09:07     GZITIC HUALING<00382> - Announcement                                

                                                                              
    This announcement is for information only and does not constitute an      
    invitation or offer to sell, acquire, purchase or subscribe for           
    securities.                                                               
                                                                              
    The Stock Exchange of Hong Kong Limited takes no responsibility for       
    the contents of this announcement, makes no representation as to its      
    accuracy or completeness and expressly disclaims any liability            
    whatsoever for any loss howsoever arising from or in reliance upon        
    the whole or any part of the contents of this announcement.               
                                                                              
    GZITIC Hualing Holdings Limited                                           
    (incorporated in Hong Kong with limited liability)                        
                                                                              
    ANNOUNCEMENT                                                              
    PROGRESS OF THE POSSIBLE SALE                                             
                                                                              
    Reference is made to the announcements of the Company dated               
    25th October, 2002, 29th November, 2002 and 23rd December 2002            
    respectively in relation to the progress of a possible sale of part       
    of the controlling interest in the Company by the GZITIC Parties to       
    the Purchaser. This announcement updates on the progress of the           
    possible sale.                                                            
                                                                              
    Investors should be aware that the contemplated transaction may or        
    may not be consummated and is subject to due diligence and further        
    negotiations on terms and conditions, including with respect to           
    price. Therefore, investors are advised to exercise caution when          
    dealing in the shares of the Company.                                     
                                                                              
    Reference is made to the announcements of the Company dated 25th          
    October, 2002, 29th November, 2002 and 23rd December 2002                 
    respectively in relation to the progress of a possible sale of part       
    of the controlling interest in the Company by the GZITIC Parties to       
    the Purchaser. Unless otherwise defined, capitalised terms used in        
    this announcement shall have the same meanings as defined in the          
    announcement dated 25 October, 2002.                                      
                                                                              
    Pursuant to the terms of the MOU, the GZITIC Parties and the              
    Purchaser agreed to negotiate in good faith on the Sale Agreement as      
    promptly as possible. Currently, the parties are still negotiating on     
    the terms of the Sale Agreement and have not entered into any Sale        
    Agreement. The due diligence exercise conducted by the Purchaser on       
    the Company was completed on 6th January 2003. While the parties          
    still show an interest to proceed with the possible sale and are          
    still continuing the negotiations, the contemplated transaction may       
    or may not be consummated. As regards the exclusivity arrangements        
    under the MOU as referred to in the announcement dated 25th October       
    2002, the exclusivity period expired on 1st January 2003 and have not     
    been extended by the parties. Accordingly, both the GZITIC Parties        
    and the Purchaser are free to negotiate and enter into transactions       
    similar to the possible sale with other parties.                          
                                                                              
    Investors should be aware that the contemplated transaction may or        
    may not be consummated and is subject to due diligence and further        
    negotiations on terms and conditions, including with respect to           
    price. At this stage, it is not certain whether a general offer for       
    shares in the Company will or will not be made. Therefore, investors      
    are advised to exercise caution when dealing in the shares of the         
    Company.                                                                  
                                                                              
    The Directors have been advised by GZITIC that no further material        
    information is available at this stage and that GZITIC will inform        
    them of any further material development of the negotiations with the     
    Purchaser.                                                                
                                                                              
                                                                              
    By Order of the Board                                                     
    Chen Xiao-shi                                                             
    Chairman                                                                  
                                                                              
    Hong Kong, 23rd January, 2003                                             
                                                                              
    The Directors jointly and severally accept full responsibility for        
    the accuracy of the information contained in this announcement and        
    confirm, having made all reasonable enquiries, that to the best of        
    their knowledge, opinions expressed in this announcement have been        
    arrived at after due and careful consideration and there are no other     
    facts not contained in this announcement, the omission of which would     
    make any statement in this announcement misleading.