China Holdings Acquisition (HOL) 425 Business combination disclosure

China Holdings Acquisition Corp.

Bright World Precision Machinery Investor Presentation

October  2008

Exhibit

99.2

2

Disclaimer

Additional Information About the Transaction and Where to Find It

In connection with the proposed acquisition, China Holdings Acquisition Corp. (“CHAC”) intends to prepare a registration

statement containing a proxy statement/prospectus to be filed with the U.S. Securities and Exchange Commission (“SEC”).

When completed, a definitive proxy statement/prospectus and a form of proxy will be mailed to the stockholders of CHAC,

seeking their approval of the transaction. Stockholders are urged to read the proxy statement/prospectus regarding the

proposed acquisition carefully and in its entirety because it will contain important information about the proposed

acquisition.

Stockholders will be able to obtain, without charge, a copy of the proxy statement/prospectus (when available)

and other relevant documents filed with the SEC from the SEC’s

website at http://www.sec.gov. Stockholders will also be

able to obtain, without charge, a copy of the proxy statement/prospectus and other relevant documents (when available) by

directing a request by mail to Mark L. Wilson at China Holdings Acquisition Corp., 5th Floor, 33 Riverside Avenue, Westport,

CT 06880 or by telephone at (203) 226-6288.

CHAC and its directors and officers may be deemed to be participants in the solicitation of proxies from CHAC’s stockholders

with respect to the proposed acquisition. Information about CHAC’s directors and executive officers and their

ownership of CHAC’s common stock and warrants is set forth in CHAC’s annual report on Form 10-K for the fiscal

year ended December 31, 2007.

Stockholders may obtain additional information regarding the interests of CHAC and its

directors and executive officers in the proposed acquisition, which may be different than those of CHAC’s stockholders

generally, by reading the proxy statement/prospectus and other relevant documents regarding the proposed acquisition when

filed with the SEC.

3

Disclaimer

Forward-looking Statements

This

presentation

includes

“forward-looking

statements”

within

the

meaning

of

the

safe

harbor

provisions

of

the

United

States

Private

Securities

Litigation

Reform

Act

of

1995.

Words

such

as

“expect,”

“estimate,”

“project,”

“budget,”

“forecast,”

“anticipate,”

“intend,”

“plan,”

“may,”

“will,”

“could,”

“should,”

“believes,”

“predicts,”

“potential,”

“continue,”

and similar expressions are intended to identify such forward-

looking statements. Forward-looking statements in this presentation include matters that involve known and unknown risks, uncertainties

and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from results

expressed or implied by this presentation. Such risk factors include, among others: future operating or financial results; future growth

expectations

and

acquisitions;

uncertainties

as

to

the

timing

of

the

acquisition;

approval

of

the

transaction

by

CHAC

stockholders;

the

satisfaction of closing conditions to the transaction; costs related to the acquisition; the performance of Bright World Precision Machinery

Limited; the impact of inflation generally as well as on the rising costs of materials; specific economic conditions in China generally or in

the markets in which Bright World Precision Machinery Limited operates; changes in laws and regulations; potential liability from future

litigation; the diversion of management time on acquisition and integration related issues; modifications or adjustments to the financial

statements of Bright World Precision Machinery Limited as a result of applicable securities laws; and general economic conditions such

as

inflation

or

recession.

Certain

of

these

and

other

applicable

risks,

cautionary

statements

and

factors

that

could

cause

actual

results

to

differ from CHAC’s forward-looking statements are included in CHAC’s filings with the SEC, specifically as described in CHAC’s annual

report on Form 10-K for the fiscal year ended December 31, 2007. Actual results may differ materially from those contained in the

forward-looking statements in this communication. CHAC undertakes no obligation and does not intend to update these forward-looking

statements to reflect events or circumstances occurring after the date of this communication. You are cautioned not to place undue

reliance on these forward-looking statements, which speak only as of the date of this communication. All forward-looking statements are

qualified in their entirety by this cautionary statement.

Notice to Bright World Precision Machinery Limited Shareholders

While the tender offer is being made to all holders of Bright World Precision Machinery Limited (“Bright World”) shares, this document

does not constitute an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities of

Bright World or an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities of CHAC

in any jurisdiction in which the making of the tender offer or the acceptance of any tender of shares therein would not be made in

compliance with the laws of such jurisdiction.

