George Chen Next stop? China Fri, 03 Aug 2012 00:04:23 +0000 en-US hourly 1 Winners and losers as Hong Kong rents scale new heights Thu, 27 Oct 2011 05:52:02 +0000

By George Chen
The opinions expressed are the author’s own.

When you walk around Hong Kong’s Central commercial and business district these days, you may notice a number of stores are holding “removal sales”, which means they can no longer remain in the same location. The reason? In most cases, just blame soaring rents.

Many analysts have forecast declines in residential and commercial property prices in Hong Kong for next year, although at a stable pace rather than a sharp drop. This may be true for some suburban areas where purchase options are more plentiful than those in downtown areas, but until that happens, prices are likely to keep rising, at least for the rest of the year.

A couple of years ago, mobile phone industry leader Nokia took a moderately sized space on Russell Road in Causeway Bay just opposite Times Square, one of the busiest shopping districts in Asia, for its flagship store in Hong Kong. Local media said the store used to be one of Nokia’s busiest in Asia, thanks to mainland Chinese travelers. But the good old days are going to end soon.

The Hong Kong Economic Times reported on October 27 that British luxury brand Burberry had signed a new lease with the owner of a site currently occupied by Nokia. Burberry is said to have agreed to pay HK $6.5 million (about US $836,600) per month for the two-floor 5,200 square foot space,versus the HK $1.8 million that Nokia is paying.

When the news came out, the reaction from the market was quite naturally, “Wow”. One reader on Sina Weibo, China’s most popular micro-blogging service, wondered: “How many coats and bags will Burberry need to sell to cover the monthly rent?” In Hong Kong, a coat or bag at Burberry usually sells for about HK $10,000-15,000. You can do your own calculations.

Burberry is not alone.

Bidding wars for prime retail locations in Hong Kong have been heating up in recent months. Some analysts call this a typical “changing hands season” for Hong Kong’s high-end property market. The only key to victory is price.

Asia’s leading fashion brand Shanghai Tang opened its first shop in the mid-1990s on the ground floor of the historic Pedder Building on Central’s Pedder Street. The same location will soon be home to a new name.

U.S. fashion brand Abercrombie & Fitch, known for welcoming customers to its flagship store on Fifth Avenue in New York City with muscular male models, will reportedly pay about $1 million per month for the location, 2.5 times more than the rent Shanghai Tang paid.

Despite the surprisingly fast rising rents in Central, Shanghai Tang, now owned by Richemont, one of the world’s leading luxury goods groups, is keen to stay in the Pedder Building, but has decided to move upstairs where rents are cheaper, local media reported.

Luxury brands are rushing into Hong Kong to tap the fast-growing demand from middle-class consumers from mainland China who swarm to Hong Kong to buy luxury products at prices far cheaper than in mainland China. U.S. upscale bag maker Coach is said to be planning to float shares in Hong Kong in the wake of Prada’s successful listing in the financial centre.

Local Hong Kong people and even some government officials and legislators in the former British colony have already complained about the quantity of money flowing into Hong Kong from the mainland, pushing property prices higher than the city’s towering skyscrapers.

Perhaps, the fast-growing retail rents willingly paid by global luxury brands can also be blamed on the luxury-loving mainland consumers who are becoming their best customers.

George Chen is a Reuters editor and columnist based in Hong Kong.

Photo: The closing Shanghai Tang store in Central, Hong Kong, seen on Oct. 26, 2011. REUTERS/George Chen

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Designed in New York, made in Dongguan Mon, 24 Oct 2011 09:26:21 +0000 By George Chen
The opinions expressed are the author’s own.

It could be the perfect story to show how China Inc and its American partner can work together for a win-win result, but Chinese consumers are having second thoughts on this.

Earlier this year, upscale U.S. handbag and accessory maker Coach said it planned to list in Hong Kong to reflect the growing importance of China’s luxury market. Coach didn’t give a timeframe for the IPO plan, but one thing is fairly certain – before Coach launches its IPO, its local partner in the small city of Dongguan, near Hong Kong, will aim to rise $200 million first.

The company, Sitoy (Dongguan) Leather Products has hired Bank of America-Merrill Lynch for a Hong Kong listing by the end of November. In IPO marketing materials distributed to potential investors, Sitoy described itself as the largest handbag OEM (original equipment manufacturer) in China, although it didn’t name any of its clients.

