China Electronics Corp. (CEC) officially acquired the handset business of the Dutch giant Royal Philips Electronics, making it the third transnational handset acquisition performed by a Chinese company.

The two sides did not disclose the exact transaction amount, although experts believe the acquisition must be costly as Philips' handset business brought in sales revenue of 320 million euros in 2006.

"The agreement enables us to dedicate more efforts to the overall shift of our business," said Leo Van Alphen, Senior Vice President of Philips. "Philips has changed from a leader in electronic appliances to a comprehensive enterprise targeting more markets, such as medical care and fashionable products."

Whether Philips' strategic shift will contribute to CEC's presence in the cutthroat cell phone market is doubtful. Insiders still remember the previous two handset acquisitions-Chinese TCL Corp. acquired French Alcatel and BenQ acquired German Siemens-both of which ended up in failure.

However, CEC was optimistic about the acquisition.

"We have been cooperating with each other for 10 years." said CEC's Vice President Lu Ming, suggesting this purchase would be successful.

Housing Prices Likely to Surge Again

The government has imposed a value-added tax of 30-60 percent on real estate developers, which began February 1, in an effort to cool off the property industry.

Some of the newly opened housing projects have confirmed that they would increase prices by 300-500 yuan per square meters after the Spring Festival, which fell from February 18 to 25.

The Chinese Government has imposed many measures to cut housing prices. However, little has been achieved. Beijing's housing prices have increased 10 percent each month beginning in June 2006.

Meanwhile, real estate developers are no fools. They tend to transfer increases in cost to buyers.

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