The promulgation of the direct selling law, on the one hand, reflects the profound openness of our country---to fulfill China's commitment to WTO; on the other hand, it is also conducive to the fair competition between direct selling companies. The enactment of the direct selling law enables direct selling companies to play the game within the law frame with a unified starting line. Herbalife is very excited about the promulgation of the direct selling law as we finally can conduct direct selling business in an orderly market according to law. We can clearly see, through the law, that the government attaches importance to the direct selling industry and has made great efforts to regulate the market. We respect the efforts and will conduct our business in accordance with the law.

The market will be reshuffled

The promulgation of the direct selling law will cause the reshuffle of China's direct selling market. Some big companies abiding by laws will enter the China market, thus introducing more companies with various industry focuses to come to China, and enabling consumers to have wider choices of better products. Besides, we think that it is very necessary to set a high threshold by requiring reserves, which will eliminate some low-grade companies. Herbalife has made outstanding performance in many markets globally. Statistics published in early August suggest that the company's net sales volume for the second quarter reached a record $384.7million (retail volume around $769.4million), an 18.7% increase from the same time in 2004. Therefore, we are confident about delivering better performance in China.

Herbalife plans on expansion and more investment