However, Chinese netizens quickly found out from the company’s website ( that one of Sitoy’s OEM clients is Coach, a  New York-based brand popular among China’s fast-growing middle-class. In China, Coach prices are far lower than those for top-tier brands such as Louis Vuitton and Gucci, although it is still considered a luxury brand among consumers in the world’s No.2 economy.

“Why not buy expensive Caoch bags directly from the Dongguan factory? I believe the cost must be very cheap,” said one Sina Weibo user in response to the news. Foreign brands — not only luxury fashion brands but also consumer electronic makers — have many OEM partners in China, although they are often reluctant to identify them to avoid such unsatisfaction from local customers.

In a company newsletter dated May 31, published on Sitoy’s website, the top headline is about senior executives of Coach visiting the factory and expressing satisfaction with Sitoy’s products for Coach. It’s now seems likely that at least some of Coach’s handbags are designed in New York but manufactured in Dongguan.

Coach was already in trouble after Chinese media pointed out that Coach handbags are much more expensive in China than they are in the United States, sometimes with a difference of hundreds of U.S. dollars. When the news about the OEM factory in Dongguan started circulating on China’s Twitter-like micro-blogging service Sina Weibo, some consumers felt they had been cheated after spending thousands of yuan on a bag that was probably made in Dongguan, a city whose reputation is usually linked with cheap labor costs.

On Sitoy’s website, the company expresses pride in being an example of the small city’s success as the world’s factory for shoes, garments and so on. Sitoy is in a position to list in Hong Kong, largely thanks to cheap labor costs and strong OEM demand from global clients such as Coach. But the case of Sitoy and Coach that is causing such frustration among Chinese consumers also raises the question of how luxury brands can keep selling at high prices while reducing costs.

Other fashion and leather brands including Salvatore Ferragamo and Burberry have said they do not plan to manufacture products in China, although Burberry has chosen other countries such as Turkey to make some low-end products such as T-shirts.

George Chen is a Reuters editor and columnist based in Hong Kong.

Photo: A Coach store in Hong Kong’s Central financial and business district, seen on Dec. 6, 2008. REUTERS/George Chen

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China is still waiting for inflation to peak Wed, 31 Aug 2011 06:44:11 +0000

By George Chen
The opinions expressed are the author’s own.

How time flies. It’s already the end of August and speculations naturally arise about what China’s inflation reading will be for this month.

The most optimistic view these days is that the August Consumer Price Index (CPI) could decline to below 6 percent. The most pessimistic view I’ve heard is that growth has slowed down in August, but probably only to 6.2 percent or 6.3 percent.

But, why should we care about the August CPI so much? One month cannot tell the whole story.

The reason we care so much is because if the August CPI growth slows down (we will see the official release of August economic data in the coming weeks), it’s good news for the central bank as well as for the ordinary people in China who have been fighting with fast inflation for more than three years already. But, it’s not good enough.

Yesterday, amid market talks about August CPI, I heard something interesting from Mengniu, China’s top dairy product maker: “We are confident we can at least maintain (first-half) margin levels in the second half,” Mengniu Chief Financial Officer Wu Jingshui told reporters after the company’s first-half earnings release. He added the company might raise product prices and adjust its product mix to offset an estimated 3 to 5 percent rise in raw milk costs in 2011.

I shared the news on my Twitter-like Sina Weibo micro-blogging service. What was the response from my audience? Frustrated would be the accurate adjective to describe it. Mengniu is the industry leader and if Mengniu leads the next and latest round of product price hikes, you can imagine how rivals will react. Or might they have already coordinated a move on the prices?

Mengniu is not alone as price increases are not just happening in the dairy product business.

Chinese liquor maker Wuliangye also announced this week it will raise prices for its alcohol by 20-30 percent starting September 10 and industry analysts expect Wuliangye’s local rivals will follow the path to maintain their profit margins, too.

So will CPI rebound (if it does decline in August, thanks to the recent fall of pork prices as some economists said) by the end of 2011?

More investors are becoming increasingly convinced these days that in a choice between GDP or CPI, Beijing should fight to maintain GDP not CPI. That is to say Beijing may tolerate further inflation, although at a slower pace month on month, but it can’t afford to see economic growth fall sharply to 7 or 8 percent, as estimated by some economists.

As you can see from the decisions made by Mengniu and Wuliangye, Chinese enterprises certainly don’t want to bear increasing costs that will hurt their profit margins. So, at the end of the day, the victims of China’s rising CPI are the Chinese consumers.

