Economic slowdown, railways hold back airlines

Slower economic growth and competition from high-speed railways were a drag on the first-half performance of domestic airlines, though there was wide divergence in the sector, the carriers' interim reports show.

On Monday, China Southern Airlines Co Ltd became the first carrier among the nation's top three to report first-half results.

The Guangzhou-based carrier saw revenue slip 4.2 percent year-on-year to 46 billion yuan ($7.5 billion), while net profit tumbled 32.7 percent to 302 million yuan, the third decline in a row.

In contrast, Beijing-based Air China Ltd, which released its interim report a day later, said net profit rose 7.31 percent to 1.1 billion yuan, ending a two-year decline. Revenue, however, fell 3.58 percent to 45.9 billion yuan.

Both airlines benefited from the yuan's appreciation against the dollar, which yielded foreign-exchange gains of 1.44 billion yuan for China Southern and 1.12 billion yuan for Air China.

Cheaper jet fuel saved money for both, cutting fuel costs for China Southern by 7.6 percent and for Air China by 8.1 percent.

But the shift from the business tax to the value-added tax offset lower fuel costs, pushing up both carriers' overall fuel cost a bit.

According to Li Xiaojin, a professor at the Civil Aviation University of China, China Southern didn't see the returns that had been expected for international flights, and the rising cost of introducing the A380 superjumbo also eroded its profit margin.

Hainan Airlines Co Ltd, the nation's fourth-largest carrier, reported robust profitability. It said on Thursday that revenue grew 3.83 percent to 14.4 billion yuan, with net profit soaring 29.28 percent to 645 million yuan.

Hainan Airlines credited the growth to an enlarged fleet, which expanded to 120 planes from 109, as well as increasing passenger traffic. In the first half, the airline carried 12.46 million passengers, up 13.38 percent.

China Eastern Co Ltd posted 41.48 billion yuan in revenue, up 2.66 percent year-on-year, and 763 million yuan in net profit. But analysts were downbeat about its performance.

"We can tell the Shanghai-based carrier's performance from the published results of Shanghai International Airport Co Ltd," said Sun Hongzhan, an industrial analyst with Minsheng Securities Co Ltd.

Shanghai International Airport, which operates Pudong International Airport and the smaller Hongqiao International Airport, generated 2.47 billion yuan in first-half revenue, up 8.68 percent year-on-year. Net profit rose 18.29 percent to 893 million yuan.

Sun said the profit mainly came from non-core operations, implying the airport company performed badly in the passenger and cargo transport businesses.

"The aviation industry globally has the lowest gross profit, at about 3 percent, among all industries, and China's ongoing economic restructuring means domestic demand will get weaker for airlines," said Sun, adding that the next two to three years will be a severe test for aviation companies that are not well prepared.

Source: By Wang Ying in Shanghai ( China Daily)

Heritage through lenses:Mount Lushan

As a unique mountain, Mount Lushan can be best described with the poem: “How could one tell what Lushan Mountain really looks like when one is in the midst of the mountain all along”. However, a closer look at its history shows the extraordinary relationship it has had with the progress of Chinese civilization. It is safe to say that Lushan is one of the birthplaces of Chinese civilization.


As an isolated mountain, Mount Lushan is bordered to the north by the Yangtze River and to the south by Poyang Lake. The two rivers also contribute to the unique regional climate that features cool summers and warm winters. The long crust evolvement here has created a comprehensive landscape of rivers, hills and lakes; meanwhile, the mysterious clouds and mist have also become prominent landscape features.

As the poem inscription on the Wall of Xilin Temple created by Su Shi reads, “The true face of Lushan is lost to my sight, for it is right in this mountain that I reside.”Built in 384 AD, Donglin Temple is the oldest temple at Mount Lushan and probably the most important as it helped usher in an era of Buddhism in China.

As the poem inscription on the Wall of Xilin Temple created by Su Shi reads, “The true face of Lushan is lost to my sight, for it is right in this mountain that I reside.”Built in 384 AD, Donglin Temple is the oldest temple at Mount Lushan and probably the most important as it helped usher in an era of Buddhism in China.

The work of famous calligraphers can be seen at the White Deer Cave Academy, which ranks frist among other ancient academies in China. Zhu Xi revitalized the academy, making it an important cultural cradle that popularized the Confucian idealist philosophy during the Song and Ming Dynasties and continues to serve as a model of academy-based education to this day.

An overview of Kuling. The town of Kuling is regarded by Hu Shi, one of China's most renowned thinkers, as evidence of Western cultural intrusion into China. As a Western commissioner, Li Deli first developed a villa district in one of Mount Lushan's valleys in the late 19th century as the best architects and planners were invited to participate in this project. Today, its residents remain true to their original lifestyle, serving as living proof of its cultural heritage.

The view of a Christian church on Mount Lushan at night. Western churches converged at Kuling that were built by a Western commissioner. The Christian association and church built in 1897 was later converted into a cinema.

Wu Mansion, built in 1929 by Wu Dingchang, who was then a member of the Kuomintang and a financier, reamins intact to this day.

Meilu, which was once Chiang Kai-shek's summer mansion, is filled with memories of major historical events. Built in 1903 by a British man, the villa was sent to Song Meiling, Chiang's wife, as a present in 1934.
...
Situated in the northern part of Jiangxi province, Mount Lushan is one of China’s most renowned mountains. Lushan National Park, which was inscribed on the World Heritage List in 1996, is a prominent tourist attraction that lures millions of tourists each year.

Apart from its breathtaking natural scenery, Lushan is the birthplace of Chinese landscape poetry, plus, the famous Lushan Plenum represents its role in China’s political evolution. From another angle, Lushan used to be a summer resort for Western missionaries in China, which gave it a reputation for being a place for Western cultural intrusion into China.The heritage that makes up Mount Lushan is so diverse that it is regarded as the national heritage of cultural landscape.

Source: China Daily

5 Unexpected Things to Do in Hong Kong

The iconic Hong Kong skyline is among the most recognizable in the world. As a result, many often equate Hong Kong with teetering monuments of steel and glass. But much in the same way that the Manhattan skyline belies low-lying and culturally diverse neighborhoods, so too does Hong Kong hide numerous unexpected surprises. But unlike New York, Hong Kong’s compact dimensions means natural beauty or bohemian neighborhoods are rarely more than an hour jaunt from the skyscrapers of the city center.

CITY SURFING

The heavily trafficked Victoria Harbour isn’t too clean, but there’s a great big ocean lapping at the shores of Hong Kong and its Outlying Islands. And when the typhoons are roaring near the South China Sea around September, a number of Hong Kong’s bays and inlets funnel the incoming surges into eminently surfable waves. Aptly named Big Wave Bay is the best place to go to catch the clean, consistent waves in the city. A 25-minute minibus ride from Hang Hau MTR station will find you in Sai Kung Country Park. Another brief bus or boat ride will take you to Big Wave Bay, where you can find Surf Hong Kong, a surf school and rental shop that has been outfitting surf-happy city-dwellers for years. If you don’t want to hang ten, they also rent out sea kayaks.

