Emerging countries, mainly China, are changing the world economic order. This presentation explains how they do it and what kind of competition the "old countries" are now facing.

1. Alain-Marie Carron Director, SECOR Facing Asian Competition… and others

3. Emerging Countries Grow Faster - - GDP Average Annual Growth Rate (in %; 2001-2006) China Vietnam India Brazil Canada Russia Thailand Mexico Source: SECOR Analysis; United Nations Statistics Division

4. Their enterprises get bigger - - Market Capitalization by number of companies Market Capitalization In Total Value Gross Margin In 2006 Net Margin In 2006 Mondialisation 2.0, Ernst & Young, May 2008 Within the 1000 biggest companies in the world 25% 14% 16% 8% Emerging Economies Developed Economies Developing Countries Developed Countries

5. Emerging blue chips - - The Emerging Market Century, Antoine van Agtmael Li & Fung Hong Kong Mrkt cap: 93.31 B CEMEX Mexico # 1 cement EMBRAER Brazil #1 regional jets HAIER Hong Kong #3 refrigerators HON HAI Taiwan # 1 electronic parts HYUNDAI Korea #1 shipbuilding INFOSYS India # 2 IT services LENOVO China #3 computers SASOL S. Africa #1 synthetic fuel TMSMC Taiwan #1 chip founder YUE YEN China #1 athletic shoes CIMC China #1 marine containers POSCO Korea # 4 steel maker RELIANCE India # 2 polyster fiber SAMSUNG Korea #1 flat screens BYD China #1 iron, #2 maganese ZTE China Mrkt cap: 93.31 B M&M India Mrkt cap: 93.31 B Goodbaby China # 1 strollers Pearlriver Piano China # 1 pianos JOHNSON ELECTRIC Hong Kong #1 micromotors RANBAXI India #2 or #3 generic drugs CVRD Brazil #1 iron, #2 maganese TENARIS Argentina #1 seamless steel pipes

6. They take a bigger part of our markets - - China’s market share in various large-scale economies (as a percentage of total imports of the economy at issue) Note: * For Russia, the percentage indicated for 1990 actually corresponds to 1996. Sources: United Nations Merchandise Trade Database (COMTRADE); data on the EU drawn from OECD World Trade Statistics (2006). PARTNER 1990 2000 2001 2002 2003 2004 Japan 5.2 14.5 16.6 18.3 19.7 20.8 United States 3.1 8.6 9.3 11.1 12.5 13.8 Korea 2.1 8.1 9.5 11.6 12.4 13.4 Australia 2.7 7.9 9.0 10.3 11.3 13.0 EU 15 2.5 6.2 6.8 7.7 9.1 10.7 Canada 1.0 3.2 3.7 4.6 5.5 6.8 Russia* 1.6 2.1 3.9 5.7 5.7 6.3 Turkey 1.1 2.4 2.3 2.7 3.9 4.8

7. A demographic map of the world - - North America never looked so slim…

13. The List Is Getting Longer - - Mass production variety and innovation Build on the brand and technological innovation Turn a niche market into a mass market Brazil beauty, cosmetics

14. The Cost/Innovation Method - - Mass production Low Salaries R&D Innovation Variety Low G&A A New Competition Model Niche The Filter

15. Their advantages that we cannot duplicate - - 1 billion 300 million Huge Market 3 to 4 times less ... and relatively low paid Roughly 300 000 new engineers a year A lot of well-trained brainpower… Up to 30 times cheaper Very low salaries 300 million rural dwellers want to move to a city An enormous labour pool

19. Let’s think out of the egg ! - - Thank You!