FREE TRADE ZONE OPPORTUNITY: HAIKOU CITY OFFICIAL LETTER OF AUTHORIZATION Global Resource Group and its’ assigned representatives have been authorized to solicit potential U.S. based corporations to participate in the new Haikou Integrated Free Trade Zone project. Global Resource Group is authorized to open negotiations with potential U.S. companies on behalf of the Free Trade Zone administration commission, pending final approvals and negotiations from China government officials. BACKGROUND: HAINAN PROVINCE/HAIKOU CIT Y Hainan Province, is an island located just of f the southern tip of China. Haikou, is the Capital of Hainan province and sits at the northern end of the island. Known for its pristine, tropical environment, Haikou is a major destination for over 60 million tourists each year. BACKGROUND: HAINAN PROVINCE Hainan was administered as part of the Guangdong Province until 1988. Since then it has been designated as a Special Economic Zone (SEZ) and become a magnet for investment. It has developed a large tourist infrastructure with over 60 million tourists visiting each year. Island covers an area of over 34,000 square kilometers Hainan Province = 9.5 million (2016) Haikou City = 2.5 million (2016) Sanya City = 1 .5 million (2016) Tourism = >60 million per year BACKGROUND: HAINAN PROVINCE American and British travelers to the island are able to obtain a visa upon arrival at the airport, making Hainan the only province in China to allow such a practice. This was established because of the stif f competition from Thailand, Vietnam and Malaysia destinations . Hainan is accessible by boat, bus (ferry), trains (loaded onto ferries). Trains stop at Haikou and Sanya as well as Dongfang. Haikou and Sanya have airports with regular flights to various Chinese cities and is also accessible from Southeast Asia. A new high-speed train system was developed to travel around the entire island. Travel between Haikou and Sanya major cities takes approximately 1 hour. BACKGROUND: HAINAN PROVINCE Sanya Beach BACKGROUND: HAINAN PROVINCE South Mountain, Nanshan Tourism Area – Buddhist temple complex BACKGROUND: HAINAN PROVINCE South Bay Monkey Island – Home of the Nanwan Monkeys BACKGROUND: HAINAN PROVINCE Volcano Park and Lava Rock Villages – South of Haikou BACKGROUND: HAINAN PROVINCE Hainan Tropical Wild Life Park and Botanical Garden BACKGROUND: HAIKOU CIT Y Haikou City is the capital of Hainan Province and is situated in the northern part of the island with the largest population of 2.5 million. It is the political, economic, cultural and transportation center of the entire province. The other prominent city of Sanya is located in the southern region of the island and a major destination for tourism. BACKGROUND: HAIKOU CIT Y In Haikou the government has developed the Free Trade Zone area. The newest section of the Free Trade Zone encompasses 477 acres of available land. Government officials have already begun building warehouse space for “move in ready” clientele and are working with others who desire customized facility floor plans. The newest Free Trade Zone area will focus on retail tied to e-commerce sales. Haikou is also working on plans to develop a new outlet mall and has commissioned the Mission Hill Development Group to assist in the development of a major resort area. BACKGROUND: SANYA Sanya lies at the southern tip of Hainan Island at Sanya Bay. This is the second largest city in Hainan Province with a population of 1 .5 million. Sanya has become a major tourist destination with over 1 ,178 hotels and is home to the largest Duty Free Shopping Center in the world - Haitang Bay. The shopping area of 775,000 square feet is in addition to the downtown Duty Free center which is 1/7 th the size. Combined, the duty free shopping centers enjoyed sales of over $800 million in 2015 . The government plans on building 4 additional duty free stores in 2016. BACKGROUND: MISSION HILLS Founded in 1992, Mission Hills is recognized as a leading golf brand world-wide and is synonymous with high-end luxury. The Mission Hills Group was commissioned by the Government of Haikou to assist them in bringing a world-class resort to their area while maintaining the pristine environment that still exists on their island. The Mission Hills “Green Mission” has been incorporated into every aspect of this resort. The property sprawls over 30 square kilometers of volcanic lava rock and has since become a new landmark in Hainan’s tourism efforts. BACKGROUND: MISSION HILLS RESORT The Mission Hills Resort includes 10 championship golf courses, the greatest collection of volcanic courses in the world, 168 hot springs, the largest collection of volcanic mineral springs in Asia, Centerville - a collection of top retail shops and duty free shopping, and an educational/cultural area which incorporates the preservation of ancient villages and hiking trails. MISSION HILLS CENTREVILLE PRESERVING THE ENVIRONMENT The Free Trade Zone project was chosen by the Haikou government because it was a vehicle which would help boost their economy with the creation of jobs and tax revenues, while preserving the pristine environment of their island. Mission Hill Group was hired to assist in the development of the area specifically because of their “Green Mission” approach. Solar pest control systems, recycling, heat recovery systems to supply hot water and use of solar and wind hybrid street lights throughout have all been incorporated into the development to conserve the environment. FREE TRADE ZONE The 1 st Haikou Free Trade Zone section was built in 1992 and includes over 116 companies in the areas of biotech, automotive, electronics and mechanical manufacturing. The 3 rd and newest Haikou Free Trade Zone section will include 1 .93 square kilometers or 477 acres of newly secured warehouse space. The focus here will be primarily retail tied to e-commerce sales to Chinese consumers. The zone is strategically located near the Haikou port, train station and international airport FREE TRADE ZONE FREE TRADE ZONE WAREHOUSING Construction is well underway for move in ready warehouse availability. Customers have the option to choose move in ready facilities or work with the Free Trade Zone government to build warehousing to their specifications. FREE TRADE ZONE IMPORT CENTER A Free Trade Zone Import Center is also being built. Located 40 minutes from the Free Trade Zone area near the City Center and will consist of 60,000 sq ft of retail space. The center will showcase international wines, imported food products from around the world and world famous jewelry brands. FTZ IMPORT CENTER FTZ IMPORT CENTER FREE TRADE ZONE OPPORTUNIT Y The government of Haikou welcomes your company to warehouse in their Free Trade Zone area. Through ecommerce, Chinese consumers can order merchandise “duty free” and goods would be sent Express Mail Service to their residence. The Haikou government is of fering warehousing space either through existing new warehouse facilities or they will work with your design team to custom build your warehousing to your specifications. FREE TRADE ZONE TAX INCENTIVES As a registered corporation in China, your company would pay the usual and customary 25% revenue taxes less business deductions. Of the total taxes paid, 60% would go directly to the central government of China. The remaining 40% generally is allocated to the local government/jurisdiction. Haikou government is willing to rebate up to 90% of their 40% tax revenues back to your company as an additional incentive SUMMARY The government leaders of Haikou Free Trade Zone welcome an opportunity to video conference directly with your company executives to answer any specific questions you may have related to their Free Trade Zone and related opportunities. And, ultimately, a trip to Haikou, as the government’s special guests, to see the Free Trade Zone area, the Mission Hill resort development and an opportunity to explore other areas of opportunity. CONTACT INFORMATION U.S. Of fice : Global Resource Group 34209 S.E. Nye Street Snoqualmie, WA 98065 Monica Park 425 441-4007 Of fice 425 260-6194 Cellular 425 441-8732 Fax China Of fice : Global Resource Group No. 23-505-1 , Taihu Central Road Changzhou, Jiangsu, China 213022 86 519 86979969 Of fice