THE NON-URBAN JUNGLE

If they’re not ditching their suits and ties for surfboards and sea kayaks, Hong Kong’s beleaguered breadwinners can often be found donning hiking boots to tackle one of the city’s 1,000-plus hiking trails. In other major cities, you might have to drive for hours to get to a good trail, but Hong Kong’s public transit system puts great walking within easy reach. Follow the Lantau Trail to the 112-foot-tall Tian Tan Buddha and the second highest point in Hong Kong, Lantau Peak. Or dip in and out of the 60-mile MacLehose Trail for incredible countryside and remarkable coastal views. If you don’t feel like going it alone, Great Outdoors Hong Kong provides free guided hikes from November to February each year and OasisTrek provides paid Hong Kong walking and hiking tours year-round.

THE URBAN JUNGLE

Despite the leafy surroundings of Hong Kong, you don’t really expect to hear the hooting of monkeys as you take a shortcut through a park in the middle of the city. But your ears aren’t playing tricks on you if you’ve stumbled into the Hong Kong Zoological and Botanical Gardens. The mini-zoo in the center of the city is easily mistaken for just another green space given the lack of heavy signage, but the free park houses a number of species of birds, mammals, and reptiles. From orangutans to flamingos to pythons, the little green patch in the middle of a chain of skyscrapers hosts an astonishing variety of animals.

A HIPSTER HAVEN

Hong Kong’s bohemian crowd has long since been pushed out of Central by wallet-depleting rents. In recent years, the two ends of the MTR’s Island Line have become home to creative types who have made the Sheung Wan and Chai Wan neighborhoods their own. Look out for galleries, fashion boutiques and trendy bars in these two districts that are a world away from the high-rolling members-only clubs of Central. Sheung Wan’s Yardbird, a Japanese gastropub, is an established favorite. Nearby Boom Gallery & Cafe serves up exhibitions and coffee during the day and turns into a hip watering hole at night. Out in Chai Wan, check out the Asia One Vertical Art Space, and art gallery housed in a stairwell in the Asia Tower.

A SPORTING CHANCE

For a sport-loving continent, Asia rarely sees large-scale sporting events on a regular basis. So when the Rugby Sevens comes to Hong Kong every year in the spring, sports fans of all stripes get a little carried away. Crazy costumes are the norm and heavy partying is an acceptable form of celebrating a win or a loss. The quality of the rugby itself is quite high, too, and the tournament has a long and storied history—it’s been around longer than the Rugby World Cup, in fact.

Source: Fodor by Adam Hodge

China Southern Profit Slumps 84% on Slower Travel, Fuel Prices

China Southern Airlines Co. (1055), Asia’s biggest carrier by passenger numbers, said first-half profit tumbled 84 percent because of an economic slowdown, higher fuel prices and currency fluctuations.

Net income fell to 449 million yuan ($70.6 million) from 2.76 billion yuan a year earlier, the Guangzhou, China-based company said in a filing to Shanghai stock exchange yesterday. That compares with the 570 million yuan median of three analyst estimates compiled by Bloomberg News. Sales rose 13 percent to 48 billion yuan.

The carrier, China’s biggest on domestic routes, filled a smaller percentage of seats in the period than a year earlier as expansion outpaced demand amid China’s cooling growth. The yuan also weakened against the dollar, the first half-year decline since 2009, ending large currency gains that have previously supported Chinese airlines’ earnings.

“Business travel demand in China was dragged by the economic slowdown, which was worse than expected,” said Li Lei, a Beijing-based analyst at China Securities Co. “The carrier’s plans to add more overseas flights will be good in the long term, but may pressure profitability in the short term.”

The airline, China’s only operator of Airbus SAS (EAD) A380s, has also suffered from only flying the superjumbos on domestic routes, he said. The planes will be introduced on the carrier’s Guangzhou-Los Angeles route in October, ending a yearlong wait caused by regulatory delays.

Passenger Yields

The carrier’s passenger yields, a measure of average airfare, increased 3 percent in the first half from a year earlier. Its load factors, or the percentage of seat filled by paying customers, dropped 1.1 percentage points to 79.5 percent, according to an earlier trading update. The carrier flew 41.2 million passengers during the period, 7.2 percent more from a year earlier.

Average domestic fuel prices in China were about 15 percent higher in the first six months than a year earlier, Li said. Jet kerosene prices averaged $127.14 a barrel in Singapore trading in the period, compared with $125.91 a year earlier, according to data compiled by Bloomberg.

The company said in July that it expected first-half net income to slump more than 50 percent. It is due to receive the nation’s first Boeing Co. (BA) 787 later this year.

The airline rose 0.8 percent to HK$3.60 at close of Hong Kong trading yesterday, before the earnings was released. The carrier has fallen 32 percent in the past year, in line with declines for Air China Ltd. and China Eastern Airlines Corp. The benchmark Hang Seng Index has risen 1.1 percent in the period.

The yuan weakened 0.95 percent against the dollar in the first six months, according to the China Foreign Exchange Trade System. Chinese carriers benefit from a stronger yuan as it pares the repatriated value of dollar-denominated debts used to buy planes and fuel overseas.

China Southern has unveiled a plan to challenge Singapore Airlines Ltd (SIA) and Emirates on Australia-Europe routes using its hub in Guangzhou. It started flights to London in June, building on existing services to Paris and Amsterdam. Australian services are due to climb to as many as 110 a week by 2015 from 42.

Budget hotels' expansion 'roomy'

China's budget hotels are subdividing into different sectors during a rapid expansion that has been ongoing around the country since 2009.

"The segment markets will be the direction for China's budget hotel business in the future," said Ye Bingxi, the senior public relations manager at Home Inns and Hotels Management Inc, which is China's largest budget hotel company by the number of properties.

The middle and high-end business hotel is Home Inns' market position. The company has run its high-end brand, Yitel, since 2008. Yitel, where average prices are about 600 to 700 yuan ($110.04) a day, has four hotels in three cities now.

Yitel will have about 50 hotels by 2015, Home Inns said.

Another significant budget hotel company, 7 Days Group Holding Ltd, is also expanding its business to middle-end hotels. Zheng Nanyan, board chairman of the company, said his first middle-range hotel will be launched this year. Some companies are going downmarket while some are expanding into the upper market.

Jinjiang Inn Co, the fourth largest budget hotel company in China by the number of hotels, has a brand name Bestay Hotel Express targeting the lower end of the market with prices from 100 yuan a night. Bestay Hotel
Express has had about 60 hotels around China since 2009.

