1. BENESCH Attorneys at Law Ohio Foreign Commerce Association clevelandcolumbusphiladelphiawilmingtonshanghai benesch, friedlander, coplan & aronoff llp www.beneschlaw.com DOING BUSINESS IN CHINA March 2, 2009

2. BENESCH Attorneys at Law BENESCH Guest Speaker: Allan Goldner Partner Co-Chair, China Group Co-Chair, Polymer Group

3. BENESCH Attorneys at Law BENESCH

4. BENESCH BENESCH

5. BENESCH With more than 1.3 billion people.

6. BENESCH Attorneys at Law In the midst of the largest population migration in the history of the world.BENESCH Attorneys at Law

7. BENESCH The Chinese government’s management of this migration is the key to maintaining social stability in China…

8. BENESCH Attorneys at Law (Population in Millions) KnownForecast 20002005201020152020 National Population 1265.81306.31352.71400.71450.4 URBAN Urban Population458.6561.6683.3811.5963.8 Urban %36.243.050.557.966.5 RURAL Rural Population807.3744.7669.4589.2486.6 Rural %63.857.049.542.133.5

9. BENESCH Attorneys at Law …and creating jobs (more about this later) is the key to this management.

10. BENESCH Attorneys at Law China is divided into distinct regions...

11. BENESCH Attorneys at Law …consisting of rural farmland,

12. BENESCH Attorneys at Law …large cities

13. BENESCH Attorneys at Law …and everything in-between.

14. BENESCH Attorneys at Law China is divided into distinct regions and large cities.

15. BENESCH Attorneys at Law Why have U.S. companies been doing business in and with China?  Because China “opened” to the West (and East) in 1978, and opened some more in 2001.  To buy goods cheaply from Chinese companies and resell them in the U.S.  To manufacture goods in China and sell them in the U.S. and around the world.  To sell goods and services into China. Deng Xiaoping

16. BENESCH Attorneys at Law How do U.S. companies do business in China?  Direct purchases from Chinese factories or intermediaries.  Representative offices.  Wholly Foreign-Owned Enterprises (WFOEs) or Foreign Invested Commercial Enterprises (FICEs).  Joint ventures of varying kinds.  Through varying kinds of holding company structures.

17. BENESCH Attorneys at Law Why does China welcome U.S. and other foreign investment?  To attract technology and innovation.  To attract capital to build all manner of infrastructure.  To create wealth and prosperity.  To create jobs.

18. BENESCH Attorneys at Law What are some of the most important considerations / risks in establishing a business in China?  Picking the right Chinese partner / key employee(s).  Due Diligence.  Market (customers / suppliers).  Operational (facilities, processes, work force, management).  Financial and accounting.  Legal and regulatory. ●Labor. ●Land Use Rights (including leasing, construction and environmental). ●IP (Intellectual Property). ●Everything else.  Cultural considerations (in connection with courtship, negotiation and everything else)

19. BENESCH Attorneys at Law Picking the right Chinese partner / key employee(s).

20. BENESCH Attorneys at Law Due Diligence.  Market (customers / suppliers).  Operational (facilities, processes, work force, management).  Financial and accounting.  Legal and regulatory.

21. BENESCH Attorneys at Law Legal and regulatory. ●L●Labor. ●L●Land Use Rights (including leasing, construction and environmental). ●I●IP (Intellectual Property). ●E●Everything else.

22. BENESCH Cultural considerations (in connection with courtship, negotiation and everything else).

23. BENESCH Attorneys at Law What are some of the most important considerations for success? ●Continuing to pay attention – hands-on. ●Ongoing competent training. ●Communication at multiple levels. ●Appreciation and respect for, and immersion in, each other’s cultures and business environments. ●Competent accounting, legal and other professional advice.

24. BENESCH Attorneys at Law

25. BENESCH Questions, please

26. BENESCH Attorneys at Law Thank you for attending!

27. BENESCH Attorneys at Law www.beneschlaw.com 3064755.2 Cleveland:200 Public Square Suite 2300 216.363.4500 Columbus:41 S. High Street 26th Floor 614.223.9300 Philadelphia:One Liberty Place 1650 Market Street 36th Floor 267.207.2947 Wilmington:222 Delaware Avenue Suite 801 302.442.7010 Shanghai:Kerry Centre, Suite 1802 1515 W. Nanjing Road Shanghai, P.R. China 200040 011.86.21.3222.0388 BENESCH Attorneys at Law