Solar Energy – World’s Largest Solar Research Institute American Corporation sets up World’s Largest Solar Research Institute in China President Obama, State of Union Address, January 2011: … yes, but Who made this Private investment? Company: Applied Materials From: United States (AMAT: US) Investment: USD300 million Functions: - R&D, Engineering, Product Demonstration, Testing and Training for Crystalline Silicon and Thin Film Solar Module Manufacturing Equipment and Processes Entire Applied SunFab™ Thin Film Manufacturing Line Complete Crystalline Silicon Pilot Process Facility: 400,000 square feet Source: All Publically Available Information , Company Website “Just recently, China became home to the world's largest private solar research facility … ”

Investment in China Green Energy nearly Double that of United States Source: Clean Energy Factbook, “Who is Winning the Clean Energy Race?”, 2009 USD billion Green Energy Investment (2009) China Today – World’s #1 Country for Investment in Green Energy

China Energy Consumption Overtakes the United States Source: Central News Agency Energy Consumption (United States and China) Million Tons of Oil Equivalent China Today – World’s #1 Energy Consumer

Table of Contents China Energy Overview Today - China Energy Consumption in Global Context The Future - China’s Economic Growth – To become #1 Economy in 2020 The Future - Forward Trend in Middle Class Growth The Future - Forward Trend in Mass Migration / Urbanization The Future - China’s Future Country-Sized Mega-Clusters The Future - China’s Energy Consumption to Grow by another 50% by 2020 Green Technology Trends Policy - China Places High Priority on Green Energy Cost Structure – Subsidies in Place to Drive Green Energy Development Investment – China Investment in Green Energy #1 in World Corporate Burning Platforms: Innovation, Markets, Cost Reduction Innovation – Where are Key Nodes for Structuring R&D Platforms? Solar Energy – Projected Market Growth Solar Energy – Where are the Solar Energy Clusters? Solar Energy – Where is Manufacturing taking Place? Wind Energy – Projected Market Growth Wind Energy – Where is Manufacturing Taking Place? Hydro Energy – Projected Market Growth Hydro Energy – Where is Manufacturing Taking Place China’s Economic Health and Report Card - China Investor Confidence: China Ranks #1 as Most Attractive Investment Destination of Future - Financial & Economic Health: China Balance Sheets - Banks, Enterprises, Households

CHINA ENERGY OVERVIEW

China Per Capita Consumption 1/6th that of United States Source: BP Statistical Review and Economist Intelligence Unit Per Capita Energy Consumption (2009) Million Tons of Oil Equivalent per Person Europe* refers to OECD Countries Today: China Energy Consumption – Very Low on Per Capita Basis

China’s Economy: Doubles every 7 Years … Tripled most Recently Source: IMF China GDP (USD trillion) Today: China Remains the Fastest Growing Economy in World

Source: World Bank The Future: World Bank Projects China as #1 Economy in World by 2020 GDP* PPP-adjusted GDP* PPP-adjusted

The Future: Forward Trend in Exploding Middle Class China’s Middle Class: 400 million (2010) … 500 million (2015) Sources: Urbanization Rates, Population based on UN, World Urbanization Prospects 2007; MGI Consumer Demand 2008

The Future: Forward Trend in Mass Migration into Cities China’s Urban Population: 600 million (2010) … 700 million (2015) Source: World Urbanization Prospects 2007 Population (million)

The Future: Emergence of 10+ Mega-Cities the Size of Countries Mega-City Profile: 60 Million Population + World-Class Infrastructure Mountains Deserts Steppe China’s Emerging MEGA-CITIES Mega-Cities Mega-Corridors

Energy Consumption Doubled last Decade … 50% Increase this Decade Source: Central News Agency China Project 2020 Energy Consumption (Million Tons of Oil Equivalent) 49% Increase The Future: China Energy Consumption to Increase by 50% by 2020

GREEN TECHNOLOGY TRENDS

Significant Growth Planned for Green Energy Development Policy: China Places High Priority on Green Energy Source: State Council, “New Energy Development Plan for China”, 2009 15% 25% 32.5% 40% Green Energy as a Percentage of Total Energy Consumption (2010 – 2050) Percentage Green Energy

Significant Growth Planned for Green Energy Development Source: State Council, “New Energy Industry Development Plan 2011-2020” Gigawatts Installed and Targeted Capacities (2010, 2020) Policy: China Places High Priority on Green Energy

