Dida Inc. — Proxy Solicitation & Information Statement 2004

Jun 23, 2004

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt about this circular, you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in China Shipping Development Company Limited, you should at once hand this circular and the enclosed proxy form to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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CHINA SHIPPING DEVELOPMENT COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1138)

PROPOSAL FOR THE ISSUE OF BONDS CONVERTIBLE INTO NEW A SHARES OF THE COMPANY

PROPOSED APPOINTMENT OF NEW EXECUTIVE DIRECTOR

A notice convening an extraordinary general meeting (“ EGM ”) of China Shipping Development Company Limited (“ Company ”) to be convened and held at at 10:30 a.m. on Tuesday 17 August 2004 at Room 319, 700 Dong Da Ming Road, Shanghai, the People’s Republic of China is set out on pages 9 to 11 of this circular. Whether or not you are able to attend the above meeting, please complete and return the enclosed proxy form in accordance with the instructions printed thereon as soon as practicable and in any event by not less than 24 hours before the time appointed for the holding the meeting. Completion and return of the proxy form will not preclude you from attending and voting in person at the meeting or at any adjourned meeting should you so wish.

23 June 2004

LETTER FROM THE CHAIRMAN

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CHINA SHIPPING DEVELOPMENT COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 1138)

Executive Directors: Li Shaode (Chairman) Sun Zhitang Wang Daxiong Yan Mingqi Yao Zuozhi

Independent Non-Executive Directors: Xie Rong Hu Hongguo Zhou Zhanqun

Registered Office: 168 Yuanshen Road Shanghai The PRC Principal place of business: 39th Floor Gloucester Tower The Landmark 11 Pedder Street Central Hong Kong 23 June 2004

To the shareholders of the Company (“ Shareholders ”)

Dear Sir/Madam,

PROPOSAL FOR THE ISSUE OF BONDS CONVERTIBLE INTO NEW A SHARES OF THE COMPANY

PROPOSED APPOINTMENT OF NEW EXECUTIVE DIRECTOR

1. INTRODUCTION

On 18 June 2004, the board (“ Board ”) of directors (“ Directors ”) of the Company announced the proposal of the Company to issue RMB 2 billion (approximately HK$1,869,158,879) in principal amount of bonds convertible into new A shares of nominal value of RMB1 each (“ A Shares ”) of the Company (“ Convertible Bonds ”). The Convertible Bonds are proposed to be in the form of RMB-denominated convertible bonds. An application is expected to be made to have the Convertible Bonds listed on the Shanghai Stock Exchange. The Convertible Bonds are expected to be offered to legal and natural persons in the People’s Republic of China (“ PRC ”) (save for those who are prohibited by PRC laws, rules and/or regulations from subscribing for them (for the avoidance of doubt, institutional investors as approved by CSRC (as defined below) may also subscribe for the Convertible Bonds) and excluding for this purpose, the Hong Kong Special Administrative Region

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LETTER FROM THE CHAIRMAN

(“ Hong Kong ”), Taiwan and the Macau Special Administrative Region (“ Macau ”)), who are not connected persons of the Company as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“ Listing Rules ”), and the existing shareholders of A Shares will be entitled to a priority right to subscribe for the Convertible Bonds, by virtue of and in proportion to their A Shareholdings. There will be a public offering of the Convertible Bonds in the PRC only. No offering document in respect of the Convertible Bonds will be issued or circulated in Hong Kong or to any member of the public in Hong Kong.

The proposed issue of the Convertible Bonds (“ Bonds Issue ”) will be conditional on, amongst other things, (a) the obtaining of approval of the shareholders of the Company at the EGM; (b) the obtaining of the relevant approvals from the China Securities and Regulatory Commission (“ CSRC ”); (c) the granting of approval for the listing of the Convertible Bonds on the Shanghai Stock Exchange; and (d) the granting by the Shanghai Stock Exchange of approval for the listing of and permission to deal in the new A Shares to be issued upon conversion (if any) of the Convertible Bonds.

The purpose of this circular is to provide you with information regarding (a) the Bonds Issue as well as the recommendation of the Board in relation thereto; and (b) Mr. Wong Kunhe, the candidate nominated for appointment as an executive Director.