Smaller players are also trying to find development opportunities from the segment market.

"Pod Inns' position is fashion and the younger group," said Zhu Hui, founder and chief executive officer of Pod Inns.

The company's consumer database also reflects its position.

The main customers are young people aged between 18 and 35 years with 2,000 to 6,000 yuan monthly incomes, he added.

In order to match its position, rooms in Pod's 200 hotels are smaller than other budget hotels. The company pays more attention to other facilities, such as Wi-Fi, Apple Inc computers and Skype to lure its target audience.

Pod's operation was appreciated by venture capitalists with the company receiving $55 million in investment in June. The money will be used for future expansion, Zhu said.

"Pod will expand to more than 500 hotels from its current 200 in the next three years," said Zhu.

Unlike the main industry players, which are working on entering the smaller cities, big cities will be the ambitious small company's main target in the future.

The number of Pod hotels in Beijing will increase from the current 12 to more than 100 by 2015, Zhu said.

While Zhu is working on his ambition for 500 hotels, most of the industry giants can already boast more than 1,000.

Some problems occurred during the big players' rapid expansion and their profits started to shrink from early 2012.

Home Inns suffered a loss in net profits in the first quarter of 2012 because of an operating loss by Motel 168, according to its financial report.

In the second quarter, although the net profit was positive, it still decreased by 85.69 million yuan compared with the same period of 2011.

Home Inns' second quarter financial report shows that the hotel company's occupancy rate decreased by about 5 percentage points in the second quarter of 2012 compared with the same period in 2011.

The company attributed the decline to the lower occupancy rate of the Motel 168 brand, which was purchased by Home Inn in 2011 and is still being integrated.

However, the difficulty of integrating the different products will not stop the budget hotel companies' ambitions to expand.

"We are confident about China's hotel market and Motel 168's performance will improve, after we finish the integration," said Sun Jian, chief executive officer at Home Inns, which plans to increase the number of its hotels from 1,600 and 190,000 rooms to 5,000 hotels in the next decade, a growth rate 2.5 times the speed of the last decade.

"Over the next three to five years, the industry will remain in the fast-expanding stage because budget hotels only account for a very small share in the whole market," said Ye.

7 Days, which is the second largest budget hotel company in China, has similar view on expansion to its rival.

"We will pay more attention to the business development of franchise stores in order to expand faster in the industry," said Lin Yunzhou, CEO of 7 Days.

The company adjusted its 2012 plan from 360 new hotels to 400 in June. In the new plan, the number of new franchises was up to 320 from an original 240 and the plans for directly managed hotels was decreased from 120 to 80.

Franchises are a business model with lower risk, lower investment but higher profit, Lin said.

Source: By Wang Wen (China Daily)

A visit to Chairman Mao's birthplace

Shaoshan residents often arrive early in Mao Zedong Square to stand and bow three times before respectfully circling the bronze statue of the former Chinese leader. In Shaoshan village, where Mao was born and raised, he is still a hero and a big part of locals' lives.

"The older villagers still have a deep affection for Chairman Mao," explains Zhou Shengen, 40, who works as a security guard in the square.

For instance, Mao Youlian, 88, is retired but still wakes up at 5:40 am. After washing his face and hands he dresses in formal clothes, with long sleeves - even in summer - and joins others in their tributes to Mao, in the square.

"Many of my neighbors do the same," explains Mao Youlian, who often drops by the former residence of the former leader, which is not far away.

"It's an enjoyable walk for old people like me. We have clean air, a nice environment, and resting places along the way. And more importantly, we can pay our respects to Chairman Mao."

In Shaoshan, nearly every family has Mao's picture or a statue of him in their living room. The streetlights are shaped like shining stars, a common icon in Mao's era.

It has been a unique tradition in Shaoshan for young couples to hold weddings and take their oaths before Mao's bronze statue in the square. Families celebrating the Lunar New Year wish for good fortune before the statue, too.

Villagers have many special ways to remember the late leader, a fellow villager who makes them all proud.

For Zhou, the most exciting event is the annual celebration of Mao's birthday in the square.

On this day, all the villagers will treat themselves and thousands of tourists to a free meal of noodles. Noodles are a traditional food to celebrate birthdays, as people believe long noodles stand for longevity.

The crowds pay tribute to the "Great Helmsman" by leaving behind bouquets at the bronze statue and singing The East is Red.

Some villagers will take along a bowl of pork braised with brown sauce, a favorite dish of Mao.

For Zhou, the work of guarding Mao's bronze statue suits him well. He even gave up a job with a higher salary in 2011.

"But I wish I was born a few decades earlier, so that I would be able to guard the real Chairman Mao when he returned to Shaoshan," Zhou says.

Stories about the former leader were learned at school and from his father, who used to be a soldier. In addition, Zhou loves reading books about Mao during his free time.

"I'm so grateful that Chairman Mao and other revolutionary forerunners made great sacrifices for our nation and gave us our happy lives today," he says.

In his opinion, the offerings and bows of visitors before the statue have nothing to do with superstition but are a traditional way of remembering Mao's merits and achievements.

"He will be an example not only for me, but all future generations in my family," says Mao Anping, who is a nephew of the late chairman and lives in an old house in the village after retiring from the tourist administration bureau several years ago.

Mao Anping says the late chairman never pursued selfish interest for his family or his home village during his lifetime. Thus he has upheld the chairman's principles of unselfishness himself.

"People will not respect you simply because you are a relative of Chairman Mao, they only respect you for what you have done," he says, adding that he won't allow organizations to use Mao's fame to their advantage.

While local residents firmly uphold a culture of praise for the former leader, they have had to keep up with the times.


Village leader Mao Yushi still remembers how difficult it was to change villagers' minds in the 1980s when local authorities decided to boost tourism.

He remembers an elderly villager felt so frustrated at stopping people from running businesses that he cried bitterly in front of a portrait of Mao Zedong.

"They argued that opening private businesses was against socialism and would bring shame to Chairman Mao," the village head explains.

He later went to villagers' houses to talk them into emancipating themselves from old shackles and embrace non-public sectors of the economy.

The situation changed gradually. Now almost all of the 450 households earn a decent income running restaurants or inns, or vending souvenirs like Mao badges or statues. Many locals have linked the name of their businesses with the late chairman.

"No matter how rich the villagers get, Chairman Mao's spirit will always be our biggest source of wealth.

We won't stop passing down his stories and spirit to future generations in Shaoshan," says Mao Yushi, the village head.

Source: By Liu Xiangrui (China Daily)

Beijing tourist numbers down 13.9% in the first half of the year

Beijing received 13.9% fewer overseas tourists in the January-July period compared with a year ago as a slow global economy took its toll on tourism, new figures showed.

