For the potential buyer, GZ City Tire & Rubber Factory, and the Head of the Planning Committee

for Guangzhou City. In todays meeting, I would like to state the major benefits to your company and whole Guangzhou province after the trade of our advanced radial tire technology, which was well adopted in other countries like US & Japan, with following reasons: (1)Higher market position as the pioneer of tire industry in China Guangzhou City Tire & Rubber Co., will be the first state-owned company in China to apply this technology on their product. This pioneer role will set your companys position at higher place in the tire market, possibly one of the top 5 listed manufacturer in China due to the publicity effect. After we have signed the contract, your company will own this technology and attract orders from the renowned domestic automobile companies, e.g. Geely Auto. According to our research, the demand and profit margin for this product is huge in China as this technology has not yet developed in China. The trade will enhance your market share and revenue in the coming 10 years. Besides, your company will become one of the alliance targets to the market leader to acquire this advanced technology for their products. The biggest tyre company in Shanghai also showed their interest on this technology but we would like to choose you as our strategic partner because you are the biggest tire manufactuer in Guangzhou where 3 international airports are located. (2)Uplifting your product quality to international standards According to the buyback agreement, we will purchase back each year a certain volume of tires that met international standard that the performance would be guaranteed with the banks for L/C. Upon the production performance /product quality is assured, we will purchase the goods for our domestic sales. This is a kind good quality assurance process for your products and boost your company standard to international level. As a result, your products can be exported to overseas countries with good tracked rercord. Following with the expansion to domestic and international market, your companys sales performance will be improve significantly after the trade. (3)Improvement on the financial performance and productivity With only the investment of US 30 million, this technology will become one of the most important asset of your company. The growing sales will enhance your companys return on asset (ROA) performance to much better level than industry norm, 0.91%. Your revenue will be enhanced with the additional sales from overseas market, a new market segment to your company, upon our buy-back agreement. With large production workforce of your plant, we are confident that your company can also handle our ad-hoc orders for the peak seasons once the production performance is achieved at agreed standards. (4)Joint investment opportunities with Firestone We are a well known tire production
P. 1

company in the world-wide market. We will not only trade with this tire technology but also bring in our best practice / business opportunities to your company through enhancing your products qaulity and developing any new tire technology. With your good geographical location where efficient transport network is provided for imported and exported goods (3 international airports + well developed ports for oversea shipment / close connected train network to major cities of China, we wish to have you as our prime partner in China for production and possible product development. We trust on this relationship will enhance the overall production efficiency with both companies distinctive advantages (Guangzhou City Tire & Rubber manpower and equipment; Firestone Tire & Rubber Technology and experience) in the trade. (5)Stimulating the economic activities in Guangzhou This trade will also benefit to the whole province. After the success of introducing this new technology in Guangzhou, your province will become the centre of the tyre production as some other Chinese / foreign tire manufacturers will plan to setup their production plant and distribution network in Guangzhou for the new product. They would keep close look into the the development of Guangzhou City Tire & Rubber and wait for the market results. It is not difficult to see that most of the tyre production plants are now located in east-northern areas of China, where the major tire and rubber companies are located, while Guangzhou has now only 9 tyre firms built. The total production amounted only 4.39% in China market, which is much lower than Shanghai (14.94%) and Shandong (20.31%). This trade will increase the production outputs in your province as well as GDP following with the shift of production centre to GZ. Furthermore, Guangzhou will be reputed with the name of new technology city and attract investors to build their technology centres / plants there after the success of technology transfer. The investors will believe that the community will be supported by local government for the development of high value goods. Guangzhous position and value proposition will be enhanced. In summary, this is a win-win case to all parties in Guangzhou that it will benefit to all of corporate, city and province levels. We believe that Guanzhou City Tire & Rubber is our ideal partner in China for this technology acqusition and building long-term business relationship.

P. 2