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Hong Kong.Hawaii Chamber of Commerce ®
Hong Kong.China.Hawaii Chamber of Commerce ®

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November 14, 2002 Hong Kong Presentation Notes by Johnson Choi
In Depth Look of Hong Kong - Past, Current & Future
In Depth Look of China - Past, Current & Future
To succeed in business in Hawaii, you must understand the islands
How to Do Business with China, through Hong Kong & Setting up Business in China?
Hawaii Failed Business Image and Continue Missed Opportunities

        

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Direct link PDF file   Year of the Pig - February 18, 2007

  Listen to MP3 Business Beyond the Reef” to discuss the problems with imports from China, telling all sides of the story and then expand the discussion to revitalizing Chinatown - Special Guest: Johnson Choi, MBA, RFC. President - Hong Kong.China.Hawaii Chamber of Commerce (HKCHcc) and Danny Au, Manager, Bo Wah Trading

BRENDA FOSTER, PRESIDENT OF THE AMERICAN CHAMBER OF COMMERCE IN SHANGHAI; "An Update of the Business Climate in China" to the Hong Kong China Hawaii Chamber of Commerce (HKCHcc) at the Pacific Club 2/14/2008

Holidays Greeting from President Obama & Johnson Choi http://www.youtube.com/watch?v=pNk4Z4lUV-k   http://www.facebook.com/video/video.php?v=219896871983&ref=mf

Wine-Biz - Hong Kong Brand Hong Kong Video

June 30, 2008

Hong Kong: Chief's plea falls on deaf ears - An unprecedented attempt by chief executive Donald Tsang Yam-kuen to silence his critics over the political appointees row looked to have backfired last night as debate raged in the Legislative Council more than seven hours after he spoke.

There are now 95,000 individuals in Hong Kong with net assets of at least US$1 million (HK$7.8 million), excluding their primary residence and cars. The number indicates a 10.2 percent increase in the number of high net worth individuals in the territory since 2006, according to the latest annual world wealth report by Merrill Lynch and Capgemini. Driving growth last year were the increase in property prices, the 39 percent rise in the Hang Seng Index, real gross domestic product of 6.4 percent driven by robust export growth, and the 55 percent increase in market capitalization on the Hong Kong stock exchange, the report said. "Hong Kong continues to attract a lot of listings from China," said Mark Matthew, senior director and chief Asia strategist of Merrill Lynch. "When I combine the very low levels of valuations in Hong Kong, particularly in the property sector ... the fact that we will not be having rising rates here, and with the better outlook in China for the second half, makes us positively disposed to Hong Kong." Matthew said "the worst is over" for the mainland's economy - now that the government has introduced a lot of tightening measures on the economy, and because inflation is on a downward trend. Even though last year's HNWI population growth rate fell below the 12.2 percent of the 2006 report, Victor Tan, market director of of Greater China at Merrill Lynch, said the number of HNWI in Hong Kong was unlikely to shrink, as most of them had diversified portfolios, thereby spreading out the risks. "Possibly, when the economy was volatile, investments had been hedged and moved into lower-risk investments," Tan said. He noted in the report a quarter of all financial assets in Asia-Pacific are in cash and deposits, while 21 percent are in fixed income. The report also showed that the mainland has the second-fastest growing HNWI population in the world.

Exchange Fund quarterly loss possible, warns Yam - Hong Kong's HK$1.468 trillion Exchange Fund may post a loss on its investments in the second quarter of this year, Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong warned yesterday.

Pressure is mounting for more Hong Kong lenders to hike mortgage rates, senior bankers said yesterday, as funding costs remain at a high level and prime rates will remain unchanged following the Fed meeting.

Hong Kong’s top officials – from Friday evening to Sunday – will head a special delegation which will visit areas of Sichuan damaged by last month’s earthquake. The delegation will be lead by Chief Executive Donald Tsang Yam-kuen and Chief Secretary Henry Tang Ying-yen, a government spokesman said on Friday. Sichuan was struck by a devastating earthquake on May 12. The quake caused extensive damage in the western mainland province – killing thousands of people and making many others homeless. According to official figures some 68,636 people died and 374,171 injured, with 18,467 listed as missing. The quake left about 4.8 million people homeless – though the number could be as high as 11 million. The government delegation will oversee Hong Kong’s contribution to reconstruction work in quake-affected areas and liaise with mainland authorities. In the aftermath of the earthquake, individuals, companies and organisations in Hong Kong have donated more than HK$1 billion to earthquake relief efforts. The government has given HK$300 million, as well as relief materials such as tents, and has also sent medical and rescue teams. Mr Tsang and Mr Tang will meet the officials in Sichuan to discuss how Hong Kong can further assist in reconstruction work. The spokesman said other top officials would also go to Sichuan with delegation. They will include Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung, Secretary for Development Carrie Lam Cheng Yuet-ngor, the director of the chief executive’s office, Norman Chan Tak-lam, and senior civil servants. Financial Secretary John Tsang Chun-wah will be acting chief executive while Mr Tsang is away. Secretary for Education Michael Suen Ming-yueng will be acting chief secretary.

Former bank executive wins tax battle over HK$15.1m payout - A German bank executive has won a legal victory in his battle with the city's tax man. The Court of First Instance ruled yesterday that Walter Fuchs does not have to pay tax on a chunk of the HK$15.1 million he pocketed after being fired from the Hong Kong office of German bank Bayerische Hypo-und Vereinsbank. The case centred on whether the money was taxable income, or termination pay, which is typically tax-free in Hong Kong. In his written decision yesterday, Mr Justice Michael Burrell said that HK$8.9 million of the payout was the same as regular income and should be taxed. But the remaining HK$6.2 million was beyond the reach of the Inland Revenue Department because it was a one-off termination payment. The judge also awarded the bank's former head of Asian operations half his legal costs. Mr Fuchs was fired after a company takeover two years ago. Separately, he also received HK$3.1 million salary for the last year of his contract, which the Inland Revenue did not tax. But the Inland Revenue ruled last year that the remaining payout - about HK$15 million - was taxable. Mr Fuchs appealed against the decision. "If [tax authorities] don't appeal this, they could run into problems in future cases," said Jennifer Wong, a tax partner at consulting firm KPMG. "I would say that this [the ruling] could be quite controversial." The Inland Revenue reasoned that the payment was income because it was spelled out in the banker's employment contract. But Mr Fuchs countered that the money was simply non-taxable damages related to his sacking. Under the terms of the executive's three-year contract, his sacking would require the bank to make a one-time payout equal to double his annual salary - about HK$6 million - plus the average of his annual bonuses, or HK$9 million. "They are two separate payments which are arguably different in nature and attract different legal consequences," Mr Justice Burrell wrote in his judgment. The doubled salary would not have been paid out if Mr Fuchs continued working, suggesting the HK$6 million was "designed to soften the blow of premature unemployment", Mr Justice Burrell added. KPMG's Ms Wong said employees could avoid similar battles if they did not have the details of termination pay spelled out in their employment contracts. "The chances of winning a case against Inland Revenue would improve," she added. "But that could lead to disputes with the employer when an employee [is fired]."

Li Ka-shing reveals his key to success - Hong Kong's richest man has unveiled his secret to success - an index warning against arrogance. Li Ka-shing said his formula was borrowed from the Greeks: to strike a balance between "arete" - meaning goodness, excellence and virtue - and "hubris", referring to pride bordering on arrogance. "The hubris index governs not only our attitude, but our behaviour. Are we excessively proud and boastful? Do we fail to listen to foils [critics] that say you're wrong? Do we refuse to get feedback about the outcome of our acts and decisions? And are we lax in planning in advance for possible problems, consequences and corrective measures?" he asked. Mr Li was speaking at a graduation ceremony at Shantou University in Guangdong. He is honorary chairman of the university council. The index had been a navigational tool that had guided him through life, Mr Li told students. Saying a humble heart was the beginning of all knowledge, he reminded young people to avoid walking on dangerous ground to "systematically inflate the view of one's own abilities, to become caught up in exaggerated pride or self-confidence". The tycoon, who had said he treated his philanthropic foundation as a third son, also cited ancient Chinese philosopher Zhuangzi to encourage young people to give, not only to take. "A position of sovereign does not necessarily connect with being thought noble, nor the condition of being poor with being thought mean," he said. The ceremony was also attended by Yang Liwei , the nation's first man in space, and Guangdong vice-governor Song Hai. Mr Li was rewarded for unveiling the secret of his success - with the singing of a song to mark his 80th birthday, entitled Great Wisdom.

China: Chinese shares plummeted on Friday as investor sentiment was hurt by weak overseas markets and concerns about new share offerings. The benchmark Shanghai Composite Index trimmed 153.42 points, or 5.29 percent, to close at 2,748.43 points. The Shenzhen Component Index dropped 563.45 points or 5.63 percent to 9,436.21. Combined turnover on the two bourses shrank to 97.2 billion yuan (around 14.17 billion U.S dollars) from 108.6 billion yuan on the previous trading day. Oil caps were deeply hurt by the rising international crude oil price, said Wan Bing, a Guangdong-based GF Securities analyst. PetroChina, the country's largest oil producer, and Sinopec, Asia's top oil refiner, plunged 3.47 percent to 15 yuan and 9.12 percent to 10.27 yuan respectively. Securities shares fell on the news of Everbright Securities' coming initial public offering (IPO). The China Securities Regulatory Commission (CSRC), the market watchdog, said late Thursday it would review IPO applications from the Everbright Securities and China South Locomotive and Rolling Stock Corp. on June 30. According to the draft prospectus, the two companies are scheduled to raise about 20 billion yuan, which would further drain liquidity from the sluggish market, dealers said. CITIC Securities, the country's largest listed brokerage firm, lost 8.33 percent to 24.55 yuan per share and Shanghai-based Haitong Securities was down 6.11 percent to 24.12 yuan. The market is also concerned about a possible interest rate rise during the weekend, which may have unfavorable effects on the A-share market, said Zhang Dongyun, a Haitong Securities analyst. A report by Guotai Jun'an Securities said that one should not be over-pessimistic about the market, believing that the country would loosen its tight monetary policy in the third quarter of this year, which would create more investment opportunities. The Shanghai Composite Index may fluctuate between 2,500 and 3,700 points in the second half of this year, said the report. Losing shares outnumbered gainers by 791 to 35 in Shanghai and by 675 to 17 in Shenzhen on Friday. The benchmark Shanghai Composite Index has shrunk more than 55 percent from its peak in mid-October last year.

A bird's eye view of the Shanghai Yangtze Bridge under construction over the mouth of the Yangtze River in Shanghai, East China, June 27, 2008. Shanghai is working on a mass transport project, including a bridge and tunnel to connect suburban islands to the city center.

An agreement to let Taipei participate in the 2010 World Expo in Shanghai was signed yesterday, confirming the first official Taiwanese involvement in a world fair since the island was ousted from the United Nations in 1971. Taipei Mayor Hau Lung-bin also invited Shanghai Mayor Han Zheng to be his guest at the 2010 International Gardening and Horticulture Exposition in Taipei. Mr Han, who seemed to be caught off guard by the invitation, did not make any firm commitment. Any visits by mainland officials to Taiwan could be controversial since there are no official relations between the governments on the two sides of the Taiwan Strait. Chen Yunlin , chairman of the Association for Relations Across the Taiwan Straits, a semi-official body set up by Beijing to handle affairs with Taiwan, has not yet visited the island. Martin Ting, general producer of the expo in Taipei, said: "We hope Shanghai can join the event. Even if they can't participate on an official level, they can send their non-government organisations to Taipei." Also attending the two mayors' meeting was Terry Guo Tai-ming, chairman and founder of Hon Hai Group and one of the richest men in Taiwan. Mr Guo sat next to Mr Hau at the meeting, though he was not a formal member of the Taipei mayor's delegation. The tycoon pledged to donate NT$300 million (HK$77.1 million) to the Taipei government to set up its pavilion at the Expo. Taipei, with 800 square metres to showcase its wireless broadband internet infrastructure and garbage recycling system, will occupy one of the most prominent locations on the Expo grounds. Zhou Hanmin, deputy director of the Expo co-ordinating bureau, said it would stand right next to the Expo's landmark, a 165-metre chimney called the Harmony Tower that he said reflected Beijing's goal of building a harmonious society. Mr Hau returns to Taipei today after leading a delegation of 25 people which arrived in Shanghai on Monday. It was his second visit to Shanghai; the first was in 2005 as head of Taiwan's Red Cross. Yesterday, he toured the Expo construction site, including the Taipei pavilion's location. He also revealed he would return to Shanghai for the event, which takes place between May 1 and October 31, 2010. The organising committee is expecting it to attract more than 70 million visitors. The horticulture exposition in Taipei will run from November 2010 to April 2011.

June 27 - 29, 2008

Hong Kong: Frederick Ma, secretary for Commerce and Economic Development of the Hong Kong Special Administrative Region (HKSAR) government announced here Tuesday night that he had tendered resignation on health reasons. "I have recently discovered that I have 'cavernous hemangioma' and 'venous angioma'. After discussing with my family, I have decided to step down from my current position," said Ma in his statement, adding that he will meet the media Wednesday to give a full account of his decision. Meanwhile, HKSAR Chief Executive Donald Tsang also issued a statement, saying that he fully sympathizes with Ma's situation and will forward Ma's resignation to the Central People's Government for consideration. Tsang said Ma told him on June 12 that he had to resign because of his health conditions. "I have since discussed with him in depth twice and fully sympathize with his situation. I shall forward his resignation to the Central People's Government for consideration forthwith. My heart is with Mr. Ma and his family and I wish him a speedy recovery," said the chief executive. Aged 56, Ma first joined the HKSAR government as the Secretary for Financial Services and the Treasury in July 2002. He was appointed to the current post in June 2007. Before joining the HKSAR government, Ma has served in key posts in Pacific Century Cyberworks Limited, J.P. Morgan Private Bank, Chase Manhattan Bank, Kumagai Gumi (HK) Limited and RBC Dominion Securities Limited. He also held a number of public service positions, including serving on the Hong Kong Exchanges and Clearing Limited and the Hong Kong Securities and Futures Commission.

People holding umbrellas walk pass a fallen tree in south China's Hong Kong on June 25, 2008. Hong Kong was affected by heavy rain as the Typhoon Fengshen headed towards the southern Chinese city. The Hong Kong Observatory issued the No. 8 Northeast Gale or Storm Signal on Tuesday and red warning on Wednesday.

As Macao's tourism industry continues its rapid development, the island city saw its market share of international markets in visitor arrivals rose to 10.5 percent in the first five months of this year, the city's tourism chief said on Wednesday. During the period, visitor arrivals almost reached 12.6 million, registering an increase of 17.4 percent year-on-year, and the Chinese Mainland, Hong Kong and Taiwan continued to be the three largest visitor generating markets, said Joao Manuel Costa Antunes, Director of Macao Government Tourist Office (MGTO). Antunes presented the tourism development of Macao and outlined MGTO's future marketing strategies at the opening ceremony of the MGTO Annual Marketing Meeting held here on Wednesday. He stressed that MGTO is moving toward the goal of source markets and tourism product diversification. According to a press release from MGTO, it is putting forward a number of tactics to attract more tourists, which include reinforcing cooperation with airlines on new routes, developing and promoting new tourism products, such as wedding/honeymoon package and strengthening regional cooperation and multi- destination travel. In addition, the Macao Special Administrative Region Government has provided steadfast support towards the development of business travel and the MICE industry, Antunes added.

Government ultimatum to chicken farmers: Take our $1b or leave it! - The poultry industry has been given an official ultimatum accept a HK$1 billion government compensation package to shut down their businesses or face an uncertain future. The city's 469 chicken retailers have been told they must decide what to do by July 24 while farmers, wholesalers and transport workers have been given until September 24. Secretary for Food and Health York Chow Yat-ngok said this was the government's final offer after a meeting of the Executive Council yesterday. As well as retailers, Hong Kong has 71 wholesalers, 50 chicken farms and 266 transport workers who depend on the trade for their livelihood. However, if the retailers' accept the buyout deal it will effectively end the businesses of the rest of the sector as well as Hong Kong's culture of cooking live chickens. The need for central slaughtering by 2011 may also be made redundant. Chow expressed confidence that most of the retailers will accept the deal which is more than three times the 2005 Voluntary Surrender Scheme. A lot of the traders said they can't operate under the overnight ban and they are also considering the risk of facing another bird flu outbreak within the next few years, he said. But, the government will only approve the offer when 90 percent of the trade accepts it. Another offer will not be tabled in the future before central slaughtering, Chow added. A source said the government has improved the deal for retailers with an increase of almost HK$100 million or over 20 percent to a total of HK$513 million. A source said the increase was justified. "If we terminate the trade's tools for living out of public health concerns, we must be more reasonable in our offer," the source said, adding that no further increase is expected after any future negotiations. Retailers who choose to resume operation on July 2 must operate under an overnight ban on keeping live chickens in the stalls between 8pm and 5am. Violators are subject to a penalty of HK$50,000 and six months' imprisonment. The amendments of the law will be gazetted this week and will be tabled at the Legislative Council for negative vetting. Chow believes the overnight ban will be agreed by lawmakers out of public health concerns. "H5N1 is not political, we must be scientific in dealing with it," he said. Chow said the 400,000 chickens which have been held in farms due to the ban and can no longer be sold because they are too old will be compensated for at a rate of HK$30 per bird. A source said the government fears the recent discovery of the H5N1 virus in the chickens of four wet markets is not a problem of smuggling, but a drop in chickens' immunity against the virus.

No one at fault in sturgeon death says Ocean Park - Ocean Park plans to release the four surviving Chinese sturgeons back into the main tank of its aquarium in early July despite the death of a fifth fish bitten by a barracuda. The park's executives, veterinarians and oceanologists insisted yesterday the attack was an accident. The necropsy on the sturgeon indicated the bite was not aggressive but a reflex action induced by contact between the fish. "No one is at fault, and no one is getting fired," executive director of zoological operations and education Suzanne Gendron said. She said it is the first time in the world for both species to be kept in the same saltwater environment and that the two species do co-exist in the South China Sea. Director of the National Aquatic Wildlife Conservation Association Li Yanliang said sturgeons should be able to get along with other fish, but barracudas may have attacked the sturgeons because they were newcomers. Sturgeons are separately kept in the Beijing Aquarium, but experts from the Ministry of Agriculture said barracudas are not particularly fierce species and interpreted the attack as an accident. Chinese sturgeons are an endangered species native to China. Five were presented to the park last month and went on display at Ocean Park's Atoll Reef main tank last Thursday. Gendron said the eight barracudas have been with the park for almost 10 years and never showed any signs of aggression.

Tycoon and politician Tsang Hin-chi and son Ricky Tsang Chi-ming have donated HK$10 million for the training of volunteers helping rebuild earthquake- devastated Sichuan.

Hang Seng Bank (0011) said yesterday it has raised its mortgage rate for new customers by 25 basis points even as the US Federal Reserve's two-day meeting got under way in Washington.


Walter Kwok Ping-sheung, the eldest brother at the heart of controversy surrounding property giant Sun Hung Kai Properties (0016), has finally broken his silence over the issues dogging the company. In his first personal appearance since being ousted as SHKP chairman and chief executive on May 28, Kwok made an effort to mend his relationship with his family by putting recent events down to misunderstandings. "The company has grown bigger and numbers of investments are on the rise. It's normal to have more conflicts among the management," he was reported as saying yesterday. His ties with matriarch Kwong Siu-hing and with his two brothers remain strong, and more communication could have solved the problem, he said. "I maintain a good relationship with my mother and we are having lunch regularly once or twice a week. "Most of the time she stands by my decisions, on the IFC [International Finance Center] and ICC [International Commerce Center] developments for example," the eldest Kwok said. He dismissed rumors that disagreements with his younger brothers, Thomas Kwok Ping-kwong and Raymond Kwok Ping- luen, stemmed from the influence of his confidante Ida Tong. "I have been the chairman for 18 years, any influence would not happen just now. She [Tong] is a good friend of mine for more than 20 years. We, among a few other friends, always meet together to discuss economic and political issues," he said. Kwok also said he has no hard feelings over his new role as an SHKP independent non-executive director. "I will adjust to it and keep on monitoring the operations of the company as a non-executive director," he said. Kwok added that he has no intention of dividing the family wealth: "I will not sell my stake [in the company] or start up my own business, it's totally a misunderstanding." SHKP was founded by his late father under the SHKP Foundation, and Kwok said he has never thought of changing the setup.

China: Whistle-blowers given protection - Huang Rui (not his real name), a resident of Chongqing municipality, had valuable information for authorities about how a government official had abused his power in approving a local land deal. In the past, Huang may have hesitated before stepping forward, for fear of retribution from the government office. However, the local procuratorate has recently taken steps to encourage informants like Huang to share what they know. Huang was taken to the new "whistleblower's center" of the first branch of the Chongqing municipal people's procuratorate. He sat in a small private room with no windows. After he was assured that there was no video camera or recording equipment in the room, Huang revealed his information to two procurators. His report helped them successfully crack the case of abuse of power by a high-ranking local official. Yang Yi, chief of the procuratorate's accusation and appeal section, said the new room was part of broader effort to encourage whistle-blowers. "The first branch has launched the system of protecting whistle-blowers, if they are under threat because of their report," Yang said. In addition to the new whistle-blower's room, which opened earlier this year, other steps are being taken. "We will send policemen to protect whistle-blowers around the clock," Yang said. The new system appears to be having an impact. Huang is one of nearly 100 informants who have submitted reports to the branch since the protection system was adopted in February, according to the branch's records. Yu Jie, chief of the first branch, said the number of clues provided by whistle-blowers has risen by 55 per cent over the same period last year. Chongqing residents have said these efforts deal with an important concern. "Being a whistle-blower can be dangerous," Zhang Jian, a Chongqing resident, said. "We are gratified because the first branch protects whistle-blowers." Whistle-blowers also play a role in cracking cases elsewhere. Mu Ping, chief of the Beijing municipal people's procuratorate, said about 11,000 clues pertaining to job-related crimes by officials in the municipality have been provided by whistle-blowers in the past five years. Also the Guangzhou people's procuratorate said earlier nearly 80 percent of cases pertaining to job-related crimes by officials were set in motion by information from whistle-blowers.

