MUSICAL INSTRUMENTS INDUSTRY IN CHINA

October 2012

INDEX
PART 1- CHINA MUSICAL INSTRUMENTS INDUSTRY
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GENERAL OVERVIEW INDUSTRY CURRENT PERFORMANCE

Page 1 Page 2

PART 2- CHINA MUSICAL INSTRUMENTS MARKET

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CHINA IMPORT AND EXPORT GENERAL OVERVIEW CHINA IMPORT CHINA EXPORT CHINA IMPORT AND EXPORT CHARACTERISTICS

Page 5 Page 5 Page 6 Page 7

PART 3- OPPORTUNITIES FOR ITALIAN COMPANY

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ITALIAN MUSICAL INSTRUMENTS IN CHINA BASIS OF COMPETITION BARRIERS TO ENTRY GLOBALIZATION KEY SUCCESS FACTORS

Page 8 Page 10 Page 12 Page 13 Page 14

PART 4- OUTLOOK

Page 15

PART 5- APPENDIX
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CHINA CUSTOMS FIGURES MUSICAL INSTRUMENTS IMPORT TARIFF

Page 18 Page 36

GENERAL OVERVIEW The Chinese musical instrument industry manufacturers in 2011 achieved industrial sales output value of 23.424 billion RMB, with a year-on-year growth of 19.40%, and 23.88 billion RMB of industrial output value (current price), with a year-on-year growth of 19.04%;export delivery value of 8.324 billion RMB, with a year-on-year growth of 25.55%. 2011 is the "12th five year planning" first year, production of the musical instrument industry scale enterprises main economic indicators continue to maintain a steady and sustained growth. There are 6 provinces total industrial output value is more than 1 billion RMB, they are Guangdong, Shandong, Tianjin, Zhejiang, Jiangsu, Hebei, with total industrial output value of 20.68 billion RMB, a year-on-year growth of 21.1%, accounting for 86.6% of the total output value of the musical instrument industry in China. The industrial output in 2011 increased faster in the Province of Jiangsu, Jilin, Hebei, respectively, with an increase of 53.29%, 48.97%, 30.97%, but Liaoning Province is down 11.36%. Tianjin, Guangdong, Zhejiang, Hebei, Jiangsu are continue listed as the top 5 provinces and regions for exporting Chinese musical instruments in 2011, all above the 5 provinces and regions total export delivery value is 6.93 billion RMB, with an increase of 21.31%, accounting for 83.21% of the total exports of the above-scale musical instrument. With the negative export performance in 2011, Shandong Province is out of the position of the top four, with a year-on-year decline of 42.34%. Among the 13 musical instruments export provinces and cities in 2011, growth in exports of 10 provinces and cities, rapid growth in Hubei, Hebei, Jiangsu, Tianjin, respectively, an increase of 77.28%, 63.38%, 46.28%, 31.52%. But Shanghai, Liaoning, Henan, respectively, over the previous year fell by 4.36%, 4.60% and 11.33%, respectively.

INDUSTRY CURRENT PERFORMANCE After the first decade in the 21 Century, China has developed into one of the worlds biggest musical instruments production and sales countries, with a complete industrial system of various types of musical instruments. After the global economic crisis from 2008, the musical instrument manufacturing industry response not very positive, most of the features are decreased. But after the global the economic crisis, the situation of musical instrument industry started to recover from the year of 2010, and continued to grow in 2011. The industry had a moderate level of revenue volatility in the five years to 2011. Increasing household disposable income stimulated domestic demand for musical instruments, while export growth continued to drive industry growth. Further, government regulations also had a large impact on the industry's development. The implementation of national standards and industrial standards concerning musical instrument production contributed to a more standardized market environment. Domestic musical instrument manufacturers are mainly concentrated in the lowand mid-end markets, while foreign enterprises mainly operate in high-end markets due to their advanced technology and brand awareness. Therefore, domestic companies are less competitive, although the total output of domestic firms was larger compared with their foreign counterparts. Many domestic manufacturers, however, have increased their investment in research and development activities in recent years, and have started implementing branding strategies.
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2011

The industrial sales output value in 2011 is 23.424 billion RMB, with a year-on-year growth of 19.40%, and 23.88 billion RMB of industrial output value (current price), with a year-on-year growth of 19.04%; export delivery value of 8.324 billion RMB, with a year-on-year growth of 25.55%. The productions of the musical instrument industry scale enterprises main economic indicators continue to maintain a steady and sustained growth.

2010

Industry revenue recovered in 2010 after industry revenue and export declines in 2009. As the Chinese and global economies recover from the global financial crisis in 2010, domestic demand for musical instruments is expected to increase, while foreign demand for musical instrument parts and components will also be greater. Industry revenue is forecast to increase by 10.1% to $2.97 billion in the year. There are forecast to be 313 enterprises within the industry in China during 2010, most of which will be small- and medium-scale producers that are less competitive than larger firms. The top four operators are expected to generate less than 25% of industry revenue, which shows a low level of industry concentration. Private and foreign enterprises developed rapidly in recent years, and currently the private, foreign and state-owned companies are expected to account for similar industry revenue percentages.
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2009

Industry revenue totaled $2.70 billion in 2009, down 0.3% for the year (constant 2010 dollars). This decline was due to lower foreign demand caused by the global economic downturn, with exports declining by 23.7% for the year. This negative impact was greatest in the Western musical instrument segment and the electronic instrument segment. Exports as a proportion of industry revenue declined to 47.6% in 2009, down from 62.3% in 2008, and also down from a peak of 76.6% in 2003. Exports increased at a slower rate than domestic demand due to greater Chinese demand for musical instruments in recent years. Competing imports declined12.9% in 2009, accounting for 11.8% of domestic demand. Imports as a proportion of domestic demand declined from a peak of 34.4% in 2003, declining steadily as more foreign firms shifted their production facilities to China, decreasing foreign manufacturing output levels.
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2007 and 2008

Industry revenue increased strongly in 2007 and 2008 by 12.8% and 24.1%, respectively. Domestic demand increased by 11.8% and 25.9% in 2007 and 2008, with strong export growth.

Costs for foreign companies importing Chinese musical instruments increased significantly in 2007 and 2008 due to the appreciation of China's Yuan. Exports, however, still increased by 22.6% to $1.68 billion in 2008 due to strong demand and improving product performance. Of the exported musical instrument products, pianos accounted for a large proportion of export values. The faster growth rate of export values within the industry compared with its export volume, especially for pianos, electronic instruments and wind instruments, showed the improvement in product quality of musical instruments made in China.
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2006

Industry revenue increased by 16.3% in 2006 to $1.93 billion. Faster revenue growth in 2006 was mainly due to strong domestic demand growth. There were 266 musical instrument manufacturers within the industry, up 10.4% from 2005. Exports increased by just 6.6% to $1.22 billion as China's Yuan continued to appreciate. Competing imports increased by 0.5% in 2006 to $169.5 million. Musical instrument parts and pianos accounted for the greatest proportions of import values, at over 60% and 17%, respectively.

CHINA IMPORT AND EXPORT GENERAL OVERVIEW According to the National Bureau of Statistics, the musical instrument industrial gross output value in 2011 amounted to 23.88 billion RMB, with an increase of 19.04% compared with the previous year. Meanwhile, total sales revenue of the whole industry is 23.42 billion RMB, with an increase of 19.40% compared to the year of 2010. The total export reached 1.62 billion USD in 2011, increased by 10.7% compared with 2010. The import amount in 2011 has also increased by 18.8%, reaching 272.03 million USD. According to the State General Administration of Customs statistics, first half of 2012, the total import and export value of Chinese musical instruments is 897.78 million USD, up 13.8%, of which exports 751.74 million USD, up 12.4%; imports 146.04 million USD, up 20.7 %.

