China is currently the third largest export market for U.S. goods (after Canada and Mexico), and the United States is China’s largest export market. Two-way trade in goods between China and the United States has grown from $33 billion in 1992 to over $536 billion in goods in 2012. The Chinese government recently introduced an ambitious agenda to restructure the Chinese economy and fully embrace the market as the “decisive force” in the country’s economic future. Accordingly, China’s plastics industry is undergoing a critical stage of upgrading its structure. In 2010 China became the largest consumer and producer of plastics in the world and accounts for one fourth of total global sales of plastics products. China’s plastics industry recorded a double-digit growth rate before 2012 and maintained a steady growth rate of over 8% in 2012 and 2013. According to the “China Plastics Industry Yearbook”, the industry employed more than 2.3 million persons in 2012. The plastics processing industry is one of the fastest growing, mainstay industries in China, with a total output value of 3.55% of China’s GDP in 2010. Due to the large domestic demand, China’s plastics industry will continue to increase.

Plastics products: In 2013, China reported production of 61.9 million tons of plastics products. It generated revenue from principal business of RMB 1868.644 billion yuan (USD 301.39 billion), an increase of 14.26%. China imported 24.62 million tons of plastics in primary forms valued at USD 49.1 billion and exported 8.96 million tons of plastic products with a value of USD 35.3 billion. Chinese exports of plastics represent 11.6% of total production Plastics production is mainly concentrated in east and south China with five major provinces (Zhejiang 15.2%, Guangdong 13.9%, Shandong 8.1%, Henan 6.9% and Liaoning 5.8%) that accounted for 49.9% of China’s total output of plastic products in 2013. There were 10 provinces in China that produced over two million tons of plastics

products in 2013. China consumed over 60 metric tons of plastics in 2012. Synthetic resin consumption by industry is as follows: building materials (32%), packaging materials (31%), agriculture (9.6%), electronics/ electrical appliances (7.8%), household goods (5.6%, clothing & shoes (2.4%), automotive (2.4%), furniture (3.2%), toys & entertainment goods (3.1), mining and other accessories (1.8%), and medical devices (1%). Domestic consumption of synthetic resin is approximately 65%. Engineering plastics has seen rapid growth in China with huge market potential, especially in the application of the auto industry. China supplied about 40% of domestic consumption of engineering plastics. Plastics machinery: China is the world’s largest market for plastics equipment. “China Plastics Industry Yearbook 2013” reported that China produced about 270,000 sets of plastics machinery in 2012, with the value of gross output at RMB 46.206 billion yuan (USD 7.45 billion). The total output of plastics machinery in 2013 was not available from public sources, but the value of gross output reached RMB 52.6 billion yuan (USD 8.48 billion) in 2013, increasing by 14%. China-made plastics machinery accounts for 77% of the total domestic plastic machinery market. More and more global plastics equipment makers have built factories in China and local companies have obtained more sophisticated technologies over the years.

We expect our company products about engineering plastic sheet (PVC sheet, FR4 sheet, FRP panel, PA sheet, PE sheet, POM rod, PS sheet, PU, Durostone, PC panel and ABS sheet) will be with a growth momentum in this year.