Taipei mayor calls for direct flights - The mayor of Taipei hopes to soon see a direct flight open between Shanghai and Taipei. A direct link between Shanghai's Hongqiao International Airport and Taipei's Songshan Airport will benefit both cities, Hau Lung-bin said yesterday. He was speaking during an official visit to the Shanghai airport. "I could imagine that Hongqiao (district) will become an important business and transport hub for Shanghai and the Yangtze River Delta by 2010," Hau said. "And with the large mass of population and business clusters, Songshan (district in Taipei) will also play a key role in Taiwan's future economic development," he said. "A direct flight will reduce travel time between the two hubs to about 80 minutes, which will closely link Taipei and Shanghai, as well as the entire Yangtze River Delta region economically," he said. "What we need to plan is how to combine our efforts in mutual development." Currently, there is no direct air route between the two cites. Travelers must transfer in Hong Kong or Macao. Chartered flights which are available on occasions like the Spring Festival take about three hours, and planes have to stop off or fly through Hong Kong or Macao. Regular weekend charter flights starts from July 4. After visiting the airport, Hau and his delegation visited the Shanghai municipal urban planning museum. Hau wrote in the museum's signing book: "May dreams of Shanghai and Taipei come true." Today, Hau will visit the Shanghai Wild Animals Park. Jason Yeh, director of Taipei Zoo, told China Daily yesterday that they would not discuss importing pandas from the mainland on this visit, as they had originally planned. The reason is that representatives from the China Wildlife Conservation Association are not available to meet as expected. "But we are very confident in getting the pandas eventually," Yeh said. Several zoos on the island are vying for the right to host the pair of pandas. Yeh said that as early as 1995, Taipei Zoo started sending staff to the mainland and zoos around the world, which have pandas, for trainings on raising pandas. "We have spent more than NT$310 million ($10.3 million) on building facilities for pandas," Yeh said. "The weather from November to March will be cooler in Taiwan and we hope they will come during that time period." Officials from both cities are expected to discuss zoo exchange programs for other rare animals, he said. Lin Hwa-Ching, CEO of the Wildlife Conservation & Research Center at Taipei Zoo, said the exchanges may include Yangtze River alligators and black snub-nosed monkeys from Shanghai and orangutans, white-handed gibbons and sun bears from Taiwan.

China has developed a new-generation supersonic trainer aircraft with state-of-the-art turbines and a full authority digital engine control.

China National Offshore Oil Company Limited (CNOOC Ltd.) announced Tuesday that a new oil field in the South China Sea had started production with a current daily output reaching 31,000 barrels.

Lieutenant General Su Shiliang (L), commander of China's South Sea Fleet, gestures while welcoming Major-Gen. Shinichi Tokumaru (R) of the Japanese Maritime Self-Defense Force after the Japanese Maritime Self-Defense Force destroyer arrived in Zhangjiang, south China's Guangdong Province on Tuesday, June 24, 2008.

Shanghai film fest a far cry from Cannes - The Shanghai festival, which recently celebrated its 11th anniversary on June 22, fails to claim its own name to fame - its image is at best, vague.

June 24 - 26, 2008

Hong Kong: Hong Kong has become the most popular destination for mainland outbound travelers, according to the latest survey released by the Ac Nielsen. The company surveyed 4,103 travelers in 26 major cities during the first two months of this year. Interviewees from north and northeast China listed France as their second favorite destination, while those from southern and western parts of the country ticked Macao and Australia, according to the survey result. Meanwhile, according to the company's Destination Satisfaction Index, a measurement of tourists' satisfaction with their destinations, Japan and Australia ranked the top two.

Lawyers warned over dirty money - Lawyers in Hong Kong have been told to step up the checks they make on potential clients amid growing concern over the twin threats of money laundering and terrorist financing.

Chicken ban to be lifted - Live chicken will be for sale again on July 2 if vendors agree not to keep the poultry alive overnight.

No more hurdles to Ho flagship listing - Casino mogul Stanley Ho Hung-sun's gaming flagship SJM Holdings finally overcame all hurdles yesterday to kick off its roadshow, with its retail book expected to be open from Thursday until July 2.

Euro V duty waiver `just drop in bucket' - The government has decided to waive the duty on Euro V diesel but has shot down calls to lower the tax on unleaded petrol and ultra-low sulfur diesel as well as fuel subsidies.

Chief Executive Donald Tsang Yam-kuen will lead a Hong Kong government delegation to quake-hit parts of Sichuan this weekend to find out how the city can help in their reconstruction. A government source said the delegation, which will spend three days in the southwestern province, would be briefed by the provincial government about the latest situation in the counties affected by the magnitude- 8 earthquake on May 12, which killed more than 70,000 people. "We hope to set up a mechanism by which Hong Kong and Sichuan government officials can discuss co-operation in the reconstruction," said the source. Among those travelling to Sichuan will be Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung, Secretary for Development Carrie Lam Cheng Yuet-ngor, the director of the Chief Executive's Office, Norman Chan Tak-lam, and senior civil servants. Macau Chief Executive Edmund Ho Hau-wah will also lead a delegation to Sichuan from Friday to Sunday. In witnessing the destruction first-hand, the delegations will be following in the footsteps of Premier Wen Jiabao and singer-actor Andy Lau Tak-wah. Individuals, companies and organisations in Hong Kong have donated more than HK$1 billion to earthquake relief efforts. More than 1,000 Hongkongers have registered as quake relief volunteers. The government has given HK$300 million as well as sending medical and rescue teams. Conservancy Association chairman Albert Lai Kwong-tak, a civil engineer, has teamed up with fellow Hong Kong engineers and professionals to plan redevelopment in the destruction zone. He said the group they had formed, Engineers Without Borders, had sent a team to Sichuan this month to make a site assessment and that another trip was being arranged for early next month. Chinese University political analyst Ivan Choy Chi-keung said Mr Tsang was worried about his falling popularity and the perception that he ducks controversy. He pointed to the publicity and photo opportunities the trip to Sichuan would generate, and said: "This will send the message that Mr Tsang is still in charge." Mr Tsang's popularity fell amid the recent controversy over the administration's handling of new appointments to his governing team. A University of Hong Kong opinion survey early this month found his approval rating had dropped to 60.8 out of 100, against 66 when the appointments were announced in May.

Tailor, hotel staff named in bribery cases - Eleven people - all suspected of helping to divert hotel guests illegally to a well-known Kowloon tailor - have been charged with bribery in four separate cases, the ICAC said yesterday. In the first case, the Independent Commission Against Corruption alleged that between December 2001 and January last year, the proprietor and three employees of Baron Kay's Tailor conspired and offered advantages to concierge staff of six hotels - The Marco Polo Prince, The Peninsula, The Marco Polo Gateway, Renaissance Kowloon Hotel Hong Kong, Marco Polo Hong Kong Hotel and Marriott Hong Kong - in return for them referring hotel guests. The ICAC named the defendants as George Kay Wai-ming, 48, proprietor of Baron Kay's Tailor; salesman Ngai Yan-lung, 61; and accounts clerks Wong Lai-ching, 52, and Lee Fung-ho, 47. Kay, Ngai and Wong each faced one count of conspiracy to offer advantages to agents, while Kay, Ngai and Lee faced a similar conspiracy offence with Wong, the ICAC said. Lee also faced one charge of perverting the course of justice. Baron Kay's Tailor, in Mody Road in Tsim Sha Tsui, has been listed in travel guides and on the Hong Kong Tourism Board's recommended shopping list. In the second case, three concierge staff at The Marco Polo Gateway hotel and two of its bell captains each face one count of conspiring to accept advantages between mid- 2005 and January this year. The ICAC said those defendants were Wong Hing-cheung, 60, Pan Wai-man, 43, and Yeung Wing-wai, 33, Cheng Chi-chiu, 59, and Leung Siu-ho, 46. In the third case, Chan Wing-yin, 46, chief concierge at the Harbour Plaza Metropolis, has been charged with one count of conspiring to accept advantages between January 2004 and November 2006. In the last case, Felix Wong Tim-ki, 27, a concierge clerk at The Peninsula, faces one count of being an agent accepting an advantage - allegedly a suit jacket, a pair of trousers and a shirt - in early 2004. The defendants, all on ICAC bail, will appear in Kowloon City Court this week.

China: The Communist Party of China (CPC) Central Committee on Sunday revealed its five-year plan for the Party's prevention and punishment of corruption. The committee has ordered Party organs at all levels to seriously carry out the plan which aims at establishing a system to punish and prevent corruption from 2008 to 2012. A focus of the plan, a guideline for the Party's anti-corruption work in the next five years, is to correct sybaritic and wasteful spending of the government's money by bosses of state-owned corporations. It orders leaders in state-owned companies to create legal, clean and democratic management by paying more attention to the appeals and demands of the public. As an important shift for the Party's anti-corruption endeavor, the plan pledges to improve its internal supervision over the power. It vows to establish a supervision system in which the Political Bureau of the CPC Central Committee regularly reports its work to the plenary meeting of the committee which supervises the Political Bureau. It also plans to intensify the supervision over officials in various Party organs and governments, making close examination of their illegal incomes, bribery, interference of market or trade and other corruptions by making use of their positions. Meanwhile, it supports pushing forward the government's information transparency through holding more public hearings and professional consultation meetings. The plan also invites the mass media to implement press supervision over the government and Party. The media will be encouraged to provide legal and constructive criticizing reports with professional ethics and Party officials shall deal with those reports in a proper way. The plan was ratified by the Political Bureau of the CPC Central Committee on April 28.

Regulator says to balance stocks supply and demand for stability - Shang Fulin, chairman of the China Securities Regulatory Commission (CSRC), on Sunday vowed to deepen reform and boost regulation to promote a stable and healthy development of the capital market.

Baosteel Group, China's top steel producer, plans to pay 28.68 billion yuan (HK$32.57 billion) for a controlling stake in a new steel mill, which will merge two existing mills, as Beijing calls for the formation of national giants to rival the likes of ArcelorMittal.

Foreign banks struggle to keep talent - While foreign banks in China foresee robust growth in the mainland this year, those overseas lenders are struggling to retain senior executives, according to a survey conducted by PricewaterhouseCoopers. The survey found the three most difficult positions to fill are senior executives, compliance officers and wealth management officers.

China Southern Airlines (1055), the nation's largest carrier by fleet size, has applied for an increase in fuel surcharge to offset expected losses resulting from last Friday's nationwide fuel price hike.

Baosteel Group, China's largest steelmaker, agreed to pay up to 96.5 per cent more for its iron ore this year in a term contract with Australian miner Rio Tinto.

Taipei Mayor Hau Lung-bin has arrived in Shanghai to close a deal that will allow a participant from Taiwan to join in the 2010 World Expo - the island's first official return to a world fair since it was ousted from the UN in 1971. Mr Hau, who led a 25-member delegation to Shanghai yesterday for a five-day visit, is scheduled to sign Taipei up for the "best cities for urban practices" exhibition from May to October 2010. Taipei will showcase its wireless broadband internet infrastructure and rubbish recycling system. "The most important mission of this trip is to witness the signing of the agreement for Taipei to take part in Shanghai Expo 2010, showing how Taipei has become a wireless city and how it has recycled its rubbish into useful things," Mr Hau, the first Taipei mayor to visit the mainland, said before his departure. The city's rubbish is separated into reusable and non-reusable categories. Taipei competed with 130 cities worldwide to enter the exhibition. The entry as a city rather than a country has allowed the island to return to Expo. Taiwan last participated in an Expo in Osaka, Japan, in 1970 - the year before the UN awarded its China seat to Beijing. In 2005, by signing an agreement with a Japanese restaurant and paying a royalty of NT$15 million (HK$3.85 million), Taiwan was able to host a food stall - in the restaurant's name - showcasing the island's best food at Expo 2005 in Aichi, Japan. Mr Hau said that to avoid being criticised by the opposition Democratic Progressive Party for wasting taxpayers' money by taking part in the exhibition, the city government obtained some funding from the Hon Hai Group, one of Taiwan's leading electronics makers. Terry Guo Tai-min, head of Hon Hai and the third-richest man in Taiwan, signed a NT$300 million contract with Mr Hau on Sunday to build and operate an exhibition hall for Taipei. While on the mainland, Mr Hau will also be competing against other Taiwanese cities for the two pandas the mainland offered to send the island as a gift after then Kuomintang chairman Lien Chan met mainland President Hu Jintao in 2005, the Taipei mayor said. "We will also visit the Shanghai Wild Animal Park, and hope to learn how it takes care of pandas," he said. Taipei is vying with Taichung, Taoyuan and Kaohsiung, but it is the only city to have built a NT$250 million panda house and bamboo grove for the two pandas. City officials said Mr Hau would also discuss with mainland authorities the possibility of hosting two other rare species - the snub-nosed monkey and golden monkey - that Beijing has promised to send to Taiwan as a gift after People First Party chairman James Soong Chu-yu's mainland visit in the same year. Mr Hau will also survey Shanghai's transport facilities and other public works, including the project of developing Hongqiao airport into a multiple transport hub in order to draw on Shanghai's experience in airport development for the remodeling of Taipei's 60-year-old airport. Mr Hau met Shanghai's deputy mayor, Tang Dengjie , last night. He is scheduled to meet his Shanghai counterpart, Han Zheng , on Thursday.

June 20 - 23, 2008

Hong Kong: The credit derivative and securitization markets in Hong Kong grew significantly, with credit derivative activity jumping 61 percent and securitization transactions up 103 percent, revealed a survey here Wednesday. The transactions were mainly entered into for trading purposes. Medium-term (one to five year) credit default swaps with investment grade reference entities continued to be the most common product, according to a survey published Wednesday by the Monetary Authority, the city's de facto central bank. On the securitization market the survey found synthetic securitization surged 313 percent and accounted for 61 percent of the total outstanding securitization exposures last year. The overall market activity heavily concentrated on a small number of institutions' activities. The market share of local banks, most of which participated in such transactions as investing banks, increased year on year from 69 percent to 83 percent. Claims on central governments and central banks as well as residential mortgage loans continued to be the most popular types of underlying assets in securitization transactions. The authority said the sub-prime fallout in the United States has prompted regulators and the market to be more cautious of certain securitization transactions. Regulators particularly are re-examining the capital and disclosure treatment of these transactions, which may shape future market activities. To ensure the prudent development of the credit risk transfer activities of authorized institutions in Hong Kong, the Monetary Authority will keep a close watch on the development of international standards and work closely with the industry in promoting sound risk-management practices. It will also consider further improvements to its data collection requirements to better capture institutions' exposure to complex-structured products given the rapid market developments and the potential risks these can entail as exemplified by the sub-prime crisis.

Three orders implementing double taxation relief arrangements for flights between Hong Kong, Mexico and Finland will be gazetted Friday, the Transport and Housing Bureau said here Wednesday. The three jurisdictions' airlines will be tax exempt for income and profits derived from international flights in a bid to cut operation costs, and improve income and efficiency, the bureau said. The Specification of Arrangements (Government of the Republic of Finland) (Avoidance of Double Taxation on Income from Aircraft Operation) Order will no longer be required, according to the bureau. The orders will be submitted at the Legislative Council on June 25.

People in the transport sector are angry at the government for what they see as delaying tactics in the form of a pledge to review duty on fuel. "The government is acting irresponsibly," said Stanley Chaing Chi- wai, who organized a two-day protest last week. "It is still considering when it should make a decision." Earlier yesterday a government spokesman said the decision to conduct a review had been made after "listening to the trade's views." The offer to conduct a review came one day before legislators are to debate a motion calling for lower duties, although senior government officials are reportedly against any reductions. Drivers staged a truck blockade in Central last Tuesday, causing traffic jams, while hundreds of protesters took part in a two-day sit-in outside Government House. The protesters last Wednesday gave the government a week to act on the fuel tax before it shaped for more rallies. Chaing said yesterday he was angry about the government's response. The removal of the duty would only cost the government about HK$400 million and would not affect revenue much, Chaing said. The transport sector has been hit by soaring fuel prices this year, with some businesses forced to close. A fuel tax cut would help offset the higher prices, people in the sector argue. A government spokeswoman has, meanwhile, defended the tariff, saying Hong Kong's diesel duty represented less than 5 percent of the retail price and was among the world's lowest. She also noted that a concessionary duty of HK$0.56 per liter for Euro V diesel applied from last December. That fell from an original rate of HK$2.89 per liter. And the concessionary duty rate of ultra-low sulfur diesel was only HK$1.11 per liter.

Mainland property tycoon Yeung Kwok-keung will soon have the bank financing to take over Shaw Brothers (0080), but the interest rate may have been hiked even higher. The long-term debt funding of HK$7 billion will be made available five to 10 days after Citi, which is arranging the syndicated-loan deal, finalizes the list of banks, Bloomberg quoted sources as saying. The already-high interest rate being levied on Yeung may have been increased. The loan pays "more than 3 percentage points" above the benchmark lending rate, the sources were quoted as saying. It was previously reported the interest rate would be set at 3 percentage points above the benchmark, equivalent to about 7 percent. Yeung, who is chairman of Country Garden (2007), has already obtained another HK$3 billion in financing from Henderson Land Development (0012) chairman Lee Shau-kee. Shares in Shaw Brothers jumped 4.3 percent yesterday to end trading at HK$21.75. At current levels, Shaw's stake in the holding company is worth at least HK$6.49 billion.

Secretary for Transport and Housing Eva Cheng Yu-wah on Wednesday said the government had not reached a decision on scrapping the duty on diesel fuel. Ms Cheng was speaking after meeting representatives from transport sectors and some lawmakers from the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) party. DAB vice-chairman Lau Kong-wah quoted her as saying the government might be prepared to phase out Hong Kong’s diesel tax. He made the comments after a meeting her on Wednesday morning. But Ms Cheng later issued a statement which clarified the government’s position. It said the government was still considering the feasibility of cutting the diesel duty. This was because the government needed to hear more opinions from different sectors, she explained. Ms Cheng said they would review duties on Euro-V diesel as soon as possible. But she said duties would be maintained on less environmentally friendly and low-sulphur diesel. This is more widely used by lorry drivers. The transport chief said reducing or eliminating the diesel tax was seen as an important way to help commercial drivers cope with rising fuel costs. After a meeting with Ms Cheng and other lawmakers on Wednesday morning, Mr Lau had told local media: “From our conversation, I believe Ms Cheng said the government could exempt all diesel taxes.” Mr Lau said it was unlikely the government would scrap Hong Kong’s petrol tax. He said eliminating the diesel tax made sense. “We hope the measure could help reduce operating costs of mini bus drivers and other commercial drivers, as well as to reducing their pressure to raise fares,” he said. Meanwhile, over 100 representatives from the transport sector, including minibus, taxi and other drivers protested outside the Legislative Council on Wednesday morning. On Wednesday, Legco also planned to debate the scrapping of taxes of Euro-V diesel and unleaded petrol by 50 per cent. This is to help reduce inflationary pressure in the wake of soaring oil prices. Representatives from the transport sector have said halving the taxes was not enough. They are demanding the government ends all diesel taxes and introduces an exemption on diesel station land premiums. Chiang Chi-wai, a spokesman for the Fuel Price Concern Transportation Joint Conference, said all diesel taxes should be exempted. “We hope the government can exempt all diesel tax, so as to reduce the burden of commercial drivers and improve their livelihood,” Mr Chiang added.

The Legislative Council’s Public Works sub-committee has recommended a one-off upfront payment of HK$21.6 billion for the West Kowloon Cultural District project on Wednesday.

Hong Kong Exchanges and Clearing Limited (HKEx) on Wednesday announced the appointment of John Williamson to replace David Webb as an independent non-executive director.

China: Hundreds of police and rescue officials have been posted to shore up dams threatening to burst under torrential rain that has already flooded 9,000 square miles of crops and homes.

Chinese Vice Premier Wang Qishan (L) and US Treasury Secretary Henry Paulson (R) shake hands after opening remarks at the start of cabinet-level meetings at the Strategic Economic Dialogue at the US Naval Academy in Annapolis, Maryland, June 17, 2008. China and the US have made substantial progress in resolving contentious issues such as currency and trade deficit, Vice-Premier Wang Qishan said at the opening of the fourth Strategic Economic Dialogue (SED) Tuesday. The two countries should adopt a patient approach and avoid "complicating and politicizing economic issues", he said. "Our cooperation is an irreversible and unstoppable current. China needs the US, and the US needs China." The meeting is being held on the US Naval Academy's campus in Annapolis, Maryland. Wang and US Treasury Secretary Henry Paulson are co-chairing the SED as special representatives of President Hu Jintao and US President George W. Bush. The two-day talks are expected to focus on the challenges the two countries face because of rising energy and food prices. An agreement on energy and the environment is expected to be the major achievement of the dialogue. The US and China must increase cooperation on energy because of the increase in demand for and record high prices of oil, Paulson said. "As the two largest net importers of oil, China and the US face similar challenges as the demand for energy increases." This is the fourth time Paulson is heading a delegation of US cabinet officials at such a conference. The Chinese team is led by Wang, who took over after Wu Yi retired earlier this year. China's high-profile delegation at the talks includes the ministers of finance, environment and commerce, Xie Xuren, Zhou Shengxian and Chen Deming, and central bank governor Zhou Xiaochuan. And the large US delegation consists of the secretaries of commerce, labor, and health and human services, Carlos Gutierrez, Elaine Chao and Michael Leavitt. Hoping the next US administration would continue the dialogue, Paulson said the SED has produced a lot of results. The two countries should continue the dialogue at least for the sake of the global economy. "The US and China don't always agree on economic issues. Sometimes we may disagree quite strongly but we keep talking." Major business groups such as the National Association of Manufacturers, the US Chamber of Commerce and the Financial Services Forum believe the high-level talks should continue because they will benefit both the countries.

China could see the fifth consecutive bumper harvest of summer grain for the first time since the founding of the new China.

China saw quicker growth in textile exports but slower rise in foreign sales of garments in the first five months of this year, sources with the General Administration of Customs said on Saturday. Between January and May, China exported $66.16 billion worth of textiles and garments, a growth of 15.4 percent on the same period of last year. The total included $26.07 billion worth of textile products, up 26.3 percent, and $40.09 billion worth of garments and accessories, up 9.3 percent. The growth rate for textile exports was higher than the level for the whole of last year, whereas that for garments was nine percentage points lower than the year-earlier level. In May alone, the nation's garment exports increased by a record-low rate of 1.08 percent to $8.59 billion worth. Industry insiders accredited the substantial slowdown to weak demand abroad, expediated appreciation of Chinese currency and higher production cost. They added that the weak demand had affected cotton sector in China. The country imported 240,200 tons of cotton in May, a decrease of 23,200 tons, or 8.81 percent, from the previous months.

Rush to fix dams as floods engulf 9,000 sq miles - Hundreds of police and rescue officials have been posted to shore up dams threatening to burst under torrential rain that has already flooded 9,000 square miles of crops and homes.

June 19, 2008

Hong Kong: Hong Kong entrepreneurs are fighting to hold back the worst flooding in half a century to save millions of dollars of equipment and facilities in the Pearl River Delta region.

Hong Kong heartthrob Tony Leung and his longtime partner Carina Lau have decided to end their lengthy courtship with a star-studded wedding slated for October, Chinese media reported Monday. Lau, an established entertainer like her boyfriend, began sending out invitations on Friday, Web site Sohu.com reports. Stars on the couple's guest list include Faye Wong and Na Ying. The wedding will be held in Hong Kong in October, with the date and the venue yet to be announced. Leung, 45, and Lau, 42, have been together for nearly 20 years, Sohu reports. Yet both have expressed their longing for marriage in recent interviews. Leung, for example, was quoted in an Associated Press report in February as saying, "I'm in my forties - I can't wait until I'm 60."