2. SUMMARY OF THE PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSED BONDS ISSUE

The current proposed principal terms and conditions of the Bonds Issue are summarized as follows (such terms and conditions will have to be approved by CSRC and be finalised in the relevant offering memorandum):

Total issuing amount: RMB 2 billion Bond maturity: 5 years Issue price: According to the par value of the Convertible Bonds Coupon rate: Fixed rate with interests being paid annually. The range of interest rates is preliminarily estimated to be between 1.0% to 2.7% per annum, with the upper limit being subject to any adjustment of the bank deposit interest rate of the People’s Bank of China. The actual interest rate will be determined by the Board as authorized by the shareholders of the Company in a general meeting after consultation with the lead underwriter and in accordance with state policies, market conditions and the requirements of the Company.

Interest and principal The interest will be paid annually. The principal will be repayment (prior to repaid together with the last installment of interest, after the conversion or redemption): fifth anniversary of the issue of the Convertible Bonds, in accordance with the repayment procedure set out in the relevant offering memorandum.

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LETTER FROM THE CHAIRMAN

Conversion price:

The initial conversion price of the Convertible Bonds will be the arithmetic mean of the closing prices of the A Shares for the 30 trading days immediately before the issue of the relevant offering memorandum, with an upward margin of 0.1% to 10% and rounded up to cents.

Conversion price will be subject to adjustment in the event of: bonus issues of shares, conversion of common reserve into share capital, issue or placing of new shares, division of the Company, merger or capital reduction and other events which would have an impact on the capital structure of or shareholders’ interests in the Company.

During the conversion period of the Convertible Bonds, in the event that the closing prices of the A Shares for at least 20 trading days out of any 30 consecutive trading days are lower than 90% of the then conversion price, the Board is entitled to make downward adjustment of not more than 10% of the conversion price, provided that the adjusted conversion price shall not be lower than the higher of the arithmetic mean of the closing prices of the A Shares for the 20 trading days immediately before the meeting of the Board held to consider and approve any said conversion price adjustment and the audited net asset value per share as at the end of the most recent accounting year. In the event that the downward adjustment of the conversion price is more than 10% of the then conversion price, the Board shall put forward the same adjustment in a resolution for the shareholders of the Company to consider and if though fit, approve in a general meeting, subject to the aforementioned proviso for the adjusted conversion price.

Conversion mechanism:

Conversion period:

Applications to convert to A Shares may be made by the holders of the Convertible Bonds at any time in accordance with the conditions set out in the relevant offering memorandum at the conversion price then effective during the conversion period where processing of the conversion applications are not suspended. Holders of the Convertible Bonds may convert all or part of the Convertible Bonds. At any time from and including the day immediately after the expiry of the six months period commencing from the issue of the Convertible Bonds, up to and including the fifth aniversary of the issue of the Convertible Bonds.

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LETTER FROM THE CHAIRMAN

Redemption at the option of the Company:

Redemption at the option of the holders of the Convertible Bonds:

During the conversion period of the Convertible Bonds, in the event that the closing prices of the A Shares in any 30 consecutive trading days shall be higher than 130% of the then conversion price, the Company shall be entitled to redeem all or part of the Convertible Bonds then outstanding, immediately following the expiry of the aforementioned 30 consecutive trading days period, in accordance with the specified redemption procedure, at the nominal value of the Convertible Bonds (together with accrued interest).

During the conversion period of the Convertible Bonds, in the event that the closing prices of the A Shares in any 30 consecutive trading days shall be lower than 80% of the then conversion price, the holders of the Convertible Bonds may require the Company to redeem all or part of the Convertible Bonds held by them as at the redemption date (as set out in the relevant redemption notice) at 103% of the nominal values of the Convertible Bonds (together with accrued interest).

If the shareholders of the Company approve a change in the use of proceeds from the issue of the Convertible Bonds or CSRC deems that there has been a change in the use of the same proceeds, the holders of the Convertible Bonds may require the Company to redeem all or part of the Convertible Bonds held by them at 102% of the nominal values of the Convertible Bonds (together with accrued interest).

