(Promulgated on January 18, 2002 by the Shanghai Municipal People’s Government)

Article 1 (Purpose)

With a view to normalizing the administration of Shanghai Chemical Industry Area, promoting the construction and development of the Chemical Industry Area, these Procedures are formulated in accordance with laws, regulations and relevant policies, and with full consideration of the actual circumstances in Shanghai.

Article 2 (Scope of Application)

These Procedures apply to the Shanghai Chemical Industry Area (hereinafter referred to as the SCIA) established under the approval of the Municipal People’s Government.

Article 3 (Location)

The SCIA lies from the Nanzhu River estuary on the east and Jiu’er Dike on the west. It is bounded on the north by the Shanghai-Hangzhou Highway and on the south by the Hangzhou Bay. Its total area is 23.4km2.

Article 4 (Direction of Construction and Guidance of Project)

According to the strategy of economic development of this Municipality and the requirements of overall planning, the SCIA shall be built into a specialized development zone consisting mainly of petrochemistry and fine chemistry.

Investors at home and abroad shall be encouraged to invest in various chemical industrial projects in the SCIA, in accordance with the provisions of the catalogues of industries, products and technologies emphatically encouraged by the State, and the guiding catalogues of relevant industries inviting foreign investors. Investors shall be encouraged to invest in the construction of infrastructures and necessary accessories for public utilities.

Article 5 (Legal Protection)

The investment, property, profits and other legal rights and interests of investors in the SCIA shall be protected by the State laws and regulations.

Article 6 (Administration Committee)

The Municipality shall set up the Administration Committee of the SCIA (hereinafter referred to as AC). The AC is an agency of the Municipal People’s Government.

Article 7 (The Duties of the AC)

The AC shall exercise the following powers in accordance with these Procedures and the entrustment of relevant administrative departments:

(1) Be in charge of drawing up and revising the development planning, plan and industrial policies of the SCIA;

(2) Be in charge of the examination and approval of investment items and use of land, and the administration of construction projects;

(3) Coordinate the routine administration of the enterprises in the SCIA by the Customs, the administrative departments of commodity inspection and quarantine, the People’s Bank of China Shanghai Branch, and the administrative department of foreign affairs;

(4) Provide necessary guidance and service to enterprises in the SCIA; and

(5) Accomplish other tasks given by the Municipal People’s Government.

Article 8 (Centralization of Administration and Service in Administrative Affairs)

The AC shall be responsible for the relevant administrative affairs in the SCIA. The relevant municipal administrative departments, in matters involving administration in the SCIA, shall solicit the opinions of the AC, with the exception of matters involving national safety and public security.

Jointly with the Municipal Industrial and Commercial Administration, Municipal Environmental Protection Bureau, Municipal Quality and Technology Supervision Bureau, Municipal National Tax Bureau and Municipal Local Tax Bureau, Municipal Labor and Social Security Bureau, Municipal Personnel Bureau and Municipal Public Security Bureau, etc. the AC shall set up corresponding departments in the SCIA, provide“All formalities handled at one place”service, and perform relevant administrative duties and responsibilities.

Article 9 (Development Organization)

The Shanghai Chemical Industry Area Development Corporation (hereinafter referred to as SCIADC) shall be specifically responsible for the development of construction and the management of the infrastructures of the SCIA, and for inviting investors and applying for approval of enterprises settled in the SCIA and other routine works. The SCIADC shall also provide services for enterprises and organizations in the SCIA.

Article 10 (Approval and Adjustment of Planning)

According to the strategy of the municipal economic development and the requirements of overall planning, in consideration of the professional features of petrochemistry and fine chemistry, the AC shall make a development program for the SCIA, and report the program to the Municipal People’s Government for approval, and then organize its implementation.

The development program shall be adjusted, if necessary, in accordance with the preceding clause, and be reported for approval.

Article 11 (Environmental Protection)

Any project that enters the SCIA shall pass through strict appraisal of its effect on the environment, adopt advanced cleaning technology in production, and guarantee that the discharge of pollutants complies with the set standards of the State and this Municipality.

Any project with serious pollutants shall be forbidden to be set up in the SCIA.

Article 12 (Supervision and Administration of Safety)

In accordance with relevant laws, rules, regulations, bylaws and standards on the safe administration of dangerous chemical commodities, the AC shall coordinate with the supervision department and fire-fighting department to, apply closed up administration in the SCIA, provide necessary facilities of safety and protection, and full-time safety agents, adopt various effective measures as well as strengthen the safety supervision of production, operation, transportation, loading and unloading, storage, research and study of dangerous chemical commodities.

Article 13 (Examination and Approval of a Foreign-funded Project)

Entrusted by the Municipal Foreign Investment Committee, the AC shall examine, check, confirm and approve the following foreign-funded projects and enterprises in the SCIA, and report them to the relevant administrative department for the record:

(1) Examine and approve projects that are encouraged by the State and that need no comprehensive balance by the State;

(2) Examine and approve projects in permissible type, with total investment below USD30 million;

(3) Examine and approve projects in restricted type A, with total investment below USD5 million;

(4) Examine and approve the alterations in agreements and articles of association of foreign-funded enterprises under Items (1), (2), and (3) of this Article.

Article 14 (Examination and Approval of a Domestic Project)

Entrusted by the Municipal Plan Committee, the AC shall examine, approve and administrate domestic projects in encouraged and permissible types in the SCIA, and report them to the relevant administrative department for the record.

Article 15 (Contract of Transfer of Land-use Right)

Any enterprise or organization in the SCIA shall sign a contract of transfer of land-use right with the SCIADC if it needs a piece of land, and shall go through land-use procedures in the AC.

Article 16 (Administration of Construction Project)

The Shanghai Administration Office of Public Bidding of Construction Projects, shall entrust the AC to do the routine works of survey, design, invite and tender bidding etc. for the construction projects in the SCIA. The Shanghai Administration Office of Public Bidding of Construction Projects shall be responsible for giving assistance and doing selective examination on the spot.

The Municipal Quality Supervision General Station of Construction Projects and the Municipal Safety Supervision General Station of Construction Projects shall entrust the AC to administrate and supervise the quality and safety of all municipal construction projects, with the exception of large-scale installation project, in the SCIA, and the two General Stations shall be responsible for the supervision and selective examination.

Article 17 (Setting up of an Enterprise)

The industrial and commercial administrative department shall give its approval within 3 working days if an enterprise is going to be set up in the SCIA and the materials are all ready.

If some matters are to be settled in accordance with laws and regulations previous to the examination and approval, the relevant department shall adopt the policy“the industrial and commercial agent shall receive the case, report the application to relevant departments, examine and approve the case jointly, finish the work within the time limit”, and shall finish the previous examination and approval within 5 working days.

Article 18 (Provide Related Services)

The SCIA shall perfect its intermediary service system, provide intermediary service for talented personnel, labor, financial affairs, finance, standards, weight and measure, patent, law as well as notarization, etc. for the enterprises and organizations in the SCIA.

The SCIA shall set up customs declaration agency and report for inspection agency in accordance with laws and regulations, and provide foreign trade services for enterprises and organizations in the Area.

Article 19 (Effective Date)

These Procedures shall become effective on February 1, 2002.