Times Square is being sued by the government to recover what could run into millions in unauthorized profits it has raked in from charging rent for the use of public space. The landmark lawsuit which backdates the claim to 1993 with interest may have significant implications for other property owners if it is successful. In a High Court writ filed against Times Square Ltd and its parent company Wharf Group, the Secretary for Justice seeks to recover rental fees of as much as HK$124,000 a day for use of the Causeway Bay piazza. Times Square, which has been the target of a vociferous campaign to free up the citys public space, says it will contest the action. Times Square understands that there are differences in legal interpretation of the related terms and clauses in the deed of dedication concerning charges to third parties for holding exhibitions and events at the ground floor piazza, a company spokeswoman said. We believe that we have not charged more than what is allowed in the deed. We think the case will ultimately provide for guidance on the proper interpretation of the relevant clauses in the deed of dedication concerned. The writ says that a February 28 letter to the Buildings Department from Times Square Ltd reveals the company charged between HK$28,000 and HK$40,000 per day from Monday to Thursday, or HK$100,000 to HK$124,000 per day on Fridays, weekends and public holidays to rent parts of the piazza. The rates are said to be in violation of the deed of dedication which stipulates the mall operator is only entitled to recover utility costs. The mall operator admits in its letter the rates may well exceed [its] facilitation expenses. Last month Secretary for Development Carrie Cheng Yuet-ngor said the government would take action against the collection of rental fees for piazza exhibitors. And while there would be a review of the overall policy, officials said it is still up to the owner whether or not activities may be held or banners displayed in the open space. The deed of dedication requires public open spaces to be used for pedestrian passage and passive recreation. Times Square general manager Leng Yen- thean has claimed overzealous security guards were responsible for preventing passersby from sitting or loitering. She also admitted the decision to lease a section of the public space to Starbucks was a staff error.

The government's decision to sue Times Square over the fees it charged for the use of public space will send shockwaves through the industry, developers' representatives warn. "This is very unusual [and] should be of real concern to [developers]," construction sector legislator Abraham Razack said. "The government should have very good justification for this action." As far as he was aware, Times Square had done nothing outside its contract with the government. "They have a right to do what they have done," he said. It is believed Times Square has been charging the highest rent for public space in the city for its two areas of public space: HK$28,000 and HK$40,000 on weekdays and HK$100,000 and HK$124,000 on Fridays, weekends and public holidays. The use of public space at Times Square and many other private developments is governed by deeds of dedication that spell out the responsibilities of management and the terms under which the space can be let. In return for dedicating part of their land to public use, developers are generally rewarded with concessions on the plot ratio. The Legislative Council panel on development is currently reviewing policies on provision of public space. Civic Party leader Alan Leong Kah-kit said that while such agreements were probably inevitable, given the city's density and pace of redevelopment, the way they were being managed needed to change. "We have very poor quality open spaces," he said. "Some are in the middle of thoroughfares and others you have to go to the seventh floor to use." He supported the action against Times Square. "The company that signed the deed acts in the role of a trustee, and they are obviously accountable." If they had been charging too much, they could be forced to pay back illegitimate profits. He hoped the Legco review would result in a more transparent and predictable system of open space. "We need consistent rules to govern the use by the public of these privately built, owned and operated spaces. We want the government to publish a set of procedures and guidelines for negotiating such deals." Lau Chun-Kong, international director of Jones Lang LaSalle, said developers had serious concerns about whether the government move would mean a loss of control over what occurred in public areas. "In the past, developers have had control over the use of the space, but if that is to change then they may reconsider their positions," he said. A shopping mall operator would want to be able to control activities that might affect tenants, such as protests against products.

Sun Hung Kai Properties (0016) has sold a luxury flat at The Arch in West Kowloon for HK$41,000 per square foot, making it the most expensive flat sold in Asia. The record-breaking property is Flat A on the 80th floor of Moon Tower, a source told Sing Tao Daily, sister publication of The Standard. It measures 5,497 sq ft and comes with a pool. In July last year, SHKP sold a property with the same floor area on the 80th floor of Sun Tower for HK$33,500 per sq ft. In April 2005, the property developer sold the then most expensive property - Flat A measuring 5,353 sq ft on the 77th floor of Sky Tower - for HK$31,300 per sq ft.

Appointees' saga 'will be seen as teething trouble' - Suffrage no precondition for launch of new team: Henry Tang - Universal suffrage for chief executive should not have been a precondition for introducing the political appointment system, Chief Secretary Henry Tang Ying-yen said yesterday. Mr Tang said the controversy over the appointments, which he admitted the government had not anticipated, would be seen as just a "small episode" or a "teething problem" when people looked back at the city's political development. Speaking to Chinese University School of Communication alumni at a dinner four weeks after the appointment of two tiers of appointees, he said that the expansion of the ministerial system was a necessary step as Hong Kong became increasingly politicised. "Some people oppose the political appointment system, with the major argument being that the chief executive is not selected through universal suffrage and is not empowered by the people, therefore undersecretaries and political assistants appointed by him lack public recognition ... I disagree." Mr Tang said. "Now, we already have a clear timetable with 2017 as the year for universal suffrage ... the expansion of the political appointment system today is to gradually introduce more and more officials to handle political work so that they can collaborate with a professional team of civil servants, and the political neutrality of civil servants can be maintained. "The experience has told us there are some matters which our community can further discuss, for example, how to handle the issues of allegiance and commitment while maintaining a diverse and international city? How to respect the public's right to know while protecting privacy at an appropriate level?" Summing up his six years working at the ministerial level, Mr Tang said he had learned to appreciate that mistakes by individual officials would do a lot of damage to the government's credibility. What had moved him most was the team of professional civil servants who had given him great support, he said. Lee Wing-tat, of the Democratic Party, said he was mystified how Mr Tang could consider the controversy a "small episode" in constitutional reform, saying the appointees' lack of a mandate was a core problem in Hong Kong's political system. "Somebody might even call Tung Chee-wah's resignation a small episode, but he was forced to leave because he lacked a mandate," Mr Lee said. "The reason why the public is so angry with the government over the political appointees controversy is because some unelected people have filled top positions with taxpayers' money." The Civic Party's Ronny Tong Ka-wah said Mr Tang was wrong in believing that a pool of political talent could be created with the appointment system. The appointees' lack of long-term political commitment, as shown by their painful decisions when pressured to relinquish their foreign citizenship, really tells us this system cannot raise people's interest in serving the public through taking part in elections,' he said. DAB chairman Tam Yiu-chung said: "Even if this is a small episode, the government should review the experience and learn its lesson."

Hong Kong should reverse its current practice of taxing cleaner fuels while waiving the duty on industrial diesel as part of a package to clean up the city's port, according to a research paper. The paper, released by the think-tank Civic Exchange yesterday, called for greater cross-border and regional collaboration on cleaning up ports. It said that while trucks using Euro V low-sulfur diesel were being taxed 56 Hong Kong cents a litre, ships were burning duty-free fuel oil that was much dirtier. At least 3.8 million people living around Kwai Chung Container Port had been exposed to health risks because of port-related air pollution, the paper said. The port, together with Shenzhen port, handles 9.5 per cent of all global sea cargo. Official data showed that sulfur dioxide emissions from marine sources had grown by 100 per cent since 1990. The 45-page report said fuel and energy use by port terminals, vessels and trucks was largely to blame. Citing the experience of the Los Angeles and Long Beach ports in California, it said financial incentives could be provided to vessel operators to adopt cleaner fuels and lower speeds within harbours, and to trucking operators in exchange for scrapping polluting vehicles. "In the short term and before an energy policy is established, Hong Kong might consider charging a fee for fuel with higher sulfur content. The reverse of this is to make cleaner fuel tax-free," the report said. While Euro V low-sulfur diesel for trucks is taxed, fuel with up to 4.5 per cent sulfur content used by ocean-going vessels is duty-free. The report also said Hong Kong's shipping operators were ready to go greener than required by the International Maritime Organisation - a global cap of 4.5 per cent sulfur content in fuel. It said what was needed now was leadership from the government in bringing industry stakeholders and mainland authorities, such as the Guangdong port authority and terminal operators, to work out collaboration plans. "There is a willingness among them to do better, but they will need government regulation to create a level playing field so that laggards do not benefit from non-action," the report said. One of the possibilities is to turn Hong Kong, along with the Pearl River Delta, into a sulfur-emission control area, with stricter standards. The report also said the Shenzhen ports had already piloted a series of green measures, while a Hong Kong operator had voluntarily been using low-sulfur fuel for its fleet calling at the ports of Hong Kong and the delta region. That type of fuel is more expensive. Arthur Bowring, managing director of the Hong Kong Shipowners Association, said the limited supply of clean fuel oil had pushed up the price, but rising demand might lower the price in the long term. Patrick Chun Ping-fai, deputy director of marine, said tightening emissions standards might impose financial burdens on business operators and hamper the port's competitiveness. As for co-operation with Shenzhen ports, he said: "Guangdong might also want to clean up its port operation but, at the same time, they might also ponder over [whether] business could be lost to other ports, like the Yangtze delta."

China: China is expected to overtake the US as the world's leading recipient of corporate investment in the next five years, reveals a study of future global capital flows. According to the study, China will become the most influential country in IT and telecom, industrial products and mining. KPMG International has come to these conclusions by surveying over 300 of the largest multinational companies in 15 countries, plus representatives of private equity and sovereign wealth funds. "Our survey shows corporate investors are already planning their responses to a shift in global economic power, after a period when the US has had a disproportionately high share of global investments. The majority of the people surveyed saw the next five years to return to more normal patterns of investment," said Sue Bonney, head of tax for KPMG's Europe, Middle East and Africa region. Some 51 corporate investors surveyed are considering investing in China this year, while the number increases to 72 in 2013 and 2014, compared with about 69 considering investing in the US in 2013 and 2014. Though still drawing a very high proportion of global investments, the US is still placed behind China. The US is also expected to be dislodged from its dominant position in mining, industrial products and IT-telecom sectors, with China taking the first place in each of these. The survey showed a trend of investments moving away from the US, Japan, Singapore and the UAE, and a big increase in investment flows into Brazil, Russia, India and China (the BRIC nations). "The BRIC economies are viable alternative places to invest, primarily taking away funds from the US economy. A roughly equal balance of economic power is being established between the Americas, Europe and Asia-Pacific, which would indeed herald the beginning of an entirely new global economic game," Sue said. Earlier in March, PricewaterhouseCoopers LLP said China could overtake the US by 2025 to be the world's largest economy and is anticipated to grow to about 130 percent the size of the US by 2050. In the report titled "The World in 2050: Beyond the BRICs", PwC said it is still upbeat about China, India, Brazil, Mexico, Russia, Indonesia and Turkey.

Rena Amudu Kelimu performs a traditional Xinjiang ethnic dance Tuesday while carrying the Beijing Olympic torch in Urumqi, capital of the Xinjiang Uygur autonomous region.

Chinese Vice Premier Wang Qishan (L) speaks during a meeting of the Sino-US Strategic Economic Dialogue Tuesday in Maryland.

China's three largest airlines, China Southern (1055), Air China (0753) and China Eastern (0670), have each secured four weekly flights to Taiwan after an agreement eased restrictions on direct flights across the Taiwan Strait, the Civil Aviation Administration of China said yesterday.

June 18, 2008

Hong Kong: The 18-month outlook for the banking industry and ratings for the banking systems in China, including the mainland, Hong Kong and Taiwan, remained stable, Moody's Investors Service said in a report Tuesday. Speaking at a media briefing in Hong Kong, Deborah Schuler, senior vice president of Moody's Asian Financial Institutions, said the sub-prime crisis and the ensuing credit crunch had been relatively minor issues for the banking industry in North Asia. "Asia's sub-prime exposures have been small and the exceptionally strong levels of earnings recorded for 2007 have kept losses well contained," she said, citing mitigating factors such as strong growth of the Asian economies, limited involvement of the banks in the global capital markets and their generally healthy financial conditions. The industry outlook for South Korea is negative due to challenges posed by liquidity management and slower economic growth, but the South Korean bank ratings outlook was stable. Nevertheless, banks in the region will face increasing challenges due to unfavorable global environment, which has been troubled by the credit tightening, the sub-prime fallout, the global economic slowdown, inflation and high prices for oil and food, etc. Greg Bauer, managing director of Moody's financial institutions group, said he expected the impact of the sub-prime fallout to extend further along the chain. There might still be uncertainties ahead in terms of inflation, although it is likely to relieve in the coming months for China, said Thomas Byrne, senior vice president of Moody's sovereign risk unit, adding that the situation was not likely to have a significant impact on the Chinese economy as a whole. Aninda Mitra, vice president of Moody's sovereign risk unit, said the international oil prices were likely to make a challenge by staying at 130-140 dollars a barrel. Schuler said she expected volatility ahead for the financial market. The financial fundamentals of banks on the Chinese mainland have improved due to recapitalization and reductions in bad loans. Their capacity to stand potential risks have improved but it was yet to be seen how much they have improved because the banks had seldom experienced any economic downturn yet, she added. The banking system in Hong Kong benefited from very experienced management, although the banks in the city "are close to, if not at the top of the credit cycle," whereas on the Taiwan island, the macro-economic environment was stable. The banking system in Mongolia was benefiting from a resources-driven boom. But the year 2009 would be difficult for banks in the region, with the coming 18 months expected to mean slower loan growth and a moderate increase in non-performing loans for the banking industries. While the banks in some Asian economies, like those in China, will manage in 2008 to exceed the record earnings of 2007, higher funding, operating and credit costs were likely to take a bite out of their income in 2009. The region's very high levels of single-borrower concentrations have also increased asset quality risk, Schuler said. "In 2009 we are not expecting them to lose money, but we do expect them to struggle," she said.

A warning of a terror attack during the Olympic events in Hong Kong from the citys immigration chief was played down by the government last night. The terrorist threat level remains moderate, a government spokesman said, but police will maintain close liaison with mainland authorities and overseas law enforcement agencies to ensure timely exchanges of intelligence. The governments response followed comments earlier yesterday by Director of Immigration Simon Peh Yun-lu that the department has received intelligence the equestrian events are under threat of attack. Speaking at his first media reception since assuming office in April, Peh said intelligence said some people are plotting to sabotage the Olympic Games, including the equestrian events. Of course this kind of intelligence will continually change right now the main individuals who might sabotage the event are terrorists, Peh added, without giving any specifics on the terrorists. If we know some are plotting to sabotage the Games, or to damage the solemnity of the events or disrupt the smooth processing of the events, we will ban their entrance. Lawmaker James To Kun-sun, deputy chairman of the Legislative Councils security panel, said it was unusual for a director of immigration to reveal intelligence on a potential threat of terrorist action. He said it was possible Peh was laying the groundwork with which to ban peaceful demonstrations during the Games or to prevent people from entering the city. In his briefing, Peh refused to be specific about the intelligence his department had received. Asked whether the department will restrict people from Xinjiang or Tibet, who have a history of fighting for independence from China, from visiting Hong Kong, Peh said the department will not tag people based on their geographical locations. He said the department will consider carefully the entry of those with a history of disrupting the Olympic torch relay in May. The department estimates 42,000 visitors will arrive in Hong Kong to see the equestrian events as well as 3,000 athletes. In addition to maintaining close liaison with mainland authorities, police will step up security measures at strategic locations, in particular the airport, the public transport system and other critical infrastructures. Sports Federation and Olympic Committee of Hong Kong, China president Timothy Fok Tsun-ting said last night he had not received any news related to the perceived threat. The Immigration Department was highly criticized on April 26 when it denied the entry of Danish sculptor Jens Galschiot. He is a member of the group Color Orange which has voiced its concern at alleged human rights violations in the mainland.

The mother of the late Cantopop diva Anita Mui Yim-fong yesterday lost her legal battle to wrest control of her daughters estimated HK$100 million estate. The High Court said Muis will, in which she left the bulk of her estate to Karen Trust, with her mother getting HK$70,000 a month for the rest of her life, was valid. Tam Mei-kam, 84, had argued her daughter was dying of cervical cancer at the time and was mentally unfit to instruct and execute the will which she signed on December 3, 2003. Mui died 27 days later aged 40. Tam said she would fight the decision all the way to the Court of Final Appeal and would donate the entire estate to charity if successful. In the 104-page written judgment, High Court Judge Andrew Cheung Kui- nung said he found the three witnesses, who testified Mui was of sound mind when she signed the will, honest, credible and reliable. They were her principal doctor Peter Teo Man-lung, Muis godmother of 20 years Sheila Ho and HSBCs private trust director Doris Lau. The judge said Teo, who was present when the contents of the documents were explained to Mui, and who had spent a substantial amount of time talking to Mui during her hospital stay, was in a particularly good position to say whether Muis mental condition was normal. The judge dismissed the suggestion put forward by Tam that Mui was suffering from a form of hepatic pre- coma, a brain disorder associated with liver disease on December 3. What is plain to me from the evidence is that the deceased only wanted to give her mother just sufficient money to maintain her then living standard, and nothing else, the judge said. The rationale is quite plain on the facts she did not trust her mother on managing money. The judge said Mui was worried that if she left her mother everything in one go, she would squander it all, with the help of her eldest brother, Peter Mui Kai-ming. Besides her mothers living expenses, Mui set aside up to HK$400,000 as university expenses for each of her brothers four children. Her properties in Happy Valley and London were left to retired designer Eddie Lau Kai. The judge ruled the costs of HSBC, the New Horizon Buddhist Association, a repository under the Karen Trust, and Eddie Lau Kai be paid out of Muis estate.

DBS Bank (Hong Kong), a relatively small player in the mortgage sector, made a surprise first move in the market yesterday by raising rates 20 basis points in response to rising funding costs.

Ferry services between Hong Kong and four ports in the Pearl River Delta have been suspended owing to the massive flooding in southern China.

The pay gap between government and private lawyers has been widening - with some senior counsels getting as much as HK$10,000 an hour, legal sources say. In contrast, senior government lawyers get around HK$100,000 a month. Senior barristers in the private sector normally charge between HK$6,000 and HK$8,000 an hour but some at the top charge as much as HK$10,000, especially for civil disputes or commercial crime cases involving the rich and famous. The hourly rates for those with five to 10 years of experience are HK$3,000 to HK$4,000, depending on the complexity of the case. "Personally, I think HK$10,000 is overcharging but there is a market for a group of top barristers who have become superstars and are picked by some clients who only go for the big names," a solicitor said. But it also means the controversy over pay between government and private lawyers is growing - even after Secretary for Justice Wong Yan-lung has called for a staggering 30 percent pay hike to stem a brain drain as reported by The Standard on June 10. In a letter to department management and staff, Wong said the top-end salary of senior government counsel would rise to HK$112,850, exceeding the starting salary of a directorate grade one civil servant. The new rate would raise the starting salary of a nondirectorate government counsel by 35 percent to HK$59,360 a month. But a Department of Justice source said the pay rise is unlikely to lift sagging morale due to the hefty workload of government lawyers, who normally work 12 hours a day handling various tasks including giving legal advise to different departments.

Seven candidates are expected to kick off their listing activities in the coming two weeks, pitching for a total of about HK$21 billion on the Hong Kong bourse. The mainland's second-largest clinker and cement maker China Shanshui Cement Group will start its retail offering this Friday while its trading debut is set for July 4. Shanshui Cement is seeking to raise HK$2.38 billion by selling 650.8 million shares at between HK$2.70 and HK$3.65 apiece. One lot of 1,000 shares would cost HK$3,686.83 based on the top end of the indicative price range. The price- earnings ratio of Shanshui Cement is 13.5 to 18.2 times forecast 2008 earnings, representing a discount of 10 to 20 percent to its peer China National Building Material (3323). Tianyi Fruit, which is pitching for HK$233 million, will also start trading on July 4. The mainland concentrated fruit juice maker will open its four-day retail book next Monday. Mainland footwear and apparel maker XDLong International began pre-marketing activities for its HK$2.34 billion initial public offering yesterday. XDLong is expected to commence the roadshow next Monday. Glorious Property, which is pitching for HK$7.8 billion, is also considering kicking off its roadshow next week, with a trading debut set for mid-July. Meanwhile, two mainland companies - liquor and cigarette distributor Silver Base Group and men's apparel maker Lilang International - are scheduled for a listing hearing this Thursday. Silver Base and Lilang are seeking to raise about HK$2.34 billion and HK$1.17 billion, respectively. "If the hearing is passed, Silver Base will start trading on the local bourse at the end of next month," said a source. But Lilang, according to another source, has not yet fixed its listing schedule. Casino mogul Stanley Ho Hung- sun's Sociedade de Jogos de Macau, which shelved its IPO in January, is expected to kick off its roadshow next Monday and start trading on July 11. The size of the revived IPO is cut by almost half to HK$4.7 billion compared to its previous size in January.

A former sales director for Centaline property agency was jailed for 40 months in the District Court on Tuesday for offering advantages of HK$1.41 million to a former Li & Fung manager.

Hong Kong’s unemployment rate remained stable at 3.3 per cent in March to May, latest statistics released on Tuesday showed.

China: Representatives from U.S. and Chinese companies on Monday signed 71 contracts and agreements worth 13.6 billion U.S. dollars in total in Missouri and Washington D.C. The deals were made at two ceremonies in St. Louis, Mo., and here, and both were attended by visiting Chinese Vice Premier Wang Qishan. During his visit to St. Louis earlier in the day, Wang met with local political and business leaders and spoke highly of growing economic and trade relations between the U.S. state of Missouri and China. He noted that the China-U.S. business relationship has expanded from coastal areas of the United States to the Midwest region, which includes Missouri, since China adopted its opening-up and reform policy 30 years ago. Wang said both the Chinese and U.S. governments need to attach great importance to their cooperation in the U.S. Midwest region and create favorable conditions and an environment for cooperation between entrepreneurs of both countries. He praised political leaders in Missouri for their firm resistance to trade protectionism and said it is the correct position that represents the interests of the people of the U.S. state. After Wang arrived in Washington later in the afternoon, he attended a contract-signing ceremony in the U.S. Chamber of Commerce. He told representatives from both U.S. and Chinese companies that cooperation between Chinese and U.S. companies serves as the cornerstone for China-U.S. economic and trade relations, and is also the foundation of the China-U.S. Strategic Economic Dialogue, or SED. Wang and U.S. Treasury Secretary Henry Paulson will co-chair the fourth round of the SED between June 17 and 18 at the U.S. Naval Academy in Annapolis, Maryland, about a 30-minute drive from Washington. Wang is attending the meeting as the special representative of Chinese President Hu Jintao, and Paulson as special representative of U.S. President George W. Bush. Wang's entourage includes ministers and other senior officials from related departments of China's State Council. Jointly launched by President Hu and President Bush in September 2006, the dialogue is held twice a year, alternating between the two countries. The previous meeting was held in December 2007 in Beijing, China.

