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ISoftStone's Annual Report And Chairman's Letter Are Available Online

China's 12th Five-year Plan puts great emphasis on improving the social well-being of its people. Municipal governments – like Foshan, Liaoyuan, Wuxi, and Zhenjiang – are investing in new IT infrastructures and applications that will help them better serve their citizens. iSoftStone is often their partner of choice because of our expertise in leading-edge technologies like the Internet of Things and Cloud Computing. We believe this trend will accelerate as China becomes increasingly urbanized and as technology infrastructures are upgraded.

Healthcare reform is a priority for both the developing and developed worlds. Breakthroughs in technologies, like Mobile Internet and Big Data, have opened new possibilities for innovative solutions. Through acquisitions and R&D, we have developed strong capabilities around eHealthcare that builds on our expertise in mobile computing and business intelligence.

Another trend we are watching closely is the emergence of the Digital Consumer generation, identified by its pervasive use of digital devices to become better informed and always connected. We are actively developing solutions that will help our clients evolve their customer and employee engagement strategies to capitalize on this new trend of consumer behavior.

These new drivers, along with good momentum in our existing business, give us a solid foundation for growth in 2012. I am mindful, however, of the challenges ahead that include the aftermath of the European sovereign debt crisis, a potential slowdown in China's economic growth, a talent shortage, and rising cost inflation, just to name a few.

I have launched a transformation program inside the company called iSoftStone 2.0, where we regrouped our organization into three strategic business groups: Greater China, Global Business, and Technology and Communications. This was designed to increase our speed of response to market changes so we can better identify and benefit from the emerging opportunities in each market.

We will continue to drive operational efficiency and excellence by further expanding into tier two and tier three cities. This is not just a cost-saving measure, even though labor costs tend to be lower in those smaller cities. More important is the competitive advantage I see that we gain by accessing a much larger talent pool, by being nearer to our clients, and by building closer relationships with local business communities and governments, who are usually the main promoters of local industrial transformation and technology innovations.

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