CHINA IMPORT In 2010 the musical instrument import amount of China is around 228.99 million USD with a considerable year-on-year growth rate of 23.3%. In 2011, the import amount has in creased by 18.8%, with 272.03 million USD. The musical instruments with biggest import value in 2011 are parts and accessories of various musical instruments of 130.93 million USD, which counts for 48.1% of the total import, with a year-on-year increase of 8.5%; followed by piano/harpsichord, with 107.93 million USD, which counts for 39.7% of the total import, a year-on-year increase of 48.9%, electric musical instruments (15.14 million USD) and other wind instruments (7.86 million USD). And from January to June in 2012, the biggest import categories are the same, parts and accessories of various musical instruments with 70.79 million USD, which counts for 48.5% of the total import, with an increase of 19.3% compare with the same period of last year; followed by piano/harpsichord, with 55.82 million USD, which counts for 38.2% of the total import, increase 21.3% compare with the same period of last year. In 2011, China has imported the musical instruments from 60 countries and regions, 23 countries less than last year. Japan continues to be the biggest export country towards China, with a total value of 123.9 million USD in 2011, which accounts for

45.6% of Chinas total import, with an increase of 18.8% compared with year 2010, followed by Indonesia, Germany, South Korea, Taiwan, United States, Italy, France, Thailand and Czech Republic. In the first half of 2012, Chinese musical instruments import reaches 146.04 million USD, up 20.7%.

CHINA EXPORT China exported musical instruments to the world's 185 countries and regions in 2011, two more countries than last year, Asia decreased by 3, and 3 more in Africa, increased one in South America, as well as Europe, Oceania. The number of Chinese musical instruments export countries and regions accounted for 82.22% of the total number of countries and regions all over the world in 2011, the steady growth in the number of export countries and regions, based on the highest reached in 2010, continued to rise in 2011. The main export areas of Chinese musical instruments in 2011 is North America, Europe, Asia, the total export value of 1.35 billion USD, accounting for 83.18% of the total exports, with an average growth rate of 9.08%. China's exports to South America, Africa, Oceania and musical instruments total 272 million RMB, accounting for 16.82% of the total export value, with an average increase of 20.8%, an increase of more than 100% greater than Europe and the United States in Asia. Chinese instruments prior to export 10 countries and regions in 2011: the United States, Germany, Japan, Brazil, China, Hong Kong, the Netherlands, South Korea, Britain, Indonesia, France. All the export countries and regions instrument amounted to 1.11 billion USD, accounting for 68.22% of the total exports.

CHINA MUSICAL INSTRUMENTS IMPORT AND EXPORT SITUATION IN 2011 SHOWED THE FOLLOWING CHARACTERISTICS:
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After the world financial crisis, Chinese musical instruments exports dropped significantly in 2009, growth resumed in 2010, and in 2011 the export amount of Chinese musical instruments not only restored to the highest level th in history in 2008, but also hit a record high. Achieve "12 Five year planning" good start. " The structure of export products of Chinese musical instruments are changed, other stringed instruments (guitar), electronic keyboard musical instruments, electronic musical instruments, percussion instruments become leading products exported to Europe and the United States, the proportion of Chinese exports to Europe and the United States of vertical and grand piano gradually narrowed. Chinese musical instruments export focus and Popular countries and regions are changed, the United States and the European Union is still the most important countries and regions to export Chinese musical instruments, And there is a new bright spot in the Central Asian region, China export to Turkmenistan, Uzbekistan, Georgia and other countries with the growth around 10-20 times. European countries affected by the debt crisis in Europe, the export Chinese musical instruments to Italy, Greece, Spain, Portugal and other countries are declining. A continued growth rate of imported musical instruments from all over the world, in 2011 China imported musical instruments amount growth rate is 8.05% higher than the growth rate of export amount growth rate, with 1.2 percentage points more than in 2010. The quantity of imports piano was continued growth, Chinese imports 92,383 pieces of pianos in 2011, exports 56,763 pieces pianos, the number of imported piano is 62.8% higher than the export, among others the import quantities of upright pianos is 74.59% higher than exports, and this situation will have to expand trend. And in the Imports pianos, there is a substantial proportion of second-hand piano, and worthy of attention.

ITALIAN MUSICAL INSTRUMENTS IN CHINA According to the statistics and figures from China Customs (See the figures In the appendix), imported totally 4.37 million USD of musical instruments from Italy in th 2011, with a year-on-year increase of 16.8%, ranks the 7 in the main export countries towards China, the same ranking as last year. The products with biggest import value 2011 are respectively other Strings (ranking nd th 2 in the world); Piano/Harpsichord (ranking 6 in the world); Parts and Accessories th (ranking 9 in the world). The musical instruments with biggest import value in 2011 are parts and accessories of various musical instruments of 1.79 million USD, which counts for 41.0% of the total import from Italy, with a year-on-year increase of 9.6%, ranking No. 9 in the world; followed by piano/harpsichord, with 1.5 million USD, which counts for 34.3% of the total import from Italy, a year-on-year increase of 70.6%, ranking No. 6 in the world. And from January to June in 2012, the biggest import categories are the same, Parts and Accessories of various musical instruments with 0.92 million USD, which counts for 40.2% of the total import, with an increase of 65.9% compare with the same period of last year, and still ranking No.7 in the world; followed by Piano/Harpsichord, with 0.86 million USD, which counts for 37.6% of the total import, increased 78.2% compare with the same period of last year, ranking No. 6 in the world. The import of Italian upright pianos in 2011 reached 1.50 million USD, with a year-on-year decrease of 70.6% compare to 2010. At present, the musical instruments Made in Italy already present in China are mainly pianos, accordions and violins. In late 90s Hong Kong Parsons Music introduced one of the most famous Italian piano brands in China mainland (Shanghai, Beijing and Shenzhen). The main customers are conservatories of music, concert halls and some privates (2-3 totally per year). An Italian accordion costs around 40,000 100,000 RMB in China while an accordion Made in China costs only 7-12 thousand RMB. The sales amount is still relatively small (around 20-30 sets per brand per year) due to their high prices. The consumers of Italian accordions in China are students of Department of Accordion in big Conservatories of Music.
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The sales channel is mainly through professors or departments of these Conservatories of Music. One dealer of Italian accordions, for example, is Tianjin Conservatory of Music, which has also a Chinese technician based in Tianjin to take charge of the maintenance and eventual repair work. There is also a trading company based in Shanghai that deals with several Italian accordion brands. Currently, the operators who deal with Italian violins in China are still not so common. Beijing Violin Hunter Stringed Musical Instrument Exchange & Communication Center is the main operator dealing with Italian middle and high-end violins. As a passionate collector of Italian violins, the owner of Violin Hunter buys yearly around 10 violins, 50% of which is kept as his private collection and is lent to students or orchestra as sponsorship for international competitions or concerts, whereas another 50% is sold to collectors, players and students. Another operator based in Beijing is Bailitongya Musical Instrument Trade Co., Ltd., the owner of which is graduated from Shanghai Conservatory of Music. The principal aim of the company is to promote the culture and history of Italian violin-making among professional players. From 2008, the Violin House of Jian Hua in Shanghai started cooperation with Italian violinmakers. The owner of Jian Hua is graduated in Violinmaking from Shanghai Conservatory of Music and is the Managing Director of China Musical Instrument Association, Violinmaker Sub-Association. The fact that there are still few dealers of Italian violins in China is caused mainly by high cost of musical instruments Made in Italy. Almost all the Chinese violin players and learners know that Italian violins represent top quality in the world and dream to own one but currently, few of them can afford it. Most orchestras also have difficulties in finding the fund to purchase an Italian violin. According to China Musical Instrument Association, although the market scale is quite small now, it will potentially grow in the next few years. There will be more people who will have interest and economic capacity as well to buy Italian violins. The operators in the sector have been making efforts to strengthen the relationship between Chinese consumers and Italian manufacturers starting from the cultural exchange.