Farmers around the country have put more than half of their harvests into storage, and a bumper summer crop is expected, the Ministry of Agriculture said yesterday. The major grain production areas are poised to reap a good crop for the fifth year in a row, maintaining the rising momentum in grain production, an unnamed ministry official said. Summer crops, mostly cereals of rice and wheat, constitute 23 percent of the country's annual grain harvest, which has grown for four consecutive years, reaching 501.5 million tons last year, almost equal to China's annual consumption.

Days of heavy rain have driven up the water level of last week's major flood, threatening thousands in south China's Guangxi Zhuang Autonomous Region.

Chinese travelers pose for a photo before departure for the United States at Shanghai Pudong international airport in Shanghai, east China, June 17, 2008. About 200 Chinese travelers set out from airports in Beijing, Shanghai and Hong Kong on Tuesday afternoon, becoming the first Chinese vacationers to take part in tour groups to the United States.

Travelers pose for a group photo before they set out from Beijing for the United States at the Terminal 3 of the Beijing Capital International Airport June 17, 2008.

Chinese shares fall 2.76% in 10th consecutive losing day - Chinese shares sank to a 15-month low on Tuesday in very low volume, amid weak investor confidence. The benchmark Shanghai Composite Index fell 2.76 percent to 2,794.75, its 10th loss in a row. The Shenzhen Component Index fared worse, sinking 4.03 percent, or 395.77 points, to 9,429.50.

June 17, 2008

Hong Kong: HK GDP rises 9.6pc to HK$409.3b in first quarter - Hong Kong’s gross domestic product increased by 9.6 per cent to HK$409.3 billion in the first quarter compared with a year earlier, new statistics released on Monday showed. The Census and Statistics Department said that after netting out the effect of price changes, Hong Kong’s GDP increased by 7.1 per cent in real terms in the first quarter, compared with a year earlier. “Total factor income inflow into Hong Kong – estimated at HK$233.6 billion in the first quarter and equivalent to 57.1 per cent of GDP – increased by 21.8 per cent over a year earlier,” the department said in a statement. It said total factor income outflow, estimated at HK$215.6 billion in the first quarter of 2008 and equivalent to 52.7 per cent of GDP of the same period, increased significantly by 31.2 per cent over a year earlier. “Taking the inflow and outflow together, a net external factor income inflow of HK$18.0 billion was recorded in the first quarter of 2008,” the department said. Hong Kong’s economy is continuing to enjoy strong economic growth and falling unemployment. But economists have warned that higher oil prices, rising food prices and the impact of the sub-prime mortgage crisis on the United States economy, were likely to slow growth in future. GDP is the total market value of all final goods and services produced within a country or territory, during a given period. Total factor income represents the value added by factors of production such as labour and capital. It is equivalent to gross domestic product less taxes, plus subsidies on production and imports.

Public-sector doctors are asking for a three- day paternity leave to bolster low staff morale. "There simply aren't enough hours in a day for me to fulfill my work and family roles," said Queen Mary Hospital doctor of international medicine Pierre Chan. During a week of 30-hour shifts and regular 12-hour work days, he has only been able to spend an hour and a half with his one-year- old daughter each time they have met. "Our family is socially and psychologically unhealthy," said Chan's wife and family doctor Eunice Chan Yin-chiu. When she was seven months' pregnant she quit the public sector fearing job-related stress would affect her pregnancy. Although her husband stayed in the public sector, she accepted a pay cut to enter the private sector to have more time with their child. According to surgeon Kelvin Ng Kwok- chai, Chan's departure to the private sector is a familiar story as more doctors are switching over to get better hours and a more balanced work life. "The problem is some doctors are also fathers, and they have to play their family roles as parents - of course they do their best to serve patients but they don't have time to take care of their family life," Hong Kong Public Doctors' Association vice president Ho Pak- leung said. With colleagues working more than 70 hours a week or 33 hours more than their contract stipulates, Ho said introducing paternity leave would not only help doctors balance work and home life but also be an important olive branch and first step in upcoming negotiations between public-sector doctors and the Hospital Authority. He said unless services are redefined and a hybrid public/private solution found, manpower shortages will continue to wreak havoc on job satisfaction and morale among public sector health-care workers. "Wives need the support and care of their husbands," Federation of Trade Union lawmaker Wong Kwok-hing said during an FTU and Men's Concern Group march in Central yesterday - Fathers' Day. He said offering leave to fathers would improve workplace morale and help divide child- rearing responsibilities between parents. An authority spokeswoman said it will consider initiatives to boost morale. Standard Chartered, HSBC and Lehman Brothers offer five days' paternity leave, while China Light and Gas offers three. Australia and New Zealand offer unpaid paternity leave to workers, and two weeks of paid leave is provided in Britain and France through social insurance.

Appointees' jobs stepping stones, says chief's departing assistant - All political appointments are transitional, and the final road to politics is through the ballot box, says a departing aide to the chief executive now eyeing electoral politics. GaryChan Hak-kan, 32, was speaking as he packed up after 2-1/2 years as a special assistant to Donald Tsang Yam-kuen. The first person to carry the banner of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) into government, Mr Chan said his position had been to act as a guinea pig for the appointment of undersecretaries and political assistants, as the ultimate goal was training political talent. "Each of these appointees should have the thought that political appointments are not permanent jobs. They are stepping stones. The next step is to go for election," said Mr Chan, who is "actively considering" running in September's Legislative Council election. The young politician, who has terminated his appointment contract with the government, due to expire in June 2012, said there had been a mutual understanding between himself and Mr Tsang from the beginning that he would leave prematurely. Mr Chan, who declined to comment on the row over salaries and citizenship of the new political appointees, considers his days working beside the chief executive to be an advantage for his candidacy. "I played the game and I know where the cutting edge is," he said. Mr Chan, who earned about HK$80,000 a month, said he had contributed ideas to the Chief Executive's Office on various policies, including district administration as well as a goods and services tax. But he had not acted as an "office messenger responsible for photocopying documents" as some teasingly accused him. The experience would be an asset when he switched his role to monitoring the government one day in the legislature, he said. "Like a soccer player turned commentator, I will do a better job than other commentators who have not played on the pitch." He estimated he had a high chance of winning in September, even though he was likely to rank second on the DAB ticket in New Territories East led by party vice-chairman Lau Kong-wah. Mr Chan's major duties at the Chief Executive's Office included liaising with political parties, the media, interest groups and deputies to the National People's Congress. Although carrying a party label, Mr Chan considered himself a civil servant while working at Government House. He said he had not really been an important bridge between his party and the administration, but was delighted his appointment had set a precedent for other political aspirants.

Victor Fung becomes new ICC chairman - Businessman Victor Kwok-king Fung was elected as the new chairman of the International Chamber of Commerce, Hong Kong, an ICC spokesman said on Monday. Mr Fung was elected at a meeting of ICC’s World Council on Friday, which brought together over 130 of the ICC’s members from 57 countries. Mr Fung, 63, who is chairman of the Li & Fung (SEHK: 0494) group, will be the first ICC chairman from Hong Kong and will serve as ICC chairman for two years. He is also chairman of the Greater Pearl River Delta Business Council, the Hong Kong University Council and the Hong Kong-Japan Business Co-operation Committee. “Mr Fung will assume the role of ICC Chairman on July 1, after having served for 18 months as the ICC’s vice chair,” the spokesman said. Mr Fung has written and spoken widely on international trade matters and is a strong advocate of a multilateral trading system. He has served as chairman of the Hong Kong Trade Development Council, the Hong Kong representative of the Apec Business Advisory Council, and on the informal business advisory body to the World Trade Organization. He has also been chairman of the Hong Kong Airport Authority, but stepped down from this position last month. Born in Hong Kong, Mr Fung has degrees in electrical engineering from the Massachusetts Institute of Technology and a doctorate in business economics from Harvard University. He was a professor at the Harvard Business School for four years before returning to Hong Kong in 1976. "My position might have been a selling point to attract more young people to join the DAB," he said.

The government would be more open about details such as the foreign passports and salaries of new political appointees in future, Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung pledged on Monday. Mr Lam, speaking to the Legislative Council, reiterated that the Basic Law did not impose a requirement on deputy ministers and political assistants to renounce foreign passports, while they were the permanent residents of Hong Kong. However, he said that in future such information and details about salaries of new appointees would be clearly stated on employment contracts. This would be to increase the transparency of the recruitment process. Mr Lam said the recruitment committee would also remind candidates that the public was concerned about these issues. But whether new appointees wanted to renounce their overseas passports or right of abode would be up to them, he added. In other developments, pro-government legislators stopped an attempt to force Chief Executive Donald Tsang Yam-kuen to apologise for his handling of the controversy of the new political appointees. A motion was defeated by 20 votes to 14 in the Legco’s Constitutional Affairs Panel. A move by Frontier leader Emily Lau Wai-hing to take the issue to the Independent Commission Against Corruption over a possible conflict of interest was adjourned to the panel’s next meeting, local radio reported.

Saudi Arabian companies are exploring the possibility of forming an organisation of senior business leaders with Hong Kong to foster closer economic ties and promote trade and investment between the two economies, Riyadh Chamber of Commerce and Industry chairman Abdulrahman Ali al-Jeraisy said. The proposed Saudi-Hong Kong Business Council would follow similar tie-ups with other major Asian markets, including Japan, the mainland and Malaysia. During Chief Executive Donald Tsang Yam-kuen's first official visit to the Middle East in January, Mr Jeraisy met Mr Tsang when he led a business delegation to Saudi Arabia. "I think a Saudi-Hong Kong Business Council is a must and is badly needed," Mr Jeraisy said. "I believe it will help in the relationship between the two economies." Saudi Arabia's consul general in Hong Kong, Alaudeen Alaskary, said the consulate would endorse the new business council if it was approved. A memorandum of understanding was needed to set up the council formally. Mr Alaskary met Mr Jeraisy in Hong Kong two weeks ago. There are more than 30 such business councils under the Riyadh-based Council of Saudi Chambers of Commerce and Industry, of which Mr Jeraisy is vice-chairman. He also chairs the Saudi-Japan and Saudi-Chinese business councils. Each business council works to increase trade and investment between Saudi Arabia and different countries. Members are drawn from both sides. Companies in Saudi Arabia were keen to do business with Hong Kong, not only to exploit opportunities on the mainland, but locally as well, Mr Jeraisy said. Likewise, there were opportunities for Hong Kong companies to take part in Saudi Arabia's education, health care, electricity generation and distribution, water desalination and transport sectors. Given Saudi Arabia's considerable experience in water desalination, Mr Jeraisy said he believed there were opportunities for co-operation with Hong Kong. The kingdom's desalination plants provide about a quarter of the world's total output. In Hong Kong, desalination could provide the largest new supply of fresh water. It is estimated the city will need 1.3 billion cubic metres by 2030, when the population reaches about 8.4 million. The process is based on reverse osmosis and involves pumping sea water at high pressure through a semi-permeable membrane to separate the salt. Despite the steep energy requirements, desalination is becoming popular in regions such as Australia and the Middle East as a way to meet freshwater needs.

Air quality report set to boost HK, Guangdong ties - Co-operation between Hong Kong and Guangdong is expected to receive a boost as a major work group under the Hong Kong-Guangdong Co-operation Joint Conference completes a report on guidelines to improve regional air monitoring systems. The work group is expected to submit a draft of its findings to Chief Secretary Henry Tang Ying-yen and Guangdong Governor Huang Huahua before the conference in August, a source familiar with the study said. The report - expected to be ready six months ago - will make proposals on ways to unify the neighbors' air pollution indices, and on standards for exhaust emissions and effluent discharge. Such proposals, along with proposals on ways to lower customs barriers and liberalize cross-border flows of goods, people and funds, will be submitted for discussion at the 11th plenary session of the joint conference. The outgoing director of the Hong Kong Economic and Trade Office in Guangdong, Peter Leung Pak-yan, said this conference - his last before retiring in December - would be an important one. "This is an important year for China: the Beijing Olympics, the 30th anniversary of the mainland's opening up to the outside world. It is the best time for China to find its position in the world." The new Guangdong party secretary, Wang Yang , has lauded the "liberalized thinking" aimed at turning Hong Kong and Shenzhen into one metropolis and fostering closer co-operation between Hong Kong and the province. But differences in culture, policies and practices await resolution before the two cities can truly integrate. Discrepancies between the two air monitoring systems, for example, have been a headache for both jurisdictions, because what might be considered bad air in Hong Kong could be acceptable just meters across the border. Conservancy Association director Albert Lai Kwong-tak welcomed efforts to standardize measuring mechanisms, but said they should follow international standards. "It is good that we can compare pollution figures from the two places, but it would be even better if these figures could also be compared with the rest of the world," Mr Lai said. "Even our own API [air pollution index] system does not follow that of the World Health Organization." He said the two governments should also seek to standardise the method of calculation used to draw correlations between pollution sources and damage caused. "Knowing the numbers alone is not enough; what the public is really interested in is the health impact the pollutants will have. That is also what would drive a policy change," he said. The source said the cross-border work group's report would consist only of proposals and would not contain technical details, such as timeframes for achieving them. "After assessments from governments on both sides, the proposals still need to go through public consultations and expert seminars before final guidelines can go to different departments for implementation," the source said. The study, begun in 2005, is the first attempt by Guangdong and Hong Kong at a joint overview of town planning. The two sides have also co-operated on projects, including the Hong Kong-Zhuhai -Macau Bridge and the Zhuhai-Macau Cross-Border Industrial Zone.

China: Online Chinese shoppers spent 16.2 billion yuan (2.3 billion U.S. dollars) in 19 major cities in the first half of 2008, China Internet Network Information Center (CNNIC) said on Monday. The findings were based on a survey carried out in four municipalities directly under the central government -- Beijing, Shanghai, Tianjin and Chongqing -- and 15 developed cities such as Changchun, Dalian, Nanjing, Hangzhou, Jinan and Guangzhou, among others. About 8.4 billion yuan, more than half of the total, came from male consumers, while 3.1 billion was attributed to students. The consumer-to-consumer (C2C) site Taobao.com, a subsidiary of online portal Alibaba.com in which Yahoo! invested 1 billion U.S. dollars in 2005, was the nation's dominant Internet retailer. It had an online shopping penetration rate of 81.5 percent. Dangdang.com was second with 16.6 percent, followed by Joyo, Amazon's China subsidiary, with 13.6 percent. Eachnet, owned by Tom Online and eBay, had 8.4 percent, while Tencent's C2C site Paipai.com was 7.2 percent. According to the CNNIC, 91 percent of online shoppers who had heard of Taobao had made purchases at the site, while 61.4 percent of those familiar with Joyo had shopped there.

Kungfu star Jackie Chan waves at the opening ceremony of Shanghai International Film Festival on Saturday night, June 14, 2008. The Shanghai International Film Festival, which extends until June 22, begins with a grand opening ceremony Saturday night, with proceeds to help victims of the Sichuan earthquake.

Actress Zhang Ziyi arrives at the opening ceremony of Shanghai International Film Festival on Saturday night, June 14, 2008.

Director Wong Kar-Wai (R) poses on the red carpet at the opening ceremony of Shanghai International Film Festival on Saturday night, June 14, 2008.

Actress Zhou Xun arrives at the opening ceremony of Shanghai International Film Festival on Saturday night, June 14, 2008.

Shanghai increased the price of liquefied petroleum gas for motor-vehicle use on Sunday to help ease a supply shortage caused by skyrocketing worldwide fuel costs - and to keep some people in business. The benchmark LPG price for mopeds was raised to 4.7 yuan (68 U.S. cents) per liter from 4.2 yuan, and that for taxis was lifted to 4.7 yuan from 3.6 yuan, according to the Shanghai Price Bureau. The bureau stressed that retail LPG prices must not exceed these benchmarks. The rises come as an increasing number of LPG filling stations in the city have temporarily closed or gone out of business. Even with a government subsidy their businesses have been unprofitable after global oil and LPG prices soared. City demand for the vehicle-use LPG is mainly met by imports. Prices of the auto gas have not been increased in Shanghai since last November. Normally, Shanghai's 280,000-odd mopeds need 70 LPG stations to supply them. But since the number of stations has halved since the beginning of this year, long queues are the norm. Shanghai promoted the use of the auto gas on a large scale at the start of the new millennium as the fuel creates less emissions compared with petrol and diesel. At its peak, the city had more than 40,000 LPG taxis and 100-plus LPG stations. However, the number of LPG taxis has declined sharply as drivers become frustrated by the lack of service stations and unsatisfactory engine performance. Plus, LPG-fueled cars are no longer so economic. LPG has higher equivalent fuel consumption against gasoline, and Monday's 4.7 yuan-per-liter LPG price is already very close to the 4.77 yuan benchmark of 90-octane gasoline in Shanghai. There are less than 3,000 LPG cars on Shanghai's roads Monday and the price bureau has pledged subsidies to taxies affected by the latest price increase. The city has barred the use of gasoline-powered mopeds since 2006, so moped drivers are the most affected by the recent LPG shortage as they have no other choice. Shanghai has urged stations that can restart services to do so as soon as possible, government spokesman Chen Qiwei said, adding the city government will keep giving subsidies to ensure supply. To keep giving subsidies will translate into a financial burden of more than 50 million yuan annually for the government. But if it doesn't, it means investments in LPG stations could be wasted as more would close if energy prices go higher. It is a true Catch-22 situation. "According to the experience of other nations, the most practical fuels in addition to gasoline and diesel so far are only natural gas and LPG," said Zhao Guotong, a city government adviser. Experts said that the city should have a clear plan as to what's the answer to its future transport energy while speeding up studying other solutions like hydrogen fuel cells.

Zhang Guoli and Jiang Wenli, the Magnolia best actor and actress in a TV series, look pleased at the closing ceremony of the 14th Shanghai Television Festival on Friday night. They won for their performances as a couple in "Golden Wedding."

A memorial ceremony is held in Chengdu on Monday for five helicopter crew members killed when their aircraft crashed on a quake relief mission on May 31. Picture taken June 16, 2008.

Japan and China have agreed to jointly develop gas fields and share profits in disputed areas of the East China Sea, Kyodo news agency reported on Monday, in a further sign of warming ties between the two countries. The reported accord follows a May summit between Japanese Prime Minister Yasuo Fukuda and President Hu Jintao at which the two leaders agreed to settle the long-running gas feud. Estimated net known reserves in the disputed fields are a modest 92 million barrels of oil equivalent, Chinese figures show, but both countries have pursued the issue, lured by the possibility of much bigger deposits being found. The dispute has come to symbolise more than an argument over maritime gas rights by the two energy-hungry countries, because it concerns matters of territory and sovereignty. Quoting sources close to Japan-China relations, Kyodo said the two sides had decided to set aside the territorial feud for now and agree on joint gas field development. “If it is true, this is a great leap forward,” said Phil Deans, a professor of international affairs at Temple University in Tokyo. “Two years ago, the two sides were so entrenched and incapable of compromise it looked as if they were never going to get anywhere.” Kyodo said an announcement of the deal could come as early as this week, but Japan’s top government spokesman told a news conference details were still being worked out. “I have heard that they are at the stage of working out final details,” Chief Cabinet Secretary Nobutaka Machimura said. China’s Foreign Ministry had no immediate comment. Sino-Japanese ties chilled during Junichiro Koizumi’s 2001-2005 tenure as Japan’s prime minister, partly because of his visits to a war shrine seen in Beijing as a symbol of Tokyo’s past military aggression in China in the 1930s and 1940s. But relations have improved markedly since then between the two Asian powers, linked closely by trade and investment. At the heart of the dispute is a row over where the boundary of the two countries’ maritime economic zones falls. Japan says the median line between the two countries’ coasts marks the divide. China says the boundary is defined by its continental shelf, extending its zone towards Japan. Tokyo has objected to Chinese development of the Chunxiao gas field, which lies just west of what Japan considers the boundary, and fears drilling there could drain gas through a honeycomb of seabed rocks from what Tokyo sees as its economic zone. Kyodo said Beijing had agreed Japan could invest in and claim profits from projects, including Chunxiao, and in waters around other fields that China calls Duanqiao and Longjing. China’s state-controlled CNOOC (SEHK: 0883) Ltd has said it was ready to begin production from the Chunxiao gas field but it was not clear if it had done so yet. Nippon Oil, Japan’s top refiner, and China’s National Petroleum Corp last year signed an accord for long-term business co-operation, including overseas oil and natural gas resources development. Nippon Oil has a stake in the area but not in the Chunxiao gas fields. An industry executive in China familiar with the fields said firms were keenly awaiting the results of the talks, but after that more work would be needed on the size of the fields. “Companies need to sit down and nail down the reserve base for joint development,” he said

June 16, 2008

Hong Kong: EU commissioner for consumer protection visits HKSAR - The European Union Commissioner for Consumer Protection Meglena Kuneva said Friday that she appreciated Hong Kong's efforts in ensuring the safety of consumer products exported to the EU market. Speaking at a press conference in the Hong Kong Special Administrative Region (HKSAR) on her China trip, Kuneva said she knew the "serious efforts" made by local customs authorities and other government branches through her visit to discuss product safety and consumer policy. Hong Kong was EU's 17th largest trade partner, with a trade volume of 31.8 billion euros, while EU was the second largest trade partner for Hong Kong. A large part of Hong Kong's export to the EU was re-export and, therefore, plays a significant role in the supply chain of the trade between the EU and the Chinese mainland, she said. The EU welcomed feedbacks on product safety of its export, she added. Kuneva said she had "open, friendly and frank" dialogue with product quality safety authorities on the Chinese mainland during her China trip, which started on Monday. China has made a lot of efforts to improve the quality safety environment, she said. The two sides have reached consensus on a number of issues, including a quality safety week in Brussels in November. A three-way ministerial meeting involving officials from the EU, the United States and China will be held then, possibly with a memorandum of understanding laying the ground for further cooperation, she said. The EU will probably work with the United States to promote common standards, which Kuneva said could send a "good signal" to manufacturing countries like China. Different standards adopted by the European Union and the United States have led to confusing signals for the manufacturers, she said, citing what she saw at a factory. But she acknowledged it would not be easy to reach common standards, adding that the EU will not lower its standards, for fear of being accused of compromising safety. Kuneva will leave Hong Kong for Chengdu, capital of the earthquake-stricken mainland province Sichuan on Friday and visit the quake-stricken areas later.

