China.Hawaii Chamber of Commerce ®
Hong Kong.Hawaii Chamber of Commerce ®
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 USA Small Business Administration (SBA) Selected Johnson Choi/HKCHcc 2008 United States National Champion

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How to Do Business with China, through Hong Kong & Setting up Business in China?
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(approximate $ exchange rates: US$1 = HK$7.8, US$1 = RMB$6.3)

China President Hu Jintao USA State Visit January 19 - 21 2011

Wine-Biz - Hong Kong Brand Hong Kong Video

Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)

成功之道 武进制造 Wujin - Changzhou - Jiangsu Province - China 

Happy Chinese New Year - Year of the Ram - Feb 19 2015 - Dance w/ Firework 

  President Obama's Lunar New Year Message - Year of the Dragon

Under the Hawaii State Law "Asian Lunar New Year Commemoration Week" The one week period following the day of the Chinese New Year shall be known and designated as the "Asian Lunar New Year Week of Commemoration in Hawaii". This week is not and shall not be construed as a state holiday. [L 2007, c 48, §2] click for more details

The Hong Kong Advantages under One Country Two Systems - when most of the world want to do business with China, there is only one place that China gives 100% backing - that is Hong Kong. Quoting the former Chief Executive of Hong Kong SAR Honorable Tung Chee-hwa "背靠祖國 - 面向世界" "backed by China and engaged globally". Whether you are an international business wanting to do business with China, or just wanting to get connected with Asia and the rest of the world - Asia's World City: Hong Kong is the right and smart choice.

TED: Martin Jacques Understanding The Rise of China 马丁·雅克:了解中国的崛起 

Hong Kong Education Bureau (click on the links for details) 德育及國民教育指引 Moral and National Education Guidelines

Hong Kong Chief Executive Policy Address, please visit The website contains all the documents and official video clips (including the recording of CE's presentation at the Legislative Council, press conference and TV forum, etc.).

Be sure to visit Hong Kong on your way TO/BACK from China

Video: 新加坡總理李顯龍香港是中國的一部分, 外國勢力應該要離開Prime Minister Lee Hsien Loong: "Hong Kong is part of China" taking a question on the Occupy Central protests in Hong Kong, its implications for the region, and whether he sees a peaceful resolution. He was speaking at the National University of Singapore Society's 60th anniversary celebrations at the University Cultural Centre at NUS, on 3 October, 2014. 

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Hong Kong*:  Sept 01 - 15 2015

In latest Li Ka-shing shake-up, Cheung Kong Infrastructure plans merger with Power Assets (Peggy Sito In the latest step in the reorganisation of Li Ka-Shing’s business empire, Cheung Kong Infrastructure Holdings, a subsidiary of CK Hutchison Holdings, has announced a proposed merger with Power Assets Holdings. Under the proposal, announced on Tuesday, all the Power Assets shares held by shareholders other than CKI’s subsidiaries will be cancelled, in exchange for newly issued CKI shares. Every outstanding Power Assets share will be exchanged for 1.04 CKI shares. The English name of CKI is proposed to change from Cheung Kong Infrastructure Holdings to CK Infrastructure Assets (Holdings). CKI intends to declare a conditional special interim dividend of HK$5 a share for all CKI shareholders, subject to the approval of the proposal. The proposed merger is not conditional upon the payment of the CKI special dividend becoming unconditional. The proposed merger will deliver value to the two companies, a joint announcement by CKI, Power Assets and CK Hutchison said. After the merger, CKI will wholly own Power Assets, of which it currently holds 38.87 per cent. CK Hutchison will remain the controlling shareholder of CKI with a 49.19 per cent stake, down from the current holding of 75.67 per cent.

 China*:  Sept 01 - 15 2015

China pledges to help revive Russia's ailing Far East region (SCM) China and Russia look set to broaden their cooperation following pledges to jointly develop Russia's ailing Far East region, a state media commentary said on Sunday in an attempt to dispel concerns of gloomy prospects for Sino-Russian ties brought on by the economic downturn. Backing President Vladimir Putin's drive for new sources of growth, Vice-Premier Wang Yang said on Saturday that Russia's push to revive the run-down region coincided with Beijing's "One Belt, One Road" strategy. Wang made the assessment at an economic forum in Vladivostok just days after Putin visited Beijing for a military parade commemorating the 70th anniversary of the end of the second world war - a move seen as boosting the united front between Beijing and Moscow. A commentary by state-run Xinhua said the development of Russia's Far East would create opportunities for cooperation between the two nations, and was expected to open "new horizons in mutual cooperation between the two". Putin's latest trip to Beijing came amid slowing economic growth in China in the wake of a recent stock market rout, which have both raised concerns about future economic cooperation between the two nations, and a possible reduction in China's demand for energy from Russia. The slower growth and the stock market rout have prompted Beijing to cut interest rates and devalue the yuan to boost the economy. But the commentary said Chinese enterprises were willing to take part in the development of the Far East region. "More practical cooperation between the two nations concerning the Far East will be launched," it said, adding it is an appropriate move to link up the region development with Beijing's "One Belt One Road" push, an initiative aimed at boosting trade and infrastructure links. "Russia has a good and unique logistical advantage in the Far East region, and this can make a significant contribution," it said.

Hong Kong*:  Aug 11 - 31 2015

Hong Kong labour secretary tells DSC workers their boss must declare insolvency before they can get paid (Allen Au-yeung After workers at defunct retailer DSC marched to the government’s headquarters in Admiralty to demand expedited recovery of their unpaid salaries, the secretary for labour and welfare reiterated the government's desire for the company’s founder and boss Hui Ming-shun to declare himself insolvent. The secretary, Matthew Cheung Kin-chung, said Hui must do so before the Labour Department could offer assistance to the employees. But he said the government would begin the process of deciding how much money each employee is owed. His comments came after he met with about 70 employees of the electronics and furniture retailer today. The meeting followed the march by staff members, in which they called on the government to speed up the process of recovering their salaries. “This morning we contacted the lawyer of Mr Hui to demand him to sign a declaration of insolvency and to determine as soon as possible the amount of money he owed to his employees,” Cheung said. “Once we receive Mr Hui’s declaration, the Labour Department will help the employees to apply for legal aid to petition to wind up the company.” In the meantime, Cheung said, the department would start the process of ascertaining how much money employees were entitled to receive from the Protection of Wages on Insolvency Fund, with a maximum of HK$289,000 per person. Hui, 61, and his wife and co-founder Lin Wai-yin, 55, were arrested yesterday on suspicion of conspiracy to defraud, as they arrived in the city from Macau. They remain in police custody. A Labour Tribunal hearing on the case will be scheduled for August 21. The police had been hunting the couple after they disappeared when their electronics chain stores were unexpectedly closed down on Monday last week, leaving 900 people jobless. The couples owe their staff more than HK$10 million in unpaid salaries. They are also being sued by landlords and suppliers over debts amounting to more than HK$10 million. The Consumer Councils has received complaints of goods undelivered by DSC.

 China*:  Aug 10 - 31 2015

China preparing to ordain second bishop amid signs of thaw in ties with Vatican (Reuters in Beijing) China is preparing to ordain a second bishop with the Pope’s approval, the spokesman for a Catholic diocese said on Tuesday, a possible sign of easing relations between the Chinese government and the Vatican. The possible ordination in central Henan province of Cosmos Ji Chengyi as bishop of Zhumadian and last week’s consecration of Joseph Zhang Yinlin as coadjutor bishop of Anyang follow a strained period between Beijing and Rome since 2011 when the Communist body that governs the church appointed bishops without Vatican approval. China’s 8-12 million Catholics are divided into two communities, an official church run by the Chinese Catholic Patriotic Association answerable to the Communist Party and an underground church that swears allegiance only to the Pope. Zhang was ordained last week as China’s first Catholic bishop in more than three years, said Li Jianlin, a priest and spokesman for Henan diocese. He said Zhang and Ji had approval from Rome, although there was no timetable set for Ji’s ordination as the church was undergoing “a lot of preparatory work”. “Catholics are thrilled because this is the first time since the founding of Henan province that there has been an ordination ceremony recognised by both sides,” Li said, referring to the approval given by Beijing and the Vatican to Zhang’s consecration. Li said the diocese was renovating a church to prepare for Ji’s ordination. China’s Foreign Ministry and the State Administration for Religious Affairs did not immediately respond to a request for comment. The upcoming and previous ordinations were good signs that the Chinese government is more open, said Anthony Lam, a senior researcher at the Holy Spirit Study Centre in Hong Kong, an organ of the Diocese of Hong Kong. China has not ordained any bishops since Thaddeus Ma Daqin publicly quit the state-sanctioned Catholic Church during his ordination as auxiliary bishop of Shanghai in 2012. The Vatican, which has had no formal diplomatic ties to Beijing since shortly after the Communist Party took power in 1949, has been trying to improve relations with China. The main point of contention between Beijing and the Vatican is which side should have the final say in the appointment of bishops. Another stumbling block is the Holy See’s recognition of self-ruled Taiwan, which Beijing considers a renegade province. Meanwhile, Christians in the eastern province of Zhejiang say authorities have been taking down crosses on churches since last year, creating tension between officials and congregations.

Hong Kong*:  Aug 1 - 10 2015

Hong Kong villagers evicted early ahead of massive commercial and housing development (Fanny W. Y. Fung Homes are due to make way for huge development - but not until at least 2020 - About 30 households living in squatter homes in a Yuen Long village are set to be the first displaced to make way for an ambitious plan for a new commercial hub in the northwestern New Territories. Some say they have been told to move out by Monday – despite the fact the mammoth government project will not begin to take shape for at least five years. Under a proposal by the Planning Department and Civil Engineering and Development Department, a 714-hectare site in Hung Shui Kiu would be transformed to provide 1.9 million square metres of office, retail and hotel space, along with 60,100 new flats. The plan is subject to a third and final round of consultation, which runs until September 16, and land formation work is not due to begin until 2020. But residents of Tin Sam San Tsuen, which will make way for the work, say they have already received notice from their landlord to leave or switch to monthly rental contracts that would allow for their rapid eviction, according to activist Chan Kim-ching. His group Liber Research Community has received calls for help from residents. More than 20 attended a village meeting last night, with some saying they had been told to leave by Monday next week. They want the government to help them find a place to settle. “Asking us to move is not a problem. Seeking possession is not a problem. But, there must be a place for us to settle,” said Chui Ming-pong, 40, who works in transportation and has lived in the village for five years. “We just want a home. I have been paying rent on time every month. I don’t have any plans now.” Luo Xuehua, 38, a housewife who came from Guangdong to Hong Kong about four years ago, lives in one of the temporary houses in the village with her two-year-old son. She said a “manager” of the squatter area had come a few days ago and told her to leave in less than two months. “I don’t know who that young lady is, actually, but she has been managing our area and collecting rent from us. … This is not my place, so what can I do? I can only look for a new place,” she said. Chan said the landlord, Honour Jet Development, had already posted eviction notices on some homes. A search of Companies Registry records found the company had an intertwined ownership structure that involved six other businesses. The houses are considered squatter homes because they are temporary structures erected illegally on public or private land. The owners could still receive compensation if the homes are cleared for a government project. The case of the village reflects a difference in the treatment of villages dating to before and after the New Territories became part of colonial Hong Kong in 1898. Tin Sam San Tsuen is one of five newer villages that will be bulldozed. But 17 villages where residents can trace their ancestry to before 1898 will be preserved. The two departments will hold a forum on Saturday on the development plan, which is set to see the population of the area rise from 42,000 to 215,000.

 China*:  Aug 1 - 10 2015

China ‘has halted reclamation works in disputed South China Sea’ (Agencies in Kuala Lumpur) China seeks to calm disputed waters but claimants remain concerned - China has stopped reclamation work in the South China Sea, Foreign Minister Wang Yi said yesterday in Beijing's latest bid to calm tensions with its neighbours over the disputed waters after blunt exchanges with Washington on the matter. Wang's remarks came as the territorial disputes dominated a high-level regional security summit, in which some Southeast Asian nations described China's construction in the region as destabilising. "China has already stopped," Wang said on the sidelines of the Association of Southeast Asian Nations forum. "You look, who is building? Take a plane and look for yourself." Wang called on countries in the region to speed up talks on how claimant states should conduct themselves in the waters. Beijing claims most of the South China Sea; the Philippines, Vietnam, Malaysia, Taiwan and Brunei have overlapping claims. Tensions mounted as China started reclamation and building an air strip in the contested waters that could be used for military purposes. Wang's remark was seen to ease tensions, but Southeast Asian diplomats said they remained concerned. Philippine foreign ministry spokesman Charles Jose said China had stopped because it had already formed its new islands. "China announced they are moving on to phase two, which is construction of facilities on the reclaimed features. The Philippines views these activities as destabilising," Jose said. Japan's senior foreign vice-minister Minoru Kiuchi "voiced deep concern over unilateral actions that … heighten tensions in the South China Sea, including large-scale land reclamation, the construction of outposts and their use for military purposes". A diplomatic source said Wang told his Southeast Asian counterparts that China would press on with construction on the new islands, and the projects would include lighthouses and medical and rescue facilities. The foreign ministry said in June that some of the reclamation near the Spratly Islands had been completed, and that Beijing would start construction mainly for meeting civilian demands but also for "satisfying the necessary military defence needs". Washington says Beijing has reclaimed more than 1,200 hectares in the last 18 months. In blunt but diplomatic terms on the sidelines of the Asean summit, US Secretary of State John Kerry and Wang suggested that efforts to ease tensions over competing claims remained a contentious work in progress. Kerry urged China to end its provocative land reclamation projects, but Wang sent a strong message that those without claims should allow the claimants to settle the matter on their own. Renmin University foreign relations expert Shi Yinhong said that by stressing China had halted reclamation, Wang was toning down the debate, creating a positive atmosphere for President Xi Jinping's trip to the United States next month. "[But] after Xi finishes his visit, I believe tensions will resume as both Beijing and Washington will not give up their core interests in the South China Sea."

Hong Kong*:  July 21 - 31 2015

 Hong Kong civil servants to get generous pay rises to boost 'morale' after vote by lawmakers (SCMP Joyce Ng) Civil service minister Paul Tang said a higher pay rise was needed to boost morale among government employees. The Legislative Council’s Finance Committee last night approved a generous, above-market rate pay rise scheme for Hong Kong’s civil servants. The committee voted 41-0 to endorse the government’s funding request for the annual pay rise, which will cost taxpayers HK$8.22 billion per year. The government’s offer will lift the annual increase 0.5 percentage points above the level suggested by a survey on private-sector pay trends which the government usually follows. Under the offer, higher earners will receive a pay rise of 3.96 per cent and those in the middle and lower ranks will pocket increases of 4.62 per cent. During the committee meeting, lawmakers had asked officials how the additional 0.5 percentage points were justified. Secretary for Civil Service Paul Tang Kwok-wai said “morale”, one of six established factors in the consideration of civil servants’ pay, justified the additional increase. “They had a tough year last year,” Tang said. “Work was difficult. [The pay rise] is to boost morale.” The other five factors were the annual private-sector pay trend survey, economic conditions, cost of living, the government’s fiscal situation, and employees’ pay claims. Lam Tai-fai, lawmaker for the industrial sector, asked Tang for the ratings of the six factors in the calculations, but the civil service chief would only say it was “a decision of the Executive Council”. It will be the seventh time since 1989, when the current system was put in place, that the government has broken from the usual practice of following market trends in setting civil service pay rises.

 China*:  July 21 - 31 2015

Chinese Premier Li Keqiang meets Abe adviser amid strains over Japan's military ambitions (Agencies and Li Jing) Relationship between the two countries still "sensitive and complex", Li tells Shotaro Yachi, a major architect of Japan's foreign and security policies - Japanese envoy Shotaro Yachi shakes hands with Premier Li Keqiang during a meeting at the Zhongnanhai leadership compound in Beijing. A key adviser to Japanese Prime Minister Shinzo Abe met Premier Li Keqiang on Friday amid strained relations between the two countries over the approval by Japan's lower house of a set of controversial security bills that would allow its military to fight overseas under certain circumstances. Li told Shotaro Yachi, a major architect of Abe's foreign and security policies, that the relationship between China and Japan was still "sensitive and complex". China would strive to develop and maintain a stable international and regional environment for the country's growth, and Japan should stick to a peaceful development strategy and work for regional stability, Li was quoted by Xinhua as saying. "Whether relations are good or bad does not only affect the well-being of both our countries' people, but has an important effect upon regional peace, stability and prosperity," Li said. After the meeting, which lasted a little over 30 minutes, a Japanese official said both sides agreed on the need for "top-level dialogue" and to "control differences" for the development of the two countries. Yachi and Li did not discuss issues such as a statement Abe is to issue in August to commemorate the 70th anniversary of the end of the second world war, a big concern for Beijing as to whether it can strengthen ties. Beijing will hold a major ceremony on September 3 for the anniversary, which it calls its day of victory in an eight-year war of resistance against Japanese aggression. China has invited Abe, along with other world leaders, to be part of the commemoration. Abe is not planning to attend the event, partly because it includes a major military parade in Tiananmen Square, but is considering visiting Beijing either before or after September 3 for what could be his third meeting with President Xi Jinping . Yachi, the secretariat head of Japan's National Security Council, also held talks with China's Defence Minister, Chang Wanquan . Chang told Yachi the passage of the bill - which must be deliberated by the upper house - was an "unprecedented move" that would "have a complicated influence on regional security and strategic stability", Xinhua said. He urged the Japanese to "learn from history, respect major security concerns of its neighbours" and to do no harm to "regional peace and stability", Xinhua added. Beijing was preparing for "high-level political dialogue" with Japan, China's top diplomat, State Councillor Yang Jiechi , told Yachi on Thursday, fuelling speculation of a leaders' summit as early as September.

Hong Kong*:  July 11 - 20 2015

'More than 2,600 jobs created in first half of year' by companies linked to Hong Kong investment body (By Ben Westcott At least at least 40,000 jobs have been created by InvestHK companies since the body was founded in July 2000. New jobs in Hong Kong created by companies helped to set up in the city by the local government’s investment promotion body jumped more than 70 per cent in the first half of the year, according to InvestHK’s mid-year report. The report, released on Thursday, said 260 companies had been assisted to invest in Hong Kong in the first half of the year, creating more than 2,600 jobs. The report said the number of new jobs generated by clients of InvestHK increased 73 per cent, compared to the same period last year, off the back of a 17 per cent growth in client companies. In addition, 54 of the companies encouraged to invest in the city, some 21 per cent of the total, were start-ups – 38 per cent more than signed on in the previous year. Start-ups from the United States, France and Britain were at the forefront of the surge in new companies investing in the city. In total, at least 40,000 jobs have been created by InvestHK companies since the body was founded in July 2000 to help encourage international investment in the city.

 China*:  July 11 - 20 2015

Chinese president attends BRICS summit in Russia's Ufa - Chinese President Xi Jinping (L) is welcomed by his Russian counterpart Vladimir Putin during the 7th BRICS (Brazil, Russia, India, China, South Africa) summit in Ufa, Russia, July 9, 2015. Chinese President Xi Jinping attended the seventh BRICS summit in the southwestern Russian city of Ufa on Thursday. It is the third time for Xi to attend the annual summit of the emerging-market bloc that groups Brazil, Russia, India, China and South Africa. Russian President Vladimir Putin, Brazilian President Dilma Rousseff, Indian Prime Minister Narendra Modi and South African President Jacob Zuma also attended this year's meeting, which is themed "BRICS partnership: A powerful factor for global development." The five leaders are expected to exchange views on enhancing cooperation among BRICS countries and on international and regional issues of common concern. Their consensuses will be included in the Ufa Declaration issued afterwards. The BRICS leaders are also to hold dialogues with leaders from member states and observer states of the Shanghai Cooperation Organization and the Eurasia Economic Union, joined by heads of international agencies and representatives of the BRICS Business Council. According to Chinese Vice Foreign Minister Cheng Guoping, the BRICS leaders will draft a blueprint for economic and trade cooperation of the bloc by passing a "BRICS Economic Partnership Strategy." China looks forward to positive outcomes on issues concerning the BRICS New Development Bank (NDB), a contingent reserve arrangement, the China-proposed Belt and Road initiative, as well as the Asian Infrastructure Investment Bank, said Cheng. By Tuesday, all member countries had ratified the agreement to build the NDB and deposited their share of the initial capital. The bank will begin operation in January 2016. The priority projects to be financed are expected to be reviewed at the summit.

Hong Kong*:  July 01 - 10 2015

CY Leung has 'no plan' for security law for Hong Kong as China enacts new national legislation (By SCMP Chris Lau, Tony Cheung and Thomas Chan) Chief Executive Leung Chun-ying was today quick to dismiss concerns over the implications that China’s newly adopted national security law could have for Hong Kong, saying there was no plan to enact the controversial Article 23 of the Basic Law. Pro-democracy lawmakers have suggested the Hong Kong government may soon attempt to resurrect national security legislation last attempted in 2003 but Leung denied there would be any impact on the city. "It is a piece of national law. It doesn’t apply to Hong Kong," he said, after initiating handover anniversary celebrations in Tsim Sha Tsui, alongside Zhang Xiaoming, director of the central government’s liaison office in the city. But he added: "Naturally, Hong Kong is part of the country and has the responsibility and obligation to protect the security of the country." Leung said such obligation should be done through local legislation in accordance with Article 23 of the Basic Law. "The Hong Kong SAR Government does not have any plan to enact Article 23 local legislation," he insisted. Article 23 of the Basic Law, Hong Kong’s mini-constitution, stipulates that that the city’s government must “enact laws on its own to prohibit any act of treason, secession, sedition [or] subversion against” Beijing.

 China*:  July 01 - 10 2015

China’s stock exchanges to lower securities transaction fees after sharp fall in markets (By Staff reporter and Agence France-Presse in Shanghai) China’s two major stock exchanges are to lower securities transaction fees following a recent slump on the markets, the official Xinhua news agency reported on Wednesday night. People’s Daily said the transaction fees for A-share trading in Shenzhen and Shanghai would be lowered by 30 per cent – from 0.0696 per 1,000 of the transaction amount to 0.0487 per 1,000 – with effect from August 1. The announcement comes after Shanghai shares closed down more than 5 per cent on Thursday, resuming their downward trajectory a day after recording their biggest gains in more than six years. After days of heightened volatility and a fortnight of heavy losses, the benchmark Shanghai Composite Index was steady for much of the day, and sometimes in positive territory, but slumped in the last hour of trading. The Shenzhen Composite Index plummeted 4.79 per cent. The Shanghai index swung more than 10 per cent on Tuesday after a weekend interest rate cut had failed on Monday to arrest two weeks of plunging prices. Markets recovered on Tuesday after 15 billion yuan flowed into Shanghai’s four largest exchange-traded funds after the state-owned pension fund announced plans to invest more actively in domestic stocks – a move that could provide a 1.3 trillion yuan boost for equities. When Shanghai peaked on June 12 it had risen more than 150 per cent over the previous 12 months, partly fuelled by margin trading – in which investors borrow cash to invest in stocks, a practice that magnifies both profits and losses. Both Shanghai and Shenzhen have since fallen by more than 20 per cent, a common definition of a bear market, with the losses largely attributed to fears stocks were overvalued, profit-taking and margin traders unwinding their positions. In a sign of the general skittishness pervading the markets, the state-backed Asset Management Association of China recently urged fund managers to buy equities and not panic, while yesterday mainland authorities moved to quash rumours that institutional investors, including Goldman Sachs and the Hong Kong unit of China Southern Asset Management, were aggressively shorting the market using index futures on China’s Financial Futures Exchange.

Hong Kong*:  June 21 - 30 2015

Hong Kong book fair hopes record 580 exhibitors can attract more than a million visitors (Timmy Sung The annual Hong Kong Book Fair returns next month with a record number of more than 580 exhibitors from over 30 countries, as its organisers said they hoped the event could attract more than a million visitors. Organisers the Trade Development Council unveiled plans for the fair this afternoon, saying an exhibition promoting Cantopop culture would be part of the event. The fair is in its 26th year and will be held at the Convention and Exhibition Centre from July 15-21 under the theme “Reading the World: Love at First Book”. To promote Cantopop culture, there will also be an exhibition featuring the works of famous local lyricists since the genre became popular in the 1970s. “I hope it can dismiss the misunderstanding that the quality of Cantopop is declining,” said Professor Stephen Chu Yiu-wai, from the University of Hong Kong’s School of Modern Languages and Cultures. The council’s deputy executive director Benjamin Chau Kai-leung said he was hoping more than a million people will visit the fair this year, but it would depend on the weather. He also said because of inflation and bigger budgets allocated to promotion campaigns, rent for booths had increased by about 3 per cent. Tickets remain at HK$25 for adults and HK$10 for children. Those who enter on the first two days can enter for free again on July 17, 18 and 19 after 7pm by presenting their ticket stub.

 China*:  June 21 - 30 2015

China and US able to bridge some economic differences in Washington talks (Agencies in Washington) Both sides closed gaps on topics such as a bilateral investment treaty, but there was little sign Washington was ready to embrace China’s new Asian Infrastructure Investment Bank - Chinese and American negotiators bridged some differences over economic policy in annual bilateral talks on Wednesday, even as the two countries continue to wrestle with major strategic disagreements. Both sides suggested they had closed gaps in talks on a bilateral investment treaty (BIT) following the talks. Washington also appeared more ready to support a major step in the internationalisation of China’s yuan, its inclusion in the basket underpinning the International Monetary Fund’s SDR currency. However, there was little sign that Washington was ready to embrace China’s new Asian Infrastructure Investment Bank, which the US has said risked undermining social and environmental standards for loans established by the World Bank. US Treasury Secretary Jacob Lew said at the end of the two-day US-China Strategic and Economic Dialogue that China had agreed to hold off on interventions in the foreign exchange markets to manage the yuan’s value, except in situations of “disorderly market conditions”. China also agreed “to actively consider” additional steps to move the yuan. Lew acknowledged that the yuan had appreciated in value and said that China’s foreign exchange intervention had declined over the past year. Yet he added that the “real test” would be when there was upward pressure on the yuan. “Will China refrain from intervening? That is still an open issue,” Lew said. “They still need to work toward having a fully market-determined exchange rate.” Lew also welcomed China’s commitment to begin publishing economic data to meet a key IMF standard by the end of 2015. “It is in China’s own interest to adopt the transparency standards of major reserve currencies.” Earlier this year Beijing asked the IMF to consider including the yuan in the basket on which the SDR is based. That would constitute a major recognition of the yuan as one of the 10 most important currencies in the world. Chinese Vice-Premier Wang Yang confirmed that Washington had shown support for the yuan’s consideration by the IMF, a decision likely to take place only next year. Wang also said the two sides had placed high priority on the BIT, as they weighed up each others’ proposed “negative list”, a register of business sectors they want to keep protected from foreign investment. The two sides had committed to “improve the negative list offer with a view to reaching a mutually beneficial and high-standard treaty”, he told reporters after the meeting, adding that the two sides had a long way to go in negotiating a bilateral investment treaty. The talks, which deal with a broad range of often technical issues, appeared to avoid flashpoint economic issues, such as the AIIB that Beijing has launched, and the Trans-Pacific Partnership, the US-driven free trade area that notably excludes China, the second-largest US trade partner. Meanwhile, Wang said that Washington had acknowledged its complaints about US economic policy, and would weigh up the impact of its expected monetary tightening on the rest of the world. “The United States will pay attention to the impact of monetary policy on international financial systems and promised increased investment, national savings, a reduced deficit ... and fiscal sustainability over the medium term,” Wang said.

Hong Kong*:  June 11 - 20 2015

1.2m welfare recipients waiting out blame game between Hong Kong government and pan-democrats (Fanny W. Y. Fung Pan-democrats and the government are blaming each other for months of delay in doling out extra benefits to welfare recipients - with 1.2 million of the city's neediest people stuck in the middle. Financial Secretary John Tsang Chun-wah proposed disbursing the HK$5.5 billion in extra cash in his February budget speech. Recipients of Comprehensive Social Security Assistance, old-age allowance or disability allowance each get two more months of payments, pending lawmakers' approval. But no funding request has yet been put to the Legislative Council's Finance Committee - scene of a series of filibustering attempts by pan-democrats. Time is running short, with the committee slated for only three more meetings before the legislative year ends in a month. Yet on Friday, committee members learned the government would request anew funding for its contentious innovation and technology bureau first. That effectively pushes back debate on the welfare benefits, possibly delaying any Legco decision for another three months, until after the summer. Yesterday, Secretary for Labour and Welfare Matthew Cheung Kin-chung urged lawmakers to vet the welfare funding requests "as soon as possible" once they were tabled. He dismissed as a "misconception" the idea that welfare funding was giving way to the formation of the new bureau. Charles Mok, the lawmaker representing the information technology sector and a supporter of the bureau, said the funding for welfare should come first. He said his fellow pan-democrats who opposed the bureau, such as members of People Power, had vowed not to filibuster over the increased welfare payments. "The government should handle the livelihood items first," Mok said. "If it insists on putting the bureau first, it will only end up in a no-win situation."

 China*:  June 11 - 20 2015

Premier Li Keqiang affirms target to reach peak carbon by 2030 (Reuters in Shanghai) Premier Li Keqiang reaffirmed the government's commitment to achieve peak carbon emissions by "around 2030", the State Council said in a statement. The statement released on Friday contained no new commitments ahead of crucial climate talks to take place in Paris at the end of the year. Li, at a meeting of the State Council's National Leading Group on Climate Change, also said it would impose a "tough limit" on the expansion of heavily polluting and energy-intensive industries. "China is committed to full, effective, and sustainable implementation of the UN Framework Convention on Climate Change," the premier said while presiding over a meeting of the National Leading Group on Climate Change, Energy Conservation and Emissions Reduction in Beijing, Xinhua reported. "China stands ready to work with all other parties to ensure a comprehensive, balanced and strong agreement at the upcoming Paris Conference," he said. China's coal consumption decreased for the first time in years in 2014, leading some to speculate that its carbon emissions could peak sooner than many had expected. As the energy-intensive heavy industrial sector has suffered over the past two years, electricity production - responsible for the bulk of coal consumption in China - has also lagged. Electricity output growth in May was flat on the year, after falling outright in the first quarter. "In 2014, China's energy consumption and carbon dioxide emission per unit of gross domestic product dropped by 29.9 per cent and 33.8 per cent over 2005," the State Council said. China has also been engaged in a strong push to raise the percentage of non-fossil fuel energy sources in its overall energy supply mix. But Friday's statement contained no explicit pledge to cap coal consumption.

Hong Kong*:  June 1 - 10 2015

Shelving of Hong Kong cruise terminal on-shore power plan draws lawmakers’ disapproval (SCMP Ernest Kao Shelving of plans for plug-in power for ships at Kai Tak cruise terminal is dereliction of duty on public health, lawmaker says - Lawmakers have criticised a government move to shelve plans for electric power for ships at the Kai Tak cruise terminal, arguing most Hongkongers would be willing to spend the money for such a system if it is in the interests of public health. The government said last month it would set aside the plan to have facilities for vessels to plug into electric power at berths rather than leaving a vessel's engines running. It said the system would be costly and one that few cruise liners would use. Environment secretary Wong Kam-sing said an electric system would lower emissions at berths but would leave the terminal underused because few ships around the world were equipped with the technology. "The use of on-shore power systems will be costly," Wong said at a meeting of the Legislative Council's environmental affairs panel yesterday. "It will be hard to get cruise companies to use the system in Asia. The few using it are plying North American routes." An Environmental Protection Department study found only 35 international cruise ships would be equipped with on-shore power systems by the end of this year - about 16 per cent of all international cruise liners. A new mandate is set to take effect this July requiring all ocean vessels to switch to cleaner fuels at berths, but lawmakers said the city should be doing more. Civic Party lawmaker Dr Kenneth Chan Ka-lok questioned why there had been such a sharp U-turn from Chief Executive Leung Chun-ying's 2013 policy pledge to install an electric system and approach Legco for funding by the end of that year. He said reduced exposure to fumes would have improved the air in Kowloon East and indirectly reduced public health care costs and deaths from pollution. "Leung is escaping from his duties once again," he said. "The government is so adamant about pushing funding for other expensive infrastructure projects, but is being petty-minded when it comes to public health." He submitted a motion to go ahead with the plan, but it was voted down by the panel. Installing such a system would take five years, cost HK$315 million to build, and require up to HK$14 million a year to maintain, according to the department, based on a feasibility study it commissioned in 2013. Ben Chan Han-pan of the pro-government Democratic Alliance for the Betterment and Progress of Hong Kong asked Wong why "as a major world port" the city was not taking the lead on on-shore power systems. "Yes, ships will be switching to fuels with lower sulphur content, but leaving an engine on will still mean other types of pollutants in the air," he said. "I don't think the public will mind spending the HK$300 million. If these facilities exist and the right incentives are offered, they will be used." But fellow DAB lawmaker Christopher Chung Shu-kun said if such systems were not going to be used then the plan should be shelved, as the government "had enough white elephants".

 China*:  June 1 - 10 2015

Yangtze cruise ship tragedy could be ‘worst maritime disaster in China’s history’ with over 400 still missing (SCMP Andrea Chen and Angela Meng) People's Liberation Army launches massive rescue operation involving 170 divers for 400 missing after vessel capsizes in Yangtze River during stormy weather, including what the captain described as a tornado - More than 400 people - most of them tourists aged from 50 to 80 - remained missing more than 24 hours after a cruise ship carrying 456 people capsized in the Yangtze River during stormy weather on Monday night. The Dongfangzhixing, or Eastern Star, was en route from the eastern city of Nanjing to the southwestern city of Chongqing when it capsized around 9.30pm on Monday in the Jianli section of the river in Hubei province. The national meteorological administration said a tornado had hit the area at about that time, but it's unclear whether it hit the ship. The PLA was committing 170 divers to the search and rescue efforts, a commander told China Central Television last night. The first batch of 13 divers sent to search for survivors said it had been very difficult to open the ship's doors underwater, especially given the poor visibility caused by the downpour. Fourteen survivors and the bodies of seven people had been found as of 9pm yesterday, the Yangtze River navigation authorities said. Satellite data released by the China Transport Telecommunication and Information Centre showed the ship had made a 108-degree turn at around 9.20pm. It then travelled for a further 10 minutes before capsizing. The ship had been carrying 405 passengers, 46 crew members and five tour guides, the youngest of whom was only three and the eldest over 80, according to a list of passengers obtained by the mainland media. "It could be the worst accident in China's shipping history," Yao Wenge, deputy chief of the Nanjing Municipal Maritime Safety Administration, said. "I have not heard of an accident that involves a larger number of passengers." Zhang Hui, a tour guide from a Shanghai-based tour agency that was a major organiser of the trip, was one of 14 who survived. The ship was sailing through a thunderstorm when it suddenly tilted at an angle of more than 45 degrees, he told the Xinhua news agency. "I tried to tell my colleague that we were in big trouble. But before I was able to finish the sentence, the ship had capsized," he said. He managed to grab a life jacket and climbed out of the window of his bedroom, whiich had filled with water up to his neck. The 43-year-old, who did not know how to swim, floated in the stormy waters for the whole night before tides pushed him to the shore at dawn. Not until Zhang was found by local residents did he realise he had floated some 90km to Yueyang county in neighbouring Hunan province. One of those saved by the rescuers was a 65-year-old female passenger. She appeared to be frightened but conscious as she lifted her blanket and looked around as she was rushed to the ambulance. Deng Zhibo, deputy chairman of a local hospital, said three survivors had been taken to hospital with minor injures including dislocations. The cause of the sinking was not immediately clear, but the captain, who was rescued and then held in custody together with the chief engineer of the ship, told local newspaper Chutian Metropolis Daily the ship tilted towards its right side after encountering a tornado. The ship capsized within one minute, he said. The meteorological administration confirmed that the Jianli section of the river had recorded a tornado that lasted for 15 to 20 minutes. The nearest weather station, 35kms away, recorded winds of up to 16.4 metres per second at the time of the accident. Initial investigations found the ship, which is capable of carrying up to 534 people, was not overloaded and that it had enough life vests on board for the number of passengers it was carrying, state media said. The captain of another passenger ship that left port at around the same time as the Eastern Star on Monday pulled over temporarily at Chibi as the weather deteriorated, but the Eastern Star continued in an effort to arrive in Jingzhou by yesterday afternoon, Chutian Metropolis Daily said. The heavy rain is expected to continue until Friday morning.

Hong Kong*:  May 21 - 31 2015

Hong Kong Tourism Board to lure summer visitors with prize giveaway (SCMP Shirley Zhao The Tourism Board is rolling out a HK$80 million promotional campaign from next month to August in which every visitor flying in or out of the city will receive a gift and some of the luckiest ones will score a luxury return trip. In the annual Summer Fun campaign, from June 15 to August 31, visitors arriving and leaving from Hong Kong International Airport will have the chance for a prize in each direction. The board plans to give out 2.4 million prizes worth more than HK$400 million, sponsored by various businesses. Those arriving in Hong Kong will receive a variety of gifts, including coupons for restaurants and shopping, ferry and tram tickets and theme park discounts, as well as more luxurious items such as watches, jewellery, hotel packages and cruises. Those leaving will be eligible to win one of 10 luxury four-day three-night return trips to the city, worth more than HK$3 million. Upon arrival at the airport, each visitor will also receive a free seven-day Wifi pass sponsored by CSL Mobile. The campaign will also include citywide shopping offers and special tourism packages for various markets such as a three-day, two-night package for two at HK$2,500 for visitors coming from Taiwan and half-price packages for those visiting from Japan. “The aim of the campaign is to attract overnight visitors and boost retail spending,” said Tourism Board chairman Peter Lam Kin-ngor. “The focus this year is mainland and short-haul markets.” Lam said he hoped the campaign would attract at least 2.4 million tourists – the same number as the prizes. “The reason we are holding these two lucky draws at the airport is because we want to attract more high-spending tourists,” Lam said. The budget from the government for the campaign includes HK$30 million earmarked for the summer promotion and additional funding of HK$50 million.

 China*:  May 21 - 31 2015

Chinese Admiral to defend ‘explosive issue’ of island reclamation at regional security summit (SCMP Minnie Chan Land reclamation in South China Sea set to dominate talks at Shangri-La Dialogue - Beijing is sending an admiral to a regional security forum in Singapore for the first time, with China well prepared to assert the legitimacy of its extensive land reclamation in the South China Sea, according to analysts. Admiral Sun Jianguo, deputy chief of the People's Liberation Army's General Staff, would head the 29-member Chinese team of officials and observers at the Shangri-La Dialogue, which runs from today until Sunday, organisers said. China sent 25 delegates last year. William Choong, the forum's senior fellow of Asia-Pacific security, said the South China Sea was likely to be "the most explosive topic" at this year's event. Sparks flew between the United States and China last year over Beijing's claims over the contested waters. "We saw what happened last year when then US defence secretary Chuck Hagel said that China's assertiveness in the South China Sea and its unilateral actions were destabilising to the region," Choong said. He said US Defence Secretary Ash Carter was expected to make a similar claim this time.

Hong Kong*:  May 11 - 20 2015

CY Leung says Guangdong Free Trade Zone won’t hurt Hong Kong’s economy (SCMP: Amy Nip Chief Executive Leung Chun-ying on Friday tried to assuage fears about the Guangdong Free Trade Zone’s impact on Hong Kong’s economy, saying that even though tax-free shopping would be available there, the impact on Hong Kong’s tourism and retail sectors would be minimal. Those sectors are currently overextended thanks to the high number of mainland visitors entering the city each day, he said, so the tax-free shopping centres currently being built in Guangdong would serve to help normalise the situation in Hong Kong. “Hong Kong’s tourism sector faces capacity problems, he told business participants in a seminar about the zone this morning. “Parallel trading by same-day visitors to Hong Kong is an abnormal activity.” The city should not worry about a drop in mainland tourists who may decide to shop in Guangdong, he said. The Individual Visit Scheme, which allows mainlanders to visit Hong Kong on an individual basis, only covers 49 out of 660 mainland cities, meaning there is much potential to expand in the future. Leung also disagreed that the launch of Guangdong free trade zone in March would erode Hong Kong’s economy. Two key factors limit economic development, he said: Talent and land. “The free trade zone will be a good platform for the [local] industrial and business sectors in the coming 20 to 30 years,” he said. When local manufacturers started moving factories to the mainland in the 1970s, people feared Hong Kong’s economy would decline. But “the outcome was increased productivity and a larger economy,” he said. “While there had been worries that workers would lose their jobs, they shifted to service industries in the end.” It was the first seminar since the zone officially launched on April 21.

 China*:  May 11 - 20 2015

Regulator tells China's commercial banks to turn on lending taps to small businesses (SCMP: Angela Meng and Agencies) The mainland's banking regulator on Friday urged commercial banks to boost lending to small businesses and the rural sector, as Beijing tries to revive its faltering economy and steer it towards more sustainable growth driven by domestic consumption and new technology. The comments by China Banking Regulatory Commission vice-chairman Zhou Mubing coincided with the release of weaker-than-expected trade data. Imports fell 16.2 per cent year on year in April while exports were down 6.4 per cent, compounding a 15 per cent decline in March. To cut the economy's reliance on trade and to encourage consumption, the central government promised to increase funding to rural and small businesses. "Commercial banks must harness the government's policy support to further improve financial services to micro and small businesses," Zhou said. The central bank also said it issued 65 billion yuan (HK$82 billion) worth of three-month loans to policy and commercial banks last month to bolster liquidity. That left China with 1.08 trillion yuan worth of three-month loans at the end of April, the central bank said in an online statement. The central government is also banking on the fledgling technology sector to be a new economic engine. As part of that push, the State Council promised in a directive released late on Thursday night to give e-commerce a leg up by cutting red tape, supporting entrepreneurship and easing market access. It was the third time in a week the central government had voiced explicit support for the tech sector and came after Premier Li Keqiang made a high-profile tour of Zhongguancun, Beijing's hi-tech business hub, to applaud innovation and encourage entrepreneurship throughout the country. Earlier in the week, the State Council issued another paper, asking local authorities to streamline taxes for tech companies. In Thursday's directive, the State Council promised to abandon strict registry requirements for e-commerce businesses, encourage more venture capital to enter the sector, reduce share-holding restrictions on foreign investment and lower the tax burden. It also said it planned to cut logistical costs, strengthen financing and infrastructure, and turn brick-and-mortar stores into click-and-mortar - both online and offline - platforms. The government aimed to lift consumer confidence in e-commerce by improving consumer rights, cracking down on online fraud, increasing security, and improving legal protection, it said. With an easing in traditional sources of growth - real estate, manufacturing and government and business spending - Li has repeatedly said the country will face problems meeting its growth target of 7 per cent. "This is not nail-clipping. This is like taking a knife to one's own flesh," Li said earlier this year, as he stressed the importance of innovation and e-commerce as the new engines of growth. E-commerce is on the rise, with mainland consumers spending 2.8 trillion yuan on online goods and services last year - an increase of 49.7 per cent compared with the total for 2013, according to the National Bureau of Statistics.

Hong Kong*:  May 1 - 10 2015

New World venture with Abu Dhabi fund may prompt HK hotel industry shake-up (By SCMP Sandy Li Sales and redevelopment on the cards as owners mull options to counter slump in tourist arrivals - Mandarin Oriental International may tear down the Excelsior hotel, a Causeway Bay landmark for 42 years. Photo: Jonathan Wong New World Development's move to sell stakes in three top hotels to the Abu Dhabi Investment Authority (ADIA) may herald a shake-out in the industry amid a decline in tourist arrivals, industry experts say. Facing declines in occupancy and room rates, hotel owners in prime tourist locations are weighing their options for weathering a market downturn. While New World has opted to reduce its controlling stakes in three hotels in an HK$18.5 billion joint-venture deal, Mandarin Oriental International has signalled it may tear down the four-star Excelsior, a Causeway Bay landmark for 42 years, for a commercial development. "Other hotel owners may sell their properties in the wake of market uncertainties," said Alfred Lau, an analyst at Bocom International. "They will sell if they receive a good price." While it is unclear if a disposal trend might emerge, hotel owners are certainly struggling to attract tourists after enjoying a 10-year boom. The number of tour groups visiting the city fell 10 per cent from a year ago to 260 during the Labour Day holiday weekend, according to the Travel Industry Council. A strong Hong Kong dollar and community tensions over an influx of mainland tourists have taken their toll on the hotel business. Average room rates over the holiday weekend fell by "a single digit", the Hong Kong Hotels Association said. While the industry's woes have been building for some time, New World's joint venture surprised the market. It is the biggest hotel deal in Asia in a decade. New World and its controlling shareholder Chow Tai Fook Enterprises will inject the three hotels, including the flagship Grand Hyatt in Wan Chai, into the 50-50 venture with ADIA, the second-largest sovereign fund in the world. The other hotels to be transferred into the venture are the Renaissance Harbour View in Wan Chai and the Hyatt Regency in Tsim Sha Tsui. New World's interest in the three hotels will be halved to 32 per cent after the deal, as will Chow Tai Fook's to 18 per cent, giving ADIA a 50 per cent stake. "We believe the proposal is good timing as it is only the start of the declining trend in the hospitality sector due to falling visitor arrivals," Deutsche Bank analyst Jason Ching wrote in a report. The transaction would also help New World unlock value from its hospitality business, freeing up funds for possible land acquisitions, Ching said. Kenny Tang Sing-hing, the chief executive of Junyang Securities, said the grim outlook for the sector would force some developers to consider converting hotels into offices to exact higher returns. Tang expects office rents at grade A properties will be supported by growing demand from companies. "More financial companies will seek to expand in preparation for the stock through train scheme that will connect the Hong Kong and Shenzhen markets," he said. However, in a rare bright spot for the industry, there are still global investors keen on top hotels in the region. "Hospitality is one of the preferred asset classes for sovereign wealth funds as hotels can provide significant cash flow if successfully operated," JLL said in a report on Asia-Pacific hotel investment. The value of transactions in the region would increase 15 per cent to about US$8.5 billion this year from last year, the property consultancy said in the report released before the New World deal. New World chairman Henry Cheng Kar-shun rejected suggestions the company is bearish about the hotel market outlook. "The partnership with ADIA will be the beginning of further cooperation beyond the hotel business," he said. New World said HK$10 billion from the deal would be used to finance the HK$18 billion redevelopment of Tsim Sha Tsui's New World Centre.

 China*:  May 1 - 10 2015

China says Philippines buildings on disputed islands violate South China Sea code (SCMP) Foreign Ministry urges the Philippines to stop its “malicious hyping and provocation” after repeated criticism of China’s own construction work - China's claims against the Philippines come after Manila criticised Beijing for reclamation work in the South China Sea, including the building on an airstrip (above). Photo: Kyodo China has accused the Philippines of violating a 13-year-old informal code of conduct in the South China Sea with its building work on disputed islets – comments that come after repeated criticism of China’s own construction work. China and the 10-member Association of South East Asian Nations signed an agreement in 2002 to refrain from occupying uninhabited reefs and shoals in the sea and from building new structures that would complicate disputes. In a statement released just before midnight on Monday, China’s Foreign Ministry urged the Philippines to stop its “malicious hyping and provocation” over the dispute, whose basis, it said, was Manila’s illegal occupation of certain Chinese islands. “The Philippines side has conducted large-scale construction of military and civil facilities including airports, ports and barracks on those islands for many years,” the ministry said. The statement was issued after the Philippines Foreign Ministry said it was China that had violated the code with its construction and that it was accusing Manila in order to justify and provide cover for Chinese reclamation work. “China has never, ever taken actions that may complicate and deteriorate the disputes or affect regional peace and stability,” the Chinese ministry said, urging Manila to stop all building work and evacuate its people from the area. Disputes over how to tackle an increasingly assertive stance by China – an ally of several Southeast Asian states – in the strategic South China Sea make the issue the region’s biggest potential military flashpoint. China last week accused Vietnam, the Philippines and others of carrying out their own illegal building work. China claims 90 per cent of the South China Sea, which is believed to be rich in oil and gas, with overlapping claims from Brunei, Malaysia, the Philippines, Vietnam and Taiwan. Recent satellite images show China has made rapid progress in building an airstrip suitable for military use in the disputed Spratly Islands and may be planning another. Those moves, along with other reclamation work, have caused alarm around the region and in the United States, too.

Hong Kong*:  Apr 21 - 30 2015

Hutchison Whampoa shareholders vote in favor of group’s merger plan (By SCMP: Peggy Sito and Sandy Li) Li Ka-shing, the chairman of CK Hutchison Holdings and Hutchison Whampoa, presiding over the restructuring of his business empire. Shareholders of Hutchison Whampoa on Monday voted in favour of the mega reorganisation proposed for the company and its parent CK Hutchison Holdings (CKH Holdings), bringing chairman Li Ka-shing’s restructuring plan for his business empire near to completion. Hutchison said more than 99 per cent of votes from shareholders at a general meeting had been in favour of the merger plan. Li Kwok-suen, a fund manager at Phillip Capital Management, expects both CKH and Hutchison Whampoa shares could fall when they resume trading on Tuesday. “The two stocks escaped the market correction,” he said. “They could come under downward pressure … there’s not much excitement to further drive up the shares.” Speaking before an extraordinary meeting of CKH shareholders in February, which also approved the restructuring, Li Ka-shing said shareholders would see increased dividend payments after the merger of the two companies. With Hutchison shareholders’ approval, the deal is expected to close in June. CKH proposed that it would offer Hutchison shareholders 0.684 CKH Holdings share for every Hutchison share. Under the proposed restructuring, Cheung Kong shareholders will receive one share in the newly registered CKH for every Cheung Kong share. Li announced on January 9 that his two flagship companies’ non-property assets, including ports, telecommunications, retail, infrastructure and energy, would be injected into CKH. All property businesses of the two companies would be injected into Cheung Kong Property Holdings, which would seek a stock exchange listing. 

 China*:  Apr 21 - 30 2015

China rolls out new rules for foreign investment in free-trade zones (By Cary Huang Central government issues standard policies and shorter list of areas off limits to foreign players - An aerial photo of the Yangshan Port's container pier of the Shanghai free-trade zone. The central government on Monday unveiled a series of policies, including its long-awaited list of restricted areas for foreign investment, for the nation's free-trade zones, ahead of today's launch of three new zones. People's Daily said the government would officially launch new free-trade zones in Guangdong, Fujian and Tianjin on Tuesday. The Shanghai FTZ was opened in September 2013. The State Council also unveiled master plans for each of the three new FTZs and a plan to expand the Shanghai zone. Meanwhile, a powerful central task force led by Vice-Premier Wang Yang would be set up to coordinate work on the four zones, assistant commerce minister Wang Shouwen said. The so-called Inter-ministries Joint Conference will comprise officials from about 30 central ministries and agencies. A unified "negative list" will apply to all four zones, suggesting that they will operate under the same rules and policies. Lu Hongjun, from the Shanghai Institute of International Finance, said the unified policy would allow each zone to develop their own profile, even though they will compete for foreign investment. "Shanghai will focus on finance and services, Guangdong will concentrate on economic integration with Hong Kong and Macau, and Fujian will develop its economic ties with Taiwan," Lu said. Within the Guangdong zone, Qianhai in Shenzhen would focus on cooperation with Hong Kong on finance and services; Hengqin in Zhuhai will mainly cover tourism and commerce in cooperation with Macau; while Nansha in Guangzhou will specialise in port facilities and manufacturing. The State Council's negative list comprises 122 areas that are off limits to foreign investment. That is down from the 139 put in place for Shanghai zone and includes sectors such as publishing, news and banking. The existing 49 per cent foreign investment cap will continue in some areas, such as securities joint ventures and asset management. Other restrictions will continue to apply to areas such as public transport and air and sea cargo operations. The government said the negative list - which allows investment in any area not specified - was to free up investment for domestic and foreign players. Many foreign investors were initially disappointed by the long list of restricted investments rolled out for Shanghai when that zone was set up, because they were hoping to see a greater relaxation of investment curbs. President Xi Jinping said the experience of the Shanghai FTZ should be replicated elsewhere "as soon as possible".

Hong Kong*:  Apr 11 - 20 2015

Bigger quotas seen for Hong Kong-Shanghai stock link after record week for Hang Seng (SCMP: Enoch Yiu and Lai Ying-kit) HKEx chief eyes an increase of more than 30pc in the trading caps under the stock link with Shanghai as mainland capital inflows fuel rally - The city's stock exchange chief yesterday flagged a possible increase of more than 30 per cent in the quota for cross-border share trading after record turnover saw the cap on mainland purchases of Hong Kong stocks being busted on two of the past three days. Fund managers have been pressing for the quotas under the through train scheme to be raised, fearing the allocations will be exhausted within weeks as the market rally heats up. The rally, which began this week as the market resumed after the Easter holiday, has triggered capital inflows. The strong demand for the Hong Kong dollar prompted the Hong Kong Monetary Authority to step into the market twice yesterday, with injections of HK$6.2 billion and HK$6.975 billion, to defend the unit. That followed a HK$3.1 billion injection on Wednesday. "Demand for the Hong Kong dollar grew alongside the rise in the market recently," an HKMA spokesman said last night. "We will monitor the market closely." The Hang Seng Index rose 1.22 per cent yesterday to 27,272.39 points, ending a tumultuous week that saw the benchmark surge 7.9 per cent in the three trading days after the holiday. Turnover hit a record HK$293.9 billion on Thursday, three times the normal volume. The frenzy has been driven by mainland investors seeking to exploit a discount on the H shares of mainland stocks against their A-share counterparts after a sustained rally across the border. A move by Beijing to allow mainland fund houses to invest in the Hong Kong market has also spurred trading in the scheme that links the city's exchange with Shanghai's. Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia yesterday said the scheme was now set to be expanded and pointed to a bigger than expected increase for the quotas of more than 30 per cent. "Firstly, there definitely will be quota expansion. Secondly, the expansion will not simply be 20 or 30 per cent. It will be a certain level of expansion," he said. The southbound trade of the scheme allows mainlanders to buy Hong Kong stocks to a cap of 10.5 billion yuan (HK$13.3 billion) a day or 250 billion yuan in total. The daily quota was used up on Wednesday and Thursday, with 25 per cent of the total quota now filled. If the quota is hit every day, it would be run out in 17 days. The northbound quota - for international investors buying Shanghai-listed A shares - stood at 13 billion yuan a day or 300 billion yuan in total. Almost 40 per cent of the allocation has been used and it will last only 14 more days if the daily limit is reached every day. Bruno Lee Kam-wing, the chairman of the Hong Kong Investment Funds Association, said: "Many international fund houses have been concerned about a suspension of trading when the quota runs out." Sun Hung Kai Financial executive director Joseph Tong Tang yesterday said the rally would continue. Chief Executive Leung Chun-ying said the through train scheme showed cross-border co-operation benefited both cities. "It shows deepening the Shanghai-Hong Kong cooperation is a win-win for the nation, Hong Kong and Shanghai," Leung, who is visiting Shanghai, said.

 China*:  Apr 11 - 20 2015

China's 'Great Cannon' program has been in development for about a year, sources say (scmp) The Beijing-backed programme hijacks incoming internet traffic and redirects it to 'unfriendly' websites, but move could harm big tech firms - The mainland's "Great Cannon" program that can hijack incoming internet traffic and direct it against any website deemed unfriendly to the Communist Party, has been in development for about a year, three sources have said. The tool marked a shift by Beijing towards an offensive strategy in censoring the internet, and could hinder attempts by mainland tech companies to take their brands to an international market, an expert said. According to a report by the Citizen Lab at the University of Toronto released on Friday, the "Great Cannon" was aimed at shutting down websites and services that help mainland internet surfers bypass the "Great Firewall", which blocks domestic access to information the authorities deem sensitive. It works by hijacking unwanted web traffic and redirecting it to websites of China's choosing in such large quantities that it can overwhelm servers and knock them offline. "The system has been in operation for about one year, and it reflects a brand-new strategy since it's taking an offensive attitude rather than the Great Wall's tactics of focusing on defence," said the chief executive with a mobile technology firm, who has knowledge of the mainland's internet security efforts. "It has proved to be efficient so far since the majority of its targets have been successfully disrupted." Beijing has intensified censorship efforts in the past months, including cracking down on the use of virtual private network (VPN) connections, which allow mainlanders to bypass internet restrictions, and strengthening the "Great Firewall". "The upgrading work was huge and lasted for a few months," said a national security source. "But it didn't work eventually. As we upgraded the firewall system, those hostile groups [overseas] also upgraded their service to help mainlanders bypass the blockages," the security source said. In March, an advocacy group that monitors web censorship on the mainland, said it was suffering a distributed denial-of-service attack. The researchers said the attack was launched through a program that hijacked internet traffic to the big Chinese search engine Baidu and used it to flood the website in an effort to knock it offline. The Citizen Lab report said it found "compelling evidence that the Chinese government operates the GC [Great Cannon] despite Beijing's denials of involvement in cyberattacks. "While the attack infrastructure is co-located with the Great Firewall, the attack was carried out by a separate offensive system, with different capabilities and design," said the report, which included collaboration from researchers at the University of California and Princeton University. It is believed the Great Firewall programme is jointly overseen by the military, national security bureau and the propaganda ministry. The new offensive weapon was similar to one used by the United States' National Security Agency, the report said. The new strategy could present a stumbling block to the global rise of internet giants such as Baidu and Tencent which an internet security expert source described as "victims". Overseas consumers might grow wary of the companies if they feel Beijing is using them to help carry out censorship.

Hong Kong*:  Apr 1 - 10 2015

Two leading Hong Kong developers propose temporary market at border (By SCMP: Peggy Sito and Tony Cheung) Henderson, Sun Hung Kai prepared to provide market space at token rent - Two of the city's biggest developers say they are willing to provide space at a token rent for a temporary market aimed at mainland tourists. Details remain sketchy despite confirmation of the plan yesterday by Henderson Land Development - which would partner with Sun Hung Kai Properties - in the proposal that will see shops operate out of shipping containers on the site near the Lok Ma Chau border. But the plan for market stalls is a short-term solution to divert the growing number of mainland shoppers from urban areas or new towns as the two developers would take over the site in two years to redevelop it as a "world-class" shopping mall targeting both Hongkongers and tourists. "[Henderson Land and Sun Hung Kai Properties] will provide the site for the operator to run the shopping area for two years, by charging a nominal rent of HK$1," said Martin Lee Ka-shing, vice-chairman and managing director of Henderson. After two years, Lee said the two developers would take over the site and "plan to build a permanent world-class shopping centre for local Hong Kong people as well as international customers". The idea of a new shopping area near the Lok Ma Chau border checkpoint was first unveiled by lawmaker Wong Ting-kwong early this year, involving a 420,000 sq ft site that could be turned into an outdoor shopping centre. Anger has grown in towns such as Sheung Shui and Tuen Mun where so-called parallel traders who buy goods in Hong Kong for resale on the mainland put intense pressure on public transport. The traders are also accused of crowding out stores selling daily necessities. AMTD Asset Management general manager Kenny Tang Sing-hing described the two developers' move as "killing two birds with one stone". "It can ease the present problem. And once it is successfully turned into a mainlander-targeted shopping area, the two developers will find it easier to get the government's approval to turn the site into retail use," said Tang. The two developers, who will own the site equally, will soon make a submission to the government to rezone it for retail use, according to Henderson. The company's chairman, Lee Shau-kee, hopes that the planned shopping area at the border can help divert mainland shoppers from busy urban areas. Speaking in the Legislative Council yesterday, Secretary for Commerce and Economic Development Greg So Kam-leung said the government welcomed the development of shopping facilities in the New Territories. Questioned whether the government would ask Beijing to cap the number of visits Shenzhen residents could make, So said setting a cap was only "one of the many proposals to improve" the city's tourism portfolio.

 China*:  Apr 1 - 10 2015

Taiwan in last-minute bid to join AIIB as founding member (SCMP - Lawrence Chung in Taipei and Timmy Sung) Taipei decided on Monday night to make a last-minute formal application on Tuesday to join the Beijing-led Asian Infrastructure Investment Bank as a founding member. The decision was announced after Taiwan's Presidential Office held a closed-door national security meeting yesterday, bringing together the heads of various government departments to discuss the island's bid to join the new regional financing body. "The finance ministry will prepare the necessary documents, which will be reviewed and approved by the cabinet before they are sent to the mainland via our existing communication channel with the [State Council's] Taiwan Affairs Office [in Beijing]," presidential spokesman Charles Chen I-hsin said. Chen also said in a statement that joining the AIIB would aid Taiwan's push for regional economic integration "and increase the odds of the island taking part in international affairs and international economic and trade organisations". But it was not immediately known whether Taiwan would be accepted as a founding member. Taiwan and the mainland have been rivals since the end of a civil war in 1949, but relations have improved since Ma Ying-jeou became the island's president in 2008. The AIIB requires member countries to have statehood to join, and Beijing regards Taiwan as a renegade province. Taiwan's decision on the eve of Tuesday's deadline for submissions came as Egypt became the first African nation to apply to join the development bank. According to the finance ministry in Beijing, more than 40 countries have signed up. In Seoul, deputy finance minister of international affairs Choi Hee-nam said South Korea, a US ally, expected to take a 4-5 per cent stake in the development bank and wanted to be a founding member. "Stakes of the individual members will be decided based on economic size and other factors, and it looks like [South Korea's stake] will be 4 to 5 percent," Choi said on the KBS public radio channel. Choi said South Korea hoped to play an important role in the bank's management. He said South Korea had a 5.1 per cent stake in the Asian Development Bank, which is dominated by the United States and Japan and faces a challenge from the AIIB. In Hong Kong, the government has expressed an interest in taking part in the AIIB, although Secretary for Financial Services and the Treasury Professor Chan Ka-keung dismissed news reports that the city needed to put up HK$10 billion in capital. 2015 Boao Forum: Chinese President delivers keynote speech The opening ceremony of this year’s Boao Forum for Asia is being held in southern China’s Hainan Province. The Boao Forum for Asia is an international non-governmental organization that provides a platform for government, business and academic leaders to connect and discuss issues concerning Asia and the wider world. The theme of this year’s forum is “Asia’s New Future: Towards a community of common destiny”. Chinese President Xi Jinping delivered the keynote speech at the opening ceremony, calling for high level integration of Asia’s political, economic and security issues. He also said that China, as a large country, should shoulder more responsibility  43國奔亞投行 創始申請今截 43 countries joining AIIB 全球前十大經濟體僅剩美日未加入 8 of the top 10 world economies part of AIIB except USA and Japan 埃及趕搭「尾班車」 精簡廉潔綠色成核心 合作比對抗更明智 創始成員國30個:中國、孟加拉國、文萊、柬埔寨、印度、印度尼西亞、約旦、哈薩克斯坦、科威特、老撾、馬爾代夫、馬來西亞、蒙古、緬甸、尼泊爾、新西蘭、阿曼、巴基斯坦、菲律賓、卡塔爾、沙特阿拉伯、新加坡、斯里蘭卡、塔吉克斯坦、泰國、烏茲別克斯坦、越南、英國、盧森堡、瑞士。 申請加入國13個:意大利、德國、法國、土耳其、奧地利、韓國、巴西、俄羅斯、澳洲、荷蘭、格魯吉亞、丹麥和埃及。

Hong Kong*:  Mar 21 - 31 2015

Hong Kong’s richest man Li Ka-shing leads tributes to ‘dear friend’ Lee Kuan Yew (By SCMP: Tony Cheung, Ernest Kao and Chris Lau) Hong Kong’s richest man, Li Ka-shing, led tributes to Lee Kuan Yew as he described Singapore’s founding prime minister as a “dear friend” and “steadfast builder of a new nation committed to a true and ordered liberty”. Lee, who ruled Singapore between 1959 and 1990, died aged 91 this morning after nearly a month in hospital with pneumonia. In a condolence letter to Lee’s son, Singapore Prime Minister Lee Hsien Loong, Hutchison Whampoa chairman Li said the world would remember Lee as a “historical giant, a steadfast builder of a new nation committed to a true and ordered liberty, a humane and just society with fair and equal participation for all.” “His courage and scholarship were readily apparent in all that he did – thoughtful, resolute and determined,” Li wrote. “In life [Lee Kwan Yew] was a veritable force of nature, successfully accomplishing what few ever will; a vision of bold and majestic presence who never lost the common touch. He now rests in peace knowing what he has built will be with all of us always, never to be forgotten and forever missed.” Li also added that he “will remember Lee Kuan Yew always as a dear friend, and it is in this capacity I mourn his loss the greatest.” Chief Executive Leung Chun-ying also wrote to Lee Hsien Loong, saying that Lee Kuan Yew’s “integrity, tenacity, vision and drive laid the most solid foundation possible for the impressive economic development, prosperity and social harmony that epitomises Singapore today.” “Singapore and Hong Kong have long been partners for each other in the pursuit of excellence and we continue to look to Singapore as a close friend,” Leung wrote. “This year, Singapore celebrates its 50th anniversary of independence. The man who was the central player in making that happen has sadly taken his untimely leave. But his legacy of how to build a thriving, proud, diverse and dynamic country will live on for generations, not just in Singapore or Asia, but the world over.” A bouquet of chrysanthemums was placed outside the Singapore consulate-general’s doors in Admiralty this morning after Lee died. “Lee Kuan Yew (a good man). Goodbye!” read a message attached to the bouquet by a man named Tony. Scores of mourners poured into the consulate to offer their condolences on the death of Singapore’s founding father. The condolences-signing, which will last seven days, began at 2:30pm as a former foreign affairs minister from the country put down words of remembrance. "Sharing the grief of the Singaporeans and the passing of our founding father. A light has gone out of our lives," the now chairman of Kerry Logistics Network, George Yeo Yong-boon, wrote. SCMP Group chief executive Robin Hu, who is from Singapore, recalled that he once worked on an industrial park project in Suzhou and a book on Singapore language policies with Lee. "That was a very humbling experience," he said, calling Lee the "architect of modern Singapore". SCMP Group publishes the South China Morning Post. Singaporean Jennete Yew learned about Lee’s death from her friends in the Lion City at 3am and arrived at the consulate early this morning to see if she could leave a message for Lee. “We criticised him a lot when we were younger – why do we have to do this, why do we have to do that – but when we got older, travelled around the world and started to work we started to admire what he did,” Yew said, as she broke into tears. “What Mr Lee did for us, was build a foundation ... We think that if he had not been so autocratic, not giving us such freedoms, we would not be what we are today.” Yew, who works in finance and has lived in Hong Kong since 1998, said more Hongkongers could learn from Singaporeans’ respect for their country and pragmatism. Another Singaporean, Kim Hor Toh, said most of his compatriots were sad to hear the news of Lee’s death, even if they were expecting it. “I think everybody is grateful for LKY’s role in building Singapore to what it is right now,” he said.” Despite the loss of [Lee], succession planning has been considered years ago, and I don’t think the transition to the future will be impacted.” 

 China*:  Mar 21 - 31 2015

 More Chinese tourists are going ‘free and easy’, with 70pc planning their own trips (By Laura Zhou Young travellers are opting for full control in planning for their own trips - Mainland Chinese holidaymakers may give the impression that they favour package tours, but most of the country’s young travellers prefer to organise their own itineraries, a recent industry report shows. The report, by, which offers budget travel plans and information on cheap flights and hotels, said more than 70 per cent of outbound tourists last year were independent travellers, meaning they planned and booked their trips themselves instead of joining tour groups. Of last year’s 109 million out-bound trips, 77 million were made by independent travellers – about 20 per cent more than 2013’s 64 million. The rapid rise in travel information on the internet and more convenient online procedures to book flights, accommodation and procure travel documents were the main reasons for the growth in do-it-yourself travel, said the report that analysed the agency’s client database. Asia was the favourite destination for 55 per cent of independent travellers, followed by Europe (29 per cent) and North America (10 per cent). Hong Kong was attractive for most independent tourists, especially for shopping, with 11.6 per cent visiting the city last year, followed by Paris (9.7 per cent) and Bangkok (8.7 per cent). The report said more than 18 per cent of independent tourists travelled to Hong Kong with their children, drawn by Ocean Park and Disneyland. While relaxed visa policies towards mainland tourists helped boost overall outbound trips last year, Jiang Yiyi, director of the China Tourism Academy’s overseas tourism department, said that as more mainland youngsters received higher education, language was no longer a barrier for mainland tourists abroad. “In the past, our tourists might have needed help from tour guides to translate, but now more and more of them are able to speak English,” Jiang said. “On the other hand, foreign tourism markets have also introduced Chinese-language services to attract mainland tourists, so tourists can now be more independent.” According to figures from the China Tourism Academy, each mainland tourist spent an average of 8,173 yuan (HK$10,300) abroad last year, slightly less than the 8,298 yuan in 2013. Their biggest expenditures were transport and shopping, the report said. While a third of the respondents said they set no cap on shopping, nearly 40 per cent said they exceeded their budgets in the shops. Others’ travel experiences, and discounts for flights and hotels, were the main reasons for more mainlanders choosing to travel abroad, the report said.

Hong Kong*:  Mar 11 - 20 2015

Hongkongers' yen for Japan pushes up tour costs (Amy Nip Depreciating currency and the famed cherry blossoms make for a huge draw over Easter, boosting group prices by a tenth from last year - he trees are in full bloom at Atami plum garden in Atami, Japan. The white, red and pink blossoms are currently at their peak and will continue to look their best until late this month, according to the Atami Tourism Association. A multitude of cherry blossoms and the cheaper yen have made Japan the top destination for travellers from Hong Kong this Easter, pushing the price of group tours up by a tenth from last year. Prices of package tours to South Korea have also increased, but those for European countries have dropped, tour agencies said. According to a survey by the Travel Industry Council, a tour to the Japanese island of Honshu will cost at least HK$8,499, up 11 per cent from last year's price of HK$7,688. The cheapest tour to the island of Hokkaido costs HK$10,259, an increase of 7 per cent from a year ago. "The flights are very full," said the council's executive director, Joseph Tung Yao-chung. Japan's yen has fallen by a third over the past year compared to the Hong Kong dollar, making the country more affordable for Hongkongers. "Change in exchange rates is a big draw for travellers. There has been a drop in rates of the yen, euro, Australian dollar and Korean won, and the countries are all shopping hotspots," Wing On Travel deputy general manager Simon Ma Sai-man said. He said tours to Japan over the Easter break were 80 per cent booked while tours to other places were about 70 per cent full. In addition to Japan's cheaper currency, its famous cherry blossoms are a huge springtime draw. This year, the trees are expected to bloom in Kyushu and Honshu from March to April, and in Hokkaido around May. The Easter holiday runs from April 3 to 7. Due to immense demand from overseas travellers and locals, the prices of air tickets and hotel rooms have gone up in absolute terms despite the yen's depreciation, Ma said. European tours, meanwhile, are about 3 per cent cheaper than last year, while those to South Korea are up to 5 per cent more expensive. Package Tour has almost sold out its Osaka and South Korea tours during Easter. Fees have gone up by 5 to 15 per cent.

 China*:  Mar 11 - 20 2015

China banks lend at fastest pace in nearly six years in February as PBOC easing kicks in (SCMP/Reuters in Beijing) Chinese banks extended 1.02 trillion yuan of new loans in February, well above market expectations, while growth in broad money supply quickened, taking some heat off the central bank as it seeks to boost flagging economic growth. Economists polled by Reuters had expected new local-currency loans to fall to 750 billion yuan in February from 1.47 trillion yuan in January, which marked a lending surge not seen since mid-2009. Chinese banks, which face limits on how much they can lend annually, tend to front-load their lending in the beginning of each year in a bid to protect their market share. Total social financing, a broader measure of overall liquidity in the economy, fell to 1.35 trillion yuan in February, versus 2.05 trillion yuan in January. Broad M2 money supply (M2) in February rose 12.5 per cent from a year ago, the central bank said on Thursday, beating expectations of 11 percent and quickening from January’s 10.8 per cent, which was the weakest since records started in 1998. Outstanding loan growth was 14.3 per cent in February. Analysts polled by Reuters had expected 13.8 per cent, versus the previous month’s 13.9 per cent. Other data released so far for early 2015 show China’s economy may already be at risk of missing the government’s annual growth target of around 7 per cent, which itself would mark a quarter-century low. Growth in investment, retail sales and factory output all missed forecasts in January and February and fell to multi-year lows, leaving investors with little doubt that the economy is still losing steam and in need of further support measures. Exports picked up in the first two months but imports slid some 20 per cent, pointing to persistent weakness in the economy, while deflationary pressures in the factory sector have intensified.

Hong Kong*:  Mar 1 - 10 2015

Mainland Chinese, Hongkongers lead way in Forbes powerful women in Asia list (By Raquel Carvalho 14 mainlanders and Hongkongers feature in Forbes list of top 50 Asian businesswomen - Women from the mainland and Hong Kong again dominated the annual Forbes list of the 50 most powerful businesswomen in Asia, with 14 top female decision-makers making the grade this year. For the first time for any company, two of Alibaba's top businesswomen were on the list: Maggie Wu Wei, the e-commerce giant's chief financial officer, and Lucy Peng, a co-founder of the company and chief executive of its fast-growing Ant Financial Services affiliate. Hong Kong's richest woman Pansy Ho Chiu-king, the managing director of Shun Tak Holdings, chairman of Jetstar Hong Kong and co-chairman of MGM China, with gambling-related projects in Macau, also featured. She is one of 17 children of casino magnate Stanley Ho Hung-sun. Huawei Technologies chairman Sun Yafang and Zhang Xin, co-founder and chief executive of Soho China, were another two business titans to appear. Also included was Cheng Xue, who heads Foshan Haitian Flavouring & Food and was named on Forbes's China Rich List with a net worth of more than US$800 million. Women from 16 countries and regions were represented on Forbes' fourth annual Asia's Power Businesswomen list, which recognises women driving change across diverse industries. Six women from India made the grade, followed by Thailand with five and Singapore with four. South Korea, Australia, the Philippines and Indonesia each had three representatives, while Japan and Vietnam both had two. Malaysia, Taiwan, Myanmar, Mongolia and New Zealand had one apiece. In addition to the most powerful list, 12 young dynamos were singled out by Forbes as "women to watch". Among them was Jean Liu, president of Didi Dache, a mainland taxi-hailing app that has just merged with its biggest rival Kuaidi, creating the largest company of its kind in the world based on user numbers. She's the daughter of Lenovo founder Liu Chuanzhi. Liu Hanyu, founder and chief executive of the first online art gallery on the mainland to accept digital payment, also merited special mention. Her website, which only launched in 2012, had sales of US$8 million last year. Xin Li, deputy chairman of Christie's Asia in Hong Kong, was described by Forbes as "part of Christie's arsenal to grow its business in Asia".

 China*:  Mar 1 - 10 2015

SCMP: China gets approval to build Argentina satellite tracking station for moon missions - Tracking base to be built in Patagonia is part of China's plans to reach the moon in 2020. Argentina's Congress has approved the installation of a Chinese satellite tracking station in the South American country's Patagonia region. The measure passed in the lower house with 133 votes in favour and 107 against. Opposition lawmakers questioned the possible military use of the base and a tax exemption that would benefit the station for 50 years. President Cristina Fernandez de Kirchner's government has said the project is part of China's plans to reach the moon in 2020. The satellite station will be used for monitoring and downloading data through an antenna with a 35-metre diameter. It is expected to cost some US$300 million and will be operational next year. Argentina will be able to access the antenna at least 10 per cent of the time to develop research projects under a deal between the two countries. Argentina launched its first domestically built communications satellite last year. The ARSAT-1 satellite was the first to be constructed with technology developed in Latin America. Jiang Shixue, a professor of Latin American studies at the Chinese Academy of Social Sciences, said the deal would boost cooperation between China and Argentina. "It means that the cooperation between the two nations is not confined only to transactions of agricultural products, but other hi-tech areas as well," Jiang said. Bilateral trade between the two nations reached nearly US$17 billion in 2013 and Argentina is a key exporter of grain to China. China has been cooperating on space and high technology overseas in recent years. In 2011, the construction of a Chinese ground station on a farm near Dongara in Western Australia was approved.

Hong Kong*:  Feb 22 - 28 2015

Hong Kong Broadband Network launches initial public offering (By Ray Chan Hong Kong Broadband Network, the city's second-largest broadband service provider, launched its initial public offering on Tuesday, raising up to US$750 million. Private equity firm CVC Capital Partners, which owns a 70.7 per cent stake in the company, HKBN's management and other investors will offer 645 million existing shares at an indicative range of HK$8 to HK$9 apiece with an expected yield of 5.4 per cent. The company would not receive any proceeds from the share offer. HKBN has already secured a US$200 million order from the Canada Pension Plan Investment Board, representing about 27 per cent of what will be the city's first major deal of the year. The firm will price the shares on March 4 and trading will begin on March 12. If the shares are priced at the top end of the indicative range, it will be the second-biggest listing in Asia-Pacific this year, after Thai telecommunications operator Jasmine International's flotation of its broadband internet business early this month, which raised US$1.13 billion. Regional stock markets have been quiet so far this year as the mainland markets remain shut due to the Lunar New Year holiday and investors are looking for direction from the US Federal Reserve. The Fed would likely be more hawkish, compared to a somewhat dovish tone last month, said analysts at ABN Amro in a research note to clients, adding that they expected the US central bank to start raising interest rates in June. KGI Asia director Ben Kwong Man-bun said a strong economic recovery in the US provided solid fundamentals for the Fed to raise rates in the second half of the year and the Hong Kong stock market should remain volatile due to a strong dollar. "The outlook of Hong Kong's listing market is expected to be tepid, given rocky trading conditions," said Kwong. "Lower government bond yields are adding to the recent caution." Hong Kong has seen only US$332 million raised from listings this year, the lowest level since 2012, compared with US$3.7 billion for the same period a year earlier, according to Dealogic. CVC bought HKBN from Hong Kong Television Network in May 2012 for HK$4.9 billion, according to its listing documents.

 China*:  Feb 22 - 28 2015

Lenovo vows laptop security overhaul amid Superfish adware controversy (By Bien Perez Lenovo Group, the world’s largest supplier of personal computers, plans to unveil a sweeping initiative to bolster security on its products, following the controversy over an adware that was preloaded on millions of its laptops in the fourth quarter. Hong Kong-listed Lenovo saw its share price tumble 2 per cent to HK$11.76 at the noon break on Tuesday, after chief technology officer Peter Hortensius issued an open letter through the company’s website to apologise for the security scare. “Lenovo may be in more hot water than initially thought. There could be a short-term hit to its stock price from reflex selling by retail investors,” Alberto Moel, a senior analyst at Bernstein Research, said. The adware, called Superfish, pushes third-party adverts into Google searches and websites without the computer user’s permission. The technology was adopted by Lenovo under a partnership with US-based software start-up Superfish, which pioneered visual search technology. Security experts last week warned that the adware broke secure connections on affected laptops to access sensitive data and inject advertising. It does that in a way that leaves the machine exposed to hackers and other malicious programmes that steal data or spy on a user’s online activities. “Clearly this issue has caused concern among our customers, partners and those who care about Lenovo … For this, I would like to again apologise,” Hortensius said. “Now, we are in the midst of developing a concrete plan to address software vulnerabilities and security with defined actions that we will share by the end of the week," he said. Lenovo - which has headquarters in Beijing and in Morrisville, North Carolina, in the US - said the affected products included certain models under its G, U, Y, Z, S, E, Miix, Flex and Yoga-series laptops shipped between September and December last year. Hortensius said Lenovo was “exploring a wide range of options that include creating a cleaner PC image”, which represents the operating system and software on the device right out of the box. The computer giant, with operations in more than 160 countries, was also looking to work directly with privacy and security experts, consumers and other interested parties “to create the right preload strategy”. In addition, the company has started “soliciting and assessing the opinions of even our harshest critics in evaluating our products going forward”, Hortensius said. His open letter stressed that Superfish was not installed on the company’s premium, Thinkpad-brand business notebook computers. The adware was also never preloaded on its desktop computers, smartphones, tablets, servers or storage devices. Lenovo shipped more than 16 million laptop and desktop machines in the fourth quarter of last year, with laptops accounting for 52.1 per cent of its revenue in the same period. Bryan Ma, the vice-president for client devices research at IDC Asia-Pacific, said: “The tragedy in all of this is that ThinkPads never had Superfish, and yet these notebooks’ rock-solid reputation for security could get questioned in the process”. “There certainly will be users who will think twice about buying Lenovo laptops in the short-term. The good thing is that the company should get past this within a number of quarters,” Ma said. Lenovo last week said it had stopped the adware preloads since last month, and committed not to include Superfish software in any devices in the future. The company offered technical support online, with an automated process on how to remove Superfish. The company’s major software partners, Microsoft, McAfee and Symantec, have also updated their programmes to automatically disable and remove Superfish.

Hong Kong*:  Feb 11 - 21 2015

Hong Kong Disneyland profits up 36pc despite slowdown in visitor growth (By SCMP - Timmy Sung Resort reported a HK$336 million profit for the last financial year thanks to a rise of per capita guest spending - Hong Kong Disneyland Resort reported a record HK$336 million net profit for the last financial year on Monday, up 36 per cent year-on-year, despite a significant slowdown in visitor growth. But the theme park did not say when it could share financial returns with the government, which owns 52 per cent of the park, even though this was its third consecutive year of robust profit growth. The theme park's revenue rose 12 per cent between October 2013 and September last year, to a record HK$5.4 billion. Per capita guest spending rose by 11 per cent, thanks to product sales associated with the ultra-popular Frozen animated film. But the attendance increased just 1 per cent, a departure from the double-digit growth in each of the previous four years. The park's managing director Andrew Kam Min-ho insisted the results were still very encouraging, however he said there was no timetable as to when the park would start paying dividends to the government. He said the profits would instead be re-invested into new projects. The park saw a total of 7.5 million visitors last financial year, a rise of only 100,000. The number of mainland Chinese visitors grew by 4 per cent, while those from Southeast Asian countries increased by 2 per cent. Kam said the opening of the new Mystic Point attraction in 2013 had boosted the park attendance, providing a higher base for comparison to the last financial year. The occupancy rate of the park's two hotels also dropped one percentage point from a year ago, to 93 per cent. Kam said renovation work had temporarily reduced room supply. A third hotel is scheduled to open in two years to provide 750 additional rooms. When asked about the progress of the resort's second phase of development, which Chief Executive Leung Chun-ying announced in his policy address last month, Kam said it had yet to enter into any "key stages" with the government. Kam expressed confidence that the opening of another Disney park in Shanghai at the end of the year would not affect business in Hong Kong. Professor Zhou Yinggang, the director of Chinese University's Centre for Hospitality and Real Estate Research, agreed that reinvestment might be a smarter move than paying a dividend. "The profit a few years later may be even better," he said.

 China*:  Feb 11 - 21 2015

Guangdong's economy grows at slowest pace in 25 years (By SCMP - Mimi Lau in Guangzhou and Cary Huang) Three main indicators miss their targets as China's exports powerhouse hits economic headwinds and the 'new normal' becomes reality - Guangdong saw its slowest economic growth in a quarter of a century last year, with three main indicators failing to reach their targets. The province's economy grew 7.8 per cent last year, to 6.78 trillion yuan (HK$8.5 trillion), compared with the previous year. This was short of the targeted 8.5 per cent, as all three drivers - investment, exports and consumption - had lost momentum, Governor Zhu Xiaodan said. The provincial government had made reducing unemployment its No1 priority among its top 10 goals for improving people's livelihoods, Zhu said at the opening of the provincial People's Congress in Guangzhou yesterday. The government hoped to contain urban unemployment to 3.5 per cent this year, worse than last year's 2.44 per cent, as the economy continued to slow. Predicting a sluggish economy ahead, Zhu set the forecast for growth at 7.5 per cent for the coming year. "With the current global economic recovery remaining weak … there are still uncertain factors that create persistent pressure and potential risks of an economic downturn," Zhu said, referring to the challenges of economic development, a restructured mode of growth, and hangovers from previous rounds of economic stimulus. Last year saw the lowest growth rate since 1989, when the province registered 7.2 per cent annualised growth amid economic sanctions imposed by US-led industrialised nations in protest over Beijing's military crackdown on the pro-democracy movement on June 4 that year. However, national economic growth last year was also the lowest in 24 years, with gross domestic product slowing to 7.4 per cent. The province rarely fails to meet its targets, and since 2000, has outperformed all its growth targets by large margins. Shen Jianguang, chief China economist at Mizuho Securities Asia, said Guangdong's slower growth reflected the "new normal" - a term used by President Xi Jinping recently to refer to the end of decades of double-digit growth in China. Louis Kuijs, chief economist of Greater China at Royal Bank of Scotland, said the Guangdong economy was facing headwinds, like other parts of the country. Wang Tao, chief China economist at UBS Securities Asia, said Guangdong should be realistic and lower its growth targets for 2015. Capital investment registered 15.9 per cent growth last year, lower than the projected 18 per cent. Imports and exports fell by 1.4 per cent during the same period, missing the 1 per cent growth target. Private consumption grew by 11.9 per cent, lower than the projected 13 per cent. Kuijs said that Guangdong, China's export powerhouse, had felt the impact of subdued global demand, rising wages and the need to improve its industrial models more than some other regions. Domestic demand was also slowing due to sluggish real estate construction. "These headwinds are unlikely to go away soon," Kuijs said. But, as a pioneer of reform, Guangdong was "reasonably well placed" to continue to grow and develop solidly in the coming five years. Guangdong has committed to further liberating its services sector, deepening financial cooperation and strengthening international trade and shipping with Hong Kong and Macau.

