The Ancient of Zhengyuan in Guizhou

Dubbed the "Venice of the Orient", Zhenyuan is a surprisingly unspoiled ancient water town located in the Qiandongnan Miao and Dong Autonomous Prefecture, southeastern Guizhou. Surrounded by gorgeous mountains and rivers, the town is best-known for its picturesque landscape, historic sites and mysterious ethnic cultures. The ribbon-like Wuyang River, which runs about 94 kilometers from west to the east across Zhenyuan, cuts the town into the northern "Old Fu (Government) Town" and the southern "Old Wei (Fortification) Town"

Source: china.org

Chinese Billionaire Guo Returns to Competition for Club Med

(Bloomberg) Fosun International Ltd., controlled by Chinese billionaire Guo Guangchang, made a last-ditch bid for French resort company Club Mediterranee SA that trumps an offer from Italian investor Andrea Bonomi.

The offer of 22 euros a share, made along with partners, values Club Med at 839 million euros ($1.08 billion) including convertible bonds, the bidders said in a statement. Bonomi’s Global Resorts group offered 21 euros on June 30 in an offer that values the company at about 790 million euros.

French regulator Autorite des Marches Financiers, or AMF, had set today as the deadline for any bid rivaling that of Global Resorts. The Fosun offer is the Chinese company’s third attempt in 15 months to secure ownership of the resort operator. Fosun and Axa Private Equity, now called Ardian, offered 17 euros a share last year and later raised the bid to 17.50 euros.

“We are presenting the highest offer and the best liquidity for all the company’s shareholders,” Jiannong Qian, head of the Gaillon Invest II investment vehicle associated with Fosun, said in the statement. “The offer is based on a long-term industrial plan. It is in line with Club Med’s strategy and is supported by the management.´´

Global Resorts can submit a new bid, as long as it tops the Fosun offer by at least 2 percent, according to AMF rules. Fosun said today it would welcome more investors, leaving open the possibility that Bonomi could join the Chinese company’s bidding group. The Italian investor owns almost 10 percent of Club Med, according to data compiled by Bloomberg.

Considering Options

‘‘We have noted the offer and we will now look at our options,” said David Stuerken, a spokesman for Global Resorts.

The offer was made by Fosun and Ardian, as well as Club Med management, Beijing UTour International Travel Service Co., and Cia de Seguros Fidelidade Mundial SA, a Portuguese insurance company controlled by Fosun, according to the statement. Fosun will own 85.1 percent of the vehicle, U-Tour 7.5 percent, Ardian 5 percent, and Club Med management 2.5 percent, based on acquiring 50 percent of the shares.

Club Med shares were suspended in Paris today after Fosun bought 2.98 million shares from Ardian for 22 euros apiece. Fosun now owns 18.3 percent of Club Med and 24.4 percent of the voting rights, according to the AMF.

Club Med shares surged to their highest price in 5 1/2 years after Global Resorts’ offer, and have risen 22 percent in Paris this year, for a market value of 764 million euros.

Offer Period

While the AMF will define an offer period in light of today’s bid, Fosun said it expects it to be Oct. 17 to Nov. 20. The regulator may also set a deadline for a potential counter-bid by Global Resorts or other parties.

Fosun started buying Club Med shares in 2010 and began a strategic partnership with the operator to lure more Chinese vacationers to its resorts.

Since 2010, Guo’s closely held Fosun Group has spent more than $3.7 billion on foreign acquisitions, including U.S. and European fashion labels, a Hollywood film studio and skyscraper One Chase Manhattan Plaza in New York’s financial district. The billionaire said in a recent interview that he’ll continue a global acquisition spree with the aim of doubling assets to about $100 billion within five years.

Societe Generale SA acted as exclusive financial adviser to Gaillon Invest II. DLA Piper and Darrois Villey Maillot Brochier acted as legal advisers.

Source: Bloomberg News by Richard Weiss | Photo: China Daily

With free visas, Thailand tells Chinese tourists 'please come back soon'

(Reuters) - To make vacationing in a country still under martial law a little more attractive, Thailand’s military junta is offering tourists from China free visas.

Chinese are the biggest visitors to Thailand, accounting for 18 percent of total arrivals in July, but they also proved among the most nervous, with numbers slumping more than other nationalities after May's military coup. Tourism accounts for about 10 percent of the Thai economy, and the imposition of martial law in May after the coup hit the industry hard. Winning back the Chinese visitors is imperative - spending by mainland tourists jumped 80 percent to $6 billion in 2013 from 2012.