Parents revolt on ESF fee hikes - Parents of English Schools Foundation students have launched a signature campaign against planned tuition fee rises. More than 300 signatures have been collected since an online campaign began a month ago, according to Hong Kong University associate engineering professor Albert T Yeung, whose two children have been attending ESF schools for 10 years. Yeung fears a hike in fees could result in some parents sending their children overseas, especially as it would be the third rise in as many years. Tuition fees are set to increase, pending Education Bureau approval, by 7 percent to HK$58,100 a year at primary schools and 5 percent to HK$89,250 at the secondary level. According to Yeung, the ESF increased fees for primary schools by 5.4 percent last year to HK$54,300 and by 2.9 percent to HK$85,000 for secondary students. He said the year before that, fees went up by 8.9 percent and 5.1 percent, respectively. In response, the foundation said it had frozen fees for six years before the 2005/2006 school year. The petitions would be sent to both the foundation and the bureau. Many students come from middle- class families which are already hit hard by inflation. Now the school is putting a further financial burden on them, Yeung said. The ESF has more than HK$558 million in reserve and capital funds, he said, so there is no justification for further increases. He also warned some professionals might leave Hong Kong with their families if the bureau continues to allow hefty tuition hikes at international schools. An expat parent with a 16-year-old daughter attending an ESF school is outraged by the increase. The ESF never listens to the parents. However, I have no choice because of the language of instruction and the location of the school. At local schools, the standards of English language are extremely poor and students only speak Cantonese, the mother said. Another parent, a local, said she would be forced to ask her two children to cut their extra-curricular activities to save money when the increase comes into effect. Instead of having both dancing and swimming classes, my daughter will have to choose only one activity. Instead of going to New Zealand for the summer vacation, we will now go to Japan, said the parent, a senior civil servant. An ESF spokesman said the foundation is aware of the anger among parents but that the increase is necessary to cover increases in the salaries of both teaching and support staff, as well as to build a reserve for the foundations further expansion. The Standard reported last month that five leading international schools want to increase tuition fees by between 3.2 percent and 9.9 percent from the next academic year. According to the Education Bureau, Hong Kong International School, Singapore International School, the Australian International School, the Chinese International School and Yiu Chung International School have applied to increase fees with at least three more intending to follow suit.

Pay the cash or else, Tien warns Chong - Hong Kong Tourism Board chairman James Tien Pei-chun has issued a final warning to former executive director Clara Chong Ming-wah to return about HK$140,000 in health-care benefits she was not entitled to within two weeks or face legal action.

New politicos pay row `overblown' - The controversy over the salaries of new political appointees has been blown out of proportion, according to new Hong Kong General Chamber of Commerce chairman Andrew Brandler. The most important issue, he says, should be what the new cadres actually do. "I think the reason why the government was put in a vulnerable position was because the role of the new appointees is undefined - I do not know what their jobs are," Brandler said. He added that his salary as chief executive at CLP Power - as well as those of other senior executives - is no secret. As democrats continue to push the government to come clean on exactly how they selected the new appointees and the factors determining their pay, Brandler said the government should have been transparent from the outset. He acknowledged that it is difficult to foster political talent in Hong Kong and said the introduction of the new tier of political appointees may be a way out. Some of the appointees have come under fire for pay levels of at least HK$134,150, the equivalent of a directorate grade three government official despite their lack of political experience. The undersecretaries get up to HK$$223,585. "In other jurisdictions, political parties play an important role. But in Hong Kong, once you become a political appointee, you have to resign from key positions in your political party," Brandler said. Undersecretary for Commerce and Economic Development Greg So Kam- leung has resigned as vice chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong. Among the 17 appointees, only four are from the pro- Beijing DAB and the Liberal Party. Meanwhile, despite inflationary pressure, Brandler believes the Hong Kong business environment is competitive. "But there are also risks that the competitiveness could be eroded," he said, citing as example the need to effectively implement the fair competition legislation and minimum wage. He is worried that even if salaries are increased, unemployment may also rise as employers may not be able to afford to hire the same number of staff. Instead of introducing a minimum wage Brandler suggested the administration provide low-income workers with a Comprehensive Social Security Scheme subsidy.

Despite healthy passenger volume growth last month, Hong Kong airport could come under pressure with July's launch of direct flights between Taiwan and the mainland, the Airport Authority chief acknowledges. "The commencement of direct, weekend charter flights across the Taiwan Strait from July will have an impact on the number of passengers transferring through Hong Kong between Taiwan and the mainland in the short to medium term," said authority chief executive Stanley Hui Hon-chung. The mainland and Taiwan signed a landmark agreement on Friday to launch regular direct flights for the first time since 1949. Weekend charter flights are scheduled for every week starting on July 4. The first tour groups will start arriving in Taiwan on July 18. Taiwan's mainland tourist arrivals quota will increase from 1,000 to 3,000 per day. The liberalization of cross-strait tourism will likely add 60 to 80 basis points to Taiwan's GDP growth rate, Goldman Sachs economist Enoch Fung said. But Hong Kong could lose about HK$300 million in tourist spending per year, said Hong Kong Tourism Board chairman James Tien Pei-chun. The SAR stood to lose about 1.5 million tourist arrivals if all Taiwanese traveling to the mainland opt for direct flights, he added. And Taiwanese transiting Hong Kong spend an average of HK$200 per visit. Economists expect Hong Kong's potential loss in tourism receipts could be as much as HK$2.5 billion, or 0.2 percent of GDP, this year, and could balloon to HK$16.6 billion in 2012.

HK plans oil futures market in China strategy - Hong Kong plans to develop a crude oil futures market aimed at setting a reference benchmark that would give Asian consumers and importers the same bargaining power as Western counterparts, said Financial Secretary John Tsang Chun-wah. The move, coming after plans to launch gold futures in the second half of this year, is part of the government's drive to diversify strategies in financial products and strengthen the city as an international financial center. "Commodity and Islamic financial products are two areas where we have made great progress and can enjoy backup from the developing China market," said Tsang. "This is crucial for our future prosperity as laid down by China's eleventh five-year plan." China has emerged in the world's top three as a consumer and importer of crude oil. However, the lack of a local reference indicator has put China and other Asian countries at a disadvantage when bargaining with Middle East producers, he said. "Asian importers could take only Dubai futures as a reference [for bargaining], which cannot truly reflect our supply and demand situation. And, most of all, it is at a much higher cost than our Western peers, who have London and New York futures to set the prices," Tsang said. A mature crude derivative market is crucial, especially to China, to let importers hedge the risk of high oil prices through a fair and transparent market. Hong Kong, with its sound legal and management infrastructure, had the advantages to develop such a platform. "It provides great potential for Hong Kong as the mainland's Shanghai, Dalian and Chengzhou commodity markets are still not open to foreigners. The setting up of a Hong Kong commodity market could therefore help China exert its influence in pricing as the largest precious metal consumer and importer," he said.

Tightened lending hits foreign deals - Hit by tightened lending by Hong Kong banks, foreign investment in the city's property sector dropped significantly with only one deal finalized in the first five months of this year, according to property consultant DTZ. The only transaction involving foreign investment is the 3-11 Warren Street in Causeway Bay bought by La Salle Investment at a price of HK$470 million in March. During the period, a total of 103 property deals were sealed for a total consideration of HK$24.32 billion. Aside from the Warren Street property, the other 102 transactions were bought by local investors, said Kent Fong, DTZ's head of Hong Kong's investment department. The figures represented a drop of 94 per cent from the same period a year ago both in terms of consideration and volume, DTZ said. Banks experienced less liquidity - and therefore, less money to lend - as more Hong Kong dollar savings were exchanged for other currencies, and this has limited the activity of foreign investors in the property sector, according to Mr Fong. In the residential market, activity has been slowing down in the past five months after a rebound in the fourth quarter of last year. But DTZ said the figures were still higher than that of 2007. It estimates the number of sale and purchase agreements in the first half would reach 76,536, representing a jump of 18.6 per cent from a year earlier. But on a weekly basis, housing transactions in the secondary market continued to slow. The number of transactions in 50 key housing estates monitored by Ricacorp Properties dropped 18.5 per cent to 374 from 459 a week earlier, while average transaction prices in the resale market were stable. Primary property market sales also remained in the doldrums with 25 units sold over the three-day break covering the Dragon Boat Festival, said property agents, who blamed the heavy rains on Saturday and the tendency of homebuyers to wait for the next batch of project launches for the lackluster performance. Harbor Place in Hung Hom led the sales in the primary market, securing 10 buyers over the weekend, while Celestial Heights, a residential project in Ho Man Tin developed by Cheung Kong (Holdings) (SEHK: 0001) and Nan Fung Development, sold eight units.

China: China recorded an all-time high number of mergers and acquisitions in May, of which 33 had unveiled capital involved, the investment researcher China Venture said on Saturday, yet failing to reveal the exact total number. The 33 cases involved 5.56 billion U.S. dollars in investment, a growth of 32.65 percent on the April level. Of the total monthly mergers and acquisitions, 52.73 percent occurred in manufacturing and energy and mining sectors. Growth rate in energy and mining M&A cases has exceeded 60 percent for three consecutive months. Analysts attributed the impressive continuous growth to the fact that price hikes for energy and industrial raw materials drove up strategic value of energy and mining sectors.

Quake-battered Sichuan Province reopened 13 cities and prefectures to tourists on Saturday in a move to revive its once-booming travel industry. The cities are Zigong, Panzhihua, Luzhou, Suining, Neijiang, Leshan, Nanchong, Yibin, Guang'an, Dazhou, Meishan, Ziyang and Liangshan, according to the provincial tourism bureau. "Among the world heritage sites, Dujiangyan-Qingcheng Mountain and the Wolong National Natural Reserve were just partly damaged. The Jiuzhaigou and Huanglong scenic spots, Ermei Mountain and the Leshan Giant Buddha suffered no damage in the earthquake," said Zhang Gu, the bureau head. Of more than 4,000 scenic areas in Sichuan, 568 were damaged in the earthquake. Losses have been put at 27.84 billion yuan (4.03 billion U.S. dollars), according to the bureau. The bureau expected tourism industry in the unaffected areas to show a 20-percent increase in revenues by the end of this year. Rural tourism was expected to recover next year. The whole industry, including disaster areas, was expected to fully recover in about 2010, Zhang said. The worst-hit places, including Beichuan County, Tangjiashan, and Hanwang Town in Mianzhu City, were expected to be built into world-class earthquake museums in three years, he said. Tourism revenue in Sichuan was 121.7 billion yuan in 2007, accounting for 11.6 percent of the province's gross domestic product. More than 400,000 people are working in the industry.

Chinese Vice Premier Wang Qishan left Beijing Sunday for the U.S. to attend the fourth round of China-U.S. Strategic Economic Dialogue.

Test runs on the Beijing-Tianjin express railway ended Saturday, with the line scheduled to be in use by Aug. 1 ahead of the 2008 Olympic Games, CCTV reported on Sunday. Trains ran at a maximum of 380 km per hour on Saturday, the fastest such service in the country, CCTV said. The 115-km trip from the Beijing South Railway Station to the Tianjin Station took 27 minutes, including one-minute stops respectively at Yizhuang and Wuqing stations. Travel between the two cities is currently affected by road congestion and slow rail service. At present, the train takes more than an hour to make the trip, and buses take two hours. Previous media reports have said that express rail tickets would cost 60 yuan (9.6 U.S. dollars) to 80 yuan, but the pricing was still awaiting regulatory approval. Express trains would run at three-minute intervals and carry a maximum of 18,000 passengers per hour.

Flooded houses are seen at Luzhai Town in Luzhai County, southwest China's Guangxi Zhuang Autonomous Region, June 13, 2008. Flood caused by heavy rains in the county has left many buildings waterlogged. A section of the Xijiang River in south China's Guangxi Zhuang Autonomous Region was about to burst its embankments following days of heavy rain, threatening tens of thousands of people, local authorities said Sunday. Rising water and strong scouring had opened a 40-meter crack as of 8 a.m. Sunday on the Dayaochong embankment in Changzhou Town, said Zhang Jinshen, a Changzhou District official in charge of flood control.

China used 42.78 billion U.S. dollars of foreign direct investment (FDI) in the first five months this year, an increase of 54.97 percent from the same period last year, the Ministry of Commerce (MOC) said Thursday. The growth was lower than a year-on-year growth rate of 59.32 percent used in the January-April period this year. Meanwhile, the number of newly-approved foreign-funded enterprises shrank 20.95 percent to 11,915 in the first five months. "The quality of China's FDI use has improved as a raft of new measures were introduced to regulate foreign investment," said Hao Hongmei, an analyst with the Academy of International Trade and Economic Cooperation under the Ministry of Commerce. Foreign companies now tend to have more interest in investing in high-tech and high-value sectors, which need vast financial input, than in labor-intensive and lower-value industries, Hao said. China began to level the corporate income taxes for foreign companies with that of domestic companies from January. It also published a new catalogue last year to encourage overseas investment in high-tech and environment-friendly projects. The actual use of FDI in May jumped 37.94 percent from a year earlier to 7.76 billion yuan and the number of newly-approved foreign-funded enterprises dropped 10.94 percent to 2,425. "China remained a favorite destination for overseas investment, especially big investors like the top 500 multinationals," Hao said. Commerce Minister Chen Deming said earlier in a press conference that the steadily-increasing FDI reflected the optimism of foreign companies about their returns from the Chinese market and their intention to accelerate investment in the country to profit from the appreciating Chinese currency. China's currency, the yuan, on Thursday ended a short-lived downward adjustment to break the 6.91 mark, setting a new high against the U.S. dollar since the country de-pegged its currency from the greenback in July 2005.

Managers of 33 travel agencies from the Chinese mainland will pay a 10-day visit to Taiwan from Sunday, an official of the China National Tourism Administration (CNTA) said.

A customer check a capsicum at a vegetable market in Shanghai. China recorded 870.4 billion yuan ($124.3 billion) in retail sales in May, a growth of 21.6 percent on the same month of last year, the National Bureau of Statistics said on Friday.

The China Securities Regulatory Commission will start a full assessment of the securities industry and the openness of the domestic capital market "to improve policies and push forward a proactive and steady opening of both." Based on the results of the assessment, the CSRC will release a "middle- to long-term" strategic plan of development policies. Last week China stocks suffered their biggest weekly plunge on record, dragging the benchmark index below 3,000 for the first time since April last year. "We will pay keen attention to the connection between domestic and international capital markets and closely watch changes in the international financial market to make improvements at a policy level, so as to enhance the competence and anti-risk ability of the securities industry and capital market," the securities regulator said. The benchmark CSI 300 Index has fallen 44 percent this year, the steepest decline among the world's 20 largest equity markets. The CSRC said it has made significant progress in developing the capital market. It has raised quotas under the QFII (qualified foreign institutional investor) program to US$30 billion (HK$234 billion) to diversify the investor base.

Ma hails cross-strait talks and urges more dialogue - The resumption of cross-strait talks was history in the making, Taiwanese President Ma Ying-jeou said yesterday, calling for more dialogue to increase exchanges and improve relations between the island and Beijing. "The two sides are making history through their talks," said Mr Ma in a meeting with Chiang Pin-kung, the island's top negotiator with the mainland. Mr Ma congratulated him for resuming the dialogue after a decade of cross-strait impasse. The talks between the government-funded Straits Exchange Foundation (SEF) and its mainland counterpart, the Association for Relations Across the Taiwan Strait (Arats), represent the institutionalization of the channel for negotiations between the two sides, he said. Cross-strait ties were never cordial after the two sides split at the end of civil war in 1949. They soured further after Beijing suspended talks with Taipei in 1999 - due to the Taiwanese independence campaign promoted by then president Lee Teng-hui and his successor, Chen Shui-bian. "Now that such a channel has become institutionalised, we can have different groups hold talks on different agendas in different places," Mr Ma said. He hoped the SEF could work with the Mainland Affairs Council (MAC) - the island's top mainland policy planning body - to generate more talks. Mr Chiang, chairman of the SEF, told Mr Ma the next round of talks being planned would address charter cargo flights, direct shipping, expansion of the mini links between Kinmen and Xiamen , joint efforts to fight cross-strait crime and preparations for earthquake relief. Mr Chiang led a 19-member delegation to Beijing on Wednesday and returned to the island yesterday. On Friday he signed two agreements with the mainland on the operation of direct, cross-strait weekend charter flights and opening the island to mainland tourists. MAC chairwoman Lai Shin-yuan hailed as "opening a new page" the resumption of talks between the SEF and Arats when she went to the airport to greet Mr Chiang yesterday. The opposition Democratic Progressive Party snubbed the dialogue as a failure since Mr Chiang had not signed a deal on charter cargo flights. Meanwhile, the mainland gave approval yesterday for 33 mainland travel agencies to begin a 10-day visit to the island today to survey tourist attractions before organising package tours to Taiwan.

Miserly bosses may face jail, fines for low wages - Employers who fail to pay a statutory minimum wage to employees could face a HK$350,000 fine and three years' imprisonment, according to a government discussion paper written last week. According to the paper, the administration would introduce a bill on a statutory minimum wage for cleaners and security guards if the current wage protection movement was deemed a failure. The paper was sent to the Legislative Council on Friday. It said breaches of a statutory minimum wage law should be treated similarly to wage offences under the Employment Ordinance. That means an employer could be fined HK$350,000 and imprisoned for three years for wilfully failing to pay an employee's wages. Under the ordinance, if employers make illegal deductions from wages, they can be fined HK$100,000 and imprisoned for one year. One of the key enforcement targets of the minimum wage legislation would be residential buildings, the paper said. This could create a situation where all owners of buildings would be liable for the offences. The administration acknowledged that this could arouse unease and concern among owners' corporation committee members, who serve mostly on a volunteer basis. It also said such enforcement of a minimum wage law could affect employers' hiring decisions, especially for residential buildings. "They may employ fewer security guards or even replace them with security equipment, such as intercoms and/or closed-circuit television," the report notes. Lawmaker Kwong Chi-kin, however, said there was no need to be too worried: "In most cases, owners delegate the responsibility for cleaning and security services to management companies that they subcontract. "Unless the owners are aware that the subcontractors are paying less than the statutory minimum wage, there won't be any personal liability." He said there could be difficulties for owners of buildings without a management company or owner's committee, like those where many poor and elderly people live. "For some single-block buildings in low-income districts like Sham Shui Po, the owners can afford to pay security guards only HK$2,000 to HK$3,000 per month. They can't afford the statutory minimum wage, which might amount to HK$6,000." Mr Kwong suggested the government help owners of such buildings work together to share costs. The Legco panel on manpower will discuss the issue on Thursday.

Private equity investors in mainland property projects should brace themselves for calls for additional equity and sharply lower returns as funding sources dry up, warn analysts and industry players. Once the white knights of cash-strapped mainland developers, the funds are now wrestling with the challenge of tightened lending policies, stricter enforcement of the "four certificates" policy, accumulated effects over the tightening policies on property buying by foreigners, and a global credit crunch that will radically alter their financing plans, they say. "Funds that bought development sites last year will now find it difficult under the new lending environment to borrow yuan loans to finish their projects," said Albert Lau Tak-yeung, a managing director at Savills in Shanghai. Ren Rong, chief executive of Harvest Capital Partners, a private equity real estate fund controlled by state conglomerate China Resources (SEHK: 0291) Holdings, said registered share capital would now have to be much larger than before, which means investment returns would be significantly affected. Typically highly leveraged, some international funds had reckoned on raising as much as 95 to 99 per cent of projected total investment costs when they bought into development projects last year - a strategy designed to reduce the amount of equity in the investments and boost returns to shareholders. But those plans were now in jeopardy, because of the changed lending environment. As a result the private investors face the prospect of calls on increasing their equity share to make up possible shortfalls in debt funding on the projects, according to analysts. "We have seen a change of policy in China in terms of property lending by domestic banks, including no lending for land banks, no lending for residential projects unless the so-called four certificates are in place, and no foreign lending into the China real estate market," Mr Ren said. The four certificates are: a Land Use Certificate, a Planning Certificate for Land to be Used for Construction, a Planning Certificate for Construction Projects, and a Construction Certificate. Market talk was that some of the private investment funds were already responding to the looming challenge of raising funds to complete proposed developments by looking to offload their investments. He declined to identify the funds involved. Mr Ren said that the new lending environment had put a lot of pressure on foreign investors in the mainland property market. "Registered share capital will now have to be much larger than before, which means investment returns will be significantly affected." Drawn to the mainland market over the past two years by the soaring rate of growth in property prices, international private equity funds initially invested heavily in completed en bloc projects. But towards the end of last year the funds began investing in development projects, bailing out mainland developers who themselves had run into funding problems and needed financial partners. Now, because of the changed lending environment, access to construction loans would be curtailed and the funds might find it impossible to meet their borrowing targets, Mr Lau said. Apart from the stricter enforcement of the four certificates, other measures that will limit access to yuan funding by foreign investors include a complicated approval procedure to remit foreign capital into the mainland. The State Administration of Foreign Exchange on July 10 last year issued a circular ordering a halt to foreign debt registration and the conversion of such debt into yuan for foreign-funded property companies set up after June 1. According to another circular issued in May last year, foreign exchange registration and settlement will be prohibited for foreign-funded property companies that have not been approved for filing with the Ministry of Commerce. The procedure takes time. Meanwhile, the investors must also wrestle with tougher credit markets and higher borrowing costs offshore as a result of risk-averse loan policies introduced by global bankers in the wake of the subprime credit crisis, said Lina Wong, managing director of Colliers International's East China region. Goodwin Gaw, chairman of Hong Kong-based investment fund Gateway Capital, said developers that built their projects on assumptions of heavy borrowing would face challenges in the new lending environment. "Due to lack of liquidity globally, the environment will favour firms with cash as we can demand higher returns from some of the higher leveraged sellers due to lower leverage available for projects." But Mr Ren said that the company with strong back-up from the state-owned enterprises would benefit from the current environment. "The mainland banks have been quite supportive of Harvest Capital given our background as being sponsored by China Resources Holdings." Private investors face calls to boost their equity share in mainland property projects to make up for possible shortfalls in debt funding.

June 13 - 15, 2008

Hong Kong: Macao registered 450,017 visitor arrivals in package tours in April this year, an increase of 27.2 percent year-on-year, according to the figures released on Thursday by the city's Statistics and Census Service (DSEC). The figures showed that visitors from the Chinese Mainland (301,892) and Southeast Asia (45,373) surged by 24.1 percent and 146.8 percent year-on-year respectively in April, while those from Hong Kong (31,339) dropped by 15.6 percent. As for the first four months of 2008, visitors arrived in package tours grew by 16.9 percent over the same period of last year to 1,647,576, according to the DSEC. Meanwhile, the number of Macao residents traveling outbound in package tours in April decreased by 14.6 percent year-on-year to 17,084, and the Chinese Mainland (75.7 percent), China's Taiwan (6 percent) and Thailand (5.8 percent) were three of the most popular tour destinations, according to the DSEC.

