Upcoming Economic Growth in China

UPCOMING GROWTH IN CHINA Investors: Don't be fooled by China's volatile equity markets. Although they may be highly volatile, the fact is China is 2nd largest and one of the world's fastest growing economies. China's growth rate is slowing in % terms but in nominal terms it is still growing. 2005 GDP Growth was NET 11.6% GROWTH with nominal GDP US$ 2,269.3B $263.2B in 2005 2014 GDP Growth Was 7% $725.24 in 2014 with nominal GDP US$ 10,361.1B 7% 11.6% growth growth is worth by simple fact GDP is almost much more than 5 TIME BIGGER in 2014 in 2005 The fact is China's nominal GDP is bigger every year Interest rate graph showing five rate cuts in last 12 months to 4.6% 1 year best Lending Rate 18% 25 Required Deposit Reserve Ratio for Major Banks 20 15 10 4.60% 2012 2014 2006 2008 2010 2002 2004 1998 2000 The markets seem to be blind to the five rate cuts taken by the world's second largest economy and the massive stimulus this will produce for the broader economy and the stock market. Over 200 million homeowners will benefit from refinancing; leaving more cash in their pocket for spending. Central bank interest rates compared to other countries still leaves PBOC (Peoples Bank of China) lots of room to easy monetary policy 4.60% 0.25% 0.05% 0.05% 0.00% JAPAN EUROPE GERMANY USA CHINA China Far From a Peak 56,421 43,940 41,955 38,458 33,223 30,594 8,154 Japan Italy China UK Germany France US 2015 GDP per capita compared to US, UK Germany, France, Japan & Italy 50,000 Beijing I Shanghai 45,000 National Total 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,00 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Rising disposable income per capita has more than doubled in 10 years Personal savings have tripled since 2006 2014 2012 2010 2008 2006 2004 2002 2000 1998 1996 1994 1992 1990 1988 1986 1984 1982 1980 8,500 7,500 8,000 6,500 7,000 5,500 6,000 4,000 5,000 3,500 4,500 2,000 1,500 2,500 3,000 500 1,000 US$ (Billion) Rapidly expanding consumption market RMB (billion) 30,000 25,000 20,000 15,000 10,000 5,000 2011 2012 2013 2014 2008 2009 2010 2005 2006 2007 2002 2003 2004 1999 2000 2001 1998 Chinese consumer spending habits have changed to higher consumption Cheapest valuation in almost 20 years - market currently trades at a 2015 estimated P/E of just 13x 70 60 50 40 30 20 10 2011 2013 2015 2005 2007 2009 1999 2001 2003 1997 Household debt 17 % of real estate assets, house prices would have to fall by 80 % to push households underwater LOM Offshore Financial Services The information herein is for information purposes only. It is not intended as specific investment or financial advice, or a recommendation or solicitation for investment. Investments in emerging markets, including China, are considered higher risk and may be subject to substantial volatility. It is recommended that advice is sought from a qualified investment professional prior to implementing any financial plan. LOM has made every effort to ensure that the contents herein have been compiled from sources believed reliable, however LOM does not warrant the accuracy, adequacy, timeliness, or completeness of this information expressly disclaims liability for errors or omissions in this information. Sources Trade Economics. http://www.tradingeconomics.com/country-list/interest-rate National Bureau of Statistics of China. http://www.stats.gov.cn/english/ IMF - World Economic Outlook, 2015 . https://www.imf.org/external/pubs/ft/weo/2015/01/weodata/index.aspx Bloomberg Business (Intelligence economist Tom Orlik).. http://www.bloomberg.com/ Bloomberg News(Intelligence economist Fielding Chen). http://www.bloomberg.com/news/articles/2015-09-08/china-debt-crisis-the-other-side-of-the-ledger-suggests-not Marco Polo Pure Asset Management. http://www.marcopolofund.com/landing.htm Google public data. http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_pcap_cd&idim=country:CHN:IND&hl=en&dl=en#!ctype=l&st rail=false&bcs=d&nselm=h&met_y=ny_gdp_pcap_cd&scale_y=lin&ind_y=false&rdim=region&idim=country:CHN&ifdim=region&tstart=7798 60800000&tend%=141101280o000&hl=en_US&dl=en&ind%3false