Progress and expectations of business between People's Republic of China (PRC) and Europe/Italy. Centro Reach S.r.l Dec 3 rd, /12/2014 1

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1 Progress and expectations of business between People's Republic of China (PRC) and Europe/Italy Centro Reach S.r.l Dec 3 rd, /12/2014 1

2 New Economy Era in China China outbound investment will exceed foreign FDI From Investment-led model to more sustainable consumption and service oriented model Average 7% moderate growth rate with boom for the middle-class Influential state-owned & private companies are more overseas-ambitious and more innovative Chinese companies are to be understood in a more complex, globalised environment. Italian companies shall evaluate opportunities provided by the Chinese market considering the global market 11/12/2014 Source: Chinese Customs. Statistics anaylised by Camera di Commercio Italo Cinese. 2 The value indicated is upon customs registration, without considering exchange rate

3 Market opportunities ( Jan Oct 2014 ) Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes Import in USD Total Export in USD Total Kazakhstan Japan Korea Rep Korea Rep Australia United States United States Germany Thailand India Italy Italy 132,131,580 11/12/2014 Source: Chinese Customs. Statistics anaylised by Camera di Commercio Italo Cinese. 3 The value indicated is upon customs registration, without considering exchange rate

4 Market opportunities ( Jan Oct 2014 ) Organic chemicals Import in USD Total Export in USD Korea Rep India Japan Taiwan Saudi Arabia United States Japan Korea Rep United States Brazil Netherlands Germany Italy Italy /12/2014 Source: Chinese Customs. Statistics anaylised by Camera di Commercio Italo Cinese. 4 The value indicated is upon customs registration, without considering exchange rate

5 Market opportunities ( Jan Oct 2014 ) Fertilizers Import in USD Total Export in USD Total Russia Byelorussia Israel Canada Norway India United States Vietnam Brazil Indonesia Italy Italy /12/2014 Source: Chinese Customs. Statistics anaylised by Camera di Commercio Italo Cinese. 5 The value indicated is upon customs registration, without considering exchange rate

6 Market opportunities ( Jan Oct 2014 ) Tanning or dyeing extracts; tannins and their derivatives; dye pigments and other coloring matter; paints and varnishes; putty and other mastics; inks Import in USD Total Export in USD Total Japan Germany United States Korea Rep. Taiwan United States Indonesia Korea Rep India Taiwan Italy Italy /12/2014 Source: Chinese Customs. Statistics anaylised by Camera di Commercio Italo Cinese. 6 The value indicated is upon customs registration, without considering exchange rate

7 Market opportunities ( Jan Oct 2014 ) Essential oils and resinoids; perfumery, cosmetic or toilet preparations Import in USD Total Export in USD Total France United States Japan Korea Rep United States HongKong Japan United Kingdom United Kingdom Indonesia Italy Italy /12/2014 Source: Chinese Customs. Statistics anaylised by Camera di Commercio Italo Cinese. 7 The value indicated is upon customs registration, without considering exchange rate

8 Market opportunities ( Jan Oct 2014 ) Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, "dental waxes" and dental preparations with a basis Import in USD Total Export in USD Total Japan United States Germany Korea Rep France United States HongKong Japan Australia United Kingdom Italy Italy /12/2014 Source: Chinese Customs. Statistics anaylised by Camera di Commercio Italo Cinese. 8 The value indicated is upon customs registration, without considering exchange rate

9 Market opportunities ( Jan Oct 2014 ) Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations Import in USD Export in USD United States Thailand Japan Czech Republic Germany United States Germany Indonesia Australia United Kingdom /12/2014 Source: Chinese Customs. Statistics anaylised by Camera di Commercio Italo Cinese. 9 The value indicated is upon customs registration, without considering exchange rate

10 Market opportunities ( Jan Oct 2014 ) Photographic or cinematographic goods Import in USD Total Export in USD Total Japan United States Korea Rep Taiwan Belgium Korea Rep HongKong Taiwan Japan United States United Kingdom Italy Italy /12/2014 Source: Chinese Customs. Statistics anaylised by Camera di Commercio Italo Cinese. 10 The value indicated is upon customs registration, without considering exchange rate

11 Market opportunities ( Jan Oct 2014 ) Miscellaneous chemical products: Residual lyes from the manufacture of wood pulp; or chemically treated, including lignin sulphonates; Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant growth regulators, disinfectants; Refractory cements, mortars, concretes and similar compositions; Artificial graphite; colloidal or semi colloidal graphite; preparations based on graphite or other carbon; Activated carbon; activated natural mineral products; animal black; Tall oil Import in USD Total Japan United States Taiwan Indonesia Korea Rep Export in USD Taiwan Korea, Rep United States Japan Thailand Germany Italy Italy /12/2014 Source: Chinese Customs. Statistics anaylised by Camera di Commercio Italo Cinese. 11 The value indicated is upon customs registration, without considering exchange rate