8 Held in fraud bust - A company director, three former senior staff and four others from two listed firms have been arrested for their alleged role in a HK$3.55 billion false accounting racket involving 18 banks. Detectives from the Commercial Crime Bureau yesterday raided the headquarters of EganaGoldpfeil (Holdings) (0048) in an industrial building on Castle Peak Road, Cheung Sha Wan. EganaGoldpfeil employees could not be reached for comment last night. Investigators have so far refused to formally identify either of the two firms. But they did say the investigation led them to believe that last year some senior staff at the firms had falsified accounting records by creating fictitious trading businesses. Officers also believe that bogus investment schemes were also created to deceive the shareholders as well as 18 banks for loans of HK$1 billion. These trading receivables and investments totalling HK$2.55 billion were subsequently written off. The arrests of the eight aged between 47 and 62 and including three women came as the police raided 13 locations across the city. EganaGoldpfeil makes and distributes jewelry, timepieces, leather products and consumer electronics. Last July, the Independent Commission Against Corruption charged then-EganaGoldpfeil executive director David Wong Wai-kwong with fraud over his alleged involvement in an acquisition by developer Grand Field (0115) of a gas pipeline business in Chongqing in 2002. EganaGoldpfeil said it was not connected to those charges. Wong then resigned his non- executive director position at Tonic Industries Holdings (0978), which makes audiovisual equipment. EganaGoldpfeil was a major shareholder in Tonic but announced plans to sell its 20.4 percent stake in the company immediately after the controversy. After Wong was charged, corporate- governance activist David Webb sparked a massive selloff in EganaGoldpfeil shares in August when he posted an article on his website claiming extensive connections between EganaGoldpfeil and broker Upbest Group (0335), which also had some executives charged by the ICAC in connection with the Grand Field deal. Webb also questioned EganaGoldpfeil's accounting policies, which he said flattered its earnings and, for at least two years, saved it from reporting net losses. After the massive selloff, EganaGoldpfeil announced that its media-friendly German chairman, Hans-Joerg Seeberger, was "under medication," could not discharge his duties and was living in Spain indefinitely." Seeberger died in Spain of natural causes on October 22 - 2 months later. Yesterday's arrests come less than five months after the Securities and Futures Commission brought charges against five people for trading in shares of Egana Jewellery & Pearls using insider information. These charges - the first brought by the SFC since insider trading was made a criminal offense in 2003 - alleged that a former BNP Paribas Peregrine Capital investment banker and four others used insider information to trade in shares of then-listed Egana Jewellery, about to be privatized by EganaGoldpfeil. Shares in EganaGoldpfeil have been suspended from trading since September 12.

Vendors may be barred from keeping chickens overnight at wet markets, according to the government's latest proposal to deal with the bird flu threat. Officials will meet with industry representatives today to discuss the proposal, a government source said. It is seen as the most "practical" solution before the introduction of a central abattoir in 2011 or 2012. The plan will make the wet market cleanup practice, currently on the 11th and 25th of each month, a daily routine and will require all unsold chickens at the end of each trading day to be slaughtered. "It can prevent the H5N1 virus from incubating in chickens, which usually takes three to five days," the source said, adding that Macau and Shenzhen are already taking similar action. Word of the plan came as more than 5,000 chickens were culled following the discovery of the H5N1 virus in a number of wet markets. Currently, about 20,000 chickens arrive daily from the mainland and about 10,000 from local farms. "We don't think the measure is draconian. The industry also has the responsibility [to protect public health]," the source said. The possibility of a mandatory slaughter of all unsold poultry was first brought up yesterday by Secretary for Food and Health York Chow Yat-ngok, who said it may require changes in legislation. Other proposals include reintroducing the voluntary surrender scheme for traders to give up licenses. The government stopped issuing licenses to wet market stalls and fresh food provision shops in August 2003 as a first step to control the live poultry industry. The ultimate solution in the bird flu fight is the building of a central abattoir. The source said a steering committee has been set up to speed up the building of the abattoir by 2011 or 2012. Work still to be done includes completing an environmental impact assessment, working out tender terms and finance arrangements, consulting the district council and getting Executive Council approval. The government has arrived at an estimate of how much it will cost to compensate the industry if Hong Kong's live poultry business was to close down but has refused to divulge details. "We are not afraid of the industry as public health is more important. For the sake of public health we can close down their business," the source said. If the 2001 compensation plan is used as a measure, the bill will be about HK$32 million. The source rejected criticism the government had been ineffective in tracking down smuggled chickens and in preventing bird flu outbreaks in 1997, 2001, 2002 and 2003. The government is still tracing the source of the latest H5N1 outbreak.

Park human cannonball has tunnel vision on track - Ocean Park's expansion program received a psychological boost with a "breakthrough" in the 1.2-kilometer tunnel that will link its lowland and headland to redefine the movement of five million visitors a year. Conducting the symbolic breakthrough yesterday with typical showmanship, park chairman Allan Zeman was blasted through a mock wall by cannon in front of Financial Secretary John Tsang Chun-wah, Commissioner for Tourism Au King-chi, the park's directors and the media. Requiring 70 tonnes of explosives and taking 193 days to build, the all- weather tunnel will displace 73,608 cubic meters of granite, rising 110 meters to exit at the park's headland. "With our HK$5.5 billion six-year master redevelopment project stated to double the park's attractions from the current 35 to over 70, we envisage an incremental rise in guest visitation as the new attractions unfold between now and 2012 to 2013," Zeman said. The tunnel, due to open next year, will house the Ocean Express attraction, a train journey set to immerse riders in a multimedia and interactive environment, embracing marine, animal and wildlife conservation themes for its three-minute duration. The tunnel will have a capacity of 10,000 visitors an hour. The park's lowland attractions will include Aqua City, housing an underwater restaurant and an aquarium four times the size of the park's biggest marine viewing tank, along with bird of prey shows and a Panda Cafe for visitors eager to grab a bite while viewing the park's popular cuddly creatures. The expansion at the park's headland will include a new Marine World inhabited by killer whales, a rainforest land with stunts, rides and an aviary, Thrill Mountain with more games and rides and a Polar Adventure area with an ice palace, polar bears and walruses. Alterations to the park's proposed hotels to address Southern District Council's concern over height have been completed and will be submitted to the government shortly, said Zeman, adding that the construction of the three projects should be open to tender by the end of the year.

Families closer after quake - The Sichuan earthquake may have claimed close to 70,000 lives and caused unimaginable damage, but a recent survey showed it also helped bring Hong Kong families closer together. A group called New Forum said the "Parents Happy Index" increased by nearly 6 percentage points in the aftermath of last month's devastating temblor based on a survey of 452 parents aged 18 to 65. The survey conducted from May 15 to 27 found the relationship between mothers and children rising 0.19 points to 3.43, and the index for mothers and other family members increasing 0.17 points to 3.41. The index is based on a scale of one to five with one being the unhappiest and five the happiest. Sha Tin District Councillor and New Form board member Scarlett Pong Oi- lan said the earthquake has taught parents, especially mothers, to treasure the time spent with their children. She said Hong Kong people have been deeply touched by the devastation and learned to love and cherish their family members. However, this closer relationship among family members did not quite extend to fathers, with the fathers dropping 0.06 points on the index. Kwun Tong District Councillor Mountain Hsu Hoi-shan, who is also a board member of New Forum, said this may be due to the fact men face higher pressure brought about by inflation and other economic woes. Hsu said men generally tend to tackle these problems without involving their children. In addition, their long working hours prevent them from spending more time with their loved ones. With Father's Day being celebrated on Sunday, Hsu said he hopes children will try to understand their fathers even more and spend additional time with their parents. The general happiness also did not extend to what families thought of the current education policy, with the index at its lowest rate of 2.48.

Obama moneymen hit China expats - Presidential hopeful Barack Obama will step up his overseas fundraising drive next week, with American expatriates in China the first target. Guests will gather at the Beijing home of Coca-Cola executive David Brooks to hear two of Obama's advisers, who will also speak in Shanghai, the Washington Post reported. Political analysts said Hong Kong would not be on the fundraising trail because long-established channels already exist in the territory. "The American expat community in China is growing, which is a result of China opening up for business as a country. The Americans are a major player. This is the first time I've heard of such a development," Linda Li Che-lan, a City University assistant professor, said. Hong Kong has frequently held such fundraising activities, Li said, so it was less likely for a high-profile delegation to gather in the territory. Advisers for Senator Obama, who recently pipped Senator Hillary Clinton in the battle for the Democrat nomination, include two senior foreign policy fellows from the Brookings Institution, Ivo Daalder and Phil Gordon. They will meet in Beijing on June 17 and in Shanghai on June 19 at an event hosted by Ted Hornbein, an executive at Richco, a company that manufactures electronic parts for mobile phones. A number of the 2008 presidential contenders have plunged into overseas fundraising in the past 16 months. Obama's rival John McCain held a luncheon on March 20 at Spencer House - a home built for an ancestor of Diana, the late princess of Wales.

While Little Sheep Group (0968) closed flat at its offer price, A8 Digital Music (0800) roared out of the gate on its trading debut yesterday with a 36 percent jump. Shares of A8 closed at HK$2.58 against an offer price of HK$1.90. About 124 million shares changed hands for a turnover of HK$292 million. Little Sheep ended flat at its offer price of HK$3.18. The mainland restaurant chain operator opened at HK$2.90 and fluctuated between HK$2.88 and HK$3.40. About 223 million shares were traded, translating to a turnover of HK$771 million. Following the contrasting fortunes of these two listings, Chongqing Machinery and Electric (2722) is tipped to make a lukewarm trading debut today. Meanwhile, casino mogul Stanley Ho Hung-sun's Sociedade de Jogos de Macau has reportedly revived its initial public offering shelved last January, while mainland developer Powerlong Group has postponed the roadshow for its US$300 million (HK$2.34 billion) IPO. Sources said SJM will meet investors from today to next Thursday but did not disclose the listing schedule. Although Powerlong had delayed its roadshow scheduled to start yesterday, a source stressed the IPO is still continuing. Last week, Xtep International (1368), Pou Sheng International (3813) and Central China Real Estate Group (0832) began trading on the local bourse and the three plunged below their offer prices on the first day of trading. Pou Sheng slumped 14.4 percent, reporting the largest trading debut fall this year. Ahead of its debut today, shares of Chongqing Machinery fell in the gray market yesterday, down 0.77 percent from its offer price of HK$1.30 to end at HK$1.29. "The gray market performance is neither good nor very bad. Whether Chongqing Machinery will fall below the offer price [today], that depends on the market situation," said CASH Financial Services Group (0510) director Horace Kwan Pak-leung.

Citic Securities and China International Capital Corp have toppled global banking giants from the top of the mainland's investment banking league, a sign that Beijing's policy of nurturing domestic brokerages is paying dividends. Investment banking fees in the first five months of the year crept up only 0.2 per cent to US$1.3 billion from a year earlier, according to Thomson Financial data. But Citic Securities, which dominated the table, saw its earnings shoot up 65.1 per cent to US$111.8 million, more than twice that of second-ranked CICC, which recorded growth of 151.1 per cent. Swiss bank UBS, which dominated last year's ranking, slumped to third place after its earnings from underwriting share issues dropped by US$62.4 million. Morgan Stanley recorded the biggest fall, dropping from second to 10th place. The stock market accounted for just 41.1 per cent of the banks' earnings while fees from advising on mergers and acquisitions contributed 54.1 per cent, a reversal of the situation last year when share offerings were the big money-spinner. Despite this year's stock market slump, Citic Securities and CICC performed strongly, pulling in US$77.9 million and US$47.5 million respectively from the equity markets after underwriting some of the biggest initial public offerings so far this year. Citic was chief book runner on the HK$5.71 billion listing of China Railway Construction (SEHK: 1186) Corp in Hong Kong in March, and CICC helped underwrite China Coal Energy (SEHK: 1898)'s share sale in Shanghai a month earlier. Citic also dominated fees from debt issuances with a market share of 61.3 per cent, while UBS headed the mergers and acquisitions table. The data indicates a triumphant fightback from the top domestic brokerages, which struggled last year after Beijing opened the securities industry to foreign competition. The figures also show it has been a tough first half for the big global banks, despite being allowed to sponsor bond and A-share offerings for the first time this year. However, the global players are unlikely to be too disappointed with their earnings in the Asia-Pacific region as a whole, where fees in the first five months amounted to US$4.3 billion. Although that was down 12.4 per cent on the period last year, it was significantly better than the 37.5 per cent and 46.2 per cent slumps recorded in the Americas and Europe. UBS led the charts in Asia excluding Japan, followed by Citi and JP Morgan.

HK schools join relief plan - SICHUAN EARTHQUAKE - Local schools are being paired with schools affected by the Sichuan earthquake to foster long-term relationships through student exchanges and reconstruction aid. Sowers Action, a charity that supports education development programmes on the mainland, yesterday announced the project, which will be held jointly with the concern group Education Convergence and student group Hok Yau Club. It is inviting Hong Kong schools to pair up with affected schools in Gansu province , building up relationships with teachers and students by writing letters or through face-to-face exchanges. Each participating school will have to raise at least HK$20,000, the cost for building a prefabricated school, for its Gansu counterpart. The prefabricated schools will be used for at least three years. Building a permanent school will cost HK$600,000 to HK$800,000. Participating schools will also be invited to elect student representatives to visit Gansu and Sichuan during the summer holiday in order to increase their sense of commitment and participation. Five primary and secondary schools have expressed interest in taking part in the project. The charity had signed up for the reconstruction of 33 schools in Gansu, which would cost more than HK$10 million, its spokeswoman said. It had received about HK$6 million in donations specifically for quake relief, so the projects would have to be partly funded by the group's development fund, she added. The Hong Kong Red Cross has received more than HK$900 million in donations for the quake. Oxfam Hong Kong has raised more than HK$93.2 million. It has outlined a preliminary action plan for the next five years in 17 areas of Sichuan. The organisation said it was budgeting about HK$20 million for the relief phase and HK$80 million for rehabilitation projects, including building temporary schools and village roads.

Government soups up IT systems - The government would launch more information technology systems in Hong Kong to improve efficiency and help users, Secretary for Commerce and Economic Development Frederick Ma Si-hang took said on Wednesday. Responding in the Legislative Council to a question from legislator Sin Chung-kai, who had asked what the government had been doing to upgrade IT, Mr Ma said a number of innovative IT services had been launched recently. These included the new e-Tax service, the Leisure Link Self-Service Kiosk System, and use of e-channels at the airport. More were planned in the next six months, Mr Ma said. “In future, we will use IT to further enhance the efficiency and convenience of public services by launching new e-services, by improving the usability and convenience of existing services and by further widening access to computing facilities.” He said that over the next six months, more than 10 new e-Government services would be provided to the public. “Over 15 e-Government services will come on stream in 2009 and 2010. To name two examples, the Transport Information System will make it more convenient for the public to plan journeys by providing up-to-date traffic information and allowing them to search for optimal routes using public transport. Mr Ma said an Electronic Health Record system would also be launched to make it easier for patients to obtain care from different healthcare providers. “We will provide a geographical user interface to make it more convenient and efficient for users to find location-based information. “And we will use our Unified Identity Management Framework to provide a more convenient way for the public to register for and use e-services, while verifying their identity and safeguarding their personal data,” added Mr Ma. He said the government was also planning a pilot scheme for setting up district cyber centers. “These will provide the hardware as well as technical support for children from low-income families and other needy residents to access online resources,” he said. Discussing websites, Mr Ma said there were now 392 websites using domain names ending with “.gov.hk”. “Out of these, 218 are hosted under the Government’s Central Internet Gateway while the others are administrated individually by the respective bureaus/departments. “Of the 218 centrally hosted web sites, they already account for over 733,000 web pages of contents and more than 173,000 downloadable documents available for public access,” he told Legco.

China: China and Australia were set to hold a new round of free trade talks in the next few days, Australia's treasurer said here Wednesday.

China's oil imports posted double-digit growth in the first five months of 2008 as global crude prices more than doubled from a year earlier, the General Administration of Customs said Wednesday.

China's hour of tragedy, triumph - An old couple walk hand-in-hand at a makeshift shelter in Mianzhu City, southwest China's Sichuan Province, May 25, 2008. From the moment we arrived at Beijing's spectacular new airport on May 6, the pride of the Chinese people as they prepared to host the Summer Olympics was evident. Six days later, in the aftermath of the Chengdu earthquake, we witnessed an even more impressive face of China. We were visiting the Panda Reserve Center in Wolong, about three hours from Chengdu, as part of a World Wildlife Fund tour when the 8.0 magnitude earthquake struck on May 12. The reserve is like a typical zoo but with 500-m mountains towering on all sides. At 2:28 pm, in a series of jolts that lasted about three minutes, boulders, trees and dirt came tumbling down. The nearest of the pieces of uprooted nature landed about 18 m from us. The center's director quickly summoned his staff and discussed how to move our group to higher ground. A boulder the size of a small car blocked our path out. The staff set up a ladder as a work-around; we had to crawl through brush, climb the ladder and cross a footbridge to get back to the entrance. Rain began to pour, but we were soon at the entrance, huddled under umbrellas. After about half an hour, a young staffer carrying a baby panda appeared on the footbridge. At first we thought the panda had escaped in the chaos. But soon a steady stream of cubs, 13 in all, was coming across the bridge in the arms of young handlers. These courageous young men and women had gone back into the wreckage to rescue the national treasure. Meanwhile, other brave staffers drove up the mountain to see whether the road to the nearby Wolong Hotel was passable. When they returned, we boarded our bus and our driver, visibly shaking, navigated the 4 km. Upon arrival, we learned that the hotel was damaged beyond occupancy; the parking lot was deemed a safer place for us to stay while awaiting rescue. As night fell, the hotel staff brought blankets to our bus. Over the next three days we were joined in the lot by a busload of British tourists, some 15 carloads of Chinese tourists and several hundred villagers whose homes had been destroyed. There was no way to communicate with the outside world. We learned through a radio report that the road out of Wolong had been cut off by the earthquake, stranding us. This report placed us approximately 96 km from the earthquake's epicenter (it was only later that we learned we had, in fact, been less than 10 km from the epicenter). At dawn the next day, we were awakened by the sounds of clanging pots. Outside the bus, hotel workers were cooking in a makeshift kitchen. The rice congee (basically a watery boiled rice) they prepared was the diet of Chinese babies and "very healthy", our stalwart tour guide, Frank Wang, assured us. It became our staple, sometimes supplemented with pickled vegetables and small pieces of pork salvaged from the hotel's refrigerators. The heavy rain lasted two days. When the sun finally broke through, it raised our spirits, but it was not until the third morning that we heard a helicopter. Minutes after it landed, our guide told us that we would be flown out. We had five minutes to board, each being allowed a small bag. Smiling young men in military uniform motioned for us to sit on the floor. After we took off, they passed around soda and cookies, as if we were on a passenger airliner. One of the young men, who looked all of about 18, asked, "How does your heart feel?" At first we thought he was inquiring about our health, but he produced a diary with a pen and asked us to jot down our feelings. Although we had been rescued, the 45-minute ride to Chengdu was bittersweet. We flew over scenes of indescribable destruction and suffering. All of the bridges that had carried us up to the reserve were in ruins. Entire villages had been leveled. Tourists who had left the reserve in a bus while we were still there were killed in the earthquake. In eight weeks, the world's attention will once again focus on China. We will watch the Summer Olympics with vivid recollections of the courage and generosity of the Chinese people. Their kindness to us was unfailing, even as their nation suffered this staggering tragedy. Elisabeth Liptak is executive director of the Washington Literacy Council. Robert Litwak is director of international security studies at the Woodrow Wilson Center The article first appeared in The Washington Post.

Taipei approves conversion bill - Taiwan's parliament approved a bill yesterday that will help speed the process of allowing wider convertibility between the Taiwan dollar and the Chinese yuan, signalling improving ties between the sides. Parliament's approval will let the Financial Supervisory Commission (FSC) and the central bank work on plans to let financial institutions exchange the yuan with individuals, which may happen by the end of this month. Some legislators have been urging speedy approval of the amended bill because the number of mainland visitors to Taiwan is expected to rise next month. Easier currency conversion will also help clamp down on black market trading, they say. "This is part of a big process of greater co-operation between the two, so it's definitely a step in the right direction," said Philip Wee, a strategist at DBS in Singapore. "What you can see is the Taiwan dollar appreciate against many Asian currencies, so it can actually be strong on a trade-weighted basis," he said, adding that the weakness of the US dollar would also support the Taiwan dollar. Parliament's approval is part of the new government's aim of reducing currency exchange restrictions along with plans to open up its tourism sector to the mainland. "The next thing that will happen is the FSC and the central bank will submit their plans to the cabinet and then submit it to the president's office," a Taiwanese parliamentary source said. Despite political differences between Taiwan and the mainland, trade between the two has flourished. The mainland is Taiwan's top trading partner and is the favourite investment destination for Taiwanese businesses. Conversion between the two currencies is very limited. Taiwan allows individuals to change no more than 20,000 yuan (HK$22,600) per transaction on Taiwan's offshore islands of Quemoy and Matsu.

Sanmina deal to help Lenovo expansion - Lenovo Group (SEHK: 0992, announcements, news) last week completed the acquisition of the Mexican personal computer business of Sanmina-SCI, pushing forward its manufacturing expansion efforts in North America, despite an expected slowdown in technology spending on the continent this year. The assets purchased would form part of Lenovo’s new 24,155 square metre Monterrey facility, which is due to start up in the third quarter of this year, according to Lenovo spokesman Raymond Gorman. “We are building a brand new facility to our own specifications and requirements, and are taking on those Sanmina assets which are a good fit,” Mr Gorman told the South China Morning Post (SEHK: 0583, announcements, news). Lenovo, the world’s fourth-largest personal computer supplier, will spend as much as US$15 million developing its facility in Monterrey, a key industrial city and capital of the northeastern Mexican state of Nuevo Leon. Sanmina, an electronics contract manufacturer based in California, agreed to sell its personal computer business to Lenovo in February as part of a restructuring plan. Lenovo also agreed to assume certain undisclosed liabilities of Sanmina. The deal marks the mainland technology giant’s first major asset acquisition since it bought IBM’s personal computer division in 2005. “Underpinned by a strong net cash reserve of US$1.6 billion, management is actively looking for new acquisition opportunities,” wrote analyst Joseph Ho in a recent report for Daiwa Institute of Research. Despite fears of a recession in North America, Lenovo said its Americas geographic market accounted for US$1 billion, or 27 per cent, of total global sales in its fiscal fourth quarter ended March. It marked the company’s fifth profitable quarter in that market. For Lenovo, the deal with Sanmina will provide it with greater manufacturing capacity to bolster its push into consumer personal computers and servers for small and medium-sized businesses in the highly competitive North American market. In a research note, Morgan Stanley analysts said: “Lenovo plans to increase in-house production by setting up its own production plants and reducing outsourcing.” That is in contrast to the strategies of Hewlett-Packard, Dell and Acer, which all rely on production outsourcing - especially for laptops - to Taiwanese original design manufacturers. In July last year, Lenovo said it was investing more than US$30 million to build new manufacturing plants and order-fulfilment centres in Baddi, India, and in Monterrey, Mexico support regional requirements. Lenovo’s other plants are in Beijing, Huiyang, Shanghai, Shenzhen, North Carolina and Pondicherry, India.