4

Non –

GAAP Financial Information

The

directors

of

CHAC

(including

any

who

may

have

delegated

detailed

supervision

of

this

presentation)

have

taken

all

reasonable

care

to

ensure

that

the

facts

stated

and

all

opinions

expressed

in

this

presentation

are

fair

and

accurate

and

that

no

material

facts

have

been

omitted from this presentation, and they jointly and severally accept responsibility accordingly.  Where any information has been

extracted or reproduced from published or otherwise publicly available sources (including, without limitation, in relation to Bright World)

or obtained from World Share Limited (“World Share”), the sole responsibility of the directors of CHAC has been to ensure through

reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in

this presentation.

The

foregoing

statement

is

made

by

the

directors

of

CHAC

strictly

for

purposes

of

complying

with

the

Singapore

Code

on

Takeovers

and

Mergers and is subject to all qualifications set forth herein. Further, additional information will be provided in a registration statement

containing

a

proxy

statement/prospectus

to

be

filed

by

CHAC

with

the

SEC,

and

the

information

contained

in

this

investor

presentation

will

be qualified by the information set forth therein.

CHAC will make a tender offer on the terms set forth below in accordance with the Singapore Code on Takeovers and Mergers.  The

Singapore Industry Council (“SIC”) has confirmed that the arrangements relating to the issuance of the CHAC shares to World Share

and

the

contingent

payment

for

the

foreign

exchange

impact

on

the

funds

in

CHAC’s

trust

account

are

not

special

deals

under

Rule

10

of

the

Singapore

Code

on

Takeovers

and

Mergers.

This

SIC

confirmation,

however,

is

conditioned

on

a

determination

by

Bright

World’s

independent financial advisor (“IFA”) that such arrangements are in its opinion fair and reasonable.

The IFA’s

determination has not

been obtained as of the date of the investor presentation.

NON-GAAP FINANCIALS:

The financial information and data contained in this presentation is unaudited and does not conform to the SEC’s Regulation S-X.

Accordingly, such information and data may not be included in, may be adjusted in or may be presented differently in, CHAC’s proxy

statement to solicit stockholder approval for the proposed acquisition of Bright World.

This presentation includes certain estimated financial information and forecasts presented as pro forma financial measures that are not

derived in accordance with generally accepted accounting principles (“GAAP”), and which may be deemed to be non-GAAP financial

measures within the meaning of Regulation G promulgated by the SEC. CHAC believes that the presentation of these non-GAAP

financial

measures

serve

to

enhance

the

understanding

of

the

financial

performance

of

Bright

World

and

the

proposed

acquisition.

However, these non-GAAP financial measures should be considered in addition to and not as substitutes for, or superior to financial

measures of financial performance prepared in accordance with GAAP. Our pro forma financial measures may not be comparable to

similarly titled pro forma measures reported by other companies.

5

Investment Highlights

Bright World continues to perform strongly -

first half 2008 revenues, net profit and EBITDA

grew 51.8%, 64.1% and 59.9% respectively relative to first half 2007

Solid historical performance -

from 2004 –

2007, Bright World achieved a revenue

compounded growth rate (CAGR) of 33.5%, a net profit CAGR 28.3% and EBITDA CAGR of

31.1%

Compelling industry

Dynamics

Strong Sponsorship

Significant Growth

Opportunity

Strong Financial

Performance

Mr. Wang Wei Yao has built extensive business relationships in China and has built the

World Group companies, which includes Bright World, into one of China’s top 500 private

companies

(1)

CHAC

management will help to provide U.S. capital markets expertise and guidance to

Bright World

(1) Designated by the Chinese Private Enterprises League

Bright World’s customer base is a major supplier of manufacturing products to

the

burgeoning Chinese middle class

Post acquisition, CHAC will have capital to pursue both vertical

and horizontal M&A

opportunities

Rights of First Refusal to acquire four companies controlled by Mr. Wang Wei Yao that

manufacture agricultural machinery, auto parts, lawn mowing equipment and heavy

construction equipment

Superior growth prospects that are directly correlated to the vibrant growth of China’s

industrial output

Precision high performance stamping machine production in China has higher technical and

capital barriers to entry and attractive fundamentals, as opposed to conventional stamping

machines, which is a more fragmented and cost competitive business

6

China Holdings Investment Criteria

An acquisition of a domestically focused Chinese company

Platform business with potential additional acquisitions

Proven business model with consistent cash flows

Require historical sales, earnings and EBITDA growth of 20% +

Compelling opportunity to participate in the economic and industrial expansion in

