Session 128 L - China Social Health Insurance Moderator: Bryan Garris, ASA, MAAA. Presenter: Davout Yean, FSA

Transcription

1 Session 128 L - China Social Health Insurance 23 Moderator: Bryan Garris, ASA, MAAA Presenter: Davout Yean, FSA SOA Antitrust Compliance Guidelines SOA Presentation Disclaimer

2 217 SOA Annual Meeting & Exhibit DAVOUT YEAN Session 128, China Social Health 23 Oct. 17, 217

3 Summary Utilized past experience of the most vibrant social health insurance program, Urban Employee-Based Basic Medical Insurance Scheme to formulate a 15 years projection model for China social health insurance programs. The results of this projection will be used to explore the possible future directions for China s social health insurance programs. 2

4 Contents Social welfare Programs Health Insurance Framework - Framework - Health Care Delivery System & Commercial Health Insurance Market - Social Health Insurance Programs New Rural Cooperative Medical Care System Urban Employee-Based Basic Medical Insurance Scheme Urban Resident-based Basic Medical Insurance Scheme Frame work, assumptions, and the structure of the 15 years projection Possible future directions for China social health insurance programs China Profile - Geographic - Demographic - Economic 3

5 Social Welfare Programs m persons 2, 1,5 1, 5 Enrollee 1,341 1,373 1,333 1,336 1, Pension Urban & New rural cooperative medical Unemployment Worker's compensation Maternity $ b 1,5 1, Fund Income and expenditure for Pension Fund Income and expenditure for unemployment+ 35% $ b Worker s Compensation+ Maternity Insurance 2 3% 25% % % % % % -5% -1% Income Expenditure Year-End Balance growth rate of income growth rate of expenditure

6 Contents Social welfare Programs Health Insurance Framework - Framework - Health Care Delivery System & Commercial Health Insurance Market - Social Health Insurance Programs New Rural Cooperative Medical Care System Urban Employee-Based Basic Medical Insurance Scheme Urban Resident-based Basic Medical Insurance Scheme Frame work, assumptions, and the structure of the 15 years projection Possible future directions for China social health insurance programs China Profile - Geographic - Demographic - Economic 5

7 Framework of China Health Insurance Systems Healthcare System Commercial Insurance Social Program Supplement Health, Critical Illness, Long-term Care, Disability Income Medical specific stop loss insurance Government Employee Health Plan Basic Medical Insurance for Urban Employees Basic Medical Insurance for Urban Residents New Rural Cooperative Maternity Insurance Self-Paid Individual and Group Public Servants, Military, etc. Employed Individual Non-employed individual and/or family member Welfare Program Urban Medical Aid Rural Medical Aid Low Income individual and family 6

8 Contents Social welfare Programs Health Insurance Framework - Framework - Health Care Delivery System & Commercial Health Insurance Market - Social Health Insurance Programs New Rural Cooperative Medical Care System Urban Employee-Based Basic Medical Insurance Scheme Urban Resident-based Basic Medical Insurance Scheme Frame work, assumptions, and the structure of the 15 years projection Possible future directions for China social health insurance programs China Profile - Geographic - Demographic - Economic 7

9 Health Care Delivery System Hospitals 29,14 Hospitals ,455 2,214 2,33 1, ,78 16,432 2,232 7,944 9,282 9,682 public hospital private hospital Class-III Hospitals Class-II Hospitals Class-I Hospitals Unrated Hospitals number of hospitals number of sickbeds (right in thousands) ,689 k beds,78.3% belong to public hospital 5.37 bed per 1, 926 k Community Medical Centers, 54 k are public 1,442 k beds Basic Structure Hospital: Inpatient, Outpatient, ER, Rad/Path, Rx, Clinic, Dental Community Medical Center (Clinic) : Small Hospital Doctor Office Rx Private Dental & Eye clinic 7, 6, 5, 4, 3, 2, 1, 23 1, ,327 36,795 21,48 638,763 15,225 Community Healthcare Centers Rural Health Centers Community Medical Center Clinics Village Clinics Other Medical Institutions number of hospitals number of sickbeds (right in thousands) 8

