The 29th Hong Kong International Jewellery Show runs from February 16 to 20 at the Hong Kong Convention and Exhibition Centre and positions itself not only as the largest event of its kind in Asia, but a way into the China market for international jewelers.

And like most other high-end industries in the world today, China is where it is all at.

In pure terms of demand, China knocked India off its perch as the world’s largest gold jewellery market in the third quarter of 2011 as its consumption rose 13 per cent, year on year to 131 tonnes.

And demand is predicted to increase in 2012 — as the Chinese Year of the Dragon is considered a particularly auspicious time to hand out gifts, a fact reflected by the China Daily newspaper’s report this week that sales of gold, silver and jewelry over the recent Chinese New Year holiday had risen 57.6 per cent.

Hence this year’s Hong Kong show has attracted an impressive 3,000 exhibitors representing 46 countries and regions.

“The undiminished market desire for high-end jewelry is indicated by a 25 per cent growth in exhibitor number in the Hall of Extraordinary, which features exceptional jewelry pieces with high quality stones set in exquisite designs. The diamonds and precious stones section has also increased by 15 per cent,” organisers the Hong Kong Trade Development Council said in a statement announcing this year’s show.

Innovations in design will be on show during the 13th Hong Kong Jewellery Design Competition, while the event will also include seminars, jewellery runway shows and auctions.

“As well as being an important trading platform, the Hong Kong International Jewellery Show will hold a series of seminars and parades during the fair, to disseminate market intelligence on topics such as the “Outlook for Gold in Emerging Markets” and inspire buyers with showpieces on live models,” said the HKTDC.

Yet while economists and analysts expect the layoffs—predominantly at European financial institutions—to continue well into the first half of this year, they see limited impact on other sectors of the city’s economy over the coming months, in part because of the strength of the flow of money from mainland China to both the retail and financial markets.

A bigger concern, they say, is the threat that cuts in banking jobs could put a heavier strain on Hong Kong’s already sluggish property market. In the past few months, prices have declined for the first time since 2008. Jobless bankers may be more inclined to sell property, possibly triggering bigger price declines.

Already, banks with a major presence in the city, such as Royal Bank of Scotland Group PLC and Morgan Stanley, have announced thousands of job cuts globally, although the final number of those affected in Hong Kong isn’t yet clear. Those layoffs would add to U.K. banking giant HSBC Holdings PLC’s ongoing move to eliminate 3,000 jobs in the city, representing roughly 10% of its local work force.

European banks have expanded significantly in the region over the last few years to capitalize on the China growth story. Now, with the ongoing debt crisis at home, many are forced to shift their focus and halt investments in Asia.

With the New Year being rung in on Monday, parents across China aspire to produce “Dragon Babies” in the hope that the symbol, long associated with emperors, power and intelligence, will bring wealth and luck. Doctors have warned some women may even turn to illegal means to dodge the cap.

Hong Kong agreed last June to cap at 34,000 the number of non-residents allowed to give birth in the city. That compares to 40,000 mainland women who gave birth in Hong Kong in 2010, when total births amounted to more than 88,000.

Newspapers have reported cases of mainland women illegally crossing the border and skirting the rules by going straight to emergency rooms in public hospitals to deliver their babies.

“At that point the hospital can’t reject them,” said Jianfa Shen, Geography and Resource Management professor at the Chinese University of Hong Kong.

As a special administrative region within China, Hong Kong largely runs its own affairs under the “one country, two systems formula.” Hong Kong also has its own currency and legal system — the “one child” rule does not apply.

There were 1,656 cases of non-local mothers making emergency room deliveries last year, just over twice the 2010 figure, the Hospital Authority has said.

Dragon years have generated baby booms before, so hospitals are sure to feel the heat as forecasters predict a healthy birth rate for the rest of the year.

In a written statement to the Hong Kong Stock Exchange on Sunday, Sands China said it had received confirmation from the Securities and Futures Commission on Thursday “that the investigation has been concluded and that no further action will be taken against the Company at this time.” It didn’t elaborate. A representative for the commission declined to comment.

The disclosure comes amid an ongoing foreign bribery probe in the U.S. The company said in March it had received a subpoena from the U.S. Securities and Exchange Commission requesting that it produce documents related to its compliance with the Foreign Corrupt Practices Act and that the Justice Department was conducting a similar investigation. The Nevada Gaming Control Board said it has also initiated an investigation into the matter.

