September 8, 2005
Via Facsimile and U.S. Mail
Zheng Bailin
General Manager
Bank of China New York Branch
410 Madison Avenue
New York, New York 10017
Re: China Development Bank
Registration Statement under Schedule B
Filed August 18, 2005
Dear Mr. Bailin:
We have reviewed your filing and have the following comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comments are inapplicable or a revision
is
unnecessary. Please be as detailed as necessary in your
explanation.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. Please refer to the first comment in our letter dated August
30,
2004, and the first comment in our letter dated September 15,
2004,
issued in connection with your Registration Statement on Schedule
B
filed on July 30, 2004. With a view to disclosure, please
describe
any changes in your operations, or in your relationships with the
People`s Republic of China central government, the People`s Bank
of
China, the China Export-Import Bank, other entities or other
countries, that would cause you to respond differently to those
comments in connection with the current filing than you did in
your
letters of September 8, 2004 and September 16, 2004 regarding the
prior registration statement. Detail for us the respects in which
you would respond differently regarding the current filing. If
your
responses with regard to the current filing would not differ from
your prior responses, please so state.
2. We note that more than Rmb 28.5 million of your balances,
including cash and cash equivalents, resides with the PBOC (see
Note
9 on page F-22). We also note the statement under the heading
"Institutional Arrangement" on the PBOC website that all capital
of
the PBOC is invested and owned by the PRC. Please refer to the
comments noted above and China`s investments in, among other
countries, Iran and Sudan (see "China Invests Heavily in Sudan`s
Oil
Industry" Washington Post (December 23, 2004) and "Global Race is
on
to Snag Oil Supplies" The Seattle Times (May 1, 2005)). Advise us
whether funds from your operations, including balances held by the
PBOC, may be used, directly or indirectly, by the PBOC, China Exim
Bank or other Chinese governmental entities to fund or support
financing or credit arrangements in or with Sudan, Iran or other
countries that have been identified by the U.S. State Department
as
state sponsors of terrorism. Please advise us of the materiality
of
any such direct or indirect funding, and whether the existence of
such an arrangement poses a material investment risk to potential
investors and existing note holders.
3. We note that a November 22, 2004 article and a March 4, 2005
article from Reuters News concerning Cuban nickel and cobalt
production include references to "financing coming from the China
Development Bank." Please describe any agreements, arrangements
and
financings that involve operations in Cuba and any other country
that
has been identified by the U.S. State Department as a state
sponsor
of terrorism. Please advise us of the materiality of any such
direct
or indirect funding, and whether the existence of such an
arrangement
poses a material investment risk to potential investors and
existing
note holders.
4. In preparing your responses to the foregoing comments, please
consider that evaluations of materiality should not be based
solely
on quantitative factors, but should include consideration of
qualitative factors that a reasonable investor would deem
important
in making an investment decision, including the potential impact
of
corporate activities upon a company`s reputation and share value.
In
this regard, we note that legislation requiring divestment from,
or
reporting of interests in, companies that do business with U.S.-
designated state sponsors of terrorism has been adopted by Arizona
and Louisiana. Legislation requiring divestment from, or
reporting
of interests in, companies that do business with Sudan recently
has
been proposed by several other U.S. states, and adopted by
Illinois,
Oregon and New Jersey.
Closing Comment
Please revise your registration statement in response to our
comments. You may wish to provide us with marked copies of the
revised registration statement to expedite our review. Please
furnish a cover letter with your revised registration statement
that
keys your responses to our comments and provides any requested
supplemental information. Detailed cover letters greatly
facilitate
our review. Please understand that we may have additional
comments
after reviewing your revised registration statement.
We direct your attention to Rules 460 and 461 of the
Securities
Act regarding requests for acceleration. Please allow adequate
time
after the filing of any amendment for further review before
submitting a request for acceleration. Please provide this
request
at least two business days in advance of the requested effective
date.
Please direct any questions about these comments to me at
(202)551-3450.
Sincerely,
Michael Coco
Special Counsel
Cc: Via Facsimile
Huanting Timothy Li, Esq.
Sidley Austin Brown & Wood LLP
39/F, Two International Finance Centre
8 Finance Street
Hong Kong SAR, China
(852) 2509-3110
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China Development Bank
Registration statement under Schedule B
2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE