Article 8 of the Law of People's Republic of China (PRC) on Chinese-foreign Joint Ventures, after the joint venture income tax is paid in accordance with the tax laws of People's Republic of China (PRC) and the state, the reserve fund, employee bonus and welfare fund and enterprise development fund stipulated in the articles of association of the joint venture shall be deducted, and the net profit shall be distributed in proportion to the registered capital of each party to the joint venture.

Detailed Rules for the Implementation of the Law of People's Republic of China (PRC) on Chinese-foreign Joint Ventures Article 87 The principles of profit distribution of a joint venture after paying income tax in accordance with the Income Tax Law of the People's Republic of China on Chinese-foreign Joint Ventures are as follows:

(1) Withdraw reserve fund, employee bonus and welfare fund and enterprise development fund, and the withdrawal ratio shall be decided by the board of directors.

(2) The reserve fund can be used not only to make up the losses of the joint venture, but also to increase capital and expand production with the approval of the examination and approval authority.

(3) If the board of directors decides to distribute the distributable profits after the three funds are withdrawn according to the provisions in Item (1) of this article, they shall be distributed according to the proportion of capital contribution of each party to the joint venture.

The surplus reserve of primary account, general surplus reserve of secondary account, statutory surplus reserve of tertiary account and arbitrary surplus reserve are used for enterprise development.

General surplus reserve is divided into two types: one is statutory surplus reserve. The statutory surplus reserve of listed companies shall be drawn at 10% of after-tax profits, and shall not be drawn when the cumulative amount of statutory surplus reserve reaches 50% of the registered capital. The second is the discretionary surplus reserve. Arbitrary surplus reserve is mainly drawn by listed companies according to the resolution of shareholders' meeting. The difference between statutory surplus reserve and arbitrary surplus reserve lies in the different basis of their respective provision. The former is extracted according to national laws or administrative regulations; The latter is extracted by the company itself.