12 Market opportunities ( Jan Oct 2014 ) Plastics Import in USD Total Export in USD Korea, Rep Taiwan Japan United States United States HongKong Japan India Singapore Russia Italy Italy /12/2014 Source: Chinese Customs. Statistics anaylised by Camera di Commercio Italo Cinese. 12 The value indicated is upon customs registration, without considering exchange rate

13 Market opportunities ( Jan Oct 2014 ) Rubber products Import in USD Export in USD Thailand Malaysia Japan United States Korea Rep Italy United States United Kingdom Russia Mexico Japan Italy /12/2014 Source: Chinese Customs. Statistics anaylised by Camera di Commercio Italo Cinese. 13 The value indicated is upon customs registration, without considering exchange rate

14 What is going on in China? Chemical Industry: the Q fact sheet - No. Companies: Revenue: RMB 3,8 trillion - Profit: RMB billion 11/12/ Source: China Nationa Development and Reform Commssion ( NDRC ).

15 What is going on in China? INVESTMENT IN FIXED ASSETS BY SECTOR 2014 (Jan.-Oct.) ( yuan) Petroleum Processing, Coking and Nuclear Fuels Processing: Raw Chemical Materials & Chemical Products Manufacturing: Medical and Pharmaceutical Products Manufacturing: Chemical Fiber Manufacturing: Rubber and Plastic Products /12/ Source: Novermber monthly report of China National Statistics Offce.

16 What is going on in China? Growth factor: urbanisation! INVESTMENT IN FIXED ASSETS (EXCLUDING RURAL HOUSEHOLDS) BY SECTOR 2014 (Jan.-Oct.) ( yuan) - Construction Transportation, Storage and Posts Real Estate PROJECTS UNDER CONSTRUCTION AND PLANNED INVESTMENT (EXCLUDING RURAL HOUSEHOLDS)( Jan.-Oct ) - Projects under construction: Newly started projects: CONSTRUCTION OF RESIDENTIAL BUILDINGS (EXCLUDING RURAL HOUSEHOLDS) 2014 ( 1000qm ) - Floor space completed: Floor space under construction: /12/ Source: Novermber monthly report of China National Statistics Offce.

17 Output of Major industrial products 2014 ( Jan. Oct. ) 11/12/ Source: Novermber monthly report of China National Statistics Offce.

18 Main economic indicators of industrial enterprises by branch of industry 2014 ( Jan. Sept. ) ( 1, Yuan ) 11/12/ Source: Novermber monthly report of China National Statistics Offce.

19 Main economic indicators of industrial enterprises by branch of industry 2014 ( Jan. Sept. ) ( 1, Yuan ) 11/12/ Source: Novermber monthly report of China National Statistics Offce.

20 Sales and inventory of industrial products (Q1-Q3, 2014) 11/12/ Source: Novermber monthly report of China National Statistics Offce.

21 What is the Chinese government planning? - Auto-sufficiency strategy and sustainability, which results in government support for local players Target: 76% auto-sufficiency for new chemicals and 1,5 trillion production of fine chemicals. - Key sectors relevant to the chemical industry: new energy, new materials, new energy automotive and energy saving. I.E. large scale ethylene project in next future - Agriculture and food safety is a must for China - Great concern for the deficit for chemicals used in plastics - «Go Abroad»: Government support for SOE and private companies to enhance their product portfolios, when possible - «Go West»: government support on developing petrochemical and chemical enterprises in western provinces 11/12/ Source: 2012 market report on China s fine chemical industry, China Import Forum

22 This is what consolidated Chinese companies are thinking for Consolidated companies: for example, 2011, more than 7000 Chinese chemical companies with revenue more than 5billlion Rmb*; 500 top companies count as 47,1 percent of industry asset.** - Quality, environment & sustainability - Brand management - Overseas Investment and acquisitions, more oriented on mid-cap foreign asset with International sales network and selected technology solutions. - Technology innovation Chinese chemical industry is restructuring itself to be more competitive on a global scale: more synthetic materials and special chemicals segments / less basic chemicals 11/12/2014 Source: *multi reports of China National Statistics Offce. ** Powerful enterprises are the basis of a powerul country: research report on 10-year developmento of 22 China s Top 500 chemical enterprises, 2013, CCEMA/CCIA

23 Think China, think global! A check list for Italian companies 1. Target definition: is China the best region for improving your global market share? 2. Opportunity definition: slowdown and overcapacity of Chinese local player can be transferred to opportunities for Italian companies? 3. Strategy definition: Considering net chemical deficit and dependency on imported material of Chinese market. Shall Italian companies concentrate on exporting or invest in China/Asia? 4. Market research: business model for Italian PMI in China 5. Qualification, certification and communication. 6. Definition of information channel for business opportunities. 7. Partner definition. 11/12/

24 Camera di Commercio Italo Cinese Via Clerici Milano Mail: info@china-italy.com 11/12/

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