George Chen is a Reuters editor and columnist based in Hong Kong.

Photo: Reuters file picture

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China’s toxic leaks and social unrest Mon, 15 Aug 2011 03:53:09 +0000 By George Chen
The opinions expressed are the author’s own.

What does PX mean? That’s the keyword for China from the past 24 hours.

State media reported that residents of Dalian were recently forced to flee when a storm battering the northeast Chinese coast, whipping up waves that burst through a dyke protecting a local chemical plant. The plant produces paraxylene (PX), a toxic petrochemical used in polyester.

On Sunday, some angry residents finally decided that instead of being forced to flee, the chemical plant should be relocated.

Tens of thousands of people took to the streets to demonstrate and Dalian, known as one of the most beautiful coastal cities in China, made headlines all over the world.

Dalian is not alone.

Blame bad luck or natural disasters, perhaps. Four days ago, an accident at a factory in Shandong province resulted in a deadly chemical gas leak and 125 people, mostly workers and nearby residents, were sent to the hospital, local media reported. About three months ago, poisonous chemical waste was dumped illegally, polluting water sources in Yunnan province. The case was only recently revealed to the public. You can imagine how angry local people must feel.

I had a chat with a young and well-educated fund manager, a typical middle-class Chinese, about those recent accidents and his views surprised me. The fund manager is usually very calm and polite before colleagues and clients. He told me he would take to the streets and even fight to the death to get the PX plant relocated if he were a resident in the area.

“It’s for the next generation, our children … The government must be aware that children are the last hope for many Chinese parents. They will do anything against the government if they think their children cannot have a happy, healthy life,” he said.

Environmental pollution has been one of the major causes of social unrest in China, which had almost 90,000 such “mass incidents” of riots, protests, mass petitions and other acts of unrest in 2009, according to a 2011 study by two scholars from Nankai University in north China. Some estimates go even higher.

About a decade ago, I still remember clearly, one of my professors told me that in China even if you don’t want anything to do with politics, at some point politics will find you and drag you into it. Global investors when rushing into China for buying opportunities must also bear in mind the political risks and fast-changing social environment.

The PX case in Dalian, the gas leak in Shandong and the contaminated water in Yunnan all prove the same thing — you can barely live without being touched by politics in China.

George Chen is a Reuters editor and columnist based in Hong Kong.

Photo: Residents hold a banner with Chinese characters forming a shape of a skull which reads ”Get out PX (paraxylene), give us back our home, never give up” as they demonstrate against a petrochemical plant at the People’s Square in Dalian, Liaoning province August 14, 2011 Reuters/Stringer

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Banking on a Triple-A rating (Part 2) Mon, 08 Aug 2011 05:35:39 +0000 By George Chen
The opinions expressed are the author’s own.

Who is perhaps the most hated man in Washington as well as on Wall Street these days?

Your guess? Not Muammar Gaddafi, not some Al-Qaeda extremist, not Kim Jong-il, but a man named David Beers. You may never have heard of David Beers but every financial policymaker in the world knows his name.

A Wall Street veteran and a graduate of the London School of Economics where he has endowed a scholarship in his name, he is the global head of sovereign credit ratings for Standard & Poor’s. For a Reuters story in details, click here.

To the surprise of some investors, if not everybody, the United States lost its top-tier credit rating from Standard & Poor’s, just days after rival agency Moody’s decided to extend its Triple-A rating for the United States. The chain reaction from S&P’s downgrade is obvious.

From London to Hong Kong, this is really the only story that investors care about and are talking  about. How will the Hong Kong and Shanghai stock markets open on Monday? How much will the market lose further this week?

These questions themselves are scary enough, aren’t they? Some economists and central bankers have tried to ease investor worries in the past 48 hours. They caution against overreaction because S&P is so far the only leading global rating agency to downgrade the U.S. We still have Moody’s and Fitch.

If Fitch also retains a triple-A rating for the United States, technically the U.S. government probably won’t be too worried about the outlook for its currency and dollar assets. S&P’s downgrade must be appreciated and welcomed by a small but ambitious player in the ratings industry.

Beijing-based  Dagong also downgraded the United States, although the impact was of course extremely limited and some investors have already dismissed Dagong’s downgrade as a political rather than financial decision. Read my last column “Banking on a Triple-A rating (Part 1)” on to see more drama behind the scene in the world of ratings.

