Property growth bubbles along to prevent meltdown (The Australian, August 17)

The property bubble in the Western world, an overvaluation of assets driven by cheap money and dodgy financial engineering models, was at the very heart of the nasty global recession that appears to be edging away from the abyss. The big question on everyone's lips is whether China is heading down the same path and if it is, like the property crash in the US, its effects will not be limited to China. What is certain is that prices are on the way up again and China's often rapacious property developers are back in business. The problem is that unemployment is not yet under control, wages are not rising and general signs of better consumer demand have not firmed (retail sales are rising but prices continue to fall). But not in property.

Isetan Mitsukoshi plans China stores (The Japan Times, August 15)

Department store operator Isetan Mitsukoshi Holdings Ltd. is considering opening more stores in China over the next several years to boost its overseas business amid shrinking demand in Japan. The company, which currently operates four Isetan stores and one Mitsukoshi store in China, plans to set up large Isetan stores with sales floors of about 30,000 sq.m in such places as Shanghai and Tianjin.

Bubble or not, property prices tipped to surge (SCMP, August 14)

Speaking at a property forum in Boao, Hainan, Tao Dong, an economist with Credit Suisse, said property prices would continue to grow or even take a "big jump" in the second half of the year. "Everybody has shifted their time deposits to savings deposits [as a result of low interest rates] for speculative purposes," Mr Tao said. "The trend will not only accelerate asset prices but also lure companies to jump on the bandwagon. It is not the responsibility of developers but the government's liquidity control." Mr Tao blamed what he called the "inaccurate diagnosis of the economy" by the central government and the People's Bank of China, which led to a lending spree that has created one trillion yuan in hot money, fuelling speculation.

Investors like property in Asia (Shanghai Daily, August 13)

Property markets in Asia experienced improved investment sentiment in the second quarter of this year with investors from China's mainland taking more active roles in real estate transactions. 9 of the 10 largest deals secured during the six-month period involved Chinese mainland investors. The amount of inter-regional, cross-border investment accounted for only 8 percent of total volume, dropping from a high of 30 percent a year earlier, as global institutional investors and real estate funds largely remained on the sidelines. Cash-affluent Chinese investors are most likely to be the main drivers of the investment market over the short to medium term as many of them are interested in purchasing quality assets for long-term investment.

Yanlord Q2 earnings up 36% on housing demand (The Business Times, August 13)

Demand for high-end housing in China drove developer Yanlord Land Group's second-quarter revenue 56 per cent higher year-on-year to $615.8 million. Net profit for the three months ended June 30 thus rose 36.3 per cent to $91.6 million, from $67.2 million in Q2 last year. The revenue increase resulted from a higher average selling price per sq.m in Q2, and more of the high-margin Yanlord Riverside City in Shanghai coming onstream. Yanlord said that its revenue was mostly derived from the sale of residential properties, with a fraction coming from property management, rental, and other ancillary services.

Bullish Evergrande moves to boost land bank (The Standard, August 13)

Home sales in the mainland may have moderated this month as property prices recovered after the recent stock rally, but leading mainland developer Evergrande Real Estate Group is still bullish. The developer is aiming to boost its land bank to 50 million sq.m by the end of this year. It is focusing on projects on the edge of city centers where land is cheaper. "The average price of our land is 500 yuan per sq.m," said Hui. Evergrande owns the largest mainland land bank at 46 million sq.m. The area under construction amounts to 10 million sq.m in 33 projects.

Shanghai AJ to acquire 2 property firms via private placement (China Knowledge, August 12)

Shanghai AJ Corp, an investment firm focusing on real estate developers, today announced that it intends to issue 214 million shares to Shanghai International Group at an average price of RMB 12.21 apiece in exchange for a 100% stake in two Shanghai-based property firms. As of Jun. 30, one property firm's net assets were valued at RMB 1.34 billion, and the other firm was valued at RMB 1.27 billion. After the placement, Shanghai International Group will directly hold a 20.67% stake in Shanghai AJ and will be its biggest shareholder.

