The company plans to sell 100% of the shares of ZTE Energy (Kaiman) Co. Ltd, a wholly-owned subsidiary, held by ZTE (Hong Kong) Corporation, another of the company's wholly-owned subsidiaries, to ZTE Energy Corporation, a related party of the company, for USD 4.45 mln. A proposal regarding the related-party transaction was examined and approved by the 13th Meeting of the 4th Board of Directors held on 19 Mar 2008.

On 14 May 2008 ZTE (Hong Kong) and ZTE Energy signed an agreement, according to which ZTE Energy will arrange a one-off payment of USD 4.45 mln to ZTE (Hong Kong) though a bank transfer within 7 days following approval of the transaction from the State Administration of Foreign Exchange.

As ZTE Energy (Kaiman) had a net asset value of USD 3.65 mln as of 31 Dec 2007, the company is expected to make a profit of USD 800,000 from the transaction. All proceeds gained from the transaction will be used to supplement the working capital of the company.

Board of Directors
15 May 2008

CN01/MZ/BT/GB