Friday_____________________ May 24

Luxury sales expected to grow

China's luxury-goods market is likely to grow by a world-leading 20 percent this year, accounting for more than a quarter of global luxury sales, according to a new report by Deutsche Bank AG.

Despite several months of sluggishness in various economic indicators in China, the second-half outlook remains positive, according to the bank's economists, because of low inflation and the foreseeable likelihood of China's central bank keeping interest rates low to spur consumer spending.

The Deutsche Bank report cites as the main risk to the luxury-goods market Chinese government policies on consumer spending and travel. Last year, authorities introduced bans on bureaucrats' use of public money to buy luxury items.

The report also predicts Chinese will continue to shop outside their country in search of lower prices and greater variety. (Photo 1)

Factory production indicates slowdown

China's factory production may hit a seven-month low in May, suggesting an economic slowdown may deepen in the second half of the year, HSBC readings show.

HSBC predicted that the manufacturing Purchasing Managers' Index, or PMI, may fall to 49.6 in May from 50.4 in April, the first time it has dipped below 50 - the point that separates expansion from contraction - since October 2012.

The preliminary indicator, based on feedback from 420 manufacturing managers in a PMI survey, was released a week before the official figure.

Global financial firms have lowered their expectations for China's 2013 GDP growth rate since May. UBS AG downgraded its forecast to 7.7 percent from 8 percent, JPMorgan to 7.8 percent after initially predicting 8.2 percent and Nomura Securities Co is expecting 7.5 percent, down from 7.7 percent. (Photo 2)

Monday_____________________ May 27

Chinese tourists spent more in US in 2012

Chinese tourists spent $9.2 billion in the United States in 2012, a 19 percent increase from the previous year, according to US government data.

The increase was smaller than the 47 percent year-on-year jump recorded in both 2010 and 2011, and China remained the fastest-growing source of inbound US travelers.

It again ranked at No 6 in spending by foreign tourists, according to data released last week by the Office of Travel and Tourism Industries, part of the Commerce Department.

The five countries whose citizens spent more in the US were Canada ($26.2 billion), Japan ($16.6 billion), the United Kingdom ($13 billion), Mexico ($10.1 billion) and Brazil ($9.3 billion).

Lenovo eyes high-end mobiles

Lenovo Group, the world's second-largest PC maker, is looking at the high-end mobile market to compete with Apple Inc and Samsung Electronics Co.

Lenovo's strategy comes in the middle of a recession in the PC industry. US research company IDC warned earlier this year that international PC shipments are poised to suffer a double-digit slump in the second quarter of this year

"Lenovo will become the No 1 smartphone vendor in China in two years," said Liu Jun, senior vice-president of Lenovo and head of the company's PC, smartphone and tablet businessses. (Photo 3)

Tuesday____________________ May 28

SAFE may invest in US real estate

China may invest part of its $3.4 trillion in foreign-exchange reserves in US real estate, according to news reports.

The State Administration of Foreign Exchange, or SAFE, began studying the possibility after signs of a recovery in the US property market, according to Bloomberg News, which cited two people with direct knowledge of the situation who requested anonymity because they weren't authorized to speak publicly about the matter.

Last week, the Wall Street Journal, citing people with knowledge of the matter, reported that SAFE had opened a New York office to invest in US assets including real estate and private equity. A separate SAFE office in New York for years has focused on buying US government debt.

Prices for single-family homes increased in 89 percent of US cities during the first quarter, reflecting stronger recovery in the housing market after a five-year slump, the National Association of Realtors said this month.

Club Med gets takeover offer

France's Club Mediterranee SA has received a takeover bid from its management and the two top shareholders, France's AXA Private Equity and Chinese conglomerate Fosun International Ltd. The bid values the resort operator at 540 million euros ($699 million).

The Wall Street Journal cited an unnamed French official as saying the government wasn't opposed to the proposed buyout.

Wednesday___________ May 29

Expats face exodus question over pollution

Should we stay or should we go?

That's what many expatriate residents in Beijing have been asking in the face of smog and other pollution. And the latter option is proving popular, according to media reports and anecdotal evidence.

The city's living environment is now the top challenge in retaining foreign workers, as opposed to salary or career development, said Adam Dunnett, secretary-general of the European Union Chamber of Commerce in China, citing research by the chamber.

Those not leaving say they are simply adapting.

James Watson-Krips, an educational consultant from the United States working in Beijing, said "sometimes you give up occasions due to health concerns", but he stressed that he's staying: "The pollution is a fly in the ointment, but isn't bad enough to drive me out. I don't think there will be an exodus from the capital, not from my circle of friends at least." (Photo 4)

E&Y report stresses improved productivity

Improving productivity will be of central importance to China in the next decade to maintain economic growth and avoid the "middle-income trap", according to an Ernst & Young survey.

Individual companies will overtake the government to become the main driving force in improving productivity levels by moving up the value chain and technological upgrading, it said.

The survey of executives and senior managers from 1,700 domestic and international companies in China earlier this year, and measured profitability.

The average profit margin for the sample companies was 20.9 percent. Only 3 percent of executives reported they were loss-making in the past financial year.

Thursday_________________ May 30

Food firm seeks biggest buy in the US

Shuanghui International Holdings Ltd has agreed to pay $4.72 billion to acquire Smithfield Foods Inc, the world's leading pork producer, to meet growing demand for US-made pork. If approved by US regulators, it would be the biggest takeover of a US company by a Chinese buyer.

The transaction, which also includes $2.38 billion in assumed debt, also must be approved by Smithfield shareholders. It faces regulatory scrutiny because it would bring a major US business under foreign control

Under the agreement announced Wednesday, Shuanghui will pay $34 for each Smithfield share.

The offer represents a 31 percent premium to the shares' Tuesday closing price of $25.97.

Based on Smithfield's 138.8 million shares outstanding, the cash portion of the deal is worth $4.72 billion. The companies valued the deal, including assumed debt, at $7.1 billion, meaning the value of the debt is about $2.38 billion.

With annual revenue of $13 billion and more than 46,000 employees, Smithfield, based in a small Virginia town of the same name, has facilities in 26 US states, including the world's largest slaughterhouse and meat-processing plant, in North Carolina. It also has operations in Mexico and 10 European countries.

The company's brands include Smithfield ham, Farmland bacon and Healthy Ones lunch meats. It raises some 15 million pigs a year and processes 27 million, producing more than 6 billion pounds (2.7 billion kilograms) of pork.

IMF lowers growth forecast to 7.75%

The International Monetary Fund lowered its economic growth forecast for China to 7.75 percent this year from 8 percent, and warned the world's second-largest economy to monitor its rapidly expanding social financing.

"If growth were to slow sharply below this year's target, then on-budget fiscal stimulus should be used, focusing on measures that support household incomes and consumption, such as reductions in social contributions, subsidies to consumption, or targeted social safety net spending," David Lipton, the fund's first deputy managing director, said Wednesday in Beijing.

The pace of the economy should pick up moderately in the second half of the year, the IMF said in a statement.

With the approach of the Dragon Boat Festival on June 12 and falling gold prices, gold rice dumplings are becoming a sought after item. Their price is 415 yuan ($67.6) per gram. Gold rice dumplings, shown here on display at Guohua shopping mall in Beijing, are the traditional food eaten during the festival. Cao Boyuan / for China Daily

(China Daily USA 05/31/2013 page8)