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May 31, 2007
Two plots of land went under the hammer in Hong Kong on Tuesday, fetching a total of HK$1.74 billion (US$223 million), at the lower end of analysts expectations.
The tax on wine should be cut further, to less than 20 per cent, to help make Hong Kong an international wine-selling hub, Liberal Party chairman James Tien Pei-chun said yesterday. China was on course to catch up with the United States and join the front ranks of world economic powers but that was little cause for concern, even among Americans, according to a global survey released on Monday. But the same poll showed there was generally as much distrust of the United States as there was of China to "act responsibly" in world affairs. Most respondents in 13 countries agreed it was "likely that someday China's economy will grow to be as large as the US economy", according to the opinion poll by the Chicago Council on Global Affairs and WorldPublicOpinion.org. "What is particularly striking is that despite the tectonic significance of China catching up with the US, overall the world public's response is low key - almost philosophical," said Steven Kull, editor of WorldPublicOpinion.org. In no country was there a majority who felt that China's economic rise would be mostly negative, but that was not because China was particularly trusted, the pollsters said. Majorities in 10 out of 15 countries said they did not trust China "to act responsibly in the world". But the same number also said they distrusted the US. "Though people are not threatened by the rise of China, they do not appear to be assuming that it will be a new benign world leader," Mr Kull said. "They seem to have a clear-eyed view that China is largely acting on its own interests." The Chinese themselves are among the more sceptical populations, with only half saying that their economy will catch up with that of the US. Among Americans, the percentage was 60 per cent. Only in India and the Philippines did a plurality of respondents say the US would always remain a bigger economy than China. The highest level of concern about the implications of China's economic march was in the US, where one in three is worried. But 54 per cent of Americans said that its rise would be "neither positive nor negative" while one in 10 said it would be mostly positive. Only in Iran did a majority - 60 per cent - say that it would be "mostly positive for China to catch up". "Their favourable outlook may stem in part from heavy Chinese investment in Iranian oil as well as Iranian desires to have a counterweight to American power," the pollsters said. The survey included 18 countries: Australia, Argentina, Armenia, China, France, India, Iran, Israel, Mexico, Peru, the Philippines, Poland, Russia, South Korea, Thailand, Ukraine, and the US, plus the Palestinian territories. Not every question of the poll was asked in each country, so that the results for some questions covered less than 18 countries.
Visiting Chinese Commerce Minister Bo Xilai in Ottawa Monday held talks with Canada's International Trade Minister David Emerson on ways to boost bilateral trade.
China will release the country's first regulation on food recall by the end of this year as part of efforts to improve food safety, a senior official has said. The move by the General Administration of Quality Supervision, Inspection and Quarantine comes in response to a recent spate of food safety scandals. Wu Jianping, director general of the food production and supervision department of the administration, told China Daily that the recall system mainly targets potentially dangerous and unapproved food products. The regulation - whose final draft will be ready by the end of the year and will be in line with international practices - stipulates that food production and sales companies should take back their products which are confirmed to endanger people's health, Wu said. "All domestic and foreign food producers and distributors will be obliged to follow the system," he said. Till now, only one section in a regulation on product inspection - issued in 2002 - touches upon food recall and the need for such a system. Among major food recall cases are enterobacter sakazakii-affected Wyeth milk powder in 2002 and Sudan-red related products in 2005. "Implementing the recall system for all food products will be a gradual process," Wu emphasized. Despite tainted-food scandals in recent years, the official said the quality of food products in China has been on the rise, especially after the country set standards for food-related products in 2002. To date, more than 525 kinds of food products in 28 categories, and more than 80,000 food enterprises have acquired market access permits. This year, another seven categories, such as food utensils, additives, detergents and disinfectants, will be required to get market permits. In a related development, the State Food and Drug Administration (SFDA) plans to blacklist food producers which break rules; and serious violators could be barred from the market. The SFDA yesterday launched a nationwide campaign on drug safety inspection. From May 28 to June 8, a total of 90 officials will be sent to 15 provinces.
Hitachi is to build a new elevator factory in Shanghai with an annual output capacity of 10,000 units, according to company sources. Hitachi, which already has elevator factories in Guangzhou and Tianjin, expects the completion of the Shanghai facility in January. It involves a registered capital of 40 million U.S. dollars and covers a 185,000-square-meter site. Completion of the facility will boost Hitachi's annual elevator production capacity in China to 35,000 units, the company said. China's elevator market saw an annual growth rate of 25 percent since 2000. The country became the largest elevator market, buying more than 150,000 units in 2006, sources said. The upcoming Beijing Olympic Games, Shanghai's World Expo and Guangzhou's Asia Games were bound to expand the market, analysts said.
May 30, 2007
Local companies sending spam e-mails have been warned of the stiff penalties when the anti-spam law comes into effect Friday, but the telecoms watchdog says it may be difficult to deal with overseas firms involved in the practice.
Hong Kong has been urged by a leading international environmental scientist to set its own target for reducing greenhouse gas emissions, even though Beijing has yet to set any national targets.
Mainland piped-gas distributor China Gas Holdings (0384) will invest 1.2 billion yuan (HK$1.23 billion) in a second gas liquefaction plant in the northeast of Sichuan province. Tingyi (Cayman Islands) Holding (0322), China's biggest packaged- food maker, reported first-quarter net profit jumped 20.6 percent year on year while market share for the group's core products continued to climb. Shanghai reappointed Mayor Han Zheng as a Communist Party deputy secretary yesterday, indicating he will remain in the city for now after a corruption case that led to the sacking of the city's previous party secretary. Despite official efforts to counter the soaring price of pork on the mainland, shoppers were still concerned yesterday that the price of other everyday necessities would follow the rising cost of the meat. A former employee of BNP Paribas allegedly bribed a mainland official to gain an underwriting contract for the country's first euro-denominated foreign bonds, according to a mainland media report. Bank of China is planning to tap the Hong Kong debt market by selling as much as three billion yuan worth of bonds denominated in the Chinese currency, the lender said. May 29, 2007
Shanghai Fosun Group, one of the largest privately owned conglomerates in the
mainland and parent of developer Shanghai Forte (2337), is looking to raise US$1
billion (HK$7.8 billion) in a listing in Hong Kong.
Longhu Real Estate, a Chongqing-based luxury developer, is planning an initial public offering of up to US$1 billion in Hong Kong this year, capitalising on investors' appetite for mainland property plays.
The Shanghai Stock Exchange (SSE) on Monday ordered all Special Treatment (ST) companies to publicize a biweekly report to inform investors about possible risks, according to a statement on its website. April saw the value of total exports of goods in Hong Kong rise to 212.6 billion HK dollars (27. 2 U.S. dollars), up 12.6 percent on the same month last year, official figures indicated Monday. The figures came after a year-on-year rise of 6.9 percent in March, according to figures released by the Census and Statistics Department of the Hong Kong Special Administrative Region. Within this total, the value of re-exports grew 14.3 percent to 204 billion HK dollars, while the value of domestic exports fell 16.1 percent to 8.6 billion HK dollars. The value of imports of goods rose 14.7 percent to 233.2 billion HK dollars, after a year-on-year increase of 11.1 percent in March. A visible trade deficit of 20.6 billion HK dollars, equivalent to 8.8 percent of the value of imports of goods, was recorded in April. For the first four months of the year, the value of total exports of goods rose 10 percent over the same period last year. Within this total, the value of re-exports grew 12.5 percent, while the value of domestic exports dropped 29.3 percent. The department said the trade prospects in the near term will continue to hinge on the global economic situation, in particular the demand in the US. Also of crucial significance to Hong Kong's trade outlook is continued strength in the Mainland economy and its vibrant trade flow. (One U.S. dollar equals 7.813 HK dollars). Xi Jinping was elected secretary of the Communist Party of China (CPC) Shanghai Municipal Committee on Monday.
