Chinese executives are reducing support for a stronger yuan

Chinese executives are reducing support for a stronger yuan, as U.S. critics easing to weaken the dollar and fueling asset bubbles in emerging market economies.

Shen Wenrong, president of Jiangsu Shagang Group Co., the nation's largest private steelmaker, said China should allow only a "token" recognition while the U.S. is "printing money to fuel inflation." Ma Weihua, executive director of China Merchants Bank Co.., Said the yuan should not go "too fast" and the Federal Reserve should show more restraint after announcing plans to buy 600 billion U.S. dollars of Treasury bonds. Jingjiang Xia, general manager of Topshow Outdoor Products Co., which makes baseball caps with logos of companies, said the government will not compromise growth more rapid exchange earnings.

Calls to limit the appreciation of Chinese executives, which in March supported an end to a two-year dollar link, reflecting the concern of the economic expansion may decrease as the central bank raises interest rates to cool inflation rapidly since 2008. Yuan forward contracts show traders are betting the currency will stop before the visit of Chinese President Hu Jintao to Washington next month and up by 2.1 percent next year.

"We expect the yuan to strengthen, but do not want the overly rapid pace of appreciation," Ma told China Merchants, the sixth largest bank by market value, in an interview on Dec. 17 in Beijing. "The U.S. is not taking responsibility. He called on China to adjust its yuan policy, but everyone is suffering from its measures of flexibility."

Forward Rates

Delivery within a month was trading at 6.6180 per dollar as of 11:41 am in Hong Kong, indicating little change from the spot rate of 6.6229. twelve-month contracts are stronger in 6.4863. Analysts predict that the yuan to appreciate another 5.5 to 6.28 percent in late 2011.

China's central bank allowed the currency to rise to 4.5 percent next year, said Rajeev De Mello, head of Asia investment in Singapore in Western Asset Management Co. The yuan has risen 3.1 percent since June 21, when the government ended a policy of fixing the exchange rate at about 6.83 per dollar to protect exporters during the global financial crisis. Thirty U.S. senators requested that the yuan is "appreciate significantly" before Hu's trip, in a letter on December 6 Chinese Vice Premier Wang Qishan.

'Ritmo faster "

"The sounds of U.S. executives probably did not worry China Chinese currency to appreciate more rapidly," said De Mello at Western Asset, which oversees 469 billion U.S. dollars of funds. "A currency appreciation would be too fast for the local economy as it has already been a lot of adjustment policies in place."

Shen, based in Jiangsu Zhangjiagang Shagang, said the government must balance to maintain export competitiveness and reducing purchasing costs of raw materials. imports of iron ore rose 26 percent last month to the second highest level this year, according to government data.

"China should not walk appreciation," said Shen. "As a major buyer of iron ore, has some benefits. But the benefits are limited."

Topshow

Xia in Yangzhou, Jiangsu, based in Topshow said his company raised prices of their hats by 3 percent to account for the yuan in the second half.

"The yuan's appreciation will be gradual," he said in an interview Dec. 22. "The central government clearly understands that a stronger yuan can do to the economy of China. I hope not risk that."

Executives at companies targeting the Chinese market, including Beijing-based computer maker Lenovo Group Ltd., a Shanghai-based China Eastern Airlines Corp. and China Merchants Bank, said in March that a stronger currency would reduce costs imports, increasing the purchasing power of consumers and promote world trade by currency.

buying dollars to weaken the yuan has boosted China's foreign exchange reserves at 2.65 trillion U.S. dollars and flooded the financial system with yuan. The trade surplus exceeded U.S. $ 20 billion for the fifth time in the sixth month of November as overseas sales rose 35 percent from the previous year, the customs agency said Dec. 10.

'Reality'

"Chinese companies have to face the reality of a kind of yuan to rise as the economy grows rapidly and increase foreign exchange reserves," said Zhang Wei, vice director of China Chamber of International Commerce, an organization run by the government to represent exporters and importers, told reporters on 17 December in Beijing. "They should also receive everything needed for the growing international pressure on China to allow the yuan to appreciate."

The People's Bank of China raised its benchmark rate for one-year deposits by 25 basis points, or 0.25 percentage point, on 25 December at 2.75 percent below the November inflation rate of 5.1 percent. The spread between the savings rate and its equivalent in U.S. came to 197 basis points this week, the most since at least 1996, increasing the attractiveness of holding assets yuan.

