1. prc iMBA 562 Coast2Coast Andrew Kohn, Joanne Newborn, Brian Renaud, Carrie Requist & Shimir Varia

3. Labor Workforce - 780 million

4. Agriculture: 38.1%

5. Industry: 27.8%

6. Services: 34.1%

7. Unemployment Rate – 4.3%

8. Inflation Rate – 5%

9. Imports – $1.31 trillionSource: CIA Factbook from https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

11. Socialist Market Economy

12. Growing Private sector

13. 70% of Market GDP1

14. 74% of China’s Enterprises2

15. Employs over 180 Million2

16. Total Capital investment $2.9 Trillion21 Source: The Economist from http://www.economist.com/node/18332610?story_id=18332610 2 Source: China Daily from http://www.chinadaily.com.cn/opinion/2011-02/12/content_11990049.htm

18. Aging population2

19. Median age 35.2 years

20. One Child Policy2

21. Instituted in 1980 to control rapidly growing population

22. Rapidly Aging population2

23. Low Buying power due to non-market based exchange rates 1 Source: About.com from http://geography.about.com/library/faq/blqzlargecountry.htm 2 Source: China Mike from http://www.china-mike.com/chinese-culture/society/china-population-growth-crisis/

26. Market Size

27. Market Growth Rate

28. Market Consumption Capacity

29. Market Intensity

30. Economic Freedom

31. Market Receptivity

32. Country Risk1Source: Global Edge http://globaledge.msu.edu/resourcedesk/mpi/ (*The data for China does not include Hong Kong, Macao and Taiwan.)

34. Ranked 1st in Two Categories

35. Market Size

36. Market Growth Rate

37. Ranked Near Last or Last in Three Categories

38. Market Intensity

39. Economic Freedom

40. Market Receptivity1Source: Global Edge http://globaledge.msu.edu/resourcedesk/mpi/ (*The data for China does not include Hong Kong, Macao and Taiwan.)

42. 1.334 Billion

43. 46.6% Residing in Urban Areas

44. Growing at 0.59% Annually

45. By 2030 Estimated 1 Billion in Urban Areas

46. Market Growth Rate2

47. 9.1% Annual Change for 2009

48. 10.75% 5-Year CAGR3

49. Ranked In Top 5 Emergency Economies for 10 Years Running1Source: Wikipedia.orghttp://en.wikipedia.org/wiki/Urbanization_in_the_People's_Republic_of_China 2Source: Google, Inc. http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_kd_zg&idim=country:CHN&dl=en&hl=en&q=gdp+growth+rate+of+china 3Source: 2011 Index of Economic Freedom http://www.heritage.org/index/country/China

51. Private Spending Low at 36% of GDP

52. Declining Since 20022

53. (Potential Opportunity = Expected to Increase to 45% by 2015)

54. Economic Freedom3

55. 135th Freest in the World

56. Average Rating of “52” on 100 Point Scale

57. World Average of “59.7”

58. Free Economies of “84.1”1Source: China Daily http://www.chinadaily.com.cn/bizchina/2011-03/22/content_12208548.htm 2Source: Research Institute of Economy, Trade & Industry, IAA http://www.rieti.go.jp/en/china/09062901.html 3Source: 2011 Index of Economic Freedom http://www.heritage.org/index/country/China

60. Low Import of US Goods1

61. Imported ~$92 Billion

62. Exported to US ~ $365 Billion

63. Trade As a Percentage of GDP2

64. Declining since 20061Source: U.S. Census Bureau http://www.census.gov/foreign-trade/statistics/highlights/top/top1012yr.html 2Source: World Bank http://data.worldbank.org/indicator/NE.TRD.GNFS.ZS

66. Country received over FDI of $108 billion in 2008

67. Policy measures to promote foreign investments

68. Barriers to FDI- opaque & inconsistently enforced laws

69. The largest number of foreign-affiliate employees is now in China

70. Economic recovery: inflows to China rapidly expanding Source: World Investment Report 2010 http://www.unctad.org/en/docs/wir2010_en.pdf (The data for China does not include Hong Kong, Macao and Taiwan.)

73. One of the most significant foreign investors in African countries

74. Oil & Gas

75. Mining

76. Metal

77. Increasing investments in Least Developed CountriesSource: World Investment Report 2010 http://www.unctad.org/en/docs/wir2010_en.pdf (The data for China does not include Hong Kong, Macao and Taiwan.)

80. Asia is viewed as the most attractive region for FDI

81. Among the 6 largest foreign investment recipients in the world in 2009, China was the 2nd most popularSource: World Investment Report 2010 http://www.unctad.org/en/docs/wir2010_en.pdf (The data for China does not include Hong Kong, Macao and Taiwan.)

