Tengtu International Corp. announced today that Beijing Tengtu Culture and Education Electronics Development Co., a wholly-owned subsidiary of its Chinese joint venture, Tengtu United, has been awarded two initial contracts under the China National Rural K-12 Schools E-learning Project (Rural School Project).

The Rural School Project is a five-year, 10 billion CNY program established in 2003 to help fund the acquisition of education resources, personnel and technologies for K-12 schools in China's rural areas. The Project is being jointly implemented by the Ministry of Education, the Ministry of Finance and the National Development and Reform Commission. Approximately one billion CNY has been allocated from the Project's budget for the purchase of education software and related resources. The budget for Rural School Project in 2004 is 2 billion CNY and is being carried out in 19 provinces.

The Tengtu contracts are the first to be awarded under a 344 million CNY Pilot Program launched at the end of 2003. The purpose of the Pilot Program is to establish technical and commercial standards for the main Rural School Project. Tengtu was informed that its education resource database system and its multimedia classroom system had been selected under the Pilot Program. Tengtu was also informed that it has achieved favourable ranking to supply Teaching CDs under a negotiated bid arrangement and Satellite Resources under a directed purchase arrangement. Decisions on these contracts are expected shortly.