An increasing number of wealthy Chinese are traveling overseas to buy luxury goods. Alex Hofford / for China Daily

Retail

Overseas luxury hard to resist for middle class

An increasing number of middle-class Chinese are buying luxury goods outside the Chinese mainland, with more overseas travel driving the trend, a KPMG report said.

Seventy-one percent of survey respondents - middle-class mainland residents - traveled overseas last year, compared with 53 percent in 2008. And 72 percent of them said they bought luxury items on such trips, with cosmetics, watches and handbags being the most popular items.

Brand recognition continues to rise as consumers become more discerning and seek luxury as well as one-of-a-kind luxury brands and products. Respondents said they recognized 59 luxury brands, up from 45 in a survey in 2010.

Nestle offers healthy protein powder

Nestle SA, the world's largest food company by revenue, has expanded into the Chinese market's health food sector by introducing a protein powder.

Nestle Yiyang Protein Powder, unveiled in Beijing on Jan 21, will be introduced in seven large cities, including Beijing, Tianjin, Shanghai and Nanjing.

Roland Decorvet, CEO of Nestle China, said he was confident about the product because of the country's increasing aging population.

By 2015 the health food market in China will hit 450 billion yuan ($72 billion; 54 billion euros), said Hong Kong Trade Development Council, the international marketing arm for Hong Kong-based traders, manufacturers and service providers.

Fast-food chain lines up franchises in southwest

The fast-food company McDonald's Corp says it will take applications for franchises in Southwest China. In an effort to accelerate its growth in the country, McDonald's said it wants franchised outlets in the Sichuan-Chongqing area.

Franchises, which are the key to McDonald's successes in many markets worldwide, will be important in helping it grow in China, the company said.

Seven cities in Sichuan and Chongqing will be open to franchise applications, it said. Till now, only Guangdong and Fujian provinces have been open to such applications.

Technology

Huawei set to beat Ericsson

Huawei Technologies Co Ltd is poised to become the world's biggest telecom equipment maker by revenue, beating Ericsson AB of Sweden.

The Chinese company is tipping that figures will show its sales rose 8 percent last year compared with the previous year to reach 220 billion yuan ($35.4 billion; 27 billion euros).

Ericsson is due to report its earnings at the end of the month, and analyst estimates compiled by Bloomberg News suggest it is likely to report sales of 226.9 billion Swedish kroner ($34.8 billion; 26 billion euros) for the year, on par with the previous year.

Huawei beat Ericsson for the first time in July when the company reported that its first-half revenue was $16.1 billion, about $850 million more than Ericsson's.

Finance

More foreign cash welcome into market

China will quicken the opening of the capital market this year by attracting more foreign investors and making it easier to develop asset management and futures businesses, the country's top securities regulator says.

The investment quota for qualified foreign institutional investors and renminbi-qualified foreign institutional investors will continually expand to satisfy growing overseas investment demand, the China Securities Regulatory Commission said. The policy to regulate qualified domestic institutional investors will continue to be improved, it said.

Trade

France eyes agricultural and food sales

France plans to increase its exports of food and agricultural products to China, and consolidate cooperation in sectors such as nuclear power and aviation, the country's Trade Minister, Nicole Bricq, says.

Bricq, on a two-day visit to China, said she was in the country to explore trade in agriculture and food processing after strengthening cooperation in nuclear power and aviation. The aim was to increase trade in dairy and meat products, as well as wine, she said.

French President Francois Hollande is due to visit China later this year.

China and Iceland resume free trade talks

China and Iceland started three days of talks in Beijing on Jan 22 on a proposed free trade agreement, the Ministry of Commerce said. The talks followed earlier meetings and were to cover issues related to trade in goods and services, investment and other areas.

Bilateral trade rose 21.1 percent to $180 million last year compared with the year before. Chinese exports rose 24.6 percent to $95.39 million, and imports rose 17.7 percent to $88.96 million.

Vehicle exports top 1 million for first time

China's vehicle exports topped 1 million for the first time last year.

The China Association of Automobile Manufacturers said the country delivered 1,056,100 vehicles abroad, nearly 30 percent more than in 2011.

In 2011 the growth in exports was much bigger, 50 percent, but both figures compare favorably with the rise in domestic sales last year, 4.3 percent. Cars accounted for 45 percent of the exports and trucks 27.9 percent, the association said.

China's vehicle exports have risen an average of 46.3 percent each year since 2001, when 19,000 vehicles were exported.

Economy

Bank predicts growth of 8.5%

Economic growth in China will be about 8.5 percent this year, with domestic demand being the driving force for expansion, a Bank of Communication report predicts.

Demand from Europe and the United States will bottom out and boost Chinese trade, it says. Exports are tipped to rise about 8.5 percent this year compared with last year's figure and imports will climb 10 percent, the report says.

Domestic demand will continue to replace investment as the leading engine for economic growth, it says.

Yuan bounces back as a currency of choice

An index measuring the yuan's global use rebounded in November on a broad-based pickup in activities and hit a new high of 737 from October's 731, Standard Chartered Bank said on Jan 21.

The increase was supported by the progress of offshore yuan deposits, dim sum bond issuance and trade settlement volumes in the currency, it said.

Growth is expected to continue on the heels of recovering confidence in China's economy and yuan appreciation, the continued global expansion of yuan invoicing, and further policy support, the bank said.

Growth slowdown bites into fiscal revenue

China's tax revenue growth slowed sharply last year because of slowing economic growth and tax breaks, the Ministry of Finance said.

National tax revenue rose 12.8 percent over the year to 11.7 trillion yuan ($1.9 trillion; 1.4 trillion euros), with growth dropping 12.2 percentage points from a year earlier, the ministry said.

It attributed the slowdown to a softening economy, weakening corporate profits, milder inflation and structural tax breaks.

China maintains its competitive edge

Despite rising labor costs and an aging population, China is still regarded as the top destination for manufacturing, and will retain this top spot over the next five years, according to an international survey.

The survey, co-launched by Deloitte Touche Tohmatsu Ltd and the United States Council on Competitiveness, was based on interviews with more than 550 CEOs and senior leaders at manufacturing companies worldwide.

Germany and the US came after China in terms of manufacturing competitiveness. But they will be replaced by India and Brazil over the next five years, according to the survey.

Aviation

New captain at controls of Airbus China

Eric Chen, who was senior vice-president of commercial and external affairs of Airbus China, has become president of Airbus China, the European aircraft builder says.

He will be responsible for Airbus' overall activities in China, including business development, commercial activities, customer services and industrial cooperation.

Laurence Barron, Chen's predecessor, has taken over as CEO and chairman of EADS China, Airbus' parent company.

China Daily-Agencies

(China Daily 01/25/2013 page14)