10 Health Care Delivery System thousand persons Health Personnel in China 7, 6, 5, Other Staffs, 1,127 Physician 3191 Graduate 1.3% Undergraduate 38.8% 4, 3, 2, 1, - Health Professionals, 5,415 Other Staffs, 1,329 Health Professionals, 2,354 Other Staffs, 265 Health Professionals, 684 Hospitals Community Medical Institutions Other Health Institutions Others 2,718 Health Professional 8,455 Registered nurse 357 Pharmacist 439 Technician 453 Others 865 Junior college 3.6% Polytechnic school 18.3% High school and below 2% *China *US Health Personnel in China Constitution of Health technician in China Health resource comparison Between Us and China # Beds per 1 people # Registered Doctor per 1 people # Registered Doctor/# Registered Nurse

11 Commercial Health Insurance Market $t 45 8% Health Insurance Breakdown % 16.7% 2.1% -1.2% % 18.3% 14.3% 2.4% % 17.9% 14.% 5.8% % 16.9% 15.7% 14.1% % 51.9% 31.7% 21.5% % 1.3% 9.2% 8.6% 6% 4% 2% % -2% -4% long term 75% Disability % short term 17% medical specific stop loss insurance 8% Covering about 1.5 billion persons in CHINA % -8% Long Term Care 31% CI 42% Life insurance non-life insurance health insurance auto insurance Life insurance growth ratio non-life insurance growth ratio health insurance growth ratio auto insurance growth ratio -1% Medical 27% 1

12 Contents Social welfare Programs Health Insurance Framework - Framework - Health Care Delivery System & Commercial Health Insurance Market - Social Health Insurance Programs New Rural Cooperative Medical Care System Urban Employee-Based Basic Medical Insurance Scheme Urban Resident-based Basic Medical Insurance Scheme Frame work, assumptions, and the structure of the 15 years projection Possible future directions for China social health insurance programs China Profile - Geographic - Demographic - Economic 11

13 Social Health Insurance Programs Enrollee mm persons Urban Employee Urban Resident New Cooperation total Insured 12

14 Basic Medical Insurance of Urban Employees Urban Employee & Growth m persons % 13.8% 14.6% % 11.1% % % % 5.2% 1 3.4% 3.3% 2.1% 2.1% % 14% 12% 1% 8% 6% 4% 2% % Funding Payroll deduction Employee 2%, Employer 6-1% Fund Distribution 3% go to Individual Account The rest go to a pool $b 18 36% Urban Employee (left) Growth (Right) Income & Payment of UE 4% 23% Current Account Balance / Income % 3% 24% 23% % 25% 2% % % 23% 15% 9.4 2% 12% % 15% 16% 16% % % 1% 1% 4.8 5% % Income(left) Payment(left) Income Growth(right) Payment Growth(right) 21% 19% 17% 15% 13% 11% 9% 7% 5% 22.1% 11.9% 14.8% 16.% 13.1% 13.8% 17.% 18.%

15 Why using Urban Employee-Based Basic Medical Insurance Scheme as the baseline? Stronger legal foundation and better support by tax policies Most mature program Standard and well-structured eligibility roles, reliable source for funding, clearly defined comprehensive coverage A matured compulsory Plan, since 21 the enrollee population almost becomes a closed population Available/Reliable experience data 14

16 Urban Resident-based Basic Medical Insurance Scheme m persons % Ubran Residents & Growth % 16% 23% % 6% % 19% Ubran Residents Growth(right) 2% 15% 1% 5% % $b % % Income, Payment & Balance% 23% % % % % Income payment Balance%(right) 35% 3% 25% 2% 15% 1% 5% % Year Total Adults Minors College Students 21 1% 46% 45% 9% 211 1% 49% 42% 9% 212 1% 54% 38% 8% 213 1% 56% 37% 7% 214 1% 58% 35% 7% 215 1% 62% 32% 6% 216 1% 66% 29% 5% CAGR 15.2% 22.3% 6.8% 3.2% $ per Capita Funding of UR 1 6% 5% % % 6 26% 27% % % % 14% % % 1% % per Capita Subssidy per Capita Premiums Growth of Total(right) 15

