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 in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo:

In order to promote a basic equilibrium in the balance of payments of China , the State Administration of Foreign Exchange ("SAFE") has decided to appropriately reduce the aggregate quota for external financing guarantees of domestic banks in 2011 based on the relevant quota in 2010. Relevant information about the ratification of the quotas for the external financing guarantees of domestic banks (hereinafter referred to as quotas) for 2011 and the relevant management requirements are hereby notified as follows:

I. A quota of a total of USD76.37622 billion for 2011 has been ratified for some Chinese-funded banks, legal-person foreign-funded banks, and branches of foreign banks.

II. As for Chinese-funded banks or legal-person foreign-funded banks, the quota shall be determined on the basis of the Tier 1 capital in both domestic and foreign currency at the end of the previous year; as for branches of foreign banks, the quota shall be determined on the basis of the working capital in both domestic and foreign currency or the net foreign exchange assets at the end of the previous year. The proportion of the upper limit of the quota shall be determined by the SAFE based on the current situation in foreign exchange receipts and payments and the business development of the banks, and so forth.

III. The quota for a bank shall come into effect as of the date of issuance and shall continue in force until the date of effectiveness of the quota for the next year. Applications submitted by the banks, within the period of validity, for adjustments of the quotas shall be forwarded to the SAFE for approval through the local branches, sub-branches, or foreign exchange administrative departments of the SAFE (hereinafter referred to as the foreign exchange authorities).

IV. Banks with quotas that have been adjusted downward, where on the date of effectiveness of the quota the balance of the external financing guarantee has already exceeded the newly-ratified quota, shall, within 3 months, bring the balance of the external financing guarantee to within the scope of the newly-ratified quota. The banks shall not handle new external financing guarantees before the balance of the external financing guarantee is reduced to the newly-ratified quota.

IV. Where foreign institutions issue bonds overseas and domestic banks, domestic non-bank financial institutions, or domestic enterprises are the proposed guarantors thereof, it shall be reported to the SAFE for approval by the domestic guarantor on a case-by-case basis through the local foreign exchange authority. Where the guarantors are domestic non-bank financial institutions or domestic enterprises, the qualifications of the guarantors and the debtors shall also be in conformity with the relevant provisions of the Circular of the State Administration of Foreign Exchange on the Administration of External Guarantees Provided by Domestic Institutions (Huifa No.39 [2010]).

Applications by domestic real estate enterprises for provision of external guarantees for overseas issuances of bonds by their overseas subsidiaries are not currently accepted.

VI. Where the foreign exchange authorities accept the applications of domestic institutions for external financing guarantees and domestic banks handle the business of external financing guarantees, the specific purpose of the proceeds from the financing obtained by the overseas debtor shall be strictly examined. The proceeds from the financing under the guarantee shall not, directly or indirectly, be transferred back to China by means of equity or debt investments, including but not limited to the following means:

(1) The proceeds from the financing are used to repay former loans of the debtor or other overseas companies, and the former loan proceeds are transferred back to China by means of equity or debt;

(2) The proceeds from the financing are used, directly or indirectly, to purchase the equity of the overseas target company whose main assets are located within China ;

(3) Other means of transfer back to China determined by the foreign exchange authorities.

VII. Where domestic institutions provide external guarantees in RMB, in principle they shall be administered in accordance with the relevant provisions of the Circular of the State Administration of Foreign Exchange on the Administration of External Guarantees Provided by Domestic Institutions (Huifa No.39 [2010]).

VIII. Domestic banks shall strictly comply with the Measures for the Administration of External Guarantees Provided by Domestic Institutions, the Circular of the State Administration of Foreign Exchange on the Administration of External Guarantees Provided by Domestic Institutions (Huifa No.39 [2010]), and other relevant provisions, strengthen internal risk controls, strictly keep the balance of actually provided external financing guarantees within the scope of the quota, and submit the relevant data to the local foreign exchange authorities as required.

IX. The foreign exchange authorities shall further strengthen ex-post inspections and the statistics and monitoring of the provision of external guarantees by domestic institutions:

(1) The foreign exchange authorities shall strictly administer implementation of the quotas of the banks within their jurisdiction, and carry out regular statistics and monitoring of the balance in the external financing guarantees provided under their quotas, the variations in the balance, and the performance of the guarantees.

(2) The foreign exchange authorities shall keep a close eye on the flow of the proceeds under the guarantees. Where the proceeds under the guarantees are transferred back to China in violation of the regulations on foreign exchange administration, penalties shall be imposed by the foreign exchange authorities in accordance with the Regulations of the People’s Republic of China on Foreign Exchange Administration and other relevant regulations.

The branches and foreign exchange administrative departments shall, upon receipt of this Circular, promptly forward it to all central sub-branches, sub-branches, and banks within their respective jurisdictions, and shall do a good job of tracking and providing feedback in a timely manner.

                                                                                                                                                            July 27, 2011