China Local Investment and Development Companies (“LIDC”) Rating Criteria

Lianhe Global applies the LIDC criteria to Chinese entities, that are 1) directly- or indirectly-owned, usually controlling, either through economic or voting control, by government(s) or government department(s) and 2) fulfil the definition of LIDCs. The criteria intend to cover most China LIDCs, but there are circumstances in which an LIDC may fall outside this scope. We believe these cases would be few and far between and we intend to use the same underlying principles to conduct our analysis on them.