agreement.

3.    The Agreement is made in Chinese. It is made into four (4) originals. Each
      Party holds two (2) copies, and each original shall have the same legal
      binding effect.

      IN WITNESS WHEREOF the Legal representatives or the authorized
representatives of both parties hereto have executed the Agreement as of the
date and venue first written above.

                                       6
<PAGE>

Signature page:

CHINA NETWORK COMMUNICATIONS GROUP CORPORATION (SEAL)

By: ____________
Legal Representative or Authorized Representative

CHINA NETCOM (GROUP) COMPANY LIMITED (SEAL)

By: ____________
Legal Representative or Authorized Representative

                                       7
<PAGE>

APPENDIX

I:    ITEMIZED LIST OF PROPERTIES LEASED BY PARTY A TO PARTY B

<TABLE>
<CAPTION>
          NAME OF THE                 FULL     AREA   RENTALS
NO.        PROPERTY       USAGE     ADDRESS   LEASED  (TOTAL)  NOTE
---        --------       -----     -------   ------  -------  ----
<S>       <C>             <C>       <C>       <C>     <C>      <C>
-------------------------------------------------------------------
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</TABLE>

*     Please indicate in the Note column if there are other special articles as
      applicable.

II:   ITEMIZED LIST OF PROPERTIES LEASED BY PARTY B TO PARTY A

<TABLE>
<CAPTION>
          NAME OF THE                 FULL     AREA   RENTALS
NO.        PROPERTY       USAGE     ADDRESS   LEASED  (TOTAL)  NOTE
---        --------       -----     -------   ------  -------  ----
<S>       <C>             <C>       <C>       <C>     <C>      <C>
-------------------------------------------------------------------
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</TABLE>

*     Please indicate in the Note column if there are other special articles as
      applicable.

                                       8

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