#MIGlobal

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been independently verified.

Source: World Bank.

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20 years of rapid change

Source: Bloomberg as of March 7, 2016, BBC Country Profile as of March 4, 2016.

New Normal ?

The “Handover”

Asia Financial Crisis

China joins the WTO

India’s PopulationTops 1 billion

Hu Jintao elected as president

China formally becomes world’s 2nd largest economy

Alibaba IPO

Abenomics

Xi Jinping Assumes presidency

Modi elected As prime minister

Myanmarelection

MSCI AC Asia Pacific

#MIGlobal

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1950 1960 1970 1980 1990 2000 2010 2020E 2030E

Mill

ion

s

Working age population

Peak in 2010

Source: United Nations Population Division. The working age population is calculated as the working age

population (between 15 and 64) divided by the non-working age population (aged 0-14 and 65+). Actual

results may vary.

Working age population ratio

Millions Ratio

Spotlight on global consumer demand growth – ChinaAging before wealth?

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0.0

0.5

1.0

1.5

2.0

2.5

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1950 1960 1970 1980 1990 2000 2010 2020 2030

Mill

ion

s

Millions

Working age population

Ratio

Source: United Nations Population Division. The working age population is calculated as the working age

population (between 15 and 64) divided by the non-working age population (aged 0-14 and 65+). Actual

results may vary.

Working age population ratio

Spotlight on global consumer demand growth – IndiaYouth bulge?

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The new normal for the Chinese economy Key Development Targets for 13th 5-Year Plan (2016-2020)

• “Medium-to-high” rate of growth and development of more value add

industries

• Innovation driven development

• New urbanization and modernization of agriculture

• Environmental conservation

• Financial sector reforms

• SOE reform and opening up to private capital

Source: 2015 report on the work of the government as of March 5, 2016

Image Source: https://en.wikipedia.org/wiki/National_Congress_of_the_Communist_Party_of_China.

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0.3% -3.9% -1.2% -0.8% 0.1% -0.2% 0.2% -0.2%

4.3% 5.2% 4.9% 6.0%4.3% 3.7% 3.7% 4.6%

5.0%

7.9%6.9% 4.2%

3.2% 4.2% 3.4% 2.5%

9.6%

9.2%10.6%

9.4%

7.6% 7.7% 7.3% 6.9%

2008 2009 2010 2011 2012 2013 2014 2015

Net Exports

Consumption

Investment

Source: FactSet, JPMorgan’s Guide to the Markets as of February 2016, CEIC.

The new normal for the Chinese economyMajor shift in China’s economic make up - China real GDP contribution

Year over year change, percent

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The new normal for the Chinese economyMajor shift in China’s economic make up - China’s services industry surpasses 50% of GDP

0

20

40

60

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Percent of GDP

Source: World Bank Cross Country Data, National Bureau of Statistics

Manufacturing

Services

Agriculture

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The new normal for the Chinese economyRobust growth in New Economy in China

Source: Bloomberg, Wind, Goldman Sachs Global Investment Research as of December 2015.

New Economy

Old Economy

-40

-20

0

20

40

60

80

100

120

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

47%

7%

Earnings year over year growth, percent

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The new normal for the Chinese economyChina consumption growth 2015 YTD (year over year, percent)

Source: IEA, WoodMackenzie, CRU, USDA, Goldman Sachs Global Investment Research as of February 2016.

-5 0 5 10 15 20

Cement

Thermal CoalSteel

Iron Ore

Met Coal

WheatCotton

Copper

Corn

SugarDiesel

Naptha

Oil (Total)

Nickel

Coffee

Soybean

Aluminium

Zinc

Kerosene

Gasoline

OpExCommodities

CapExCommodities

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The new normal for the Chinese economyChina as percent of total US and EU imports

Source: CEIC, Goldman Sachs Investment Research, February 2016.

Miscellaneous Articles (including Toys, Footwear, Textiles)

2%

4%

6%

8%

10%

20%

25%

30%

35%

40%

45%

50%

2002 2004 2006 2008 2010 2012 2014

Power Machinery andEquipment (RHS)

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The new normal for the Chinese economy

Source: Bloomberg as of March 7, 2016

Image source: http://www.ddokbaro.com/2648

Image source: https://commons.wikimedia.org/wiki/File:Tencent_Logo.svg

Image source: http://www.baidu.com/

$181B

$61B $178B

BAT market cap greater than & combined

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Restructuring in ChinaChina’s banking system has more than tripled since 2008

0

50

100

150

200

250

2008 2009 2010 2011 2012 2013 2014 2015

RMB trillion

Source: China Banking Regulatory Commission.

China banking system assets

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Restructuring in China Rapid growth in private credit

50

75

100

125

150

175

200

2000 2002 2004 2006 2008 2010 2012 2014

Percent of GDP

Source: Bank of International Settlements.