The Industrial and Commercial Bank of China, the nation’s largest lender, said on Monday it plans to boost the budget for fixed-asset investment by nine billion yuan (US$1.17 billion) this year. Beijing plans to make a major push to develop solar energy projects this year in a bid to meet its 2010 target and it is likely to award projects by open bidding to keep costs down, according to a policymaker. Greater China has become the largest market for high-end "smart phones" made by Nokia, the world's biggest maker of mobile telephones, and is a growing source of product innovation in mobile applications, according to executives of the Finnish company. China, the biggest producer of Bluetooth headsets, will also become one of the world's largest markets for the wireless accessories as communications network operators and mobile-telephone vendors expand their marketing efforts, an industry expert says. Global telecommunications equipment supplier Ericsson is reviewing its alliance with mainland peer ZTE Corp on the development of TD-SCDMA wireless technology solutions, according to the Swedish company's Greater China president. May 28, 2007
The officials of Hong Kong Special Administrative Region (HKSAR) will be invited to attend a fashion show and even walk on the catwalk early next month to encourage more casual dressing in the workplace for saving energy, local press reported on Friday. Chief Executive Donald Tsang has agreed to officiate the event, and all 14 secretaries have been invited to attend the show on June 3, Sing Tao Daily cited a government source as saying. The event, currently entitled "Dress smart-casual for work for energy-saving's sake", will be held two days before the annual United Nations World Environment Day on June 5, which focuses on climate change and the effects of global warming. Among those already prepared to exchange their suits and ties or formal wear for a more casual look on the catwalk are Secretary for Health, Welfare and Food York Chow and Secretary for the Environment, Transport and Works Sarah Liao, according to the report. The catwalking officials will have advice from experts on what to wear. In July 2006 the government began promoting light dressing for work in its Action Blue Sky Campaign.
Senior government officials are to take to the catwalk early next month in an attempt to get Hong Kong's army of executives and overdressed salesmen to cut down on energy waste by dressing "smart-casual," according to a source within the administration.
President Hu and Japanese PM Abe are likely to meet on the sidelines of the G8 summit in Germany next month. Foreign Ministry spokeswoman Jiang Yu said yesterday that the officials of the two countries are working to coordinate the talks and the result would be announced next week. Japanese media said the nuclear issue on the Korean Peninsula and the dispute over gas exploration rights in the East China Sea would be high on the agenda of Hu-Abe talks. It would be the third meeting between the two leaders since Abe visited China last October soon after taking office in a bid to mend bilateral ties. They met again a month later in Vietnam on the sidelines of the Asia-Pacific Economic Cooperation Forum.
More than 1.9 million couples got divorced in China in 2006, an increase of 128,000 couples or 7 percent on the previous year, a report said.
People's Bank of China governor Zhou Xiaochuan said
yesterday that the government will not exercise any monetary restraints in the
near future. "The government needs time to observe the feedback of recent
policies before taking further measures to cool down the economy," Zhou told
reporters after meeting with the United States' senators during the U.S.-China
Strategic Economic Dialogue in Washington. Last Friday, the central bank raised
the benchmark one-year interest rate by 0.27 percentage points to 3.06 percent,
and one-year lending rate by 0.18 percentage points to 6.57 percent. It also
ordered commercial banks to set side 11.5 percent, of their deposits as
reserves, up from 11 percent. That marked the first simultaneous use of two
monetary tools in a decade, as well as the eighth increase in reserve ratio
since last July and fourth interest rate hike since last April. Also on Friday,
the reminbi's daily trading limit against the US dollar was widened to 0.5
percent from 0.3 percent. Undaunted by the latest tightening measures, Chinese
stocks has rebounded this week, though with strong daily up-and-downs. Xiang
Huaicheng, Chairman of the National Council for Social Security Fund, admitted
that the Chinese mainland's stock market has turned somewhat overheated
recently. "The bubbles exist", he said. "But the stock market is just like beer,
it is good to have some bubbles unless there are too many." However, he pointed
out that investors should be fully aware of the risksin the market.
May 26 - 27, 2007
The government Wednesday won the first round of its battle to dismantle and relocate Queen's Pier when the Legislative Council's public works subcommittee approved its request for HK$50 million to do the job. Pavements along Mong Kok's famous Tung Choi Street - one of Hong Kong's most popular open bazaars - are to be widened under an ambitious program to improve and upgrade major shopping areas in the district.
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Green Futures (Hong Kong) Limited, a leading Chinese mainland-based financial
group Tuesday announced that it becomes the first mainland futures starting
business in Hong Kong after receiving permission from Hong Kong Securities and
Futures Commission. Analysts believe, Green Futures, the first out of 180
futures companies in the Chinese mainland, with its expanding business to Hong
Kong is the fruit of the recently expanded Closer Economic Partnership
Arrangement III (CEPA III), the provisions of the free trade between Hong Kong
and Chinese Mainland, which allow for Chinese mainland securities and futures
companies to run businesses in Hong Kong. Wang Shuan-hong, Chairman and
President of the Green Group, believe its establishment in Hong Kong will
provide a strong platform for the group to speed up alignment with international
markets. While the Director-General of Investment Promotion at Invest Hong Kong,
Mike Rowse, echoed that Hong Kong, aiming at strengthening its role of financial
center of the region, wants to offer a highly mature financial market for
qualifying mainland companies to develop closer ties with their Hong Kong and
overseas counterparts and clients. 
A prospective buyer views an oil on
canvas painting by Chinese artist Xu Beihong entitled "Portrait of a Lady". Two
contemporary Chinese works of art sold Sunday for record prices at auction in
Hong Kong, underlining a growing demand for modern Asian art. An abstract
painting by Zhao Wuji entitled "14.12.59" set a record for the artist when it
went under the hammer for 29.44 million Hong Kong dollars (3.78 million US
dollars). And two hulking brass sculptures called "Taiji Series -- Big Sparring"
by Ju Ming also set a record for the artist at 14.89 million dollars. The two
items were among hundreds of lots worth more than a billion dollars that are
going under the hammer at the Christie's Spring sale of Asian art over the next
four days. Although the identity of the buyers was not revealed, Eric Chang,
senior vice-president of 20th century Chinese art at Christie's, said all buyers
were Asia-based. Among other big sellers was the elegant "Portrait of a Lady" by
Xu Beihong, the current darling of the Asian art world, which fetched nearly 30
million dollars with fees taken into account. Xu's "Put Down That Whip" sold
earlier this year for 72 million dollars -- the highest price commanded for a
Chinese painting at auction. Also on Sunday, the stark "Scenery of Northern
China" by Wu Guangzhong sold for 31.68 million dollars. Christie's and its rival
Sotheby's have been holding twice-yearly sales in Hong Kong since the mid-1990s
as growing wealth in China has fuelled a bonanza in the Asian art market. Some
art historians have criticized the recent explosion in the prices for Asian art,
which 10 years ago was struggling to attract any interest, and have criticized
over-exuberant first-time buyers for sending prices sky-high.
