China Bakery Market Overview

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INDUSTRY OVERVIEW

This section contains certain statistics, industry data or other information which have been derived from government, official or other public sources. We believe that the sources of such information are appropriate sources for such information and have taken reasonable care in extracting and reproducing such information. We have no reason to believe that such information is false or misleading or that any fact has been omitted that would render such information false or misleading. The information has not been independently verified by us, the Sole Sponsor, the Sole Global Coordinator, the Joint Lead Managers, the Joint Bookrunners, the Underwriters, any of their respective directors, officers, affiliates, advisors or representatives, or any other party involved in the Global Offering, and no representation is given as to its accuracy. We, the Sole Sponsor, the Sole Global Coordinator, the Joint Lead Managers, the Joint Bookrunners, the Underwriters, any of their respective directors, officers, affiliates, advisors or representatives, and any other party involved in the Global Offering make no representation as to the completeness, accuracy or fairness of such information and accordingly such information should not be unduly relied upon. THE PRC ECONOMY Economic Growth The PRC economy has been experiencing steady and fast growth since the PRC government adopted the “Open Door Policy” in 1978. According to the National Bureau of Statistics of China, the PRC’s gross domestic product, or GDP, increased from approximately RMB21,631 billion in 2006 to approximately RMB40,120 billion in 2010, representing a CAGR of approximately 16.7%. Urbanization Trend Industrialization has accelerated urbanization in the PRC through the migration of rural populations to urban areas and the development of towns into cities. According to the National Bureau of Statistics of China, from 2006 to 2010, total urban population in the PRC increased from approximately 583 million to approximately 670 million. Urban population, as a percentage of total population, increased from approximately 44.3% in 2006 to approximately 49.9% in 2010. The table below shows the growth of the urban population in the PRC from 2006 to 2010. 2006 – 2010 Growth of Urban Population in the PRC CAGR (20062010) 3.5% 0.5%

2006 Urban population (million) . . . . . . Total population (million) . . . . . . Urbanization rate (%) . . . . . . . . . . 583 1,314 44.3%

2007 606 1,321 45.9%

2008 624 1,328 47.0%

2009 645 1,335 48.3%

2010 670 1,341 49.9%

Source:

National Bureau of Statistics of China

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INDUSTRY OVERVIEW
Increasing Disposable Income and Food Consumption Expenditure As a result of steady economic growth, PRC households have been enjoying continued increases in disposable income, which have contributed to the growth in food consumption. According to the National Bureau of Statistics of China, from 2006 to 2010, the per capita annual disposable income of urban households increased from approximately RMB11,760 to RMB19,109, representing a CAGR of approximately 12.9%. In the same period, the per capita annual food consumption increased from RMB3,112 to RMB4,805, representing a CAGR of 11.5%. CAGR (20062010) 16.7%

2006 GDP (RMB billion) . Growth rate . . . . Per capita annual disposable income of urban households (RMB). . . . . . . . . Growth rate . . . . Per capita annual food consumption expenditure of urban households (RMB) . . . . . . . . Growth rate . . . . 21,631 17.0%

2007 26,581 22.9%

2008 31,405 18.1%

2009 34,090 8.6%

2010 40,120 17.7%

11,760 12.1%

13,786 17.2%

15,781 14.5%

17,175 8.8%

19,109 11.3%

12.9%

3,112 6.8%

3,628 16.6%

4,260 17.4%

4,479 5.1%

4,805 7.3%

11.5%

Source:

National Bureau of Statistics of China

Geographic Characteristics Due to differences in economic development, Shanghai, Beijing, Zhejiang and Tianjin have enjoyed the highest per capita...
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