Subsidies in Place to Drive Green Energy Cost Structure: China Places High Priority on Green Energy Source: Wind Energy Information Center, RMB / kWh Subsidy Net Cost Cost of Electricity

Significant Investment in Wind and Solar Green Energies Investment: High Investment Levels in Green Energy Source: Bloomberg New Investment in China Green Energy (2009) USD billion

Major Investment in Green Energy - Wind, Solar, Renewables Investment: China Investment in Green Energy #1 in World Source: Clean Energy Factbook, “Who is Winning The Clean Energy Race?”, 2009 USD billion Green Energy Investment (2009)

BURNING PLATFORMS: Next Generation Strategic Optimization

Today’s Burning Platform: Markets and Innovation Global Structural’ Cost Reduction … Revenue Growth Cost Reduction MARKETS KNOWLEDGE RESOURCES Sales Development Research Sourcing Production Distribution Marketing Shared Services IT HR F&A Procure DRIVING Shareholder Value PRODUCTION / SOURCING SALES & MARKETING Revenue Growth Innovation RESEARCH & DEVELOPMENT SHARED SERVICE CENTERS (SSC) CONTRACTS, PARTNERSHIPS

Innovation: Where are Key Nodes for Structuring R&D Platforms? “R” of R&D Seeks Universities … “D” Seeks Markets & Production Heilongjiang Jilin Liaoning Hebei Beijing Inner Mongolia Shandong Jiangsu Shanghai Zhejiang Fujian Guangdong Guangxi Hunan Jiangxi Anhui Hubei Henan Guizhou Yunnan Sichuan Chongqing Gansu Ningxia Shaanxi Shanxi Qinghai Xinjiang Tibet Tianjin Mountains Deserts Steppe 1 1 1 0.65 - 0.75 0.8 - 0.9 0.7 - 0.8 Wage Bands Mega-Cluster Mega-Corridors > 10 > 50 > 150 R&D Centers (# Operations) Research & Development Centers (Number of Operations in Select Cities) Source: UNCTAD, WIR

Innovation: China Mobilizes all Resources to Develop Talent China Science and Engineering: 1.6 Million Graduates per Year Sources: National Science Board, Science & Engineering Indicators 2008

Energy Market: Where are Designated Provinces for Green Energies? Solar –> West … Wind –> North … Hydro –> S West … Nuclear -> East Green Energy Geographic Focus Heilongjiang Jilin Liaoning Hebei Beijing Inner Mongolia Shandong Jiangsu Shanghai Zhejiang Fujian Guangdong Guangxi Hunan Jiangxi Anhui Hubei Henan Guizhou Yunnan Sichuan Chongqing Gansu Ningxia Shaanxi Shanxi Qinghai Xinjiang Tibet Tianjin Source: National Development Reform Commission (NRDC); World Nuclear Association; Gao Hua Securities Legend

Solar Energy – World’s Largest Solar Research Institute American Corporation sets up World’s Largest Solar Research Institute in China President Obama, State of Union Address, January 2011: … yes, and who made this private investment? Company: Applied Materials From: United States (AMAT: US) Investment: USD300 million Functions: - R&D, Engineering, Product Demonstration, Testing and Training for Crystalline Silicon and Thin Film Solar Module Manufacturing Equipment and Processes Entire Applied SunFab™ Thin Film Manufacturing Line Complete Crystalline Silicon Pilot Process Facility: 400,000 square feet Source: All Publically Available Information , Company Website “Just recently, China became home to the world's largest private solar research facility … ”

Projected Photovoltaic Installations in China Solar Energy – Projected Market Growth Source: China Generating Equipment Market Analysis Cumulative Installed Photovoltaic Power Capacity (2010 – 2020)

Solar Energy Cells - Projection in China Solar Energy – Growth across Technologies Source: GTM Research, trimmed by CEBM Solar Energy Cell Market Projections

Solar Energy – Where are the Solar Industry Clusters? Bohai Rim … Yangtze River Delta … Pearl River Delta … Western China Photovoltaic Industry Clusters Source: UNCTAD, WIR R&D Centers (# Operations) Circum-Bohai-Sea Region Monocrvstalline Silicon Wafer Processing Yangtze River Delta Photovoltaic Cell Module Research and Manufacturers Pearl River Delta Photovoltaic Downstream Applicable Industries Central and Western China Photovoltaic upstream Polysilicon Industry