Riyo Mori, Miss Japan 2007, right, reacts as she wins the Miss Universe 2007
title in Mexico City, early on Tuesday (HK time) as Zuleyka Rivera, Miss
Universe 2006, looks on.
China: China
has allowed its currency, the yuan, to appreciate by more than 7.5 percent
against the U.S. dollar since it scrapped the yuan-dollar peg in July 2005, said
the country's central bank.
Tianjin FAW
Toyota Motor Co., LTD. holds the unveiling ceremony for its third plant and
Corolla at Tianjin Economic and Technological Development Zone on Monday. The
plant occupies 400,000 square meters, with an annual output capacity of 200,000
popular sedans.
Zheng Xiaoyu,
former director of China's State Food and Drug Administration (SFDA), was
sentenced to death by a Beijing court Tuesday morning. Zheng, 63, was convicted
of taking bribes and dereliction of duty, according to the first instance
hearing of the Beijing Municipal No. 1 Intermediate People's Court. He received
the death penalty on the graft charge and 7 years in imprisonment for the charge
of dereliction of duty. All Zheng's personal property was confiscated and he was
deprived of his political rights for life. The death sentence was appropriate,
according to the court, given the "huge bribes involved and the great damage
inflicted on the country and the public by Zheng's dereliction of duty". The
bribes taken by Zheng, including cash and gifts, were worth more than 6.49
million yuan (about 850,000 U.S. dollars), according to the court. The bribes
were given either directly or through his wife and son. The court said Zheng
"sought benefits" for eight pharmaceutical companies by approving their drugs
and medical devices during his tenure as China's chief drug and food official
from June 1997 to December 2006. "(Zheng's acts) greatly undermined the
uprightness of an official post and the efficiency of China's drug monitoring
and supervision, endangered public life and health and had a very negative
social impact," the court said. Zheng violated reporting rules and
decision-making processes when approving medicines from 2001 to 2003. He failed
to make careful arrangements for the supervision of medicine production, which
is of critical importance to people's lives, said the court. The consequences of
Zheng's dereliction of duty have proved extremely serious. Six types of medicine
approved by the administration during that period were fake medicines. Some
pharmaceutical companies used false documents to apply for approvals, the court
said. It is not yet known whether Zheng will appeal. 
Residents
dressed as cartoon characters parade during the opening of the Jinlv traditional
cultural festival in Suzhou, East China's Jiangsu Province May 29, 2007.
A girl is listening to cell phone music in Beijing
International High-tech Expo May 27, 2007. Up to the end of April, the country's
cell phone penetration ratio has hit 35.3%, according to the latest statistics
from the Ministry of Information Industry. The number of China's cell phone
users amounted to 480.43 million by the end of April, increasing 26.35 million
from the end of last year. About 182.6 billion short messages were sent in April
with a 38.1 percent growth year-on-year.
David Eldon,
former chairman of the influential Hong Kong General Chamber of Commerce,
published an article in the chamber newsletter urging the government to further
simplify its immigration procedures for foreign employees of local businesses.
His view is a reflection of the strong demand for foreign talent by local
businesses. It is part of coping with economic restructuring to meet rising
competition from various mainland cities, particularly Shanghai. Many business
leaders in Hong Kong are beginning to realize that the biggest talent pool
waiting to be tapped lies on the mainland. This was not obvious in the past.
Mainland business executives and professionals were seen by many Hong Kong
business people as unsuitable for a fast changing and highly competitive
business environment which rewards only those with initiative and daring. But
this bias against mainland managers is fast melting away. Rapid economic
development and the opening of the mainland market have produced a new crop of
mainland managers and professionals. They have shown that they can be as
adaptable to a competitive environment as their Hong Kong counterparts. This
change is anything but subtle. In our office in Shanghai, I have the pleasure of
watching the transformation of a few young and timid interns, fresh out of
college, into hard-charging, inquisitive and thoughtful reporters full of
self-confidence. All they needed was a bit of guidance, encouragement and, more
importantly, a keen sense of competitiveness not only with reporters on the
rival papers but also with their colleagues in other bureaus. My personal
judgment was confirmed when I had dinner with a senior expatriate editor in
Beijing the other evening. He asked me about a reporter in the Shanghai bureau
whom he thought was particularly outstanding on her beat. He was hugely
surprised when I told him that this reporter joined us about six months ago and
had never worked at any foreign media as he had assumed. She is simply more
combative than others. To survive in a work environment where rewards are
closely tied to individual performance, most young Hong Kong executives learn
the lesson of competitiveness early on. Such a lesson has taught them to be
efficient, adaptive and innovative, the common traits widely attributed to Hong
Kong people. There is, of course, a less flattering side to the stereotype. Hong
Kongers, who are also characterized as needlessly aggressive, inconsiderate to
the point of rudeness, uncaring and impatient. But on balance, most Hong Kong
people feel pretty comfortable about how they are seen by outsiders. Based on my
experience in working with young reporters on the mainland, I believe that most
young mainland executives will have no problem picking up the lesson on
competitiveness very quickly if they have a chance to work in Hong Kong. This
would be an excellent opportunity for them to gain the exposure to a free
international marketplace that is so close to home. It appears that a growing
number of Hong Kong business owners are keen on recruiting talent from the
mainland. To satisfy their needs, it may make sense for the Chamber of Commerce,
one of Hong Kong's more powerful business groups, to take the initiative of
setting up recruitment offices in Beijing, Shanghai and some other major cities
to publicize employment opportunities in Hong Kong and to build a data base of
qualified talent willing to work in Hong Kong.
Cast member Jackie Chan attends a photocall to introduce
his film 'Rob-B-Hood' at the Venice Film Festival September 8, 2006. Jackie
Chan's production company has sold the remake rights for the action-comedy
"Enter the Phoenix" to a producer of "The Bourne Ultimatum." The 2004
Cantonese-language original was directed and co-written by its star, Stephen
Fung. The plot centers on the gay son of a boss whose dying wish is that he take
over the family business. Chan was one of the producers. Hollywood remakes of
Asian films are hot, with such properties as "The Grudge" and "The Ring"
storming the box office. Earlier this year "The Departed," Martin Scorsese's
remake of Hong Kong box office winner "Infernal Affairs," won four Oscars,
including best picture and director. Andrew Tennenbaum will produce the remake,
according to a statement from his L.A.-based Flashpoint Entertainment. "This is
my first Asian film remake and I couldn't be more excited," said Tennenbaum, who
also helped make "The Bourne Supremacy." He said he was meeting with writers and
directors to create the adaptation. 
Nicholas
Sallnow-Smith, chairman of the controversy-laden Link REIT (0823), has accepted
a job as regional chief executive for northeast Asia at Standard Chartered
(2888) - less than two months after he took over the politically charged helm at
the real estate investment trust. He will assume his new position at Standard
Chartered July 1, the lender announced Monday. While Sallnow-Smith plans to hold
down both posts, market watchers are dubious. "It may send signals that he may
not see his employment with The Link as a long-term relationship," said Phillip
Securities director Louis Wong Wai-kit. "Already, for The Link, the reshuffle at
the senior level has undermined confidence in the investor community." Fulbright
Securities general manager Francis Leung Sheung-nim said: "He wants to work for
a bigger company. Basically, he's getting the best of both worlds." His
independent, non-executive role at The Link has drawn fire from lawmakers and
public housing residents. "I think it's quite hard to take up two important
jobs," said Tung Tai Securities director Kenny Tang Sing-hing. "I think
eventually he may need to give up one job, maybe The Link." Sallnow-Smith became
chairman at Link REIT April 1 after Paul Cheng Ming-fun resigned for personal
reasons. It was then expected that Sallnow- Smith's extensive experience as
chairman of Hongkong Land could help improve returns at The Link. "Apparently,
people will be very disappointed," said Lun. "They placed their faith in the
wrong person." Three senior executives have left Link REIT since the beginning
of the year amid repeated demands from the largest shareholder, British hedge
fund The Children's Fund Investment Management, for significant rent increases.