Hong Kong*:  Feb 1 - 10 2015

Hong Kong retains top spot as ‘world’s freest economy’ for 21st year in a row (By Lai Ying-kit Hong Kong has been ranked the world’s freest economy for the 21st year in a row – but the city is weighed down by perceived corruption and eroding public trust, according to the US think tank Heritage Foundation. Hong Kong scored 89.6 out of 100 points in overall economic freedom, down by 0.5 points from last year. But the territory's lead over its closest rival has further narrowed, with economic freedom just 0.2 points higher than second-placed Singapore - New Zealand was ranked third, followed by Australia, Switzerland, Canada and Chile in the overall rankings. The index measures economic freedom in 186 countries based on 10 quantitative and qualitative factors, such as rule of law and regulatory efficiency, on a scale of 0 to 100. The foundation noted that Hong Kong showed small improvements in business freedom, labour freedom and fiscal freedom but these were outweighed by a higher level of perceived corruption. Its scoring in “freedom from corruption” fell 7.3 points to 75 points, a record low since the 1997 handover. In its 2015 report, the foundation said Hong Kong continued to thrive on the free flow of goods, services and capital. “As the economic and financial gateway to China, and with an efficient regulatory framework, low and simple taxation, and sophisticated capital markets, the territory continues to offer the most convenient platform for international companies doing business on the mainland,” it said. Hong Kong’s “impressive level of resilience” enabled it to weather global economic swings and domestic shocks, said the conservative US think tank, funded by a variety of companies and individuals, including the billionaire Koch brothers. However, the foundation said the Hong Kong economy’s uniqueness, based on its commitment to economic freedom and the autonomy afforded it by mainland China, had “faded” slightly. “Although Hong Kong maintains the features of an economically free society, economic decision-making has become somewhat more bureaucratic and politicised, and the government’s administrative scope and reach have expanded,” it said in the report. “Recent political events appear to have undermined public trust and confidence in the administration,” it said. The Hong Kong government welcomed the latest ranking. “The government will continue to uphold our fine tradition of the rule of law, a clean society with a level playing field, an efficient public sector, and a simple tax regime with low tax rates,” a spokesman said. On the perceived corruption rating, the government spokesman said high-profile cases might have influenced this, but insisted the cases “are isolated since the levels of corruption in Hong Kong remain very low”. “The way these cases were handled in accordance with the law clearly demonstrates our determination to fight corruption without fear or favour, regardless of the background, status and position of those involved,” he added. Former chief secretary Rafael Hui Si-yan and property tycoon Thomas Kwok Ping-kwong were convicted last year for misconduct and bribery in the city’s biggest graft trial. Former chief executive Donald Tsang Yam-kuen has also been placed under investigation in another case by the Independent Commission Against Corruption (ICAC) over allegations that he accepted inappropriate favours from local tycoons, including trips on luxury yachts and private jets. A spokesman for the ICAC said extensive media coverage on some cases, including the prosecutions and convictions of a former senior government official and senior executives of a listed company, might have affected respondents’ impression. “Yet, these are isolated cases and should not be seen as an indicator of deterioration in the probity situation in Hong Kong,” he said. Director of Public Prosecutions Keith Yeung said on Monday that the probe into Tsang was complete and that the Department of Justice would decide later whether to prosecute, according to Chinese state news agency Xinhua, in a rare report on the progress of the investigation. Xinhua also reported that current Chief Executive Leung Chun-ying refused to comment on the case.

Troubled broadcaster ATV hit with second prosecution over unpaid salaries (By Vivienne Chow Cash-strapped ATV and its executive director Ip Ka-po face further legal action over unpaid salaries, despite the prospect of finding a potential new investor. The Labour Department announced on Tuesday night that ATV would be prosecuted over a delay in paying November salaries contrary to the Employment Ordinance. The prosecution is the second against the troubled broadcaster this month, following legal action over unpaid salaries from September. The department issued another 42 summonses against ATV and Ip, 21 of them laid against the company for “wilfully and without reasonable excuse” failing to pay its staff on time. Ip received the rest of the summonses as “the offences were suspected to have been committed by the company with the consent, connivance or neglect of the director concerned.” Together with those related to the delays of September salaries, the department has issued a total of 76 summonses against the broadcaster. A hearing on the September salaries delay will take place on Friday. Secretary for Labour and Welfare Matthew Cheung Kin-chung on Tuesday said: “We are taking enforcement action seriously.” The second prosecution came as the managers of ATV and representatives from Deloitte China confirmed on Monday that they had received “several” proposals to buy a 10.75 per cent stake in the station. Deloitte said that it would take one or two weeks for managers to review and consider the proposals in detail with the relevant parties. The tender was initiated after a court last month assigned two accountants from Deloitte as ATV managers and tasked them with selling a 10.75 per cent stake held by Wong Ben-koon, who is a relative of major investor Wong Ching. Wong Ching controls 52 per cent of ATV through Wong Ben-koon, but the court ruled that the mainland businessman had interfered with the running of the station and had jeopardised its future.

 China*:  Feb 1 - 10 2015

Thirteen judges sworn in as China launches country’s first circuit court in Shenzhen (By Laura Zhou The move is aimed at increasing court independence and reducing interference by local officials - A new circuit court – the first of its kind in China – has been set up in Shenzhen as part of the country’s efforts to promote judicial independence and reduce interference by local party officials. A total of 13 judges have been appointed to the court, which will start hearings on Monday, according to Chinese media reports. It will handle major administrative and civil cases across Guangdong, Guangxi and Hainan provinces, and will act as the region’s final appellate court, with the same power of final adjudication as the Supreme Court. The circuit court was set up following the Communist Party’s fourth plenum in October, during which the party leadership pledged to improve court independence and eliminate local interference. Supreme Court spokesman Sun Jungong said late last year that by setting up such circuit courts, local courts would get more power to “help solve local disputes … and allow the Supreme Court to concentrate on making judicial policies and judicial interpretation”, The Beijing News reported. According to the pilot scheme, China’s second circuit court is expected to be set up in Shenyang, capital city of Liaoning province, by the end of January, the Beijing Youth Daily reported. But some legal experts have raised doubts about whether the courts would efficiently reduce local government interference. Peking University legal professor He Weifang wrote on his blog earlier this month that the circuit courts would cut the travelling costs of lawyers and plaintiffs, but that a judgment from these circuit courts might not necessarily face less local interference than other local courts.

Expatriates to be lured for startups (By SU ZHOU(China Daily)) Policy incentives will be launched in different areas of China to support talent from overseas - China is aiming to attract more expatriates to start businesses in the country, amid efforts to lure international talent and entrepreneurship, a senior official said on Tuesday. Authorities will continue to introduce policy incentives in different areas to support overseas talent, including funding, workspaces and consultation on business startups. The move is expected to diversify channels for China's global talent recruiting program and attract professionals in different fields to devote themselves to the country's economic and social development. The policy decision comes as many Chinese are being encouraged to start businesses as the country aims to become more innovation-driven. This follows the success stories of companies such as e-commerce giant Alibaba Group, whose market capitalization has reached more than $250 billion. Zhang Jianguo, director of the State Administration of Foreign Experts Affairs, said that a shortage of scientists and top talent in technology and the service industry has affected China's innovation capability and competitiveness. "We have to focus on the nation's strategic goals and attract high-level talent to start innovative businesses in China," Zhang said. He said the talent-recruiting program had been driven mainly by different levels of government and had become outdated. "In the future, the model will be more market-orientated and driven mainly by demand and employers' development priorities, Zhang added. In 2013, Fuzhou, the capital of Fujian province, launched China's first plan to accelerate the arrival of innovative overseas talent. The Fuzhou Bureau of Foreign Experts Affairs provides free workspaces for startup companies and funds for outstanding startup programs. Help is provided with related paperwork and meetings arranged with potential partners, such as venture capital firms. Ten startup companies have settled in the city under this plan. Lan Zhen, head of the bureau, said, "Fuzhou has advantages in cooperation with Taiwan and abundant resources in returned overseas students, but these are not enough. "Attracting overseas talent to start businesses in China is new, and we are not sure how it will develop." Lan said that to date the results have been good and have attracted attention from other provinces. Last year, 13 groups of officials from provinces including Hunan, Guangdong, Anhui and Shandong visited Fuzhou to see how the plan is working. Wang Huiyao, president of the Center for China and Globalization, a think tank in Beijing, said that despite the small percentage of overseas talent recruited in China, overseas startups will provide impetus for the country's innovation efforts and economic growth. "Take Suzhou in Jiangsu province for example. It has a program to attract returned Chinese who have studied or worked overseas to start businesses at home," Wang said. "The outcome has been so good that Suzhou has extended the program to expatriates in China. "China has missed the opportunity to attract multinationals to the country as the engine for innovation. Now, with individual innovation booming, China can take advantage of this trend to leverage its development."

Hong Kong*:  Jan 21 - 31 2015

SCMP: Hong Kong tourist arrivals jump 12pc despite Occupy uncertainty (By Amy Nip Arrivals hit 60.8m, thanks to more visitors from Shenzhen and S Korea - Tourist arrivals in Hong Kong increased 12 per cent to 60.8 million last year - up on an estimate made last February that there would be 59 million visitors and despite uncertainty created by the Occupy protests. The total included 47.2 million from the mainland, an increase of 16 per cent from the year before, according to preliminary Tourism Board figures. For the first time, South Korea replaced Japan as Hong Kong's third-biggest tourism market. The mainland and Taiwan came in first and second. The growth in mainland figures was driven by Shenzhen permanent residents who used their Hong Kong multiple-entry permits to make more trips to the city. Arrivals of other Asian visitors rose in the first three quarters of last year, but the increase was countered by a fall in the last quarter due to the Occupy protests. A sluggish economic outlook in Europe continued to affect long-haul arrivals, leaving the biggest growth potential in Southeast Asia, according to the board's executive director Anthony Lau Chun-hon. To boost demand for travel during the Lunar New Year holidays next month, the statutory body is sending a delegation of about 10 representatives from the retail, tour agency and hotel sectors to Beijing, Taiwan, South Korea, Japan, Singapore, the Philippines and Indonesia. The marketing campaign includes discounted plane tickets, new tour itineraries and promotions. Three airlines will offer return tickets from Taiwan priced at HK$500, excluding tax. The promotion began last week and the travel period runs until the Lunar New Year. "We will spread the message that tear gas and the Occupy movement are over," said board chairman Peter Lam Kin-ngok. Meanwhile, the board said Hong Kong had risen in popularity among South Koreans. For the first time ever, more South Koreans than Japanese came to Hong Kong last year. In the first 11 months of last year, the city received more than 1.1 million South Koreans, an increase of almost 17 per cent from the year before. The country beat Japan in terms of the absolute number of visitors as well as the growth rate. Over the same period, growth in the number of tourists from Japan was just 3.5 per cent. Thanks to the Korean cultural boom, South Korean television stations invest a lot in their programmes and do not hesitate to film their shows overseas - including in Hong Kong. "Hong Kong is a hot filming location for their programmes," Lau said. Popular South Korean variety programme Running Man was invited to Hong Kong, which saw stars go on a treasure hunt across the city. This year, the board has asked Witch Hunt, a variety programme about dating, to record a session here.

 China*:  Jan 21 - 31 2015

Civil servants to see 60 percent increase in salary (By Wang Jianfen( Chinese mainland authorities have rolled out its long-expected plan to increase salaries for civil servants, Hong Kong-based Wen Wei Po reported on Sunday. The pay raise plan, released by the State Council on Jan 12, covers grass-roots officials to ministerial level officials. The plan actually went into effect on Oct 1, 2014. This month civil servants will get their one-off compensation for salaries from the fourth quarter of last year. The base salary for ministerial level officials will increase from the current 7,020 yuan ($1,130) to 11,385 yuan, while the salaries for the lowest level officials will jump to 1,320 yuan from 630 yuan, according to the plan. The plan also said that in the future salaries for civil servants will be adjusted every year or every two years. The newspaper quoted an expert saying that the first increase in salaries of civil servants seems big, but is still reasonable while taking inflation into consideration. It is noteworthy that lower level officials are receiving a bigger increase, said the expert. While increasing the level of base salaries, the plan also puts a freeze on the rise of allowances. Some allowances will be merged with the base salary. The allowances for ministerial level officials will be reduced by 650 yuan, while those for the lowest level officials will be down by 220 yuan. On Wednesday, the State Council unveiled measures to unify old-age pension systems for enterprise employees and workers in government agencies and public institutions. In the past, corporate employees had to pay for their own pensions, while government staff enjoyed pensions without making any contribution at all.

Hong Kong*:  Jan 11 - 20 2015

HSBC’s Hong Kong head Anita Fung leaving amid reshuffle (By SCMP Enoch Yiu) Anita Fung Yuen-mei, chief executive of HSBC Hong Kong, is leaving the bank next month while the lender’s China head, Helen Wong, is taking up a new role in which she will oversee the mainland, Hong Kong and Taiwan operations. The reshuffle was announced in a staff memo circulated on Thursday afternoon and obtained by the South China Morning Post. It said Fung, who has been with HSBC since 1996 and was its first female Hong Kong head, is leaving to “pursue opportunities outside the group”. Wong, who is now deputy chairman, president and chief executive of HSBC China, will assume the role of chief executive, Greater China. “This is a newly created role to develop a more integrated Greater China strategy for HSBC, increase our international connectivity between Greater China and the Group, and deliver the Greater China growth opportunity more effectively to our clients globally,” said Peter Wong Tung-shun, chief executive, Asia Pacific, in the memo. Helen Wong’s new role is subject to regulatory approval and will take effect from March 1. She will be based in Hong Kong and report to Peter Wong. She will be the acting chief executive of the Hong Kong office until Fung’s successor is appointed. Fung took up the Hong Kong head role in 2011. She was then the head of global banking and markets, Asia Pacific. Helen Wong has been a key figure promoting HSBC’s yuan business. “She is a senior figure in the region’s financial market and through her various industry roles has actively promoted the evolution of Hong Kong’s financial landscape, as well as that of other regional markets,” Peter Wong said in the memo. She has 30 years of banking experience in the Greater China and Asia-Pacific regions. She joined HSBC in 1992 and was appointed to her current position in 2010. “Over the last four years, Helen has successfully led the expansion of our mainland China business, establishing HSBC as the largest foreign bank in China, and has played a key role in securing our leadership position in the internationalisation of the RMB,” Peter Wong said. David Liao, now head of global banking and markets, HSBC China, will succeed Helen Wong as China head. 

 China*:  Jan 11 - 20 2015

Air China's new Boeing 747-8 lands By HU HAIDAN in New York(China Daily USA) Air China's new Boeing 747-8 aircraft debuts internationally on the Beijing-New York route on Wednesday in New York. Zhou Yuelong (fourth from left), general manager at Air China New York; Liu Yi (third from left), counselor of China's Consulate General of China in New York; Xue Yaping (second from left), director of China National Tourist Office in New York; Mike Moran (fourth from right), general manager at John F. Kennedy International Airport; Liu Yongbing (third from right), captain of the B747-8; John Selden (second from right), deputy general manager at JFK International Airport, and staff members from Air China hold the congratulation banner in front of the B747-8 at the airport. Air China's new Boeing 747-8 aircraft made its international debut on the Beijing-New York route arriving at JFK on Wednesday. The 13-hour flight will run once a day between Beijing and New York. At the in-cabin reception, Zhou Yuelong, general manager of Air China New York spoke with guests and the media. "We are pleased that our Beijing headquarters has chosen New York for the international launch of the B747-8," Zhou said. "The B747-8 is the first aircraft in Air China's fleet with a four-cabin configuration, " he explained. "This is significant as this provides travelers from New York and other neighboring cities to China and beyond with more options." Liu Yi, counselor of the economic and commercial office of China's Consulate General of China in New York, congratulated Air China on behalf of Zhang Qiyue, consul general of China in New York. In a congratulatory letter, Zhang wrote: "As one of the biggest airline companies in China, Air China makes momentous efforts in connecting China and US economic trade and culture communication." Xue Yaping, director of the China National Tourist Office (CNTO) in New York said the extension of tourist visas between the US and China from one year to 10 years will provide a huge boost to the travel industries of both countries. "We treasure every improvement in travel and transportation," Xue said. Even though the China National Tourist Administration's annual report for 2014 hasn't been released yet, Xue said the expected number of Chinese travelers to the US is around 2.3 million, up more than 25 percent over the 1.8 million Chinese travelers who visited the US in 2013. Mike Moran, General Manager at JFK International Airport welcomed Air China's new flight. He said it was the first scheduled flight of a Boeing 747-8 at JFK. "Air China as an innovator and as an industry leader is always identifying new ways to address customers' needs," Moran said. "This efficient and friendly aircraft offering a four-class cabin figuration, passenger options and many other features truly means a lot for passenger experience." Air China's 747-8 features 12 luxury suites in the Forbidden Pavilion first-class cabin, 54 fully-flat sleepers in the Capital Pavilion business class, 66 premium economy seats and 233 in the economy cabin for a total of 365 seats. According to Theresa Wu, sales manager at Air China, the Boeing 747-8 is fuel-efficient and environmentally friendly. Also the seats in premium economy and economy cabins offer more legroom. Air China plans to put a Boeing 747-8 into their Beijing-Los Angeles route in March.

US law firms grow in China practice, staff By PAUL WELITZKIN in New York(China Daily USA) Major US law firms experienced steady growth in their China practices in 2014, driven by increased business from technology, mergers and acquisitions (M&A) and regulatory matters. And firms contacted by China Daily said they expect continued growth this year and the addition of more lawyers to their ranks. "The volume, deal size and sophistication of US acquisition matters from our China-based clients have steadily increased in the past several years. We anticipate continued growth in 2015," said Thomas Albrecht, managing partner Asia-Pacific region with Chicago-based Sidley Austin LLP, which has offices in Beijing, Hong Kong and Shanghai. Miranda So, a Davis Polk & Wardell LLP corporate partner in Hong Kong, said the China practice was "busy" in 2014 and expects to remain busy in 2015. Davis Polk, based in New York, has offices in Beijing and Hong Kong. Paul Marquardt, partner at New York-based Cleary Gottlieb Steen & Hamilton LLP, which maintains offices in Beijing and Hong Kong, said after a period during which Chinese investors appeared convinced that any China-linked deal would face protectionist backlash via a review process from the Committee on Foreign Investment in the United States (CFIUS), Chinese acquirers are now confident in addressing CFIUS. "We've been involved in transactions with major Chinese State-owned enterprises, private companies, and investors that demonstrate that even in potentially sensitive sectors such as energy and telecoms deals can still be done," Marquardt said. Davis Polk's So said capital markets, M&A and regulatory enforcement were the top areas for the firm's China practice last year. "Many of the largest deals we work on are cross-border transactions that involve teams from both our China and US office. "Our Hong Kong and Beijing offices have grown significantly in the last few years," So continued. "On the US side, we are focused on recruiting the best talent from US law schools who are interested in practicing law and developing a career in China. Ten years ago, all of our US associates would start in our US offices and work there for a few years before transferring to China. Now, we recruit law school graduates and encourage those who are interested to start hitting the ground right away in China." Albrecht said Sidley Austin client concerns in 2014 included manufacturing and technology issues. "As the deals have grown in sophistication and complexity, it has become more important to have the deal lawyers located in a time-zone friendly jurisdiction to interface with opposing counsel and other US- based professionals involved in the transaction. In other words, the involvement of our US-based colleagues has increased," he said. Has Sidley had to add staff and if so where - in China or the US? "Because of the existing depth of our US M&A capability, we have plenty of bench strength to accommodate the increased flow of outbound investment activity from China. We have increased our lawyer headcount in China recently as a result of a general increase in work flow from our China-based clients, but that is not due simply to an increase in outbound M&A activity in the US," Albrecht said. Sidley has hired more than 130 lawyers that speak Mandarin or Cantonese in the last five years, and plans to add around 15 Mandarin/Cantonese-speaking lawyers in 2015. Cleary Gottlieb's China practice focuses on M&A, private equity, capital markets, acquisition finance, fund formation, and coordinating antitrust matters in China. "We see significant opportunities in the areas of M&A, real estate, and investment funds. Inbound M&A activity by multinational corporate and PE (private equity) clients continues to grow, as does as outbound M&A by Chinese clients in US, Europe and Latin America," said Cleary Gottlieb partner W. Clayton Johnson. "There have been Chinese companies seeking our antitrust advice or approaching us for antitrust advice (including transactional, advisory, and litigation work) in the United States and in the EU," added Cleary Gottlieb associate Cunzhen Huang. "We added six Mandarin-speaking lawyers in our Beijing and Hong Kong offices in 2014, four new hires and two transfers from our New York office. In addition, partner Denise Shiu, a Mandarin and Cantonese speaker, will transfer from Hong Kong to Beijing in early 2015. We plan to hire additional Mandarin-speaking lawyers in Beijing and Hong Kong in 2015," said Ling Huang, partner at Cleary Gottlieb.

Hong Kong*:  Jan 1 - 10 2015

Hong Kong protests fail to dampen retail sales as growth picks up (Amy Nip Sales turnaround continues as tourism and consumer sentiment improve, but government warns of rocky road ahead amid uncertainty - Hong Kong's retail sales continued to regain momentum last month on stronger consumer sentiment and rising tourist numbers - but the government is warning of uncertainty ahead. The value of sales in November was up 4.1 per cent year on year, after growth of 1.4 per cent in October signalled an end to months of falling sales amid economic uncertainty and Beijing's crackdown on graft and conspicuous consumption. The revival coincided with the height of the Occupy Central pro-democracy movement, and came despite dire warnings that the street blockades, cleared earlier this month, would be ruinous for the economy. "Consumer sentiment appeared to have turned more stable, and the notable growth in inbound tourism in that month also provided support," a government spokesman said. But future growth would depend on the labour market, wages and tourism, he added. "We also need to stay alert to the unsteady external environment and the uncertainties associated with the changing pattern of tourist spending." Consumer durables was the best performing sector with year-on-year growth of 14.6 per cent as sales of the new iPhone 6 models remained strong. Sales of miscellaneous durable goods, including smartphones, grew 35.4 per cent, according to Census and Statistics Department figures. Medicine and cosmetics sales grew 10.3 per cent. Department store sales rose 4.9 per cent and supermarket takings were up 3.5 per cent. But the jewellery, watches and valuable gifts category - long the biggest drag on the figures - continued to slump, although only by 2 per cent, after an 11.6 per cent fall in October. High-end goods were popular with mainland tourists, but President Xi Jinping's anti-graft drive has dampened their enthusiasm. Spending on fuel fell 4.4 per cent amid slumping global oil prices. Tourism Board figures for October show that visitor numbers from the mainland rose 18.3 per cent year on year to more than four million, offsetting a small decline in the number of overseas visitors. Government sources expect a year-on-year increase for last month. The Retail Management Association said the improved picture had continued this month. It expects sales growth to be in mid-to-high single figures. Dr Terence Chong Tai-leung, a Chinese University economist, said taxi drivers, caterers and some retailers had suffered during Occupy, and that could have a mild effect on growth next year. The return of tourists suggested the political movement's impact was limited and short term, he added. But political tension would affect Beijing's policies and have an impact on growth in the long term. Meanwhile, the Trade Development Council said strong Christmas sales overseas pointed to an improved export picture. The government last month revised its forecast for gross domestic product growth this year down to 2.2 per cent.

 China*:  Jan 1 - 10 2015

China's polluters face tougher fines under new green rules (By Li Jing Violators face higher penalties but critics say the revised environmental protection law lacks teeth - The mainland's "toughest ever" green rules come into effect today, with revisions to the environmental protection law ushering in higher fines and more stringent conditions for industry. The new regulations aim to combat the scourge of pollution across the country but analysts have mixed opinions on the rules' prospect of success. Under the revamped system, environmental offenders will have to pay higher penalties and polluters will have to obtain emission permits before going into production. The changes also make it easier for the public to monitor and sue polluters, and force local officials to take greater responsibility for environmental oversight. Federation of Hong Kong Industries deputy director Daniel Cheng said the revisions showed the leadership was more serious than ever about tackling pollution. He also said that President Xi Jinping's crackdowns on corruption would deter officials from shielding polluters. Ma Jun, head of environmental group the Institute of Public and Environmental Affairs, said the end of the 500,000 yuan (HK$630,000) cap on fines for polluters could make a difference. In theory, penalties can be calculated on a daily basis and add up to huge sums, making it more worthwhile for companies to invest in proper pollution treatment. "Investors do not care about pollution problems unless the prospects of returns are threatened. The new penalty mechanism is a starting point for change," Ma said. But Renmin University professor Song Guojun said the changes lacked teeth and the effectiveness of the penalties hinged on application. "The mechanism works in the United States because a company's 'illegal gains' - or earnings made during its environmental violation - are confiscated," Song said. "That is the real deterrent for polluters." He also said that regulators had designed the permits as "vouchers" for buying the right to emit pollutants when they should have developed legally binding agreements to control companies' pollution emissions. "The 'voucher' is like buying a bus ticket for taking a ride, with which companies can easily pay to pollute," Song said. Wang Canfa, an environmental law professor at China University of Political Science and Law, said the revisions were "in line with China's development status". The changes come just two days after the Jiangsu High People's Court ordered six companies to pay a total of 160 million yuan for dumping nearly 26,000 tonnes of chemical waste into rivers. The fine is the highest environmental class action payout ever imposed on the mainland. But the inconvenient truth of China's worsening environmental crisis is that supervision continues to be lax and the costs of violating environmental regulations are so low that many companies would rather break the law than abide by it. National Business Daily reported yesterday that when one Shandong pharmaceutical company was accused of falsifying pollution data and discharging waste with high levels of antibiotics into nearby rivers last week, a company source argued that the costs for treating pollutants were too high. "If [we] fully abide by national environmental standards, the cost will be so high that all manufacturers of antibiotics in the eastern part of the country will have to relocate, either to western provinces or out of the country," the report quoted the source as saying.

Hong Kong*:  Dec 21 - 31 2014

Jackie Chan's son Jaycee facing jail after being charged with drug crime (By SCMP Angela Meng and Vivienne Chow) Jaycee Chan Jo-ming, the son of kung fu action superstar Jackie Chan, faces up to three years in jail after prosecutors in Beijing charged him with sheltering others to use drugs. The younger Chan was detained along with Taiwanese movie star Ko Chen-tung for suspected drug use at a foot massage parlour in the capital on August 14. Police said more than 100 grams of marijuana were later found at Chan's home and that both men admitted to using the drug. Ko was released after 14 days in administrative detention, while Chan, 32, has remained in police custody. The charge was announced by the Supreme People's Procuratorate on its microblog yesterday although it did not elaborate on the legal proceedings. After his son's detention, Jackie Chan said he was "furious and shocked", and blamed himself for his son's behaviour. He offered a "deep bow of apology" in August for his son. Jackie Chan, 60, served as goodwill spokesman for the China National Anti-Drug Committee in 2009. Jaycee Chan, also known as Fong Cho-ming, has seen his attempts to establish a film career fall flat on the mainland and Hong Kong. In 2011, his father said he was not leaving him any money after he died. President Xi Jinping is cracking down on illegal drug use on the mainland, and police have launched numerous raids in Beijing. In the past, celebrities busted for drugs have been given administrative detention but not charged with a criminal offence. In July, the police detained Hong Kong actor Roy Cheung Yiu-yeung, 51, after he was allegedly caught smoking cannabis in a Beijing hotel. They said 1.15 grams of marijuana was found in his luggage and he tested positive for drugs. He was given 20 days of administrative detention. In 2011, Hong Kong actor Suen Hing was detained for 19 days, while colleague Max Mok Siu-chung was released after 14 days. Other high-profile arrests include actor Gao Hu, Zhang Mo and award-winning director Zhang Yuan.

 China*:  Dec 21 - 31 2014

China's anti-graft officials could monitor assets of officials using new centralised real estate database (By SCMP Peggy Sito and Laura Zhou) Beijing's new rule on real estate ownership will create national database and is seen as move to regulate opaque investments and fight corruption - The central government yesterday issued new rules that stipulate full disclosure of real estate ownership, in a move to regulate opaque property investments and fight corruption. The new registration requirement rule for all immovable property takes effect on March 1 next year. It will create a unified national property database, allowing government departments to share information on property ownership. Government officials believe it will take about three years to establish the unified registration system. Property ownership data is collected by the authorities but as the system is not integrated, it leaves room for those looking to game the system and hide wealth through property investments. "All real estate assets - land, water areas as well as houses, forests and the like - will be subject to this set of rules," the announcement said. The rules apply to first-time registration, changes of ownership as well as property transfers, write-offs and asset freezing, among other things. The registration database will not be accessible to the general public. "With the new rule, everyone's asset will be clearly disclosed. It will help [the government] to fight against corruption," said Wang Yukai, a professor at the Chinese Academy of Governance, adding that government officials' assets would be easier to monitor with the new system in place. Mao Shoulong, a professor of public administration at Renmin University in Beijing, said it was too early to say if the registration system would substantially help in aiding anti-corruption probes. Mao said he would expect resistance from vested interests and obstacles in implementing the system. The central government earlier this year established a bureau under the Ministry of Land and Resources, tasking it with rolling out a national system of real estate registration. Edison Bian, the head of China property research at UOB Kay Hian, said while the new rules were aimed at providing the legal framework for protecting residents' property rights, they were also aimed at establishing a nationwide unified information system for expanding property tax trials. A pilot programme for property taxes in Shanghai and Chongqing was initiated in 2011, but its expansion has been stalled to focus on generating national property tax legislation. The National People's Congress is now working on such property tax legislation, which may be put in place by 2016. Bian said he expected the secondary market to come under selling pressure as a result of the registration requirement. He also expected limited impact on the primary market, and by extension listed developers, whose earning and sales growth were more dependent on the movements in the primary market. "The regulations, in our view, could help curb a property price surge next year, especially in regions where supply will be low in the second half as a result of sluggish new starts and slow construction activity this year," Bian said.

Hong Kong*:  Dec 16 - 20 2014

Hotpot chain raises HK$1 billion in IPO (By Sophie Yu Xiabuxiabu Catering Management (China) is raising HK$1 billion in an initial public offering priced at HK$4.70 a share. The mainland bar-style, quick-service hotpot restaurant chain set the IPO price in the middle of the indicative price range of HK$4.40 to HK$5.00 a share. The company said the Hong Kong public offering had been “slightly over-subscribed”, with applications equivalent to 4.07 times the 22,710,000 shares available, representing 10 per cent of the global offering. Net proceeds from the global offering will be HK$1 billion. Xiabuxiabu said 74.4 per cent of the money, or HK$744.7 million, would be used to open 453 restaurants throughout China by the end of 2018. About 10 per cent would be used to establish an additional logistics and production centre in Beijing, while 12.6 per cent would be spent on a logistics and production centre in Shanghai. Trading of the shares will begin on Wednesday.

 China*:  Dec 16 - 20 2014

US$1.25 trillion moved out of mainland China illegally in 10 years, says report (Benjamin Robertson The mainland lost US$1.25 trillion between 2003 and 2012 to illicit outflows including tax evasion, crime and corruption, the largest loss of money among 151 developing nations surveyed, according to a Washington-based advocacy group that tracks such activities. This number was described as “highly conservative” as it did not include cash settlements, common among drug dealers and money launderers, Global Financial Integrity said in an annual report on illicit financial flows. “After a brief slowdown during the financial crisis, illicit outflows are once again on the rise, hitting a new peak of US$991.2 billion in 2012”, 10 times the amount those countries received in official development aid, report authors Dev Kar and Joseph Spanjers wrote. The growth in unlicensed outflows outstripped the rise in global gross domestic product and should give policymakers pause for thought. Illicit outflows represent a circumvention of national taxation policies, meaning a net loss to local treasuries, and a knock-on disruption to balance of payments and fiscal policies; especially in economies like the mainland’s, which have strict capital control measures in place to restrict money going offshore. The mainland had the biggest outflow in 2012 of US$249.5 billion, up 53 per cent on 2011, the report said, citing data from the World Bank and International Monetary Fund. The second-largest cumulative outflow was in Russia, which lost an estimated US$973.8 billion between 2003 and 2012. Mexico and India were third and fourth, losing US$514.2 billion and US$439.5 billion respectively. As a continent, Asia accounted for 40.3 per cent of unauthorised financial flows from the developing world during the period. That the mainland should lead the league table is not surprising given its population and economic size. Mainland capital controls also mean that some companies have to resort to illegitimate ways to move money offshore as a cost of doing business. “Not all illegal money movement is money laundering,” said risk consultant Julian Russell. Capital control rules “encourage an underground economy for people providing a facilitation service to move money”, Russell said. Most illicit outflows were due to trade mis-invoicing, described by the report as “an acute problem for administrations in developing countries”, whereby traders under-invoice exports and over-invoice imports as a way to move money offshore. Such practices have long been common on the mainland, and discrepancies between mainland and Hong Kong trade data have often been cited by analysts as evidence of widespread tax evasion and money laundering. In some cases however, money is round-tripped back into the economy as foreign investment. To curtail furtive financial flows, the report recommended governments create registers of corporate beneficial owners, tighten anti-money-laundering rules, and force multinationals to disclose profit and loss, sales, and taxes paid, broken down by national market.

Hong Kong*:  Dec 06 - 15 2014

SCMP: ‘Pack up and go’, Occupy protesters warned ahead of major clearance operation at 9am on Thursday - Protesters should pack up their things and leave the Occupy camp in Admiralty before a clearance begins on Thursday morning, lawmaker Paul Tse Wai-chun said. Tse, solicitor for Kwoon Chung Bus Holdings subsidiary All China Express, said bailiffs and police would start the clearance at 9am following a court order obtained by the bus company. “If anyone fails to follow the court injunction order, I am afraid we will officially request the involvement of bailiffs and police to assist and execute the order,” Tse said today. Copies of the court order were posted in the injunction area this afternoon. Although he failed to say how many police officers would be deployed in the removal action, Tse said police had promised their full support. A police source yesterday put the figure at 3,000 officers, adding that the force intended to clear the entire Occupy camp and reopen roads to traffic. The source also said that police would clear the Occupy site in Causeway Bay on Thursday too, if possible. Tse believes it would take about two hours to clear the areas covered by the injunction order in Admiralty if there was no resistance from protesters. He said he would find an appropriate channel to pass the message to students. “I hope they will leave the scene peacefully,” he said. However, a leader of a newly-formed student group warned that they might “use force to stop violence” if police attack occupiers during the clearance. The leader of Student Front, who only identified himself as Mr Cheng, said that his group’s members would “monitor” the police’s work if they only cleared the area designated in the court injunction. But if officers tried to clear the main Admiralty camp, and protesters insisted on staying, Cheng’s group would be “standing at the frontline to defend,” he said. Speaking on a RTHK radio programme this morning, Cheng said: “We believe there’s nothing wrong with using force to stop violence. As the police said they could use minimal force [in their operations], we won’t rule out using minimal force to protect ourselves.” He also said students should protect themselves with motorcycle helmets instead of those used by construction workers, because he had seen police officers removing protesters’ helmets and hitting them with batons. Student Front was founded on Saturday by about a dozen core members. Cheng, who studies at an Australian university, said more than 200 people had expressed an interest in joining the group, but he would only handle membership matters after the police operations. Meanwhile, some protesters in Admiralty had already begun packing. Yesterday, no protesters were seen camping in areas covered by the court injunction. All that remained was some construction waste and four roadblocks from outside City Hall on Connaught Road Central to the section of Cotton Tree Drive next to the Lippo Centre. Those guarding roadblocks on the border of the Occupy camp were also moving their line of defence out of the area covered by the injunction yesterday afternoon. “If we are outnumbered by the police [when clearance starts], say by several times, it’s unwise to get arrested just for the sake of being arrested,” said a 24-year-old fresh graduate surnamed Cheung, who together with several others moved their roadblocks out of the injunction area. 

 China*:  Dec 06 - 15 2014

SCMP: Zuckerberg hosts Chinese internet regulator, 'buys Xi Jinping's book' for Facebook staff - Move interpreted as an effort by Zuckerberg to court the government of China, where Facebook is blocked. A Chinese government news portal released a photo Monday of Facebook founder Mark Zuckerberg with a copy of Chinese President Xi Jinping’s book on governance at his desk while hosting the country’s top internet regulator. Zuckerberg, who has long sought market access to China, where Facebook is blocked, was quoted by as saying he purchased several copies of Xi’s book so he and colleagues could learn about “socialism with Chinese characteristics”. The California-based company did not immediately respond to inquiries regarding the visit to Facebook’s offices by Internet regulator Lu Wei. said Zuckerberg gave Lu a tour of Facebook’s office in Putonghua. The gesture, interpreted as an effort by Zuckerberg to court the government, disappointed and angered activists in China, who have long held the social networking company in high regard for its ability to share information beyond the tight controls of the ruling Communist Party. “Mr Zuckerberg is either ignorant of China’s politics or shameless,” said prominent dissident Hu Jia, who called Lu a top enemy of Internet freedom and expressed worry that technology giants such as Facebook were kowtowing to Beijing for their own business interests. “He is an Internet genius who should understand the power of technology for social change.”, controlled by China’s Internet Information Office and another government agency, said the photo was taken at Facebook’s Menlo Park office and that Xi’s book The Governance of China was at Zuckerberg’s workstation when he hosted Lu. “I bought this book for my colleagues as well,” Zuckerberg was quoted as telling Lu. “I want them to understand socialism with Chinese characteristics.” The photo shows a beaming Lu sitting in Zuckerberg’s work chair, with the Facebook founder smiling and standing next to him. “In that photo, Lu Wei looks the part of a boss,” Hu said in a phone interview. “I feel ashamed for Facebook and sorry for Mr Zuckerberg. When you yield to the executioners of the internet, they will only become more arrogant.” A cartoon posted online showed Zuckerberg in a Chinese military outfit holding a bayonet and clutching Xi’s book to his chest. Some commenters joked that he was close to joining the Communist Party of China, although others suggested that Zuckerberg might have placed Xi’s book on his desk merely for show. It was not clear when the visit took place, but Lu was in the United States last week to attend a Chinese-American internet conference at which Beijing pushed for a louder voice in the management of the Internet. China also argued in favour of the concept of “information sovereignty,” which could help justify its tight controls over Internet information. Zuckerberg surprised Chinese college students in Beijing in October when he chatted with them for 30 minutes in Putonghua, in a move widely seen as an attempt to court Chinese good will.

Hong Kong*:  Dec 01 - 05 2014

SCMP: C.Y. Leung issues strongest warning yet to Occupy Central protesters - Citing Chinese saying on limits to tolerance, chief executive tells protesters that stand-offs by police at sit-in sites are not sign of weakness - Chief Executive Leung Chun-ying has issued his strongest warning yet about clearing the nine-week-old Occupy Central protest sites, hours after overnight clashes between police and pro-democracy protesters who laid siege to government headquarters in Admiralty. He warned that just because police had not yet taken action to clear protesters, the demonstrators it was not because they were incapable of doing so and their inaction was not a sign of weakness. The administration yesterday issued a statement condemning "violent radicals" who repeatedly attempted to storm government headquarters and charged police lines. This morning he expanded upon the theme, blaming the student groups who organised Sunday night's violent protest for drafting in demonstrators from Mong Kok to join the Admiralty protest. Before being shut down by police, demonstrations in Mong Kok had been far more volatile than those on Hong Kong island. "Now the Federation of Students and Scholarism have mobilised the Mong Kok protesters to Admiralty and Tamar. This worries me very much," he said. Leung also said there growing calls from the public for sites to be cleared. "Many residents are of the view that there is a limit to their tolerance," he said. The Causeway Bay sit-in, outside Sogo department store near Yee Wo Street, is the police's next clearance target after Mong Kok, a police source said. They would then close in on the Admiralty zone, in an operation also planned for this month.

 China*:  Dec 01 - 05 2014

SCMP: Mexico pays Chinese rail firm over 100 million yuan after pulling out of bullet-train deal (Adrian Wan Mexico has compensated a Chinese-led consortium with over 100 million yuan after its government cancelled a rail contract that the group had earlier won. Chinese state-owned enterprises including China Railway Construction and CSR Corporation – which were part of the ill-fated consortium – would put in their bid as soon as a new tender for the project began, said Professor Wang Mengshu, a senior scientific advisor to the Chinese government on high-speed rail projects. “We will certainly make a new bid. We are confident that the terms we offer will still compare favourably against other bidders,” said Wang, who is also deputy chief engineer of state-owned construction company China Railway Tunnel Group. “Mexico has paid the consortium more than 100 million yuan in compensation for the costs that went into preparing for the bid,” he said, adding that they had yet to arrive at a final figure. It remained to be seen whether the four Mexican firms who were part of the consortium would also take part in the new bid, he said. The compensation comes after China Railway Construction on November 11 threatened legal action against the Mexican government over its decision to revoke the US$3.75 billion contract to build a 210km rail link between Mexico City and Queretaro state. Mexico’s Communications and Transport Secretary Gerardo Ruiz Esparza previously said the government would pay the winning bidder non-recoverable costs, but did not give an estimate of how much that would be. The contract had been awarded to China Railway and its partners on November 3, after all other potential bidders bowed out, arguing that they did not have enough time to prepare their bids in the two-month process. But on November 6, the Mexican government annulled the deal over public concerns about the bidding process. Just two days later, Mexican media reported that President Pena Nieto’s wife Angelica Rivera was living in a US$7 million mansion registered under the name of a Mexican firm that was part of the winning consortium. Mexican officials said the contract’s cancellation was not related to concerns over the mansion, but rather the need to “strengthen the absolute clarity, legitimacy and transparency” of the bidding process. The government later announced it would open a new round of bidding. China Railway Construction did not respond to requests for comments. But Wang said the China Railway-led consortium was currently in Mexico again, negotiating on the new tender. He added that relations between the group and the Mexican government remained harmonious. “Our high-speed railway, with its high technology, safety standards and low costs, will compare favourably with any other company in the world. That’s why we’re seeing more and more orders for our high-speed trains all over the world,” he said. “It also benefits China – not just financially – as it will build up a good global reputation for the state.” Wang believed the consortium’s chances of winning the new tender were high because their competitors, including companies from Japan and Turkey, could not offer a comparable standard of construction and maintenance support, he said.

Hong Kong*:  Nov 26 - 30 2014

Closing time: How Hong Kong’s hawkers face a struggle to survive (SCMP: Jennifer Ngo, Robin Fall and Cedric Sam) Hong Kong’s hawkers will die out in less than 50 years, if current stringent policies don’t change. Talking to different hawkers from those manning dai pai dongs to itinerant hawkers selling fruit on carts and stall owners touting clothes on Mong Kok’s famous hawker streets, the South China Morning Post reports on what is pushing the trade into extinction. Tucked between high-rise offices of multinational banks and companies in Central, the hawkers of Stanley Street serve up steaming cups of Hong Kong-style milk tea to early-rising workers. Business will pick up at lunchtime, when their kitchens will dish out plates of hot rice topped with wok-tossed meat. For dinner, beer glasses will clink as Cantonese dishes are set on roadside tables.There are just a handful of such stalls now, food stall hawker Wily Chan Chiu-wah says. Decades ago the streets were filled with stalls and customers.“It’s almost all gone now ... and we’re the lucky ones already,” said Chan, tossing rice and egg in a huge wok. Chan scooped the fried rice onto a waiting plate and wiped his brow with a towel. Hong Kong hawking – an age-old practice of selling cheap food and wares from stalls and street carts – is going the way of horse-drawn carts and century-old buildings. Worried about hygiene, safety and street congestion, city officials took steps in the 1970s to limit the practice. Those rules – a ban on new licences and severe limits on their transfer – has shrunk the number of legal hawkers from 50,000 in 1974 to about 6,000 today, city records show. Last year, the city started a programme to buy back licences, further shrinking the numbers.With many licence holders in their 60s, and no new licences or policy changes to foster this form of commerce, hawking – and all its tourist charms and economic benefits for the lower classes – could die out in 50 years if current policies don’t change, says Yip Po-lam, convener of a grassroots concern group for hawkers. Perhaps realising this, the city has begun exploring changes to their policies, said an official of the Food and Health Bureau, who asked to remain anonymous. A department spokesman said the government recognised the cultural significance of hawking and is not trying to kill it off. “The Administration’s current hawker policy is [designed] to strike a proper balance between allowing legal hawking activities on the one hand and maintaining environmental hygiene and protecting the public from undesirable effect[s] on the other,” a spokesman from the Food and Environmental Hygiene Department wrote in an email. License restrictions are necessary, “as hawker licences should not be regarded as commodities available for free transfer or trading in the market”. Yip said the government needs to move quickly.“We see many overseas places – Japan, Korea, Singapore – that have kept them for a reason,” said Yip, who has spoken at Legislative Council meetings for hawkers. “Supermarkets, which are owned by large corporations, will soon become the only choice” for shoppers, she said. “If you see it from poverty alleviation, culture and tourism or local economy point of view, then you should grow it.”

 China*:  Nov 26 - 30 2014

Brokers upbeat as through train off to slow start (SCMP: Enoch Yiu, Jeanny Yu and Daniel Ren in Shanghai) Scheme fails to ride yuan exchange boom but turnover expected to pick up as mood improves - Brokers are looking beyond a disappointing first week for the much-hyped through train stock trading scheme to the prospect of improved turnover, when market sentiment on both sides of the border picks up and more international funds clear regulatory hurdles that have kept them on the sidelines. Turnover for the first five days of the scheme that links the Hong Kong and Shanghai markets stood at 29 billion yuan (HK$36.7 billion), according to the China Securities Regulatory Commission. Northbound trade accounted for 87 per cent of the volume, highlighting a lack of interest among mainlanders in Hong Kong stocks. A move by the Hong Kong Monetary Authority to scrap the 20,000 yuan daily exchange cap served to boost the yuan conversion rate but did not, as intended, see the funds flow into stocks. Investors' ability to freely exchange any amount of yuan from other currencies had been seen as key support for the scheme. In southbound trade, mainland investors tapped into just 3 billion yuan of trading quota in the first week, representing a scant 1.2 per cent of the total 250 billion yuan quota for buying Hong Kong stocks. Only 1.8 per cent of the 10.5 billion yuan daily quota was used yesterday. Even the more active northbound trade used up only 24 billion yuan of the quota this week, or 8 per cent of the 300 billion yuan total quota for Hong Kong and international investors to buy A shares. Yesterday's trading saw 18 per cent of the 13 billion yuan daily quota used. The daily quota was filled on Monday's launch, when trading was limited to purchases. "It is not really a big surprise because the market sentiment was not good this week," said Ben Kwong Man-bun, a director of broker KGI Asia. "Turnover may go up over the longer term, however. We have seen that many Hong Kong investors have shown an interest in the scheme but they are just waiting for the right timing." The Hang Seng Index closed 2.7 per cent lower for the week at 23,437.12 points yesterday. The Shanghai Composite Index rose 0.3 per cent to 2,486.79 points. "Some mainland investors have locked up their profits following the recent strong rally," Shenyin Wanguo Securities analyst Qian Qimin said. "The buying interest in A shares from international investors would remain strong as they would take a long view and hope to profit from China's economic growth in future," Qian said, adding that liquor makers such as Kweichow Moutai were popular picks for them. Mainlanders like to trade big brands in Hong Kong such as Tencent Holdings, China Mobile and Cheung Kong (Holdings), while international investors favour financial and consumer stocks in Shanghai such as Ping An Insurance, Kweichow Moutai and Daqin Railway. Kevin Rideout, the head of wholesale execution services for Asia at Citi, said there was a strong interest in the scheme from Europe and the United States. But many international funds could not invest in the scheme now as they needed to wait for local regulatory or client approvals. "We are confident that volumes will gradually increase in phases of regulatory approval, documentation and operational readiness," Rideout said. Credit Suisse head of China research Vincent Chan said the short notice for Monday's launch of the scheme - less than one week - was insufficient for institutional investors. "Overall, I'm actually very positive about the improvement of scale in the northbound flow into China. Firstly, the A-share exposure of foreign investors is still very small when compared to their overall China portfolio," Chan said. "Secondly, based on the conferences and other corporate access activities hosted by us and other investment banks, investors are clearly very keen to learn about A shares." Moreover, index companies are racing to launch indices to trade the two markets despite weak turnover. China Exchanges Services, the joint venture of the three stock exchanges in Hong Kong, Shanghai and Shenzhen, plans to launch two indices next month, while Hang Seng Indexes on Monday launched an index covering 50 stocks listed in Hong Kong and Shanghai. While the stock market is left waiting for the benefits of the scrapping of the 20,000 yuan daily exchange quota, the banks have seen brisk business. Hang Seng Bank executive director Nixon Chan said demand for yuan this week was 14 times greater than that in the first two weeks of the month, based on average daily turnover. Tommy Ong, an executive director of treasury and markets at DBS Bank, said many people took the opportunity in yuan exchange and invested in structured products. "As the conversion cap is removed, I expect Hong Kong people to emerge as a major force in boosting the city's yuan deposits in future," Ong said.

Hong Kong*:  Nov 21 - 25 2014

Six arrested after masked crowds smash Legco glass doors, clash with police (SCMP) Police on Wednesday strongly condemned a “mob” of protesters who stormed the Legco building last night, attempting to break in through a window, which they smashed using an iron barricade. Hui Chun Tak, chief superintendent of Police Public Relations Branch, said that six men aged between 18 and 24 had been arrested for criminal damage and for assaulting police officers during the incident. Three police officers were injured in scuffles at the scene and Hui said there may be more arrests pending further investigations. Equipment belonging to the police also went missing last night’s clash – a baton, a helmet and two shields – and police urged people who knew their whereabouts to return the items to police. Regarding the protest site in Mong Kok, Hui said police would assist bailiffs in carrying out the injunction order to remove barricades there and confirmed they had met with the plaintiff and bailiffs today to discuss how to implement the removals. Hui said a large-scale confrontation could easily take place as many protesters of opposing camps have gathered tehre. A man aged 52 was arrested last night for common assault, Hui added. The police urged people not be incited by radical individuals and urged protesters to remove the obstacles and leave the protest zone in an orderly and peaceful manner as soon as possible. The surprise flare-up of violence, which led to the deployment of pepper spray and police baton-charging protesters, took place barely one day after a clearance operation had been carried out at one of the main pro-democracy protest sites in the district. The Legco meeting and Public Works Subcommittee meeting scheduled for Wednesday were cancelled hours after the clashes broke out. At around 1am, a group of masked people, many of whom appeared to be teenagers, used metal barriers and various objects including broken bricks to try to crack open the glass doors outside the canteen at the Legco complex. Lawmaker Dr Fernando Cheung Chiu-hung, who had arrived at the scene earlier, tried in vain to stop them. Scores of police officers carrying shields moved in shortly afterwards, deploying pepper spray to fend off the attackers. Officers later spread out and guarded the entrance of the building after the crowd retreated. Waving yellow, then red warning flags, police told the masked group not to charge again. The stand-off continued for hours as more protesters flocked to the area and police reinforcements were called in.At 3am, some protesters gathered again at the Legco's north entrance facing Victoria Harbour, with another group forming in the open area 20 metres away. More protesters continued to pour in. The crowds were very fluid and moved around. Most protesters wore masks and protective goggles. Some protesters said they were furious at seeing the barricades in the occupied area around Citic Tower being removed by bailiffs on Tuesday. "We want to use this action to pass on our voices, across onto those over on the other side of the glass," said a protester, who refused to be named. Another protester, who said she had been staying in the protest zone in Admiralty since the class boycott in September, said the "main stage" people, who organised the Occupy Central sit-in, were doing nothing and just waiting for the government to come clear them out. "At least we need to fight to abolish functional constituencies ... Universal suffrage is a far-off dream, but this we need to fight for because it's the first step," she said. Not all "pushing-forward" actions were bad, she insisted. Both said they were there when the glass doors in the Legco complex were broken by rocks, and said there were three people still inside the building. There is a split in the Occupy camp over whether protests should remain peaceful or not, said Kuroros Li, 23, who was among those who stormed Legco. He said that some demonstrators were wary of political parties using the Occupy movement to leverage support. "I'm not afraid to say that we already disagree with most political parties; it's just that we wanted to unite at first, but that'll change after last night. We may go our separate ways," he said. "Our aim is to attract Occupiers in Admiralty who still insist that peace can change everything, and not the people on the outside. "When the clearances started yesterday, they were extremely cooperative and even helped move their stuff away, which felt strange to me: why are you playing along with the government?" He said some protesters have talked about taking over government buildings and key locations, like Admiralty Centre and Lung Wo Road. "It's not a matter of which government building or landmark we occupy, but if we do nothing, then we're just waiting for this movement to end," he said. Lawmaker Cheung, who tried to stop the protesters from smashing the glass doors, also said there might be at least one protester who had snuck into the complex. “What they [the masked attackers] did was not helpful to the matter as a whole,” he said. Cheung was not injured but at least one suspected blood stain was seen on his shirt. He said he suspected someone might have been cut by broken glass. Cheung called the protesters’ action a "dark spot" for the Occupy movement. "The opposition will definitely use what happened last night to smear our entire movement, and that might deal us a fatal blow in a referendum," he said. "For the past 50 days now, the government has remained an inaccessible wall and hasn't responded to very reasonable demands from citizens. "I'm afraid this will give the government and pro-government lawmakers an excuse to put up more walls in Legco." At 4.30am, protesters regrouped and clashed with police again. Officers used pepper spray and baton-charged the crowd, who were again forced to retreat, with dozens mounting a wall and fleeing into the adjacent Tamar Park. Earlier on Tuesday night, at around 10pm, dozens of masked people attempted to storm the Legislative Council through the side gate but could not enter the building because the gate was locked. Some of them then suggested occupying Lung Wo Road which is adjacent to the complex, before they were stopped by other protesters at the site. Some masked protesters claimed they were trying to obstruct the amendment to the copyright law that addresses the issue of user-generated content. This is, however, not on the agenda of the Legco meeting on Wednesday. Federation of Students secretary-general Alex Chow Yong-kang said on Wednesday morning that storming Legco was pointless. He denied that the Occupy protests had gone out of control but admitted that there was "room for improvement" in coordinating among protesters. Scholarism convener Joshua Wong Chi-fung said the protesters' action would endanger other demonstrators. “In a civil disobedience campaign participants have to shoulder their legal responsibilities and ensure the safety of all other participants,” he said. “Those storming the Legco and then leaving the scene immediately afterwards would pose danger to other protesters behind them.” 

 China*:  Nov 21 - 25 2014

More nuclear plants and renewable energy under new development plan (By Angela Meng and Bloomberg China will also boost oil exploration and use less coal and more natural gas under the a new seven-year development plan from the State Council - China will boost oil exploration, use less coal and more natural gas, build more nuclear plants and develop renewable energy under a new seven-year development plan. The State Council’s newly released plans for 2014-2020 marks the latest attempt by policymakers to limit the nation’s appetite for energy. Reflecting its rapid industrialisation and economic growth, China has become a voracious consumer of energy, changing global energy markets and the geopolitics of energy security. The document sets out five strategic tasks for the nation’s energy development. The first is to achieve greater energy independence by promoting clean and efficient use of coal, increasing domestic oil production, and developing renewable energy . China plans to develop new and existing oilfields in nine regions where it has large proven reserves – including in the northwestern, central and northeastern provinces as well as offshore fields in the Bohai Gulf and the East and South China seas. The plan also calls for boosting offshore oil exploration though improved exploration trace analysis, promoting deep-sea bidding from foreign corporations to develop offshore sites and greater research and development in deep-sea oil discovery technology and equipment. The plan’s second task is to curb excessive energy consumption and implement energy-efficiency programmes in urban and rural areas. The third task builds on this goal by cutting the proportion of coal used in the nation’s energy production while using more natural gas, nuclear power and renewable energy. The plan calls for more nuclear plants to be built along the coast “at a suitable time” while also studying the feasibility of inland nuclear plants. The fourth task is to expand international cooperation in energy, establish regional markets and participate in global energy governance. The fifth is to promote innovation in energy-related technology. According to the plan, China’s annual energy consumption by 2020 should be equal to 4.8 billion tonnes of standard coal. China’s energy use surged 45 per cent in the seven years to last year, National Bureau of Statistics data shows. The State Council document was dated June 7, before President Xi Jinping last week said that China would strive to double the amount of energy it gets from zero-emission sources over the next 16 years, while cutting coal consumption in Beijing, Tianjin, Hebei and Shandong, the Pearl River Delta and the Yangtze Delta region.

Hong Kong*:  Nov 16 - 20 2014

Ex-chief justice Andrew Li calls on Occupy Central protesters to retreat (SCMP) Former chief justice Andrew Li Kwok-nang on Monday called on Occupy Central protesters to retreat, warning that the rule of law would be impaired if ongoing court injunctions were not obeyed. This comes after police said they would take action "this week" to clear protesters from some occupied sites just as a new poll showed that nearly 70 per cent of the public wants the movement to end. Li said everyone understood young peoples’ pursuit for democracy, but he said their actions should not override the rule of law. “The Occupy movement has lasted such a long time, and the injunctions issued by the court have not yet been obeyed and respected. This will have an adverse effect on our rule of law”, Li said. Li also the courts were not able to resolve political issues, which should be dealt through discussions in the political arena. “Courts can only maintain the rule of law,” he said.

 China*:  Nov 16 - 20 2014

China will never use force to achieve goals, Xi vows (Agence France-Presse) In an address to the Australian parliament, Xi said China needed peace, noting that history showed countries did not benefit from conflict - Xi addressed the Australian parliament in Canberra. President Xi Jinping on Monday vowed never to use force to achieve Beijing’s goals, including in maritime disputes, just days after US President Barack Obama warned of the dangers of outright conflict in Asia. In an address to the Australian parliament, Xi said China needed peace, noting that history showed countries did not benefit from conflict. “A review of history shows that countries that attempted to pursue development with force invariably failed,” he said in a lengthy address in which he also reminisced about kangaroos and koala encounters during previous visits to Australia. “This is what history teaches us. China is dedicated to upholding peace. Peace is precious and needs to be protected.” But he added: “We must always be on high alert against the factors that may deprive us of peace.” Beijing is locked in disputes with four Southeast Asian countries over outcrops in the South China Sea, and with Japan over another set of islets known as the Diaoyus by Beijing as the Senkaku by Tokyo. The leaders of the US, Australia and Japan on Sunday called for peaceful resolutions of the maritime disputes. The day before, Obama had warned of “disputes over territory – remote islands and rocky shoals – that threaten to spiral into confrontation.” Xi said Monday he was open to dialogue. “It is China’s long-standing position to address peacefully its disputes with countries concerned and territorial sovereignty and maritime interests through dialogue and consultation,” he said. “China has settled land boundary issues with 12 out of its 14 neighbours through friendly consultation. And we will continue to work in this direction,” added Xi. “The Chinese government is ready to enhance dialogue and cooperation with relevant countries to maintain freedom of navigation and the safety of maritime routes, and ensure a maritime border of peace, tranquility and cooperation.”

Hong Kong*:  Nov 11 - 15 2014

Austar heats up Hong Kong IPO market with heavily oversubscribed float (By Bien Perez Engineering services provider boosts size of HK tranche in float that raises a net HK$339 million - Austar Lifesciences saw huge demand that put its initial public offering about 1,250 times oversubscribed, prompting it to increase the size of its public offer. The strong demand made the stock the city's highest-profile listing this year as investors' interest almost rivalled that of's offering, which was 2,000 times oversubscribed in February 2000. In its regulatory filing yesterday, Austar said 50 million shares that were initially available under its international placing have been reallocated to the Hong Kong tranche, increasing the number of shares for public subscription to 62.5 million shares from 12.5 million. The size of the float remained at 125 million shares. The shares are scheduled to start trading today. Headquartered in Beijing, Austar expected to raise HK$339.3 million from the global offering, based on an offer price of HK$3.12 per share, after deducting underwriting fees, commissions and other related expenses. About 40 per cent, or HK$134.4 million, of the proceeds will be used to establish a research and development and production complex in Shijiazhuang, the capital of Hebei province. Potential acquisitions in mainland China, North America and Europe will use up a further 20 per cent, or HK$67.9 million. Austar is a leading provider of integrated engineering services and products for pharmaceutical manufacturers and research institutes on the mainland and in other developing countries. Its major customers include the Lijun Group, Hisun Pharmaceutical, Chengdu Institute of Biological Products, Hualan Biological, Shanghai Institute of Biological Products, GlaxoSmithKline Biologicals and Beijing Fresenius Kabi. Austar's net profit in the first six months of this year fell 8 per cent to 32.75 million yuan (HK$41.5 million) from 35.61 million yuan a year earlier, on lower revenue from its liquid and bioprocess system business segment. Total revenue dropped 9.4 per cent to 320.82 million yuan from 354.07 million yuan. Haitong International Capital was the sole sponsor of the share offering. Haitong International Securities was the global coordinator and joint bookrunner with Bocom International Securities.

 China*:  Nov 11 - 15 2014

China, Japan agree to resume high-level talks in bid to ease maritime tensions (By Kristine Kwok in Beijing) Consensus reached by officials paves way for easing of strained ties and raises hopes of dialogue between leaders on forum sidelines - Ken Okaniwa, a spokesman for the Japanese delegation, said the two foreign ministers could meet this weekend. China and Japan have announced a broad bilateral consensus, paving the way for a détente between the two neighbours. Although differences remain, both sides have agreed to disagree and resume dialogue. In an apparent effort to finalise a possible face-to-face meeting between President Xi Jinping and Japanese Prime Minister Shinzo Abe in Beijing on the sidelines of the Apec leaders summit, which takes place on Monday and Tuesday, top officials from both sides laid out a four-point consensus after meeting in the capital yesterday. Both sides now agree that "different views" exist on the territorial dispute over an island chain in the East China Sea, the two countries' foreign ministries said, hours after State Councillor Yang Jiechi met Japanese National Security Adviser Shotaro Yachi in Beijing. They also agreed to gradually resume political, diplomatic and security dialogue and to prevent escalation of tensions by using consultations and a crisis-management mechanism. The two countries will also uphold the principles of the so-called four political documents - all signed before Sino-Japanese relations hit a nadir under the reign of Abe. The two countries would "face history squarely, and look forward to the future" to overcome obstacles that had been straining ties, the two foreign ministries said in similarly worded statements. Preparations were under way to arrange a meeting between the countries' foreign ministers - China's Wang Yi and Japan's Fumio Kishida - this weekend on the sidelines of the Asia-Pacific Economic Cooperation ministerial meetings in Beijing, Ken Okaniwa, a deputy press secretary with Japan's foreign ministry, said. The meeting between Xi and Abe was "not yet decided", but both sides were trying to arrange it, he added. Japan's NHK and Kyodo both reported that the two leaders were likely to meet next week. But Abe, appearing on a news programme, was cautious, saying only that the two nations had set up "an environment conducive to opening the door" for dialogue, and that he would raise the idea of a maritime communication mechanism for disputed waters "if the summit were to take place". Beijing officials also struck a cautious tone, with foreign ministry spokesman Qin Gang calling on Japan to take "concrete actions" to improve ties. The two leaders have not met since they took power in 2012, while ties have deteriorated over maritime disputes and historical issues. Beijing has insisted two preconditions must be met in order for a meeting to take place: that Abe refrain from visiting the controversial Yasukuni Shrine - a memorial to Japan's war dead including war criminals - as prime minister and Japan recognise8 that sovereignty of the Diaoyu Islands - known as the Senkakus in Japan - is disputed. Many diplomats and scholars have said it would be impossible for Japan to recognise the islands' sovereignty was disputed, but Tokyo could acknowledge that Beijing had a different understanding of the sovereignty issue. Yang and Yachi's agreement to recognise "different views" on the Diaoyu Islands suggested that the two countries might have narrowed their differences and were moving one step closer to talks between Xi and Abe. In their meeting, Yang, China's highest-ranking official in charge of foreign affairs, said the two countries would seek to "properly settle differences and sensitive issues" while building trust and consensus through negotiations.

Hong Kong*:  Nov 6 - 10 2014

CY Leung plans HK-Shanghai ‘through train’ talks as he urges return to social order (By Tony Cheung Chief Executive Leung Chun-ying said he would try to get the Hong Kong and Shanghai stock market “through train” scheme to start as soon as possible, as he warned that Occupy Central protests could harm the city’s role as an international financial centre. Speaking before the Executive Council’s weekly meeting this morning, Leung said that he would raise the issue of the cross-border share trading plan if he gets the chance to meet state leaders at the Asia-Pacific Economic Cooperation meeting in Beijing next week. Leung also said that social order in Hong Kong must return to normal to protect the city’s standing as a global financial hub. “As an international financial centre, we have two very important [advantages]: social order and the rule of law [business] environment. We know that in the past month, there’s a problem with our social order, and some people are destroying our rule of law environment. They did not only disobey the law, but also refused to obey the law court’s injunction,” Leung said, “So in our work in getting the [implementation of the] Shanghai-Hong Kong through train and Hong Kong to continue to develop as an international and national financial centre, we need the entire society to work with us to reinstate social order and respect the rule of law.” The stock through train scheme, announced by Beijing in April, would allow investors to conduct cross-border share trading up to a quota of 550 billion yuan (HK$694 billion). Though the regulators never officially announced a clear-cut date for the launch of the programme, it was widely believed to be October 27. But no announcements were made that day, to the disappointment of the markets. While some brokers speculated that Beijing is punishing Hong Kong for the Occupy movement, others have blamed the volatility on global markets. Financial Secretary John Tsang Chun-wah also said that the protests were not the reason the long-awaited link between the Hong Kong and Shanghai exchanges was not launched last month as expected. On the Liberal Party’s call for him to engage pan-democrats, Leung said “The government and I value the relationship with all parties and lawmakers in the Legislative Council. In the last two years, and in the [tenure of the] former chief executives, basically we don’t fight back when we were criticised – this isn’t even necessarily the case in Western democratic governments. We listen to opinions humbly.” Last week, Liberal lawmaker James Tien Pei-chun resigned as the party’s leader after the nation’s top political advisory body expelled him for asking Leung to consider resigning. When asked whether he had a role in the decision of the Chinese People’s Political Consultative Conference, Leung said he was only informed after the news was made public.

 China*:  Nov 6 - 10 2014

Beijing pledges clean air in bid to host 2022 Winter Olympics (By Wu Nan Capital, which is competing with Almaty for the event, banking on its facilities and economic clout to help offset environmental concerns - Beijing has pledged to clean up its air by 2022 to provide a safe environment for athletes as it kicked off an international campaign to win votes to host the Winter Olympic Games that year. Wang Hui, media director of Beijing’s bid committee, told reporters today that the city is formulating a two-step clean air plan, with targets set for the years 2017 and 2022. Beijing city officials launched the Atmospheric Pollution Prevention Action Plan last year to clean up the air and to reduce PM2.5 levels – the finest pollutant particles, which can cause the most harm to health – in Beijing and its surrounding counties by 25 per cent from 2012 levels by 2017. Using less coal, reducing vehicle emissions and promoting a green economy are some of the measures being undertaken. “Beijing has called upon cooperation in major provinces and districts in northern China and will mobilise all its resources to clean up the air and bring down the air quality index value,” Wang said. “We’ll make sure by 2022 the air quality in Beijing is the best for athletes to compete.” Beijing had made it onto a shortlist of three candidate cities, including Almaty in Kazakhstan and Oslo in Norway, to host the Games. But in October Oslo withdrew from the list, creating momentum for Beijing, which hosted the 2008 Summer Olympic Games. But the city’s air quality has become a persistent concern for athletes. An international marathon in Beijing last month saw many of the 30,000 runners using gas masks because the city was blanketed by smog with the air quality index climbing above 400. Beijing Mayor Wang Anshun will lead a delegation on Friday to push the city’s bid to the General Assembly of the Association of National Olympic Committees in Bangkok. “We will make sure the athletes can perform the best in the games if we could host the 2022 Winter Olympics,” Wang Hui, the media director, said. She added that Beijing’s mayor will try to impress the Olympic Committee by showcasing the city’s athletic facilities, its economic budget and the benefits gained from spreading the Olympic spirit and promoting winter sports in greater China. In the 2022 bid, Beijing will pair up with Zhangjiakou, about 200km away, to cohost the games, with the capital using stadiums built for the 2008 Summer Games for ice events, and Zhangjiakou, which has several private ski resorts, staging the snow sports. There will be a budget to host the Winter Games, an official with Beijing’s bid committee said, adding that 90 per cent of the resources will be coming from non-state funding. There has been a steadily growing market in Zhangjiakou for winter sports and tourism, he added. “There are about 90 snow slopes in Zhangjiakou’s ski resorts. It’s easy to upgrade them to fit the Winter Olympic standards,” Wang, the media officer, said.

Hong Kong*:  Nov 1 - 5 2014

Carrie Lam dismisses Occupy camp's proposals for ending impasse (By Jeffie Lam and Ng Kang-chung) Carrie Lam dismisses Occupy camp's proposals to trigger a by-election or dissolve legislature - The government and political heavyweights have dismissed suggestions of dissolving the legislature or triggering a de facto referendum with by-elections as solutions to the political impasse. "[These ideas] seem unrealistic," said Chief Secretary Carrie Lam Cheng Yuet-ngor yesterday, warning a so-called plebiscite had no legal binding force and would cost more than HK$100 million. Lam was referring to the two ideas that have been floated by protesters to end the stalemate as the civil disobedience movement enters its second month with no sign of ending. While student leaders believe by-elections triggered by some lawmakers voluntarily resigning could serve as a plebiscite to garner public views on reform, Occupy Central organiser Benny Tai Yiu-ting has suggested dissolving the entire legislature if the reform package is voted down. His remarks are based on Article 50 of the Basic Law, which states that the chief executive may dissolve the legislature if the budget or any other important bill that is introduced by the government is vetoed and a "consensus still cannot be reached after consultation". Basic Law Committee member Maria Tam Wai-chu, who is also a barrister, said Article 50 could not apply to electoral reform proposals because it only dealt with local bills. She said electoral reforms required the National People's Congress Standing Committee to amend Annex I of the Basic Law. But Tai, a law professor at the University of Hong Kong, maintained that his idea was workable. "I did not invent this. It is stated in the Basic Law," he said. "[The government] can't just say this is not OK and that is not workable." Dr Chan Kin-man, another Occupy organiser, admitted the movement was stuck in a dilemma on whether to force a de facto referendum. The by-elections could extend the pro-democracy movement beyond the occupied sites, he said, but it would also be a risky move for the camp. "It's too dangerous to have pan-democratic legislators resigning," he said. "The pan-democrat camp would lose its veto power and the government could do many things in this 'window period'." Meanwhile, Alliance for Peace and Democracy spokesman Robert Chow Yung said it had collected 1.5 million signatures against the protests.

 China*:  Nov 1 - 5 2014

China to reform anti-corruption bureau to help in the fight against graft (By Li Jing Agency to be overhauled, with a new body focusing on major cases, official says - China will reform its nearly two-decade-old anti-corruption bureau to further boost the country’s graft fighting, a top prosecutor has said. Qiu Xueqiang, deputy head of the Supreme People’s Procuratorate (SPP), said, in an interview with Xinhua over the weekend, the agency would be overhauled and named the General Administration of Anti-Corruption and led by a deputy minister of SPP. The new body will focus on “major cases”, said Qiu, adding that the reform is expected to provide the anti-corruption team, built in 1995, with stronger “fighting capacity, credibility and agility”. The announcement came as the country’s top graft buster, Wang Qishan, called the fight “a battle [the party] cannot afford to lose” in an opinion piece published in the People’s Daily today. The anti-graft battle is “a long-term fight full of complexity and difficulties”, Wang warned in the column and urged party members to possess “political convictions” and “confidence to win”. Wang said the party would continue to put pressure on cadres so that they do not dare become corrupt and will gradually build effective systems so that they “don’t want to be corrupt” and “can’t be corrupt”. Wang, head of the Central Commission for Discipline Inspection (CCDI), told more than 100 of his inspectors in Beijing that wayward officials who are undeterred by the country’s anti-corruption campaign would pay a price for their behaviour. Qiu, a long-time graft-busting official, said the anti-corruption bureau, built nearly 20 years ago, could no longer meet the requirements needed to take down corrupted officials. The current set-up of the bureau makes it weak when handling the rising number of corruption cases, he said, pointing out the agency’s current manpower was too scattered and limited, and there were too many cases but too few officials to handle them. “The severity of corruption is unprecedented in the party’s history, and the party’s determination to tackle corruption is also unprecedented,” Qiu said. “The anti-corruption fight is going on everywhere. Either we take down corruption, or corruption takes down us.”

Hong Kong*:  Oct 26 - 31 2014

HKEx chief Charles Li Xiaojia doesn't know when 'through train' will start (By Enoch Yiu HKEx chief Charles Li gives no reason for delayed launch of markets link - Charles Li refused to be drawn on whether the pro-democracy Occupy Central protests had played a part in the delay. Hong Kong Exchanges and Clearing chief Charles Li Xiaojia has no idea when the scheme to directly link the Hong Kong and Shanghai stock markets will eventually begin operations, after the so-called "through train" missed its anticipated arrival date today. Li told the South China Morning Post that all the technical and regulatory work on the Shanghai-Hong Kong Stock Connect scheme was complete and declined to speculate on the reason for the delay. "Some smart people up there have to make the decision," Li said, referring to officials in Beijing, when asked who had the final say on when the 550 billion yuan scheme (HK$694 billion) would eventually get going. Li refused to be drawn on whether the pro-democracy Occupy Central protests had played a part in the delay. "I do not know," he said when asked, adding quickly that the scheme's complexity and recent volatility in global markets could also explain the delay. Some brokers believe the delay is Beijing's punishment for the month-long Occupy protests. Others dismiss the theory, arguing that the mainland needs to attract huge sums of foreign capital to domestic financial markets as it pushes ahead with a structural economic reform program. The uncertainty has left institutional investors increasingly frustrated at the opaque decision-making process. "We would like to see Beijing announce all rules and regulations in detail at least several weeks before the scheme is kicked off," said Bruno Lee Kam-wing, chairman of the Hong Kong Investment Funds Association. Changes to fund management mandates, legal disclosures and client consent would be impossible to secure before full details of the scheme's trading rules - including those for settlement where a risk of insider trading could exist - were made public. None are expected before a start date is confirmed. Premier Li Keqiang caught regulators and markets by surprise in April when he said at a business forum in Hainan that the "through train" - mooted since 2007 - would be ready to go in six months. Officials have been silent on a start date since, though Hong Kong government sources had previously told the Post that the city's top financial officials had been told to keep October 27 clear for a possible trip to Shanghai, which had fuelled expectations of a launch by today. 

 China*:  Oct 26 - 31 2014

China's growing role in Mexico not a threat to US: expert (By Zhang Yuchen In Beijing(China Daily USA)) Jose Rogelio Garza, undersecretary of industry and commerce of Mexico, discussed the investment environment in Mexico at the China-Mexico Industry Investment Cooperation Seminar during the sixth China Overseas Investment Fair Oct 24 in Beijing. China's increasing commerce with Mexico will not negatively affect the relationship between the United States and its southern neighbor, said an expert. The interdependent relationship between the US and Mexico won't be changed, and both still see China as a competitor, said Dr José Luis-Ugalde, senior scholar at the Universidad Nacional Autónoma de México (UNAM) and visiting professor at the Freie Universität in Berlin, Germany. Valdés-Ugalde letured in Renmin University of China in Beijing in September, about one and half months after Chinese President Xi Jinping's visit to Latin America. "But it is necessary for the Mexican economy to reach a trade balance," Valdés –Ugalde said. China exported $61.3 billion worth of goods to Mexico in 2013, while importing $6.5 billion. The volume of Mexico's exports to the US and Canada through the North American Free Trade Agreement (NAFTA ) reached $310 billion last year, 87 percent of which is to the US. Under a new comprehensive strategic relationship, China and Mexico intend to increase cooperation in areas such as food, automobiles, energy, medicine and electronic devices. "It is not necessarily invading the US zone," said Valdés-Ugalde. China wants to get closer to the US market and also gain political influence among the Caribbean countries. China also needs energy and mining products. Mexico has a trade deficit with China and is losing ground in the US market to the Chinese products. During the first decade of the 2000s, China's share of the US market rose from 6.22 percent in 2000 to 19.42 percent in 2009, while Mexico's dropped slightly from 16.61 percent to 16.01 percent. The Alix Partners Manufacturing cost index ranks Mexico as the best country for business costs, with a 25-percent cost advantage for the US, according to Jose Rogelio Garza, Mexico's undersecretary of industry and commerce. Garza spoke at the China-Mexico Industry Investment Cooperation Seminar during the China Overseas Investment Fair on Oct 24 in Beijing. According to professors Enrique Dussel and Kevin P. Gallagher, the US participation in the Mexican market declined as China's increased. The same pattern was noted in the Mexican participation in the US market, mainly among 20 products. Dussel is a professor at UNAM and runs the Center for China-Mexico Studies. Gallagher is professor of international relations at Boston University and co-directs the Global Economic Governance Initiative. The share of China's imports in Mexico's markets increased from 1.09 percent in 2000 to 17.83 percent in 2009, while the US' fell from 72 percent to 41.54 percent. "It is still not clear what are the specific projects in which China and Mexico will cooperate," said Valdés-Ugalde. It is, however, expected that China will help Mexico develop transportation infrastructure, mainly in port cities, which will improve the transportation of products, the professor said.

Hong Kong*:  Oct 21 - 25 2014

Hong Kong's High Court orders Occupy protesters in Mong Kok to leave immediately 香港高等法院命令示威者佔據旺角立即離開 (By Joyce Ng and Thomas Chan) Hong Kong's High Court has ordered pro-democracy protesters in Mong Kok to leave the area immediately, granting injunctions in two cases against the demonstrators. The two injunctions were granted at about 6.45pm to representatives of the Taxi Association and the Taxi Drivers and Operators Association in one case, and to representatives of the Chiu Luen Public Light Bus Company in another. The orders are effective immediately. Mr Justice Jeremy Poon Shiu-chor, of the Court of First Instance, accepted the arguments of lawyers acting for the plaintiffs that the occupations in Mong Kok have continued for a long time and had caused public nuisance and “inconvenience”. The judge also said that there had been violence at the protest sites, adding that prolonged occupation could lead to more violence between police and protesters. The orders are imposed on “persons occupying portions of Nathan Road” but do not identify any individuals. Hundreds of protesters remain on the streets of Mong Kok despite an initial protest camp and road blockades being cleared by police on Friday. Police have accused the demonstrators of instigating violence and charging police cordons, while the demonstrators have said that police have used excessive force and had themselves instigated chaos by charging stationary protesters. The protesters taking part in the occupation in Mong Kok, while associated with a wide variety of causes, have been united in their calls for the resignation of Hong Kong Chief Executive Leung Chun-ying and for the central government in Beijing to allow an open election of the next chief executive. Beijing, through an August ruling of the national legislature, has said that the city's next leader can be elected by universal suffrage - but the shortlist of candidates must be approved by a 1,200-strong committee likely to be stacked with staunch supporters of the central government. In the first case, the plaintiffs asked the court to order people occupying “portions of Nathan Road near to and between Argyle Street and Dundas Street” to leave. In the second case, the injunction is against those occupying the “westbound carriageway of Argyle Street between the junction of Tung Choi Street and Portland Street”. The injunctions will be announced to protesters at the specified locations in Mong Kok and will also be published in one Chinese-language and one English-language newspaper. At the protest site, People Power lawmaker Albert Chan Wai-yip told demonstrators that he was talking to legal experts about ways to fight the court's decision. "We have spoken to some barristers and solicitors and they said there is room for appeals," he said. He also warned protesters of the raised stakes should they choose to remain. Contempt of court, he pointed out, could lead to a custodial sentence.

 China*:  Oct 21 - 25 2014

China donates US$6 million for food in Ebola-stricken countries (By Associated Press in Beijing) A Chinese medical expert helps workers from Sierra Leone-China Friendship Hospital learn how to protect themselves against Ebola disease in Freetown, Sierra Leone on September 22, 2014. China has donated US$6 million to help stave off food shortages in the three African countries worst affected by the Ebola virus, the World Food Program announced Monday, part of Beijing’s growing assistance to a continent where its companies have become major investors. WFP China representative Brett Rierson said the money is being spent on one month of emergency food rations of mainly rice, lentils and yellow peas for 300,000 people in Guinea, Liberia and Sierra Leone. The Ebola outbreak in those countries has killed more than 4,500 people out of the 9,000 infected and led to widespread transport disruptions, higher food prices and the abandonment of crops and livestock by some farmers fleeing to areas considered safe. The WFP has now raised US$59 million of a US$179 million appeal for emergency Ebola food aid, with the US contributing US$8.8 million and Japan US$6 million. Altogether, donors have given nearly US$400 million to UN agencies and aid groups, still far from the US$988 million requested. China has already dispatched several planeloads of medical material and aid teams to the three worst affected countries, and at least one Chinese pharmaceutical firm is among those working on a vaccine. With the world’s second-largest economy and a permanent seat on the UN Security Council, China is beginning to make larger contributions to international aid efforts. China now spends about US$5 billion annually in foreign aid, about 55 per cent of which is offered in the form of low-interest loans, according to a government report issued in July. Just over half of the money goes to African countries, helping China build market share in a continent where its companies have found customers for infrastructure, telecommunications and manufactured goods. China is Africa’s largest trading partner, with about US$200 billion in commerce between them, twice the level of Africa’s trade with the United States.

Hong Kong*:  Oct 16 - 20 2014

Hong Kong chief says reform must not abandon law (By KAHON CHAN in Hong Kong(China Daily)) Hong Kong Chief Executive Leung Chun-ying maintained that the city government will not talk to student protesters "for the sake of talking", since the Basic Law provisions and decisions of the top legislature cannot be abandoned to meet the students' demands. The Hong Kong government shelved talks with the Hong Kong Federation of Students last Thursday amid the protest organizer's threat to hold bigger protests if their demands are not met, such as "overturning" a resolution adopted by the National People's Congress Standing Committee. In a TV interview aired on Sunday, Leung said that his administration decided to not engage in the talks for now, since the student activists have not been clear and consistent with their expectations. For instance, he ruled out any possibility of the country's top legislature going back on its decision. "We don't talk for the sake of talking. We are going to talk, hoping to implement the universal suffrage election in 2017. But if the premise is to abandon the Basic Law and the decisions of the NPCSC, I believe we all know the prospect is almost nil," said Leung. Sunday marked the beginning of a third week of the impasse, as unlawful protests continued to block thoroughfares around Hong Kong. The local police called upon protesters to "reduce" their occupation area, warning against attempts to hinder removal of barricades by police. But clearing the rallies by force will be a last resort, said Leung. "We don't want any people, especially young students, to get hurt." He disagreed with foreign media's labeling of the protest as "revolution", believing that protesters are spontaneous, but that also means they are not under anyone's command. As hard-line activists defied calls to leave the asphalt, the city's population of over 7 million suffers. Around 160 bus routes were suspended or diverted on Sunday. Retailers and restaurant owners in the downtown areas are also becoming cash-strapped as revenues plummet. Leung called for reflection from participants in the unlawful assemblies. "We know about the democratic aspirations of the occupiers. But even if they are willing to sacrifice, they shouldn't sacrifice or infringe the rights of others." Raymond Tam Chi-yuen, secretary for constitutional and mainland affairs, questioned whether the protesters had taken others' rights into account when they set up barricades on the trunk roads. Tam also lambasted the protest leaders for an inconsistent narrative on their demands, which has dampened liaison efforts made by senior officials and political leaders. It is time, he told reporters in Guangzhou, for the students to ponder what to do next to serve the long-term interests of Hong Kong. Financial Secretary John Tsang Chun-wah, concluding his official trip to the US, wrote in a weekly blog that he has heard good words about the city's restraint and tolerance in the face of the sheer inconvenience caused by the blockades. But he admitted he could not foresee what would happen next. "I think it is time for them to leave the streets," Tsang wrote, worried that a prolonged protest would lead to sharper conflicts that might considerably shake the city's foundations and values, such as stability of the financial market and the rule of law.

 China*:  Oct 16 - 20 2014

US is biggest hacker, Chinese military expert says (By Angela Meng A commentary in the People’s Daily overseas edition today hit back at the United States and claimed that China is the biggest victim of hacking. Zhang Junshe, a military expert, said revelations by former US intelligence officer Edward Snowden and statistics from the China Academy of Cyber Space have enabled the “international community” to see the “real face” of the “world police”, the United States. “Snowden’s latest revelations once again confirmed that the US is the world’s biggest cyberespionage attacker,” Zhang wrote. ”China is a firm cyber-security defender, the Chinese government and army have never engaged in or supported any network attacks and espionage activities.” China’s State Internet Information office published the country’s data on US cyberattacks in May. The data claimed that from March 19 to May 18 of this year, 2,077 Trojan horse networks or botnet services in the US directly controlled 1.18 million host computers in China. According to the report, the US has been spying on the Ministry of Foreign Affairs extensively for years. It said that US planted optical fibre bugs between the walls of the offices of the Chinese embassy in Australia when it was built in 1990. The commentary also mentions that data from the National Computer Network Emergency Response Technical Team Coordination Centre of China in May found 135 host computers in the US targeted 1,754 Chinese websites in 57,000 attacks. Tensions between China and the US on cybersecurity issues have intensified this year. In May, the US Justice Department indicted five members of the Chinese military for stealing trade secrets and cyberespionage, marking the first time the US government has publicly accused foreign employees of hacking into American firms. China responded by summoning the American ambassador in Beijing to condemn the accusations, increased security checks for computer hardware and services operating in China and banned Microsoft’s Windows 8 operating system.

Hong Kong*:  Oct 11 - 15 2014

Jackie Chan criticises economic cost of Occupy Central, calls on Hongkongers to ‘love the country’ (By James Griffiths Jackie Chan speaks during a press conference which opened a Chinese Film Festival in Romania last month. Hong Kong’s famous and controversial action star Jackie Chan has waded into a debate that has split families and caused divisions across the city: the ongoing pro-democracy protests. In a post on his Weibo account on Thursday, Chan called on everyone involved in the protests to “work together, return to reason, face the future, love the country, love our Hong Kong.” “I read the news that economic losses in Hong Kong are up to 350 billion,” Chan wrote. “This makes me really anxious. I believe that all Hong Kong people love Hong Kong.” He also quoted the lyric of the song Nation recorded by him with singer Liu Yuanyuan in 2009 to celebrate the 60th anniversary of the founding of the People’s Republic of China: “Can there be a prosperous home without a powerful country?” Internet users in China praised Chan on Weibo, which has been heavily censored of all Occupy Central and “Umbrella Movement” content during the protests, for “daring to speak out”. While Chan’s remarks were nowhere near as critical as China’s state media coverage of the protests, which previously called events the “the opposite of democracy”, they have been framed as being in opposition to the protests, which are set to continue after the Hong Kong government on Thursday evening called off scheduled talks with student leaders scheduled for Friday.

