XII. Medical Apparatus and Instruments Industry

1. Disposable injectors, transfusion systems, blood transfusion systems
and blood bags

2. Manufacture of large medical treatment equipment such as CT, MRI and
accelerators for medical use

XIII. Shipping Industry (the Chinese part will be the holding
party or play a leading role)

1. Repairing, design and manufacture of special ships, high performance
ships and over 35,000-ton ships

2. Design and manufacture of diesel engines for ships, auxiliary
machines, wireless communication, navigation equipment and parts

XIV. Domestic and Foreign Trade, Tourism, Real Estate and Service
Industry (wholly foreign owned enterprises are not allowed)

1. Domestic commerce (the Chinese party will be the holding party or play
a leading role)

2. Foreign trade (the Chinese party will be the holding party or play a
leading role)

3. Tourist agencies

4. Cooperation school-running (with the exception of elementary education)

5. Medical establishments (the Chinese party will be the holding party or
play a leading role)

6. Accounting, audit and legal consultation services and agent company

7. Agent services (boats and ships, freight, futures, sales,
advertisement, etc.)

8. High-ranking hotels, villas, high-class office buildings, and
international exhibition centers

9. Golf links

10. Development of pieces of land

11. Large scale tourist, cultural and recreational parks and artificial
landscapes

12. Construction and management of State-ranking tourist areas

XV. Finance and Relevant Trades

1. Banks, finance companies and trust investment companies

2. Insurance companies, insurance brokerages and underwriting agent
companies

3. Bond companies, investment banks, merchant banks, fund management
companies

4. Financial lease

5. Foreign exchange brokerages

6. Financial, insurance and foreign exchange consultation

7. Production, processing, wholesales and retail of gold, silver, gems
and jewelry

XVI. Miscellaneous

1. printing, publishing and issuing business (the Chinese party will be
the holding party or play a leading role)

2. Testing, appraising and attestation business of import and export
goods (wholly foreign-owned enterprises are not allowed)

3. Production, publishing and issuing of audio and video products and
electronic publication (the Chinese party will be the holding party or
play a leading role)

XVII. Other industries restricted by the State or International
Treaties that China has concluded or take part in

I. Agriculture, Forestry, Animal Husbandry, Fishery and Related
Industries

1. Wild animal and plant resources protected by the State

2. China's rare precious breeds (including fine genes in plants industry,
husbandry and aquatic products industry)

3. Construction of animal and plant natural reserves

4. Processing of green tea and special teas (famous teas, dark tea, etc.)

II. Light Industry

1. Ivory carving and tiger-bone processing

2. Hand-made carpet

3. Bodiless lacquerware

4. Enamel products

5. Blue and white porcelain

6. xuan paper, and ingot-shaped tablets of Chinese ink

III. Power Industry and Urban Public Utility

1. Construction and management of electricity network

2. Construction and management of urban network of water supply, water
drainage, gas and heat power

IV. Exploration, Selection, or Processing of Mining Industry,
Exploration, selection, smelting or processing of radioactive
mineral products

V. Petroleum Industry, Petrochemical Industry and Chemical
Industry

1. Mining and processing of szaibelyite

2. Mining and processing of celestine

VI. Medicine Industry

1. Traditional Chinese medicines which have been listed as State
protection resources (musk, licoriceroot, etc.)

2. Preparing technique of traditional Chinese medicine in small pieces
ready for decoction and products of secret recipe of traditional Chinese
medicine already prepared

VII. Transportation and Post & Telecommunications Service

1. management of post and telecommunication business

2. Air traffic control

VIII. Trade and Finance

1. Commodity future, financial future and related fiance business

IX. Broadcasting and film Industries

1. Broadcasting stations, TV stations (networks) at various levels,
launching stations and relay stations

2. Production, publishing, issuing or showing of films

3. Video tape showing

X. Journalism

XI. Manufacturing Industry of Weapons

XII. Miscellaneous

1. Projects that endanger the safety and performance of military
facilities

2. Developing and processing of carcinogenic, teratogenic, and
mutagenesis raw materials

3. Racecourse, gambling

4. Pornographic service

XIII. Other Industry Prohibited by the State or by International
Treaties China Has Concluded or Taken Part In

Sources from the Ministry of Electronics Industry (MEI) said in order to
strengthen reform and adjustment of the State-owned electronics
enterprises, accelerate industrial restructuring and expand exports of
electronics products, MEI is determined to make efforts to solve 10 major
issues:

1. Map out a plan to pull the large and medium State-owned electronics
enterprises out of difficulties.

2. Forward the experiment of building 120 enterprise groups and promote
512 related enterprises to establish modern corporate systems.

3. Continue the strategy of forming large electronics companies and
supervising and following--up on the top 100 electronics enterprises.

4. Strengthen efforts to carry out asset restructuring, mergers and
annexations within sectors of colour Tvs and computers.

5. Fully implement the policy to regulate bankrupcy, encourage mergers,
lay off employees and enhance efficiency.

6. strengthen market research and co-ordination of production and sales
in sectors of VCD (video compact disc), Smartcard and mobile
telecommunications products.

