11:09     CHINA UNICOM<00762> - Announcement (2)                              

    of the Company under the Hong Kong Listing Rules. Therefore, the          
    transactions aforementioned constitute continuing connected               
    transactions for the Company under the Hong Kong Listing Rules.           
                                                                              
    China International Capital Corporation (Hong Kong) Limited and           
    Morgan Stanley Dean Witter Asia Limited are the financial advisers to     
    the Company in respect of the Continuing Connected Transactions.          
                                                                              
    An Independent Board Committee has been established to advise the         
    Independent Shareholders as to the terms of the the New Agreements        
    and the caps on the relevant Continuing Connected Transactions.           
    Lehman Brothers was appointed as the Independent Financial Adviser to     
    the Independent Board Committee.                                          
                                                                              
    2.                                                                        
    Details of the 2-Step Approach                                            
    To address the particular concern arising from the A Share Company's      
    rights to participate in, or otherwise exercise influence over, the       
    approval of the Company's connected transactions, the Company has         
    confirmed to the Hong Kong Stock Exchange that the Company's              
    connected transactions that require the approval of the Independent       
    Shareholders are to be carried out using the 2-Step Approach, under       
    which a relevant connected transaction will be structured to consist      
    of an initial agreement and a further agreement, as follows:              
                                                                              
    (1)                                                                       
    the entering into of an initial agreement (the Initial Agreement) in      
    connection with the relevant connected transaction between Unicom         
    Group or its subsidiaries (not including the A Share Company or any       
    of its subsidiaries) and the A Share Company. The Initial Agreement       
    will constitute a connected transaction of the A Share Company but        
    not of the Company. The Initial Agreement will contain the following      
    terms:                                                                    
                                                                              
    (i)                                                                       
    completion of the Initial Agreement will be subject to the following      
    conditions:                                                               
                                                                              
    -                                                                         
    the successful transfer of all rights and obligations of the A Share      
    Company under the Initial Agreement to the Company or its                 
    subsidiaries; and                                                         
                                                                              
    -                                                                         
    the approval of Independent Shareholders of the Further Agreement         
    (as defined below).                                                       
                                                                              
    The Initial Agreement would therefore only be implemented with the        
    approval of the Independent Shareholders (in addition to the approval     
    of the A Share Company's independent shareholders).                       
                                                                              
    (ii)                                                                      
    Unicom Group or its subsidiaries (not including the A Share Company       
    or any of its subsidiaries) will agree and acknowledge in the Initial     
    Agreement that all the rights and obligations under the Initial           
    Agreement can be transferred to the Company or its subsidiaries and       
    no further consent from Unicom Group or its subsidiaries for such         
    transfer is required; and                                                 
                                                                              
    (2)                                                                       
    the entering into of a further agreement between the A Share Company      
    and the Company or its subsidiaries (the Further Agreement) to            
    transfer all the rights and obligations of the A Share Company under      
    the Initial Agreement to the Company or its subsidiaries. The Further     
    Agreement will constitute a connected transaction of the Company          
    under the Hong Kong Listing Rules, but not a connected transaction of     
    the A Share Company requiring independent shareholders' approval          
    under PRC laws and regulations and listing rules of the Shanghai          
    Stock Exchange.                                                           
                                                                              
    The Further Agreement, being a connected transaction of the Company,      
    will be submitted to the Independent Shareholders for approval at the     
    same time as the Initial Agreement is submitted to the independent        
    shareholders of the A Share Company for approval.                         
                                                                              
    The Company expects, insofar as the nature of a particular connected      
    transaction allows, the 2-Step Approach to apply as described above.      
    The New Agreements, other than the New Guoxin Premises Leasing            
    Agreement, have adopted the 2-Step Approach as described above.           
                                                                              
    However, there may be circumstances where the nature of the               
    connected transaction requires the application of the 2-Step Approach     
    to be adjusted. This may arise where the Group is the provider,           
    rather than recipient, of certain services. In this event, the 2-Step     
    Approach will need to be adjusted so that the process as described        
    above is effectively reversed, such that the Initial Agreement is         
    entered into by the Group rather than Unicom Group with the A Share       
    Company. Unicom Group, rather than the Group, will be party to the        
    Further Agreement. The arrangements (including the conditions) will       
    apply correspondingly. The New Guoxin Premises Leasing Agreement has      
    adopted this adjusted 2-Step Approach.                                    
                                                                              
    3.                                                                        
    Information on Continuing Connected Transactions