Securities Code: 600500  Share shortened form: G SINOCHEM  Announcement No.: 2005-030

The Announcement of the Connected Transactions
 of SINOCHEM International Corporation

��Specific Brief��

This company and all the members of the Board ensure the truth, accuracy and integrity of the announcement, and should bear the joint and several obligations to any falsely recorded announcement, misguiding presentation or serious omitted.

��Brief on the major contents��

�� The contents of this transaction: This company would invest more to SINOCHEM International Taicang Xingguo Industrial Co., Ltd (hereunder called "Xingguo Company"), SINOCHEM International Taicang XingKai Industrial Co., Ltd (hereunder called "Xingkai Company"), SINOCHEM International Yuhang Macromolecule Material R& D Co., Ltd (hereunder called "Yuhang R&D") as per the shares held be each connected party. Wherein, this company would invest another ��47.5 million to Xingguo Company, another ��9.5 million to Xingkai Company and another ��28.50 million to Yuhang R&D��total ��85.5 million.
�� This investment increasing is a connected transaction and the relevant items had been reviewed by the independent directors before being submitted to the board of directors for checking. The directors of the connected party were not presented during the board voting. Whole independent directors delivered their duty opinions and agreed expressly.
�� This connected traction of the shareholding transferring wouldn't hinder the capability of continuous operation of this company or impact its profit and loss, or reduce its assets.

I. Summary of the connected transaction
The 15th Meeting of the 3rd Session Board of Directors of SINOCHEM International Corporation (hereunder called "This Company")was held in Shanghai on Sept. 27, 2005. The meeting has examined and approved to invest more to SINOCHEM International Taicang Xingguo Industrial Co., Ltd (hereunder called "Xingguo Company"), SINOCHEM International Taicang XingKai Industrial Co., Ltd (hereunder called "Xingkai Company"), SINOCHEM International Yuhang Macromolecule Material R& D Co., Ltd (hereunder called "Yuhang R&D") as per the shares held be each connected party. Wherein, this company would invest another ��47.5 million to Xingguo Company, another ��9.5 million to Xingkai Company and another ��28.50 million to Yuhang R&D��total ��85.5 million. As all above 3 project companies are subsidiaries, China New Technology Trade Development Co., Ltd (hereunder called "New Technology") and SINOCHEM Europe Capital, held or shared by the shareholder of this company, the relevant capital increasing was concerned with the connected investment, which has formed the connected transaction.

The above items related to the connected transaction had been reviewed by the independent directors before being submitted to the board of directors for checking. The directors of the connected party were not presented during the board voting. Whole independent directors delivered their duty opinions and agreed expressly.

II. Introduction of the connected parties:

1. China New Technology Development Trade Co., Ltd
This company was found in Beijing on Apr. 1, 1988 approved by Ministry of Foreign Trade and Economic Cooperation, and jointly invested by shareholder SINOCHEM and SINOCHEM International Bidding Co., Ltd, wherein, SINOCHEM holds 95% of its shares. Its registered office address is located in the SINOCHEM Building Fuxingmenwai Street A2, Xicheng District, Beijing. Its legal representative is Mr. Xin Jie and the registered capital is ��824.3 million.

The main businesses of this company include: importing and exporting the 3rd class products approved, as well as researching, developing, producing and selling the hi-tech products, new technology products, software and communication products. The net profit of its latest accounting year was �� 2.6742 million; the net assets of the closing of the latest accounting years was ��137.9584 million; it has/has not the liabilities at the end of the latest accounting year or the items after this period.

2. SINOCHEM EUROPE CAPITAL CORPORATION LTD.

It was solely found by SINOCHEM Hong Kong (Group) on Dec. 6, 2002. The registered office address is British Virgin Islands and its main office is located in the RM 4701, Office Tower, Convention Plaza, 1 Harbor Road, Wanchai, Hong Kong. The accepted capital was $ 10 million. The sole shareholder of this company-- SINOCHEM Hong Kong (Group) �Cis a window of SINOCHEM in Hong Kong.

The major businesses of this company are financing and investment. It raised $ 80 million syndicated loans with 3 years period for a Banking Syndicate headed by ABM Amro in Mar. 2003, which was refunded ahead of the schedule on July 11, 2005. The net profit of its latest accounting year was $ 850,000; the net assets of the closing of the latest accounting years was ��19,85 million; it has/has not the liabilities at the end of the latest accounting year or the items after this period.

III. The basic information of the transaction
The basic information of the three project companies --Xingguo Company, Xingkai Company and Yuhang R&D are as following:

IV. The main contents of the connected transaction

As per the requirements on the capital for the strategic development of relevant project companies --Xingguo Company, Xingkai Company and Yuhang R&D, each shareholder would increase the capital as per the shares they are holding. For the details of the capital increasing, see the following table:

The Statistic Table on the capital increasing to Xingguo Company, Xingkai Company and Yuhang R&D    In ��10000 Yuan

V. The purpose of the connected transaction and its impacts to this company

1. Purpose: as the foregoing three companies are still growing, the board of the directors of this company researched carefully and decided to increase the capital, same as the other shareholders invested, to satisfy their need on the capital.

2. Impacts: as this connected transaction increases only the ��85.5 million long term shareholding investment for this company and no direct loss or profits are brought in, it would not hinder the continuous operational capability and loss and profits of this company or reduce its assets.

VI. Opinions of the independent directors

1. The connected transaction had been reviewed by the independent directors before all of them agreed independently submit them to the board of directors for checking.

2. The directors of the connected party were not presented during the board voting. The voting processes of the board of directors were legal and the decisions were valid.

3. Via the auditing, all independent directors believed that the joint investment done by this company the connected parties to the three joint-venture companies as per the shares they are holding are used for satisfying the requirements from the relevant project companies on the capital, and it is essential for their strategic development. This connected transaction didn't reduce the benefits of this company and all shareholders.

4. All independent directors agreed the foregoing connected transactions.

VII. The traceable documents:

1. The decision of the 15th Meeting of the 3rd Session Board of Directors of This Company, and the minutes signed by all directors;

2. The Opinion of the Pre-auditing confirmed and signed by all independent directors and the duty opinion of the independent directors;

Hereby it is specially announced:

SINOCHEM International Corporation