【正文】 ? Positive outlook due to continuously growing purchasing power ? Development of chain stores ? Sales revenue of chain store corporations has experience double digit rise from 1997 ? Multinational chain stores have been aggressively improving their presence in China market ? Intercity trade ? Currently more than 50% of the foreign industrial and retail firms distributed their products in more than 50 cities ? Intercity trade will be frequent after WTO Favorable Macro Economic Outlook 1 8 Point/Final Version/Logistics Industry Outlook final/ 27 The State Economic and Trade Commission has established a master plan for developing logistics services in China State Economic and Trade Commission Logistics Industry Trade Plan 30 Pilot Centers Interregional Networks Supply Chain Systems Select suitable enterprises in various key cities to establish 30 pilot logistics and distribution centers 10 National Enterprises About 10 specialized key enterprises with national logistics and distribution works will be developed Realign assets to form interregional, intersector and interownership logistics and distribution works Efforts will be made to explore the possibility of using 3PL and distribution enterprises to build supply chain systems, and to bring facilities and services of logistics panies closer to advanced international standards Public Policy and Spending 2 8 Point/Final Version/Logistics Industry Outlook final/ 28 A wide array of government supported logistics infrastructure development programs are under way across China Source: Chinainfobank Examples of Government Initiatives to Improve Logistics Infrastructure A number of national logistics centers are under construction, with reasonable size, standardized operation, and modern facilities Coastal Large Cities Logistics Center Inland Areas Road/Railway ? Modern third party logistics and distribution base ? Its main body will be linked to 7 railways and hundreds of railway transit points ? Expected to serve for the dispatch of over 90% of daily necessities in the city ? Also serve eastern China and the whole country Shanghai Commercial Logistics Center Public Policy and Spending 2 ? High way density will grow to about 1650 km/ in year 2023 ? Invest RMB 270 Bn to upgrade railway infrastructure New railways, electric railways, highways, expressways are in phase: 8 Point/Final Version/Logistics Industry Outlook final/ 29 Interviews with SOEs and foreign invested enterprises in China indicate a relatively strong interest in outsourcing logistics services Source: . Kearney field interviews and research ? SOEs usually have own warehouses and trucking divisions, therefore, they demand less warehousing, transportation and other related valueadded services. However, in face of increased petition, SOEs have a growing interest in outsourcing logistics ? Foreign invested enterprises have the highest requirement for logistics services in terms of range and quality. These panies are extending their supply chains into China replacing middle men who used to get China origin cargo to the port. MNCs will be looking for logistics services panies in China to help them fill the void ? Import/export panies have the least demand for logistics services providers, because most of these panies also provide transportation, customs clearance services, etc. Remarks % of Respondents with Interest in Outsourcing Logistics Services (2023) Increasing Interest in Outsourcing for Logistics Needs 3 25%40%38%S O E F o r e i g n I n v e s t e dE n t e r p r i s e sI m p o r t / E x p o r tC o m p a n i e s8 Point/Final Version/Logistics Industry Outlook final/ 30 Chinabased panies have a positive attitude towards purchasing advanced logistics services and quality, speed, and price are the most important purchasing criteria Note: (1) Survey by the China Warehouse Association (2023) Attitudes and preferences for distribution of 450 large and mediumsized enterprises (2) The responding enterprises deal in electrical home appliances, electronics, foodstuffs and chemicals for daily use Source: Chinainfobank, China Warehouse Associate, . Kearney filed interviews and research 7% 22% 26% 29% 44% 52% 64% 75% Looking for distribution services Prefer transportation panies Use general logistics agents Prefer trunk line services Looking for new logistics agents Hire third party agents Hope that new logistics providers will provide prehensive logistics services Looking for modern logistics panies Interest in Logistics Services – Survey Results (2023) Logistics Services Purchasing Criteria China Network Documentation Reputation Info Tracking Professionalism Price Service Speed Service Quality Relative Importance High Avg. = Increasing Interest in Outsourcing for Logistics Needs 3 Low 8 Point/Final Version/Logistics Industry Outlook final/ 31 Online transactions provides an additional source of growth for logistics services Source: Research Report of China EBusiness Association and Network Evaluation Center, Apl. 2023 01020304050602023 2023 2023 2023 20230123B 2 B B 2 CGrowth of Online Transaction in China (US$, Bn) B to B (US$, Bn) B to C (US$, Bn) CAGR (0004) B2B: 53% B2C: 167% Growing IT and EBusiness 4 ? Industry Public information platform ? Reducing cost and overlap in investment, information share ? Customers/shippers ? Standard bar coding system, easier for outsourcing ? Better facilities to municate with service providers, easier to manage and supervise ? Service providers Intra ? Cost