N E W S L E T T E R December 2008

Story of the Month

ZTE Is Expanding to the U.S. Market

Despite the troubled economy worldwide, ZTE Corporation (hereinafter, “ZTE” or the “Corporation”) finds opportunities and is actively acting on expanding to the U.S. market. Up until the present, the sales volume of ZTE’s cellular phones has exceeded 50 million dollars. The growing rate of this year is expected to exceed more than 100%. Sun Zhenge, CEO of ZTE USA indicated that ZTE had achieved its periodical goal in expanding to the American market, and that the Corporation is expecting to conclude several contracts relating to terminals and network devices. Sales Increased in the U.S. ZTE first launched its cellular phones in the U.S. market in 2007. This year, the Corporation’s terminal product

“WiMAX” officially entered the U.S. market. A few types of terminals WiMAX 16e by ZTE were launched in the U.S. in Mid-October, covering terminals such as cellular phones, PC cards, and modems. It was generally accepted that ZTE’s activities demonstrated that ZTE had squeezed opened the door to the U.S. high tech market. Sun pointed out that the U.S. market is completely controlled by operators, and that various testing is very strict, which could cause many challenges to producers. However, ZTE’s strong ability of research and development and its feature of meeting requirements by the operators fit for the U.S. market. Thus, ZTE spent much less time on opening the door to the U.S. market compared to Nokia (ten years). The Layout of Network Devices Sped Up At present, the network CDMA EV-DO built up by ZTE covers the sky all over the U.S., which is the first communications network that covers the air from the ground via CDMA. Besides this breakthrough on aeronautical communication, ZTE has sped up on the layout on two major networks, CDMA and WiMAX. It was divulged that ZTE had completed all the network testing with UICC, America’s major operator, and signed a framework contract on providing CDMA network devices of semi 3G. ZTE also became a core strategic partner of Sprint, America’s major operator of WiMAX network. Financial Crisis May Bring About More Opportunities While ZTE is gradually opening the door to the U.S. market, a worldwide financial crisis emerged. On the industrial perspective, Sun said, financial crisis may

bring about more opportunities. He analyzed that the financial crisis had more influence on traditional industries than telecommunication industry. In the short run, people tend to desire acquisition of faster information, which may bring up the need of telecommunication.

(Source: www.sztqb.sznews.com)

NAROS Update

NAROS Meets with New York Economic Development Corporation and Partnership for New York On August 20, 2008, North American Representative Office of Shenzhen, China (NAROS) met with Yuet-fung Ho, Vice President for International Business Development of the New York Economic Development Corporation (NYEDC), the economic development agency for New York City at their Manhattan office. The two organizations discussed and implemented a closer partnership and collaboration. NYEDC has been closely affiliated with the City of Shenzhen for a period of time, but a closer interconnectivity was discussed. Also noted were the many potential ways that the City of New York and Shenzhen complimented each other's interest, mainly trade and investment. On the same visit in New York, NAROS also met with Diana Torres, the Vice President of Global Competiveness for the Partnership for New York, the major business organization in New York City. Discussion on the City of Shenzhen and its new presence in New York was of interest as Shenzhen is looking to heavily invest in New York City. Torres and NAROS started communication efforts to increase and sustain a closer relationship between the Partnership for New York and NAROS. NAROS updated Shenzhen Mayor's road show trip to New York in late October and the progress of the opening of Shenzhen trade and investment office in New York, in which both organizations expressed their interest to support on both events. NAROS representatives were Robert Fraser, Grace Chen, and Holly England.

