W O R L D T R A D E G R O U P . L L P .

B u s i n e s s O u t l l o o k I N

C H I N A

A B r e a k f a s t R o u n d - T a b l e

WORLD TRADE GROUP. LLP.

China at a Glance

Slightly smaller than the US

1.3 billion people

Population growth rate of 0.9%

23 provinces / 6 special administrative regions / 5 state-governed municipalities

Counties / Cities / Villages

WORLD TRADE GROUP, LLP.

WORLD TRADE GROUP, LLP.

WORLD TRADE GROUP, LLP.

WORLD TRADE GROUP. LLP.

-5

0

5

10

15

20

25

Ann

ual G

row

th R

ates GDP

CPI

Urban Income

Rural Income

Economic Indicators

-1

0

1

2

3

4

5

6

7

8

9

China Aisa-Pacificw/o China

US World

An

nu

al G

DP

Gro

wth

(%

)

1999

2000

2001

2002

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

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

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

Government Initiatives and Projects

SOE overhaul and privatization Financial services

Banking overhaul Insurance services Asset management Investment services

Agricultural modernization

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

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

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

Major Exports - 2002

Apparel, clothing & footwear

Machinery, parts & transportation equip.

Textiles & yarn

Chemical industrial products

Furniture, housewares, toys, handicrafts

Food stuffs

Electrical equipment & parts

Major Imports - 2002

Electrical equipment & parts

Machinery & parts

Transportation equip.

Crude oil and fuels

Plastics and plastic articles

W O R L D T R A D E G R O U P . L L P .

C h in a ’ s L e a d in g M a r k e t s

U S

H K

J A P A N

E U

O T H E R

W O R L D T R A D E G R O U P . L L P .

Economic Indicators

US

TAIWAN

JAPAN

EU

OTHER

C h in a ’ s M a jo r S u p p l ie r s

Table 1: China's Trade with the World ($ billion)

 1996 1997 1998 1999 2000 2001

Exports 151 182 183 194 249

Imports 138 142 140 165 225

Total 289 325 324 360 474

 

266

243

509

2002

550

WORLD TRADE GROUP. LLP.

Table 5: China's Trade with the United States ($ billion)

1996 1997 1998 1999 2000 2001

US Exports 12.0 12.8 14.3 13.1 16.3

US Imports 51.5 62.5 71.2 81.8 100.1

Total 63.5 75.3 85.4 94.9 116.4

2002

19.1

102.2

121.3

WORLD TRADE GROUP. LLP.

0

2

4

6

8

10

12

Pe

rce

nta

ge

Gro

wth Annual GDP Growth 1990-2000

Annual GDP Growth 2000-2010

Florida Trading Partners: GDP Growth

Continued 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

W O R L D T R A D E G R O U P . L L P .

C h in a ’ s B ig 3 T r a d in g C e n t e r s

B e i j i n g / T i a n j i n

S h a n g h a i / J i a n g s u /Z h e j i a n gG u a n g d o n g / S h e n zh e n

O t h e r

Rogers Towers Bailey Jones & Gay

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

0

10

20

30

40

50

60

Industry and commerce

agriculture and forestry

other

China’s Labor Supply

1999 2000 2001 2002

Labor costUSD / hour

0.42 0.44 0.44 0.50

Recorded Unemployment*

5.50 7.0 6.0

????

8.0

????

* Does not include 150 mil. Underemployed in rural areas

Manufacturing Wages: China vs. Latin America (USD)

780

1802

2658

3738

7338

7607

0 2000 4000 6000 8000

China

Guatemala

Honduras

Uruguay

Argentina

Mexico

Labor Over-Supply

At current GDP growth rate:

8 million new jobs / yr

Current annual rate of new workers:

12 million / yr.

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

Services Opening up with WTO

Sales and distribution

3rd party Logistics

Telecom

Banking and finance

Insurance

Construction and development

Project consulting

Engineering

Architecture

Environmental

Legal services

Education / training

Travel services

Employment agencies

Franchising

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

W O R L D T R A D E G R O U P . L L P .

B u s i n e s s O u t l l o o k I N

C H I N A

A B r e a k f a s t R o u n d - T a b l e

Break

Panel Members

William Cobb – Coastal Industries

Ken Overman – Hunter Marine

Sasha Yang – World Trade Group

Mike Bellamy – PassageMaker

Bill Rhey – JU College of Bus.

Jeff Michelman – UNF College of Bus.

Arthur Chiang – FCCJ

W O R L D T R A D E G R O U P . L L P .

B u s i n e s s O u t l l o o k I N

C H I N A

A B r e a k f a s t R o u n d - T a b l e

End