 China*:  Oct 11 - 15 2014

Beijing marks Apec summit with extra public holiday, moves to cut pollution (Angela Meng Beijing announces measures to reduce pollution during next month's summit - The Beijing municipal government has announced a six-day public holiday for central and city government departments, and reintroduced an odd-even licence plate scheme to ease traffic on the roads during the Apec summit next month. Zhuang Zhidong , deputy head of Beijing's environmental protection bureau, said the measures would reduce pollution during the Asia-Pacific Economic Cooperation forum meeting. Local traffic controllers would restrict private cars on the road based on whether the last digit of the licence plate was odd or even, Xinhua reported. From November 3 to 12, the number of public buses in the city will increase by 400, or 2 per cent of total public transport, to compensate for the lack of private vehicles. Traffic authorities expect the measure to cut congestion by 35 per cent. During the 2008 Olympics, Beijing imposed a traffic ban using the same system and took 45 per cent of private cars off the road, relieving both traffic congestion and pollution. Employees of government departments, quasi-government institutions and organisations in Beijing will be granted a six-day holiday from November 7 to 12 as an extra measure to reduce cars on the road. Workers will instead work on Sunday, November 2, and Saturday, November 15. Similar measures were in place during the Apec summit in Shanghai in 2001, where government departments and schools were closed for five days. The mainland's unprecedented growth in the past decade has resulted in a massive growth in car ownership among the previously bicycle-dependent population. It is a major contributing factor to pollution levels. Beijing established a car lottery scheme in 2010. Only those who win the lottery may register for a number plate. Beijing also imposed a rule that on any given weekday, only one-fifth of the city's private cars were allowed on the road. The Apec Economic Leaders' Meeting will be held on November 10 and 11, with ministers of the 21 Pacific-rim governments meeting from November 7.

Hong Kong*:  Oct 06 - 10 2014

There are limits to the exceptions you can enjoy, Hong Kong warned (Adrian Wan in Beijing People's Daily commentary scolds Hongkongers for thinking they deserve more special treatment - State television continues to run reports on Occupy Central on its evening news, including interviews with local opponent Robert Chow Yung. There were limits to the exceptions granted to Hong Kong by the central government, the latest Beijing commentary on the Occupy sit-ins said. It also said that Hong Kong people "should realise that only dialogue and reconciliation can solve problems, not extreme resistance". The piece, posted on the website of the Communist Party's official newspaper, said the benign treatment granted Hong Kong, such as the "one country, two systems" formula and the ability to govern itself, had led some in the city to think they were the exception to the rest of the nation. "Occupy Central is the extreme embodiment of the ethos of 'Hong Kong exceptionalism'," and it had crossed a line, said the commentary. The writer is identified as Guoping. The central government had taken a pragmatic approach in giving Hong Kong some "exceptional" policies, demonstrating Beijing's rationality, generosity and tolerance, it said, adding: "Some people should not keep asking for more; they should know where the line of exceptions is." It also reasserted the supreme authority of the decision made by the National People's Congress Standing Committee on electoral reform, saying it must be "thoroughly executed and not be affected by external pressure like Occupy Central". The commentary is the ninth on the Occupy sit-ins penned by Guoping. The pen name was likely aimed at a different group of readers to typical state media editorials, said Hong Kong-based political commentator Johnny Lau Yui-siu. "Guoping can mean 'national peace' or 'state's view'. The mainland media has a propensity to play on double entendres like this," he said. On September 30 - two days into the protests - a Guoping commentary called for rational dialogue. It said Beijing respected the differences between Hongkongers and mainlanders and understood Hongkongers' frustration. "The tolerance, patience and sincerity the central authority has for Hong Kong has never waned. A rational dialogue could be had as long as the deluded few recognise the truth," it read. In subsequent days, the writer defended the Hong Kong police force's handling of peaceful demonstrators, which included using tear gas and pepper spray. State media released two other Guoping commentaries late on Sunday. One of them focused on how street politics was doomed to fail, while chastising protesters who confronted police for disturbing the social order. In another comment, posted on the writer slammed protesters for using "populism" to mobilise young people. The news portal is affiliated with the State Council Information Office. Lau said such essays did not achieve much. "On the mainland, people have come to doubt what the state media says, or even assume the opposite of what is said is happening. In Hong Kong, given the far-fetched content, people don't take them very seriously," he said. State television continues to run reports on Occupy Central on its evening news, including interviews with local opponent Robert Chow Yung.

 China*:  Oct 05 - 10 2014

Beijing won't yield to Occupy Central, says ex-Thatcher aide Charles Powell - Charles Powell said he did not believe the protests that have paralysed parts of the city would force change. (Toh Han Shih A former aide to late British prime minister Margaret Thatcher says it is naive to expect Beijing to yield to Occupy Central's demands. His comments came as a US government group backed the protesters' goals. Charles Powell, who served as private secretary to Thatcher when Britain negotiated Hong Kong's return to Chinese sovereignty, said he did not believe the protests that have paralysed parts of the city would force change. "The position about elections has been clear since [the Basic Law] was published in 1991 and I don't believe for one moment that Chinese are going to change that basic position," he said. Speaking on BBC Radio 4, Powell said Hong Kong had always been part of China. "We rented for a while and we didn't introduce democracy. One reason we didn't is because we knew it was eventually going back to China and it would have been far worse to introduce full democracy and then taken it away from them." The British peer is now a director of property developer Hongkong Land and chairman of the Asia Task Force, a UK government advisory group on trade and investment. Also during the weekend, the US-China Economic and Security Review Commission, a US government body that advises Congress on relations with China, said it supported an open and democratic system in Hong Kong based on universal suffrage and freedom of expression. "We urge Hong Kong's leadership to adopt an election process based on universal suffrage which provides a genuine choice of candidates," it said. "We urge Hong Kong and Chinese authorities to exercise restraint and respect protesters' right to express their views." Jeff Bader, a former Asia adviser to US President Barack Obama, told The Washington Post on Thursday that the protests would not last long and that Chief Executive Leung Chun-ying might have been playing the situation well. "It's unrealistic to think that millions of Hongkongers are going to remain supportive or even tolerant over weeks as the city grinds to a halt. The sympathies are going to shift if this continues," he said. "People may be sympathetic, but reality and the needs of daily life intrude. So [Leung's] strategy so far of watching and waiting is not stupid." On Saturday, Singapore Foreign Minister K. Shanmugam was quoted in Singapore media as saying: "China will be firm. It is not going to institute any major political change to copy the Western models in the short term. "The leadership believes that any such move will be disastrous for China and will hurt the people of China."

Hong Kong*:  Oct 01 - 05 2014

China is Hong Kong's future – not its enemy 中國是香港的未來 - 而不是它的敵人 - Protesters cry democracy but most are driven by dislocation and resentment at mainlanders’ success - Hong Kong had 155 years of British rule with no democracy - today British and American have become so concern about Hong Kong democracy want Hong Kong what took them 200 years to accomplish to do it in months. 香港155年在英國統治下沒有民主 - 今天英國和美國都變得對香港民主這麼關注, 英美需時200年完成的民主要香港在幾個月完成. (Martin Jacques - The Guardian) The upheaval sweeping Hong Kong is more complicated than on the surface it might appear. Protests have erupted over direct elections to be held in three years’ time; democracy activists claim that China’s plans will allow it to screen out the candidates it doesn’t want. It should be remembered, however, that for 155 years until its handover to China in 1997, Hong Kong was a British colony, forcibly taken from China at the end of the first opium war. All its 28 subsequent governors were appointed by the British government. Although Hong Kong came, over time, to enjoy the rule of law and the right to protest, under the British it never enjoyed even a semblance of democracy. It was ruled from 6,000 miles away in London. The idea of any kind of democracy was first introduced by the Chinese government. In 1990 the latter adopted the Basic Law, which included the commitment that in 2017 the territory’s chief executive would be elected by universal suffrage; it also spelt out that the nomination of candidates would be a matter for a nominating committee. 

This proposal should be seen in the context of what was a highly innovative – and, to westerners, completely unfamiliar – constitutional approach by the Chinese. The idea of “one country, two systems” under which Hong Kong would maintain its distinctive legal and political system for 50 years. Hong Kong would, in these respects, remain singularly different from the rest of China, while at the same time being subject to Chinese sovereignty. In contrast, the western view has always embraced the principle of “one country, one system” – as, for example, in German unification. But China is more a civilisation-state than a nation-state: historically it would have been impossible to hold together such a vast country without allowing much greater flexibility. Its thinking – “one civilisation, many systems” – was shaped by its very different history.

In the 17 years since the handover, China has, whatever the gainsayers might suggest, overwhelmingly honoured its commitment to the principle of one country, two systems. The legal system remains based on English law, the rule of law prevails, and the right to demonstrate, as we have seen so vividly in recent days, is still very much intact. The Chinese meant what they offered. Indeed, it can reasonably be argued that they went to extremes in their desire to be unobtrusive: sotto voce might be an apt way of describing China’s approach to Hong Kong. At the time of the handover, and in the three years I lived in Hong Kong from 1998, it was difficult to identify any visible signs of Chinese rule: I recall seeing just one Chinese flag.

Notwithstanding this, Hong Kong – and its relationship with China – was in fact changing rapidly. Herein lies a fundamental reason for the present unrest: the growing sense of dislocation among a section of Hong Kong’s population. During the 20 years or so prior to the handover, the territory enjoyed its golden era – not because of the British but because of the Chinese. In 1978 Deng Xiaoping embarked on his reform programme, and China began to grow rapidly. It was still, however, a relatively closed society. Hong Kong was the beneficiary – it became the entry point to China, and as a result attracted scores of multinational companies and banks that wanted to gain access to the Chinese market. Hong Kong got rich because of China. It also fed an attitude of hubris and arrogance. The Hong Kong Chinese came to enjoy a much higher standard of living than the mainlanders. They looked down on the latter as poor, ignorant and uncouth peasants, as greatly their inferior. They preferred – up to a point – to identify with westerners rather than mainlanders, not because of democracy (the British had never allowed them any) but primarily because of money and the status that went with it.

Much has changed since 1997. The Chinese economy has grown many times, the standard of living of the Chinese likewise. If you want to access the Chinese market nowadays, why move to Hong Kong when you can go straight to Beijing, Shanghai, Guangzhou, Chengdu and a host of other major cities? Hong Kong has lost its role as the gateway to China. Where previously Hong Kong was China’s unrivalled financial centre, now it is increasingly dwarfed by Shanghai. Until recently, Hong Kong was by far China’s largest port: now it has been surpassed by Shanghai and Shenzhen, and Guangzhou will shortly overtake it.

Two decades ago westerners comprised the bulk of Hong Kong’s tourists, today mainlanders account for the overwhelming majority, many of them rather more wealthy than most Hong Kong Chinese. Likewise, an increasing number of mainlanders have moved to the territory – which is a growing source of resentment. If China needed Hong Kong in an earlier period, this is no longer nearly as true as it was. On the contrary, without China, Hong Kong would be in deep trouble.

Understandably, many Hong Kong Chinese are struggling to come to terms with these new realities. They are experiencing a crisis of identity and a sense of displacement. They know their future is inextricably bound up with China but that is very different from embracing the fact. Yet there is no alternative: China is the future of Hong Kong.

All these issues, in a most complex way, are being played out in the present arguments over universal suffrage. Hong Kong is divided. About half the population support China’s proposals on universal suffrage, either because they think they are a step forward or because they take the pragmatic view that they will happen anyway. The other half is opposed. A relatively small minority of these have never really accepted Chinese sovereignty. Anson Chan, the former head of the civil service under Chris Patten, and Jimmy Lai, a prominent businessman, fall into this category, and so do some of the Democrats. Then there is a much larger group, among them many students, who oppose Beijing’s plans for more idealistic reasons.

One scenario can be immediately discounted. China will not accept the election of a chief executive hostile to Chinese rule. If the present unrest continues, then a conceivable backstop might be to continue indefinitely with the status quo, which, from the point of view of democratic change, both in Hong Kong and China, would be a retrograde step. More likely is that the Chinese government will persist with its proposals, perhaps with minor concessions, and anticipate that the opposition will slowly abate. This remains the most likely scenario.

An underlying weakness of Chinese rule has nevertheless been revealed by these events. One of the most striking features of Hong Kong remains the relative absence of a mainland political presence. The Chinese have persisted with what can best be described as a hands-off approach. Their relationship to the administration is either indirect or behind the scenes. Strange as it may seem, the Chinese are not involved in the cut and thrust of political argument. They will need to find more effective ways of making their views clear and arguing their case – not in Beijing but in Hong Kong.

Martin Jacques - The Guardian, Tuesday 30 September 2014 14.45 EDT

 China*:  Oct 01 - 05 2014

Cargo growth strong as China exports pick up (Sijia Jiang Global air freight has recorded strong growth for two months in a row as recovery strengthens on the back of Chinese export orders, show data for August from the International Air Transport Association (IATA). “The outlook for air cargo is clearly getting better,” said Tony Tyler, director-general and CEO of the IATA, which predicts Chinese exports and emerging-Asia trade volumes will sustain growth momentum for carriers in the region. Global air freight volumes rose 5.1 per cent year on year in August, following a 6.1 per cent increase in July. Airlines in all regions, led by the ones in the Middle East, Asia-Pacific and North America, reported expansion in freight tonne kilometres (FTK), a metric of cargo volume. FTKs carried by Asia-Pacific airlines increased 6.3 per cent in August, beating those in North American ones, at 5.5 per cent. The growth, however, was slower compared to July’s 7.1 per cent. “A notable rise in Chinese export orders bodes well for future demand growth,” IATA said in a report. Chinese exports jumped 14.5 per cent in July and 9.4 per cent in August, beating expectations. Its Purchasing Manager Index of manufacturing has also stayed above 51 since June, showing expansion in business activity in the manufacturing sector. “This should help sustain positive trade momentum in the region, which in turn ought to continue driving demand for air freight services on local carriers”, IATA said, noting that solid growth in emerging Asia trade volumes also supports demand for freight on Asia-Pacific carriers. Asia-Pacific is the world’s biggest cargo market, accounting for nearly 40 per cent of global volumes and home to major cargo carriers such as Cathay Pacific, Korean Air and Asiana Airlines. IATA said the fortunes of carriers in the region “are tied to the strength of major economies such as China, Japan and South Korea”, which are expanding again after a slowdown at the start of the year. Europe remains a weak spot, with 1.4 per cent cargo growth, while Latin American carriers’ growth slowed to 1.1 per cent, from 7.6 per cent in the previous month, as the Brazilian economy slowed down along with regional trade activity. Tyler warned the extent of future gains could be limited in spite of the generally positive outlook. “Businesses are reported to have more confidence in the future but the list of political and economic risks continues to moderate how that confidence translates into actual activity,” he said.

Hong Kong*:  Sept 26 - 30 2014

Beijing to take a more active role in Hong Kong's affairs, hints Xi Jinping (By Joyce Ng in Beijing and Ng Kang-chung) President tells tycoons 'one country, two systems' will stay, but highlights central government leadership role and need to tailor 'one man, one vote' - Chinese President Xi Jinping (front right) meets with a delegation of Hong Kong's industrial and business circles headed by Tung Chee-hwa (front left) in Beijing. President Xi Jinping has reiterated that the central government's policies towards Hong Kong will remain unchanged but hinted that Beijing would play a more active role in the city's affairs. Speaking to a delegation of senior figures from the city's business and professional sectors, Xi said the implementation of "one man, one vote" in Hong Kong must be tailored to the specific situation of the country and the city. Xi also vowed to support the Hong Kong government in the face of any activities that destroy social order, an implicit reference to the upcoming Occupy Central protest. Xi said Beijing's policies towards Hong Kong had not changed and would not change. "We shall firmly adhere to the 'one country, two systems' [principle] and the Basic Law. [We shall] firmly push ahead with Hong Kong's democratic development, and maintain Hong Kong's prosperity and stability." But he also highlighted the role Beijing should play. "I sincerely hope that Hong Kong, under the leadership of the central government and under the stewardship of the chief executive, can continue to advance and create a better future." The city's richest man, Li Ka-shing, who stood next to the president in the photo session, told Xi that he hoped to see Hong Kong move towards universal suffrage, according to one person present at the meeting. The delegation, which comprises more than 70 of the city's elite and Beijing loyalists from the commercial, industrial and professional sectors, was led by former chief executive Tung Chee-hwa, who is now a vice-chairman of the Chinese People's Political Consultative Conference. The reception was marked by the presence of Zhang Dejiang , chairman of the National People's Congress who oversees Hong Kong affairs, and Vice-President Li Yuanchao . Sitting next to Xi during the meeting at the Great Hall of the People was Tung. Among those on the front row were Li; Lee Shau-kee of Henderson Land Development; Robert Kuok of Kerry Group; New World Development chairman Henry Cheng Kar-shun; and Peter Woo Kwong-ching of Wharf Holdings. The meeting lasted for an hour and 40 minutes. While Xi vowed that the central government would adhere to the "one country, two systems" principle and the Basic Law, he did not use the phrases "Hong Kong people ruling Hong Kong" or "high degree of autonomy" in his opening remarks or in the official notes presented to the delegates, as former president Hu Jintao had done when he hosted the city's tycoons in 2003. However, Louis Shih Tai-cho, one of the delegates, said Xi did mention "high degree of autonomy" at another stage of the meeting, while saying it had to be in line with national sovereignty. Later in the meeting, Xi described Hong Kong as a "local administrative region that comes directly under the central people's government". The wording is almost identical to Article 12 of the Basic Law, except that the latter also uses the phrase "high degree of autonomy". "As the president, Mr Xi would craft his speech very carefully. The omission would not be accidental," Chung Kim-wah, a political scientist at Polytechnic University, said. Democratic Party chairwoman Emily Lau Wai-hing feared Xi's omission of the catchphrase "Hong Kong people ruling Hong Kong" signalled Beijing was not paying as much attention to the principles as it had previously. But Professor Lau Siu-kai, now vice-chairman of the Chinese Association of Hong Kong and Macau Studies, dismissed such fears. "There is no need to be oversensitive. Mr Xi has said there is no change in policy and we should take his word for it," he said. Wharf Holdings chairman Peter Woo said he felt "encouraged" that Xi had stressed that the "one country, two systems" concept would remain intact. 
List of tycoons and business professionals going to Beijing
Cheung Kong (Holdings) chairman Li Ka-shing
Chairman of Kerry Group, Robert Kuok
Chief executive officer of Shangri-La Asia, Kuok Khoon Chen
PCCW chairman and younger son of Li Ka-shing, Richard Li Tzar-kai
K Wah Group chairman and Galaxy Entertainment Group founder Lui Che-woo
Henderson Land Development chairman Lee Shau-kee and his elder son Peter Lee Ka-kit
Sun Hung Kai Properties Alternate Director Adam Kwok Kai-fai
Bank of East Asia chairman David Li Kwok-po
New World Development chairman Henry Cheng Kar-shun
CLP Holdings chairman Michael Kadoorie
Sino Land chairman Robert Ng Chee Siong
Harilela Group vice-chairman Gary Harilela
Hang Lung Properties chairman Ronnie Chan Chichung
Shui On Land chairman Vincent Lo Hong-sui
MGM China's co-chairman and daughter of casino mogul Stanley Ho Hung-sun, Pansy Ho Chiu-king
Ian Fok Chun-wan, son of the late Henry Fok Ying-tung
Wharf (Holdings) chairman Peter Woo Kwong-ching
Asia Financial Holdings chairman Robin Chan Yau-hing
Li & Fung honorary chairman Victor Fung Kwok-king
Lai Sun Development chairman Peter Lam Kin-ngok,
Oriental Press Group former chairman Ma Ching-kwan
Glorious Sun Enterprises chairman Yeung Chun-kam
Phoenix Satellite Television chairman Liu Changle
Swire Pacific director Ian Shiu Sai-cheung
Shimao Property Holdings founder and chairman Hui Wing-mau
China Grand Forestry Resources Group founder Ng Leung-ho
Goldlion Holdings deputy chairman Ricky Tsang Chi-ming
Novel Enterprises vice-chairman Ronald Chao Kee-young
HKR International managing director Victor Cha Mou-zing
Hongkong and Shanghai Banking Corporation chief executive officer Peter Wong Tung-shun
Prof Anna Pao Sohmen, daughter of late tycoon Pao Yue-kong
Far East Consortium International chairman David Chiu Tat-cheong
Shun Hing Group vice-chairman David Mong Tak-yeung
Galaxy Entertainment Group deputy chairman Francis Lui Yiu-tung
Dah Sing Life Assurance Company chairman David Wong Shou-yeh
Far East Holdings International chairman Deacon Chiu’s son, Duncan Chiu
Bank of China International Holdings deputy chief executive officer Tse Yung-hoi
Chinese People’s Political Consultative Conference
Henry Tang Ying-yen
Ambrose Lau Hon-chuen
Yu Kwok-chun
Chan Wing-kee
Stephen Tai Tak-fung
Lam Shu-chit
Annie Wu Suk-ching
Hung Chao-hong
Anthony Wu Ting-yuk
Choi Koon-shum
Chan King-wai
Lo Man-tuen
Samuel Yung Wing-ki
Wong Cho-bau
Tam Kam-kau
Chang Yung-tsung (former CPPCC member)
Business chambers
Pang Yiu-kai, chairman of Hong Kong General Chamber of Commerce
Stewart Leung Chi-kin, chairman of executive committee, Real Estate Developers Association
Jose Yu Sun-say, standing committee member of Chinese General Chamber of Commerce
Lawrence Ma Chung-lai, standing committee member of Chinese General Chamber of Commerce
Iron Sze, president of Chinese Manufacturers’ Association
Stanley Lau Chin-ho, chairman of Federation of Hong Kong Industries
Chong Shing-hum, president of Hong Kong Chinese Importers’ and Exporters’ Association
Professionals and others
Kaizer Lau Ping-cheung, surveyor; campaigner for Leung Chun-ying in chief executive election
Law Society former president Ambrose Lam San-keung
Lawyer and DAB Wong Tai Sin District Councillor Maggie Chan Man-ki
Chairman of Hong Kong Federation of Education Workers Wong Kwan-yu
PricewaterhouseCoopers Partner Dennis Ho Chiu-ping
Medical Council President Dr Louis Shih Tai-cho
Engineer Yim Kin-ping
Architect and former lawmaker Patrick Lau Sau-sing
Institute of Surveyors former president Stephen Lai Yuk-fai
Executive Councillor Cheung Chi-kong

 China*:  Sept 26 - 30 2014

Jack Ma displaces property tycoon to top China rich list (By Toh Han Shih A 38 per cent rise in Alibaba’s stock on the first day of trading on Friday rocketed Jack Ma into the No 1 position with a fortune of US$25 billion, up five times on last year. Jack Ma Yun, the 50-year-old co-founder and chairman of Alibaba Group Holding, topped the Hurun China Rich List 2014. This year’s Hurun list saw the number of US dollar billionaires in China increase to 354, 39 more than last year. China had only three US dollar billionaires 10 years ago. As a result of President Xi Jinping’s crackdown on corruption, “18 of last year’s list are in varying degrees of trouble with the authorities, of which 11 still made the list this year”, said Hurun. “Jack Ma Yun is officially crowned the Richest Man in China. A 38 per cent rise in Alibaba’s stock on the first day of trading [on Friday] rocketed Jack Ma into the No 1 position with a fortune of US$25 billion, up five times on last year. "Ma’s fortune is mainly made up of his 6 per cent holding in Alibaba and his 46 per cent share in Alipay [Alibaba’s subsidiary],” said Hurun. Alibaba’s initial public offering on the New York Stock Exchange has raised US$25 billion, making it the world’s biggest listing with a market capitalisation exceeding Facebook’s. “[Information technology] has seen the biggest book. Five of the top 10 are in IT,” said Hurun. The entrepreneurial spirit that has caught China seems not to be abetting. These include the 43-year-old Pony Ma Huateng of Tencent Holdings at fifth spot with a personal wealth of US$18.1 billion; Baidu co-founding chairman and chief executive Robin Li Yanhong and his wife Melissa Ma Dongmin at sixth with US$17.5 billion; Richard Liu Qiangdong of at ninth place with US$8.8 billion; and Lei Jun of Xiaomi Technology in 10th place with US$7.5 billion. Three of the top six spoke fluent English - Jack Ma, Li Hejun and Robin Li, demonstrating the globalisation of the Chinese private sector, said Hurun. Among this year’s list, 26 are under 40 and self-made. Two of them are US dollar billionaires, namely Chen Ou, 31, of Jumei with a fortune of US$1.5 billion, and 34-year-old Zhang Bangxin, of TAL Education, with US$1.05 billion. Rupert Hoogewerf, Hurun Report chairman and chief researcher, said: “The entrepreneurial spirit that has caught China seems not to be abetting, with eight self-made individuals born in the ’80s making the list. Any country would be proud of that. "The Hurun Rich List has seen more action on the international front than in the previous 15 years added together.” Wang Jianlin, chairman of Dalian Wanda Group, and Guo Guangchang of Fosun International are two members of this year’s list who are actively investing overseas. In August, Wanda said it would invest US$1.2 billion in a mixed-use property project in Beverly Hills to aid China’s entry into Hollywood. Wang and his family, with an estimated wealth of US$24.2 billion, dropped from the top spot on Hurun’s list last year to second place this year.

Hong Kong*:  Sept 21 - 25 2014

Actor Jaycee Chan formally arrested on drug charges (By Nectar Gan Actor and Ko Chen-tung were detained last month after being caught smoking marijuana - Jaycee Chan has been formally arrested on drug charges, nearly a month after he was caught smoking marijuana in Beijing. The prosecutor's office, or procuratorate, in Beijing's Dongcheng district approved the arrest of Jaycee Fong Cho-ming, son of international kung fu icon Jackie Chan, on suspicion of "accommodating drug users". This signals that authorities are moving forward with the case against Jaycee, who is currently in detention. Jaycee, 32, was taken away by police on August 14 with his friend Taiwanese actor Ko Chen-tung, 23, for doing drugs at a foot massage parlour in Beijing. Police recovered more than 100 grams of marijuana from Chan's home in Beijing. Mainland media reported that Jaycee Chan admitted that he first abused drugs in the Netherlands in 2006, while Ko did so for the first time in Jaycee’s home two years ago. The public security bureau of Dongcheng had sought the procuratorate’s approval for Chan’s arrest on September 10, the statement on Weibo said. Chinese police need official approval from prosecutors to formally arrest a suspect. During a period of formal arrest, police can continue to investigate. If they decide to criminally charge him, a trial would follow. The maximum sentence for allowing others to take drugs in a property, workplace or hotel is three years’ imprisonment. Ko was given a sentence of 14 days in administrative detention after he admitted using marijiuana. On his release, he appeared at a news conference with his parents and agent and apologised for smoking the drug. Jackie Chan, who was named an anti-drug ambassador in 2009 by Chinese authorities, has publicly apologised for his son’s drug use and pledged to work with him on his recovery. A series of celebrities have been detained on drug charges following a declaration in June by President Xi Jinping that illegal drugs should be wiped out and that offenders would be severely punished. Performing arts associations and theatre companies in Beijing have pledged not to hire any actors connected with drugs, and national associations representing film actors, directors and producers have reportedly issued a notice saying members who repeatedly take drugs will be expelled and banned from making movies.

 China*:  Sept 21 - 25 2014

Fighter pilots show their right stuff in PLA air force drills (By Alice Yan Month-long training session in northwestern desert focuses on improving navigation and combat skills - Xu Liqiang said he encountered a strong competitor – a fellow pilot in his early 30s from the Jinan military zone – during the largest air force drill in the history of the People’s Liberation Army earlier this month in a northwestern desert. “My rival is capable. I can tell that he and his teammate cooperated well, and his operations on the plane were in the exact place,” Xu, who is a vice brigade commander in the Shenyang military zone, told CCTV. The pair were among the pilots representing all the country’s military zones taking part in the drill, which is expected to last a month and focus on improving navigation and fighting skills Fights are being carried out between either single planes or plane teams, and each confrontation lasts 40 minutes, CCTV reported. The weapons on the planes of both parties in a fight are similar, and the pilots don’t know who their rivals will be until they board their planes. All the moves the pilots and planes make are seen simultaneously through a signal transporting system in a command hall where radar, missile and air fight specialists gather to make assessments. The five top fighter pilots will be selected from those participating in the drill. The drill comes ahead of the 65th anniversary of the founding of China’s air force on November 11, said Colonel Shen Jinke, the air force spokesman,, the PLA’s news portal, reported. Shen said the air force would hold commemoration activities at Airshow China, which will run from November 11-16 in Guangdong’s Zhuhai. Leaders of China’s air force will meet with their foreign counterparts, the country’s first batch of female fighter jet pilots will fly as part of a performance by the Chinese Bayi aerobatic flight squadron, and some new weapons will be exhibited at the event, he said.

Hong Kong*:  Sept 16 - 20 2014

SHKP sees tough times ahead for property developers in Hong Kong (By Sandy Li Greater competition for buyers and heavy subsidies on taxes will hit profit of city's property firms next year, the developer warns market - Sun Hung Kai Properties, the city's largest developer by market value, expects competition to heat up next year, with heavy subsidies on stamp duties to cut profit margins, after it reported a 14.99 per cent increase in full-year core profit. Driven by increased property sales and solid growth in rental income, SHKP reported underlying profit, excluding revaluation gains on investment properties, of HK$21.41 billion, lower than the HK$21.55 billion consensus estimate of 16 analysts compiled by Bloomberg. For the year ended June, net profit dropped 16.86 per cent to HK$33.52 billion due to smaller revaluation gains on investment properties. Turnover rose 39.61 per cent to HK$75.1 billion. Profit generated from property increased 46.17 per cent to HK$10.51 billion, while net rental income grew 17 per cent to HK$14.27 billion. SHKP declared a final dividend of HK$2.40 per share, the same as last year. "Profit margins will not be as good as before," co-chairman and managing director Thomas Kwok Ping-kwong said, without further elaboration. Profit margins for developers could be cut by 20 to 50 per cent, according to analysts, because they are offering projects at discounted prices and subsidising stamp duties to entice buyers. SHKP shares dropped 0.17 per cent to close at HK$117.90 yesterday before the release of the earnings results. Kwok said fierce competition to sell flats would escalate further next year and bidding for land would also heat up. The company said it aimed to complete 30 per cent more flats in Hong Kong during this financial year, taking the total to 3.64 million sq ft. Developers are set to sell a record HK$150 billion of new homes this year, up from a five-year low of HK$92.44 billion last year, according to data from Centaline Property Agency. "We will actively pursue land acquisition opportunities except small sites," Kwok said, pointing out SHKP's interest in bidding for MTR Corp's Tai Wai Station residential project. With growing uncertainties in the global economy, he said it was extremely difficult to predict the city's property market outlook. "I have to apologise … I really don't know how to assess the market now," he said. Figures released by the Rating and Valuation Department last week showed home prices and rentals climbed to record levels in July despite the introduction of heavier taxes to curb investment demand. Deputy managing director Victor Lui Ting said the company had increased its sales target for this financial year to HK$32 billion, up from HK$28 billion in the past year, when contracted sales totalled HK$27.7 billion. Another deputy managing director, Mike Wong Chik-wing, said SHKP would build more small to medium-sized units in order to meet market demand. "With the changing of the Hong Kong family size, demand for units to accommodate a family of two to three is stronger than the previous five to six people," Wong said. Lee Wee Liat, the head of property research at BNP Paribas Securities, said SHKP's ability to put more flats on the market should support higher sales for this financial year.

 China*:  Sept 16 - 20 2014

Canada ratifies China investment deal, may help smooth relations (By Reuters in Ottawa) Agreement over protection for foreign investments in Canada to come into force after two-year delay in move seen as method to defuse tensions between Ottawa and Beijing - Canada has finally ratified a foreign investment protection agreement with China after a two-year delay in a step that may help ease tensions between the two countries and smooth the way for a possible visit to China by Prime Minister Stephen Harper. International Trade Minister Ed Fast announced the ratification on Friday and said the agreement, designed to give investors greater legal certainty, would come into effect on October 1. It was signed in September 2012. Relations between Ottawa and Beijing have been strained by China’s detention last month of Canadians Kevin and Julia Garratt on suspicion of stealing state secrets and for threatening national security. The Garratts, who ran a coffee shop in Dandong on the border with North Korea, deny the charges. The Canadians were detained less than a week after Canada accused Chinese hackers of breaking into a government computer network, a charge Beijing denied. A Canadian government official, however, dismissed any connection between the Garratts and the Foreign Investment Protection Agreement (FIPA), noting that the agreement was important on its own merits for promoting trade. “Announcing the FIPA, and consular issues, are separate things that are dealt with separately,” said the official, speaking on condition of anonymity. The Chinese embassy declined to say whether the ratification could lead to freedom for the Garratts or to a Harper tour. “The Chinese side is willing to work with the Canadian side to promote economic and trade cooperation to a new level, and further advance the development of China-Canada strategic partnership,” said embassy spokesman Yang Yundong. The Chinese ambassador, Luo Zhaohui, said in an article last month that there were no difficulties that could not be overcome. What China watchers are looking for is whether Harper will make a bilateral visit to China for a few days after attending a November 10-11 Asian regional summit in Beijing, an idea both sides had informally discussed. “Seeing as we’ve ratified this thing in good faith, one would hope that the Chinese would see their way clear to resolving our concerns over the arrest of the Garratts, which would then make it possible for the prime minister to have the three-day tour in China,” said Brock University professor Charles Burton, a former Canadian diplomat who served twice in China. “The prime minister appears to have taken a personal concern in this matter and really feels that it’s important to be resolved, or otherwise he’s unlikely to spend time with the Chinese leadership.” Canada’s main opposition New Democratic Party criticised the agreement, saying it would give Chinese companies in Canada the right to sue if federal or provincial governments legislated environmental standards that affected their investments. Paul Evans, a professor at the University of British Columbia, said that for all the talk about what the Chinese firms might do, it gave Canadian companies important protection in China. “Almost everyone who’s looked at it [says] it’s the best [such agreement] anybody’s negotiated with China and is likely to be the template for some other negotiations,” he said. The Canadian government says the agreement ensures greater protection against discriminatory and arbitrary practices and provides prompt compensation in the event of expropriation. It says the deal preserves the right of both sides to regulate in the public interest.

Hong Kong*:  Sept 11 - 15 2014

Harvard University receives largest ever donation from Hong Kong foundation (By Linda Yeung and Ng Kang-chung) Morningside Foundation hands over US$350m to American university's school of public health - The donation is from the Morningside Foundation - set up by T.H. Chan's sons Ronnie Chan (right) and Gerald Chan Lok-chung, who earned his master's and doctorate degrees at the school of public health. A foundation set up by Hang Lung Group chief Ronnie Chan Chichung and his family has made the biggest donation in Harvard University's 378-year history, handing over US$350 million to its school of public health. The school will be renamed the Harvard T.H. Chan School of Public Health after the late tycoon Chan Tseng-hsi, founder of Hang Lung. It becomes only the second Harvard faculty to carry the name of a person, after the John F. Kennedy School of Government. The donation is from the Morningside Foundation - set up by Chan's sons Ronnie Chan and Gerald Chan Lok-chung, who earned his master's and doctorate degrees at the school of public health. Harvard president Professor Drew Faust said: "This extraordinary gift from the Chan family will enable Harvard's school of public health to tackle intractable health problems and to translate rigorous research into action and policy worldwide." The donation will go towards fighting four global health threats: pandemics old and new, from malaria and Ebola to obesity and cancer; tackling harmful physical and social environments - covering everything from pollution to gun violence; poverty and humanitarian crises; and failing health systems worldwide, that leave many people without access to health care. "On behalf of my mother and my brothers, I want to express how pleased we are that the legacy of our late father can be honoured by this gift," said Gerald Chan. "He was a generous man who was a staunch supporter of education. He also wanted to support scientific research to alleviate human suffering." Chan Tseng-hsi founded Hang Lung in 1960 and built it into one of the city's biggest developers before his death in 1986. The brothers are ranked Hong Kong's 17th-richest people by Forbes, which put their net worth at almost US$3 billion. The donation is more than double the previous record gift of US$150 million, donated by an American billionaire in February. Hong Kong tycoons have long been supporters of health and education. The biggest donation locally was Li Ka-shing's 2005 gift to the University of Hong Kong of HK$1 billion. In 2008, Morningside gave about HK$100 million to Chinese University towards construction of the new Morningside College. HKU and Chinese University have each raised more than HK$1billion in donations in recent years, helping them access the maximum grant of HK$600 million each under a government matching grant scheme. Donations by Hong Kong tycoons to overseas universties:
1995 Gordon Wu Ying-sheung of Hopewell Holdings - US$100 million to Princeton University in New Jersey
1999 Lui Che-woo of K Wah Group - US$500,000 to the Stanford University Medical Centre
2005 Li Ka Shing Foundation - US$40 million to the University of California, Berkeley
2010 Dickson Poon of Dickson Concepts - £10 million (HK$126.5 million) for construction of the University of Oxford China Centre Building
2012 Dickson Poon - £20 million to Law School of King's College London
2014 Li Ka Shing Foundation - US$10 million to University of California, Berkeley and UC San Francisco

 China*:  Sept 11 - 15 2014

China’s fever for iPhones is cooling, merchants say (By Stephen Chen With the iPhone 6 being unveiled on Tuesday in the US, Chinese consumers seem far less interested than they were in the iPhone 5 - Tuesday is the day Apple unveils the iPhone 6 in the United States (1am Wednesday in Hong Kong), but Chinese consumers have given the run-up the collective cold shoulder, as their thoughts seem to be more on competing products and the government’s anti-corruption campaign. To echo the US release,, China’s largest online shopping platform, opened a special section dedicated to pre-orders and discussions about the new product. And even though promises of fast delivery have been made, most of the large online electronics shops had not received a single order by 2pm on Tuesday. “You won’t believe [the cold reception for the iPhone 6] if you compare it to the fever of their previous release,” said an online shop manager, who declined to be named. “We have noticed a downtrend in interest since the iPhone 5, but we never expected iPhone fever could drop so fast.” Although there as a report in the Legal Evening News that the pre-order price for a new iPhone 6 at some electronics shops in Beijing soared as high as 28,000 yuan (HK$35,200), most certified shops on Taobao asked for an advance payment ranging from 4,000 to 6,000 yuan. The actual price would almost certainly be higher than that, but a buyer could ask for full refund if the final cost was too high. reports the earliest date the phone will be for sale is Friday next week. Chen Xi, a university student in Beijing, may be representing the apathy in the Chinese market. She uses an iPhone and says she might be interested in buying a new one, but she’s not captivated enough to preorder an iPhone 6 when she doesn’t know what its new features are. “I might be disappointed and shift to a [Samsung] Galaxy,” she said. “I hope the new iPhone will have a bigger screen so I can read my e-books more easily.” There may have been a time when having the new expensive toy in China was alluring, but a businessman in Guangzhou said he was no longer going to order a few dozen from a merchant in Hong Kong to give out as gifts, as he has done previously. His reason reflected the new tide in current events. “In the past a government official can take out a new iPhone and draw nothing but envious look from others,” he said. “Now they dare not [flaunt the new phone] because it might be reported and prompt an anti-corruption investigation.”

Hong Kong*:  Sept 6 - 10 2014

Number of skilled Hong Kong labourers working in Macau triples in two years (By Eddie Lee Number of skilled Hong Kong labourers working in gambling hub triples in two years amid growing manpower shortage at home - The number of skilled construction workers leaving Hong Kong for Macau has more than tripled in the past two years just as the former is struggling with severe labour shortages. There were 4,685 registered Hong Kong workers on construction sites in the former Portuguese enclave by the end of July, compared with 1,305 in July 2012, according to the latest Macau police figures. The real number is likely to be higher given that many Hong Kong construction workers go to work in Macau as unregistered daily commuters. The number of Hong Kong construction workers in Macau had remained steady at around 1,000 since 2009. But the number surged over the past two years as Macau embarked on a new construction spree. Hong Kong itself is now facing an acute construction labour shortage. A recent survey released by the Royal Institute of Chartered Surveyors found more than 90 per cent of construction managers flagged up various degrees of skill shortages. The chairman of the Real Estate Developers Association's executive committee, Stewart Leung Chi-kin, said the body would write to the government next week to urge the relaxation of rules on importing labour. Unions and activists vehemently oppose such a move. But Leung argued it was necessary to keep rising construction costs in check, blaming high construction costs on labour shortages. The problem could get worse. Hong Kong faces fierce competition from Macau for construction labourers, particularly skilled workers like bar-benders. Many contractors in Hong Kong are eager to win the lucrative contracts for casino projects, insiders say. Lawrence Ng San-wa, president of the Hong Kong Construction Sub-Contractors Association, acknowledged that the number of Hong Kong workers going to Macau constituted only 2 to 3 per cent of the 200,000 qualified workers in the industry. Still, he said contractors in Macau would pay up to 30 per cent more than contractors in Hong Kong for skilled workers from Hong Kong. Eric Tse Chun-yuen, another major contractor figure in Hong Kong, backed Ng's comments. Ng said most of the workers going to Macau were skilled. "They're skilled labourers specialised in areas such as bar-bending or curtain-wall installation, working for more complicated hotel projects in Macau," Ng said. He said Hong Kong workers mainly played supervisory roles in construction projects and provided training to less skilled Macau or mainland workers. In his policy address this year Macau Chief Executive Dr Fernando Chui Sai-on pledged that his administration would focus on the economy and accelerate construction projects. The Macau government's spending plans alarmed some of the city's lawmakers. On Thursday, Melinda Chan Mei-yi described overspending on public construction as among "the most important things" for the government to tackle. Both Ng and Tse played down fears that Hong Kong may lose even more workers to Macau and said competition from the gambling enclave was only a small part of Hong Kong's labour shortage problem. Ng did not expect the exodus to get worse because Macau had imposed tight restrictions on labour imports. He said he supported calls for Hong Kong to relax its own labour import restrictions. Ng said this could help bring down construction costs, which in turn are driving up property prices.

 China*:  Sept 6 - 10 2014

Chinese woman wrongfully jailed for theft given apology and payout 25 years after (By Kathy Gao Bai Chunrong's case another in a series of cases exposing injustices in country's courts system - A suspect in a drug trafficking case cries during sentencing in Hainan in this file photo. Convictions that may later prove to be based on flimsy evidence and wrong judgments are a new challenge for China's legal authorities. Twenty-five years after she was locked up behind bars, a Guangdong woman on Thursday received more than 650,000 yuan (HK$818,000) in compensation for being wrongfully imprisoned – in the latest case of corrective measures for miscarried justice in China. Bai Chunrong was sentenced to eight years in prison for theft on July 28, 1989, and served time until she was released in 1996, the Guangdong province newspaper New Express reported. Bai filed an appeal in March 1990 but the Foshan Intermediate People’s Court upheld the conviction. There were no further details about her crime given in the court announcement. The same court reopened the case in late March and the judge declared her innocent on the grounds of insufficient evidence. Bai received the compensation from the Foshan court judge, who apologised to Bai for the wrongful conviction. Bai, crying while kneeling on the floor and kowtowing to the magistrate, said: “I really thank the current court and judge for helping me get vindicated.” Last month, in a rare acquittal, a court in southeastern Fujian province overturned the death penalty against a food hawker convicted of double murder. Nian Bin, who was sentenced to death in 2006 and had already served eight years in prison, was declared innocent of the fatal poisoning of two children and was immediately freed on August 22. Nian Bin’s case has drawn wide attention on China’s social media, largely due to the high-profile social media campaign Nian’s family launched, claiming he had been tortured to confess to the alleged crime. In March last year, a man in eastern Zhejiang province who was handed a suspended death sentence was acquitted also for lack of evidence. Last August, state legal authorities issued guidelines for judges, prosecutors and police on preventing wrongful convictions. The guidance said any legal practitioners or law enforcers who torture suspects into admitting crimes or concocting evidence would be severely punished. And last week, China’s top prosecutor Cao Jianming, chief of the Supreme People’s Procuratorate, declared wrongful convictions as the biggest challenge confronting the country’s legal supervisory body. Cao blamed the “biased mindset of some judiciary officials” – the presumption of guilt and the emphasis placed on proving guilt rather than innocence – as factors in the problem. ”Illegal evidence should be excluded by law and for uncertain cases, [and] we should stick with the presumption of innocence,” he told an audience at the National Prosecutors College in Beijing. Cao cited two high-profile cases of false convictions, one against an Anhui man who served 17 years of a life sentence before being acquitted last year when a higher court ruled that the evidence against him was not enough for a conviction. The other case involved two truck drivers – a father and nephew – who were placed on death row for the murder of a 17-year-old girl in 2003. Last year, a Zhejiang high court ruled they were innocent as new DNA testing showed there was another possible culprit.

Hong Kong*:  Sept 1 - 5 2014

Hong Kong election rules could be here to stay, says top mainland official Li Fei (By Joyce Ng, Peter So, Jeffie Lam and Ng Kang-chung) Beijing's divisive framework for CE vote may extend past 2017 even if vetoed by local lawmakers - Chief Executive Leung Chun-ying and Li Fei attend the AsiaWorld-Expo briefing on the electoral framework yesterday. Beijing's conservative framework for Hong Kong's universal suffrage in 2017 could apply to elections beyond that year even if it is vetoed by local lawmakers, a top mainland official said in a warning that deepened pan-democrats' desperation. Li Fei's remark came as he explained to local community representatives the decision rolled out by the Standing Committee of the National People's Congress on Sunday for the city's first popular election to choose its leader in 2017. It also came as three international political and legal scholars told the South China Morning Post that the new reform framework was a far cry from international democratic standards. Li, chairman of the Basic Law Committee under the Standing Committee, was asked at a press conference whether the framework for the 2017 election would be re-tabled and applied to elections beyond that year, if it was vetoed by the Legislative Council. "It has been considered," Li said. "The decision has stipulated the term 'starting from 2017', meaning that the election method for universal suffrage in 2017 and beyond should also be based on this framework." But he also said amendments could be made in accordance with the "actual situation" in the future and consensus in society. The Sunday decision allows only two or three candidates. Aspirants will first need approval from a simple majority of a 1,200-strong nominating committee before going to the public vote - a high threshold likely to block pan-democrats from running. Meanwhile, four of the major chambers of commerce - the Chinese General Chamber of Commerce, Hong Kong General Chamber of Commerce, Chinese Manufacturers' Association and Federation of Hong Kong Industries - welcomed the Standing Committee's ruling. CMA chief executive officer Adeline Wong and FHKI chairman Stanley Lau Chin-ho both said pan-democrats should look at the issue pragmatically. A CMA delegation will visit Beijing today to meet senior cadres. Tycoon Li Ka-shing reiterated that "every effort for democracy will not be a vain struggle".

 China*:  Sept 1 - 5 2014

Chinese shop for property abroad as domestic market cools (By Peggy Sito Chinese investors have shown keener interest in buying properties outside their home turf, where the property market has been suffering from a slowdown, plagued by high inventories and tight financing. And wealthy Chinese have emerged chasing ultra-luxury properties offshore, not just ordinary homes, property consultants said. According to international property consultancy Knight Frank, Chinese buyers accounted for 10.2 per cent of the newly built residential market in prime central London for the year to July 31, double the 5.1 per cent a year ago. Average spending rose to £1.07 million (HK$13.8 million) from £839,000. “Five years ago, they were not really in the market. Three years ago, they were at the tip of the market. But now they are in the marketplace,” said Liam Bailey, global head of residential research at Knight Frank. And there is a new phenomenon: ultra-high-net-worth Chinese buyers chasing luxury homes. Citing transactions handled by Knight Frank as an example, Tim Hyatt, the firm's head of lettings, said it sold seven properties for over £20 million each. Wealthy Chinese buyers bought two super-luxury homes in June. “There is an emergence of ultra-high-net-worth Chinese buyers in the market,” Hyatt said. Hyatt said prime central London property prices have risen at an annual rate of around 7 per cent, and prime outer London also saw growing price momentum. While the pace of growth may slow, transactions remain healthy, Hyatt said, suggesting investors take a longer-term view when buying in London. The trend of Chinese buying offshore is expected to accelerate as deflation in the mainland’s property market continues to accelerate. According to China’s National Bureau of Statistics, 64 out of 70 cities recorded a month-on-month drop in July, with an average decline of 0.93 per cent, the most significant decrease ever. Given the structural imbalance between supply and demand, the slowdown in the mainland property market will continue, analysts said. London is not the only market Chinese or ultra-high-net-worth Chinese are targeting; US markets such as California are also popular. “Chinese buyers are among the top international buyers in our area right now. I have shown my high-end listings to countless Chinese buyers, almost all of whom are looking for second homes,” said Sally Forster Jones, president of Beverly Hills-based Aaroe International Luxury Properties. Chinese investors have topped the list of foreigners buying property in the United States, accounting for almost a quarter – US$22 billion – of the US$92.2 billion spent by foreign buyers in the US real estate market, a survey by the National Association of Realtors released in July showed. Irvine, California, and Los Angeles’ San Gabriel Valley were some of the most attractive housing markets owing to their Chinese immigrant communities. “Most are looking for properties in prime areas, and some are looking close to schools their children may be attending,” Forster Jones said. “Most buyers are looking for new properties – new constructions or high-end remodels – properties that require very little to no work.” Chinese buyers are also looking for development opportunities. They are looking to invest in prime areas where they see potential for appreciation and return on their investments. “I have closed several recent deals with Chinese buyers ranging from US$800,000 to about US$20 million,” Forster Jones said. Instead of waiting for the wealthy Chinese to come, some agents have decided to knock on their doors. The Miami Association of Realtors, the largest local real estate association in US, will visit Beijing and Shanghai next month to introduce the city and its properties to mainland Chinese. Participating agents and developers will represent the majority of projects planned in Miami, Teresa King Kinney, chief executive of the group, said. “While China did not figure in the top list of countries investing in Miami in 2013, they are in eighth place for the first half of 2014, according to the Miami Association of Realtors multiple listing service,” Kinney said. What are mainland Chinese’ concerns, apart from the market outlook? “I had a very interested Chinese buyer,” Forster Jones said. “One of their main concerns was the street number, which was considered an unlucky number. We had to work with the city to see if it was possible to change the street address before they would consider the property further.”

Hong Kong*:  Aug 25 - 31 2014

Universal suffrage for 2017 election should be approved in Beijing ‘on Wednesday’ (By Tony Cheung in Beijing and Joyce Ng) Members of top legislative body praise Leung Chun-ying's report on political reform, as the chief executive and Occupy Central's Benny Tai clash in Hong Kong - Beijing’s top legislative body should give preliminarily approval on Wednesday for Hong Kong to elect its next leader by “one man, one vote”, according to local deputies to the National People’s Congress speaking in Beijing today. NPC deputy Ip Kwok-him also said the details of political reform – including highly contested issues such as the nomination threshold for candidates – will be discussed at tomorrow’s meeting, after which a report will be drawn up by senior figures. In Hong Kong, Chief Executive Leung Chun-ying said that reform does not have to meet any international standards according to the Basic Law. Leung pointed out that many aspects of the mainland-Hong Kong relationship – such as the currency peg to the US dollar – are unique to the territory. But legal academic and Occupy Central co-founder Benny Tai Yiu-ting later argued that Leung had misunderstood. Article 39 of the Basic Law says that the International Covenant on Civil and Political Rights remains in force in Hong Kong after the handover, Tai said. “[The covenant] says every citizen must have equal voting rights,” he added. Leung had said that granting foreign permanent residents the right to vote, as Hong Kong does, was also not the international norm. “If the [chief executive] election in 2017 must fulfil international standards, should we deprive foreigners who are among the 5 million qualified voters of the right to universal suffrage?” he said. In a large number of developed nations, permanent residents who are not citizens have limited voting rights, but once someone becomes a citizen they would have full voting rights in most countries. Leung attempted to offer further examples to support his argument. “The Basic Law requirement that the person elected as chief executive must then be appointed by the central government – this does not fit international standards. “Hong Kong enjoys financial independence and need not contribute to the central government’s treasury. This is the privilege granted by the central government to Hong Kong... This does not fit international standards either,” he said. Leung also referred to the fact that Hong Kong and the mainland use different currencies. The pro-democracy camp have argued that the model for the 2017 election must meet international standards for universal suffrage, meaning no unreasonable restriction could be placed on running or voting in the election. The model should also provide voters with a genuine choice between candidates. Occupy plan to stage a mass sit-in if the official plan for the election does not offer genuine choice. Leung said Occupy would be “counterproductive” to achieving universal suffrage. In Beijing, NPC deputy Maria Tam Wai-chu said members of the NPC Standing Committee had agreed with the report on political reform that the chief executive had delivered last month. The report was intended to summarise opinion in Hong Kong about reform, but Leung was accused of downplaying or ignoring non-establishment views. “The NPCSC members who spoke in the morning agreed … that he had explained Hong Kong’s situation comprehensively,” Tam said. Ip and Tam were speaking after sitting in on the Standing Committee’s first group discussions this morning. The committee is expected to lay out a framework for reform by the end of its meetings on Sunday. “I think it’s likely that a report will be made in the plenary session tomorrow on the detailed content of the resolution,” Ip said – referring to a “draft decision” to be prepared by the NPC Chairmen’s Council, which consists of the chairman Zhang Dejiang and the 12 vice-chairmen. About 1,000 people have been invited to attend a briefing to be held at the AsiaWorld-Expo in Lantau next Monday where the Standing Committee’s decisions will be explained. Those invited include legislators, chairmen and vice-chairmen of District Councils and the city’s deputies to the NPC and the Chinese People’s Political Consultative Conference. It is understood that the Beijing officials will meet senior government officials and executive councillors in a separate briefing at the government headquarters in Tamar that afternoon. 

 China*:  Aug 25 - 31 2014

No need to fear Beijing’s white paper, says top British judge Lord Neuberger - Call for judges to be patriotic dismissed as consistent with present oath of allegiance (By Stuart Lau Lord David Neuberger, President of Britain's Supreme Court and non-permanent judge of Hong Kong's Court of Final Appeal, delivers a speech at the FCC at Central. Photo: Sam Tsang. The UK Supreme Court’s president, who also sits on Hong Kong’s top court, has dismissed worries over demands in Beijing’s white paper for local judges to be patriotic, saying the requirement is “not inconsistent” with judicial independence. “I wonder if there is anything to worry about in the white paper,” Lord David Neuberger said in a speech at the Foreign Correspondents’ Club on Tuesday. Neuberger, a non-permanent judge on the city’s Court of Final Appeal since 2009, said judges were expected to be patriotic to the extent that they took an oath of allegiance. “I took an oath to bear allegiance to the Hong Kong Special Administrative Region of the PRC,” he added. “Judicial independence is not inconsistent with judicial patriotism. The way in which judges demonstrate their patriotism is by an irrevocable and undiluted commitment to the rule of law.” The way in which judges demonstrate their patriotism is by an irrevocable and undiluted commitment to the rule of law. Neuberger’s position stood in contrast to the cautious attitude displayed by Andrew Li Kwok-nang, chief justice for 13 years before he stepped down in 2011. Li said in an article this month that the patriotism referred to in the white paper had been widely perceived as meaning “supportive of and cooperating with” the central and local governments, and protecting their interests. He said judges should not be pro or anti anyone “under the principle of judicial independence”. The present chief justice, Geoffrey Ma Tao-li, has said he shared Li’s views. Until Tuesday, other serving judges had remained silent on the issue. Neuberger, 66, said he saw “no present problem” with the city’s rule of law. He later added that he “might resign” from the Court of Final Appeal if he felt the rule of law was undermined. The white paper, released in June, drew some 1,800 lawyers onto the streets in protest amid fears that the rule of law was being jeopardised. The paper also called judges “administrators” of Hong Kong, prompting worries about the separation of executive and judicial powers. On this, Neuberger said words “are slippery things”. “The word ‘government’ can be properly used to mean the executive arm of the government alone or all three branches of the government including the judiciary [and legislature]. The word ‘administration’ is similar.”

Hong Kong*:  Aug 22 - 24 2014

New tax of up to 2.5pc proposed to fund HK$3,000 a month pension for all Hongkongers (By SCMP - Phila Siu, Shirley Zhao and Emily Tsang) Official suggestion to Commission on Poverty is for a universal system with no means test - Every Hongkonger over 65 - rich or poor - would get a pension of HK$3,000 a month without a means test under a scheme put forward yesterday. A long-awaited government-commissioned study said the pension should be funded partly by contributions ranging from 1 to 2.5 per cent of employees' salaries, paid by both employers and workers. The government would need to inject HK$50 billion but an additional profits tax - as groups such as the Federation of Trade Unions proposed - would not be required. The study was headed by University of Hong Kong academic Nelson Chow Wing-sun. "If the government can make a decision by 2017 [on whether to introduce the scheme], then I would say that my effort on the study had not been wasted," Chow said after a presentation to the Commission on Poverty yesterday. Under the suggested "payroll old age tax", those earning less than HK$10,000 a month and their employers would contribute 1 per cent of the worker's salary. For those paid less than HK$6,500 a month, employers would contribute 1 per cent and workers would be exempted. For salaries of HK$10,000 to HK$20,000, both would pay 1.5 per cent and for HK$20,000 to HK$120,000 the amount would be 2.5 per cent. READ: Six ways Hong Kong could fund a universal pension scheme But the proposal has some limitations. The pension pool is expected to go into annual deficit from 2026. By 2041 only about HK$13.5 billion would be left. The influential Federation of Hong Kong Industries said Chow's proposal would be a "very huge burden" for employers to bear. Chief Secretary Carrie Lam Cheng Yuet-ngor, who chairs the commission, said it needed more time to study the report. Lam said she "could not commit the commission to any timetable for the time being except to assure you that the commission will … convene another meeting in due course". Federation of Hong Kong Industries chairman Stanley Lau Chin-ho said employers were already required to make MPF contributions. "Why do we need to make another contribution?" he asked. "Without a means test, [the billionaire] Li Ka-shing will also get the pension. Does he need it?" Chow's report also included an analysis of five other proposals including those from the Alliance for Universal Pensions and the Federation of Trade Unions. The report said the alliance's proposal would record a deficit from 2028 but still have HK$127 billion left by 2041. The federation's proposal would record a deficit in 2017 and the money would be used up by 2030. The reports both suggested an additional profits tax and transferring part of the Mandatory Provident Fund contributions to the pension scheme. "A concern is the impact on public finance," Lam said. "Of the four proposals that do not have a means test, there will be sustainability problems by 2041. The money coming into the scheme will be less than the money to be given away." Of the two proposals that did require a means test, the annual additional average expenditure for the government would be HK$8.1 billion and HK$15.3 billion. "That is obviously a huge burden for public finance," Lam said. Commission member Frederick Fung Kin-kee, of the Association for Democracy and People's Livelihood, said there should be an additional profits tax. "We have been talking about retirement protection for 30 years. Now the government has huge surplus … if it is not introduced now, it may be impossible to do so in the future," he said. FTU lawmaker Tang Ka-piu said he welcomed any proposals as long as the elderly received HK$3,000 a month. But he believed an additional profits tax would be more sustainable. New People's Party chairwoman Regina Ip Lau Suk-yee said the best option would be one under which the government met the expense, without needing to adjust the tax system.

 China*:  Aug 22 - 24 2014

Bosses at China's state-owned enterprises face pay cuts of up to 50pc (By SCMP) Xi's bold reform plan aims to shake up top management at major state-owned enterprises - Officials in charge of China's state-owned enterprises face pay cuts of up to 50 per cent and new job descriptions under a reform plan approved by President Xi Jinping. Xi said at a meeting on Monday that China needed to speed up reform targeting the salaries of top executives at SOEs. He also approved a seven-year overhaul of their management structure. Sources say the reform plan involves two steps. The first is to cut the salaries of top executives at major SOEs, particularly those in finance and banking. Some may have to take a 50 per cent pay cut. The second step is to gradually change their job responsibilities. The government-appointed officials will probably join the board of directors. The day-to-day operations will be handled by senior managers recruited from outside, with salaries in line with international standards. The new model will be similar to that of the MTR Corporation in Hong Kong. As the major shareholder, the Hong Kong government appoints three representatives to the board of directors to ensure the firm follows its policy direction. The day-to-day operations, however, are run by top managers hired through an open recruitment process. The reform is to address public discontent over the ambiguous status of top SOE managers, particularly those in charge of the so-called central enterprises directly under the State Council. Most of these top executives carry a vice-ministerial or ministerial-level ranking that comes with perks and privileges. At the same time, they are paid like top Western business executives and earn many times more than their fellow officials. There has been criticism that the high salaries are unwarranted because many SOEs operate as monopolies or near-monopolies. An executive of an energy industry SOE said the head of a central enterprise in his field could make one million yuan (HK$1.26 million) a year. Those working for banking and finance central enterprises could earn more. Jiang Jianqing, the chairman of the Industrial and Commercial Bank of China, was paid nearly two million yuan in 2013. In comparison, the annual salary of some ministry-level party cadres is about 200,000 yuan. Yet some top executives point to their counterparts in the West and complain their incomes are too low. Former premier Wen Jiabao pledged in 2002 when he took office that he would push for reform and cap the salary levels of top SOE executives to "no more than 12 times that of an average staffer" in the same company. In 2009, Wen made the promise again but changed the cap to "no more than 30 times". By the time he stepped down in 2012, no reform had been carried out. Professor Li Shi, executive dean of the China Institute for Income Distribution at Beijing Normal University, said talk about such reform was "always there" but resistance had been too strong in the past. "Now Xi has specifically brought this up again … Resistance will always be tough, but Xi has built up his authority from the anti-graft campaign. If he insists on it this time, I think this reform [plan] will succeed," Li said.

Hong Kong*:  Aug 19 - 21 2014

Jackie Chan’s son Jaycee arrested in Beijing drug bust with Taiwanese actor Kai Ko (By Wu Nan ackie Chan's son, Jaycee Chan, and Taiwanese actor Kai Ko have both been detained by Beijing police for drug-related offences, mainland media reports said on Monday. Jaycee Chan, also known as Fang Zuming, was detained by Beijing police together with his friend, 23-year-old Taiwanese movie star Kai Ko Chen-tung, the Beijing News and Beijing Times newspapers reported on Monday. In a statement released on its official Weibo account on Monday evening, the Beijing public security bureau said that police officers detained a number suspects for drug use last Thursday in Dongcheng District, including a 32-year-old Hong Kong actor with the surname Chan and a 23-year-old Taiwan actor named Ko. These descriptions seem to match Jaycee Chan and Kai Ko. Urine tests on both Chan and Ko have returned positive results for marijuana, and both actors have confessed to using it, the police statement said. Police also recovered more than 100 grams of marijuana from Chan's home, it said. The police statement says Chan has been put under criminal detention for the suspected crime of "providing a shelter for others to abuse drugs," which carries a maximum prison term of three years if a suspect is convicted. Ko, on the other hand, would receive the much less severe penalty of "administrative detention", which lasts up to 15 days. Two other local residents, a 36-year-old assistant and a 33-year-old suspected dealer, were also detained, according to the statement. Chan and Ko join a growing list of celebrities – including mainland, Hong Kong and Taiwanese actors – who have been arrested in Beijing’s widening campaign targeting celebrity drug abuse over the last few years. Chan, the son of Jackie Chan, Hong Kong movie star and a current member of the Chinese People’s Political Consultative Conference, won a nomination for best supporting actor by the mainland’s Hundred Flowers Awards for his popular role in the 2010 film, Mulan: Rise of a Warrior. It has been reported that Jackie Chan has invested in land, property and in the film industry in China, as well as promoting mainland charities. Jaycee Chan has played some important roles in mainland-produced films, such as The Ideal City directed by famous writer Hanhan in 2012. The father and son duo have landed some lucrative advertising contracts in the mainland, too. In August 2008, they represented Yuan Ye tea brand launched by Coca-Cola. Ko, 23, the 2011 Taipei Golden Horse Film Festival Best New Performer winner, gained fame for his role in the film You Are the Apple of My Eye and drew wider popularity in China after he performed in 2013’s box office smash Tiny Times, directed by celebrity writer Guo Jingming. Ko’s Sina Weibo account now attracts more than 32 million followers. The People’s Daily online edition said that Ko had once appeared in an anti-drug public service advertisement in 2012 , in which he vowed never to use drugs. Jackie Chan was pointed as an anti-drug ambassador by China’s National Narcotics Control Commission in 2009. In the past six months, several entertainment artists have been arrested for drug use, including mainland singer Li Daimo, director Zhang Yuan, actor Zhang Mo and screen writer Ning Caishen. In July, Hong Kong actor Roy Cheung was also arrested for using marijuana. Last Wednesday, forty-two artist management agencies signed an anti-drug agreement with local police in Beijing, claiming that they would refuse to hire artists who used drugs in the future, in a bid by authorities to tackle drug-use within the entertainment industry. One Beijing-based director said that he was investing in a film which was considering using Kai Ko as the lead actor. “We can no longer hire him, since he’s now been arrested for drug use,” he said. “However, the anti-drug agreement contains discrimination. It should not become the only rule to deny an actor’s talents and chances,” he added, preferring not named. The Beijing police could not be reached for comment on Tuesday.

 China*:  Aug 19 - 21 2014

Xi Jinping calls for new style of media organisation (By Teddy Ng in Beijing Reform initiative aims to create groups that are 'diversified', 'advanced', and 'competitive' - Xi Jinping shakes hands with Prince Albert II of Monaco in Nanjing. President Xi Jinping called for the country to build a homegrown new media industry yesterday as he chaired the powerful central leading group for deepening reform. The meeting came after the conclusion of the annual informal closed-door talks among Communist Party leaders at the seaside resort of Beidaihe in Hebei , and ahead of a series of key events including the 110th birthday anniversary of late leader Deng Xiaoping and the party's fourth plenary session in October. Xinhua reported that various other reform initiatives were discussed at yesterday's meeting, including regulating the pay of top executives at state-owned enterprises. Xi also chaired a meeting of the leading group for financial and economic affairs yesterday, at which he called for a faster adjustment of the economic development pattern. A report on promoting the integration of traditional and new media was approved at the reform group meeting, calling for measures to be taken to develop new media organisations that are "diversified", "advanced", and "competitive", Xinhua reported. "Several new media groups that have strength, communication capacity, credibility and are influential should be established," Xi was quoted as saying. Authorities have to "properly integrate and manage traditional and new media, ensuring the integration is heading in the right direction," Xi said. New media is hugely popular in China. Nearly 400 million monthly active users were reported in the first quarter for the instant messaging platform WeChat, where more than 5.8 million content providers are disseminating information on its public accounts. Many journalists also use the platform. The Shanghai United Media Group, which publishes the Dongfang Daily, last month launched The Paper, which is available online and through a mobile phone app and WeChat. Hu Yong , a journalism professor at Peking University, expected the central government would give political and financial support for more new media platforms as the impact of traditional media dwindled. Qiao Mu , an associate professor at Beijing Foreign Studies University, said the impact of new media would be limited because authorities were tightening their grip over all platforms. Earlier this month, the State Internet Information Office said only news agencies and news websites were authorised to publish original news content on instant messaging platforms. "The authorities still want to maintain tight control over ideology. The promotion of new media will not lead to any real change in the nature of the media industry," Qiao said.

Hong Kong*:  Aug 16 - 18 2014

Occupy Central activists will face quarter of Hong Kong's 28,000-strong police force (By Clifford Lo and Samuel Chan) 7,000 officers expected to be on hand to deal with possible protest in Central this month - Supporters march to Police Headquarters for Chater Garden to support vigorous law enforcement by the police. At least a quarter of the 28,000-strong police force will turn out to handle the possible chaos should the Occupy Central movement for democracy carry out its threat to block streets in the main business hub later this month, sources close to the matter say. The deployment would be the largest police operation since the city mobilised 9,000 officers during six days of World Trade Organisation meetings in 2005. It would also be a near doubling of the police numbers deployed during the July 1 democracy march this year and the overnight sit-in on Chater Road on July 2. The police plans come amid warnings by Occupy organisers in recent days of bringing Central to a standstill should the National People's Congress Standing Committee arrive at a framework for the 2017 chief-executive election later this month that does not offer a genuine choice of candidates for voters. While police vacated their posts to converge on Central, the force would assign about 1,000 auxiliary officers and hundreds of retired officers - recently hired as station assistants - to maintain normal policing services, sources said. The Police College in Wong Chuk Hang will be turned into a temporary detention centre, with room for 3,000 prisoners. One police source said the force was discussing whether the Correctional Services Department could provide a facility to house detainees. "The move is to prepare for the event of mass arrests if our temporary holding centre fails to accommodate all detainees," he said. The Transport Department would help plan traffic diversions if traffic was paralysed, while the fire services and paramedics would also be on standby. Frontline officers had been told to cancel their leave on August 31, and during the Mid-Autumn Festival from September 7 to 9, another police source said. It is understood that 7,000 to 8,000 officers would be involved - including the entire police tactical unit (PTU) and officers from traffic divisions, patrol sub-units and emergency units. PTU teams are expected to be on standby at various positions in Central. "They will swoop into action if radical activists try to paralyse traffic on major roads or occupy infrastructure," another source said. "We are preparing to deal with any eventuality." The organised crime and triad bureau will also be involved.

 China*:  Aug 16 - 18 2014

Shenzhen company develops kit to test for Ebola virus, report says (By Stephen Chen PLA scientists are helping the company synthesise a chemical solution that would change colour in the presence of the deadly virus - Customs and quarantine staff members hand out brochures about preventing Ebola virus disease to passengers arriving at the airport in Nanjing. A Shenzhen-based company has developed a field test kit that can quickly identify the Ebola virus, People’s Daily reports, as China is trying a range of countermeasures against the possible spread of the deadly virus on the mainland. BGI, the world’s largest genomics research institution, is using technical assistance from People’s Liberation Army’s Academy of Military Medical Sciences to synthesise a liquid chemical solution that would change colour if the unique nucleic acid of the Ebola viral strain is present. The state newspaper said the test kit could be massively deployed when the virus was detected on the mainland. The test kits are being produced in Wuhan, Hubei, said a BGI spokeswoman. Major cities such as Beijing have 10,000 sets each. However, mass production of the kits has not begun because they still need final approval from national food and drug safety authorities, said the spokeswoman, who asked that her name not be used. “The US FDA [Food and Drug Administration] issued a special permit for an Ebola test kit last week,” she said. “We have submitted a request for special approval to the China Food and Drug Administration with hope that they will respond as efficiently as the US FDA to this public health emergency. “If the infection zones request it, we can begin mass production.” BGI had been working with military research institutes on the Ebola virus for years, which enabled it to come up with a test kit shortly after the outbreak in West Africa, the spokeswoman said. Meanwhile, the National Centres for Disease Control and Prevention (CDC) has obtained key Ebola virus genes for analysis and vaccine development from Genewiz, a US-based genomics service company. The genes were synthesised at the company’s branch in Suzhou, Jiangsu, under the commission of the CDC and the Chinese Academy of Sciences, according to a statement on Genewiz’s website. Genewiz president Dr Amy Liao said in the statement that “synthesising the Ebola virus genes is the foundation for studying the pathogenic function and crystal structure of the viral proteins”. “This information can help researchers gain a better understanding of the pathogenesis and transmission mechanisms quickly,” she added. In Beijing, 10 ambulances with quarantine capability stationed at the Beijing Emergency Medical Centre were on 24-hour standby to transport suspected Ebola infected patients, according to the Beijing Morning News. Traffic authorities will set up an emergency lane to help transport these patients, the municipal government said. Two hospitals, Youan and Ditan, have been designated to admit Ebola victims. Suspected patients would be isolated and diagnosed by a special committee of medical experts. Once confirmed, the patients would receive various treatments, including Chinese herbal medicine. The municipal government also said it would intensify medical checks on travellers from infected regions in West Africa and closely monitor their health conditions. A military research institute is using the test kit to screen some suspected patients from Africa. The testing procedure, from sample taking to result analysis, takes three to four hours.

Hong Kong*:  Aug 13 - 15 2014

Hutchison disposal confirms Li land bias - Hutchison Whampoa is controlled by the Cheung Kong Group, and headed by Li Ka-shing, Asia’s wealthiest man, who has been nicknamed “Superman” because of his investment prowess. Its operations include ports, with property and hotels, retailing telecommunications (Hutchison Telecommunications International) and infrastructure (Cheung Kong Infrastructure). (By SCMP Jasper Moiseiwitsch and Yvonne Liu) Companies in Li Ka-shing’s empire are set to sell Shanghai property assets worth almost HK$6 billion, bringing the value of disposals made by the tycoon on the mainland and in Hong Kong since August 2013 to about HK$25 billion. The deals, through Li’s Hutchison Whampoa and real estate investment trusts he partly owns, are part of a concerted strategy of cutting exposure to real estate and raising funds to deploy elsewhere. “This is a pretty consistent trend across the group. To me, it’s not a coincidence,” Danie Schutte, CLSA’s deputy head of Asia research, told the South China Morning Post. “They [Li-led firms] have not purchased any land in Hong Kong or China for three years. Victor Li [deputy chairman of Cheung Kong (Holdings) and son of Li Ka-shing] talked about it and said they are cashed up and ready to buy, [but] they clearly think prices will come down.” Schutte said Cheung Kong typically maintained a land bank of five to six years in Hong Kong, but these days its land reserves would only last about three to four years. The firm’s land bank on the mainland had dropped from 200 million sq ft to 160 million sq ft, he added. Cheung Kong is the main property arm of Li's group of companies. Hong Kong-listed Hutchison Harbour Ring, which owns office towers in Shanghai, said in a stock exchange announcement that parent Hutchison Whampoa was seeking to sell its 71.36 per cent stake in the firm to Shenzhen-listed Oceanwide Holdings for between HK$3.5 billion and HK$3.8 billion. Meanwhile, ARA Asset Management, a manager of real estate investment trusts partly owned by Li, is selling International Capital Plaza in Shanghai for 1.54 billion yuan (HK$1.94 billion), according to a report in the Beijing Times. Hutchison Harbour Ring shares jumped 35 per cent yesterday despite the fact that, at the midpoint, the selling price comprised a 12 per cent discount to the firm’s pre-announcement equity capitalisation of HK$5.8 billion. The discrepancy was explained in the announcement, alongside the offer, of a special dividend of 20 HK cents per share. The offer values Hutchison Harbour Ring at 55 to 598 HK cents per share, implying a valuation of 798 HK cents at the top. The stock closed yesterday at 88 HK cents. Companies in which Li’s family has stakes have sold nearly HK$25 billion in assets on the mainland and in Hong Kong since August last year. Hong Kong developers were well known to time property markets and the Li-initiated disposals suggested the Hong Kong and mainland property markets were at a peak, particularly with regards to land prices, said analysts. “For the moment, they [Cheung Kong] have a land bank and projects to sell. While property prices are still rising, in three or four years, when various projects are completed, prices may no longer be rising,” said Alan Jin, who covers Cheung Kong for Mizuho Securities Asia. Among recent transactions, Cheung Kong in 2013 sold Kingswood Ginza, a retail shopping mall in Hong Kong, to Fortune Real Estate Investment Trust for a profit of HK$2.7 billion, and sold a 70 per cent stake in Sheraton Shenyang Lido Hotel on the mainland in January 2012, reaping a profit of HK$1 billion. Through Cheung Kong, Li owns a 7.84 per cent stake in ARA Asset Management. The largest shareholder is Singapore-based Straits Trading, which owns 20.1 per cent.

 China*:  Aug 13 - 15 2014

China asks Interpol to help in chase for fugitive businessman accused of illegal fundraising (By Reuters in Beijing) Zhengling Group's chief Liao Rongna suspected of unregulated raising of billions of yuan - A fugitive Chinese businessman suspected of raising billions of yuan illegally is being hunted by judicial authorities, who are seeking help from Interpol, according to Xinhua. The authorities have asked Interpol to issue a Red Notice for the arrest of Liao Rongna, 58, the chairman of private car and machine manufacturer Zhengling Group. Liao was once listed among the wealthiest individuals in China by Hurun’s Rich List. Chinese authorities have also asked the international police organisation to arrest Liao’s wife, Xinhua reported. Interpol uses red notices to inform its 190 member countries that an arrest warrant has been issued for an individual by a judicial authority. The notice seeks the location and arrest of wanted persons with a view to extradition or similar lawful action. Liao is the latest example of a Chinese businessman being sought by police for illegal fundraising. Private fundraising, which includes gathering deposits and selling loans outside the formal banking sector, is common but illegal in China as it escapes regulation. Zhengling Group raised more than 7 billion yuan (HK$8.8 billion) in illegal bank loans and another 3 billion yuan in individual loans, according to local media reports published in April and May, which would make it the largest case of illegal fundraising in the region. Local media reports emerged earlier this year saying that Zhengling Group had problems repaying its borrowing, but the company as late as May characterised the reports as “rumour” and “speculation” intended to “mislead the public”. Liao’s company, based in the southwest Guangxi Zhuang Auotonomous Region, was not immediately available for comment. Xinhua said police found more than 1,500 loan contracts, involving about 3.2 billion yuan, as part of its investigation. As many as 600 creditors have registered with local public security agencies, and more creditors are expected to emerge, the news agency said. Zhengling Group said its total assets reached 26.54 billion yuan as of July 31 last year, while group debts amounted to 8.52 billion yuan. In March, the owner of a troubled property developer in China’s coastal Zhejiang province was detained after amassing loans of 3.5 billion yuan. Liao appears on Interpol’s website as “wanted by the judicial authorities of China for prosecution/to serve a sentence”.

Hong Kong*:  Aug 10 - 12 2014

More than half of Hongkongers would accept 2017 one-man, one-vote with unsatisfactory nomination, says survey (By Joyce Ng Survey finds more than half of Hongkongers would accept universal suffrage even if the nomination process was unsatisfactory - More than half of Hongkongers would accept a one-man, one-vote election for chief executive in 2017 even if they were not happy with the method for choosing candidates, according to a survey. The survey also found views were getting ever more polarised: a willingness to accept an unsatisfactory election system has grown among residents who do not identify themselves with either the pro-establishment or pan-democrat camps, while such readiness among pro-democracy respondents has dropped. The survey, commissioned by a 15-member group of businessmen and professionals, was released on the same day that Zhang Xiaoming , director of Beijing's liaison office in Hong Kong, reasserted the central government's "rights" over the city to prevent disturbances. It also coincided with the launch of a new campaign by the Hong Kong government to call on people to set aside disputes and secure the 2017 te first. "While the pan-democrats are getting tougher and are ready to reject an unsatisfactory reform package, there's a sign those in the middle ground are starting to share pro-establishment views," said Shih Wing-ching, a member of the Concern Group for Public Opinion on Constitutional Reform and founder of property agency Centaline. Shih referred to one question in the phone survey, conducted by Lingnan University researchers, on whether people wanted a "one-person, one-vote" election in 2017 if the nomination procedure was not satisfactory. Of the 1,017 who responded, 55 per cent said yes and 36.5 per cent said no. The rest disagreed with either option or were unsure. The results were similar to a survey the researchers conducted in May, asking mostly the same questions. But the breakdown revealed polarising views. The survey found 61.3 per cent of unaligned "middle-ground" respondents said yes to that question, up from 50.6 per cent in May. Among those who identified with the pan-democratic camp, 48.2 per cent said yes, down from 56.5 per cent. Fifty-eight per cent of pro-establishment respondents would accept an imperfect reform package, up from 53.2 per cent. The group called on all sides to stay at the negotiating table to bridge the gap. The survey was released two weeks ahead of a decision by the national legislature on the direction of Hong Kong's reform. It was conducted in late July. Democratic Party lawmaker Albert Ho Chun-yan said: "When you talk about whether to 'pocket' an unsatisfactory reform package first, it is a matter of principle and not a mere matter decided by a majority view." Civic Party chairwoman Audrey Eu Yuet-mee said whether to accept the reform package "would ultimately depend on what is offered on the table", which is unclear at this stage.

 China*:  Aug 10 - 12 2014

Xi Jinping's anti-corruption drive faces test at Beidaihe party meeting (By SCMP: Keith Zhai and Cary Huang) Analysts say Beidaihe summit of nation's elite will be dominated by president's war on graft, and may well determine if campaign succeeds - This week's gathering of the Communist Party elite in Beidaihe will test President Xi Jinping's authority to hold the party together as senior cadres and interest groups feel the heat from his sweeping anti-corruption campaign, analysts say. The meeting of party elders and the leadership at the seaside resort for the traditional low-key gathering comes after the president reportedly acknowledged that his two-year-old drive against graft faced challenges. "The two armies of corruption and anti-corruption are in opposition and are at a stalemate," Xi said, according to state media reports earlier this week. The reports did not elaborate, but analysts and insiders suggested the widening campaign had damaged interest groups with links to some of the party elite, and Xi had clearly realised that it was make-or-break time in the fight against them. Renmin University political science professor Zhang Ming said the situation was complicated, and different parties might hit back in Beidaihe. Zhang said the anti-graft campaign would dominate the informal summit, as leaders were expected to discuss how far the crusade would go, or if any "bigger tigers" would be caught. "I think the announcement [last week of the formal investigation into former security chief] Zhou Yongkang suggested that Xi did not want to discuss the case at the meeting, but move forward on other possible major corruption cases and issues," he said. "At the centre is what kind of rule of law the leaders want." Last week, the Politburo said the annual plenary session in October of the party's 205-member decision-making Central Committee would discuss ways to advance the rule of law. It also announced an investigation into Zhou, who retired from the Politburo Standing Committee in 2012 and is the most senior official to be brought down by graft in modern history. Xi broke an unwritten rule that incumbent and retired Standing Committee members were immune from corruption investigations, intensifying speculation that some affected political groups were trying to challenge his authority. Jonathan Holslag, research fellow at the Brussels Institute of Contemporary China Studies, said Xi's biggest challenge was that he was becoming isolated. "Business leaders are losing patience with his economic policies. The military complains about being stripped of some of its privileges. The party is getting increasingly plagued by distrust and the public is starting to feel that the easy times are over." One aim of the Beidaihe summit was to reduce behind-the-scenes power struggles and reunite the party under Xi ahead of the annual plenary session, the analysts said. Steve Tsang, director of the China Policy Institute at the University of Nottingham in Britain, said: "This is meant to deliver a powerful, effective and efficient Leninist party, to enable Xi to introduce the reforms he feels essential to secure the 'China Dream' of promoting a rich and powerful China under the leadership of the party and himself. "Whether this process of unrelentingly reinforcing the power of the party will gather a momentum of its own, so much so that it just keeps going, is an open question," Tsang added.

Hong Kong*:  Aug 7 - 9 2014

Chronic shortage of doctors in Hong Kong will not be met in medium term, report warns (By Emily Tsang University report warns that even with rising number of medical graduates in Hong Kong, city faces staffing shortage for years to come - The medical watchdog is under growing pressure to relax stringent licensing rules for overseas doctors after a government-commissioned study concluded that a chronic shortage of doctors "would not be resolved in the medium term", the South China Morning Post has learned. The study, carried out by University of Hong Kong researchers for the Food and Health Bureau, has not yet been released to the public. It is intended to assess demand for health professionals in the next 15 to 20 years so the government can draw up a strategy. There will still be a scarcity of doctors amid the increasing demand. "Even with the increase in the number of medical graduates starting from 2015, there will still be a scarcity of doctors amid the increasing demand [for] medical services," an official with access to the report cited it as saying. Public hospitals have struggled for years to fill vacancies as doctors are lured to lucrative private-sector jobs. The Hospital Authority has about 250 doctors' vacancies and an annual staff turnover of more than five per cent. But doctors' unions have long opposed lowering licensing requirements for overseas doctors. Some 90 per cent of the city's patients use public hospitals, but they employ just 40 per cent of doctors. Efforts to meet the shortfall have included adding places on medical courses at the two universities that train doctors, the University of Hong Kong and the Chinese University. Some 320 graduates will join the workforce next year, rising to 420 by 2018. But the authority believes it will need 18,000 extra beds and 6,200 more doctors by 2041, when the government expects the city's population to have grown to 8.5 million. The findings come as the Medical Council considers easing licensing requirements for foreign doctors wishing to practice in the city, an idea that has sparked conflict with the doctors' union, the Medical Association. Council chairman Professor Joseph Lau Wan-yee told the Post that the council last month passed a resolution to exempt overseas doctors with specialist qualifications in fields including paediatrics and obstetrics from a clinical examination that forms part of the licensing exam. It is also considering exempting experienced foreign doctors from a mandatory 12-month internship at local hospitals. "We are now seeking legal advice on this matter since it may require legislative amendments," Lau said of the internship rule. Foreign doctors would still take a multiple choice test on their professional knowledge and an English language exam before being licensed. The Medical Association proposed reducing the internship to six months - provided the doctor agreed to work for three years in a public hospital. However, the council's legal advisers have cast doubt on that idea. Lau said the council has agreed to put the issue on hold for four months to seek further legal advice. Patients' Rights Association spokesman Tim Pang Hung-cheong said he welcomed the idea of more overseas doctors. But medical sector lawmaker Dr Leung Ka-lau argued importing doctors will not solve the imbalance in manpower between the public and private sectors. About 100 overseas doctors sit the council's licensing examination every six months, of whom about half pass. The Hospital Authority offers a one-year "limited registration" for overseas doctors on short term contracts, who are exempted from the full licensing exam. But since the contract lasts only a year, it has proved unattractive, with just six doctors signing up by November last year.