BASIS OF COMPETITION Internal Competition The major factors forming the basis of competition among manufacturers in the Musical Instrument Manufacturing industry in China include: Price versus Quality: Price plays an important role in the customers' decision-making process, as most musical instruments, such as pianos and violins, are expensive. Further, the quality of musical instruments is also crucial for both household buyers and institutional purchasers. In China, households mainly purchase musical instruments for the education of children. As a result, parents will pay more attention to product quality, as it will influence the effects of their children's studies. Institutional clients, such as orchestras, purchase high quality products because the quality of their musical instruments will have an obvious impact on their performance and reputation.
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After sales services: The majority of musical instruments need regular maintenance. For instance, household and school pianos require tuning services two and four times a year, respectively, while pianos used at concerts need to be tuned for every concert. These services require experts with professional knowledge of musical instruments. Consequently, consumers will consider after sales services when making the purchasing decision. Companies providing premium after sales services will gain advantages over the competition.
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Brand awareness: Enterprises with good brand awareness generally provide high quality products and services, which stimulates customer consumption.
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Production scale: Having a large production scale can reduce costs to realize economies of scale. Therefore, production scale is vital to maintain and strengthen competitive advantages within this industry.
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Domestic manufacturers enjoy competitive advantages in the low- and mid-end markets, as they provide musical instruments at relatively lower prices compared with their foreign counterparts. Further, many domestic operators have a large manufacturing capacity, which makes China the largest manufacturing country of
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musical instruments in the world. However, these domestic companies are less competitive in production technologies and brand awareness, and costs therefore increase due to higher prices for raw materials and energy in China. Domestic musical instrument manufacturers are expected to strengthen their technological competitiveness and pay more attention to brand building to gain market share in the future. Further, more leading foreign companies will enter the Chinese market, which will also intensify the internal competition. External Competition As musical instruments are mainly used for entertainment and education, product substitutes are usually sporting and athletic products, and other products used in the education of children. Therefore, the major external competition for the Musical Instrument Manufacturing Industry in China comes from the Sporting and Athletic Goods Manufacturing Industry in China and the Professional Training Industry in China.

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BARRIERS TO ENTRY
z Capital Start-up costs require prospective entrants to the industry to have large amounts of capital, as purchase costs account for a large proportion of industry revenue. Especially in recent years, the prices of wood, metal and plastic, as well as energy resources, have increased significantly, which increases the production costs of musical instruments. The capital requirement is more obvious in the mid- and high-end markets due to advanced technologies and manufacturing equipment utilized.

Standards There are national standards for the production of pianos and electronic pianos. Industrial standards on many other musical instruments, such as Chinese musical instruments, have also been constituted in recent years. These standards have prevented some prospective entrants from entering this industry.
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Brand Consumers purchasing musical instruments often prefer to choose products that are well-known brands, as these products are considered to be of high quality. A new operator needs to establish its brand to attract consumers and gain market share. As a result, brand plays an important part in the current intensive competition within this industry. The importance of brands, however, is much lower for new operators in the low-end market.
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Licenses New companies must apply for production licenses with the local departments of State Administration for Industry & Commerce (SAIC). Companies without qualifications are not approved to enter this industry. For instance, in 2004, the State Forestry Administration (SFA) and SAIC stipulated that only certain companies with permission could produce Erhu with boa skins, and these products should be specially marked.
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GLOBALIZATION The trend of Globalization is increasing, over 30% of the leading musical instrument manufacturers in the world, such as Yamaha (Japan), KHS (Taiwan), Sejung (South Korea) and AXL (the US), have entered the Chinese market by establishing joint ventures or wholly-owned enterprises. Especially after China's accession to the WTO (World Trade Organization) in 2001, more foreign enterprises set up subsidiaries in China. Currently, some of these players have dominated certain niche markets. More domestic enterprises now operate in foreign countries. For instance, Guangzhou Pearl River Piano Group Ltd had established its subsidiaries in the US and Germany in 1999 and 2004, respectively. The company also acquired some foreign manufacturers. China has been the largest manufacturing country in terms of musical instrument output. Although the industry still has a medium globalization level, this differs in specific product segments. For example, the globalization level of pianos, guitars, wind instruments and electronic instruments are higher compared with Chinese musical instruments. The globalization level of this industry is expected to increase in the following years. This is because more domestic manufacturers will operate in foreign countries in the future, and exports of high-end musical instruments will also rise. Further, more leading foreign manufacturers will enter the Chinese market to take advantage of rapidly growing Chinese market.

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KEY SUCCESS FACTORS The key success factors in the Musical Instrument Manufacturing industry are: Establishment of brand names

Brands play a crucial role in the market within this industry, as they can attract more customers to form a loyal customer base. Companies can gain competitive advantages by establishing their brands. Provision of superior after sales service

Companies that provide superior after-sales service will gain a competitive advantage, as the maintenance of musical instruments requires professional knowledge. Ability to pass on cost increases

Costs related to purchases and utilities have been increasing in recent years. As a result, the ability to pass on cost increases to upstream suppliers or downstream buyers can give manufacturers competitive edges in the market. Having a good reputation

Enterprises with good reputations generally provide high quality products and premium services. In China, the leading musical instrument manufacturers have a loyal customer base due to their good reputation. Economies of scale

It is vital for large manufacturers within this industry to provide a wide range of musical instruments with large output volumes, which can reduce production costs. Ability to educate the wider community

People without musical knowledge are not expected to purchase musical instruments. Therefore, enterprises with the ability to educate the wider community in musical knowledge will gain advantages in the market.

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OUTLOOK According to the ACMR-IBISWorld forecasts, that in the five-year period through 2015, revenue from the Musical Instrument Manufacturing industry will increase with an annualized rate of 8.2%, totaling 4.40 billion USD in 2015. Industry growth is expected to be strongest in 2011 with a forecast revenue increase of 11.5%. Industry revenue growth is forecast to slow steadily in subsequent years to 6.9% in 2015 as the industry matures and industry expansion becomes more difficult. Total industry assets are expected to increase considerably to 2.99 billion USD by the end of 2015, with an annualized growth rate of 4.9% in the outlook period. The increases in both industry revenue and total assets are attributable to the government accelerating education innovations in China, with schools and parents likely to pay more attention to the artistic education of children. The Government is also contributing to the popularization of Western and traditional Chinese music, which is expected to stimulate demand for musical instruments in the future. Industry competition is expected to intensify in the five years through 2015. Musical instrument manufacturing profits are expected to remain stable as material costs increase and firms cut costs in other areas of their business. Many companies, however, will develop new materials to replace original ones, and to reduce production costs. Other cost control measures will also be taken as there will be few opportunities to increase final prices, especially in low-end and parts markets. As a result, large-scale manufacturers will have advantages in the market due to their economies of scale. Further, domestic enterprises will be more competitive with continued brand-building and advertising. The size of the high-end musical instruments segment is expected to increase in the following years due to increasing household disposable income levels. Competition between foreign and domestic companies will also intensify in medium and high-end markets. The leading foreign manufacturers will launch new products to increase market share in low-end segments, while domestic operators will focus on developing the mid-end markets. More leading foreign enterprises are expected to enter the Chinese market over the outlook period due to the large potential market in China. Consolidation processes will also accelerate in this period. The number of enterprises is expected to increase to 335 by 2015. The slower growth rate compared with the current performance period is because both national and industrial standards will increase industry's entry barriers. Also, growing competition and possible supply surpluses will discourage new players from entering the industry.

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Musical instrument exports will continue to account for a large proportion of industry revenue in the outlook period. Exports are forecast to increase to 2.05 billion USD by the end of 2015, with a five-year annualized growth rate of 7.6%. Exports of low- and mid-end products are expected to slow down as this market segment has become increasingly saturated with Chinese products over the current performance period. Exports of high-end musical instruments, however, are expected to continue increasing strongly in future years. The downturn in key export markets though will hinder export growth in the outlook period, as export demand slowly recovers from the aftermath of the global financial crisis and low consumer confidence. Competing imports are forecast to total 351.2 million USD by 2015. Of the musical instruments imported to China, high-end products are still expected to account for a large proportion of domestic demand, as consumers pay more attention to musical instrument quality due to increasing household disposable income levels.

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APPENDIX CHINA CUSTOMS FIGURES* IMPORT TARIFF *

* The data in the present appendix come from different sources (China Customs or China Musical Instrument Association) and may vary due to different calculation criteria. * Customs Import and Export Tariff of the Peoples Republic of China deleted HS Code 9203 and 9204 from the year of 2007.

