11:09     CHINA UNICOM<00762> - Announcement (3)                              

    (A)                                                                       
    New CDMA Lease                                                            
    (i)                                                                       
    Pursuant to an agreement dated 24 March 2005 (the New CDMA Lease),        
    on the basis that the A Share Company has the right to transfer its       
    rights and obligations to the New Operating Entity, Unicom New            
    Horizon has agreed to lease all the constructed Capacity under its        
    CDMA Network to the A Share Company. Completion of the agreement is       
    subject to, inter alia, the approval of the independent shareholders      
    of the A Share Company. The agreement provides for an initial term of     
    two years commencing from 1 January 2005.                                 
                                                                              
    (ii)                                                                      
    Pursuant to a transfer agreement dated 24 March 2005, the A Share         
    Company has agreed to transfer all of its rights and obligations          
    under the New CDMA Lease to the New Operating Entity. Under the           
    transfer agreement, the A Share Company will cease to be a party to       
    the New CDMA Lease and the New Operating Entity will replace the A        
    Share Company as a party to the New CDMA Lease. Following the             
    transfer, the New Operating Entity will exercise and enjoy all the        
    rights of the A Share Company arising under the New CDMA Lease in         
    substitution of the A Share Company as if the New Operating Entity        
    had at all times been a party to the New CDMA Lease. Completion of        
    the transfer agreement is subject to, inter alia, Independent             
    Shareholders' approval.                                                   
                                                                              
    Background                                                                
    Unicom Group is the only carrier licensed by the MII to offer CDMA        
    cellular services in China. Unicom New Horizon, a wholly-owned            
    subsidiary of Unicom Group, is responsible for the construction of        
    the CDMA Network within the PRC and owns the nationwide CDMA Network      
    in the PRC. The Group has been leasing from Unicom New Horizon the        
    CDMA Network Capacity in the Twelve Provinces and Municipalities, the     
    9A Areas and the 9B Areas pursuant to the Old CDMA Leases since 2002      
    in stages.                                                                
                                                                              
    Term of the New CDMA Lease                                                
    The New CDMA Lease has an initial term of two years (the Initial          
    Term) and, subject to the fulfilment of the following conditions          
    precedent, takes effect from 1 January 2005. The New CDMA Lease may       
    be renewed at the option of the New Operating Entity. The length of       
    the renewed term (each an Additional Term) shall be agreed by all         
    parties to the New CDMA Lease.                                            
                                                                              
    Conditions precedent of the New CDMA Lease                                
    The New CDMA Lease is conditional upon, among others, the following       
    conditions precedent:                                                     
                                                                              
    (a)                                                                       
    the passing of resolutions by the independent shareholders of the A       
    Share Company at the A Share Company's general meeting approving the      
    New CDMA Lease;                                                           
                                                                              
    (b)                                                                       
    the passing of resolutions by the Independent Shareholders at the         
    Company's general meeting approving the transfer agreement relating       
    to the New CDMA Lease; and                                                
                                                                              
    (c)                                                                       
    all other conditions precedent contained in the transfer agreement        
    relating to the New CDMA Lease having been fulfilled (or waived).         
                                                                              
    Exclusive operating rights                                                
    All parties to the New CDMA Lease have agreed that the New Operating      
    Entity shall have the exclusive rights to provide CDMA services in        
    the Twelve Provinces and Municipalities, the 9A Areas and the 9B          
    Areas. All operating revenue, including airtime charges, monthly          
    subscription fees, interconnection charges, income from sales of UIM      
    cards and handsets and other income generated from or in connection       
    with the operation of the CDMA Network shall belong to the New            
    Operating Entity.                                                         
                                                                              
    Capacity                                                                  
    Unicom New Horizon has agreed to lease all constructed Capacity of        
    its CDMA Network to the New Operating Entity pursuant to the terms of     
    the New CDMA Lease.                                                       
                                                                              
    Lease Fee                                                                 
    Pursuant to the New CDMA Lease, the lease fee of the CDMA Network         
    shall be as follows:                                                      
                                                                              
    (a)                                                                       
    in 2005, 29% of the audited CDMA business income of the New               
    Operating Entity for that year;                                           
                                                                              
    (b)                                                                       
    in 2006, 30% of the audited CDMA business income of the New               
    Operating Entity for that year,                                           
                                                                              
    provided that the annual lease fee of the CDMA Network shall not be       
    less than a certain minimum level (the Minimum Lease Fee) regardless      
    of the amount of CDMA business income for that year. The Minimum          
    Lease Fee for 2005 shall be 90% of the total amount of lease fee paid     
    by the Group to Unicom New Horizon pursuant to the Old CDMA Leases