 China*:  Aug 7 - 9 2014

Newly constructed bridge offers relief for those trapped in Yunnan quake zone (By Nectar Gan Helicopters and airplanes also helping out rescue efforts for survivors as 72-hour critical period looms - Relief supplies were finally able to reach Yunnan’s worst-hit quake zone late last night after the construction of a steel bridge leading into Longtoushan township. Survivors trapped in the zone could also be carried out to safety. A previous bridge on the Longquan River had collapsed during the deadly magnitude-6.5 earthquake, hampering the transport of large amounts of aid and supplies. Rescuers could only carry goods into the quake zone by foot, Xinhua reported. After 40 hours of construction, the new 30-metre bridge, with a load limit of 15 tonnes, was completed at 10pm on Tuesday. Trucks were seen driving into Longtoushan one after another, while the injured were carried out in vans, Xinhua said. However, the road to the township might still experience congestion due to landslides after Sunday’s earthquake. The official death toll on Wednesday climbed to 598, with another 2,401 wounded. Helicopters and airplanes have also been deployed to help rescue efforts. The military in Chengdu, in neighbouring Sichuan province, sent helicopters carrying food, bottled water and tents to the disaster zones on Tuesday. There have been previous reports of dwindling water and food for those still stranded in the rubble, with some having to subsist on one potato each or to drink muddy water. Authorities had earlier on Wednesday called for volunteers to stay away from one of the disaster zones as traffic blocked supply routes and “substandard” relief goods flooded into the area, according to reports. Close to 30 injured people were brought to hospitals by helicopter, the director of Zhaotong’s Disease Control Centre told Xinhua. 

Hong Kong*:  Aug 4 - 6 2014

Retiring to the mainland is losing its lustre for Hong Kong seniors (Olga Wong Tens of thousands have retired to the mainland for a better life; costly health care and limited benefits are driving many back - The Kornlake Villa Resort in Dongguan offers luxury set amid 27 hectares, yet many residents have returned to Hong Kong for cheaper and better medical services. Woodlands and farm plots span the 27 hectares of Kornlake Villa Resort, a retirement community in the town of Zhangmutou near Dongguan. The resort is one of the many luxury estates built here in the 1990s to attract Hongkongers. There is space to farm, to garden, to dance and to practise calligraphy. Despite the beauty and sense of community, Father Joe, a retired Anglican priest, left to return to Hong Kong in July. Joe is one of tens of thousands of Hong Kong seniors who moved to the mainland in recent years seeking a better life in retirement than one in congested and expensive Hong Kong. But he and a growing number of seniors are coming home, unable to access affordable Western medical care or government subsidies on the mainland. "I couldn't imagine how I would be transferred across the border when I needed urgent treatment, not to say when [dealing with] my dead body," said Joe. He suffers multiple ailments - coronary heart disease, kidney failure and mild depression. He asked that his full name be withheld to protect his privacy. The number of Hong Kong elderly at Kornlake has dropped from 300 in 2008 to 103 today, the resort's chairman said. Some of those died there, but many left for Hong Kong to access better and less expensive health care. Thus, there's a conundrum for the Hong Kong government. The number of Hong Kong residents aged 65 or older is projected to grow by 161 per cent - from 980,000 in 2012 to 2.56 million in 2041. As more than 30,000 people aged 65 and up await nursing home beds, Hong Kong needs to handle a fast greying population. The government's steering committee on population policy is expected to develop policy recommendations later this year. One suggestion likely to be raised: encourage people to retire on the mainland. But as Joe and others have discovered, that's not so easy, as when retirees leave Hong Kong they also leave behind many of the benefits the city grants its seniors. Hong Kong citizens living on the mainland receive only limited financial benefits from the city and no medical benefits from either the city or the mainland. They are referred to as "the marginalised" in a mainland retirement study released by Hong Kong's Central Policy Unit in July. Encouraging Hong Kong's elderly to move to the mainland is "an option, given the scarce land resources in Hong Kong", said Alfred Chan Cheung-ming, a gerontologist who chairs the Elderly Commission. However, there are problems. "Supporting measures are lacking. Can older people receive medical services on the mainland at Hong Kong prices? Which authority should handle their bodies when they pass away?" About 110,000 Hong Kong retirees have moved to the mainland, according to 2011 estimates by the Census and Statistics Department, the most recent available. The department believes the real number could be higher because the survey did not take account of residents who had sold their properties in Hong Kong or did not stay for long periods in the city.

 China*:  Aug 4 - 6 2014

Rescuers race to find survivors of Yunnan quake as death toll mounts (By Associated Press in Beijing) Rescuers continued to search on Monday for survivors beneath toppled buildings after a powerful earthquake in a remote area of southwestern China’s Yunnan province killed at least 398 people. The 6.5-maginitude quake, which struck Zhaotong city, Ludian county, at 4.30pm on Sunday, also left 1,801 others injured and led to an emergency evacuation of about 230,000, Xinhua news agency quoted provincial officials as saying. China has mobilised more than 7,000 soldiers and police, in addition to 11,000 rescuers sent from local authorities, to help 1.08 million people affected, the agency said. Premier Li Keqiang arrived at Longtoushan township, the epicentre of the quake, in the afternoon after walking about 5 kilometres and observed a moment of silence, according to the local media. Aboard a plane to the region, Li convened a meeting with senior government officials and the People’s Liberation Army, telling them to make utmost efforts to save lives, the agency said. “Just in my neighbourhood, dozens of people died. I have no food from yesterday,” a man in the township told a Kyodo News reporter who entered Ludian on Monday morning. Longtoushan, a mountainous area around 25 kilometres from the central region of Ludian County, was the hardest-hit. Many of the homes that were flattened by the earthquake were made of brick. Transportation remains disrupted in the region, hampering rescue operations and the transport of relief supplies, including food, water, medicine and blankets. Rocks and bricks lay scattered on the road to the township from the central part, and some residents were carrying the dead by themselves. People in the county were filled with fear and exhaustion after a sleepless night. The weather agency has issued warnings to prepare for heavy downpours in the next several days, raising concerns about mudslides. “An intense earthquake suddenly happened,” a 50-year-old man said. “I could not sleep as the aftershocks continued ... Many people spent the night outside.” As of 4pm on Monday, the China Earthquake Administration said 467 aftershocks took place in the region, with four of them registering magnitudes of between 4.0 and 4.9. Of the 398, 319 died in Ludian, about 300 kilometres from the provincial capital Kunming, and 66 in adjacent Qiaojia County, according to Xinhua. The northeast of Yunnan, one of the poorest areas in China, is known as a earthquake-prone region. A magnitude 5.7 earthquake struck Zhaotong in September 2012, killing more than 80 people. The United Nations and many countries offered their condolences to China following the latest quake, the most powerful to hit the province in 14 years. “The United Nations stands ready to lend its assistance to efforts to respond to humanitarian needs created by the disaster and to mobilise any international support needed,” UN Secretary General Ban Ki Moon said in a statement released by his office.

Hong Kong*:  Aug 1 - 3 2014

Hang Lung offers more units at Long Beach (By Sophie Yu The response yesterday to Hang Lung's release of 40 units at its Long Beach project was so strong that the developer has decided to increase the size of the launch to 80 and adopt a ballot rather than its announced "first come, first served" policy. "There were about 300 people queuing on Saturday evening when I was at the office," said Kent Chui, a director of Ricacorp Properties. The statement from Hang Lung last week that it would offer discounts of up to 18 per cent on the first 40 units attracted so many potential buyers that the situation was "out of control", Chui said. "It's too messy, and the sales regulations were not carefully designed," he said. For example, it was not clear what the situation would be if the first buyer wanted more than one flat, he said. Hang Lung said it would double the number of sale units in the first batch to 80 and a ballot would be held on November 2. Chui said a price war had started because of concern over the outlook for the property market. "Developers think prices will go down, so they have taken the initiative to lower prices so they can sell more," he said. Secondary market sales were already falling, and developers were relying on discounts and subsidies such as payment of stamp duty to help push sales. New World Development and Wheelock Properties also adopted a discount strategy for the first 185 units at their joint project Austin last week, which attracted about 3,000 potential buyers. The price for the 366 units at Long Beach was HK$16,487 per square foot, which Chui said was "not expensive" compared with other projects sold in the area. On Saturday, buyers were told they would receive an 8 per cent discount if they signed the deal by November 3. There would be a further discount of 10 per cent if the transaction was completed in 60 days, 8 per cent if 90 days and 6 per cent if 180 days.

 China*:  Aug 1 - 3 2014

PLA lets foreign press attend monthly briefing for first time in bid for greater transparency (By Associated Press in Beijing) Officers say allowing foreign reporters access to the monthly press conferences of the People's Liberation Army is a step towards greater transparency - Not many years ago, foreign reporters in China trying to call the country’s secretive military couldn’t even get a connection because phone numbers assigned to the journalists were barred from ringing through to the Defence Ministry. On Thursday, members of the foreign press were finally permitted to attend the ministry’s monthly news briefing, marking a small milestone in the increasingly confident military’s efforts to project a more transparent image. Restrictions still apply and there is no sign of an improvement in the generally paltry amount and poor quality of information released by the People’s Liberation Army, the world’s largest standing military with 2.3 million members. Officers who oversee the briefings say the new invitations reflect a desire by the top brass to allay foreigners’ concerns over fast-expanding budgets, vast hardware improvements, and an increasingly clear determination to use the military to assert China’s interests and territorial claims. “It’s very important that we explain Chinese defence policy in a way that is understood. We especially hope that international society will have a correct and objective understanding of the Chinese military,” spokesman Yang Yujun said at a briefing to announce the change. Although the People’s Liberation Army remains the force behind the ruling Communist Party – dedicated above all to its survival in power – it’s been eager to portray itself as a force for security and stability by taking part in international forums and peacekeeping missions such as anti-piracy patrols off the Somali coast. Beijing has chafed against accusations of opacity from the US, Japan and others, and now publishes limited status reports on force size, weaponry and missions. It’s also been taking part in an increasing number of joint drills with others, this year joining in for the first time in the world’s largest international naval exercises hosted by the US known as the ‘Rim of the Pacific’. The ministry began holding monthly briefings in 2011, but restricted attendance to reporters from the mainland, Hong Kong, Macau and Taiwan. Foreign media were limited to sending their questions by fax. Still, that was a vast improvement over the ministry’s previous accessibility. Less than a decade ago, calls or faxes from phone numbers in neighbourhoods where foreigners were allowed to live and work simply wouldn’t connect with the ministry. In contrast to China’s monthly briefings, the US military holds news conferences open to all journalists up to four times per week, along with copious background briefings and wide access to exercises, bases and operations abroad – something that remains a distant prospect for the PLA.

Hong Kong*:  July 29 - 31 2014

HKU won't drop pricey mainland Chinese hospital even after HK$200m bill (By Amy Nip Despite sky-high costs, the Shenzhen partnership will continue - Despite a financial setback, the University of Hong Kong has decided to move forward with its Shenzhen hospital project. The university will continue its cooperation with the Shenzhen government in running the HKU-Shenzhen Hospital in Futian, its council resolved unanimously yesterday. The decision came after media reports that the university had spent HK$200 million on clinical management and supervision since the hospital opened in 2012, and that the whole project could lose HK$4.8 billion by 2023 if there were no effective reforms. Chinese-languag daily Ming Pao reported that the university's chances of recovering the sum were not high, as Shenzhen deputy mayor Wu Yihuan was said to have stated that HKU would be repaid only when the hospital was financially viable. Council chairman Dr Leong Che-hung said yesterday that the university supported the project based on its core values. "It will help us realise the university's principles of research and education, as well as assist the national medical reform," he said. He did not address the question of when the debt would be settled, but said the university would give a report and recommendations to the Shenzhen government on how to better run the hospital. "It's been clear that the Shenzhen government is responsible for settling that sum of money, and they admitted it. What we have to do is to offer suggestions on how to make the hospital succeed," he said. The hospital should have more private wards, he said, and open five special diagnosis centres - for heart disease, orthopaedics-traumatology, reproductive medicine, tumour and organ transplant - as soon as possible. University vice chancellor Professor Peter Mathieson said the council discussed concrete suggestions for how to make the hospital succeed. "The task is to realise some of the potential there is for HKU and at the same time manage the risk. As an ongoing piece of work, we will accept the responsibility of doing the two things," he said. For the 2012-13 financial year, the university recorded a surplus of HK$2.3 billion, thanks to additional school fees.

 China*:  July 29 - 31 2014

Beijing scores points as it marks 120th anniversary of defeat by Japan (By Cary Huang 120th anniversary of defeat in Sino-Japanese war is opportunity to demonise an old foe and push reforms at home, analysts say - People visit the file and photo exhibition marking the 120th anniversary of the First Sino-Japanese War, in Shengyang. The 120th anniversary of the first Sino-Japanese war, which falls on Friday, is drawing more media interest than in past years given the current strained ties between the two countries and Beijing's push to modernise its military. The commemoration represents an opportunity both at home and abroad, analysts say. It allows Beijing to argue on the global stage that Japan's militarism runs deep, while it pushes a message for a domestic audience that reforms are vital to protecting the nation. On Friday, the North Sea Fleet held a commemoration off Weihai in Shandong , where the Beiyang Fleet was based. The Beiyang was the pride of the Chinese navy at the time, but suffered heavy losses against Japanese forces. When the war ended on April 17, 1895, little of the fleet remained and Taiwan was ceded to Japan. Xinhua quoted a naval political commissar as saying the ceremony should stir soldiers' patriotism by reminding them of past humiliations. Chinese media have also pointed to remarks President Xi Jinping previously made about the anniversary. Xi said in February China should remember the painful lesson of losing Taiwan to Japan, and then in June noted the special meaning the anniversary carried in the traditional Chinese calendar. Under its 60-year cycle, 1894 was a jiawu (wood horse) year, as is 2014. The occurrence has led some hawks to argue that the humiliation of a weak China then should be avenged by a strong China now. Beijing has increasingly been referring to a string of historical events to highlight old grievances. The central government held an unusually high-profile commemoration on July 7 marking the 77th anniversary of the start of China's second war with Japan. It has also proclaimed December 13 a memorial day for the Nanking Massacre, committed by Japanese troops over six weeks beginning in 1937. Giving prominence to such anniversaries is part of a broader domestic agenda, analysts say. "An important aspect and end goal of achieving the Chinese dream is to rid China of past humiliations inflicted by foreign powers, and Japan perhaps did more than its share," said Yuan Jingdong, a professor at the University of Sydney Centre for International Security Studies. Dr Benjamin Herscovitch, a research fellow with the Centre for Independent Studies, a think tank in Australia, said commemorating the war presented no downside for the Communist Party. Japan could be portrayed as the expansionist, occupying power, while defeat was the result of an ineffective imperial government, Herscovitch said. "This is the ideal combination of messages for Beijing. On the one hand, it apparently adds weight to the narrative that Japan's militarism runs deep and that Tokyo cannot be trusted, and on the other hand, it seems to vindicate the lesson that modernisation and reform are essential for the protection of the nation," he said. Historians point to many reasons for China's defeat in the war, among them corruption in the Qing government. The Empress Dowager Cixi was said to have diverted state funds intended to further modernise the navy to the reconstruction of the Summer Palace in Beijing. The Qing government's failure to carry out reforms and a lack of innovative thinking also left China weakened. Professor Kerry Brown, director of the China Studies Centre at the University of Sydney, said the war revealed China's lack of progress, and modernisation became the solution to victimhood. "That process of regeneration and strengthening continues right up to this day, and is what gives Chinese leaders so much passion when they speak or act in ways that address this history," Brown said. Revisiting the war was not intended as a deep analysis of the past, but as a sharp reminder to China's new generation of political leaders of the perils of failing to carry out comprehensive reforms, Herscovitch said, The message of the anniversary "dovetails perfectly with the party's economic reform agenda and anti-corruption drive". Although the military leadership might use the occasion to argue for more resources for the PLA, it did not mean China would "seek confrontation", Yuan said. 

Hong Kong*:  July 25 - 28 2014

McDonald’s Hong Kong pulls Chicken McNuggets, four other menu items in wake of ‘rotten meat’ scandal (By SCMP Ng Kang-chung) Chicken and pork products sourced this year and last year; government announces suspension of imports from troubled Husi Food Company - McDonald’s Hong Kong said on Thursday it would suspend the sales of five popular menu items available in the city in the wake of the "rotten meat" scandal. In a statement released on Thursday night, McDonalds said it would suspend the sale of Chicken McNuggets, McSpicy Chicken Filet, Fresh Corn Cup, Iced Fresh Lemon Tea and Green and Chicken Salads, as they contained ingredients supplied by the food processing company at the heart of scandal. This comes after the Hong Kong’s government confirmed that McDonald's Hong Kong imported chicken and pork from the Husi Shanghai food processing plant at the centre of the food safety scandal. The Food and Environmental Hygiene Department on Thursday announced that the city has suspended all imports of food products from Husi Food Company, owned by the Illinois-based OSI Group. McDonalds said that the dishes included food ingredients supplied by Husi operations in Hebei province and Guangzhou - including chicken and beef from Hebei, and several vegetable and fruit items from Guangzhou. Mainland authorities are investigating reports that rotten meat had been reprocessed and repackaged with new expiry dates at Husi’s Shanghai plant. The tainted meat may have been sold to many other international chains such as KFC and Pizza Hut. Any Husi food that has already made it to Hong Kong will be stored in warehouses for the moment, Hong Kong’s government announced on Thursday. Dr Lee Siu-yuen, the department’s assistant director, said McDonald's Hong Kong had imported cooked chicken legs from Husi’s Shanghai plant. All of the chicken was sold to customers and no Husi stock remained in the chain’s Hong Kong restaurants, Lee confirmed. From July last year until December, McDonald's Hong Kong also imported 10 “batches” of frozen pork from the troubled Shanghai plant. McDonald's Hong Kong had previously denied having imported any food products from the Shanghai plant. On Thursday the fastfood chain apologised to its customers for the "confusion", according to Cable TV. Lee said the Centre for Food Safety had inspected over 1,000 samples of foods from fastfood chains including KFC, Starbucks, Yoshinoya, Burger King and Pizza Hut in the past two days. Hygiene conditions at all outlets were deemed satisfactory, she said. On Tuesday the centre had confirmed that products from a Husi processing plant in Hebei province had been imported into Hong Kong this year. But the centre had said it had no records of any products from the Shanghai plant arriving in Hong Kong this year. Five Husi executives were questioned by Shanghai police on Tuesday, after investigators seized 160 tonnes of raw meat as well as 1,107 tonnes of Husi Food products. The factory was licensed to export to both Hong Kong and Japan, according to its website. McDonald's Japan admitted that the company had sourced about a fifth of its “Chicken McNuggets” from the Shanghai plant and that it had halted sales of the product on Monday. On Wednesday, OSI Group chief executive Sheldon Lavin apologised to "all of our customers in China". Lavin said the incident was "terribly wrong", adding that the company's own team of "global experts" had been sent to China to assist with the mainland's investigation.

 China*:  July 25 - 28 2014

China plans to extend Tibet railway line to India, Nepal borders by 2020 (By Reuters in Beijing) Connections to the borders of India, Nepal on the drawing board as Beijing looks to extend the railway line linking Tibet to the northwest province of Qinghai - Workers labour along railway tracks leading towards the station in Lhasa, Tibet. China announced plans to extend the line to India and Nepal, state media reported. China plans to extend a railway line linking Tibet with the rest of the country to the borders of India, Nepal and Bhutan by 2020 once an extension to a key site in Tibetan Buddhism opens, a state-run newspaper reported on Thursday. China opened the railway to Tibet’s capital Lhasa in 2006, which passes spectacular icy peaks on the Tibetan highlands, touching altitudes as high as 5,000 metres above sea level, as part of government efforts to boost development. Critics of the railway, including exiled Tibetans and rights groups, say it has spurred an influx of long-term migrants who threaten Tibetans’ cultural integrity, which rests on Buddhist beliefs and a traditional herding lifestyle. The Global Times, published by the Communist Party’s official organ, the People’s Daily, said that an extension to Shigatse, the traditional seat of Tibetan Buddhism’s second-highest figure, the Panchen Lama, would formally open next month. That link is scheduled for its own extension during the 2016-2020 period to two separate points, one on the border of Nepal and the other on the border with India and Bhutan, the newspaper cited Yang Yulin, deputy head of Tibet’s railways, as saying, without providing details. China has long mooted this plan, but the difficulty and expense of building in such a rugged, remote and inhospitable region has slowed efforts. Tibet is a highly sensitive region, not just because of continued Tibetan opposition to control from Beijing, but because of its strategic position next to India, Nepal and Myanmar. The Chinese announcement coincides with a drive by India, under its new Prime Minister Narendra Modi, to consolidate its influence with its smaller neighbours. Modi’s foreign minister, Sushma Swaraj, heads to Nepal on Friday with a proposed pact to help develop the Himalayan country’s hydro-electric power potential high on his agenda. Modi, who made his first foreign trip as prime minister to Bhutan, is to visit Nepal next month. But Nepal’s opposition Maoists are uneasy about the hydro-electric plan and say it could lock out China to the benefit of Indian companies. India and China fought a brief border war in 1962 over the region at the eastern end of the Himalayas. The nuclear-armed neighbours signed a pact in October to ensure that differences on their shared border do not spark any further confrontation. India and China have competing claims over what India calls Arunachal Pradesh, a state that has been administered by India for decades and what China calls South Tibet. China’s Communist army occupied Tibet in 1950. Nine years later, Tibet’s spiritual leader, the Dalai Lama, fled to India after a failed uprising.

Hong Kong*:  July 22 - 24 2014

Hong Kong's 2017 election is not the end of reform, hints NPC's Zhang Dejiang (By Gary Cheung, Ng Kang-chung and Joyce Ng) Chairman's statement that the method of electing city's chief executive could change seen as latest strategy to win over moderates. There would be more room for compromise with Beijing if Hong Kong accepted that the method for electing its chief executive could be changed after universal suffrage was achieved in 2017, a Peking University academic said in March. Many pan-democrats did not take Jiang Shigong's words seriously then. But now, messages from the National People's Congress chairman Zhang Dejiang in his meetings with pro-establishment groups over the past few days are starting to sound similar to Jiang's suggestion. NPC Standing Committee member Rita Fan Hsu Lai-tai, who met Zhang on Sunday, quoted him as saying democratic development in other countries went step by step. She said she understood from Zhang that Hong Kong's democratic development would move forward after the city achieved "one man, one vote" in 2017. Federation of Hong Kong Industries chairman Stanley Lau Chin-ho, who met Zhang on Saturday, quoted him as saying that it took 100 years for many countries to develop a mature political system and that democracy in Hong Kong should develop in a gradual, orderly manner. Zhang's reminder that the 2017 chief executive election is not the endgame of democratic development in the city is seen as Beijing's latest strategy to win over moderate pan-democrats. The Standing Committee will decide on Hong Kong's political reform when it meets at the end of next month. Echoing Zhang's remarks, Chief Secretary Carrie Lam Cheng Yuet-ngor said yesterday that there could still be room to improve the method for electing the chief executive after 2017. NPC Standing Committee member Rita Fan Hsu Lai-ta said she understood from Zhang Dejiang that Hong Kong's democratic development would move forward after the city achieved "one man, one vote" in 2017. "I gather that neither the Basic Law nor the relevant decisions by the NPC Standing Committee rules out the possibility of making improvements to related arrangements after the goal of achieving universal suffrage in 2017 has been achieved," Lam said. Hong Kong officials in charge of constitutional development have also been using the same argument to lobby moderate pan-democrats to compromise on reform. The government has to win the support of at least five pan-democrats to secure a two-thirds majority in the Legislative Council for its reform plan. Former Democratic Party lawmaker Cheung Man-kwong said: "If Beijing wants Hongkongers to buy its views that the electoral methods can be improved after 2017, it needs to convince Hongkongers that they can believe again what it promises." Cheung was one of three Democratic Party representatives involved in talks with the central government's liaison office in Hong Kong in 2010 over the 2012 elections. Meanwhile, Liberal Party lawmaker Vincent Fang Kang, who also met Zhang on Sunday, quoted him as saying there were some pan-democrats who could be regarded as "loving the country and Hong Kong". The state leader reportedly dismissed concerns about the Occupy Central movement, which plans to rally protesters to blockade Central district if the Hong Kong government does not come up with what it sees as a satisfactory reform proposal.

 China*:  July 22 - 24 2014

RMB developing quickly as major world currency (By Jiang Xueqing (China Daily USA The renminbi is on track to become the third-largest international currency behind the US dollar and the euro within five years as China accelerates its promotion of the yuan, said a Renmin University of China report released on Sunday. Last year, RMB cross-border trade settlement amounted to 4.63 trillion yuan ($746 billion), up 57.5 percent from 2012. It accounted for 2.5 percent of cross-border trade settlement worldwide, the report said. By the end of the fourth quarter of 2013, direct investment settled in renminbi amounted to 533 billion yuan, 1.9 times the same period in 2012. The RMB is currently the fifth-most widely used currency internationally. The British pound is third and the Japanese yen fourth. The offshore yuan market has been developing rapidly in recent years, and this year the People's Bank of China signed a memorandum of understanding regarding yuan clearing and settlement arrangements with the central banks of the UK, Germany, Luxembourg, France and South Korea. Chen Yulu, president of Renmin University and member of the central bank's monetary policy committee, said the offshore yuan market in Europe has huge potential since major European financial centers are competing for the market. Wei Jianguo, vice-chairman of the China Center for International Economic Exchanges, suggested the government establish additional centers in places such as Dubai, South Africa and Latin America. In spite of the rapid expansion of the RMB, its internationalization still faces many challenges including technical difficulties using the currency globally. "To resolve the problem, China has to build a safe, efficient and low-cost offshore RMB clearing system as soon as possible," Chen said. "In addition, the regulators must create a legal framework for the offshore RMB market and make sound regulations to stop money laundering and tax evasion via offshore yuan transactions." At present, Chinese financial institutions are relying mainly on traditional offshore yuan businesses such as RMB trade settlement and deposit. They have to innovate on products to deepen and widen the offshore RMB market, Chen said. By the end of 2013, the outstanding volume of international bonds and bank notes denominated in renminbi rose 24.9 percent year-on-year to $71.9 billion. The issuers of RMB-denominated bonds started to expand out of Hong Kong, with countries such as Japan and Canada joining in. As Chinese economic power continues to grow, an increasing number of countries have become willing to accept the renminbi as a reserve currency. By the end of 2013, the PBOC had signed currency swap agreements involving a total of 2.57 trillion yuan with 23 countries and regions, the report said.

Hong Kong*:  July 19 - 21 2014

Hong Kong-born chef and wife died aboard Flight MH17 after change of route (By Stuart Lau Fan Shun-po, a cook working in the Netherlands, was travelling with his Malaysian wife, Jenny Loh, according to a Dutch newspaper - A change to their usual travel routine proved fatal for a celebrated Hong Kong-born chef and his Malaysian wife. Each year Fan Shun-po and Jenny Fan, both in their 50s and who owned a Chinese restaurant in Rotterdam, would fly from Amsterdam to Hong Kong and then Kuala Lumpur to visit their respective hometowns. But this time, because they had to take Jenny's elderly mother home to Penang after she paid them a visit, they opted to fly from Amsterdam to Kuala Lumpur aboard the doomed Malaysia Airlines Flight MH17. The couple, who perished with 296 others aboard the Boeing 777 after it was shot down over Ukraine, are survived by their son Kevin, who is in his early 20s and also lives in Rotterdam. Christy Liu, who was in the same Buddhist group as the couple in the Dutch port city, said people who knew them were concerned about Kevin in the wake of the tragedy. "It is devastating to him. He is very sad, not answering phone calls and only willing to send text messages," Liu said. "He just texted us back with messages [yesterday] afternoon. He was finding it impossible [on Thursday] to face the matter." She said friends of the Fans would try to help Kevin arrange his parents' funeral. Many of Kevin's friends have posted on his Facebook page the word sterkte - Dutch for strength. Fan and his wife migrated to the Netherlands in 1978 and made a name for themselves when their restaurant in downtown Rotterdam, Asian Glories, won a recommendation from the Michelin Guide. Tributes poured in on the restaurant's Facebook page, where a poster named Gaea Gail recalled nights when "after closing hours [as] we sat and talked about life, Jenny was as lively as she always was and Mr Fan his smiling peaceful self, listening to his wife as she talked the night away". The pair were also respected for their philanthropy. "Whenever there were natural disasters, the Fans never hesitated to organise charity dinners to help raise funds," Liu said. In the wake of the Fukushima tsunami in March 2011, the pair staged a dinner that raised €27,500 (HK$288,000) for victims. Hong Kong's Immigration Department said it was checking if more Hongkongers were on board Flight MH17. 

 China*:  July 19 - 21 2014

Sun Yuxi appointed special envoy to Afghanistan (By Teddy Ng in Beijing China has appointed a special envoy for Afghan affairs amid rising concerns over security in the war-tone nation following the withdrawal of Western troops. Veteran diplomat Sun Yuxi, a former Chinese ambassador to Afghanistan, India, Italy and Poland, had been named as the special envoy, the Foreign Ministry said. "China and Afghanistan have traditionally been friendly neighbours," ministry spokesman Hong Lei said in the statement. "China is highly concerned with the development of the situation in Afghanistan, and is committed to deepening the strategic cooperative partnership between the two nations." The appointment came as China prepares to play a more robust role in the nation, a move observers believe is triggered by fears militants might sneak into the restive Xinjiang region in western China. Beijing had previously accused some Uygurs, the main ethnic minority in the region, of calling on people in Afghanistan and Pakistan to join the "holy war". "The security is worrying after Nato troops pulled out. Afghanistan is unstable and terrorism may be spreading," said Sun Shihai, a South Asian affairs expert at the Chinese Academy of Social Sciences. Calls have mounted for China to increase its security commitment along with boosting its economic presence in the country. For example, a US$3.5 billion copper mine project in Aynak, invested by state-owned Metallurgical Corporation of China and Jiangxi Copper Corporation, has been attacked by terrorists several times over the past year. Beijing earlier pledged to provide training to 300 Afghan police. Last week, a conference on the country's future co-chaired by the deputy foreign ministers of both nations was held in Beijing. Sun expected Beijing would refrain from becoming involved in domestic affairs. "The conflicts between different religious groups and races are too complicated," he said.

Hong Kong*:  July 16 - 18 2014

Hong Kong government unveils crucial reports on universal suffrage for 2017 - 'Mainstream opinion' is that only a committee should have power to nominate candidates for chief executive, who should 'love the country and love Hong Kong', reports state (By Joyce Ng, Ng Kang-chang and Jeffie Lam) Chief Secretary Carrie Lam Cheng Yuet-ngor is delivering her report on public views about reform. This afternoon the government kick-started the formal process of reforming the way Hong Kong selects its leader in time for the next chief executive election in 2017. In two reports – one delivered by Chief Secretary Carrie Lam Cheng Yuet-ngor to lawmakers, and one that will be delivered by Chief Executive Leung Chun-ying to Beijing – the government stated that the “mainstream opinion” in Hong Kong was that only a nominating committee should have the power to elect the city’s next leader. The reports also state that Hongkongers “generally agree” that reform should be strictly in accordance with the Basic Law, the city’s mini-constitution, and that the next chief executive should be a person who “loves the country and loves Hong Kong”. The top officials reported “considerable views” that the nominating committee should be expanded from the 1,200-strong Election Committee which has until now selected the city’s leader – but also noted “quite a number of views” that the number of members should stay the same. Almost 800,000 had called for the public to be allowed to nominate candidates for the top job in an unofficial referendum organised by the pro-democracy Occupy Central movement. The chief executive made no mention of the Occupy poll, or the July 1 pro-democracy rally which organisers say was attended by more than half a million people, in his report to the Standing Committee of the National People's Congress (NPCSC). But the report does state that "a number of groups and members of the public" expressed "divergent" views after the consultation period "through different ways and channels". Occupy plan to stage an open-ended mass sit-in on Central streets if the government's official plan for the 2017 election – expected later this year – fails to guarantee voters a genuine choice between candidates. Pro-democracy leaders have also suggested that a campaign of non-cooperation could begin before the government delivers its plan. Beijing has repeatedly rejected public nomination as unconstitutional, while it’s proponents say that a nominating committee stacked with Beijing-friendly members will only put forward candidates for the election that the central government approves of. The reports, which appear intent on drawing a line under public nomination, are unlikely to satisfy the pro-democracy camp, meaning the contentious battle over universal suffrage continues. Both reports also concluded that the public "generally agrees" that there was no need for further major reform of the way the Legislative Council is elected, disappointing those who had called for a reduction in or the abolition of functional constituency seats, which are not elected by the general public. Lam's report summarised the results of a five-month consultation with the public during which the government received some 124,000 submissions. Later today, Chief Executive Leung Chun-ying will submit his report to the NPCSC asking it to approve political reforms, marking the first step of the year-long reform process.

 China*:  July 16 - 18 2014

China sees itself taking key role in proposed BRICS international bank (By Teddy Ng in Beijing and Agence France-Presse in Fortaleza, Brazil) Brazilian President Dilma Rousseff (centre), Russia's President Vladimir Putin (left), India's Prime Minister Narendra Modi (second left), China's President Xi Jinping and South Africa's President Jacob Zuma (right) pose for the official photograph of the 6th BRICS summit in Brazil. China is positioning itself as a major player in providing alternative financing to emerging markets as they meet for their summit in Brazil. Leaders of the five big emerging economies known as the BRICS, which also include Russia, South Africa and India, were due yesterday to sign off on a new development bank and a reserve fund they hope can act as a counterweight to Western-led financial institutions. The bank will have initial capital of US$50 billion, with each country contributing an equal share. In addition, a US$100 billion reserve would also be established, with US$41 billion coming from China, US$5 billion from South Africa, and Brazil, India and Russia each putting in US$18 billion, officials said. The leaders are still negotiating the location of the bank's headquarters, although Shanghai is said to be the front runner. In his talks with Russian President Vladimir Putin before the summit, President Xi Jinping called for more co-operation among the five countries to enhance their bargaining power on the global stage. Wang Dehua , a professor at the Shanghai Institutes for International Studies, said China was aiming to boost its influence in the bloc by contributing more of the funding. "As the world's second largest economy, it is expected China would want to have more influence in the bank," Wang said. Oliver Rui, a professor of finance and accounting at the China Europe International Business School in Shanghai, said the new bank would offer the five nations a united front against the Western-led World Bank and the International Monetary Fund, which did not offer favourable terms to developing nations. "They want a platform where they can actively participate in it and have influence," Rui said. For China, the new bank allows it to diversify the concentration of its US$3.9 trillion in reserves away from US treasuries. Financing projects in developing nations could also expand the yuan's role as an international currency, Rui said. But Wang said China might face opposition in its bid to exert greater control over the bank's operations. "China needs to constantly convince the other nations that it is not seeking to dominate the bank," he said.

Hong Kong*:  July 13 - 15 2014

Big interest expected in small flats at Fung Yuen, Tai Po - New homes in Fung Yuen, under 200 sq ft and less than HK$2m, are due on sale this month (By Yvonne Liu Tiny flats on offer at Cheung Kong's Mont Vert in Tai Po are set to cause a big impact among investors and first-time buyers. Tiny flats on offer at Cheung Kong's Mont Vert in Tai Po are set to cause a big impact among investors and first-time buyers. The 1,071-unit project in Fung Yuen offers 196 flats with sizes of less than 200 sq ft. The smallest have a saleable area of only 177 sq ft, with 97 sq ft living rooms, 13 sq ft kitchens and 31 sq ft washrooms. It makes them similar to typical public housing studio flats, which have monthly rents of HK$1,200. They are also bigger than flats at Henderson Land's High Place in Kowloon City, which launched in September with a saleable area of 166 sq ft. Cheung Kong plans to launch Mont Vert this month, and property agents expect prices will be more than HK$1.7 million, or HK$10,000 per sq ft. Anthony Man, a district manager at Centaline Property Agency, said: "The market response will depend on asking prices. But many people are interested in the project. "The demand for small flats in Tai Po from end-users has been very strong in recent months." Man added: "The leasing market in Tai Po usually records 40 to 60 deals a month. "However, leasing transactions increase to over 100 a month from June to August. "More than half of the tenants are mainland students. They have to rent a flat before the academic year at the universities begins." Liu Zhanxiang, a mainlander newly graduated from Chinese University, said: "Tai Po is close to the university. I think many mainland students would be interested in the flats. But the flat size is only 177 sq ft. It's too small for me." Veteran residential investor Chan Ching-pak is not interested in the project. "It would be difficult to find tenants when the project is completed - and it is not located in the urban area. You have to ask for a lower rent to attract tenants. "I don't think the monthly rent of the flats can reach HK$5,300 or HK$30 per sq ft," he said, adding that small flats in urban areas such as Causeway Bay and Wan Chai were more popular in the leasing market. Chan added: "It may be difficult to resell the flats. They are too small. No one would pay a large amount to buy a tiny flat." An architect, who declined to be identified, believes the developer is trying to both maximise the floor area and comply with the Buildings Ordinance. He said: "They may not be able to offer one-bedroom flats based on the building layout. "Another possible reason is that it is a marketing strategy. It is easy to catch the market's attention with an asking price of less than HK$2 million."

 China*:  July 13 - 15 2014

RMB use is on the rise in US business (By Amy He in New York (China Daily USA)) The use of the Chinese renminbi to settle trade between US and China continues to become more widespread, and US business leaders expect both their trade volume and RMB settlement to increase in the next year, according to an HSBC report. More American businesses are using renminbi (RMB) to settle their trade and more plan to use it "amid expectations by business leaders that their trade with China will increase in the next 12 months", the bank said in its second annual RMB report. The lender surveyed 1,304 international companies that conduct business with China mainland and found that of 102 US companies, 17 percent said they used RMB to settle trade this year. While that figure is lower than the global average - 22 percent - it is an increase from last year's 9 percent. The US is now behind the French (26 percent) and German (23 percent) in RMB trade settlement outside of Chinese mainland, Hong Kong, and Taiwan, it said. "As China continues to internationalize its currency, there are more opportunities and considerations in trade, investment, cash management and funding for US companies," said Steve Bottomley, senior executive vice-president of HSBC Bank USA, in a statement released Wednesday. "US businesses are becoming more comfortable using RMB and are increasingly making it, or looking to make it, a part of their competitive strategy and planning." Companies in Hong Kong and China say that foreign firms settling trade in RMB receive financial advantages, such as transactional discounts, HSBC said. The US trails its European competitors, however, in overall RMB trade settlement, mostly due to the strength of the dollar and convenience of trading in the world's reserve currency. Compared to last year's survey results, the percentage of German businesses using RMB jumped to 23 percent this year from 9 percent in 2013, HSBC numbers show. "I think US companies will need to be competitive with their European counterparts, so we expect that US businesses remain competitive and to react to the same market forces, which may mean adopting renminbi settlements," Martin Brown, executive vice-president of HSBC Bank USA, told China Daily. "Many of our European clients are trading in multiple currencies, but in the US, many people continue to settle trade in US dollars. US companies have not been as active in the foreign-exchange market as international companies because of greater reliance on the dollar," he said. HSBC's findings mirror RMB trade data released by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) in June. The Belgium-based financial services company launched its RMB tracking service three years ago to monitor the global flow of RMB as the Chinese government liberalized its currency as part of its policy to let the market exert bigger influence over the economy. SWIFT data showed that "RMB growth is gaining traction in non-traditional clearing centers, such as the United States" and that United States RMB payments value increased 327 percent between April of last year and April of this year. "Although the corridor remains dominated by the US dollar, data suggests that the United States is increasingly using the RMB to support its corporates that want to reach more suppliers in China mainland. This is good news for the internationalization of the RMB as a world payments currency," said Michael Moon, head of payments in the Asia Pacific at SWIFT. The increased international use in RMB is good for Chinese companies as well, since it reduces chance of currency fluctuation. "That's one of the advantages US companies have from the dollar being the international currency - a lot of times both their expenditures and revenues are in dollars, so you don't have to worry about depreciation or appreciation radically altering your underlying financial situation," said Nicholas Borst, research associate for the Washington-based Peterson Institute of International Economics. "So for Chinese companies, they don't have to worry about whether the amount of dollars they're going to be paid back in are going to be worth more or less depending on what's going on with the renminbi. If they can just switch to being reimbursed to renminbi in the first place, it makes planning from a corporate perspective a lot easier," he said.

Hong Kong*:  July 9 - 12 2014

The Archbishop of the Hong Kong Anglican Church has said pro-democracy advocates in the city should keep quiet, just as ‘Jesus remained silent’ in the face of crucifixion. Reverend Paul Kwong made the remarks during a sermon in St Paul’s Church, Central, on Sunday, on how to be a Christian. The archbishop turned to politics when talking about the responsibilities of a Christian. “Whenever people see me or other church leaders, they will say, 'We must speak up! Speak up at all times, on everything, understand? It is a must to fight.' "For what do people have to speak up so much? [It appears] as if they wouldn’t have another chance, as if they were dumb otherwise," said Kwong, who is a member of the Chinese People's Political Consultative Conference - the country's top political advisory body. Kwong extolled to his flock the virtue of silence, citing a Bible story on how Jesus behaved when being sentenced to death by Pontius Pilate. "Jesus remained silent in the face of Pilate. He was like a lamb awaiting slaughter. Sometimes we don't have to say anything. Silence is better than saying anything." The bishop also took a sarcastic tone towards a number of the 511 student protesters arrested during a sit-in in Chater Road, Central, following the annual July 1 rally. "Last week some students arrested by the police told reporters: ‘We had no food to eat. We had to queue up for the toilet’. I would say ‘why didn't they bring along their Filipino maids to the march’." 鄺保羅大主教評 7.1 指部分人不懂分析信息 講得真好,有良心及良知的神職人員! 港聖公會教省主教長鄺保羅大主教在講道時評論到七一遊行及中環遮打道被捕人士,他指部­分人只接收一種信息,完全不懂去分析。他又不認同,抗爭一定要發聲。 聖公會聖保羅堂網頁上載了鄺保羅大主教剛剛在星期日的講道聲帶,提到近日的社會運動,­包括七一遊行:「大家都聽到甚麼都自己選擇。你看最近遊行,香港人自己甚麼都是自己選­擇,這些人知不知自己說甚麼。上星期遊行時有年輕人,記者問他,你是否第一次出來遊行­,為甚麼你第一次出來?出年沒有(機會)了,差點我都去了,明年不能遊行,還不去。很­多人很相信這些,說到真的一樣。我相信那些人心裡完全沒有平安,沒有平安。耳朵、腦筋­只接收一種信息,腦筋完全不懂去分析。」 鄺保羅又評論七一遊行後,在中環遮打道集會的被捕學生:「上星期拘捕了學生,第一時間­告訴記者,我們沒有飯吃,去洗手間要排隊。我心想記者又不問我,叫他們遊行不如帶菲傭­去,這就是人們完全心靈沒有平安。」 他又指,基督徒應該學習耶穌,不應用暴力:「我不相信如耶穌今天在立法會,像某些議員­甚麼都擲,亦不相信在街上,祂會用羞辱的說話罵官員、其他人。我亦不相信耶穌基督會用­不理性暴力表達。今日那些人見到我或教會領袖,一定說我們要發聲。成日都要出聲,甚麼­都要出聲,一定要抗爭,不知道成日出那麼多聲做甚麼,好像一不出聲就沒機會,啞了。」 63歲的鄺保羅2007年起擔任香港聖公會教省主教長。他曾經接受教會刊物訪問時表示­,不贊成市民以公民抗命形式爭取2017年普選,他去年獲委任為全國政協委員。 

 China*:  July 9 - 12 2014

China calls on US to 'correct' hacking claims, stay out of maritime disputes - Cyberspying allegations and American role in maritime disputes hurt ties, Foreign Ministry says ahead of strategic and economic dialogue (By Teddy Ng Beijing has called on Washington to "correct its wrong act" in alleging PLA officers were involved in hacking US businesses and stop interfering in regional maritime sovereignty disputes. United States Secretary of State John Kerry and Treasury Secretary Jack Lew will be in Beijing for the 6th round of the bilateral strategic and economic dialogue that begins tomorrow. State Councillor Yang Jiechi and Vice-Premier Wang Yang will lead the Chinese side in the two days of talks. Assistant Foreign Minister Zheng Zeguang said issues including the US presence in the Asia Pacific region and North Korea's nuclear programme would be discussed at the talks. The annual dialogue comes amid rising tensions between Washington and Beijing after the US charged five Chinese military officers with hacking into US companies to steal trade secrets, prompting Beijing to suspend a bilateral cybersecurity working group established last year. "We believe [the charges] are … intentionally fabricated by the US. That move shows that the US lacks sincerity in working with China through dialogue to address cybersecurity," Zheng said in a press briefing on the annual talks, adding the indictments damaged mutual trust. "We urge the US to correct its wrong act and create conditions for dialogue and cooperation on cyberspace. At the same time, we also urge the US to stop its cybertheft against the Chinese government, institutions, organisations and individuals." Zheng also criticised Washington for interfering in maritime disputes between China and its neighbours, saying it was a "wrong move" that created uncertainty in Sino-US relations. He said Washington should respect China's sovereign and territorial integrity, and view China in an objective manner. "The US should make judgment based on facts instead of an ideological basis, and whether a certain country is an ally or not," he said. Deputy Finance Minister Zhu Guangyao said the two nations were expected to make progress in negotiating a bilateral treaty that opens up investment. "The economic ties between the two nations are very important when their overall ties face uncertainty," Zhu told the briefing.

Hong Kong*:  July 7 - 8 2014

The roots of Hong Kong's rage - Regina Ip says Hong Kong people living through the wrenching social and economic changes in recent years may find it easy to blame the mainland influence, but at what price? Hong Kong people have a reputation for staging peaceful demonstrations, but an atmosphere of violence has crept in of late. Anyone who has met diplomats posted to Hong Kong from much more turbulent parts of the world will have noticed how appreciative they are of the safety and security of our city. Famed for their love of freedom, Hong Kong people have established a reputation for staging peaceful public demonstrations. Compared to the mayhem that has torn some parts of the world, Hong Kong has stood out as an oasis of peace. Sadly, that seems poised to change. Although the threats to Hong Kong's physical security seem insignificant at this stage, an atmosphere of violence has set in and is poisoning the civility and stability of our city. Violence in the form of calls to "occupy Central" from self-proclaimed democracy advocates who want to pressurise Beijing into yielding to their demands. Violence in the form of extremist positions on arrangements for electing the chief executive, taken by student groups who will brook no compromise. Violence in the form of reckless filibustering in the Legislative Council, whatever the cost to Hong Kong's future. Violence in the form of unprecedented attempts by young radicals, some armed with offensive weapons, to storm the Legco building. Violence in the form of hate-filled verbal abuse hurled at mainland visitors unaccustomed to the ways of our sophisticated city. Also, violence in the form of insults hurled at the chief secretary by graduates of the Academy for Performing Arts at a recent graduation ceremony. By insulting the guest of honour, they debased the ceremony and disgraced themselves. Many older Hongkongers are asking: what has become of our city and what went wrong? Many things have indeed gone wrong. First, despite the increase in overall wealth, our wealth gap has widened. Hong Kong has one of the highest Gini coefficients, a statistical measure of income inequality, among developed economies. And so, too, do other free-market economies such as Singapore and the US. This may be due to the fact that when you have free, open markets, the strong get stronger while the weak get weaker. According to government statistics, Hong Kong's Gini coefficient is not only high but has also been rising over the years - from 0.43 in 1971 to 0.518 in 1996 and 0.537 in 2011. The steady increase is partly the effect of globalisation and partly the progressive narrowing of our economy with the migration of our manufacturing activities across the border. Hong Kong's economy is now 93 per cent service-oriented. This relocation has meant the loss of a wide range of jobs in the manufacturing sector and the skills that go with it. Hong Kong no longer makes anything, but makes its living largely by providing trading, logistics and tourism services mainly for mainland Chinese clients, and financial and professional services in connection with the city's financial hub. Other than the financial and professional services, many of the services provided by the city are low-end, and by some accounts trending down. The past decade has also seen a staggering concentration of wealth in the property sector. The overspill of wealth from the mainland caused prices to go through the roof until they were artificially suppressed by the various stamp duties slapped on by the administration. Young people have become increasingly disillusioned as their hopes for acquiring wealth through owning a home diminish. High property prices have crowded out other riskier, more innovative economic activities and turned those without homes against the landed class. Where education and skills are concerned, in the past few decades, our education authorities have largely succeeded in expanding mass education but at considerable cost to the standards of elite schools, so much so that many have converted themselves into "direct subsidy schools" to acquire greater freedom in setting their curriculum and raising resources. Parents who want their children to be globally competitive scramble to put them in direct subsidy, international or independent schools, while more and more "practical" subjects, like tourism and hospitality studies, are introduced to cater for students at the low end. The polarisation of knowledge and skills translates into the polarisation of opportunity, another source of discontent to young people with limited scope for upward social mobility. Adding to all these woes we now have the heated constitutional debate on how to elect the chief executive in 2017. Many Hongkongers oppose any attempt by Beijing to limit the field of candidates to trustworthy patriots. On the face of it, it is a matter of Beijing versus Hong Kong people in allowing the people a "real choice". But, essentially, it is about whether Hong Kong people are willing to support the national goal of safeguarding sovereignty, security and developmental interest, or insist on going the other way. Void of deep-rooted sectarian or ethnic divides, the political cleavage in Hong Kong has always been about China. In their rebellious moment, some demonstrators might wish to be rid of constraints imposed by the centre. But Hong Kong might well fall to pieces if the centre cannot hold. Regina Ip Lau Suk-yee is a legislator and chair of the New People's Party

 China*:  July 7 - 8 2014

Beijing, Berlin getting closer despite geographical distance Xinhua) German Chancellor Angela Merkel eats kung pao chicken, a spicy Sichuan dish made with chicken, peanuts, vegetables, and chili peppers, at a Sichuan restaurant during her visit to Chengdu, the capital of Southwest China's Sichuan province, July 6, 2014. Merkel kicked off her 7th China trip Sunday in the Southwestern city, a place that German companies regard as a springboard to the relatively underdeveloped western parts of China. Beijing and Berlin, though thousands of miles apart, are defying their geographical distance to forge ever closer ties. The fatigue of nearly half-day flight between the two capitals cannot prevent Angela Merkel from embarking on her seventh trip to China as the German chancellor this weekend. During her four-day stay, Merkel will meet Chinese President Xi Jinping and Premier Li Keqiang, both of whom have paid a visit to Berlin since they took office last year. The frequency of high-level mutual visits is a clear indicator of the closeness between Beijing and Berlin and the level of importance that both countries have attached to each other. It is fair to say that China-Germany relations are at their best in history, which have been strongly underpinned by the pragmatic cooperation between the two economic heavyweights. For starters, it is worth noting some basic figures. Germany is now China's largest trading partner in Europe, while China is Germany's biggest in the Asia-Pacific region. Two-way trade stood at $161.6 billion last year, accounting for nearly one-third of the grand total between China and the European Union (EU). One fact that lies behind those remarkable figures and stays barely noticed is that both China and Germany are manufacturing powers and world's leading exporters, but they for the most of the time managed to avoid a trade war and stood together for free trade. Merkel earned applause from China last year for her opposition to the EU trade investigation into Chinese mobile telecommunication equipments. The unusual co-action between the two exporting powerhouses is deeply rooted in their economic complementarity. As Xi put it during his visit to Berlin in March, the China-Germany cooperation is a perfect blending of Chinese market and German technology and an alliance between Chinese speed and German quality. When German companies are eager to sell their sophisticated products to the fast-growing Chinese market, China is equally keen to learn from Made-in-Germany for its own economic upgrading. The visit saw Merkel accompanied by a high-profile business delegation including executives of Siemens, VW, Airbus, Lufthansa and Deutsche Bank, all familiar brands to the Chinese. There is high expectation that the German chancellor will find her ongoing trip as fruitful as ever and bring her country one step closer to China.

Hong Kong*:  July 4 - 6 2014

SCMP: Lawmaker Wong Yuk-man arrested for throwing glass at Chief Executive CY Leung - Lawmaker arrives at station in Central to be arrested on suspicion of assault after incident involving chief executive at Legco meeting. Independent lawmaker Wong Yuk-man was arrested last night on suspicion of common assault after he hurled a glass in the direction of Chief Executive Leung Chun-ying in a Legislative Council meeting on Thursday. The arrest came on the same day as five members of the July 1 pro-democracy march were held for leading the rally too slowly. The arrests were seen as a sign the government may be toughening its stance in the face of mounting pressure for "genuine" universal suffrage. Arriving at the police station in Central by car, Wong flashed a "victory" sign to a group of supporters and reporters who had been waiting for him. He was accompanied by a lawyer. "I got a tip-off that the police want to arrest me. Save the trouble - it's just a glass. I am coming here myself. This is how you act like a hero," he said. "If they really lay a charge against me, I must make 689 appear in court!" he said, in a mocking reference to the number of votes the chief executive received from the 1,193-strong Election Committee to win the election two years ago. Police said Wong, 62, was arrested for common assault and released on bail pending further investigation. A police source said officers went to Wong's office in the afternoon but could not find him. They waited for Wong outside the building while he was in a Legco finance committee meeting.

 China*:  July 4 - 6 2014

President Xi Jinping highlights Japan’s ‘barbarous’ militarist past in Seoul speech 習近平在首爾講話強調了日本過去的“野蠻”軍國主義 By Agence France-Presse, Reuters Xi recalls Japan’s repressive colonial rule and wartime aggression – a message guaranteed to go down well in South Korea. President Xi Jinping stressed the joint suffering of China and South Korea under Japanese militarism during a speech in Seoul on Friday that came days after Tokyo announced a landmark shift in military policy. “In the first half of the 20th century, Japanese militarists carried out barbarous wars of aggression against China and Korea, swallowing up Korea and occupying half of the Chinese mainland,” Xi said in an address at Seoul National University. “When the war against Japan was at its highest pitch, the Chinese and Korean people shared their suffering and helped each other with sweat and blood,” he added. Xi’s speech came on the second and last day of his state trip to South Korea which had been flagged as a snub to ally North Korea because of his decision to visit Seoul before Pyongyang. But the hard-hitting language was saved for recalling Japan’s repressive colonial rule and wartime aggression – a message guaranteed to go down well in Seoul. Relations between Seoul and Tokyo are currently at their lowest ebb for years, mired in disputes related to Japan’s 1910-45 rule over the peninsula. China is also embroiled in a territorial row with Japan and analysts say Xi’s efforts to stake out common cause with South Korea reflect a wider diplomatic strategy. South Korea and Japan are the two key US military allies in the region, and exploiting any rift between them would help China in countering US President Barack Obama’s strategic “pivot” to Asia. Xi’s evocation of Tokyo’s military past carried particular resonance in the wake of Prime Minister Shinzo Abe’s announcement this week that Japan’s powerful military had the right to go into battle in defence of allies. The shift to a policy of so-called “collective self-defence” marks a highly contentious change in Japan’s pacifist stance and was viewed with deep suspicion in Beijing and Seoul. Xi, whose two-day trip breaks the tradition among his predecessors to make Pyongyang the first port of call in Korea, held talks with South Korean counterpart Park Geun-hye on Thursday and witnessed the signing of cooperation documents to elevate bilateral ties. A joint statement said the nations would work to conclude negotiations for a free-trade deal this year. On security issues facing East Asia, they said the development of nuclear weapons would seriously affect the stability of the Korean peninsula and the region, South Korea's Yonhap news agency reported. Favourable conditions should be created for the resumption of stalled six-party talks on denuclearisation, which also involve Japan, the United States and Russia, they agreed. "In today's summit the two leaders agreed that the denuclearisation of North Korea should be realised by all means and agreed that [we[ resolutely oppose a nuclear test," Park said. Xi adopted a more moderate tone, saying the Korean peninsula faced uncertainty and the concerns of different parties should be balanced and issues resolved through negotiations on an equal basis, state-run CCTV reported. Pyongyang has conducted a series of rocket and missile tests since Kim Jong-un came to power in 2012. Beijing is regarded as Pyongyang's ally, but diplomats said ties were not as positive as they once were because Xi and Kim have not exchanged visits. North Korea may be moving closer to Japan, which yesterday eased some sanctions on the reclusive state in return for an investigation into the fate of abducted Japanese nationals.  Xi and Park also discussed recent developments in Japan. On Japan, both nations rebuked Tokyo after the cabinet voted to lift a 60-year-old ban on its armed forces fighting abroad. Xi said the two nations could jointly commemorate the 70th anniversary of the end of war in the Pacific.

Hong Kong*:  July 1 - 3 2014

'Patriots must run Hong Kong': State newspapers hit back at July 1 demonstrators (By Li Jing The central government should make no concessions to pro-democracy demonstrators – and Hong Kong must be run by “patriots”, the Communist Party’s mouthpiece People’s Daily and nationalist tabloid Global Times warned in two strongly-worded editorials on Wednesday. The state run newspapers hit back following the biggest July 1 protests in the city in a decade. Patriotism is a natural emotion and putting patriots in charge of the city should be “a matter of course”, the People’s Daily said in a front-page editorial. The paper added the late paramount leader Deng Xiaoping defined a “patriot” as those "who loyally support China’s exercise of sovereignty over Hong Kong, and those who do not impair Hong Kong’s prosperity and stability”. It went on: “The central government’s reiteration that Hong Kong must be governed by the Hong Kong people with patriots as the mainstay is not an intervention [in] Hong Kong’s autonomy. It is a move to clarify Hong Kong [officials'] rights and obligations written in the Basic Law. "It is not trying to screen or select anyone. The aim is to give all Hong Kong people a reference in their hearts.” People's Daily said that some people were still confused over the city's leadership 17 years after Hong Kong’s return to Chinese rule. “Some have misunderstood, or deliberately misconstrued, the white paper,” the editorial read. The white paper last month declared Beijing’s authority over Hong Kong. The newspaper went on to argue that regarding judges and judicial officials as Hong Kong’s administrators does not “violate in the least” judicial independence. It would also add to their responsibility to follow the Basic Law, the editorial said, responding to the protests against the white paper by the Bar Association. Judges and judicial officials are obliged to protect national sovereignty and Hong Kong’s prosperity and stability, the paper argued. “In any place, the judges and officials must be loyal to the country, and shoulder the responsibility to safeguard the national sovereignty and security. Hong Kong [is] no exception.” The Global Times dismissed the protesters’ demand for universal suffrage and “genuine” democracy. The July 1 march has become a protest tradition in Hong Kong, with "opposition groups" at the heart of the demonstrations. But the Global Times added that participants are becoming increasingly diverse and now include both “dissidents” from the mainland and even supporters of gay rights. “Other people are either trying to express their ‘dissatisfaction’ or simply joining in the fun, seeing the protests as a party or a carnival,” it said. Some Hongkongers see “democracy” as their only advantage over the mainland, now that the city is losing its economic edge, the newspaper added. Global Times said: “Joining protests makes some [Hong Kong] people feel proud and superior to their mainland counterparts. "Therefore they are willing to participate but do not really care about the results. In this way, they are exploited by the radical opposition groups.” Both editorials were carried only in the papers’ mainland versions.

 China*:  July 1 - 3 2014

China's presence in RIMPAC 'significant': US commander (By AMY HE in New York (China Daily USA)) Vice-Admiral Kenneth Floyd, the commander of this year's Rim of the Pacific (RIMPAC) naval exercise in the Hawaiian Islands, said that China's first-time participation in the drills is "absolutely significant". The whole world is watching this year's RIMPAC and China's participation will "make for better cooperation in the future at sea", Floyd said in a media conference call on Tuesday from Pearl Harbor, Hawaii. "I like to say that it's all about building relationships, and the relationships span oceans and span years, so all of the youngsters that are here today from the People's Republic of China, Brunei, as well as the other 20 nations, they're going to go away and they're going to remember RIMPAC and that they got to know each other," said Floyd. "And in the future when we meet each other on the high seas, we might recognize bases, but we'll certainly remember how we worked together, and I think that will serve us well in the future." Floyd, commander of the US Third Fleet, heads the 2014 RIMPAC Combined Task Force, along with vice-commander Rear Admiral Yasuki Nakahata of the Japan Maritime Self Defense Force and deputy commander Rear Admiral Simon Cullen of the Royal Australian Navy. The exercises began on June 26 and will end on Aug 1. China will be participating on medical exchanges, with more than 40 Chinese doctors taking part in various events, Floyd said. Doctors and medical staff from all 22 nations participating in the exercises will be part of the medical exchanges, he added. They will center on humanitarian assistance and disaster relief, which are "the most likely areas they'll drop in together and operate in the future in the real world," Floyd said. At sea, there will be gunnery exercises and work on countering piracy, he said. In more than 2,000 events and exercises of the next month, China will be participating in a good number of them, Floyd said. The atmosphere in Honolulu has been "great", he said. When asked about how this year's RIMPAC has been different because of China's first-time participation, Floyd said that every RIMPAC is different but that the exercises so far have been going very well. "There've been a lot of get-togethers. There's usually some kind of reception every night that everyone is participating in — lots of smiles, lots of handshakes. I'm always excited to have new countries participate in RIMPAC," he said. "It's been a lot of fun so far and I'm really looking forward to getting underway and doing some work out at sea." China is being represented by four ships: the Haikou missile destroyer, Yueyang missile frigate, Qiandaohu supply ship and the Peace Ark hospital ship. The RIMPAC exercises are the largest international maritime drills and take place biannually in Hawaii. They were established in 1971 and have been hosted by the US Pacific Fleet. The 2014 drills include participation from Australia, India, New Zealand, and Malaysia, with Brunei and China participating for the first time. All of China's vessels except the Peace Ark are scheduled for a port visit in San Diego, California, after the RIMPAC exercises, the Global Times reported.

Hong Kong*:  June 27 - 30 2014

Once upon a dream: Stage production Tonnochy captures the spirit of the 1970s (By Edmund Lee) Star-studded Cantonese stage production Tonnochy is a study of a city in transition - If someone were to look back at the history of Hong Kong theatre a decade from now, the summer of 2014 would likely be remembered for the presence of three blockbuster local productions. Remarkably, these are not just musicals with Canto-pop stars conveniently taking singing roles but traditional theatre productions featuring some of the biggest local stars. The 21-show run of a Cantonese adaptation of Equus - starring Anthony Wong Chau-sang and Hins Cheung King-hin - concluded earlier this month. In August, Jan Lamb Hoi-fung and Eric Kot Man-fai of Canto-rap unit SoftHard will perform in 17 performances of The Nonsensemakers' Academy of Laughter, an adaptation of the two-man play by Koki Mitani. Sandwiched between those two is Tonnochy, which arguably has the highest profile of all. With two film stars (Carina Lau Ka-ling and Tony Leung Ka-fai) and a celebrated stage actor (Gardner Tse Kwan-ho) in its cast, the original Cantonese play sold out its 10 July performances during the advance booking period. Ten extra September shows were announced in May - before a rehearsal was even held - and six more have been added since. "What attracted me was definitely the combination of cast and crew," says Lau when we meet on the day of Tonnochy's first rehearsal session in late May. "I've been wanting to return to the stage for several years now. A few theatre directors have approached me with projects over the years, but perhaps it's fate that I agreed to this one. I took up this opportunity without hesitation - there wasn't even a script when I accepted." The actress' last theatrical turn was for the musical Red Boat, which ran for 64 performances from November 2000 to January 2001 at the Lyric Theatre at the Academy for Performing Arts, the venue for Tonnochy. It may feel like déjà vu for the production team: both Red Boat and Tonnochy are produced by Albert Yeung Sau-shing of Emperor Entertainment Group. They share the same director in Fredric Mao Chun-fai, and stars in Carina Lau and Tony Leung. Even Gardner Tse was assistant director for the earlier work.The concept of Tonnochy was conceived by producer Vicky Leung Lee Siu-ha, who is the director and treasurer of the Hong Kong Motion Picture Industry Association. She was an influential industry figure during the Hong Kong New Wave cinema movement of the 1970s and '80s. Having accompanied her husband to Tonnochy several times in the '70s she briefly became friends with some of the hostesses, whom she describes as "carefully selected and reasonably educated". Leung says the nightclub was a symbol of luxury and decadence amid the hardship that the general public endured during that era. "Everyone visiting Tonnochy had a story," she says. The script was written by Candice Chong Mui-ngam and further enhanced by William Chang Suk-ping's art direction and costume design. Tonnochy's plot involves a trio of characters at the club: Tse's audacious stock market player, Tony Leung's introverted banker and Lau's widow, who comes looking for answers following the mysterious death of her husband. With its 11 actors and 15 chorus members, the play is a complicated web of fraud and romance among a group of businessmen and hostesses at the nightclub. Tse says: "Every character is living in a beautiful dream. They all realise that but are unwilling to wake up from it. This is about their attempt to enjoy themselves while it lasts." Tonnochy represents the third time that Leung has worked with director Mao. The actor says he was most inspired by a chat he had with Tse during the production of Red Boat. "I remember Tse telling me back then: 'when we make films, the actors are in a passive position because everything is eventually in the hands of others. But when you do theatre, no matter what happens during the rehearsals or how controlling the director is, when the curtains part, the stage is all yours'." Tse calls Tonnochy "a very special play" in that "it's very refreshing for me because I've never done a play set in the 1970s", he says. Although the Hong Kong theatre scene is thriving nowadays, Leung believes there is a need for a greater variety of original works that speak to the city's local history. "The fact that this play is set in Tonnochy puts a strong emphasis on its historical context," Leung says. "Tonnochy is a symbol of so many things from that time, including the blooming economy, [and the contrast between] the richest and poorest members of the population … " "The essence of that era," Lau chimes in. "The play provides a microcosm of society at that time," says Leung. "I hope that this will become a classic in the Hong Kong theatre scene. I hope people will return to it and restage it every year, so that this can become a representative play that is passed on through the generations. We have a great sense of purpose." "Whoa," Lau says, laughing, "what a great sense of purpose." Tonnochy, July 18-20, 22-26, September 4-6, 8-10, 12 and 13, 15-20, 8pm; July 26, September 7, 14, 3pm. In Cantonese. Lyric Theatre, HK Academy for Performing Arts, 1 Gloucester Road, Wan Chai. HK$180-HK$1,200 HK Ticketing. Inquiries: 2835 6688

 China*:  June 27 - 30 2014

China and US can resolve differences through engagement, says US ambassador Max Baucus (By Teddy Ng in Beijing 'Constructive engagement' is the key to maintaining good ties, ambassador Max Baucus says - US ambassador to China Max Baucus, making his first public address about the Sino-US relationship, said both countries were crucial to the region's security. The United States and China are both crucial players in ensuring security in Asia-Pacific and can overcome their differences through "constructive engagement", Washington's ambassador to Beijing said yesterday. In his first major public address on Sino-US ties since he took up his post in March, Max Baucus indicated the US would maintain a presence in Asia and urged both sides to manage their differences. "Security in the region depends in large part on the constructive engagement between the US and China," he told the American Chamber of Commerce in Beijing, where he outlined his nation's hopes for Sino-US relations. Baucus said the US would deepen engagement with China on critical global security issues. Baucus said the two countries should be able to "work together on any problem", and dismissed as "simply untrue" concerns that the US sought to contain China. "Nothing in the US-China relationship is pre-ordained," he said. "Conflicts between a rising power and an established power are not inevitable. It's up to us." The US welcomed a strong, stable and prosperous China, he added . His remarks came as four People's Liberation Army ships departed to join the US-led Rim of the Pacific (Rimpac) drills - the world's largest international naval exercise. It is the first time China has participated in the event, and analysts say the move will give a slight boost to relations that have frayed over tensions in the South China Sea, allegations of cyberspying from both sides and disputes over human rights. Beijing dispatched a guided-missile destroyer, guided-missile escort ship, supply ship and hospital ship to join the drills starting today. Rimpac lasts until August 1 and involves 23 nations - including Brunei, Malaysia and the Philippines, which each have territorial disputes with Beijing. Next month, top American officials, including US Secretary of State John Kerry, will visit Beijing for the two countries' annual Strategic and Economic Dialogue, which covers a range of issues, from economic engagement to bilateral, regional and global security. Baucus touched on China's economic development in his remarks, saying the nation was at a "critical juncture" as it pushed reforms forward and reduced its reliance on export-driven growth. He also called on China to honour the rights of citizens. China and the US remain suspicious of each other's strategic intentions, despite years of thriving economic cooperation. Figures from the Chinese Ministry of Commerce said bilateral trade reached US$521 billion last year. Beijing has been wary about the US "pivot to Asia" announced by US President Barack Obama and Washington's provision of support to nations involved in territorial disputes with China.

Hong Kong*:  June 25 - 26 2014

Morgan Stanley eyes WH Group IPO relaunch at 25pc discount, say fund sources (By George Chen Sino-US pork producer WH Group’s high-profile, on-off Hong Kong IPO could come back to the market at a discounted valuation of at least 25 per cent to April’s original failed US$6 billion offering, potential investors have told the South China Morning Post. Two fund managers told the Post that US investment bank, Morgan Stanley, has contacted them to gauge interest in a deal that would value WH shares at 12 times estimated this year earnings compared to the 15-21 times earnings the sale was pitched at two months ago. One private equity source contacted by Morgan Stanley told the Post on condition of anonymity that the bank had stressed that its communication was a “private and informal” approach to potential cornerstone investors. The original deal collapsed on a combination of poor market conditions, a disclosure of massive payments to two company executives and conflicting messages to investors from a record 29 investment bank bookrunners. Bank of China International, Goldman Sachs, Morgan Stanley and UBS were the lead managers of the April initial public offer (IPO) which initially aimed to raise US$6 billion and was eventually scaled back to US$1.9 billion before being scrapped. The IPO aims to raise funds to pay back loans incurred by the formation of WH Group when Shuanghui, the mainland’s top meat producer, bought out US pork supplier Smithfield Foods in a landmark US$4.7 billion deal last year. Morgan Stanley was not immediately available for comment. Executives at WH Group declined to comment.

 China*:  June 25 - 26 2014

Chinese navy to participate in seven programs during RIMPAC exercise 中國海軍在夏威夷環太演習參加七個項目 The missile destroyer Haikou (R), missile frigate Yueyang and supply ship Qiandaohu(C) are seen during the supply at sea in Pacific Ocean, during the the Rim of the Pacific (RIMPAC) multinational naval exercises on June 13, 2014. After 6 days' sail, the Chinese fleet participating in the Rim of the Pacific (RIMPAC) multinational naval exercises joined naval forces from Singapore and the United States in waters off Guam on Saturday. The world's largest joint military exercise at sea, the 2014 Rim of the Pacific (RIMPAC) Naval exercise, will kick off in Hawaii on Thursday. It is the first time that China will have participated in the exercise. The Chinese forces include missile destroyer Haikou, missile frigate Yueyang, supply ship Qiandaohu, hospital ship Peace Ark, two helicopters, a commando unit and a diving squad, totaling 1,100 officers and soldiers. Its complement is second only to that of the host, the United States. Japan, Australia and 22 other countries will take part in the exercise. In accordance with the consensus reached by national leaders from both China and the U.S., the Chinese navy will take part in seven programs, including artillery practice, sea security operations, and military medical exchanges. This shows that the U.S. has the will to improve bilateral military ties. According to unwritten rules generally applied in practice, a country does nto normally join in the actual programs during its first participation in the exercise, and major security missions are carried out by the U.S. and its principal allies, said Zhang Junshe, a researcher at the People's Liberation Army Naval Military Studies Research Institute. Analysts believe the US aim is to build an Asia-Pacific version of "NATO" on the basis of the traditional alliance, and ultimately dominate Asia-Pacific security affairs, while Japan, Korea, Australia and other countries want to further strengthen relations with the United States to improve their military capabilities. The goals for Canada, the United Kingdom, Norway and other peripheral participating countries are to increase foreign participation in Asia-Pacific affairs as well as gain experience and develop skills. China's presence at the exercise will have a positive effect on relations between China and the U.S., strengthen their friendly cooperation, and help to safeguard regional peace and stability. It is also a great opportunity to broaden exchanges and pragmatic cooperation between China and other countries, and lay a good foundation for safeguarding maritime security in the future. RIMPAC, which started in 1971, is the world's largest multinational maritime military exercise. It forms a complete set of medium-scale "sea intervention maneuvers".

Hong Kong*:  June 23 - 24 2014

US human trafficking report misleading, says Hong Kong (By Danny Lee Hong Kong has hit back after a US State Department report accused it of not doing enough to tackle human trafficking. The latest annual Trafficking in Persons report for the first time identified the city as a "source territory" - as well as a "destination" and "transit" point - for trafficking. It said victims came from as far away as Chad, Uganda and Colombia and Asian countries. Some of the city's 320,000 domestic workers were victims of "debt bondage" because of fees owed to agencies, the report said. Authorities identified just seven victims of sex trafficking despite arresting 3,000 mainland and foreign prostitutes, it added. But the government accused Washington of failing to reflect the city's "unfailing commitment" to fighting trafficking. "[It] doesn't fully reflect the unfailing commitment and continuous efforts of the government in the fight against human trafficking," a government spokesman said. "In particular, we disagree that Hong Kong is a destination and transit and source territory for men, women, and children subjected to sex trafficking and forced labour." The report highlights the high-profile case of Indonesian domestic helper Erwiana Sulistyaningsih as an example of the dangers suffered by domestic workers. Erwiana's employer has pleaded not guilty to 20 charges of labour violations and abuse of Erwiana and two other maids. The report said children as well as men and women were at risk of trafficking and forced labour. The practice of "compensated dating" would "facilitate the prostitution of Hong Kong children and their vulnerability to trafficking", it added. Women were lured to the city and forced to work as prostitutes, the report said, and the city was a "transit point" for Southeast Asian fishermen forced to work aboard boats in the Pacific. The city was ranked in tier two, which means it did not fully comply with US anti-trafficking laws. It was downgraded from tier-one status in 2009. Eman Villanueva, of the Asian Migrants Coordinating Body, welcomed the report. "This time the report has focused on the abuses and this time it shows the problem persists, and in my view, is worsening," Villanueva said. "With the case of Erwiana … the US State Department report will put more pressure on the government to take some concrete measures in reforming their existing policies." The government spokesman added: "Notwithstanding the rare occurrence of human trafficking crimes, we recognise the need to maintain our vigilance towards this threat."

 China*:  June 23 - 24 2014

Li Keqiang urges peaceful development of seas, says conflict leads to 'disaster' (By Reuters in Shanghai) China wants to promote peaceful development of the oceans, Premier Li Keqiang has said. At the same time, he warned that conflicts in the past had only brought "disaster for humanity". His words come at time when China is involved in a growing dispute with its neighbours over the energy-rich South China Sea, which China claims almost in its entirety. It rejects rival claims to parts of it from Vietnam, the Philippines, Taiwan, Malaysia and Brunei, making the dispute one of Asia's most intractable and a possible flashpoint. China also has a long-running dispute with Japan in the East China Sea. "China will unswervingly follow the path of peaceful development and firmly oppose any act of hegemony in maritime affairs," Li told a maritime summit in Greece, according to the foreign ministry's website. "Developing the oceans through cooperation has helped many nations flourish, while resorting to conflict to fight over the sea has only brought disaster for humanity." At a forum in Beijing yesterday, China's top diplomat, State Councillor Yang Jiechi, who visited Vietnam last week to discuss a row over the siting of oil rigs in waters claimed by Hanoi, said Beijing had the patience and sincerity to push for talks to resolve such disputes, but China would not sacrifice its sovereignty. "China will not trade its core interests and will not swallow the bitter pill of harming its sovereignty, security and development interests," said Yang, who outranks the foreign minister. Xinhua, in a report late on Friday, accused Vietnam of encouraging trawlers to fish in disputed waters around the Paracel Islands - which China calls the Xisha Islands and Vietnam the Hoang Sa Islands - by using financial incentives. "Vietnamese seized by Chinese law-enforcement authorities for illegal fishing confessed that they were given large subsidies by the Vietnamese government to fish in 'disputed waters'," Xinhua said. "In addition, armed Vietnamese fishing vessels have repeatedly looted Chinese fishing boats, posing a serious threat to the safety of Chinese fishermen's lives and property. The Philippines has meanwhile said it will ask an international arbitration tribunal to make a speedy ruling on its South China Sea dispute with China.

Hong Kong*:  June 21 - 22 2014

Mark Wahlberg, Li Bingbing kick off Transformers world premiere in Hong Kong (By Vivienne Chow and Michael de Waal-Montgomery) Fans delighted as stars take to red carpet for Hong Kong world premiere of Transformers 4 - Hollywood glamour added heat to the Hong Kong summer as hundreds of enthusiastic fans congregated at the red carpet to catch a glimpse of the world’s A-listers at the latest Transformers world premiere. Big cheers erupted as Mark Walhberg, lead star of the fourth instalment of the Transformers franchise, Transformers: Age of Extinction, got out of a black Mercedes in a grey suit and sunglasses. Crowds chanted “Walhberg! Walhberg!” as the Oscar-nominated star swiftly removed his sunglasses and waved at the crowd upon stepping out onto the red carpet at the clock tower outside the Cultural Centre in Tsim Sha Tsui, where the premiere is being held. Red carpet glamour came under attack by what might indeed be Decepticons as heavy downpours suddenly put a dampener on the proceedings. Many fans rushed for shelter while others stayed put under umbrellas. Co-star Stanley Tucci, who arrived after Walhberg, was forced to walk down the red carpet under the protection of a black umbrella. Earlier, at around 5pm, leading lady Nicola Peltz arrived in a revealing turquoise floor-length dress wearing her blond hair down. She was followed by director Michael Bay, Hong Kong actor Ray Lui – one of the film’s cast members – and mainland actress Li Bingbing. It was the first time that Hong Kong has hosted the world premiere of an international blockbuster. The premiere kicked off at 6.30pm, and will be followed by an after-party outdoor concert with Grammy-award winning American rock outfit, Imagine Dragons. The film was partly shot in Hong Kong and mainland China, where the premiere was initially tipped to be held. Industry insiders say film company Media Asia switched the venue of the premiere to Hong Kong after overseas journalists had trouble securing travel visas to the mainland. Jorden Bhavnani, 13, a student at YMCA of Hong Kong said she and her friends came to see the red carpet show after a day of school exams. “It’s amazing. I didn’t think I’d ever have celebrities like this so close to me. I’m really excited to see Mark Walhberg. Hong Kong hasn’t had this type of thing before.” US Grammy-winners Imagine Dragons drew a large following of loyal fans ahead of their rooftop concert at Ocean Terminal car park scheduled after the premiere. Some fans tried to gain access to Ocean Terminal car park as early as 2pm in the hope of getting the best spots in the all-standing concert set against the the backdrop of Victoria Harbour. Jodie Lam Weng-san, 21, a student from Macau skipped the red carpet and began queuing for the concert at a stairwell blocked by security at the car park area just under the rooftop. “They were great last time I saw them in Germany,” she said. Filming in Hong Kong lasted for ten days last October across a variety of locations, including Quarry Bay, To Kwa Wan and government headquarters in Tamar. It was understood that the government provided unprecedented support for the filming of the latest Transformers franchise. Despite the blackmailing drama – where an air-conditioning technician was jailed after attempting to extort HK$100,000 from director Michael Bay for location fees – Bay said in a recent interview that he had a great experience in Hong Kong. “Hong Kong is a very visual city,” he added. Hong Kong Tourism Board chairman Peter Lam said using Hong Kong as a location for international films and staging premieres helped boosted the city’s appeal worldwide. Other blockbusters shot in Hong Kong included The Dark Knight (2008) and Contagion (2011). Director Michael Mann’s upcoming film Cyber was also shot in the city last year. “We are extremely happy and very proud,” said Lam, who is also the boss of film company Media Asia. “In recent years, we have seen a number of big-budget Hollywood action blockbusters shot in Hong Kong. These films are not only visual treats for filmgoers. They also put Hong Kong on the big screen around the world.”

 China*:  June 21 - 22 2014

China hits number three for growth of US dollar millionaires (By Enoch Yiu China last year saw a 17.8 per cent growth in the number of people with more than US$1 million to invest, taking the total to 758,000. Mainland China is the thirdfastest at producing millionaires after Japan and Kuwait and ahead of Hong Kong and the US. The world's second-largest economy last year experienced a 17.8 per cent growth in the number of people with more than US$1 million to invest, taking the total to 758,000, according to the World Wealth Report 2014 released yesterday by Capgemini and RBC Wealth Management. The report tracks the world's wealthiest people in 71 countries. The pace of growth on the mainland was higher than the global average of 15 per cent. Michael Yong-Haron, managing director and head of North Asia of RBC Wealth Management, said the mainland and other emerging markets gained from strong economic and stockmarket growth last year. "Strong growth in Asia, Japan and the US has created more new high-net-worth individuals. Almost 40 per cent of high-net-worth wealth has been created in only the past five years," said Yong-Haron. He believed the mainland would continue to churn out high-net-worth individuals as quickly in future. In terms of absolute numbers, however, the mainland still has a long way to go. The country's wealthy represent only 5.5 per cent of the world's total of 13.7 million who qualify for that tag. The US, ranked sixth in terms of the pace of growth in the number of rich individuals - at 16.6 per cent - topped the list in terms of absolute numbers, with four million. Simon Ng, managing director of RBC Wealth Management Hong Kong, said a 22 per cent rise in the number of rich last year secured Japan's place at the top in terms of growth, largely because of a strong stock market rally. The number in Hong Kong grew 9.4 per cent to 124,000, the pace slowing from the heady 27 per cent growth in the previous five years when the city held the crown. Ng said the drop in the growth rate resulted from a high base of comparison.

Hong Kong*:  June 19 - 22 2014

Aircraft sex pests set to face civil action in Hong Kong courts (By Bryan Harris Bill will make sexual harassment of a service provider illegal, even if it happens outside HK - If passed, the Sex Discrimination (Amendment) Bill 2014 would close a gap in existing regulations by making the sexual harassment of any service provider "unlawful". Passengers who sexually harass staff on Hong Kong aircraft could soon feel the weight of local law after the government yesterday announced a bill to clamp down on mile-high sex pests. Set to be introduced to the Legislative Council next Wednesday, the bill would make the sexual harassment of flight attendants a civil offence, with offenders liable to be brought before a court for financial damages. The move by the government follows a survey by the Equal Opportunities Commission in February that found more than one quarter of flight attendants - both men and women - had been sexually harassed in the previous 12 months. It also comes a little more than a month after Cathay Pacific flight attendants called on the company to redesign its uniforms, which cabin crew said were too revealing and could provoke sexual harassment. If passed, the Sex Discrimination (Amendment) Bill 2014 would close a gap in existing regulations by making the sexual harassment of any service provider "unlawful". "Based on recommendations made by the Equal Opportunities Commission, we propose to render any sexual harassment by customers against providers or prospective providers of goods, facilities or services unlawful," said a spokesperson for the Constitutional and Mainland Affairs Bureau, which is behind the bill. Given the international nature of flight attendants' work, the bill would also cover offences committed on a Hong Kongregistered ship or aircraft while outside Hong Kong, the bureau said. Representatives from the aviation industry reacted positively to the news, with Cathay Pacific's Flight Attendants Union hailing the extra legal protection. "About 27 per cent of flight attendants were sexually harassed last year, while 47 per cent witnessed or heard about cases of sexual harassment," union vice-chairman Julian Yau said, citing figures from the Equal Opportunities Commission study. "We're very happy to see the government wants to fix the law to cover all service providers." Yau said he hoped the prospect of punishment would be a deterrent to would-be offenders. "It is also good for other service providers, like waiters or waitresses," he said. "They know they are protected."

 China*:  June 19 - 20 2014

State Councillor Yang Jiechi tells Vietnam to stop 'hyping up' oil rig tensions (By Kristine Kwok Sharp remarks by State Councillor Yang Jiechi suggest little progress was made in resolving oil rig dispute in meetings with Hanoi officials - Chinese State Councilor Yang Jiechi (left) meets Vietnamese Communist Party General Secretary Nguyen Phu Trong in Hanoi. A senior Chinese official told Hanoi yesterday to stop "hyping up" tensions over an oil rig that Beijing has placed off Vietnam's coast, in remarks indicating that the two countries are still trapped in a diplomatic quagmire over the South China Sea. State Councillor Yang Jiechi was in Hanoi for the highest-level talks between the two countries since the oil rig deployment early last month caused a nosedive in relations. The discussions were seen as an attempt to contain the worst diplomatic crisis between the ideological allies in decades. But analysts said Yang's sharp remarks indicated no progress was made during the one-day trip. In a move that could further stoke tensions, China's Marine Safety Administration announced on its website that another drilling platform, Nanhai No9, would be moved close to Vietnam's coast by tomorrow. Coordinates released by the administration indicate the area is close to the Gulf of Tonkin, where the countries are negotiating on possible joint development projects. It is not clear if the rig will be in disputed waters. During a meeting with Yang, Vietnamese Prime Minister Nguyen Tan Dung urged China to withdraw the rig Haiyang 981 and told Yang that China's behaviour severely violated Vietnam's sovereignty and offended the Vietnamese people, according to the state-run Vietnam News Agency. But in another meeting with Vietnamese Deputy Prime Minister and Foreign Minister Pham Binh Minh, Yang reiterated that oil rig 981 had been operating within an area of Chinese sovereignty and the current difficulty in the bilateral relationship was a result of Vietnam's "illegal disruptions", according to a summary of the meeting posted on the Chinese foreign ministry's website. China would adopt all necessary measures to protect its sovereignty and maritime rights, and Vietnam should stop "illegally" disrupting the Chinese operation, Yang said, indicating the oil rig would remain in the location until August 15 as planned. Vietnam, he added, should stop hyping up the problems and properly handle the aftermath of anti-China riots last month. The oil platform is about 32km from the China-controlled Paracel Islands, which Vietnam also claims, and 278km from the Vietnam coast. Its deployment has badly strained relations and ships of the two countries, both government and civilian, have frequently clashed or collided. Anti-China protests broke out in several Vietnamese cities last month, claiming four lives. Scores of foreign-invested factories were also badly damaged during the demonstrations. Vietnam has threatened to take the maritime dispute with China to international arbitration. It claims the oil rig is within its Exclusive Economic Zone under the United Nations Convention on the Law of the Sea and should be relocated. Minh told Yang Vietnam was willing to improve relations with China and to keep the situation under control, according to the Chinese foreign ministry. It described the meeting as "candid" and "constructive". Zhang Jie, an expert on regional security with the Chinese Academy of Social Sciences, said Yang's remarks indicated the two sides were nowhere near finding a solution to the current impasse. "This indicates that no agreement was achieved and both sides remain unwilling to budge on their stance," Zhang said. Yang is the highest-ranking official in China overseeing foreign affairs. "The majority of Vietnam's politburo still favours accommodation with China," said Carl Thayer, an expert on Vietnam at the Australian Defence Force Academy. "They are stuck with the question of do you get out of this gracefully and then have working relations with China."

