1. THE CHINESE
CONSUMER
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3. Contents
1. UNITE AND CONSUME ...................... 1
2. RISE OF THE WORKING CLASS ........ 5
3. NETIZEN UPRISING ............................ 9
4. FROM MARX TO LUXE ....................... 13
5. THE GREAT MARCH
TO URBANISATION .............................17
6. FIDELITY FUNDS –
CHINA CONSUMER FUND .................. 21

4. UNITE
AND
CONSUME
Times have changed; it is no longer a case
of China produces and the world consumes.
The Chinese government has implemented a
series of policies to further stimulate domestic
consumption, ensuring that consumer spending
grows by leaps and bounds.
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5. Did you know? Tap into China’s
China will overtake United States to consumption power!
become the world’s largest economy by The consumption boom is expected to
2017. And by 2020, it will account for more continue for the next 5 to 10 years as
than 20% of world GDP in Purchasing Power government policies shift towards
Parity terms, up from the current 13%. addressing income inequality and
promoting wage growth.
Source: Euromonitor International, “Top 10 largest economies in
2020”, July 2010
China Retail Sales – Consumer Goods
Largest economies by GDP in PPP terms
1,600
2010 1,400
CNY, billion
1,200
US$14.8 trillion US$9.7 trillion
1,000
800
2020
600
400
05 06 07 08 09 10
US$22.6 trillion US$28.1 trillion Nov Nov Nov Nov Nov Nov
Source: Euromonitor International from IMF, International Financial
Statistics and World Economic Outlook/UN/national statistics, Source: National Bureau of Statistics, China, 30 November 2010
July 2010
3 4

6. RISE
OF THE
WORKING The per capita disposable income of urban
residents was 19,109 yuan (US$2,911) in
CLASS 2010, up 82% from 2005*. The Ministry of
Human Resources and Social Security also
reported that 30 Chinese provinces had
raised the minimum wage in 2010 by an
average of 23%^ from the year before.
*Source: chinadaily.com.cn, March 2011
^Source: People’s Daily, 26 January 2011
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7. Did you know? Get ready for the new age
China’s middle class is already larger than of consumption!
the entire population of the United States Increase in wages has boosted sales of
and is expected to reach 800 million* in mid-priced consumer discretionary goods
15 years. like sportswear. Home-grown companies
have sprung up to tap into this market and
*Source: Helen Wang, Forbes columnist, “The Chinese Dream” are expected to continue growing given the
anticipated income rise.
Per capita disposable income of urban residents
US$2,911
Size of China’s sportswear market
$
82.1%
2008
US$9.8 billion
2013
US$20 billion
2002
US$3.3 billion
Source: KGI, 21 July 2010; Citigroup, 29 November 2010
2005 2010 year
Source: chinadaily.com.cn, March 2011
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8. NETIZEN
UPRISING
China has the world’s largest internet market.
The current 457 million internet users are
expected to grow to more than 700 million by
2013 – however, that would still only represent
a little more than 50% of China’s population.
Source: China Internet Network Information Center, 2010
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9. Did you know? Plug into China’s
The Chinese use the internet more for fastest-growing companies!
entertainment – playing online games, In 2009, the internet penetration rate in China
messaging, downloading music and movies, was 29%*. Given the low penetration rate
and shopping – than for work. People in the 60 and the Chinese’s obsession with the
largest cities in China spend around 70% of internet, the telecommunications sector
their leisure time on the Internet. The PC has presents tremendous growth opportunities.
replaced the TV set as an entertainment hub.
*Source: CSLA Asia-Pacific Markets, January 2011
Source: McKinsey Quarterly March 2010, “China’s internet obsession”
Internet penetration rate
% of leisure time spent
80% 7
77.3
60%
70%
40%
31.8
20%
0%
9 0 1 2 3 4 5 6 7 8 9 0
199 200 200 200 200 200 200 200 200 200 200 201
C
China Korea U
US U
UK J
Japan HK
Source: CNNIC, ITU, MII, NSD, OECD and FIL, November 2010
11 12

10. FROM
MARX
TO LUXE
Sale of luxury goods in China will hit US$27
billion by 2015. This will represent 20% of the
total global luxury sales, with China eclipsing
Japan as the world’s number one consumer
of luxury goods.
Source: McKinsey Insights China, 2011 Luxury Consumer Report,
March 2011
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11. Did you know? Arise and embrace China’s
Whereas the market for luxury goods in new wealth!
other countries is typically dominated by Chinese shoppers prefer high-end luxury
women, in China the men fill the tills with goods and this has been the key driver of
nearly equal abandon. They buy both for the Hong Kong retail market. Their total
themselves and for others, since gifts spending rose from HK$15.5 billion in 2002
lubricate business in China. to HK$48.8 billion in 2009.
Source: The Economist, February 2011
Source: Company information; Credit Suisse, 11 November 2010
Shopping spending by Chinese visitors
HK$m
60,000
50,000
40,000
30,000
20,000
10,000
0
2002 2003 2004 2005 2006 2007 2008 2009
15 16

12. THE GREAT
MARCH TO
URBANISATION China is on an accelerated urbanisation
drive. By 2015, China’s urban population is
expected to exceed 700 million, marking
the first time China’s urban residents
exceed its rural neighbours*.
*Source: China’s National Population and Family Planning
Commission, July 2010
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13. Did you know? Ride on the wave of
Cities have been the major drivers of China’s China’s growth!
GDP growth over the past two decades. The home appliance sector will grow with the
By 2025, the proportion of China’s GDP increased pace of urbanisation in China. The
generated by cities will rise from 75% today growth in the sector will benefit manufacturers
to 95%. and retailers of such appliances.
Source: McKinsey & Co. report, “Preparing for China’s urban
billion”, March 2009 Home appliance penetration rates in urban
and rural areas (units per 100 household)
China’s GDP as generated by cities 140
120
By 2025 100
% 80
95% 60
100 Now
40
75% 20
80 0
Air conditioner Refrigerator Washing mashine
60
40
20 Urban households Rural households
0 Source: CEIC, JP Morgan, 16 July 2010
19 20

14. Fidelity Funds – Investment Objective
China Consumer Fund The fund aims to achieve
Fidelity Funds – China Consumer long-term capital growth through
Fund offers investors the investing primarily in equity
securities of companies having
opportunity to benefit from
their head office or exercising a
the Chinese consumption
predominant part of their
mega-trend. This equity fund uses
activities in China or Hong Kong.
Fidelity’s dedicated China-based
These companies are involved in
research team, as well as its
the development, manufacture or
global resources, to invest in sales of goods or services to
companies that will benefit from consumers in China.
the coming golden age of
Chinese consumption growth.
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15. Fund Details
Disclaimer
Benchmark MSCI China Index NR This document is prepared by Fidelity
USD - 23 February 2011 International. All views expressed cannot be
Fund Launch Date SGD - 1 August 2011 construed as an offer or recommendation.
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Investor Profile a growth investment strategy information only and does not have regard
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appropriate for investors who financial situation and particular needs of
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convertible currency.
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