During the period between the 59th and the 60th month, commencing from the date of issue of the Convertible Bonds, the holders of the Convertible Bonds may require the Company to redeem all or part of the Convertible Bonds held by them at prices which do not exceed 110% of the nominal value of the Convertible Bonds (together with accrued interest).

Target subscribers:

Listing of bonds:

Citizens holding valid and legal proof of identity of his/her PRC citizenship and PRC legal persons (save for those who are prohibited by PRC laws, rules and/or regulations from subscribing for the Convertible Bonds (for the avoidance of doubt, institutional investors as approved by CSRC may also subscribe for the Convertible Bonds)), who are not connected persons of the Company as defined in the Listing Rules.

An application is expected to be made to the Shanghai Stock Exchange for the listing of the Convertible Bonds on the Shanghai Stock Exchange.

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LETTER FROM THE CHAIRMAN

The timing of the Bonds Issue will be determined by the Board after careful consideration and taking into account the prevailing market conditions and all other relevant factors at the time. The actual terms and conditions of the Convertible Bonds will be determined by the Board prior to the Bonds Issue. The details of the terms and conditions of the Convertible Bonds which were published in Shanghai Securities News and Shanghai Securities Journal on 21 June 2004 are for indicative purpose only and may or may not be altered.

3. PROPOSED USE OF PROCEEDS

The proceeds of the Bonds Issue in the sum of RMB 2 billion (before deducting expenses) are expected to be used to finance the following projects:

• (a) the construction of six 57,300 tons dry bulk cargo carriers (as to approximately RMB700,740,000);

• (b) the construction of two 42,000 tons refined/crude oil tankers (as to approximately RMB315,220,000);

• (c) the construction of four 75,000 tons oil tankers (as to approximately RMB375,980,000); and

• (d) the purchase of two large second-hand very large crude carriers (as to approximately RMB538,200,000),

and approximately RMB110,000,000 will be used to supplement the working capital requirement of fourteen vessels.

Any further funds which the Company requires for financing the above projects will be sourced from elsewhere by the Company.

4. REASONS FOR THE BONDS ISSUE

The Board has carefully considered different financing options for the funding requirements of the Company. It believes that the Bonds Issue is the most appropriate option for the Company for the following reasons:

• (a) the Bonds Issue would allow the Company to take advantage of the current favorable low interest rate environment, thereby lowering the Company’s overall funding cost;

• (b) the Bonds Issue, as a convertible bond issue, would generally allow the Company to pay a lower interest coupon payment than for a straight bond issue; and

• (c) the Bonds Issue would not lead to any immediate dilution of the Company’s basic earnings per share which would arise in the case of a new issue of A Shares.

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LETTER FROM THE CHAIRMAN

5. IMPACT OF THE BONDS ISSUE ON CAPITAL STRUCTURE OF THE COMPANY

Upon conversion of the Convertible Bonds, there would be an increase in the number of A Shares held by the public. Shareholders’ equity interest in the Company will be diluted as a result of the exercise of the conversion rights attached to the Convertible Bonds. The exact size of the above increase will depend upon the final terms of the Convertible Bonds, including, amongst other terms, the conversion price at which the Convertible Bonds will be converted into A Shares. It is currently contemplated that the initial conversion price will be determined with reference to a premium over the average closing price of A Shares for a certain period of trading days immediately prior to the issue of the relevant offering memorandum. The final terms of the Convertible Bonds are expected to be determined only after the completion of a roadshow and “book-building” offering process. The aggregate amount of A Shares to be issued upon full conversion of the Convertible Bonds are not expected to exceed 20% of the domestic shares of the Company in issue as at the date of the EGM.

For illustrative purposes only, assuming full conversion of the Convertible Bonds and that the conversion price equals to RMB8.86 (being the average closing price of the A Shares for the last 5 trading days ending on 18 June 2004, with an upward margin of 0.1%), the percentage of shareholding of the existing shareholders of the Company are follows:

	Percentage of shareholding	Percentage of shareholding
	immediately before	immediately after
	conversion in full of	conversion in full of
	the Convertible Bonds	the Convertible Bonds
Non-listed domestic shares	50.51%	47.30%
A Shares	10.52%	16.21%
H shares	38.97%	36.49%
	100%	100%

Further announcements will be made once the terms and conditions of the Convertible Bonds are determined.

