Due to rumors being spread regarding 3Q 2008 losses that the company has allegedly suffered through its foreign exchange business, the following clarification is hereby disclosed:

In 1H 2008, as a result of increases in the AUD/USD exchange rate and the company's large accumulation Australian dollars stemming from ongoing projects in that country, approximately USD 1.5 bln were committed to a structured deposit, duly approved by the State Administration of Foreign Exchange Authority.

As of 30 Sept 2008, the structured deposit came due and no balance remained. As of that date however, the company still held deposits in several major foreign currencies. Notably, funds raised via H-share issues, as well as other kinds of foreign exchange capital, had not been invested in financial derivatives.

Other than RMB 907 mln raised via H-share issues which have already been allocated, the company had deposited RMB 17,238,000,000 in a dedicated account with Bank of China (Hong Kong). Net losses of remaining funds raised via H-share issues amount to the equivalent of RMB 1.94 bln. The company has taken corresponding measures to address this matter.

The company is currently operating normally, maintaining good momentum in its development and planning to announce its 3Q 2008 performance once related proposals have been approved by the board of directors.

The China Securities Journal, the Shanghai Securities News, the Securities Times, the Securities Daily and the website of the Shanghai Stock Exchange (www.sse.com.cn) are the company's designated media for information disclosure.

Board of Directors
23 Oct 2008


Source: Shanghai Stock Exchange

Date: 23 Oct 2008

CN01/CJ/JL/JE/MM