10:26     JINGWEI TEXTILE<00350> - Announcement (3)                           

    responsible for repayment of the Loan together with payment of            
    all the related interests, penalties, damages and the Bank's              
    expenses incurred in relation to the enforcement of the Loan              
    Agreement and the Guarantee Agreement (if any), if each of                
    Hualian Building Company and Hualian Investment Company defaults          
    the repayment of the Loan and breaches the counter-indemnity              
    respectively. In such case, the Company will use internal                 
    resources of the Group to fulfill its obligation under the                
    Guarantee Agreement.                                                      
                                                                              
    BACKGROUD INFORMATION ON THE GROUP, HUALIAN BUILDING COMPANY              
    AND HUALIAN INVESTMENT COMPANY                                            
                                                                              
    The Group is principally engaged in the manufacture and sale              
    of textile machineries.                                                   
                                                                              
    Hualian Building Company, a joint stock company established in            
    the PRC and a listed company on the Shenzhen Stock Exchange,              
    is principally engaged in the operation of shopping centers and           
    chain department stores. As at the date of this announcement,             
    the entire issued share capital of Hualian Building Company was           
    owned as to approximately 29.08%, 23.66% and 21.98% by *(Beijing          
    Zhongshang Huatong Technology and                                         
    Trading Company Limited), *(Beijing                                       
    Century Guoguang Technology and Trading Company Limited) and              
    Hualian Investment Company respectively.                                  
                                                                              
    Hualian Investment Company is a limited liability company                 
    established in the PRC, whose principal business is investment            
    management and consultation.                                              
                                                                              
    The business relationship between Hualian Building Company and            
    the Company is that Hualian Building Company is a lessee of a             
    property owned by, Zhong Lian Company, 47.917% of the equity              
    interest of which was owned by the Company (such equity interest          
    was agreed to be transferred to Hualian Investment Company by             
    the Company in December 2003 and the transaction is to be                 
    completed in December 2005).                                              
                                                                              
    To the best of the Directors' knowledge, information and belief           
    having made all reasonable enquiry, each of Hualian Building              
    Company, its above-named shareholders and the Bank is an                  
    Independent Third Party to the Company.                                   
                                                                              
    GENERAL                                                                   
                                                                              
    A circular containing, among other things, further details of             
    the Guarantee Agreement will be despatched to the holders of              
    the H Shares as soon as practicable.                                      
                                                                              
    DEFINITIONS                                                               
                                                                              
    In this announcement, unless the context otherwise requires,              
    the following expressions have the following meanings:                    
                                                                              
    "A Shares"      the 203,000,000 Renminbi-denominated domestic             
    shares in the share capital of the Company, with a nominal value          
    of RMB1.00 each, which are listed on the Shenzhen Stock Exchange          
                                                                              
    "Bank"  *(Beijing City Bank Joint Stock Company                           
    Limited), the lender under the Loan Agreement                             
                                                                              
    "Company"       Jingwei Textile Machinery Company Limited, a joint        
    stock limited company established in the PRC, the A Shares and            
    H Shares of which are listed on the Shenzhen Stock Exchange and           
    the Stock Exchange respectively                                           
                                                                              
    "Counter Indemnity      a letter of counter-indemnity to the              
    Guarantee Agreement dated 25 March                                        
      Letter"       2005 and provided by Hualian Investment Company