Aquascutum’s acquisition price was determined by its value and future profiting potential, a report published by YGM said. Covered in the transaction includes the company’s brand and assets including its head office, concessions and stores in the UK.

Talks are underway that could see YGM buy Aquascutum’s concessions in Canada and Spain and a factory in Corby. Public files acquired from YGM showed it gained control of Aquascutum  brand in 42 countries in Asia and other regions.

A joint administrator from Aquascutum Geoff Rowley was upbeat about the company’s acquisition saying jobs of 100 employees were safeguarded adding that Aquascutum brand and business will now have the best opportunity for exponential growth both in the UK and the world over.

Aquascutum, a very popular luxury clothing brand in U.K, was founded 161 years ago and prides itself as a pacesetter in terms of craftsmanship and design in the apparel industry.

Founded in 1949 by Dr. S.K Chan, YGM Group has interests in garment and textile whole selling and retailing and other industries. It headquarters are found in Hong Kong and has offices in Guangzhou, Beijing and Shanghai.
 

Over the January-March period, the country’s overseas direct investment clocked USD 10.98 billion up 18.7% year-on-year, a report from the Ministry of Strategy and Finance revealed.

Direct investment in to the Latin American and Asian countries surged 231.9% and 95% respectively over the same period, a fact that led to South Korea’s first quarter overseas direct investment go up.

It wasn’t all one way investment either. South Korea’s direct investment in to China went up 166.3% year-on-year to USD 1.48 billion in The first quarter coming from an increase in investment into the manufacturing, property development, insurance and finance sectors. Into Brazil and Philippines, South Korea’s direct investment surged 300% and 1,400% respectively.

However, the Asian country’s investment in to the US shrunk 15.3% year-on-year to USD 1.68 billion though it still remained the most popular spot. The second popular destination was Australia that attracted a foreign direct investment worth USD 1.62 billion from South Korea.

The manufacturing sector took the lion share of South Korea’s overseas direct investment having suged 61.1% while foreign mining development projects shrunk 38.4% year-on-year in the first quarter.

However, economists voiced their concerns yesterday saying such a measure would do little to avert a crisis in the world’s second largest economy. According to the economists, an interest rates cut and more stimulus policies are needed to boost the economy.

The economist’s reaction was prompted by an announcement made by People’s Bank of China on Saturday, to the effect that more money for lending will be available from Friday this week since the amount of reserves commercial banks must hold has been cut. The bank’s latest move may free about RMB 420 billion (USD 67 billion).

An economic data released Friday revealed surprising drop in investment, trading, lending and domestic consumption. According to PBOC, in April, bank lending fell RMB 61.2 billion to RMB 681.8 billion, the lowest figure so far this year.

Many analysts believe April’s data is a conformation China’s economy may be weakening further a fact that prompted Premier Wen Jiabao to call for ‘back-up’ plans in case the situation worsens.

Electricity production is an indirect measure of the amount of economic activity going on, but one that many economists rely on as it is seen as a real statistic that is not subject to interpretation, estimation or even manipulation.

Until recently electricity production was growing by a similar order of magnitude to the economy. March 2012 production was up 7.2% on the year earlier, compared to the most recent economic growth rate for the March quarter of 8.1% on an annual basis.

Electricity is just one of a number of indicators that point to a sudden slowdown. Other data about bank lending and rail cargo also showed a sudden drop off. Rail cargo growth rates for example have halved compared to last year.

A collapse in real estate investment is being pointed to as the cause, given that property construction and investment contributes around 13% of China’s GDP. A tightening of credit as a result of years of loose lending to developers and even local government has caused the collapse.

Unlike at the start of the global financial crisis, China’s central government has limited means to boost construction activity. The country’s banks now have weak balance sheets and are less willing to let loose another flood of easy credit.

Similarly, major capital investments across Asia Pacific also sunk 42% quarter-on-quarter  to to USD11.6 billion,the report revealed.

According to the Asia-Pacific Capital Markets Market-view report released by CB Richard Ellis, a renowned real estate services provider, the decline was partly attributed high value of investment in the second quarter of 2011 and the New Year holidays in January. The CBRE report said in the first quarter of 2012, real estate investment in mainland China plunged to US$949 million.

Executive director of CBRE Investment Properties in Asia Greg Penn said other factors that led to a relatively quiet real estate market in China include development acquisitions between developers since most are facing liquidity challenges and the increasing occupier purchases by domestic companies.

According to the CBRE data, domestic capital was the main driver of the market accounting for 86% of the total investment value. Meanwhile, cross-border acquisitions went down 69% quarter-on-quarter to USD 1.6 billion.

The immensely successful Fiat 500 small car will be launched as soon as regulatory approval for its import is granted, which realistically will be in 8 or so months time. The stylish Fiat 500 (‘cinque cento’) has taken European markets by storm with 500,000 units sold globally since 2007 in what has proved to be a welcome cash generator for the Turin based car maker.

Fiat was forced to withdraw from South Korea during the 1997-98 Asian financial crisis when its local partner, Kia Motors, went bankrupt.

It planned a return again for 2008 but this time was held back by the global financial crisis.

This time, it will enter as a brand of Chrysler Korea. Chrysler Corporation of the US was forced to sell itself to Fiat in June 2009. With an operating company of the enlarged group already established in South Korea, the new start this time is actually only the launch of a brand, not the setting up of a new company.

Approval for the return of the Fiat brand has already been approved by the Asia-Pacific branch of Fiat Group, so its left only for the seal of approval from Turin to get the go-ahead. A senior member of the Fiat Group is expected to arrive in Seoul in a few weeks to formalise proceedings.

