1. China has experienced strong economic growth averaging 10.8% annually between 2001 and 2008, making it the third largest economy in the world. 2. It represents an important opportunity for foreign companies as a large market of over 1.3 billion consumers, low cost production base, and sourcing base. 3. By 2050, projections indicate China will become the world's largest economy, surpassing the United States.

1. CHINA OUTLOOK 200 9

2. AGENDA Executive Summary China at a Glance Political Structure National Accounts Balance Trade China Diversity National Economic Plan Business Organization Legal Structure for Foreign Enterprise Business District Map

3. China , with its 1.33 billion population, is the country with the largest potential for growth in the world and thus must represent an essential part of each company’s strategy , either as a production base or as a final market The economy has been growing at average rates of 10. 8 % between 200 1 and 200 8 and is now 3rd largest in the world , accounting for 6 % of global GDP ; foreign trade has been growing dramatically ( an average of 2 5 % CAGR between 200 4 and 200 8 ), and foreign investment has kept pouring in to the country with actually utilized foreign capital of 92.4 billion in 2008 , up by 23.6% For Italian companies, China represents an extremely important opportunity on any of the following 3 fronts : Sale : as a final market with more than 1.3 3 billion consumers Delocalization : as a low cost production base Purchasing : as a sourcing base Exchange rate : RMB/USD stood at 6.83 at the end of 2008, with a 6.9% appreciation of the end of 2007 RMB/EUR stood at 9.61 at the end of 2008, with an 9.8% appreciation of the end of 2007 Inflation : CPI in 2008 surged to 5.9% mainly due to the soar of food price. Other factors such as increase of energy price and excess liquidity in the financial market may keep the momentum of CPI Stock Market : SSE composite index plunges 2/3 from the beginning of the year; whether the government should intervene is under intense debate The new LAW OF THE PEOPLE'S REPUBLIC OF CHINA ON EMPLOYMENT CONTRACTS came into effect in 1st Jan, 2008 towards more protection of the employees The 29th Olympic Games was held successfully in Beijing in August, 2008. EXECUTIVE SUMMARY Source : China Statistical Yearbook , China National Statistics Bureau, NPV analysis

4. AGENDA Executive Summary China at a Glance Political Structure National Accounts Balance Trade China Diversity National Economic Plan Business Organization Legal Structure for Foreign Enterprise Business District Map

5. By 2050 it is expected that China will be the world’s number one economy Source : BRIC Report , Goldman Sachs CHINA AT A GLANCE 20 2 5 USD bn 205 0 USD bn The largest economies in Asia in 2025 The largest economies in the world in 2050

6. Country profile Source : China Statistical Yearbook, NPV analysis CHINA AT A GLANCE Territory - 9.6 million km 2 , 1st in Asia, 3rd largest in the world Population - 1,3 28 billion in 200 8 (51,5% male , 45.7% urban ) - Annual growth rate of approximately 0. 53 % Capital - Beijing Government System - Communist Administrative Divisions - 4 level : Province (3 4 ) / Prefecture ( 333 ) / County ( 286 0 ) / Townships (41 040 ) Currency - RenMinBi (RMB) or Yuan , semi-flexible exchange rate Languages - Mandarin, with Cantonese as the second most common language Ethnicities - Han ( 92% ) and 55 minorities (8%) Religion Buddhism, Islam, Taoism, Christianity

7. AGENDA Executive Summary China at a Glance Political Structure National Accounts Balance Trade China Diversity National Economic Plan Business Organization Legal Structure for Foreign Enterprise Business District Map

8. POLITICAL STRUCTURE Source : http://afe.easia.columbia.edu/china/gov/chart.htm, NPV analysis Government and Communist Party Structure

9. BEIJING SHANGHAI TIANJIN CHONGQING HONG KONG MACAU XINJIANG TIBET QINGHAI GANSU SICHUAN YUNNAN INNER MONGOLIA GU I ZHOU GUANGXI HUNANI HUBEI SHAANXI SHANXI NINGXIA HENAN HEBEI GUANGDONG JIANGXI FUJIAN ANHUI ZEJIANG SHANDONG HAINAN LIAONING JILIN HEILONGJIANG TAIWAN JIANGSU Municipality Autonomous region Special administrative region Source : China Statistical Yearbook, NPV analysis Administrative Division 23 ordinary provinces (including Taiwan) 4 Municipalities : Beijing Chongqing Shanghai Tianjin 5 Autonomous regions : Guang x i Inner Mongolia Ning x ia Tibet Xinjiang 2 Special administrative regions : Hong Kong Macau POLITICAL STRUCTURE China administrative divisions

10. Source : Chinese Government , NPV analysis Central Government Municipalities Provinces, Autonomous Regions Special Administrative Regions Districts Counties Cities Autonomous prefectures Counties, Autonomous Counties Districts Counties Cities Counties Autonomous Counties Townships Ethnic townships Towns POLITICAL STRUCTURE China administrative divisions

11. AGENDA Executive Summary China at a Glance Political Structure National Accounts Balance Trade China Diversity National Economic Plan Business Organization Legal Structure for Foreign Enterprise Business District Map

12. China is the 3rd largest economy in the world in 2008 , 6 % of gross world product (200 7 ) Considering the GDP per capita , China is the 1 06 th in the world in 2008 ( at $3,315 ) Chinese economy grows consistently reaching a 10% annual growth rate during the latest five years. China’s urban households’ per capita disposable income growth has consistently been higher than CPI inflation , indicating a positive real growth in the people’s living standard. China GDP 200 4 - 200 8 People’s Income and CPI¹ 200 1 -200 8 RMB Bn NATIONAL ACCOUNTS Source :China National Economic and Social Development Report, China Statistical Yearbook, NPV analysis

13. Secondary industry is the dominant force in driving economy forward accounts for almost 50% of GDP, with CAGR 18.12 % from 2000 - 200 8 Tertiary industry grows with CAGR 1 7.61 % from 2000 -200 8 GDP – Breakdown 1978-200 8 Source : China National Economic and Social Development Report , China Statistical Yearbook, NPV analysis NATIONAL ACCOUNTS

14. Average GDP per capita in 2008 : 3,315 USD Shanghai is the richest province level area with a per capita GDP of 10, 922 USD in 2008. Z H EJIANG, JIANGSU, and GUANGDONG are the TOP 3 richest provinces 4 3 . 1 % of population’s GDP per capita is higher than average China has reduced 62 million, 53% extreme poverty during the past 20 years. In 1985 China had 116 million people living under $1 dollar-a-day poverty level.(*) GDP per capita ( USD ) (*) MGI China consumer demand model NATIONAL ACCOUNTS Source : China National Economic and Social Development Report , China Statistical Yearbook , NPV analysis Over 4,000 USD/person 464 million Below 2,500 USD/person 347 million Over 2,500 USD/person 489 million Average