Article 21: Outside enterprises annexing enterprises in the autonomous region shall implement the regulations as stipulated in The Circular on Rectification of the Issue of Suspension, Reduction, and Postponement of the Interest of Loans of Annexed, Dissolved, and Bankrupted Enterprises by the People's Bank of China and other banks (refer to yinfa document No.113-1993). In addition to carrying out the above said regulations, outside enterprises annexing enterprises in urban Yinchuan and those included in the autonomous region's list to experiment optimization of capital structures, and state-designated key enterprises from other place annexing Ningxia's enterprises shall also carry out the regulations as stipulated in The Circular on the Issue of Bank Loans and Interest After the Enforcement of Encouraging and Supporting Superior Enterprises from 18Pilot Cities to Annex State-Owned Enterprises in Difficulties by the People's Bank of China and departments concerned (refer to yinfa document 130-1995).

Article 22: Priority shall be given by the bank in providing circulating funds and loans for technical transformations and science and technology development to outside hi-tech enterprises which cooperate with the autonomous region's enterprises in the production of products, ancillary products, and spare-parts and enable the local enterprises to become the backbone of revenues at the autonomous regional, prefecture, or county level and to export products and earn foreign currency after the expansion of their production capacity. The interest rate of loans shall not go up for enterprises that have good economic results or export products to earn foreign currency.

Article 23: In accordance with the principle of equal priority, banks within the autonomous region shall give priority in granting loans to support cooperative projects between China's eastern and western regions, and the length of maturity shall be as long as the set limit allows. The length of maturity may be prolonged in case that the loans cannot be repaid by the set schedule. Under ordinary circumstances, the interest rate of loans shall not float upward but be handled according to the reference rate or go down within the range of 10 percent. In case that state-owned banks lacks loan quota, the People's Bank of China shall help the said banks to submit applications to the head office of the People's Bank of China for the needed loan quota, or cut down other loans to regulate loan quota for the cooperative projects between the eastern and western regions.

Article 24: The People's Bank of China shall give priority to outside enterprises participating in cooperative projects to establish shareholding system in, annex, or restructure the existing enterprises in the autonomous region in making arrangement for them to issue local enterprise bonds or giving them short-term fund-raising support.

Article 25: The Agricultural Development Bank shall favor loan granting according to the merits of outside enterprises which operate poverty-relief economic entities in the eight mountainous counties and Taole County; engage in land improvement and development in the areas for comprehensive agricultural development as stipulated by the state; support the renewal of economic forests and fruit trees and the development of name-brand, quality, and special products; or engage in deep-processing of forest products and the development of natural resources of the sandy areas in the autonomous region.

Article 26: Outside investors who come to establish joint ventures with state-approved enterprises producing articles for minority groups may enjoy preferential interest rate for the loans they borrow from the banks circulating funds according to relevant regulations, a refund of interest differential subsidization from the bank at the end of every quarter of the year to subsidize their own circulating funds.

Article 27: To provide various branches of insurance to enterprises with lateral economic ties. Insurance companies shall render various insurance services including service by special arrangement, adopt a flexible approach to insurance period and insured amount, and give preferential treatment by reducing the premium or rewarding for safety in production insight of the specific amount an enterprise insures. When handling claims by large and medium-size enterprises for disasters or accidents outside their domain, the insurance company may prepay 50 percent of the indemnity according to the extent of liabilities or an initial estimate of the losses prior to the settlement of the claims, so as to help the affected enterprises restore production as soon as possible.

Policies and regulations governing intermediary services

Article 28: Any units and individuals providing the autonomous region's productive enterprises with new techniques, new technologies, and new products or transferring scientific and technological achievements shall be entitled to a reward of 10 percent of the yearly newly-added after-tax profits from the beneficiaries for three to five years after the new techniques, new technologies, new products or scientific and technological achievements are put into production, in addition to receiving a non-recurring transfer fee from the beneficiaries according to the contracts. The beneficiaries shall give a nonrecurring bonus of 1-3percent of the yearly newly added after-tax profits to the intermediaries according to the advanced degree of the new techniques, new technologies, and scientific and technological achievements, the notability of the new products the intermediaries introduced, and the economic results of the beneficiaries. To those who cooperate with the autonomous region's enterprises in other forms and bring about good economic results, the beneficial enterprises shall give a nonrecurring bonus of 1-2 percent of the annual newly added after-tax profits.

Article 29: To those who introduce domestic and foreign funds to the autonomous region, the beneficiaries shall give a nonrecurring bonus of5-10 percent of the received amount according to the amount of funds they introduced, the actual sum received, the rate of interest, and the time of service of the funds, subject to approval by government at the corresponding level.

Article 30: To those who provide the autonomous region with sophisticated technologies and valuable information that bring about remarkable economic results to the local enterprises, the local beneficial enterprises shall give a nonrecurring bonus of 5-10 percent of the yearly newly-added after-tax profits.

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