To the Finance Departments (Bureaus) of all provinces, autonomous regions, and municipalities directly under the central government:

To standardize asset valuation fee practices, safeguard the public interest and the legitimate rights and interests of all parties involved, and promote the healthy development of the asset valuation industry, the National Development and Reform Commission and the Ministry of Finance have jointly issued the “Measures for the Administration of Asset Valuation Fees” (NDRC Price [2009] No. 2914), which introduces significant reforms to the existing asset valuation fee system. To ensure the effective implementation of the “Measures for the Administration of Asset Valuation Fees” and to carry out the reform of the asset valuation fee system smoothly, we hereby issue the following notice on related matters:

First, we must achieve a unified understanding and attach great importance to this issue. The matter of asset valuation fees not only affects the level of compensation for the service costs incurred by valuation agencies but also impacts the economic interests of the relevant parties, and is closely linked to the establishment and improvement of an anti-corruption system in the economic sphere. Standardizing the fee-charging practices of asset valuation agencies and perfecting the related management systems are crucial safeguards for the healthy and orderly development of the asset valuation industry.

The newly released “Administrative Measures for Asset Valuation Fees” will take effect from January 1, 2010. The current asset valuation fee system, jointly formulated in 1992 by the former State Price Bureau and the former State Administration of State-owned Assets, will soon be abolished. By the end of December 2009, if local authorities have not publicly announced the newly revised asset valuation fee measures and fee standards, asset valuation fees will fall into a regulatory vacuum. Therefore, provincial-level financial departments must attach great importance to the reform of the asset valuation fee system and earnestly carry out all preparatory work for the implementation of the “Administrative Measures for Asset Valuation Fees.”

II. Master the content and advance reform. Each provincial-level financial department should thoroughly grasp the content and requirements of the reform of the asset valuation fee system. The “Administrative Measures for Asset Valuation Fees” has introduced significant reforms to the existing asset valuation fee system, primarily including:

(1) Adjust the single fee structure by introducing both government-guided prices and market-regulated prices for asset valuation fees.

(2) Adjust the basis for calculating assessment fees by abolishing the practice of using the asset valuation result as the standard for determining assessment fees. Instead, adopt a fee structure that combines piece-rate billing, hourly billing, or a combination of both.

(3) The practice of setting only an upper limit without specifying a lower limit for fees has been adjusted. For statutory asset valuation services subject to government-guided pricing, a benchmark price will be established, along with fee standards that can fluctuate up or down within a specified range.

(4) Based on the development of the socio-economic and appraisal industries, the various factors that should be considered in determining asset appraisal fees have been clarified.

III. Clarify tasks and focus on practical results. Each provincial-level financial department should, as soon as possible and in light of local conditions, comprehensively review all policies related to asset valuation fees by the end of December 2009. They should carefully study and propose asset valuation fee methods and fee standards specific to their respective regions. By strengthening institutional norms, they should make concerted efforts to address the prominent issue of arbitrary price-cutting and vicious competition currently plaguing the asset valuation industry, and, in accordance with regulations, consult with their counterparts in the price administration authorities at the same level to formulate these measures.

When studying and proposing the benchmark price for statutory asset valuation service fees as well as their upper and lower fluctuation ranges, one shall comply with the requirements of Articles 6, 7, and 9 of the “Administrative Measures for Asset Valuation Fees,” while also paying attention to the following matters:

(1) Assessment fees should be commensurate with the quality of assessment services provided, as well as the economic responsibilities borne by the assessment institution and the assessment personnel.

(2) Reasonably reflect the value of asset valuation work, ensure that the costs incurred by asset valuation agencies in providing services are compensated, and facilitate the recruitment and development of high-quality valuation professionals.

(3) Take into account, where appropriate, the differences between securities valuation services and ordinary valuation services. Securities valuation fees should be commensurate with the social impact, complexity, service requirements, and practice costs associated with securities valuation work.

(4) Take into account the objective need for practicing across regions and assess the homogeneous requirements of business operations in different regions, paying attention to the alignment of differing price levels among regions.

4. Strengthen leadership and ensure coordinated division of responsibilities. Each provincial-level financial department should reinforce organizational leadership over the reform of the asset valuation fee system. When formulating opinions on local asset valuation fee methods and fee standards, they should conduct thorough investigations and research and fully solicit input from provincial asset valuation associations and local asset valuation agencies. Each provincial-level asset valuation association should actively cooperate with the financial departments in carrying out the reform of the asset valuation fee system, fully leverage its role in industry supervision, and promptly provide the financial departments with the foundational data required for their research. Regarding the implementation of the “Administrative Measures for Asset Valuation Fees,” we must strengthen supervision and inspection, establish a daily regulatory system, and report any issues to our ministry in a timely manner.

Ministry of Finance

December 4, 2009