Beijing Capital Land sees contracted sales rise 25% in Jul (China Knowledge, August 12)

Beijing Capital Land Ltd, China's leading real estate developer and hotel operator, announced that its contracted sales rose to RMB 1.43 billion in July, up 25% compared with June, marking the highest level so far this year. The Beijing-based company said that its sales area in 30 major cities declined 4% month on month in July, but that its overall sales volume increased due to the company's effective sales strategy and the utilization of market opportunities.

E-House 2Q Results Surge As China Demand Builds (WSJ, August 12)

Chinese builder E-House Holdings Ltd. reported a 65% surge in second-quarter earnings as the firm continues to quickly develop new space. There are fears that the Chinese real-estate market could be bubbling again as stimulus efforts there have kept economic growth strong by global measures. Loans have been easy to obtain in recent months, and builders are increasing supply as a result.

RCI Signs Six New Chinese Resorts (CHN, August 12)

Group RCI, the world's largest timeshare vacation exchange network and part Wyndham Worldwide, has recently signed six Chinese resorts as its new affiliates, bringing RCI's presence in China to 24 affiliated resorts. The six resorts are: Beijing BBMG BaDaLing Hot Spring Resort in Beijing, Sunshine Water World Resort in Xiaotangshan, LuGuHu Holiday Inn in Sichuan, Ramada Plaza Hotel Yantai in Shandong, Ramada Hotel Wuxi in Jiangsu, and Zen International Hotel in Henan.

GreenTree Inn Opens Six New Hotels (CHN, August 12)

GreenTree Inn has announced the opening of its six new hotels in Beijing, Shanghai, Jinan, Wuxi, Yanji, and Huaian — all on the same day. The six hotels are GreenTree Inn Yanji Time Square Hotel in Jilin, GreenTree Alliance Beijing West Railway Station North Square Hotel in Beijing, GreenTree Inn Shanghai Yanchang Lu Hotel in Shanghai, GreenTree Inn Huaian Huaihainanlu Hotel in Anhui, GreenTree Inn Jinan Beiyuanlishan Hotel in Shandong, and GreenTree Inn Wuxi Xishan Friendship Hotel in Jiangsu.

Beijing Capital Land approved to issue RMB 1.8 bln in bonds (China Knowledge, August 11)

Beijing Capital Land Ltd, which is engaged in real estate development and hotel operation, received the approval from the China Securities Regulatory Commission to issue up to RMB 1.8 billion in domestic corporate bonds. The proceeds will be used to replenish working capital, repay short-term loans and optimize financial structure.

Realty firms ready to board IPO train (English Eastday, August 11)

After China State Construction Engineering Corp, the nation's largest housing contractor, successfully raised 50.16 billion yuan in the world's biggest initial public offering in 16 months, many Chinese real estate companies are trying to stick their hands in stock investors' pockets for money to expand business, or more specifically, to buy more land. According to an initial estimate by China Economic Weekly, more than 30 property developers in China have lined up plans for public floats in the mainland's A-share market and Hong Kong's H-share market.

Mainland property sales leap 60pc on lending surge (The Standard, August 11)

Property sales in the mainland surged 60 percent in the first seven months of this year on record lending and strong demand for homes. The value of sales reached 1.96 trillion yuan compared with the same period last year. Home sales climbed 65.3 percent year- on-year. Real estate investment for the seven months grew 11.6 percent to 1.77 trillion yuan.

Trial program to work out rules for home-stay guests (Shanghai Daily, August 17)

Although Shanghai is building new hotels for the 2010 World Expo, limited bed supplies will still be a big problem for the organizers. A way of resolving the situation is "home-stay" hotels. Shanghai Tourism Administration said that everyday during the peak season of Expo the hotel bed shortage will reach about 100,000 and rise to 380,000 at peak times. Despite the "home-stay hotels," many visitors are also expected to stay in hotels in neighboring Zhejiang and Jiangsu provinces.

