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Investing in China What we should know in this fast growing market

Investing in China What we should know in this fast growing market. Pension fund asset allocation 10 years ago. Assets Pension funds consider now. Development of China. Shenzhen - 30 years ago. Development of China. Shenzhen - Now. Development of China. 20 years ago.

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Investing in China What we should know in this fast growing market

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  1. Investing in ChinaWhat we should know in this fast growing market

  2. Pension fund asset allocation 10 years ago

  3. Assets Pension funds consider now

  4. Development of China Shenzhen - 30 years ago

  5. Development of China Shenzhen - Now

  6. Development of China 20 years ago

  7. Development of China Now

  8. Development of China

  9. Development of China

  10. Development of China

  11. Development of China

  12. Stock Market Performance Financial Crisis Collapse Recent Underperformance Strong Growth Post Crisis Recovery

  13. Opportunities I skate to where the puck is going to be, not where it has been. Wayne Gretzky

  14. OpportunitiesHealthcare Percentage of Order Adults (Age 65+) in China • Far less mature industry than developed countries • Demographic change and aging population • Rising income and affordability • Healthcare reform • Healthcare awareness

  15. OpportunitiesEnvironmental Protection • Serious environmental degradation driven by economic development • Strong government support • Clean China over the next 5 years • Higher desire for clean energy

  16. OpportunitiesTechnology • Government Investment: Biotech, energy saving, environmental protection, high-end manufacturing • Internet Penetration

  17. Technological Change “Internet will change people’s life” 1999 Jack Ma – Founder of Alibaba Group

  18. Technological Change

  19. Technological Change

  20. Technological Change 1 – Eliminating steps “take a human desire, preferably one that has been around for a really long time. Identify that desire and use modern technology to take out steps.” Evan Williams – Co-Founder of Twitter

  21. Technological Change 1 – Eliminating steps

  22. Technological Change 1 – Eliminating steps

  23. Technological Change 1 – Eliminating steps

  24. Technological Change 2– Cross Sector Competition Who stole my cheese??

  25. Technological Change 3– Recognition of Intangible Assets Patents Intellectual property Intangibles Brand Tangibles New Technology Data Goodwill CAPITAL LAND User Platform Human Capital Customer Base MACHINERY LABOUR 25

  26. Technological Change 4– Innovate or Die

  27. Technological Change 4– Innovate or Die Mobile Payment Platform Apps for taxi/flight booking Mobile Social Media Mobile IM Wechat Launched QQ Mobile App, Expand Value Added Services Webmail QQ Blog QQ Online Game

  28. Technological Change 5 – Distinction and uniqueness, not just scale Customer First Team Work Integrity Embrace Change Passion Commitment

  29. Technological Change 5 – Distinction and uniqueness, not just scale

  30. Ways to access Chinese market

  31. Limitation and Risk • Less capacity to access the market for foreign investors • Lack of transparency • Lack of using derivatives for hedging and portfolio replication • Demographic shift • Political risk • Increased concerns of credit growth • Property bubble • Perceived slowdown in growth

  32. Summary • Fast growing market • More open to the world • Opportunities include • Health Care • Environmental Protection • Technology • Technological Change • Positive to technology sector and those which use technology in the right way • Winners • Meet human desire (take out steps) • Innovate • Monetise intangible assets • Unique and distinct market position • Negative Impact • Some traditional sectors, e.g. retailers, sales agents, intermediaries • Business impacted by cross-sector competition

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