* Yuan FDI part of China’s efforts to globalise yuan use
(Adds HKMA response, analyst comment)By Soo Ai PengSHANGHAI, Oct 14 (Reuters) - China has formalised a pilot
scheme to allow foreign businesses to invest in the country with
yuan legally obtained overseas, as the country moves to
internationalise its currency.The People’s Bank of China (PBOC), China’s central bank, and
the Ministry of Commerce on Friday issued documents detailing
rules aimed at governing yuan foreign direct investment (FDI).The PBOC said the new rules, which guide foreign businesses
and banks in processing yuan FDI, will make “procedures for
related financial services more convenient.”The formalisation of yuan FDI marks a big boost to Hong
Kong’s standing as an offshore yuan hub, analysts said.”The main message is that it confirms the legitimacy,” said
Frances Cheung, analyst at Credit Agricole CIB in Hong Kong.”This adds to incentives for potential issuers to issue Dim
Sum bonds when the market stabilises, pushing up Dim Sum bond
yields gradually, in the longer term,” she added, referring to
yuan-denominated bonds issued in Hong Kong.BRING ON THE DIM SUMChina, ambitious to push for wider global use of its own
currency, has taken steps to support Hong Kong’s role as an
offshore yuan hub. Some multinational companies with a heavy
presence in the mainland, including Caterpillar and
McDonald’s Corp , have issued yuan bonds in the
territory.Norman Chan, chief executive of the Hong Kong Monetary
Authority, said that the new rules were “an important measure”
for the development of offshore and onshore yuan markets.The new rules “will significantly increase investment
options for yuan funds in Hong Kong, promoting fundraising via
yuan-denominated bond issuance in Hong Kong,” he said in a
statement.The Ministry of Commerce separately detailed definitions and
application procedures for yuan FDI in a notice posted on its
website.Among other stipulations, the notice said all applications
for yuan FDI worth 300 million yuan ($47 million) or above must
be submitted to the Ministry of Commerce for approval.As part of its efforts to increase the influence of the
yuan, China first launched a yuan trade settlement scheme in
July 2009 in a few cities and expanded it to 20 provinces a year
later.However, businesses have complained that they are facing
difficulty investing their yuan revenues due to China’s capital
controls.Trade settled in yuan swelled 33.7 percent in June from the
previous month to 205.1 billion yuan ($32 billion) in Hong Kong,
which helped drive the territory’s yuan deposits to 553.6
billion yuan in the month.
($1=6.38 Yuan)
* New NYC stores to be biggest in Uniqlo’s fleetBy Phil WahbaNEW YORK, Oct 13 (Reuters) - Fast Retailing Co Ltd’s Uniqlo is launching its U.S. expansion this week with
the opening of a flagship store in Manhattan that will anchor a
global push to rely less on its home market of Japan.In addition to the Fifth Avenue location, opening on
Friday, Uniqlo is also opening a store in New York’s Herald
Square next week, bringing its U.S. total to three locations.
The new stores will be the chain’s two biggest.The retailer’s goal is to eventually have 200 stores in the
United States and U.S sales of $10 billion by 2020.Uniqlo, run by Japanese billionaire Tadashi Yanai, is
directly challenging rivals such as Spain’s Inditex SA , Sweden’s Hennes & Mauritz AB and U.S.-based
Gap Inc with stores a stone’s throw away from theirs on
Manhattan’s major shopping strips.All these chains are trying to tap the growing market for
fashionable clothes, such as cashmere sweaters and lightweight
down jackets, at lower prices among U.S. consumers who are
likely to have a reduced purchasing power for some time.”Even people who don’t have much money have the same desire
to wear something nice,” Yanai told Reuters on Thursday through
an interpreter.Its rivals are well established in the United States. H&M
opened its first U.S. location in 2000 and now has more than
100. In 2010, it had U.S. sales of some $1.3 billion. Zara has
49 stores here, including seven in New York. Uniqlo has had a
single U.S. store, in New York’s SoHo district, since 2006.But H&M appeals to younger shoppers who change their
wardrobe more quickly, while Zara’s shoppers are a bit older,
leaving room for Uniqlo, an industry analyst said.”Uniqlo brings in a broader customer base and is a bit more
classic and tailored,” said NPD Group Chief Industry Analyst
Marshal Cohen. “They will appeal to a slightly more affluent
shopper.”But the U.S. expansion is modest compared with Uniqlo’s
plans for Asia, especially China, Southeast Asia and South
Korea. Of the 4,000 stores it hopes to operate by 2020, up from
1,000 now, some 70 percent will be in those countries.Sales in Japan, which account for three quarters of Fast
Retailing’s sales, fell 6 percent in the last business year.
Uniqlo has 843 stores in Japan.”The (Asian) middle class will grow,” Yanai said. “It’s a
gold rush.”The New York stores, which will attract U.S. and foreign
tourists, as well as taste-makers, are central to its global
strategy.”This is our showcase for the world,” Yanai added.