The economy grew 9.6 percent in the third quarter last year, after growing 10.3 percent in the second quarter and 11.9 percent in the first.

Vice Finance Minister Zhu Guangyao told reporters in Beijing on November 8 Fed's asset purchases could "shock" of emerging markets by flooding the capital.

Dollar Index

Emerging markets funds have taken action on a record of 92.5 billion U.S. dollars and bond mutual funds in developing economies the income of 52.5 billion U.S. dollars this year, EPFR Global, a research firm Cambridge, based in Massachusetts, said last week.

So far, Fed policy has not led to a weaker dollar or faster inflation in the country.

IntercontinentalExchange Inc. 's dollar index, which tracks the greenback against the currencies of six major U.S. trading partners, is up 5 percent from 03 November, when the Fed announced the second round of purchases of debt under its plan of quantitative easing. U.S. consumer prices increased at an annual rate of 1.5 percent in 2011, compared with a rate of 1.6 percent in 2010.

A "stable" evaluation is sufficient to promote the use of yuan in trade and global finance, Hong Weipeng, head of fixed income investments Haitong International Asset Management, said in an interview Dec. 22 in Hong Kong. The unit of China's largest brokerage by assets to establish a fund of 5 billion yuan (754 million U.S. dollars) in August, which invests in bonds renminbi offshore.

Promote stability

"Investors do not want to see the yuan rise 10 percent a month and then go down by 20 percent next year," he said. "In the short term, if global financial markets become more volatile, either due to the debt crisis of the European emerging markets or face higher inflation, then that can slow the yuan's appreciation."

Yuan settlements trade increased 160 percent in the third quarter from three months to 126.5 billion yuan, the central bank said on 2 November.

Sinosteel Corp., the nation's largest iron ore trader, favors those transactions, because of the potential gains in local currency, the president Tianwei Huang said. Ma at the China Merchants Bank said, although the bank is profiting from this business, "too fast" for a finding would be harmful.

"The trend for the yuan to rise is, without doubt, as China's economy has grown rapidly and it is impossible that the country will always maintain as large foreign exchange reserves and trade surplus," he said. "But if the appreciation is very fast, many Chinese companies may go bankrupt."

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India M & A may exceed the record 71 billion U.S. dollars this year of the agreements

India M & A in 2011 may exceed the record 71 billion U.S. dollars this year of the agreements, led by oil and gas, metals and mining companies, according to M & A bankers like Topsy Standard Chartered Plc Mateo .

$ 10,700,000,000 billionaire Sunil Mittal's acquisition of mobile operators in Africa was an almost fourfold increase in acquisitions this year exceeded 2,007 offers from 69 billion.

"Large Indian corporations are going through a growth phase: it is thought that there are plenty of opportunities, they think they have access to capital", 35 years old, Mathew, CEO of M & A for India, said in an interview Dec. 27. The London-based bank rose 13 places to number two among India acquisition advisers this year, its highest level. "They are taking advantage of positive sentiment to carry out long-term strategic transactions," he said.

Companies in Asia-Pacific, including India and China are expected to be more buyers purchasing in 2011 and offers attractive valuations of national unity and global competition .
Foreign firms may guide the Indian pharmaceutical companies and consumers and local companies seeking natural resources, said Bank of America Corp., the No. 3 spot.

'Highly active'

"Hotel output remains highly active, as the international company valuations are still relatively depressed, and Indian companies have access to debt and equity capital", Saurabh Agrawal, director of 41 years of age, banking India's investment in Charlotte, North Carolina-based Bank of America, wrote in an e-mail response to questions on 14 December. "Local and incoming offers will take place."

cross-border deals rose to a record 59.2 billion U.S. dollars in India this year, after New Delhi Mittal Bharti Airtel Ltd. in March agreed to buy assets Zain Africa for $ 10.7 billion. Out of mergers and acquisitions accounted for 74 percent of that volume.

The acquisition spree in India, China and Brazil contrasts with the slowdown in global tenders. Mergers worldwide have declined 46 percent between 2007 and the record. In the U.S., the world's largest market, volumes are 51 percent lower, and levels in Europe have fallen by 59 percent.