China

A transaction with managements’

alignment tied to the future performance of the

business

A target sourced through extensive and deep relationships in China

A valuation that compares favorably to public company peers in China

7

China Holdings Investment Criteria (cont’d)

Experienced management team, led by serial entrepreneur with 25 years of business

expertise and a CEO with more than 35 years of direct industry acumen

CHAC Objective

Bright World Investment Highlights

Experienced

Management Team

Attractive Valuation

(1)

CHAC’s acquisition of Bright World is attractive: 

–

Transaction cost implied multiple –

[10.9x] 2008 Trailing Twelve Month Earnings

–

Median of comparables = 17.8x (see page 11)

(1)

Under

the

Deed

of

Undertaking

(the

“Deed

of

Undertaking”)

entered

into

between

CHAC

and

World

Share

and

its

shareholders,

World

Share

is

entitled

to

receive

additional

CHAC

shares

(up

to

15,765,000

shares)

in

the

event

that

CHAC

shares

achieve

certain

price

levels,

post-closing.

The

value

of

the

right

to

receive

these

additional

shares

is

not

included

in

the

calculation of cost.

CHAC is not and does not purport to be providing any financial forecast or estimate for Bright World.  The reference to Bright World’s year trailing twelve month 2008 earnings and

valuation

multiples

in

this

presentation

does

not

represent,

and

should

not

be

taken,

construed

or

be

relied

on

as,

a

forecast

estimate,

warranty,

guarantee

or

representation

by

CHAC

as

to

the

future

profitability

or

financial

performance

of

Bright

World

in

respect

of

FY2008

or

FY

2009

.

There

is

no

assurance

whatsoever

as

to

Bright

World’s

future

financial

performance

and

accordingly,

nothing

in

this

presentation

should

be

construed

as

providing

any

such

assurance.

Anticipated Board of

Directors

–

Wang Wei Yao, Non-Exec. Chairman

–

Shao Jian Jun, President & CEO

–

Paul K. Kelly, Vice Chairman

–

Xiao Feng, Director

–

Cheng Yan Davis, Director

8

China Holdings / Bright World Transaction Overview

On October 24, 2008, CHAC (AMEX: HOL) entered into an amendment to the Deed of Undertaking

with

World

Share,

Mr.

Wang

Wei

Yao

and

Mr.

Shao

Jian

Jun

–

CHAC has agreed to make a tender offer for all of the issued shares of Bright World, a

Singapore Stock Exchange listed company

–

World

Share,

which

owns

approximately

77.4%

of

the

issued

shares

of

Bright

World,

has

agreed to accept the tender offer with respect to all of its CHAC shares

–

As part of the transaction, CHAC would re-domesticate into a newly formed BVI company, and

would seek a listing on the New York Stock Exchange

Consideration of $255 mm plus additional CHAC shares to controlling shareholder if stock price 

achieves certain targets

Key changes since initial announcement include:

–

The

issuance

of

the

additional

CHAC

shares,

which

was

previously

based

on

achieving

a

2008

earning target for Bright World, is now based on achieving certain stock price levels:

3,500,000 shares if share price attains and/or exceeds $12.50

3,500,000 shares if share price attains and/or exceeds $13.00

8,765,000 shares if share price attains and/or exceeds $13.50

CHAC sponsors will exchange their promote shares for newly issued warrants that can be exercised

for nominal-consideration only when the common share price attains and/or exceeds $13.50

The transaction is planned to close during the first quarter of 2009

–

Requires approval from a majority of the CHAC shareholders

–

CHAC shareholders holding up to 33.3% of the outstanding CHAC share less one share may

exercise conversion rights

9

Transaction Overview (cont’d)

After the closing of the transaction, it is intended that CHAC shall declare and pay a cash

dividend of $0.50 per share to its shareholders of record and reduce the strike price for

CHAC’s

currently outstanding warrants by $0.50.  World Share has waived its right to receive

the cash dividend with respect to any CHAC shares it may hold

For the first six months of 2008, Bright World’s revenues, net profit and EBITDA (earnings

before interest, taxes, depreciation and amortization) grew by 51.8%, 64.1% and 59.9% (US

dollars), respectively, compared to the same period in 2007

CHAC will have a right of first refusal to acquire four other companies controlled by Mr. Wang

Wei Yao (collectively known as the “World Group”) that manufacture agricultural machinery,

auto parts and components, lawn mowing equipment and heavy construction equipment. 

