09:08     CITIC 21CN<00241> - Announcement & Resumption of Trading (5)        

    shareholder composition represents access to                              
    telecommunication infrastructure of China Telecom,                        
    database and software development expertise of CITIC                      
    21CN and AQSIQ's existing nationwide databank of                          
    product information being collected through its                           
    routine product quality check. The Directors believe                      
    the Company would not have entered into the JV                            
    Agreement without the participation of AQSIQ given                        
    AQSIQ's importance to the operation of the JV Company                     
    as disclosed in the paragraph titled, "Advancement                        
    of capital on behalf of AQSIQ".                                           
                                                                              
    Forgeries have long been considered as a factor                           
    discouraging Chinese and foreign corporations to                          
    invest in their products' research and development                        
    in the PRC. Brand strategy has been a distant concern                     
    to many corporations operating in the PRC because the                     
    consumers will have no reference to be assured whether                    
    what they buy is genuine.                                                 
                                                                              
    In Quality Supervision Platform, every product coming                     
    through will be given a unique code while the                             
    logistics information of such product will be                             
    constantly fed back to a centralised database. The                        
    information of a product's specifications as well as                      
    its logistics record will form a reference on whether                     
    a product is genuine. A consumer who is in doubt of                       
    a product can authenticate it through various                             
    telecommunication channels such as mobile phone,                          
    fixed line phone or internet.                                             
                                                                              
    It is currently intended that consumers will be                           
    charged for their enquiries and the manufacturers                         
    charged for data management, the assignment of the                        
    unique codes and possibly a membership fee. The                           
    Directors believe Quality Supervision Platform will                       
    be met with strong demand from the consumers and                          
    manufacturers alike due to the rampant forgeries in                       
    the PRC. AQSIQ statistics showed that four out of                         
    every 100 items bought by the consumers in China led                      
    to a forgery related complaint in 2003.                                   
                                                                              
    As a new business venture, the JV Company will operate                    
    independently from the Company. Financially, the                          
    Directors are of the view that the formation of the                       
    JV Company will further expand the Group's revenue                        
    base and enhance the Group's profitability.                               
                                                                              
    SUSPENSION AND RESUMPTION OF TRADING IN THE SHARES                        
    Trading in the shares in CITIC 21CN on the Stock                          
    Exchange was suspended at the request of the Company                      
    with effect from 2:30 p.m. on 17 January 2005 pending                     
    the release of this announcement, which the Directors                     
    believe is price sensitive. Application has been made                     
    by the Company for the resumption of trading in its                       
    shares with effect from 9:30 a.m. on 24 January 2005.                     
                                                                              
    INFORMATION ON THE COMPANY                                                
    The Company is an investment holding company. The                         
    principal activities of the Company and its                               
    subsidiaries are telecommunications value-added                           
    services, system integration and software                                 
    development.                                                              
                                                                              
    GENERAL                                                                   
    Based on the potential contribution of the JV Company                     
    to the Company and the significance of China Telecom                      
    and AQSIQ to the operation of the JV Company as                           
    described in this announcement, the Board is of the                       
    view that the terms of the JV Agreement and the other                     
    agreement (including the advancement of capital on                        
    behalf of AQSIQ) and undertaking disclosed above are                      
    fair and reasonable and of