Alliance Boots, the owner of Europe's largest pharmacy chain, said on Sunday it will buy a 12 percent stake in China's Nanjing Pharmaceutical Co Ltd for about 56 million pounds ($91 million).

The deal will make Alliance Boots the second-largest shareholder in Nanjing Pharmaceutical with board and operational management representation.

Nanjing Pharmaceutical, which is listed on the Shanghai Stock Exchange, is the fifth-largest pharmaceutical wholesaler in China with sales of about 2 billion pounds in 2011.

The company has distribution centers in 12 cities across eight provinces and one autonomous region. Its largest shareholder is Nanjing Pharmaceutical Group Ltd.

Alliance Boots first entered the mainland pharmaceutical distribution market in 2008 through a joint venture with Guangzhou Pharmaceuticals Corp.

India may launch solar panel anti-dumping probe

India may launch an anti-dumping investigation against solar panels made in China, after the United States and Europe launched similar probes, Guangzhou Daily reported on Monday.

The Indian anti-dumping authority said that it has received an application from local companies, asking them to start investigating solar panels made in China, Malaysia and the US, the newspaper said.

About 90 percent of the solar panels made in China are for export. Europe and the US are the major destinations.

The solar industry in China is struggling because of sluggish demand and the previous anti-dumping probes.

Li Hui, a researcher with Essence Securities, said that if India decides to launch an anti-dumping probe, it will have a limited effect on Chinese companies because India is not a major market.

Barclays cuts China GDP growth forecast

Barclays cut its forecast on China's GDP growth to 7.5 percent this year from its original 7.9 percent estimate because of the weak August data, the investment bank said in a research note on Monday.

The lackluster August data confirmed that China's growth momentum remains weak. The bank also cut its GDP growth forecast to 7.6 percent, from 8.4 percent, in 2013.

"The current growth slowdown is a combination of both structural and cyclical changes, and we think 7 to 8 percent growth may become the new 'normal'," said Chang Jian, an economist with the bank.

The bank also said that due to the government's recent measures to boost the economy, including the infrastructure projects approved by the National Development and Reform Commission, and the recent modest improvement in credit, China's economic growth is likely to stabilize in the coming quarters.

"We think these measures should cap the growth deceleration and help China achieve an above 7 percent growth in the coming quarters," the research note said.

The bank is forecasting a growth of 7.3 percent in the third quarter and 7.2 percent in the fourth quarter.

Ito Yokado discussing temporary store closures

Leading Japanese retailer Ito Yokado, part of Seven i Holdings Co Ltd, is in discussions over whether it will close its operations in Beijing on Tuesday, a memorial day marking Japan's wartime occupation of parts of China.

Cheng Ning, director of public affairs of Beijing Huatang Ito Yokado Ltd, said it has received orders from its headquarters in Japan to ensure the safety of its customers, employees and property in China.

The local government in Beijing has also advised the company to enhance its security and food safety.

Cheng said he still waiting orders from the company's management on whether to continue operations on such a sensitive date.

In recent days, some of Ito Yokado stores in Beijing have closed two hours earlier to alleviate the impact of the ongoing activities targeting Japanese businesses that have erupted in many cities in China.

As a result, the businesses have been affected by the shorter hours.

There are eight Ito Yokada stores in Beijing and five in Chengdu, Sichuan province. Last year, the eight outlets in Beijing had revenues of 2.7 billion yuan ($425 million).

Legend Holdings buys famous wine company

Legend Holdings Ltd, the parent of personal-computer giant Lenovo Group Ltd, spent 400 million yuan ($63.32 million) on Saturday to buy Shandong Kongfujia Group, a well-known Chinese wine company.

Kongfujia's management team will not change. Kongfujia Chairman Qiu Zhenxin declined to tell how many stakes they sold.

Legend Holdings has already created a development plan and set of goals for Kongfujia, in which the former will invest in improving the latter's production ability, widening sales channels, optimizing the product structure and establishing brand reputation.

The purchase of Kongfujia Group is Legend Holdings' third acquisition in the liquor sector since the company announced last year its plans to diversify into agricultural production.

Legend Holdings has already bought a 39 percent stake in Hunan Wuling Wine Co, a subsidiary of Luzhou Laojiao Co, a Sichuan-based liquor enterprise in July 2011, and took full control of a liquor company in Chengde, Hebei province, in October.

Legend Holdings' acquisition of liquor companies is expected to encourage industry giants and foreign capital to integrate their own liquor enterprises, experts said.

Rebar in Shanghai declines on slowdown concerns

Steel reinforcement-bar futures in Shanghai dropped on concern that demand for the product used to strengthen concrete will falter as the property market cools amid an economic slowdown in China, the largest steelmaker.

The January-delivery rebar contract closed 0.2 percent lower at 3,554 yuan ($563) a metric ton on the Shanghai Futures Exchange. The contract lost 1.5 percent earlier, the biggest intraday decline since Sept 11. Trading volume of the most-active contract rose to 4.06 million lots from 3.94 million lots on Sept 14. Open interest increased to 1.32 million lots from 1.22 million lots. One lot is equal to 10 tons.

Home sales in China fell 4.7 percent in the week ended Sept 14 from a week earlier, CEBM Group said on Monday, citing data from 58 cities tracked by the Shanghai-based investment advisory company.

