MERCER CHINA2014 ANNUAL HR CONFERENCEWINNING THE FUTURE THROUGH TODAY’S INNOVATION

September 23, 2014Shanghai China

Economic OverviewGlobal, Asia Pacific and China

MERCER 2

World GDP and InflationGDP goes up and Inflation goes down from 2013 to 2015

Source: IMF World Economic Outlook (April, 2014)

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

2008 2009 2010 2011 2012 2013 2014 2015

Emerging market anddeveloping economies Inflation 9.2 5.4 5.9 7.3 6.0 5.8 5.5 5.2

Emerging market anddeveloping economies GDP 5.9 3.1 7.5 6.3 5.1 4.7 4.9 5.3

World Inflation 6.0 2.5 3.6 4.9 3.9 3.6 3.5 3.4

World GDP 2.7 -0.4 5.2 3.9 3.2 3.0 3.6 3.9

MERCER 3

Shift in Global Business LandscapeDriving corporate growth in Asia Pacific

Source: APAC Exec Brief, August, 2014, IMA Asia

Asia Pacific still leading the pack

To cash in where the growth is today, and for the foreseeable future,

Increasing focus on Asia Pacific

4.3% GDPgrowth1.1% GDP

growth2.0% GDP

growth

Asia Pacific vs. Developed markets

MERCER

Regional GDP, Inflation & Salary Increase

0%

2%

4%

6%

8%

10%

12%

4

Source: IMA Asia Brief Aug 2014Mercer Global Compensation Planning Report 2014 July

*Mercer TRS Surveys 2014

AU CN HK ID IN JP KR MY NZ PH SG TH TW VN

GDP 3.0% 7.4% 2.5% 5.0% 4.9% 0.4% 3.6% 6.2% 3.3% 6.2% 3.2% 1.1% 3.8% 5.0%

Inflation 2.6% 2.5% 3.8% 5.7% 7.3% 2.7% 1.5% 3.5% 2.0% 4.6% 2.1% 2.3% 1.7% 4.9%

Salary Increase 3.5% 7.5%* 4.5% 10.0% 11.0% 2.1% 5.0% 5.6% 3.0% 7.0% 4.5% 5.9% 3.8% 10.7%

MERCER 5

-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

North America Europe andCentral Asia

Asia and Pacific Latin Americaand the

Caribbean

Middle East andNorth Africa

Sub-SaharanAfrica

• Overall index is unweighted average of the four pillar scores• Scores are weighted by population; population data from United Nations Department of Economic and

Social Affairs, World Population Prospects, rev. 2012.

Source: The Human Capital Report, World Economic Forum, 2013The report is published in collaboration with Mercer

Human Capital Index – by Region

Health andWellness

Education

Workforce andEmployment

EnablingEnvironment

Human Capital Index

MERCER

Human Capital Index - China Rank #43

6

Country Rank ScoreSwitzerland 1 1.455

Finland 2 1.406

Singapore 3 1.232

Netherlands 4 1.161

Sweden 5 1.111

Japan 15 0.948

United States 16 0.920

Malaysia 22 0.644

China 43 0.186

Thailand 44 0.158

Russian Federation 51 0.010

Indonesia 53 0.001

Brazil 57 -0.054

Mexico 58 -0.057

Vietnam 70 -0.202

India 78 -0.270

Source: The Human Capital Report, World Economic Forum, 2013

MERCER

6.0% 4.0% 2.0% 0.0% 2.0% 4.0% 6.0%

0-45-9

10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-8485-8990-9495-99100+

Asia

Population Demographics – Gender

7

2010

2030

Source: UN Population Statistics 2012

Male Female

MERCER 8

Population Demographics – Median Age

Source: UN World Population Prospects 2012

0

5

10

15

20

25

30

35

40

45

50

55

India ASEAN USA Australia China South Korea Japan

Median Age of the Total Population(Years)

1990 2010 2030

MERCER

China’s Changing DemographicsAge Group between 20 - 59

9

Unit: thousand

The forecast of the future population adopts medium fertility rate assumption.Source: World Population Prospects: The 2012 Revision, United Nations

50,000

100,000

150,000

200,000

250,000

1990 1995 2000 2005 2010 2015 2020 2025 2030

20-29

30-3940-49

50-59

MERCER

China on Track for Moderate GrowthGDP, CPI, salary increase and turnover rate

10.411.6

13

9.69.1

10.49.3

7.8 7.7 7.4

-2

0

2

4

6

8

10

12

14

16

18

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(E) 2015(F)

GDP CPI(Inflation Rate) Salary Increase Staff Voluntary Turnover

2014 1st half year

10

Source : National Bureau of Statistics of ChinaIMA Asia (Aug 2014)

2004-2014 Mercer Total Remuneration Survey

6.7

12.213.5

14.6

11.3

15.716.3

13.6 13.613.4

7.2

8.68.2 8.7

6.9

8.5

9.6 9.4

8.27.9

7.5 7.7

1.8

4.8

1.5

5.9

-0.7

3.3

5.4

2.6 2.82.52.6

MERCER

China on Track for Moderate GrowthGDP per capita

11

1. Source: IMF World Economic Outlook (April, 2014).2. GDP is expressed in current U.S. dollars per person. Data are derived by first converting GDP in national currency to U.S.

dollars and then dividing it by total population.3. For the ranking, there are 186 countries and regions with the data of GDP per. capita

China’s Ranking ofGDP per capita

Year Ranking

2011 91

2012 88

2013 84

2014(F) 82

2015(F) 81

54346078

67477333

7961

2011 2012 2013 2014(F) 2015(F)

MERCER

China GDP Growth Rate Forecast

12

Source: China Forecast Book, IMA Asia， 2014 Q3

0

3

6

9

12

15

2010 2011 2012 2013 2014 2015 2016

Manufacturing Construction Services GDP

CHINA: GDP Growth by Component, %

MERCER

China’s Total Debt vs. GDPRaised rapidly since 2008 economic risk increased

13Source: Financial Times reported on July 22, 2014, citing estimates from Standard Chartered.

