IN BRIEF

POLICY

China to continue prudent monetary policy

The People's Bank of China (PBOC), or the central bank, said recently it would continue to implement a prudent monetary policy as inflationary pressures remained high.

Although the economy is headed toward the government-set macro control target, the country still faces a complicated economic and financial situation, with fragile global recovery and other uncertainties, said an online statement summarizing a quarterly meeting of the PBOC's monetary policy committee on July 4.

The central bank later raised interest rates by 25 basis points on July 7, the third time this year.

The rate paid on one-year deposits will rise to 3.5 percent and the rate for one-year loans will rise to 6.56 percent.

TRADE

EU may end levy on chemical substance

The European Union (EU) said it may end a tariff on furaldehyde, a chemical substance from China used to make lubricating oils and foundry molds.

The EU said it would review the need for the 16-year-old duty because the price of imports from China has increased.

The levy of 352 euros a metric ton is intended to discourage Chinese exporters from selling the substance in Europe below cost, a practice known as dumping.

RETAIL

Longchamp to expand across the nation

The French luxury brand Longchamp SAS will accelerate its expansion in China to make the country one of its top-three markets in three years, the company's chief executive officer said.

"Our company's business in the first six months in China increased 67 percent over last year, making the nation the fastest-growing market in our global business," said Jean Cassegrain, CEO of Longchamp.

To achieve that goal, Cassegrain said the French family enterprise is considering opening six to 12 stores annually in the next two to three years in China, the world's second biggest market for luxury products.

Tesco, Gome enter strategic cooperation

Tesco PLC, the world's third-largest grocery chain by sales, signed a strategic cooperative agreement with Gome Electrical Appliances Holdings Ltd.

The move signals a further step in the UK retailer's development of shopping malls and underlines its ambition in the Chinese market.

"We have great confidence in China and will invest 53 billion yuan (5.7 billion euros) here, and 23 billion yuan will be from our own funds," said Philip Clark, chief executive officer of Tesco.

In the future, Gome and its related companies will be welcome to open electrical appliance stores in Tesco's "Lifespace" shopping malls.

Gome will give the "Lifespace" malls priorities in its business, including new product launches and promotions.

COMMUNICATIONS

Sony Ericsson, China Mobile to develop 4G

Sony Ericsson Mobile Communications AB will cooperate with China Mobile Holdings Ltd to develop mobile phones that support China's domestic fourth-generation telecommunications technology, Sony Ericsson's global president said.

Bert Nordberg, president and chief executive officer of Sony Ericsson Mobile, said the company hopes to work on the time division long-term evolution (TD-LTE) technology, which is going global.

Operators in Japan, India and the United States have already adopted the technology.

MARKET

IPO volume and sums drop: PwC report

The funds raised in initial public offerings (IPOs) on China's capital market may reach 400 billion yuan (42.71 billion euros) this year, down 16 percent from 2010 because of economic uncertainties both at home and abroad, PricewaterhouseCoopers (PwC) said.

"Despite the decrease in China's IPO market activity in the first six months this year, we believe the momentum remains robust for 2011 due to high confidence in the growth of China's economy and domestic demand," said Jean Sun, a partner at PwC China.

The number of IPOs and amounts raised on the Shanghai and Shenzhen stock exchanges in the first half of 2011 both dropped from the same period last year, according to PwC's report on the IPO market interim review and outlook for 2011.

TAKEOVERS

Nestle's bid for snack firm may win approval

The proposed takeover of Chinese snack and candy maker Hsu Fu Chi International Ltd by Nestle SA is likely to be approved by Chinese regulators, analysts said.

"China's confectionery sector is a fully competitive industry where mergers and acquisitions naturally arise," said Huang Shichuan, a food and beverage industry analyst with Southwest Securities.

The Wall Street Journal reported that Nestle, the world's largest food company by sales, is negotiating to buy Guangdong province-based Hsu Fu Chi, which has a market capitalization of $2.6 billion (1.8 billion euros).

A deal would be one of the biggest foreign takeovers of a Chinese company.

AUTO

European auto

models finding favor

More Chinese customers intend to buy cars from European manufacturers as fewer are considering Japanese and domestic Chinese models, according to a study recently released by JD Power Asia Pacific.

The 2011 survey found that 32 percent of respondents who say they would consider purchasing a car in the next 12 months prefer a European model, up from 25 percent in 2009.

The study showed consideration of buying Japanese models declined to 27 percent from 32 percent in 2009, while the rate for Chinese domestic brands decreased from 26 percent to 20 percent.

The increase in demand for European cars indicates that prospective buyers have positive perceptions about their safety and improvements in engine and transmission technology, the report said.

ENERGY

China tops renewable energy investment

China has become one of the largest investors in renewable energy projects, according to a report released in Frankfurt.

The report is based on a study jointly conducted by the Frankfurt School of Finance and Management, the United Nations Environment Program (UNEP) and Bloomberg New Energy Finance.

This is the first time that developing countries surpassed the developed counterparts in the value of major "green" projects in 2010, according to the report, Global Trends in Renewable Energy Investment 2011.

In 2011, Europe's investments in large-scale projects fell 22 percent to $35.2 billion (24.5 billion euros).