Conformed Copy - C3271 - Enterprise Reform Project - Supplemental Letter 1

Page 1 PEOPLE’S REPUBLIC OF CHINA ENTERPRISE REFORM PROJECT December 30, 1999 International Development Association 1818 H Street NW Washington D.C. 20433 Re: Credit No. 3271 CHA (Enterprise Reform Project) Performance Indicators Ladies and Gentlemen: We refer to the Development Credit Agreement of even date herewith between the People’s Republic of China (the Borrower) and the International Development Association (the Association) for an Enterprise Reform Project (the Project). For purposes of Paragraph 5(a) of Schedule 5 to the Development Credit Agreement, the Borrower will cause the Project Cities to monitor and evaluate the carrying out of the Project and the achievement of the Project’s objectives, all in accordance with the indicators set forth in the Annex to this letter. Please confirm your agreement to the foregoing by signing the form of confirmation in the space provided below. Sincerely yours, PEOPLE’S REPBULIC OF CHINA By /s/ Zhu Guangyao Authorized Representative CONFIRMED: INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Yukon Huang Authorized Representative