0. China’s Changing Role in the Global Economy: - Implications and Opportunities for the Resource Industry
Johannesburg, 3 October 2013
Kobus van der Wath
Founder and Group Managing Director,
The Beijing Axis
International Advisory and Procurement

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3. A number of megatrends are reshaping the global landscape – China is at the forefront of these trends 2 1
Continued Asia
Growth Story
Centrality of Renewable Energy Sources
Global Integration Across the Value Chain
China’s Rise… 3
Rise of Digital Media & Social Technologies
Is China Still a Megatrend? 9
Re-energised Political Consciousness
Demographic
Shift – Aging Societies vs. Migratory Ones
An Ascendant S. America
Megatrends 4
A Slowing Western World…
Rising Emerging Market Consumption 8
Security Issues Driven by Non-state Actors
Increasing
Energy Needs Despite Limited Resources
Food Security & Access to Water 5
Increasing Number of
Resurgent African Countries
Unrealised BRICS Potential.. 7 6
Source: Various; The Beijing Axis Analysis

4. Key global factors The backdrop
China’s rise … labour market and supply shock as a producer … engine as a consumer … investor
New competitive lines and forces, winners/losers – the rise of Asia, BRICS, etc.
A two-speed global economy over the medium and long-term
A lasting GDP trajectory in Africa, Asia and Latin America – governance, growth, stability, infrastructure, confidence, etc.
The issues now
Europe broken … fragile developed markets – and knock-on effects?
China’s landing – soft or hard? Implications for growth and resource demand?
Tapping into the China story vs. over-reliance on China and need to diversify economic ties
Strategic intelligence – to make decisions in boardrooms around the world in order to reposition
Source: The Beijing Axis Analysis

5. Emerging economies are outperforming developed economies in terms of economic growth. By 2015, the Asia-Pacific region is expected to account for one-third of the world’s GDP
Regional GDP Comparison (2012, 2015F)
GDP Average Growth Rate ( F)
A bubble this size represents
GDP = USD 1,000 bn
Asia-Pacific is expected to account for the largest share of the world’s GDP by 2015F
Asia-Pacific will add 1.5 times Africa’s 2012 GDP by 2015
Rising real incomes and high commodity prices will continue to drive Africa’s growth
Africa
Other Asia
South America
Asia-Pacific
Forecast world average GDP growth until 2015F
2012 to 2015F
3.9%
BRICS
2015F GDP (USD bn)
2012 Growth Rate (%)
2012 GDP Per Capita (USD)
China
11,020
7.8%
6,091
India
2,308
5.0%
1,489
Russia
2,544
3.4%
14,037
Brazil
2,800
0.9%
11,340
South Africa
411
2.5%
7,508
North America
Developed economies are expected to continue to lose share in the world’s GDP over the coming years
Share of World’s GDP
Europe
2012 to 2015F
Source: IMF; The Beijing Axis Analysis

6. China’s rapid economic growth has positioned it as the world’s second-largest economy - likely to overtake the US around 2025 to become the world’s largest economy
Top Economies’ GDP, excl. US (USD bn, F)
China Rank 10 9 7 8 6 5 4 3 2
…2?
India Rank 12 14 15 13 11 9 10
…8?
Rank
2012
2015F
2000: China
surpassed Italy
2007: India surpassed Korea 2 2 3 3 4 4
1995: China surpassed Canada
2005: China
surpassed France 5 6 6 7
Q2 2010: China
surpassed Japan 7 5 8 10
2006: China
surpassed UK 9 8
1996: China
surpassed Brazil 10 9 18 16
2015: Brazil to
surpass UK and France 29 28
2007:China
surpassed Germany
Note: Forecasted GDP growth based on IMF Economic Outlook
Source: IMF; The Beijing Axis Analysis