Sallnow-Smith, whose Standard Chartered position will be based in Hong Kong,
will oversee governance, strategy and financial performance in northeast Asia
for the emerging- markets lender. 
Spiraling pork prices in the mainland have fanned prices of food and
agricultural products as well as shares of companies listed in Hong Kong with no
direct link to the sector. Shares of China Yurun Food (1068), the mainland pork
distributor and meat processor that is also a wholesale supplier to Hong Kong,
hit a high of HK$9.52 Wednesday. They eased 0.85 percent to close at HK$9.37
Monday. However, edible oil trader Aptus Holdings (8212) and edible oil refiner
Hop Hing Holdings (0047) started the week with surges of about 30 percent.
Shares of CP Pokphand (0043), which mainly trades agricultural products as well
as operate feedmills and poultry farms, also drove up 17.11 percent to close at
HK$0.445. Analysts said investors believe pork prices will continue to rise for
at least six to nine months and that the increases will spill over into other
food categories, causing speculative buying. According to Ministry of Commerce
data, wholesale pork prices in 36 major cities jumped 43.1 percent in the first
three weeks of this month from a year earlier, or 17 percent up from March.
"Pork accounted for about 5-6 percent of the mainland CPI basket in the past
but, with the price gains, it now makes up more than 20 percent," Chen Xindong,
senior economist at BNP Paribas Securities, told The Standard. With the surge in
pork prices, economists said, inflation in the coming months will surpass the 3
percent target set by Premier Wen Jiabao in March. The price increases came as
Beijing was having initial success in inflation, with the consumer price index
dipping to 3 percent last month following a 3.3 percent increase in March over a
year earlier.
Greenpeace activists turn the Golden
Bauhinia into a symbolic energy-efficient light bulb to demand stronger action
on climate change. The three-day International Conference on Climate Change has
brought hundreds of representatives from 26 nations to Hong Kong.
Hong Kong Heritage Museum staff check the
mounting of Bronze Mask with Protruding Pupils, which will be on display at the
museum from June 6. The piece, dated 1200 BC, is among 120 treasures on display
from the Sanxingdui Museum, Chengdu Museum and Sichuan Provincial Institute of
Archaeology, all in Sichuan.
Hong Kong will continue to strengthen its role as China's
international financial center, although the stock exchange will not be the sole
beneficiary of mainland policies, a senior executive said. Ronald Arculli,
chairman of Hong Kong Exchanges and Clearing (0388), told The Standard the
exchange is ready to play a greater role in China's economic development, while
also aiming to become a leading regional market by attracting more overseas
listings. Arculli said the exchange could not depend entirely on the mainland to
develop further despite the expansion of the qualified domestic institutional
investor scheme. The move, announced May 11, helped to drive turnover May 14 up
to HK$94.99 billion and lifted the Hang Seng Index to a record closing high of
20,979.24 points. "QDII is not only designed for the Hong Kong market. It is a
measure to give mainlanders more investment choices," he said. "[The quotas] may
be enlarged, but we can't absorb it all." Arculli said the news that about US$7
billion (HK$54.6 billion) would be made available for investment propelled daily
turnover to a record and that it meant the bourse would be swamped with huge
capital flows if all of the mainland's financial policies were to be decided in
favor of Hong Kong. And as the bourse evolves, the exchange is strengthening its
market infrastructure. "Our trading system is ready. It can handle more than 1.5
million transactions per day, while the current daily average is only 400,000
transactions." Since the 1970s, Hong Kong has played an important role in
China's economic development, contributing to and benefiting from the country's
robust economic growth, Arculli said. Now, 10 years after the handover, Hong
Kong should look at the bigger picture and develop a tighter relationship with
the nation, Arculli said. "China has upcoming macro plans. Areas such as
railways development, customs cooperation and financial market convergence are
areas in which Hong Kong has a role. This will be long term and might need more
than three to five years to be implemented. The central government has clearly
said Hong Kong's status as an international financial center is irreplaceable.
Their support for us will not change." He said the bourse is eager to become the
region's leading financial center. "We have been focused on attracting mainland
enterprises to use Hong Kong as a platform for overseas fund raising. And now
our goal is to be the time zone's regional financial center, like London or New
York," Arculli said. "We do not fear competition from our mainland peers.
Competition is not only from the mainland but also from overseas counterparts
such as Nasdaq." Overseas exchanges such as the New York Stock Exchange, Nasdaq
and Deutsche Borse are planning to set foot in China with the aim of attracting
major issuers. Rules allowing them to open offices take effect July 1.
As the mainland continues to reform
its economy to align its business environment with international standards, it
will become one of the top three epicenters for private equity money. Gene
Donnelly, global managing partner, advisory and tax, at PricewaterhouseCoopers,
said there will soon be "three epicenters of private equity in the world - New
York, London, and we think China is going to be the third." He told The Standard
private equity activity in the mainland is "booming." "There are too many firms
to mention that are opening." Changes in the tax law that take effect from the
start of next year provide a high degree of certainty. The unified tax system, a
major part of the mainland's accession to the World Trade Organization, provides
a clarity that will help foreign investors such as private equity firms manage
their risks better. At the moment, foreign-funded enterprises get preferential
tax treatment - 15 percent on average as opposed to 25 percent for domestic
companies. "I think this tax change is a good example of how China is quickly
conforming to the rules of the game around the world," Donnelly said. Private
equity firms have so far been taking smaller stakes in mainland deals, than in
other markets. As they adapt to the culture, however, big value deals will
become possible. "Learning the new culture, learning how to get along with
regulators, who the regulators are, is all part of the natural evolution of
private equity as it moves into new markets," Donnelly said. Private equity
players still have a lot to learn about doing deals in China. 
Nine thousand children take part in a
mass drum-banging rehearsal at the Hong Kong Coliseum, for the Dragon Jamboree.
The students will join hundreds of others from the mainland, Taiwan and Macau
for a 10,000-strong event on June 30 in an attempt to set a Guinness world
record for the largest simultaneous percussion performance.
Chinese Premier Wen Jiabao (C) talks with
customers on the pork prices at a supermarket in Xi'an, capital of northwest
China's Shaanxi Province, May 26, 2007. Wen visited Shaanxi Saturday for an
investigation into pig-raising and pork market.
Nasdaq is working closely with the
Chinese authorities to open a representative office in Beijing, said Nasdaq's
chief representative of China Xu Guangxun on Sunday.
Manulife Financial, the Canadian
insurer and wealth management firm, is pulling out one of its two ventures, a
move that is making the industry regulator nervous as it is unprecedented and
the deal could help it set up related rules, according to an industry source.
