China

In light of its high rate of economic growth, China remains the focus of global attention. In 2006, China recorded a year-on-year increase in real GDP of 10.7%. This represents the fourth consecutive year of double-digit growth.

With the commencement of the nation’s 11th Five-Year Plan in 2006 and the upcoming Beijing Olympics in 2008 followed by the Shanghai Exposition in 2010, expectations for significant infrastructure investment and continued robust rates of economic growth remain high.

Marubeni opened its first representative offices in China in 1979 just as the Chinese government began to implement policies that opened its economy to foreign investment. Today, we maintain 15 subsidiaries and representative offices in 13 cities in China and Hong Kong.

 Marubeni’s business scope and its role as a trading house in China have expanded significantly since market deregulation and China’s admittance to the WTO. With the lifting of restrictions on the distribution and sale of merchandise and approval to establish Marubeni (Beijing) Trading Co., Ltd., the Group has initiated a wide range of commercial functions. Local subsidiaries in coastal free-trade zones, including Shanghai, Qingdao, Tianjin and Guangzhou, the Group’ subsidiary in Hong Kong and field offices in Changchun, Chengdu, Nanjing, Shenzhen, Xiamen and Kunming, are now operating on the same footing as commercial Chinese firms. These companies have taken on import and export as well as domestic wholesale and retail operations, giving the Marubeni Group a sales network covering the whole of China.

In addition to petrochemical development, Marubeni has invested more than US$3.0 billion in China. In 1988, we stole the march on competitors by becoming the first Japanese company to launch a local residential housing company. More recently, we formed Shanghai Baihong Trading Co., Ltd., which is the first foreign capital backed joint venture in China to acquire a wholesale dealer’s license.

As of April 1, 2007, Marubeni held US$420 million in equity in 150 Group companies in China and Hong Kong that have a total capital of approximately US$1.7 billion.

Marubeni is also reenergizing its environmental and clean development mechanism (CDM)-related businesses while advancing new business models in partnership with Chinese companies aimed at developing offshore and third-country operations.

Making the most of its business know-how, expertise and experience in China, Marubeni will continue to develop operations across a wide variety of fields, including agri-marine products, chemicals, textiles, paper, industrial machinery, plant, natural resources, development and construction, finance and logistics. In the key Chinese market, Marubeni will continue to aggressively pursue trade and investment opportunities.