I won’t elaborate on the potential impact on global markets of the S&P downgrade. Your mailbox should be full of research notes about this from your brokers and investment bankers. See how much email you receive today about the downgrade.

Probably, the more emails, the more serious and bigger the impact will be.

Central bankers certainly don’t want to see another financial crisis but they are no smarter than most of us. Now we have a game of market sentiment rather than a debate among central bankers and economists. The market will naturally express what it thinks and then we will see how it goes.

For better or for worse, S&P this time has made a difference as it apparently wins the public relations game among the big three ratings agencies. This may even be a motive for the decision to downgrade the United States … I hope not.

George Chen is a Reuters editor and columnist based in Hong Kong.

Photo: David Beers, Managing Director of Standard & Poor’s sovereign and international public finance ratings group listens to reporters during a Reuters Investment Outlook Summit in London, June 9, 2010 REUTERS/Benjamin Beavan

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Banking on a Triple-A rating Thu, 04 Aug 2011 04:00:15 +0000

By George Chen
The opinions expressed are the author’s own.

You may think I am overly cynical today but let me first ask you a simple-yet-complicated question — what is fair?

Global ratings agency Moody’s said yesterday that the United States will retain its top AAA credit rating after President Barack Obama signed a bill to raise the federal debt ceiling. However, we heard very different opinions from China on the credit rating of the world’s No.1 economy.

A Chinese ratings agency yesterday downgraded the U.S. from A-plus to A, saying the deal to lift the debt ceiling would not solve underlying U.S. debt problems or improve its debt-paying ability over the long term.

Dagong Global Credit Rating, a relative newcomer to the sovereign debt rating realm and little known outside of China, said in a statement that the U.S. decision to raise the borrowing ceiling would  not change the fact that the growth of its debt had outpaced overall economic growth and fiscal revenue.

Global ratings agencies are “unrealistic” in their assessment of U.S. credit, overestimating the ability of the U.S to pay off debt, Dagong’s chairman Guan Jianzhong told our correspondent Lucy Hornby in Beijing. Click here to watch the full TV interview online, brought to you by Reuters Insider.

I’m not going to tell you which rating is more accurate. Readers of my column on are mostly professional investors, so I am sure you have your own clear thoughts on this. The opposing views from Moody’s and little-known Dagong interest me purely because I really don’t know these days who is really telling the truth in the financial market.

When almost nobody is reliable and you can only rely on yourself, it’s really quite a scary feeling, isn’t it? Let’s imagine — today the U.S. budget ceiling adjustment took place in China, or perhaps France. What would the reactions of  rating agencies be?

I am of course not a ratings expert but I don’t think it’s rocket science. It’s just a decision on a combination of numbers and facts without any subjective thoughts or emotions.

Moody’s decision to keep the United States “Triple-A” and Dagong’s decision to downgrade the U.S. (made, some people say, for the sake of Beijing’s political agenda in Sino-U.S. relations) actually mean the same thing — that such ratings are merely subjective rather than based on facts and are in fact a potential and indirect risk to global economic recovery.

In the statement issued by Dagong downgrading the United States, the firm should probably have noted in its disclaimer that the U.S. Securities and Exchange Commission had denied Dagong’s application to become an officially recognised bond rater in the U.S.

Since then, Dagong has often verbally attacked the credibility of the SEC and the U.S. government. Google the news and you will find more buzz about the bad relationship.

So, tell me, who do you believe these days?

George Chen is a Reuters editor and columnist based in Hong Kong.

Photo: A Moody’s sign on the 7 World Trade Center tower is photographed in New York August 2, 2011 REUTERS/Mike Segar

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A turning point for China? Thu, 28 Jul 2011 02:48:28 +0000

By George Chen
The opinions expressed are the author’s own.

Is the train crash tragedy becoming a turning point for China’s political and economic development?

Frustrations among the Chinese public have been growing rapidly — at least on the internet if not yet in the streets. People are particularly unhappy with the way the Ministry of Railways has dealt with the train accident, which so far has cost 39 lives.

It has now turned into a full-blown crisis. Shen Minggao, chief Greater China economist for Citigroup, said in his latest research note to clients that the train tragedy could become “a turning point in the China growth model.”

“Authorities may choose intentionally to slow GDP growth gradually but firmly to 7-8 percent in following years and spend more time to fix the problems created by artificial fast growth,” said Shen in the note.

