1. According to China Anti-Monopoly Law, we need the following information in order to evaluate whether a deal reaches the threshold of concentration filing in China:

a. The worldwide turnovers of the two parties.

To evaluate whether a certain concentration triggers anti-monopoly review, China’s authority looks at all turnover figures of all concentrating parties, regardless of spheres of business those turnovers are derived from. The only exception is that where the concentration involves asset acquisition, the turnover calculation for the seller refers to the turnover specific to the concentration.

b. The turnovers of the two parties within Chinese territory.

c. The worldwide turnovers of other companies directly or indirectly controlled by (we will explain the concept of “control” in the following section) the two parties. Again, the turnovers are not limited to the services involved in the deal

.

d. The nationwide turnovers in China of other companies directly or indirectly controlled by the two parties. Again, the turnovers are NOT limited to cargo services. “Turnovers in China” pertains to turnovers earned from within the territory of mainland China, regardless the nationality of the customers.

e. The worldwide turnovers of the two parties.

f. The nationwide turnovers of the parties in China. For the purpose of concentration filing, “turnovers in China” pertains to turnovers earned from within the territory of mainland China, regardless the nationality of the customers.

g. The worldwide turnovers of other companies directly or indirectly controlled by the two parties.

h. The nationwide turnovers of other companies controlled by the two parties. Again, the “turnovers in China” pertains to turnovers earned from within the territory of mainland China, regardless the nationality of the customers.

2. We will now try to explain the definition of several key concepts necessary for a proper understanding of concentration filing.

a. Control exists in the following circumstances:

ØA holds over 50% shares of B with voting rights or assets; or

ØEven if A holds less than 50% shares or assets of B, but A, by virtue of equity or asset purchase, or through contractual arrangement, has the right to decide one or more than one member(s) of B’s board of directors, other key executives, financial budget, selling and marketing, price, important investment or other important strategies concerning management and operation.

b. Turnover is the income of the preceding fiscal year from selling products and offering services, deducted by all taxes except business income tax and value added taxes.