CHINA TOTAL IMPORT By Country

Millions of USD Country /Region 2009 World 1 2 3 4 5 6 7 8 9 10 21 Japan Korea, South Taiwan United States Germany Australia Malaysia Brazil Saudi Arabia Russia Italy 1,003,892.75 130,748.70 102,125.01 85,706.02 77,432.67 55,904.39 39,174.80 32,206.00 28,311.20 23,582.41 21,099.40 11,026.60 2010 1,393,909.27 176,304.03 138,023.45 115,645.18 101,310.45 74,377.66 59,698.06 50,375.26 38,038.09 32,862.02 25,810.81 13,993.69 2011 1,741,429.81 194,409.77 161,673.31 124,895.24 118,120.67 92,759.00 80,929.74 62,017.27 52,648.80 49,544.88 39,043.25 17,573.18 2009 100.0 13.0 10.2 8.5 7.7 5.6 3.9 3.2 2.8 2.4 2.1 1.1 2010 100.0 12.7 9.9 8.3 7.3 5.3 4.3 3.6 2.7 2.4 1.9 1.0 2011 100.0 11.2 9.3 7.2 6.8 5.3 4.7 3.6 3.0 2.9 2.2 1.0 Value % Share % Change 11/10 24.9 10.3 17.1 8.0 16.6 24.7 35.6 23.1 38.4 50.8 51.3 25.6

Rank

Source: China Customs

CHINA TOTAL IMPORT By Country (January June)

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 21 Japan Korea, South United States Taiwan Germany Australia Saudi Arabia Malaysia Brazil Russia Italy 2010 649,406.40 81,191.02 65,303.09 47,386.70 55,696.55 34,530.34 25,975.64 15,261.63 23,444.32 16,051.23 13,977.95 6,600.66 Value 2011 828,478.98 93,978.81 76,595.67 59,322.30 61,562.30 45,013.91 35,923.23 23,168.74 29,730.75 22,169.72 18,459.49 8,567.29 2012 884,674.37 88,313.04 76,922.24 62,669.21 58,517.18 45,449.64 39,449.04 29,216.47 27,693.62 25,555.54 23,839.17 7,870.63 2010 100.0 12.5 10.1 7.3 8.6 5.3 4.0 2.4 3.6 2.5 2.2 1.0 % Share 2011 100.0 11.3 9.3 7.2 7.4 5.4 4.3 2.8 3.6 2.7 2.2 1.0 2012 100.0 10.0 8.7 7.1 6.6 5.1 4.5 3.3 3.1 2.9 2.7 0.9 % Change 12/11 6.8 -6.0 0.4 5.6 -5.0 1.0 9.8 26.1 -6.9 15.3 29.1 -8.1

Source: China Customs

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CHINA TOTAL IMPORT MUSICAL INSTRUMENTS BY CATEGORY

Millions of USD HS Code 92 9201 9202 9203 9204 9205 9206 9207 9208 9209 Description 2009 Musical Instruments Piano, Harpsichord, Etc Other Strings Organ, Etc, Free Mtl Rd Accordion Etc; Mouth Organ Other Wind Percussion Electric Music Box, Fairground Organ Parts, Accessories 179.89 56.52 1.60 0.00 0.00 6.47 3.49 19.01 0.41 92.39 Value 2010 228.99 72.51 4.05 0.00 0.00 7.81 4.14 19.55 0.31 120.63 2011 272.03 107.93 4.06 0.00 0.00 7.86 5.61 15.14 0.50 130.93 2009 0.0 31.4 0.9 0.0 0.0 3.6 1.9 10.6 0.2 51.4 % Share 2010 0.0 31.7 1.8 0.0 0.0 3.4 1.8 8.5 0.1 52.7 2011 0.0 39.7 1.5 0.0 0.0 2.9 2.1 5.6 0.2 48.1 % Change 11/10 18.8 48.9 0.2 0.0 0.0 0.8 35.4 -22.5 62.3 8.5

Source: China Customs

CHINA TOTAL IMPORT MUSICAL INSTRUMENTS BY CATEGORY (January June)

Millions of USD HS Code 92 9201 9202 9203 9204 9205 9206 9207 9208 9209 Description 2009 Musical Instruments Piano, Harpsichord, Etc Other Strings Organ, Etc, Free Mtl Rd Accordion Etc; Mouth Organ Other Wind Percussion Electric Music Box, Fairground Organ Parts, Accessories 96.43 28.74 1.30 0.00 0.00 3.12 2.15 8.91 0.15 52.07 Value 2010 120.97 46.03 1.82 0.00 0.00 3.51 2.50 7.54 0.20 59.36 2011 146.04 55.82 2.76 0.00 0.00 5.40 2.94 8.09 0.25 70.79 2009 0.0 29.8 1.4 0.0 0.0 3.2 2.2 9.2 0.2 54.0 % Share 2010 0.0 38.1 1.5 0.0 0.0 2.9 2.1 6.2 0.2 49.1 2011 0.0 38.2 1.9 0.0 0.0 3.7 2.0 5.5 0.2 48.5 % Change 11/10 20.7 21.3 51.2 0.0 0.0 54.0 17.7 7.2 20.2 19.3

Source: China Customs 19

CHINA TOTAL IMPORT MUSICAL INSTRUMENTS BY COUNTRY

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Japan Indonesia Germany South Korea Taiwan United States Italy France Thailand Czech Republic 2009 179.89 77.71 12.50 17.56 13.68 13.05 6.29 3.45 2.45 1.35 0.46 Value 2010 228.99 97.28 22.63 20.69 19.86 15.54 10.06 3.74 2.16 2.21 1.49 2011 272.03 123.91 38.94 23.09 20.45 17.92 10.86 4.37 2.42 2.39 2.14 2009 100.0 43.2 7.0 9.8 7.6 7.3 3.5 1.9 1.4 0.8 0.3 % Share 2010 100.0 42.5 9.9 9.0 8.7 6.8 4.4 1.6 0.9 1.0 0.7 2011 100.0 45.6 14.3 8.5 7.5 6.6 4.0 1.6 0.9 0.9 0.8 % Change 11/10 18.8 27.4 72.0 11.6 2.9 15.3 7.9 16.8 12.2 8.2 44.0

Source: China Customs

CHINA TOTAL IMPORT MUSICAL INSTRUMENTS BY COUNTRY (January June)

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Japan Indonesia Germany Korea, South Taiwan United States Italy Czech Republic France Austria 2010 96.43 40.32 9.84 8.10 8.72 7.07 3.95 1.37 0.25 0.76 0.06 Value 2011 120.97 53.14 15.83 10.37 9.37 8.78 5.07 1.80 0.88 1.20 0.44 2012 146.04 65.21 26.54 13.66 10.45 8.90 5.55 2.28 2.04 0.80 0.64 2010 100.0 41.8 10.2 8.4 9.1 7.3 4.1 1.4 0.3 0.8 0.1 % Share 2011 100.0 43.9 13.1 8.6 7.7 7.3 4.2 1.5 0.7 1.0 0.4 2012 100.0 44.7 18.2 9.4 7.2 6.1 3.8 1.6 1.4 0.6 0.4 % Change 12/11 20.7 22.7 67.6 31.8 11.6 1.3 9.4 26.3 131.9 -32.7 47.6

Source: China Customs

20

CHINA IMPORT FROM ITALY

Millions of USD HS Code 92 9201 9202 9203 9204 9205 9206 9207 9208 9209 Description 2009 Musical Instruments Piano, Harpsichord, Etc Other Strings Organ, Etc, Free Mtl Rd Accordion Etc; Mouth Organ Other Wind Percussion Electric Music Box, Fairground Organ Parts, Accessories 3.45 1.19 0.26 0.00 0.00 0.26 0.02 0.04 0.02 1.67 Value 2010 3.74 0.88 0.90 0.00 0.00 0.13 0.01 0.18 0.02 1.63 2011 4.37 1.50 0.81 0.00 0.00 0.10 0.00 0.07 0.10 1.79 2009 0.0 34.4 7.6 0.0 0.0 7.7 0.5 1.1 0.4 48.3 % Share 2010 0.0 23.5 24.0 0.0 0.0 3.4 0.2 4.7 0.4 43.7 2011 0.0 34.3 18.5 0.0 0.0 2.4 0.0 1.5 2.3 41.0 % Change 11/10 16.8 70.6 -10.0 0.0 0.0 -19.8 -100.0 -61.7 538.6 9.6

Source: China Customs

CHINA IMPORT FROM ITALY (January June)

Millions of USD HS Code 92 9201 9202 9203 9204 9205 9206 9207 9208 9209 Description 2010 Musical Instruments Piano, Harpsichord, Etc Other Strings Organ, Etc, Free Mtl Rd Accordion Etc; Mouth Organ Other Wind Percussion Electric Music Box, Fairground Organ Parts, Accessories 1.37 0.21 0.33 0.00 0.00 0.08 0.00 0.10 0.00 0.66 Value 2011 1.80 0.48 0.61 0.00 0.00 0.06 0.00 0.06 0.04 0.55 2012 2.28 0.86 0.38 0.00 0.00 0.05 0.00 0.06 0.01 0.92 2010 0.0 15.0 23.8 0.0 0.0 5.6 0.0 7.6 0.0 48.0 % Share 2011 0.0 26.6 33.6 0.0 0.0 3.4 0.0 3.4 2.4 30.6 2012 0.0 37.6 16.9 0.0 0.0 2.3 0.0 2.5 0.5 40.2 % Change 12/11 26.3 78.2 -36.6 0.0 0.0 -13.2 0.0 -9.0 -71.7 65.9

Source: China Customs 21

CHINA TOTAL IMPORT 9201-PIANO, HARPSCHORD ETC.