Shen’s comments have sparked a big debate online. Some young Chinese have said they are utterly disappointed at the way the government has handled the post-accident situation and don’t believe fundamental problems in China like corruption and bribery can be fixed or changed quickly.

I consider such hopelessness a big political risk for Beijing — even more risky than the growing tensions over the South China Sea these days. People losing not just confidence but all hope in the authorities is one of the gravest problems any government can face.

In the capital market, we see some Chinese brokerages still recommending investors buy some railway-related stocks that lost value sharply in the past few days due largely to growing concerns on the outlook for China’s high-speed train development and safety issues.

Goldman Sachs analysts said in a report the train crash accident may speed up the pace of reform of the Ministry of Railways and some listed railroad companies can benefit from this.

Before the accident, some asset managers selected some railway stocks as a big part of their portfolios, and you know the way Chinese asset managers like to invest when they want to make a big bet – they usually unite.

That is to say, if one big fund steps into the railway sector, others will naturally follow, and then a sort of investment alliance is formed in the stock market. This is the so-called win-win way that many Chinese asset managers are happy to work with and this could well explain why some foreign fund managers can easily get lost when they first come to invest in China.

The train crash last Saturday was unexpected, a so-called “black swan” factor to those fund managers, and now it’s apparently going to affect the performance of some big Chinese funds for the coming months.

Will the train crash trigger a market crash in China? This is certainly not the turning point for that Beijing wants to see in its economy.

George Chen is a Reuters editor and columnist based in Hong Kong.

Photo: China’s President Hu Jintao (L) looks at Premier Wen Jiabao as they leave after the opening ceremony of the National People’s Congress at the Great Hall of the People, in Beijing March 5, 2011 REUTERS/Jason Lee

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Not just an accident Mon, 25 Jul 2011 04:11:10 +0000

By George Chen
The opinions expressed are the author’s own.

We’ve talked about whether China’s economy will have a soft or hard landing. In fact, what China needs is a pause. Lots of things in China may be moving way too fast. Including our trains.

On Saturday, at least 35 people died when a high-speed train smashed into a stalled train in eastern Zhejiang province, raising new questions about the safety of the fast-growing rail network. For a Reuters story, click here.

In my view, the train crash does not only raise doubts about China’s big ambitions and effort to build its high-speed train network. It also adds to people’s frustrations over the way the country is administered. Some political commentators have said the “accident” was not really an accident but an incident, which in the end may have corruption, irresponsibility and bureaucracy to blame for.

For investors, it could be a time to short on those high-speed train related stocks. The Ministry of Railways tried the best to regain trust from the nation’s frustrating passengers that China’s latest high-speed train technology is safe and advanced. Such declarations came less than 24 hours after the tragedy that the the entire country is now mourning.

I think the market has already given its response to the rail ministry — shares of China train equipment makers fell as much as 16 percent on Monday. Meanwhile, many investors began to refocus on airlines. For a related Reuters story, click here.

Chinese companies and stocks have been under growing pressure in the past months on a variety of factors related to safety and stability.

Are Chinese food companies safe? Can accounting records and the business performance of listed Chinese companies be simply stable, rather than subject to abrupt warnings of earnings revisions, or challenges by rating agencies over credibility problems?

When we talk about the safety of China, it’s not just about the safety of the country’s transportation. The big question is if China is morally safe.

The New York Times quoted a Chinese blogger as saying: “China, please stop your flying pace, wait for your people, wait for your soul, wait for your morality, wait for your conscience! Don’t let the train run out off track, don’t let the bridges collapse, don’t let the roads become traps, don’t let houses become ruins. Walk slowly, allowing every life to have freedom and dignity. No one should be left behind by our era.”

I will stop here and leave you to consider that.

George Chen is a Reuters editor and columnist based in Hong Kong.

Photo: An injured man receives medical treatment at a hospital after two carriages from a bullet train derailed and fell off a bridge in Wenzhou, Zhejiang province July 24, 2011 REUTERS/Aly Song

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Put a pause on China concept stocks Fri, 22 Jul 2011 04:02:33 +0000 By George Chen
The opinions expressed are the author’s own.

Two Chinese dotcom companies have apparently become the latest victims of the growing market concern about China “concept” stocks in the wake a series of accounting scandals.

Online video firm Xunlei Ltd and Chinese e-book firm Cloudary Corp have postponed their U.S. fundraising plans. They both blamed volatile global markets. Volatile markets? Really? Aren’t the markets always volatile?