Overseas visitors amounted to 2.51 million in the first seven months of the year, the local statistics bureau said on Saturday.

Overall, the city hosted 2.17 million foreign visitors, down 14.7%. Meanwhile, visitors from Hong Kong, Taiwan and Macao also declined by 9.1% to 347,000, the bureau said in a statement.

Of the major sources, tourists from the United States fell by 3.6% year on year to 431,000. The numbers from South Korea fell by 19.9% to 215,000, while those from Japan fell by 53.7% to 136,000 in the wake of deterioration in bilateral relations.

Source: Want China Times

Air China Profit Climbs on Yuan Gains, Income From Cathay Stake

Air China Ltd. (601111), the nation’s biggest carrier by market value, said first-half profit rose 10 percent as currency gains from a stronger yuan and income from its stake in Cathay Pacific Airways Ltd. (293) helped offset lower fares.

Net income increased to 1.14 billion yuan ($187 million) from 1.04 billion yuan a year earlier, the carrier said in a Shanghai stock exchange filing today, citing international accounting standards. That exceeded the 1.02 billion-yuan average estimate of five analysts compiled by Bloomberg.

Currency gains also helped China Southern Airlines Co. prop up its first-half profit as a stronger yuan helps Chinese carriers pare the repatriated value of dollar-denominated debts. Air China and rivals are offering discounted fares as they contend with the nation’s economic slowdown and intensified competition from bullet trains.

Air China’s sales fell 3.6 percent from a year earlier to 45.9 billion yuan. It carried 37.5 million passengers in the period, 7.8 percent more than a year earlier, and filled 81.1 percent of seats.

The carrier had 1.12 billion yuan of foreign exchange gains, compared with a loss of 341 million yuan a year earlier, after yuan appreciated 1.5 percent against the U.S. dollar in the period. It also booked 44 million yuan of gains from its about 30 percent stake in Cathay after the Hong Kong carrier posted a first-half profit.

Shares of Air China rose 0.2 percent to close at HK$5.15 in Hong Kong trading before the earnings announcement. The stock has lost 21 percent this year, compared with a 3.45 percent drop in the benchmark Hang Seng Index. (HSI)

Air China’s passenger yields, a measure of average ticket price, fell 13 percent to 0.60 yuan, according to the statement. China Southern’s yield also declined.

China Southern, Asia’s biggest carrier by traffic, yesterday posted a first-half profit as gains from the yuan’s appreciation helped mask an operating loss. Still, the Guangzhou-based company’s profit missed estimates and was the worst in three years.

The yuan was the best performer in 24 emerging market currencies tracked by Bloomberg in the first half.

Source: Bloomberg News By Jasmine Wang | Photo: CNN

China Southern Posts Profit as Yuan Masks Operating Loss

China Southern Airlines Co. (1055), Asia’s biggest carrier by traffic, posted a first-half profit as gains from the yuan’s appreciation helped mask an operating loss caused by competition with bullet trains. The shares dropped.

The airline reaped a foreign-exchange gain of 1.5 billion yuan ($245 million) in the six months through June. The Guangzhou-based company’s profit missed estimates and was the worst in three years.

The earnings are a pointer to how the strengthening currency may help prop results at China Eastern Airlines (670) Corp. and Air China Ltd. (601111), both due to report this week. China Southern -- the only national carrier to fly an Airbus SAS superjumbo and a Boeing Co. Dreamliner -- is also discounting tickets as high-speed trains offer competition and President Xi Jinping discourages officials from taking overseas trips.

“The operating loss shows its fundamental airline business is weak,” said Will Horton, an analyst at CAPA Centre for Aviation. “Foreign exchange is hugely picking the airline’s net performance up, but this can be a volatile factor. Over the long term, you need a steady operating business to accommodate the infamous volatility aviation brings.”

China Southern shares fell 3.8 percent, the most in more than a week, to close at HK$2.81 in Hong Kong. Air China (753), reporting later today, rose 0.2 percent and China Eastern advanced 0.4 percent.

Best Performer

Net income in the six months ended in June fell 19 percent to 344 million yuan, China Southern said in a filing to the Hong Kong stock exchange yesterday. That lagged behind the 516 million-yuan median profit estimate of five analysts surveyed by Bloomberg News. The operating loss was 114 million yuan.

Chinese airlines “faced many challenges from economy, politics and high-speed rail competition,” Citigroup Inc. analyst Vivian Tao said in a report today.

China Southern generated the foreign exchange gain in the first half as the yuan was the best performer against the U.S. dollar among 24 emerging market currencies tracked by Bloomberg. A stronger local currency helps Chinese airlines pare the repatriated value of dollar-denominated debts at a time when they contend with cooling Chinese growth and overcapacity.

High-Speed Trains

“Having been influenced by domestic and international economic conditions, and with the emerging unfavorable factors including slowing-down market demand, rapidly increasing capacity and high-speed rail, the competition in the domestic market is fiercer,” China Southern said in its statement. This “put the company’s operation under greater pressure.”

China opened the world’s longest high-speed rail line at the end of last year between Beijing in the north and Guangzhou in the south. The service cuts train- travel time between the two cities to eight hours from almost a day.

China Southern had a currency loss of 314 million yuan a year earlier, according to its statement. The yuan gained 1.5 percent against the U.S. dollar in the first half.

Passenger yields, a measure of average ticket price, fell 11 percent in the first half, the worst decline in four years. China Southern carried 43.8 million passengers, 6.3 percent more than a year earlier, while it expanded seat capacity by 9.3 percent, according to the statement.

The airline plans to deploy its Airbus A380s on Guangzhou-Sydney route in October. The carrier hasn’t won the right to fly the plane on overseas routes from the nation’s capital Beijing even after receiving its first superjumbo about two years ago. The airline has been mostly using its five A380s for domestic services or on the Guangzhou-Los Angeles route.

Source: Bloomberg News By Jasmine Wang

Fisherman in China

A fishman catches fish on the Hengjiang River in Huangshan City, Anhui Province, Aug. 23, 2013.
Source: Xinhua

China Southern Earnings: Profit Drops 19%

China Southern Airlines Co. kicked off earnings reports for Chinese airlines with a 19% decline in first-half profit, signaling trouble for the country's carriers as slowing economic growth curtails demand.

China Southern has the largest domestic market presence of the three big state-owned carriers, leaving it the most vulnerable to declining demand. A frugality campaign spearheaded by Chinese President Xi Jinping has weighed on sales of first- and business-class services, analysts said.

"The carrier's outlook will remain challenging and there isn't a quick fix," said Eric Lin, Asia transportation analyst at UBS Securities. "The carrier's profitability in the second half will continue to be hurt by China's slowing economic growth, intensifying domestic competition, as well as an increase in capacity that has put pressure on domestic airfares."

