Wall Street Journal reports that after years of flooding luxury stores from New York to Paris to snap up handbags and watches, Chinese consumers are shopping more at home. High-end names such as Cie. Financière Richemont, Burberry Group PLC and LVMH Moët Hennessy Louis Vuitton are experiencing a surge in sales in mainland China as the government taxes overseas purchases and some luxury brands lower prices in China to bring them closer to those elsewhere. The yuan's depreciation and recent terrorist attacks in Europe are also deterring Chinese from traveling internationally, boosting luxury purchases on the mainland, some analysts say. The shift in spending by the Chinese, the world's top buyers of high-end goods, is an opportunity for luxury brands on the mainland but also a risk to their business elsewhere in the $267 billion personal luxury-goods industry.

Financial Times reports that Chinese overseas deals worth almost $75bn were cancelled last year as a regulatory clampdown and restrictions on foreign exchange caused 30 acquisitions with European and US groups to fall through.The figures, which reveal a sevenfold rise in the value of cancelled deals from about $10bn in 2015, highlight a waning appetite for global dealmaking by the world's second-largest economy. But despite more deals being abandoned, the analysis by law firm Baker McKenzie and researcher Rhodium shows that Chinese direct investment into the US and Europe still more than doubled to a record $94.2bn in 2016. Sellers of assets in Europe and the US are becoming increasingly wary of large deals with Chinese buyers, according to people involved with several cross-border transactions involving China. "The Chinese are getting more professional but sellers are giving more priority to potential buyers outside China because of the restrictions imposed on capital," said one person who dealt with mainland buyers.

Financial Times reports that James Mattis, US defence secretary, said during a visit to Asia that there was no need for "dramatic military moves" in the South China Sea to pressure Beijing to stop construction on a series of maritime features in the contested resource-rich waters.Speaking in Tokyo after a visit to South Korea and Japan, Mr Mattis stressed the US should pursue diplomatic efforts to urge China to stop its controversial activities in the South China Sea. He said that although the US would continue to conduct freedom of navigation exercises in international waters, "we do not see any need for dramatic military moves". "What we have to do is exhaust all diplomatic efforts to try and resolve this properly and maintain open lines of communication," Mr Mattis said at a joint press conference with Tomomi Inada, the Japanese defence minister...The comments by Mr Mattis suggest that the retired four-star Marine general advocates a less assertive strategy for the South China Sea than Rex Tillerson, the newly confirmed secretary of state.