New Measures For Fixed Asset Loans

Amid concerns that the easing of monetary policy by the Central Chinese government in early 2009 have caused monies to be channelled to speculation in shares and real estate instead of the real economy and of the increasing risk of asset bubbles and bad loans, China Banking Regulatory Commission ("CBRC") issued the Tentative Measures for the Administration of Fixed Asset Loans (the "Measures") on 23 July 2009. The Measures which came into effect on 23 October 2009 aim to provide stricter guidelines on the approval process and strengthen internal control management for lending on fixed assets.

"Fixed asset loans" under the Measures refers to loans granted by a lender to a legal entity in China to finance investment in fixed assets, either in RMB or foreign currency.