China Trading and consulting CBC (Shanghai) Trading Co., Ltd.

Case

Overview of Business & Key Attributes

Building a business model to fully realize our position as the "world's factory" in the "world's market."

Since 2004, China's economy has averaged about 10% annual growth. The GDP jumped up from $1,000 per person in 2001 to $3,600 in 2010, an increase of 3.6 times. And, by surpassing Japan in 2010, China became the world's second largest economic powerhouse after the U.S.A.

China is undergoing a remarkable evolution from the "world's factory" to the "world's market." CBC's strong point here is that we function both as a trading company and a manufacturer. In addition to sales and trading bases in Beijing, Shanghai, Guangzhou and Hong Kong, the CBC group has a manufacturing base in Beijing, an optical lens factory, while CBC INGS owns processing factories for cell phones, digital cameras and automobile parts in Changshu, Dongguan and Tianjin.

For our import and export business, we are concentrating on China's raw materials and products in
electronic and electrical industries, optical, medical, and food stuffs. In addition, we are focused on manufacturing in new industrial fields as well as establishing CBC's original product resources.

In the future, we will develop our business by focusing on emerging strategic industries such as next-generation information technology, environmental protection, new materials, high-end equipment manufacturing and alternative energy automobiles (listed in the Twelfth Five-Year Guideline of the People's Republic of China, since 2011), as well as consumer business.

Examples of Recent Initiatives 1
Expanding global development

To promote further globalization, CBC Shanghai is making a transition from a conventional business model, which was skewed to specific countries and areas such as Japan, to enhancing partnerships with Europe, the U.S.A. and Southeast Asia.

As well as forming business partnerships with Japanese companies in China, we are working to enhance business with powerful Chinese companies by offering technical and sales support, export of Chinese chemical products, medical raw materials, electronic processing parts and optical parts. We are also involved in sales of automobile-related processing equipment, and we recently started importing raw food stuffs from Eastern Europe.

With regard to China, we see great potential in alternative energy automobiles, lithium-ion cells and environment-related new materials. So in these areas we will focus our efforts on raw materials, products, manufacturing equipment and testing equipment.

Examples of Recent Initiatives 2
Expansion of manufacturing

In manufacturing we are trying to create new value, and new products and services by fully utilizing CBC's global network to organically connect strengths in optical parts, electronics and electrical industries, and automobile parts.

Recently, we began the OEM assembly of rear combination lamps for a Japanese automaker as well as the processing of semi-finished digital cameras. These operations are designed to lead to both the expansion of business in Japan and the establishment of Southeast Asian production bases.

In 2013, we are going to establish our first CBC group joint venture with a pharmaceutical company in Jiangsu Province to build a pilot plant for high-quality pharmaceutical intermediates and APIs. In the model of Procos S.p.A. in Italy, we are planning to expand our business as a manufacturing and exporting base for markets in Europe, the U.S.A. and Japan.

Currently, we believe the key to business success in China is to quickly breakaway from conventional business models and create high value-added business. The CBC China group, including CBC Shanghai, is aiming for further global expansion by developing our solid foundation in China.