7. China, India and Indonesia are the prominent economies in developing Asia and account for 40% of the contribution of developing markets to the global economy
Four high-level drivers
USD 72 tn
USD 72 tn
USD 27 tn
USD 8.2 tn
USD 8.2/8.6 tn2
USD 8.2 tn
USD 8.2 tn
Net Exports
Northwest
Govt. Consumption Expenditure
Other Developed Countries
Northeast
Others
Other Developing Countries
Others
Southwest
Tertiary
Industry
North
Private Consumption Expenditure
Africa
Canada
Hunan
Italy
Russia
Hubei
Brazil
Sichuan
U.K.
France
South
Africa
Liaoning
Developed Asia1
Other
Developing Asia
Germany
Hebei
Indonesia
Japan
Henan
India
Zhejiang
Secondary Industry
Other Developing Countries
China
Shandong
Gross Capital Formation
East
China
Jiangsu
Africa
U.S.
Guangdong
Primary Industry
China
Regional dynamics….Industry breakdown…Expenditure approach
Note (1): Developed Asia includes Japan, South Korea, Taiwan, Singapore and Hong Kong
Note (2) The difference between GDP by province and GDP by industry is due to different statistical caliber. Usually, GDP reported by province is higher than the GDP reported by NBSC.
Source: IMF; National Bureau of Statistical of China; The Beijing Axis Analysis

8. Asian countries are set to grow at an impressive average rate of 5
Asian countries are set to grow at an impressive average rate of 5.8% per year, a pace that is beyond that of any other region - large developing economies in Asia will lead the way
Average GDP Growth Forecast for Select Asian Countries ( F)
Emerging Markets
Developing Markets
Developed Markets
Average : 5.8%
Source: IMF; ADB; The Beijing Axis Analysis

9. Due to the diversity within the Asia region, it is useful to group countries based on economic development
Tier 1: Emerging Markets
Tier 2: Developing Markets
Tier 3: Developed Markets
2011
GDP
(USD bn)
Per Capita GDP (USD)
Pakistan
210.2
1,194.3
Bangladesh
113.9
735.0
Sri Lanka
59.2
2,835.4
Myanmar
51.4
842.2
Nepal
19.0
619.5
Brunei
16.4
31,007.9
Cambodia
12.9
900.0
Papua New Guinea
12.7
1,844.5
Mongolia
8.7
3,056.1
Laos
8.3
1,319.6
Timor-Leste
4.5
896.3
Bhutan
1.5
2,287.7
2011
GDP
(USD bn)
Per Capita GDP (USD)
China
7,298.2
5,444.8
India
1,826.8
1,488.5
Indonesia
846.5
3,494.6
Thailand
345.7
4,972.0
Malaysia
287.9
9,656.3
Philippines
224.8
2,369.5
Vietnam
122.7
1,411.2
2011
GDP
(USD bn)
Per Capita GDP (USD)
Japan
5,866.5
45,902.7
South Korea
1,116.3
22,424.1
Taiwan
466.4
20,082.9
Singapore
259.9
46,241.0
Hong Kong
243.7
34,457.0
Note: Countries within each cluster are ranked by GDP size
Source: World Bank; The Beijing Axis Analysis

10. Asia has become a fundamentally important engine of capital, trade and commodity consumption worldwide
Asia Pacific as % of World Total (%, 1990, 2000, 2010)
GDP
FDI Inflows
FDI Outflows
GDI % of GDP
Exports as % of GDP
Imports as % of GDP
Copper Consumption
Steel Consumption
*Note: ROW stands for Rest of World and APAC stands for Asia-Pacific
Source: CEIC; CRU; UN; World Steel Association; The Beijing Axis Analysis

11. Total Private Consumption Expenditure (USD tn, 2012)
Major Asian economies are yet to see a shift towards consumption-driven growth model – the GDP per capita of developing Asian economies still remains low
Global Private Consumption Expenditure (USD tn, 2012)
GDP Per Capita Across Selected Countries (USD, 2012)
57%
68%
60%
31%
61%
51%
57% 2%
Share of World
100%
26%
Represents consumption expenditure as a % of GDP 7% X%
10.7 1%
Consumption expenditure is a much smaller share of GDP in China 9% 9%
3.6 6%
10%
2.5 5%
2.1
19% 5%
Total Private Consumption Expenditure (USD tn, 2012)
Smaller GDP per capita compared to peers, but growing more rapidly
40.5
7.4
18%
31% 1
India
1.05 tn
57% of GDP 2
Indonesia
0.46 tn
53% of GDP
Asian Countries
14%
12.4 7%
World US
Japan
China
Germany
Others (Asia)
Others X%
Represents CAGR for GDP per capita during the period
Source: World Bank; United Nations; The Beijing Axis Analysis

