EXERCISE OF THE OVER-ALLOTMENT OPTION

Air China Limited
10 January 2005

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, OR INTO, THE UNITED STATES,
CANADA OR JAPAN.

EXERCISE OF THE OVER-ALLOTMENT OPTION

Unless otherwise defined herein or the context otherwise requires, terms defined
in  the  listing  particulars dated 3 December 2004 (the  "Listing  Particulars"
which  expression  shall include the supplementary listing particulars  dated  9
December  2004)  issued  by  Air China Limited (the  "Company")  have  the  same
meanings when used in this announcement.

Air China Limited (the "Company") today announces that the Over-allotment Option
referred  to  in  the  Listing  Particulars  was  exercised  in  full  by  China
International Capital Corporation Limited and Merrill Lynch Far East Limited  on
behalf of the International Underwriters in respect of 420,852,000 additional  H
Shares (the "Over-allotment Shares"), representing approximately 15% of H Shares
initially offered under the Global Offering, solely to cover over-allocations in
the International Offering. 382,592,727 Over-allotment Shares will be issued and
allotted by the Company and 29,749,686 and 8,509,587 Over-allotment Shares  will
be  sold  by CNAHC and CNACG, respectively at HK$2.98 per H Share (exclusive  of
brokerage,  SFC  transaction  levy, investor compensation  levy  and  the  Stock
Exchange of Hong Kong Limited trading fee), being the Offer Price per H Share in
connection with the International Offering.  Application has been made for the H
Shares  issued  pursuant  to the Global Offering, including  the  Over-allotment
Shares, to be admitted to the Official List of the UK Listing Authority  and  to
trading  on  the  market  for listed securities of the  London  Stock  Exchange.
Admission  of  the  Over-allotment Shares to the Official List  is  expected  to
become effective, and unconditional dealings in the Over-allotment Shares on the
London Stock Exchange are expected to commence, at 8.00 a.m. on 11 January 2005.

The shareholding structure of the Company immediately before and after the issue
and the sale of the Over-allotment Shares is as follows:

               Before the issue and sale of    After the issue and sale of Over-
                   Over-allotment Shares               allotment Shares

              Number of         Approximate    Number of         Approximate
              Domestic / Non-H  percentage of  Domestic /        Percentage of
              Foreign /         issued share   Non-H Foreign /   issued share
              H Shares          capital        H Shares          capital

Shareholders

CNAHC         4,855,945,675     53.65%         4,826,195,989     51.16%
              Domestic Shares                  Domestic Shares
CNACG         1,388,992,507       15.35%       1,380,482,920     14.64%
              Non-H Foreign                    Non-H Foreign
              Shares                           Shares
Strategic     905,061,819       10.00%         943,321,091       10.00%
Investor      H Shares                         H Shares
H Share       1,900,618,181     21.00%         2,283,210,909     24.20%
public        H Shares                         H Shares
Shareholders

Total number  9,050,618,182     100%           9,433,210,909     100%
of Shares     Shares                           Shares


The  net  proceeds  of approximately HK$1,100 million, after deducting  expenses
(comprising principally of underwriting commission, the Stock Exchange  of  Hong
Kong  Limited trading fee, SFC transaction levy and investor compensation levy),
from  the issue of 382,592,727 Over-allotment Shares by the Company will be used
by  the  Company to acquire certain aircraft and to repay debts that will mature
in  one  year, as more fully described in the Listing Particulars in the section
headed "Future Plans and Use of Proceeds".

Both  CNAHC and CNACG are required by PRC regulations to contribute the proceeds
from  the  sale  of  the  Over-allotment Shares to the Chinese  National  Social
Security Fund.  Pursuant to an approval from SASAC, CNAHC will, on behalf of the
Chinese  National  Social  Security Fund, sell such  Over-allotment  Shares  and
transfer the net proceeds to the Chinese Social Security Fund.  The net proceeds
to  CNAHC and CNACG from the sale of the Over-allotment Shares upon the exercise
of  Over-allotment Option will be approximately HK$110 million  after  deducting
expenses  (comprising principally of underwriting commission, the Stock Exchange
of Hong Kong Limited trading fee, SFC transaction levy and investor compensation
levy).   The  Company will not receive any proceeds from the sale  of  the  Sale
Shares comprised within the Over-allotment Shares.

This  announcement is for information purposes only and does not constitute,  or
form  part of, any offer or invitation to sell or issue, or any solicitation  of
any offer to subscribe for or purchase, any securities in Air China Limited.

The  information contained herein does not constitute an offer of securities for
sale  in the United States. Securities may not be offered or sold in the  United
States  unless  they  are  registered  under  applicable  law  or  exempt   from
registration.

This  announcement  is  not  for  distribution in  the  United  States,  Canada,
Australia  or Japan. No securities have been marketed to, nor are available  for
purchase  in whole or in part by, the public in the United Kingdom or elsewhere.
The  distribution  of  this announcement in certain other jurisdictions  may  be
restricted  by law and therefore persons into whose possession this announcement
comes  should  inform  themselves about and observe any such  restrictions.  Any
failure  to  comply with these restrictions may constitute a  violation  of  the
securities laws of any such jurisdiction.

Stabilisation / FSA.