Any new A Shares to be issued upon conversion of the Convertible Bonds will rank pari passu with, and within the same class as the A Shares in issue on the relevant conversion date in all respects, save in respect of entitlement to dividends and other distributions which will depend on, inter alia, the conversion date(s) for the Convertible Bonds.

6. NOMINATION FOR APPOINTMENT AS AN ADDITIONAL NEW EXECUTIVE DIRECTOR

The Company proposes to nominate Mr. Wong Kunhe, the deputy general manager of the Company, for election at the EGM as an executive Director. Mr. Wong, aged 56, has been employed by the Company since 1998. He graduated from Jimei Maritime Professional School in 1968. Mr. Wong joined Guangzhou Maritime Shipping Bureau in 1974 and had served as its chief engineer and head of mechanical department. From 1995 to 1998, he served as deputy general manager and then general manager of Guangzhou Maritime Xinghua Shipping Company.

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LETTER FROM THE CHAIRMAN

Save and except for the relationship with the Company, Mr. Wong does not have any relationship with any other Directors, senior management, substantial shareholders or controlling shareholders of the Company. Mr. Wong has no interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. Mr. Wong will enter into a service contract with the Company which will take effect from his appointment. The term of his service will be effective from the proposed date of appointment to 27 May 2006. For the year 2004, Mr. Wong will receive remuneration of approximately RMB200,000 in his capacity as an executive Director (for the period from the proposed date of his appointment, 17 August 2004 to 31 December 2004). His remuneration was determined in accordance with his qualification and experience.

7. EGM

Under the Company Law of the PRC and the Company’s articles of association, the Bonds Issue is subject to the approval of the shareholders of the Company. Set out in pages 9 to 11 of this circular is the notice to convene and hold the EGM at Room 319, 700 Dong Da Ming Road, Shanghai, The People’s Republic of China at 10:30 a.m. on 17 August 2004. It is proposed that a special resolution for the approval of the Bonds Issue be put to the shareholders of the Company for their consideration at the EGM.

Upon approval of the Bonds Issue at the EGM, the issue of the Convertible Bond will still be subject to the approval of CSRC. The timing of the Bonds Issue shall be subject to the approval of CSRC, as well as the bond market conditions in the PRC. Further announcement will be made by the Company when the CSRC’s approval has been obtained and the maturity period and the coupon rate of the Convertible Bonds have been fixed.

It is also proposed that an ordinary resolution for the approval of the appointment Mr. Wong Kunhe as an executive Director be put to the shareholders of the Company for their consideration at the EGM.

For the purposes of the EGM, the register of members of the Company will be closed from 17 July 2004 to 17 August 2004 (both days inclusive), during which no transfer of shares will be registered. Accordingly, holders of H shares of the Company and holders of domestic shares of the Company (including A Shares) whose names appear on the register of members of the Company at the close of business on 16 July 2004 shall have the right to attend the EGM.

Each Shareholder who has the right to attend and vote at the EGM, is entitled to appoint one or more proxies, whether they are Shareholders or not, to attend and vote on his behalf at the EGM.

A proxy form for use in connection with the EGM is enclosed. Whether or not you are able to attend the meeting, please complete and return the enclosed proxy form in accordance with the instructions printed thereon as soon as practicable and in any event not less than 24 hours before the time appointed for holding of the meeting. Completion and return of the proxy form will not preclude you from attending and voting in person at the meeting or any adjourned meeting should you so wish.

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LETTER FROM THE CHAIRMAN

8. POLL PROCEDURE

Set out below is the procedure by which Shareholders and the chairman of any Shareholders’ meeting may demand a poll pursuant to the articles of association of the Company:

“At any general meeting of shareholders, a resolution shall be decided on a show of hands unless a poll is demanded before or after any vote by show of hands by:

• (1) the chairman of the meeting;

• (2) at least two shareholders, who possess the right to vote, present in person or by proxy; or

• (3) any shareholder or shareholders present in person or by proxy and representing in the aggregate not less than one-tenth of the total voting rights of all shareholders having the right to attend and vote at the meeting.

