Presentation Roadmap Macro Overview 12 th Five Year Plan Best
Prospects How CS China Can Help?
Slide 3
Macro Overview 12 th Five Year Plan Best Prospects How CS China
Can Help?
Slide 4
An Abridged History of US-China Relations
Slide 5
The Latest Vice Chairman Xi Jinping to U.S. Heir Apparent Met
with POTUS & VPOTUS Spoke with Congress $38 B in Deals (or $5.8
B?) RMB / Export Credits / Films Mandatory Tech Transfer / Auto
Insurance / Trade Secrets
Slide 6
JCCT 2011 Highlights Smart Grid Standards Tourism 27 Provinces
No to Indigenous Innovation Catalogues Vice Premier Lead IPR
Enforcement Pharmaceuticals Data Protection NEVs No Tech Transfer /
No Domestic Brand Subsidies OK
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10th Anniversary Joining WTO PLUS Improved Access to China
market Lower Barriers to opening / operating business Easier to
Repatriate Profits NOT SO PLUS Liberalization Downshift AD / CVD
Cases Growing Transparency and the Rule of Law
Slide 8
Transfer of Power Hu Jintaos Handoff Late 2012 + U.S. Silly
Season = Posturing
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US Companies in China 59% - optimistic 5-year business outlook
76% - recent economic reforms helped great / very great extent 54%
- expand operations 2 nd / 3 rd tier cities 78% - rank China within
top-3 destinations for near-term global investment plans Positive
U.S. Business Outlook
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SOME Obstacles for U.S. Firms in China Protectionism Catalogue
Guiding Foreign Investment Standards Labor Costs Wages double-digit
growth over 2010 Hiring / Retention Mid - Senior Management
Foreigners Social Insurance Costs Certifications / Approvals CCC
Mark Costly, Slow Duplicative Unclear Regulatory Environment
Slide 11
Chinas Response to 2008 Financial Crisis Total Stimulus $586B
$1.45 trillion new Regional Bank loans Goals Stimulate Economy 2
nd, 3 rd, 4 th Tier City Infrastructure Major Glitches
Non-Productive Investment Debt Horizon Not Match Project Timing
$250B Already Unrecoverable
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Chinas GDP Trends
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Trade surplus with U.S. new high $295.5B U.S. imports from
China Up $34.4B ($399.3B Total) U.S. exports to China Up $12B 13.1%
($103.9B Total) U.S. Worldwide exports up 15.8% Trends
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Foreign Currency Holdings Down Weakening Exports Outbound FDI
Up Inflation Steady Food Twice CPI Rate Housing Labor Trends
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Technology 513M Netizens 250M Micro-bloggers 356M Mobile Users
Rebalancing economy From Fixed Asset Investment to Domestic
Consumption 2010 35% 2015 50% of GDP Trends
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Urbanization 171 Cities > 1M (9 in U.S.) 47% Urban 2010
51.5% Urban 2015 Middle Class 23% Now 48% 2020 Trends
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Luxury Consumption 20% ($27B) Worldwide Luxury Goods 2015 80%
Buyers < Age 45 (50% in U.S.) (40% < Age 35)
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Trends Chinas E-Commerce Market China Revenue $114B 2011 4.6%
of Total Sales U.S. Revenue $194B 8% of Total Sales
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U.S. EXPORTS Top 15 60% Hefei Up 164% Ningbo Up 90% Chengdu Up
75% Hangzhou Up 63% 2 nd / 3 rd Tier Cities China 40: The Rising
Urban Stars. Jones, Lang, LaSalle, 2009.
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Trends Source: National Bureau of Statistics of China
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Chinas 12 th Five Year Plan Macroeconomic View Best Prospects
How CS China Can Help?
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12 th Five Year Plan Restructure Economy From Fixed Asset
Investment to Consumption Basic Manufacturing Up Value Chain
Promote Domestic Market Growth Promote Social Equality Income
Imbalance Poor Regions Economic Growth Protect Environment Lower
Emissions per Unit GDP More Renewable/Non-Fossil Fuel Energy
Slide 23
Economic Targets 7% GDP Annual Growth 4% Inflation Target 5%
Urban Unemployment 8% Rise Government Expenditures 45M Urban Jobs
Created 12 th Five Year Plan
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Economic Restructuring 7 Strategic Industries 3% to 8% GDP
Service Sector Up to 47% GDP Urbanization to 51.5% Innovation
R&D Funding Up 12.5% 2.2% GDP 3.3 patents /per 10,000
population Trade Expand Use of RMB 12 th Five Year Plan
Slide 25
Environmental Protection Up 10% Energy Consumption Cut 16% From
Non-Fossil Fuel 11.4% Carbon dioxide emission cut 17% Water
Consumption/ Unit Value-Added Output cut 30% 14 nuclear reactors
& 27 under construction Energy Saving & Environment
Protection
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12 th Five Year Plan Crude oil consumption will increase 5%
annually Natural gas consumption will increase 19.4% annually China
leads world in solar & wind energy 2011: 28 of 51 clean-tech
IPOs Chinese Energy Saving & Environment Protection
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12 th Five Year Plan Energy-Saving and Environment Protection
Efficiency / Recycling / Smart Grid New Energy Nuclear / Solar /
Wind / Biomass / Hydro Biotechnology Medicine / Ag / Mfg. New
materials Composites Strategic & Emerging Industries Magic
7
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12 th Five Year Plan High-End Manufacturing Aeronautics /
Astronautics / Marine / Hi-Speed Rail Clean-Energy Vehicles Plug-In
Hybrid / Electric Next Generation Info Tech Comm Networks/Flat
Panel Display/ Integrated Circuits/Hi-End SW Strategic &
Emerging Industries Magic 7
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Population 1.39B Per Capita Income Up 7+% Affordable Housing Up
14.8% Minimum Wage Up 13% Education Spending Up 16.3% Healthcare
Spending Up 16.3% 12 th Five Year Plan Livelihood: Social
Harmony
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Best Prospects Macroeconomic View 12 th Five Year Plan How CS
China Can Help?