Big future for shoppers' paradise (Shanghai Daily, August 15)

Sichuan Road N. is already regarded as one of Shanghai's leading shopping areas, but it is about to become even bigger and better. The 3.7 km long Sichuan Road N. in downtown Hongkou will be expanded to a 2.4 sq km multifunctional commercial area that includes shopping malls, high-end office buildings and leisure facilities. The expansion of the area will account for about 10 percent of the entire district by 2015. The planned commercial area will extend from northern Dalian Road W. to Suzhou Creek in the south. About 1.2 million square meters of new business and commercial buildings will have been established in the new area by the time the 2010 World Expo begins next May.

Used housing index extends rally (Shanghai Daily, August 15)

Shanghai’s second-hand housing index extended its rally last month as it maintained its climb for five months in a row. The monthly index, which reflects price fluctuations of existing homes across the city, rose 1.21 percent, or 29 points, to 2,427 last month, the highest since it was established in November 2001.

Shanghai Industrial to buy 3 parcels in Shanghai for HK$1.7 bln (China Knowledge, August 14)

Shanghai Industrial Holdings Ltd on Aug. 12 announced that it plans to spend HK$1.73 billion purchasing three pieces of land in Shanghai from its parent Shanghai Industrial Investment (Holding) Co Ltd. On the three sites, the Hong Kong-listed company will build high-end apartments and villas next year.

Tesco To Open Second Energy-saving Store In Shanghai (CRN, August 14)

British retail giant Tesco has announced that its second energy-saving store in Shanghai, Wanda Zhoupu store, will be opened in September 2009. This will also be Tesco's first outlet to open after it registered in Shanghai as a foreign company. With the opening of this new store, Tesco will have 19 stores in Shanghai and 66 in China. Located on Hunan Road, the new Tesco Wanda Zhoupu store will cover a total construction area of 18,000 sq.m and is expected to save 25% energy compared with a normal store of such a scale.

City's home prices seen to rise (Shanghai Daily, August 14)

Home prices in Shanghai may continue to rise over the next few months and luxury houses are seen to be highly sought after, despite a correction in volume last month. The central government's relatively loose macro-economic policies, an imbalance between supply and demand as well as an increasing need to park cash in real estate as a hedge against inflation would probably help home prices maintain their climb right to the end of this year.

Pay-to-play graft trial begins (Shanghai Daily, August 14)

A former division chief in charge of construction planning approval for the Pudong New Area allegedly accepted 14.85 million yuan in bribes, including 29 property units. Tao Jianguo, ex-head of the construction planning and environmental management department of Pudong's Waigaoqiao Bonded Area, admitted to the Shanghai No. 1 Intermediate People's Court that he had received the properties and cash. But he denied they were bribes, claiming they constituted legal income from running companies and providing advice to real estate developers.

New mortgage loans increase (Shanghai Daily, August 13)

Mortgage loans helped shore up new yuan lending in Shanghai last month as home buyers dashed into the property market. Chinese banks extended 11.43 billion yuan in new individual mortgage loans last month in Shanghai, accounting for two-thirds of new yuan loans in the city. The new mortgage loans were 8.63 billion yuan more than the year ago level. Individual mortgages for new homes totaled 5.66 billion yuan last month, up 4.31 billion yuan. Mortgages on second-hand homes hit 5.77 billion yuan, up 4.32 billion yuan. Home buyers are dashing into the property market as prices rise rapidly. Many fear that home prices will continue to escalate.

Construction Starts On China's First "Sunken Hotel" (CHN, August 13)

Construction recently started on Songjiang Hotel, China's first "sunken hotel", which is to be built in a water-filled quarry in Songjiang, Shanghai. The quarry, which is 89 m below sea level, is at the east of Hengshan inside the Shanghai Sheshan National Holiday Resort. The 21-floor hotel will have two floors under water, two floors above ground-level and 17 floors between the water surface and ground-level.