The World Group companies, including Bright World, constitute one of China’s top 500

private companies as designated by the Chinese Private Enterprises League.

Horizontal and vertical integration opportunities

10

Transaction Structure

Uses

(1)

Pro Forma Closing Common Ownership

(2)(3)

Sources

(1)

(1)

Assumes

no

redemptions

of

CHAC

common

stock

which

may

aggregate

a

total

of

4,266,239

shares

with

an

estimated

value

of

$41.8

million.

(2) Assumes shares valued at $9.29 per share which is the estimated redemption price of $9.79 per share for CHAC common stock less the $0.50 per share cash dividend.

(3) Bright World Shareholders excludes the public float shares which are assumed to be acquired via the tender offer. 

(4) The majority 77.42% ownership of Bright World is owned by World Share which, in turn, is owned 82% by Wang Wei Yao and 18% by other insiders.

(5) Existing founders shares to be exchanged for warrants exercisable at $13.50 per share.

(6) Assumes warrants calculated using Treasury Stock Method at $9.29 / share with 15.6 mm warrants outstanding.

(7) CHAC is not and does not purport to be providing any financial forecast or estimate for Bright World.  The reference to Bright World’s trailing twelve months 2008 earnings and valuation multiples in this presentation

does not represent, and should not be taken, construed or be relied on as, a forecast estimate, warranty, guarantee or representation by CHAC as to the future profitability or financial performance of Bright World in

respect

of

FY2008

and

FY

2009.

There

is

no

assurance

whatsoever

as

to

Bright

World’s

future

financial

performance

and

accordingly,

nothing

in

this

presentation

should

be

construed

as

providing

any

such

assurance.

Note: Figures used are subject to rounding.

Transaction Cost and Implied Multiple

Offer

Purchase of Bright World shares from majority S/H

(4)

198.3

Purchase of Bright World  shares from minority S/H

49.8

Pro Forma Net Bright World debt assumed

6.8

Fees and expenses

3.0

Redemption of CHAC Shares

(1)

--

Cash dividend ($0.50 per share)

6.4

Total use of capital for initial transaction

$264.3

Offer

Issuance of new CHAC shares

(2)

$198.3

Use of cash and trust fund

59.2

Pro Forma Net Bright World debt assumed

6.8

Total sources used in transaction

$264.3

Cash available for organic growth and M&A

$55.6

Offer

(share in millions)

Shares

% Ownership

Shares Issued to Bright World S/H

(4)

21.3

56.2%

Existing Founders' Shares

(5)

--

--

CHAC Public Shares

(1)

12.8

33.7%

Warrants

(6)

3.8

10.1%

Total Shares Issued Post-Transaction

38.0

100.0%

Offer

(2)

Number of CHAC Shares Issued

21.3

CHAC Share Price

$9.29

Total CHAC Stock Issued

$198.3

Cost of Bright World Minority Investors

49.8

Pro Forma Net Debt Assumed

6.8

Total Cost

$254.9

2008 Trailing Twevle

Month P/E Multiple

(7)

10.9x

11

Comparable Company Analysis

(Share Price in CNY)

Implied purchase multiple for Bright World based upon 2008 trailing twelve month earnings:

10.9x

Market Cap.

Price / Earnings

Company

StockPrice

(US$M)

(1)

LTM

CY 2008

CY 2009

Shenyang Machine Tool Co., Ltd.

4.71

$375

35.1x

15.7x

8.9x

Qingchuan

Machinery

5.29

270

17.8

14.7

10.6

Weihai

Huadong

Automation Co., Ltd.

6.98

122

15.4

14.0

8.8

Shenji

Group Kunming Machine Tool Co., Ltd.

6.98

433

8.9

9.3

6.9

Huagong

Tech Company Limited

5.35

257

23.1

31.5

25.5

Shaanxi Aero-space Power Hi-tech Co. Ltd.

5.85

158

30.6

32.5

18.9

Ningbo Donly

Transmission Equpment

Co., Ltd.

7.51

198

17.2

15.6

9.6

Mean

$259

21.2x

19.0x

12.7x

Median

$257

17.8x

15.6x

9.6x

Source: Stock prices per Yahoo Finance.

Note: Market Data as of  Oct-22-2008.

(1) Assumes 6.844 RMB = US $1.00.

LTM

(Latest

Twelve

Months)

historical

earnings

per

Reuters’

normalized

calculations.