Shenzhen Hosts a Bilateral Business Seminar in Toronto, Canada Representatives of the North American Representative Office of Shenzhen, P.R. China (NAROS) and a delegation from the City of Shenzhen traveled to Toronto, Canada on October 22, 2008 to host Shenzhen –

China’s City of Innovation, Exploring Bilateral Business Opportunities Between Shenzhen and Canada. Representatives of all levels of government welcomed the Shenzhen Delegation to Toronto, including: Bill Macheras, Deputy Director, Foreign Affairs and International Trade Canada, The Honourable Monte Kwinter, Member of Provincial Parliament, Province of Ontario, Parliamentary Assistant to the Minister of International Trade and Investment and Chair, Ontario Investment and Trade Advisory Council; Councillor Guby, Deputy Speaker of Toronto City Council and Chair of the Government Management Committee representing Mayor David Miller and Liu Yi Commercial Consul, Consulate General of the People’s Republic of China in Toronto. With over 200 guests attended for the half day seminar featuring keynote speaker, Mr. Wang Xuewei, along with a panel of distinguished industry speakers, the seminar focused on bilateral trade and investment opportunities. The panel presentation was moderated by Eugene Gierczak, Partner, Miller Thompson LLP, and the four presenters was: Steven Jast, President, ROI (Research On Investment) “ROI Research on Investment’s Perspective on Global FDI Trends”, Charles J. Li, Senior Manager, KPMG LLP "Canada and China: The Two-Way Business Communication - An Update," Paul Greenhalgh, Director, EPM Global Services Inc. “EPM’s Development in Shenzhen”, and Jiang Xiangyang, President, ZTE Corporation (North America) “ZTE Corporation and ZTE Canada – Today and Future”. The delegation was led by SZBTI Director-General Mr. Wang Xuewei and included Andrew Pan, and Grace Chen of NAROS.

(Photo: Toronto Seminar)

(Photo: Mr. Wang Xuewei responding to Q&A)

Shenzhen Hosts a New York Luncheon and the Office Opening Ceremony Representatives of the North American Representative Office of Shenzhen, P.R. China (NAROS) and a delegation from the City of Shenzhen hosted a luncheon at the Marriott Marquis in Times Square, New York City, on October 27, 2008. The event, “Shenzhen – China’s City of Innovation, Exploring Bilateral Business Opportunities Between Shenzhen and New York” was in conjunction with the Shenzhen delegation’s road show to promote bilateral trade and investment that included a full list of speakers and presenters as well as a ribbon cutting ceremony for the official opening of the North American Representative Office Branch in New York. A local New York firm, Grayling Global, aided the office in event formation and provided the Master of Ceremonies, Leslie Wolf-Creutzfeldt. Approximately 200 guests witnessed the office opening; the honored ribbon cutters being Mr. Andrew Pan, Chief Representative, NAROS; Mr. Wang Xuewei, Director-General of Shenzhen Bureau of Trade and Industry; Mr. Sam Natapoff, Senior Vice President, International Economic Development Empire State Development Corporation; Ms. Terry Jackson, Managing Director of the Division of International Business for the Office of the Mayor of New York; and Ms. Ann Li, Vice President, International Business Development for the NYC EDC. Other presenters included Shenzhen based companies Huawei Technologies, and China Merchants Bank. Two Memorandums of Understanding were signed after the ceremony between the City of Shenzhen and Preferred Freezer Services, and the City of Shenzhen and Air Products and Chemicals, Inc. The delegation was led by Mr. Wang Xuewei, Director-General of Shenzhen Bureau of Trade and

Industry (SZBTI) and included Andrew Pan, Holly England, Emma Chang and Vivian Zhang of NAROS. For information about our New York Office, email newyork@shenzhenoffice.org.

(Photo: New York Luncheon)

(Photo: Mr. Wang Xuewei Accompanied by Mr. Andrew Pan)

(Photo: Ribbon Cutting Ceremony)

Shenzhen Hosts a Bilateral Business Breakfast Meeting in Miami Representatives of the North American Representative Office of Shenzhen, P.R. China (NAROS) and a

delegation from the City of Shenzhen, including Shenzhen Bureau of Trade and Industry (SZBTI) and Huawei Technologies, hosted a breakfast meeting in Miami on October 28, 2008 to promote bilateral business opportunities between Shenzhen and Florida. The breakfast meeting featured keynote speech by SZBTI Director-General Mr. Wang Xuewei, along with a panel of distinguished business peoples discussing bilateral trade and investment opportunities. Speakers included in the panel discussion included Mr. Andrew Pan, Chief Representative, North American Representative Office of Shenzhen, Lita Hager, President, Association of Bi-National Chamber of Commerce (ABICC), John Diep, Director, International Trade Development at Enterprise Florida, Ken Roberts, FIU Professor, Author of “The Mao of Business: Guerrilla Trade Techniques for the New China”. Over 100 guests attended the meeting.

