2. China at a Glance

3. China Map

4. US / China

5. China Population

6. Economic Indicators

7. Comparative GDP Growth ( 3.9% of global GDP / 15% of global growth )

8. Economic Growth -- 2002 Policies driving growth: Expansion of “socialist market economy” Rapid Emergence of private sector  1.32 million private companies  300% increase in # of employees over 5 years Continued Overhaul of SOE’s Emphasis on export trading Clean-up of capital markets

9. Economic Growth -- 2002 Market sectors driving growth Manufacturing – 35% of GDP Exports – 26% of GDP Infrastructure expansion 10% – 15% of GDP Foreign investment – $52 billion Capital Markets  Domestic consumption

10. Government Initiatives and Projects *  SOE overhaul and privatization  Financial services Banking overhaul Insurance services Asset management Investment services  Agricultural modernization

11. Government Initiatives and Projects * -- continued  Home ownership – 30% growth  Technology development  Developing Western provinces  Infrastructure projects (water / waste / roads / power / airports / Yangtze project)  Environmental clean up – 1% of GDP  2008 Olympics  2010 World Expo

12. New Milestones -- 2002  8% GDP growth – largest globally  #1 in foreign investment - $52 billion  24% increase in domestic investment  #1 in cell phone users – 200 million  #2 in Internet users – 59 million  #4 in auto sales – 3.2 million  Foreign investment in stock markets  2010 World Expo

13. Change in Leadership Hu Jintao New Chairman of Central Committee – CCP President – March, 2003 Maoist leanings and ideals Rejuvenation of Party Continuation of private sector expansion “Spreading the growth” to inner Provinces Social security and health care benefits

14. Major Exports – 2002 * Apparel, clothing & footwear Machinery, parts &transportation equip. Textiles & yarn Chemical industrial products Furniture, housewares, toys, handicrafts Food stuffs Electrical equipment & parts

15. Major Imports – 2002 * Electrical equipment & parts Machinery & parts Transportation equip. Crude oil and fuels Plastics and plastic articles

16. China’s Leading Markets

17. China’s Leading Suppliers

18. 199619971998199920002001 Exports151182183194249 Imports138142140165225 Total289325324360474 266 243 509 2002 550 China’s Trade with the World

19. China’s Trade with the US

20. Florida Trading Partners: GDP Growth

21. Recent Foreign Corporate Expansions in China * Walmart Kfc / Pizza Hut Heinz / P&G MacDonalds Office 1 Superstore Home Depot Honda / Mitsubishi / VW / GM Intel Microsoft Computer Associates DuPont Rockwell Toshiba Embraer Aviation World Trade Group

22. China’s Big 3 Trading Centers

23. Rogers Towers Bailey Jones & Gay Map

24. China’s Work Force Allocation (percentage of work force)

25. China’s Labor Supply 1999200020012002 Labor cost USD / hour 0.420.44 0.50 Recorded Unemployment * 5.507.06.0 ???? 8.0 ???? * Does not include 150 mil. Underemployed in rural areas

26. Manufacturing Wages: China vs. Latin America

27. Labor Over-Supply* At current GDP growth rate: 8 million new jobs / yr Current annual rate of new workers: 12 million / yr.

28. Major WTO – Related Changes in 2002 Tariffs Quotas and other non-tariff barriers Anti-dumping / overproduction Enhanced IP protection and enforcement Transparency rules and systems Accelerated Clean up of banking and securities markets “ Opening up service industries

29. Services Opening up with WTO Sales and distribution 3 rd party Logistics Telecom Banking and finance Insurance Construction and development Project consulting Engineering Architecture Environmental Legal services Education / training Travel services Employment agencies Franchising

30. Chinese Legal Changes - 2002 Over 200 new or changed laws Joint ventures and wholly-owned subsidiaries Patent, trademark and copyright laws Foreign investment Import / export, distribution, franchising Stock markets Thousands of implementing regulations Training of attorneys and judges

31. Taxes in China  33 % tax on profits BUT SEZ’s = 15 % Open Coastal cities = 25% Inland areas = tax preferences 3-5 yr. Forgiveness for FIE  17 % VAT BUTSpecial treatment for exported items

32. Ongoing Logistics Issues in China International transport Inland transport Aggregation and warehousing Cold-chain storage Supply-chain management IT solutions Customs issues

33. Miscellaneous Issues Who am I really dealing with ? Referrals to “Friends” Who is in charge ? Public corruption Language translation / documentation “Contract” = a living document

34. End