Unless a poll is so demanded, a declaration by the chairman of the meeting that a resolution has on a show of hands been carried or not carried and an entry to that effect in the minutes of the meeting shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded for or against such resolution.

A demand for a poll may be withdrawn by the person who made the demand.”

9. RECOMMENDATION

The Board, including the independent non-executive Directors, is of the opinion that the Bonds Issue is in the best interest of the Company and the Shareholders as a whole and recommend the Shareholders to vote in favour of the special resolution to be proposed at the EGM.

Yours faithfully,

China Shipping Development Company Limited Li Shaode

Chairman

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NOTICE OF EGM

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CHINA SHIPPING DEVELOPMENT COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1138)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (“ EGM ”) of China Shipping Development Company Limited (the “ Company ”) will be convened and held at Room 319, 700 Dong Da Ming Road, Shanghai, the People’s Republic of China on Tuesday, 17 August 2004 at 10:30 a.m. (the “ PRC ”) to consider and, if thought fit, approve the following resolutions:

Ordinary Resolution

1. “ THAT Mr. Wong Kunhe be and is hereby appointed as an executive director of the Company and the board of directors of the Company be and is hereby authorised to make such amendments (if any) to the articles of association of the Company as it thinks fit so as to reflect any consequential changes resulting from such appointment.”*

Special Resolution

1. “ THAT :

2. (a) conditional upon such approvals or consents being granted by the relevant PRC regulatory authorities for the issue by the Company of, bonds in the aggregate principal amount of RMB2,000,000,000 which are convertible into new A shares of normal value of RMB1 each of the Company (“ A Shares ”) (“ Convertible Bonds ”) and the new A Shares to be issued upon the exercise (if any) from time to time of the conversion rights attached to the Convertible Bonds, the issue by the Company of the Convertible Bonds on such terms and conditions as the directors of the Company (“ Directors ”) may determine be and is hereby approved and the Directors be and are hereby authorized to do all such further acts and things and execute all such further documents and take all such steps which in their opinion may be necessary for the issue the Convertible Bonds, provided that the aggregate A Shares which are convertible from the Convertible Bonds shall not exceed 20 per cent of the aggregate nominal amount of domestic shares of the Company in issue as of the date of this Resolution. The aforementioned approval and/or authority in relation to the issue of the Convertible Bonds shall expire twelve months after the date of this extraordinary general meeting unless otherwise revoked or varied by shareholders of the Company at a general meeting;

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NOTICE OF EGM

• (b) contingent on the board of Directors resolving to issue the Convertible Bonds pursuant to sub-paragraph (a) of this Resolution, the Directors be and are hereby authorised to increase the registered capital of the Company and make all appropriate and necessary amendments to the Company’s articles of association at any time as the Directors think fit in order to reflect the increase in the registered capital of the Company and the new capital structure of the Company upon conversion (if any) of the Convertible Bonds, and the Directors be and are hereby authorized to carry out such increase, to make such amendments, to attend to and handle all necessary procedures and registrations regarding the amendments to the registered capital and articles of association of the Company; and

• (c) conditional upon the issue of the Convertible Bonds, the Directors be and are hereby authorised to allot and issue, separately or concurrently, from time to time and in accordance with the terms and conditions of the Convertible Bonds, such number of new A Shares as may be required to be issued pursuant to the exercise of the conversion rights (if any) attached to the Convertible Bonds.”

21 June 2004 Shanghai The People’s Republic of China

Notes

• (1) Holders of the Company’s shares, including the Company’s overseas listed foreign shares (in the form of “H” shares) whose names appear on the Register of Members of the Company at close of business on 16 July 2004 are entitled to attend the EGM with their passports or other identity papers.

• (2) The Register of Members of the Company will be closed from 17 July 2004 to 17 August 2004 (both days inclusive), during which time no share transfers will be effected.