The Locations of Major PV Manufactures China Source: SEMI Beijing Tianjin Baoding Weihai Bengbu Suzhou Shanghai Ningbo Jiangxi Fujian Shenzhen Haikou Kunming Dali Chengdu Harbin Harbin Crona Solar Photo-electricity China Light Solar Soltech Corporation Jinneng BSTRPV Solar Energy S&T Topsola Green Energy Ulica SMIC Suntech Solar Electric Power Cineng PV GS Solar Topray Solar Jiawei Hengyang Photovoltaic Trony Hainan Tianju Polar PV Yingli Solar Jing Ao Solar Solarfilms Ganneng Huaji Best Solar Nuvo Solar Energy Star Solar Yunnan TianDa Solar Energy – Where is Manufacturing Taking Place? Yantai China Solar Power Sopray Solar Shaoxing Langfang ENN Solar Shunfeng Trina Solar Nantong Changzhou Wuxi Eoplly QS Solar Best Solar Suntech Wuxi Shangpin Crystalline-Silicon Solar Cells Thin-Film Solar Cells Canadian solar

China World’s Largest Manufacturer of Windmills Wind Energy – World’s #1 Producer of Wind Technologies

Wind Turbine Market Projection 2020 Wind Energy – Projected Market Growth Source: China Generating Equipment Market Analysis Wind Turbine Installation Capacity

Wind Turbine Manufactures in China Wind Energy – Where is Manufacturing Taking Place? Source: Status of Wind Energy in China, 2008 Beijing Tianjin Nanjing Shanghai Leqing Zhongshan Harbin Liaoning Xinjiang Xi’an Baotou Chengdu Xiangtan Harbin Electric DEC Hafei Industry SINOVEL CASC ACCIONA SHANGHAI ELECTRIC HeWind Windey China Creative Wind Energy GE Energy SUZLON Gamesa REPower NORDEX GOLDWIND CSIC XEMC CSR MINGYANG ELECTRIC ENGGA Guangzhou Nantong Hangzhou

World’s Largest Dam – Three Gorges Dam Hydro Energy – World’s #1 Producer of Hydro Technologies Three Gorges Dam Total Capacity: 18,200 MW Total Investment: USD31 billion

Water Turbine Generator Installation Capacity Hydro Energy – Projected Market Growth Sources: The 2nd International Conference on Hydropower Technology & Equipment, 2009 Megawatts Water Turbine Installation Capacity

Water Turbine Manufacturers Hydro Energy – Where is Manufacturing Taking Place? Source: All Publically Available Information , Company Website Harbin Tianjin Hangzhou Shanghai Lanzhou Fujian Ganzhou Chengdu Jinan Fadian STGC Nanjing Jinan Resource Hydro Harbin Electric ALSTOM NTC TOSHIBA ZHEFU Fujian Nandian Tonglu DEC LANZHOU ELECTRIC TIANBAO HEAVY INDUSTRY GANZHOU UNITE

China’s Economic Health … Report Card

Senior Executives Select China as Most Attractive in World Investor Confidence in China #1 in World Source: World Investment Prospects 2009 - 2011 Top 14 Most Attractive Destinations for Future Investment (2009 – 2011) % Percent of Responses

Healthy Balance Sheets – Banks, Enterprises, Households USD2.85 trillion in Foreign Reserves … Insulation of Financial System … Clean Balance Sheets China’s Financial System Healthy, Benefits from Insulation, Abundant Liquidity China banks cleaned up in 1990s: Non-performing loans in 1997 averaged 40 – 50%; only 6% in 2007. Financial institutions extended approximately USD1.4 tr in new loans in 2009; almost double that of 2008; and USD1.2 tr in 2010, slightly down from 2009. Forex Reserves Achieve Record High in 2010: USD 2.85 trillion The Central Bank has accumulated over USD 2.85 trillion in foreign reserves. The accumulation of large external surpluses means financial system enjoys abundant liquidity. Clean Balance Sheets for Enterprises and Households State Owned Enterprise net profits as share of GDP has grown from (-1%) in 1997 to (+4.3%) in 2007. Record corporate profit growth over past 5 years (industrial profits rose 38 ppa); liability ratios declined. Urban incomes have nearly doubled in past 10 years. Source: Deutsche Bank; Standard Chartered; UBS; IMF; Other

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