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Japan Indonesia Germany South Korea Czech Republic Italy Austria United States United Kingdom Australia 2009 56.52 39.36 1.83 8.52 1.84 0.45 1.19 0.91 0.39 0.05 0.00 Value 2010 72.51 45.95 6.85 10.37 4.31 1.04 0.88 0.61 0.68 0.08 0.09 2011 107.93 65.00 16.64 12.05 7.50 2.10 1.50 0.74 0.44 0.30 0.03 2009 100.0 69.6 3.2 15.1 3.3 0.8 2.1 1.6 0.7 0.1 0.0 % Share 2010 100.0 63.4 9.5 14.3 5.9 1.4 1.2 0.8 0.9 0.1 0.1 2011 100.0 60.2 15.4 11.2 7.0 2.0 1.4 0.7 0.4 0.3 0.0 % Change 11/10 48.9 41.5 142.8 16.2 74.1 101.9 70.6 21.6 -35.5 270.9 -62.0

Source: China Customs

CHINA TOTAL IMPORT 9201-PIANO,HARPSCHORD ETC. (January June)

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Japan Indonesia Germany Korea, South Czech Republic Italy United States Austria Australia United Kingdom 2010 28.74 18.98 3.25 4.03 1.47 0.24 0.21 0.22 0.02 0.09 0.02 Value 2011 46.03 26.92 7.30 5.32 2.99 0.87 0.48 0.16 0.39 0.03 0.02 2012 55.82 29.86 11.56 6.88 4.42 1.13 0.86 0.49 0.46 0.05 0.04 2010 100.0 66.0 11.3 14.0 5.1 0.8 0.7 0.8 0.1 0.3 0.1 % Share 2011 100.0 58.5 15.9 11.6 6.5 1.9 1.0 0.4 0.9 0.1 0.0 2012 100.0 53.5 20.7 12.3 7.9 2.0 1.5 0.9 0.8 0.1 0.1 % Change 12/11 21.3 10.9 58.3 29.3 48.0 29.0 78.2 199.1 18.0 48.2 111.4

Source: China Customs

22

CHINA TOTAL IMPORT 9202- OTHERS STRINGED INSTRUMENTS

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Indonesia Italy Germany United States Japan Romania Spain Hungary France Canada 2009 1.60 0.52 0.26 0.38 0.11 0.02 0.00 0.02 0.00 0.19 0.01 Value 2010 4.05 1.02 0.90 1.07 0.50 0.07 0.00 0.01 0.00 0.09 0.04 2011 4.06 1.81 0.81 0.36 0.19 0.13 0.12 0.06 0.05 0.04 0.04 2009 100.0 32.3 16.4 23.7 6.6 1.5 0.0 1.4 0.0 11.7 0.8 % Share 2010 100.0 25.2 22.1 26.4 12.4 1.8 0.0 0.3 0.0 2.3 0.9 2011 100.0 44.5 19.9 9.0 4.8 3.3 2.9 1.4 1.3 1.0 0.9 % Change 11/10 0.2 76.8 -10.0 -66.0 -61.4 81.9 14786.4 433.5 0.0 -58.0 -3.9

Source: China Customs

CHINA TOTAL IMPORT 9202- OTHERS STRINGED INSTRUMENTS (January June)

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Indonesia Italy United States Japan Germany Austria Spain Czech Republic Canada Romania 2010 1.30 0.42 0.33 0.13 0.03 0.12 0.00 0.00 0.00 0.01 0.00 Value 2011 1.82 0.59 0.61 0.09 0.01 0.24 0.01 0.03 0.00 0.02 0.04 2012 2.76 1.55 0.38 0.31 0.19 0.11 0.07 0.03 0.02 0.01 0.01 2010 100.0 32.7 25.1 9.7 2.6 9.3 0.0 0.1 0.2 0.8 0.0 % Share 2011 100.0 32.5 33.2 4.8 0.3 12.9 0.3 1.8 0.1 0.9 2.0 2012 100.0 56.1 13.9 11.2 6.9 3.8 2.4 1.3 0.6 0.5 0.4 % Change 12/11 51.2 160.7 -36.6 251.5 3149.9 -55.1 1032.2 7.5 1052.0 -15.6 -70.7

Source: China Customs

23

CHINA TOTAL IMPORT 9205 - OTHER WIND

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Japan France Germany Taiwan United States Vietnam Netherlands Italy Indonesia North Korea 2009 6.47 1.51 0.90 2.01 0.79 0.73 0.05 0.00 0.26 0.00 0.00 Value 2010 7.81 2.53 0.95 1.29 0.63 0.78 0.14 0.00 0.13 0.02 0.01 2011 7.86 3.35 1.13 0.94 0.93 0.81 0.26 0.10 0.10 0.05 0.03 2009 100.0 23.3 13.9 31.0 12.2 11.3 0.8 0.0 4.1 0.1 0.1 % Share 2010 100.0 32.4 12.2 16.5 8.1 9.9 1.8 0.0 1.7 0.3 0.1 2011 100.0 42.6 14.3 11.9 11.8 10.3 3.4 1.3 1.3 0.6 0.4 % Change 11/10 0.8 32.4 18.8 -27.2 46.6 4.2 87.8 85238.5 -19.8 99.6 333.2

Source: China Customs

CHINA TOTAL IMPORT 9205 - OTHER WIND (January June)

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Germany Japan Taiwan Czech Republic France Vietnam United States Italy Austria Korea, North 2010 3.12 0.17 1.08 0.28 0.00 0.46 0.09 0.15 0.08 0.00 0.00 Value 2011 3.51 0.43 1.45 0.38 0.00 0.61 0.14 0.26 0.06 0.00 0.00 2012 5.40 1.88 1.27 0.63 0.46 0.45 0.25 0.25 0.05 0.05 0.05 2010 100.0 5.3 34.5 9.0 0.0 14.6 2.8 4.8 2.5 0.1 0.0 % Share 2011 100.0 12.2 41.4 11.0 0.0 17.4 4.1 7.5 1.7 0.1 0.0 2012 100.0 34.9 23.4 11.7 8.5 8.3 4.7 4.6 1.0 0.9 0.9 % Change 12/11 54.0 341.8 -12.7 64.8 0.0 -26.6 76.9 -4.2 -13.2 884.5 0.0

