The Target Assets and Business comprise of: (i) the telecommunications business across the 21 provinces in Southern China and the local access telephone business and related assets in Tianjin Municipality operated by Unicom Parent and Netcom Parent and/or their respective subsidiaries and branches, (ii) the backbone transmission assets in Northern China owned by Netcom Parent and/or its subsidiaries and branches, (iii) a 100% equity interest in each of Unicom Xingye, CITC and New Guoxin currently owned by Unicom Parent. The total consideration for the Proposed Acquisitions is RMB 6.43 billion (equivalent to HK$ 7.28 billion), and will be paid in cash. Meanwhile, China Unicom will lease the telecommunications networks in Southern China from Unicom New Horizon, a wholly-owned subsidiary of Unicom Parent.

China Unicom has completed its merger with China Netcom Group Corporation (Hong Kong) Limited (“China Netcom”) on 15 October 2008, the integration of business, network resources, personnel and organization is being implemented smoothly, and the integration of personnel and organization at headquarter level and provincial level has been completed in general. The Proposed Acquisitions are part of the overall restructuring of the Company, and are expected to promote China Unicom’s integration of resources, business and employees across all regions in mainland China and enable the Company to further create and benefits from synergies arising from its merger with China Netcom.

“The Proposed Acquisitions are expected to further strengthen China Unicom’s capability of providing full spectrum of telecommunications services across all regions in mainland China, and lay a solid foundation for the implementation of Broadband-Mobile integration strategy and the development of 3G business. Meanwhile, the Proposed Acquisitions are expected to diminish potential competition as well as reduce connected transactions between the Company and its substantial shareholders, which is helpful for the improvement of corporate governance.” said Mr Chang Xiaobing, Chairman and CEO of China Unicom.

After the completion of Proposed Acquisitions, China Unicom is expected to expand its fixed-line and broadband business to Southern China regions including the Pearl River Delta and the Yangtze River Delta, the population coverage is expected to triple, and the number of fixed-line and broadband subscribers is expected to increase from 130 million by about 14 million to reach over 140 million. This is expected to significantly enhance China Unicom’s capability to provide full spectrum of telecommunications services across all regions in mainland China, and further promote fixed-line and mobile integration, which will provide solid foundation for the forthcoming 3G rollout and enhance China Unicom’s overall competitiveness.

After the completion of the Proposed Acquisitions, through the integration of business, network resources and designing, customer service capacities, the Company is expected to fully utilize its marketing and network resources and improve the quality of customer services, release synergetic effects and enhance the efficiency of resources usage.

China Unicom will hold Extraordinary General Meeting on 14 January 2009, and Independent Shareholders will vote on the Proposed Acquisitions. Subject to obtaining the approval of Independent Shareholders and all necessary approvals from relevant government authorities, the Proposed Acquisitions are expected to complete end of January 2009.

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FAQ of the Proposed Acquisitions and Lease

About China Unicom:

China Unicom (Hong Kong) Limited (“the Company”) was incorporated in Hong Kong in February 2000 and was listed on the New York Stock Exchange and the Stock Exchange of Hong Kong on 21 June 2000 and 22 June 2000 respectively. On 1 June 2001, the Company was included as a constituent stock of the Hang Seng Index.

On 15 October 2008, the Company merged with China Netcom Group corporation (Hong Kong) Limited.

At present, the Company is engaged in GSM cellular business in 31 provinces, municipalities and autonomous regions in China, the provision of international and domestic long distance calls, data and mobile Internet services, and other related telecommunication value-added businesses.

The Company is also a leading broadband and fixed-line telecommunications operator in the PRC and provides services in Beijing Municipality, Tianjin Municipality, Hebei Province, Henan Province, Shandong Province, Liaoning Province, Heilongjiang Province, Jilin Province, Neimenggu Autonomous Region and Shanxi Province. The Company provides fixed-line voice and value-added services, broadband and other Internet-related services, information and communications technology services, business and data communications services as well as advertising media services.