12. China’s fixed asset investment growth has moderated in recent years but remains solid – investment was focused primarily in urban areas so far, but this will change
Fixed Asset Investment (USD bn, )
Total Investment in Urban and Rural Areas (USD bn, ) %
Manufacturing and real estate account for half of the fixed asset investment
Urban-focused investments correlate with the rapid urbanisation process
Global financial crisis induced stimulus
22%
% of GDP
34%
72% X%
Represents CAGR for the period
Source: MOFCOM; World Bank; The Beijing Axis Analysis

13. China is an important investment destination and a global source of capital – FDI inflows outweigh FDI outflows
Top 20 World FDI Inflows (USD bn, 2012)
Top 20 World FDI Outflows (USD bn, 2012)
China ranked 2nd
China ranked 3rd; fifth largest investor in Africa
FDI inflows in 2012 represent 3.27% of the GDP
FDI outflows in 2012 represent 2.27% of the GDP
Source: WIR 2013; The Beijing Axis Analysis

14. China’s outward FDI is diversified across geographies and industries - countries such as Australia and Canada receive a large proportion of their total OFDI from China
China’s OFDI Flow by Sector (USD bn; 2004, 2012)*
Top Destinations for Chinese Outward Investment (USD bn, )
CAGR
46.5%
34.7%
17.9%
28.7%
41.8%
19.3%
57.7%
41.4%
8.5%
1.8%
5.9%
4.2%
1.2%
Total
South Africa?
Pvt. Chinese companies accounted for 9% of the OFDI in 2012, up from 4% in 2010
11.2%
2.1%
Represents China share of the country’s total inward investment stock X%
9.5%
Note*: Business services includes investment in holding companies, regional headquarters and SPVs often established in offshore financial centers from where investments are made in other countries and sectors; Finance includes investments in the banking industry such bank branch offices, bank affiliated institutions, bank rep. offices and insurance institutions; Wholesale and retailing as well as transportation, warehousing and postal services are closely linked with China export and import activities
Source: Heritage Foundation; IMF; MOFCOM; The Beijing Axis Analysis

15. Companies from the Asia-Pacific region continue to emerge as winners in global markets. Companies from China and India feature prominently in this equation
Fortune Global 500’s Geographic Distribution ( )
Asia-Pacific Fortune 500 Country Breakdown (2011)
China had just 16 companies in 2005
Asia-Pacific Fortune 500 Industry Breakdown (2011)
The domination of American companies in the global rankings has shrunk. Only 143 made the list in 2012 compared to 189 in 2005
Source: Fortune Magazine; The Beijing Axis Analysis

16. THANK YOU! Kobus van der Wath
Beijing, China
Cheryl Tang
Director & GM, China
Hong Kong
TBA Secretary Corporate Office
3806 Central Plaza, 18 Harbour Rd Wanchai, HK
Singapore
Andrew Kagoro
Finance & Projects
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Perth, Australia
Kobus van der Wath
Founder & Group MD
Johannesburg, South Africa
Dirk Kotze
Director & GM, Africa
London, UK/Europe
Matt Pieterse
Non-executive Director
Russia Desk
Lilian Luca (Beijing)
Latin America Desk
Javier Cuñat (Beijing)
Associate Director,
Beijing Axis Strategy
Yangon, Myanmar
Dr. Wong YF
Chief Representative
India Desk
Ankit Khaitan (Singapore)
Eastern Africa Desk
Walter Ruigu (Beijing)
THANK YOU!
Kobus van der Wath
Founder and Group Managing Director, The Beijing Axis
International Advisory and Procurement
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