Source: China Customs

24

CHINA TOTAL IMPORT 9206 - PERCUSSION MUSICAL INSTRUMENTS

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 72 United States Taiwan Germany Netherlands Japan Canada Indonesia Thailand France Switzerland Nepal Israel Egypt Ghana Mexico Turkey Senegal United Kingdom Korea, South Kenya Italy 2009 3.49 0.77 0.94 0.25 0.39 0.25 0.12 0.05 0.06 0.03 0.00 0.01 0.15 0.00 0.02 0.00 0.02 0.00 0.00 0.01 0.00 0.02 Value 2010 4.14 0.87 0.62 0.43 0.54 0.26 0.16 0.12 0.10 0.03 0.01 0.00 0.09 0.02 0.02 0.01 0.01 0.02 0.02 0.01 0.00 0.01 2011 5.61 1.15 1.04 0.85 0.61 0.48 0.38 0.26 0.11 0.06 0.05 0.03 0.02 0.02 0.01 0.01 0.01 0.01 0.01 0.01 0.00 0.00 2009 100.0 22.0 26.9 7.1 11.3 7.2 3.5 1.5 1.6 1.0 0.1 0.2 4.2 0.0 0.5 0.0 0.4 0.0 0.1 0.3 0.0 0.5 % Share 2010 100.0 20.9 15.0 10.5 13.0 6.4 3.8 2.9 2.3 0.6 0.3 0.0 2.1 0.4 0.5 0.2 0.1 0.6 0.4 0.3 0.1 0.2 2011 100.0 20.6 18.6 15.2 10.9 8.6 6.9 4.7 2.0 1.1 0.9 0.6 0.4 0.3 0.3 0.2 0.2 0.1 0.1 0.1 0.1 0.0 % Change 11/10 35.4 33.1 67.3 96.8 13.9 83.2 146.1 119.7 18.8 137.8 346.8 1909.5 -74.5 8.8 -32.0 75.8 47.7 -69.7 -57.7 -48.8 -32.9 -100.0

Source: China Customs

25

CHINA TOTAL IMPORT 9206 - PERCUSSION MUSICAL INSTRUMENTS (January June)

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 65 United States Germany Indonesia Taiwan Netherlands Canada Switzerland Japan Thailand Israel South Korea Turkey France United Kingdom Nepal Ghana Hungary Brazil Sweden Australia Italy 2008 2.15 0.56 0.13 0.03 0.31 0.26 0.11 0.01 0.13 0.04 0.09 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 Value 2009 2.50 0.72 0.31 0.10 0.40 0.17 0.27 0.02 0.16 0.04 0.00 0.00 0.01 0.02 0.00 0.01 0.01 0.00 0.00 0.00 0.00 0.00 2010 2.94 0.76 0.51 0.34 0.32 0.26 0.14 0.11 0.10 0.07 0.06 0.03 0.03 0.02 0.02 0.01 0.01 0.00 0.00 0.00 0.00 0.00 2008 100.0 26.1 5.9 1.5 14.4 12.1 5.0 0.5 6.2 1.9 4.0 0.0 0.0 0.1 0.0 0.0 0.2 0.0 0.0 0.0 0.0 0.0 % Share 2009 100.0 29.0 12.3 4.0 15.9 6.7 11.0 0.6 6.6 1.6 0.1 0.0 0.3 1.0 0.0 0.3 0.6 0.0 0.0 0.0 0.0 0.0 2010 100.0 25.7 17.5 11.7 10.9 9.0 4.9 3.6 3.3 2.3 2.2 1.1 1.0 0.8 0.6 0.5 0.3 0.2 0.1 0.1 0.0 0.0 % Change 10/09 17.7 4.6 67.6 245.3 -19.1 57.4 -47.4 575.3 -41.6 70.9 2210.8 5990.3 234.2 -6.0 0.0 55.5 -41.8 0.0 63.3 0.0 0.0 0.0

Source: China Customs

26

CHINA TOTAL IMPORT 9207 - ELECTRIC MUSICAL INSTRUMENTS

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Indonesia Japan United States Mexico Korea, South Taiwan Hong Kong Italy Sweden Germany 2009 19.01 2.07 1.48 0.46 0.01 0.11 0.00 0.10 0.04 0.00 0.06 Value 2010 19.55 4.06 3.66 1.19 0.00 0.27 0.18 0.06 0.18 0.00 0.04 2011 15.14 5.09 3.99 1.66 0.59 0.25 0.07 0.07 0.07 0.05 0.01 2009 100.0 10.9 7.8 2.4 0.0 0.6 0.0 0.6 0.2 0.0 0.3 % Share 2010 100.0 20.8 18.7 6.1 0.0 1.4 0.9 0.3 0.9 0.0 0.2 2011 100.0 33.6 26.3 10.9 3.9 1.7 0.5 0.5 0.5 0.3 0.1 % Change 11/10 -22.5 25.5 8.8 39.0 88794.6 -7.6 -59.7 23.8 -61.7 1010.6 -66.4

Source: China Customs

CHINA TOTAL IMPORT 9207 - ELECTRIC MUSICAL INSTRUMENTS (January June)

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Indonesia Japan United States Mexico South Korea Italy Vietnam Germany Sweden Taiwan 2010 8.91 1.53 1.30 0.30 0.00 0.02 0.10 0.00 0.03 0.00 0.04 Value 2011 7.54 2.20 1.93 0.73 0.24 0.11 0.06 0.00 0.00 0.00 0.07 2012 8.09 3.96 2.62 0.33 0.21 0.11 0.06 0.03 0.02 0.01 0.01 2010 100.0 17.1 14.6 3.4 0.0 0.2 1.2 0.0 0.4 0.0 0.5 % Share 2011 100.0 29.2 25.6 9.6 3.2 1.4 0.8 0.0 0.0 0.0 1.0 2012 100.0 49.0 32.4 4.0 2.6 1.4 0.7 0.3 0.3 0.2 0.1 % Change 12/11 7.2 79.6 35.6 -55.1 -13.4 3.3 -9.0 0.0 0.0 527.3 -86.0

Source: China Customs

27

CHINA TOTAL IMPORT 9208 MUSIC BOX, FAIRGROUND ORGAN

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Japan Italy Taiwan United Kingdom Switzerland Canada Spain United States Greece France 2009 0.41 0.11 0.02 0.02 0.01 0.04 0.00 0.00 0.00 0.00 0.00 Value 2010 0.31 0.04 0.02 0.05 0.04 0.03 0.02 0.01 0.02 0.00 0.00 2011 0.50 0.13 0.10 0.05 0.03 0.03 0.01 0.01 0.01 0.01 0.01 2009 100.0 26.6 3.7 4.7 2.1 10.4 1.2 1.2 0.2 0.0 0.1 % Share 2010 100.0 12.0 5.1 14.7 12.1 11.2 7.6 2.9 7.7 1.1 0.2 2011 100.0 26.3 20.1 10.0 6.7 5.2 2.8 2.2 1.5 1.4 1.2 % Change 11/10 62.3 255.7 538.6 10.2 -10.6 -24.2 -39.4 24.2 -67.9 112.8 735.8

Source: China Customs

CHINA TOTAL IMPORT 9208 MUSIC BOX, FAIRGROUND ORGAN (January June)
Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Thailand Japan Switzerland Taiwan United States Germany Italy Spain United Kingdom Canada 2010 0.15 0.00 0.02 0.03 0.02 0.02 0.00 0.00 0.00 0.03 0.00 Value 2011 0.20 0.00 0.04 0.02 0.04 0.00 0.00 0.04 0.01 0.02 0.01 2012 0.25 0.04 0.04 0.03 0.03 0.01 0.01 0.01 0.01 0.01 0.01 2010 100.0 0.0 12.6 23.2 14.4 12.9 0.5 0.0 2.3 19.5 3.4 % Share 2011 100.0 0.0 20.9 10.1 19.9 1.5 0.8 20.9 3.3 7.9 3.8 2012 100.0 18.0 16.1 13.9 12.5 5.8 5.2 4.9 4.2 3.7 2.2 % Change 12/11 20.2 0.0 -7.3 65.0 -24.6 377.7 660.0 -71.7 49.1 -43.8 -32.1

Source: China Customs

28

CHINA TOTAL IMPORT 9209 PARTS AND ACCESSORIES

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Japan Taiwan Indonesia Korea, South Germany United States Thailand Hong Kong Italy France 2009 92.39 34.98 11.28 8.03 11.69 6.35 3.83 1.30 0.84 1.67 1.30 Value 2010 120.63 44.77 14.05 10.55 15.25 7.48 6.02 2.11 2.13 1.63 1.09 2011 130.93 50.83 15.80 15.08 12.66 8.87 6.60 2.28 1.96 1.79 1.16 2009 100.0 37.9 12.2 8.7 12.7 6.9 4.2 1.4 0.9 1.8 1.4 % Share 2010 100.0 37.1 11.7 8.8 12.6 6.2 5.0 1.8 1.8 1.4 0.9 2011 100.0 38.8 12.1 11.5 9.7 6.8 5.0 1.7 1.5 1.4 0.9 % Change 11/10 8.5 13.5 12.5 42.9 -17.0 18.6 9.6 7.7 -8.0 9.6 7.1