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Best Prospects Clean Energy Green Building Renewable Energy
Water & Water Pollution Travel & Tourism Medical Devices
& Healthcare Railroads and Metro Transit Aviation Information
& Communications Technology Marine Industries Agriculture
Chinese Outbound FDI
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Cleaner Conventional Energy 12 th FYP Targeting 10% Emissions
Reduction Best Prospects- De-NOx Solutions / Monitoring De-Sox
Campaign of 11 th FYP is Model
Slide 33
Electric Power Infrastructure State Grid Invest $595B 2009 thru
2020 Grid Development $83B Smart Grid Solutions Standards Critical
U.S. Company Participation Essential Best Prospects - Power Storage
IT Solutions Smart Meters
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Greenbuilding New Buildings By 2020 - 65% Energy Use Savings
From 1980 Base Best Prospects Building Design HVAC Building
Envelope Building Integrated Renewable Energy
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Renewable Energy Did you know? U.S. had a $240 million trade
SURPLUS in solar products with China in 2010. The 2011 stats show a
disturbing trend: $1.6 billion DEFICIT with China. Best prospects
include Waste to energy municipal, agricultural, industrial Wind
and solar power plant financing construction, integration and
management
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Water Treatment Investing $450B in EP Industry Increase 121%
Over 11th FYP Investing $11.25B WW Treatment Increase 39% Over 11
th FYP Best Prospects Industrial Wastewater Treatment Building
Greywater Reuse Systems Sludge Treatment / Disposal Systems
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Travel & Tourism US$6,000 Per Tourist #1 Spender 2011 1.09M
-- Up 37% from 2010 2016 2.9M Best Prospects Luxury Travel Wine /
Golf Tours National Parks Cruise Lines Honeymoons/Weddings
Meetings, Incentives, Conferences and Exhibitions
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Medical Devices, Healthcare Equipment & Services 178M over
60 221M by 2015 Worlds 2 nd Market $15B in 2010 22% Annually US
Products Reputation Superior Quality Technologically Advanced
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Railroads & Metro Transit 56K miles (#2) to 74K miles by
2015 Hi-Speed Rail 5200 miles (#1) to 10K by 2015 Urban Rail
Transit #1 Market35 cities by 2015 U.S. Design / engineering U.S.
Materials / Rail Car & Locomotive Components U.S. Rail Track
products / Services / Signaling
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Aviation Grow 7% Annually through 2020 Aircraft Parts Imports
>$1.6B U.S. Market Share 35% -- $560M Beijing Airport -- Worlds
2 nd Busiest From 180 Airports to 244 by 2020 Invest $234B in
industry through 2016
Slide 41
Education 160,000 Students 2011 up 24% from 2010 Increasing
Demand Vocational Schools Community Colleges FCS Vetted Agents List
Chinas #1 Education Destination
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Information & Communications Technology (ICT) US ICT
Exports to China, share of domestic market 200920102011
4.78%4.66%3.76% Total Market $317B, Up 12% U.S. Share 4%, down 1%
Software Market $8B High-End Software Solutions U.S. Share 70%
Piracy
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Marine Industries Largest Shipbuilding Base - >40% Mkt Share
U.S. Expertise / Design Offshore Energy Projects Including Spill
Response Services Recreational Marine Industry $10B Next 10 Years
Pleasure Boats and Accessories >$90M in 2010 Investing in
Marinas / Cruise Ship Centers Shanghai, Zhoushan, Qingdao, Dalian,
Ningbo, Beihai, Dongguan, Shenzhen, and Hainan Island
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Agriculture U.S. Agriculture, Fishery, Forestry Exports to
China Up 17% from 2010 $18.9B 14% of U.S. Total Second Largest U.S.
Market Tractors, Harvesting/Planting/Fertilizing Mach.
Mechanization Up 60% by 2015
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SelectUSA.gov Source: U.S. Bureau of Economic Analysis Chinese
Investment in the U.S. US$1.4 B US$3.2 B 60% Annual Growth Rate
2006-2010 1 2 3 Chinese FDI into U.S. 2010 (MOFCOM) Total Chinese
FDI in U.S., 2010
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How CS China can help? Macroeconomic View 12 th Five Year Plan
Best Prospects
Slide 47
19 Cities 5 CS Offices > 100 Staff 14 Second Tier Cities
Your Global Business Development Team
Slide 48
Find Distributors/Agents for U.S. Exports (GKS) Screen Chinese
Companies (ICP) Promote Your Firm to Target Markets (SCP)
Multi-City U.S.G.-Led Trade Missions Trade Show Support Market
Research (CMR) Organize/Lead Chinese Buying Delegations (IBP) How
We Can Help
Slide 49
Aviation Cooperation Program Energy Cooperation Program
Healthcare Cooperation Program American Rail Working Group How We
Can Help Public Private Partnerships
Slide 50
U.S. Patent & Trademark Office (PTO) The US Embassy IPR
Toolkit http://beijing.usembassy-china.org.cn/ipr.html China IPR
Advisory Program -1 hr free consultation
http://www.abanet.org/intlaw/china_program2.html USPTO: Free China
Conferences
http://www.stopfakes.gov/events/china_webinar_series.asp IP Webinar
Series www.stopfakes.gov
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What Motivates Us? U.S. Jobs Created and Maintained