It remains unclear if the investigation by Hong Kong’s securities regulator is related to the U.S. probe. Sands China said in March that the commission had asked the company to produce documents for an investigation into alleged breaches of the Securities and Futures Ordinance. Neither the company nor the regulator has disclosed the nature of the investigation. David Webb, a shareholder activist in Hong Kong, said earlier that the main focus for companies regarding the Securities and Futures Ordinance is the issue of filing false or misleading statements to the stock exchange.

The U.S. gambling giant said it believed the U.S.  subpoena stemmed from allegations in a wrongful-termination lawsuit filed last October against the company by its former head of Macau operations, Steve Jacobs. In the case, filed in a Nevada court against Las Vegas Sands and its Macau subsidiary, Mr. Jacobs accuses the company of wrongfully terminating his employment.

Las Vegas Sands has denied the allegations.

An internal memo from the general counsel for Las Vegas Sands, reviewed by The Wall Street Journal, shows that Las Vegas Sands is seeking to secure a list of government officials who have gambled at the company’s Macau casinos, indicating a possible focus of the U.S. government’s bribery investigation into the company.

The U.S. Open champion, runner-up in Hong Kong twice before, came from three strokes behind heading to the final round to win by two strokes, firing a five-under-par 65 for a 12-under-par tally.

World number two McIlroy needed to win or finish second in Hong Kong to have any chance of denying Luke Donald the unprecedented feat of achieving the European and PGA Number One titles in the same season.

The 22-year-old McIlroy, who won his fourth professional title, will also need to finish in the top two and above Donald in next week’s Dubai World Championship to deny him both money-list titles.

McIlroy said he had also been fired up by rivalry with British world number three Lee Westwood, who recorded a 62 to move seven strokes clear of the field after the Sun City Challenge third round in South Africa on Saturday.

“When I woke up this morning and saw that Lee Westwood shot 62 in Sun City, I thought I really needed to win to stay above him in the world rankings, and that was a little bit of motivation for me,” McIlroy told reporters.

“After two place finishes here in Hong Kong, if feels like this win has been a long time coming, to be honest.

“It’s just fantastic. I’ve loved this city, I’ve loved this golf course. I played my first Hong Kong Open in 2007; I felt like it owed me something after losing the play-off in 2008.

“I had to wait a few years for it to finally happen but to get my hands on this trophy and to win this tournament is very special.”

McIlroy’s first-prize cheque of 341,723 euros allowed him to move from third to second place on the Race to Dubai money list, 789,789 euros behind Donald.

For McIlroy to deny Donald the two tour titles, he will need to win the season-ender in Dubai and see his fellow Briton finish outside the top 20 in the elite, 60-player field.

“One of my goals going out today was to win this tournament to keep myself in with a shout next week,” McIlroy said.

Three other IPOs — by an auto dealer, a zinc miner, and a maker of jelly products, all Chinese — also began order-taking for a total of $US786 million in Hong Kong IPOs.

But volatile markets claimed a victim with Chinese department-store operator Charter Group Holdings postponing order-taking for an IPO of as much as $US350m, people familiar with the situation said yesterday.
New China Life Insurance, China’s No. 4 life insurer by premiums, begins order-taking for the Hong Kong tranche of its Hong Kong-Shanghai listing today.

Four cornerstone investors have pledged to buy a total of $US780m in the Hong Kong tranche, including Singapore-listed insurer Great Eastern Holdings, which is buying $US380m, people familiar with the deal said.

Chinese shares closed up 1.92 percent. The Shanghai Composite Index, which covers both A and B shares, added 47.63 points to 2,528.71 on turnover of 82.5 billion yuan ($12.98 billion).

Savings denominated in the Chinese currency rose 2.2 percent to 622.2 billion yuan ($98 billion) at the end of September from August, according to a statement from the Hong Kong Monetary Authority.

“Demand for the yuan has dropped as fewer investors see it as an attractive investment vehicle,” said Nathan Chow, an economist at DBS Bank (Hong Kong) Ltd. “Chinese exporters’ increasing use of the yuan for trade settlement also drew some currency back to China from Hong Kong.”

In Hong Kong’s offshore market, the yuan declined 0.2 percent to 6.3902 per dollar today, paring the currency’s advance this month to 1.6 percent. Twelve-month non-deliverable forwards advanced 0.9 percent in October to 6.3625 in Hong Kong, according to data compiled by Bloomberg. The contracts fell 0.1 percent today.