Source: China Customs

CHINA TOTAL IMPORT 9209 PARTS AND ACCESSORIES (January June)

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 Japan Indonesia Taiwan Korea, South Germany United States Italy Hong Kong Czech Republic Canada 2010 52.07 18.78 4.59 6.41 7.23 3.63 2.58 0.66 0.76 0.01 0.89 Value 2011 59.36 22.62 5.59 7.89 6.25 4.07 3.11 0.55 1.08 0.00 0.16 2012 70.79 31.14 9.11 7.87 5.89 4.24 3.41 0.92 0.63 0.44 0.37 2010 100.0 36.1 8.8 12.3 13.9 7.0 5.0 1.3 1.5 0.0 1.7 % Share 2011 100.0 38.1 9.4 13.3 10.5 6.9 5.2 0.9 1.8 0.0 0.3 2012 100.0 44.0 12.9 11.1 8.3 6.0 4.8 1.3 0.9 0.6 0.5 % Change 12/11 19.3 37.6 62.9 -0.2 -5.8 4.1 9.7 65.9 -42.2 0.0 133.6

Source: China Customs

29

CHINA TOTAL EXPORT BY COUNTRY

Millions of USD Country /Region 2009 World 1 2 3 4 5 6 7 8 9 10 11 12 13 United States Hong Kong Japan South Korea Germany Netherlands India United Kingdom Russia Singapore Taiwan Australia Italy
1,202,047.37

Rank

Value 2010
1,578,444.20

% Share 2011
1,899,280.69

% Change 2011 100.0 17.1 14.1 7.8 4.4 4.0 3.1 2.7 2.3 2.1 1.9 1.9 1.8 1.8 11/10 20.3 14.5 22.6 22.5 20.5 12.3 19.7 23.5 13.8 31.4 9.2 18.3 24.5 8.3

2009 100.0 18.4 13.8 8.1 4.5 4.2 3.1 2.5 2.6 1.5 2.5 1.7 1.7 1.7

2010 100.0 17.9 13.8 7.6 4.4 4.3 3.2 2.6 2.5 1.9 2.1 1.9 1.7 2.0

220,705.80 166,109.44 97,209.00 53,629.72 49,932.09 36,688.92 29,570.44 31,266.93 17,507.88 30,049.80 20,466.31 20,659.51 20,246.22

283,183.61 218,204.99 120,262.33 68,810.58 68,068.79 49,711.08 40,879.31 38,776.33 29,591.84 32,333.24 29,642.32 27,227.66 31,135.84

324,300.30 267,515.99 147,290.06 82,924.70 76,433.38 59,482.03 50,488.63 44,113.00 38,885.81 35,297.39 35,065.92 33,906.49 33,707.62

Source: China Customs

30

CHINA TOTAL EXPORT BY COUNTRY (January June)

Millions of USD Rank Country/Region 2010 World 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 United States Hong Kong Japan South Korea Germany Netherlands India United Kingdom Russia Singapore Australia Taiwan Malaysia Indonesia Brazil Vietnam Thailand United Arab Emirates France Italy 705,184.29 124,465.94 93,485.65 54,773.58 32,450.66 30,711.49 22,250.54 18,434.84 16,999.87 11,785.02 16,113.10 11,680.10 13,624.72 11,563.02 9,832.65 10,319.42 9,871.40 8,993.28 9,943.38 13,218.41 13,490.79 Value 2011 874,491.40 145,431.56 126,796.78 67,744.20 40,991.39 35,345.04 26,297.36 22,610.10 19,004.72 17,201.49 17,454.73 15,196.45 17,499.85 12,608.68 14,025.23 14,588.34 13,422.72 12,174.17 11,910.53 14,312.65 17,596.76 2012 954,664.85 165,409.33 139,241.88 73,565.79 44,103.72 33,973.71 28,345.07 22,706.43 21,248.68 19,786.68 18,064.92 17,165.95 16,495.89 16,261.99 16,252.22 15,526.65 14,863.24 14,715.42 14,164.63 13,554.97 13,338.11 2010 100.0 17.7 13.3 7.8 4.6 4.4 3.2 2.6 2.4 1.7 2.3 1.7 1.9 1.6 1.4 1.5 1.4 1.3 1.4 1.9 1.9 % Share 2011 100.0 16.6 14.5 7.8 4.7 4.0 3.0 2.6 2.2 2.0 2.0 1.7 2.0 1.4 1.6 1.7 1.5 1.4 1.4 1.6 2.0 2012 100.0 17.3 14.6 7.7 4.6 3.6 3.0 2.4 2.2 2.1 1.9 1.8 1.7 1.7 1.7 1.6 1.6 1.5 1.5 1.4 1.4 % Change 12/11 9.2 13.7 9.8 8.6 7.6 -3.9 7.8 0.4 11.8 15.0 3.5 13.0 -5.7 29.0 15.9 6.4 10.7 20.9 18.9 -5.3 -24.2

Source: China Customs

31

CHINA TOTAL EXPORT MUSICAL INSTRUMENTS BY COUNTRY

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 11 12 13 United States Germany Japan Brazil Hong Kong Netherlands Korea, South United Kingdom Indonesia France Canada Australia Italy 2009 1,217.64 322.06 94.51 81.59 39.20 88.46 37.09 42.07 60.03 25.46 22.96 33.00 24.34 29.69 Value 2010 1,466.92 398.36 138.56 78.86 73.41 91.13 61.89 45.09 55.86 43.00 38.13 31.38 25.13 30.30 2011 1,623.77 424.54 154.83 95.02 86.77 70.40 63.45 58.33 57.42 55.08 42.57 31.26 31.04 29.66 2009 100.0 26.5 7.8 6.7 3.2 7.3 3.1 3.5 4.9 2.1 1.9 2.7 2.0 2.4 % Share 2010 100.0 27.2 9.5 5.4 5.0 6.2 4.2 3.1 3.8 2.9 2.6 2.1 1.7 2.1 2011 100.0 26.2 9.5 5.9 5.3 4.3 3.9 3.6 3.5 3.4 2.6 1.9 1.9 1.8 % Change 11/10 10.7 6.6 11.7 20.5 18.2 -22.7 2.5 29.4 2.8 28.1 11.7 -0.4 23.5 -2.1

Source: China Customs

32

CHINA TOTAL EXPORT MUSICAL INSTRUMENTS BY COUNTRY (January June)

Millions of USD Rank Country /Region World 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 United States Germany Japan Brazil Hong Kong Korea, South Indonesia Netherlands United Kingdom France Canada Malaysia Mexico Australia Thailand Italy 2009 585.76 142.40 55.98 29.81 28.80 38.54 22.31 19.78 25.11 21.04 13.97 11.31 6.58 7.47 9.77 5.14 14.36 Value 2010 669.01 166.53 62.33 37.25 38.51 34.56 26.35 25.43 25.74 20.43 16.94 12.42 7.97 8.24 12.38 8.44 14.84 2011 751.74 185.78 62.61 50.67 38.61 34.18 30.06 28.90 27.40 24.89 17.89 14.46 13.92 13.54 12.99 12.50 12.03 2009 100.0 24.3 9.6 5.1 4.9 6.6 3.8 3.4 4.3 3.6 2.4 1.9 1.1 1.3 1.7 0.9 2.5 % Share 2010 100.0 24.9 9.3 5.6 5.8 5.2 3.9 3.8 3.9 3.1 2.5 1.9 1.2 1.2 1.9 1.3 2.2 2011 100.0 24.7 8.3 6.7 5.1 4.6 4.0 3.8 3.7 3.3 2.4 1.9 1.9 1.8 1.7 1.7 1.6 % Change 11/10 12.4 11.6 0.5 36.1 0.3 -1.1 14.1 13.7 6.5 21.8 5.6 16.4 74.5 64.2 4.9 48.1 -19.0