Pending deals

Pending jobs in India, including the sale of a controlling stake in Mumbai-based software maker and Patni Computer Systems Ltd. 's Honda Motor Co. held in New Delhi, Hero Honda Motors Ltd. equity firms private and Carlyle Group are bidding to acquire the shares, people familiar with the matter have said.

A group of state enterprises hired Citigroup Inc. last week to prepare a bid for Sydney Ltd., based Riversdale Mining, the fight against a 3.9 billion U.S. dollars (3.9 billion) offer to host London, Rio Tinto Group.

"The funds will be a big focus, with companies from India looking to consolidate its position in oil and gas, metals and mining," Mathew said Standard Chartered. "There will be a particular focus on India's public sector companies seeking oil assets in international and Indian companies looking to acquire the assets of iron ore and coal for their steel operations and power. "

Natural resources and telecommunications will continue to drive mergers and acquisitions, said Frank Hancock, managing director of corporate finance at Barclays Capital in Mumbai. Telecom acquisitions accounted for 26 percent of deals in India this year, while energy companies and mining accounted for another 30 percent.

Rules of Acquisition

A proposed revision of India's M & A rules also may stoke interest in national objectives, Hancock, 50, said in an e-mail Dec. 14. Barclays is ranked No. 4 in acquisitions in India, its highest ever position.

"While border still represent 70 percent of the cake, the balance between input and output will become more uniform," said Hancock. The new regulations "will make it easier for a listed company to be responsible and removed from the list since then."

A panel formed by the capital market regulator in India in July recommended increasing the threshold level of participation that would trigger mandatory open offers to 25 percent from 15 percent. Shareholders who already has more than 25 percent may also offer to buy 10 percent, half of the current requirements.

India Aims

Facilitate the limits of foreign direct investment also strengthens the appetite foreign companies' acquisition targets for India, Sameer Nath, managing director and head of mergers and acquisitions in the local unit of Citigroup, said in an emailed response to December 20 questions. New York, Citigroup is No. 6 among the advisers of purchase in India this year.

"The liberalization of FDI in the context of a sensible way would be positive for all parties," said Nath. Foreign companies may look to India for its telecommunications, healthcare and consumer industries, while local businesses will be overseas oil and gas, metals, mining and technology assets, he said.

Funding remains an important prerequisite for the acquisition in the nation, including bankers, said Nath. Output deals are particularly dependent on funds, Agrawal wrote.

A decline in borrowing costs has allowed Indian firms to substitute cheaper debt financing, putting them in position now to be more aggressive in acquisitions, "said Ganeshan Murugaiyan, managing director and head of investment banking in the local unit of UBS AG. The Swiss bank was ranked No. 7 this year in advising on acquisitions in India.

"The environment of benign debt markets, especially the second half of 2010, has helped many corporations to refinance debt or raise funds at attractive long-term costs," wrote Murugaiyan, 37, Dec. 14 . "Against this background, we expect Indian companies to be more greedy of next year."

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China may need to build more affordable housing next year

China may need to build more affordable housing next year provided 10 million units as the target can not be "sufficient" to meet national demand, according to the International Strategy and Investment Group.

The Government plans to almost double the supply of affordable housing 2011 of 5.8 million units this year, as it introduces more measures to curb property speculation, Prime Minister Wen Jiabao said in a radio program on 26 December.

"During the last decade, a delay of about 20 million homes have to be satisfied," said Donald Straszheim, director of Los Angeles, research in China in the ISI, which ranked first in the categories of macro and Economics survey by Institutional Investor magazine last year.

Increasing the supply of housing is one of the measures China took this year to curb housing prices. Property values up 18 months in November after the government suspended the mortgages for the purchase of a third country and the commitment to accelerate the trials of the property tax. In October, the central bank raised interest rates for the first time in three years and increased borrowing costs again on 25 December.

China also stressed the construction of social housing in its annual economic powerhouse earlier this month that sets out plans for next year, and ordered local governments to set their own targets for these households with approach to the construction of public rental housing.

Major inputs

The country has 3.7 million of the 5.8 million low-cost housing by 2010, said Wen. The government is likely to be completed 75 percent of its goal next year because "demand for commodities, labor, the ability to plan and execute, with the space, coordination of subcontractors and tickets will be significant," said Straszheim.

