Finance

Dagong puts Italy ratings on negative watch

Chinese ratings agency Dagong Global Credit Rating Co Ltd has put Italy on

Dagong initially put Italy's sovereign credit ratings for local and foreign currencies at 'A-' with a negative outlook in June 2010.

This recent change was made because of Italy's increasing dependence on the European bond market and the fact that the trend of financing costs will directly affect the country's solvency.

Although the assets of Italian financial institutions that are exposed to the risks of Greece, Ireland and Portugal are small, low profitability, increasing number of non-performing loans and huge demand for financing have led to a weak foundation for Italy's financial system, the report says.

employment

Chinese funds create more jobs in UK

Investors from China created approximately 1,500 jobs in the United Kingdom in the year ending March 31. That's twice the number from the previous year, despite a drop in the number of projects under investment, according to the government body, United Kingdom Trade and Investment (UKTI).

In the period 2010-2011, Chinese companies invested in 59 projects, which provided 1,471 jobs. China was the seventh-largest investor in the UK, one position lower than the previous year, but the number of jobs almost doubled from 760 in the previous year.

"Among the high-growth markets, India and China are still the two principal sources of inward investment by project numbers," UKTI said in a report released on July 11.

Ipo

Novartis considers public listing in China

Swiss drugmaker Novartis AG is considering a possible initial public offering (IPO) in China, joining a growing list of multinationals interested in selling yuan-denominated shares in Shanghai, according to a Reuters report.

Global firms including HSBC, Standard Charterd, Unilever and Coca-Cola Co have already expressed interest in listing on Shanghai's planned international board, which is widely expected to be launched this year.

Novartis is studying the feasibility of a China IPO and has been consulting relevant government agencies, said the sources, who declined to be identified because the information is not public. Novartis spokesman Eric Althoff declined to comment.

Auto

Fiat sees 100 Chinese dealerships by 2012

Fiat Group Automobiles, a unit of Italy's Fiat Spa, plans to expand its dealership network in China to around 100 dealers from 40 by September 2012, a company executive said on July 12.

Fiat Group Automobiles will also launch in China a medium sedan, known as the C-medium, specially designed for the Chinese market in September next year, said Lorenzo Sistino at a press conference in Shanghai to launch the company's Fiat 500.

"Today we have 40 dealers and our target is to have 100 dealers by the launch of the C-medium, by September more or less next year," Sistino said.

Fiat Group Automobiles aims to sell around 140,000 of the medium sedan per year from its launch, around half the company's 300,000 car sales forecast for 2014.

Deals

Philips to acquire Povos Electric

Royal Philips Electronics announced its agreement to acquire Povos Electric Appliance (Shanghai) Co Ltd., a leading kitchen appliance company in China.

The unit, Povos Appliance (Shanghai) Co, will become a wholly owned subsidiary of the Netherlands-based Philips after the deal.

Financial details of the transaction were not disclosed. The transaction, which is subject to confirmatory due diligence and other customary closing conditions, is expected to close in the fourth quarter of 2011.

The acquisition of Povos underlines the importance Philips attaches to building business creation capabilities in growth markets.

Dairy

Olympus leads investment in Huaxia

Asia-focused middle market private equity firm Olympus Capital said on July 12 that it will lead an investor group that includes the European dairy products maker Mueller Milch Management in investing $45 million (32.05 million euros) for a minority stake in Chinese milk producer Huaxia Dairy Farm.

Olympus Capital will invest

$30 million. Mueller Milch Management, the private equity arm of the largest privately-held dairy in Germany, will invest $10 million and previous investors will contribute the additional $5 million.

Bernd Pfister, managing director of Mueller Milch Management said: "China represents one of the most exciting dairy opportunities in the world."

In addition to securing more land and growing its herd, Huaxia hopes to reach milk production of over 10 tons per cow per year compared to the average industry production of 4.8 tons per cow per year.

Corporate

More domestic firms in Fortune 500 list

Sixty-one Chinese companies made the 2011 list of the world's largest 500 companies compiled by US-based Fortune magazine.

That makes China the country with the second most firms on the list, after the US' 133. Coming in third, Japan followed close behind China with 68 enterprises on the list.

The number of Chinese

companies represented an

increase of 15 from last year's list. They posted total revenues of

$2.89 trillion (2.06 trillion euros), or 47.8 percent of China's gross domestic product, and combined profits of $176.1 billion, according to Fortune.

The US companies come from

35 industries, compared with 22 industries for Chinese companies.

Energy

Biomass power output to be increased

The nation will plan to expand its installed generation capacity of biomass power to 13 million kilowatts by the end of 2015, China Business News reported on July 11.

The figure doubled the former goal proposed by the China Electricity Council, and is even higher than the planned installed capacity of solar power, which will grow to 10 million kilowatts by the end of the 12th Five-Year Plan period (2011-2015), according to Liu Tienan, the head of the National Energy Administration, who made these remarks at the national rural energy conference.

China's present installed capacity for biomass power, of which marsh gas generation and garbage incineration are project examples, is about 5.5 million kilowatts.

Policy

Obsolete capacity to be phased out

China will continue to phase out unneeded industrial capacity this year, with 2,255 enterprises closing facilities, while the government fights the worst power shortage in years, a statement on the Ministry of Industry and Information Technology website said on July 11.

Obsolete production capacity in 18 major industrial sectors - including iron, steel, coke, cement, flat glasses, paper making as well as printing and dyeing - will be eliminated, according to the statement.

The ministry statement said that production capacity for 31.22 million tons of iron, 27.94 million tons of steel, 19.75 million tons of coke and 153.27 million tons of cement will be removed by the end of the year as the country continues to reduce pollution, conserve energy and upgrade industry.

China Daily-Agencies