China IT Land, Infrastructure, Channel and profit matrix

1. China IT Land, Infrastructure, Channel and profit matrix Opportunities for US Business Alliances in China’s Most Dynamic IT Marketplace 08/02/01 IT China Land June 2001

2. Program Itinerary • Introductions • Company • Project • Finance • Competition and Risk • Operation • Team • partner • Conclusion IT China Land June 2001

3. Introduction • A 1.6 million of Intelligent complex, only one in the world. • First place to host and demo world class IT players in China. • Unique channels to connect all of IT related business as well as • people, culture and society. • A profit center for e-learning, technology, networking, education, • e- business, entertaining, service industries and so on. • World top event and business center. • China’s top program, media, publish and IT exchange center. • Very best site for technology development and research. • A well connected incubator and marketing channel. • Very first and private own project in 2008 Beijing Olympic park. • A window for China and world IT developer. IT China Land June 2001

4. Company • IT China Land Co., Ltd.. started as private enterprise in 1998. • Joint Ventured between Beijing Ethnic Park Group, a HK joint ventured private cooperation, and Sino – US Commercial group, a US based consulting and holding company in May 2001. • Developed Beijing Ethnic Park and IT Land complex in near 150 acres land in Beijing Olympic park. • A entertaining and real estate developer which include restaurants, retails, clubs, hotels, movie/perform center, amusement park, etc.. • A technology and market developer that include Internet date center, e-commerce, software, wireless, satellite and so on. • A media and culture organizations with TV channel, broadcasting, publisher, museum, exhibition center, e-learning, etc. • A open, experience and reliable counterpart. IT China Land June 2001

5. China IT Land project • A 1.6 million square feet of complex locate inside of Beijing Olympic Park and junction with Beijing Ethnic Park. • Attached another 1.2 million square feet of entertaining complex ( indoor Sea World, Movie Mall, Hotel ) • Government Support and Promotion • Private own and operation • Perfect location and size for world class IT player in hosting, event, exchange, demonstration, education and trading. • Well built intelligent space for business, education and event • Unique marketing, developing and research channels for business, technologies, products and services • Low competition and risk • Strong financial background and revenue model • Open and ready to off ground

6. Finance • Fund by Hong Kong investors and SUCG, China IT land Co., Ltd. Have been spend near $100 million in past 10 years, and will continue to be supported by its founders, and new investors and partners. • CITC will create another $6 million for the project and look for another $40 -100 million for further completion and operation. • CITC may apply a loan during 2001 – 2002 if it is necessary, and will return it within 5 years. • CITC is no debt and its cash flow currently is positive. • Estimated revenue in first year is $12-14 million and 30-40% increase in next 5 years.

7. No Competition! No such location No such land available No second plan No such operating co. No possible for another Risk - Long term capital support team player expansion space Politic influence Accident Competition and Risk

8. Operation Agenda Aug. 01: Discuss with investors and partners, bring engineer on sites. Sept. 01: new team show up, News Conference. The first version of proposal and business plan. Sign agreement with investors and partners. Oct. 01 The first sum of investment arrival ($5-10 million), full team function, Finish business/operating plan, the first project start. Nov. 01 Second fund come ( no less $10 million ), some projects start: museum, hotel, IDC, e-book city and exhibition center, etc. Dec. 01 The third fund (70% of total) come and all projects start. Feb. 02 All investment done and the first project open public ( March 02) Full 03 All projects complete and open public.

9. Team • Mr. Bai Ruo Bin, Chairman • Ms. Wang Ping, Vice Chairman • Mr. Lijian Lin, CEO and president • Mr. Tony Tang, CFO • Mr. Guangbin Yang, EVP Operation • Mr. Yang Wang, VP Technology • Mr. Xinjun Lee, VP International • Mr. Mark Zhang, VP Business development • Ms. Amy Guang, Project Manager • ( detail see resume )

10. China In Transition • In general, the legal and political climate in China is getting better– government is becoming more transparent and market based reforms are being instituted • Initial trend in Joint Ventures now migrating toward wholly-owned operations • WTO promises to further open up the communications and other industries • Positive and growth market size and new policies are creating real opportunities for foreign companies to do business in China • However, flexibility, patience, and commitment is still required –one step backward for every two steps forward • 2008 Olympic Game will be another big impact !

11. POLITICIAL AND ECONOMIC INFLUENCES ON LEGAL REQUIREMENTS • Everything open to negotiation • Central government now vies for power with strong municipal and provincial governments, such as Beijing, Shanghai, Shenzhen, Chengdu, Tainjin, etc. • Importance of the negotiation of the business scope in the Business License • Often desirable to establish a FIE under the local approval body (COFERT) rather than the central government (MOFTEC). • Certain activities or technologies, such as GSM or CDMA manufacturing requires central government approval (MII). • Partners are usually SOEs; first negotiate with partners and then negotiate with government • All technology and fund transfer agreements must be approved by the government; often will limit amount of royalty and rules.

12. Partial list of potential partners or tenant APEC, Japan Economic Organization, Japan Economic Development Associations, European e-commerce committee, China IT Union, China Computer World, China elearning network Cooperation, Beijing Global Internet Data Center, Beijing Global Software Institution, China eBook City, Beijing information Bureau, ChinaUSe-com, Inc., China PDA Committee, Hong Kong Octopus Commercial Channel, Ltd., Beijing eChannel, Ltd., Midwest Group ( ISP part ), China International Enterprise Exhibition Group, Sub office from MII, Scientific & technology Adm., Adm. Of Education, State of Consul, Beijing Municipal office, Culture Dept., and other central and province government offices, China Computer Business News and other 5 media and IT consulting and advertise companies, China IT Quality Control Institution, Apollo Technology, Ltd., Zhong Wei Group ( ISP part, such as China Online ), offices from telecom companies, such as China telecom and Beijing Telecommunication cooperation, China TV and cable development incorporation, The list of company from US and potential event hosted will be separated ( such as Wart Mart ).

13. TAX LAWS IN CHINA Foreign Invested Enterprise Tax 30% Local Income Tax 3% Incentive Tax Rates 0% to 15% VAT (on sale of goods) 17% Business Tax (on services) 5% Withholding Taxes (royalties, dividends, etc.) 10% Import Duties (vary by product) 8% to 9%

14. COMPANY STRUCTURES

15. FINANCE LEASE JV (SAMPLE) Public End Users Central MOFTEC Vendor MII VPNs (1) Approval License Telcos $ x equity Foreign Investor Telecom Equip. Finance Lease JV (3) Basic Telecom Operator (4) 10-20x debt ISPs/ASPs (2) Off-shore Fiber Swaps 1. Equipment Supply Agreement 2. Service Support Agreements 3. “Pay-Go” Structured Finance Lease Agreement + Related Services Agreements 4. Capacity Off-take Agreements

16. Patience Is a VirtueYu Gong Yi Shan

17. CUSEC US Alliance Companies

18. Chinese AllianceCompanies CUSEC

19. Follow-Up Opportunities CUSEC • Open to any where of China IT and commercial market • Leading e-business, IT technology player in China • Well-secured center for profit and revenue • unique channel to connect business with media, culture and finance.

20. Bridge the Opportunities!