As the old saying goes, "The rich get richer," but for fat cat developers, not without ample cash flow. So in China's booming property market, these big golden boys are turning to outside help to blimp themselves up a bit more. But if "greed is good," then it's also smart for companies listed overseas to return to the mainland for their extra injection of cash. At least that's what every Tom, Dick and Harry Chinese company seems to be doing these days, including overseas Chinese company returnee Ping An. But the blue chips may not be the best investment in the A share market, as QFII investors are noting. It could be the undervalued underdogs that turn invested pennies-or mao-into riches. Meanwhile, foreign companies continue to jump on the mainland bandwagon-Alliance Boots Plc is the latest to make the leap into the pharmaceutical sector.

Wanted: a Cash Cow

Beijing-based Sunco Property, one of the country's largest property developers, sold 39.74 percent of its shares for 1.3 billion yuan to Hong Kong-based Road King Infrastructure Ltd.

Actually, it is not the first deal. Last September, the Hong Kong firm already bought 55 percent of Sunco's stake.

Even as citizens complain of skyrocketing housing prices, property giant Sunco has ironically suffered from a cash flow shortage, partly due to the overly rapid expansion of the property sector and tightened policies.

"It is too aggressive for a 1-billion-yuan comp

any to develop over 7 million square meters at the same time, especially when the government began to rein in the overheating sector and made developers' financing more difficult," an analyst who declined to be named told China Daily. The property company desperately needed cash flow to partake in the currently booming-or perhaps bubbling-real estate market.

Road King is confident that the acquisition of Sunco is likely to bring substantial rewards to its shareholders.

Ping An Insurance Under Spotlight

China's second largest life insurer, Ping An of China, is set to launch the country's second biggest initial public offering (IPO) in March and has been approved by the securities watchdog China Securities Regulatory Commission (CSRC).

Ping An, 19.9 percent owned by HSBC, applied to issue 1.15 billion yuan-denominated A share in the Shanghai Stock Exchange and plans to raise over 40 billion yuan, beating industry leader China Life's 28-billion-yuan Shanghai IPO. Goldman Sachs Gaohua Securities Co., Galaxy Securities and CITIC Securities will be the underwriters.

The mainland's bullish stock market, where the main indexes soared 130 percent last year, has tempted major mainland companies listed in Hong Kong to make plans to return.

China Life's A shares have more than doubled since it listed on January 9. Insurance stocks have been highly sought after by investors as a result of the industry's growth potential in China, partly because less than 4 percent of the 1.3 billion population has insurance and it leaves huge room for further development.

One Man's Trash is Another Man's Treasure

Some major foreign institutional investors who are qualified to invest in the Chinese stock market, known as QFIIs, are actually paying more attention to the "undervalued" stocks in the stock market.

UBS, the largest QFII, said it would focus on stocks with low price/earnings (P/E) ratios this year instead of a heavy investment in stocks with high returns. "We will increase our hold of low-priced, high-growth-potential stocks after selling part of our high P/E ratio stocks," said Yuan Shuqin, head of China Equiai.

"The P/E ratio in the A share market is relatively high compared with market fundamentals," said Qu Hongbin, chief economist of China at HSBC. "It is time to shift the focus from the high-priced financial sector to the consumer sector."

A Boot-hold in the market

Alliance Boots Plc, owner of the United Kingdom's largest drugstore chain, stated it will build up a joint venture with Guangzhou Pharmaceuticals Corp., China's third largest pharmaceutical wholesaler, in an effort to enter the Chinese market.

"This is an exciting deal for Alliance Boots and underlies our commitment to be a major international player in pharmacy-led health and beauty," said Richard Baker, CEO of Alliance Boots, in its statement, adding "the Chinese market has good growth potential."

The 50-50 joint venture will run 29 retail pharmacies, the maximum allowed by current regulations in China.

Although the joint venture is still waiting for government and shareholders' approval, who would dare say no to such a "win-win" situation?

Foreign Trade Wrap-Up China and the European Union Ministry of Commerce (MOFCOM) statistics show the trade volume between China and the European Union (EU) hit $272.3 billion in 2006, up 25.3 percent year on year. China-EU trade accounted for 15.5 percent of China's total foreign trade volume last year, and the EU remained the top trade partner of China, according to MOFCOM statistics. According to EU figures, EU's imports from China were 135.6 billion euros, 4.6 billion euros more than its imports from the United States. China has replaced the United States to become the EU's largest import market. The EU has been the largest technology provider to China and it was the top source of technology imports for China in 2006. China and Africa MOFCOM statistics show the total trade volume between China and Africa hit $55.5 billion last year, growing 40 percent. China's exports to Africa expanded by 43 percent, while imports from Africa increased by 37 percent. The sound trade relations between China and Africa resulted from the two sides' friendly political relations and the complementarity of their commodities. China imposed zero tax on 190 commodity items from 28 least developed African countries in order to expand imports from Africa. China will write off debts owed by 33 African countries to honor the pledge it made at the Sino-African Forum in November, according to MOFCOM, but MOFCOM didn't reveal the amount. China and India MOFCOM announced that trade between China and India reached $24.9 billion in 2006, maintaining an average annual growth of 45 percent since 2000 (see graph). The two Asian giants, which comprise the world's fastest growing economies, signed an agreement in 2005, vowing to bring bilateral trade volume to $20 billion by 2008. The goal was reached ahead of schedule. India was China's 10th largest trading partner in 2006, and China was India's second largest after the United States. Goldman Sachs estimated India will overtake the United States to become the world's second largest economy after China by 2042.