More or less, to some extent. We still see other companies lining up to list in the U.S. although the near-term outlook for China IPOs to land in the U.S. market doesn’t look too bright. In return, such concerns — warranted or not — are growing about Chinese companies listing in Hong Kong and Singapore.

There were some early signs about Xunlei’s difficulties to go public. It failed to win direct investment from News Corp. And some analysts say Xunlei could face challenges from some Hollywood movie makers over copyright issues.

For Cloudary, it’s a different story. The company changed its name from Shanda Literature before the IPO plan, as the firm seeks to brand itself as an e-book maker and seller — trying to convince U.S. investors it could become “China’s Kindle maker”. In the end, the rebranding campaign didn’t make headway.

Maybe what the two companies should really blame is not the volatile market but the investment bankers they hired who should have gotten them to list faster and earlier. Remember the match-making site called It may be a good idea to revisit my previous column “Is China exporting a dotcom bubble?“.

The reason I mention in particular the two Chinese dotcom companies today is to reflect the growing difficulties of selling so-called China concept stocks. China is not just a concept any more. Investors are getting more cautious and are asking more questions.

That should send a message to other Chinese companies considering public listings. For investors in Hong Kong, isn’t it time to review the China concept and related stocks that you hold in hand?

George Chen is a Reuters editor and columnist based in Hong Kong.

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Will Beijing be Italy’s White Knight? Wed, 13 Jul 2011 03:54:56 +0000

By George Chen
The opinions expressed are the author’s own.

Let’s talk about Italy.

Italy is about art — Leonardo da Vinci, Michelangelo Buonarroti and more names. Italy is about luxury — Prada, Salvatore Ferragamo and more brands. Italy is also about food.

But, right now, Italy is about debt — huge national debt that is putting the entire eurozone or even the rest of the world into market panic. So, who’s going to rescue Italy?

Perhaps Chinese investors. They are focused on Italy these days because the deepening debt crisis there has become a negative external factor dragging down the benchmark Hang Seng Index for two straight trading sessions. At the beginning, people were not fully aware of the situation, as some thought Italy could not be Greece.

After all, Italy is the No.3 economy in the euro zone. How can Italy be in crisis? If Italy is in trouble, what about the rest of Europe? Yesterday, I moderated an online forum where a former Trade Commissioner for the Italian government spoke. Mr. Romeo Orlandi, an old China hand, who’s now teaching globalisation at the University of Bologna in Italy, said Italy was “too big to fail”.

The European Union may find it difficult to work with the current Italian government given political dramas related to Prime Minister Silvio Berlusconi and the highly complex domestic politics in Italy, but one likely scenario is that Italy should survive from the growing debt crisis in Europe if Beijing decides to step in to help.

The Chinese government is already suffering from the “cheap dollar”, given its more than $3 trillion in foreign exchange reserves, in which U.S. dollar assets play a major part. As such, a “cheap euro” may be the last thing Beijing wants to see.

Beijing has already pledged to help at least two European nations — Greece and Portugal — solve their debt problems by buying government bonds. Mr. Orlandi expects that Beijing could take a similar approach with Italy.

The link between Beijing and Rome strengthened further after Prada floated shares in Hong Kong. The luxury handbag maker has already established a strong customer base among China’s fast-growing middle-class. Today, Italian media broke the news that Berlusconi’s AC Milan soccer club may consider Hong Kong for its planned IPO.

Chinese Premier Wen Jiabao traveled to Italy early this year to show his support for Sino-Italy business cooperation. Recent media reports also indicated that China Development Bank, a policy bank turned commercial lender strongly backed by the Chinese government, may pour more money into business opportunities in Italy.

The truth is the deeper you get in, the more difficult it is to get out. But let’s try to think positive. When a crisis occurs, it certainly also means opportunity. To Beijing, it’s time to consider what role it should play in Italy’s growing debt crisis. To the rest of the world, if Beijing steps in, then what else shall we worry about?

Of course, analysts at Moody’s may disagree with me as they have a fight in words and reports with Beijing on how financially healthy the Communist nation is, but that’s another story. Economists have been forecasting that the Chinese economy could collapse for the last decade, but nothing has happened yet.

So let’s focus on Italy — for now.

George Chen is a Reuters editor and columnist based in Hong Kong.

Photo: A man walks in front of a Prada store in Hong Kong June 12, 2011 REUTERS/Tyrone Siu

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