17 m persons 1, $ b New Rural Cooperative Medical Care System 124% 15% % 179 % -9% 5% % -5% Income and Payment Enrollee % 6% % 44.% 1 4.8% 4% % 8 2.5% 8.6% 2% % 19.6% 1.8% -.4% % % % % 1. -6% Funding Payment Funding Growth Payment Growth $ Per Capita Funding % % % 2% 11% Per Capita Funding Growth Insureds Growth 7% 6% 5% 4% 3% 19% 2% 1% % 16

18 Contents Social welfare Programs Health Insurance Framework - Framework - Health Care Delivery System & Commercial Health Insurance Market - Social Health Insurance Programs New Rural Cooperative Medical Care System Urban Employee-Based Basic Medical Insurance Scheme Urban Resident-based Basic Medical Insurance Scheme Frame work, assumptions, and the structure of the 15 years projection Possible future directions for China social health insurance programs China Profile - Geographic - Demographic - Economic 17

19 Key Components for Projection Model Enrollee Demographic Structure Funding/Income/ Premium Claim Cost Financial Positions in 23 Enrollee Demographic Structure Use 21 nationwide census results as a reference Age and education level two dimensional approach Assumptions: Average employment age at 18 Average retirement age at 58 Enrollee age distribution Enrollee education level distribution Progression Active New graduate (enter) Retired active enrollee(enter) New employment (enter) Retiree New unemployment (exit) Death(exit) Funding/Income/Premium Average Wage Premium Contribution Base Contribution Rate Claim Cost Analyze Utilization by.. Two major demographic categories: Active, Retiree Three benefit categories: Hospital Inpatient, General & ER Office Visit, Office Visit(Specific Illness) Four different view on utilization: Episode, Admission, Day, Visit. Analyze matching cost per unit 18

20 Enrollee - Assumption and Projection 45% Enrollee/Total Population Age Distribution Assumption 4% Education Level Distribution Assumption 35% 25% 15% 5% 25% 17% 39% 36% 34% 26% 23% 22% 2% 21% 37% 25% 23% 34% 22% 21% 3% 23% 2% 21% 25% 29% 23% 23% 21% 22% % 2% 1% % 1.3% No Formal Education 1.6% Primary School 26.7% 26.8% Junior High School Senior High School 2.7% Associate College 12.6% College 1.4% Graduate Enrollment rate of Active and Retiree by Education Level m persons 4 Enrollee Projection % 1% 8% 6% 4% 2% % 5.% 22.% 7.6% 1.% 2.4% 11.% No Formal Education Primary School Junior High School 85.% 38.% Senior High School 95.% Associate College 1.% 1.% 9.% 95.% 98.% College Graduate Active Staff Retiree Active Staff Retiree Total Enrollee Active Staff/Retiree(right) 19

21 Funding - GDP, Average Wage, Premium Contribution Base $ Premium Contribution Base, Average Wage (per Capita) % 16% 14% 12% 1% 8% 6% 4% 2% % 13.% 13.5% 1.1% GDP Per Capita, Premium Contribution Base, Average Wage - Growth Rate 12.5% 14.4% 9.% 16.2% 11.9% 1.4% 1.1% 13.1% 9.5% 11.9% 1.1% 9.6% 8.9% 7.3% 7.2% 6.8% 6.4% 6.1% Premium Contribution Base ($) Average Wage ($) GDP per Capita Premium Contribution Base Average Wage 8% 6% 4% 2% % Fiscal Subsidy 7.4% 3.3% 3.3% 3.1% <1% 1.3%.9%.7%.8%.7% Year China GDP ($b) GDP Per Capita ($) GDP Per Capita Growth Rate Premium Contribution Base Growth Rate Premium Contribution Base /GDP Per Capita % 13.% 79% % 12.5% 76% % 16.2% 8% % 1.4% 81% % 13.1% 85% % 11.9% 89% % 9.6% 89% 2