Suning Universal purchases 2 parcels in Nanjing for RMB 374 mln (China Knowledge, August 13)

A wholly-owned Jiangsu-based subsidiary of Suning Universal Co Ltd on Aug. 11 won the bids for two pieces of land in Nanjing, Jiangsu Province for RMB 374 million in total. One parcel, located in the city's Heban County, covers a land area of 37,762.7 sq.m and has a potential floor area of 60,932.53 sq m. The subsidiary of Suning Universal purchased the parcel for RMB 268 million. The subsidiary acquired the other parcel for RMB 106 million or RMB 7,143 per sq m of potential floor area. The parcel, located in Nanjing's Gulou District, covers a land area of 9,275.7 sq m and has a potential floor area of 14,841.12 sq m.

Shanghai Forte Land to acquire property project in Nanjing (China Knowledge, August 12)

Shanghai Forte Land Co Ltd, which is engaged in real estate development and related consultancy services, is planning to spend RMB 1.04 billion to acquire a property project in Nanjing. The project has a gross floor area of 300,000 sq.m.

Property disputes on the rise in former Nanhui District (Shanghai Daily, August 12)

Property disputes in the former Nanhui District doubled in the past two months as the property market surged following its merging into Pudong New area. The former Nanhui District People's Court heard 36 property disputes in the last two months. Most of them involved sellers withdrawing from signed contracts in the hope of a larger profit as house prices rocketed more than 40 percent in less than three months.

Carrefour To Open New Store In Hefei In 2010 (CRN, August 12)

According to reports in local media, Carrefour is expected to open a new store as part of Hefei's western supermarket project before the Spring Festival in 2010. In April 2009, Carrefour Hefei signed a letter of intent with Hefei New Civil and Cultural District Investment Company to rent the first to the third floors of the investment company's western supermarket project for a new outlet. The leasing area is 23,000 sq.m and the leasing period is 20 years.

Pullman To Open Two New Hotels In Shanghai (CHN, August 12)

Pullman Hotels, the upscale Accor brand, is to open two new five-star hotels in Shanghai. Pullman Shanghai Pudong Zhangjiang is scheduled to open in 2010 offering 300 rooms. Pullman Shanghai South will open in June 2013. Located in Xuhui District and directly opposite to Shanghai South Railway Station the new hotel will be part of the new Zhongxing City complex. The hotel will be integrated with an office building and shopping mall and will have 350 rooms.

Greentown acquires land in Wuxi for RMB 2.9 bln (China Knowledge, August 11)

Greentown China Holdings Ltd, which primarily engages in residential property development and is based in Hangzhou, Zhejiang Province, on Aug. 7 won the bid for a piece of mixed-use land in Wuxi, Jiangsu Province. The lot covers a land area of 222,616.8 sq.m and will have a floor area ratio between 2 and 3.

Guangzhou R&F sells property in Guangzhou for RMB 765 mln (China Knowledge, August 17)

Guangzhou R&F Property Co Ltd on Aug. 14 sold a commercial building located in Zhujiang New Town, Guangzhou, Guangdong Province for RMB 765 million to Infinitus (China) Co Ltd and Shanghai Pudong Development (Group) Co Ltd. The two purchasers will each hold a 50% stake in the commercial building, which covers a floor area of 30,113 sq.m, of which office space accounts for 28,066 sq m and stores account for 2,047 sq m.

SZ CPI sees first growth since January (Shenzhen Daily, August 17)

Shenzhen’s consumer price index increased by 0.6 percent in July from a month earlier. It was the first growth recorded since January, which indicated a clear rebound in the city’s economy.

Taiwan's Fubon to make more investment in Xiamen Commercial Bank (What’s on Xiamen, August 14)

Fubon Financial Holding, parent of Taiwan's No. 2 insurer, will increase its investment in China's Xiamen Commercial Bank by the end of the year. Fubon Bank holds about 20 percent of Xiamen Commercial Bank.