The slump in tourist numbers after the coup was much more pronounced among visitors from East Asia than from Europe.

Chen Wei, the manager of an outbound travel department for Asia at Shanghai Huating Overseas Tourist Co, said his firm had only one group of 20 tourists a week traveling to Thailand this month, compared with two to three groups a week of more than 30 tourists each last year.The number of visitors from China fell 41 percent in June - the first full month under military rule - from Hong Kong 46 percent, Japan 25 percent, and Korea 29 percent, while arrivals from Europe fell by three percent.

The Tourism Authority of Thailand said its new tourism promotion measures included a 30-day extension of stay for visitors from 48 countries and one territory, in addition to the free visa for Chinese guests, although tourists from many other countries don't need holiday visas.

The return of some normality to Thailand, and possibly the 1,000 baht ($30) visa saving, could be starting to work with visa applications from China rising, while tourism operators say visitor numbers picked up last month.

With less than half their rooms filled, compared with occupancy rates of 60 to 65 percent in July 2013, Thailand’s hoteliers are impatient for martial law to be lifted now that political unrest has subsided.

"It was eerily quiet in June and July," said Boonchai Suwatsakulsawasd, general manager of the Centara Duangtawan Hotel in Chiang Mai, which targets Chinese tourists. "It only got better in August."

The fall in Chinese tourist numbers was keenly felt in Chiang Mai. The northern city became a favorite with Chinese tourists in 2012 after featuring in the Chinese box-office comedy hit "Lost in Thailand", which portrayed the travel adventures of two Chinese men.

Tatcha Riddhimat, general manager of the Dusit D2 Chiang Mai hotel, said the number of Chinese guests at his hotel fell nearly 90 percent in June and July.

MARTIAL LAW

While the number of Chinese visitors appears to be on the rise again, the total for this year is forecast to fall short of the record 4.6 million who visited in 2013.

The Tourism Authority of Thailand (TAT) has revised up its estimates for mainland visitor numbers this year to 4.3 million from about 4 million, said Thawatchai Arunyik, governor of the TAT.

That would still be down over 6.5 percent on the year. In January-July this year, Thailand had 2.2 million Chinese visitors, down about 24 percent from last year. The agency expects a total of 25.5 million tourists this year, about a million less than in 2013.

Foreign tourists may have ruled out Thailand because most travel insurance policies have exemptions specifying that claims will not be paid if they are a result of martial law or civil unrest, and many countries have maintained travel warnings on Thailand.But from late July, international tourists visiting Thailand can buy special insurance coverage known as the "Thailand Travel Shield" set up by the TAT in cooperation with four well-known Thai insurance companies, which might have helped with the recovery.

The military government said it was considering lifting martial law, particularly in areas that attract a lot of tourists, a junta spokesman said on Wednesday.

"We need to lift martial law to get business going quickly," said Surapong Techaruvichit, president of Thai Hotels Association. Thai tourism has bounced back before, recovering quickly from protests in 2010 that closed parts of central Bangkok for weeks before a military crackdown.

Credit Suisse forecast a sharp rise in tourist numbers for 2015, and consequently increased its 2015 economic growth forecast to 4.5 percent from 3.9 percent. It sees growth of only 0.9 percent for this year.

($1 = 32.0 Thai Baht)

Source: Reuters by Orathai Sriring and Pairat Temphairtojana 

Mysterious land - Lugu Lake

Located in the mountainous ranges between Yunnan and Sichuan provinces about 200 kilometers from Lijiang, Lugu Lake is like a shimmering pearl inlaid in the hills of the northwest plateau in Yunnan. Many ethnic communities, such as the Yi, Tibetan and the matriarchal Mosuo, live around the lake. The path around the lake is popular among backpacking hikers.

Source: china.org

Boeing raises China plane demand forecast 8 percent as overseas travel grows

(Reuters) - Boeing Co said on Thursday it expects China to need more than 6,020 aircraft in the next 20 years, an 8 percent rise over last year's two-decade estimate, as growing overseas leisure travel drives demand for single-aisle and wide body planes.

The aircraft maker's new estimate of 6,020 planes, valued at $870 billion (528.91 billion pounds), is up from the 5,580 it estimated last year and represents a near tripling of China's current fleet. The country, the world's second-biggest aircraft market, is essential to Boeing's long-term global strategy.

"New business models like low-cost carrier, regional carriers are driving demand for more direct flights to more destinations," said Randy Tinseth, vice president of marketing at Boeing Commercial Airplanes, speaking at a media briefing in Beijing.