22 Funding - Premium Contribution Base Projection $ GDP per Capita & Growth Rate 25, 2, 15, 1, 5, 1.1% 9.% 4,561 8,123 1,916 2,15 7.3% 7.2% 6.8% 6.4% 6.1% 6.3% 5.9% 6.6% 5.9% 6.3% 6.6% 6.3% 6.6% 5.9% 6.3% 12.% 1.% 8.% 6.% 4.% 2.% $ 2, 18, 16, 14, Premium Contribution Base Projection 13,342 17,98.% 12, GDP per Capita(left in $) Growth Rate(right) Premium Contribution Base/GDP per Capita - Actual & Assumption Actual Projection 1, 8, 6, 7,66 9, % 9.% 4, 2,

23 Funding - Income Projection $ 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, Premium Contribution Base Projection 13,342 9,796 7,66 17,98 m persons Enrollee Projection Actual Income and Projection Active Staff Retiree Total Enrollee % 9.2% 9.% 8.8% 8.6% 8.4% Average Contribution Rate 9.25% 9.7% 8.99% 8.99% 9.1% 9% 8.94% 8.79% Average Contribution Rate Average Contribution Rate (Assumption) Fiscal Subsidy=.8% Interest=3.4% $b Income Projection 22

24 Claim Cost - Overall Trend 3% 25% 2% 24% 23% 21% 2% 15% 15% 12% 1% 1% 5% % ) Enrollee 2 ) Active/Retired 3 ) Medical Cost Inflation 4 ) Utilization Rate 23

25 Claim Cost - Utilization Assumption Hospital Inpatient Admission Rate; General & ER Office Visit Rate; Specific Illness Office Visit Rate Hospital Inpatient Admission Rate General & ER Office Visit Rate Specific Illness Office Visit Rate 5% 45% 4% 35% 39.5% 41.6% 44.1% 45.9% % % 2% % 1% 5% 9.% 9.4% 9.9% 1.3% % Actual Rate for Active Staff Projected Rate for Active Staff Actual Rate for Reitree Projected Rate for Reitree Active Staff (#) Retiree (#) Active Staff (#) Retiree (#) 24

26 Claim Cost - Unit Cost Assumption Hospital Inpatient Cost Per Admission; General &ER; Specific Illness Cost Per Visit Inpatient Cost per Admission in $ (4%) General &ER Cost per Visit in $ (5%) Specific Illness Cost per Visit in $ (5%) , , , , Active Staff Retiree Active Staff Retiree Active Staff Retiree 25

27 Contents Social welfare Programs Health Insurance Framework - Framework - Health Care Delivery System & Commercial Health Insurance Market - Social Health Insurance Programs New Rural Cooperative Medical Care System Urban Employee-Based Basic Medical Insurance Scheme Urban Resident-based Basic Medical Insurance Scheme Frame work, assumptions, and the structure of the 15 years projection Possible future directions for China social health insurance programs China Profile - Geographic - Demographic - Economic 26

28 @23 - Baseline $b 5 4 Income and Expenditure Projection Expenditure Projection Fund Income Projection Reserve ($ b) 215 Actual 216 Actual

29 @23 - Lesson Learned Pay as You Go model holds if strong GDP growth continue, health care cost inflation and services utilization are under control. For many poor performer individual fund/plan, break even year & reserve year will arrive before 23. Determine what should be the core coverage (or set priority), i.e. wellness, preventive, basic, chronicle, severe illness. Need further realignment on deductible, co-insurance, benefit max, Out of pock max, specific stop loss protection. Management/control on Individual Account needs more attention. Premium increase shouldn't be/will not be the life saver. 28

30 @23 - Social Health Insurance Programs Expenditure? 7.% 6.% 5.% 4.% 3.% 2.% 1.%.% 58.3% 5.5% 51.8% 51.% 49.% 49.4% 47.9% 41.2% 36.8% 34.% 35.5% 34.1% 31.7% 28.5% 18.9% 23.6% 16.9% 13.5% 11.4% 7.7% 8.3% Total $214. b $12.5 b $61. b $5.5 b Urban Employee-based medicial Insurance Scheme New Rural Cooperative Medicial Care System urban Resident-based medicial Insurance Scheme 29