(Photo: Miami Breakfast Meeting)

(Photo: Wang Xuewei with Miami Guests)

Organizers of this event included the City of Shenzhen, Shenzhen Bureau of Trade and Industry, The North American Representative Office of Shenzhen, China,

Florida Chinese Chamber of Commerce, and Oriental Logistics. The delegation was led by SZBTI General Director Mr. Wang Xuewei and included Andrew Pan, Emma Chang, and Vivian Zhang of NAROS.

U.S./China/Shenzhen Business News

Shenzhen and Hong Kong Airports Reach Strategic Alliance Sources disclosed that new cooperation programs will be launched early September of this year to allow more convenient transfers for passengers connecting on flights between the Shenzhen and Hong Kong airports. Transit passengers heading to mainland China can get their onward boarding passes and check baggage in Hong Kong before heading to the Shenzhen airport by a direct bus service. The same procedure applies for mainland China passengers passing by Shenzhen and flying out of Hong Kong. "The result of trial operation shows that the new cooperation programs will not only provide more convenience for passengers and cargos, but also help to enhance the value of the airline networks," said industry insiders. Undoubtedly, the cooperation indicates that both sides intend to optimize their own resources, with the Hong Kong airport and the Shenzhen airport focusing on exploring international airlines and domestic airlines respectively.

(Source: www.avbuyer.com.cn)

Shenzhen is Developing Green Tourism According to Li Xiaogan, director of Shenzhen Municipal Tourism Bureau, Shenzhen will invest more than CNY15 billion to develop major tourism projects, which includes the second phase of East OCT, the Happy Harbour of OCT, a leisure resort area, an international conference center, and a yacht club. "Over next two years, Shenzhen tourism industry will focus on the high-end and green tourism development sectors. At present, there are seven hotels built to five-star standards under construction in Shenzhen. The number of five-star hotels in Shenzhen will be 30 by 2010 as expected," Li said. Nowadays, various clubs of yacht, paragliding, and diving items are gradually popular and will become high-lights of entertainments in the city; an international cruise port in Taiziwan, Shekou, has commenced

construction; the Dapeng Peninsula layout is accelerating. And the city is preparing for the China International High-end Tourism Fair. In addition, Shenzhen established its first standard for green scenic areas and implemented it in the whole city. More than 100 hotels have been named Green Hotels, and ten scenic areas have been awarded the Green Scenic Area emblem.

(Source: www.chinahospitalitynews.com)

UPS Looks for Acquisitions Chances in China

According to the reports, UPS, the top global logistics firm is searching for acquisitions chances in China and preparing to boost staff there in coming years. Along with its rival FedEx Corp., UPS is facing the falling earnings because the rising fuel costs and a weak economy. Aiming to develop other larger market outside U.S., UPS will open two US$180 million transport hubs in China and quadruple its staffing there in the next few years, hoping to meet the growing demand for delivery services in a relatively untapped market. "UPS had doubled its headcount in China over the past 18 months to around 5,300, but the number will increase by at least 1,000 annually over the next 3 to 4 years as expected," said Brutto, the president of the company's international business. "It's now looking for acquisitions within the world's fourth largest economy, despite fears that Chinese growth will taper off over 2008 and 2009," Brutto added.