Manulife's sale of its John Hancock Tianan Life stake comes as foreign insurers
seek to tap China's largely uninsured 1.3 billion people. For most foreign
insurance firms, a licence in the mainland is much coveted as a large portion of
the country's 1.3 billion people is still uninsured and the economy has been
rising rapidly, boosting policy sales. But Manulife Financial, the Canadian
insurer and wealth management firm, is pulling out one of its two ventures, a
move that is making the industry regulator nervous as it is unprecedented and
the deal could help it set up related rules, according to an industry source.
Manulife was in talks with several non-Chinese insurers to sell its 50 per cent
stake in John Hancock Tianan Life Insurance because it wanted to focus on its
first venture with Sinochem International, Robert Cook, Manulife Financial's
newly appointed senior executive vice-president and general manager of its Asia
division, said in an interview. An insurance industry source said the China
Insurance Regulatory Commission was deeply worried about the deal as this would
the first time the regulator had to handle a stake sale of a Sino-foreign
insurance joint venture. "The procedures and regulations applied to this case
may well become a precedent of how Sino-foreign joint ventures will have their
stakes change hands in future," the source said. "The CIRC is very careful in
making a decision because it wants to make sure the negotiations and the sale
will be smooth and orderly." China has not yet set clear rules on stake sales by
a foreign firm in a domestic venture because foreign insurers are still hungry
for a licence to tap the market and few would consider a retreat. With more
global mergers and acquisitions, it appears the CIRC will need to come up with
related rules. The Netherlands-based ING also has two life insurance ventures in
the mainland - Pacific Antai, which it inherited from a merger, and ING Capital
Life. ING has expressed its desire to keep both ventures. Manulife bought out
the global operations of US insurance company John Hancock in 2004, in a deal
that also gave it 50 per cent of John Hancock Tianan Life Insurance - a joint
venture between John Hancock and Tianan Insurance. That was Manulife's second
venture, as the Canadian insurer and Sinochem International set up
Manulife-Sinochem Life Insurance in 1996, the first and now the largest
Sino-foreign insurance venture in the mainland. Mr Cook said the group wanted to
sell the stake in John Hancock Tianan to allow Manulife to concentrate on its
joint venture with Sinochem International. "We have a very good relationship
with Sinochem for the past 10 years and we want to focus on this first joint
venture. We do not want to engage in another joint venture to compete against
it," Mr Cook said. "We also consider merging the two joint ventures would not
work as they have different set-ups and management." Mr Cook said several
non-Chinese companies had shown interest in the stake, while its mainland
partner, Tianan Insurance, might also buy it out. "We are still negotiating with
all the potential buyers and the regulator. We keep a close dialogue with the
China Insurance Regulatory Commission. I hope we can reach a solution by the end
of this year," he said. "Tianan Insurance also understands our position and why
we want to sell the shares. We would continue to keep a good relationship with
the company." Mr Cook said although John Hancock Tianan is smaller than
Manulife-Sinochem, it was growing fast. Last year, John Hancock Tianan had
premium income of 200 million yuan, three times that of 2004, compared with 890
million yuan at Manulife-Sinochem. Mr Cook said although Sinochem was not an
insurance company, it provided good knowledge and network to support Manulife in
China. "Manulife is an insurance company and we do not need another firm to tell
us how to do insurance business," Mr Cook said. "Sinochem has been a terrific,
good joint-venture partner. It helped us establish the joint venture and helped
us understand the market and regulations in China. It is a true partnership and
not just someone providing some money for the company to grow." 
Mainland bourses
are likely to remain jittery today after falling slightly in volatile trade
Thursday following comments by former US Federal Reserve chairman Alan Greenspan
that shares are overvalued and might be heading for a "dramatic contraction."
Analysts in Hong Kong believe sentiment has weakened, while retail investors in
the mainland are treating the 81-year-old retired Fed chief's comments with
skepticism. Still, investor nervousness will be further exacerbated by the
"Friday effect" - announcements of recent tightening measures have come as the
working week winds down. Speaking to a conference in Madrid via satellite
Wednesday, Greenspan said the bull run in the mainland market could not last for
much longer. "It is clearly unsustainable. There is going to be a dramatic
contraction at some point," he was quoted by Reuters as saying. His remarks
spurred some selloffs in New York and Asia. The benchmark CSI 300, which tracks
A shares listed on the two mainland exchanges, fell 19.20 points or 0.49 percent
to 3,919.75 after swinging between gains and losses earlier in the day.
Foreign-currency B shares, open to both Chinese and overseas investors, plunged
for the third straight day after gaining 70 percent in the previous three weeks.
The Shanghai B-share Index fell 7.97 percent or 25.79 after losing 5.03 percent
Wednesday, while the Shenzhen B-share Index fell 4.41 percent or 32.80 points to
711.17. Stocks fell after the China Securities Regulatory Commission also
demanded brokerage houses step up investor education programs. Mainland
officials, senior Hong Kong government figures and tycoons have also raised the
alarm about a bubble. Last week, billionaire Li Ka- shing, Financial Secretary
Henry Tang Ying-yen and Lee Shau-kee, chairman of Henderson Land Development
(0012), warned of a possible plunge. " I think sentiment in the A-share market
has turned a little weak after several influential people warned about a bubble
and a correction," said Eugene Law Sheung-pui, head of research at Cash
Securities. "[Thursday's] correction will have some effect psychologically, but
there is still quite a lot of liquidity, plus China expanded the QFII investment
quota. So I don't think there will be a big correction in the short term." The
People's Bank of China has raised interest rates four times in the past 12
months, and revised the reserve ratio for banks eight times in 10 months, but
investors have continued to bet on stocks, driving a rally. Law said the Hong
Kong market, closed Thursday for a holiday, is likely to track the A-share
market. "Hong Kong investors are quite worried about the bubble in the A-share
market. So I think both the Hang Seng and H-share indexes will have a correction
Friday," he said. "I will closely look at the turnover. If the turnover, which
has dropped quite a lot in the past few days, continues to fall, then it
indicates investors have lost [the risk appetite] on concerns over the A-share
market." 
More than 20,000 visitors packed the streets of Cheung
Chau Thursday as celebrations marking the annual Bun Festival got underway, with
the traditional bun-scrambling competition and parade of "floating" children
being the highlights. The atmosphere was jubilant, although the number of
visitors was well short of the 40,000 expected by event organizers. Thousands
went to the island to watch the bun-scrambling contest, held at midnight Friday
as part of the festival that was started in 1894 by survivors of a deadly
epidemic. Eleven men and a woman took part in the scramble up the 14-meter bun
tower at the Pak Tai Temple playground, watched by an excited crowd. The
scramble, restored for the third straight year with tighter security precautions
after a bun tower collapse in 1978 led to the competition being banned for 26
years, involves athletes racing to the top of the tower to collect as many buns
as possible. But the buns, which used to be edible, were replaced by plastic
ones this year as they had become rotten and were deemed unhygienic after being
exposed to rain and sunlight over the years. A three-hour parade through the
island's streets, which began at 2pm from Pak Tai Temple, kicked off the
celebrations. "Floating" girls, dressed in costumes denoting characters from
ancient myths to current affairs personalities, riding tiny seats attached to
steel rods, stole the show. Among 15 groups of "floating" children, a remarkable
pair of characters were dressed like Education and Manpower Secretary Arthur Li
Kwok- cheung and former permanent secretary for education Fanny Law Fan Chiu-fun
- in a suit and tie and green mandarin gown, respectively.