31 @23 - Overall Health Expenditure? $ b Total Health Expenditure Government Social Three Social Health Insurance Programs Expenditure 214./72.3% / 8.4% 17.9 / 84.5% 145. / 81.2% Personal

32 Contents Social welfare Programs Health Insurance Framework - Framework - Health Care Delivery System & Commercial Health Insurance Market - Social Health Insurance Programs New Rural Cooperative Medical Care System Urban Employee-Based Basic Medical Insurance Scheme Urban Resident-based Basic Medical Insurance Scheme Frame work, assumptions, and the structure of the 15 years projection Possible future directions for China social health insurance programs China Profile - Geographic - Demographic - Economic 31

33 Possible future directions for China social health insurance programs 中共中央总书记 国家主席 中央军委主席 中央全面深化改革领导小组组长习近平 215 年 12 月 9 日主持中央全面深化改革领导小组第十九次会议重要讲话 The Key Words.. Mission: Promote healthcare reform, social equality and people s welfare Goal: Build a multi-layered medical security system Next Step: Integration of Urban Residents Basic Medical Insurance and New Rural Cooperative System Key Focus: Unified coverage, funding, benefits, medicine catalogues, site management and fund management. The Take Away. Integrate Urban Residents Basic Medical Insurance and New Rural Cooperative System to promote social equality and people s welfare. 3 key ingredients for the integration: Unified coverage, funding, administration support 32

34 @23 Further Integration Scenarios Stay the Same Project both 2 programs to 23, based on current coverage level. Cost per capita at 23 Urban Employee-Based Basic Medical Insurance Scheme $ 1,62 Urban & Rural Resident-based Basic Medical Insurance Scheme $ 114 Unified Coverage Project both 2 programs to 23, based on the same coverage level with Urban Employee-based Basic Medical Insurance Scheme Cost per capita at 23 Urban Employee-Based Basic Medical Insurance Scheme $ 1,62 Urban & Rural Resident-based Basic Medical Insurance Scheme $ 1,62 33

35 @23 Further Integration Scenarios Stay the same Unified Coverage Social Health Insurance Programs Expenditure at 23 (USD billion) Urban Employee-Based Urban & Rural Resident-Based Total % 22.71% 1.% 399 1,35 1, % 72.2% 1.% Total Expenditure/GDP at % 5.34% 34

36 @23 Further Integration Scenarios $ b GDP Total Health Expenditure Government 26,862 (CAGR=6.4%) 2,686 (1% of GDP assumption) 87 (3% of Total) 11,199 11,65 1,482 9, (6.4% of GDP) (5.7% of GDP) (5.2% of GDP) 49.9 (5.1% of GDP) Social 1, Social Health Insurance Programs Expenditure 1,434/8% 214./72.3% / 8.4% 17.9 / 84.5% 145. / 81.2% Personal 86?

37 @23 Further Integration Scenarios Social Programs Funding - Tax revenue - Surplus reserve - Individual account Coverage - Definition of Basic Coverage - Cost sharing Pooling - Eligibility policy - Geographical & economical barrier Full Integration of Social Programs Health Care Service Delivery System Structure Realignment - Hospital & Community Medical Center - General hospital, specialty hospital, clinic Privatization - Right or commodity - Escalate medical inflation - Qualify for social program Clinical & Logical separation - 3 separation: health care service personnel, clinic, Rx - Qualification and education Accessible, Good Quality, Affordable Social Equality Commercial Health Insurance Function & Role - 2 tracks approach or supplemental - Incentive Integrated with Social Programs Corporation with health care service industry/system Key role in multi-layer security system 36

38 Contents Social welfare Programs Health Insurance Framework - Framework - Health Care Delivery System & Commercial Health Insurance Market - Social Health Insurance Programs New Rural Cooperative Medical Care System Urban Employee-Based Basic Medical Insurance Scheme Urban Resident-based Basic Medical Insurance Scheme Frame work, assumptions, and the structure of the 15 years projection Possible future directions for China social health insurance programs China Profile - Geographic - Demographic - Economic 37