CY 2008 and CY 2009 earnings estimates per Reuters except for

Shaanxi

Aero-space

which

was

obtained

from

SouthChina

Securities.

12

Bright World Company Overview

Established in 2004, Bright World manufactures

stamping machines and related components which are

used by its customers to bend, cut and shape metal

Description

Products

Customers

Location &

Employees

Manufactures over one hundred models of stamping

machines

–

Stamping machines are classified into 11 product

series and divided into Conventional and High

Performance machines

Margins expanding due to shift to high performance

stamping machines (which have technical and capital

barriers to entry) as China’s industrial base moves

upscale in world markets.

Bright World’s broad customer base is composed of

companies in the automotive, hardware,

telecommunications and home electronic appliances

industries

Danyang

City, Jiangsu Province, PRC

–

Close proximity to numerous manufacturing

companies

~2,200 employees

13

$9.0

$11.8

$14.5

$19.0

$6.8

$11.2

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

2004

2005

2006

2007

H1 07

H2 08

$10.7

$13.0

$18.4

$24.1

$9.0

$14.5

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

2004

2005

2006

2007

H1 07

H1 08

$31.3

$39.2

$56.4

$74.5

$32.8

$49.9

$0.0

$25.0

$50.0

$75.0

$100.0

2004

2005

2006

2007

H1 07

H1 08

Strong Consistent Growth

EBITDA

(2)

Net Sales

(1)(2)

(USD in millions)

Source: Bright World filings.

(1) 4Q07’s revenues were negatively impacted by a reported interruption associated with shifting existing production lines to Bright World’s new facilities. 

(2) Foreign exchange rates used -

2004: 8.2768RMB = US $1.00, 2005: 8.1936RMB = US $1.00, 2006: 7.9723RMB = US $1.00, 2007: 7.6058RMB = US $1.00,

1Q 2007: 7.7582 RMB = US $1.00, H1 2008: 7.0568RMB = US $1.00

Net Profit

(2)

14

Customers by Sectors

Automotive

30%

Home Electronic

Appliances

20%

Computer & Telecommunications

20%

Hardware & Others

30%

2007 Sales Breakdown

15

Competitive Strengths

Consistent track record of strong year-over-year growth and profitability

Enhanced focus on the successful ongoing transition toward the high performance

sector

Well recognized AOTU brands and World trademarks

Introduction of new, high-tonnage stamping machines capability makes Bright World

a totally integrated producer of power press machines, with product lines in all major

segments

Continuous focus on R&D to sustain competitive edge

–

Long-term track record on innovation of sophisticated products with increased

tonnage and efficiency

Experienced management team, led by serial entrepreneur with 25 years of business

experience and a CEO with more than 35 years of direct industry acumen

Established in-house marketing and sales force, plus more than 300 distributors,

spanning coastal and central China

16

Experienced Management Team (Post-Transaction)

Wang Wei Yao, Non-Executive Chairman

–

Mr.

Wang

has

received

a

number

of

awards

for

his

entrepreneurial

activities

in

China.

He

has

served

as

Chairman

of

a

number of companies which he has founded or acquired and restructured.  As Chairman and a major shareholder of such

companies, he has been responsible for determining the overall strategic development of each company, as well as

assessing and implementing the major policies of each company.

–

Mr. Wang developed Bright World from a small, underperforming stamping company, which he acquired in 1998.  At that

time, the company had far less than RMB 100 million in sales, compared to RMB 566 million for FY 2007.  Mr. Wang is

also Chairman of World Group, which includes 4 machinery manufacturing companies for which CHAC has a Right Of

First Refusal to purchase. 

–

Mr. Wang is the recipient of an Executive Masters Certificate from China Europe International Business School.

Jianjun Shao, President and CEO

–

Mr. Shao has 35 years experience in the forging and metal forming businesses. 

–

Mr. Shao is the CEO of WPM (China) and is in charge of the overall operations of the company.  He is certified as a

Senior Machinery Engineer by the Science and Technology Committee.  He has been intimately involved in the

development

of

new

products

designed

to

meet

customers’

needs,

and

to

increase

market

share

of

the

company. 

–

Mr. Shao has obtained an Executive Masters Certificate from China Europe International Business School.

Paul K. Kelly, Vice Chairman

–

Mr. Kelly is a founder and current Chairman and C.E.O. of CHAC.

–

Mr. Kelly is President and C.E.O. of Knox & Co., international investment bankers.

