Foreign invested enterprises (?FIE?) and domestic enterprises1 were subject to different income tax regulations and tax rates in China in the past. For example, as compared with domestic enterprises, FIEs generally were eligible for a lower income tax rate and more tax deductions and exemptions. With the effectiveness of the Enterprise Income Tax Law of the People?s Republic of China (?Tax Law?) and the Implementing Rules of the Enterprise Income Tax Law of the People?s Republic of China (?Implementing Rules?) (collectively referred to as the ?New Tax Laws?) as of January 1, 2008, however, the above situation has materially changed. As compared to previous tax laws, FIEs and domestic enterprises are no longer used as labels for different enterprise income tax payers, and they are now both subject to the same income tax law and same tax treatment. The following is a summary of the New Tax Laws.

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