The Hong Kong
Monetary Authority, the territory's de facto central bank, said Thursday it is
worried about the persistent weakening of the Hong Kong dollar as the city may
suffer from an interest rate shock if lagging local rates suddenly jump to match
US rates. "I fear that if the gap closes abruptly, then firms and households and
the financial system in Hong Kong might suffer from a large interest rate shock,
which is not good for financial stability," HKMA chief executive Joseph Yam Chi-kwong
said in his weekly online column Viewpoint. The local currency hit a 22-year low
Wednesday, trading at 7.8256 to the US dollar as the Hong Kong dollar has been
used by many arbitrage traders as a "carry trade" tool owing to its relatively
low interest rates. Carry trade is the process by which traders borrow a
low-interest-rate currency - in this case the Hong Kong dollar - to purchase
higher-yielding equities elsewhere to make a profit. Yam said he could not be
certain for now how the market would react if the Hong Kong dollar continues to
fall, and the authority will have to intervene with the market, ensuring the
currency is traded between the convertibility zone of 7.75 to 7.85 against the
greenback. "It remains to be seen how the spot exchange rate will behave when it
is close to the weak-side convertibility undertaking," Yam said. "But I can
assure you that the HKMA has both the will and the wherewithal to defend the
linked exchange rate system." Yam said he is not so much worried about how low
the Hong Kong dollar will hit, but is more concerned about the pace of the
currency's weakening. "Under the refined regime, the natural tendency for the
interest rate spreads to become zero may not necessarily happen," Yam said. "It
is the speed of change rather than the level of the interest rate spreads that
concerns me more." HKMA introduced refinement measures in 2005 to better align
Hong Kong dollar interest rates with their US dollar counterparts. 
More than 10,000 people crowded into
the Hong Kong Convention and Exhibition Centre in Wan Chai Thursday for the
official ceremony marking the Buddha's birthday. The eighth day of the fourth
lunar month marked the 2,551st anniversary of the birth of the Buddha. Hong Kong
Buddhist Association president Kok Kwong presided at the ceremony and led other
Buddhist leaders in prayers. The official guests included the commissioner of
the Ministry of Foreign Affairs in the HKSAR Gao Siren, Secretary for Home
Affairs Patrick Ho Chi-ping, Legislative Council president Rita Fan Hsu Lai-tai,
and former secretary of justice Elsie Leung Oi- sie. Among others at the
ceremony were National People's Congress Standing Committee delegate Tsang Hin-chi,
Confucian Academy president Tong Yun-kai and Cantonese opera star Liza Wang
Ming-chuen. They performed a ceremony called "bathing the Buddha," by pouring
consecrated water and flower petals on a statue of the Buddha. The organizer
expects that up to 50,000 people will attend the four-day function, for which
entrance is free. Kok said this year's celebrations were a "doubly happy" event
for Hong Kong as it marked the ninth year since the Buddha's birthday became a
recognized holiday and the 10th year since the territory rejoined the
motherland. "This shows the central government's commitment to the freedom of
religion and the SAR's government fair treatment of all religions in Hong Kong,"
Kok said. "The public holiday also allows Hong Kong people the opportunity to
leave their work behind and to understand more about Buddhism."
People
parade in Kowloon Park as part of a project to encourage senior citizens to do
more exercise. Up to 1,000 people worked out together in the park's sports
centre. The project is jointly organized by 17 welfare groups.
Mary Ma to take a non-executive
advisory role at Lenovo. 
Chinese Vice Premier Wu Yi (R) meets with US President
George W. Bush in the White House, Washington, capital of US, May 24, 2007. Wu
Yi led a Chinese high-level delegation for the second meeting of China-U.S.
Strategic Economic Dialogue (SED). Bush says China-U.S. Strategic Economic
Dialogue "important" - U.S. President George W. Bush, at a White House press
conference on Thursday, said the just- concluded China-U.S. Strategic Economic
Dialogue is "important" and there has been some progress achieved at the
dialogue. "This is an important dialogue. And it's one that I thank the Chinese
government for engaging in," Bush said. Bush said he met with Chinese Vice
Premier Wu Yi in the White House Oval Office on Thursday, and asked her to pass
a message to Chinese President Hu Jintao that he appreciates China's willingness
"to work with strategic dialogues in order to put in place the type of measures
that reflect a complex relationship." Bush also said that the United States
values its relationship with China. The president made the remarks after the
second China-U.S. Strategic Economic Dialogue, co-chaired by Chinese Vice
Premier Wu Yi and U.S. Secretary of Treasury Henry Paulson, concluded on
Wednesday. During the two-day closed-door talks in Washington, top economic
officials from the two countries, including dozens of cabinet ministers,
discussed topics covering areas of service, investment and transparency, energy
and environment, as well as growth balance and innovation. Both sides reached
consensus on how to move forward in financial services, civil aviation, and
energy and environment, and signed a number of specific agreements. The United
States, by right of its competitive advantages, has become the biggest
beneficiary of the opening of services by China, Chinese Vice Premier Wu Yi said
in Washington Thursday. In the past five year, for example, shares held by
American financial institutions in Chinese banks have taken up nearly 40 percent
of the total FDI (foreign direct investment) used by China's banking industry,
Wu said while delivering a speech at a welcome banquet hosted by six American
organizations. According to Wu, the number of representative offices of American
law firms in China has accounted for nearly 45 percent of the total of overseas
firms, and their business revenues have accounted for more than 50 percent of
the aggregate. The number of American companies awarded a direct selling license
has been 55 percent of FIEs (foreign invested enterprises) in China. China has
imported 121 American movies on both lump-sum and revenue-sharing basis,
accounting for 52 percent of all films imported and the share of imported
American AV products has always been between 50 percent to 75 percent. Of the
nearly 50,000 American invested enterprises in China, over 90 percent have
obtained right to trading and to distribution, the vice premier said. Wu said
that the rapid development of services market in China and the notable
advantages of modern American services sector mean enormous cooperation
potential enjoyed by the two sides. "We agree to the U.S. proposal on developing
an innovative and effective services sector," she said. "But at the same time,
we want to draw the American attention to the fact that China is a developing
country, whose modern services industry starts late and is still at a very low
level." Further opening up of China's services sector can only be realized
steadily and safely in light of its national conditions and cannot be achieved
overnight, Wu said, adding "acting with undue haste will harm both sides'
interests instead." China is willing to strengthen cooperation with the United
States in services on the basis of equality, mutual benefit and complementarity,
addressing problems emerging from bilateral cooperation through consultation and
striving for a balanced outcome, the vice premier said. The six organizations
are the U.S.-China Business Council, the U.S. Chamber of Commerce, the China
General Chamber of Commerce-USA, the American Bankers Association, the American
Council of Life Insurers and Financial Services Forum. 
Any attempt to impose pressure on the Chinese currency,
the yuan or RMB, to force a considerable revaluation cannot help at all, Chinese
Vice-Premier Wu Yi said in Washington Thursday. Since China introduced a RMB
exchange rate reform in July, 2005, the new RMB exchange rate mechanism has been
functioning smoothly, said Wu while giving a speech at the welcome banquet
hosted by six American organizations. She said that the RMB has now appreciated
by 8.1 percent in cumulative terms. "I believe the floating band of the RMB
exchange rate will be constantly expanded with the market change," Wu said.
"China's exchange rate reform will be advanced in an orderly way under the
principle of self-initiative, controllability and gradual progress," she added.