Citigroup Inc cut the country's 2013 growth forecast, saying the slowdown will extend into next year. China needs to be cautious with its monetary policies as quantitative easing in the United States will create pressure to control inflation, Xinhua News Agency reported, citing the Industrial Bank Co.

Yuan retreats from four-month high

China's yuan retreated from a four-month high as concern domestic growth is slowing countered optimism the US Federal Reserve's latest stimulus measures will spur fund flows to emerging markets. Interest-rate swaps were steady.

Citigroup Inc cut its 2012 expansion forecast for China to 7.6 percent from 8 percent, according to a research report.

The Dollar Index, which tracks the greenback against major currencies, has fallen 0.7 percent since Thursday, when the Fed announced a third round of asset purchases, a policy known as quantitative easing that boosts the supply of the US currency, to stimulate the world's largest economy.

"While global risk appetite has greatly improved, the sentiment over China's growth hasn't," said Tommy Ong, a Hong Kong-based senior vice-president of treasury and markets at DBS Bank (Hong Kong) Ltd.

"A further weakening in the dollar could lead the yuan to trade below 6.3" toward year-end, he said.

The yuan slipped 0.02 percent to 6.3157 per dollar as of 10:54 am in Shanghai, according to the China Foreign Exchange Trade System. It touched 6.3122 earlier, the strongest level since May.

Joint stock banks urged to strengthen risk controls

China's top banking regulator on Monday urged joint stock banks to watch their bottom lines and be wary of risks while supporting manufacturers and service providers.

The remarks from Shang Fulin, chairman of the China Banking Regulatory Commission, follow a record August in new yuan loans. The comments came at a joint stock bank meeting, according to a statement published on the CBRC's official website.

Shang said commercial lenders must strengthen comprehensive risk management to improve their risk control in a complex environment.

"Take effective measures to identify, measure, cushion, control and resolve risks, to make sure their operation is stable and prudent," Shang said.

Shang's cautionary note comes as Chinese listed banks, particularly smaller ones, reported some degree of asset deterioration in their interim results.

Ping An Bank Co Ltd reported a 51 percent jump in non-performing loans.

Baosteel shareholders likely to support buyback plan

Shareholders in Baoshan Iron and Steel Co Ltd plan to discuss various proposals on Monday, including one calling for the company to buy back 5 billion yuan ($791.1 million) worth of its shares, sources said.

The company plans to buy back 1 billion of its outstanding shares at not more than 5 yuan each, according to a filing to the Shanghai Stock Exchange dated Aug 28.

"There should be no reason why the proposal wouldn't get the green light at the shareholders' meeting," Liu Junqing, a steel industry analyst from Shanxi Securities Co Ltd, was quoted as saying by Xinhuanet.

The same day the steelmaker's plan was announced, the company, commonly known as Baosteel, saw its shares rise by the upper daily limit. From then until the closing of the market on Friday, the stock's price increased by 13.8 percent.

According to the plan, the 1 billion shares that are to be repurchased constitute about 5.7 percent of the Shanghai-listed steelmaker's capital stock, and the purchase is meant to boost Baosteel's stock price amid bearish sentiment in the market for A-shares, which are denominated in renminbi and traded on mainland exchanges.

Japanese automakers face tough times in China

Japanese automakers are facing tough times in China, as ongoing territorial tensions between the two countries start to hurt sales.

"The serious impact we are seeing is far beyond our expectations," said Luo Lei, deputy secretary-general of the China Automobile Dealers Association.

"It will be impossible for struggling Japanese automakers to achieve their full-year sales targets," Luo said.

Protests against Japan over the "nationalization" of the Diaoyu Islands broke out across China over the weekend in what observers described as the largest demonstrations against Japan since 1972. Experts said the protests could continue for days.

Luo added that the current situation might have the "most serious" impact seen so far on well-established Japanese car brands in China, and could be even worse than the lackluster market performance seen in the first half after the earthquake and tsunami that hit Japan last year, and from which the Japanese car companies had just managed to recover.

Though the improved sales performance in the first half allowed Nissan and Toyota to increase their previous sales targets for 2012 by 20 percent, "the demonstrations, with people showing their rage against Japan-made products, will keep Chinese consumers away from the showrooms of Japanese brands," Luo said.

He also suggested that Japanese automakers should close the doors of their 4S stores - centers which provide sales and repair services - for a few days, to avoid unnecessary losses from possible damage caused by the protests.

Output versus emissions improves by 52.3%

The output value of each cubic meter of waste water or gas discharged in China increased by 52.3 percent from last year to 1.60 yuan ($0.25), suggesting the economy has become more efficient, said a report released on Sunday.

The report, compiled by the World Economy Research Center of Beijing Technology and Business University, calculated the ratio of regional nominal GDP to the annual amount of pollutants discharged in 300 cities and provinces in China.

By far, Beijing was the greatest emitter, having an output value of 5.31 yuan for each cubic meter of its discharges.

Lowest in the ranking were the Xinjiang Uygur autonomous region, Ningxia Hui autonomous region and Shanxi province, the average output value per unit was less than 0.2 yuan.

The survey suggested that heavy emissions of industrial fumes have become more common in China since 2007.

The quick development of China's western region has worsened environmental pollution and ecological destruction.

China Daily-Agencies

(China Daily 09/18/2012 page14)