MERCER

-20

-10

0

10

20

30

40

Gro

wth

Perc

enta

ge(Y

ear-

on-y

ear)

China FDI Growth

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

14

China Foreign Direct Investment (FDI)

Source : Ministry of Commerce of the People’s Republic of ChinaSource: World Investment Report 2014

United Nations Conference on Trade and Development

2011 2012 2013 2014

100124

2013 FDI Flow

FDI Outflow FDI InflowUSD, Billion

2014

Outflow > Inflow

MERCER

50.2

54.1

45

46

47

48

49

50

51

52

53

54

55 PMI ManufacturingPMI Service

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

China PMI : Manufacturing and Services

15

Source: HSBC September, 2014

2013 2014

Service

Highest

since Mar 2013

Down Again

after 3-month upManufacturing

MERCER

Global Innovation Index rankings

16

Innovation – A Path to TransformationChina has improved its innovation from 2013 to 2014

Country/Economy Score(0-100) 2014 Rank 2013 Rank

Switzerland 64.78 1 1

United Kingdom 62.37 2 3

Sweden 62.29 3 2

United States of America 60.09 6 5

Hong Kong (China) 56.82 10 7

Japan 52.41 21 22

China 46.57 29 35

Russian Federation 39.14 49 62

Brazil 36.29 61 64

India 33.70 76 66

Source: The Global Innovation Index 2014Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO)

MERCER

Summary

17

• China still has strong-to-moderate GDP growth rate in next 3years.

• Economic risk is raising due to stimulation.

• China may become a FDI net outflow country in 2014.

• China is on the way improving its Human Capital Index andinnovation ranking in the world, while the aging population willbe a issue, China has to seek way to offset its negative impact.

New Technology BringsNew Practices of Talent Management

MERCER 19Source: CBN Weekly 2014

MERCER 20

HR Revolution with business change

Hiring Communication

Learning&

Development

Saving

MERCER

From Graduates’ points of view

21

• Strong financialpower

• Competitivebenefits

• Innovative culture• Inspiring leadership

• Attractive companyproducts/services

• Innovative culture

• Fast promotion• Job Security

• Performance-basedbonus

• Fast promotion• Entrepreneurship

environment

• Grey area• Compensation for

overtimes

Data source: Universum

But lack of…

MERCER

Graduate Top 3 Preferences

22

Data source: Universum

MNCSOE

POE OWN-BIZSTART-UP

MERCER

FIFA World Cup and Social Network

23

Data source: Peel, eMarketer

350,000tweetsPer day

1,000 +milliondiscussion

62%out of500 million

MERCER

Revolution in Recruitment Channel

24

MERCER

Revolution in Recruitment Channel

25

MERCER

Once upon a time…

26

“……以最饱满的诚意，招聘最优秀的人才加盟，共同谱写辉煌的未来！” 我们将遵循公平、公正的

原则择优录用，同时提供具有竞争力的薪酬待遇和广阔的发展空间，欢迎优秀人才积极报名应聘。

MERCER

And Now…

27

“他就是传说中最理性的感性的管理者…无论多少关键词都无法代表他的全部现在快加入…吧让我们一起创造属于我们的下一个神话！”

“希望有美感，性格外向活泼敢想敢做，梦想无限的亲们踊跃加入！”

“领导炫酷：工作时带领你，指点江山帅你一脸，不定期释放傲娇卖萌特技…只要你来，绝不辜负!”

MERCER

CommunicationCEO Corner

28

MERCER

Learning & Development

29

MERCER 3024 September 2014

MERCER 3124 September 2014

MERCER 3224 September 2014

MERCER

85%Chineseemployees are notgood at financialplanning andinvestment

MERCER 3434

Investment Platform

Financial ManagementSeminar

Smart Saving

Customized FinancialManagement Solution

Smart SavingThe new thoughts on Benefits

Do not forget, you are an inflation-linked bond!

MERCER

0

1

2

3

4

5

35

I have trust in Company Leadership, who has cleargoals and is guiding the company in right direction

Company Culture

Standardized Management

Colleagues Relationship

Team Building Activities

Flexible Working Hours

Health Issue

Recognition for individualperformance

Democratic and innovativeenvironment

Open door policyfor complaints and appeals

Convenient Location

Data source: 2014 Mercer Retention Survey

Leadership and Retention - Key to Business

MERCER

Hiring Communi-cation

Learning &Developme

ntSaving

36

HR-Marketing

Transpa-rency

Innovation HR -Finance

MERCER CHINA2014 ANNUAL HR CONFERENCEWINNING THE FUTURE THROUGH TODAY’S INNOVATION

September 23, 2014Shanghai China