• (3) Each shareholder who has the right to attend and vote at the EGM is entitled to appoint one or more proxies, whether they are shareholders or not, to attend and vote on his behalf at the EGM.

• (4) A proxy of a shareholder who has appointed more than one proxy may only vote on a poll.

• (5) For holders of H shares, the instrument appointing a proxy must be in writing under the hand of the appointor or his attorney duly authorized in writing. If that instrument is signed by an attorney of the appointor, the power of attorney authorising that attorney to sign, or other documents of authorisation, must be notarially certified. To be valid, the notarially certified power of attorney, or other document of authorization, and the form of proxy must be delivered to the Company’s registrar, Computershare Hong Kong Investor Service Limited, Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not less that 24 hours before the time appointed for the holding of the EGM.

• (6) Shareholders intending to attend the EGM should return the reply slip to the Secretary’s Office of the board of directors of the Company (the “ Board ”) before 27 July 2004 personally or by mail, cable or facsimile. Returning the reply slip in writing will not affect shareholders’ rights to attend in person.

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NOTICE OF EGM

• (7) The EGM is expected to last no more than half a day. Shareholders attending the EGM are responsible for their own transportation and accommodation expenses.

• (8) The details of the Secretary’s Office of the Board are as follows:

Room 1601, Shipping Tower, 700 Dong Da Ming Road, Shanghai The People’s Republic of China

Post Code : 200080 Telephone : (021) � 6596 7160, 6596 6165, 6596 7742 or 6596 6163 Facsimile : (021) � 6596 6160

• The biographical details of Mr. Wong Kunhe are set out in the circular of the Company dated 23 June 2004.

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CHINA SHIPPING DEVELOPMENT COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) Proxy Form for the Extraordinary General Meeting to be held on 17 August 2004

I/We[(1)]

of[(1)]

am/are the shareholder(s) of China Shipping Development Company Limited (the “ Company ”), holding[(2)] H Shares/domestic shares. I/We hereby appoint[(3)]

of (3)

as my/our proxy/proxies. In the absence of proxy/proxies, I/We hereby appoint the chairman of the Extraordinary General Meeting as my/our proxy/proxies for[(4)]

H Shares/domestic shares which I/we hold in the share capital of the Company to attend and vote at the Extraordinary General Meeting to be held at Room 319, 700 Dong Da Ming Road, Shanghai, the People’s Republic of China at 10:30 a.m. on Tuesday, 17 August 2004. The proxy/proxies is/are authorised to vote on the resolutions according to the following instructions. In the absence of instructions, the proxy/proxies shall vote for or against the resolutions or abstain at their discretion.

		Ordinary Resolution	For (5)	Against(5)	Abstention(5)
1.	“THAT Mr. Wong Kunhe be and is hereby appointed as an executive director
	of the Company and the board of directors of the Company be and is hereby
	authorised to make such amendments (if any) to the articles of association of
	the Company as it thinks fit so as to reflect any consequential changes
	resulting from such appointment.”
		Special Resolution
2.	“THAT:
	(a)	conditional upon such approvals or consents being granted by the
		relevant PRC regulatory authorities for the issue by the Company of,
		bonds in the aggregate principal amount of RMB2,000,000,000 which
		are convertible into new A shares of nominal value RMB1 each of the
		Company (“A Shares”) (“Convertible Bonds”) and the new A Shares
		to be issued upon the exercise (if any) from time to time of the
		conversion rights attached to the Convertible Bonds, the issue by the
		Company of the Convertible Bonds on such terms and conditions as
		the directors of the Company (“Directors”) may determine be and is
		hereby approved and the Directors be and are hereby authorized to do
		all such further acts and things and execute all such further
		documents and take all such steps which in their opinion may be
		necessary for the issue the Convertible Bonds, provided that the
		aggregate A Shares which are convertible from the Convertible Bonds
		shall not exceed 20 per cent of the aggregate nominal amount of
		domestic shares of the Company in issue as of the date of this
		Resolution. The aforementioned approval and/or authority in relation
		to the issue of the Convertible Bonds shall expire twelve months after
		the date of this extraordinary general meeting unless otherwise
		previously revoked or varied by shareholders of the Company at a
		general meeting;
	(b)	contingent on the board of Directors resolving to issue the
		Convertible Bonds pursuant to sub-paragraph (a) of this Resolution,
		the Directors be and are hereby authorised to increase the registered
		capital of the Company and make all appropriate and necessary
		amendments to the Company’s articles of association at any time as
		the Directors think fit in order to reflect the increase in the registered
		capital of the Company and the new capital structure of the Company
		upon conversion (if any) of the Convertible Bonds, and the Directors
		be and are hereby authorized to carry out such increase, to make such
		amendments, to attend to and handle all necessary procedures and
		registrations regarding the amendments to the registered capital and
		articles of association of the Company; and
	(c)	conditional upon the issue of the Convertible Bonds, the Directors be
		and are hereby authorised to allot and issue, separately or
		concurrently, from time to time and in accordance with the terms and
		conditions of the Convertible Bonds, such number of new A Shares as
		may be required to be issued pursuant to the exercise of the
		conversion rights (if any) attached to the Convertible Bonds.”