(Source: paper.sznews.com)

Shenzhen Based BYD Soars to a Higher Dream BYD Auto is a Chinese automobile manufacturer based in Shenzhen, Guangdong Province, China. It was founded in 2003 and is part of the BYD Company Limited. It has built a 16-million-square-foot auto assembly plant and hired a team of Italian-trained car designers. Just like its name BYD, which means Build Your Dream, it is making great efforts to pursue its own dream of building a green hybrid by the end of the year. "We'd like to make a green energy car, a plug-in," said Paul Lin, a BYD marketing executive. BYD Auto's dream reflects that Chinese companies are trying to move up the value chain, hoping eventually to challenge the world's biggest corporations. They are not

content with being the home of low-skilled, low-cost, low-margin manufacturing for toys, pens, clothes, and other goods anymore.

The government policies in China now favor high-tech economic zones, research and development centers, and companies that promise higher salaries and more skills. "We are ready for a fight, to control the scientific high ground and earn a seat on the world's high technology board. We will make some serious efforts to strengthen our nation's competence," stated President Hu Jintao. Chinese firms are expanding software and biotechnology, automobiles, medical devices and supercomputers. China's development is following in the footsteps of Japan and South Korea, which successfully evolved from low-skilled manufacturing to high technology, services and the creation of global brands, according to economists.

(Source: www.timesdaily.com)

Cree Opens Facility in Shenzhen, China According to the announcement of Cree Inc. of Durham, North Carolina USA, it has opened a Cree Shenzhen Engineering Center in Shenzhen, China. It is a technical education facility devoting to training lighting product designers and manufacturers in best practices for LED lighting product design and construction. There were many customers and honorable guests who attended the opening ceremony on July 25, 2008, including Mr. Chen Yansheng, president of the China Association of Lighting Industry. The facility is co-located with the Cree Shenzhen sales office. It employs application engineering, technical, and sales staff. The experts there can teach courses about LED lighting product design and provide

customers with consulting service on XLamp LED-based designs. Besides that, there is on-site handling guidance for LEDs during production and evaluating LED designs for efficiency and performance.

(Source: www.compoundsemi.com)

RMI Cooperates with Huawei-Symantec According to the announcement at a press conference in Beijing, RMI Corporation and Huawei-Symantec has just launched a strategic partnership agreement. As the agreement required, RMI's multi-core multi-threaded processors will be used for the Huawei-Symantec's storage and security appliances, including the USG9000 and the USG6000. RMI Corporation, based in U.S., is a provider of high performance processor solutions for networking, communications and media rich applications. Huawei-Symantec is a joint venture company formed in May 2007, between Huawei Technologies and Symantec. The latter one delivers infrastructure software that address risks to security, availability, compliance and performance. "This partnership is a decision towards success supported by RMI's advanced technical capabilities," mentioned Su Li-Qing, president of Huawei-Symantec joint venture. "RMI applauds Huawei-Symantec on its success and we are proud to be recognized as its strategic partner. We are committed to supporting Huawei-Symantec as it moves towards the next growth phase," said Behrooz Abdi, president and CEO, RMI. (Source: it.tmcnet.com)

DuPont Expands in Shenzhen, China

According to a report, DuPont Engineering Polymers is to expand its compounding capacity for its Zytel range at its manufacturing site in Shenzhen, China. It is part of a continued plan to invest in regions with the highest market growth in Shenzhen. The expansion will include Zytel nylon 6 and

66 resins and Zytel HTN PPA high performance polyamide resins, and will add 30,000tpa for Zytel GRZ nylon resins, and 10,000tpa for Zytel HTN PPA high

performance polyamide resins. Production is expected to start in the second quarter of 2009. "China is a cornerstone of our growth strategy. Our continued investment in the Shenzhen site demonstrates our commitment to reinforce our position as the leading supplier of PA66 engineering plastics globally and in Asia," said Dr Richard Mayo, global business director for Zytel nylon resins and Crastin PBT resins. "We expect that the market in China will continue to grow at high rates and this investment will allow us to continue to supply our global and domestic customers locally," he added. (Source: www.prw.com)