7. Speed up construction of the sales channels of electronics production
by consolidating cooperation between the commercial sector and
enterprises.

8. Formulate a plan to adjust the industrial structure, making endeavours
to support a number of key products, pillar industries and production
bases, backbone enterprises and famous brands.

9. Continue efforts in pushing forward "gold" series projects, 909
project and "Double Plus" project.

10. Make public the latest developments in marketing and products in both
home and foreign markets.

MEI has also made public the 10 major goals the ministry is projected to
reach in 1998.

* Total industrial output 460 billion yuan (US$ 55.42 billion), up 22 per
cent from 1997.

*Increase in industrial output --70 billion yuan (US$ 8.43 billion), up
14.8 per cent from 1997.

*Profits --2 billion yuan (US$ 36.14 billion), up 25 per cent from 1997.

*Export volume US$30 billion, up 20 per cent from 1997.

*Computerized switch machines-18 million lines, with 1 million exported.

*Computers--2.6 million units, with 400,000 units exported.

*Colour Tvs-24 million sets, with 5 million sets exported.

*Video tape recorders -2.5 million sets, with 1.8 million exported.

*Integrated circuits-1.6 billion sets, with 1 billion large and medium
circuits.

Technical innovation is expected to become a key force in boosting
China's onshore oil development and exploration in the next three years.

The China National Petroleum Crop (CNPC), which produces 90 per cent of
the country's oil, has drawn up a plan to under take scientific and
technical progress to increase oil output in 1998.

"It always tops our agenda to accelerate exploration by applying more
advanced technology," said a company official.

CNPC will introduce advanced technology, especially three-dimensional
seismic technology, to promote oil exploration.

The Tarim Basin will be the main focus, the official said.

The 560,000--square-kilometer basin, the largest in China, is thought to
be the last large oil bearing basin to be developed in the world.

According to the second national oil and gas resource assessment
conducted by CNPC, the basin has 10.8 billion tons of oil reserves and
8,400 billion cubic metres of natural gas, or one seventh of the
country's oil and one-quarter of its natural gas.

To date, major oilfields have not been found in the basin because of its
extremely complicated geological conditions.

Other western basins, including Qaidam, Jungar, Turpan-Hami and Karamay,
are also listing their priorities in the new round of large-scale
exploration, the official said.

Thanks to broad technical applications, a string of break-throughs has
been achieved in exploration, especially in western China, the official
said.

In 1997, newly proven reserves and controlled reserves totaled 1.8
billion tons of oil equivalent, the highest in recent years.

Ten large oil fields, with reserves of over 100 million tons each, have
been verified this year. Eight of them are located in the west.

The Tarim Basin, where important discoveries have been made in its Bachu,
Tazhong, Lunnan and Kudong regions, was in the spotlight in 1997.

Technical progress is also playing a significant role in enhancing oil
output. CNPC has successfully been using technology to control water to
stabilize output of China's eastern high-water-bearing oilfields for a
long time.

Other advanced technology, such as polymer flooding, has attained
industrial production levels.

Thanks to these advanced technologies, Daqing Oilfield has maintained its
annual output of over 50 million tons of oil for 22 years.

Several new production technologies based on polymer flooding, named
tertiary oil recovery, helped Daqing increase oil output last year by 2.7
million tons more than in 1996.

In total, CNPC pumped 143.2 million tons of crude oil and 17.17 billion
cubic metres of natural gas in 1997, 1.8 million tons and 730 million
cubic metres more over its 1996 output.

CNPC also gained 970,000 tons of crude oil from its overseas projects
last year.

The Chinese Academy of Sciences (CAS) has signed an agreement with the
Sate Statistics Bureau to do a comprehensive survey on land resources of
the whole country, according to news released yesterday from the opening
of a CAS conference.

CAS will also start a pollution reduction project on cleaning Dianchi
Lake in Yunan Province by using biological engineering. The Yunnan
government is assisting.

These are two of the several major science projects that CAS, by taking
advantage of its strength of science and technology research personnel
and facilities, will carry out this year.

The projects, in turn, will enable the academy to meet national
requirements in the coming new century.

"The Chinese Academy of Sciences is aiming to progress as a national
science research team onto the world level," said Lu Yongxing, academy
president, in the opening speech of the meeting.

He said CAS will continue to play an important role in scientific
research as the country's highest level research academy and will develop
as one of the most effective consultative systems on scientific and
technological development in China.

The academy will continue to set up and improve the country's first-level
bases fro natural science research and studies to solve key problems for
sustainable development and public welfare.

CAS will encourage scientists to focus on basic, strategic and frontier
studies related to social and economic development, Lu said.

The academy will also strive to become a centre to explore new areas of
science and technology for China, he said.

CAS is building internal networks for the country's scientific
development.

All the facilities and personnel will be the best in China, Lu said.

The system to manage the research projects should become more
competitive, he said. the whole organization will be flexible to meet the
changes of national requirements and world's science development.

Lu said the trend of scientific development in the world will change from
the mathematics and physics as a core to be more synthetic and
cross-disciplinary, linking many frontier subjects-life science,
information technology, medicine and biology, new materials, and energy
and environmental sciences.