June 12, 2008

Hong Kong: HSBC Holdings (0005) was the savior yesterday, helping the Hang Seng Index to close above 23,000. The bank said it may pull out of a US$6.3 billion (HK$48.14 billion) deal to buy a big chunk of Korea Exchange Bank.

State-owned financial conglomerate CITIC Group will pay lower than expected to privatize its Hong Kong-listed arm CITIC International Financial Holdings (CIFH) and will finally inject it into mainland-based China CITIC Bank. The privatization is widely believed to be part of CITIC Group's effort to facilitate the restructuring of its mainland and overseas financial platform, forming a tripartite collaboration between CIFH, CITIC Bank and CITIC Ka Wah Bank, a fully owned commercial bank of CIFH. "Following the trend of internationalization of its mainland peers, the injection of CIFH into CITIC Bank can help the mainland bank tap into global opportunities through a unified brand," said Chang Zhenming, vice-chairman and president of CITIC Group. But there is no timetable for the injection and it will be subject to approval of CITIC Bank's shareholders and regulators on the mainland and Hong Kong. The acquisition price is widely considered too low. CITIC Group would offer shareholders one CITIC Bank H share plus HK$1.46 cash for each CIFH share they own. Based on CITIC Bank's Hong Kong closing price at HK$5.44 on June 2, the offer represents HK$6.9 per share, or a 21 percent premium on CIFH's closing price of HK$5.7 before trade suspension on June 3. It represents 1.6 times the price-to-book ratio of CIFH. CIFH's trading resumed yesterday in Hong Kong, with shares rising 8.25 percent to close at HK$6.17. CITIC Bank lost 4.81 percent to end at HK$4.95. The offer would involve the issue of 1.746 billion CITIC Bank H shares and approximately HK$2.59 billion in cash, according to CIFH's statement. A cash offer would also be made to option and bond holders. After the privatization, CITIC Group's stake in CIFH will rise to 70.33 percent from 55.16 percent, while Spanish shareholder Banco Bilbao Vizcaya Argentaria SA (BBVA)'s stake will double to 29.67 percent from 14.52 percent. The Spanish bank has said it will spend 800 million euros in increasing its participation in both CIFH and CITIC Bank. After the deal, BBVA's stake in CITIC Bank will rise to 10.07 percent from 4.83 percent. "CIFH's shares were undervalued in the past. Average share price excluding CITIC Bank is only HK$0.03. Therefore, I believe the acquisition price is very attractive," said Chang in response to the allegation that the offer price was too low. CIFH will give up acquiring BBVA's Asian assets as planned before, while the foreign shareholders increase stakes in both CIFH and CITIC Bank. "After valuing BBVA's Asian assets, we believe it is not suitable for us to merge with it," said Dou Jianzhong, CEO of CIFH, noting that there will still be other opportunities as BBVA has a strong business in South America. As an overseas strategic partner, CIFH will continue to cooperate with BBVA in areas of risk management, human resources training, trade finance and wholesale banking, Dou said.

Macao seeks to build up business platform with largest annual trade fair As the 13th Macao International Trade and Investment Fair (MIF) is set to open later this year, the city will step up the effort to establish itself as an " efficient business platform" for the region, said Macao's economic chief in a press statement released on Wednesday. The event, organized by the Macao Trade and Investment Promotion Institute (IPIM), will be held from Oct. 23 to 26 this year, and the organizer has sent out 10,000 invitation letters to government departments, enterprises, and institutes inside and outside of China. "MIF highlights the roles of Macao as an economic and trade co-operation service platform between China and the Portuguese- speaking countries, a regional co-operation service platform for the Pan-Pearl River Delta as well as a liaison and co-operation service platform for international Chinese entrepreneurs," said Tam Pak Yuen, Secretary for Economy and Finance of the Special Administration Region (SAR). Last year, the 12th edition of the MIF attracted 236 delegations from 50 countries and regions. To build on the success, the organizer intends to add some new pavilions to this year's fair, namely 2010 Shanghai World Expo, Franchise/Agency Business and Taiwan pavilions. Some 800 exhibition-booths will be established during the event this year, which is more or less the same with last year, according to Jackson Chang, acting president of IPIM, at today's press conference. As the city's largest annual trade event, the organizer is also keen to support local small and medium sized enterprises (SME) to make use of the MIF platform to open up new business opportunities. IPIM announced at the press conference that it will offer subsidy of up to 5,800 patacas (725 U.S. dollars) each booth to local SMEs for their participation in the event. He also reiterated that the holding of MIF is not a signal that Macao wants to compete with neighboring regions in the MICE (Meetings, Incentives, Conventions and Exhibitions) industry, but to capitalize on the mature regional market conditions and create more business opportunities for local and international enterprises. In addition to exhibitions, the organizer will put in more effort in the collection of business matching and investment projects during the event period of this year. Meanwhile, conferences and forums on investment, regional cooperation, informatics, etc. will also be held during the event.

Hong Kong filmmaker Johnnie To has donated almost every award he has won to a local film archive. Industry observers say the gesture shows his indifference to fame. A total of 36 awards of the internationally-acclaimed director and producer will be permanently kept by the Hong Kong Film Archive, which is dedicated to preserving and showcasing local film culture, Wen Wei Po reported on Wednesday. According to the newspaper, the archive will hold a ceremony on Friday to officially accept To's donations. This will be followed by a discussion led by To about his experiences as a filmmaker. To's donations include awards for Best Director at the 2004 Hong Kong Film Awards for "PTU"; Best Director at the same year's Taiwan Golden Horse Awards for "Breaking News"; and the Carnet Jove Jury Award at the 2006 Sitges - Catalonian International Film Festival in Spain for "Exiled." Johnnie To first announced he would donate his awards a year ago in an interview with Beijing News. He was quoted as saying, "These trophies are just decorations. [Fame] is not a big deal." To is among Hong Kong's most renowned filmmakers, and is credited with popularizing crime thrillers.

Poor air quality in Hong Kong, Macau and the rest of the Pearl River Delta is costing 10,000 lives, 440,000 hospital stays and 11 million outpatient visits every year, according to top scientists and experts. Conducted by think-tank Civic Exchange, reasearchers in a study called on the three governments to adopt an overall air quality management framework - including adopting the World Health Organization's objectives - to improve monitoring and boost clean energy usage, while reining in land and marine emissions. The think-tank has put the total health-care bill in the mainland delta region caused by air pollution at 6.665 billion yuan (HK$7.5 billion), while Hong Kong and Macau spend HK$1.1 billion and HK$17 million respectively on reactive medicine. The researchers said the four pollutants - particulate matter, ozone, sulfur dioxide and nitrogen oxides - were responsible for 548 deaths, 38,720 hospital bed days and 3.97 million outpatient visits in Hong Kong alone in 2006. Presenting the findings at the Foreign Correspondents Club yesterday, study co-author Anthony Hedley, of Hong Kong University's school of public health, said all estimates were conservative. Many estimates are likely to increase or even double when the latest figures are released shortly. Remarking that most people affected by pollution would not live to see retirement, Hedley said younger generations would also bear the physical burden of impaired development and that sufferers faced slow deaths marked by chronic disease, dependency on health-care services, a reduced quality of life, loss of productivity and being burdens to their families. "There is a need for accountability in terms of the harm that is being done to the population's health by ambient pollution ... we are harming future health as well as present health," he said. "If the government took a health perspective as opposed to an administrative perspective, they will then adjust their way on what they do," said Civic Exchange chief executive Christine Loh Kung-wai. She said the think-tank is conducting discussions to have the government link health and pollution in its policy outlook in the hope the city and its neighbors could get their acts together before the East Asian Games in November next year. The study compared recent pollutant levels up to 2006 with health-care costs and productivity losses due to hospital admission and deaths, with the annual burdens translated into monthly costs. Demographic profiles, mortality rates, hospital admissions and outpatient visits to private and pubic sectors, productivity loss data and cost data for workers aged 15 to 64, with adjustments for per capita income and gross domestic product, were taken into account in formulating the findings.

Yeung to Sing Pao rescue - Hong Kong entrepreneur Carson Yeung Ka-shing plans to invest at least HK$160 million in the beleaguered Chinese-language newspaper Sing Pao Daily News.

Organ donor fees could be scrapped - The Hospital Authority is considering waiving medical fees for local and overseas organ donors. Secretary for Food and Health York Chow Yat-ngok told lawmakers yesterday the authority had previously waived fees for organ donors on a case-by-case basis but would now consider institutionalizing the arrangement. The announcement was made in response to queries by Democratic Party lawmaker Albert Ho Chun-yan after it was recently reported an approved mainland donor received a hefty medical bill after recovering from his operation. An authority spokeswoman said the move is expected to help facilitate the authority's twin-pillar strategy of encouraging live donations and donations after death. Medical-sector lawmaker Kwok Ka-ki, who said medical bills for donors could easily run into millions of dollars, urged caution in reviewing the waiver policy. "I think it would be difficult to waive the fee for all donors and we need to be careful as it may become a constant phenomenon that will incur a lot of cost," he said. Favoring the use of discretionary funds at the government's disposal to be used for patients in financial difficulties, he said the case-by-case review would be the best way forward until the authority finalizes its proposal. Chairman of the Alliance for Patients' Mutual Help Organizations Cheung Tak- hai said the waiving of fees is an encouraging move in light of the acute shortage of donors. "I hope this will have a positive effect on boosting participation, because having to pay fees on top of already giving up organs will scare many potential donors away," he said. Hong Kong Liver Foundation executive administrator Doris Ho Lai-ching said the announcement is great news to patients. She also said the government's strict restrictions limiting potential overseas donors to immediate family members should be relaxed. Acknowledging that restrictions are meant to stifle the growth of an organ trade, she said allowing a legitimate channel for donors of non-family members would help donation rates keep up with transplant queues. According to the Food and Health Bureau, 31 liver disease patients on the transplant waiting list died in 2007. It said 126 and 1,489 patients were on the waiting lists for liver and kidney transplants respectively as of December 31 last year. Last year, only 26 livers and 58 kidneys pre-donated by deceased people were available for transplant.

Little Sheep Group (0968) and A8 Digital Music (0800) are being tipped to make impressive trading debuts today - but analysts predict this will not whet investors' appetite for new listings.

China: Mainland, Taiwan start talks on weekend chartered flights - The Chinese mainland and Taiwan began negotiations on weekend chartered flights here Thursday five years after the service was adopted for major festivals. Sun Yafu and Li Bingcai, vice chairmen of the mainland-based Association for Relations Across the Taiwan Strait (ARATS), discussed the issue with Kao Koong-lian, vice chairman and secretary-general of Taiwan-based Straits Exchange Foundation (SEF). The talks followed the meeting between ARATS Chairman Chen Yunlin and his Taiwan counterpart Chiang Pin-kun on Thursday morning. In 2003, the mainland and Taiwan agreed to offer chartered flights during the Spring Festival, China's major festival for family reunions, to help Taiwan business people working on the mainland return home. That year, the flights had to land in Hong Kong or Macao en route and only Taiwan airline companies could operate the flights. The service suspended in 2004 due to the disagreement over operation details between the two sides. They resumed a year later after an agreement was reached to allow both mainland and Taiwan airlines to operate direct non-stop flights. The terminals in the mainland also increased from just Shanghai to three with the inclusion of Beijing and southern Guangzhou. Since 2006, all Taiwan residents having legal passes to travel across the Strait have been allowed to board chartered flights instead of just business people and their families. Xiamen city, in southeastern Fujian Province, has become the newest terminal. Meanwhile, the service has been expanded to three other major Chinese festivals, the Qingming Festival, or Tomb Sweeping Festival, Dragon Boat Festival and Mid-Autumn Festival. However, residents and industries from the both sides are calling for regular chartered flights for weekends and faster cargo transport services. The ARATS and SEF will also talk about the issue of mainland tourists traveling to Taiwan, according to the schedule. It was a "down-to-earth and right" attitude that the two sides would pick up easier problems first and start from economic issues, said Chiao Jen-ho, former SEF vice chairman and secretary-general, in a telephone interview with Xinhua. "I believe the talks will produce practical results," he said.

Mainland, Taiwan organizations hold talks after 9 years' suspension - Chinese mainland's Association for Relations Across the Taiwan Strait and the Taiwan-based Straits Exchange Foundation began to hold talks after nine years' suspension.

China's monthly CPI rises 7.7% in May - China's consumer price index, the main gauge of inflation, rose 7.7 percent year on year in May, the National Bureau of Statistics said on Thursday. The figure, compared with 8.5 percent in April and a nearly 12-year-high of 8.7 percent in February, was broadly in line with most forecast.

The file photo shows Chinese "taikonauts" in training. China's Shenzhou VII manned space mission, which will include the first spacewalk by a Chinese "taikonaut", is to launch in October, said a spokesman of the China manned space engineering office in Beijing, June 12, 2008. China's 1st spacewalk mission to launch in October. China's Shenzhou VII manned space mission, which will include the first spacewalk by a Chinese "taikonaut," is to launch in October, said a spokesman of the China manned space engineering office here on Thursday. He would not give the exact date of the launch, but said a day would be selected in October. A crew of six astronauts had been chosen for the mission, with three manning the spacecraft and three substitutes, said the spokesman. Two of the astronauts on board the spacecraft would prepare for the historic spacewalk, he said. The remaining taikonaut was expected to carry out scientific experiments, he said. Scientists had finished the research and assembly of the space craft, he said. The Shenzhou VII will be launched from the Jiuquan Satellite Launch Center in the northwestern province of Gansu. The launch center is getting prepared for the launch, according to earlier reports. The spacewalk mission is crucial for China to establishing a space laboratory or station. China began its manned space program in 1999 and successfully sent its first astronaut, Yang Liwei, into orbit on the Shenzhou V spacecraft in 2003. Two years later, Fei Junlong and Nie Haisheng completed a new Chinese record with a five-day flight on the Shenzhou VI All returned safely.

Chiang Pin-kun (L), chairman of the SEF, bows to the statue of Kuomintang founder Dr. Sun Yat-sen in the memorial hall of Dr. Sun Yat-sen at Biyun Temple in Beijing June 12, 2008.

Tote fashion goes green - "I'm not green, but I could be," reads one. Others have similar messages printed on them, "My Bag", "Use Me and Re-use Me". Since the Chinese government issued its June 1 ban on free plastic bag handouts, retailers in China have found themselves in the midst of a "green" phenomenon. They're anxious to turn fashion-conscious customers into eco-aware shoppers.

China has quietly given permission since March to six foreign fund managers to invest up to US$675 million (HK$5.26 billion) in the country's securities market, official sources said yesterday.

June 11, 2008

Hong Kong: The shooting of John Woo's new movie Chi Bi, or The Battle of Red Cliff, was stopped by a serious fire with one dead and at least three injured, Tuesday's Beijing News reported. The fire broke on early Monday morning when the crew were shooting a scene that a small smoking boat crashed with a large ancient war vessel at a location in northern suburb of Beijing. A 23-year-old stunt man was killed in the fire, the newspaper quoted the local fire control department. And at least three people were sent to hospital, other sources said. The cause of the fire is still under investigation. John Woo was in Hong Kong and the second unit director was in charge of the shooting, according to the newspaper. The historical epic drama with a budget of 80 million U.S. dollars was claimed to be Asia's biggest movie production, gathering a bunch of famed actors including Tony Leung, Zhang Fengyi and Takeshi Kaneshiro. The film, adapted from China's classic novel Romance of the Three Kingdoms, is divided into two parts and the first part is going to be released next month. It has been Woo's latest Chinese movie following his several Hollywood motions such as Face Off and Mission Impossible II.

Hong Kong singer and actress Gigi Leung attends a commencement ceremony for the UN Children's Fund "Young Envoys Program" on June 9. As the Hong Kong ambassador of the UN Children's Fund, the star called on people to make donations to victims of the Sichuan earthquake.

The Secretary for Justice has called for a staggering 30 percent rise in the pay of senior government lawyers in a move that would see their salaries top those of senior civil servants for the first time. The proposed pay hike aims to stem a worrying brain drain from the Department of Justice to the lucrative private sector and address sagging morale caused by ever-increasing workloads. In a letter to department management and staff, Secretary for Justice Wong Yan-lung said the top-end salary of senior government counsel would rise to HK$112,850 exceeding the starting salary of a directorate grade one civil servant. At present, government lawyers are on the same pay scale as civil servants but in a further move Wong proposes the creation of a separate legal pay scale for government lawyers. It would mean that the starting salaries of non-directorate government counsel would jump by 35 percent to HK$59,360 per month and peak for non-directorate senior governmental counsel at HK$112,850 a 29 percent rise. This means the highest paid non- directorate senior government counsel would earn more than a level one directorate officer who starts on HK$97,250. This will act as an incentive to staff and provide added rewards for career advancement by progressively and regularly increasing a counsels salary, Wong said. The proposals were made in a submission to the civil service pay-review body, the Standing Commission. Between 2002 and 2007, 53 government lawyers quit the department 2.5 percent of the total complement. Wong said a separate adjusted pay scale would allow more flexibility to deal with staff retention and lure highly skilled lawyers from the private sector. Law officers and I feel strongly that the increased work pressure shouldered by colleagues in the government counsel grade ought to receive appropriate recognition, he said. Wong said: "The package the Department of Justice offers must be reasonably attractive vis-a-vis what the private sector is offering, as we are competing with high-end firms in attracting the best talent." Other recommendations sent to the Standing Commission, which oversees the Grade Structure Review, a civil service pay review, stipulated that any pay rise must be applied on an equal footing to both serving lawyers and new recruits with the same levels of experience. Pointing to the mounting workload of lawyers, Wong said the number and complexity of requests for legal advice had risen in recent years. New government projects raised new legal issues and draft legislation is subject to more rigorous scrutiny by the legislature. The number of judicial reviews is also growing. The Standing Commission gathered the views of department staff and management in April. Low morale, resulting from a heavy workload and lower salaries is driving government lawyers to the private sector, said a senior counsel from the Local Government Counsel Association. The source warned that the department should urgently improve employment terms before more lawyers decide to leave.

Four months before the government is due to consider drafting minimum wage legislation, the Hong Kong Federation of Trade Unions has come up with a proposal that would see all workers receive no less than HK$7,000 a month or HK$33 an hour.

HSBC Holdings (0005), Standard Chartered (2888) and CIMB Group are among potential bidders for a 42 percent stake in unprofitable BankThai, part-owned by US buyout firm TPG, five people familiar with the plan said.

Government reveals appointees' pay - Highest-paid deputy ministers earning more than HK$220,000 a month - The government revealed the salaries of the 17 newly appointed deputy ministers and political assistants on Tuesday - with the highest monthly salaries exceeding HK220,000 a month. The details were released in a statement published on the government website. The announcement follows weeks of controversy over the appointment of the deputy ministers. The controversy has focused on whether appointees held foreign passports and what their salaries would be. The government has come under growing pressure to release salary details. The Democratic Party had earlier proposed moving a resolution to invoke the Legislative Council (Power and Privileges) Ordinance demanding details on each appointee’s salary. The government statement said the highest salaries were earned by Gregory So Kam-leung, under-secretary for commerce and economic development, and three other deputy secretaries: Kenneth Chen Wei-on, under-secretary for education; Julia Leung Fung-yee, under-secretary for financial services and the treasury; and Florence Hui Hiu-fai, under-secretary for home affairs. They will all earn HK$223,585 a month. The other four deputy ministers will earn HK$208,680 a month. They are Raymond Tam Chi-yuen, under-secretary for constitutional and mainland affairs; Kitty Poon Kit, under-secretary for the environment; Gabriel Matthew Leung, under-secretary for food and health; and Yau Shing-mu, under secretary for transport and housing. The political assistants will earn less than the under secretaries. Katherine Ng Kit-shuen, the political assistant to the secretary for financial services and the treasury, will earn HK$163,960 a month, while former journalist Linda Choy Siu-min, the political assistant to the secretary for the environment, will have HK$149,055 a month. The other seven political assistants will earn HK$134,150 a month. They are Frankie Yip Kan-chuen, political assistant to the financial secretary; Raymond Cheung Man-to, political assistant to the secretary for development; Jeremy Young Chit-on, political assistant to the secretary for education; Paul Chan Chi-yuen, political assistant to the secretary for food and health; Caspar Tsui Ying-wai, political assistant to the secretary for home affairs; Zandra Mok Yee-tuen, political assistant to the secretary for labour and welfare; and Victor Lo Yik-kee, political assistant to the secretary for security. Chief Executive Donald Tsang Yam-kuen held a press conference on Tuesday in which he appeared alongside the 17 new political appointees. Mr Tsang defended the appointments, saying the recruitment procedures to select the 17 political appointees had been transparent and fair. “The government acted both in accordance to the Basic Law and the central government’s policy towards Hong Kong,” he said. Mr Tsang said Hong Kong’s legislators had also been involved in creating the positions. “The process began after legislators approved the creation of the positions in December last year. We made it clear that all interested parties could put forward nominations,” he said. Mr Tsang also praised recent decisions by deputy ministers to renounce their right of abode in foreign countries and overseas passports. “Five undersecretaries have already renounced their foreign right of abode. They did so to demonstrate their commitment to Hong Kong and to put this matter to rest. These were personal decisions – and I respect them,” he added.

Industrial conglomerate Chongqing Machinery & Electric raised HK$1.3 billion in a Hong Kong initial public offering after it priced its shares at the bottom of an indicated range, a source close to the situation said on Tuesday. The machine and car parts tool maker priced its shares at HK$1.30 apiece, compared with a range of HK$1.30 to HK$1.70 each, the source said. The public offering portion of the IPO was about 5 times covered, the source added. The company is selling 1.0049 billion shares, or 27.3 per cent of its enlarged share capital, in a deal handled by Credit Suisse. The firm is scheduled to start trading on June 13, under the symbol “2722”.