ZOW is Coming to Shenzhen

According to a report, ZOW supplier fair for the furniture and interior design industry will be held between 19 and 22 March 2009 in the Shenzhen Convention & Exhibition Centre. This is the first time that ZOW will come to Shenzhen. Business men can discuss innovative product ideas and take the opportunity to make excellent business contacts in a relaxed atmosphere. ZOW is taking place at the same time as the Shenzhen International Furniture Exhibition (SIFE), held every March and organized by Shenzhen Furniture Trade Association (SZFA). To the decision-makers in the furniture industry, SIFE is a good platform of learning from each other and showing capability. Shenzhen is situated in the south of Guangdong province, which is the centre of the furniture industry in southern China and with its economic growth. It offers promising sales prospects for international furniture suppliers. At ZOW, visitors can expect to see the full range of products from the furniture supplier industry all in one place: surfaces and fittings, recess and lighting systems, panels and profiles, built-in and semi-finished parts, adhesives and glues, and much more. (Source: Madera.fordaq.com)

Doing Business in China

China will Relax Business Visa Issuance Policies After the national holiday in October, China will relax its current strict visa issuance policies for business visas, according to the sources.

Aiming to provide convenience for business travelers to China, China will start issuing one year multi-entry F visas begin from the second week of October. The new policy will beneficial to the various trade shows, such as the Canton Trade Fair, that China traditionally holds during Autumn. This new policy will redress the restrictions on visa issuance, and will come as welcome signal to China-bound business people visiting the country. (Source: www.china-briefing.com)

New Regulations on Foreign Investment in China Launched Jointly promulgated by the State Administration for Industry and Commerce (SAIC) and Ministry of Commerce (MOC), newly revised administrative regulations on foreign investment in advertising enterprises came into effect on October 1, 2008, replacing the former regulations issued on March 2, 2004. The new regulations allow foreign invested advertising enterprises, upon official approval, to engage in design, production, publication and some other types of advertising businesses for customers home and abroad. Conditions for the establishment of Sino-foreign advertising joint ventures, wholly foreign-owned advertising enterprises, and foreign-invested advertising enterprises are provided therein. Shenzhen, following the national step, changed its related regulations accordingly as well. (Source: People’s Daily)

Shenzhen Facts � The average annual GDP growth of Shenzhen

has increased over 25% from 1980 to 2007. In 2007, Shenzhen’s GDP reached US $90.81 billion, ranking it 4th among all mainland China cities; while its GDP per capita ranked 1st in the country.

� By the end of 2007, there were more than 36,983

foreign-invested companies in Shenzhen; among them were 148 Fortune Global 500 companies. Shenzhen has also been the largest import and export city in China for the past 15 consecutive years.

� The construction of the six major logistics parks

in Shenzhen has proceeded smoothly with a total planned area of 22.48 square kilometers. With an investment of 7.1 billion yuan, a project bank for logistics park development has been developed, with 19 major projects.

� By the end of 2006, the total assets of the city's

banking institutions reached about 1,450 billion yuan, up about 20 percent over the previous year. The banking institutions' outstanding deposits in RMB and foreign currencies totaled 1,061.6 billion yuan, and outstanding loans, 839.4 billion yuan, a 10 percent increase over the previous year. The city ranked fourth in the country in terms of total outstanding deposit and loan.

� The government of Shenzhen will strive to

strengthen its support for the city's finance industry by providing the most favorable policies, optimum environment and top-quality services. By 2010, the added value made by the city's finance industry will be expected to total 135 billion yuan and account for more than 15 percent of the city's GDP.

North American Representative Office

Of Shenzhen, P. R. China

中国深圳市驻北美经贸代表处中国深圳市驻北美经贸代表处中国深圳市驻北美经贸代表处中国深圳市驻北美经贸代表处

350 S. Figueroa Street, Suite 288

Los Angeles, CA 90071 Tel: (213) 628-9888 Fax: (213) 628-8383

Email: info@shenzhenoffice.org Website: www.shenzhenoffice.org

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