39 Geographic - Location Size: 3.71 Million Mi² One Coast Line: 9,1 Miles Long Neighboring Countries: Too Many Land Policy Kazakhstan Kyrgyzstan Tajikistan Afghanistan Pakistan India China Nepal Bhutan Myanmar(Burma) Laos Russia Mongolia North Korea Vietnam 38

40 Geographic - Great Divide Population Distribution Precipitation Distribution Spring Festival Rush Smog Days 39

41 Contents Social welfare Programs Health Insurance Framework - Framework - Health Care Delivery System & Commercial Health Insurance Market - Social Health Insurance Programs New Rural Cooperative Medical Care System Urban Employee-Based Basic Medical Insurance Scheme Urban Resident-based Basic Medical Insurance Scheme Frame work, assumptions, and the structure of the 15 years projection Possible future directions for China social health insurance programs China Profile - Geographic - Demographic - Economic 4

42 Demographic - Population Profile billion persons 1.4 Growth Rate.8% 1% Ageing 1.3.6% 8% %.2% 6% 4% 2% Year-End Population Growth Rate Unit:1 thousand 3.% % E 225E 23E Newborn E 224E 23E : Severe famine 198: 1 kid only 211: If both parents are single child allow 2 kids 213: If one of the parents is single child allow 2 kids 216: 2 kids only 41

43 Demographic - Population Profile Dependency Ratio Proportion of working population(right axis) HuKou ( 户口 ), comprehensive residential registration system Demographic Dividend Demographic Debt Low illiteracy ratio China 3.6% US.9% India 27.8% 7% 6% 5% 4% 3% 2% 1% % 19.4% 23.7% 26.4% 29.% Urbanization Rate 36.2% 43.% 49.9% 56.1% 6.% Value shift for labor force Urbanization 42

44 Contents Social welfare Programs Health Insurance Framework - Framework - Health Care Delivery System & Commercial Health Insurance Market - Social Health Insurance Programs New Rural Cooperative Medical Care System Urban Employee-Based Basic Medical Insurance Scheme Urban Resident-based Basic Medical Insurance Scheme Frame work, assumptions, and the structure of the 15 years projection Possible future directions for China social health insurance programs China Profile - Geographic - Demographic - Economic 43

45 Economic - Key Index $b GDP % 25, , 1. 15, 5. 1,. 5, USA GDP CHN GDP EU GDP USA GDP Growth CHN GDP Growth EU GDP Growth Interest Rate (%) USA CHN Exchange Rate RMB/USD , , , Ex Rate Foreign Ex RSV (right in $b) Pegging Floating 'Basket of Currencies' Deprecation Expectation 'Reference Rate' 44

46 Economic - Key Index $b 3, 25, 2, 15, 1, 5, M2 % USA M2 CHN M2 EU M2 USA M2 Growth(right) CHN M2 Growth(right) EU M2 Growth(right) (5) CHN USA EU JAN GDP 11,199 18,569 16,398 4,939 M2 24,32 16,815 1,162 8,557 M2/GDP 215% 91% 62% 173% $b % Inflation USA Inflation CHN Inflation EU Inflation 45

47 Economic - Capital Market SOE Phenomena 217 FORTUNE5- SOE & PE in CHINA Mainland TOP 1 in FORTUNE ranking Company 1 WAL-MART STORES 2 CHINA STATE GRID CHINA SINOPEC GROUP 4 CHINA NATIONAL PETROLEUM TOYOTA MOTOR 6 VOLKSWAGEN 7 ROYAL DUTCH SHELL 8 BERKSHIRE HATHAWAY 9 APPLE 1 EXXON MOBIL # State-owned Enterprise 8 Private Enterprise stock exchanges (Shanghai, Shenzhen and Hong Kong) total market cap is $1 trillion (NYSE + NASDAQ )= $27 trillion ~5% of total market cap of Shanghai and Shenzhen stock exchange belongs to SOEs 5 TOP 1 in CHINA -217 ranking Company 2 CHINA STATE GRID 3 CHINA SINOPEC GROUP 4 CHINA NATIONAL PETROLEUM 22 INDUSTRIAL & COMMERCIAL BANK OF CHINA 24 CHINA STATE CONSTRUCTION ENGINEERING 27 HON HAI PRECISION INDUSTRY 28 CHINA CONSTRUCTION BANK 38 AGRICULTURAL BANK OF CHINA 39 CHINA PING AN INSURANCE 41 CHINA SAIC MOTOR 46