China Southern, the country's largest airline by fleet size, said Monday that its net profit dropped to 344 million Chinese yuan ($56.2 million) from 424 million yuan a year earlier. Analysts had forecast a profit of 405 million yuan for the latest half.

China Southern booked a foreign-exchange gain of 1.52 billion yuan, reversing a 314 million yuan loss a year earlier, when the yuan fell nearly 1% against the dollar. The Chinese currency gained 1.6% against the dollar in the first half, adding to a 2% gain in the second half of last year. Mr. Lin said foreign-exchange gains would help cushion Chinese carriers' earnings as demand weakens.

China Southern notched a 114 million yuan operating loss, compared with an operating profit of 1.77 billion yuan a year earlier.

Its number of passengers rose 6.3% to 43.8 million, in contrast to the double-digit growth that used to be common for Chinese carriers. The proportion of seats filled on each flight barely rose, to 80%.

"Many Chinese state enterprises are cutting their travel expenses, putting pressure on airfares and demand for front-end cabins," said Bonnie Chan, an analyst at Macquarie.

To mitigate weaker demand, China Southern is seeking to deploy more fuel-efficient planes to fly long distance. An airline executive last week said the carrier plans to fly the Airbus A380 superjumbo on China Southern's twice-daily Guangzhou-Sydney route beginning late October.

The Guangzhou-based carrier is the first of the three major state carriers to report first-half results. Air China Ltd.'s earnings release is slated for Tuesday, and China Eastern Airlines Corp. is expected to report on Friday. 

Source: Wall Street Journal by Joanne Chiu | Photo: Reuters 

Cathay Pacific Says Jetstar Entry to Hurt Hong Kong Aviation

Cathay Pacific Airways Ltd. (293), seeking to bounce back from its lowest profit in at least 15 years, said allowing foreign airlines to share Hong Kong’s traffic rights would damage the city’s economy as a Qantas Airways Ltd. (QAN) venture seeks to start a budget carrier.

Cathay will respond to the government within two weeks on an application by Jetstar Hong Kong to operate out of the city, the airline said in an e-mailed statement. The proposal of the new carrier, part owned by Qantas and China Eastern Airlines Corp. (670), was published in the local government gazette.

About half of Hong Kong’s traffic is controlled by Cathay and Asia’s biggest international carrier is seeking to defend that dominance while China’s economic growth slows. Jetstar Hong Kong in June sold a stake to a company founded by gambling tycoon Stanley Ho in a bid to win an operating license in the former British colony, where no budget airline has a base.

“Expecting Cathay to support Jetstar would be like turkeys voting for Christmas,” said Timothy Ross, a Singapore-based analyst at Credit Suisse Group AG. “In such a highly competitive industry as the airline sector, incumbents do their best to eliminate potential competition as early as possible.”

Transport Bureau

Hong Kong’s Transport and Housing Bureau is currently reviewing the regime for designation of local carriers and expects to complete the process “in the next few months,” the authority said in an e-mailed statement today. The Bureau said in June it won’t process any application to start airlines in the city pending the completion of the review.

Under the current system, an applicant must seek an air operator’s certificate and an air transport license as well as the designation as a Hong Kong carrier, according to the Bureau’s statement. Jetstar Hong Kong’s application for the license was published on the gazette Aug. 23.

“Jetstar Hong Kong is a carrier that is a franchise of and controlled by Jetstar Australia and its parent, Qantas Airways,” Cathay said. Putting some of Hong Kong’s air-traffic rights “into the hands of a carrier that is controlled by a foreign airline would also be very damaging to the local aviation industry and the Hong Kong economy.”

According to Hong Kong’s basic law, the local government has the authority to issue licenses to airlines incorporated in Hong Kong and with the city as its principal place of business.

“Whilst we don’t take anything for granted, we are confident that Jetstar Hong Kong will meet all requirements including principal place of business,” Jetstar said in an e-mailed statement. “Vast majority of the future direct 600 staff members will be employed locally.”

Marque Carrier

Cathay this month reported first-half profit that missed analyst estimates. The airline also named Ivan Chu as its next chief Executive. Chu, who has worked at Cathay for 29 years and has been chief operating officer since March 2011, will take over after annual results are announced in March.

Shares of Cathay fell 0.3 percent to close at HK$13.98 in Hong Kong. The stock has fallen 1.7 percent this year, compared with a 2.9 percent decline for the benchmark Hang Seng Index.

In June, Jetstar Hong Kong sold a 33.3 percent stake to Shun Tak Holdings (242), a company founded by Ho. Qantas and China Eastern Airlines hold 33.3 percent each of the proposed carrier. The venture also named Pansy Ho, managing director of Shun Tak and a daughter of Stanley Ho, as its chairman last week.

Jetstar Hong Kong said in June that it is “confident” of getting approvals before the end of this year.

No budget carrier has a hub at Hong Kong Airport. Oasis Hong Kong Airlines Ltd., which operated budget long-haul flights, collapsed in 2008 after racking up losses of about HK$1 billion ($129 million) in less than two years.

Source: Bloomberg News By Jasmine Wang

Riding 'The Dragon's Back:' 7 inspiring China train journeys

Flying's fine if you're in a hurry, but nothing beats China’s train system for a slow, relaxing and down-to-the-earth journey through the country that's practically a continent in itself.

Approximately 100,000 kilometers of railways form the dragon nation's back, connecting some of China’s best nature, culture and landscapes.

Here are seven China train rides you won't want to fall asleep on.

Beijing-Lhasa, Tibet

Renowned as the highest railway in the world, the “Sky Road” (its nickname in Chinese) climbs to a light-headed 5,000 meters. Much of the journey is at an altitude of more than 4,000 meters.

A mind-boggling number of bridges dot this magnificent train line -- 675 in total, spanning ravines and fast-flowing rivers; the route also passes the Hoh Xili Nature Reserve, which is known in China as a "death region" for its harsh climate.

Headaches from the high altitude pale into insignificance beside scenes of wide open plains, nomadic herders with their animals, the reaches of the Tanggula Pass and exotic towns such as Golmud (格尔木) in Qinghai.

This plateau train line is one of China's modern-day engineering miracles, especially as sections of the track had to be laid over the permafrost.

Distance: 4,064 kilometers
Time: 47 hours 28 minutes
Price: Around RMB 1,189 (US$186, soft sleeper), RMB 723-766 (hard sleeper), RMB 363 (hard seat)

Urumqi-Kashgar, Xinjiang Uyghur Autonomous Region

This train route into China’s western desert region is a trip into its medieval past. Uyghur towns along the way formed part of the famed Silk Road.

The ride meanders through remote desert country with striking views of the snow-capped Tian Shan mountain range and the red-sandstoned Flaming Mountains in Turpan.