The increase in China's social housing will boost the nation's economic growth by one percentage point to 0.2 per year, according to Straszheim. "This is important, but not large enough to change the general course of the economy," he said in an emailed response to questions yesterday afternoon.

Only 6 percent of Chinese urban households living in social housing, including low-rent houses and apartments with controlled prices, according to a report from China International Capital Corp. in June. The government offers land that costs less than market value, and developers are forced to sell homes at regulated prices.

China's social housing is a key investment area in the government's five year economic plan, and that bodes well for the cement and machinery, according to Goldman Sachs Group Inc. in November.

$ 71 billion investment

China invested 470 billion yuan ($ 71 billion) in social housing construction this year, representing 60 percent of the budget year, the Ministry of Housing and Urban-Rural Development of 20 September, said a statement. China also attaches a subsidy of 69.2 billion yuan for the construction of these homes this year, the ministry said.

The social housing scheme may add 1.5 percentage points to economic growth in China in 2010 and 2011, Bank of America Corp. 's unit of Merrill Lynch said in a report of 15 December. The brokerage estimates that 5.8 million units, including 3 million new homes and 2.8 million renovated apartments, will cost 700 billion yuan this year. The 10 million next year planned to add another 1.3 billion yuan, he said.

Shanghai plans to 15 million square feet of affordable housing in 2011, up 25 percent this year, support from the city of Housing and Building Management Office, said on 24 December. The port city of Tianjin in northeastern China hopes that 190,000 of these households next year, the state news agency Xinhua reported on 27 December.

China's building boom continues "without ceasing" and has even increased since the government enacted policies to cool speculation, Jim Chanos, the hedge fund manager who predicted that the market may crash after 2010, said an interview Television earlier this month. Many of the policies in China have been designed to be "skirt", she said, and reiterated its view that China is in a "treadmill to hell."

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Brazil raised its tariffs on toy imports from China

Brazil raised its tariffs on toy imports from China in a bid to help the South American country, manufacturers of administrative officers affected by an increase of 37 percent of the real against the yuan over the past two years.

Tariffs on 14 types of toys ranging from dolls and puzzles for tricycles and electric train sets will increase to 35 percent from 20 percent until late 2011, the Chamber of Foreign Trade said in an emailed statement yesterday .

The chamber said it was acting at the request of toy manufacturers to help Brazil, Äúfight, AU increased imports, 90 percent of whom come from China. The higher tariffs affect goods whose imports totaled 290 million U.S. dollars between January and November this year, according to the Ministry of Commerce.

China, the Ministry of Commerce AM "No, AOT respond to a faxed request for phone calls and comments were not a spokesman, TWA said.

Brazilian imports of Chinese products in the 12 months to August increased 37 percent to $ 21,400,000,000, of $ 15 billion throughout 2009, according to a study published this month by Brazil, the AM state development bank. The increase in imports from China, driven by the yuan, the rate of competitive exchange administrative officers, threatening to displace domestic sales of manufacturers from Brazil and has implications Äúimportant, the AU for the country's industrial development administrative officers, said the bank, known as BNDES.

True, the AM 37 percent gain against the yuan over the past two years is the third best performer among major currencies after the Australian dollar and South African rand. The front of 12 months without delivery suggests traders are betting the yuan will strengthen to 2.2 percent in a year of its current cash value of 6,625 per U.S. dollar.

Toy sales in Brazil will reach 3 billion reais (1.8 billion) this year, 49 percent of which come from products made abroad, according to estimates from Brazil, MA Manufacturers Association toys. In 2009, imported toys accounted for 46.8 percent of 2.7 billion reais in sales, the group said.

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Lawson CEO plans to open about 10,000 stores in China in 2020 "drinks, food and magazines"

Lawson CEO Takeshi Niinami Inc. plans to open about 10,000 stores in China in 2020, selling drinks, food and magazines. To remove it, the Tokyo-based executive is packing its bags from Shanghai.

As the second largest Japanese convenience store operator plans to boost sales outlets in more than 30 times, Niinami, 51 from China, will spend a month in the country since May and in less than a year, said a press conference in Tokyo on 20 December. Lawson is also training to recruits of China in Japan to work as managers of the stores in their country of origin, where the company lags behind rival Seven & I Holdings Co. and FamilyMart Co.

"To get an idea of daily life in China and to take risks, I have to live there a couple of months," said Niinami. "Standing all time in Japan, which tend to focus only on downside risks."

