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Adjustment of the Standard of Social Security Payment

Shanghai Human Resources and Social Security Bureau issued the New Standard of Social Security Payment in Shanghai (the “New Standard”) on March 31, 2011. The New Standard has come into effect on April 1, 2011 and will expire on March 31, 2012.

The New Standard increases the payment base (the “Base”), which refers to the number used to calculate the amount of the social security payments.

The new standard regarding the upper limit and the lower limit of the Base are summarized as follows:

Urban Insurance Small Town Insurance Comprehensive Insurance
Base The actual salary of the employee (However, the upper limit is RMB 11,688 and the lower limit is RMB 2,338.) RMB 2,338 RMB 2,338
Cost Employee: 11% of the Base Employer: 37% of the Base Employer: 25% of the Base, namely RMB 585. Employer: 12.5% of the Base, namely RMB 293.

The amount of the social security payment shall be a percentage of the Base. Since the Base is increased every year, the social security payment will be increased accordingly.