Source: China Customs

33

CHINA TOTAL EXPORT BY CATEGORY

Millions of USD HS Code 92 9201 9202 9203 9204 9205 9206 9207 9208 9209 Description 2009 Musical Instruments Piano, Harpsichord, Etc Other Strings Organ, Etc, Free Mtl Rd Accordion Etc; Mouth Organ Other Wind Percussion Electric Music Box, Fairground Organ Parts, Accessories 1,217.64 69.60 262.95 0.00 0.00 133.31 108.64 449.12 38.28 155.75 Value 2010 1,466.92 87.09 324.22 0.00 0.00 144.13 140.49 519.79 45.77 205.43 2011 1,623.77 93.73 396.16 0.00 0.00 161.60 144.85 531.32 68.13 227.98 2009 0.10 5.72 21.60 0.00 0.00 10.95 8.92 36.88 3.14 12.79 % Share 2010 0.09 5.94 22.10 0.00 0.00 9.83 9.58 35.43 3.12 14.00 2011 0.09 5.77 24.40 0.00 0.00 9.95 8.92 32.72 4.20 14.04 % Change 11/10 10.69 7.62 22.19 0.00 0.00 12.12 3.11 2.22 48.84 10.98

Source: China Customs

CHINA TOTAL EXPORT BY CATEGORY (January June)

Millions of USD HS Code 92 9201 9202 9203 9204 9205 9206 9207 9208 9209 Description 2010 Musical Instruments Piano, Harpsichord, Etc Other Strings Organ, Etc, Free Mtl Rd Accordion Etc; Mouth Organ Other Wind Percussion Electric Music Box, Fairground Organ Parts, Accessories 585.76 38.86 126.26 0.00 0.00 64.14 58.61 189.85 17.24 90.80 Value 2011 669.01 41.10 156.73 0.00 0.00 70.27 63.38 207.94 20.97 108.62 2012 751.74 42.61 185.98 0.00 0.00 88.36 59.96 236.94 31.19 106.70 2010 0.1 6.6 21.6 0.0 0.0 11.0 10.0 32.4 2.9 15.5 % Share 2011 0.1 6.1 23.4 0.0 0.0 10.5 9.5 31.1 3.1 16.2 2012 0.1 5.7 24.7 0.0 0.0 11.8 8.0 31.5 4.2 14.2 % Change 12/11 12.4 3.7 18.7 0.0 0.0 25.8 -5.4 13.9 48.7 -1.8

Source: China Customs 34

CHINA EXPORT TO ITALY

Millions of USD HS Code 92 9201 9202 9203 9204 9205 9206 9207 9208 9209 Description 2009 Musical Instruments Piano, Harpsichord, Etc Other Strings Organ, Etc, Free Mtl Rd Accordion Etc; Mouth Organ Other Wind Percussion Electric Music Box, Fairground Organ Parts, Accessories 29.69 2.13 8.45 0.00 0.00 3.35 2.98 7.24 1.13 4.42 Value 2010 30.30 2.34 8.40 0.00 0.00 3.48 2.85 6.14 1.27 5.80 2011 29.66 2.92 8.66 0.00 0.00 3.32 3.02 5.95 1.10 4.70 2009 0.2 7.2 28.5 0.0 0.0 11.3 10.0 24.4 3.8 14.9 % Share 2010 0.1 7.7 27.7 0.0 0.0 11.5 9.4 20.3 4.2 19.2 2011 0.1 9.8 29.2 0.0 0.0 11.2 10.2 20.1 3.7 15.8 % Change 11/10 -2.1 24.8 3.1 0.0 0.0 -4.7 5.8 -3.2 -13.6 -19.1

Source: China Customs

CHINA EXPORT TO ITALY (January June)

Millions of USD HS Code 92 9201 9202 9203 9204 9205 9206 9207 9208 9209 Description 2009 Musical Instruments Piano, Harpsichord, Etc Other Strings Organ, Etc, Mtl Rd Accordion Etc; Mouth Organ Other Wind Percussion Electric Music Box, Fairground Organ Parts, Accessories Free 14.36 1.15 3.50 0.00 0.00 1.60 1.55 2.92 0.60 3.03 Value 2010 14.84 1.50 3.74 0.00 0.00 1.62 1.53 3.30 0.56 2.58 2011 12.03 0.53 3.01 0.00 0.00 1.79 1.41 2.37 0.48 2.44 2009 0.1 8.0 24.4 0.0 0.0 11.1 10.8 20.4 4.2 21.1 % Share 2010 0.1 10.1 25.2 0.0 0.0 10.9 10.3 22.2 3.8 17.4 2011 0.1 4.4 25.0 0.0 0.0 14.9 11.7 19.7 4.0 20.3 % Change 11/10 -19.0 -64.4 -19.7 0.0 0.0 10.5 -7.9 -28.3 -14.3 -5.7

Source: China Customs 35

MUSICAL INSTRUMENTS IMPORT AND EXPORT TARIFF IN CHINA IN 2012

MFN (%) VAT (%) ED (%)

Tariff Item.

Article Description Pianos, including automatic pianos;

Unit

9201 92011000 9201200001 9201200090 92019000 9202

harpsichords and other keyboard stringed instruments: Upright Pianos (incl. automatic) Grand Pianos (incl. automatic) dutiable price USD50000/set Other Grand Pianos Others (incl. automatic and harpsichords) Other string musical instruments (for example, guitars violins, harps): String instruments, played with a bow, dutiable price USD15000/set (containing skin of animal in imminent dangers) Other played with a bow, containing skin of animal in imminent dangers Played with a bow, dutiable price set/piece set/piece set/piece set/piece set/piece 1 17,5 17,5 17,5 17,5 17 17 17 17 17 13 13 13 USD15000/set, other than leather of animal in imminent dangers Other played with a bow Other Other string instruments, containing skin and other parts of animal in imminent dangers Other string instruments set/piece 1 17 set/piece set/piece set/piece set/piece 17,5 1 17,5 17,5 17 17 17 17 13 13 13 13

9202100011

9202100019

set/piece

17,5

17

9202100091 9202100099 92029000 9202900010 9202900090

36

Tariff Item. 9205 92051000 9205100001 9205100090 92059010 92059020 92059030 9205909001 9205909090 9206

Article Description Other wind musical instruments (for example, clarinets, trumpets, bag-pipes): Brass-wind instruments Brass-wind USD2000/set Other brass wind musical instruments Keyboard pipe organs; harmoniums and similar keyboard instruments with free metal reeds Accordions and similar instruments Mouth organs Other wind musical instruments, dutiable price USD10000/set Other wind musical instruments Percussion musical instruments (for example, drums, xylophones, cymbals, castanets, maracas): Percussion musical instruments, containing leather of animal in imminent dangers Other percussion musical instruments Musical instruments, the sound of which is produced or must be amplified electrically (for example, organs, guitars, accordions): Keyboard instruments Electric musical instruments Musical boxes, fairground organs, mechanical street organs and singing birds, musical saws and other musical instruments; decoy calls of all kinds; whistles, call horns and other mouth-blown sound signaling instruments: instruments, dutiable price

Unit

MFN (%)

VAT (%)

ED (%)

set/piece set/piece set/piece set/piece set/piece set/piece set/piece set/piece 1 17,5 20 21 21 1 17,5

17 17 17 17 17 17 17 17

13 13 13 13 13 13 13 13

9206000010 9206000090 9207 92071000 92079000

set/piece set/piece

17,5 17,5

17 17 13

set/piece set/piece

15 30

17 17

13 13

9208

92081000 92089000

Musical boxes Others (incl.fairground organs, mechanical street organs etc.)

set/piece set/piece

22 22

17 17

13 13

37

Tariff Item.

Article Description Parts (for example, mechanisms for musical boxes) and accessories (for example, cards,

Unit

MFN (%)

VAT (%)

ED (%)

9209

discs and rolls for mechanical instruments) of musical instruments; metronomes, tuning forks and pitch pipes of all kinds:

92093000 92099100 92099200 92099400 92099910 92099920 92099990

Musical instrument strings Parts and accessories for pianos Parts Parts and and accessories accessories for for the the musical musical instruments of heading N.92.02 instruments of heading N.92.07 Metronomes tuning forks and pitch pipes Mechanisms for musical boxes Other

kg kg kg kg kg kg kg

17,5 17,5 17,5 10 17,5 17,5 17,5

17 17 17 17 17 17 17

13 13 13 13 13 13 13

Source: China Customs Remark:

z z z

MFN: Most-favored-Nation treatment VAT: ED: Value Added Tax Export Rebates

38