It’s hard to believe you’re still in China -- the people, bazaars, curling Uyghur script, minarets and food seem to owe more to Istanbul than Beijing.

To maximize the -- very pleasurable -- culture shock, time the journey for Kashgar’s Sunday Market which is known for its abundance of exotic foods and goods and babble of Central Asian lingos.

This is the most westerly train journey in China.

Distance: 1,588 kilometers
Time: 25-32 hours (depending on train speed)
Price: RMB 306-529 (soft sleeper), RMB 170-345 (hard sleeper), RMB 78-191 (hard seat)

Shanghai-Beijing high-speed railway

Sleek bullet trains hurtle between China’s two largest metropolises at speeds of more than 250 kph. The trip is a blurry but comfortable experience lasting less than five hours.

Despite the population density on the east coast, the train track was built in a straight line and steers clear of mass development.

The scenery isn’t as incredible as along the route to Lhasa or Xinjiang, but the thing to admire here is China’s ability to develop modern infrastructure.

"[This is] China at its fastest and its best," says 30-year-old Swiss-Chinese train buff David Feng (冯琰), who blogs and hosts radio shows about train travel in China.

"My best memories are the greener-than-green scenery of Anhui," he continues, noting the fields were still "resilient green" even in November.

Some of the trains' notable features include seats which can be fully converted into a two-meter-long bed in business class, fold-out TV sets and a free power socket for every passenger.

Passenger numbers are growing on the line as the nouveau riche are spreading their wings.

Slower trains still take this route, however they take up to 20 hours.

Distance: 1,318 kilometers (high-speed rail)
Time: 4 hours 48 minutes
Price: RMB 1,750 (business class), RMB 650-935 (first-class seat), RMB 410-555 (second-class seat)

Beijing-Ulaanbaatar, Mongolia

Acting like a feeder to the Trans-Siberian Railway, this epic journey provides incredibly scenic  views of sheep herds and green fields.

Passengers can see the Great Wall giving way to brick houses and sandy towns near the border, before crossing the dry undulating reaches of the Gobi desert.

The train uses Chinese rolling stock -- but at the border the bogies need to be changed to the Russian gauge.

Each coach is jacked up so the wheels can be replaced before they are lowered back onto the tracks -- an interesting process but it can take several hours, together with customs and passport checks.

After this, the view out of the window is sand stretching out in all directions like an ocean.

Two-humped Bactrian camels and the odd sand-blasted frontier town are the only things to keep the train company until it nears ger settlements outside Ulaanbaatar.

Distance: 1,357 kilometers
Time: 33 hours or 29 hours 35 minutes
Price: Around RMB 2,220 (deluxe carriage), RMB 2,056 (soft sleeper), around RMB 1,450 (hard sleeper)

Nanning-Guilin, Guangxi

Winding through China’s dramatic karst mountains, this train ride is one of China’s most scenic.

Even the Chinese think so and have called Guilin’s scenery “the best under heaven.”

The river views, the gnarled rocky hills, and the verdant paddy fields make for an exceptional introduction to a region which begs for further exploration off the train.

An exciting extension to the journey is to continue from Nanning to Kunming (828 kilometers) through Yunnan’s beautiful southern mountain ranges.

Nonstop services are possible but in order to make the most of the views, break the journey and take the day trains.

Distance: 437 kilometers
Time: 5 hours 30 minutes-8 hours (direct service)
Price: RMB 176-183 (soft sleeper), RMB 116-123 (hard sleeper), RMB 65 (hard seat)

Xi’an, Shaanxi-Chengdu, Sichuan

This trip links two of China's most famous tourist draws -- the terracotta warriors and the panda reserve -- through farm land in Sichuan’s fertile river valleys.

Northeast Sichuan is relatively hilly. The border with Shaanxi features dramatic escarpments.

A good place to view the increasingly mountainous terrain is at Jiangyou (江油) on the Fu River and Guangyuan (广元) just south of the Shaanxi border on the Jialing River.

The other highlight of this journey is the rivers. The train line never seems far from water, obviously utilizing the river valleys to crisscross the rugged terrain.

"Lose yourself in tunnels and bridges and watch for wider-than-reality rivers," says Feng, who has clocked in more than 65,000 kilometers traveling around 20 Chinese provinces in the past five years.

He remembers having to pass a river so wide that it took the train more than one minute to cross it.

A new high-speed railway between the two cities is set to open in 2015. This line will cut the distance to 510 kilometers, take less than three hours and traverse the lush Qinling and Daba Mountains.

Distance: 842 kilometers
Time: 12-17 hours
Price: RMB 193-316 (soft sleeper), RMB 122-209 (hard sleeper), RMB 64-113 (hard seats)

Beijing-Kowloon, Hong Kong 

Crossing almost two-thirds of the entire country, this China train journey is one of the best ways to get to grips with the nation's majesty, landscapes, culture and sights.

While it would be quicker to fly, the train allows you to whiz through numerous provinces on a single ticket, including Tianjin, Hebei, Shandong, Henan, Anhui, Hubei, Jiangxi and Guangdong.

The journey starts and finishes with plenty of urban sprawl but there are some scenic highlights to watch out for, particularly when the train passes over the Yangtze River in places like Wuxue (Hubei) and Jiujiang (Jiangxi) just to the south.

In Jiujiang a seven-kilometer bridge spans the river -- there are actually 790 bridges and 160 tunnels over the entire route.

Jiangxi as a whole is a particularly beautiful region -- from the train you will see wooded hills and highlands of the region, particularly around Lushan (庐山).

Feng says his favorite bits are between north Guangdong and south Hu'nan.

"[The view is] not exactly as stunning as rice terraces but very close to," Feng says. "I also liked the bit of Hong Kong you just before I crossed the borders. [It] shows boomtown Shenzhen at its max."

Distance: 2,475 kilometers
Time: 23 hours 36 minutes
Price: RMB 1,447 (deluxe soft sleeper), RMB 768 (soft sleeper), RMB 458 (hard sleeper)

Source: CNN Go By Joanne Lane

Shaoxing's Timeless Appeal

For almost two millennia, Shaoxing has been renowned for its culture and natural beauty

Chinese people use the phrase "cities of fish and rice" to describe the places south of the Yangtze River.

There are huge grain plantations and waters that can produce aquatic foods. Shaoxing, in the northwestern part of Zhejiang province, is one such place.

It was one of the richest Chinese cities in the Western Jin Dynasty (AD 265-316), and even in the industrialized modern world Shaoxing is still the center of China's textile industry. Situated to the east of
Hangzhou and the west of Ningbo, it is a two-hour drive from two of the most developed cities in Zhejiang.

But do not assume that Shaoxing's economic development has erased its natural beauty. It is still as pretty as a painting, and visitors can travel along Shaoxing's waterways in a wooden boat, listening to the boatman singing traditional songs.