48 Economic - Capital Market $t $t outstanding debt U.S. and CN Bond Market Outstanding U.S. Bond Market Debt Outstanding CN Bond Market Debt debt issuance in U.S. and CN Bond Market 7.3 Outstanding U.S. Bond Market Debt in 216 Corporate Debt 22% Mortgage Related 22% Others 11% Municipal 1% Treasury 35% Issuance in the U.S. Bond Markets Global Ranking: 1.US; 2.Japan; 3.China Substantial Municipal bond rollover in 215, 216 Issuance in CN Bond Markets 3.2 Corporate Debt 8% Outstanding CN Bond Market Debt in 216 Others 14% Policy Bank Debt 28% Municipal 24% Treasury 26% 47

49 Economic - Property Market Growth of Real Estate Investment Growth of GDP Contribution of Real Estate to GDP Growth (right) % RMB Yuan/ Mi² $b Land-Transferring Fees Proportion of Financial Revenue Average Housing Price Growth 1, 34% 4% 32% 32% 3% 8 24% 3% 21% 21% % % % Key factor for GDP growth, counted for 15% of the GDP Land Economic Property Tax 14

50 Economic - Infrastructure Development Commercial Airport in China number of commercial civil aviation airport growth rate thousand kilometers % 7% 6% 5% 4% 3% 2% 1% % 8 9 High Speed Railroad operation length new line invested 2 Highway and Expressway km/million square thousand kilometers 5 4,16 4,238 4,356 4,464 4,577 4,696 kilometers total mileage of highway in China total mileage of expressway in China density of highway in China For total length of Express Way, China exceed US in 214, rank #1 in the world. China: 123, km US:1,km

51 Economic - Infrastructure Development twh 8 Electricity Consumption in China 2% US electric energy production(twh) ,365 4,326 4,148 4,333 4,35 4,254 4,275 4,37 4, % growth rate(%) % 8% China electric energy production(twh) 3,282 3,496 3,715 4,27 4,713 4,988 5,432 5,795 5,811 growth rate(%) annual electricity consumption growth rate 4% % World electric energy production(twh) 19,955 2,35 2,184 21,494 22,185 22,753 23,336 23,894 24,98 growth rate(%) Source of Electricity Production in 211 Source of Electricity Production of China in 215 hydropower 19.6% wind power 3.2% nuclear power 3.% thermal power 74.2% 5

52 Economic - Infrastructure Development Cement Output and Growth Rate Crude steel production 3,, 25.% 1,, 45.% 2,5, 2,, 1,5, 1,, 5, Ranking of 215 Cement Output 2.% 15.% 1.% 5.%.% -5.% -1.% cement output(thousand tons) growht rate Ranking Country Cement Output (thousand tons) World 4,1, 1 China 2,35, 2 India 27, 3 US 83,4 4 Turkey 77, 5 Brazil 72, 6 Russia 69, 7 Indonesia 65, 8 Iran 65, 9 North Korea 63, 1 Vietnam 61, 8, 6, 4, 2, Crude steel production (thousand tons) Ranking of 216 Crude steel production(thousand tons) 1 China 88,366 2 Japan 14,774 3 India 95,618 4 US 78,475 5 Russia 7,88 6 Korea 68,576 7 Germany 42,8 8 Turkey 33,163 9 Brazil 31,275 1 Ukraine 24, % 25.% 15.% 5.% -5.% growth rate Other Countries crude steel production proportion China s crude steel production proportion Ranking of cities 216 Crude steel production in China(thousand tons) 1 Tangshan 88,31 2 Handan 41,88 3 Suzhou 33,53 4 Langfang 27,66 5 Maanshan 18,72 6 Tianjin 17,99 7 Laiwu 17,68 8 Anshan 17,59 9 Anyang 17,39 1 Shanghai 17,9 51

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