2Q15: 196%

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Restructuring in ChinaHigh savings rate have funded the banking and shadow banking system

25

27

29

31

33

35

37

39

41

43

1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Percent of GDP

Source: Barclays, China enters Zugzwang as of February 2016.

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Restructuring in ChinaIncreasing effect of RMB movement on global financial markets

65

75

85

95

105

115

125

135

Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16

Index, 01/01/2015 = 100

DAX Index

S&P 500 Index

MSCI EM Index

Nikkei 225 Index

Hang Seng Index

FTSE 100 Index

RMB Big Move

A-share Turmoil

Source: Bloomberg as of March 7, 2016.

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Restructuring in ChinaRMB has appreciated sharply against trade weighted basket since GFC despite recent depreciation

against the USD

5.9

6.1

6.3

6.5

6.7

6.9

7.1

7.3

7.595

100

105

110

115

120

125

130

135

140

145

2008 2009 2010 2011 2012 2013 2014 2015 2016

Index, 01/2008 = 100

RMB Nominal trade Weighted Exchange Rate

USDCNY (RHS, Inverted)

Source: Bloomberg, BIS.

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Restructuring in ChinaChina’s competitors’ currencies have continued to weaken

40

50

60

70

80

90

100

110

120Malaysia

BrazilIndia

China

Mexico

Indonesia

Source: UBS , Bloomberg as of March 14, 2016.

Index, 2010 = 100

Exchange Rates for Major Exporters (Relative to USD)

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Restructuring in ChinaPan-Asia currency volatility in perspective

-10.84% -8.54% -8.42% -7.33% -6.02% -4.13% -3.89% -3.68%-0.86% -0.22% -0.14%

6.36%

-9.36%

-18.71%

10.38%

-33.89%

9.08%

-0.81%

23.42%

1.32%

-29.32%

18.16%

-0.10%

3.75%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

LTM10 Years

Source: Bloomberg as of March 7, 2016.

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Restructuring in ChinaPan-Asia currency volatility in perspective

-40% -30% -20% -10% 0% 10% 20% 30%

Malaysian Ringgit

South Korean Won

Thai Baht

Indian Rupee

Philippine Peso

Taiwanese Dollar

Chinese Renminbi

Australian Dollar

Indonesian Rupiah

Singapore Dollar

Hong Kong Dollar

Japanese Yen

Source: Bloomberg as of March 7, 2016.

10 Years

LTM

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Restructuring in ChinaRapid reserves depletion could lead to liquidity trouble in the near-term

2.0

2.5

3.0

3.5

4.0

4.5

Jan-10 Oct-10 Jul-11 Apr-12 Jan-13 Oct-13 Jul-14 Apr-15 Jan-16

US$ trillions

Source: International Monetary Fund.

China FX Reserves

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QE Lands in AsiaChina and India among the few with ample room to ease

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Central bank rates

Source: Bloomberg (03/07/2016).

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Chinese corporates go outbound

Target Target of Country Acquirer Acquirer Country Ann. DateDeal Size

$USD million

1) Syngenta Switzerland China National Chemical China Feb 2016 43,000

2) Macquarie Global Property Singapore BlackRock United States May 2013 23,500

3) Beam United States Suntory Japan Jan 2014 16,000

4) Pirelli Italy ChemChina China Mar 2015 7,650

5) HCC Insurance United States Tokio Marine Japan Jun 2015 7,500

6) Smithfield Foods United States Shuanghui International China Jun 2013 7,100

7) Las Bambas Project Peru MMG; GIIC; CITIC Hong Kong, China Apr 2014 5,850

8) Oriental Brewery South Korea Anheuser-Busch inBev Belgium Jan 2014 5,800

9) Protective Life United States Dai-ichi Life Japan Jun 2014 5,708

10) Bank of Ayudhya Thailand Mitsubishi UFJ Financial Japan Jul 2013 5,486

Source: AVCJ as of March 7, 2016. Includes acquisitions largest acquisitions by transaction size of

non‐China, Hong Kong, Taiwan or Mongolia based enterprises since January 1, 2013.

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One Belt, One Road

Source: BOCOM International as of February 2015.

Three Continents

Total population of 4 billion (63% of world’s population

Aggregate GDPOf $20 trillion(29% of theworld’s total)

More than 40countries

RUSSIA

Xian

Fuzhou

Guangzhou

Hanoi

Kuala Lumpur INDONESIA

Jakarta

Kolkata

SRI LANKA

Lamu

KENYA

DJIBOUTI

PAKISTANIRANTeheran

UrumqiBishkek

KAZAKHSTAN

UZBEKISTAN

SamarkandDushanbe

KYRGYZSTAN

TURKEYITALY

FRANCE

Moscow

Maritime Silk Road imitative

Silk Road Economic Belt

Colombo

Hambantota

GREECE

GERMANY

BELGIUM

Istanbul

UKRAINE

MALAYSIA