50%/50% Joint Venture Between Digital China and EMC

The Board of Digital China Holdings Limited announces that on 18 March 2008, the Company, through its subsidiary, entered into a non-legally binding Framework Agreement with EMC (Benelux) BV, Sarl, an independent third party for a proposed joint venture to conduct investments in IT Business in the PRC.

The Board wishes to emphasize that the Framework Agreement is non-legally binding and the Parties have not yet entered into any formal and binding definitive agreements in relation to the Proposed Joint Venture as at the date of this announcement. As such, the Proposed Joint Venture may or may not proceed. Shareholders and investors should exercise caution when dealing in the securities of the Company.

This announcement is made pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the Listing Rules). The board of directors (the Board) of Digital China Holdings Limited (the Company) announces that on 18 March 2008, the Company, through its subsidiary (DC Subsidiary), entered into a non-legally binding cooperation framework agreement (the Framework Agreement) with EMC (Benelux) BV, Sarl (EMC Subsidiary) (collectively, the Parties) for the proposed formation of a joint venture company and proposed investment in target companies which engage in information technology businesses (IT Business) in the People’s Republic of China (the PRC) (the Proposed Joint Venture).

The holding company of EMC Subsidiary is EMC Corporation (EMC), a company listed on the New York Stock Exchange. Both EMC Subsidiary and EMC are independent third parties of the Company. Pursuant to the Framework Agreement, the joint venture company will be held as to 50% by DC Subsidiary and 50% by EMC Subsidiary.

The initial start up share capital of the joint venture company will be contributed by the Parties in equal portions. In addition to the initial start up capital, the Parties may contribute further funding (whether by way of share subscription or shareholders’ loan) on a prorata basis to the joint venture company to support its operations. It is intended that the joint venture company will principally engage in investments into IT Business in the PRC, but where considered appropriate, the Parties also have the flexibility of investing into the investment opportunities identified by the joint venture company themselves.

The joint venture company will be jointly managed by the Parties, with all investment decisions to be made unanimously by the board of directors of the joint venture company.

EMC is a global leading developer and provider of information infrastructure technology and solutions. EMC Subsidiary is an investment holding company which is wholly-owned by EMC. The Board believes that, through the Proposed Joint Venture, it can leverage on EMC’s  leading market position in infrastructure technology, solutions and information technology services and indepth experience in investing in IT Business worldwide, to foster the expansion of the Company’s existing information technology services business and exploration of new business opportunities in the PRC.

If the Parties further proceed with the Proposed Joint Venture and enter into formal and binding definitive agreements, the transactions under such agreements may constitute notifiable transactions of the Company.

Further announcement in respect of the Proposed Joint Venture will be made by the Company in compliance with the Listing Rules in the event that any formal and binding definitive agreements are signed.

The Board wishes to emphasize that the Framework Agreement is non-legally binding and the Parties have not yet entered into any formal and binding definitive agreements in relation to the Proposed Joint Venture as at the date of this announcement. As such, the Proposed Joint Venture may or may not proceed. Shareholders and investors should exercise caution when dealing in the securities of the Company.

Digital China Holdings Limited

EMC Corp.