The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government; the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo:

In order to maintain an equilibrium in the balance of payments and strengthen the management of liquidity, the State Administration of Foreign Exchange has decided to further reduce the aggregate quota for outstanding short-term external debts of domestic institutions in 2011 based on the shrinkage in the relevant quotas in 2010. For the purpose of directing the banks' response to the State's macroeconomic regulatory policy to optimize the structure of the quota allocation, the SAFE has reduced the quotas granted to financial institutions with a relatively higher proportion of borrowing, deposits, and lending, and a relatively larger historical quota, and has appropriately increased the quotas granted to banks that have shown rapid growth in trade financing in recent years and have a relatively small historical quota. Relevant information about the ratification of the quotas for the outstanding short-term external debts of domestic institutions (hereinafter referred to as quotas) for 2011 (April 1, 2011 to March 31, 2012, the same as below) and the relevant management requirements are hereby notified as follows:

1. A quota of a total of USD10.168 billion for some Chinese-funded banks for 2011 has been ratified (see Appendix 1).

A quota of a total of USD14.62509 billion for 2011 has been ratified for some legal-person foreign-funded banks and branches of foreign-funded banks that implement centralized administration of their quotas (see Appendix 2).

Local quotas of a total of USD7.6078 billion have been ratified for Chinese- and foreign-funded legal-person banks, branches of foreign-funded banks that have not implemented centralized administration of their quotas, and Chinese-funded enterprises and other relevant institutions within the jurisdiction of the SAFE branches and the foreign exchange administrative departments (hereinafter referred to branches) (see Appendix 3).

For domestic institutions with quotas that have been adjusted downward, if on the date of reduction of the quota, the outstanding short-term external debt subject to quota control already exceeds the newly-ratified quota, they shall, within 3 monthstime, bring  the outstanding short-term external debt subject to actual quota control to within the scope of the newly-ratified quota.

2. All the branches of the SAFE shall allocate and adjust the quotas in an impartial and reasonable manner, based on needs to bolster import financing, strengthen liquidity management, and maintain a BOP equilibrium, as well as based on the utilization of the quota and the structure of fund use by institutions within their jurisdictions. Quotas granted to the locality of each branch in 2011 shall be preferentially allocated for import financing by domestic banks and enterprises.

3. All short-term external debts of financial institutions in any form shall be incorporated into the quota management, with the following exceptions:

(1) Accepted but unpaid letters of credit with a maturity of less than 90 days (inclusive) and overseas advances with a maturity of less than 90 days (inclusive). In the event that an issuing bank provides overseas advances after the issuance of the L/C, the term for the L/C issuance and the overseas advances shall not exceed a total of 90 days. In such a case, the overseas advance shall correspond to the import contract and import financing with respect to terms, amounts, and time of payment.

(2) Non-resident individual deposits with an amount of less than US$500,000 (inclusive) in the same legal-person bank.

(3) Balances in various special accounts for foreign investors opened in the name of non-residents upon the approval of the SAFE.

(4) Other cases specified by the SAFE that need not be incorporated into quota management.

4. Policies concerning the borrowing of short-term external debt by Chinese-funded enterprises.

(1) After ratification of the quotas, a branch can distribute part of the local quotas for 2011 as balances to Chinese-funded enterprises that have lived up to the relevant standards within its jurisdiction.

(2) Quotas awarded to Chinese-funded enterprises after ratification shall only be used for the borrowing of short-term external debt with a contract term of not longer than one year (inclusive). The balance of the outstanding principal of the short-term external debt of Chinese-funded enterprises that is subject to quota administration shall not exceed the scale of the ratified quota.

(3) Ratified quotas shall be given to Chinese-funded enterprises in industries that are encouraged and permitted by national industrial policies and that have sound financial status and strong solvency.

(4) The short-term external debt borrowed by Chinese-funded enterprises shall not be used for foreign exchange settlement.

(5) Chinese-funded enterprises shall borrow the short-term external debt in strict compliance with the relevant regulations for the administration of the external debt that are currently in effect and shall register the external debt on a deal-by-deal basis; the opening of a special account for the external debt and the repayment of the principal and the interest by Chinese-funded enterprises shall be examined and approved by the SAFE.

(6) The branches can adjust and utilize the quotas among the financial institutions and Chinese-funded enterprises based on the situation in terms of the quota use of the institutions within their jurisdiction.

5. Each branch of the SAFE shall monitor the outstanding short-term external debt and variations among financial institutions and Chinese-funded enterprises within its jurisdiction, strengthen oversight of quota utilization by financial institutions and Chinese-funded enterprises within its jurisdiction, and submit the Form for the Use of Quotas for Outstanding Short-term External Debts by Institutions within the Jurisdiction of _____ (Region) by the end of ____ Quarter, ____(Year) (Appendix 4) to the Capital Account Administration Department of the SAFE through the email address of the portal Web site of the SAFE (debt@capital.safe) within 15 working days after the end of each quarter.

Appendix: Omitted

                                                                                           March 30, 2011