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tions bought; then locals switched from bonds to equities. Investors who were late to the rally seem to have given bank shares an extra fillip, buying them because their ups and downs amplify those of the economy. As the yen has climbed recently, bank snares have done well again, as investors have turned away from exporters and towards domestic stocks, such as banks and retailers.

In addition, banks have been making rosy profit forecasts for the half-year ending on September 30th. MTFG has almost quadrupled its net profit forecast, to 270 billion. On October 6th, Mizuho raised its estimate from 100 billion to 230 billion. Two days later, SMFG revised its forecast from 80 billion to 130 billion. UFJ is expected to follow suit.

Banks made big profits by selling bonds in the spring. Now that the stock-market has risen, they can count unrealised share-price gains too. Their profits also include one-off tax refunds from the Tokyo city government. MTFG and Mizuho say that the mild economic upturn seems to have helped stem the flow of bad loans. MTFG has even cut its general reserves against loans to weak borrowers, on the assumption that the improving economy will have helped their finances.

67 Home Improvements in China store, which opens in Beijing in October. Steve Gilman, head of B&Q International, wants to have 75 stores in 30 Chinese cities by the end of Doing up the Middle Kingdom 2008. If everything goes to plan, analysts think that by 2010, China Shanghai and Shenzhen could contribute 3 billion ($5 billion) of sales and 185m of operating A boom in private housing is fuelling a new market for home decoraprofit, one tenth of Kingfisher's present operating profit.

tion and could change the way the Chinese shop Trust me Gaudy paper lions dance between shopping trolleys. The store is full bright lights, banner; and orange-clad helpers beaming at the But that would require big changes in how retailing works in throng of eager shoppers. In one corner, children hammer together China. The key advantage foreign chains currently have is trust. Chipieces of wood, while in another rapt adults are watching a product nese shoppers are used to being sold shoddy goods backed by dodgy demonstration. Everywhere, customers are pulling items off shelves to guarantees. Their defence is to negotiate fiercely and examine goods touch and even smell them. But this is no toyshop at Christmas. It is the carefully. Wandering around B&Qs Shenzhen store, 34-year-old Yuan recent opening of B&Qs newest store in Shenzhen. "Home improveYe is reassured by the fact that it is foreign. "I can trust international ment" has arrived in China and with it, a potential shopping revoluretailers," she says. Signs around the shop promise "no fakes" and tion.

money-back guarantees. In China, B&Q even takes customers to workAs with so many opportunities in the world's most populous shops to reassure them about quality.

country, the market promises to be huge. B&Q, part of Britain's KingMs Yuan also likes the idea of one-stop-shopping. In China, refisher retailing group, estimates that one-tenth of China's 400m housetailing is over-specialised. Along Hong Kong's home-improvement holds have "western" levels of disposable income, with $1,000 or more alley, Lockhart Road, one store sells door handles, another paint and a year to spend on home improvements. That number is increasing rapyet another paintbrushes. On the mainland, new homes are often conidly. Government deregulation (Chinese used to rent accommodation crete shells, with no plumbing or even dividing walls. Decorating takes from their work units) is boosting home ownership by 30 % a year.

enormous energy, requiring trips to scores of stores, and a hunt for a reAlong with home ownership comes an interest in decor. China's homeliable contractor. B&Q is profiting from this. Its "home solutions" serimprovement market, estimated to be worth almost 200 billion yuan vice will fit out an entire house, including furniture, and guarantee all ($24 billion) two years ago, has since grown much bigger. "Chinese the work. It is proving to be very popular, boosting B&Qs same-store people have the money, intention and desire to improve their homes," sales in China by 19 % this year and prompting it to experiment with says David Wei, head of B&Q China.

the same service back in Britain, where the home-improvements busiIn readiness, foreign chains are trying to move quickly ahead of ness is more popularly known as do-it-yourself (DIY).

new rules that will allow them to open shops anywhere in China from The big challenge facing B&Q, and its rivals in China, is that most December 2004. B&Q is already China's biggest chain by sales. Its forcustomers are not doing it themselves. "Chinese DIY is still really BIY eign rivals include Sweden's IKEA and Germany's Obi. America's giant buy it yourself," admits Mr Wei. Government policy is to build homes Home Depot, which already has links to Homeway, a Chinese chain, that are more finished, so B&Q needs to turn DIY into more of a hobby may enter in its own right. China's domestic retailers, including and the Chinese into a nation of home improvers, like the Americans and Homemart (the second biggest), No 9 and Orient Homes, are expandBritish. Yet middle-class Chinese feel it is beneath them to build a cabiing. B&Q plans to open 12 new stores a year. It has doubled sales each net or fit a shelf and, thanks to the abundance of cheap labour, have year since it opened its first store in China in 1999, and will have never had to. Many Chinese don't know how to wire a plug or rise to the stores in seven cities by the end of the year, including its largest-ever challenge of scumble painting. So the company is giving its customers 69 lessons, showing them how to use a drill, for instance, and even teaching Even if foreign retailers can make China's retail industry effichildren the mysteries of self-assembly furniture. cient, shoppers will not readily trust their promises. In Shenzhen and Shanghai, China's most western cities, customers in B&Q still try to Even if B&Q succeeds in changing how people shop, it must haggle over price. And even Ms Yuan, the customer in the new also change its supply chain. In a low-margin industry like retailing, Shenzhen store, walked out empty handed. "I need to check the prices efficient suppliers are the key to success. However in China, getting goods into stores is expensive and costly, says David Inglis, head of of the local specialists down the road," she explained.