83. Chinese companies invested $2.81 billion in U.S. projects or acquisitions during the first nine months of 2010. 1

84. 2010 - Chinese companies acquired or announced they were establishing more than 50 companies in U.S. 1

85. Recent greenfield investments 1

86. Tianjin Pipe - $1 billion steel pipe mill in Corpus Christi, TX

87. Suntech Power Holdings – Solar panel assembly plant in AZ

88. American YonchengGravue – Cylinder plant in Spartanburg, SC1 Source: China-U.S. Trade Law from http://www.chinaustradelawblog.com/2011/02/articles/investment/the-united-states-welcomes-chinese-foreign-direct-investment-the-handful-of-deals-blocked-by-cfius-are-aberrant/

90. ADVANTAGES

91. Allows Chinese companies to better serve customers

92. Takes advantage of Buy American provisions in government contracting

93. Avoid trade barriers

94. DISADVANTAGES

95. High labor costs

96. Recent negative press for Chinese FDI in U.S. 21 Source: Reuters from http://www.reuters.com/article/2009/02/16/us-usa-stimulus-buyamerican-idUSTRE51F4BF20090216 2 Source: China-U.S. Trade Law from http://www.chinaustradelawblog.com/2011/02/articles/investment/the-united-states-welcomes-chinese-foreign-direct-investment-the-handful-of-deals-blocked-by-cfius-are-aberrant/

98. 2009 - U.S. FDI in China was $49.4 billion 1

99. Only represented 1.4% of U.S. outward FDI worldwide

100. Netherlands and United Kingdom receive the most U.S. outward FDI

101. U.S. FDI in China by sector (of the $49.4 billion) 1

102. Manufacturing – 45.8%

103. Computer and electronic products – 11.6%

104. Chemicals – 10.1%

105. Since 1994 - Employment at Chinese affiliates of U.S. companies has grown 390% 2

106. Employment by U.S. affiliates in China is larger than any other country1 Source: UCSC: http://www.uscc.gov/hearings/2011hearings/written_testimonies/11_03_30_wrt/11_03_30_fung_testimony.pdf 2 Source: Univ. of Colorado at Boulder from http://www.nber.org/books_in_progress/china07/yeaple7-29-08comment.pdf

108. ADVANTAGES

109. A 1% increase in U.S. FDI in China will increase exports to other Asian markets by 0.37% 1

110. Lower cost of employment and bigger employment pool

111. DISADVANTAGES

112. 2009 - Inconsistent regulatory interpretation

113. 2008 – Management-level human resource constraints1 Source: UCSC: http://www.uscc.gov/hearings/2011hearings/written_testimonies/11_03_30_wrt/11_03_30_fung_testimony.pdf

115. Total Trade:

116. 2010= $2,972.4 billion

117. 2010 35% vs. ‘09 and 16% vs.‘08

118. Exports - 2010 31% vs. ‘09 and 10% vs.‘08

119. Imports - 2010 39% vs. ‘09 and 23% vs.‘08Source: www.econographer.com from http://seekingalpha.com/article/245695-china-exports-continue-growth-imports-hit-record-in-december

121. Pressure from major trading partners to decrease trade imbalance:

122. 2010  9% vs. ‘09 and  39% vs. ‘08 Source: www.econographer.com from http://seekingalpha.com/article/245695-china-exports-continue-growth-imports-hit-record-in-december

123. International Trade Major Exports 2010 Major Imports 2010 Source: PRC General Administration of Customs, China’s Customs Statistics from http://www.uschina.org/statistics/tradetable.html

124. Top Ten Trading Partners Source: PRC General Administsration of Customs, China’s Customs Statistics from http://www.uschina.org/statistics/tradetable.html

125. Top 10 Export and Import Top 10 Export Destinations Top 10 Import Suppliers Source: PRC General Administsration of Customs, China’s Customs Statistics from http://www.uschina.org/statistics/tradetable.html

127. Significant impact in 2009 due to economic downturn in global economy

128. In 2010 United States imported 23% of China’s total export volume.Source: US-China Trade Statistics and China's World Trade Statistics from http://www.uschina.org/statistics/tradetable.html

129. Trade with United States Major Imports 2010 Major Exports 2010 Source: US-China Trade Statistics and China's World Trade Statistics from http://www.uschina.org/statistics/tradetable.html

131. Large population of consumers

132. Government policy measures are promoting FDI

133. 1.334 Billion People with 46.6% in Urban Areas

134. Market Growth Rate at 10.75% 5-Year CAGR

135. Disadvantages

136. Currency value set by fiat, not by free trade, artificially makes goods less expensive on the world market but limits consumer buying power.

137. Ranked 135th for “Freest Economies” in the World

139. PRC is opening up to more inward FDI

140. PRC is expected to play a key role in the global economy in the coming years.

141. For the right international firms the opportunities are excellentSource: CIA – The World Factbook https://www.cia.gov/library/publications/the-world-factbook/maps/maptemplate_ch.html