Niinami plans highlight how Japanese companies have China may overtake Japan as second largest economy in the world this year as a shrinking and aging of the population is obscured growth prospects in the country. It is also an example of how executives of the nation are trying to overcome the lack of international experience as they expand abroad.

"Move Lawson shows how Japanese companies are trying to globalize," said Tsuyoshi Komori, president of the Tokyo-based consultant for Mercer Japan Ltd. "Spending time and energy that flows demonstrate China's commitment Niinami."

Lawson rose 0.7 percent to 4.035 yen at the end of three hours of negotiations in Tokyo. The shares have fallen 1.6 percent this year, compared with a 1.9 percent drop in the Nikkei 225 Stock Average.

Household expenditure

Lawson operated 318 stores in mainland China since November, according to the website of the company. The nation is Lawson's single market outside Japan, where he had 9,935 points of sale.

The momentum in China is driven in part by a decline in Japanese consumer spending, which fell in 2008 and 2009, according to figures released by the Cabinet Office.

Japan's population is declining from a peak of 127.8 million in 2004 and may hit bottom in less than 90 million in 2055, according to the National Institute of Population and Social Security Research.

In contrast, the number of middle income and wealthy consumers in China, the world's most populous country with more than 1.3 million people, you can almost triple to 415 million dollars in 10 years, Boston Consulting Group Inc. said November.

7-Eleven, FamilyMart

Lawson competitors have surpassed the use of growth in China. Seven & I Holdings, the world's leading convenience retailer operated 708 7-Eleven outlets in mainland China since November, said Minoru Matsumoto, a spokesman for the company. FamilyMart had 492 stores in the country, according to its website.

Lawson opened its first China store in Shanghai in 1996, according to its website. The three companies are based in Tokyo.

"To reach a goal of 10,000 stores in 2020, no single example of leadership of the CEO, but also the logistics and human resources will be needed," says Naozumi Nishimura, TIW Inc. analyst in Tokyo with a recommendation "neutral" rating on the shares of Lawson. "I'll be paying attention to the rapidly expanding and how fast to turn a profit from it."

Lawson's growth in China has been delayed by lack of human resources, Niinami said in an interview in April. An initial effort to send their Chinese employees to Japan for training proved to be too long, he said. Changing its strategy, the company began hiring and training of Chinese graduates of Japanese universities.

"The new system started three or four years, and now I think we have the resources to accelerate our business abroad," said Niinami in April.

International Experience

cross-border training and experience is also a challenge level management in Japanese companies. Japan ranked 49th among 58 countries this year on international experience for senior managers, according to the World Competitiveness Yearbook 2010 published by the IMD business school in Switzerland International.

The number of Japanese living in China almost tripled in one decade to 127,282 in October 2009, according to Japanese Foreign Ministry. Shanghai is home to 48,255, according to the ministry.

Niinami international experience includes business start trading Chinese sugar Mitsubishi Corp., a trading company based in Tokyo, said in an interview with LA 21, a monthly magazine in 2008. He is also a graduate of Harvard Business School.

He began his career with Mitsubishi, the largest shareholder in Lawson, in 1981 and became president of convenience store operator in 2002. In 2005 he was appointed CEO of Lawson.

China Gains

Under Niinami, Lawson's operating profit has increased in the last seven consecutive fiscal years. The company expects net income in the 12 months ending in February could rise to 22 billion yen (266 million) 12,600,000,000 yen last fiscal year, while revenues may fall to 430 million yen 467 200 000 000 JPY.

In China, operating profit was at a level of balance last fiscal year, according to the website of the company.

Niinami plans to send a team of officials, including company directors, in China ahead of his own arrival, said Dec. 20.

The director general is also improving speaking skills of China, said Song Wenzhou, founder of the Tokyo-based Softbrain Co. and a strategic advisor to Lawson in China.

"These days, when Mr. Niinami called me, speaking Chinese with pronunciation as well be confused with China", the song, a native of China, said in an interview Dec. 17.

After working in China may be increasingly seen as a qualification for senior executive positions in Japanese companies, as well as having served in the U.S. was a prerequisite for some, said Song.

Niinami, speaking at the conference of December 20, made the same suggestion.

"I will send the best people in our company" China said. "If they succeed, they may be in line for my job."

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