Hong Kong*:  June 17 - 18 2014

Citi in record HK$5.4b deal for shift to East Kowloon office (By Enoch Yiu Banking giant's outlay for a Wheelock-developed site is the city's biggest single-office transaction - Citi is taking up the East Tower in the East Kowloon development (centre), shown in an artist's impression of the project. US banking group Citi will spend HK$5.42 billion on a new building in East Kowloon that will become the hub for its 4,500 staff scattered around the city, in the largest single-office transaction in Hong Kong. The deal eclipsed the mark set by Agricultural Bank of China with its HK$4.88 billion purchase of 50 Connaught Road Central in 2012. The Citi building is being built by Wheelock Properties and the whole block of Grade A office space is named One Bay East - East Tower. It would be completed next year, with 21 floors and a total gross floor area of 512,000 square feet, the lender said yesterday. "This is one of the greatest milestones of our 112 years of history in Hong Kong," Weber Lo, the country officer and chief executive for Hong Kong and Macau, told the South China Morning Post. "This strategic investment of a Citi-owned office property is a testament of our commitment to the future of Hong Kong, and our determination to furthering our franchise in this priority market of Citi." Stephen Bird, chief executive for Citi Asia Pacific, said the move was "in line with our global strategy to consolidate our operations in priority markets". In Hong Kong, Citi has so far leased several offices and owned only a few branches. Aside from a Central branch, its other offices include Citibank Plaza in Garden Road and premises in Quarry Bay. Lo said the deal supported efforts to transform Kowloon East - comprising Kai Tak, Kowloon Bay and Kwun Tong - into another core business district. Joseph Tong, executive director of Sun Hung Kai Financial, said the deal underlined the difficulty in securing ample office space in Central. "It is not just the expensive rent. Even if companies can afford to pay, many companies cannot find adequate office space in Central to house all their staff," Tong said. "Consolidating all staff into one building would enhance operational efficiency." Citi's neighbour will be insurer Manulife (International). Wheelock chairman Stewart Leung Chi-kin had said more than eight parties were in talks to buy One Bay East, which is in Hoi Bun Road. Wheelock Properties is a wholly owned unit of Hong Kong-listed Wheelock & Co.

 China*:  June 17 - 18 2014

Royal start for Li Keqiang's UK trip as China, Britain seal trade deals worth HK$184b (US$23.7 billion) Strictly business for Cameron and Li, with politics kept off the table = WINDSOR, ENGLAND - JUNE 17: Queen Elizabeth II receives Chinese premier Li Keqiang (3rdL) and his wife Cheng Hong (2ndL) at Windsor Castle, during their visit to the UK on June 17, 2014 in Windsor, England. During his first official visit to the UK Mr Li will meet the Prime Minister at Downing Street and attend a Global Economy Roundtable. At the start of Mr Li's three-day visit, the Home Office announced a new visa service, to be offered to all Chinese visitors to the UK following a pilot programme for tour operators last year. Li Keqiang and David Cameron, who said Britain was a "strong and good friend of China and supporter of China’s rise". China and Britain signed trade deals worth over £14 billion (HK$184 billion) during a visit by Premier Li Keqiang in London, British Prime Minister David Cameron said yesterday. Both sides are seeking to mend ties that were strained when Cameron met the Dalai Lama, Tibet's exiled Tibetan spiritual leader, in 2012. At a joint press conference Cameron said he and Li had reviewed the two countries' relationship, including the part of it concerning Hong Kong. "This year marked the 30th anniversary of the Joint Declaration, which stressed the two governments' commitment on Hong Kong's prosperity and stability and 'one country, two systems'," Cameron said. Business, not thorny political topics, dominated the visit, with the two sides focusing on potential collaboration in nuclear po wer, high-speed railways and finance. In announcing the deals, Cameron said Britain was a "strong and good friend of China and supporter of China's rise". He stressed the importance of the ties to Britain's economic recovery. British energy giant BP said earlier that it would be signing a deal worth around US$20 billion over 20 years with Chinese state-owned firm CNOOC to supply China with liquefied natural gas. The UK had made significant efforts to improve relations with Beijing since the cooling of relations after Cameron met the Dalai Lama, said Hugo Williamson, managing director of the Risk Resolution Group, a consultancy based in London. "Cameron now looks to project the UK as China's best friend in the West," he said. Earlier, a military band played to welcome Li and his wife, Cheng Hong , to Windsor Castle, before Queen Elizabeth greeted the pair in a lavishly decorated drawing room. The Chinese leader then travelled to central London for a formal inspection of British soldiers and a meeting with Cameron at his office in Downing Street. Cameron told reporters that he and Li had also discussed terrorism, Iraq and Ukraine, among other topics. He did not directly address China's human rights record, a subject that often raises Beijing's ire. Around 100 rights activists campaigning for Tibetan independence and other issues staged a colourful protest near Downing Street, fighting for attention with a rival pro-China group. A heavy police presence held the protesters at arms' length, though their chants could be heard as Cameron and Li shook hands and posed for photographers. Li's meeting with the queen was a significant political gesture because the privilege is typically granted to heads of state. Analysts say China probably pushed for the royal audience, underscoring its increasingly aggressive approach to diplomacy. Asked about Chinese ambassador Liu Xioming's earlier remark that Britain ranked below Germany and France in terms of China's European ties, Li said at the press conference he had high hopes for Sino-British ties. "There's an old saying in China that when you are at one mountain you shall sing their local song," Li said. "I am in the UK and I'd say that I hope China-UK relations can become the driving force of China-EU relations." After the UK, Li will visit Greece later this week.

Hong Kong*:  June 15 - 16 2014

Former justice minister defends white paper, warns city will be 'doomed' if it engages in 'colour revolution' (By Tony Cheung Elsie Leung Oi-sie said it was important to stay vigilant about whether external forces are "meddling in Hong Kong’s internal affairs". Beijing is concerned about external forces at work in Hong Kong as the city would be “doomed" if a "colour revolution" took place, a former justice minister warned on Sunday morning. Elsie Leung Oi-sie, currently deputy director of Basic Law Committee and former Secretary of Justice, was speaking in a radio interview in defence of the controversial white paper issued by the central government last Tuesday. The white paper on the “one country, two system” policy, emphasised Beijing’s control over Hong Kong, and warned that national security would be jeopardised if Hong Kong was not ruled by “patriots”. Pan-democrats have criticised the white paper, saying it confirmed that Beijing was “backtracking” on its promise about allowing Hong Kong to maintain its highly autonomous status, but Leung dismissed these concerns. “The central government is worried about the country’s situation,” Leung said. “Hong Kong is such a free city, and many non-residents can [engage in] activities here, so [the white paper] says we have to be stay vigilant about whether external forces are meddling in Hong Kong’s internal affairs. “Hong Kong would be doomed if we engage in ‘colour revolution’, and in fact intense movements has been on the rise recently, and I think [Beijing’s] worries are not groundless.” Leung did not specify what she meant by “intense movements” and why a “colour revolution” – like those that took place in the former Soviet Union and the Balkans in the early 2000s – could be possible in Hong Kong. She also reiterated her worry that the Occupy Central movement would end in violence, although she disagree with those who fear that the civil disobedience plan would end in a military crackdown – just as in the Tiananmen Square crackdown on June 4, 1989. “Some people are very scared that the [Chinese] army would repeat the June 4 political storm – but it won’t, the local garrison would only [be mobilised] if the SAR government asks the central government for help, and it is limited to the purpose of maintaining public order,” Leung said. “Those who strongly reacted and said the central government will suppress [protests in the city] have not read the Basic Law clearly,” she added.

 China*:  June 15 - 16 2014

Former US congressman: Diaoyu Islands part of China 美國前國會議員:釣魚島及其附屬島嶼是中國的一部分 (By Xinhua News) BEIJING - The Diaoyu Islands belong to China since ancient times, former US congressman David Wu said. The Japanese government's behavior on the issue has brought troubles for the China-US relations and put the Obama administration in a very awkward situation, Wu said in a recent interview with the Hong Kong-based newspaper Wen Hui Po. Wu, who stated during his term of office that historically and geographically the Diaoyu Islands have always been a part of China, said he still holds this viewpoint and it is unfortunate and unnecessary for the United States to get involved in the issue of the Diaoyu Islands. It was Shinzo Abe's government which complicated the East China Sea situation and the Japanese prime minister's 2013 visit to the Yasukuni shrine, which enshrines 14 convicted Class-A war criminals, also irritated East Asian countries, Wu said. Japan has never made enough apologies for what it did during World War II, which has infuriated China and other countries and made unnecessary troubles for the United States, Wu said. Wu believed the United States does not hope to intensify its relations with China. He said a lot of companies from America and other countries have made huge investment in China in the past 30 years and that it is likely these countries will receive a great amount of investment from China in the next 30 years. A peaceful solution to the Diaoyu Islands issue is in the interest of both China and the United States, Wu said.

Hong Kong*:  June 13 - 14 2014

Vinexpo Asia-Pacific lingers long on the palate (By Mischa Moselle The magic of the Vinexpo trade fair is that although the show lasts only three days, the buzz it generates brings a stream of winemakers to Hong Kong that takes several weeks to process. While some are hoping for a coating of the Vinexpo fairy dust, others have different motives. Winemakers from the northern hemisphere have new releases to push, and ones from the southern hemisphere want to check out the competition. Adding to the excitement this year was the big push for Côtes du Rhône wines organised by Le French May. So can the Post dig out its crystal ball and predict what will be in our glasses during the coming year? Not quite. The trade show doesn't collect figures on how much business is done, and by whom, and some exhibitors seemed to be here to find a new distributor rather than support their current one. Plenty of others, however, were brought here by their distributors and many of their wines are available in Hong Kong. Here are some highlights of the past few weeks of tasting. Johann Krige, of Kanonkop Estate in Stellenbosch, South Africa, gave a tutored tasting of five vintages of the winery's Paul Sauer Bordeaux blend. Krige describes the wines as "terroir-driven" and pointed out the structure given by a mix of roughly 70 per cent cabernet sauvignon, 20 per cent cabernet franc and 10 per cent merlot. The wine grew in alcohol strength from 12.5 per cent for the 1991 to 14 per cent for the 2009, but there were consistent flavour notes of berries, black pepper and tea leaves. Geoff Merrill, proprietor of Geoff Merrill Wines in McLaren Vale, Australia, talked an audience through five recent vintages of his world-beating shiraz. The weakest wine came in at 14 per cent, the strongest at 15.5 per cent alcohol but these wines hide their alcohol levels remarkably well - they are certainly not fruit bombs. While the big guns from Bordeaux don't really need a presence at Vinexpo, there were a few surprises from Burgundy. The great chablis from the estate of Jean-Marc Brocard was no surprise - but its relatively low price certainly was. This is a wine that the trade would describe as over-delivering for its price. The sparkling red wine from Parigot, which also makes a cremant de Bourgogne - a sparkling wine made by the champagne method but outside the Champagne area - was also a big surprise. Sparkling red is usually thought of as an Australian invention and one with little appeal here. This was more than a novelty. The wine cannot even be labelled a cremant due to strict labelling laws. The makers seem to have their eye on the China market - one version comes laced with gold leaf. Vintae is a Spanish company that owns wineries in several of the country's regions. I tried the 100 per cent tempranillo wines from the Matsu winery in the Toro appellation. I hope the gastronomic wines, with their eye-catching labels, have already managed to find a local distributor or importer. Debra Meiburg gave an interesting talk on the treasures of her native Sonoma County in California. While the region neighbours Napa Valley, the mountain range that divides the two gives Sonoma a distinct terroir. Not only has the tectonic activity that created the mountains given the region its unique soil, they form a barrier for the fog that rolls in off the Pacific ocean and cool the grapes overnight. The characterful Australian Chester Osborn was there to introduce his range of eccentrically named but well-made wines. We enjoyed the 100 per cent rousanne Money Spider and the sweet viognier, marsanne, pinot gris blend called the Noble Mud Pie. Anticipating some criticism for his tempranillo, grenache and shiraz blend, he called it Sticks and Stones, but it certainly doesn't deserve any brickbats. Côtes du Rhône is an underappreciated region in Hong Kong. It's a vicious circle: it rarely gets ordered, so it rarely appears on shop shelves or wine lists, meaning no one has an incentive to add it to their list. Southern Rhone wines also have a reputation among some for being too sour for the Hong Kong market. As Hong Kong's fine wine lovers appreciate wines that come from iconic labels, have interesting stories and present opportunities for displaying connoisseurship, it's surprising the area isn't better known. There are only a handful of iconic labels, but few are better known than Hermitage, Crozes-Hermitage, while appellations include Côte Rôtie and Condrieu, home the world's benchmark viognier wines. In the south, the possible permutations of up to 18 grapes in the wine must surely appeal to connoisseurs. However, the commonest grapes used are syrah and grenache, hardly unfamiliar varieties. As to that sourness, I didn't find it myself, but perhaps it is too subjective a quality. The climate of the two sections of the valley is radically different and its cooling and heating mistral and sirocco winds surely provide plenty of talking points. Alsace has fallen out of favour since its heyday as the mandatory match with Asian food, so it was nice to be reminded of its quality with a tasting at Dopff & Irion. The funny thing about Vinexpo is that even though exhibitors are not happy unless they are complaining, they come back every year.

 China*:  June 13 - 14 2014

Li Keqiang granted meeting with Queen Elizabeth (By Cary Huang [Li Keqiang, born in 1955, became China's premier in March 2013. Like ex-president Hu Jintao, his power base lies with the Communist Youth League, where he was a member of the secretariat of the league’s central committee in the 1980s and later in the 1990s the secretariat’s first secretary. His regional governance experience includes a period as vice party boss, governor and party boss of Henan province between 1998 and 2003 and party boss of Liaoning province beginning in 2004. He became vice premier in 2008. Li graduated from Peking University with a degree in economics] Premier Li Keqiang will meet Queen Elizabeth when he visits Britain next week, an unusual meeting observers say shows how aware China has become of its world status. Deputy Foreign Minister Wang Chao announced the royal meeting in Beijing yesterday. An earlier report in The Times of London said the trip would be in jeopardy unless the royal meeting was on the agenda. The announcement of the unusual meeting came just a few days after the Daily Telegraph newspaper alleged that the family of former Chinese premier Wen Jiabao had bankrolled a professorship at the prestigious Cambridge University. The newspaper reported on Tuesday that the Chong Hua Foundation, a charity that gave £3.7 million in 2012 to Cambridge University to endow a professorship for Chinese development studies, was controlled by Wen Ruchun, daughter of ex-premier Wen Jiabao. The report quoted Vivien Wang, founder of the EtonKids kindergarten chain, as providing the information about the link between Wen Ruchun and the charity. But Wang issued a statement on Friday denying she had spoken to the newspaper. "I have never spoken to a representative of the Telegraph," said Wang in the statement. She said Simon Montlake, the reported who penned the Telegraph story, had contacted her "some time ago" claiming to work for Forbes, but she denied giving him any information for the story. "At no time did I say any of the quotes attributed to me, or anything remotely similar, to Mr. Montlake or anyone else," Wang said in the statement. She also threatened to take legal actions unless the Telegraph published an immediate retraction of the story. Meanwhile, analysts have declined to speculate on the Times of London report that the Chinese side had insisted on the royal meeting, noting some other notable non-heads of state had met the queen. But they agreed the encounter suggested a significant agreement between the two countries. “Such an audience is politically significant and the confirmation of the meeting suggests an important political agreement between the two nations,” said Tian Dewen , a researcher in European studies at the Chinese Academy of Social Sciences. Kerry Brown, professor of Chinese politics and director of the China Studies Centre at the University of Sydney, said: “It just shows how aware China is now of its status and prestige, so that it can demand the protocol treatment it desires.” But Brown said the Chinese must be aware of the queen’s limited political influence. “Hopefully the UK has used the Chinese love of status-enhancement gestures like this to get some much more meaningful concessions in return,” he said. Li is expected to discuss financial matters, including London’s role as a yuan trading centre, during his visit, which begins on Monday. He is scheduled to meet Prime Minister David Cameron the next day at 10 Downing Street. Talks with Cameron would cover trade, investment, energy and cultural exchanges, Wang said. Deputy Commerce Minister Gao Yan earlier said Li would discuss London’s role as an offshore yuan trading hub. “On this visit to Britain by Premier Li, I believe there will be positive developments on this issue, including on financial cooperation,” Gao said.

Japanese F-15 tails Chinese jet at close distance (By By Zhang Yunbi and Zhao Shengnan) China made a rare release of video footage and photos on Thursday to show the risky scene of Japanese aircraft stalking Chinese planes at a stunningly close distance above the East China Sea. Experts observed that the Japanese aircraft were carrying missiles to pose a blunt threat, and the distance between them was close enough to lead to a crash. China's Ministry of National Defense criticized Japan's accusation that a Chinese military aircraft had "approached unusually close" to two Japanese warplanes, saying it's "a thief who cries thief". Ministry spokesman Geng Yansheng said that two Japanese F-15 fighter jets intruded into China's East China Sea Air Defense Identification Zone on Wednesday to conduct reconnaissance and follow the regular patrol of China's Tu-154 plane. On May 24, Japan accused China of sending aircraft to approach Japanese planes at "an unusually close distance". But China said the two Japanese aircraft were disturbing an ongoing China-Russia naval drill. Geng criticized Japan's second accusation within a month as "ignorance of the facts". What has been done by the Japanese pilots was dangerous and "obviously provocative", Geng said. The ministry attached links of two video clips of the airspace confrontation on its website. Zhang Junshe, a researcher at the People's Liberation Army Naval Military Studies Research Institute, said the video showed that the Japanese planes carried missiles and weapons, which is a sort of intimidation and threat. Li Jie, a senior professor at the Naval Military Studies Research Institute of the People's Liberation Army, said releasing the video footage is a good choice to help present the facts to the international community. The ministry spokesman underscored the detail that "the closest distance was about 30 meters, which seriously affected the flight safety of the Chinese aircraft". Li said 30 meters is an extremely dangerous distance. "Because both planes were flying at high speeds, and the two planes would have crashed within a tenth of a second if one of the pilots makes a wrong move." Also on Wednesday, a YS-11EB electronic intelligence aircraft and an OP-3C surveillance plane from Japan conducted reconnaissance within the Chinese ADIZ and tailed Chinese planes. 

Hong Kong*:  June 11 - 12 2014

UK consulate in Hong Kong bars same-sex weddings after government objection (By Christy Choi British missions in China and numerous other countries can perform same-sex unions, but Hong Kong's will not go against government policy - Henry Lam (left) and Guy Ho are lobbying the government for their marriage in Canada to be recognised in Hong Kong. Same-sex marriages will be allowed at British consulates in China, Russia, Azerbaijan and 20 other countries, but not in Hong Kong, according to the local consulate. "Unfortunately, the Hong Kong government has raised an objection to the solemnisation of same-sex marriages in Hong Kong," said a spokeswoman for the British consulate. While diplomatic missions are under British rule and not subject to Hong Kong law, it is a requirement under British law that a marriage licence only be issued if the host government does not object. The news from the British Foreign and Commonwealth Office last week saying couples could approach consulates in some countries to be married initially drew joy from LGBT (lesbian, gay, bisexual and transgender) couples, but it was cut short when the consulate revealed the Hong Kong government's objection. "The Chinese [central] government and the Russian government aren't objecting, yet the Hong Kong government is still saying they don't want this," said Nigel Collett, a writer who is set to marry his Singaporean partner this August in Britain. "They're blocking every stage of the way to same-sex marriage, thinking if they give an inch it'll come to pass in Hong Kong." While Collett's plans are not foiled by the Hong Kong government's objection, others who have been lobbying their consulates are still upset about this development. "We are especially outraged by this … there's a very strong homophobic group lobbying for this," said Betty Grisoni, 44, co-founder of Double Happiness, a group looking to lobby for the interests of LGBT couples. Grisoni, a public relations expert, has been trying to marry her partner of 15 years at the French consulate ever since France legalised same-sex marriages in May 2013. "Most of our friends are here, I've been living here for 12 years, and not been living in France for over 23 years. Why can't we get married where most of our friends are? It's just not fair," Grisoni said. Double Happiness looks to push for the right to marry in the consulates of countries where same-sex marriages and civil unions are legal, and ultimately to lobby the Hong Kong government itself to recognise LGBT unions. Globally, there are 16 countries that recognise same-sex marriages, all with diplomatic missions in Hong Kong, but so far the Post has only been able to confirm that the Spanish consulate performs such marriages. A representative from the Spanish consulate said it would be possible for two Spaniards, or a Spaniard and a person from another country where same-sex marriage is legal, to be married in the consulate. But if the partner came from a country with restrictions, that would have to be looked at on a case-by-case basis. The British consulate said it had sent a note to the Hong Kong government seeking guidance. The government's protocol department said it could not provide an answer, while the Immigration Department and Security Bureau said it was not a matter under their purview. 

 China*:  June 11 - 12 2014

Beijing ‘freezes’ cooperation talks with Taiwan over stalled trade pact (By Lawrence Chung in Taipei) Taiwanese President Ma Ying-jeou called for progress to be made in the legislature regarding cross-strait bills. Beijing has frozen further cooperation talks with Taiwan in a sign of growing displeasure over the island’s delayed ratification of a controversial free-trade agreement signed last June. Woody Duh, Taiwan's economics vice-minister, confirmed today that since April the mainland has not scheduled any more negotiations with Taiwan over the merchandise trade agreement supposed to be signed at the end of this year. “It is not surprising for the mainland to adopt such a ‘wait-and-see’ attitude” given the delay, Duh conceded. The merchandise trade agreement and the services trade pact are a follow-up to the Economic Framework Cooperation Agreement – a semi-free trade pact – signed by the two sides in 2010. Taiwan’s legislature was supposed to ratify the services trade pact within six months of its signing last June but demonstrators have objected to the agreement on the grounds that it would lead to serious job losses. They also argue closer ties with Beijing pose a threat to the island’s democracy. On March 18, a group of students started a three-week occupation of the legislative chamber to protest against the government’s alleged failure to consult public opinion before it signed the services trade pact. Demonstrators demanded its withdrawal and the passing of a new law to increase scrutiny on future cross-strait agreements. Local news media said the scale of the opposition means it will now be difficult for the legislature to pass both the services trade pact and the new legislation before the end of the year. If the new legislation is not approved, it would effectively mean the two sides would be unable to sign any future cross-strait agreements. Analysts said the logjam explains why the mainland has put further talks on hold, including negotiations with Taiwan on further cooperation in the aviation, tourism, shipping and postal service sectors. Duh urged the legislature to quickly approve the services trade pact and the new law to increase scrutiny of future agreements to avoid delaying the follow-up merchandise trade deal talks. The legislature will hold an extraordinary session from Friday to review the services trade pact and the draft bill to increase scrutiny of future cross-strait. Taiwanese President Ma Ying-jeou, whose government has signed some 20 non-political cooperation agreements with the mainland since 2008, called today for progress to be made in the session.

Hong Kong*:  June 9 - 10 2014

Occupy Central being used by anti-China forces to try to seize power, warns former Xinhua official (By Jeffie Lam Ex-Xinhua head accused of scare tactics after warning movement is being used by anti-China forces and PLA will step in if riots occur - Zhou Nan warned that the central government would intervene if riots broke out in Hong Kong. "Anti-China forces" are using the Occupy Central movement to try to seize control of Hong Kong's administration, a former director of Xinhua's Hong Kong branch has warned. Zhou Nan said the People's Liberation Army would intervene if riots broke out in the city. His remarks to two Hong Kong broadcasters come as the civil disobedience movement is mobilising Hongkongers to participate in its June 20-22 "civil referendum" - intended to show the public's preferences for electoral reform. A co-founder of the movement accused him of scare tactics. "Occupy Central … is illegal and violates Hong Kong's rule of law," Zhou said in the television interview in Beijing. "This has demonstrated that a portion of the anti-China forces inside and outside Hong Kong are conspiring to usurp the jurisdiction of the city, which should never be allowed." He said that if appropriate action was not taken, these forces would become even more "arrogant" and might even call for Hong Kong's independence. Occupy Central has vowed to mobilise 10,000 supporters to block the main roads in Central if the government fails to offer a satisfactory reform plan for the chief executive election in 2017, which Beijing has said may be held under universal suffrage in accordance with the Basic Law, the city's post-handover mini-constitution. Zhou, who also served as a minister of foreign affairs and played a prominent role in the negotiations with Britain over Hong Kong's future when Xinhua was Beijing's de facto embassy in the city, warned the central government would intervene if riots broke out in Hong Kong. Zhou said: "On the matter of the [PLA] garrison, [the late leader] Deng Xiaoping said that it has another function other than as a symbol of sovereignty - to handle possible riots. "Would the central government get involved if there was something harmful to the country's interests happening in Hong Kong? We could not allow Hong Kong to turn into a base to subvert China's socialist regime under the guise of democracy." He said that Article 23 of the Basic Law, which requires the city to enact a law to prevent treason, secession, subversion and sedition against the central government, was specifically designed to prevent Hong Kong turning into a base for such activity. The government's attempt to pass the required legislation in 2003 failed after it triggered a massive protest by half a million people who saw the draft legislation as a threat to the rights and freedoms of Hongkongers. The march forced the government to shelve the measure. Benny Tai Yiu-ting, a co-founder of Occupy Central and a legal scholar at the University of Hong Kong, said the civil disobedience movement was by no means subversive. "Zhou only wants to scare off Hongkongers with his words so as to discourage people from participating in the referendum on June 20-22 and the [annual] July 1 protest," he said. Democratic Party founding chairman Martin Lee Chu-ming believed Zhou's remarks did not represent the central government's view. There was no need to deploy the PLA to handle Occupy Central, he said, as the Hong Kong police had already said they were confident they could take care of any problems that might arise.

 China*:  June 9 - 10 2014

Beijing, Vatican prepare to resume talks for first time since 2010 (By Kristine Kwok Meeting said to be in the works, but recent anti-church actions could complicate dialogue - Fang Xingyao (left) and Pope Francis. Pope Francis revealed that he exchanged congratulatory messages with President Xi Jinping following each other's appointment last year. This was seen as a sign of warming ties. China and the Vatican are preparing to resume a long-stalled dialogue as changes of leadership on both sides have created an opportunity for communication, people close to the Roman Catholic Church said. But the recent mass demolition of churches - both Catholic and Protestant - in Wenzhou, Zhejiang, and the election of a state-sanctioned bishop in Chengdu, Sichuan, make it doubtful the two sides can bridge major differences, the two people said. "The atmosphere is quite positive for both sides to restart the dialogue now," a person close to the Holy See said, highlighting hopes generated by the relatively new leadership in both the Vatican and Beijing. The Vatican was now waiting for Beijing to confirm the time and location of the talks, he added. Another person close to the Hong Kong church said the meeting could happen this year. If formal talks are held they would be the first between the two sides since 2010, when Beijing's unilateral ordination of bishops damaged what had been an improving relationship. Relations were further strained in 2012 when Thaddeus Ma Daqin, an outspoken bishop in Shanghai, was detained hours after he announced his resignation from the leadership of the Chinese Catholic Patriotic Association, the officially sanctioned church which the Holy See does not recognise. Previous talks sought to address key issues, such as the unilateral ordination of bishops, and to pave the way for resuming diplomatic ties. Bishop John Fang Xingyao, chairman of the Chinese Catholic Patriotic Association, said now was the ideal time to resume a relationship with the Vatican. "My understanding is that China is hoping to establish diplomatic ties with the Vatican, and most people in the Vatican share this view too. This is the best time to do so; we shouldn't miss it," Fang said. The Vatican has insisted that the issue of unilateral ordination should be addressed before formal ties can be established. But Fang said that the best way to resolve the issue was to resume diplomatic ties. Pope Francis, hailed as a great communicator who does not shy away from thorny issues, raised hopes with his election last year that he could make headway on the relationship. The pontiff has yet to make any public pronouncement on China. But he has reached out to the nation's faithful by sending them messages ahead of special prayers dedicated to Chinese Catholics in May this year and last year. In an interview with an Italian newspaper in March, Pope Francis revealed that he exchanged congratulatory messages with President Xi Jinping following each other's appointment last year. This was seen as a sign of warming ties. But last month the authorities in Wenzhou demolished more than 60 churches, raising concerns of a crackdown on religion. The source close to the Vatican said initial feedback on the demolitions indicated they could stem from an isolated policy authorised by the local government. But the incident could complicate the dialogue, the source added. Another potential stumbling block is the election of Joseph Tang Yuenge as bishop of the Chengdu diocese in May. The Vatican must now decide whether to approve Beijing's choice. Should Beijing ordain him without the Holy See's recognition, it would test the Vatican's reaction, the Hong Kong church source said. "Since the Pope's election, everybody is watching how he is going to engage with China … whether he is going to take a stronger approach, or if he is going to make a compromise."

Hong Kong*:  June 7 - 8 2014

As digital arm churns out profits, CNBC explores reality TV (By Bien Perez Mark Hoffman says CNBC is engaging small businesses, an important target for advertisers. Nearly two decades since making its first broadcast from Hong Kong, the Asia-Pacific operation of CNBC has developed into the leading satellite and cable business news network across the region. “We’ve made tremendous progress. We’re now No 1 in terms of ratings – whether you measure it by day, week, month or quarter – by a healthy distance,” Mark Hoffman, the chief executive and president at parent CNBC in the United States, told the South China Morning Post. CNBC’s Asia-Pacific operation was set up in the city in June 1995 as part of the American cable and satellite business news television channel’s 24-hour financial market coverage around the world. The following year, it became the first US-owned, Asia-based TV news organisation to open a bureau in Shanghai. The network, which moved its regional headquarters to Singapore in 1998, has managed to make some headway into the mainland’s highly restrictive media market. The country’s vast media market continues to be technically off-limits to foreign investors. In 2003, CNBC formed a strategic partnership with the Shanghai Media Group, one of the mainland’s biggest entertainment and media conglomerates, which provides business news from the country’s financial centre to the network. Another important collaboration was made in 2010 with state broadcaster China Central Television (CCTV). Hoffman said the CCTV deal has allowed CNBC to gain access to “roughly 400 million homes inside the mainland”. CNBC opened a new bureau in Beijing in 2012. Other programmes originate from Sydney, and bureaus are maintained in Tokyo and Seoul. CNBC also has a joint venture, TV18 Broadcast, in India with Network18 Media and Investments. Owned by NBCUniversal under its eponymous news group, CNBC was founded in April 1989 and now counts more than 390 million household subscribers globally. NBCUniversal operates 30 news, entertainment and sports cable networks. It is a subsidiary of Comcast, the world’s largest media and communications firm by revenue. For the first quarter, Comcast’s total revenue increased 13.7 per cent to US$17.4 billion from US$15.3 billion a year earlier. Hoffman said CNBC has posted “three record years in a row of profitability internationally. We’re also making big investments both in Asia and in Europe”, without giving the amounts spent. In April, CNBC unveiled a redesigned studio in Hong Kong, which is now home to the network’s flagship morning programme, Squawk Box. Hoffman, a broadcast veteran with more than 25 years of experience, is credited with further driving the network’s global expansion, establishing a profitable digital business, building an award-winning “long form” documentary unit and leading the overall organisation to five consecutive years of record operating profit. He recently discussed with the Post CNBC’s advances in the digital market segment, its foray into business-themed reality TV series production and prospects on the mainland. 

 China*:  June 7 - 8 2014

Stakes high in firm’s quest to put China’s first jumbo jet in the air (By Daniel Ren in Shanghai President Xi Jinping inspects the cockpit of a C919 prototype at Comac's headquarters in Shanghai last month. Four giant banners that read “Sustained effort”, “Sustained study”, “Sustained hardship” and “Sustained dedication” flutter alongside the national flag at the imposing plant of Commercial Aircraft Corp of China (Comac) in Dachang, Shanghai. They are a sign of how seriously the company takes its mission, to put a large aircraft made in China in the air, which President Xi Jinping has indicated is part of the “Chinese dream”. Xi told Comac officials last month that the country must achieve the goal of creating its own jumbo jet at all costs. “The ability to develop and make a large airplane represents the strength of a country’s aviation industry,” he said during a visit to the company. “More importantly, it’s a symbol of a country’s overall strength and power. A large airplane is the dream of several generations of Chinese.” Despite the firm’s sustained efforts, however, and regardless of the political and economic cost of failure, this dream is not one that will be readily realised. Comac, a state-owned juggernaut, was established in 2008 to assemble a large plane that can compete against the single-aisle aircraft made by global aviation giants Airbus and Boeing. The ambitious project is part of Beijing’s efforts to move the manufacturing sector up the value chain. Tian Min, Comac’s chief financial officer, told reporters last month that the assembly work for the C919, a 168-seat jet, would begin in the second half of this year. He said the maiden flight would take place late next year. That was the first official acknowledgment of a likely delay in the project. In 2010, the company said it would redouble its efforts to ensure a test flight this year and that it would start delivering the aircraft to buyers in 2016. Tian insisted the production of the C919 was on track despite growing suspicions about China’s ability to create its own jumbo jet. Beijing announced in 2007 it would take 90 months for the country to produce a jumbo jet. As Comac was officially set up in 2008, a one-year delay of the maiden flight was in line with the 90-month schedule, Tian said. Nonetheless, industry officials are sceptical. Comac’s 90-seat regional jet, the ARJ21, made its first flight in 2008, but it took more than five years to complete the certification process. The first ARJ21 has yet to be delivered to buyers. As the country lacked the core technologies for the key parts and systems for the jumbo jet, domestic manufacturers were encouraged to set up joint ventures with global industry leaders such as General Electric to supply them to Comac. According to Beijing’s script, the foreign companies could profit from the joint ventures’ supply deals with Comac, while the country would have access to the key technologies through the tie-ups. However, people familiar with the industry said cooperation with foreign firms didn’t appear to be smooth, since they were reluctant to transfer their key technologies to their Chinese partners. A delayed delivery of the C919 could mean a multibillion-US-dollar loss of business for Comac because of competition from international rivals in the mammoth market for jumbo jets. The mainland’s airlines are expected to buy 5,000 jets worth about US$560 billion in the next two decades, Comac said. The upgraded and re-engined Airbus A320neo and Boeing 737 Max are set to hit the market earlier than the C919. “Considering the demands from the customers, we tried to make our products more economical,” Tian said. “We have effectively controlled the costs, and our jets would have a pricing advantage over their rivals.” But Tian was tight-lipped on exactly how much a C919 would cost. Comac has secured orders for about 400 of the jets. Chinese officials have reason to dream of an indigenous airplane. In 1980, the Y-10 aircraft made by the Shanghai Aircraft Factory completed a test flight to Xinjiang and Tibet. However, the plane was never commercially used, since Beijing abandoned the project to focus on a partnership with US company McDonnell-Douglas to assemble the MD-80 jet instead.

Hong Kong*:  June 5 - 6 2014

Alleged gunman's daughter Liddy Li was photographed with married director last week (By Stuart Lau and Clifford Lo) The daughter of Li Tak-yan, the man police believe shot dead his neighbour and himself at the weekend, was snapped with Oxide Pang Chun, the husband of actress Angelica Lee - Liddy Li (centre, holding paper and phone), daughter of alleged gunman Li Tak-yan, leaves the Fu Shan Public Mortuary after identifying his body on Tuesday morning. The man who police believe shot dead a neighbour and himself over the weekend was the father of an actress, Liddy Li, who was recently photographed sharing an intimate moment with a well-known married film director, a police source said on Tuesday morning. Li Ting is the daughter of the alleged gunman, Li Tak-yan. She adopted the first name Liddy after entering the entertainment business. On Tuesday, Liddy Li and her mother identified the body of Li Tak-yan at Fu Shan Public Mortuary in Sha Tin at about 9am. The pair wore black hats, face masks and sunglasses in a bid to hide their identities. Shortly before 10am, the pair made no comment as they left the mortuary with another woman. Last week, photographs emerged of Liddy Li apparently hugging and kissing Hong Kong film director Oxide Pang Chun, the husband of award-winning Malaysian actress Angelica Lee Sinje. Images of the intimate scene, captured in Elements shopping mall in Kowloon, have featured on magazine covers and made entertainment news headlines. Prior to the weekend’s shootings, Pang had returned to Malaysia where he issued a joint statement with Lee announcing they intended to mend their relationship. It remains unclear why Li, 51, allegedly shot dead Liu Kai-chung, a 43-year-old air-conditioning technician, on the 21st floor of Lok Ching House, Kai Ching Estate, on Saturday night. Some 12 hours later, police say, he shot himself in his apartment on the 10th floor when elite officers used explosives, tear gas and stun grenades to storm the flat. No evidence has been discovered to indicate that the two men knew each other or had a dispute, according to another police source. “His neighbours told police that [Li] always shouted at home but there was no other person in his flat,” the source said. Police seized a computer from the 10th floor flat for examination as they work to unravel the events of the weekend. Officers also seized two guns, 43 rounds of ammunition and three holsters from Li’s flat. The Kowloon East crime unit is investigating the source of the firearms. Liddy Li entered the entertainment industry in 2009, landing a number of supporting roles in TVB dramas and feature films, including Lan Kwai Fong 2. Her parents divorced in 2010 after her father’s Hong Kong-mainland trading business fell apart in the wake of the handover, according to court documents from Li Tak-yan’s conviction two years ago for attacking a neighbour with a knife. She lives with her mother and younger sister in a Tsing Yi apartment.

 China*:  June 5 - 6 2014

More than 1,300 rich Chinese join lawsuit over axing of Canada visa scheme (By Ian Young in Vancouver Lawyer representing wealthy mainland Chinese applicants to present case at Federal Court calling for compensation to be paid over cancelled millionaire migrant scheme - Canada's immigration authorities could face a payout of up to C$18 billion over termination of the millionaire migrant scheme. More than 1,300 rich mainland Chinese have joined a lawsuit against Canada’s immigration authorities in a last-ditch attempt to escape Ottawa’s decision to shut down its millionaire migrant scheme and terminate tens of thousands of applications. Tim Leahy, the Toronto lawyer behind the Federal Court case that goes before Justice Mary Gleason on Wednesday, is seeking C$5million (HK$35.7 million) in compensation for each applicant and their dependents unless the government agrees to assess their cases. Leahy said 1,335 of his 1,446 clients had lodged their applications for the federal Immigrant Investor Programme [IIP] in Hong Kong. Virtually all of the Hong Kong applicants are mainland Chinese. The litigation, if successful, represents a potential payout of C$18 billion, based on an average of 2.5 individuals per application. Leahy regards the threat of such a payout as the “poison pill” that would force the processing of the applications. Although the scheme’s cancellation was announced in the Canadian federal budget on February 11, the termination of the applications in the queue will not go into effect until the budget is passed, which is expected on June 26. “Faced with that [C$18 billion] cost, I would expect CIC [Citizenship and Immigration Canada] to agree to finalise the cases on the merits even though it will have terminated your file when the Budget Bill passes,” Leahy said in an e-mail to clients last month that was also shared with the South China Morning Post. Leahy said by phone on Monday that by inserting the IIP’s cancellation and the backlog’s termination in a budget bill, the government was seeking to avoid “full parliamentary scrutiny”. Immigration data shows that of the 66,423 individuals in the federal immigrant investor backlog as of July last year, 50,131 had lodged their applications via Hong Kong. Leahy claimed that immigration authorities unfairly slowed the processing of applications under the federal IIP well ahead of its cancellation. He drew a contrast with the rate at which applications were processed under a parallel scheme run by the province of Quebec. That scheme continues to operate. “If CIC had allocated to the rest of Canada an FIIP quota equal on a per capita basis to the quota it allocates to Quebec, there would be no FIIP inventory. All the files would have been finalised by now,” Leahy claimed. Leahy’s lawsuit includes would-be migrants who lodged applications in Ankara, London, New Delhi, Paris, Port-of-Spain, Pretoria and Singapore, in addition to those from Hong Kong. Federal authorities have not commented publicly on the case. The announcement that the federal IIP would be shut down came less than a week after the South China Morning Post published a series of investigative reports that revealed how tens of thousands of applications to the scheme by wealthy mainlanders had swamped Canada’s Hong Kong consulate, creating the vast backlog. About 80 per cent of the Chinese applicants were seeking to live in the province of British Columbia, nearly all destined to settle in the city of Vancouver if past census data held true. The IIP had been a key means of migration for rich Hongkongers and mainland Chinese over the past 28 years. Under the scheme, applicants worth a minimum of C$1.6 million received visas for themselves and their immediate family in return for loaning the government C$800,000 interest-free for five years, after which the loan was returned in full. Leahy refused to say on Monday how much he was being paid by his clients. However, in March he told the Post that he is charging an up-front fee with a similar amount payable should the case prove successful, with the total fees in the four-figure Canadian-dollar range. Leahy has a history of antagonism with CIC. In February last year, immigration authorities took the unusual step of issuing a bulletin warning staff not to deal with Leahy, who was serving a 60-day suspension for failing to co-operate with an investigation by the Law Society of Upper Canada, the body overseeing the profession in Ontario. The suspension, which remains the subject of an appeal by Leahy, has long expired and Leahy has regained his status as a practising society member.

Hong Kong*:  June 3 - 4 2014

Thousands brave the heat to take part in Sai Kung dragon boat races (By Ernest Kao At least 180 crews compete under intense sunshine in one of city's biggest rowing galas of the year; red tides force beachgoers out of the water in Southern District - The air along the Sai Kung promenade was thick with sunscreen, sea breeze and adrenaline as throngs arrived on Monday morning for the annual Dragon Boat Racing Gala, arguably the biggest rowing event of the year in Hong Kong. At least 180 crews ranging from established local Sai Kung clubs to novice university teams vied for glory over 35 events under blue skies and intense sunshine, braving temperatures of up to 33 degrees Celsius. Organisers said more than 3,000 paddlers in all competed. Amid the festive atmosphere, carving of roast pig and lion dances, competition was cut-throat among the crews. Many had been in training since the rowing season began in March. The Sai Kung waters, shallower than other race locations such as Stanley, meant crews had to put in more effort in the earlier lengths of the contests. Izzy Siu, captain of the Sai Kung-based Aguaholics paddle club, said a friendly rivalry had developed between Sai Kung teams and the less experienced non-local ones. “We know the waters well, it’s our home turf,” said Siu, a schoolteacher. He said the sport, once dominated by rich clubs, has grown over the years with an influx of new, more affordable teams. “As the sport becomes more accessible, it is also getting bigger and more popular,” Siu said. Now a household name in Sai Kung paddling circles, the Fat Dragons team was formed by former aircraft-maintenance workers 14 years ago. Team member Simon Kwan King-wai, 57, said that he and his colleagues had realised, after a temporary hiatus from paddling in the late 1990s, that they had all become overweight. “We didn’t want to give ourselves a pretentious name like the Flying Dragons, but we still wanted something cool – so we went with the Fat Dragons.” The team placed second in the men’s group C open race on Monday. Sai Kung-based Nicky Lee Kwok-man, 46, of the Blue Sky Athletic Club, has been paddling since he was a teen. He urged more youngsters to try out the sport. “It was a different time back in my day. Kids weren’t only into going out drinking and playing video games,” he said. “Our club is now trying to attract new talent.” Dragon boat races are held every year on the Tuen Ng festival holiday, which commemorates the death of the Chinese poet Qu Yuan. He killed himself in a river in despair at the defeat of his homeland’s capital – now part of modern Hubei province. To keep the fish from devouring his body, villagers were said to have taken to their boats, splashing the water with their paddles, beating drums and throwing rice dumplings to the hungry fish. A tradition was born. Other major races held on the holiday take place in Sha Tin and Stanley. Meanwhile, visitors to some of the most popular beaches in Southern District were warned to stay out of waters affected by red tides. The algae bloom "dyed" about a third of the beach in Repulse Bay bright red. Other beaches with red-tide warnings issued by the Leisure and Cultural Services Department include Deep Bay, St Stephen's, Middle Bay, South Bay and Chung Hom Kok. Last week, red tides formed by non-toxic algae were reported at several beaches in Southern District, the Po Toi Island fish culture zone and in Victoria Harbor. 

 China*:  June 3 - 4 2014

Air China launches non-stop Beijing-Washington flight (Xinhua) BEIJING - Air China will offer non-stop flights between Beijing and Washington D.C. four times a week from June 10 this year in the latest move to expand its network in the United States. The flight, operated with Boeing 777-300ER aircraft, is scheduled to leave Beijing at 1:00 pm (Beijing time) and arrive at 2:35 pm (Washington time) on the same day. The return flight is expected to depart at 4:35 pm and arrive at Beijing Capital International Airport at 6:15 pm the next day. Flight numbers for the Beijing-Washington service will be CA817/818. The United States is a popular travel destination for the increasingly affluent Chinese. China is expected to be the top tourist source market for the United States in 2018 with the number of visiting Chinese hitting 4.7 million, according to predictions from the US official tourism and marketing organization Brand USA.

Abe, Hagel's accusations rejected (By ZHAO SHENGNAN in Singapore) China has never taken the first step to provoke trouble, PLA officer says - Wang Guanzhong, deputy chief of the General Staff of the People's Liberation Army, and Russia's Deputy Minister of Defense Anatoly Antonov attend a plenary session of the Shangri-La Dialogue in Singapore on Sunday. Wang Guanzhong, the highest ranking military official in the Chinese delegation at an Asia-Pacific security forum, started his speech on Sunday by highlighting the common aspiration for a utopia with the same name as the event: Shangri-La. However, the deputy chief of the General Staff of the People's Liberation Army did not continue with his mild-toned comments as planned on the last day of the Shangri-La Dialogue in Singapore. The lieutenant general diverted from the script about midway through the speech, saying he felt forced to respond to Tokyo and Washington's finger-pointing at China. Japanese Prime Minister Shinzo Abe opened the forum on Friday night with a high-profile speech full of thinly veiled comments targeting China. US Defense Secretary Chuck Hagel went further on Saturday by directly accusing China of "destabilizing" the South China Sea and by backing Tokyo's pursuit of a more muscular military role as a counterweight to Beijing. "The speeches made by Mr Abe and Mr Hagel gave me the impression that they were coordinated with each other, they supported each other, they encouraged each other and they took the advantage of speaking first at the Shangri-La Dialogue and staged provocations and challenges against China," Wang told defense and military representatives and scholars from 27 countries. Calling such rhetoric "unacceptable" and "unimaginable", Wang said: "China has never taken the first step to provoke trouble. China has only been forced to respond to the provocative actions by other parties." When responding to the "nine-dash line" in the South China Sea, one of the many questions he received after the speech, Wang questioned the US motive for criticizing China, saying Washington should first abide by international laws by ratifying the United Nations Convention on the Law of the Sea, a document Beijing has ratified. "When will the US ratify the UNCLOS?" Wang asked. Wu Shicun, president of the National Institute for South China Sea Studies, said Wang sent a message that a growing China is not a threat to the world. On the contrary, it firmly safeguards regional stability. Issues involving China, the US and Japan took center stage at the three-day meeting in Singapore. Zhou Qi, a senior researcher at the Chinese Academy of Social Sciences, said Washington is using the territorial rows between China and the Philippines and Vietnam to challenge China and seek regional support for its Asian rebalancing policy. Geoffrey Till, emeritus professor of maritime studies at King's College London, said the US is pursing "a very delicate balance" as it supports its allies obliged by treaties, but it also avoids to see conflicts in the region. Despite the unusually strong language directed toward each other, Wang and Hagel dedicated part of their speeches to calling for improved military ties. Lori Forman, a professor at the Asia-Pacific Center for Security Studies in the US, said open conversation is the key to managing differences and maintaining stability. Wang also said he preferred Hagel's frankness by directly naming China, compared with Abe who did not mention any country, but obviously targeted Beijing. "If I am to compare the attitude of the two leaders, I would prefer the attitude of Mr Hagel. It is better to be more direct," he said during the speech, drawing some laughter from the reporters.

Hong Kong*:  June 1 - 2 2014

3 Cheung Kong firms to acquire Australian gas pipeline firm Envestra (By Peggy Sito Envestra is Li Ka-shing's latest overseas target as group rebalances local holdings in favour of foreign assets with higher returns - Australia, home to some of the world's biggest gas reserves, has seen rising international interest in its energy sector. Cheung Kong (Holdings), Cheung Kong Infrastructure (CKI) and Power Assets have joined hands to acquire Envestra, an Australian gas pipeline firm, in a cash deal worth A$2.37 billion (HK$17 billion). The firms in the consortium are all controlled by Li Ka-shing, Asia's richest man. The cash offer is the latest in a string of overseas acquisitions by the Cheung Kong group of companies as it rebalances its holdings in Hong Kong and on the mainland in favour of international assets offering higher growth and returns. The news came a day after AS Watson, the retailing arm of Hutchison Whampoa, said it would sell its 50 per cent stake in a joint venture, Nuance-Watson Group, which operates travel retail businesses in airports and duty-free stores in shopping centres in cities including Hong Kong, Macau and Singapore and on the mainland. AS Watson said it would sell the interest in Nuance-Watson to its partner, The Nuance Group. Hutchison agreed in March to sell a 25 per cent stake in AS Watson to Singapore's Temasek for HK$44 billion and pushed back plans for an initial public offering for the unit. The three firms in the consortium said in a joint statement yesterday that they had offered an off-market takeover bid for all of Envestra's shares for a cash consideration of A$1.32 a share. In a statement to the Australian Securities Exchange yesterday, Envestra said its chairman and an independent board committee had unanimously recommended the cash offer. CKI is a subsidiary of Hutchison Whampoa, which is 49.97 per cent owned by Cheung Kong. Power Assets is 38.87 per cent owned by CKI. The offer price values Envestra at about A$2.37 billion. The offer will be financed through existing cash reserves and credit facilities available to the three firms in the consortium, according to the Envestra announcement. CKI, through a wholly owned subsidiary, already owns 17.46 per cent of Envestra and is its second-largest shareholder. By accepting the consortium's offer, Envestra is reversing its previous support for a share-swap offer from its largest shareholder, APA, Australia's largest gas pipeline group. Envestra had recommended APA's bid for about two months, but companies related to CKI opposed it and unexpectedly submitted a higher, cash offer. "Given that 80 per cent of Envestra's gas coverage is in South Australia and Victoria, the acquisition would enable us to further share our expertise and to explore opportunities for synergy," CKI group managing director Kam Hing-lam said. Kam said CKI's investment in Envestra in 1999 was its first entry into the Australian market. It now has a portfolio of regulated energy businesses in Australia comprising SA Power Networks and Victoria Power Networks. The buying consortium expects that a bidder's statement will be lodged with the Australian Securities and Investments Commission, the Australian Securities Exchange, and Envestra by the middle of next month. According to Envestra, the deal is subject to conditions including approval from Australia's Foreign Investment Review Board, and the consortium is required to acquire a relevant interest in more than 50 per cent of Envestra's shares, including CKI's existing stake. Li Kwok-suen, a fund manager at Phillip Capital Management, described it as a logical move by the Cheung Kong group to enlarge its asset size by acquiring higher-yielding assets.

 China*:  June 1 - 2 2014

Chinese official Fu Ying accuses Shinzo Abe of using tensions as pretext for changing military policy (By Kristine Kwok in Singapore Chinese official says premier sees territorial dispute as way to amend Japan's security policy - Fu Ying said Shinzo Abe's denial of history stokes concern at the direction he is taking. A senior Chinese official yesterday accused Japanese Prime Minister Shinzo Abe of exploiting the territorial dispute in the East China Sea to amend the country's security policy. In an apparent attempt to pre-empt Abe's own speech at the Shangri-La Dialogue, former deputy foreign minister Fu Ying told a special panel on the sidelines of the annual forum in Singapore that Abe's denial of Japan's history would intensify concerns at the direction in which he was taking the country. "My observation is that after he came to office he didn't show interest addressing the Diaoyu Islands dispute. Instead he has made it into a bigger issue - that is, China as a country is posing a threat to Japan as a country," said Fu, now chairwoman of the Foreign Affairs Committee of the National People's Congress. "He has made such a myth. And with that as an excuse, he is amending the security policy of Japan. That's worrying for the region and for China." The Diaoyu Islands are claimed by mainland China, Taiwan and Japan, which calls them the Senkaku Islands. Fu's comments were widely seen as a response to Abe's call during the forum, which brings together senior defence officials across the region, for a greater regional security role for Japan. Fu was speaking ahead of Abe's keynote speech at a special debate on the forum's sidelines. Her fellow panellists included US Senator Ben Cardin, Singapore ambassador-at-large Tommy Koh and Indian politician Tarun Vijay. She also suggested that America's involvement in recent tensions between China and Vietnam over the South China Sea was unnecessary. After Cardin raised the issue of China's unilateral move to position a giant oil rig in disputed waters off Vietnam's coast, Fu said Beijing and Hanoi would resolve the dispute bilaterally. "I don't think Ben can go there and solve the problem for us," she said. With tensions over maritime disputes between China and its neighbours continuing, discussions at the three-day forum are expected to be focused on Beijing's increasingly assertive approach in the region. Beijing said it would promote its own security theory in Asia at the forum. The Chinese delegation was headed by Lieutenant General Wang Guanzhong , deputy chief of the general staff of the People's Liberation Army, foreign ministry spokesman Hong Lei said.

Hong Kong*:  May 29-31 2014

South China Morning Post: Edward Snowden says he worked as a spy for the United States ‘at all levels’ (By Reuters in Washington) Former US spy agency contractor claims he 'was trained as a spy' and worked undercover overseas for US government agencies - NBC Nightly News anchor Brian Williams with former defense contractor Edward Snowden during the interview in Moscow. Former US spy agency contractor Edward Snowden, who leaked details of massive US intelligence-gathering programs, said in a US TV interview he “was trained as a spy” and had worked undercover overseas for US government agencies. In an advance excerpt of his interview in Moscow with NBC Nightly News that aired on Tuesday, Snowden rejected comments by critics that he was a low-level analyst, saying he worked “at all levels from — from the bottom on the ground, all the way to the top.” “Well, it’s no secret that the US tends to get more and better intelligence out of computers nowadays than they do out of people,” Snowden told NBC news anchor Brian Williams. “I was trained as a spy in sort of the traditional sense of the word in that I lived and worked undercover overseas — pretending to work in a job that I’m not — and even being assigned a name that was not mine.” Describing himself as a “technical expert,” Snowden said: “I don’t work with people. I don’t recruit agents. What I do is I put systems to work for the United States. And I’ve done that at all levels from the bottom on the ground all the way to the top.” He said he worked undercover overseas for both the CIA and NSA and lectured at the Joint Counterintelligence Training Academy “where I developed sources and methods for keeping our information and people secure in the most hostile and dangerous environments around the world.” “So when [critics] say I’m a low-level systems administrator, that I don’t know what I’m talking about, I’d say it’s somewhat misleading,” Snowden added. Snowden, who fled to Hong Kong and then Moscow last year, is believed to have taken 1.7 million computerized documents. The leaked documents revealed massive programmes run by the NSA that gathered information on e-mails, phone calls and internet use by hundreds of millions of Americans. He was charged last year in the United States with theft of government property, unauthorised communication of national defence information and wilful communication of classified intelligence to an unauthorised person. He was granted asylum by Russia last August. NBC is airing the full interview with Snowden on Wednesday night. 

Travel warning for British expats living in Hong Kong over passport ‘mess’ (By Danny Lee Renewals taking months after processing is returned to UK - British passport holders are being warned by Her Majesty’s Passport Office (HMPO) not to make travel plans outside of Hong Kong before receiving new passports as delivery could now take months. Major problems have arisen from the handover of passport processing to the UK after the closure of the British consulate’s Hong Kong passport office last year. Consular officials have declined to say how many people have been affected but the number is understood to run into hundreds at least. According to 2012 consular census, there were 250,000 full British nationals and 3.4 million British National (Overseas) passport holders in Hong Kong. “It is to do with transferring from the Foreign and Commonwealth Office’s regional passport processing centres to HMPO. That’s the reason,” a spokeswoman for the UK government told the South China Morning Post. The delays extend to all types of British passport holders renewing internationally. Some expatriates in the city have already had to wait up to three months to take delivery of a new passport. Events organiser Greg Hunt, applied for a new passport on March 17 and is still waiting for his renewal. He described the situation as a “mess” and said he has submitted a complaint to the UK government ombudsman. “They can’t even tell me where along the process my passport is, the service, for want of a better word, is a disgrace and it’s affecting many, many people,” Hunt said. The consulate originally promised the “cost-cutting” closure of its passport centre “will not affect the time taken to process these applications.” It said that relocation of the office after December 28 last year was to “help us to maintain a speedy and efficient service”. Renewals previously took up to four weeks. However, on May 21 consular officials warned that renewals would now take at least six weeks and first-time applications could take eight weeks or longer to process. “If you are planning any overseas travel in the coming weeks and months, please do not leave it until the last minute to renew your UK passport,” acting consul general Karen Bell warned in a statement issued earlier this month. A HMPO spokesman said that security checks are “significantly longer” for overseas applications and deliveries will not commence until all checks have been made. “We recommend customers should not book travel until they have received their passport,” the spokesman added. Some expatriates who need new passports within four weeks are being forced to buy an emergency passport, which cost HK$1,200 and allows for only a single-entry. Normal application fees for a 10-year passport are HK$1,340 for a 32-page passport and HK$1,450 for one with 48 pages. Katherine Horgan, an exchange student on an education visa that expires June 2, was told to wait between three and six weeks and has now no choice but to apply for emergency passport. “I sent my application on time, they gave me a time frame, and I worked to it. I booked flights – non-refundable or exchangeable – for June 1, and my visa runs out on June 2,” Horgan said. “They are forcing me into a position where I will be staying in Hong Kong illegally against my will.” At the British consulate, a Post reporter talked to more families and individuals troubled by the delay. One woman attempting to obtain an emergency passport explained she sent her passport for processing in early March. Two families also applied for an emergency travel document after the passports failed to arrive within six weeks. The families said the problems could have been avoided if the consulate’s regional passport processing centre remained open. Richard Healy, a commercial litigation lawyer, described the situation as a “shambles.” He applied for a new passport on February 28, and waited nine weeks before delivery, instead of one month. Later, he had to pay HK$2,400 for two emergency passports to travel on business.

 China*:  May 29-31 2014

State Grid to invite private capital to build electric-car charging stations (By Kwong Man-ki in Beijing Investment sought for electric vehicle charging stations as mainland opens up utilities sector - Mainland authorities will only partially open up key utilities to private investment because the sector serves public interest. The mainland's dominant power grid operator, State Grid Corp of China, will invite private capital to build electric vehicle charging stations and integrate more power from private producers into the state grid, marking a step forward to the opening up of the utilities segment amid state-owned sector reform. State Grid said yesterday that it would support charging services for all kinds of electric vehicles, allowing consumers to build their own charging stations if they had a fixed parking space, Xinhua reported. The charging cost could be as low as 50 fen per kilowatt-hour, which would be more cost-effective for consumers, it said. State Grid said it would also support the development of distributed energy resources, which are privately owned, smaller-scale power sources, usually located close to where electricity is used. Individuals who had solar power panels at home would also be allowed to integrate the electricity into the state grid, Xinhua said. It marked a step forward in the opening up of the mainland's utilities sector to private investment, said Zhu Boshan, the general manager of Tacter Investment Consulting in Shanghai. "Allowing private capital in charging stations means the opening up of the electricity distribution side, while supporting smaller-scale power units to integrate into the state grid will allow more private units to participate in power supply," said Zhu, who focuses on state-owned enterprises reform. "This is in line with the government's stance to break state-owned monopolies." Zhao Xijun, a finance professor at Renmin University in Beijing, said the government had been gradually allowing more private investment in monopolised industries, but the opening up of utilities would remain limited because of public interest concerns. Utilities industries such as the electricity sector were closely related to people's livelihoods, so the government would only partially open them up to the private sector, he said. Beijing has said SOEs with monopolistic market positions should co-invest with private firms in an effort to boost business efficiency, following a key Communist Party meeting in November last year that called for market forces to have a decisive role in the economy. Despite the government's efforts to promote the use of electric vehicles and curb pollution, one of the obstacles has been a lack of charging stations. Zhu said that although more private investment would be welcome in the building of smaller power generators and electric car charging stations, the business might not be lucrative enough to attract private firms. Electricity prices were controlled by the government, which would make it more difficult for private power units to make a profit, he added.

Hong Kong*:  May 28-29 2014

Hong Kong facing shortage of 10,000 construction workers - and MTR is suffering (By Phila Siu As mega projects put strain on available manpower, MTR is among companies feeling the pinch - The MTR needs 18,000 workers for five projects including the West Kowloon terminus of its express rail link. By March it had hired only 14,100 labourers. The race is on for developers and contractors to find 10,000 construction workers that Hong Kong needs in the next four years - and the delay-plagued MTR is already feeling the pinch. The rail operator says it needs 18,000 workers for five projects with demand to peak in the middle of this year, but by March it had hired only 14,100. "A number of mega projects, including railways, are currently under way in Hong Kong, and the prevailing labour shortage is common to the construction industry," an MTR spokesman said. "The corporation has been working with the government and the industry to address the labour shortage issue." Contractors for the government's two biggest projects - the Hong Kong-Zhuhai-Macau bridge and the Central-Wan Chai bypass - have however been "generally able" so far to find enough workers locally, except for some aspects of the bridge that require specialist skills. The Construction Industry Council says there are about 320,000 registered construction workers but only about 70,000 are active. It has estimated that the city needs 10,000 additional workers in the coming four years. Questions have hung over whether some of the big public projects can be completed on schedule since the MTR announced in April that construction of its HK$67 billion high-speed rail link to the border would be delayed to 2017. Although the MTR said the delay was caused by damage to a tunnel-boring machine and tougher-than-expected geological conditions at the West Kowloon terminus, it admitted that it still had not hired enough workers for its five railway projects. The spokesman said efforts had been made to improve employment and working conditions to attract younger people as well as experienced workers to join or return to the construction industry. The government said, meanwhile, that about 160 specialised workers had been brought in through the Supplementary Labour Scheme for the Hong Kong-Zhuhai-Macau bridge. The Highways Department and the Civil Engineering and Development Department both said that there were 2,700 workers on the Hong Kong-related projects of the massive cross-estuary project. The Central-Wan Chai bypass had 1,200 workers. "The contractors have to arrange in timely fashion for the required workforce and recruit the necessary types and numbers of construction workers according to the programmed works," the departments said. "To date, the contractors are generally able to employ the required level of workforce locally, except for some trades [on the bridge project] which require specialist skills." They said about 250 workers were employed on another major project, the Liantang-Heung Yuen Wai border crossing, and the contractors so far had not needed to apply for imported workers. Construction Industry Council executive director Christopher To said it was difficult to hire tunnel workers because no training had been done for years. "It is difficult to offer this training because we need to find a hill to do so. We cannot do this training in the classroom," he said. He added that Hongkongers did not like the job as they found working in a dark tunnel a "psychological challenge". On top of the lack of construction workers there is a shortage of engineers, according to Dr Daniel Ho Chi-wing, associate professor in the University of Hong Kong's real estate and construction department. Fresh engineering graduates received monthly salaries of HK$16,000 two years ago. Now they were earning HK$19,000, he said. "And some surveying firms are now hiring people such as social-science graduates, who have not studied surveying at all, and giving them on-the-job training," Ho said. "The demand is now huge. I haven't seen such huge demand since the peak in the 1990s." Construction at another mega project, the West Kowloon Cultural District, is slowly getting into gear with preliminary work on the Xiqu Centre for Chinese opera and the M+ museum. A spokesman for the West Kowloon Cultural District Authority said about 100 workers had been employed for foundation work at the Xiqu Centre, where it is estimated that 400 to 500 workers will be needed at the peak. Site-preparation work for the M+ museum began in April and the average daily number of workers needed was 10 to 14, the spokesman said. 

 China*:  May 28-29 2014

 Police hail 'major victory' after foiling plot to launch new bomb attack in Xinjiang (By Andrea Chen Security has been visibly stepped up in Urumqi, the Xinjiang capital, after the region saw its bloodiest day in five years last Thursday. Anti-terror police in Xinjiang claimed to have scored a “major victory” after officers swooped on a “significant terrorist group” and raided two bomb factories, according to the local Communist Party mouthpiece, the Xinjiang Daily. Police arrested five suspects who allegedly planned to bomb a crowded public place in the troubled region’s Hotan prefecture, the report said. Officers seized 1.8 tonnes of explosive material. The planned attack, allegedly to be led by Abuliz Dawut, was said to have been modelled on the deadly explosions that rocked an open-air market in Urumqi last week, according to the Xinjiang Daily. The gang were reported to have planned to drive into crowds before detonating their handmade explosive devices. The police also found the suspects travelled to Urumqi and other mainland cities to purchase explosive material. Police have also broken up terror groups based in Aksu, Kashgar and Ili. They allegedly participated in terror activities, distributed audio and video products containing terrorist content, manufactured explosives and tried to flee abroad, the paper added. Their arrest follows a raid on Sunday, in which the police captured 200 suspects allegedly part of 23 terrorist or religious extremist groups. China has announced a one year anti-terror campaign. Xinjiang, where separatist movements have been active, is the “main battlefield”, Xinhua reported. The state-run Global Times newspaper said the language barrier, poverty and enthusiasm for religion made Pishan County, the home of the alleged lead terror suspect Abuliz Dawut, a hotbed for terrorism. The paper said: “Most of the secondary school graduates could not write their own names in Chinese, especially in rural areas …If it were not for the policy that residents who have not finished junior high school cannot get marriage certificates, many may have quit school long ago.” Meanwhile, the authorities have expanded the campaign to include local cadres with an “ambiguous stance” on the terrorist attacks. In an interview with Tianshan news portal, a government-run website, chief of the regional Commission for Discipline Inspection Ma Guowei said the authority had punished 65 cadres for violation of the party’s “political discipline” since last year. Last July Ahtam Hlili, a local military recruitment officer in Aksu, was removed from his post for sending emails that promoted “holy war”. Now Batur Duwamat, deputy office chief of Ili Prefecture government, has been placed under investigation after officials received “complaints from cadres and the public that he made certain comments inconsistent with the country’s ethnic policies in public”. The region saw its bloodiest day in five years last Thursday when five suicide bombers ploughed two off-road vehicles into crowds while throwing explosives out of the windows in a busy street market in Urumqi. The attack, which left 39 people dead and 94 injured, was the second suicide bombing in the Xinjiang capital in less than a month. Late last month, a bomb and knife attack at the train station killed one bystander and wounded 79. The authority announced on Saturday four of the suicide bombers were killed at the scene and the fifth was captured on Thursday night. Security has also been stepped up in Beijing. The capital’s police aviation team has sent five helicopters to patrol crowded areas several times since the weekend, the Beijing News reported. The helicopters can transport snipers to an emergency, the paper quoted team leader Yang Dongfeng as saying. The team has multiple patrol routes that cover the city’s major transport hubs, markets and parks, the paper added.

Hong Kong*:  May 26-27 2014

Cepa no help as Beijing set to ban city's accountants (By Enoch Yiu Brokers already at a disadvantage under cross border pact, now it is the turn of auditors as SFC wins 'state secret' ruling - First brokers, now accountants. Its been 10 years since the Closer Economic Partnership Arrangement (Cepa) was introduced, but the mainland market seems to be as elusive as ever for Hong Kong professionals. With a Hong Kong court ruling that Ernst & Young cannot use the "state secret" clause to withhold information on mainland businesses from the local regulator, it may be sliding further away. It is feared the verdict will prompt the mainland's Ministry of Finance to speed up its audit reforms, which propose to bar the city's accountants from plying their trade across the border. The Court of First Instance on Friday rejected EY's plea that it could not hand over to the Securities and Futures Commission the auditors' working papers relating to mainland listing candidate Standard Water as they constituted a "state secret". Joseph Tong Tang, executive director of Sun Hung Kai Financial, said this may prompt Beijing to push ahead faster with its new audit rules to prevent overseas regulators from accessing information on mainland companies and individuals. "This is why foreign accounting firms will be restricted from working on the mainland in future," said Tong, referring to the 10 new rules proposed by the Ministry of Finance. The rules, out for consultation until the end of this week and to be implemented later this year, require international accounting firms to team up with one of the 100-odd mainland accounting firms to perform audits on Chinese companies. The new rules would also prohibit international accounting firms from sending their staff to the mainland under temporary licences, spelling doom for Hong Kong accountants. Global accounting firms are likely to scale down their hiring in Hong Kong but increase hiring on the mainland as a result. The news of the proposed changes, reported by the South China Morning Post last Monday, has shaken up local accountants and those training to enter the industry. "When I joined the accountancy industry three years ago, I thought it would be a good career move," said a young city accountant, who did not want to be named. "The fast-growing mainland economy, I thought, would bring more opportunities for big accounting firms in Hong Kong that deal with customers across the border." The accountant, who has been working at the Deloitte Hong Kong office for three years after getting a degree from Britain, said: "It's unfair competition as we are losing out to junior auditors on the mainland, not because of the quality of our work, but because of Beijing's discriminatory policy." During three years in the profession, almost half of his time has been spent on field audits of factories across the border - a practice that will become a thing of the past if the proposed rules are enacted. Hong Kong Institute of Certified Public Accountants president Clement Chan said the institute and the city's government are in talks with the Ministry of Finance, urging Beijing to keep the interests of Hong Kong accountants in mind. "Hong Kong is part of China. We want central policies to benefit both Hong Kong and mainland accountants," Chan said, adding it would be better if Beijing allowed Hong Kong accountants to work with their mainland counterparts even if it makes it mandatory for international firms to team up with mainland firms for audits. Chan said if Hong Kong accounting firms cannot send their own staff to the mainland, it would be difficult for the Hong Kong accountants to work on the mainland. Not many Hongkongers can obtain the China Institute of Certified Public Accountants qualification to work on the mainland as the examinations are conducted in simplified Chinese. This is why Cepa exempts Hong Kong accountants from four of the six exams needed to become a member of the institute. Still, only 152 out of 35,000 qualified accountants in Hong Kong have passed the tests so far. Christopher Cheung Wah-fung, lawmaker for the financial services sector, said Cepa has similarly failed to open the doors of the mainland market for Hong Kong brokers. "Although there have been several rounds of Cepa promising Hong Kong brokers and financial firms the chance to apply for a licence, no Hong Kong firm has managed to get a licence or to set up joint ventures on the mainland," he said. "In contrast, scores of mainland brokers and fund houses have set up shop in Hong Kong under Cepa."

 China*:  May 26-27 2014

Corruption probe into He Jintao, elder son of ex-Politburo man He Guoqiang (By SCMP) Top leaders order investigation into He Jintao whose father, He Guoqiang, sat on supreme ruling body and headed corruption commission - He Guoqiang, a former member of the supreme Politburo Standing Committee. His son He Jintao is now under house arrest. The party's top leaders have approved the launch of a corruption investigation into the elder son of He Guoqiang, a former member of the supreme Politburo Standing Committee, four sources familiar with the matter told the South China Morning Post. The son, He Jintao, is now under house arrest. Wang Qishan, who is in charge of the Central Commission for Discipline Inspection, the Communist Party's anti-corruption investigation department, has briefed He Guoqiang on some of the initial findings, the sources said. He Guoqiang was Wang's immediate predecessor as head of the anti-graft commission and was the eighth most senior official in the party before his retirement in 2012. It is not clear if a younger son, He Jinlei, is also under investigation. The inquiry into He Jintao did not mean his father was implicated, the sources added. The case contrasts with the corruption investigation into the former security tsar Zhou Yongkang , who was also a member of the Politburo Standing Committee. Zhou's elder son, Zhou Bin, was detained as investigators focused on Zhou Yongkang himself. He Guoqiang, 70, once headed the powerful Central Organisation Department that controls more than 70 million Communist Party appointments and assignments across China. He also served as the party chief in Chongqing . Sources said Wang had advised He to persuade his son to cooperate with the investigation. It remains unclear if the son will eventually face criminal charges - the sources said it would depend on the final findings of the investigation and his level of cooperation. President Xi Jinping is believed to have made the final decision to launch the investigation, two sources said. The president urged Wang to "get to the bottom of it" when he was briefed on the corruption investigation into Song Lin , former chairman of the state-run conglomerate China Resources. He Jintao is said to have played a part in the case. The investigation into Song came after he was accused in June by two mainland reporters of misconduct and corruption over coal mine acquisition deals in Shanxi province, but it was only last month that Beijing announced a formal investigation into his affairs. After Song's detention, the Guangming Daily, which is controlled by the party's central propaganda department, raised questions over the case and implied the former executive was protected by a senior leader. "Who was responsible for withholding the top leadership's order to investigate Song for nearly a year? Who resisted against the probe?" the newspaper said in an editorial. Xi's decision to push the investigation into He's son showed his determination to weed out corruption that is undermining the foundations of communist rule, the sources said. The case would also send out a powerful message that family members or close associates of senior leaders would no longer be spared from investigation, even if the former top politicians themselves were not under scrutiny. "Top leaders believe the runaway corruption among relatives or secretaries of senior leaders will sabotage the party's rule if things continue," said one of the sources. The leaders had reached a consensus in the He case in light of the investigations into Zhou and his family, the source said. It has been revealed that many secretaries and relatives of Zhou were involved in allegedly illegal acts. One of the sources said the president would face some "tough battles" ahead as he pressed his campaign against corruption, but Xi also understood he had to continue for the party to clean up its image and consolidate its rule. The president has repeatedly stressed the importance of "zero tolerance to corruption" since taking office and he sees graft as the major threat to the party's legitimacy. He Guoqiang's last public appearance was at an alumni event at the Beijing University of Chemical Technology in September. He also published a book in January, a compilation of his speeches and essays on building the party written during his tenure as head of the anti-corruption commission. An article published by the Hong Kong-based magazine Phoenix Weekly the same month praised He as honest and upright, saying his sons' weddings took place at a simple guest house. The article quoted his unnamed secretary as saying that He urged his family to "be honest" and behave themselves. It also said his secretary felt safe working with him because he was an uncorrupt official. Zhou ranked beneath He in the party hierarchy before his retirement in 2012. The outcome of his case has yet to be made public and is awaiting a final decision from the top leadership.

Hong Kong*:  May 24-25 2014

'Extremists' in Occupy Central will not succeed, Beijing official warns (By Phila Siu and Kwong Man-ki in Beijing) ‘Extremist’ democrats who try to force central government to give in on 2017 vote by blocking Central will face full force of law, warns official - Wang Guangya was quoted as saying yesterday that the civil-disobedience movement represented only the views of a minority. Beijing will not give in to "extremist acts" such as those planned by Occupy Central, a mainland official in charge of Hong Kong affairs has declared. Wang Guangya, the director of the State Council's Hong Kong and Macau Affairs Office, was quoted as saying yesterday that the civil-disobedience movement, which aims to clog the business centre to push for democracy, represented only the views of a minority. His views were relayed by Hong Kong members of provincial advisory bodies after they met Wang in Beijing. "[Beijing] hopes Hongkongers can be rational," Tam Kam-kau, president of the Hong Kong CPPCC (Provincial) Members Association, said. "As for the small group of democrats who wreak havoc and use extremist acts to force the central government to give in, they will not succeed. If the illegal Occupy Central movement really takes place, [Beijing] believes the Hong Kong government will enforce the law accordingly." Tam also quoted Wang as saying Beijing supported universal suffrage in 2017, but the chief executive election should be in accordance with the Basic Law and related decisions by the Standing Committee of the National People's Congress. Beijing insists that allowing voters to nominate candidates - a key element of demands by Occupy Central and its supporters - would breach the mini-constitution. Association chairwoman Eliza Chan quoted Wang as saying that Occupy Central represented only the minority, while most people were silent and the city should not suffer damage because of a small group. Wang also had said the radical lawmakers' filibuster holding up passage of the budget bill would hurt people's interests and seriously affect the city's stability. He said Hong Kong people and mainlanders had very different levels of civilisation so both sides should be more understanding of the other, a reference to anti-mainlander protests and the row over a child urinating in public. Meanwhile, in an attempt to improve turnout at its unofficial referendum next month, Occupy Central organisers are planning to add another question to the vote: should the Legislative Council veto the government's political reform if it is not up to international standards? The referendum, on June 22, will ask people to choose one of three reform proposals. All contain elements of public nomination, raising fears the turnout may be small because of limited choice. "This is why we are planning to add a fourth question … to draw people across the political spectrum," campaign co-founder Dr Chan Kin-man said.

 China*:  May 24-25 2014

Ex-Google Brain head Andrew Ng to lead Baidu's artificial intelligence drive (By Danny Lee Hiring of Andrew Ng, who led 'deep learning' project, highlights big plans of China firms - Baidu has appointed Andrew Ng as chief scientist to head an expanded research operation in Beijing. Chinese internet giant Baidu has hired top computer scientist Andrew Ng - once head of Google Brain, the American firm's "deep learning" project. The recruitment of Ng, a pioneer in artificial intelligence, shows the big ambitions of China's leading technology companies. Baidu has appointed Ng as chief scientist to head an expanded research operation in Beijing and its new labs in San Francisco. Ng will also lead the development of artificial intelligence. Deep learning, regarded as the next big development in computer intelligence, refers to research that enables machines to simulate brain functions and process huge amounts of data. Analysts believe the major signing of such a big name will make it easier for Baidu to compete and attract further talent to take on Western technology giants in Silicon Valley as they poach top talent from American rivals. Ng, a long-time Stanford researcher whose family is from Hong Kong, was a key member of Google's secretive project X - the same division that developed Google Glass and driverless car technology. He left Google last year to start his own company, Coursera, an online education start-up. Professor Pong Ting-chuen, provost of teaching innovation and e-Learning at the Hong Kong University of Science and Technology, praised Baidu's hiring of Ng. "I first met Andrew when we talked about a partnership between HKUST and Coursera," Pong said. "He's a highly intelligent and technical guy. No doubt, he is one of the top researchers in machine learning; in particular his work in deep learning attracts a lot of attention." During his time at Google developing artificial intelligence, Ng trained an army of computers to mimic human brains and recognise a cat by analysing thousands of YouTube videos. Pong said the advancement of deep learning - and extracting data to get knowledge - would reshape the use of computers. "It is an area people think will advance the intelligence of the computer," he said. "A lot of work that couldn't be done in the past can now be realised." Ng confirmed his departure on his company blog. Baidu's chairman and chief executive, Robin Li, said Ng was the "ideal individual to lead our research efforts as we enter an era where AI plays an increasingly pronounced role". Baidu's senior vice-president Jing Wang said: "Baidu Research … will bring together top-flight Chinese, American, and global research talent to advance Baidu's technological leadership."

Hong Kong*:  May 22-23 2014

Sun sets on joint Hong Kong-Shenzhen solar project (By Cheung Chi-fai DuPont Apollo decided the locally made solar cells were not competitive as and prices for rival products dropped. The first-ever collaborative project between Hong Kong and Shenzhen to create solar cells for power generation will come to an end this year after a subsidiary of American chemical giant DuPont pulled out. The project's end came with the announcement from DuPont's local subsidiary, DuPont Apollo, that it was stopping production in the region of silicon thin-film modules, which are used in solar cells. That dealt a blow to cross-border efforts to establish the region as a hub for the research, development and production of solar power technology. The partnership, called the Shenzhen-Hong Kong Innovation Circle, sought to create research and development facilities in Hong Kong for the technology that would be manufactured in Shenzhen. It was established in 2008 at the invitation of the Hong Kong and Shenzhen governments as part of the central government's 11th five-year plan. Thin-film solar cells use thin photovoltaic material, such as might be found on a solar calculator, deposited on a substrate. DuPont Apollo had aspired to become one of the world's top three providers of thin-film photovoltaic modules by next year. Its versatile thin-film products were cheaper to produce as it uses much less silicon than rival crystalline panels. In 2009, it still expected the photovoltaic market to grow exponentially. But a year later, an oversupply of silicon lowered the prices of rival modules, making the technology less competitive. DuPont Apollo ran the project's production facilities in Shenzhen and a research and development centre at the Hong Kong Science Park in Tai Po. News of the closure came as Chief Executive Leung Chun-ying was seeking support for a technology bureau to take charge of the city's lagging hi-tech and science development. DuPont Apollo chairman Chuck Xu Chengzeng cited a flagging market for the decision to pull the plug on the project. "The state of the silicon thin-film solar module market segment has changed dramatically in recent years and market conditions for this segment continue to deteriorate," he said. Expressing regret over the decision, a spokeswoman for the Science Park said: "We understand and respect this tough business decision made against the backdrop of technology shift and the extremely challenging climate for amorphous thin-film solar module manufacturers." She said DuPont Apollo would hand back the research and development facility, opened in 2009, to the Science Park when the lease expired in August. About 100 scientists and engineers would be transferred within the group or paid to leave, a person with knowledge of the operation said. The production facility in Shenzhen, which came into full operation in 2010, will be suspended but the person believed the factory might be modified for new uses. DuPont Apollo boosted its nominal and paid capital to HK$804 million from HK$664 million in January. The extra shares were issued to DuPont China.

 China*:  May 22-23 2014


What Xi gave Putin for dinner: State banquet menu reveals belt-tightening at 4-star hotel bash (By Andrea Chen As President Xi Jinping and Vladimir Putin met in Shanghai, chefs from a four-star hotel at the centre of the city’s central business district were busy rehearsing for a state banquet held last night, offering security summit delegates a taste of China. “We rehearsed twice yesterday,” executive chef Su Dexing said in an interview with Shanghai Morning Post after the banquet. “Nine chefs needed prepare over 10 dishes for each of the 330 guests … We were under unprecedented pressure.” Xi, who has issued a joint declaration of support and launched joint naval drills with visiting President Putin, reportedly sat next to the Russian leader and China’s first lady, Peng Liyuan, at the dinner. Today marked the start of the little-known security summit, the Conference on Interaction and Confidence Building Measures in Asia, whose participants include Afghan president Hamid Karzai and UN secretary general Ban Ki-moon. The hotel, in Shanghai’s Pudong district, was commissioned more than half a year ago to prepare a banquet that would represent the cuisine of the Yangtze River’s southern region, where the summit is being held, Su said. His team received hundreds of “revision directives” and “polished” their first draft of the menu multiple times before they came up with six appetizers, one soup and five main dishes that match the banquet’s theme, “The Silk Road”, an ancient trade and cultural transmission route that connected China with Central Asia. The menu listed the following items:
Fish maw stewed with matsutake (soup)
Double-flavoured prawn
Fried and braised beef
Stir-fried scallop
Flatfish with soya bean sauce
Stir-fried towel gourd and green soy bean
Dim sum
Su said the team was also instructed to marry Chinese cuisines with Western seasonings, including black pepper and brandy to suit the foreign delegates’ tastes. State news agency Xinhua, which usually keeps silent about the details of the state events, unveiled the full menu within hours after guests left the dining hall. To stick to a budget amid Xi’s austerity drive, the chef used seasonal ingredients commonly sold in local markets, state media reported, and tried to steer away from luxury items like shark fin and abalone – traditional highlights of a Chinese banquet. The menu includes fish maw stewed with Matsutake (a type of mushroom), double-flavoured prawns, fried and braised beef, fried scallops, flatfish with soy bean sauce and seasonal vegetables. Gold tablecloths and matching cutlery were set, along with a centrepiece – a 1.2-metre-long vegetable carving – titled “Great Wall” for the long table reserved for heads of state, which were flanked by smaller round tables for other guests. But those with hectic schedules could only spare an hour to enjoy more than 12 dishes before they rushed to a theatre at the centre of Puxi for art performances. This demanding itinerary was no sweat for the hotel staff. “We were told the guests could spend no more than one hour and 15 minutes on dinner,” the local news paper quoted Su as saying. “We had to time our service by seconds.”

China, Russia sign landmark US$400b gas deal after decade of talks (By Reuters, Agence France-Presse in Shanghai) Deal represents a triumph for Putin as he seeks to forge new markets in Asia as European countries reduce their reliance on Russian gas in the wake of the Ukraine crisis - Russian President Vladimir Putin and Chinese President Xi Jinping attend the opening ceremony at the fourth Conference on Interaction and Confidence Building Measures in Asia (CICA) summit in Shanghai. China, Russia sign huge gas supply deal after decade of talks China, Russia’s Gazprom sign gas supply agreement Reuters, Agence France-Presse in Shanghai China and Russia signed a long-awaited natural gas supply deal on Wednesday, securing the world’s top energy user a major new source of the clean-burning fuel and opening a market to Moscow as Europeans look elsewhere for their energy. The contract signatures were witnessed by Chinese President Xi Jinping and visiting Russian leader Vladimir Putin, CNPC said in a statement. “This is another major milestone achievement in China-Russia energy strategic cooperation,” it said. The deal would see Russia supply 38 billion cubic metres (bcm) of gas to China each year for 30 years under a contract valued in excess of US$400 billion overall. The amount is just over half the 70 billion cubic metres envisaged under a 2009 framework agreement between the two. The gas will be transported along a new pipeline linking Siberian gas fields to China’s main consumption centres near its coastline. Russian President Vladimir Putin and Chinese counterpart Xi Jinping witnessed the deal in Shanghai between Russian state-controlled company Gazprom and China National Petroleum Corp (CNPC). Gazprom declined to disclose what price was agreed, a key hurdle in talks that have dragged on for more than a decade. Symbolically, for Putin the agreement represents a major triumph as he seeks to forge new partnerships in Asia while customers in Europe attempt to reduce their reliance on Russian gas in the wake of the crisis in Ukraine. Russia has in recent years sought to align itself more closely with China as it seeks to unlock new energy markets in Asia and those efforts are expected to intensify in the face of a fresh confrontation between Moscow and the West over Ukraine. Russia has vast energy reserves and China is constantly seeking resources to power the growth of its economy, but the neighbours had been unable to agree a price for years. But from a commercial point of view, much will depend on the price and other terms of the deal. No information was immediately available on the terms. One potential sticking point was whether China would pay a lump sum up front in order to fund some of the infrastructure costs, but as yet that element of the agreement remains unresolved, Gazprom’s CEO Alexei Miller said. Shares in Gazprom rose almost two per cent in reaction to the announcement of the deal.