operations for B&Q China. The company's gross margins in China are half of those of its international division, and the group will not break even (excluding pre-opening costs) until 2005 on an investment of $120m and rising. China's huge size and enormous regional variations mean retailers struggle to establish a national infrastructure, let alone a national brand. Laminated wood, for example, cannot survive Shenzhen's humid summers while the aquariums popular in the southern city freeze over during a Beijing winter. "It's like operating in different countries," adds Mr Inglis.

As a result, even the biggest retailers remain in thrall to regional manufacturers and their middlemen which raises costs. B&Q has 600 vendors supplying its 350 British stores but 1 800 for 15 Chinese ones. Even worse, these middlemen cut deals behind retailers' backs.

Even on the shop floor, vendor representatives routinely offer customers "special" prices. Mr Gilman is concerned: "This is a state-controlled economy. Price fixing is endemic. Retailers are at the bottom of the food chain in China. They have far less power than manufacturers. It is the opposite of the rest of the world." B&Q is heroically trying to change how its suppliers operate.

From next year it plans to open regional warehouses and to buy directly from manufacturers. It also wants to turn suppliers into partners. Nippon Paint makes B&Q own-label paint, which earns a margin of over 20% for the retailer, compared with 6% for an independent brand. But even as market leader B&Q is still not yet big enough to matter in such a vast market. Even if it were, foreign, retailers are treated inequitably.

They pay sales tax which tiny stores have the guanxi, (connections) to avoid. They are frequently offered only the poorest sites B&Q had to build its new Shenzhen store under a residential tower block, for example. Nor does cheap labour compensate. While staff costs in China are a third of those in Britain, B&Q needs twice as many people per store to meet the greater service levels expected.

71 Supplement. VOCABULARY NOTES :

1) then follows a discussion on...

1) the present paper, article 2) then the author goes on to the problem of...

2) the theme (subject-matter) 3) the next paragraph deals with (presents, discusses, de3) the main (major) problem scribes)...

4) the purpose 4) after discussing... the author turns to...

5) the basic principle 5) next (further, then) the author tries to (indicates that, explains 6) , problems related to; problems of that)...

7) similarly; likewise 6) it must be emphasized that (should be noted that, is evident 8) , , hence; therefore that, is clear that, is interesting to note that)...

9) on the contrary 10) nevertheless; still; yet :

11) besides; also; in addition; furthermore 12) at first 1) the final paragraph states (describes, ends with)...

13) , next, further, then 2) the conclusion is that the problem is...

14) , finally 3) the author concludes that (summarizes the)...

15) in short, in brief 4) to sum up (to summarize, to conclude) the author emphasizes (points out, admits) that...

:

5) finally the author admits (emphasizes) that...

1) the object (purpose) of this paper (to discuss, to describe, to :

show, to develop, to give)...

2) the paper (article) puts forward the idea (attempts to deter1) in my opinion (to my mind, I think) mine)...

2) the paper (article) is interesting, of importance (of little importance), valuable (invaluable), up-to-date (out-of-date), useful (use, :

less)... (not interesting)...

1) the paper (article) discusses some problems relating to (deals with some aspects of, considers the problem of, presents the basic theory, provides information on, reviews the basic principles of)...

2) the paper (article) is concerned with (is devoted to)...

:

1) the paper (article) begins with a short discussion on (deals firstly with the problem of)...

2) the first paragraph deals with...

3) first (at first, at the beginning) the author points out that (notes that, describes)...

73 .................................................................................................Part I. .......................................................................................................... Part II. ARTICLES FOR RENDERING Why Italians dont make babies............................................................... Doctored..................................................................................................Write on................................................................................................... Dyed in the womb....................................................................................Omnipresent.............................................................................................Why Thailand's star is rising..................................................................Deadly traffic...........................................................................................Berlusconi burlesque................................................................................ENJOY RENDERING! Desperate measures..................................................................................What to do about slums.......................................................................... Med sea Bubble.......................................................................................( ) Patriots too...............................................................................................Smoke and mirrors...................................................................................Ploughshares into swords.........................................................................Are the Rules being bent again..............................................................Breathe or be strangled............................................................................Spying on the spies..................................................................................PART III. ARTICLES FOR TRANSLATING Money in, money out...............................................................................Science and the Nazis..............................................................................Economics focus......................................................................................Western promise......................................................................................Japan........................................................................................................The job market.........................................................................................Japanese banks rising............................................................................... .. Home improvements in China................................................................. .. Supplement. VOCABULARY NOTES...................................................... 03.03.05. 6084 1/16.

. . 4.7. .-. . 5.1. 200 . 96.

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