House prices soar, volume drops in Xiamen in July (What’s on Xiamen, August 13)

In July, Xiamen’s house prices hit another new record high after they continued rising for five months. However, the transaction volume in July has dropped over the previous month. The average house price stood at 9, 565 RMB/sq m in July, a year-on-year increase of 355 RMB/sq m. A total of 3,044 apartments were sold in July, a decrease of 844 sets compared with that of June. The total transaction volume of second-hand houses in the first seven months reached 1,688,300 sq.m, up by 227.3% over the same period of last year. In addition, non-local buyers are still the main forces of house purchases, accounting for 56% of the total house buyers.

Revival pushes up office sales (Shenzhen Daily, August 13)

As Shenzhen’s economy has regained momentum and businesses started hiring, sales of office space in the city picked up and the vacancy rate dropped markedly. In the first half of this year, 207,600 sq.m of office space was sold in Shenzhen, up 89.94 percent from a year ago and exceeding the total sold in all of 2008. In June alone, 73,100 sq.m of office space was sold, up 18.4 percent from a month ago and the highest since July 2006. Prices for offices have risen slightly too. The average price for office space rose 5.53 percent from a year earlier to 22,222 yuan per sq.m.

Shenzhen's new apartment price hits RMB 16,080 per sq m in Jul (China Knowledge, August 12)

Shenzhen in July saw the average transaction price for new apartments hit RMB 16,080 per sq.m, a price reflecting a year-on-year decrease of 0.73% or a month-on-month increase of 8.47%. During the period from February to July, the city's average transaction price for new apartments swelled RMB 5,310 per sq m, or 50%.

New landmark building in the making in Haicang, Xiamen (What’s on Xiamen, August 11)

A new sports center, which is expected to be another landmark building in Haicang District of Xiamen, has started construction. The new center, which is called the Haicang Sports Centre, will cover a total area of 100,000 sq.m. The total investment will reach RMB 460 million.  The first phase of the project is scheduled to be completed at the end of June, 2011. The 2nd phase includes the upper part of the main stadium, a natatorium and underground car park.

Gome Shangdu sold for RMB6 billion (Economic Observer News, August 14)

Eagle Properties has reached a preliminary agreement with an unknown investor to dispose its largest retail property – Gome Shangdu with 350,000 sq.m. aboveground and 200,000 sq.m. underground area for about RMB 6.0 billion. The details have not yet been disclosed and the unknown investor is probably an investment bank. To date, Eagle Properties has disposed of several projects including a hotel in Fengtai and a residential plot in Tongzhou to improve its balance sheet.

Kowloon Development acquires Shenyang project (Guandian, August 14)

Kowloon Development has acquired the project company that holds a complex project with 578,600 sq.m. gross floor area in Shenyang from Polytec Group, which was its majority shareholder. The company will pay HKD620 million for the construction-in-progress project and bear its loan.

Vanke to start Beijing project (China Knowledge, August 13)

China Vanke Co Ltd, the country's largest publicly traded residential property developer, plans to start construction on a high-end residential property project in Chaoyang District, Beijing and to pre-sell units in the project starting in December. The Shenzhen-listed enterprise intends to build properties with a total floor area of 149,000 sq.m on an 81,500-sq m plot it purchased for RMB 1.7 billion or RMB 11,400 per sq m of potential floor area on Oct. 25, 2007. An insider at Vanke said that the firm has not decided the selling price and that the project will principally consist of residential properties having a potential floor area of 160 sq m per unit.

Neo-China Land sells project in Beijing for HK$1.18 bln (China Knowledge, August 13)

Neo-China Land Group (Holdings) Ltd on Aug. 11 announced that it plans to sell a 100% stake in a Beijing investment firm that holds a 55.95% stake in a mixed-use property project for HK$1.18 billion. The Hong Kong-listed enterprise will earn HK$117 million through the sale. The property project, which is under construction, is located in the Tongzhou District, Beijing. The first stage of construction is expected to be completed in 2010, covers a land area of 253,000 sq.m and will have a floor area of 800,000 sq m.