Xi puts on a show of solidarity with Putin by signing joint declaration (By Teddy Ng in Shanghai Leaders defy mounting pressure by opposing international interference and launching joint naval exercises, but fail to sign gas supply deal - President Xi Jinping presented a united front with his Russian counterpart Vladimir Putin at a meeting in Shanghai as they faced mounting pressure over their handling of conflicts. The two leaders vowed in a joint declaration to oppose interference in the domestic affairs of other countries and came out against unilateral sanctions - a remark widely seen as targeting the United States. They also pledged to counter attempts to "falsify the history" of the second world war. And in a further show of unity, they launched joint naval exercises around the sensitive East China Sea, where China and Japan are involved in a dispute over territorial sovereignty. "I am convinced that the Russian-Chinese strategic partnership will keep growing," Putin was quoted as saying by Russia's Itar-Tass news agency. Xi described the declaration and the other cooperation documents signed as carrying "heavy weight", even though a massive natural gas supply deal could not be signed. "Further facilitating the China-Russia all-round strategic partnership of cooperation based on common interests is a requirement for promoting international fairness and justice," Xi said. The talks on the sidelines of the Conference on Interaction and Confidence Building Measures in Asia were overshadowed by conflicts facing the nations. China is involved in territorial disputes with its neighbours, while Russia is under pressure from sanctions after annexing Crimea from Ukraine. Both accuse the US of manipulating the regional and domestic affairs of other nations. Li Lifan, an expert in Russian affairs at the Shanghai Academy of Social Sciences, said: "The suspicions towards the US have pushed China and Russia to move closer, forming a 'sub-alliance' relationship that see both sharing a common stance." But the relationship was not confined by any treaty similar to the one that pledges US security support to Japan because China sticks to a non-alignment foreign policy doctrine, Li said. On Ukraine, the two nations called for political dialogue to ease tensions. The two nations would establish a "comprehensive energy cooperation partnership", but failed to sign the deal for Russia to supply 38 billion cubic metres of natural gas to China annually. Reports suggested Russian gas giant Gazprom's average price in Europe was US$380.5 per 1,000 cubic metres, but China wants a lower price as it has secured natural gas supplies from Central Asian nations. The pledge of closer relations between Beijing and Moscow has triggered concerns about ties between China, Russia, Germany and Japan. Germany is China's major trade partner, but is at odds with Russia over Ukraine, while Japan is one of Russia's main investors. But observers insisted any impact would not last long.

Hong Kong*:  May 20-21 2014

Vietnam threatened with loss of Hong Kong business unless order is restored (By Phila Siu Lawmaker representing textile and garment sector says firms may withhold further investment until protests are quelled - Protesters are angry that China is drilling for oil in waters claimed by Hanoi. Hong Kong investors in Vietnam may put their expansion plans on hold until Vietnamese authorities show that they have the ability to maintain order in the light of anti-China protests there, businessman and lawmaker Felix Chung Kwok-pan said on Monday. And at least one has already done so, the lawmaker representing the textile and garment sector told a radio show. Chung said that one Hong Kong businessman who has invested US$300 million in Vietnam is holding off on injecting another US$100 million to see how the situation unfolds. But Chung did not provide any more details about the business in question. About 3,000 Chinese nationals have already been evacuated from Vietnam, following deadly rioting sparked by anger over Chinese oil drilling in a disputed area of the South China Sea. The violence was triggered by China’s positioning of a US$1 billion oil rig in a part of the South China Sea claimed by Hanoi. It is the worst breakdown in ties between the two Communist neighbours since a short border war in 1979. “In the short term, I believe that whether businessmen will expand their investments there will depend on how the government handles [the protests],” Chung said. Many Hong Kong businesses started to open up factories in Vietnam a decade ago because wages there were cheap – and they still are. At present, a worker in Vietnam gets paid an avergae of US$200 to US$300 a month, compared to US$600 to US$700 on the mainland. Manufacturing and exports accounted for 75 per cent of Vietnam’s economy in 2012, up from 56 per cent in 2009. The bulk of that manufacturing was funded by foreign investment. China was the ninth largest foreign investor in Vietnam last year, putting in US$6.94 billion, mostly in manufacturing and infrastructure, according to Vietnam’s ministry of finance. Taiwan is the fourth biggest investor, while Hong Kong is sixth.

 China*:  May 20-21 2014

Chinese navy ship to map seabed in search for missing flight MH370 (By Associated Press in Canberra) Chinese navy vessel. A Chinese navy survey ship will start mapping the seabed off the west Australian coast this week as part of the latest phase in the search for the Malaysian airliner. A Chinese navy survey ship will start mapping the seabed off the west Australian coast this week as part of the latest phase in the search for the Malaysian airliner, officials said on Monday. Chinese, Australian and Malaysian authorities met at the west coast port city of Fremantle at the weekend and agreed that the Chinese ship Zhu Kezhen will conduct a bathymetric survey of the Indian Ocean floor as directed by Australian air crash investigators, Australia’s Joint Agency Coordination Centre said in a statement. The Canberra-based centre said the ship was scheduled to sail for the survey area on Wednesday, weather permitting. Officials believe the Malaysia Airlines Boeing 777 that vanished with 239 passengers and crew on March 8 during a flight from Kuala Lumpur to Beijing veered far off course and crashed in the southern Indian Ocean. After an initial air and seabed search failed to find any trace of the wreckage, authorities this month announced a new phase over a vastly expanded seabed search area covering 60,000 square kilometres. The new phase also involves mapping of the seabed where depths and topography are in parts largely unknown. Negotiations are underway to contract powerful sonar equipment to scour the seabed for wreckage that could be in water more than 7 kilometres deep. The original ocean floor search of an area of less than 400 square kilometres where a sound consistent with aircraft black box was thought to have emanated was conducted by a US Navy unmanned sub, the Bluefin 21, near its 4.5 kilometre depth limit. The Bluefin 21 had continued searching an ever widening area until a communications problem was discovered last week involving the transponders on the sub and the Australian navy ship that tows it, Ocean Shield. The centre said the Ocean Shield arrived on Sunday at the Australian west coast port of Geraldton, where preparations were underway to install spare transponder parts to both the ship and sub.

China says internet security necessary to counter 'hostile forces' (By Li Jing US Stuxnet computer worm attack on Iran and Snowden revelations are cited as examples of the types of online threats facing the nation - A senior official with China's new top steering committee on internet security said political security was fundamental for the country's cybersecurity policy, the People's Daily reported yesterday. Wang Xiujun, a deputy director of the China National Internet Information Office, said in a interview with the Communist Party's mouthpiece that winning the battle against "ideological penetration" would "decide to a large extent the future of our party and country". Wang said his department also served as the general office of the new steering group on internet security and promotion of information technologies, headed by President Xi Jinping. Xi told the panel's first meeting in February that "there is no national security without internet security, and there is no modernisation without wide adoption of information technology", Xinhua has reported. Wang's remarks have shed light on what the authorities see as the top cybersecurity risks. "Overseas hostile forces are using the internet as a main channel to penetrate and destroy us, [and are] repeatedly attacking, slandering and spreading rumours in the name of 'internet freedom' in an attempt to undermine our social stability and national security," he told the People's Daily. He cited the US Stuxnet attack that crippled Iran's nuclear facilities and the National Security Agency's surveillance programmes revealed by the whistle-blower and former NSA contractor Edward Snowden as lessons for China to strengthen the security of computer networks and information systems. The Stuxnet computer worm that sabotaged Iran's uranium enrichment programme showed key facilities were already "the real targets of cyberattacks". Snowden's case showed that "a few countries have used their superiority in internet resources and information technology to conduct large-scale internet surveillance and to steal political, economic, military and corporate secrets", Wang said. In a separate interview published in the paper yesterday, Wu Hequan, a fellow of the Chinese Academy of Engineering, said China's lack of "core technology" posed a potential cybersecurity risk as it still relied heavily on imported silicon chips for electronic devices, and "foreign made" operating systems for computers and mobile phones. He suggested that China should take the opportunity of the expanded internet address scheme, or IPv6, to establish more root directory servers - a vital part in directing internet traffic - in China. Wang Yukai, a professor at the Chinese Academy of Governance in Beijing, who is also a member of the Advisory Committee for State Informatisation, told the People's Daily that previous Chinese internet security agencies had only limited success, as they lacked the authority to command other ministries. Earlier this month, the Beijing Communist Party committee set up the first city-level leading small group on cybersecurity. Last week, the authority detained Xiang Nanfu for allegedly selling and posting "fabricated information" to Boxun, an overseas website on Chinese political gossip. Guangdong's spy agency said recently it busted a group whose members leaked defence information to a foreign agent.

Hong Kong*:  May 18-19 2014

60-metre-high Ferris wheel to open in September at HK$100 per trip (By Amy Nip and Suzanne van der Erf) Operators finally outline schedule for launch at Central ferry piers site - How the Hong Kong observation wheel will look when it is finally opened - it will have 42 gondolas and offer spectacular views over Victoria Harbour. People willing to part with HK$100 will be able to view Victoria Harbour from 60 metres in the air from this autumn. Operators of the Ferris wheel billed as Hong Kong's answer to the London Eye say they plan a soft opening in September to "build awareness", with an official launch later. If it goes ahead, the opening will come more than a year into a three-year tenancy granted to Swiss AEX to operate the wheel at the Central ferry piers. Although the site has been vacant for a year, the company has told the Harbourfront Commission it is "finalising the appointment of an internationally renowned contractor to be responsible for the preparatory footings and construction work". It said the wheel would have 42 gondolas, each holding eight to 10 passengers, and it expected a million passengers a year - a rate of 2,740 a day. "A soft launch of the project will take place in September to build awareness and anticipation. A higher-profile 'launch' will, thereafter, be carried out in cooperation with the Harbourfront Commission, Hong Kong Tourism Board, district representatives and the Hong Kong government," it said in a paper sent to the commission. The price will be HK$100 for adults and HK$70 for children. The company said investigation work started last June and teams for project and construction management and landscape design had been appointed. "Swiss AEX briefed [Central and] Western District Council last week and will meet with the Harbourfront Commission on Monday," director Leon Snep said. "We prefer to brief them first out of respect and gratitude towards the HK government for winning the tender. "Once we've done so, we're happy to answer any questions the public and the South China Morning Post may have." Travel Industry Council chairman Michael Wu Siu-ieng said HK$100 sounded a reasonable price. He said: "It would be an attractive ride, given that one can see Victoria Harbour with no obstruction. It would be best to go around sunset." To meet the target number of one million visitors a year, a fully occupied wheel would have to rotate more than six times a day. Wu said it was hard to say whether the number could be met until more information was available about the gondolas, such as whether they would be air conditioned. Harbourfront Commission member Paul Zimmerman said the schedule was tight if the wheel was to be open in September. "I'm very surprised that the site is still vacant," he said.

Panel probing high-speed rail project 'not looking for individuals to be penalised' (By Ada Lee Carrie Lam says objective is to uncover 'systemic' problems, as she appoints top judge to replace academic who quit over a suspected conflict of interest - A senior judge has been appointed to head a three-man government panel inquiring into delays in building the high-speed railway to Guangzhou. The appointment of Mr Justice Michael Hartmann, a non-permanent judge of the Court of Final Appeal, follows the embarrassment of original chairman Professor Lee Chack-fan stepping down within two hours of his appointment because of a conflict of interest. The project has been further rocked by an MTR report showing that a broken tunnelling machine - blamed in part for the two-year delay to the HK$67 billion project - was already out of action when it was further damaged by a flood in March. The other panel members are Peter Hansford, chief construction adviser to the British government, and Andrew Whittle, a professor of civil engineering at the Massachusetts Institute of Technology in the United States. Announcing Hartmann's appointment yesterday, Chief Secretary Carrie Lam Cheng Yuet-Ngor confirmed the panel members had no conflict of interest. Lee stepped down because he is a director of Paul Y Engineering, one of the project contractors. Lam said the independent expert panel's main task was to identify what had gone wrong with the project, not to look for who was personally responsible. "[But if the panel] comes across issues relating to how individuals have performed, then I suspect [it] will also report on those findings," she said. Hartmann, who also chairs the Securities and Futures Appeals Tribunal and the Market Misconduct Tribunal, said he was "quite happy" to accept the appointment and "deal with matters that affect the public and are important to the public". Asked whether his panel should have the power to find out who should be held responsible, he said: "It's probably for other people to think whether we should have more or less power." Chief Executive Leung Chun-ying said that if anyone was found to be at fault, the government would pursue the matter. In a paper submitted to the Legislative Council yesterday, the MTR said repairs to the tunnelling machine further damaged by flooding in March would take another nine months. A government report said Chew Tai-chong, projects director of the MTR, had raised the alarm about a possible delay before MTR chief executive Jay Walder called transport minister Professor Anthony Cheung Bing-leung in November to persuade him not to tell Legco because the delay could still be made up.

 China*:  May 18-19 2014

Service sector shines as FDI in China hits US$40b for January-April period (By Celine Sun in Beijing and Reuters Central government keen to attract greater foreign direct investment in services, high-end manufacturing and environmental industries - China's services industry continues to be a magnet for overseas investors, absorbing 56 per cent of FDI up to April. Foreign direct investment into China grew 5 per cent to US$40.3 billion in the first four months of this year, with the biggest share going to the nation's service industry, the Ministry of Commerce said yesterday. "The figures have shown that foreign investors are generally taking an optimistic view of China's long-term economic growth despite some discouraging economic data in recent months," said Xu Gao, the chief economist with China Everbright Securities. In a briefing, ministry spokesman Shen Danyang said the government is "cautiously optimistic" on the trade performance in 2014 and believes it can achieve the original target of 7.5 per cent growth it has set for the whole year. "Chinese companies have been under bigger pressure in the face of competition from Vietnam, which has begun to enjoy preferential duties from the European Union since this year," Shen said. "But we should also be aware that China has developed new advantages in technology, brand, quality and services based on the labour-intensive manufacturing model." China's services industry continued to be a strong magnet for overseas investors, absorbing 56 per cent of foreign direct investment between January and April. During the period, it attracted US$22.5 billion, up 19 per cent year on year. In April alone, foreign direct investment rose 3.4 per cent year on year to hit US$8.7 billion. Investment in the manufacturing sector though fell 11 per cent to US$14.5 billion. For the first four months, Hong Kong remained a top investor in the mainland with US$27.8 billion, followed by Singapore and Taiwan with US$2 billion each. Investment from South Korea, the fourth largest investor in China, rose at the quickest pace during the period, surging 139 per cent from a year ago to US$1.8 billion. Investment by the United States dropped 11 per cent to US$1.2 billion. A total of 6,661 overseas enterprises set up business on the mainland during the period, the ministry said. Despite the growth in foreign direct investment, China's non-financial direct outbound investment fell 12.9 per cent to US$25.7 billion in the first four months. "This is likely due to the tightening of liquidity in the country and the pessimistic view by domestic investors over a slowing economy," Xu said. In the first four months, 66.5 per cent of China's outbound non-financial investment went to seven economies: Hong Kong, Asean, the EU, Australia, the US, Russia and Japan. Investment in the seven totalled US$17.1 billion. China's trading performance has improved in April, with both exports and imports recording minor growth compared to the declines seen in March. The country is also increasing its support for the trade sector. The State Council said in a document on Thursday that a series of new measures, including more tax breaks, credit insurance and currency hedging options to exporters, will be launched. The government wants to attract foreign direct investment to the services sector, high-end manufacturing, and environmental industries instead of into low-value added factories, and wants local firms to increase offshore investment.

Hong Kong*:  May 16-17 2014

Government to suspend Hospital Authority funding in June (By Tanna Chong Financial secretary says administration is facing problems paying its expenses beyond May in light of budget filibuster - The government will suspend funding to the Hospital Authority and two other bodies next month in light of the ongoing filibuster of the budget, the financial secretary announced on Thursday. Speaking after talks with civil servants, John Tsang Chun-wah said the administration was facing difficulty in paying its expenses beyond May. The government’s provisional funding runs out on May 31. Tsang ruled out applying for emergency funding. “The funding for the Hospital Authority, the University Grants Committee and the Legislative Council Commission will be suspended in June to pull together a HK$5.1 billion funding for other operations,” he said. “Over 60 departments will see their reserves drying up within June,” said Tsang, who based his assessment on cash-flow forecasts collected from all government departments. “The ideal passage time for the appropriation bill is mid-May but it has already passed.” Tsang rejected suggestions that the dire expenses forecast was “scaremongering” or intended to exert pressure on Legislative Council president Jasper Tsang Yok-sing to cut short the budget filibuster. Two filibustering lawmakers, of the People Party, advised Tsang on Wednesday that their marathon protest could finish by the end of May. They have asked the government to apply for emergency funding. Tsang refuses to meet with the filibustering lawmakers, who are calling on the government to set up a universal pension fund, among other demands. “A meeting with them would not help much [to end the filibuster]…We understand their stance. The universal pension fund is a very complex issue,” said Tsang. People Power lawmaker Albert Chan Wai-yip said that if the government was unable to fund itself it would be because of its own “incompetence”. Legco has yet to vote on any of the 1,192 amendments to the budget – mainly sponsored by four pan-democrat lawmakers – after 43 hours of debate since April 30, including 10 hours spent counting quorums. The HK$5.1 billion funding diverted from the three bodies will only sustain the administration’s expenses for a week, Tsang said. The Water Supplies Department will be among the first batch of departments affected, he said, as the payment for water from the Dongjiang is due in early June. The University Grants Committee is a non-statutory body that advises the government on funding and development of higher education. The Legislative Council Commission provides administrative support to the Legislative Council. Government services which could be affected by budget delay - The raising of the annual voucher amount under the elderly health-care voucher scheme from HK$1,000 to HK$2,000. - Enhanced support for non-Chinese-speaking students. - HK$3.7 billion for one month’s public housing rental relief and one extra month’s allowance under CSSA, Old Age Living Allowance and disability allowance.

 China*:  May 16-17 2014

Hong Kong and China issue travel alerts after 20 die in anti-Beijing protests (By Reuters in Hanoi) Beijing voices concern after a doctor in Vietnam said on Thursday at least 16 Chinese nationals and five Vietnamese had been killed in a riot at a Taiwanese-owned steel mill in the centre of the country - The Hong Kong government on Thursday raised the Outbound Travel Alert (OTA) for Vietnam to red, warning travellers to avoid non-essential visits to the country, after at least 16 Chinese nationals and five Vietnamese had been killed in a riot at a Taiwanese-owned steel mill in centre of the country. The travel alert signal for Vietnam was upgraded to red tonight from the current amber which Hong Kong's Security Bureau’s brought into effect on Wednesday. Travellers are advised to “adjust travel plans” and “avoid non-essential travel” to places issued the red travel alert signal where travellers would face “significant threat”, according to the Security Bureau’s website. This will put Vietnam on par with Lebanon. The Foreign Ministry in Beijing has expressed serious concern over violence against Chinese nationals in Vietnam and it urged the authorities in Hanoi to punish lawbreakers and compensate victims. Ministry spokeswoman Hua Chunying made the comments at a regular media briefing on Thursday. More than 20 people were killed and rioters attacked Vietnam’s biggest steel plant overnight as violent anti-China protests spread to the centre of the country a day after arson and looting in the south, a doctor and newspapers said on Thursday. The doctor at a hospital in central Ha Tinh province, 250 kilometres south of Hanoi, told Reuters five Vietnamese workers and 16 other people described as Chinese were killed in the rioting, one of the worst breakdowns in Sino-Vietnamese relations since the neighbours fought a brief border war in 1979. “There were about a hundred people sent to the hospital last night. Many were Chinese. More are being sent to the hospital this morning,” the doctor at Ha Tinh General Hospital told reporters by phone. Hundreds of Chinese have fled to Cambodia to escape the riots, Cambodian police said on Thursday. “Yesterday more than 600 Chinese people from Vietnam crossed at Bavet international checkpoint into Cambodia,” National Police spokesman Kirt Chantharith told reporters. “They are at guest houses and hotels in Phnom Penh, with around 100 people staying in Bavet town,” he added. “After the situation calms down, they may go back to Vietnam or to other places.” Bavet is on a highway stretching from Ho Chi Minh City, Vietnam’s commercial centre, to Cambodia’s capital. China’s tourism administration said in a notice on its website on Wednesday that any Chinese planning to visit Vietnam should “carefully consider” their plans, and called for visitors to “raise their consciousness of danger”. China’s embassy in Vietnam urged the country’s public security authorities to take “effective measures” to protect its nationals’ personal safety and legal rights. The embassy made the remark in a statement published on its website, adding that China had launched an emergency mechanism to cope with the effects of anti-Chinese riots in its southern neighbour. The Hong Kong government issued a travel warning for Vietnam on Wednesday and the Immigration Department said it had received three requests for help from Hongkongers in Vietnam. Taiwanese media said around 1,000 rioters attacked a huge steel plant in Ha Tinh province owned by Formosa Plastics Group, Taiwan’s biggest investor in Vietnam. When completed in 2020, it would be Southeast Asia’s largest steel plant and would include a seaport and a power plant. Local media in Vietnam said the complex could cost about US$20 billion. Taiwan’s ambassador to Vietnam, Huang Chih-Peng, who reportedly spoke to a member of the management team at the mill on Thursday morning, put the death toll much lower, saying rioters lit fires at several buildings and hunted down the Chinese workers. He said that the head of the provincial government and its security chief were at the mill during the riot but didn’t “order tough enough action”. Huang said the rioters left the complex at 6am, but he feared they “might be going for a rest and could come back.” The anti-China riots erupted in industrial zones in the south of the country on Tuesday after protests against Beijing placing an oil rig in a part of the South China Sea claimed by Hanoi. The brunt of the violence has been borne by Taiwanese firms, mistaken by the rioters to be owned by mainland Chinese. Thousands of Vietnamese set fire to foreign factories and rampaged through industrial zones in Binh Duong and Dong Nai provinces on Tuesday, officials said. There were no confirmed reports of any violence later in that area. In Binh Duong alone, police said 460 companies in the province had reported some damage to their plants, local media reported. “More than 40 policemen were injured while on duty, mainly by bricks and stones thrown by extremists,” the state-run Thanh Nien (Young People) newspaper said. About 600 people were arrested for looting and inciting the crowd, the newspaper quoted Vo Thanh Duc, the police chief of Binh Duong province, as saying. The United States has called on both sides for restraint. Such disputes “need to be resolved through dialogue, not through intimidation,” White House spokesman Jay Carney told a regular briefing. “We again urge dialogue in their resolution.” The US State Department said it was monitoring events in Vietnam closely, and urged restraint from all parties, while adding: “We support the right of individuals to assemble peacefully to protest.” The current crisis erupted within days of a week-long visit to Asia by President Barack Obama in late April in which he pledged that Washington would live up to its obligation to defend its allies in the region. China’s state-run Global Times newspaper said in an editorial on Thursday that the riots were “the outcome of Hanoi’s years of anti-China propaganda”. “China’s over-tolerance must not test China’s patience beyond the limit,” the paper said, adding that Vietnam should compensate foreign investors.

Hong Kong*:  May 14-15 2014

London tops world's billionaire list, while Hong Kong comes in sixth place (By Agence France-Presse in London) Hong Kong ranks 6th, below Moscow and San Francisco - London is home to 72 of Britain’s 104 sterling billionaires. London has more billionaires than any other city in the world, and Hong Kong takes up the sixth place in number of billionaires per city, new data showed. The survey of Britain’s super-rich compiled for the Sunday Times newspaper is likely to prompt debate in a country where many still struggle financially and where food banks are a fact of life, despite economic growth recently returning to levels not seen since the 2008 financial crash. London is home to 72 of Britain’s 104 sterling billionaires, well ahead of Moscow in second place with 48 people worth the equivalent of one billion pounds or more. New York is in third place with 43 billionaires, San Francisco in fourth place with 42, Los Angeles next with 38 and Hong Kong in sixth place with 34. Indian-born brothers Sri and Gopi Hinduja top the British list with a fortune of 11.9 billion pounds (HK$155.4 billion), amassed through the family-owned Hinduja Group, which has interests in oil, banking, the automotive industry, property and the media. The pair nudged last year’s top of the billionaire list, Alisher Usmanov, to second place. The Uzbekistan-born Russian’s fortune has been hit by the fall in value of the rouble and Russian stock prices due to the Ukraine crisis. Others in the top 25 include Ukrainian-born internet, chemicals and music industry investor Len Blavatnik in fourth place, property magnate the Duke of Westminster, Gerald Grosvenor, in tenth place, and Saudi-born Mohamed Bin Issa Al Jaber and his family, known for their hotel and resort investments, in thirteenth place. This year is the first year the minimum wealth of Britain’s 50 richest people has topped 1.5 billion pounds. Only 700 million pounds was needed to join the exclusive club a decade ago. Britain’s 104 billionaires have a total wealth of 301.13 billion pounds, compared to 88 a year ago with a combined worth of 245.66 billion pounds. The combined wealth of Britain’s super-rich is now well ahead of pre-recession levels of 2008, which then totalled 201.99 billion pounds. On Friday independent think tank the National Institute of Economic and Social Research said British per-capita gross domestic product - often used to indicate a population’s average wealth - was “well below” the pre-2008 peak, and unlikely to exceed it before 2017. The Trussell Trust, Britain’s largest food bank network, said the number of people that had approached them for emergency food had risen 163 per cent in the year to the end of March to just over 913,000 people. The group labelled the figure “shocking”, particularly as it does not include those helped by other food providers or the large number of people too ashamed to seek help and who cope by eating less food.

 China*:  May 14-15 2014

Beijing launches armed patrol force in wake of civilian attacks (By Stephen Chen More than 1,300 armed police and 150 patrol vehicles took to Beijing's streets today as the government stepped up security measures following a series of violent attacks on civilians at public facilities. As the 25th anniversary of the Tiananmen Square crackdown approaches, Beijing authorities have vowed that the units will be their “most important” force on the streets as they make it their “exclusive responsibility” to fight “terrorism and serious crimes of violence”, according to the Beijing Times newspaper, quoting the Beijing Municipal Public Security Bureau (PSB). With maximum striking force and minimum response time, the new armed patrol units are built with what the newspaper called a double-three standard: each unit will cover a street section less than three kilometres long, and the site of any incident can be reached within three minutes, the newspaper reported. The armed patrol force comes in the wake of a series of attacks on public places in China which have resulted in multiple deaths and injuries. An attack on Kunming train station two months ago saw a group of nine suspects hack at commuters with knives for nearly half an hour, leaving 29 dead and more than 140 injured. Earlier this month, a knife attack on Guangzhou train station left several people injured. The slow response of local police contributed to the large number of fatalities and prompted doubts over the government’s ability to deal with such sudden, violent incidents. Ordinary patrol officers were often occupied by many assignments to deal with non-violence issues, such as thieving, family quarrels or prostitution, according to the Beijing Times. They were often not adequately trained or armed to contain organised, large scale violent attacks, either, the newspaper reported. The new units will each include nine fully armed officers with four assistants and they would rotate to maintain around-the-clock cover. Maximum visibility will be used by the units to deter violent crimes, the municipal police said. The armed vehicles will park in public areas or road intersections with dense population, looking for anyone acting suspiciously. However, the units will cover less than 500km of streets in total, only a fraction of Beijing’s over 21,000km long road network. The units will therefore be placed at “critical areas”, although the authorities would not give details on where they were or what qualified as a critical area. Beijing’s new armed patrol force is part of a national effort to maintain the stability in urban areas. In Shenzhen, city government staged a two-hour long anti-terror drill amid a heavy downpour on Sunday, mobilizing a large number of armed forces including tactical units and armed helicopters. Following the attack in Guangzhou train station last week, top level officials with the Ministry of Public Security visited train stations in Changsha, Beijing and Shanghai to inspect the implementation of security measures. Liu Siyue, an accountant in Beijing’s Chaoyang district, said he was disturbed by the increase in security forces on streets. “More than once I have been asked for my ID card by a policeman when walking in downtown areas. I feel very uncomfortable about this,” he said. But Li Yuanyuan, a public servant in Dongcheng district, said she felt safer with the presence of the new patrolling force. “It is the price we pay for safety. It is unavoidable,” she said. “A few more attacks can make us as terrified as the Americans.”

Hong Kong*:  May 12-13 2014

Li Ka-shing’s rumoured plan to reduce investments ‘could damage Hong Kong’ (By Sandy Li and Peggy Sito) Report by central government think tank warns tycoon's reputed plan to reduce his investments in city could hit its economic competitiveness - Li Ka-Shing Often referred to as “Superman” in Hong Kong because of his business prowess, Li Ka-shing is the richest businessman in Asia, and chairs conglomerate Hutchison Whampoa and Cheung Kong Holdings, a property group. Li turned Cheung Kong Industries into a top property group, and Cheung Kong expanded to acquire Hutchison Whampoa in 1979 and Hongkong Electric in 1985. Li is a noted philanthropist and heads a charitable foundation that is a shareholder in Facebook. Li Ka-shing's apparent move to reduce his investments in Hong Kong could damage the city's economic competitiveness, says a study by a central government think tank. Hong Kong still ranked as the most competitive Chinese city last year, according to the annual "blue paper" by the Chinese Academy of Social Sciences (CASS). But it said soaring property prices and the lack of innovation could hamper the city's growth and it could be overtaken by other Chinese cities. "[There are also] rumours about Li Ka-shing and his group's plan to withdraw from Hong Kong. If [the group] frequently sells assets in the latter half of this year, it could affect Hong Kong's overall business competitiveness," the report said. Coincidentally, Cheung Kong and Hutchison Whampoa - the two flagship firms controlled by Li - reduced their shares in Hong Kong-listed Hui Xian Real Estate Investment Trust yesterday. Rumours about Li's intentions have been swirling since the planned sale was announced last year of his ParknShop supermarkets, later abandoned. In November, he rejected suggestions he was pulling out of the city as a "big joke". But in January, Hongkong Electric Investments - part of his energy flagship, Power Assets - raked in HK$52 billion in an initial public offering. And in March, Li sold a 60 per cent stake in the container port's Terminal 8 West for HK$2.47 billion. In February he gave a downbeat assessment of Hong Kong, pointing to Occupy Central, the harassment of mainland tourists and declining competitiveness vis-à-vis neighbouring markets. In response to the CASS report, Cheung Kong said Li, its chairman, had emphasised on several occasions that the group had no plans to withdraw from the city. "Hong Kong and the mainland will continue to be the group's important investment area," a company statement said. Liao Qun, chief economist of Citic Bank International, said: "It is hard to say whether rumours of [Li] cashing in will affect the city's competitiveness. "Li has sold assets in Hong Kong and in some mainland cities. But I see it as an asset allocation. I do not think he will sell his assets in Hong Kong and mainland on a large scale." Dr Chan Kin-man, co-organiser of the Occupy Central movement, said the protest could create "short-term disturbances", but that Hong Kong would become more competitive if it had real democracy. The CASS report said Hong Kong could leverage the support of Beijing to develop as an offshore yuan and international asset management centre. It added that a transparent government coupled with an efficient transport system could also help to sharpen its edge over other mainland cities. But Hong Kong faced a challenge because of its high level of dependence on the financial and real estate sectors and its rapidly ageing population. "The development of small-to-medium-sized enterprises has been affected by high rentals," the report added. Political commentator Johnny Lau Yui-siu said: "It is academic research. It does not mean that it represents the central government's stance." 

 China*:  May 12-13 2014

Lost in translation: British journalist 'shocked' Japanese book he dictated denies Nanking Massacre (By Julian Ryall in Tokyo) Henry Scott-Stokes 'horrified' Japanese book he dictated dismisses war crime as propaganda - Lost in translation: British journalist 'shocked' Japanese book he dictated denies Nanking Massacre - A veteran British journalist says he has been misrepresented by the translator of his best-selling book that looks at Japan’s history from an outsider’s point of view, and has disavowed the book’s claim that the Nanking Massacre never occurred. Henry Scott-Stokes’ Falsehoods of the Allied Nations’ Victorious View of World History, as seen by a British Journalist, has become a bestseller since it was released in December. Conservatives and nationalists have held it up as evidence that Japan has been the target of unfair international criticism for its colonial past. But Scott-Stokes claims his Japanese translator twisted his words. Most controversially, the Japanese-language book concludes that the Chinese government made up the Nanking Massacre for its own political purposes. Scott-Stokes could not be contacted by the South China Morning Post, but in an interview with Kyodo News he said that he was “shocked and horrified” to discover his book dismisses one of the most notorious events of the second world war as propaganda. Scott-Stokes insists that while he believes China has exaggerated the figure of 300,000 victims of the Imperial Japanese Army in the city now known as Nanjing, a blanket denial that the atrocity occurred is “straight forward right-wing propaganda” put forward by Japanese revisionists. He added that claiming nothing happened in Nanking in December 1937 and January 1938 was ludicrous and fatuous. Now 75, Scott-Stokes suffers from worsening Parkinson’s disease that makes it difficult for him to type or write. He was also unable to read all of the Japanese-language version of the book. Scott-Stokes dictated the book during more than 170 hours to Hiroyuki Fujita, a translator who is a member of the nationalist group The Society for the Dissemination of Historical Fact. Fujita told the Post there had been “a lot of misleading explanations” put forward and that a statement would be released through the web site of publisher Shodensha. “Regarding the translation, we had a discussion on interpretations and what he had in mind and what I thought he had in mind,” Fujita said. He declined to comment further. Speaking previously to Kyodo, Fujita admitted that he “added his own language” to the book, but the opinions it contained were those of Scott-Stokes. Fujita has declined to comment on other additions that he made to the book and is refusing to share the recordings of the interviews. Scott-Stokes was apparently alerted to the possibility that his book had been appropriated by the far-right in Japan by Angela Erika Kubo, who was helping create an English-language transcript of the book. Kubo wrote to Scott-Stokes to tell him that she could no longer work on the project, amid her doubts that it accurately represented his views. In a statement on the Japan Subculture Research Centre web site, Kubo said: “I realised that I felt that Mr Stokes, who is a very nice elderly journalist who I respect, was having his words taken out of context.” In a letter to Fujita explaining her reasons for resigning from the project, she added: “I’ve also become increasingly uncomfortable with the content of some of the recordings. “It seems that words are being put into Henry’s mouth and that the interviews don’t reflect his real opinions or thoughts – and that there are many leading questions.” Scott-Stokes, a former Japan bureau chief for The New York Times, said he was warned by colleagues to be wary of the venture. It was apparently proposed by Fujita and Hideaki Kase, another leading member of the Society for the Dissemination of Historical Fact, both of whom he considered friends. “As I was being interviewed by these people, I trusted them to stick by the record,” Scott-Stokes told Kyodo. “And if they haven’t done that, they have let me down and let themselves down.”

Hong Kong*:  May 10-11 2014

Inquiry to look at role of top MTR management in rail link fiasco (By Ada Lee and Tanna Chong) Head of independent committee does not rule out interviewing chief executive Jay Walder (The MTR Corporation (its original full name was Mass Transit Railway Corporation) is listed on the Hong Kong Exchange and is a constituent of the benchmark Hang Seng Index. MTRC operates the Hong Kong underground rail system and is a major property developer and landlord in the city. It also invests in railways outside Hong Kong) Former government minister Frederick Ma Si-hang said the committee would not rule out interviewing chief executive Jay Walder. The independent committee set up by the MTR to investigate the fiasco over the corporation's delay in finishing a high-speed railway insists it will probe the role of "top management". Former government minister Frederick Ma Si-hang, who is heading the inquiry into how the MTR management handled the saga, said the committee would not rule out interviewing chief executive Jay Walder. Speaking after the first meeting of the six-member committee, Ma said projects director Chew Tai-chong, whose early retirement was brought about by the scandal, had already been spoken to. Ma said the committee would also visit construction sites during the next two months ahead of completing a preliminary report. When asked if the team would investigate Walder's role, Ma said the scope included the "top management team". Meanwhile, there is a greater chance the Legislative Council will next month pass a motion to invoke its special powers to investigate the two-year delay in completing the link between Hong Kong and Guangzhou. The government-friendly Liberal Party said it would probably support an attempt to invoke the Legco Powers and Privileges Ordinance to set up a select committee to probe the delay if the government did not set up an independent commission headed by a former judge. Liberal leader James Tien Pei-chun said the decision would hinge on whether Chief Executive Leung Chun-ying took the party's advice to appoint a commission of inquiry to sort out who should be held accountable. "A commission of inquiry, appointed by the chief executive, is the only way out. It can be headed by a retired judge, with the aim of sorting out the responsibility of each of the parties involved," said Tien. "If there is no concrete reply from the government it is very likely we will support the vote for a Legco probe next month." As well as Tien, who is directly elected, the Liberals have four legislators representing functional constituencies. If they vote for a probe, the motion would stand a higher chance of passage as its biggest hurdle is the likelihood of defeat by lawmakers for functional constituencies. Yesterday talk of a special probe was dropped from the agenda of Legco's house committee, which voted 31-29, with one abstention, to veto a bid by pan-democrats Wu Chi-wai and Gary Fan Kwok-wai to put such a motion on the agenda.

 China*:  May 10-11 2014

China 'considering' building high-speed rail line from Beijing to the United States (The Guardian) Entire trip would take two days and run through Siberia - The project - nicknamed the 'China-Russia plus America line' - would run for 13,000km, about 3,000km further than the Trans-Siberian Railway. China is considering plans to build a high-speed railway line to the US, the country’s official media has reported. The proposed line would begin in north-east China and run up through Siberia, pass through a tunnel underneath the Pacific Ocean then cut through Alaska and Canada to reach the continental US, according to a report in the state-run Beijing Times newspaper. Crossing the Bering Strait in between Russia and Alaska would require about 200km (125 miles) of undersea tunnel, the paper said, citing Wang Mengshu, a railway expert at the Chinese Academy of Engineering. “Right now we’re already in discussions. Russia has already been thinking about this for many years,” Wang said. The project - nicknamed the “China-Russia plus America line” - would run for 13,000km, about 3,000km further than the Trans-Siberian Railway. The entire trip would take two days, with the train travelling at an average of 350kmh (220mph). The reported plans leave ample room for scepticism. No other Chinese railway experts have come out in support of the proposed project. Whether the government has consulted Russia, the US or Canada is also unclear. The Bering Strait tunnel alone would require an unprecedented feat of engineering - it would be the world’s longest undersea tunnel - four times the length of the Channel Tunnel which connects France and England. According to the state-run China Daily, the tunnel technology is “already in place” and will be used to build a high-speed railway between the south-east province of Fujian and Taiwan. “The project will be funded and constructed by China,” it said. “The details of this project are yet to be finalised.” The Beijing Times listed the China-US line as one of four international high-speed rail projects currently in the works. The first is a line that would run from London via Paris, Berlin, Warsaw, Kiev and Moscow, where it would split into two routes, one of which would run to China through Kazakhstan and the other through eastern Siberia. The second line would begin in the far-western Chinese city of Urumqi and then run through Kazakhstan, Uzbekistan, Turkmenistan, Iran and Turkey to Germany. The third would begin in the south-western city of Kunming and end in Singapore. The routes are under various stages of planning and development, the paper said. 

Hong Kong*:  May 8-9 2014

Stage set for biggest graft trial in Hong Kong history (By Stuart Lau Former chief secretary Rafael Hui and property tycoon Kwok brothers face multiple charges in HK$34m corruption case - Former chief secretary Rafael Hui Si-yan with Thomas Kwok Ping-kwong (top inset) and Raymond Kwok Ping-luen (bottom inset). All eyes will be on the Court of First Instance today as the city's former No 2 official and the co-chairmen of one of the world's major real estate firms face trial in the biggest corruption court case in Hong Kong's history. At issue is the HK$34 million in bribes and other financial inducements that former chief secretary Rafael Hui Si-yan allegedly received from billionaire brothers Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen, the chairmen of Sun Hung Kai Properties (SHKP). Prominent names in government and business are among the 82 prosecution witnesses listed for a case that has become a cause célèbre for the Independent Commission Against Corruption and prosecution officials. Scheduled to last 70 days, the trial before Mr Justice Andrew Macrae begins more than two years after Hui and the Kwoks were arrested in March 2012. Listed as the first defendant, Hui stands accused of receiving financial inducements that included HK$28.8 million in cash, HK$5.4 million in loans and the rent-free use of two luxury flats in Happy Valley when he held key government positions between 2000 and 2009. Hui, 66, is the highest-ranking former official ever to face trial in the city. According to the latest indictment issued by the prosecution in February, Hui faces eight criminal charges, five of which he shares with either or both of the Kwoks. They include conspiracy to offer an advantage to a public servant, misconduct in public office and conspiracy to commit misconduct in public office. The oldest accusations against Hui date back to 2000 when, it is alleged, he failed to disclose negotiations with SHKP for a "consultancy agreement" while he was managing director of the Mandatory Provident Fund Schemes Authority, a government body. The prosecution also says Hui received HK$2.4 million in unsecured loans from a company owned by SHKP. As he rose to be chief secretary in 2005, under the administration of chief executive Donald Tsang Yam-kuen, the Kwoks allegedly bribed him with cash. The elder brother, Thomas, is alleged to have given Hui a cheque for HK$5 million in return for his being "favourably disposed" to the property magnate during Hui's tenure as chief secretary from 2005 to 2007. Raymond Kwok is accused of bribing Hui with HK$4.125 million in the same period. Raymond Kwok and Hui are jointly charged with conspiracy to commit misconduct in public office. Raymond Kwok and Hui also face a charge of furnishing false information contained in an invoice for the same sum. The invoice was "in respect of services ... from April 2005 to February 2006, and to be paid in recognition of Rafael Hui's excellent performance over the past 13 months", according to the indictment. Two other bribery charges also concern other defendants, and cover Hui's tenure as chief secretary and, subsequently, as a non-official member of the Executive Council until 2009. The brothers and Hui are accused of conspiring with SHKP executive director Thomas Chan Kui-yuen and former Hong Kong stock exchange official Francis Kwan Hung-sang to commit misconduct in public office. The four are alleged to have arranged a series of payments totalling HK$8.5 million to induce Hui to remain favourably disposed to SHKP. Another charge facing all five is conspiracy to offer an advantage - HK$11.182 million worth of payments - to Hui as a public servant. The eldest Kwok brother, Walter Kwok Ping-sheung, was arrested by graft-busters in 2012 but was not named as a defendant or witness by the prosecution. Walter Kwok resigned from his position as a non-executive director of SHKP in January. The list of witnesses submitted by prosecutors includes two ex-ministers who served alongside Hui: former housing and education minister Michael Suen Ming-yeung and ex-commerce minister Rita Lau Ng Wai-lan. Former Hong Kong Exchanges and Clearing chairman Charles Lee Yeh-kwong, Adeline Wong Ching-man, former undersecretary for constitutional and mainland affairs and Hui's administrative assistant, and Alice Lau Yim, permanent secretary in Chief Executive Leung Chun-ying's office, will also testify.

Thousands ignore rain and flock to Cheung Chau for annual Bun Festival (By Shirley Zhao Thousands celebrate annual event and queue for traditional ‘peace buns’ - A young performer stands on a bun tower as he parades during the Bun Festival on Cheung Chau island. A worker puts the finishing touches on the buns during today's festival on Cheung Chau. Rain didn’t dampen the spirits of thousands of people who flocked to Cheung Chau island today for the annual Bun Festival. But New World First Ferry Services said a total of 6,300 people took the ferries from Central to the island between 8am to 10am, which was 12 per cent less than the same period last year, probably due to the bad weather. But New World First Ferry Services said a total of 6,300 people took the ferries from Central to the island between 8am to 10am, which was 12 per cent less than the same period last year, probably due to the bad weather. Regardless of the dampness, streets on the island were crowded with people, eager to see the two highlights of the festival: the Piu Sik, or floating parade, and the bun-scrambling contest, where contestants vie for the highest score by getting the most buns on the upper part of the tower. The special “peace buns” – on each of which two Chinese characters meaning peace are stamped – are also the must-buys among revellers. Outside one of the most famous peace bun bakeries, about 70 people queued for the buns, with many expecting to buy at least 20. Kevin Leung, 28, who bought seven buns after queueing for 20 minutes , said it was his first time at the festival. He arrived on the island at 10am and planned to stay until midnight for the bun-scrambling contest. “The Bun Festival is very famous and I don’t want to miss any of its highlights,” he said. Kwok Yu-chuen, owner of the bakery, said the staff worked from 7am yesterday to 1am today to prepare the buns. Last year, the bakery sold buns made out of 300 23kg bags of flour, he said. He bought 350 bags of flour this year, expecting more customers. While the festivities continue, local Cheung Chau residents are embroiled in a row with private firm A Gimmick Limited, based in Kwai Chung, which has applied to the Intellectual Property Department to register the trademark of the “peace” stamp in November last year. Kwok said the pink stamp had been used for the festival for a decade and belonged to local bun makers, residents and all festival participants. “If someone trademarked the stamp, Cheung Chau and the Bun Festival would lose its symbol,” he said. The Transport Department expected to see 70,000 people taking ferries to Cheung Chau for the festival today.

 China*:  May 8-9 2014

GM plans jump start of slowing China sales (By Michael Barris in New York and Li Fangfang in Beijing) The years of double-digit sales for automobiles in China may be vanishing in the rear view mirror, but General Motors Co is spending $12 billion to reclaim the title of the country's largest foreign automaker from German rival Volkswagen AG. Although sales by GM and its joint-venture partners climbed 6.3 percent in April to a record 278,263 vehicles, paced by the sturdy Buick, Chevrolet, Cadillac and Wuling brands, the figures represented a 14-month low. The decline was 12.6 percent from the first quarter and 11.4 percent from April 2013. The April industry average was forecast to be 10 percent, according to the China Passenger Car Association. "China has been GM's largest market since 2010 - last year accounting for about one-third of our global sales,"President Dan Ammann said. He said he expects China - which is the world's largest auto market by sales - to remain GM's largest market well into the future. Ammann said capital spending in China by GM and its joint ventures will be about $12 billion between 2014 and 2017. That will accelerate funding and capacity expansion for new product programs. "We are counting on China for another record year in 2014, and I'm confident we can make it with strong new models,"Ammann said. Some of the $12 billion investment will fund the launch of more than 60 new and upgraded vehicles coming to market through 2018. The investment also includes opening five new manufacturing plants by the end of 2015 - four for vehicle assembly and one for power trains. With additional expansion from 2014 to 2020, GM China's manufacturing capacity will be on track to increase by 65 percent. Volkswagen, which last year ended GM's eight-year reign as China's largest foreign automaker, has not released April sales data. Combined China sales at Volkswagen and its two joint ventures surged 16.2 percent in 2013 to 3.27 million units, outpacing GM's 3.16 million. It was the first time that the German maker delivered more than 3 million vehicles in a single country. In the first quarter, GM was the top seller in China, with 881,000 units. The company announced aggressive investment and growth plans at the Beijing Auto Show in April to help fuel momentum. Contact the writers at and

Nationwide campaign to promote smoking ban in public spaces in China (By Li Jing Government has pledged to stop people lighting up in areas such as restaurants and bars by the end of the year - A month-long publicity campaign is to be launched in China from Monday to promote a nationwide ban on smoking in public places. A spokesman for the National Health and Family Planning Commission Mao Qunan told a launch ceremony in Beijing the campaign was aimed at raising public awareness of the health risks of tobacco use, Xinhua reported. China has pledged to ban smoking in public areas – such as restaurants, hotels, bars, cinemas and on public transport – under the World Health Organisation’s Framework Convention on Tobacco Control. The country ratified the pact in 2005, but has failed to enforce all its anti-smoking measures. “China still faces an uphill battle to honour its commitment on smoking control. The popularity of tobacco use is partly due to the lack of understanding of smoking-induced diseases and the harm of being exposed to secondary smoke,” Mao said. Health authorities said in January they aimed to roll out a nationwide smoking ban in public places by the end of this year. The central government issued an order in December telling Communist Party officials to “lead by example” and to stop smoking in areas such as government offices, schools, hospitals and sports and cultural venues. China is the world’s largest cigarette manufacturer and consumer, with more than 300 million smokers, according to national statistics. About 740 million people, including 180 million children, are affected by passive smoking. Medical experts have blamed smoking as a main contributor to the country’s surging lung cancer rates. A study released by the Peking Union Medical College Hospital, a leading Chinese medical institution, found the death rate from lung cancer had risen 465 per cent over the past three decades. National legislation enacting a ban on smoking in public places is viewed by the authorities as the most effective way for the government to fulfil its commitments, but so far action has been limited to several cities.

Hong Kong*:  May 6-7 2014

World Toilet Organisation steps into public urination row (By Christy Choi Jack Sim Ruihua, World Toilet Organisation's Singapore founder - The WTO has now weighed in on the issue of public urination and defecation. No, not the World Trade Organisation, but the World Toilet Organisation. "Public education at points of entry could be useful," said WTO's Singapore founder, Jack Sim Ruihua, following the controversy sparked by an online video of a mainland couple allowing their toddler to go to the toilet in a busy Mong Kok street. "Make the message clear that people will die if they keep doing that," he said. "The flies will go to the poop and spread disease." Sim said Hong Kong should help mainland visitors understand the importance of hygiene, and offered his organisation's help to create a memorable public education campaign. With initiatives like the "Don't Eat S*** Campaign" and "Potty Parity", the WTO brings humour to a serious and, usually, little discussed public health issue. Hong Kong, Sim said, was particularly sensitive to the issue of disease after the Sars crisis in 2003 - which killed 299 Hongkongers - and outbreaks of avian flu, among other epidemics. Sim advised Hong Kong to enlist the help of celebrities for an aspirational campaign. "Something like, 'Toilet habits reflect your dignity'," he suggested. "Most people don't like to be disgraced. Make hygiene a status issue." While the World Toilet Organisation sounds kooky, it is linked to serious players, like the United Nations Environment Programme, the Asian Development Bank and the Bill and Melinda Gates Foundation. It has more than 200 members and its current chairman is a graduate of the school of foreign service at Washington's Georgetown University and Harvard Law School. Sim said the issue in Hong Kong would not be fixed overnight as large parts of the mainland were still developing and people there were learning the importance of hygiene. He added: "I am sure there are people from the mainland who don't act this way, who are upset that Hong Kong people are bundling them in with people who do. "They will be scolding their own and that will be helpful."

 China*:  May 6-7 2014

Chinese businessman shot dead and 3 others injured in Manila car 'ambush' (By Niall Fraser and Raissa Robles in Manila) Identities of three others injured in ambush unknown, but one is reportedly a Hongkonger - A gun attack in Manila has left a Chinese businessman dead and three more Chinese injured - one of them reported to be from Hong Kong. Officials were last night trying to confirm the identities of those involved in the attack, which comes less than two weeks after the two places stepped out of the shadow of the 2010 Manila bus hostage incident and a travel ban to the city was lifted. The shootings took place overnight on Friday on the boundary of Manila and Pasay, two areas in Metro Manila, when an unidentified gunman opened fire on a car carrying "four Chinese" in what appears to have been an ambush. One of those in the car was killed and at least three other people injured. A police source in Manila told the Sunday Morning Post the dead man was 27-year-old Chen Lijun from Shenzhen and that one of the injured was Zhao Zhijun, from Shanghai. The driver of the car was reportedly a Taiwanese businessman, Bruce Huang. However, the source added: "We are investigating information received that alleges one of those injured was a nurse from Hong Kong." A number of the men who were in the car are said to have connections to China Airlines and the international seafood business. The motive for the attack was unclear but police did not rule out the possibility of robbery. Initial checks revealed bullet holes in the rear of the car. A spokesman for the Immigration Department in Hong Kong said: "The Immigration Department has contacted the Office of the Commissioner of the Ministry of Foreign Affairs of the People's Republic of China in Hong Kong and the Chinese embassy in the Philippines. It did not receive any requests for assistance from a Hongkonger." Less than two weeks ago the Philippines expressed its "most sorrowful regret and profound sympathy" over the Manila bus hostage tragedy, which left eight Hongkongers dead. A joint statement issued by the two governments announced the immediate lifting of sanctions against Philippine officials and a "black" outbound travel alert against the Philippines. The current level of the travel alert is yellow - Hongkongers intending to visit the country are advised to monitor the situation, exercise caution and attend to personal safety.

Hong Kong*:  May 4-5 2014

Rail link farce as head of inquiry into delay quits (By Olga Wong, Tong Cheung and Gary Cheung) Professor given task of leading independent investigation into controversy is found to be on the board of one of the project's key contractors [The MTR Corporation (its original full name was Mass Transit Railway Corporation) is listed on the Hong Kong Exchange and is a constituent of the benchmark Hang Seng Index. MTRC operates the Hong Kong underground rail system and is a major property developer and landlord in the city. It also invests in railways outside Hong Kong.] Controversy over the delayed HK$67 billion high-speed rail link descended into farce last night. The man appointed by the government to head up an independent probe into the row resigned after it emerged he was on the board of one of the project's main contractors. The move came two hours after government minister Professor Anthony Cheung Bing-leung announced that former University of Hong Kong pro-vice-chancellor, Professor Lee Chack-fan, would chair an expert investigative panel. Lee was then revealed to be an independent non-executive director of Paul Y Engineering, a key contractor on the rail link's underground terminus in West Kowloon, where excavation difficulties have been pinpointed by the MTR Corporation as being at the centre of the delay. Lee, a respected geo-technical engineer and past president of the Hong Kong Academy of Engineering Sciences, could not be contacted for comment. But the Transport and Housing Bureau - of which Cheung is the head - confirmed Paul Y was awarded two contracts on the project and said it was not aware of Lee's role in the company when it invited him to lead the probe. The bureau said it would appoint a suitable expert as early as possible. A government source admitted the appointment was a "hiccup" and said: "We value the panel's credibility so we accepted his resignation as soon as we knew about it." Cheung's announcement was seen as an attempt to save the government from accusations of a possible cover-up by the corporation over the two-year delay to the railway to Guangzhou. It came as the MTR Corporation admitted it was confident it could cope with the project's challenges in a report submitted to Legco yesterday. The expert panel was set up in addition to an internal probe pledged by the corporation on Tuesday. But Cheung denied it was a delaying tactic to head off public criticism. Pan-democrat lawmaker Wu Chi-wai said he now had little confidence in the inquiry into the controversy. The corporation apologised yesterday for not providing proper communication regarding the delays. But a source close to the MTR insisted there had been no cover-up as the management had been informed by its projects director, Chew Tai-chong, that the difficulties facing the project could be overcome. "The management was still informed that the project would meet the deadline in December last year," the source said. While worrying that further delay could be caused by lawmakers who plan to launch an investigation by invoking the Legislative Council's special powers and privileges, the source said the corporation would open its project documents - including contracts - to lawmakers who are willing to sign a non-disclosure agreement. It will also accept recommendations from the expert panel. Although two special powers and privileges proposals by pan-democrats were voted down yesterday, lawmakers said they would not rule out trying to invoke the powers again.

 China*:  May 4-5 2014

South China Morning Post: Yuan bashing a missed opportunity for US (By Stephen Roach) Stephen Roach says by fixating on the weakening yuan, the US is missing an opportunity to restructure its own economy and benefit from China's rebalancing towards domestic demand - A woman walks past Chinese yuan and US dollars symbols in a Hong Kong mall. The yuan has been weakening in recent months, resurrecting familiar charges of manipulation, competitive devaluation and beggar-thy-neighbour mercantilism. In mid-April, the US Treasury expressed "particularly serious concerns" over this development, underscoring what has long been one of the most contentious economic policy issues between the United States and China. This is a timeworn debate - politically inspired and grounded in bad economics - that does a serious disservice to both sides by diverting attention from far more important issues affecting the US-China economic relationship. Taken to their extreme, America's accusations risk pushing the world's two largest economies down the slippery slope of trade frictions, protectionism or something even worse. First, the facts: since hitting its high-water mark on January 14, the yuan has depreciated by 3.4 per cent relative to the US dollar up to April 25. This follows a cumulative appreciation of 37 per cent since July 21, 2005, when China dropped its dollar peg and shifted its currency regime to a so-called "managed float". Relative to where it started nearly nine years ago, the yuan is still up 32.5 per cent. Over the same period, there has been a dramatic adjustment of China's international balance-of-payments position. The current-account surplus - the most telling symptom of an undervalued currency - has narrowed from a record 10.1 per cent of GDP in 2007 to just 2.1 per cent last year. The International Monetary Fund's latest forecast suggests that the surplus will hold at around 2 per cent of GDP this year. Seen against this background, US officials' handwringing over the recent modest reversal in the yuan's exchange rate appears absurd. With China's external position much closer to balance, there is good reason to argue that the renminbi, having appreciated by nearly one-third since mid-2005, is now within a reasonable proximity of "fair value". The IMF conceded as much in its latest in-depth review of the Chinese economy, which calls the yuan "moderately undervalued" by 5 to 10 per cent. This stands in contrast to its earlier assessments of "substantial" undervaluation. America's fixation on the yuan is a classic case of political denial. With US workers remaining under intense pressure in terms of both job security and real wages, politicians have understandably been put on the spot. In response, they have fixated on the Chinese component of a gaping trade deficit, claiming currency manipulation is the culprit behind the long-festering woes of the American middle class. This argument is politically expedient, but wrong. The US trade deficit is a multilateral imbalance with many countries (102 in all), not a bilateral problem with China. It arises not from the alleged manipulation of the yuan, but from the simple fact that America does not save. Lacking in domestic savings and wanting to grow, the US must import surplus savings from abroad and run massive current account deficits to attract the foreign capital. And that leads to America's multilateral trade imbalance. Yes, trade with China is the largest component of this imbalance, but that largely reflects the complexity of multinational supply chains and the benefits of offshore efficiency solutions. That brings us to the uncomfortable truth about America's politically inspired China bashing: it will backfire. If America fails to solve its saving problem - a reasonable scenario in light of fiscal gridlock and persistently subpar personal saving - the current account deficit will persist. That means any reductions in China's share of America's external imbalance would simply be shifted to other foreign producers. Significantly, this alternative sourcing will most likely have a higher cost base than Chinese production, thereby imposing the functional equivalent of a tax hike on already beleaguered middle-class Americans. As China rebalances towards a growth model that draws greater support from domestic demand, Washington should stop ranting about the renminbi and start focusing on the opportunities this bonanza will create. That means emphasising US companies' access to China's domestic goods and services markets. Pushing for a bilateral investment treaty that relaxes caps on foreign ownership in both countries would be an important step. Similarly, the US needs to give China credit for having taken meaningful steps on the road to further currency reform. The mid-March widening of the daily yuan-dollar trading bands to plus or minus 2 per cent (from the earlier 1 per cent band) is an important step in relaxing control over the so-called managed float. That, coupled with the 3 per cent depreciation in the past few months, should send a strong signal to speculators that one-way renminbi bets are hazardous - a signal that could help dampen inflows of hot money, which have complicated liquidity management and fuelled asset-market volatility in China. There are two different views of the future of the US-China economic relationship: one that sees only risk, and another that sees opportunity. Fixating on the yuan falls into the former category: it misses the rebalancing and reforms already under way in China and deflects America's focus from addressing its most serious long-term macroeconomic problem - a lack of saving. By contrast, viewing China as an opportunity underscores the need for America to undertake its own rebalancing - rebuilding US competitiveness and pushing for a meaningful share of China's coming boom in domestic demand. Unfortunately, the revival in US saving that this will require is being drowned out by the renminbi rant. Stephen S. Roach, a faculty member at Yale University and former chairman of Morgan Stanley Asia, is the author of a new book Unbalanced: The Codependency of America and China. Copyright: Project Syndicate

Chinese firms join IBM's new chip-tech group alliance (By Michael Barris in New York Chinese companies' participation in an International Business Machines Corp chip-technology alliance gives them the ability to custom-design chips that power a growing economy, analysts said. The US information-technology giant's recruiting of telecom equipment maker ZTE Corp, server maker Inspur Group Co and other Chinese technology providers is the latest step in a plan unveiled last summer to allow many companies to license IBM microprocessor designs based on the company's "Power" technology, a key step in IBM's effort to broaden the technology's acceptance. "IBM must find additional revenue sources through new markets and partners or they will struggle to fund the substantial development costs needed to design future Power processors," Moor Insights & Strategy senior consultant Karl Freund wrote in a research article. For years, the designs existed only in the Armonk, New York-based company's own server systems. Under the alliance, dubbed "OpenPOWER", licensees can include IBM-designed circuitry in their own chips. Alliance members work on related products such as servers, networking and storage devices. With IBM revenue slumping, "the stakes could not be higher," Freund wrote. From 2002 to 2012, IBM's share of the market for the widely used Unix multiuser operating system jumped to more than 55 percent from 14 percent, on the back of the speedy Power architecture. Amid declining demand for Unix-based servers, IDC sees Unix server revenue sliding to $8.7 billion in 2017 from $10.2 billion in 2012. Unix market share is seen plunging to 9 percent of server revenue in 2017 from 16 percent. IBM decided last summer to reboot the technology by opening it to high-tech allies who could tailor it to parties' specific needs. Google Inc joined in August. In January, China's Suzhou PowerCore Technology Co and the Research Institute of Jiangsu Industrial Technology signed on. Suzhou PowerCore agreed to license IBM's Power architecture, intellectual property related to its fast Power8 processor, and chip design tools to develop and market processors for specialized servers in China. The Research Institute of Jiangsu Industrial Technology said it would promote and help develop Power in Jiangsu province and throughout China. ZTE and Inspur will be producing chips to meet growing demand and satisfy security requirements, alliance president Bradley McCredie told China Daily. The alliance's seven Chinese members are ZTE, Research Institute of Jiangsu Industrial Technology, Inspur, Teamsun, Chuanghe Mobile Co, Suzhou PowerCore Technology Co and VeriSilicon. Freund said recruiting the Chinese companies was important to IBM because of the size of the potential Asian market. "IBM likely is targeting the large Chinese data centers such as Tencent, Alibaba, Baidu, and China Telecom," which have "deep collaborative relationships with Intel", he wrote. Analyst Timothy Prickett Morgan said participation is a way for the Chinese companies to flex some of that muscle in their business dealings with the US company. The big tech companies in China want to have some sort of say in how Power-based machines are designed and they don't just want to buy boxes from Big Blue, according to Morgan. That is one reason why Suzhou PowerCore has licensed the Power8 chip specs and is working on its own variants for servers, storage, and other data center products. Tom Rosamilia, IBM's systems and technology general manager, said the company has "had a very successful business in China around our Power technology for quite some time now. It is obviously a big market for us and for all the world."

Hong Kong*:  May 2-3 2014

Hongkongers No 4 in world in material well-being (By Denise Tsang World Bank study also shows China closing in on US as the world's largest economy [The World Bank and the International Monetary Fund (IMF) were both created at the 1944 Bretton Woods Conference. The World Bank’s mandate is to lend to developing countries to fund capital programs to alleviate poverty. The IMF, an organisation of almost 200 countries, helps alleviate problems among member countries. Since the onset of the global financial crisis in 2008, the IMF has taken part in rescues of countries such as Greece] Hongkongers are able to enjoy a good life at prices that are reasonable compared with elsewhere in the world. Hongkongers are perched comfortably near the top of a global ranking of material well-being, a new World Bank study shows. China, meanwhile, has made a huge leap towards overtaking the United States as the world's largest economy, the agency's International Comparison Programme found, based on 2011 data. The study used purchasing power parity (PPP) calculations, which adjust for price levels and exchange rates to allow comparison of disparate economies. Hong Kong ranked fourth in actual individual consumption per capita among 199 economies on a PPP basis. Actual individual consumption refers to consumer spending by households and spending on goods and services for individuals, such as on health care and education, by government and non-profit institutions. The figure for the city was 87 per cent of that in the US, which ranked second. Bermuda topped the list with 101 per cent, and the Cayman Islands ranked third with 91 per cent. Rounding out the top 10 were Luxembourg, Norway, Switzerland, the United Arab Emirates, Germany and Austria. Bank of East Asia economist Paul Tang Sai-on said Hong Kong's heavy consumption was closely related to a sharp jump in retail property rents. Rents for retail spaces had risen 55 per cent in the five years to February, he said. "Retail-space supply lags behind demand, which creates more pressure on the Hong Kong government to offer more land to shopping malls at the border or develop underground shopping arcades in busy districts," he said. China's gross domestic product on a PPP basis doubled to 86.9 per cent of US GDP from 43.1 per cent in 2005, the last time the study was done. India also nearly doubled its ratio, to 37.1 per cent from 18.9 per cent, to emerge as the world's third-largest economy, overtaking Japan, whose GDP fell to 28.2 per cent of that in the US, from 31.3 per cent. Britain, which ranked ninth, was the only other economy in the top 10 that shrank relative to the US, to 14.2 from 15.4 per cent. The report cautioned that the latest findings were not strictly comparable with those from 2005, as there had been changes in methodology and the number of economies compared had increased from 146 to 199.

 China*:  May 2-3 2014

South China Mornng Post: China, Russia to hold joint naval drill in politically sensitive East China Sea (By Minnie Chan Decision to stage exercise in East China Sea may be a way of showing displeasure at US policies - China and Russia will stage a naval drill in the sensitive East China Sea at the end of this month, a move analysts say could be aimed at showing their displeasure over Washington's policies regarding the Diaoyu Islands and Ukraine. The Ministry of National Defence yesterday confirmed the Chinese-Russia naval manoeuvres, named Joint Sea-2014, would be staged in waters and air space near Shanghai and in the East China Sea. "The naval drill, which is a regular exercise between the Chinese and Russian navies, aims to deepen pragmatic co-operation between the two militaries as well as to improve their capability to deal with maritime security threats," the ministry said in a statement. The East China Sea has become more sensitive after Beijing announced the creation of an air defence identification zone in November. The zone includes the disputed Diaoyu Islands, known as the Senkakus in Japan, over which both China and Japan claimed sovereignty, but which are now controlled by Tokyo. The drill will start at almost the same time as a scheduled visit to Shanghai later this month by Russian President Vladimir Putin. "Russia might want to use the joint drill to remind the United States and the European Union that Moscow and Beijing are going to strengthen their 'full-fledged strategic partnership', a consensus reached by President Xi Jinping and President Putin," Shanghai-based military expert Ni Lexiong said. Since last week, the US and EU have imposed new sanctions targeting a string of Russian individuals and companies that Washington says are linked to Putin's "inner circle" as a retaliation against Moscow's actions in Ukraine. Beijing-based naval expert Li Jie said Beijing was also unhappy at US President Barack Obama's remarks in Tokyo that the US-Japan security treaty covered the Diaoyus, and Washington's decision to sign a new 10-year military pact with Manila, which has territorial disputes with China in the South China Sea. "Choosing the East China Sea as the drill's location is obviously a political gesture to protest against US sanctions toward Russia, as well as Washington's intervention in China's territorial disputes with Japan and the Philippines in the East and South China seas," Li said. Masafumi Iida, a China military analyst at the National Institute of Defence Studies in Tokyo, said the joint exercises could be seen "as a message aimed at the Japan-US alliance or to Tokyo or Washington individually". "But I do not believe it will be so beneficial to Russia to ally itself with China over the issue of the Senkakus," he said.

Hong Kong*:  May 1 2014

Chinese pork giant WH Group pulls Hong Kong IPO citing weak demand (By Ray Chan While confusing syndicate and high valuations lead to the failure of the pork producer's deal, Bank of Beijing seeks to tap HK market for US$4b - The world's largest pork producer WH Group has postponed its US$1.9 billion share sale, effectively axing what was once billed as the biggest initial public offering in Asia so far this year. The decision came after a move last week to slash the price and the offer size of the deal from an original US$5 billion, which failed to tempt potential investors, who were already signalling their unwillingness to swallow such a large transaction. "In light of deteriorating market conditions and recent excessive volatility, the company, having consulted the joint sponsors, has decided that the global offering will not proceed at this time," WH said yesterday. As many as 29 investment banks were working on the deal, which critics said created confusing messages about details of the offer. WH, formerly Shuanghui International, originally planned to use the proceeds from the offer to pay down the US$4 billion syndicated loan it borrowed to acquire Smithfield Foods, the largest pork producer in the United States, for US$4.7 billion last year. Apart from an unusually large and confusing syndicate, the deal failed partly due to its demanding valuations, which sparked a major pullback by a handful of big sovereign wealth funds. "WH's [offer] failed to meet investors' expectations on earnings growth after the firm paid a lofty 30 per cent premium on the acquisition of Smithfield," said a fund manager with a European firm in Hong Kong. The manager had withdrawn his order due to questions over WH's earnings going forward. "The overall sentiment remains cautious even though valuation in the city's stock market looks inexpensive," the manager added in a reflection of mounting concerns over growth prospects in the mainland economy. A flurry of other deals are working their way around the Hong Kong market, including a US$4 billion share sale by Bank of Beijing, the mainland's biggest city lender. It is among a clutch of mainland banks lining up to sell equity to meet increasingly stringent capital requirements set by the country's regulators. Analysts reckon as much as US$50 billion in securities from mainland banks will be marketed to investors over the summer. Bank of Beijing, in which Dutch financial group ING holds a 14 per cent stake, said it planned to sell as many as 3.4 billion H shares at a time when sentiment over the mainland's banking stocks remains lukewarm amid concerns over deteriorating asset quality and rising non-performing loans in a slowing economy. Board chairman Qiang Xin was quoted by mainland media as saying the flotation could boost the lender's capital adequacy ratio by 3 percentage points and fulfil its capital requirement for the next five years. The final decision was pending approval by shareholders and regulators, the bank said. It raised 15 billion yuan (HK$18.9 billion) through a Shanghai float in September 2007 and then a further 11.8 billion yuan from a private placement in the city in 2012.

 China*:  May 1 2014

President Xi Jinping delivers tough message to ‘frontline of terror’ on visit to Xinjiang (By Zhang Hong in Beijing President demands tough action against unrest in Xinjiang, but also urges steps towards Uygur integration and promotion of economic growth - President Xi Jinping inspects weapons used by officers to halt violent unrest on a visit to a police station in Kashgar. President Xi Jinping visited troops in one of the most restive areas of Xinjiang, where pockets of separatist groups opposed to Chinese rule reportedly operate. Xi Jinping has made his first presidential visit to what he called the "frontline against terrorism" in the restive region of Xinjiang. Xi's tour of Kashgar came ahead of a work conference in June that will decide policies for the troubled region. Xinjiang has seen a series of attacks in recent years, blamed by the government on Muslim ethnic-Uygur separatists. The authorities also blame them for last month's knife attacks at Kunming railway station that left 29 dead and 140 injured. Xi visited a military unit and an armed police squad on Sunday afternoon. He also toured a police station in Kashgar on Monday and watched an anti-terrorism drill. "You must have the most effective means to deal with violent terrorists," Xi was quoted by Xinhua as saying. "The more you sweat in training, the less you bleed in wartime." Cracking down on terrorism has been top of the agenda for Xi's administration and is among the priorities of the Communist Party's newly created National Security Commission. At least 100 people have been killed in violence in Xinjiang over the past year, officials say. Over the past two months, Xi has publicly discussed the battle against terrorism 15 times. Two days before Xi toured Kashgar, he vowed in a Politburo meeting to "resolutely crack down on terrorism and separatism with high intensity to safeguard national security". During his trip, Xi also visited a nearby village and asked about the daily lives of Uygurs. Later, while visiting a school, Xi urged ethnic Han teachers to master the Uygur language and to help Uygur students become fluent in Putonghua. "It's important to [have] bilingual education for minority children. [They] will be able to find jobs easier in the future by mastering the Chinese language and more importantly they will contribute more to national unity," Xi said. Part of his visit also touched on promoting economic growth. At a meeting yesterday, Xi told officials to develop the manufacturing and services sectors and to launch projects to create jobs in the region. "We should help people to get jobs, make a living and have hope," Xi said. Pan Zhiping , a senior researcher at the Xinjiang Social Science Academy, said Xi wanted to see the situation in Xinjiang for himself ahead of the government work conference in early June. "Xi wants to tell local officials and people in the south of Xinjiang that he is a leader who doesn't just sit in a Beijing office and read reports written by local officials, but a leader who goes to get in touch with them," Pan said. "During the trip, Xi sent a clear message to the outside world that he would deal with terrorists with an iron fist, but might be more flexible when dealing with religious and ethnic conflicts, as well as other social problems." Southern areas of Xinjiang have higher populations of Turkic-speaking Uygurs. Human rights organisations and Uygur exile groups claim Beijing's policies discriminate against the ethnic group's culture and religion, stoking unrest. The area is often marred by violent unrest. In April last year a clash between Uygurs and police near Kashgar left 21 dead. Related violence has also spread to other parts of the country, including Beijing.

BYD unveils first electric commuter bus in California (By Cindy Liu in Lancaster, California From right: Stella Li, CEO of BYD Motors, applauds after presenting the key of BYD’s first electric bus to Julie B. Austin, executive director of the Antelope Valley Transit Agency, and agency chairman Norm Hickling, while California Governor Jerry Brown looks on in California on Monday. From right: Stella Li, CEO of BYD Motors, applauds after presenting the key of BYD’s first electric bus to Julie B. Austin, executive director of the Antelope Valley Transit Agency, and agency chairman Norm Hickling, while California Governor Jerry Brown looks on in California on Monday. BYD Motors unveiled its first made-in-California electric bus with a ceremony attended by Governor Jerry Brown and the 60 Americans hired locally to produce the buses. "It is a celebration of jobs. It is a celebration for all of California," BYD Motors CEO Stella Li told the audience on Monday that also included R. Rex Paris, the mayor of Lancaster where the buses are being manufactured and BYD's first plant in the US. BYD employees were dressed in their company uniforms for the ceremony. The company is committed to creating 100 local jobs by end of 2014 and 200 more by end of 2015. Brown praised the partnership established by BYD and the United States. "Great minds collaborate together and this is why people can make a better world to live in," he said. "Whatever works for California can work in China too. By putting the US and China's great technologies and expertise together, I believe Chinese cities like Beijing and Shanghai can be as clean as cities are in California today." When asked why Lancaster was chosen as the site to produce the 40-foot-long green bus, Li said, "When you meet the right leadership, everything moves so smoothly." She praised Paris for the effort he has put into making the bus a reality. "I have traveled to China five times and I will go there more often to ensure this great partnership we have with BYD in China, " Paris said. Mike Antonovich of the Los Angeles County Board of Supervisors, said Lancaster is "the gate way to a new model of international partnership with China, " with BYD being "a pioneer and setting a great example." Lanny Davis, an attorney for BYD and a former White House special counsel, praised the bus technology. "It is clean. It is silent. And it is economic. China's world leading company has made green life come true," he said. "We save 2.77 trees per day." Electric buses run entirely off battery power lasting up to 24 hours on a single charge, with peak charging time of 3 to 5 hours, with No transmission, clutch, or an internal-combustion engine. The buses can hold up to 60 passengers and are designed with low floors and without steps for easy entry. BYD's electric bus has been tested for more North American miles at more Transit Authorities than any other electric bus. According to research, an electric bus saves 2.77 trees a day, literally a forest each month on U.S. road. Located in northern Los Angeles Country, the City of Lancaster has earned the Eddy Award for "Most Business Friendly City" from the Los Angeles County Economic Development Corporation. 

Hong Kong*:  Apr 30 2014

Hong Kong Bar Association rejects public nomination for 2017 chief executive election (By Tanna Chong Barristers reject key demand of pan-democrats but question notion that only 'patriots' can run - Legal sector lawmaker Dennis Kwok said the submission set clear boundaries on the extent to which the nomination process could be used to "screen out" candidates critical of Beijing. [The Basic Law was drafted as part of the Sino-British Joint Declaration covering Hong Kong after its handover to China on July 1, 1997. The joint declaration stated that Hong Kong would be governed under the principle of ‘one country-two systems’ and would continue to enjoy its capitalist system and individual freedoms for 50 years after the handover.] Hong Kong's barristers have dismissed a key demand of the pan-democratic camp in the debate over the 2017 chief executive election - and described one of Beijing's criteria for the city's future leader as legally dubious. In its submission to the government consultation on electoral reform, the Bar Association rules out the idea of letting the public choose or even suggest hopefuls when the city elects its leader for the first time. It says the Basic Law is clear that only a nominating committee can pick candidates, despite claims by some pan-democrats that public nomination is vital for a truly democratic poll. But the association describes as "highly questionable as a matter of law" the idea that candidates must be patriots who "love the country and love Hong Kong", as Beijing officials and loyalists have repeatedly asserted. Legal sector lawmaker Dennis Kwok said the submission set clear boundaries on the extent to which the nomination process could be used to "screen out" candidates critical of Beijing. "The explicit language of Article 45(2) of the Basic Law does not envisage nominating other than by the [committee]. Likewise … [the clause] rules out a nominating committee consisting of the whole of the electorate or each and every registered voter," the association says in its 40-page submission. The clause of the mini-constitution states that the chief executive should be elected by universal suffrage upon nomination by a "broadly representative" nominating committee that follows "democratic procedures". Some pan-democrats argue that those words do not prevent a system in which the committee would have to approve, or at least consider, candidates with a certain level of public support. But the association says such a system would inhibit the committee's ability to "act on its own". It adds: "The nominating committee cannot be required by legislation to nominate a person who has fulfilled a certain characteristic (whether … by reason of his being able to demonstrate the support of a certain number of electors or a certain proportion of the electorate). Such an arrangement cannot be reasonably described as the nominating committee acting on its own." Even a system in which the committee selected a fixed number of candidates from a list "recommended" by voters could constitute an "impermissible fetter" on the committee's power to select candidates. But elsewhere in its submission, the association casts doubt on the criteria set by Beijing and local government officials for the 2017 race. Insisting that candidates must be patriots would be "highly questionable as a matter of law" as it would contradict other parts of the Basic Law, it says. Because of uncertainty in the meaning of the phrase "love the country, love Hong Kong", such a requirement "cannot possibly be a reasonable restriction" on the right to stand for election guaranteed elsewhere in the miniconstitution. Placing a cap on the number of candidates, as some have suggested, would "infringe the authority and liberty" of the nominating committee, the association says. Chief Secretary Carrie Lam Cheng Yuet-ngor said on launching the consultation that the patriotism requirement was "self-explanatory", while Basic Law Committee chairman Li Fei said last year that the city's leader must "love the country and Hong Kong". The consultation ends on Saturday. The government is expected to put forward a reform plan later this year.

 China*:  Apr 30 2014

China will not be 'intimidated': envoy (By Zhang Fan in New York Cui Tiankai, Chinese Ambassador to the United States, makes a public speech on China's policy towards the Asia-Pacific region at the Harvard Kennedy School on Friday. In protecting its sovereignty and integrity, China will not be intimidated or compromised, said Chinese Ambassador to the US Cui Tiankai. "Nothing - whether direct coercion or implied threat, whether unilateral statement or a so-called joint statement as the one just issued in Tokyo - can intimidate China or compromise our principles," Cui said during a speech at Harvard's Kennedy School of Government on April 25. Cui made the remarks after President Barack Obama, during his recent Asia tour, pledged to support Japan in its territorial disputes with China over the Diaoyu Islands. Obama's statement was strongly rejected by the Chinese government as China's foreign ministry urged the US to "respect the fact" that the islands are China's "inherent territory". China also criticized the US-Japan security treaty as a product of the Cold War era and should not be aimed at a third party nor harm China's territorial sovereignty. Cui said that managing the current security challenges in the Asia Pacific is "clearly beyond the scope and capability" of any military alliances. What is needed, he said, is a "common, comprehensive and cooperative approach". "China takes a constructive approach to the differences it has with the US on some regional issues," he said. "We believe that the two countries should do their best to narrow those differences and manage them skillfully, so the differences will not disrupt our overall bilateral relationship or the regional situation." "China's position has always been firm and clear-cut, such consistency and clarity help reduce the possibility of miscalculations by others," he added. "So let there be no underestimating of China's readiness to defend its core interests." Obama's Asia tour included four stops - Japan, the Republic of Korea, Malaysia and the Philippines. His trip was described as the "latest manifestation" of the Asia Pacific rebalancing policy of the US government. Cui said that China recognized the US' presence and interest in the region and welcomed a "constructive role" by the US in regional affairs, and, he added, China sees win-win interaction with the US in the Asia Pacific. The year 2014 marks the 35th anniversary of diplomatic ties between China and the US. To face the new challenges, Chinese President Xi Jinping proposed building a new model of major country relations during his California summit with Obama in 2013. The new model, according to Xi, is based on avoidance of conflict and confrontation, mutual respect and win-win cooperation, to which Obama responded warmly. "This new model rejects the old zero-sum game among major powers, that has resulted in so many conflicts and confrontations in the past," Cui said in the speech. He said the new model aims at "win-win cooperation on the basis of mutual respect" and "it is not a favor given by one side to the other" and can only be achieved by requiring positive energy from both sides. "A serious commitment has to be made and honored by both sides," Cui said. "We in China remain firmly committed to this goal. With such a positive political view, the long term common interest of both countries will be served."

Hong Kong*:  Apr 28-29 2014

Reliability at issue in proposal for Hong Kong to tap into mainland China's grid (By Cheung Chi-fai The first part in a series on Hong Kong's energy mix looks at whether a proposal to tap into mainland grid can meet city's standards - The mainland grid from which Hong Kong proposes to buy electricity has made remarkable progress in improving its reliability but still falls short of the stringent standards set for local power firms, research by the South China Morning Post shows. The performance of the China Southern Power Grid (CSG) has been in the spotlight since Hong Kong environmental officials put forward a proposal to import up to 30 per cent of the city's electricity from it by 2023. Part of a proposal to meet rising power demand that also included nuclear energy imports, it is an alternative to another scheme under which natural gas use would account for 60 per cent of demand by 2020, versus 22 per cent now. Some experts have warned against exposing the city's supply network to disruption risks from a mainland grid that is perceived as less reliable. But others said the fears were overstated. In the past five years, power disruptions in major cities in Guangdong and its neighbouring provinces have fallen sharply, according to CSG, which owns and operates grids in five provinces. In 2012, Shenzhen, the best-performing city in the grid, had an average of 1.12 hours of "system interruption" per consumer - planned and unplanned - a 77 per cent improvement on the five hours of 2008. Guangzhou has also cut disruptions by 74 per cent, with just 1.79 hours of unavailable service per consumer in 2012. Translating these interruptions into the internationally used average service availability index (ASAI) - the percentage of time during the year that the average customer has power - Shenzhen's reliability reached 99.98 per cent and Guangzhou's 99.97 per cent, both above the national standard of 99 per cent. But they still fell short of the minimum standard Hong Kong sets for its power firms of 99.99 per cent. Under Hong Kong law, utilities performing below that level will be penalised. And experts who did not support the power import option warned that Hong Kong's diversified economy meant an outage could lead to huge economic losses, especially to small and medium-sized businesses. Dr Chung Chi-yung, of Polytechnic University's department of electrical engineering, said he was not optimistic that the quality of the Hong Kong and CSG grids would match. "It is virtually impossible for the southern grid to meet such a high reliability standard," he said. Hong Kong's regulation of its power firms - favouring infrastructure investments - and its high density are key to making power reliable and cheap, factors missing across the border. Dr Mak Sui-hoi of Baptist University and a government energy adviser, was more optimistic. He said the importation of power would not start for 10 years. "We can expect that the mainland grid will continue to invest in new and more advanced facilities." Macau, which imports about 90 per cent of its power from CSG, reported an ASAI of 99.9999 per cent in 2012. CLP Power said it had outperformed the government reliability targets since 2009.

 China*:  Apr 28-29 2014

Wuxi takes lead in easing policy to boost home sector (By Langi Chiang Small cities may follow move to loosen residency registry but doubts grow over its effectiveness - Every time the mainland's property market cools, rumours about policy relaxation swirl. This year is no exception. Partly fuelling expectations this time are repeated pledges from top leaders in recent months that different cities need to impose different policies tailored to the development of the local market. It is no surprise that the first rumours about relaxation of property policy have come from Wenzhou and Hangzhou, both in Zhejiang province. Once an entrepreneurial boomtown, Wenzhou has been the only one among 70 major cities on the official radar screen in the past 21/2 years that has suffered year-on-year declines in home prices. Hangzhou is the first where developers cut prices to speed up sales in February. Discounts are now deeper and wider and spreading to other cities. While other cities are still testing the political waters, Wuxi in Jiangsu province has become the first to make a significant move, loosening its urban residency registry from Thursday this week to stimulate housing demand. Wuxi has 6.5 million permanent residents, but only 4.7 million are registered as locals, who can enjoy the social safety net the city government provides. "The policy bears no political risk and may well become a major choice for other small cities to revive local property markets," said China Real Estate Information Corp, a subsidiary of mainland consultancy E-House. Over the weekend, prices of several residential properties on sale in Shanghai and Hangzhou dropped sharply, feeding speculation of a fresh round of price cuts by developers to boost sales, Reuters cited a report in the Shanghai Morning Post yesterday. In Shanghai, a developer slashed average prices of a batch of homes on sale by 28 per cent to 36,000 yuan (HK$45,210) per square metre amid sluggish sales. Separately, 12 projects in Hangzhou went on sale on Saturday, with developers wooing buyers with prices much lower than their counterparts in the city, the paper reported. An official in Zhengzhou in Henan province has said the city could relax its policies if the housing market deteriorates, without offering any specific measures or time frame. Analysts said a reported package of 10 measures by Fujian province, including halving the deed tax for buyers of first homes, might have exceeded what the top authorities were prepared to countenance and would be immediately cancelled once it was officially announced. An official at the provincial housing bureau has denied the report. The top leaders have yet to spell out details about which cities can relax existing tightening measures, under what conditions and how they can gradually phase out home purchase restrictions. The mainland has in the past killed a few premature attempts by local officials at easing property policy. The real estate sector is the largest driver of the economy, despite repeated government tightening campaigns to cool the market as record-high home prices have stoked citizens' anger. Any sudden or steep correction in the property market will jeopardise the authorities' efforts to land the world's second-largest economy gently on a more sustainable track. Local governments used land as collateral to borrow a total of 7.76 trillion yuan of debt at the end of last year, official data showed. Meanwhile, analysts doubt whether the measure taken by Wuxi is strong enough to avert expectations of a further cooling of the market. "We expect to see more third- and fourth-tier cities following the same route of indirectly relaxing housing purchase restrictions," said Edison Bian, research head for China property at UOB Kay Hian. "However, without credit loosening, the impact of local relaxation on housing markets could be rather limited." WorldUnion, a mainland property consultancy, said the 1.8 million non-locals working in Wuxi mostly earned middle or low incomes and the recent tightening of mortgage loans by banks had made it even harder for them to afford a home. It suggested Wuxi should instead try to rebuild its local industries, such as high-end garment and electronics manufacturing, so that the city could attract more outsiders with jobs offering higher incomes to revive the property market.