–

Mr.

Kelly

is

the

C.E.O.

of

Stuart

Management

Co.,

which

provides

administrative

services

to

CHAC.

–

He is a graduate of the University of Pennsylvania and has an MBA from Wharton.

Mark L. Wilson, CFO

–

Mr.

Wilson

is

a

senior

financial

executive

with

broad

experience

in

several

industries

during

his

28

year

business

career.

–

Mr. Wilson serves as an Officer and Director of Stuart Management Company and serves on the Management Board of

Biflex International Group, a leading private label intimate apparel supplier. 

–

Prior to CHAC, Mr. Wilson was the CFO of Towers Perrin, a $1.3 billion global professional services firm and held prior

executive positions at The Thomson Corporation and MacAndrews & Forbes Holdings. 

–

He is a graduate of Cornell University (BS Class of ‘79 and MBA Class of ‘80) and earned his CPA at Ernst & Young.

17

Balance Sheet Highlights

    Bright

     CHAC

    World

     Pro Forma

(USD in millions)

Q2 2008

(1)

Combined

Cash & cash equivalents

(2)

$6

$69

Inventories

31

31

Receivables

49

49

Current assets

86

149

Property, plant & equipment

50

50

Total assets

$136

$199

Payables and accruals

$28

$30

Short term debt

13

13

Current liabilities

41

43

Minority Interest

0

0

Shareholder's Equity

(2)

95

156

Total Liabilities & Shareholder's Equity

$136

$199

Net cash position and

unlevered

balance sheet

provides adequate capital

for acquisitions

Note:  CHAC PF combined assumes acquisition of 100% of Bright World.

Note:

Figures used are subject to rounding.

(1) Foreign exchange rate used: 6.8544RMB = US $1.00

(2) Assumes no redemptions of CHAC common stock which may aggregate a total of   

(2)

4,266,239 shares with an estimated value of $41.8 million

18

Bright World First Half Comparison

($ USD in 000's)

H1 2008

H1 2007

% Change

Revenue

$49,857

$32,846

51.8%

Gross Profit

16,451

11,438

43.8%

Gross Profit Margin

33.0%

34.8%

(1.8%)

Distribution, Selling & Admin.

3,910

3,738

4.6%

DSA % Sales

7.8%

11.4%

(3.5%)

Profit from Operations

12,848

7,860

63.5%

Operating Profit Margin

25.8%

23.9%

1.8%

Net Profit

$11,177

$6,811

64.1%

Note: Foreign exchange rates used: H1 2007: 7.7177RMB = US $1.00, H1 2008: 7.0568RMB = US $1.00.

19

Recent Comments on Chinese Economy

“The Chinese growth rate looks remarkably robust compared with other big economies, but

policymakers know that they need to keep expansion at about 8 per cent to 9 per cent”

The Times –

10/21/2008

“China continues to be well-placed to avoid following the western world into the economic abyss. The

mainland economy continues to decelerate, but differs from the US and Europe in several key ways: 1) no

loss of confidence in the Chinese financial system; 2) no liquidity problems and no risk of bank insolvency; 3)

low levels of external debt and very minor exposure to foreign mortgage-related investments; 4) export

growth will continue to slow but will not disappear, and is in any event not a critical growth driver; 5)

domestic consumption remains very strong; 6) with raw material and energy costs falling, we expect

industrial profits to rebound early next year; 7) Beijing has the means to keep propping up investment; 8)

should GDP growth appear likely to slow beyond what we believe is Beijing’s 2009 target of 8%, the

Andy Rothman, CLSA –

10/21/2008

“China's

statistics

bureau

reported

Monday

that

economic

growth

slowed

to

a

year-to-year

expansion

of

9%

in

the

third

quarter,

still

healthy

but

sharply

down

from

10.1%

in

the

second

quarter

and

10.6%

in

the

first.

For

the

year,

China's

growth

is

likely

to

be

below

10%

for

the

first

time

since

2002.

Many

economists

now

forecast

it

to

fall

to

as

low

as

8%

next

year,

even

assuming

Beijing

takes

more

measures

to

boost

growth…Chinese

growth,

to

be

sure,

remains

extraordinarily

high

by

world

standards

and

looks

likely

to

stay

so.”

Wall

Street

Journal

–

10/21/2008

government

has

the

fiscal

capacity

and

political

will

to

quickly

implement

an

aggressive

stimulus

program”