COFCO Property to borrow RMB 1.58 bln for Beijing project (China Knowledge, August 12)

COFCO Property (Group) Co Ltd has announced that it plans to borrow RMB 1.58 billion from its parent, COFCO Ltd, to develop a project in Beijing. The project, which involves three pieces of land in Shunyi District, will have a floor area of 520,000 sq.m and will consist of a hotel, a shopping mall and apartments.

Beijing Huaye Realestate to raise RMB 2 bln (China Knowledge, August 11)

Beijing Huaye Realestate Co Ltd plans to issue up to 300 million new shares for RMB 7.26 per share or RMB 2 billion in total. Beijing Huaye Realestate will invest RMB 1.3 billion of the proceeds from the issuance in a mixed-use property project located in Tongzhou District, Beijing. The project, which has a land area of 253,000 sq.m and a potential floor area of 826,100 sq m. The firm will also inject RMB 400 million in a project located in Dalian.

Easyhome To Open New Store In Baotou (CRN, August 11)

Beijing-based construction and decoration material retailer Easyhome has signed an agreement with the Kundulun district of Baotou, Inner Mongolia to open a new store in this area. With a total construction area of 60,000 sq.m, the Easyhome Baotou store has an operating model which integrates market, supermarket, and brand specialty stores, providing a one-stop shopping services to consumers.

China Housing & Land posts US$10-mln net loss for Q2 (China Knowledge, August 17)

China Housing & Land Development Inc, a real estate developer based in Xi'an, Shaanxi Province, on Aug. 12 announced that its un-audited net loss was US$10 million in the second quarter of this year, whereas it had net income of US$1.1 million in the same period of last year and reaped net income of US$1.9 million a quarter earlier.

Hubei Adds Four Five-star Hotels (CHN, August 11)

Information from Hubei Provincial Tourism Administration says that the National Star-rated Hotel Assessment Committee has approved four hotels to be five-star hotels in Hubei Province, increasing the total number of five-star hotels to 11. The four hotels are Howard Johnson Pearl Plaza Wuhan, Renaissance Wuhan Hotel, Wuhan Jin Jiang International Hotel, and Jingzhou Jingwei International Hotel. Jingzhou Jingwei International Hotel is also the first five-star hotel in a prefecture-level city in Hubei.

Blackstone, Goldman Sachs mull investment firms in China (China Knowledge, August 17)

U.S.-based private equity group Blackstone Group LP and the private equity arm of Goldman Sachs, are setting up investment firms in China to raise RMB funds from local investors and acquire stakes in local companies with Chinese partners. The move shows that the Chinese government is determined to promote the use of RMB and improve the standard of corporate management in China.

QFIIs' average return surges (Shanghai Daily, August 15)

The average return of funds managed by overseas institutions to trade yuan shares surged 83.32 percent in the first seven months of this year. The performance outshone that of equity funds which reported an average return of 72.42 percent, fund research firm Lipper & Co said in a report. Last month, 15 funds under the Qualified Foreign Institutional Investor scheme scored an average return of 14.21 percent, compared with 14.07 percent for the equity funds, the report said.

Ping An says H1 net profit falls 45% (China Daily, August 15)

Ping An Insurance (Group) Company of China Ltd, the country's second largest insurer by market value, said Friday that its first-half net profit fell 45 percent to 5.22 billion yuan under international accounting rules. The drop in profit, down from 9.49 billion yuan a year earlier, was mainly a result of lower investment returns, higher payouts for claims and tax provisions. Under Chinese accounting rules, the insurer's first-half net profit was 4.35 billion yuan, a fall of 38.8 percent from 7.1 billion yuan a year ago.