In a move that may or may not be related, the COO of Samsung Electronics, Lee Jay-young recently became a non-executive board member of Exor, the holding company that controls Fiat-Chrysler.

Well, that has come to pass. Currently, the US is now trailing the south Asian economic power house as the world’s largest smartphone market ,a report released last week by Canalys, a respected market research firm has showed .

According to the report, total smartphone shipments around the world surged 45 percent year-on-year  to 146 million units. However regional and country differences were clear.

For instance, in the US shipments  went up only 5% year-on-year while in the Asia Pacific region a whooping  81% growth was recorded. One thing that is clearly interesting is that for the first time, shipments in China overtook those in the US.

In the first quarter, China accounted for 22% of the global smartphone shipments while US represented 16%. Although this does not come as a surprise to industry watchers, such figures were the other way round a year earlier.

Meanwhile, countries in the Asia Pacific region accounted for half of the top 10 markets for smartphones.

According to Canalys Research Director for China Nicole Peng, among the factors that boosted China’s smartphone market include the landing of the iPhone and the Lunar New year.

Samsung took the lead in China’s smartphone share with a market command of 22% in the first quarter. Apple’s share rose to 19% while Nokia fell in the third place.

On Wednesday, the China Association of Automobile Manufacturers said in April, total sales went up 5% to year-on-year to 1.62 million vehicles. However, at 6.4 million vehicles, the January April sales were down 1.3%.

April auto sales in China last year were low mainly due to the effects of the Japan earth quake that disrupted production of vehicles. Further decline in sales has however been occasioned by cooling economic growth, tight credit policies and tariff curbs imposed by local governments.

It is worth noting that the growth of auto sales in China has slowed from 35% in 2010 to a meager 2% in the first quarter of 2012.  However, foreign and luxury brands have continued to fair well in the world’s second largest economy.

According to the American-based General Motors, sales of its joint venture and GM vehicles in China went up 11.7% in April from a year earlier with 227,217 vehicles being sold.

Another foreign automaker, Ford Motors Co. said its sales in China went up 24% from a year earlier with 54,881 vehicles having been sold.

According to the plan released by China National Textile and Apparel Council (CNTAC), the textile industry is aiming to increase clothing and textile exports by 7% annually thereby boosting the export value of  fiber products to USD 400 billion by 2020.

According to CNTAC, the transformation and upgrading of the textile industry will be accelerated by rising demand for fiber products and further boost branding and innovation to drive high-end industrial development.

For some industry observers though, the CNTAC plans are optimistic and ignore the competition for exported textiles from other Asian countries with lower cost bases such as Bangladesh

The domestic Chinese market is likely to deliver strong demand by itself though. The number of people joining the middle class in China is expanding. According to CNTAC average spending on clothing among the Chinese urban citizens is expected to grow by an average of 12.5% year-on-year in the 2011-2020 period.

Spending on clothing among rural folks is expected to go up by 15% annually over the same period. Last year, urban citizens in China spent an average of RMB 1,674.7  ( USD 265.8 ) each on clothing up 15. 95% from the previous year while that of rural residents increased by  29.5% year-on-year.

However, the Chinese textile industry has for long been dogged by a number of challenges including use of traditional technology, a fact that CNTAC says would be changed by the use of more advanced technologies. In support of this, CNTAC’s president said China’s textile industry still needed to improve on its innovation capabilities.

China’s banks have over-stretched their lending in recent years and many are now in poor shape. The irony is that they lent to government, or rather local provincial and municipal governments. A staggering 80% of their lending was to local government, and in 2010 alone it was worth at least USD 1.7 trillion.

China – a country where loans to government are high risk

In most countries, loans to local government should be seen as low risk. In China however the debt was secured through local government financial vehicles (LGFVs) and was in turn pumped into real estate development, much of it speculative. The loans were made at preferential interest rates that did not adequately reflect the risk, so now the banks have debt repayment problems and are unwilling to lend to normal businesses. In effect, local government has crowded out the private sector.

The problem has had a number of unintended consequences which has exacerbated the situation and left businesses seeking debt assistance. Property prices have fallen sharply as real estate developers struggled to finance the properties they were building and buyers struggled to get mortgages. As property prices fell, the balance sheets of LGFVs started to look shaky, putting more stress on the banks.

Victor Shih was one of the economists who raised the question on the practice of LGFV borrowing. He first projected that by the end of 2009 there was RMB 11.4 trillion of LGFVs debt, along with 12.8 trillion credit lines. The figure was shocking to those outside China but hardly raised an eyebrow in China. Three government agencies then audited the debt and came up with three very different calculations. In reality, no one knows the exact size of the local government debt problem but conservative estimates put it at RMB 12-13 trillion (USD 1.9 to 2.1 trillion)

Shadow Banking System

The debt problem has also led to the unexpected growth of the shadow banking system. Shadow banking includes trust loans, loans from criminal organisations and informal lending. With banks almost only lending money to other state-owned companies, normal private small businesses have been forced to take out loans from these subversive channels.

Worryingly, the shadow banking system has reached a similar size to that of the local government debt. Societe Generale recently estimated that China’s shadow banking system was worth RMB 14-15 trillion.

The equity alternative in Hong Kong

As an alternative some larger companies have looked to Hong Kong to raise finance through an equity listing on the Hong Kong stock exchange, but as we reported recently, there has been a crunch there too.

Of course officially, China and its banks do not have a debt problem. The loans are all carried by banks (state owned) with the liabilities held by local government and their financial vehicles. If all this debt was treated as being held by the central government, China’s debt to GDP ratio would be close to 90%, or about the same as many European countries.

This article was written by Martha Jackson who works for Debt Consolidation Care.