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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (1985)	12/14/2003 12:12:17 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Luxury Retailers Eye Hong Kong Expansion Sun December 14, 2003 03:22 AM ET (Page 1 of 2) By Susan Fenton HONG KONG (Reuters) - Rainbow Sun, a marketing manager from Shenzhen, has just seen a ring in a Cartier store in Hong Kong that she wants to buy on her next trip to the city. Work permitting, that should be soon, she said. The southern Chinese boom city of Shenzhen is a mecca for tourists seeking fake Gucci bags and Rolex watches, but increasingly affluent mainlanders want the real thing and for that they are shopping in Hong Kong. "We don't have Cartier in Shenzhen," Sun said. Hong Kong offers the full range of luxury retailers, including Cartier, Christian Dior and Fendi, which have this year opened new stores in the city, smartening up the Tsim Sha Tsui tourist district in Kowloon. They are just round the corner from a new YSL boutique, while across the harbor in Hong Kong's central business district, Hermes, Prada and Ermenegildo Zegna are among luxury brands preparing to open flagship stores next year. After tough times -- as Hong Kong suffered three recessions in six years and Japanese tourists virtually disappeared -- the city's retail sector is looking up again. "We're riding a wave of interest from retailers. It's part of a cohesive strategy to raise their profile in China," said Simon Galpin, associate director-general at Invest Hong Kong. JAPANESE DISAPPEAR ... reuters.com

To: RealMuLan who wrote (1985)	12/15/2003 10:01:28 AM
From: Clappy	Read Replies (1) \| Respond to of 6370

China may move to stop overheating in motor industry December 15, 2003 By Bloomberg Beijing - China's state development and planning commission might issue a directive as early as today ordering commercial banks to stop lending to car makers and local governments to stop building and expanding plants, China's 21st Century Business Herald reported on Saturday, citing unidentified officials. "Investment in China's motor industry is a case of having too much, too soon, too fast," said Michael Dunne, president of Automotive Resources Asia. "If the government doesn't step in, the margins car makers enjoy now could drop to nothing." China is expected to overtake Germany in the next two years to become the world's largest car maker after the US and Japan. Volkswagen, General Motors, Toyota Motors and other foreign car makers have poured an estimated $20 billion into the country, betting that the Chinese will exchange their bicycles for cars as the nation's economic expansion puts more money in their pockets. One in 120 Chinese now own a car. Motor manufacturing capacity is forecast to grow to 12 million cars a year by 2007, exceeding domestic demand by 5 million, 21st Century Business Herald said. Car prices fell 4.6 percent in November, after the unsold inventory shot up 37 percent. In the same month, industrial production surged by a record 18 percent and inflation accelerated at the fastest pace in six years. "We have been arguing for some time now that the government would introduce measures to prevent the economy from overheating," said Yiping Huang, Hong Kong-based chief China economist at Citigroup Global Markets Asia. "The government is implementing measures where there's a bubble. There's a problem of overinvesting in the motor, property and steel industries." To feed demand, Chinese iron ore imports have soared. Prices may rise 15 percent next year, Goldman Sachs Group analysts said, after a 9 percent gain this year. The industry surge is pushing up energy use beyond the nation's generating capacity. China, which suffered blackouts last summer, will probably face more shortages next year, according to a report this month by China's biggest grid operator. China announced in October that it would seek to slow investment in the steel, motor, aluminium and cement industries to curb raw material prices and ease power shortages. The risks of overheating industrial production were outlined in a report last week by Standard & Poor's, which said a glut of factories turning out cars and consumer goods may hurt corporate profits and raise bad loan ratios at the nation's banks. Volkswagen, Europe's largest car maker and the biggest foreign car maker in China, also voiced concern back in October about excessive production capacity. Its market share has been whittled to about 35 percent from half as rivals piled into China. "We can't lose sight of reality in China," Volkswagen chief executive Bernd Pischetsrieder told a conference in Tokyo. "We could well wind up in a similar situation in China by 2012 as there is in Brazil. Some years ago the whole car industry ran to Brazil, hoping that the market would equal 200 percent." Volkswagen will cut its workforce in Brazil to 21 000 from the current 25 000. PSA Peugeot Citro‘n lost $245 million in Brazil last year and expects to lose about the same in 2003. Still, there's no sign interest in China is abating. Volkswagen said it would invest $7.3 billion in the next five years to double its manufacturing capacity there to 1.6 million vehicles. DaimlerChrysler's Mercedes has announced a $1.2 billion plan to produce cars and trucks in China, and Ford is pledging to spend as much as $1.5 billion more. "The expectations in China are too high," Andreas Dittmer, who helps manage $2.4 billion at APO Asset Management in Dusseldorf, Germany, said two months ago. "Car makers are going to have to sober up and be realistic. With everyone getting in, not everyone can win." For now, profit is holding up. China's 14 biggest car makers earned a combined $3.4 billion in the first 10 months of the year, the state-owned assets supervision and administration commission said. Car sales had nearly doubled in the past two years to 4.3 million units, said Automotive Resources Asia's Dunne. "Your Volkswagens and Hondas are making very nice money in China. The government wants to maintain that."