L'Oreal enters mass shampoo segment (China Daily, August 15)

L'Oreal Group, the world's largest cosmetics and beauty company, plans to beef up its presence in the over 30-billion yuan Chinese mass shampoo market and pose a stiff challenge to market leader Procter & Gamble. L'Oreal, known for its hair care products, was until now present in the high-end shampoo segment. The change in focus, primarily stems from the vast size of the low-end segment in China and the fast pick up in domestic consumption due to the recent government stimulus measures.

UPDATE: China Merchants Securities To Sell 24% Fund Co Stake (WSJ, August 14)

China Merchants Securities Co. on Friday put a 24% stake in Bosera Asset Management Co. up for sale, potentially removing an obstacle to the brokerage gaining regulatory approval for a planned initial public offering. China Merchants Securities said it is offering to sell the stake in Bosera, China's second-largest fund-management company by assets after China Asset Management Co., at CNY109.5 a share through the Tianjin Property Rights Exchange. Auction notices posted on the exchange's Web site Friday indicated the stake is worth CNY2.63 billion. Only Chinese companies are allowed to submit bids for the stake, and the offer expires Sept. 10.

UK bank to boost high-end business (Shanghai Daily, August 14)

Standard Chartered Bank plans to boost its high-end consumer banking business in Asia by hiring 850 more personnel, with more than half of the new employees to be recruited in China. The London-based bank is riding on China's rising affluence amid the country's economic growth by boosting its number of officers who will provide high-end priority banking services.

PREVIEW: China Banks Likely Had Weak 1H Despite Soaring Loans (WSJ, August 13)

Chinese banks have expanded credit at an unprecedented pace to help Beijing achieve its goal of 8% annual economic growth this year, but they are likely to disappoint shareholders in coming weeks with weak first-half earnings. Analysts said net interest income declined due to a drop in interest margins amid Beijing's monetary easing. This is despite China's banks pumping out a record CNY7.4 trillion worth of new yuan loans in the first half, a quarter of the country's annual gross domestic product.

Officials may inflate figures (China Daily, August 13)

The overestimation of local GDP figures in some provinces may have resulted in the 1.4 trillion yuan difference between the combination of local figures and the number from the National Bureau of Statistics in the first half of the year, statistics official said. "GDP growth has become a very important tool to evaluate the work performance of local officials in China recently, so some may inflate the number in order to get through the assessment or beautify their work report," said Peng Zhilong, director of national economy assessment department at the NBS, in an article in People's Daily yesterday.

Wumart to sell shares for expansion (The China Post, August 13)

Wumart Stores Inc., Beijing's largest supermarket chain, plans to raise a net HK$1.65 billion placing shares to investors including a TPG-managed fund and will use the money to open new stores and for possible acquisitions.

Xinyu Hengdeli aims at opening more stores (SCMP, August 13)

Xinyu Hengdeli Holdings, the mainland's biggest luxury timepiece retailer, plans to open more than 20 stores this year despite net profit dropping 10.69 per cent in the first half. The company, which has 204 retail stores nationwide, aims to focus its expansion in second and third-tier cities after they recorded double-digit growth in same-store sales this year.

Limits seen on power of local demand (The Standard, August 13)

China's efforts to boost domestic consumption cannot completely offset slumping export demand, the vice minister of commerce said. Fu Ziying was speaking as part of an effort to counter a belief that domestic consumption can support continuous and strong economic growth. The external situation remains critical and the outlook for the second half difficult to predict, he said, though the country was on the right track for economic growth. Signs of improvement were being seen in the exports sector, Fu went on, with the full-year aggregate amount for trade set to hit a target of US$2 trillion.

