The Financial Times leads it’s China business coverage with Wal-Mart’s green push into China. The world’s largest retailer is to convene a meeting in October involving around 1,000 Chinese suppliers to set out goals for significant reductions in the environmental impact of its vast supply chain. Blu Skye, an environmental consultancy, is assessing the China strategy for the retailer. Environmental Defense, a non-profit group that has also worked closely with Wal-Mart, recently signed an agreement with the China Association of Small and Medium Enterprises to offer technical support on environmental issues. CASME’s more than 5,000 members include many Wal-Mart suppliers.

The FT story is accompanied by an interview with Lee Scott, Wal-Mart’s chief executive, who is bullish about the prospects of sustainability in China due to the “really aggressive” approach taken by the government.

The FT also reported that New Zealand will become the first developed nation to sign a comprehensive trade agreement with China the country's prime minister Helen Clark and Wen Jiabao, the Chinese premier, attend a signing ceremony in Beijing on Monday. The agreement, details of which have been kept secret, was reached after three years and more than 15 rounds of negotiations. New Zealand was the first developed country to sign China’s accession to the World Trade Organisation and the first to recognise China as a market economy. Meanwhile, Kevin Rudd, Australia’s prime minister, is due in Beijing later in the week to promote his country’s stalled trade negotiations with China. The negotiations have lost momentum due to China’s unwillingness to make concrete offers on the agriculture and services sectors. 

The South China Morning Post leads its China business coverage with a budget overrun at the Village at Sanlitun, a mega retail-hotel development in Beijing. Swire Properties has had to inject an additional US$142.8 million (RMB1 billion) into the 1.47 million square foot development, which it bought semi-completed for US$616.2 million last year together with Hong Kong-based property fund Gateway Capital. Swire has an 80% stake in the retail portion of the development while Gateway took 20%. Swire also acquired 100% of the 99-room boutique hotel. The additional funds were needed to upgrade the retail portion of the project to meet the higher standards required by Swire, sources told the newspaper. Gateway Capital chairman Goodwin Gaw said the cost overruns were mainly due to "our much higher specifications" but also blamed higher inflation for the increased costs. "Everything is getting more expensive on the mainland,” he said. Swire said last month it had committed US$2.85 billion (RMB20 billion) for four mainland projects - two in Beijing, one in Guangzhou and one in Shanghai.

The SCMP also reports that China Reinsurance, the world’s fifth largest reinsurer, is having trouble attracting foreign investors in the run-up to its expected US$2.6 billion initial public offering. Swiss Re, the largest reinsurer in the world, Munich Re, the second largest reinsurer, and private equity investors including Kohlberg Kravis Roberts and TPG have walked away from talks for a 10% stake in the company. Talks began in December last year but the potential investors grew concerned due to larger than expected claims after China was hit this winter by the worst storms in 50 years and a poor earnings outlook. China Re's return on equity is just 4%, well below the mid-teen profitability expectation of most market observers. Another source said private equity had turned cold on an investment in the company now there is an open playing field in the reinsurance market since Beijing broke China Re's dominance in December 2005. If the company is unable to attract a foreign investor, a move to a sole domestic market share offering would be more likely, the newspaper said.

The newspaper also reported that China's State Grid Corp, the largest electrical grid operator on the mainland, and Cheung Kong Infrastructure Holdings, a Hong Kong utility and roads company, are separately bidding as much as US$1 billion to buy power grid in New Zealand's capital city Wellington. It will be the second overseas bid by State Grid after it paid US$3.95 billion for the 25-year rights to run the Philippines' power grid in December last year.

In mid-morning, the SCMP also updated  its overnight story on Sinopec’s sharper-than-forecast dive in quarterly earnings. Asia's top oil refiner reported worse than expected full-year profit growth of just 5.5% to US$8.07 billion (RMB56.53) billion after refining losses erased more than 60% of its fourth-quarter profits. The company’s Hong Kong shares slid as much as 5% in morning trade Monday before recovering slightly to be down just 3% mid-morning. Analysts forecast that lofty crude prices would continue to erode margins.