(6)

Signature:

2004

Date:

Notes:

• (1) Please write the full name(s) and address(es) as stated in the register of members in BLOCK CAPITALS.

• (2) Please insert the total number of shares and indicate the type of shares registered in your name(s).

• (3) Please insert the name(s) and address(es) of proxy/proxies. In case no name(s) and address(es) are inserted, the chairman of the meeting will be your proxy. The proxy/proxies need(s) not be shareholder(s) of the Company. However, the proxy/proxies should attend the meeting on your behalf in person.

• (4) Please insert clearly the number of shares and indicate the type of shares registered in your name(s) which are related to this proxy form. In case no number is inserted, the proxy/proxies will be deemed to act on behalf of all shares registered in your name(s).

• (5) Please note that if you would like to vote for the resolution, please put a tick in the “For” column. If you would like to vote against the resolution, please put a tick in the “Against” column. If you would like to abstain, please put a tick in the “Abstention” column. If you give up the right to vote, the Company will deem that vote as not being counted when calculating the results of voting for that matter. If you would like to vote in respect of some of the shares represented by the proxy (proxies) appointed, please insert the number of shares instead of a tick. If no tick or a number of shares is put in any column, the proxy/proxies is/are authorised to vote or abstain at his/her/their discretion.

• (6) If the shareholder is a legal person or a corporation, this proxy form shall bear the stamp of the legal person or corporation, or duly signed by the legal person or director(s) of the corporation or duly authorised representative(s).

• (7) This proxy form must be accompanied by the signed power of attorney or other document(s) of authorisation, if any, or a notarially certified copy of that power of attorney or document(s) of authorisation. They must be deposited at the Company’s registrar, Computershare Hong Kong Investor Services Limited, Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not less than 24 hours before the time appointed for holding of the Extraordinary General Meeting in order for such documents to be valid.

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CHINA SHIPPING DEVELOPMENT COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

SHAREHOLDERS’ REPLY SLIP FOR ATTENDING THE EXTRAORDINARY GENERAL MEETING TO BE HELD ON 17 AUGUST 2004

To: China Shipping Development Company Limited (the “Company”)

I/We[(1)]

of[(1)]

being the registered holder(s) of (2) H Shares/domestic shares in the Company, hereby inform the Company that I/we intend to attend (in person or by proxy) the Extraordinary General Meeting of the Company to be convened and held at Room 319, 700 Dong Da Ming Road, Shanghai, the People’s Republic of China at 10:30 a.m. on Tuesday, 17 August 2004.

Date: 2004 Signature:

Notes:

1. Please insert full name(s) and registered address(es) as shown in the register of members of the Company in block capitals.

2. Please insert the number and category of shares in your name(s).

3. In order to be valid, this completed and signed reply slip must be delivered to the Company at the Secretary’s office of the board of directors of the Company at Room 1601, Shipping Tower, 700 Dong Da Ming Road, Shanghai, the People’s Republic of China, on or before Tuesday, 27 July 2004 personally or by mail, cable or facsimile (fax: (021) 6596 6160).