Wu said that the elasticity of the RMB exchange rate will be continuously
increased through the reform, with a roughly stable RMB exchange rate maintained
at a reasonable equilibrium. "In the meantime, we must take measures to
effectively control and duly dispose of risks within the financial system," she
said. Wu said that it is recognized by many internationally renowned economists
that the RMB exchange rate is not the main cause of the huge U.S. trade deficit.
"Any attempt to impose pressure on the RMB for its considerable revaluation
cannot help at all and could probably injure the interests of the two countries
and the public," she stressed. The six organizations hosting the banquet are the
U.S.-China Business Council, the U.S. Chamber of Commerce, the China General
Chamber of Commerce-USA, the American Bankers Association, the American Council
of Life Insurers and the Financial Services Forum. 
Beer firms
must focus on top end - To fend off international giants from gobbling up
Chinese market share, local beer makers need to produce profitable beers aimed
at the high-end market. There's no doubt the local premium beer market is the
key to long-tern growth: profits from one bottle of high-end beer are over 10
times of that of a low-end substitute. Additionally, market size is growing
rapidly. It's estimated that by the end of 2010, China will have the largest
middle-class in the world at over 490 million. Public entertainment venues,
including KTV, cafs and Western-style restaurants and bars, are the hottest
sellers of premium beers. Take Beijing's many bars, for example. There are about
500 bars in the capital, dotted around Sanlitun, Houhai, Chaoyang Park and
Weigongcun. A recent study shows about 70 percent of beer consumption takes
place in bars. Frequent bar visitors usually come from the middle-class. They
are around 35 years old, fashionable and generous spenders. Local beer producers
have been losing ground to international competitors in China's high-end market.
Their sales volume may be smaller, but international brands continue to grow in
China simply because they dominate the lucrative high-end market. They are also
strengthening efforts to increase their share of the pie. Companies such as
UK-based InBev and Canadian-based Molson Coors are launching their best-selling
premium brands in China and are seeking out mergers and acquisitions to increase
local market share. Their marketing strategy is simple but straightforward -
target the bars. The study indicates four major international breweries are best
sellers in Beijing's bars, and 90 percent of bars are selling all four brands,
including US-based Budweiser, Holland-based Heineken, Denmark-based Carlsberg,
and Mexico-based Corona. But local brands are trying to catch with their global
competitors. In 2005, two local brands - Tsingtao and Yanjing - entered the Top
10 World Brewery Brands list, ranking ninth and tenth place respectively. In
recent years, the top three local brands - Tsingtao, Yanjing and China Resources
Snow - have been leading the way by throwing huge sums of money into high-end
brands, which has lifted sales volume and revenue. Pearl River Beer, Harbin
Beer, Kingway Beer and Chongqing Beer have all followed with premium brands. But
there seems to be only a small difference between the high-end products and
other brands, and local beers sell for much less than international competitors.
More importantly, local brands haven't caught on in the bars and suffer from
weak marketing and promotional initiatives. According to the study, about 70
percent of Beijing's bars sell Tsingtao beer, and just 14 percent sell Yanjing
beer. There is always a misconception circling the brewery industry that says
local brands can't compete with international ones. This statement is false.
Local brands can eventually succeed through strategic and innovating marketing
campaigns. After all, there is little difference between the brewery techniques
of local and global brands. In terms of branding, local brewers should promote
unique taste, top-quality packaging and novelty brand names. Marketing
initiatives should be consistent and comprehensive. Prices should be set at the
average premium level, or offered at a higher price than international brands to
draw consumers' attention. Setting up at bars that only serve local brands'
high-end beers is another effective practice, although it is costly. From a
long-term perspective, the practice will drive profits and brand image as well.
Lastly, local manufactures should be trendsetters and create innovate lifestyle
concepts whenever launching a new product. The author is an expert in beer
marketing.
Chinese plans to
resume issuing licenses for securities ventures in the second half of this year
could allow a long line of foreign hopefuls to enter a market long tainted by
scandals and poor management. Since a huge, two-year overhaul of the country's
brokerage sector, hard lobbying for Beijing to allow foreign players to set up
brokerage joint ventures has largely fallen on deaf ears. But China heeded US
calls for further opening its financial sector during high-level talks in
Washington Wednesday, unveiling its intention to resume licensing for securities
firms, including joint ventures, this year. "It is very positive that China has
agreed to give foreign financial firms greater access to the booming domestic
market," said Jing Ulrich, managing director and chairman of China Equities at
JPMorgan. "Over time, this will help improve the efficiency and governance of
the Chinese brokerage industry," she said. Beijing was scant on detail and all
eyes will be on the speed at which the securities regulator allows in foreign
players. "We welcome the further opening of China's financial sector and look
forward to additional details regarding the new policy," said Hans Schuettler,
chief executive of Morgan Stanley Asia. Overseas players have long argued they
could help bring much-needed expertise to a domestic securities market famed for
its insider trading scandals and poor management. With a surging stock market,
the stakes are high. As of Monday, Chinese brokerages had already earned a total
of 66 billion yuan (HK$67.46 billion) in stock trading commissions this year,
according to the China Securities Journal - more than double the sum for all of
last year. Overseas banks looking for new sources of growth see a winning ticket
as long as they can get a toe-hold in a market benefiting from growing
investments by a nation of savers. Citigroup and Merrill Lynch are tipped to be
among the first beneficiaries of the fresh market opening, China watchers say.
Others circling China's brokerage market include HSBC (0005), Credit Suisse and
JPMorgan. Those already active in China and those looking to enter will watch
closely for signs that the authorities may lift investment caps in securities
joint ventures.
Chinese Vice Premier Wu
Yi, right, looks at chairman and CEO of Boeing and chairman of the China-US
Business Council Jim McNemey, left, as he reads her a question, during a dinner
reception in her honor on Friday. The agreements reached during the Strategic
Economic Dialogue talks between the mainland and the US in Washington this week
failed to placate critics in the US Senate, who lashed out at the moves as too
little too late. Many now advocate legislation to force the Bush administration
to impose sanctions on Beijing. "For years we have heard vague assurances of
greater market access for American financial institutions, but they rarely seem
to become reality from China," Democratic Senator Charles Schumer, a leading
critic of Beijing, said in a statement. "In addition, there is a glaring
omission to the White House press release: an eight-letter word, `currency'."
The two-day economic summit ended on Wednesday. US Secretary Treasury Henry
Paulson and Vice-Premier Wu Yi announced new agreements that will lift a ban on
new foreign firms and joint-ventures entering the mainland's securities industry
and allow overseas banks to offer yuan-denominated credit and debit cards.
Beijing will also raise the maximum limit for approved international investors
to purchase domestic Chinese stocks from US$10 billion to US$30 billion.
However, there was no accord on the appreciation of the yuan, although the
People's Bank of China did increase the trading band for the currency last week.
Democrat Max Baucus, the chairman of the Senate finance committee, expressed
"deep concern" that the currency issue was not addressed. While welcoming the
agreements, Democratic Senator Chris Dodd said significant discriminatory
policies remained that protected the mainland's financial sector from foreign
competition, such as restrictions on foreign banks offering full domestic
currency services. "These policies hinder the ability of US firms to compete in
China and to expand their market presence among a consumer population in need of
financial services, products and expertise," Senator Dodd said. The criticism of
the financial agreements follows intense negotiations during the dialogue
meetings, with Mr Paulson unsuccessfully seeking to persuade Beijing to lift the
25 per cent ceiling on foreign ownership of domestic banks. At a Senate security
and international trade and finance subcommittee session, Democratic Senator
Evan Bayh said the financial reforms, and particularly the appreciation of the
yuan, were symbolic and moving at a "glacial" pace and warned that Washington
must take action. "The Chinese don't seem to take us seriously," he said. The
senators said they would push legislation seeking to impose sanctions on the
mainland over the value of the yuan, which they said was undervalued by as much
as 40 per cent. Senator Dodd has asked the US Treasury Department to cite the
mainland as a currency manipulator. The designation would allow the US to impose
sanctions on imported Chinese goods. 