“Yuan deposit growth in Hong Kong is likely to remain sluggish in the near term as expectations for appreciation will take some time to recover,” Chow said He estimates deposits could rise to 700 billion yuan to 750 billion yuan by the end of the year.

Yuan deposits in the city have jumped more than 10-fold in the past two years from 58.2 billion yuan in September 2009, according to data from the authority, the city’s de-facto central bank.

On a year-on-year basis, deposits in September jumped 317 percent, the smallest gain since October 2010, HKMA data show.

The gains came in thin turnover, suggesting that short covering gave the market a bigger boost than fresh buying.

Still, analysts hoped that the HSBC China Flash Purchasing Managers’ Index (PMI) for October, which showed the mainland manufacturing sector snapped a three-month contraction, could encourage investors.

The HSBC report and earnings from Chinese companies this week “should suggest that the pessimism on China is overdone and dissipate a lot of worries,” said Peter So, co-head of research at CCB International Securities in Hong Kong.

The Hang Seng Index closed up 4.1 percent at 18,771.8, scaling a gap between 18,411 and 18,675 formed between Oct. 17 and 18, with the peak on Oct. 17 at about 18,908 seen as near-term resistance.

Several other gaps on the charts opened up after steep falls in August and September precipitated the benchmark’s worst quarter in a decade, pointing to stiff resistance ahead.

But any real resolution to the Euro zone debt debacle from Wednesday’s European leaders summit could spur longer-term investors into fresh buying in riskier sectors that could lift the Hong Kong market.

Short-selling continued to stay below 10 percent, accounting for about 7 percent of total turnover in Hong Kong at midday, according to traders. Full data for Monday was not immediately available.

Energy and materials sectors led gains on Monday. Jiangxi Copper Co Ltd jumped 11.2 percent while China Coal Energy Co Ltd rose 7.6 percent.

Chinese property counters were also lifted after Moody’s Investors Service said on Monday that most of its rated Chinese developers would not face liquidity risks in the next 12 months, but it pointed out a challenging operating environment as Beijing keeps its tightening measures in place.

China Resources Land Ltd led percentage gains among Hang Seng Index components, up 10 percent, clawing back about half of its losses last week.

The benchmark Hang Seng Index lost 770.26 points to end at 16,822.15 on turnover of HK$76.37 billion ($A10.17 billion) on Monday.

It was the lowest close since May 15, 2009.

Chinese financial and property stocks led the fall on concerns over tighter lending policies and fears banks could be left holding significant amounts of bad debt.

Officials in the Chinese city of Wenzhou – a key hub of China’s private economy – on Thursday urged banks to limit lending rates and make more funds available to small businesses amid worries about a credit crunch.

“We believe there’s a higher chance of a surge in non-performing loans for China banks on this news,” Prudential Brokerage associate director Alvin Cheung told Dow Jones Newswires.

Mainland China’s stock markets were closed for a week-long national holiday with trading to resume on October 10.

Ping An, the worst-performing Hong Kong blue-chip, plummeted 13.3 per cent to HK$38.30.

Among other Chinese financial stocks, Bank of Communications fell 7.0 per cent to HK$4.36, while Bank of China lost 6.5 per cent to HK$2.29, on the back of the bad-loan worries.

“We’ve seen a switch to safe haven (assets) from riskier assets such as equities by foreign institutional investors,” said Patrick Pun, head of brokerage Haitong Securities Ltd.’s China division.

The selloff in Hong Kong came after Financial Secretary John Tsang on Sunday warned the city must be prepared for another financial crisis due to the worsening economic situation in the US and Europe.

Chinese property developer China Resources Land plummeted 11.8 per cent to HK$7.49, on fears that Beijing would launch more measures to cool property prices, while rival China Overseas Land also tumbled 11.1 per cent to HK$10.06.

Macau casino stocks were hit by a massive sell-off amid fears over a slowdown in China’s economy that could hurt the world’s biggest gambling hub.

SJM, controlled by tycoon Stanley Ho, plunged 25.5 per cent to HK$10.50.

Galaxy Entertainment fell 18.9 per cent to HK$9.42, Sands China – the Macau unit of casino giant Las Vegas Sands – was down 14.3 per cent and Wynn Macau, a unit of US casino mogul Steve Wynn’s Wynn Resorts, fell 10.9 per cent.