Dear shareholders:

China Wind Systems recognizes the enormous potential of the wind power industry in China and is taking strides toward becoming a leading supplier of wind energy components. Our 12 years of experience manufacturing high precision industrial equipment is highly transferable and relevant to the wind industry. We have successfully leveraged our core competency into producing critical wind power components, with impressive financial results since our entry into the sector.

Despite the global economic downturn in 2009, the world’s total wind capacity increased 31% to approximately 160 gigawatts with the total market for wind turbines globally $63 billion, according to the Global Wind Energy Council. Given this worldwide perspective, China’s growth is distinguished. In 2009, China doubled its wind capacity from 12 gigawatts to 25 gigawatts, adding more capacity than any other country and making it the world’s largest market for wind turbines. China’s goal is to grow this capacity six times to 150 gigawatts in the next 10 years by 2020.

Recently, the Chinese government announced its new goal to increase China's projected installed wind capacity to 150 GW by 2020, representing potential $200 billion market for wind power components and projects in China. Leveraging industry growth momentum, China Wind Systems has recently signed a $14 million contract to supply wind tower flanges, demonstrating the compelling long-term opportunities available in the wind power industry.

Going forward, our primary focus is to become a leading supplier to China’s rapidly growing wind power industry. We have carefully crafted a growth strategy to achieve this objective. We are excited by the many opportunities in the emerging Chinese wind-power industry, and we feel confident in our ability to execute our business plan due to our advanced technology, management expertise and strong relationships with wind turbine and gearbox manufacturers.

We strategically expanded our product offerings into ESR in order to accomplish two critical objectives. First, our mission is to become China’s leading forged products supplier to the wind energy industry. ESR products are much higher quality than our regular forged products and they increase the durability and quality of steel material used in high-quality yaw bearings and other high performance components for the wind power industry. Therefore, by entering the ESR market, over the long-term we will be able to win contracts from wind turbine manufacturers that demand the highest quality inputs and thereby establish China Wind Systems as a market leader.

Jianhua Wu
Chairman & CEO
China Wind Systems, Inc.