China's fiscal growth slows down in July, finances stay tight (Shanghai Daily, August 12)

Growth in China's fiscal revenues slowed down in July and the government's finances this year remain tight. Fiscal revenue grew 10.2 percent year on year to 669.6 billion yuan in July, down from 19.6-percent growth in June. Despite the recent growth, China's total fiscal revenue still edged down to 4.07 trillion yuan in the first seven months, a drop of 0.5 percent from a year ago. China's shrinking tax income contributed to the falling fiscal revenue, dropping 3.5 percent year on year to 3.55 trillion yuan in the first seven months.

Construction Bank buys AIG unit for US$70m (SCMP, August 12)

China Construction Bank Corp is buying a unit of financial conglomerate American International Group for US$70 million, its first acquisition outside the mainland in about three years. The deal, being conducted by China Construction Bank (Asia) Corp, a wholly owned subsidiary of the world's third-largest bank by market value, also involves repayment of loans and deposits totalling US$557 million to take over AIG Finance (Hong Kong). The transaction is expected to be completed in October, subject to approval from the regulatory authorities.

Citibank China Gets OK To Be Mkt Maker In Interbank Bond Mkt (WSJ, August 12)

Citigroup Inc.'s China-incorporated unit, Citibank (China) Co., has received regulatory approval to act as a market maker on China's interbank bond market, making it the second foreign market maker in Asian's second-largest debt market after Japan. Allowing more experienced international investors to post bond prices in China's debt market should help build a more efficient pricing mechanism. The move also represents an increase in foreign banks' role in the domestic bond market after Beijing allowed the locally incorporated units of foreign lenders to sell yuan-denominated bonds in Shanghai and Hong Kong earlier this year.

Bank Of Communications Aims To Set Up Insur Unit This Year (WSJ, August 12)

Bank of Communications Co. expects to set up an insurance unit before the end of the year. The company is waiting for final approval from China's regulators and declined to give further details of the plan to set up the unit.

New yuan loans reach 9-month low (Shanghai Daily, August 12)

New yuan lending hit a nine-month low in China last month as banks took a step back and slowed their credit growth amid rising concerns of asset bubbles forming. Banks in China extended 356 billion yuan of yuan-denominated loans last month, a sharp fall from the 1.53 trillion yuan in June. Meanwhile, M2, the broadest measure of money supply, jumped 28.4 percent last month.

China urban fixed-asset investment up 32.9% in first seven months (China Daily, August 11)

China's urban fixed-asset investment rose 32.9 percent in the first seven months of this year from a year earlier to 9.59 trillion yuan. The growth rate was 5.6 percentage points higher than the same period of last year, but 0.7 percentage points lower than the first half of this year, when urban fixed-asset investment rose 33.6 percent from a year earlier.

China July CPI falls 1.8%, PPI down 8.2% (China Daily, August 11)

China's consumer price index dipped 1.8 percent in July from a year earlier. This marked the sixth consecutive month of decline since the index dropped 1.6 percent in February. The country's producer price index, a major measure of inflation at the wholesale level, fell 8.2 percent year on year in July. It showed a month-on-month increase of 1 percent.

China's retail sales up 15.2% in July (China Daily, August 11)

China's retail sales, the main measure of consumer spending, rose 15.2 percent in July to 993.7 billion yuan from a year earlier. The growth rate was 8.1 percentage points lower than July last year, but 0.2 percentage points higher than that of June. The country's retail sales in the first seven months rose 15 percent to 6.86 trillion yuan from the same period a year earlier.

Railway construction to get 700b yuan each year in next three years (China Daily, August 11)

The investment plan for China's railway construction for the next three years has been settled, with an annual average investment exceeding 700 billion yuan. China aims to expand its operating railway network to 110,000 km by 2012.

New loans rise but NPLs drop (Shanghai Daily, August 11)

The amount of bad loans in China dropped in the first half of the year despite soaring new credit. Analysts, meanwhile, said the regulator is expected to vigorously scrutinize the situation to avoid sour loans from appearing in the future. The outstanding non-performing loans fell to 520.8 billion at the end of June, down 42.7 billion yuan from the end of 2008.