09:18     PCCW<00008> - Announcement & Resumption of Trading (6)              

    China Netcom's strategic investment in the Company, China Netcom will     
    be able to capitalise on the Group's expertise to accelerate              
    innovations in its business management and enhance its marketing          
    expertise.                                                                
                                                                              
    GENERAL                                                                   
    The Company is the largest telecommunications provider in Hong Kong       
    and one of Asia's leading integrated communications companies. The        
    Company provides key services in the areas of: integrated                 
    telecommunications; broadband solutions; connectivity; narrowband and     
    interactive broadband (Internet services); information technology         
    solutions and services and infrastructure.                                
                                                                              
    The Board considers the terms of the Subscription Agreement and the       
    PCCW Substantial Shareholder Anti-Dilution Agreements to be fair and      
    reasonable and in the interests of the Company and the Shareholders       
    as a whole.                                                               
                                                                              
    TAKEOVERS CODE                                                            
    The SFC has confirmed that it does not consider China Netcom and the      
    Subscriber to be `acting in concert' (as such term is defined in the      
    Takeovers Code) with the PCCW Substantial Shareholders as a result of     
    the arrangements in relation to, or in connection with, the               
    Subscription as described in this announcement. As a result, none of      
    the Subscriber, China Netcom, the PCCW Substantial Shareholders or        
    their respective concert parties will be required, as a result of the     
    entering into and implementation of the Subscription Agreement, the       
    shareholders' agreements and/or the agreements relating to the            
    Anti-Dilution Rights, to make any general offer under Rules 26 of the     
    Takeovers Code.                                                           
                                                                              
    SHAREHOLDERS APPROVAL AND INDEPENDENT BOARD COMMITTEE                     
    The Directors intend to seek a specific mandate from the Independent      
    Shareholders for the issue of the Subscription Shares to the              
    Subscriber and seek the approval of the Independent Shareholders for      
    the Anti-Dilution Rights.                                                 
                                                                              
    A committee consisting of the independent non-executive directors of      
    the Company has been formed to advise the Independent Shareholders in     
    connection with the Anti-Dilution Rights. An independent financial        
    adviser will be appointed to advise this committee. The Company will      
    issue a circular to Shareholders in due course containing further         
    details of the above transactions, together with a notice convening       
    an extraordinary general meeting of the Company to approve the            
    increase of the authorised share capital of the Company, the issue of     
    the Subscription Shares and the Anti-Dilution Rights. It will include     
    the advice of an independent financial adviser provided to the            
    committee consisting of the independent non-executive directors of        
    the Company.                                                              
                                                                              
    SUSPENSION AND RESUMPTION OF TRADING                                      
    At the request of the Company, trading of the Shares was suspended        
    at 9:30 a.m. on 20 January 2005 pending the release of this               
    announcement. An application has been made to the Stock Exchange for      
    resumption of trading of the Shares with effect from 9:30 a.m. on 21      
    January 2005.                                                             
                                                                              
    This announcement is being made for information purposes only and         
    does not constitute an invitation or offer to acquire, purchase or        
    subscribe for Shares. Shareholders are advised to exercise caution        
    when dealing in the Shares.                                               
                                                                              
    DEFINITIONS                                                               
    `Anti-Dilution Rights'         anti-dilution rights granted               
                                   to China Netcom in the                     
                                   Subscription Agreement and                 
                                   the anti-dilution rights                   
                                   granted to each of the PCCW                
                                   Substantial Shareholders in                
                                   the PCCW Substantial                       
                                   Shareholders Anti-Dilution                 
                                   Agreements (in each case,                  
                                   subject to the approval of                 
                                   the Independent                            
                                   Shareholders)                              
    `associates'                   has the meaning ascribed to                
                                   it in the Listing                          
                                   Rules                                      
    `Board'                        the Board of Directors of the              
                                   Company                                    
    `China Netcom'                 China Network Communications               
                                   Group Corporation, a                       
                                   state-owned enterprise                     
                                   established under the laws of              
                                   the                                        
                                   PRC                                        
    `CNC HK'                       China Netcom Group                         
                                   Corporation (Hong Kong)                    
                                   Limited, a company                         
                                   incorporated in Hong Kong                  
                                   with limited liability and a               
                                   subsidiary of China Netcom,                
                                   the shares of which are                    
                                   listed on the Stock