Boeing expects China to overtake the United States as the world's single-biggest aircraft market in the period through 2032.

Chinese airlines are increasingly training their sights on overseas routes as the domestic market cools amid a slowing economy and government budget austerity. The overseas push is also fueled by rising numbers of outbound leisure travelers, expected to double to 200 million by 2020, according to brokerage CLSA.

Besides intensifying its coverage of neighboring countries, Air China alone has opened three new routes to the United States since July, 2013, including launching a three-time weekly service to Honolulu in January, 2014. The last time it launched new flights to the United States was in the early 1980s.

China Southern Airlines, the largest carrier on China-Australia routes, started flying non-stop to New York last month. Even budget carrier Spring Airlines, which flies mostly domestic and some Asian routes on its Airbus Group A320 jets, has been weighing an option to buy wide-body Airbus A330 planes.

Source: Reuters  

Profits decline 98% for China Eastern Airlines

(Xinhua) China Eastern Airlines, one of the country's leading carriers, has posted a net profit drop of 97.76% from the same period last year in the first half of 2014.

With net profit of 14 million yuan (US$2.28 million), the company registered a business revenue of 42.59 billion yuan (US$6.93 billion) in the first six months, according to a statement it filed with the Shanghai Stock Exchange on Sunday.

The revenue was a 2.68% increase from the same period last year, said China Eastern Airlines.

It attributed the lackluster performance to "geopolitical instability, fewer high-end business travelers, and more convenient high-speed railway services."

The airline foresees both opportunities and challenges in the second half of this year due to a mixed picture consisting of "uncertainties in global economic recovery, continuous growth in China's airline market, and fierce competition."

By June 30, the Shanghai-based carrier had 485 planes, including 459 passenger planes, 12 cargo planes, and 14 corporate jets under its trusteeship.

source: xinhua via china.org

Hong Kong Airlines to Apply for Dual-Currency Listing

(WSJ) Hong Kong Airlines will apply for listing approval from the Hong Kong Stock Exchange for a US$500 million initial public offering that would be the city's first dual-currency IPO.

The airline, which focuses on short-haul flights, plans to submit a so-called listing application to the stock exchange Monday to float a yuan and Hong Kong dollar-denominated deal, a person familiar with the situation said Monday, adding the listing is likely to be in the fourth quarter.

The airline, which based in Hong Kong, is planning offer half of the shares in the retail tranche of the IPO in yuan-denominated offerings. The retail portion will make up 10% of the total IPO, the person said. Investors who buy from the institutional tranche of the IPO, accounting for 90% of the deal, will be allotted some yuan-denominated shares if there is sufficient demand for them, the person said.

Demand from institutional investors is unlikely to be huge, as most invest in U.S. dollars. Many Hong Kong residents, who can buy in the public tranche of the IPO, however, sit on billions of yuan of deposits, since China started allowing them to save yuan in the city.

By the end of June, yuan deposits in the Chinese territory totaled 925.9 billion yuan (US$150.6 billion), up from 893.4 billion yuan in January, according to the Hong Kong Monetary Authority.

China has been moving to loosen restrictions on its currency as part of efforts to internationalize the yuan, with Hong Kong whose currency is pegged to the U.S. dollar, acting as the de facto center of the nation's test of allowing banks and individuals to freely trade the yuan abroad.

The share offering would be the latest yuan-denominated product offered to investors in Hong Kong, seeking returns from their growing yuan deposits.

Currently, yuan investments products in the city are limited. The only company in Hong Kong that trades in the Chinese currency, Hui Xian Real Estate Investment Trust, raised US$1.6 billion in an IPO in April 2011. Other than that, most Hong Kong investors with yuan deposits spend it on yuan bonds, also known as 'dim-sum bonds', which have emerged since international companies began selling them in 2010.

Hong Kong Airlines is controlled by Chinese conglomerate HNA Group, whose holdings include Hainan Airlines. It flies short-haul regional routes between Hong Kong and other destinations in Asia, including Phuket in Thailand, Osaka in Japan, and Chinese cities like Beijing and Shanghai.

The airline, which has a fleet of around 23 aircraft, is looking to list as it grapples with high fuel prices and competition from bigger rival Cathay Pacific Airways Ltd. Funds raised from an IPO would go toward financing its plan to buy more aircraft, the carrier had said.

J.P. Morgan Chase & Co is handling the transaction.

Source: Wall Street Journal by Prudence Ho