Easier visas aim to attract more Chinese (By Zheng Xin and Huang Yiming in Sanya, Hainan) Countries are scrambling to change their policies so they can grab a larger slice of the pie - As China is expected to surpass the United States as the world's largest travel and tourism economy in 2027, experts and industry insiders expect visa barriers targeting Chinese tourists to be eased in the near future. One of the major inhibitors of the tourism industry is the fact that 70 percent of tourists still need to go to an embassy to visit a foreign destination, said David Scowsill, president and chief executive of the World Travel and Tourism Council. Yang Jinsong, a professor at the China Tourism Academy who focuses on international tourism, said that visas are still the major hindrance to Chinese outbound tourism, the growth of which would be inestimable without the visa barriers. "However, thanks to the tremendous growth of China's outbound tourism in recent years, an increasing number of countries are extending an olive branch, by reducing the visa application process for Chinese applicants or waiving the visa requirement in an attempt to attract more Chinese tourists," Yang said. "No one wants to be left behind as China's economic pie is being carved up." Despite all the concerns, including overstays, terrorism, illegal immigration, considering the potential economic contribution, it is an inescapable trend that visas to most countries will be waived in the future, he said. "As much of the growth of the tourism and travel industry is coming out of Asia, especially China, more countries will come up with easier visa policies, including e-visas instead of interviews, and reciprocity among nations, to further eliminate visa barriers and make travel easier." There were more than 98 million outbound visits by Chinese in 2013, and the country's tourism market will exceed more than $2 trillion five years later, Chinese Vice-Premier Wang Yang said on Thursday at the opening ceremony of the 2014 World Travel & Tourism Council Global Summit in Sanya, Hainan province. The boom in Chinese outbound travel is changing the global tourism landscape. Chinese travelers have emerged as the largest spenders in worldwide outbound tourism, said Richard Solomons, global chief executive of the InterContinental Hotels Group, a multinational lodging company headquartered in the United Kingdom. Many countries, including the UK, the United States, France, New Zealand, Malaysia and Thailand, have eased their visa procedures for Chinese travelers, either through waivers or reducing the red tape involved. "As the whole world is competing to welcome Chinese tourists, governments are being more progressive in trying to come up with loosened visa application procedures," said Arne Sorenson, president and chief executive officer of Marriot International Inc, a leading global hospitality company. "The United States, as well as the European Union, has been trying hard to make it easier for Chinese to get a visa, which shows that the world is more than ever focusing on Chinese tourists," said Sorenson. Sorenson, who is also a member of the President's Export Council, which is the principal advisory committee to the US president, said the US has been looking to introduce a more progressive visa policy and easier access for Chinese tourists and to grant longer stays - and even a visa waiver the second time a Chinese visits the US in the future. He said he has talked to President Barack Obama about the US' visa policy a dozen times, and it is crystal clear that the president wants to encourage more tourists to visit the US. Michael Robbins, a partner at the Tourism Company, a Canada-based management consultancy specializing in tourism, said the Canadian government has been investing heavily to attract Chinese tourists, and there has been a sharp growth in the number in recent years "but the visa has been a hurdle that prevents tourism development". "Countries are left with no choice but to make it easier for Chinese to get a visa, because people will opt for another country if they have to wait for months for a visa," said Desiree Bollier, chief executive of Value Retail management, the creator and operator of Chic Outlet Shopping. Bollier said the group has been talking with the UK's Ministry of Tourism to push for easier visa applications targeting the Chinese, one of the major customer sources of the outlet, which is one of Europe's largest discount outlet chains. "All these are not one way straight. In both sides we are trying to be progressive to make the visa easier for Chinese coming to US and US citizens coming to China."

Tourism sector calls for enhanced global marketing - China's government should develop tourism marketing globally to attract more foreign visitors, industry insiders said. "The government should enhance its travel promotion to the rest of the world, (issuing) an invitation saying that we'd love to have you in China," Marriot International Inc's president and CEO Arne Sorenson said. "When people travel abroad, what matters in the first place is that they know they are welcome." Sorenson pointed to the United States as a country that has been proactive in promoting its destinations. Marriot International's chief global communications officer Katheleen Matthews said Beijing's Olympics was successful, but the tourism promotion was not sustained. The Chinese capital has ramped up tourism marketing globally since 2013. It has advertised on CNN and the National Geographic Channel, and has promoted visa wavers at Chinese embassies and consulates. IHG's global chief executive Richard Solomons said the investment will help increase inbound tourism in the long term. Sorenson said bilingual signage has made traveling in China easier for Western tourists. He believed China should improve its air quality to enhance its allure. "The pollution is not an invitation but a warning," he said. "It's necessary to improve the air, which is going to take time, though." Desiree Bollier, chief executive of Value Retail, one of Europe's largest discount outlet chains, believed a shortage of direct flights was a bigger problem. "An easier and convenient journey for the travelers will help attract more foreign visitors," she said. "The inbound tourism in your country is to grow massively." - Zheng Xin

ASEAN countries speak positively of China relations (By China Daily) Senior officials of the members of the Association of Southeast Asian Nations spoke positively of ASEAN-China relations after the 20th ASEAN-China Senior Officials' Consultation, which concluded on Tuesday in Pattaya, Thailand. ASEAN-China relations have a solid foundation, cover a wide range of areas and are full of vigor, the officials of member countries such as Thailand said, adding that the strategic partnership between the two sides has become a pillar for regional peace and stability, and will be even more important in the future. China is a natural and important partner for the ASEAN countries on the bilateral, regional and international levels, they said, calling on both sides to strengthen high-level communication and build consensus, in order to push for greater progress in their ties, as the strategic partnership enters its second decade. They also spoke positively of the 2+7 (two political consensuses and seven areas of cooperation) framework proposed by China last year. They welcomed the results achieved at the 10th joint working group meeting between the ASEAN and China on the implementation of the Declaration on the Conduct of Parties in the South China Sea, held last month in Singapore. In the eyes of countries such as Malaysia, China is the most active ASEAN dialogue partner, as it has put forward many constructive cooperation proposals. The officials said the sound development of China-ASEAN relations is conducive to regional peace and stability, as well as the ASEAN's own development. Malaysia said it will work closely with China to ensure the success of the ASEAN Regional Forum Disaster Relief Exercise, expressing hopes that the exercise will contribute to the building of a regional disaster relief cooperation mechanism. Countries, including Indonesia, Thailand and Myanmar, said China's proposal to conclude a China-ASEAN treaty on good-neighborliness and cooperation is conducive to safeguarding regional peace, stability and prosperity as it is in line with the ASEAN's goal of realizing the ASEAN Community. The community comprises three pillars - namely, the ASEAN Political Security Community, the ASEAN Economic Community and the ASEAN Socio-Cultural Community. Singapore, Indonesia and Brunei said the China-ASEAN free trade agreement is significant as it is the first free trade agreement the ASEAN has signed with one of its dialogue partners. The upgraded version of the FTA will not only promote investment between China and the ASEAN countries but also offer fresh impetus to the Regional Comprehensive Economic Partnership negotiations, they said. Thailand, Brunei and Cambodia expressed gratitude to China for its support of the Master Plan on ASEAN Connectivity, saying they believed that the establishment of the Asian Infrastructure Investment Bank will facilitate the connectivity of regional infrastructure. Singapore suggested that the investment bank focus more on commercial banks and the areas that have not been covered by the existing multilateral development institutions. ASEAN countries welcomed China's proposal to construct a 21st Century Maritime Silk Road, saying it will further consolidate regional peace and stability as it can help countries in the region to achieve common development and shared prosperity. They also spoke highly of the 2014 China-ASEAN Cultural Exchange Year, the opening ceremony of which was held in early April in Beijing.

Hong Kong*:  Apr 27 2014

Chinese state media weighs into ‘urinating toddler’ debate as story shared one million times on Weibo (By Tanna Chong Hongkongers scuffled with the mainland couple after they allowed their toddler to relieve himself on a busy street in Mong Kok. State media weighed into the debate over a mainland child urinating in a Hong Kong street on Thursday, stating that both the youngster’s parents and those who so vocally objected to their actions needed to “raise their level of civilisation”. In an editorial, the People’s Daily questioned whether the bystanders who captured the young boy’s act on camera had acted properly, while calling for a need for “mutual civilisation and understanding” between tourists and Hongkongers. The incident, reported earlier this week, reignited a debate about the behaviour of mainland tourists in the city, dividing opinion on whether the parents were in the right or wrong in allowing their child to urinate in a busy Mong Kok street. Since being posted on social media earlier this week the video and images have drawn more than one million comments and reposts on Weibo alone, while the incident sparked heated debate on both Facebook and Twitter. Using a conciliatory tone, the editorial stated that due to sheer numbers alone, not all tourists would behave badly. “It is an act of civilisation to understand others’ difficulties,” it read. “No one occupies the moral high ground of civilisation. There were over 30 million mainland tourists visiting Hong Kong last year, so it was inevitable some of them would not act up to modern standards." It added: “It is normal for kids to have difficulties holding in their urine. If there is a long queue at the washroom … one can understand the difficulties of being parents.” The editorial described the toilet incident as “just a trivia in society which could have easily blown away in the wind”, but added when scuffles and discrimination comes into play, it highlights a wider problem in society. The piece concluded: “It takes a lot of self-reflection and learning to achieve civilisation, while experiences are also required for travelling. Both the tourists and [the people at] the destination need to raise their level of civilisation to get along with each other. The crux of it is understanding.” The editorial came after an opinion piece in the Global Times the previous day criticised the pair who shot the footage for being “more uncivilised” than the family allowing the child to go to the toilet by the roadside. “Those locals cannot face the fact that the difference between the pace of development of Hong Kong and mainland coastal cities is rapidly diminishing… their attitudes have been distorted, losing patience towards the mainland Chinese,” the state-run newspaper said. The dispute erupted on Sai Yeung Choi Street when the parents allowed their child to relieve himself by the road, leading to a fierce quarrel with passers-by. Surrounded by onlookers, the woman desperately explained to the crowd that they had found a public toilet but saw there was a long queue, so had no other choice but to let their child go on the street. “The kid was going to pee in his pants, what do you want me do?” the mother asked the young men before a scuffle broke out and the parents attempted to snatch the memory card from one young man’s camera. The husband and wife, both two-way permit holders, were subsequently arrested on suspicion of theft and assault respectively, Hong Kong police said. The woman was later released on bail and was ordered to report back to police in mid-May pending an investigation, while her husband was released unconditionally.

 China*:  Apr 27 2014

China calls on talent worldwide (By Chen Jia in San Francisco) China's Consul General in San Francisco Yuan Nansheng (left) presents the 2013 Chinese Government Award for Outstanding Self-financed Students to Zhao Liang, a PhD candidate in electrical engineering at Stanford, on Tuesday at the consulate. For 30-year-old Yue Han, driving the two hours from Santa Cruz to San Francisco was not just to pick up a check for $6,000 jointly awarded by the Chinese Consulate General and the China Scholarship Council, but also to start paving an academic route back to China. Han and his wife are currently both PhD candidates in earth physics at University of California, Santa Cruz and are planning to apply for post doctorate positions in the US. "After completing our post doctorate studies, we believe China would be a good option for us to develop our careers," Han's wife told China Daily in San Francisco. The Chinese government has made some hefty investments in academic research in recent years, and the 1000 Talents Plan would be a good platform for them to find a university or institute in China to continue their scientific research, she explained. Beijing is our ideal destination if we return to China," she added. As Chinapushes to cultivate world-class scientists, the 1000 Talents Plan aims to attract top-notch overseas talents who have the potential to become leaders in their fields. The couple told China Daily there is a special program under the 1000 Talents Plan for young researchers who are under 40 years old, have obtained a doctorate degree in a world-class university and have at least three years of experience working overseas. A total of 518 Chinese PhD candidates who are under 40 years old and from 29 countries around the world are the latest recipients of the award. The program was started in 2003 and has so far honored 3,396 people. The 29 countries are: the US, Japan, UK, France, German, Canada, Australia, Russia, Singapore, Sweden, Holland, New Zealand, Ireland, Ukraine, South Korea, Finland, South Africa, Denmark, Belgium, Thailand, Austria, Switzerland, Norway, Belarus, Italy, Spain, Portugal, Israel and the Czech Republic. "Student winners are selected through a rigorous process of evaluation of their academic and research work," said Yang Jun, education counselor at the Consulate General of China in San Francisco. "When I got my bachelor's degree at Tsinghua University and came to the US four years ago, I thought a job offer from a big company in Silicon Valley would be perfect," said Zhao Liang, a PhD candidate in electrical engineering at Stanford University, who is among this year's 20 winners from the Bay Area. "After four years' studying in Silicon Valley, I have fallen in love with the vibrancy of the startup culture but I've noticed that some of the best opportunities are on the Chinese mainland," he said. Increasing numbers of venture capitalists are showing an interest in approaching the booming market in China by investing in startups, he said. "Even if I begin my startup career in Silicon Valley, one or two years later I will expand to China for production," he added.

Hong Kong*:  Apr 26 2014

Property owner says he would pick up total cost of lawsuit to block June 4 Memorial Museum (By Emily Tsang ‘Normal businessman with no political background’ says lone action would speed process - Stanly Chau Kwok-chiu, chairman of the owners’ corporation of Foo Hoo Centre in Tsim Sha Tsui, plans to sue operators of the June 4 Museum for allegedly breaching the office building’s rules. One of the property owners opposed to the first June 4 Memorial Museum in a Tsim Sha Tsui building said today he would privately fund all costs for a lawsuit to block the museum. Stanly Chau Kwok-chiu, chairman of Incorporation Owners of Foo Hoo Centre, said he would sue the museum after seeking legal advice which said there is a possible violation of deeds of covenant on behalf of the block’s owners’ corporation. “As a chairman and an owner of a property in this block for over 10 years, I just want to get this matter over with as soon as possible,” Chau said during a press conference today. Chau, who would not disclose his budget, said it would be quicker for him to fund the action alone as it would require a lot of time for the committee to go through a tender process for a law firm. Chau, who owns a property on the 1st level of the block, denied the suggestion that his action is being funded by another party. He also said he would not pursue a payback on the legal cost from owners who refused to pay. “I am just a normal businessman who does not have any political background,” he said. To comply with fire Fire Services Department and Buildings Department requirements in 2011, Chau said the committee has been planning construction work on stairs and lifts. But the emergence of a new museum in the commercial building would increase traffic in the block and would require additional safety measures. Chau, who said that 90 per cent of owners agreed to the legal action, was elected as the chairman of the owners’ corporation in 2012. Other corporation members and property owners were not at the press conference. Despite the move, the Hong Kong Alliance in Support of Patriotic Democratic Movements is set to officially open the museum to the public on Saturday – weeks before the 25th anniversary of the June 4 crackdown. The Alliance bought the 800 sq ft space in Tsim Sha Tsui’s Foo Hoo Centre for more than HK$9.7 million in December, but they received a lawyer’s letter from the corporation last month warning them against the opening of a museum in a commercial centre. It said the space should only be used for offices. 

Return of confidence in Philippine tours will take time, says Hong Kong’s security chief (By Ernest Kao and Samuel Chan) Second round of sanctions was being prepared before agreement reached with families, lawmaker reveals - It will take some time for Hongkongers to recover lost confidence in the Philippines’ tourism industry despite a “severe threat” warning being lifted as part of the 2010 Manila bus hostage crisis settlement, Hong Kong’s security chief said today. Reaction from the public to yesterday's agreement was mixed on whether the city has compromised too much in reaching an agreement with the Philippine government, with a number of callers to RTHK slamming the government for lifting the “black” travel alert too soon. Speaking on RTHK, Secretary for Security Lai Tung-kwok said tour operators would need some time to resume regular tour services to the Philippines. “They will not all of a sudden start heading up there … there are all sorts of arrangements that need to be made to organise tours including finding a [local] agency and planning itineraries,” he said. “I do believe Hong Kong residents, in regards to the local tourism there, will need some time to regain confidence in the tourism.” Lai, who was undersecretary for security during the crisis, said he hoped the relatives of the victims and the public could take “a step forward toward a new start”. A joint statement issued by the two governments yesterday announced the immediate lifting of visa-restrictions against Philippine officials and lifted the “black” travel advisory which was imposed shortly after the tragedy. The Philippines also expressed its “most sorrowful regret and profound sympathy” over the tragedy which claimed the lives of eight Hong Kong people. Speaking on Commercial Radio, Democratic Party lawmaker James To Kun-sun, who has been helping the relatives of the victims’, said the negotiations came with a lot of “twists” and the lowest point came in January when the government announced its first round of sanctions. A second round of sanctions was also planned, Lai and To confirmed though both refused to give any details. Commenting on the debate over why there was no mention of the words “apologise” or “sorry” in the joint statement, To said he and the relatives understood it was a “diplomatic negotiation” and would still accept it as an apology. He also said Manila Mayor Joseph Estrada used the words “apology” and “sorry” repeatedly in front of the relatives before they met the press yesterday. “The relatives know they did say it during the meeting. The mayor grabbed [injured victim] Yik Siu-ling’s hand and said sorry and apologised multiple times … she even said she was very moved. He reiterated that the government did not force the victims’ relatives to accept the apology. “If they didn’t accept the apology, the government … would have enacted a second round of sanctions. They knew it would affect other people too and that if they insisted on the word ‘apology’ the road will only go on and on.” Reactions from the public was varied. One caller to Commercial Radio, identified as Hui, claimed to be a friend of Masa Tse Ting-chunn, the tour guide who was gunned down in the crisis. He said he was very sad when heard of the agreement yesterday. “But I understand their [the victims and families] decision,” he said. “They are very kind and generous as they wish not to see other Filipinos to suffer … it must be very hard for them, if not impossible, to leave the whole incident behind.” Another caller, identified as Ms Lee, said the immediate lifting of the “avoid all travel” alert sent the wrong message to the world. “[The reason why the black travel alert] was in effect was because of the safety concern, not because the Philippines had not apologised,” Lee said. The government should not act as if they had made significant achievements, she said, adding that the Hong Kong government alone did not achieve much before Beijing’s more active intervention. One caller said he disapproved of Chief Executive Leung Chun-ying, but said he deserved some credit for the success, while another disagreed and said the sanctions should have come earlier and stronger.

 China*:  Apr 26 2014

Li Yuanchao slams Occupy Central as ‘illegal movement that impedes universal suffrage’ (By Adrian Wan Vice-president Li Yuanchao has criticised Occupy Central as an 'illegal' movement that 'damages the prosperity and stability of Hong Kong'. Vice-president Li Yuanchao slammed Occupy Central as an “illegal” movement that “damages the prosperity and stability of Hong Kong” during a meeting with Hong Kong media executives. The deputy leader of the central government’s Hong Kong and Macau liaison group also said that Beijing was strongly opposed to the movement during the meeting between executives and Beijing officials, which marked the 60th anniversary of the Newspaper Society of Hong Kong. Lee Cho-jat, chairman of the society spoke to reporters after the meeting with Li, of which the first five minutes were open to the media. “He said Occupy Central is illegal. He also said it impedes universal suffrage. He also said it damages the prosperity and stability of Hong Kong,” Lee said. “So, the central government is strongly opposed to Occupy Central.” Occupy Central is a civil disobedience movement which has planned a protest for universal suffrage in July this year in Central, Hong Kong. “Your media companies have, I should say, contributed much in fostering a smooth handover of Hong Kong back to the mainland and protecting Hong Kong’s prosperity and stability,” Li told more than 20 media executives in Beijing on Thursday morning. He also urged the executives to see the “bigger picture” and lead society in reaping the benefits of China’s reforms and development. “I hope the media of Hong Kong could consider the collective benefits of the country and Hong Kong society and operate objectively, fairly, and impartially to lead society to grasp the new opportunities that have come with the country’s reforms and developments,” Li said. He also reiterated the need for Hong Kong to come to a consensus on universal suffrage pragmatically, and that constitutional development must proceed in accordance with the Basic Law and the relevant interpretation and decisions of the National People’s Congress Standing Committee, Lee said. However Li did not comment on proposed solutions to the deadlock over the 2017 chief executive election. The meeting also discussed the Chinese economy and the relationship between Hong Kong and the mainland. Lee said the meeting had not been set up for Beijing to convey messages to the media executives, adding that the delegation had the authority to ask whatever questions it wanted. The delegation is due to meet Wang Guangya, director of the Hong Kong and Macau Affairs Office, on Thursday afternoon and officials of the Ministry of Foreign Affairs on Friday.

Hong Kong*:  Apr 25 2014

Hong Kong, Philippines resolve bus hostage crisis as families accept payout (By Samuel Chan and Raissa Robles in Manila) Philippines closes dispute over 2010 tragedy in Manila by expressing its 'sorrowful regret', with grieving relatives receiving undisclosed compensation - Survivor Lee Ying-chuen, deceased tour guide Masa Tse Ting-chunn's brother Tse Chi-hang, lawmaker James To Kun-sun, Tse's older brother Tse Chi-kin and survivor Yik Siu-ling with the resolutions from Manila city council and the letter from the police chief. More than three years of strained ties over the 2010 Manila bus hostage crisis ended yesterday. The Philippines expressed its "most sorrowful regret and profound sympathy" over the tragedy which claimed the lives of eight Hong Kong people. A joint statement issued by the two governments announced the immediate lifting of sanctions against Philippines officials and a "black" travel alert imposed shortly after the incident. Watch: Hong Kong says Philippine hostage row over The families of those affected received an undisclosed sum in compensation, which they have described as reasonable. The Philippine government had consistently refused to offer a formal apology for the deaths during a botched rescue after sacked police officer Rolando Mendoza hijacked a Hong Kong tour bus before being shot dead. Although the final agreement did not contain an apology, Tse Chi-lin, the brother of Hong Kong tour guide Masa Tse Ting-chunn - one of those gunned down by Mendoza - said the two national-level Philippine officials used the words "apologise" and "sorry" when they met the families. The Philippine government said moves were under way to hold those responsible accountable and that it would give updates on their progress. It was also announced yesterday that three senior Philippine police officers responsible for the botched rescue had been demoted and the brother of the hostage-taker had been dismissed from service, pending an appeal. Each victim and their families received a letter from Philippine National Police director general Alan Purisima, which ended with the line, "Please accept our most sorrowful regret", which lawmaker James To Kun-sun - who has been assisting the families - described as "having the meaning" of an apology. Manila Mayor Joseph Estrada, who arrived in Hong Kong on Tuesday, also handed over two resolutions passed by Manila's city council expressing the authorities' apology and declaring August 23 will from now on be a day of prayer for the souls of those who died. Chief Executive Leung Chun-ying said he and the families believed the sincerity shown by the Philippines helped make the agreement possible. "I also believe the bilateral relations between the peoples of Hong Kong and Philippines will start a new chapter," Leung said. The breakthrough came after Estrada, with Philippine President Benigno Aquino's two close allies - police chief Purisima and cabinet secretary Jose Rene Almendras - visited Hong Kong. Another crucial point came on April 4 when the Hong Kong government notified Tse of the Philippine government's bottom line on the choice of words for the final agreement. "We were left with only two choices … to decline would mean stepping up the sanctions," Tse said. "We do not wish to see other innocent people going through what we have endured over the past three years," he said. 

 China*:  Apr 25 2014

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Macau's request for more space inspires similar dreams in Hong Kong (By Ng Kang-chung A request by Macau for more space on the neighbouring mainland island of Hengqin has brought a call for Hong Kong to follow suit and seek to expand into Shenzhen or Guangzhou. Macau Chief Executive Dr Fernando Chui Sai-on said five square kilometres allocated on the island for joint cross-border development was not enough and "we have decided to officially request more land on Hengqin from the central government". Dr Bill Chou Kwok-ping, an associate professor of political science at the University of Macau, said that was sensible given the size of Macau - 31 square kilometres - and its population of about 610,000. Announcing the Hengqin New Area, as the district is known, in 2009, then vice-president Xi Jinping hailed it as a "demonstration area" for co-operation between Guangdong, Hong Kong and Macau. In the same year, Macau paid about HK$1.2 billion to rent a square kilometre for 50 years for an extension of the University of Macau that opened last year. City University political scientist Dr James Sung Lap-kung said Hong Kong could consider a similar mode of development. "Renting land in neighbouring mainland cities will be a good option," he said. "Like it or not, there is a need for deeper integration between Hong Kong and Guangdong if Hong Kong is to further develop." While Hong Kong is also co-operating with Shenzhen to develop its Qianhai district, Sung said the pace of that development was too slow. Dr Chung Kim-wah of Polytechnic University said the Hengqin model could be "too politically sensitive" for Hong Kong.

Hong Kong*:  Apr 24 2014

Guangdong governor talks up free-trade zone with Hong Kong and Macau (By Keith Zhai Beijing backs plan for pilot free-trade zone that would encompass Qianhai, Hengqin and Nansha - A proposal to create a free-trade pilot zone encompassing Hong Kong, Macau and parts of Guangdong had got the backing of Beijing, the province's governor, Zhu Xiaodan, said yesterday. "We hope [the proposed free-trade pilot zone] would take from Shanghai's free-trade zone," Zhu said. Without offering an exact timetable for realising the proposed zone, he said: "I hope we don't have to wait until the end of the year." Like the Shanghai zone, it would be a place to test new regulatory approaches, public policy or economic policy programmes as well as facilitating trade and business transactions. The province had received positive feedback from the top leadership and government departments after it submitted draft plans, Zhu said on the sidelines of a meeting on intellectual property, held in Guangzhou. The proposal would be finalised and submitted to the State Council as soon as possible, he said. Zhu added that the zone would aim to make life easy for investors and residents, so they could "live life as conveniently as in Hong Kong". Unlike Shanghai's free-trade zone, which has an international focus, Zhu said Guangdong's would focus solely on the Pearl River Delta area and was intended to transform and upgrade the region's economy from low-end manufacturing to high-end industries. Zhu said in September the zone would take advantage of Hong Kong's position as a financial hub to boost regional growth. Hong Kong Chief Executive Leung Chun-ying said at the time he was looking into the plan. Guangdong party chief Hu Chunhua raised the idea of a free-trade zone connecting the development zones of Qianhai, Hengqin and Nansha with the two special administrative regions last year. If approved, it would cover an area of more than 1,000 square kilometres. The Shanghai free-trade zone, initiated in September, is 29 square kilometres in area. Tianjin and Xiamen are considering setting up similar zones. During yesterday's meeting, Zhu stressed the importance of the protection of intellectual property to the development of the province's economy. He said Guangdong urgently needed to develop hi-tech industries.

 China*:  Apr 24 2014

‘Uncultured’ multi-billionaire is China’s biggest fine-art collector (By Xu Donghuan Friends and rival collectors say Liu Yiqian, a self-made businessman, has a keener instinct for artworks than most people think - Liu Yiqian owns insurance and investment companies, as well as one of the biggest private collection of art in China. He is a self-described tuhao (Chinese nouveau riche with barely the culture to match his wealth), but the fact that multibillionaire Liu Yiqian has amassed a huge collection of Chinese art suggests a finer taste than he lets on. At a Sotheby’s auction early this month, the Shanghai collector paid a record sum of HK$281.24 million for a palm-sized Ming-dynasty cup which has been described as the holy grail of Chinese porcelain. Bearing a garden scene of a rooster and hen tending to their chicks, the antique, known as a “chicken cup”, is one of 16 known to survive that period. “Though Liu likes to say he knows nothing about antiques, he has an eye for the best in the market,” says Zhu Shaoliang, a collector of ancient Chinese art who has known Liu for a few years. “That’s why his collection so far is on the par with the treasures at the Palace Museum and other top museums on the mainland,” Zhu says. Liu, 50, comes from humble beginnings. Born in 1963 to a working-class family in Shanghai, he left school at the age of 14 to help the family business, making synthetic handbags which his mother would sell on the street. It was when China’s reform-minded leader Deng Xiaoping was at the helm, driving the country towards a market economy, and citizens were encouraged to build a business and make a fortune. By 17, Liu held 10,000 yuan (HK$12,500), a distant goal for many Chinese at a time when the average income in Shanghai was only a few hundred yuan a year. Although the family business thrived, he felt it was too risky to focus on just one product. At 20, he diversified the business and rented a shop at the Yuyuan Bazaar, a popular marketplace for tourists at the centre of old Shanghai, where he sold souvenirs and accessories. Soon, he started going on business trips to the country’s south, bringing back goods for his small shop. Often finding it difficult to find taxis at the railway station on his way home, the idea came to him of forming his own taxi company. A few months later, he bought two cars for his elder brother and himself and did just that. In the late 1980s, when most people were wary of investing in state bonds, he reaped a small fortune by buying bonds sold at discount by the government. But his first big break came in 1990 at the age of 27. He was in Shenzhen buying materials for bags when he heard about stock trading for the first time from a former schoolmate. In December that year, China launched its first stock market in Shanghai. Yuyuan Bazaar, where he rented a shop, was listed on the Shanghai stock exchange. Liu bought 100 shares at a cost of 100 yuan each. Within a year, the share value increased to 10,000 yuan each. Liu expanded to buying shares from a wide range of companies and industries. Then he set his sights on corporate shares, which were still closed to individual investors. In 2000, entering forbidden territory, he set up an investment company, Xin Liyi. Over the next two years, he invested heavily in shares of a dozen firms and his wealth rose significantly. The media dubbed him “China’s Warren Buffett” and the “tsar of corporate shares”. In 2004, Liu ventured into the insurance business, setting up Tianping Auto Insurance and Guohua Life Insurance. In April last year, Tianping formed a joint venture with Europe’s No.2 insurer, AXA. Liu ranked No.200 in last year’s Forbes China Rich List, with an estimated worth of US$900 million. “Liu’s success is against the backdrop of China’s reform and opening up. He has seized every opportunity that is also available to most of us,” said Dong Guoqiang, a business partner of Liu from the Beijing Council International Auction. “His secret is he made the correct judgment at each crucial moment in the country’s economic growth and acted quickly. He was among the first to try out stock trading, to own corporate shares and to buy antiques at auctions,” Dong said. Liu’s art purchases began in 1993 when he acquired two Chinese paintings at the first-ever auction of China Guardian in Beijing. Unlike in the stock market, where his rule was to go for the cheapest, he bid for the most expensive lots. “His art collection does not have a boundary. He bids for anything, from ancient musical instruments to furniture and paintings, which everyone says are good [things],” Dong says. Since then, Liu has generated headlines as a record-setter at auctions. In October 2009, at Sotheby’s Hong Kong, he paid a HK$85 million for a Qing dynasty emperor’s dragon throne. A month later, he bought a Ming dynasty painting for 170 million yuan at a Beijing Poly auction. “Liu is a good listener. But the final decision is always his own,” Dong said. Liu’s strategy has been driven partly by the need to steer clear of fakes believed to be common in the lower end of the market. But some of Liu’s acquisitions have stirred controversy. Two months after the calligraphy auction, three experts from the Shanghai Museum claimed it was a fake. Doubts were also raised about the authenticity of another painting by 20th-century ink master Qi Baishi which Liu sold for US$65.4 million at a China Guardian auction in 2011. The winning bidder has since refused to pay for the work. Liu contends that both works of art are authentic, but no definitive judgment has been made. As China’s biggest art collector, Liu is seen as a mover and shaker in the world’s largest art market, which surpassed the United States in 2011. “Every year, he injects over 1 billion yuan into the art market. He is certainly the biggest player here,” says Dong.Last September, when a calligraphy piece by famous Song-dynasty poet Su Shi went under the hammer for US$8.2 million at a Sotheby’s auction in New York, it ended in Liu’s hands. “Every auction house loves him,” says Ji Tao, from China Auctioneers Association. “When he appears at an auction, the highest bid will probably be from him. Other times, he sends really good works for auction. He is our biggest client,” Ji says. In December 2012, Long Museum, a 10,000 square metre private art gallery which Liu and his wife Wang Wei built, opened to the public in Shanghai’s eastern Pudong district. A few weeks ago, a branch of the museum, three times larger in floor space, was inaugurated in the West Bund. The two buildings, the largest private art galleries in China, house the couple’s entire collection, spanning from the revolutionary period to contemporary works. The latter is the special focus of Liu’s wife. “We are competitors at the auctions, but I respect him for what he does,” says Zhu, the collector. “He bought all these treasures at auctions and then built these two huge galleries to exhibit them permanently. He is a real art collector who loves art over profit,” says Zhu. Liu’s success and plainspoken manner with the media have raised a few eyebrows. His statement that his strength is in being rich drew ridicule, with some saying it reflected his “low taste” and arrogance. “In mainland China, having lots of money is a sin,” says Dong. The masses have a general disdain for the rich flaunting their wealth, a fact the government has echoed in its austerity and anti-corruption campaigns. But Dong suggests Liu is a self-made man and that many of the criticisms against him are unfounded. “As far as I know, he has no government connections, no [backers]. So he has nothing to hide in terms of where his money comes from. “Those who dislike him are from outside the collectors’ circle. Liu is the biggest mover in China’s art world. We all benefit from him.”

Hong Kong*:  Apr 23 2014

Hong Kong restaurants turning toward sustainable, organic fare (By Janice Leung Hayes) Local restaurants embrace sustainably produced, organic and, where possible, local ingredients, writes Janice Leung Hayes - The phrase "farm to table" is now so ubiquitous in the language of dining that it sounds almost like a cliché. As with most catchphrases, the term has been abused by unscrupulous marketers - after all, you could argue that all of our food started off on a farm of some description. But there are some genuinely enthusiastic chefs and restaurateurs who are turning concrete terraces into herb gardens and swapping board meetings for farm tours. The term conjures images of open fields and rustic barns, and should denote production processes that are sustainable, responsible and traceable. The early proponents of the green eating trend did tend to err on the hippy dippy side of things, but these days, ensuring the integrity of a restaurant's products and sources is no longer the prerogative of left-leaning social activists; it's becoming a given for everyone who loves food. One of the earliest practitioners of the farm-to-table philosophy in Hong Kong was Margaret Xu, who started her private kitchen, Yin Yang, five years ago. Back then, it was just her, on a farm in Yuen Long, serving one table each night. These days, she can feed about 30 guests in her three-storey heritage building on Ship Street, in Wan Chai, but she remains steadfast in her approach. "I wanted to take local ingredients and add creativity that is inspired by the rest of the world. I found a certified organic farm in Hong Kong, and they supply the bulk of my ingredients," she says. Nurdin Topham, head chef at the newly opened NUR, has spent several months since arriving from London learning about the region's flora and fauna and reaching out to local organic farms. "We want to explore the regions, the edible geography, if you like, and be inspired by what we find," he says. The restaurant even has a dedicated sourcing manager to coordinate with farms. Topham says, "We're just starting on the process. We're now coming out of winter, and the challenge is summer when the temperatures rise and local farmers grow very little, so we've tried to select seed cultivars and take inspiration from other cultures, like Thailand, Malaysia, that have a more fertile growing season despite the warm weather. For me, it's all about the cultivar. That determines the resilience, how well it does in its terroir, it determines its taste, its nutrition, so that's the focus." Although there are now about 100 local organic farms in Hong Kong, their small sizes, unstable supply and limited variety of plants make it challenging for chefs like Topham, who is from Britain and has a background in fine dining. "It's our intention to gain as much produce as possible from our local region, but I'd be lying if I said that everything was from this region. I would love to serve a menu that was completely local," he says. Topham worked for more than a decade with Raymond Blanc. The master chef of the Michelin two-star Le Manoir aux Quat' Saisons is known for his commitment to conscious eating. Blanc was awarded an OBE for culinary excellence and is president of the Sustainable Restaurant Association. "As a chef, you have a tremendous responsibility to influence an industry and every purchase you make is a political decision," Topham says. "You make a decision to support a form of agriculture that cares about the environment, or one that doesn't. I see it as black and white as that. Blanc would instil in all of us the importance of cultivar, the environment in which the product was brought up, its terroir." After leaving Blanc, Topham went to the Nordic Food Lab, the research arm of notable farm-to-table champions of late, Noma, in Copenhagen. These experiences have affected how Topham has formulated his menu at NUR. "The idea is to bring nutrition and gastronomy together, so for me that means the focus is on the raw ingredients, where they come from, how they've been produced, who's behind the production of that ingredient and being able to select the produce because of the ethos of that person," Topham says. "But the other aspect is finding something that is gastronomically interesting that ticks all the boxes - that it's the right cultivar, that it's been picked at the right point, it's been stored in the right way. The devil is in the details." In addition to limits in the variety of products available locally, given the city's landmass-to-population ratio, Hong Kong could never hope to be fully self-sufficient. Careful, conscious sourcing from abroad is new Chinese restaurant Mott 32's way of respecting the farm-to-table philosophy. "I think a group of people have rediscovered a fundamental importance about eating food and the process [of sourcing it]," says Malcolm Wood, owner of Mott 32. "When we choose a simple steak, we think about how it reacts to wet ageing, dry ageing, what it was fed, how it was looked after, how it was shipped, how the supplier handles the meat, and really look at how it got from not just the kitchen to the table, but the farm to the kitchen. "I'm working with a conservation group in Canada for the conservation of salmon, I'm reaching out to a couple of organic, grass-fed beef farmers in South Australia to build close relations with them. You'll see a lot of these ingredients popping up on our menu." In addition to the ecological advantages of these products, Wood believes they taste better. "I would say that in general, sustainable products equal higher quality. That's due to the fact that people practicing sustainable farming generally care about the ingredients. That care is passed from supplier to restaurateur to customer," he says. Topham is eager to teach the next generation of chefs about the importance of consciously sourced ingredients. "We're committed to training. I want to share the knowledge with people, in the same way that I worked with Raymond Blanc. It's something that we must do, it's a responsibility," he says. Xu says that the farm-to-table movement also needs government support. "It's a global trend, and chefs, even from big hotels and so on, are interested in giving it a try. But whether this is sustainable is another matter. The farms in Hong Kong are now at risk because the government wants to redevelop the land around them, which will destroy the farming environment. Farms need support from government authorities, otherwise it would be hard for this to flourish."

 China*:  Apr 23 2014


More than 1,000 armed police start patrols in Shanghai (By SCMP) Extra security introduced in the wake of the knife attacks in Kunming last month - More than 1,000 police officers started patrols in Shanghai carrying guns on Sunday, Xinhua reported. The Ministry of Public Security said last month that more armed patrols would be introduced around the country in the wake of the knife attacks at Kunming railway station on March 1. Twenty-nine people and four assailants were killed during the attacks that officials have blamed on Muslim separatists from Xinjiang. Most police officers on the mainland do not carry firearms. The ministry said security would be stepped up in a number of mainland cities, including Changsha in Hunan province, Urumqi in Xinjiang and Lhasa in Tibet. Police officers around the country are also to receive three months of intensive weapons training. The ministry said the aim was to improve the skills of officers on the front line, especially those assigned to street patrols or responding to emergencies, particularly in big cities. The authorities in Guangzhou announced earlier this month that about 3,000 armed police would start patrols in May, the Yangcheng Evening News reported.

Hong Kong*:  Apr 21-22 2014

On the tourism front line, low-paid shop staff set HK$1 million monthly sales target (By Amy Nip Low basic pay and high sales targets criticised by trade union, which says cost-cutting bosses make it hard for store staff to earn commission - Leung Tin-cheuk said increasing the supply of land for commerce was crucial to spreading the benefits. Hong Kong's tourism industry may be in the midst of an unprecedented boom, but frontline workers aren't sharing in the benefits - with store staff set sales targets of as much as HK$1 million per month before they can earn commission, a unionist says. Store owners looking to cut costs in the face of rising rents are boosting the targets salespeople must hit to earn commission, says Cheung Lai-ha, general secretary of the Retail, Commerce and Clothing Industries General Union. That leaves workers with just their very low basic salaries. Cheung's claims will stoke the debate about whether explosive growth in visitor numbers is truly benefitting Hongkongers or simply leaving streets too crowded and rents too high. The monthly sales target for an employee selling electronics or mobile phones in bustling Mong Kok has hit HK$1 million, Cheung says, much higher than in quiet residential areas. They might receive three per cent of sales as a commission, but even that has a sting in the tale. "The biggest problem about the retail sector is a low basic salary," she said. "People work very hard to earn commission by meeting targets. But once they manage to do so, bosses again raise the target. It is frustrating." Government figures show that visitor arrivals rose from 29.6 million in 2009 to 54.3 million last year, boosted by big-spending mainlanders often coming to shop. Retail and catering workers saw wages rise by more than the rest of the workforce during those four years, although salaries in the sector still lag behind the average. While the median wage for all workers rose by 23 per cent in those four years to HK$14,100 per month, catering staff saw their pay increase 32 per cent, travel agency workers earned 29 per cent more and store staff saw wages rise by 27 per cent. But median wages for all three sectors remained between HK$10,000 and HK$12,000. Wong Pit-man, head of the Eating Establishment Employees General Union, said tourism and weddings had been the biggest drivers of growth in the catering sector in recent years. "In busy districts, up to 70 per cent of clients are individual travellers from the mainland," he said. While workers in tourist hubs like Yau Tsim Mong and Causeway Bay could earn HK$1,000 to HK$2,000 more than those elsewhere, they would also work later, perhaps for 10 to 13 hours a day. And another factor may have had just as much of an effect on pay in the three sectors: the minimum wage introduced in 2011. For example, security guards saw wages grow 45 per cent in the same four-year period despite having few obvious connections to the tourist industry. "It seems to me that the minimum wage has played a role here," said Dr Leung Tin-cheuk, an assistant professor of economics at Chinese University. Leung said increasing the supply of land for commerce was crucial to spreading the benefits. Unless more space could be found for shops, rents would skyrocket but there would be little competition to hire staff and no need to pay them more. A government report earlier this year found that tourism contributed 4.5 per cent of the city's gross domestic product and offered over 230,000 jobs, including about 40 per cent of retail jobs. Although the report concluded that Hong Kong could cope with a further increase to an estimated 70 million visitors in 2017, citizens were not convinced. This month, Chief Executive Leung Chun-ying said his administration was studying ways to "regulate" tourist numbers.

 China*:  Apr 21-22 2014

4,000-year-old ebony tree unearthed in E China - Part of an ebony tree, which had been buried for about 4,000 years, is unearthed on Wednesday, April 17, 2014, in Wuning, a county in Jiangxi province. Four sections were found, with the longest measuring about 10 meters. They will be preserved and exhibited at Wuning Museum. 

Hong Kong*:  Apr 19-20 2014

Hong Kong's own Forrest Gump starts running... and does an entire circuit of Taiwan (By Julie Chu Professional coach took lead from his favourite character Forrest Gump and went where his feet took him - around the entire island - One day, for no particular reason, Stephen Poon Wing-sing decided to run. Once the Hongkonger started, he just kept going, 40 kilometres a day for 27 consecutive days around the entire coast of Taiwan. “I just felt like running,” says Poon, 38 – giving the same reason as his favourite film character, Forrest Gump, who suddenly takes up running. “I felt that there was an urge that came to me and summoned me to run. There was no other reason.” Having decided on Taiwan because he had recently finished competing in a marathon there, he bought an air ticket and, without a detailed plan or even a map, went where his feet took him - just like the character Gump, played in the film, Forrest Gump, by actor Tom Hanks. Poon's feet took him from the southern city of Kaohsiung and all the way back, starting last January 11 and finishing – with just a few minor aches and pains – on February 6. Also like Gump, the professional running coach, who lives in Wong Tai Sin, says he learned a lot about life along the way. “I thought of lots of things about what had happened over the years,” he says. “I began to learn to let things go.” One of these things was to accept his life as a coach, and to let go of his disappointment at failing to achieve his ambition of winning a major international competition. Working at the airport and for the MTR after school while he honed his running skills, Poon says it became clear to him that a major win was the only way he would get funding and support from the government to pursue a full-time career in athletics. Things looked promising in Macau in 2004 when he ran his personal best time for a marathon – two hours and 38 minutes – which made him the fastest Chinese entrant. However, he over-trained and had to drop out of all competitions for the rest of the year, eventually ending his athletic career in his early 30s. “It’s just like smashing a bowl of eggs against the wall,” he says. “The egg that remains intact becomes the chosen one,” he says, describing himself as one of the smashed ones that got left behind. Poon worked at ordinary jobs for a time, but the track still beckoned and he became a coach two years ago. Now, each week he takes classes for elite and leisure runners at Tsing Yi and Happy Valley. His work as a coach has made him realise that even the most talented athlete cannot perform to his or her best in today’s sports without scientific support. “Nowadays young athletes are very lucky because they have more chances and better support,” he says. “In my time, athletes could rely only on themselves.” Today’s support includes all kinds of research to help enhance performance along with treatment and advice from team doctors, physiotherapists, dieticians and psychologists. Barton Lui Pan-to, 20, Hong Kong’s Olympic short-track speed skater, complained about the lack of medical attention when he competed at the Winter Games, in Sochi, Russia, in February. However, Poon says this situation is similar in almost all kinds of sport in Hong Kong. He says, for example, that even when a team have their own physiotherapist, the physio will have to serve the whole team and the workload can be extremely heavy. “Those behind-the-scenes heroes deserve more respect as they are part of sports now,” he says. Poon says that in training athletes to perform at their best he has found the secret is just “to concentrate” on the sport. “When your aim is clear, you know a lot of difficulties and hardship can be sorted out,” he says. “But for me, I think I have really learned to enjoy running now. I am running for running itself.”

 China*:  Apr 19-20 2014

UN hosts Chinese Language Day (By Jack Freifelder in New York) Zhang Xuguang, vice-secretary-general of the China Artists Association in Beijing, poses for a photo next to an installation of his calligraphy work at the United Nations (UN) in New York on Thursday. Zhang, a renowned calligrapher, was in New York to attend the UN's annual Chinese Language Day event. The United Nations celebrated its 5th annual Chinese Language Day on Thursday with a series of activities aimed at highlighting the historical importance of Chinese language and culture. The celebration, hosted by the UN in conjunction with its Language Days initiative, brought together close to 100 people at the UN's Dag Hammarskjold Library Auditorium. Zhang Xuguang, a renowned calligrapher who serves as the vice-secretary general of the China Artists Association in Beijing, said the UN is the "biggest stage in the world" for promoting cross-cultural exchange. Chinese Language Day is a great opportunity to promote and show the culture of China, and as a result, the arts," Zhang said. "As a calligrapher, it is my duty and responsibility to spread Chinese culture and symbolism." The UN first celebrated Chinese Language Day on Nov 12, 2010, but the event was moved to April beginning in 2011 to coincide with the tale of Cangjie - a legendary ancient Chinese figure credited with the invention of Chinese characters several thousand years ago. Chinese Language Day featured a variety of events, including calligraphy writing workshops, traditional music performances and Chinese art demonstrations. Zhang, who began learning calligraphy at a young age, said the art form is not as widespread as it once was, but "popularity is starting to pick back up". "With the development of science and the modernization of writing, calligraphy is no longer a useful way to learn Chinese characters," he said. "But, the beauty and cultural appeal of calligraphy has increased in past years." "Calligraphy in China is unique," he said. "For thousands of years, Chinese people have learned calligraphy as the way to learn their characters. It is one of the oldest aspects of Chinese culture." The United Nations Educational, Scientific and Cultural Organization (UNESCO) launched the UN Language Days initiative in February 2010, as an endeavor to promote each of the intergovernmental organization's six official working languages. However, UN Language Days is not the only offshoot of UNESCO's efforts. UN hosts Chinese Language Day International Mother Language Day, another worldwide appreciation event, is held annually in February to increase the understanding of cultural and linguistic diversity. UNESCO is a specialized agency of the UN, and its purpose is to promote international collaboration through education, science and culture. Zhang also conducts classes for UN members interested in or looking to learn the art of ancient Chinese calligraphy. "This is the third time I'm here to spread Chinese culture, but especially calligraphy," Zhang said. "People need an emotional connection with China more and more, and I am a promoter of classic Chinese culture and language." Chinese is now spoken by more than a billion people worldwide.

Silicon mayors (mayors of Menlo Park, Union City, Millbrae and Morgan Hill, North California) are on mission to China - By Chen Jia in San Francisco - In a move to draw investment and forge connections with Chinese entrepreneurs and officials, the mayors of Menlo Park, Union City, Millbrae and Morgan Hill, North California, announced plans for a landmark joint trip to China on Thursday. And the delegation may include mayors from as many as eight more Silicon Valley cities before it takes off. "It could be the largest-ever group of American mayors to visit China to further localize and deepen China-California relations," Stephanie Xu, president of China Silicon Valley, the trip's organizer, told China Dailyat a press briefing in San Francisco on Thursday. "These Silicon Valley leaders will visit Chinese innovation hubs and sources of investment that are already reshaping California cities," she said. The mayors will be joined by members of the Chinese Consulate in San Francisco and representatives from other Silicon Valley cities and leading corporations. The delegation will leave for Chinaon June 16 and their 11-day trip will have four stops - Beijing, Shanghai, Shenzhen and Wuhan. "The city of Menlo Park welcomes all kinds of investments, including from China," Menlo Park Mayor Ray Mueller said. "We were recently approached by some Chinese investors looking for office space. We will certainly inform them should anything become available." "Real estate, green tech and other industries, we expect Chinese investors from various fields," Carol Dutra-Vernaci, mayor of Union City, said. In the past two years, the state of California has been very ambitious in its quest for more investment from China. Last year, California Governor Jerry Brown led a week-long trade mission to China with more than 75 participants to Beijing, Nanjing, Guangzhou and Shenzhen. His delegation came to China just as the California-China Trade and Investment Office reopened after a similar one had closed in 2003. Today, the new office is funded with $1 million in private-sector funds raised by the Bay Area Council business group. Silicon mayors are on mission to China - In 2014, San FranciscoMayor Ed Lee visited China for his third time on a trade and cultural exchange mission. On his first trade trip to China in April, Lee secured a $100,000 donation for retrofitting the San Francisco Chinese Hospital. That trip also promoted the sports business between the two sides. The Golden State Warriors - San Francisco's NBA team - took two games to Chinese basketball fans in Shanghai and Beijing in October. About 80 business leaders from the San Francisco Bay Area paid a $6,000 participation fee each to join Lee on his China trip in November. Oakland Mayor Jean Quan was also off to China with a Bay Area business delegation last autumn. As a result, Chinese company Zarsion agreed to invest $1.5 billion to transform 65 acres of industrial land in Oakland into a waterfront neighborhood with 3,100 homes.

Hong Kong*:  Apr 18 2014

Mainland China advisers furious over Hong Kong's high-speed rail link delay (By He Huifeng It will definitely affect pace of integration in the Pearl River Delta, says Guangdong adviser [The MTR Corporation (its original full name was Mass Transit Railway Corporation) is listed on the Hong Kong Exchange and is a constituent of the benchmark Hang Seng Index. MTRC operates the Hong Kong underground rail system and is a major property developer and landlord in the city. It also invests in railways outside Hong Kong] The MTR Corporation announced that the HK$67 billion Express Rail Link between Hong Kong and Guangzhou will be delayed for two years and won't be opened until 2017. A two-year delay in the completion of the HK$67 billion high-speed railway connecting Hong Kong with Shenzhen and Guangzhou will have a serious impact on the Pearl River Delta, government advisers say. Shenzhen officials - always cautious when commenting on Hong Kong - complained they had yet to be formally notified by the Hong Kong side. "We are very sorry … so far we haven't been told by any Hong Kong department [about the delay]. What we can do is to make sure that our section will be completed on schedule," said an official from Shenzhen involved in the project, who refused to be identified. Mainland government advisers were much more blunt. Zheng Tianxiang, a provincial policy adviser involved in several infrastructure projects - said the delay would "definitely affect" the pace of the Pearl River Delta's integration. A plan to streamline travel time to no more than an hour between each of the economically powerful delta region's cities is at the centre of the Guangdong government's development blueprint. Local authorities believe this will create capital and prompt a flow of talent to help the region upgrade its economy. "For this to happen, all sections of the key infrastructure projects must be completed and connected synchronously. If one part gets delayed, the whole plan will be affected," Zheng said. Zheng said the delay would affect the profitability of the rest of the rail link. The section between Guangzhou and Shenzhen is already open but ridership is low because most potential customers want to come to Hong Kong instead of Shenzhen. "The passenger flow is much lower than we expected because the Hong Kong side is lagging behind. Now we are told there will be another two-years of delay," Zheng said. "Would the Hong Kong government take up the responsibilities for the poor return of the Guangzhou-Shenzhen express railway?" Ding Li, a planning expert at the Guangdong Academy of Social Sciences, blamed the "weak determination and political will" of the Hong Kong government in pushing for cross-border co-operation. "The delays will make our regional integration progress look bad in the eyes of Beijing. Integration is the only future for the delta. If one falls behind, all fall behind." The MTR Corporation disclosed the delay on Tuesday, citing the breakdown of a tunnelling machine at Yuen Long as the main problem. It means construction, which started in 2010, will not be finished until 2016, with services starting in 2017. When announced, the project was to be finished next year. MTR officials have said additional costs due to the delay would be covered by a HK$4.4 billion contingency fund.

 China*:  Apr 18 2014

Trade recovery lightens the gloom (By Victoria Ruan in Beijing Real demand for mainland's exports is stronger than the data indicates, officials say, citing value of deliveries and high growth in many provinces - Mainland authorities may have found something to smile about in a slew of discouraging economic data: trade recovery. Government spokesmen Sheng Laiyun from the National Bureau of Statistics and Shen Danyang from the Ministry of Commerce said the official export and import figures had underestimated the real - and favourable - trade performance. Shen told a press briefing yesterday that the ministry remains "fully confident" that exports and imports would meet the government's annual target of a 7.5 per cent growth this year. "The trade situation will recover in the second quarter," likely starting in May, Shen said. The mainland is expected to maintain a trade surplus for some time, though the gap would gradually narrow, he added. Exports in March surprisingly fell 6.6 per cent from a year earlier. Imports dropped by a sharper 11.3 per cent, generating a US$7.7 billion surplus. Shen attributed the unexpected decline to the "unusually high" comparison base last year, particularly in trade with Hong Kong. Analysts believe that last year's trade figures were inflated to mask an influx of speculative funds betting on yuan appreciation. The lacklustre economic performance in emerging countries such as India and South Africa has hurt demand for China's products this year, Shen added. But in the first quarter, the value of deliveries made by exporters rose 4.2 per cent, showing that real demand is more robust than the data indicates, both spokesmen noted. In addition, nearly half of mainland provinces reported double-digit growth in imports and exports in the quarter, adding to evidence of a rebound in trade. But researchers also caution that uncertainties remain. "The outlook for exports is affected by two factors. We need to see whether the impact of a global economic recovery outweighs rising labour costs," said Song Li, vice-director of the economic research institute under the National Development and Reform Commission. Zhang Liqun, a researcher with the State Council's Development Research Centre, warned that bumps still lay in the road to recovery in developed economies, with risks ranging from the European debt crisis to the rise in the consumption tax in Japan. The ministry also reported a year-on-year drop of 1.5 per cent in foreign direct investment in March to US$12.2 billion. Shen said monthly FDI readings were often affected by individual investment projects and exchange-rate fluctuations. Foreign investment would show a steady full-year growth, he said. The mainland economy expanded 7.4 per cent in the first quarter, the slowest since 2012. Property investment growth in particular slumped in a tight credit environment. Song said reasonable liquidity should be maintained to ensure stable growth and prevent any "collapse in the funding chain" in the property sector. "Too much money and credit supply would exacerbate existing risks. But insufficient money supply or a sudden squeeze on liquidity due to any reason could crack the chain of credit and fuel new risks," he said.

Hong Kong*:  Apr 17 2014

Sir Alex Ferguson to auction HK$39 million wine collection in Hong Kong (By Amy Nip and Reuters) Legendary ex-Manchester United boss puts a different set of reds up for sale with Christie's - Legendary soccer boss Alex Ferguson used to take his mind off the pressure of the "beautiful game" by building up a collection of wines almost as impressive as the collection of trophies he won at Manchester United. Now, about 5,000 bottles of wine - red, of course - from Ferguson's cellar are to be sold off along with signed memorabilia in Hong Kong. Auction house Christie's announced the sale, with an estimated value of HK$39 million, yesterday. One star lot will be six bottles of Romanee-Conti Grand Cru 1999, which are offered with a Manchester United Champions League shirt from 1999 signed "Best wishes, Alex Ferguson". It has a maximum estimated value of HK$850,000. Ferguson said he wanted to auction some of his collection in Hong Kong as "Asia is a part of the world that holds great affection for Manchester United". He was always amazed by the level of support and reaction that accompanied his team's visits. "It is more than just an association, it is a romance dating back many years," he said. Some 75 per cent of the cellar is made up of Domaine de la Romanee-Conti, a French Burgundy which Christie's international director of wine David Elswood says "is probably the wine in vogue, the wine of the moment in terms of demand. So hopefully that's going to draw the attention of not just Alex Ferguson fans but wine fans, too." The cellar spans every year of Ferguson's career with United from 1986 until he retired last year. It includes lots from 1999, the year United won an unprecedented treble of the English Premier League, the Champions League and the FA Cup. "People keep saying, 'What was the best moment of your life as a manager?' and '99 is without question," Ferguson told Elswood in an interview. "There was always this thing about my career that I never had won the Champions League, so to win it in the way we did win it was absolutely fantastically special. And it coincided with a vintage; you were talking about Romanee-Conti '99, a really special year. I think we deserved that." After the Hong Kong sale on May 24, further sales of Ferguson's wine will take place in London and online. Hong Kong is one of the world's biggest centres for wine sales, helped by a favourable tax regime and mainland demand. Twelve bottles of French Burgundy sold for a world record HK$3.67 million at a Christie's auction in Wan Chai last year.

 China*:  Apr 17 2014

China hits back at US reports criticising Beijing over MH370 search (By Angela Meng US media reports accusing Beijing of dragging its feet spark angry response - On April 5, Chinese patrol ship Haixun 01 announced it had detected pulse signals. They were later ruled out as relating to the plane. China has angrily hit back at mainstream US media that accused Beijing of dragging its feet in the search for missing Malaysia Airlines flight 370. The Beijing-based Global Times defended the nation's stance yesterday, after foreign ministry spokeswoman Hua Chunying on Tuesday called a Monday report in The New York Times an irresponsible and pointless provocation. The report said: "The mission has clearly been a prime opportunity for the Chinese government to demonstrate its determination and technological abilities to its domestic audience and to improve on its response to Typhoon Haiyan in the Philippines last year, which was widely criticised as late and tepid." Another report by The Wall Street Journal the following day also highlighted China's "reluctance" to partner with others, citing delays in sharing information about detecting suspected ping signals, as well as its absence at regional search and rescue co-operation forums before MH370 went missing. On April 5, Chinese patrol ship Haixun 01 announced it had detected pulse signals, while Shanghai party mouthpiece Jiefang Daily posted photos of the Chinese search team using rather rudimentary equipment more suitable for shallow water search. Australian defence vessel Ocean Shield detected two further signals near the same area. They were later ruled out as relating to the plane. According to the Times, analysts believed the false alarm "served to distract and delay the search effort". More than a month after the plane disappeared on March 8, families of the 239 on board - 154 of whom were Chinese - remain in the dark as to the whereabouts of their loved ones. As military assets are at stake, some of the 26 countries working together have been reluctant to share all their data. A multitude of countries, including China, Malaysia and Australia, have reportedly seen satellite images and spotted debris possibly relating to the missing aircraft. Beijing-based naval expert Li Jie said it was "common practice" for countries to withhold sensitive digital data they receive until the data is analysed and publicly announced. "It's a pity the countries have been unable to co-ordinate. Even the news reporting mechanism is a mess," Li said. "All of this has delayed the search." But he was hopeful all the countries involved would come up with a more efficient system of collaboration. Shanghai-based military expert Professor Ni Lexiong said no country was to blame for slowing down the investigation. "China has always stressed that its technology lags the US' by at least 30 years, especially those technologies used in the military sector," Ni said. "This incident has showed the world that there is a big gap between China and the West. China knew of its weakness before taking part in the investigation, but it went ahead because more than half of the missing passengers are Chinese."

China sells more of its US debt in February: Treasury (By Amy He in New York China, the largest holder of US debt, sold some of those securities in February, according to new data released by the US Treasury Department. China's holdings for February totaled $1.272 trillion, down from $1.275 trillion in January. The country acquired a record amount of US treasuries in November of last year, and has since sold US debt almost every month since. Japan, the second largest US debt holder, picked up an additional $9.1 billion in February, bringing its total to $1.21 trillion. Based on data released by the People's Bank of China (PBOC) or activity through March, China's foreign exchange reserves hit an all-time high of $3.95 trillion, increasing about $100 billion. "Some senior officials have been claiming that the move down in the renminbi (RMB) recently was driven by the economic slowdown and the drop in the trade balance, but that doesn't explain the Q1 bounce in foreign-exchange reserves," said Kent Troutman, research analyst at the Peterson Institute. Troutman said that the central bank was potentially facing appreciation pressures from the country's financial channels, so intervention was needed to "thwart those pressures", though a few more months' worth of data is needed for a sign of whether the central bank has reached a turning point in intervention policy. Joseph Gagnon, senior fellow at the Peterson Institute, said that China's capital flows are getting more "volatile", but that ultimately, "a reduction early this year would not be surprising and would not say much about the future". "However, the PBOC decided to push the renminbi down late in February and into March, so it must have purchased a lot of foreign-exchange reserves in late February and March," he said. "Some of these may eventually show up in US Treasuries, so March may see an increase." Foreign purchases of US Treasuries hit a record high in February, totaling $5.89 trillion, up from $5.84 trillion in January, most likely due to tension between Russia and the West, analysts said. The "strong inflows may have been the result of de-risking flows following the beginning of escalation in the Crimean region, with US investors similarly shedding $1 billion in foreign assets during the month, consistent with a risk-off tone," wrote Gennadiy Goldberg, interest-rate strategist with TD Securities, in a note. "Private investors purchased $75.9 billion in Treasuries during the month as official accounts purchased $16.6 billion, leading to the strongest month of Treasury purchases since the post-US downgrade uncertainty of September 2011," he wrote. The total of all net foreign acquisitions of long-term securities, short-term US securities, and banking flows was $167.7 billion, the Treasury said. Foreigners purchased $76.5 billion in long-term securities, after selling a revised $2.1 billion in January. The department said that there was $85.7 billion of long-term capital inflow in February. 

Hong Kong*:  Apr 16 2014

Hong Kong to Guangzhou express rail link facing delay of up to 2 years, says MTR (By Ada Lee and Ng Kang-chung) MTR chiefs heading HK$67 billion project blame damage to tunnel boring machine and problems at West Kowloon terminus - Project general manager Antonio Choi and network projects director Chew Tai-chong explain the delay. The much-heralded HK$67 billion high-speed railway linking Hong Kong with Guangzhou - the most expensive ever built per kilometre - has been delayed by up to two years due to "unforeseen difficulties". MTR chiefs yesterday blamed the delay - which could cost taxpayers tens of millions of dollars - on damage to a tunnel boring machine suffered during last month's heavy rain and problems with the construction of the West Kowloon terminus at the Hong Kong end of the 26-kilometre underground link. Transport secretary Professor Anthony Cheung Bing-leung - an MTR board member - insisted he only learned of the extent of the delay at the weekend and was "totally caught by surprise". The MTR said the delays meant construction would not be finished until 2016, with services starting in 2017. When announced, the project was to be finished next year. Last night, critics attacked the MTR and the government for a lack of transparency. MTR network projects director Chew Tai-chong said last month's storm had flooded a construction site near Tsat Sing Kong and Tai Kong Po in Yuen Long. The tunnel boring machine was seriously damaged and an investigation was looking into whether to repair it or to excavate the remaining tunnel by other means. Either way, construction of that part of the project would be prolonged by nine months, Chew said. "We recognise the government has entrusted the management of this project to us and we are very sorry to have to bring forth this revised schedule," he said. Chew said the MTR had spent two weeks pumping water from the tunnel, and had realised the extent of the problem only recently. He also attributed the delay to complicated conditions at West Kowloon and complex geology at the cross-border section beneath a protected wetland. Antonio Choi Fung-chung, MTR general manager for the project, said it had been difficult for contractors to survey ground conditions at the terminus before construction started because of the facilities - such as a golf driving range - in the area, and busy traffic on Jordan Road. That, together with the many underground cables, had contributed to many unforeseen situations. The MTR refused to disclose the length of the construction delay at the terminus or the extra costs. Choi and Chew said only that the additional costs would be covered by a HK$4.4 billion contingency fund. There was also no full explanation of the delay beyond the nine months caused by the damaged boring machine. Hints of a delay emerged in recent months, with officials changing their line to saying the project would be completed next year and would open in 2016. Cheung said that at the end of last year, the MTR was still telling the government the line would open in 2015. "Obviously I felt very disappointed and deeply concerned about the delay," he said.

 China*:  Apr 16 2014

China cancels 20-nation navy parade because of hunt for Malaysian airliner (By Minnie Chan and Agencies) Bangladeshi navy ship the Abu Bakar in Hong Kong en route for the parade. Bangladeshi navy ship the Abu Bakar in Hong Kong en route for the parade. China has cancelled a multinational naval parade to mark the 65th anniversary of the PLA Navy later this month because of the continuing search for the missing Malaysia Airlines jet. PLA Navy spokesman Liang Yang announced the cancellation yesterday, according to a statement by the navy. The statement said the long and so-far futile search in the Indian Ocean for the missing Boeing 777 had dealt a harsh blow to the families of the more than 150 Chinese passengers who were aboard. "Under such a special situation and atmosphere, China decided to cancel the multinational naval parade," Liang was quoted as saying. He added that an international symposium would go ahead as planned. The parade, which was to have been held at the naval base in Qingdao , Shandong , on April 23, would have been China's second-largest fleet review, following its first five years ago. More than 20 nations were invited and many had sent vessels to take part. Even before yesterday's announcement, the parade had proved controversial. The Japanese navy was not invited - much to Tokyo's and Washington's annoyance. The US subsequently decided not to join the parade. Military experts said the absence of large-tonnage and advanced warships may have been another reason for the cancellation. "Many of the navy's largest and most advanced warships are still taking part in the search in the Indian Ocean," Beijing-based naval expert Li Jie said. Macau-based military expert Antony Wong Dong said the US withdrawal might also have led China to call off the event. "Beijing doesn't want to offend Washington, and the missing Malaysia Airlines flight provided them with an excuse to cancel," he said. China has contributed nine warships and six aircraft to the search mission, including two of the navy's four biggest amphibious landing ships, the 20,000-tonne Jinggangshan and Kunlunshan. It also sent its fastest and most advanced missile destroyer, Haikou, and the supply ship Qiandaohu. The Malaysia Airlines plane was carrying 227 passengers, 154 of them Chinese, and 12 crew when it vanished on March 8 en route from Kuala Lumpur to Beijing. The plane is believed to have drastically changed course during its journey and probably ran out of fuel over the Indian Ocean, though the reason remains a mystery. Malaysia's acting transport minister, Hishammuddin Hussein, said in Kuala Lumpur yesterday that his government would release all data recovered from the Boeing's black box if it were recovered. "It's about finding the truth," he told reporters. Malaysia's government has come under fire for a seemingly chaotic initial response, while the scarcity of official information on MH370 has prompted questions over its transparency.

Hong Kong*:  Apr 15 2014

New technique boosts regrowth in liver cancer patients (By Lo Wei Queen Mary Hospital first in city to use method - Doctors at Queen Mary Hospital have introduced a new surgery technique for liver cancer patients. The Queen Mary Hospital has introduced a new liver surgery technique to help boost liver regrowth in cancer patients. Removing a part of the liver with the tumour is one of the most effective treatment for liver cancer. But it is usually unsuitable for patients with a small liver or those with poor liver function as the risk of liver failure after surgery is too high. The hospital is the first in Hong Kong to introduce a new method, which uses an ultrasonic dissector to cut the liver into half, keeping the main blood vessel, allowing the left liver to grow. After seven to 10 days, when the left liver is large enough, a second surgery can be done to take out the right liver. Announcing the results today, University of Hong Kong surgery clinical assistant professor Albert Chan Chi-yan said all six patients treated with the technique since October have recovered well. The hospital receives about 300 liver cancer patients a year, around half of them are suitable for a removal surgery. Chan expects that 10 to 20 more patients at their hospital will benefit from the new technique each year. Liver cancer is the third leading cause of cancer in Hong Kong, with about 1,800 new cases a year.

 China*:  Apr 15 2014

UCLA will open lab in Shanghai (By By Chen Jia in San Francisco) At the signing ceremony for UCLA-CTI joint venture in Shanghai are Sangem Hsu (left seated), president of CTI, and Dr David Feinberg (right seated), president of UCLA Health System, with (from left) Ren Sun and Dr Jianyu Rao (both from UCLA), Paul Fasi (CTI), Dr Scott Binder, Dr Jonathan Braun and Dr Tom Rosenthal (all of UCLA). A Chinese firm, the Centre Testing International (CTI) Corp plans to team up with the University of California and UCLA's department of pathology to open a unique health laboratory in Shanghai in September. The partnership is the first between a US academic medical center and a Chinese company to create such a laboratory in China. "More and more major US academic centers and hospital systems are interested in establishing patient-based services in China," Rao Jianyu, a professor of pathology and laboratory medicine at the Geffen School of Medicine and director of cytopathology at the UCLA Health System, told China Daily on Friday. "It is not uncommon for major US academic centers to partner with third-party laboratories to provide diagnostic services," Rao said. UCLA has a long tradition of academic and research collaborations with major hospitals in China, but offering direct service to patients is relatively new. The new lab will support clinical trials and enhance medical care for Chinese patients with cancer and other diseases. Through UCLA's years of collaboration with major hospitals and academic centers in China, they have experienced firsthand how differently the two countries' medical systems work, he said. "It will take some time for China to adapt to the concept of third-party testing, similar to how America had to adapt to changes in health insurance billing," he said. They are confident that the technology and expertise provided through UCLA's partnership with CTI will save lives and improve care for Chinese patients, he said. The 2,322-square-meter facility - the first of its kind in China - will offer genetic and molecular diagnostics and other sophisticated tests that exceed the scope of the average lab in China, and UCLA pathologists will train Chinese lab specialists to accurately interpret the tests, Rao said. Modern medicine requires precise diagnostic testing at the molecular level to allow physicians to provide appropriate treatment. This is particularly true for complex diseases like cancer, where targeted new drugs are used to shrink patients' tumors. These drugs work only if tests are able to detect specific molecular changes in the tumor tissue. Therefore, it is crucial to determine the patient's cancer type at the molecular level, he said. "Our jointly operated lab with CTI also will offer the most current and advanced molecular tests that are difficult for the average hospital lab to perform," Rao said. "This joint venture is founded on UCLA's desire to build strong global relationships that, through education, research and service, improve the health of people and communities throughout the world," said Tom Rosenthal, chief medical officer for UCLA Health System and co-director of UCLA's Center for World Health. "CTI will be an outstanding partner in our effort to significantly improve patient care in China," said Scott Binder, senior vice-chair of pathology and laboratory medicine at the Geffen School of Medicine, and director of pathology laboratory services for UCLA Health System.

Hong Kong*:  Apr 14 2014

Money laundering investigations in Hong Kong up sharply following 2012 law (By Toh Han Shih and Samuel Chan) But reports of 'brain drain' plague agencies investigating financial crimes under new law - Police in Hong Kong received 33,000 reports of suspicious financial transactions last year - a 12-year high and a 40 per cent rise from 2012 - after Hong Kong tightened its money-laundering laws. Police have initiated more investigations since the new legislation went into effect in the middle of 2012, and spend an average of 18 months on each case. Of the thousands of new reports, the Financial Investigations Division of the Narcotics Bureau initiated 349 investigations in 2013, up 41.9 per cent from the 246 in 2012. However, the increased enforcement comes alongside concerns that the city's efforts to tackle money laundering are being undermined by a "brain drain" as experienced investigators are lured to more profitable careers in the private sector. Gloria Yu Yin-ching, superintendent of the Narcotics Bureau's financial investigation unit, denied her team lacked new talent. She said the anti-money laundering team had recruited 40 new members since 2008. The total value of assets frozen by Hong Kong police in money-laundering investigations rose 13.7 per cent to HK$873 million in 2013, from HK$768 million in 2012, according to Hong Kong police data. In 2011, police froze HK$731 million worth of assets. The cases included requests from overseas law enforcement agencies as well as cases opened by local police. Law enforcement agencies from the mainland, Australia and the US had been "very co-operative" with Hong Kong police in money laundering investigations, Chief Inspector Paul Chung Yat-cheung said. Yu said: "The increase in reports can be attributed to a number of factors. Enhanced awareness by the public, the enactment of [anti-money laundering legislation] and requests from overseas law enforcement agencies are some." Hong Kong implemented the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance, better known as AMLO, on April 1, 2012. Following that, a 29 per cent rise in the number of suspicious transactions was reported to Hong Kong authorities in the first half of that year, according to a report by Ropes & Gray, an international law firm. The law "was the first piece of Hong Kong legislation to address money laundering as its primary focus, and importantly has strong provisions encouraging increased reporting of suspicious activity," said Kim Nemirow, a lawyer at Ropes & Gray. AMLO is the first Hong Kong legislation to impose customer due diligence requirements on banks and financial institutions. Yu declined to say if a current crackdown on graft on the mainland was creating more money laundering cases in Hong Kong. The dirty money "could be from anywhere, Eastern Europe for example. If our mainland counterparts ask us to render assistance, we will do so", Yu said. "The money laundering cases I see often involve fraud from foreign investment in China," said Julian Russell, director of Pacific Risk, a Hong Kong risk-management consultancy. "Other projects I have worked on involve Hong Kong as an intermediary where stolen money from overseas enters but then leaves to other jurisdictions such as Singapore or Switzerland to obfuscate the trail." Many professional money launderers based in Shenzhen and Hong Kong offer their services to anyone, Russell said. Most criminals launder their own money through offshore companies registered in places like the British Virgin Islands and Cayman Islands, he added. In recent years more laundering cases had been heard in the High Court instead of the district courts, which might indicate a higher amount of laundered assets were involved, Yu said. 

 China*:  Apr 14 2014

Funds returning to Chinese stocks as reforms seen improving prospects (By Reuters in Hong Kong) China’s first-ever domestic bond defaults, a weakening currency and slowing economic growth are not normal buy signals, but money managers see them as a sign that the country’s reform drive is genuine and that stocks offer long-term value. Attracted to stock valuations near their lowest in at least a decade, investors have pushed the Shanghai Composite Index up about 6 per cent, and an index of the top mainland listings in Hong Kong up 13 per cent in a rally that started roughly three weeks ago. While investors are not convinced the recent bounce in Chinese assets will blossom into a true rally, they said the sheer scale of Beijing’s financial sector reforms would be positive in the medium and longer term. “Things are heading very much in the right direction,” said Bill Maldonado, Asia-Pacific chief investment officer for HSBC Global Asset Management. “What would you call the widening of the currency bands? What would you call the way that that default happened? What would you call the increase in quotas? All these things are clear evidence of reforms,” Maldonado said. HSBC is overweight on China in its regional portfolios. Since unveiling an ambitious reform blueprint in October, China has embarked on reforms including overhauling its bloated state-owned sector, widening the currency’s trading band and increasing investment quotas in a push to allow market forces a greater say in its markets. Those reforms have included allowing smaller companies to default, with first domestic debt default recorded last month. This has spooked many credit investors, but money managers said this would lay the foundation for sustainable economic growth and possibly higher stock prices in the near term. A report from HSBC last month said stock mutual funds had raised their exposure to Chinese equities to near five-year highs, significantly turning overweight on China from being underweight three months earlier. Another reason for this shift is that Chinese equity valuations now look cheap after a wave of aggressive selling early in the year. Investors pulled out about US$1.8 billion from China-focused equity and exchange-traded funds in the first quarter, according to Lipper data. Andrew Swan, head of Asian equities at the world’s biggest money manager, BlackRock, said the reforms added stability and better growth prospects and would improve the way companies are managed in China by allowing market forces to direct credit to the most productive sectors of the economy. Even after their recent bounce, Chinese equities are still 50 per cent below their April 2007 peaks. The IBES MSCI China Index trades at 1.33 times book value, near its cheapest levels since Thomson Reuters Datastream began compiling the data in 2004, and more than 77 per cent below its 10-year median. The index trades at 8.3 times forward 12 months earnings, 26 per cent below its 10-year median.

Hong Kong*:  Apr 13 2014

Hong Kong exchange welcomes New York defectors keen to list (By Ray Chan and Jeanny Yu) Postcolumnist George Chen (left) with the panel at yesterday's seminar discussing Hong Kong's role as a financial hub. Hong Kong's capital market is set to embrace a new breed of Chinese issuers that have left the Nasdaq and New York Stock Exchange for a listing in the city, as a more favourable valuation of shares and the depth of liquidity have lured them back home. "There are more take-private activities by [the mainland] companies previously listed in the US markets since they got disillusioned and saw less benefit from a US listing," Mark Hyde, Clifford Chance's head of finance in Asia Pacific, said in a Redefining Hong Kong panel discussion hosted by the South China Morning Post. Marshall Nicholson, a managing director with Beijing-based investment bank CICC, pointed out that a US listing was very costly to small companies since they had to issue quarterly financial reports and faced stringent legal burdens such as the Sarbanes-Oxley Act. "Greed is a good thing sometimes," said Nicholson, referring to the firms' decision to relist in Hong Kong in pursuit of a higher valuation. Nicholson added that the development of the city's capital market had allowed it to offer a more diversified range of products, including more issuance of new shares, bonds and convertible securities, gradually moving away from a reliance on initial public market offerings. With financial aid from private equity firms, a dozen US-listed Chinese companies decided to go private through buyouts as US regulators and investors turned hostile after a few accounting scandals and short sellers' accusations over the so-called variable interest entity corporate structure. Under such a structure, Chinese firms and foreign venture capital funds set up an offshore vehicle to gain control of the Chinese firms through a complex series of deals. Focus Media, a Shanghai-based display advertising firm, is planning to conduct a Hong Kong listing early next year. This follows a consortium of investors including the firm's chairman, Jason Jiang, and Carlyle taking the firm private in a US$3.1 billion buyout deal in August 2012, one of the largest-ever buyouts of a Chinese firm, according to Dealogic. "The capital market in Hong Kong today is as large as it is in New York and London," said Nicholson, who came to the city in 2002 after more than a decade of banking experience in New York. "Much of the decision-making process by the international fund management firms has shifted to Hong Kong from their headquarters, a clear sign of the importance of the city." Bill Stacey, chairman of the Lion Rock Institute, a Hong Kong-based free-market think tank, described the city as an international financial centre that took off after the handover in 1997 as its ample liquidity and sound legal infrastructure enabled it to directly compete with New York. "The depth of market liquidity and timely policies are vivid examples of the city's response to the global financial crisis of 2008," Stacey said. Stacey is chief executive of Vanda Securities, an investment manager and adviser. The panel discussion was moderated by the Post's financial editor and columnist George Chen.

'Long Hair's' aborting of trip to Shanghai lays bare pan-democrat divide (By Jeffie Lam in Shanghai Radical's decision to quit Legco trip to Shanghai lays bare rift in camp - Legco President Jasper Tsang (left) joins Chief Executive Leung Chun-ying in a flight simulator at a factory in Shanghai. "Long Hair" Leung Kwok-hung's decision to abort his trip to Shanghai laid bare a rift in the pan-democratic camp. Nowhere is the split more apparent than in the Civic Party. Its leader, Alan Leong Kah-kit, called off plans to join the trip over what he called the "unacceptable" treatment of Leung, who returned to Hong Kong on Friday on being told by immigration officials that he would have to surrender materials banned on the mainland in order to enter. But Leong's party colleague, Ronny Tong Ka-wah, took part in most scheduled visits yesterday along with Beijing loyalists. Two other Civic Party lawmakers, Kwok Ka-ki and Dennis Kwok, skipped official events and gave out fliers on reform for the 2017 chief executive election - the key topic of the visit - to Hongkongers in the city. Dennis Kwok said Tong had disappointed him: "After all, we all want to do the thing well. It would be better if there's more team spirit." Labour Party lawmakers Cyd Ho Sau-lan and Peter Cheung Kwok-che also returned to Hong Kong in sympathy with Leung. Leung, chairman of the League of Social Democrats, flew back to Hong Kong after insisting he keep items related to the June 4 crackdown, including leaflets and a banned book on the Communist Party. Leung has long been barred from the mainland, but was invited to join the trip along with all other lawmakers. Jasper Tsang Yok-sing, president of the Legislative Council, who is leading the delegation, said it was a pity Leong withdrew. The withdrawals mean only 10 pan-democrats, along with 42 others, will meet Wang Guangya, director of the State Council's Hong Kong and Macau Affairs Office, Basic Law Committee chairman Li Fei and liaison office chief Zhang Xiaoming for talks today on reform. Tong, who has been at odds with other pan-democrats after putting forward a reform plan for 2017 that would not allow the public to nominate candidates for chief executive, said he was not in Shanghai to make a political statement. "I will stay until the last minute … This would be my decision even if my party colleagues shared a different view," he said. He ruled out quitting the party. Leong questioned whether the central government was willing to accommodate differences. "Leung's is a dissenting voice, and our call for public nomination is as much a dissenting voice," he said. "If there's a lack of sincerity, there wouldn't be much meaning in the meeting." Other pan-democrats - including Democrats Sin Chung-kai and Helena Wong Pik-wan - stayed but snubbed most visits. Wong said she would raise the Leung case with officials.

 China*:  Apr 13 2014

PBOC at the ready on growth goal: chief (By Kwong Man-ki in Boao, Hainan Zhou Xiaochuan says the central bank will launch minor measures if mainland's economic expansion drops below Beijing's target range - The mainland's central bank will roll out minor measures if economic growth falls below the range targeted by the central government, People's Bank of China governor Zhou Xiaochuan said yesterday. The State Council has set an economic growth target of about 7.5 per cent this year and had considered what the normal range of growth should be, Zhou said at the Boao Forum. He said that if mainland gross domestic product growth was within the normal range, the government would not need to launch significant policies to boost growth. "But if the economic growth diverts from the normal range, we will use monetary policy fine-tuning, or slightly bigger adjustments [to boost growth]," Zhou said. "This is the framework of the current controlling measures." Premier Li Keqiang said on Thursday that no short-term stimulus measures would be rolled out to foster economic growth because the government's target was flexible as long as enough jobs were created. Zhou said the central bank had multiple objectives when deciding its monetary policy and considered not only the labour market, but also inflation, economic growth and balance of payments data. "It's difficult to compare the weight between low inflation and the creation of jobs, but I think there is a conventional practice - a low inflation target has the highest weight in our multiple objectives," he said. Economic conditions could be inconsistent with demand for labour, with GDP growth having slowed last year while job creation increased, Zhou said, and monetary policy was dynamically adjusted with reference to the four indicators. He also said that credit growth had remained stable this year and was not too high, while voicing concern about the high level of leverage at mainland enterprises. "When credit continues to expand, the leverage level will also go up," he said. Zhou described recent bank runs at some small lenders as being small scale, but added that they showed that a deposit-insurance system was needed as part of the mainland's financial sector reforms, which also include interest rate liberalisation and yuan exchange rate reform. Securities regulators on the mainland and in Hong Kong on Thursday announced new rules that will allow direct share trading between the Hong Kong and Shanghai stock exchanges. The so-called through train scheme, which will let mainlanders trade a total quota of 250 billion yuan (HK$314.2 billion) worth of Hong Kong stocks through mainland brokers and Hong Kong investors to trade up to 300 billion yuan of A shares, is expected to be in place within six months. Zhou said it would boost cross-border use of the yuan, helping it become a more convertible currency. Joint efforts with other authorities and ministries were important when financial reforms were under way, he said, while noting that the inclusion of too many parties could hamper communication.