Here are some places worth visiting:

1. Kuaiji Mountain

This mountain is six kilometers southeast of downtown Shaoxing. It is the birthplace of China's first dynasty, the Xia Dynasty (c.21st century-16th century BC). Kuaji Mountain is considered a sacred peak.

Yu, the first emperor of the Xia Dynasty, was married, crowned and buried at this mountain. His tomb, which can be visited today, is an illustration of the grand style of ancient Chinese architecture.

When visiting the mountain, travelers can hear many birds singing. The mountain is the site of the largest bird population and numbers of species in China.

There are devices enabling people to "talk" to birds, and visitors can also watch birds perform. At the top of Kuaiji Mountain, a 1,280-meter ski path awaits visitors. Allowing speeds of up to 60 kilometers per hour, the path is the first of its kind in Zhejiang.

2. Keyan scenic port

Scenic Keyan has been famous for its rocks, waterways and caves for more than 1,800 years. Its iconic rock, Yungu, is more than 30 meters tall, but its base is no more than 4 square meters. There is a 1,000-year-old cypress at the top of the rock.

Yuanshan Garden contours to the mountain's terrain. It is the largest garden of Tang Dynasty (AD 618-907) style in China. Many rocks were used in its construction, reflecting Keyan's craggy beauty.

In Shaoxing, where there is a mountain there is a lake, and Keyan is no exception. Jianhu Lake is another of Keyan's main scenic spots. Li Bai, one of the greatest poets in Chinese history, once wrote that the water of Jianhu Lake is as smooth and bright as the moon.

Visitors can also hear Yueju Opera, China's second-largest traditional opera, while sitting on a boat on a lake, with the mountain and the rocks around them.

3. Lanting Pavilion

Chinese calligraphy is one of the traditional arts that are recognized worldwide. Lanzhu Mountain, where Lanting Pavilion is located, was once the residence of Wang Xizhi, one of China's greatest calligraphy artists.

Lanting Pavilion is where Wang created some of his celebrated calligraphy pieces and has become a sacred site.

The pavilion is hidden in the mountains, surrounded by trees and bamboo. A brook runs through the area.

When visitors are sitting quietly in the pavilion, the sounds of breezes, falling leaves and the running brook can all be enjoyed. For more than 1,500 years, Lanting Pavilion has been a gathering place for people who love calligraphy and enjoy the peace of the natural world.

4. Lu Xun's former residence

Lu Xun, whose real name is Zhou Shuren, was a 20th-century novelist, revolutionary and thinker. His masterpieces appear in the textbooks of Chinese primary and middle schools. Shaoxing, his hometown, was where he lived until his teens.

His former residence in Shaoxing is the best-preserved block in the downtown area. On either side of the narrow street are the house where his grandparents used to live, and the houses where Lu Xun used to live and study, as well as his family's gardens. It easily reminds people of similar scenes in his novels.

Lu Xun's old house is a two-story wooden dwelling. Some of the old furniture is still there, so visitors can get an insight into the early life of China's greatest contemporary writer.
Eating and drinking

Xianheng Restaurant is a must-go. Beans flavored with aniseed is the favorite snack for Shaoxing residents to eat with wine. The city is famous for its yellow rice wine, which is referred to as huangjiu in Chinese. The amber-colored wine is made from glutinous rice. When the wine is hot and you take a sip, the mild liquid flows easily down your throat while its natural taste remains in your mouth.

Shaoxing residents' fondness for wine can be seen in their food. Braised chicken with wine, crabs with wine and shrimp with wine are all famous local dishes. And while you are dining in Shaoxing, the pork with dry cabbage cannot be missed.

Source: China Daily

Chinese Airlines Lure Pilots With Double the Pay of U.S. Captains

China is snapping up the world's supply of senior pilots, contributing to a global shortage and creating headwinds for Asia's fast-expanding airlines.

China is among the world's fastest-growing air-travel markets, with domestic passenger traffic second only to the U.S., with the market expanding 14.7% in June compared with a year earlier, according to the International Air Transport Association.

The rising middle class in China means millions more people are taking to the skies. Beijing plans soon to allow even more growth in its tightly controlled sector by encouraging the development of budget airlines, which are already booming across Asia.

Chinese carriers have more than 800 commercial airliners on order, on top of 2,088 now flying. Each plane requires about six two-person flight crews, creating demand for thousands of new pilots. Chinese airlines lack sufficient locally trained candidates.

The shortage illustrates an endemic problem in China's rapidly expanding economy, where the development of infrastructure and professional skills hasn't kept pace with surging demand. The country also struggles to retain expatriate talent amid worsening pollution concerns and rising consumer prices.

China isn't alone in its need. Boeing Co. estimates that the broader Asian-Pacific region will require 185,600 new pilots between 2012 and 2031, accounting for 40% of global pilot demand. The region today has 56,000 pilots, or roughly 26% of the global total, according to Boeing.

Chinese airlines are wooing experienced foreign pilots by upping the pay for captains. Some carriers are advertising annual salaries and benefits of up to $270,000, or roughly double the average wage of a U.S. airline captain.

"You've got a shrinking supply [of experienced pilots], so the answer is to increase pay," said Mark East, managing director at New Zealand-based Rishworth Aviation, the largest airline-pilot recruiting firm in Asia, with 600 contract pilots in the region. He said Chinese airlines have raised their pay offers to foreign pilots by up to 30% in the past 18 months to cope with the growing shortage.

Chinese airlines account for more than 60% of the recruitment postings for captains on the careers website of Flightglobal, an industry publication.

While China is training more local crews, pilots still need roughly a decade of experience before they can be promoted to captain. The air-travel boom has outpaced that maturation. Today, nearly all Chinese airlines employ foreign crews. Americans represent the largest proportion.

Chinese carriers started hiring foreign pilots in 2003. They now account for roughly 6% of the commercial-pilot workforce, with 1,778 foreign-pilot licenses issued as of last year, according to China's aviation regulator.

Among the Chinese airlines offering top salaries are Hainan Airlines Co., which is promoting net annual packages of up to $270,000, and Shenzhen Airlines Co., with packages valued at up to $231,600, according to the Flightglobal listings.

These salaries are on par with what the most senior captains at premium airlines make and well above world standards. Average captain's pay at a major U.S. airline is $135,000, according to the U.S. Bureau of Labor Statistics.

Rich Chinese compensation comes with heavy work loads, however. Paul Schneider, an Australian who worked as a Boeing 737 captain with a major Chinese airline in 2010 and 2011, said the duty times for foreign pilots in China were among the longest he's ever seen, particularly for those working short domestic flights.

China's appetite for senior pilots is hurting many smaller Asian upstarts, which too are eager to expand but must compete for crews.

