What's news

Food

Losses hang over top liquor firms

China's leading liquor producers continue to feel the effects of the ongoing austerity and anti-corruption campaigns, according to reports showing that first-quarter revenues and profits were hard-hit.

Baijiu maker Shui Jing Fang Group, acquired in 2006 by London-based Diageo, saw a loss of 85 million yuan ($13.7 million) in the first three months of 2014 and is forecast to report a net loss this year.

Its first-quarter results showed the liquor maker's revenue reaching 74 million yuan, down 77 percent from the same period in the prior year. Its 85 million yuan net profit reflected a 175 percent drop.

Last year, the company's revenue fell by 70 percent to 486 million yuan, and it reported a net loss of 154 million yuan.

Mondelez charts new plan

Illinois-based food company Mondelez International Inc is exploring new ways to reach customers in third- and fourth-tier cities in China to combat slowing growth in the market.

Wang Haiyan, Mondelez's Asia Pacific and China biscuit category leader, said the company has expanded to second and third-tier cities in recent years, to venues including hypermarkets as well as local convenience stores and community shops.

"We hope no matter how remote the place is, if there is an option, consumers will find our products," she said.

Despite weak growth in the biscuit or cookie market in the nation last year, which some say was affected by the government's austerity campaign as well as the economic slowdown, Wang says China holds immense potential as a market. 

Retail

Bosideng ends UK contracts

Chinese fashion retailer Bosideng International Holdings Ltd is ending contracts with its UK buying and design teams and shifting some key manufacturing to China.

Three buyers, including a design executive and an assistant based in Bradford, northern England and one designer in London, have been made redundant. The move is part of strategic adjustment, Bosideng China said.

No more collections will be designed from the UK as local Chinese designers will take their place and add more Chinese elements into the following work, according to Bosideng China. They are shifting down clothes' manufacture to their factories in China and keeping other men's apparel categories overseas.

The company's plan of marching into the European market is also being reconsidered, to balance the aims of neither rushing in nor missing major opportunities, Bosideng said.

Value Retail outlet in Suzhou

Value Retail, one of Europe's biggest discount outlet chains, will open its first luxury outlet in Suzhou, Jiangsu province, next month, with another five under discussion and construction.

The outlet chain will boast more than 100 luxury brands in the first phase of the complex starting May 15, with more to come after its grand opening in October.

Though most of the brands in the outlet are ones that are known by Chinese consumers, the company will look to introduce some less-familiar brands also, said Desiree Bollier, CEO of Value Retail.

The merchandise will be sold at a 40 percent to 50 percent discount off regular retail prices, she said.

The chain plans to open its second outlet in Shanghai and to come up with another four in five years' time.  

Technology

Smartphones lift flat-panel sector

China's growing appetite for portable smart devices will accelerate domestic innovation and could shorten the product life cycle across the entire production chain, according to industry insiders.

Flat panel display manufacturers will reap more orders as the global smartphone fever continues to attract Chinese technology companies.

"Surging market demand for high-resolution smartphone screens is lifting the sector, to the point where it's become the biggest vertical segment in the panel manufacturing industry, overtaking television panels," said Bo Lianming, executive director and chief operating officer of home appliance maker TCL Corp.

Banking

ICBC buys majority of Turkish bank

Industrial and Commercial Bank of China Ltd will buy Turkey's Tekstil Bankasi AS to counter a lending slowdown at home that led to its weakest profit growth in almost five years. Net income for the first quarter rose 6.6 percent to 73.3 billion yuan ($11.89 billion), ICBC said. It will buy 76 percent of Tekstil Bankasi from its parent for $316 million.

Materials

Royal DSM banks on China

Royal DSM, the Netherlands-based multinational life sciences and materials sciences company, plans to increase its sales in China from last year's $1.7 billion to $3 billion by 2015, Ivo Lansbergen, president of DSM Engineering Plastics Asia Pacific, said on April 23. The sales increase will be echoed by an effort to complete the Netherlands-based company's $1 billion investment plan in China by 2015, Lansbergen said.

Entertainment

Curbs on foreign TV shows

Tougher regulations on television series produced in the United States may be coming after four shows, including popular comedy The Big Bang Theory, were removed from major online video sites in line with a government order, analysts warned on April 28.

Chinese video websites should learn how to cope with regulatory changes, although this specific development may have a "very limited impact" on profits, they added.

"The industry is poised to see a longer list of banned TV series because the government's grip on the category is obviously tightening," said Su Jie, who specializes in the online video market for research firm Analysys International.

Over the weekend, the State Administration of Press, Publication, Radio, Film and Television told the country's major video sites to pull the shows. The agency didn't provide a specific explanation.

Finance

Chinese bank to sell 6 billion yuan in bonds

China Development Bank Corp will raise as much as 6 billion yuan selling one-year bonds through Industrial and Commercial Bank of China Ltd as part of a trial to expand its financing channels. The notes will be offered on May 5 to individual and non-financial institutional investors, according to a statement on the Chinese government bond clearing house website.

Policy

FTZ to boost raw material trade

Shanghai will allow exchanges for iron ore, metals and energy in its free trade zone as China pushes for more influence in raw material pricing. Baosteel Group Corp and Shanghai Ganglian E-Commerce Holdings Co, owner of China's largest steel researcher Mysteel.com, are among the eight companies that have got permission to set up exchanges in the China (Shanghai) Pilot Free Trade Zone, Shanghai Ganglian board secretary Hu Xiaochun said.

China Daily-Agencies

(China Daily Africa Weekly 05/02/2014 page18)