Hong Kong*:  Apr 12 2014

Long Hair Leung Kwok-hung flies back to Hong Kong after row at Shanghai airport (By Jeffie Lam in Shanghai and Fanny W. Y. Fung) Pan-democrat returns to HK after dispute at airport, with two more flying back in support - Lawmaker Leung Kwok-hung is surrounded by custom officers at Shanghai airport as he wears a Tiananmen mothers campaign T-shirt. A trip by Hong Kong lawmakers to Shanghai to meet state officials got off to a disastrous start yesterday, with three pan-democrats including "Long Hair" Leung Kwok-hung deciding to turn back soon after they arrived. The remaining 11 pan-democrats decided to stay for the talks on political reform. Leung, chairman of the League of Social Democrats, secured a last-minute ticket and returned to Hong Kong last night. He had arrived in Shanghai wearing a T-shirt bearing words in support of Tiananmen Mothers, a group formed by mothers whose children died in the 1989 crackdown. Customs officers searched his luggage as he waited in a VIP lounge at the airport with the rest of the Hong Kong party. He was then asked to surrender items he was carrying, including leaflets about the crackdown, several T-shirts with related slogans and a book on the Communist Party that is banned on the mainland. But Leung refused. Other lawmakers attempted to mediate and Legco Secretariat staff sought help from the Hong Kong trade office in Shanghai. After a stand-off of about 20 minutes, Leung decided to boycott the meeting and return to Hong Kong. He boarded a flight back last night, according to Legco president Jasper Tsang Yok-sing and fellow pan-democrat Charles Mok, who both witnessed the confrontation. The Labour Party's Cyd Ho Sau-lan and Peter Cheung Kwok-che also decided to return this morning in support of Leung. But others from the pan-democratic camp decided to proceed with the trip. Leung, who is usually barred from visiting the mainland, was among a group of 24 legislative councillors who arrived at Shanghai Pudong International Airport at 8.30pm. The delegation is scheduled to meet state officials tomorrow to discuss electoral reform in Hong Kong, and Legco chief Tsang said he hoped the dispute would not affect the dialogue. "It is regrettable and is a pity … I hope the incident won't seriously affect the way the visit is being conducted," Tsang said. Moderate pan-democrat Frederick Fung Kin-kee, of the Association for Democracy and People's Livelihood, said the incident had increased tensions between the pan-democrats and Beijing, but he and 10 others from the camp would remain. "The main goal of this trip is to discuss the political reform with Beijing officials, which would be the first time in over 10 years … We treasure this opportunity …," Fung said.

 China*:  Apr 12 2014

Xi's awakened lion claim rings true for France (By Adrian Wan in Beijing Envoy Sylvie Bermann echoes Xi Jinping's words from state visit, but says Paris hopes for more action on trade deficit and climate change - President Xi Jinping's visit to France last month, during which a raft of business and bilateral deals were sealed, showed China "was an awakened lion, but a peaceful one", says France's top envoy to China. Sylvie Bermann was echoing an analogy Xi made in a speech to an audience that included French President Francois Hollande. He compared China to an awakened lion, albeit one that was "peaceful, pleasant and civilised". Bermann said she was surprised by the analogy. "I was a bit struck by the expression," she said at the French embassy in Beijing. "But I think it's a beautiful expression. When a new company opens in China, there is always a lion dance, and people are smiling and feeling peaceful." Xi's 10-day "very successful" visit produced tangible economic, political and cultural benefits, she said. The state visit saw major bilateral trade deals signed. French aviation giant Airbus signed a deal to sell China 70 jets worth more than US$10 billion. In addition, some 50 trade agreements were finalised or advanced in sectors including nuclear energy, finance and car manufacturing. Bermann said she did not believe an increasing reliance on Chinese business presented any political dilemmas because a framework for bilateral dialogue was in place. During Xi's visit, the two countries discussed "all regional crises including Ukraine, Iran, Syria, a little bit of Afghanistan, and also Africa". Beijing and Paris issued a mid to long-term blueprint for the development of ties, pledging to enhance co-ordination on key global and regional issues, jointly respond to challenges such as terrorism, weapons of mass destruction and their delivery, as well as cybersecurity, she said. The two nations pledged to continue to meet each year, and exchange ideas on major bilateral and global issues of common concern at multilateral events. The two would also promote the role of a high-level dialogue in the event of trade disputes, with Bermann noting a "huge French trade deficit". "China's investment in France is very welcome. We don't mean we want less Chinese imports, we just want to export more to China," she said. "And there is an agreement on that issue." Last year, the France's trade deficit with China hit €26 billion (HK$280 billion), accounting for about 40 per cent of the country's total foreign trade deficit. France was also pressing China for a concrete commitment to set an emissions reduction target for the United Nations climate change summit to be held in Paris next year, she said. "We raised the topic with Xi and he agreed it was a global issue, but refused to give a precise answer as to how much emissions they would cut, saying he was facing the issue at home as well," she said. "We're still talking to different countries, but we consider that China is very important because without China we can't do much." China has been a leader in renewable energy investment and is in the process of launching a national carbon tradings market.

Hong Kong*:  Apr 11 2014

Through train back on track as cross-border share trading quotas announced (By Enoch Yiu Mainland investors will soon be able to trade in selected Hong Kong stocks and vice versa. Hong Kong and mainland investors will be able to start trading designated stocks in each other’s market in about six months via a connection between the stock exchanges of Hong Kong and Shanghai, which have brought the shelved scheme back on track. The China Securities Regulatory Commission and the city’s Securities and Futures Commission jointly announced the details of the Shanghai-Hong Kong “through train” scheme on Thursday, several hours after Premier Li Keqiang said at an investment seminar in Boao, Hainan province, that the bourses would be linked up. Under the scheme, mainlanders will be allowed to trade an annual quota of 250 billion yuan (HK$314 billion) worth of Hong Kong stocks, subject to a maximum of 10.5 billion yuan a day, through mainland brokers, who will place the orders with the Shanghai Stock Exchange, which will then pass them on to Hong Kong Exchanges and Clearing. Hong Kong investors will be able to trade up to 300 billion yuan of A shares, subject to a maximum of 13 billion yuan a day, through Hong Kong brokers, who will place the orders with HKEx, which will pass them on to the Shanghai bourse. SFC requires mainland investors taking part in the scheme to be institutional investors or individual investors with more than 500,000 yuan in their securities accounts. Only the shares of companies with dual listings in Shanghai and Hong Kong and the constituent stocks of major indexes will be allowed to be traded. Beijing first proposed the “through train” scheme in August 2007 but dropped it four months later over concern it would surrender too much control over the market.

 China*:  Apr 11 2014

Protecting Chinese sovereignty in South China Sea is 'unshakable', Li tells economic forum (By Teddy Ng in Beijing But he says China is still committed to peace in the region - Chinese Premier Li Keqiang claps during the opening ceremony of the Boao Forum for Asia on Thursday. Premier Li Keqiang vowed that China would “resolutely” respond to provocations by other claimants of disputed maritime territory as he addressed a regional economic forum. Speaking at the Boao Forum of Asia – the region’s version of the World Economic Forum in Davos – in the southern island of Hainan, Li said China would stick to a peaceful development path and maintain friendly ties with its neighbours. But he added: “Our determination to protect our territorial sovereignty is unshakable.” “We are willing to settle territorial disputes through peaceful means, and we are supportive of joint maritime co-operation, but we will make resolute response to any provocative moves that affect the peace and stability of the South China Sea.” The disputed waters have become a flashpoint between China and its Southeast Asian neighbours, particularly the Philippines and Vietnam. Brunei, Malaysia and Taiwan also lay claim to the disputed waters, but China insists it owns a large part of it. Southeast Asian nations complained of China’s aggressive behaviour over the disputed waters, including cutting seismic exploration cables of their survey ships and blocking the passage of their ships. But China insisted its actions in the disputed waters are legitimate. Chinese Defence Minister Chang Wanquan criticised the Philippines on Tuesday after sitting down for talks with US defence chief Chuck Hagel. Chang said Manila was “stirring up trouble” by filing the dispute to a United Nations arbitration tribunal. Chang said the Philippines “did the math in the wrong way” – or that Manila miscalculated in filing the UN case – and that China would not participate in the arbitration process. “The fact is that it is the Philippines [that is] illegally occupying part of China’s islands and reefs in the South China Sea,” he said. Li said stability in the South China Sea was in the mutual interest of China and its neighbours, adding that Beijing was willing to push forward with negotiations for a code of conduct in disputed waters. The negotiations also cover other initiatives, such as joint maritime rescue, security dialogue and fighting terrorism. “China is willing to jointly maintain peace and stability, and freedom of navigation [in] the South China Sea,” he said. “Chinese people always stick to the belief of, ‘Be just with those who are wrong, and be kind to those who are right’. “China attaches importance to friendship and will never treat its friends badly,” he said.

Hong Kong*:  Apr 10 2014

Formula-E race plan back in the frame for Hong Kong (By Alvin Sallay Revised and simplified street circuit reopens the door for organisers of revolutionary international series to stage contest in city - Hong Kong's first internationally sanctioned motor race, the Formula E, is back on track for next year with top official Lawrence Yu Kam-kee confident a revamped and modified circuit plan will be accepted by the International Automobile Federation (FIA). Hong Kong Automobile Association president Lawrence Yu, seen with Formula E chief executive Alejandro Agag, is upbeat about a race in the city. The city was dumped from the inaugural season of the new electric-car racing series, starting in September in Beijing, after the proposed circuit in Central failed to meet the approval of the world auto sports governing body. The FIA believed the circuit along Lung Wo Road was not safe for electrically powered cars racing through the streets at speeds of 200km/h. "We have now come up with a new plan for the circuit, one which has been modified and will make it easier to be accepted by the FIA," said Yu, president of the Hong Kong Automobile Association. "This modified circuit is safer for high-speed cars to go through Central." The most contentious part of the circuit, a 10-metre stretch, which dips under a small tunnel, has been bypassed under one option, and this has raised hopes the new circuit will get the green light from the FIA. Technical officials from Formula E have given the thumbs up to the adapted plan, according to Yu. "I'm very confident we will get approval now that we have made changes to the circuit, the most important being that we will not go through the tunnel," Yu said. "We can cut this bit out as it was deemed dangerous at high speeds. Among the other modifications we have undertaken is to widen the road in a number of areas. "The track will still remain at 2.4 kilometres, but it will be simpler and safer. Once we get on the circuit, we can make the race more interesting by introducing sharp corners and so on. But our first objective is to become part of the series and to do that we have had to modify our circuit," Yu said. If the plan is approved by the FIA, it will mean removing a number of islands along Lung Wo Road before race day as well as a number of traffic lights. "It is probably a blessing in disguise that we were rejected by the FIA this year. If they had approved our circuit this time, I don't think we would have had sufficient time to work with the various government departments," Yu said. "We need all the support from the government to make this a success. "The race can become the Hong Kong Sevens of the Formula E series - it can become the most popular leg in the series. "Now that we have a modified plan for the circuit, I'm confident we can hold a race in Central next October or November."

IMF latest to warn of Hong Kong banks' growing mainland exposure (By Jasper Moiseiwitsch Loan quality of city's banks may deteriorate this year as credit tightens on the mainland and marginal borrowers spill over to Hong Kong - The International Monetary Fund has warned of Hong Kong banks' rising exposure to mainland debt, saying loan growth to mainland entities has been "rapid" and now comprises 19 per cent of local institutions' total assets - excluding loans to other banks. "While deepening integration suggests that financial linkages will continue to grow, the large exposure requires close monitoring and co-operation with mainland supervisors," the IMF said in a report. The report by the agency, which is broadly tasked with the job of promoting international financial stability, comes as bankers said the Hong Kong Monetary Authority has informally cautioned them to tighten the approvals process on loans to mainland firms. The authority is worried China's shadow banking clampdown will send lower-grade borrowers spilling into Hong Kong, said bankers. "Banks have been asked [by the HKMA] to watch their China exposure, to make sure they are well covered and they have adequate security. The concerns are that Chinese liquidity is tightening, the economy is slower and shadow banking is shutting down, so [the HKMA] doesn't want bad borrowers from China coming to Hong Kong and flooding the system," said a head of Asia-Pacific loans syndication at a European bank. A Standard & Poor's report projects that the loan quality of the city's banks will deteriorate in 2014 as more mainland firms borrow from Hong Kong banks. "In the unlikely event of a hard downturn in China [with GDP growth below 5 per cent], Hong Kong's economy and its banking sector will suffer severely because of the close ties between the two systems," S&P's report said. Loans in the Hong Kong banking system grew about 16 per cent in 2013, said S&P. Loans from Hong Kong banks grew 22 per cent in February over the previous month, according to HKMA data. Sonny Hsu, a banking analyst for Moody's, said the HKMA has special teams examining banks' exposure to mainland credit. "We have a negative outlook on nine out of 17 [Hong Kong] banks we cover. The growing integration between Hong Kong and China means that any slowdown in the mainland economy can have a negative impact on the Hong Kong banking system," he said. Hsu said Hong Kong banks have increased lending to mainland firms in recent years, and pointed to trade finance as an example. Mainland officials have relaxed foreign exchange controls such that mainland firms no longer needed regulators' approvals to arrange trade finance in Hong Kong and transfer such funds to the mainland, he said. Hsu said Hong Kong banks' trade finance grew by 7.5 per cent in the first two months of 2014, largely thanks to a boom in such loans to mainland firms. The Bank for International Settlements said there is US$430 billion in loans outstanding from Hong Kong banks to mainland entities. However, the HKMA said only US$110 billion relates to non-bank debts. "Therefore, the US$430 billion figure includes normal bank lending activities and support for mainland companies operating in China. The HKMA doesn't think this is hot money," said an HKMA spokesman.

 China*:  Apr 10 2014

Xi Jinping urges US defence chief Chuck Hagel to work on closer military ties with China (By Teddy Ng in Beijing and Agencies Co-operation is crucial to conflict resolution, president tells US defence chief Chuck Hagel - Xi Jinping greets Chuck Hagel at the Great Hall of the People. President Xi Jinping set the tone for developing military ties between China and the United States during talks with US Defence Secretary Chuck Hagel, saying the two militaries should "properly manage conflicts" and avoid confrontation. The talks between the two came a day after Hagel and Defence Minister Chang Wanquan exchanged fire on a range of issues that could threaten ties and after China's top envoy warned the US against creating an "Asian Nato". "Both sides should stick to the principle of non-confrontational, non-conflict, mutual respect and mutual benefit to proactively push for pragmatic co-operation in various aspects," Xi was quoted as saying by CCTV. "The scope of co-operation between China and the US is wider under the current complicated international conditions." Xi and Hagel's meeting focused less on contentious issues, said two US officials who spoke on condition of anonymity. China criticised the US yesterday for passing a bill permitting the sale to Taiwan of four second-hand US warships. "This act is highly damaging, and doubtless will seriously … damage the development of Sino-US military ties and the peaceful development of cross-strait relations," said defence ministry spokesman Geng Yansheng . Hagel said the US had to honour its security treaty obligations with Japan and the Philippines. The two sides vowed to avoid the risk of miscalculation, and pledged to make progress on a notification mechanism for navy and air force activities at sea. Zhang Baohui, a security specialist at Lingnan University, said negotiations for the protocol would take a long time. "The US will insist that it is legitimate for them to do surveillance in waters around China, but China will still regard such moves as a threat to national security," he said. In New York on Tuesday, Ambassador Cui Tiankai said Washington needed to think hard about the purpose of its military presence in Asia. "If your intention is to establish an Asian Nato, we are back in the cold war era. This is something that will serve nobody's interest," he said.


US urged to restrain Japan (By Pu Zhendong) Minister of Defense Chang Wanquan chats with US Secretary of Defense Chuck Hagel during a news conference at the Ministry of National Defense headquarters in Beijing on Tuesday. Beijing warned Washington on Tuesday to "stay vigilant" about Japan and not to be "permissive or supportive" of Tokyo's provocations as Chinese and US defense chiefs vowed wider cooperation in the Asia-Pacific region. In a "candid, constructive and productive" discussion, Defense Minister Chang Wanquan told visiting US Defense Secretary Chuck Hagel that the US should respect China's core interests as Washington is implementing a pivot strategy to the region. Chang asked the United States to keep Japan "within bounds" and criticized the government of Japanese Prime Minister Shinzo Abe. "It is Japan who is being provocative toward China," Chang said at a news conference after talks with Hagel. "If you come to the conclusion that China is going to resort to force against Japan, that is wrong." Hagel, meanwhile, struck a belligerent tone at the news briefing by claiming that China did not have the right to establish an Air Defense Identification Zone in the airspace over China's Diaoyu Islands without consulting other countries. He also said that the US will protect Japan under treaty obligations. Chang said that China "will not take the initiative to stir up trouble" with Japan, but it would use military force, if necessary, to defend its territory. "We will not compromise, nor concede, nor trade on territory and sovereignty. We will not tolerate these being infringed upon, even the least bit," he said. He said that remarks and provocation from the Abe administration have caused severe difficulties for China-Japan relations. He also said that the Philippines has illegally occupied parts of China's islands and reefs in the South China Sea and "disguised itself as a victim". However, the defense chiefs also mentioned areas of broad agreement, including the willingness to build a new model of military-to-military relations, a consensus reached by President Xi Jinping and his US counterpart Barack Obama. China and the US will work to establish mutual notification of major military activities and standards of behavior for air and naval military safety on the high seas. On greater military-to-military communication, new formal procedures will allow armies to better communicate with each other, and an Asia-Pacific Security Dialogue, involving high-ranking defense officials from both countries, will also be established. China and the US will conduct a joint military medical exercise after the Pacific Rim military exercise led by the US later this year. Observers said growing cooperation mixed with harsh criticism reflects the current condition of China and US military ties. Zhao Xiaozhuo, deputy director of the center on China-US defense relations at the PLA Academy of Military Science, said Washington is stuck in a security dilemma in the Asia-Pacific region since it is pursuing balance between China and Japan.from page 1 "For example, the US perceives the security alliance with Japan and other Asian countries as the cornerstone of its rebalancing strategy, but China sees it as a barrier for development," Zhao said. "As the two countries seek to build a new type of military relations focusing on common interests, the strategic suspicion and the latent contradictions will become more acute," he said. Zhu Chenghu, dean of the Defense Affairs Institute at the National Defense University of the People's Liberation Army, said military-to-military ties between Beijing and Washington lag far behind the development of other aspects of bilateral relations, but both countries have shown sincerity to expand cooperation. "Hagel's criticism of China to pacify US allies is one thing, whether the US will take action to sabotage the burgeoning China-US cooperation is another thing," Zhu said. On his first visit to China as a US defense chief, Hagel reaffirmed that the US welcomed the rise of a stable, peaceful and prosperous China. Hagel said China-US relations are essential to peace and prosperity in this century and his focus is on how to develop the new model of military-to-military relations. "My tour to the aircraft carrier, the Liaoning, yesterday was a good beginning because it represented an effort that we are both striving to do more on, which is the openness and transparency," he said. On Monday, Hagel became the first foreign visitor to board the aircraft carrier in Qingdao, Shandong province. He is also scheduled to visit a non-commissioned officers school in a Beijing suburb on Wednesday. "Our vision is a future where our militaries can work closely together on a range of challenges, such as humanitarian assistance and disaster relief missions. However, to reach this objective, we must be candid about issues where we disagree," Hagel said. Both defense chiefs agreed that international terrorism was a common challenge to peace and stability, and they agreed greater cooperation was the way forward. Days before his trip to China, Hagel reaffirmed Washington's military treaty commitments to Japan and promised to send two more ballistic missile defense destroyers to the country by 2017. In an interview with Japan's Nikkei newspaper on Saturday, Hagel criticized China's Air Defense Identification Zone over the East China Sea as provocative and unilateral. On Tuesday afternoon, Fan Changlong, vice-chairman of the Central Military Commission, criticized Hagel's remarks as "tough, and with a clear attitude". "I can tell you, frankly, ... the Chinese people, including myself, are dissatisfied with such remarks," Fan told Hagel at the presence of the press.

Hong Kong*:  Apr 9 2014

Local talents showcase Hong Kong’s design history in Milan (By Vivienne Chow Experiences of young talents can make HK the design hub of Asia, says award-winning architect - Nille Juul-Sørensen, curator of the Hong Kong presentation, said the city had marked its place on the world map of design. The busy streets of Mongkok, Star Ferry rides across the harbour and the red plastic lamp shades of the wet markets – these are some of the personal experiences that can best demonstrate Hong Kong’s potential as a city of design. That’s according to Nille Juul-Sørensen who, as curator of the largest presentation of Hong Kong design at this week’s Milan Design Week, is tasked with showcasing the city’s credentials to an expected 300,000 visitors. Juul-Sørensen believes the city’s fast changing nature and a rise of young talents who focus on designing “experiences” rather than products can make Hong Kong the design city of Asia in the next 10 years. Singapore may strive to be a design hub, and leading mainland cities such as Shanghai and Beijing may have lots of money, but Hong Kong can lead the game. “It’s not about the money. It’s about not being afraid of taking chances,” he said. Hong Kong had marked its place on the world map within the past five years and its experience could provide a lesson for its European counterparts, said the award-winning architect, who is also the CEO of the Danish Design Centre. “In many places, design is treated as art only. But Hong Kong shows us that design is business, which is what many countries are looking for,” said Juul-Sørensen, whose own public works include designing airport components for the Hong Kong International Airport. He said Hong Kong was a fast-paced city and that a growing influence from the mainland had quickened the pace of change. While some changes could be “grotesque”, they were also inspirational, and he wanted to show that to a global audience. The exhibition “Hong Kong: Constant Change”, presented by the Hong Kong Design Centre, recreates the cityscape for visitors to the Milan fair through the works of 60 leading young designers. The works, in a multimedia format, enable visitors to experience the buzz of Hong Kong’s streets, take a Star Ferry ride across Victoria Harbour, and shop at a wet market without having to board a long haul flight. Each activity, according to Juul-Sørensen, showcases Hong Kong’s design history. “Milan [Design Week] is the largest festival of design objects,” said Juul-Sørensen. “This is not an exhibition of objects, but one about designers and the design environment of Hong Kong.” He said visitors to the Hong Kong exhibition would discover a pool of young talents who were into strategic and social design that could make the city a better place to live in. “Hong Kong young designers have been talking about ‘me’, but they are shifting towards ‘we’,” said Juul-Sørensen. Young designers were tuning in to their environment and producing designs to answer social needs from better hospitals to sustainable development. He praised the Octopus card for its design and how it had been integrated into people’s daily life seamlessly. “Designers can help by designing social welfare systems, smarter hospitals and better ways of treating people,” he said. “Let the 2 per cent [of designers] make nice chairs and the rest of them should do something else.” Milan Design Week runs until April 13.

 China*:  Apr 9 2014

China will play 'constructive role in Middle East', Xi Jinping tells visiting Israeli President Shimon Peres (By SCMP) Iran's nuclear programme and stalled peace talks with Palestinians likely to be discussed during visit of 91-year-old Israeli president - Israel's President Shimon Peres (left) chats with Xi Jinping before inspecting an honour guard at the Great Hall of the People in Beijing. President Xi Jinping pledged China would continue to play a constructive role in the Middle East peace talks, as he received visiting Israeli President Shimon Peres yesterday. Xinhua reported that Xi told Peres that Israeli-Palestinian peace talks had entered a critical stage, as they met at the Great Hall of the People in Beijing. China hoped that Israel would set its sights on regional peace and push for real progress in peace talks with the Palestinians and the international community, Xinhua reported, citing Xi. Peres said Israel hoped that Beijing would continue to play an important role in mediating the peace talks, Xinhua reported. Beijing is keen to get a stronger foothold in the Middle East, which is outside its traditional sphere of influence. Last year, Beijing set up a task force to boost trade with Israel during Israeli Prime Minister Benjamin Netanyahu's visit - immediately after Palestinian Authority President Mahmoud Abbas concluded his own China tour. Yao Jiande, an expert on Middle East affairs at Yunnan University, said Israel was expected to urge China to flex its political influence over Iran. "Israel is worried about Iran's nuclear programme. It hopes that China can help co-ordination in the P5 plus 1 group [the five UN Security Council permanent members China, Russia, France, the US and Britain, plus Germany] plus Iran, sending a clear signal to Tehran [that it] should not develop nuclear weapons," Yao said. "China will probably tell Israel that it supports non-proliferation, but that there should be a clear differentiation between civilian and military nuclear use." In a regular press briefing yesterday, foreign ministry spokesman Hong Lei called for Iran and six world powers to be flexible in the latest nuclear talks that started yesterday in Vienna. "China hopes all parties show flexibility, take a practical stance, address each other's concerns and solve their differences to accumulate consensus and create favorable conditions for a breakthrough," the spokesman said. The 91-year-old Israeli president started his three-day visit yesterday in quintessential Chinese style: by opening a Sina Weibo account. "Shalom, my Chinese friends," Peres said in his first post on the massively popular platform, where he quickly garnered nearly 50,000 followers. "I'm very happy to open my weibo account and to have a direct dialogue with Chinese netizens," he said. Maintaining strong relations with China is a key agenda for Peres. He told The Jerusalem Post on Monday night that enhanced relations with the world's second-largest economy and regional superpower would be benefit both Israel and China. Xi told Peres that China was willing to boost co-operation with Israel on agriculture, energy, environmental protection, education, medical care and technological innovation. Yao said China was keen to boost its presence in the Middle East by securing energy deals and ensuring that extremist religious views do not spread to China's mainly Muslim western regions. "China also wants to boost military trade with the Middle East, and that's why it is stepping up engagement with nations there," he said.

常萬全:捍衛中國領土 軍隊做好準備 中國防長常萬全昨日在北京與來訪的美國防長哈格爾舉行記者會。 香港文匯報訊(記者 葛沖 北京報道)中國軍方高層昨日以罕見語氣當面斥責來訪的美國國防部長哈格爾,警告美方勿在釣島、台灣、南海等問題上指手劃腳。中美防長更在記者會上針鋒相對,哈格爾聲言美方會在釣島問題上協防日本,中國國防部長常萬全則重申領土主權是中國的核心利益,在領土問題上中方不會妥協、不會退讓、不會交易,更不允許受到絲毫侵犯,強調解放軍已做好準備,「戰之必勝」。他並敦促美國約束日本行為,不要姑息養奸。昨天上午,常萬全在八一大樓為哈格爾舉行了歡迎儀式,並陪同檢閱了解放軍三軍儀仗隊。常萬全在會談中表示,雙方應以不衝突不對抗為目標,有效管控風險,防止誤解誤判;以兩軍關係未來發展大局為眼,妥善解決重大障礙和分歧;以維護地區和平穩定為動力,加強在亞太地區的良性互動。哈格爾表示,希望借助這次訪問進一步拓展與中國發展軍事關係的深度和廣度。 中國軍隊「戰之必勝」 在隨後舉行的記者會上,兩國防長宣布雙方達成的七點共識,並稱兩國將推動重大軍事行動相互通報機制和公海海域海空軍事行為準則進入實質性磋商階段,年內舉行兩國國防部的亞太安全對話。 針對當前日本、菲律賓等美國盟國在與中國的領土主權爭端問題上大做文章一事,常萬全表示,領土主權是中國的核心利益。在領土問題上我們不會妥協、不會退讓、不會交易,更不允許受到一絲一毫的侵犯。「中國軍隊肩負維護,時刻做好應對各種威脅的準備,召之即來,來之能戰,戰之必勝。」 哈格爾表示,中方無權單方面劃設東海防空識別區,又說美國必要時會在釣魚島爭端中協防日本。哈格爾並對日本欲修憲允許自衛隊行使集體自衛權表示公開支持,稱任何國家都有責任自保。 強烈反對美對台售武 常萬全則回應說,日本在歷史問題上混淆是非,大開倒車;在釣魚島問題上一味示強,挑起事端;在政治右傾化問題上越走越遠,應當引起國際社會的關注和警惕。他並要求美方對日本的所作所為要有所警惕和約束,「不要聽之任之,姑息養奸。」 對於美國眾議院昨日通過對台軍售案。哈格爾辯稱,美台關係以及對台售武符合中美三個公報政策,完全是為了台灣自衛。常萬全則重申,美售台武器嚴重違反中美三個聯合公報,在會談中他已向美表達強烈不滿和堅決反對。

US defence chief Chuck Hagel challenged on issues including Japan and Taiwan (By Teddy Ng in Beijing US defence chief warned about arms sales to Taipei and his call for Beijing to 'respect neighbours' - US Defence Secretary Chuck Hagel and Chinese Minister of Defence Chang Wanquan arrive at a joint news conference in Beijing on Tuesday. The Chinese and US defence chiefs exchanged fire on a range of thorny regional and global security issues at their first official meeting in Beijing yesterday. Defence minister Chang Wanquan said his discussion with his visiting US counterpart Chuck Hagel was "candid" and "constructive". He said their talks covered topics including regional territorial disputes and cybersecurity. Chang also urged Washington to stop a bill that reaffirms America's commitment to Taiwan and calls for continued arms sales to the island. He said Beijing was "strongly dissatisfied" with the move and firmly opposed it. Hagel arrived on Monday and was given a rare tour of China's first aircraft carrier the Liaoning in Qingdao harbour. But that welcoming gesture made way for a more hardline approach from Chang, who warned Washington to respect Beijing's core interests as the US shifts its strategic focus to the Asia-Pacific region. "The China-US relationship is not comparable to US-Russia ties in the cold war," Chang said at a joint press conference. "China's development cannot be contained by anyone." On the territorial dispute with Japan over the Diaoyu Islands in the East China Sea, Chang warned that China's armed forces were "ready to assemble at the first call" and were "capable of winning". He warned the US to "stay vigilant" over Japan. Hagel told Chang at the press conference that Washington had a treaty obligation to protect Japan in any dispute with China, and denounced Beijing's declaration of an air defence zone over the East China Sea in November. He said: "Every nation has a right to establish an air defence zone, but not a right to do it unilaterally with no collaboration, no consultation. "That adds to tensions, misunderstandings, and could eventually add to, and eventually get to, dangerous conflict." Hagel also called on Beijing to be more transparent about its cyber capabilities. But Chang said China was already being transparent and co-operative. In another open confrontation, a deputy chairman of the powerful Central Military Commission, Fan Changlong , told Hagel that Beijing was not happy with his remarks in Japan last week when he urged Beijing to respect its neighbours. "I can tell you, frankly, your remarks made at the Asean defence ministers meeting and to the Japanese politicians were tough and with a clear attitude. "The Chinese people, including myself, are dissatisfied with such remarks," Fan was quoted as saying by Xinhua at the opening of talks with Hagel. In a positive gesture, both sides promised to step up a regular dialogue to minimise the risk of misunderstandings. Ni Lexiong , a Shanghai-based navy expert, said: "Both sides are not shying away from problems. "The process may be tough, but it is better than pretending there is no problem." The risk of conflict between China and the US was heightened in December when an American guided missile cruiser, the USS Cowpens, took evasive action to avoid colliding with a Chinese landing vessel in the South China Sea during exercises involving the Liaoning. Zhu Feng , a security specialist at Peking University, said: "The two nations need to have mechanisms for deciding what action should be taken when their ships or aircrafts are getting close."

Hong Kong*:  Apr 8 2014

We don't need foreign help with political reform, says Carrie Lam 林鄭月娥說: 政治改革 香港不需要外國的幫助 (By Tanna Chong and Jeffie Lam) Chief Secretary warns against foreign meddling as pan-democrats continue hunger-strike protest - Hong Kong doesn't need foreign countries intervening in its democratic development, the Chief Secretary said yesterday after two top pan-democrats met United States vice-president Joe Biden in Washington. "Constitutional development is the internal affair of the central and SAR government," Carrie Lam Cheng Yuet-ngor said. "I believe we have enough wisdom, and need no involvement by foreign countries." Her comments came after Democratic Party co-founder Martin Lee Chu-ming - who is on a two-week visit to the United States and Canada with former chief secretary Anson Chan Fang On-sang - called on the US Congress to bring back the US-Hong Kong Policy Act. The Act, passed in 1992, required the US Secretary of State to report to Congress on Hong Kong developments, including its autonomy, until 2007. The meeting also drew criticism from Hong Kong's Office of the Commissioner of the Foreign Ministry. "We firmly oppose any countries meddling in the city's internal affairs," it said. Meanwhile, a hunger strike for democracy by four pan-democrats, clocked up 244 hours at 6pm yesterday, with only water and power drinks consumed. Some 13 of the original 17 hunger strikers have given up. Lam yesterday also commented on an electoral reform proposal put forward by a group of 18 academics, saying it "has not violated the Basic Law". She said the plan, which allows anyone who receives signatures of support from two per cent of registered voters - or about 70,000 people - to be included in a shortlist for the nominating committee's consideration, is "back to the framework of the mini-constitution". The results of a poll commissioned by the Democratic Alliance for the Betterment and Progress of Hong Kong and released yesterday suggested 65.6 per cent of the 1,005 respondents objected to the Occupy Central campaign, up 3.1 per cent from last month.

 China*:  Apr 8 2014

Chuck Hagel kicks off China visit with rare glimpse of Liaoning aircraft carrier (By Teddy Ng in Beijing US defence chief becomes first foreign official to be welcomed aboard China's first aircraft carrier - US defence chief Chuck Hagel is greeted by military personnel as he arrives at Qingdao airport before his inspection of China's first aircraft carrier, the Liaoning. US defence chief Chuck Hagel was given a rare tour of China's first aircraft carrier as he kicked off a three-day visit yesterday. He became the first foreign official to go on board the Liaoning after arriving in the port city of Qingdao, getting a glimpse of Beijing's growing military strength and ambition. Observers said the visit was a response to increasing concern in Washington about the lack of transparency surrounding China's military build-up. Hagel was invited to China by Defence Minister Chang Wanquan, but the inspection was arranged at Washington's request, said a senior US official. Hagel and a small number of his staff spent about two hours on the ship at Yuchi Naval Base, a US official said. Hagel received a briefing about the carrier and then toured its medical facilities, living quarters, flight deck, bridge, and flight control station. He also had refreshments with junior officers in the dining area. "The secretary was very pleased with his visit today aboard the carrier Liaoning," said Pentagon press secretary Admiral John Kirby. "He hopes today's visit is a harbinger for other opportunities to improve our military-to-military dialogue and transparency." Hagel said in Tokyo on Sunday that Beijing should respect neighbours anxious over its stance on territorial disputes. Beijing has not hit back at Hagel's comments and the PLA Daily said yesterday that his visit would help remove obstacles to improving the relationship between the two nations' militaries. "It is helpful in suppressing attempts by a few nations to utilise and 'create' conflicts between China and the US for their selfish gains and to bring a positive impact in regional peace and stability," the article said. Observers said the carrier visit was a crucial step after the US and China had agreed to establish regular dialogue between their armies and to take part in more multinational military drills. Ni Lexiong, a Shanghai-based naval expert, said: "By allowing Hagel to visit the carrier, which is sensitive in nature, China is showing sincerity." Wang Fan, a professor at the China Foreign Affairs University, said the move may help reduce criticism of China's military ambitions. "By allowing the carrier visit, China is saying that it has nothing to hide about its military modernisation," he said. The relationship is often troubled by mutual distrust. Beijing fears its leverage in territorial disputes in both the East and South China seas will be lost as Washington strengthens its military presence in the region. Hagel reaffirmed this in Tokyo by promising to send two more missile defence ships to Japan. Zhu Feng, director of the International Security Programme at Peking University, said: "The competition triggered by China's demand to maintain territorial sovereignty and the US desire to keep its dominant position in the region is not going to be eased and this has triggered the possibility of military clashes. They need to find ways to contain such a possibility." Yue Gang, a retired colonel, said the carrier inspection showed China was confident about its military capability. "Some say the aircraft carrier is just a 'paper tiger' because it is not fully operational. But China wouldn't show it to the US defence chief if it was not sophisticated enough," he said.

Hong Kong*:  Apr 7 2014

Hong Kong property experts call for new tack to lure shoppers (By Peggy Sito and Sandy Li) With competition growing from the region and change in buying behaviour of mainland visitors, the government is urged to increase retail space - The government has been urged to provide more shopping facilities to cater to the increasing number of mainland visitors coming to Hong Kong on day trips. Hong Kong is still a shopping paradise, especially to residents from the Pearl River Delta, but a strategic plan for the next 10 years is urgently needed given growing competition from neighbouring cities and changes in the shopping behaviour of mainland visitors. The government is being urged to increase retail space supply to allow more shopping facilities near the border control point at Lok Ma Chau to capitalise on growing commuter traffic in the delta region, according to property consultants. They also raised attention to Macau. The territory's ability to replace Hong Kong as a shopping destination still seems unlikely, but the gaming mecca will see rising retail sales, which will attract more luxury brands as shopping facilities increase in the coming years. "The retail property market in Hong Kong has enjoyed strong growth in the past 10 years, bolstered by the individual visit scheme, rather than the city's strategic planning. As the shopping style of mainland visitors changes, what is our strategy to keep our competitiveness?" asked Helen Mak, a senior director at Colliers International. Mak noted a rise in less affluent mainland visitors and the change in tourist consumption from luxury goods towards mid-priced products - daily necessities such as beauty or personal care goods. The mainland's political campaign against extravagance might have curbed luxury consumption, she said. Hong Kong's retail sales fell 2.3 per cent from a year earlier to HK$40.5 billion in February, the first fall in value since August 2009, the Census and Statistics Department said. The value of sales of jewellery, watches and clocks, and valuable gifts increased 5.3 per cent, down from the 10 per cent growth notched in January. The increasing proportion of middle-class affluence is reflected by faster growth in the same-day visitor arrivals, according to Colliers. In the first six months of last year, same-day visitors from the mainland accounted for 65.4 per cent or 8.26 million tourists and it is essential for the government to discover a new retail hub to capture the increasing demand for shopping facilities. According to the latest report by the secretary for commerce and economic development, the city could see a 30 per cent increase in visitors to 70 million in three years. The increasing number of tourists will strain infrastructure in the city centre. On the other hand, same-day visitors would not necessarily head for the city centre if all they wanted to buy were daily necessities, Mak said. "The control point at Lok Ma Chau is one of the spots with the highest daily passenger throughputs and we believe the place should provide facilities to capitalise on the growing volume," she said. "Renowned brands at discounted prices, last-minute gifts and utilisation of time are the factors to induce purchases at control points' retail stores." The government also announced that Hong Kong Park, Victoria Park, Happy Valley racecourse and Kowloon Park are among areas initially selected for a pilot study on developing underground spaces. Mak said improved infrastructure between Hong Kong and the Pearl River Delta had increased Hong Kong's competitiveness, leading to larger numbers of mainland visitors. For example, when the Shenzhen-Hong Kong section of the Express Rail opens next year, travelling time from Shenzhen's Futian to West Kowloon Station would only take 15 minutes, she said. Thomas Lam, the head of research and consultancy for Greater China at Knight Frank, said establishing a shopping centre at the border was a viable option to capture passenger traffic. "Mainlanders' buying patterns have been changing. Those affluent and eager to buy luxury goods would have already visited Hong Kong in the past 10 years. Such visitors will drop and the buying list of luxury items will become shorter after their numerous purchases," Lam said. "The good old days that rely on luxury items to boost rents are over. The retail property market has peaked." Retail landlords also noticed the changes. Stephen Ng Tin-hoi, the deputy chairman and managing director at Wharf, said after the company's recent result announcement the company wanted to attract shoppers from neighbouring countries to reduce the reliance on mainland travellers. Instead of limiting the number of mainlanders visiting Hong Kong, Ng said: "We should come up with a solution to accommodate them." For example, Wharf has converted some office space at Harbour City in Tsim Sha Tsui into retail space. "It will help accommodate more retailers to meet the growing demand. We have seen positive results," Ng said. Another challenge the Hong Kong market is facing is a dearth of variety in retail outlets. High shop rentals have forced some long-established and distinctive retailers and restaurants out of prime shopping districts. Joe Lin, a senior director of retail services at property consultancy CBRE, said: "Hong Kong can no longer rely on its existing superiority as an international city and gateway to [the mainland]. "We need to highlight its uniqueness as a retail hotspot, expand its tenant mix and also focus more on cross-border growth to remain competitive." Hong Kong is ranked sixth among cities in the world that have the highest percentage of retailers at 40.5 per cent, according to a CBRE survey. In 2012, many international brands expanded through branches in the city but the number declined last year, while Singapore and Vietnam saw increasing number of global retailers opening, according to Lin. Hong Kong's retail industry remains heavily reliant on mainland visitors. Ng said those clamouring for curbs on the influx of mainland tourists should be aware that other markets were keen to attract these big spenders. Macau is one of those cities. Tom Gaffney, the head of retail at JLL Hong Kong, is optimistic of strong growth in retail sales in Macau, saying that 90 per cent of shoppers there came from the mainland. Retail sales in Macau rose 25 per cent to 66 billion patacas last year while Hong Kong's grew 11 per cent to HK$494 billion. Gaffney noted an increasing number of luxury brands, such as those selling watches, opening shops in Macau, attracted by strong sales and lower rents. In contrast, the expansion pace in Hong Kong slowed over the past few years. New shopping centres were being built as part of casino developments in Macau catering to tourists, he said. "As shopping facilities improve, fast fashion retailers such as Uniqlo and H&M are also eyeing the market there," said Gaffney. "Tenants receive good sales [in Macau] and the margins are much better." Tomorrow, an examination of mainlanders' spending on insurance in Hong Kong

 China*:  Apr 7 2014

China drills 7km borehole in 'roof of world' (By Stephen Chen Chinese exploration teams have drilled their deepest borehole yet in the "roof of the world". They have punched a seven-kilometre borehole into the Tibetan Plateau in their bid to tap the region's oil and natural gas resources. It is the deepest borehole ever drilled at such extreme altitudes, according to mainland scientists who are following the project. Tibet's remoteness, thin air and lack of infrastructure have so far saved it from the unchecked exploration and extraction of fossil fuels and minerals elsewhere in the country. But the government wants to lessen the country's dependence on oil imports and is funding domestic scientific research to the hilt. The latest project is shrouded in secrecy. Professor Li Haibing, a researcher with the Chinese Academy of Geological Sciences, would not reveal the project's location and declined to identify which state-owned oil companies were active in the region. But Li, who led one of the largest scientific drilling projects in Tibet, said: "Tibet's altitude and geology make it among the world's most difficult drilling locations. Fragmented [geological] structures, prone to collapse, increase the risks." Li, who works for the academy's Institute of Geology, also noted that "oxygen scarcity at higher elevations drains workers' energy considerably". China has been keeping a low profile about its exploration of resources in Tibet due to the sensitivity of the region, which has seen growing political and religious strife. The two largest state-owned oil and gas companies, China National Petroleum Corporation (CNPC) and China Petroleum and Chemical Corporation (Sinopec), did not respond to the South China Morning Post's queries on projects in Tibet. But information on their websites indicate that both firms have had footprints in the region for nearly 20 years. CNPC began exploring the Qiangtang Basin in central Tibet in 1995 and subsequently estimated the basin's oil reserves at 10 billion tonnes, or more than 70 billion barrels. In 1997, Sinopec established its first exploration centre in Nagqu county, with the aim of mapping the surrounding area with detailed seismic surveys and experimental drilling. Li said the central government was reviewing a proposal for a new "deep-earth" exploration project "submitted by the nation's most prominent geologists" to drill wells more than 10 kilometres deep to obtain study samples, with Tibet an area of the greatest interest. Last August, the China Geological Survey, under the Ministry of Land and Resources, signed a 20 million yuan (HK$25.1 million) exploration agreement with Sinopec after the Tibet region showed "enormous oil and natural gas potential", according to the ministry's website. The discovery of commercially viable flows of oil and natural gas in Tibet has the potential to develop the region's economy. Tibet has one of the lowest gross national products among China's administrative regions. Professor Wei Wenbo, a geologist with the China University of Geosciences and an expert on Tibetan geological conditions, said scientists continue to debate Tibet's oil and gas potential. It is hoped that samples from the seven-kilometre borehole will clarify some of the questions about the region's hydrocarbon and mineral resources. Wei said: "It is one of the last virgin territories for natural resource exploration on the planet, drawing interest from miners and drillers at home and abroad." The world's deepest borehole - the Kola Superdeep Borehole in northwestern Russia at 12,262 metres - was drilled by the former Soviet Union in the late 1980s. Wei warned against a rush to exploit Tibet's rich mineral veins. "Exploration and extraction of minerals and hydrocarbons in Tibet will require massive capital expenditure," he said, noting that infrastructural construction and drilling at such high altitudes drives up labour and logistics costs. Wei said mining projects had the potential to irreversibly mar Tibet's fragile ecosystems. "Environmental impact studies must be undertaken and risks assessed before commercial projects are approved," he added.

Hong Kong*:  Apr 6 2014

Hong Kong home completions rise with land supply (By Yvonne Liu Prices are expected to decline 10pc in HK this year as the number of private flats to be built heads for a nine-year high, led by the rural areas - Government figures show 17,610 flats will be completed in Hong Kong this year, 113 per cent more than in 2013. The number of private flats to be built in Hong Kong this year is expected to climb to a nine-year high after the steady increase of land supply by the government in past years. Figures from the Rating and Valuation Department's annual publication, Hong Kong Property Review 2014, showed 17,610 flats would be completed this year, 113 per cent more than in 2013 and the highest since 2005. However, private homes scheduled for completion next year will drop 28 per cent to 12,660. "The increase in completed flats does affect property prices. But the main factor affecting property prices is how many of these new flats will be released for sale in the market. You can see that the developers did not release a large number of flats for sale in the first quarter amid weak housing demand," said Thomas Lam, head of research at property consultant Knight Frank. "Unless there is an economic downturn or interest rates increase sharply, forcing developers to release a large amount of flats for sale and cut asking prices to levels below the going rates for second-hand flats, prices would only fall gradually." The department said property prices continued to rise in the first eight months of last year but started to ease in the fourth quarter, when they grew 9 per cent, compared with the year before. The residential rental index climbed 4 per cent during the period, the publication said. Lam said he expected property prices to drop 10 per cent this year. Flats in suburban areas with more new supply would experience a 15 per cent decline in prices, he said. Nearly 61 per cent of the flats completed this year will be in the New Territories, led by Tsuen Wan, Tseung Kwan O and Yuen Long. "Developers will prefer to release the flats in the New Territories and accept a lower price. But in prime locations such as Hong Kong Island, they won't cut prices and would prefer to sit on the inventory," Lam said. Meanwhile, completed office space this year is expected to increase to 148,000 square metres from 123,000 last year. Completion will double to 277,000 square metres in 2015. Grade A office space completion this year is estimated at about 115,000 square metres, all in non-core commercial districts. About 63 per cent of the new supply will come from Kwun Tong and Sha Tin. Office vacancy rate climbed to 7 per cent last year from 6 per cent in 2012 due to a "negative take-up" of 17,000 square metres. Negative take-up refers to the surrender of office space for factors including termination of rental contracts, relocation, downsizing and bankruptcy of the tenant. The tender for two residential sites in Shau Kei Wan and Tai Wai received 10 and eight bids, respectively, yesterday. A commercial plot in Cheung Sha Wan got 12 bidders. Surveyors estimated the three sites were worth a total of HK$1.05 billion to HK$1.6 billion. "The response has been good. Hong Kong Island lacks land supply and the Shau Kei Wan site has sea view and involves a small investment. That's why it attracted many medium-sized and small developers," said Alvin Lam, a director at Midland Surveyors. 

 China*:  Apr 6 2014

Chinese directors critique Hollywood and China's cinema (By Amy He in New York Directors Ang Lee (right) and Zhang Yimou speaking at an event held at Cooper Union in New York. The event is presented by LeTV and New York University's Tisch School of the Arts. The two directors discussed the Chinese cinema landscape as well as their experiences as filmmakers. As more Hollywood movie stars show up in China to promote their work in the world's second-largest box office, two of China's biggest film directors offered their views on Hollywood and the Chinese cinema landscape. Directors Ang Lee - a two-time Academy Award winner - and Zhang Yimou spoke to a small audience about "China's film" and "China's confidence" at New York's Cooper Union. The event was sponsored by New York University's Tisch School of the Arts and popular online video portal LeTV, a Beijing-based company that owns Le Vision Pictures, which produced Zhang's latest film Coming Home. The film is expected to premiere at the Cannes Film Festival in May. Reflecting on the movies popular in China now, Lee said that on one hand, directors are learning from Hollywood, but on the other, they're resorting to recycle, "and that's not good". The two directors talked about their upcoming projects, but they divulged very little. Lee said that he is working on a film about boxing, a 3D film that was first reported about last year, noting that there were some "difficulties, money-wise". He did not elaborate. Zhang said his next project will be a Hollywood project, a "large-scale" one that's going to be a "big challenge" to him. Zhang is a household name in China, famous for works like Raise the Red Lantern and House of Flying Daggers. He also directed the opening and closing ceremonies of the 2008 Beijing Olympics. The directors were given the opportunity at the event on March 27 to ask each other questions, and Zhang asked Lee about his place in the film industry as someone who can "inhabit both worlds", as a Chinese director who won Oscars for Brokeback Mountain and Life of Pi. "How do you put the Chinese world into your movies if you're making a movie for the world and you want the world to understand you?" Zhang asked. Lee said that the answer lied in "mastering the Hollywood style" and that there are "basic rules of movie-making that we all understand". He said that moviemakers have to find their own language, and then work on finding a common language with the world. Both Lee and Zhang took pride in China being the biggest movie market in the world. "Hollywood came to me, I didn't go to Hollywood," Zhang said, referring to his next project. "This cooperation with Hollywood will be good promotion for Chinese culture." Global box office sales for American movies released around the world were nearly $36 billion in 2013, and China made up more than $3 billion of that, according to figures released by the Motion Picture Association of America (MPAA). China became the first international market to exceed $3 billion in box office, according to MPAA, which represents six major US movie studios. Lee said that 20, 30 years ago, China didn't have a movie culture and then suddenly it became an in-demand market. But he said that China's world of cinema is not without problems. "I feel like culture is something that naturally grows. If you make it grow too fast, it won't be healthy," he said, and that movies need to find their audience naturally in order to be healthy. Directors and moviemakers cannot be either too artistically-inclined or business-oriented, Lee said. "In a market as big as China's, of course we all want to see it grow healthily, and wish for it to be better than America's. And America is not necessarily healthy right now, either. I kind of want China to help America a little," he joked.

Hong Kong*:  Apr 5 2014

Chow Tai Fook in HK$1.6b deal to buy Marriott London Grosvenor Square Hotel (By Yvonne Liu) Group and partners bank on British tourism boom as they snap up luxury Mayfair hotel - The 237-room Marriott London Grosvenor Square Hotel. The prospect of high returns and a British tourism boom prompted Chow Tai Fook Group and some partners to snap up a luxury hotel in central London for £125.15 million (HK$1.6 billion). The 237-room Marriott London Grosvenor Square Hotel is next to the US embassy in exclusive Mayfair and rooms go for about HK$2,500 a night. The deal works out at £528,000 for each room, making it the second-most expensive hotel deal in London this year in terms of price per room. New York-listed Strategic Hotels & Resorts announced it had sold the hotel to an affiliate of Hong Kong-based private equity firm Joint Treasure International. Daniel Yiu, senior adviser at Joint Treasure, said yesterday that he, Chow Tai Fook Group and some partners had bought the hotel. "The hotel is located in the centre of the city centre, the best of the best," he said. "It could offer a yield of more than 6 per cent. We are optimistic on the market outlook and the tax rates are lower than in the United States. "Although the hotel has a ground lease with only 43 years left, that is still more than the hotels in China with only 40-year land tenure. And about 70 per cent of the properties in the area are leasehold." Agents said Joint Treasure had seven partners, including the Wee family, owner of Singapore's United Overseas Bank, and David Chiu of Far East Consortium International. They said different partners were involved in different property purchases, depending on their preferences. George Nicholas, executive vice-president at property consultant Jongs Lang Lasalle's hotels and hospitality group, who was involved in the deal, said London was the most sought-after investment destination among hotel investors in Europe because of the strong and improving market fundamentals. James Innes, a partner at British consultancy Gerald Eve, said: "The new hotel room supply in London has failed to match growth in demand. Although looking ahead the pipeline for new rooms shows a steady increase of around 6,000 rooms per annum, forecasts ... show UK visitors will grow from 31 million in 2012 to over 40 million by 2020."

 China*:  Apr 5 2014

Buddhist temple monks recruited to new Kunming anti-terror squad (By Adrian Wan Members of the squad demonstrate how they would restrain a suspect. A Buddhist temple in Zhejiang province has set up a squad to deal with terrorist attacks. The unit at the Lingyin Temple in Hangzhou consists of 20 monks and 25 security officers and was formed in the wake of the knife attack at the Kunming railway station last month that officials blamed on separatist militants from Xinjiang, Xinhua reported. Twenty-nine people and four attackers were killed in the Kunming incident. The Lingyin temple near West Lake was built in AD326 and is a big tourist attraction in the city. Some people commenting on social media said they were saddened that a place of peace and contemplation had formed an anti-terror unit. Master Jueheng, a member of the unit, told Xinhua: "The Lingyin Temple receives about 10,000 visitors and worshippers every day. With this group we can raise awareness among monks about how to respond to sudden terrorist attacks and ensure visitors' and worshippers' safety. "Monks worship Buddhism in the day and have training at night," he said. Monks were drilled on how protective gear, including shields and truncheons, was stored around the temple in case of attack, said Jueheng. Monks had to be robust and agile, and aged between 20 and 40, to be considered for the squad, he said. The 25 security officers carry pepper spray and truncheons. The report did not say whether the monks also practiced martial arts as part of their anti-terrorism drills. Calls to the temple were not answered yesterday. Some internet users made light of the news, comparing it to the Shaolin Temple in Henan province, which is world-famous for the training it gives in martial arts. But some saw the more sombre side, lamenting the lack of a sense of peace and serenity at the temple. One said: "We go to the temple to purge ourselves and be free, kind and trusting. I wonder why even monks have to learn anti-terror tricks now?" Another said: "Why can't we leave the monks alone and just let them pray?"

Hong Kong*:  Apr 4 2014

Hong Kong-born Olivia Chow urges voters in SAR to help her defeat Toronto mayor Rob Ford (By Ian Young in Vancouver Mayoral candidate Olivia Chow says Canadians in SAR 'share shame' at crack-smoker's antics - Toronto mayoral candidate Olivia Chow has urged tens of thousands of Torontonians living in Hong Kong to help end the "embarrassment" of having Rob Ford as leader of Canada's biggest city. Chow, whose family migrated from Hong Kong to Canada when she was 13, told the South China Morning Post on Tuesday that Toronto residents living in Hong Kong shared the "sense of shame" that came from having a crack-smoking mayor. The former MP for the left-leaning New Democratic Party (NDP) said Canadian citizens in Hong Kong who were eligible to vote in October's municipal elections had the chance to restore pride to Toronto. She was visiting Hong Kong with fellow MPs in November when Toronto police confirmed the existence of a video that showed Ford smoking from a crack pipe. Ford's drunken escapades and his association with known gang members have also provided rich fodder for late-night comedians. "That was the exact time when Rob Ford made international news. So I saw Rob Ford on the front page of the South China Morning Post. I thought 'oh my God. We can't escape the embarrassment'," said Chow, 57, who is one of Canada's most prominent ethnic Chinese politicians. It is unclear how many Canadians in Hong Kong are eligible to vote in Toronto's elections. However, a 2010 survey conducted by the Asia Pacific Foundation suggested there were about 295,000 Canadian citizens in the SAR, most of them returnee immigrants. Since a large majority of Hong Kong emigrants settle in either Toronto or Vancouver, a conservative estimate of the number of Torontonians in Hong Kong would reach more than 100,000. Chow, the widow of former NDP and opposition leader Jack Layton, stepped down as a federal MP last month in order to challenge Ford. She said she believed Hong Kong's Torontonians felt "a fascination and a deep-seated embarrassment and sense of shame" about Ford's behaviour. "There we are on CNN, being recognised not as this most diverse and successful city, but as a laughing stock on Hollywood late-night shows," she said. Chow is considered the leading contender to oust Ford, who remains popular in working-class Toronto suburbs known as "Ford Nation". More than 40 candidates have registered for the October 27 race, with former provincial Progressive Conservative party leader John Tory the other main challenger. Chow has campaigned on the promise of creating a world-class public transport system in Toronto. She has also pledged to create jobs by cutting taxes on small businesses. The mayor's brother, Councillor Doug Ford, told the Toronto Sun last month that voters "may despise Rob Ford but I know deep in your heart if you had Olivia Chow taking care of your bank account or Rob Ford, you wouldn't care if Rob had 10 beers because he'd watch every single penny". A poll conducted by Forum Research on March 13, the day Chow launched her campaign, saw her leading the field of candidates, with 36 per cent of respondents supporting her. Ford had 28 per cent support and Tory 22 per cent. In the first televised mayoral debate, held on March 26, Ford's rivals mainly steered clear of the controversy surrounding his behaviour, and most observers thought Ford held his own. But Chow delivered the best line of the night, after the cost-cutting mayor boasted that he had been elected to "stop the gravy train". "Your gravy train has turned into a train wreck," Chow said. Chow said her primary message to potential voters in Hong Kong was that they should participate. "Toronto is your city too. You may want to come back to retire or invest … You want to be proud of your city," she said. Would-be overseas voters must register, with applications available via the Elections Canada website or at the Canadian Consulate General. Ballots are sent to registered voters, who must return them by mail to Elections Canada a week before the election date.

 China*:  Apr 4 2014

Trip builds bridge to Europe (By By Wu Jiao in Bruges, Belgium) President says China and EU can become twin engines of growth - President Xi Jinping, his wife Peng Liyuan (right), Belgian King Philippe (third from right) and Queen Mathilde (second from right) attend a ceremony to present the 300,000th Volvo car produced for the Chinese market at a Volvo plant in Ghent, northern Belgium, on Tuesday. Ending his European tour with a speech in the Belgian city of Bruges - derived from the old Flemish for "bridges" - President Xi Jinping said on Tuesday that he had come to Europe to build bridges of friendship and cooperation across the Eurasian continent. "We need to build four bridges for peace, growth, reform and the progress of civilization, so that the China-EU comprehensive strategic partnership will take on even greater global significance," he said. "We must uphold the open market, speed up negotiations on the investment agreement, actively explore the possibility of a free trade area, and strive to achieve the ambitious goal of bringing two-way trade to $1 trillion by 2020," Xi told dignitaries, including Belgian King Philippe, Queen Mathilde and Prime Minister Elio Di Rupo, at the College of Europe. In addition, they should study how to dovetail China-EU cooperation with the initiative of developing a Silk Road economic belt to integrate the markets of Asia and Europe, and make China and the EU the "twin engines" for global economic growth. Xi said China cannot copy the political system or development model of other countries. "The Chinese people, more than 2,000 years ago, had come to understand this from a simple fact that the tasty orange, grown in southern China, would turn sour once it is grown in the north," he said. "The fruit may look the same, but the taste is quite different, because the north is a different location and different climate." "The Chinese people are fond of tea and the Belgians love beer," he said. "To me, the moderate tea drinker and the passionate beer lover represent two ways of understanding life and knowing the world, and I find them equally rewarding." Xi said that one can hardly understand China without a proper understanding of its history and culture, and the profound changes taking place. That explained why he devoted nearly half of his speech to describing what kind of country China is. Xi said the memory of invasion and bullying has never been erased from the minds of the Chinese people, and is why people cherish the lives they lead today. "The Chinese people want peace, we do not want war. This is why China follows an independent foreign policy of peace," he said. China is committed to non-interference in other countries' internal affairs, and China will not allow others to interfere in its own affairs, he said. More than 200 million Chinese are still living under the poverty line set by the World Bank, roughly the population of France, Germany and the United Kingdom combined, Xi said. China is the second-largest economy in the world, he said, but is ranked 80th in per capita GDP. That explains why economic development remains the top priority, he said.

Hong Kong*:  Apr 3 2014

Hong Kong the 'best city in the world for commuters' (By Ada Lee Public transportation gets top marks in survey but cycling and air quality still a problem - A study praises Hong Kong's MTR saying it has turned the city's high population density "into an opportunity rather than a threat". Hong Kong is the best place in the world for people to travel around, but falls behind in cycling paths and air quality, a study has found. The study, involving 84 major cities across the globe, found the city had developed “the most advanced urban mobility system in the world”, with public transport being the main mode of commuting and the number of registered vehicles per head of population is one of the lowest. Hong Kong, which also topped the list in the last survey in 2011, scored 58.2 out of 100 this year, followed by Stockholm with 54.7, Amsterdam third and Copenhagen fourth. Singapore is in sixth place, after Vienna. London ranked ninth in the study, with Tokyo 19th and Beijing 28th, followed by Guangzhou. The Urban Mobility Index report, compiled by international consultancy company Arthur D Little, found Hong Kong’s railway system “impressive”, and the high use of Octopus cards also played an important part in securing the top spot. “MTR has turned Hong Kong’s high population density into an opportunity rather than a threat,” it said. It described the city as “a striking example of a city entering into a virtuous system”, but it noted that its mobility had been shaped by “one dominant operator” – the railway. “Further improvement of the mobility system will require more co-operation with other stakeholders in the ecosystem and the introduction of innovative mobility services”. Although the city fares well in most indicators of the study, its score in cycle path density was the lowest in the top 11 cities. Hong Kong only has 187 kilometres of cycling paths for every 1000 square kilometres of land, compared to 4,041 in Stockholm, 3,502 in Amsterdam and 280 in Singapore. The city also did not do well in the air quality indicators. The annual average transport-related emission of nitrogen dioxide stood at 50mcg per cubic metre, and there was 50mcg per cubic metre of particulate PM10. Government figures show the roadside nitrogen dioxide level has increased by a quarter since 2006. Hong Kong Cycling Alliance chairman Martin Turner said Hong Kong had great potential to become a bicycle-friendly city because of the compact urban area, and the government should stop treating cycling only as a leisure activity. He welcomed the government’s initiatives to improve and build cycling tracks in the New Territories but said more effort would be needed to extend the network to other areas. “We shouldn’t use [the high ranking of Hong Kong] as a reason for the absence of cycling.” Friends of the Earth’s Melonie Chau Yuet-cheung said poor air quality score could be attributed to the bad planning in Hong Kong, with buildings creating a wall effect. The many traffic lights also made cars stop and go frequently, generating exhaust fumes.She said the government should considering road charging in the busiest parts of the city or banning cars from entering certain districts. The study said 38 per cent of Hongkongers used zero emission modes of transport – cycling and walking. The organisation noted that it was much higher than the general public perceived. The Transport Department said it strived to promote bicycle-friendly environment in rural areas, new towns and new development areas and was carrying out a comprehensive review of the city’s cycling policy. The Environmental Protection Department said it was pleased with the survey. It had taken measures to reduce roadside pollution by phasing out some 82,000 pre-Euro IV diesel commercial vehicles, subsidising franchised bus companies to test hybrid and electric buses, and other schemes to control emissions. It would also work with Guangdong authorities to reduce emission in the region, it said.

 China*:  Apr 3 2014

EU-China research centre opens in Belgium (By SCMP) Facility at College of Europe to study ‘rapidly developing relations between the European Union and China’ - Jorg Monar, rector of the College of Europe, right, speaks at the opening of the EU-China Research Centre. The College of Europe, a postgraduate institute that trains European leaders and diplomats, opened its EU-China Research Centre in Bruges, Belgium, on Tuesday The opening came a day after Xi Jinping made the first visit by a Chinese president to the European Union’s headquarters in the historic city. Xi, accompanied by his wife, Peng Liyuan, was on the final leg of a 10-day, four-nation tour of Europe, his first as president. The European Union has 28 member states and is China’s largest trading partner. “The Centre aims to study the rapidly developing relations between the European Union and China by critical analysis and academic research,” the centre’s director, Jing Men said. The centre will undertake research, produce publications, organise conferences and promote co-operation between scholars who specialise in EU-China studies, she added. Following the inauguration ceremony, the centre and other institutions at the college began a two-day seminar on “China’s reform and its impact on the EU and the world”. On Friday, the college inaugurated its China Library, providing about 10,000 books and audio-visual publications in six languages that were donated by China’s State Council Information Office. The College of Europe was founded in 1949 to promote “a spirit of solidarity and mutual understanding between all the nations of Western Europe”. It has about 400 postgraduate students from more 55 countries. Its famous alumni include Danish Prime Minister Thorning Schmidt Helle, the British Deputy Prime Minister Nicholas Clegg, and ambassadors from countries across Europe. Sino-EU trade between has doubled since 2003 to 1 billion euros (HK$10.5 billion) a day, and a number of important trade deals were announced during Xi’s visit that included the Netherlands, France, Germany and Belgium. 

Hong Kong*:  Apr 2 2014

Pro-Beijing camp woo pan-democrats with ‘exclusive’ talks for Shanghai visit (By Jeffie Lam and Stuart Lau) Pro-Beijing figures 'will find a way' for rivals to have private meeting with officials in Shanghai - Lawmakers (left-to-right) Ronny Tong Ka-wah, Dennis Kwok Wing-hang, Emily Lau Wai-hing, Frederick Fung Kin-kee and Cyd Ho meet the press after discussing the details of a purposed meeting with Beijing officials in Shanghai with Legislative Council president Jasper Tsang Yok-sing. Pressure is growing on pan-democrat lawmakers to join a trip to Shanghai after pro-government figures said they would find a way for them to have an exclusive meeting with Beijing officials. This emerged yesterday when one of the hold-outs, Frederick Fung Kin-kee, of the Association for Democracy and People's Livelihood, said he was willing to go after hearing of the gesture. But other pan-democrats want a guarantee. "We still want the central government to give us a reply first on whether the officials are willing to have an exclusive meeting with us," Labour Party lawmaker Cyd Ho Sau-lan said. Only 44 of the 70 lawmakers - and just one pan-democrat, radical "Long-Hair " Leung Kwok-hung - had signed up by the deadline yesterday to join the visit on April 12 and 13 for talks with Beijing officials on Hong Kong's political reform. Pan-democrats have demanded an exclusive meeting with the director of the State Council's Hong Kong and Macau Affairs Office Wang Guangya , Basic Law Committee chairman Li Fei and central government liaison office director Zhang Xiaoming . Pro-Beijing figures including Legislative Council president Jasper Tsang Yok-sing believe such an arrangement is possible. Yesterday Fung quoted Tsang as saying he had heard of the possibility that establishment lawmakers would excuse themselves from a meeting with the Beijing officials to give pan-democrats an exclusive audience. "While the pro-establishment camp hopes an exclusive meeting can be arranged for pan-democrats, [Tsang] heard that some pro-Beijing lawmakers are willing to stay away and let pan-democrats have an [exclusive] dialogue with the officials," Fung said. Lawmaker Wong Kwok-kin said he believed most of his pro-Beijing allies would agree to such an arrangement. "We really hope - and would be very glad - to see pan-democrats finally start a rational discussion with Beijing officials on reform," he said. But Ip Kwok-him, of the Democratic Alliance for the Betterment and Progress of Hong Kong, said he would respect the arrangements made by mainland officials. Ho said the pan-democratic camp, which meets today, could make a decision by Thursday, when all parties would have consulted their members.

 China*:  Apr 2 2014

We should join hands, Xi tells EU (By WU JIAO and FU JING in Brussels and PU ZHENDONG in Beijing) Chinese President Xi Jinping (L) meets with Jose Manuel Barroso, president of the European Commission, in Brussels, Belgium, March 31, 2014. The two sides must start study on free trade agreement 'as soon as possible' China and the European Union should be partners for growth, offering each other opportunities and speeding up completion of an investment treaty, President Xi Jinping told European Council President Herman Van Rompuy on Monday. In the first visit to EU headquarters by a Chinese president, Xi told the bloc's top official that China expects Europe to expand high-tech exports, and that the two sides should start a feasibility study for a free trade pact as soon as possible. Xi, on the last leg of his first official tour of Europe, met with Van Rompuy, European Parliament chief Martin Schulz and European Commission President Jose Manuel Barroso. Xi said China firmly supports European integration and has committed itself to expanding and deepening a comprehensive strategic partnership with the EU. He proposed that the two sides take the lead in following a course of peaceful development by intensifying consultations and coordination on international and regional affairs to push for the political settlement of "hot" issues. As reform in China and the EU has entered "deep-water" zones, the two sides should share experience and step up cooperation on such reform priorities as the macroeconomy, social governance, public policies, rural development, employment and environmental protection. Van Rompuy said the Chinese president's presence at the EU headquarters is testimony that the EU-China comprehensive strategic partnership is on a firm footing. Echoing Xi, Van Rompuy said the EU is willing to speed up negotiations for a Europe-China investment agreement and for a free trade pact, and to cooperate with China in areas including urbanization, sustainable development and coping with climate change. The EU places emphasis on the new opportunities unleashed in China's reform and opening-up and hopes to broaden cooperation with the nation, he said. In an earlier interview with Xinhua News Agency, Van Rompuy said, "There are many common features in Europe's growth and job strategy and China's 12th Five-Year Plan — how to provide first class educational opportunities for our young people, how to encourage research and innovation, how to sustain a clean environment, reduce poverty, ensure effective public service and cut red tape for business. "In all these areas, we can learn from each other and exchange views on how to achieve our priorities," he said. Chi Fulin, president of the China Institute for Reform and Development, said, "Xi's visit to EU headquarters is of historic meaning, and the consensus achieved between Xi and Van Rompuy is also of great significance," — a reference to the fact that China and the EU have agreed to deepen partnerships in peace, growth, reform and civilization. Chi is among a group of Chinese experts attending a high-level seminar on China's reform and its implications to Europe and the world, hosted by the College of Europe on Tuesday and Wednesday, where Xi is scheduled to give a speech on Tuesday to wrap up his European tour. In a meeting with Barroso, Xi said he hopes Europe will keep markets open, exercise caution over the use of trade remedy measures and bring trade friction under control. Xi said he hopes the two sides will conduct equal dialogue and friendly consultations to "put out the sparks of trade frictions and let the flames of prosperous development rage". Barroso said the EU, in line with the China-EU 2020 Strategic Agenda for Cooperation, hopes the two sides will upgrade trade and investment levels as they negotiate the investment agreement and free trade pact. Both sides will properly handle trade friction in wireless communications equipment and other areas, he said. In view of last year's solar panel dispute between the two sides, Feng Zhongping, vice-president of the China Institutes of Contemporary International Relations, said the "lose-lose" game of trade friction will lead to China and the EU consulting each other on setting up an early warning mechanism to avoid serious damage. "In terms of reducing future trade disputes, the negotiation and signing of the China-EU Investment Agreement offers another perspective," Feng said. The EU is China's largest trade partner, while China is the EU's second largest. In 2013, bilateral trade reached $559 billion. Zhou Hong, director of the Institute of European Studies at the Chinese Academy of Social Sciences, said: "European integration offers a new perspective for China. The two sides can find common language on innovations in governance mechanisms and institutions. "On one hand, the integration process has effectively prevented vicious competition and brought peace among member states," she said. "On the other hand, the integration has led to prosperity because of the merger of many small state-level markets into one vast and well-functioning community."


Hong Kong*:  Apr 1 2014

Marine Department promises review amid shortage of mooring space (By Ada Lee With lack of berths driving up rents and illegal moorings, Marine Department promises review - Government will look into shortage of mooring space. Community pressure over Hong Kong's chronic shortage of mooring spaces, which has put the cost of boat ownership beyond the means of all but the most wealthy, has prompted a government review. Industry representatives warn that the shortage - estimated at about 10,000 spaces - is forcing skippers to berth illegally, while competition for available legal spaces has caused rents to double. The Marine Department has promised to launch a review of the berth situation within two months. The department is to appoint consultants in May, with the review to be completed by the middle of next year. According to tender specifications, the review will survey existing supply and demand for the spaces and make projections up to 2030, taking into account development plans. It will also look at whether more sheltered berths are needed, analyse occupancy levels at popular moorings and collect views from industry figures and the public. There are more than 15,000 fishing and leisure boats in the city, but the number of moorings is estimated to be less than 5,000. Baggy Sartape, of Asia Boating in Aberdeen, said the rent for a mooring space had doubled in the past five years. A berthing space at a private marina cost between HK$50,000 and HK$80,000 per month, he said. Sartape said some owners had taken to berthing two vessels on one mooring, while others sublet berths, despite both practices being illegal. He estimated that the number of boats increased 10 per cent each year, but said the last private moorings created were the 33 established 11 years ago in Cheung Sha Lan, Lantau. "Now, even if you are rich, you may not be able to find a sublet space, simply because there are no more," he said. He called on the government to create more mooring spaces, which would bring the rents down and enable more people to enjoy boating. Southern District councillor Paul Zimmerman suggested the Aberdeen Typhoon Shelter could be expanded to provide more mooring spaces. This would alleviate pressure on berths, while creating job and business opportunities, Zimmerman said. The district council is to discuss the issue tomorrow.

 China*:  Apr 1 2014

'Nubia', not iPhone, is Chinese first lady Peng Liyuan’s latest choice of smart phone (By Chris Luo [Peng Liyuan is a popular Chinese folk music and opera singer and the wife of Chinese president, Xi Jinping. A native of Yuncheng County, Shandong, Peng was a finalist at the First National TV Chinese Vocal Contest and is best known for works including People from Our Village and On the Plains of Hope] Peng Liyuan, wife of the president of the People's Republic of China, Xi Jinping, takes pictures next to Volkswagen CEO, Martin Winterkorn in Berlin, Germany on Saturday. Ever since Peng Liyuan dazzled the public on her first official appearance as China’s first lady a year ago, the former military singer's every movement, speech and choice of apparel has been closely watched by fans as well as analysts. And the latest social media craze about Peng among China’s online community is, “what cellphone is she using?” On Saturday, a picture of Peng snapping photos with a white mobile phone emerged on the internet, prompting curious internet users to speculate over exactly what brand the first lady favoured. A smiling Peng was seen sitting between her husband Xi Jiping and Volkswagen CEO Martin Winterkorn, raising a white smart phone to take pictures of a friendly match between German and Chinese youth soccer teams in Berlin, during the couple's state visit to Germany. Although only the back of the smartphone and no logo was visible in the photo, gadget-savvy web users soon discovered that Peng's phone was a Nubia Z5 mini, a one-year-old model made by Chinese firm ZTE, the world’s seventh-biggest smartphone maker. The budget smartphone retails between 1,499 yuan and 1,888 yuan (US$241-304), but is no longer available on Nubia’s official website as it has been replaced by newer versions. Peng’s new handset choice, a far cry from the iPhone 5 she was pictured using on her US trip last June, drew applause from many Chinese netizens who saw it as a demonstration of the first lady's support for domestically manufactured products. Many Nubia fans wrote on social media that they were delighted to discover the first lady shared the same taste with them. In addition, the companies concerned have been quick to bank on the revelation as a marketing windfall. The official Weibo social media account of the brand Nubia on Saturday night reposted the photo of Peng holding the phone, and added the comment: “the Chinese dream starts from Chinese-made,” a reference to Peng’s husband President Xi Jinping’s iconic political slogan. It also added a tag referring to the handset as the “cellphone [used by] the mother of the nation,” playing on a popular nickname for the first lady. And the microblog of, China’s second largest e-commerce website and Nubia’s exclusive distributor, commented: “Recording the Chinese dream, using a JD phone … the flagship cellphone is Only Available on” But a number of online users did not find the 'patriotic' narrative quite so plausible. “Isn’t the [cellphone’s] operating system still Google’s Android?” one blogger observed in a comment echoed by a number of others. Some others questioned the appropriateness of the brand name, which sounds very much like “niubi” – a somewhat vulgar slang term meaning “badass” or “kickass”. Peng earlier won praise from mainland internet users and fashion experts when she sported outfits designed by the Chinese fashion icon Wuyong, as many fashion critics called the brand choice “elegant,” “dignified,” and “falling in line with her identity”. The latest online frenzy surrounding Peng has also prompted a number of businessmen to try to promote copies of everything Peng wore from coats to handbags on Taobao, a major online shopping website in the mainland. The 51-year-old Peng is among China’s most famous folksong singers working for the People's Liberation Armyand, and used to hold a non-combat rank equivalent to that of a major general. Her successful singing career made her a household name in the 1980s, years before her husband emerged as a rising political star. 

Hong Kong*:  Mar 31 2014

Hong Kong's dominates Dubai sprint features in successful international raid (By Alan Aitken in Dubai Joao Moreira puts on a demonstration to the world, winning the Al Quoz Sprint aboard Amber Sky and the Golden Shaheen on Sterling City, but the Hong Kong team could not match their rivals in the bigger races - Sprinters carried the day for Hong Kong's assault on the Dubai World Cup, answering the call for multiple wins by bringing home the two short course Group Ones but the longer races proved a back-to-earth experience as the Japanese and then the Godolphin team waltzed off with the biggest money races. Joao Moreira was one of the stars of the show, donning a gift of a Brazilian flag from an excited fan as he returned with Ricky Yiu Poon-fai-trained Amber Sky after the Al Quoz Sprint but Team Moore found him a bauhinia flag to sport as he came back with Sterling City, who beat Rich Tapestry in the Golden Shaheen 40 minutes later in a triumphant Hong Kong quinella. An incredible three wins beckoned but Hong Kong's fortunes tapered off as the Group One races got longer, with Blazing Speed well beaten a long way from home in the Duty Free, Dominant brave in the Sheema Classic after early interference, and the World Cup a popular home town result for Godolphin's African Story while Akeed Mofeed (fifth) and Military Attack (10th) were never threats. "I have to be pretty happy with my night - to win two races was fantastic," Moreira said and he was showing all the skills - in front throughout on Amber Sky for Ricky Yiu Poon-fai and the horse's owner, martial arts legend, Sammo Hung Kam-po, then waving his wand across John Moore-trained Sterling City just when compatriot Rich Tapestry looked to have him beaten. Joao Moreira after winning the Golden Shaheen with Sterling City. "We have 1,200 horses in Hong Kong and look what we're doing at the biggest meeting in the world," said Moore, after the Golden Shaheen quinella, echoing the predictions he had made on Friday that Hong Kong would win multiple events at the meeting. Amber Sky was simply too quick over the straight 1,000m in the Al Quoz, holding a neck margin to the line. "I don't know what to say - I don't even believe it yet," said Hung after a win that was months in planning for Yiu. "In the mornings in Hong Kong, we have been taking him for long walks, before and after trackwork, doing everything to get him to settle down and keep calm," Yiu said. "I still remember seeing Amber Sky as a yearling and my first impression was that he would make a two-year-old. But he has just kept improving." Asked to compare the speedster with other greats he had handled, like Sacred Kingdom and Fairy King Prawn, Yiu said it was not a fair question. "So far, Amber Sky is a 1,000m straight horse. Those other horses won around the turns, at different distances, so you cannot compare them," he said. "But I'm hoping Amber Sky will continue to improve, learn to handle the turns and run 1,200m in time." If Moreira's Al Quoz win was anticipated and looked straight forward during the race, Sterling City's win was anything but assured as the sprinter was being cajoled by the Brazilian approaching the home straight. "This was his first time on the Tapeta, he has never experienced it and the kickback was affecting him," Moreira said. But Moore was a relieved man when Moreira hooked right on the gelding, moved into clear space and Sterling City launched his finishing sprint. "Sterling City has beaten Rich Tapestry every time they have met in Hong Kong, but he had won easily here on this surface and I was thinking about that in the run," Moore said. "But we're lucky to have the Magic Man on." "This is my first win in Dubai and also the first for Team Moore - my son George rode Sterling City in his work here and my daughter, Caroline, told me she would love to strap a horse here and I said Sterling City is a very quiet horse and he'd be perfect." "I want to mention Henry Plumptre too - this isn't one of the horses I've bought for my owners at the sales. We got him through Henry, and the Lings and I are very grateful." Yiu indicated that further overseas action may be ahead for Amber Sky - with consideration given to the King's Stand Stakes or possibly Melbourne - while Moore indicated Singapore as the next target for Sterling City, but Royal Ascot may be on the agenda thereafter. Michael Chang Chun-wai had to settle for second with Rich Tapestry, but was taking nothing away from the winner. "We had to do a little more this time from the 12 barrier, but he was there to win, the winner was just too good. I am very proud of my horse," Chang said.In the Al Quoz, veteran Joy And Fun, the 2010 winner of the race, bowed out of racing unplaced but with a typical fighting effort - beaten just over a length for fourth placing - while trainer Richard Gibson said he was not disappointed with Akeed Mofeed's fifth. "I can't be disappointed with Akeed Mofeed - Douglas Whyte gave him a great ride, I thought he was going to hold on for third but they got to him the last bit," said Gibson. Moreira said he had not persevered strongly with Blazing Speed when he was dropping out 600m from the post, but had a troubled run on Military Attack and said Dominant (fifth) was caught up in an incident when Mars, reportedly suffering a fractured pelvis, ran off the course and through the outside rail at the first turn in the Sheema Classic. "Dominant was actually quite good, considering that and the wide gate and he finished very strongly in the straight," Moreira said. "And Military Attack was not happy in the gates, then he got a bump on the first turn and I don't think he enjoyed the kickback on the Tapeta. If he had clear room in the straight, he might have run three or four places closer."

 China*:  Mar 31 2014

Wartime atrocities still fresh in memory, President Xi Jinping says in Berlin (By South China Morning Post Staff Reporter and Associated Press in Berlin) Xi says in Berlin that China must build up defences, while stressing desire for peace - Volkswagen chief Martin Winterkorn presents a soccer shirt to Xi and wife Peng Liyuan at a match involving Chinese youngsters. President Xi Jinping said during his visit to Germany that Japanese atrocities during the second world war were still "fresh in the memory" in China and that the nation needed to build its defences to safeguard against aggression. In a speech in Berlin, Xi also reiterated that China's rise posed no threat to the world and that it was committed to creating friendly partnerships with its neighbours. His comments came after an earlier speech in France during the president's European tour in which Xi compared China to an "awakened lion" which he said was "peaceful, pleasant and civilised". In his speech in the German capital, Xi also said China was no Mephisto, a fictional demon character in German literature. "Some view China through coloured glasses and believe it will inevitably become a threat and even portray China as being the terrifying Mephisto who will someday suck the soul of the world," he said. These opinions, he said, highlighted deep prejudices against China. Xi mentioned Japanese aggression twice in his speech and said China understood the importance of peace. "The war of aggression committed by Japan militarism alone inflicted over 35 million Chinese military and civilian casualties. "These atrocities are still fresh in our memory … China needs peace as much as human beings need air and plants need sunshine," he told a forum attended by politicians and business representatives. In a question-and-answer session at the forum, Xi appeared willing to take on some sensitive questions, including China's territorial disputes in the South China Sea with neighbours and the nation's defence budget. "It is purely normal and consistent with China's need to defend itself as a large country in the world," he said of China's defence spending. "On the issue of the South China Sea, we will not provoke trouble ourselves. But when it comes to our sovereignty and territorial integrity we will firmly safeguard our interests." Business ties took centre stage at Xi's meeting with German Chancellor Angela Merkel. The two leaders oversaw the signing of deals including agreements by carmakers Daimler and BMW to deepen ties with their Chinese partners. A deal was also signed between the countries' central banks that will allow yuan-denominated payments to be cleared and settled in Germany's financial centre, Frankfurt. Xi also called for a "quantum leap" to boost economic ties with Germany. Germany is China's largest European trading partner, while China is Germany's biggest export market outside Europe after the United States.

China mulls global satellite surveillance after flight 370 riddle (By Stephen Chen Beijing mulls launching network of dozens of satellites, giving it the ability to monitor the whole world, in wake of lost flight 370 - China is considering massively increasing its network of surveillance and observation satellites so it can monitor the entire planet, scientists working on the project said. The government is mulling building more than 50 orbiting probes, which Chinese researchers said would make the nation's satellite surveillance network on par with, or even larger than, that of the United States. Frustration with the search for the missing Malaysia Airlines aircraft over the past three weeks had led the project to win strong backing from decision makers in Beijing, the researchers said. "If we had a global monitoring network today, we wouldn't be searching in the dark. We would have a much greater chance to find the plane and trace it to its final position," said Professor Chi Tianhe, a researcher at the Chinese Academy of Sciences' Institute of Remote Sensing and Digital Earth. "The plan is being drafted to expand our regional monitoring capability to global coverage." The number of surveillance and observation satellites now operated by China, which largely focus on the nation and surrounding region, is a state secret, but Chi estimated the US operated about 50 similar satellites. It was not known when the project might start, but if approved by the government the satellites could be launched in as few as two years, according to Chi. A satellite costs about 400 million yuan (HK$503 million) to build, according to estimates from experts in the mainland's space industry, meaning the total budget for the project would be at least 20 billion yuan. After the Malaysia Airlines flight went missing, the Chinese Academy of Engineering submitted a letter from senior scientists to state leaders urging them to start construction of a global satellite-surveillance network as soon as possible, according to sources close to the academy. Professor Liu Yu, a remote-sensing expert at Peking University's school of earth and space sciences, said the project had "almost incredible ambition" and if approved would be a game changer for China's ability to carry out observation from space. More than 1,000 satellites now orbit the earth, but most are for communications. About 150 are earth-observation, remote-sensing and military-surveillance satellites, according to statistics from the US-based Union of Concerned Scientists. "International earth-observation services today are dominated by the US and European countries, but if China launches more than 50 satellites for this purpose, the whole landscape will be changed," Liu said. "The more Chinese satellites there are in space, the easier our work becomes. By analysing data from numerous satellites positioned at different locations and equipped with different sensors, we can understand much better an area of interest." The project faces technological challenges even if it does get approval from the government. China launches about 15 conventional satellites a year and would need to nearly double that if it was to meet its target of swiftly deploying a global network. That would stretch the limit of existing space centres such as Jiuquan , Taiyuan and Xichang , which are also involved in other missions, including lunar exploration and manned space flights. But the upgrade of China's largest launch centre at Wenchang in Hainan province is complete, with the first launch scheduled this year. This would significantly boost China's rocket-launch capacity and make the project possible, space-industry experts said. Scientists also need to improve the technical quality of the imaging equipment used in satellites, according to Liu, although progress has been made. Professor Guo Ziqi, who also works at the Institute of Remote Sensing and Digital Earth, said the 50 or so new satellites would be run by numerous ministries, making co-ordination difficult. China did not have a central agency to co-ordinate the positioning or tasks of satellites, he said. Professor Zhao Chaofang , an oceanographer at the Ocean University of China in Qingdao , said China would also need to build many more ground stations at home and overseas to maximise the speed of sending back data. "Many Chinese satellites can only offload their data when they are flying over China, so the data we receive is sometimes only a fraction of the amount collected by the satellites," he said. "To build up a global monitoring network as efficient as that of the US, our ground stations overseas must be expanded as well."

 *News information are obtained through various sources: South China Morning Post, The Standard, Hong Kong Trade Development Council, Hong Kong Economic and Trade Office, Hong Kong Government, Asia Society, Wall Street Journal, China Daily, Xinhua, World Journal, The Singtao Newspaper, TVB, CCTV Stations in China and others that are deemed reliable, but not guaranteed

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