International
action star and heartthrob Chow Yun-Fat, who plays the pirate lord Captain Sao
Feng in "Pirates of the Caribbean: At World's End," says he'd like to snag a
leading-man role in a Hollywood drama or romance but is getting lost in
translation. Chow, whose acting range and stature in Asia have been compared
with that of Robert De Niro, voiced frustration at racial barriers that persist
in America's movie industry. "Honestly, I prefer (to do) more dramas. In
American society ... Asian actors are not accepted as leading men," he said in
an interview last week for the "Pirates" publicity tour. "Maybe we have to wait
for a few more years." "Pirates" director Gore Verbinski said that as soon as
the writers decided the plot would take the film to Singapore, he knew he would
try to cast Chow. "Once we knew that, there was nobody else," Verbinski said. "Yun-Fat
is a living legend." The 51-year-old Hong Kong actor is known to Asian audiences
as a cross between Cary Grant and James Bond, but in Hollywood he has had
trouble moving beyond the period films like "Anna and the King" and martial arts
fare like "Crouching Tiger, Hidden Dragon" that U.S. audiences know best. "He
has experienced a glass ceiling in Hollywood," said filmmaker Jeff Adachi, who
explored the topic in his PBS documentary "The Slanted Screen." "The tragedy is
that there are roles that should be offered to Asian leading men but people are
not used to seeing that ... so it's something that studios are not willing to
invest in," Adachi said. SILENT FILM PHENOMENON - The first Asian actor to
achieve stardom rivaling that of Caucasian actors in U.S. films was Japanese
actor Sessue Hayakawa, who became a silent film phenomenon after his turn as a
merchant who extorts a white woman to have an affair with him, then brands her
when she tries to leave him, in Cecil B. DeMille's "The Cheat" in 1915. The role
propelled Hayakawa to silent film superstardom, and saw him playing romantic
leads frequently opposite white actresses, said Stephen Gong, executive director
of the Center for Asian American Media in San Francisco. "The amazing thing that
happened is that suddenly Hayakawa overnight became a huge star and his fan base
was American women," Gong said. "They didn't know what to make of him."
Hawaiian-born actor James Shigeta also broke the racial barrier in the late
1950s and 1960 with leading roles including "Bridge to the Sun," opposite
Carroll Baker and the 1961 musical "Flower Drum Song." But those roles have been
less plentiful than "Yellow Peril" villain roles, such as Ming the Merciless
from "Flash Gordon," "asexual beings" like the comic character Long Duk Dong
from "Sixteen Candles," or martial arts roles made popular by Hong Kong imports
Jackie Chan and Jet Li, Adachi said. Film historian David Thomson said that
while Chow has a shot at landing dramatic roles of the type popularized by
action star Harrison Ford, he still faces an uphill struggle for romantic leads.
"We break down these barriers very slowly and I don't think we are doing we are
doing it quickly enough to encourage an actor like Chow to think he will get
away with it," Thomson said. "I think there is a great deal of racism in the
country too." 
Fresh buns, with characters denoting peace and safety, are sold on Cheung Chau -
Cheung Chau's bakers have been busy churning out thousands of fresh buns for
today's festival after rain in the past few days ruined about 20,000 of them. As
skies cleared yesterday, the festival's committee chairman, Yung Chi-ming, said
he expected the festivities to run smoothly despite a forecast of a few showers
for today and a few thunderstorms tomorrow. Heavy rain earlier in the week
damaged buns stacked on three towers outside the Pak Tai Temple for distribution
to the public. "We have made another 6,000 fresh buns to replace the loss and we
will give them away at 8am on Friday," Mr Yung said. Bakers and owners of
holiday villas are crossing their fingers that the mixed weather won't keep away
festival visitors who usually give their businesses a boost. One of the two
master bakers on the island, Kwok Kam-chuen, said yesterday he had already made
20,000 buns and was making more for customers who are expected to form long
queues outside the bakery today. "As we have for the past, we keep making fresh
festive buns for people. The business has been good these past two days and I
expect it will get even better [today]." Mr Kwok, who sells the buns for HK$5
each, said not everyone bought the buns to eat, as many would buy one or two to
perform rituals at the temple. The buns - round and white, with red characters
on top denoting peace and safety - are an essential part of the Tai Ping Qing
Jiao festival, which began to pacify spirits believed to haunt the island after
an outbreak of the plague in 1894. The 70 rooms in the Warwick Hotel - the only
hotel on Cheung Chau - are booked out, with the earliest reservation made two
months ago. Agents for holiday villas say about 90 per cent of their
accommodation has been let. The main event, the parade featuring children in
colourful costumes "floating" above the crowd on concealed poles starts at 2pm.
It will climax at midnight with the bun-scrambling competition in which 12
individuals and eight teams - including entrants from Shenzhen, Guangdong and
Macau - will set out to grab the most plastic buns from a steel tower next to
the three towers bearing the real buns. The 15-metre tower is decorated with
8,000 plastic replicas, which are being used for the first time this year. A
crowd of 1,500 will receive tickets to enter the Pak Tai Temple playground where
the competition will be held. Up to 1,000 people will be able to watch it on a
big screen at the Cheung Chau Sports Centre. There will be extra ferry sailings
after midnight when visitors leave after watching the bun scramble. 
Chinese President Hu Jintao,who is also chairman of the
Central Military Commission, meets delegates to the Beijing Military Area
Command's ninth congress of the Communist Party of China, in Beijing, capital of
China.
Chinese Vice
Premier Wu Yi (L) and US Treasury Secretary Henry Paulson deliver statements at
the conclusion of the second meeting of the China-US Strategic Economic Dialogue
in Washington, capital of U.S., May 23, 2007. US Treasury Secretary Henry
Paulson, ending a meeting with China's top economic leaders, said the
negotiations had produced "tangible results" including agreement on financial
services and aviation that would help build confidence in bilateral trade ties.
His counterpart, Vice-Premier Wu Yi , called the two days of top-level talks a
"great success". "While we have much more work to do, we have tangible results
for our efforts thus far," Mr Paulson said at the end of the two-day "strategic
economic dialogue". Ms Wu said the high-powered lineup of officials representing
each side in the talks showed the importance the countries attached to
maintaining an ongoing dialogue. She again called for the United States to
rebuff protectionist trade pressures. "The China-US economic and trade
relationship is one of the most complicated in today's world," Ms Wu said. "It
calls for direct consultation and dialogue between us, instead of easy resort to
threat or sanctions. "Secretary Paulson and myself have the responsibility and
courage to carry out the important task of [removing] barriers of all kinds and
[making] the strategic economic dialogue a genuine, important platform for
China-US economic trade relations and overall bilateral relations to grow." The
strategic-level talks began in Beijing last year. The "tangible results" to
which Mr Paulson referred included greater access for US firms to the coveted
mainland financial sector. Beijing will remove a bar on new foreign securities
firms and resume licensing securities companies, including joint ventures, in
the second half of this y