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Underwriting of Small-and-Medium Enterprise Collective Notes

I. Introduction
A debt instrument issued by corporate entities (between 2 (inclusive) and 10 (inclusive)) in the interbank bond market under unified product design, unified title, unified credit enhancement and unified issuance/registration, where the principal and interest are repaid within a period agreed. Offering period and types of Small-and-Medium Enterprise Collective Notes ("SMECN") can be flexibly designed according to the financing needs of issuers.

II. Target Clients
Small-and-medium non-financial corporate entities established in People's Republic of China (excluding Hong Kong, Macau and Taiwan) in stable and development stage and require funding for the business.

III. Functions and Features
Small-and-medium enterprise collective notes are issued collectively. Small-and-medium enterprises ("SMEs") face difficulties if issuing debt instrument alone because of the smaller size, low credibility, difficult to obtain guarantee and high cost. Credit enhancement and compensatory mechanism in SMECN are designed to address these issues and help SMEs raise funds. Issuance of SMECN can fully utilize interbank market as one source for SMEs to raise funds. SMEs can also beef up their competitive edge and reputation in the interbank market.

IV. Advantages
1. Strong underwriting: ICBC is a Class A bond underwriting member under the Ministry of Finance, Class I trader of People's Bank of China's open market, the earliest commercial bank in China to be qualified for the underwriting of non-financial corporate debt instruments. For years ICBC has been named excellent underwriter and excellent trader by the Ministry of Finance and People's Bank of China.

2. Rich experience: ICBC has a team of professional staff experienced in bond underwriting, and a comprehensive, effective internal mechanism in place for customer service, credit risk assessment and underwriting execution.

3. Good relationship: ICBC maintains good contact with regulatory authority and good relationship with the investors. ICBC is able to underwrite SMECN as scheduled.

V. Product Price
The interest rate is determined by the offering period, issuer's credit rating and market conditions.

VI. Service Channel and Hours
Customers are welcomed to contact ICBC directly during office hours, based on own financial requirements.

VII. Steps
1. Verify: Customers must supply application documentation to ICBC required by the regulatory authority. ICBC will proceed due diligence and assess credit risk.

2. Approval: ICBC sends the application documentation to NAFMII for approval.

3. Issuance: Once approved, NAFMII will inform the customers the registration. After that, customers can choose an "Announcement date" within 2 months to announce the offer and issue the SMECN on the "offering date".

VIII. Example
In February 2010, ICBC underwrote the first small-and-medium enterprise collective note for SMEs in Shanghai Minhang.

Note: Information herein is for reference only. Refer to the announcements and regulations of local outlets for further details. Industrial and Commercial Bank of China Limited reserves the final right of interpretation.

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