"We are the ones feeling the pinch of the pilot shortage…the smaller carriers are in a battle to attract quality pilots," said David Wilmot, acting director of flight operations at Jet Asia Airways Co., a Thailand-based charter airline with six Boeing 767s that employs mostly foreign pilots.

Mr. Wilmot says the exorbitant salaries some of the Chinese airlines are willing to pay are "just putting us out of the market" for pilots. Many airlines in Southeast Asia pay expat captains around half of some of the Chinese carriers' best recent offers.

Worsening the captain shortage: aging veterans, particularly in the U.S. "There is a tsunami of retirement which is now under way in the airline industry," said John Bent, a consultant to the International Air Transport Association, a global industry group. "We've got potentially the first big pilot supply problem" in years, he said.

The improving U.S. airline market is further aggravating Asia's problems because overseas American pilots are heading home, Asian airline executives say. Hiring foreign pilots was much easier three years ago, they say, but the supply has recently flattened out.

Source: Wall Street Journal by Jeffrey Ng

Hawaii aims for 30% growth in China travel

HONOLULU (AP) - The Hawaii Tourism Authority's new marketing representative in China is asking Hawaii travel industry professionals to do more to accommodate Chinese travelers.

Brenda He (HUH) of Travel Link Marketing told a tourism conference in Honolulu on Friday that hotels need to support Chinese tour operators and provide some rooms at special fares.

She says companies should have a Chinese sales team because Chinese tour operators don't do business the same way as Japanese tour operators.

The tourism authority views China as a major growth market. It recently hired Travel Link Marketing to promote Hawaii tourism in China.

He says her target is to bring more than 180,000 Chinese travelers to Hawaii next year. That's about 30% more the 140,000 arriving this year.

Source: Associated Press by Audrey McAvoy

Chengdu visa-free policy to lure more tourists

Zhu Zhangyi is excited that his hometown, Chengdu, Sichuan province, will become the fourth Chinese city after Beijing, Shanghai and Guangzhou to adopt a 72-hour visa-free policy.

"I'm sure it will bring more overseas tourists to Chengdu," said Zhu, deputy curator of the Jinsha Site Museum.

The policy, which will go into effect on Sept 1, will allow transit passengers from 45 countries who have valid visas and a flight ticket to a third country to stay up to 72 hours in Chengdu and cities and counties under its administration, according to the city government.

Those who overstay their visit may be fined, detained or deported from the country, said Chen Yongzhi, deputy chief of Sichuan Armed Police Frontier Corps.

When the policy is implemented, Chengdu will be the first city in an inland region of China to adopt the visa-free plan.

With a population of more than 14 million, the provincial capital of Sichuan received 122 million tourists last year. Around 1.6 million came from abroad, according to government figures.

Tourists have frequently visited the Jinsha Site Museum, located next to the archaeological site of the same name, since it opened in 2007. "Each year, about 1.2 million people visit our museum. But it is regrettable that fewer than 100,000 are from overseas," Zhu said.

In comparison, Hangzhou, the capital of Zhejiang province with a population of 8.8 million, received more than 3.3 million overseas tourists in 2012.

Robert Barsby, a British hotelier in Chengdu, said the visa-free policy will enhance the city's international image. He said it would be convenient for international business travelers to visit the city or access it in transit.

Shuangliu International Airport in Chengdu, the fourth largest in China in terms of passenger traffic, has 22 direct flights to 16 countries and regions around the world. The number of people passing through China via the airport is expected to surpass 2.3 million at the end of this year.

Luo Xiaohu, an officer with the Sichuan Armed Police Frontier Corps, said a major reason why Chengdu was chosen as the first city in an inland region to adopt the visa-free policy is because it has more international flights than any other city in central and western China.

Several foreign general managers at international five-star hotels in the city said they believe the policy may boost the hospitality industry, which has been sluggish since the country's new leadership discouraged government officials from extravagant galas and events this year.

Through the first half of this year, six international five-star hotels in the city, including Shangri-La, Regal Master and the Kempinski, lost 60 million yuan ($9.77 million) in room bookings, compared with the same period last year, said Barsby, general manager of the Regal Master Hotel in Chengdu, who has lived in China for almost 20 years.

Suggested itinerary

Must-see sights during 72 hours in Chengdu:

Day 1

• Chengdu Research Base of Giant Panda Breeding

On any given day, more foreigners might be found at the center in the northern suburbs of Chengdu than in the entire city.

"Each year, 300,000 foreign tourists visit our base," said Pu Anning, chief of the center's general office.

The base was established in a mountainous area in March 1987 with six sick and hungry pandas. It currently has 121 pandas.

The bamboo forests make the base an ideal site for a half-day visit, which starts at 7:30 am when pandas usually stay outside their dens, eating bamboo and frolicking.

• Temple of the Marquis of Wu

In the afternoon, history buffs can visit the site built for Zhuge Liang (AD 181-234), prime minister of the Shu Kingdom during the Three Kingdoms period (AD 220-280) and now the personification of loyalty and wisdom in China.

The temple is the most widely known of about 100 ancient sites in China related to the Three Kingdoms period.

Statues of civil officials and generals of the Shu Kingdom, most of whom are household names in Chinese culture, are on display at the museum.

• Jinli Street

After visiting the temple, tourists can stroll this nearby street built in the traditional Chinese architectural style.

It offers a variety of local snacks ranging from noodles to dumplings priced from 5 yuan to 10 yuan.

Day 2

• Jinsha Site Museum

On Feb 8, 2001, workers at an apartment construction site in Jinsha in western Chengdu found pieces of ivory and jade in a pile of mud.

Since then, archaeologists have excavated more than 5,000 relics, including items of gold, jade, bronze and stoneware, as well as a metric ton of intact elephant tusks.

Many of the relics are on display in the Jinsha Site Museum.

• Du Fu Thatched Cottage Museum

Upon entering the gardenlike museum near Jinsha, visitors stand on what is considered sacred land in historical Chinese literature.

The museum is dedicated to Du Fu (AD 712-770), a poet who lived in the transitional period coinciding with the decline of the Tang Dynasty (AD 618-907).

Du, who experienced a great deal of hardship, used poems to record social ills, national conflict and chaos caused by war and daily suffering.

About 240 of his 1,400-plus poems Chinese people read today were written in Chengdu when he lived in the thatched cottage for nearly four years.

Near the northern entrance of the museum is a restaurant serving the famous spicy dish of mapo tofu, first served in 1862.

Day 3

• Dujiangyan

For the third and final day, visitors can visit this city under the administration of Chengdu.

The Dujiangyan Irrigation Project is the world's only preserved water conservation project that doesn't have a dam. The project was included in the UNESCO's World Cultural Heritage List in 2000.

Source: By Huang Zhiling ( China Daily)