Bringing back the flavour of old HK - Official explains aim of new hawker policy - The government's policy U-turn to allow more hawkers, ice cream vendors and dai pai dong in the city is in answer to growing conservation concerns, a senior government official says. Director of Food and Environmental Hygiene Cheuk Wing-hing said many Hong Kong people loved open bazaars and the local tastes of dai pai dong. "Many years ago there were a lot of dai pai dong, causing nuisances to the environment," Mr Cheuk said. "Now only 28 are left and they are like antiques in a museum to some people. "The department's primary role is to take care of environmental hygiene. But when we are able to ensure a good environment, then we should also take a look at conservation and the social functions of hawkers in Hong Kong." At the end of March, there were 6,531 fixed-pitch hawker licences - including 28 dai pai dong - and 590 itinerant hawker licences. "Open bazaars are part of our city landscape," Mr Cheuk said. "For example, the Fa Yuen Street market and the Ladies Market in Mong Kok are very popular attractions to both locals and tourists. They also have a social function, providing lower-priced goods and job opportunities. "If we don't do something now, there will come a time that hawkers will disappear in Hong Kong, similar to the case with dai pai dong." In the early 1970s, the two former municipal councils stopped issuing new hawker licences. The government introduced a scheme in 2002 to encourage dai pai dong licensees and itinerant hawkers to surrender their licences. Under the latest review, to be discussed by a Legislative Council panel today, the department would bring in new operators to take up the 800 or so vacant stalls. It also wants district councils to advise on whether a particular dai pai dong should be allowed to continue to operate when its licence is due to expire. The passing on of dai pai dong licences would no longer be limited to spouses, but be extended to immediate family members. Mr Cheuk said the government would not fix a quota for dai pai dong. "If local residents and the district councillors can identify a good site for a dai pai dong, we will keep an open mind to any suggestions." The department was strongly criticised for its rigid policy when it refused to renew the licence for the Man Yuen noodle shop, an 80-year-old dai pai dong in Central. The department ordered the shop to close in May 2005 after its licensee, Wong Kwong-hing, died. Wong had never married and the shop closed in July of that year after the operators lost a battle with the department. The shop reopened five months later at a fixed location in Elgin Street. Mr Cheuk said the latest reversal of the hawkers policy would not automatically return Man Yuen's dai pai dong licence. "The policy cannot be retroactive," he said. "But if there is big support for its return, we will vet each application individually." The review also proposes increasing the number of licences for small ice cream vendors and ice cream vans. There are now only 30 ice cream vendors and 16 ice cream vans. "We need a balance. If we allow too many operators in the markets, they may not be able to survive," Mr Cheuk said. The review also wants to abolish the automatic succession of licences, where hawkers' licences can be passed from one generation to another with no time limit. "We want to set a time period, say three or four years, for how long the second generation can hold the licence," Mr Cheuk said. "It will be fairer to newcomers who want to join the trade."

China: China's currency, the yuan, Tuesday continued the upward trend in the previous trading day to break the 6.92 mark, setting a new high against the U.S. dollar after the country reformed its currency policy in July 2005.

China launched a new communications satellite, Zhongxing-9, from the Xichang Satellite Launch Center in the southwestern Sichuan Province at 8:15 p.m. (Beijing Time) Monday. The satellite was shot into space aboard the Long March-3B rocket carrier. It was the 107th launch mission for the Long March series of carrier rockets. Zhongxing-9, a satellite ordered by China Satcom from the France-based Thales Alenia Space, would be used for live television broadcast and put into use before the Beijing Olympic Games in August. Audiences would be able to watch live broadcasts of Olympic events via the satellite. The quality and coverage of the country's television and broadcasting services were to be increased, and people in remote regions of China would receive clear television programs. The China Great Wall Industrial Corporation (CGWIC), the contractor of the satellite launch, signed the launch service contract with China Satcom in November 2005. As the only company engaged in international commercial satellite launching services, CGWIC has launched 34 foreign satellites for 28 services.

The World Health Organization (WHO) on Tuesday praised China's health emergency response as "quick, effective and well organized" in the wake of the fatal earthquake that has killed nearly 70,000 people in the southwestern province of Sichuan. In a press release, WHO said the conclusion was made after its representatives visited and inspected health measures in the quake-hit areas in Sichuan. Facilities visited included several hospitals and a temporary settlement in Mianzhu City, a county-level city in Deyang prefecture, as well as the Sichuan Provincial People's Hospital in Chengdu, the capital of the province. "The effectiveness of the response was especially commendable considering the number of people affected and the extent of the damage," said Dr Hans Troedsson, WHO's Representative in China. "In particular, I would underline the high level of dedication and volunteerism evident in the medical professionals we met," Troedsson said. A second team of WHO experts will visit China from June 11 to 23 to provide a set of recommendations on rebuilding healthcare services, the press release said. WHO experts have already provided training to nurses and volunteers who are working with the earthquake survivors in response to the assistance request raised by China's Ministry of Health. China has also asked WHO to assist in providing essential medical equipment and supplies to quake victims.

The International Finance Corporation(IFC), a member of the World Bank Group, announced Tuesday it had invested 100 million U.S. dollars with Morgan Stanley in Nature, one of the largest flooring manufacturers in China. IFC's investment included a 20 million U.S. dollars equity investment and 30 million U.S. dollars long-term loan. Morgan Stanley made the other 50 million U.S. dollars equity investment. Both companies did not disclose its equity share of the investment. The money would be used to develop plantation forests in east China's Jiangxi Province and establish a steady supply of certified wood to the floor maker. Nature plans to increase the use of such independently certified wood gradually to 100 percent. The China Forest Trade Network, the national body of the World Wildlife Fund's Global Forest and Trade Network, will regularly assess the company's progress on this target, according to the IFC. The Chinese government promotes both ecological conservation and forestry development, as the two are interdependent of each other, said Jia Zhibang, administrator of the State Forestry Administration. By cooperating with international financial institutions such as IFC and Morgan Stanley, China's forestry industry could expand financing channels, he said. China is by far the largest growing market of forest products, with annual wood consumption estimated at 337 million cubic meters and wood imports rising at an average of 16 percent a year during the past decade, according to data from the China Timber Distribution Association. According to Jia, China's total industrial forestry output exceeded one trillion yuan (142.9 billion U.S. dollars) in 2007 with over 74 million cubic meters of artificial board produced, the largest amount in the world. China was by far the third largest investment destination of the IFC. Focusing on private sector development, the IFC had invested a total of 3.668 billion U.S dollars in 147 projects in China by the end of 2007.  

The ruins of a collapsed bridge are cleared to make way for the water from a "quake lake" in the earthquake-devastated city of Beichuan, Sichuan province June 10, 2008.

A woman inserts her single journey ticket in the new automatic fare collection system to check out at the Xizhimen subway station in Beijing on June 9, 2008.  Beijing said goodbye to paper subway tickets yesterday. They were replaced with electronic ones

Taiwan advance party sets stage for historic cross-strait talks - Taiwan has sent a group to set the stage for the resumption of cross-strait talks, which open in Beijing on Thursday after a 10-year break. Chang Shu-ti, deputy secretary-general of the government-funded Straits Exchange Foundation (SEF), said after arriving in Beijing yesterday that his six-member delegation's mission was to ensure the talks between SEF chairman Chiang Pin-kung and his mainland counterpart, Chen Yunlin, of the Association for Relations Across the Taiwan Strait (Arats), ran smoothly. The two sides will start their landmark dialogue with an economic agenda - the launch of weekend charter flights across the Taiwan Strait and opening of the island to mainland tourists. Mr Chang, the first high-level SEF official to visit Beijing in a decade, said the talks in Beijing on Thursday and Friday were "not only a big event for the two organisations, but also highly important for the two sides of the Taiwan Strait". He declined to say whether Mr Chiang would meet President Hu Jintao during his stay, but a senior SEF official said in Taipei the two were expected to meet "possibly after the end of the talks". Beijing agreed to resume talks with Taiwan after a historic meeting between Kuomintang chairman Wu Poh-hsiung and Mr Hu last month. The victory of Ma Ying-jeou of the mainland-friendly KMT in the March 22 presidential election in Taiwan was the key to Beijing's agreement to reopen talks suspended since 1999 after relations soured under the presidencies of independence-leaning Lee Teng-hui and Chen Shui-bian. A 19-member SEF group, which includes two vice-ministers and five government officials, will arrive in Beijing tomorrow at 5pm. On Thursday, deputy secretaries general from the two agencies - SEF and Arats, set up in 1991 to represent their respective governments in talks in the absence of formal ties - will begin talks in the morning, followed by vice-chairmen of the respective agencies in the afternoon. They are expected to sign agreements on Friday, and Mr Chiang might meet Mr Hu after that. SEF vice-chairman Kao Koon-lian said it was possible the deputy secretary general-level talks would be skipped as civilian representatives from the two sides had already completed their preliminary round of talks. "In that case, the meeting would start with the talks between the vice-chairmen of the two sides on Thursday," he said. The resumption of cross-strait talks is a key policy of Mr Ma's KMT government. Yesterday he met Mr Chiang and other members of the delegation. "I want to remind you that we are making history, which will have profound significance for Taiwan," he told the SEF chief. He said the talks would build a solid foundation for long-term cross-strait relations and help consolidate ties. Mr Chiang is expected to touch on cargo charters, direct shipping, a mainland consignment of two pandas to Taiwan in September and a possible visit by Chen Yunlin to Taiwan later this year.

Helicopter, bodies found in quake zone - A military helicopter that crashed in southwest China 11 days ago during earthquake rescue operations was found on Tuesday, along with the bodies of all 19 passengers, state media said.

June 10, 2008

Hong Kong: Dragon boats went full speed ahead on Sunday, with sun and showers after days of heavy rain. Organisers estimated that as many as 40,000 spectators and 12,480 competitors in 511 teams had attended Dragon Boat festival races in Ping Chau, Tuen Mun, Stanley, Tai Po, Discovery Bay and Sai Kung. Another event, the Hong Kong International Dragon Boat Regatta, will take place next weekend in Sha Tin. The Sun Life Stanley International Dragon Boat Championships looks set to attract the largest crowd, with 200 teams and 10,000 spectators expected - the same turnout as last year.

Chief executive Donald Tsang Yam-kuen's visit to Tai O failed to bring comforts to frustrated residents, as it will take at least two weeks before road traffic leading to and from the fishing town can be partly resumed. Flying on a helicopter, Mr Tsang on Sunday inspected traffic network and flooded areas affected by the Saturday heavy downpour on Lantau Island. He also made a short stay in Tai O to talk to residents about their problems brought by blocked traffic roads and lack of water supplies. "I hope traffic lanes can be open after the holiday. Co-ordination and rescue work has been done quite well. But I also understand that residents are having a hard time without water supply,” he said describing the rain on Saturday as 'rare which happened once in a hundred years'. But director of Highways, Wai Chi-sing said it would take at least two weeks to partly resume road traffic connecting Tai O and other areas. "It is quite dangerous to do clearance work at the moment. We can still see lots of water flowing along slopes, and some slopes are quite unstable. Our goal is to try to open one lane for road traffic in two weeks,” he said at a joint conference on Tai O situation on Sunday. Mr Wai said some parts of Keung Shan Road were badly affected by landslide, and foundation work of the road was also badly damaged. Commissioner for Transport Alan Wong Chi-kong said ferry services frequency would be increased to meet residents' needs. "Service frequency will be increased by 10 every day for weekdays with seven departing from Tai O and the last ferry is scheduled at 10.30pm and three from Tung Chung. The first ferry will depart from Tai O will be 6.30am for residents who go to work and school,” he said. "Ferry service frequency will also be increased by 14 in total with seven departing from Tai O and seven for Tung Chung during holidays and Sundays.” Water supplies only partly resumed in Tai O after midnight, and residents had to queue up at a ferry pier with trolleys filled with all kinds of containers to get fresh water from water vessels. Fixed-line telephone service fully resumed at around noon on Sunday, while mobile phone service only gradually went back to normal. Medical service at a clinic in Tai O has not been affected, and residents can seek help from the Government Flying Service for urgent treatment at hospitals. But Tai O residents were not satisfied with the series of measures introduced by the government. "It only thinks about traffic leading to Tung Chung, but how about traffic on Lantau Island and the connection between Tai O and South Lantau?” Tai O resident Cat O said. "I work in Mui Wo which means I have to take a ferry to Tung Chung, then the MTR to Central and catch a ferry to Mui Wo. It is going to take 3 hours. It only takes 25 minutes by road traffic from Tai O to Mui Wo.” Mr Ho who took part in a residents' meeting last night said some parents also expressed worry about transport on Lantau Island, as their children went to schools in South Lantau. "The government should introduce ferry services running between Tai O and some spots in on South Lantau such as Pui O and Mui Wo.” Another resident Chan Sui-ming said shop operators were also worried, as transportation of goods and resources for constructions mainly relied on road traffic.

For the first time since it opened, the highway to the airport was rendered impassable, with more than a metre of muddy water trapping cars and requiring emergency workers to rescue stranded people. Rain triggered landslides on the hill opposite the Caribbean Coast complex and mud cascaded down on to the North Lantau Highway shortly before 8.30am. "There were three waterfalls on the hill as muddy water washed down," a resident of Caribbean Coast said. At least 10 vehicles, including two buses and taxis, broke down in the 1.5-metre-deep water. Firemen were called in to rescue people. A taxi driver said: "I tried to speed away on the [Kowloon-bound] slow lane but vehicles in front broke down. As I tried to reverse my taxi, the water came very quickly and my vehicle broke down. "I could not open the door. I had to lower a window and climb out." The driver of a double-decker bus said the water was chest-deep and she had to go to the upper deck to stay dry. The Transport Department advised the public to us the railway, and the MTR Corp put on more trains and extended services until 2am. The deputy director of the Highways Department, Cheung Hing-wan, said sand and stones had been washed into a drain and workers needed time to clear the blockage. An excavator was called in to clean out the mud but it broke down in the water and another was ordered in. Mobile pumps were called in to clear the water. Shortly after 4pm, the Kowloon-bound lanes of the highway were opened to two-way traffic. Last night, workers were removing mud that had been left on the airport-bound lanes after the water drained away. Secretary for Transport and Housing Eva Cheng said the government would review arrangements for co-ordinating emergency transport. She said the government's long-term plan was to build an alternative highway connecting Tuen Mun and Lantau. Ms Cheung said the government would inspect slopes along the North Lantau Highway for any possible landslide dangers. "We will discuss with related departments whether we need work to make slopes - not only this slope but all along the highway - safe," she said.

When Hong Kong doctor Lau Chor-chiu arrived in the Sichuan earthquake zone one week after the disaster struck, he was stunned by the scale of the damage and tragedy that has seen the loss of almost 70,000 lives. He was also struck by the efficiency and capability of the mainland's disaster response network. To Dr Lau and more than 40 health workers sent by the Hospital Authority to Sichuan last month, the trip was more than just disaster relief; it was also a journey of self-discovery and a wake-up call as they reflected on how Hong Kong would deal with a disaster on such an unprecedented scale. "The mobilization by the mainland government to implement disaster relief was amazing," Dr Lau said. "I asked myself if Hong Kong could cope so well if a disaster took place here. I have doubts about that." The chief of service in accident and emergency at the Pamela Youde Nethersole Eastern Hospital is possibly the most qualified person to assess disaster relief services in Hong Kong. He has been a flying doctor with the Government Flying Service and in 2004 became the first doctor sent by the Hong Kong government to help Hongkongers injured in accidents overseas.

China: The death toll in China's major earthquake increased by 4 overnight to 69,134 as of Saturday noon, the State Council Information Office said. A total of 374,061 people were injured and 17,681 others remained missing after the 8.0-magnitude quake that jolted southwestern Sichuan Province and some other areas on May 12. A total of 46.16 million people were affected by the quake, according to the office. Hospitals had treated 94,964 injured people as of Saturday noon, of whom 76,069 had been discharged and 16,302 were still being treated. By Friday, more than 1.37 million quake survivors had been found and evacuated.

People practice paddling before a dragon boat race for the Dragon Boat Festival on the West Lake of Fuzhou, East China's Fujian province June 4, 2008.

The Beijing subway will on Monday bid farewell to the familiar paper tickets that have been in use for 38 years, local media reported Thursday. A new automatic fare collection (AFC) system would be put into operation in all subways stations in the Chinese capital, the Beijing Daily said. Passengers will need to produce their magnetic strip tickets or mass transit smart cards twice when going through the system machines, both in entering and exiting the gates. At present, a passenger only needs to present his paper ticket or process his smart card when entering a subway station. Jia Peng, a Beijing Subway Company official, said the new AFC system would help collect information on how many people entered and exited the subways at different time periods of a day. The data would help the company to better organize the frequency of trains. In addition, the magnetic strip tickets that have replaced the paper tickets could be used repeatedly -- about 2,500 to 3,000 times -- and thus contribute to environment protection, he said. Beijing, the host city of this summer's Olympic Games, now has five subway lines with 140 kilometers of track, transporting millions of passengers daily. It plans to add three subway lines this year and reach 200 kilometers in length.

June 9, 2008

Hong Kong: In what is being widely seen as a major step toward globalizing China's gold market, HSBC yesterday became the first overseas bank to start trading gold on Shanghai Gold Exchange (SGE) after gaining approval from China's banking regulator. Tong Gang, the press officer of Shanghai Gold Exchange, told China Daily: "The transaction volume traded by HSBC today (Thursday) on SGE amounted to 17 kilogram of gold in purity Au9995." "It is an exciting policy to allow overseas banks access to China's gold market," said Tong. "A closer tie between China's gold market and the global market is expected to be established." Along with HSBC, Standard Chartered Bank and Canada's Scotiabank were also given SGE memberships earlier this year. Industry experts said the opening of Shanghai's gold market to overseas banks is widely considered a major effort to help increase the liquidity of the domestic gold market and bring in the foreign expertise that can promote the development of the market in the longer term. Richard Yorke, group general manager, president and CEO of HSBC China, said: "The opening of the gold market to overseas banks is another exciting development for China's financial market." "HSBC China is pleased to remain at the forefront of the new market developments. Our trading at the exchange will enable us to share our international experience and expand our participation in China's financial markets as well as our service scope," Yorke added.

Hanny Holdings (0275) chairman Charles Chan Kwok-keung yesterday said he was not approached by any interested buyers before selling his stake in Golden Harvest (1132) last Thursday, refuting media reports that he ignored the interests of Golden Harvest's minority shareholders. "Before I signed the contract with Golden Harvest chairman Wu Kebo, I did not receive any concrete proposals concerning the acquisition," Chan told Sing Tao Daily, sister paper of The Standard. Yesterday local media reported that Chan, together with Li Ka-shing, sold their 39.3 percent stake in Golden Harvest at HK$3.7 per share to Wu, despite a US fund house having previously offered to buy the stake at as much as HK$4.8 per share. "The media report is not accurate. Among those who approached me before I signed the contract, none was a US fund house," said Chan. A spokesperson for Li Ka-shing also denied that Li was reached by a US fund house before selling his stake in Golden Harvest. Chan said: "If one wants to blame me for not selling the stake at HK$4.8 per share, I could only say it's the problem of wrong timing." He said he signed the agreement with Wu last Thursday and informed the stock exchange a day later. "A fund house did come to me last Friday night. But that was too late."

Beijing backs HK over aides' citizenship - Beijing has weighed into the row over the Hong Kong government's new political appointees, with a spokesman for its liaison office backing the administration and praising five undersecretaries for their "show of commitment to the public" in giving up their foreign citizenship. The spokesman told the semi-official Hong Kong China News Agency the appointment of foreign passport holders as undersecretaries and political assistants was in line with the Basic Law and the city's "actual situation". He said the qualifications of the undersecretaries had been studied by the Basic Law Drafting Committee. "Considering the complication in nationality of Hong Kong citizens, there is no requirement on foreign citizenship for undersecretaries, as stated in the Basic Law," he said. Civic Party lawmaker Alan Leong Kah-kit took issue with the comments, the first by a mainland government spokesman. "The nationality row is not a legal issue. It is politics," he said. Since the appointments were announced more than two weeks ago, the government has come under fire following the revelation that several appointees hold foreign passports or have the right of abode abroad as well as for its refusal to disclose what each appointee is being paid. A member of the public has taken legal action and political groups are seeking to use official and legal channels to press for disclosure of the information. Two cabinet members called yesterday for citizens to "look forward" and give the eight undersecretaries and nine political assistants "more space". Cheung Chau retiree Kwok Cheuk-kin, 65, filed a writ on Wednesday seeking a judicial review of the government's non-disclosure of appointees' salaries. He argued that the practice had violated the public's right to know and right to monitor the administration under common law. Mr Kwok also challenged the legality of appointing holders of foreign passports as undersecretaries. Democratic Party legislator Lee Wing-tat said the party was considering other channels to demand the disclosure of each appointee's salary, in addition to its tabling of a resolution to invoke the Legislative Council (Powers and Privileges) Ordinance. "We are considering seeking judicial review or complaining to the Ombudsman," Mr Lee said. "This is public money paid to public-office bearers and needs to be used in a transparent manner." Secretary for Transport and Housing Eva Cheng and Executive Council convenor Leung Chun-ying separately appealed for a cooling of public sentiment. "Now the most important thing is to look forward and to allow space for these new colleagues to serve citizens," Ms Cheng said on RTHK. Mr Leung echoed her comment and said he understood the public's concerns. He also said that it was difficult to find candidates with political experience to join the government given Hong Kong's historic and social circumstances.

Short-selling came under the spotlight last week when Hong Kong Exchanges and Clearing (SEHK: 0388, announcements, news) (HKEx) chief executive Paul Chow Man-yiu promised to review whether to allow it during the 10-minute closing auction period as a way to improve conditions during the controversial week-old extension of trading. Legislators will hold a special meeting on Tuesday to discuss the chaos that was witnessed during the 10-minute session on Friday, May 30. On the fifth day of extended trading, turnover reached HK$14.87 billion during the 10-minute period, compared with the previous days' volume of HK$2 billion. Twenty-one stocks rose more than 5 per cent. The new system extended the market close to 4.10pm, from 4pm. During the extra 10 minutes, investors may use tenders to determine the closing prices of stocks. This replaces the old method of using the middle price of the last five orders. Legislator Chim Pui-chung alleged the unusual share-price movements on that day were the result of market manipulation. But Mr Chow said they resulted from the rebalancing of MSCI indices. Fund managers needed to buy stocks to adjust to the new weighting, he said. Mr Chow promised, however, that there would be a review to determine how the auction system could be improved, including a proposal to allow investors to short-sell shares during the 10-minute trading period. Investors now can short-sell stocks during normal trading hours but not during the 10-minute auction period. Sun Hung Kai Financial executive director Joseph Tong Tang said that if the exchange allowed investors to sell short during the closing auction, it should help stabilise prices. "If investors can sell short during the closing auction period, it will increase the number of sellers during the period and hence will increase liquidity," he said. "This is better than the current arrangement in which investors can only buy up but cannot sell short during the 10 minutes." Timothy Lo, managing director of CIC Investor Services, agreed with the relaxation but suggested the exchange think about going further. Mr Lo said it could consider scrapping the tick rule, which bans traders from short-selling below the best current asking price, a restriction that effectively bans short-selling during a falling market. The restriction was imposed in August 1998, during the Asian financial crisis, when the government battled to keep the market from crumbling under the pressure of hedge fund speculators betting it down. Securities and Futures Commission (SFC) chief executive Martin Wheatley initially called for a review of the tick rule early last year because Hong Kong lagged behind other markets in short-selling activity. Short-selling volume makes up about 5 per cent of market turnover in Hong Kong, far below the 25 per cent to 30 per cent in New York and London. The stock exchange had planned to revoke the tick rule in November but a market slump prompted the SFC to ask the exchange to delay the plan for the time being. However, CIC's Mr Lo said many markets did not have the tick rule and he supported the move for Hong Kong to match international practice. "The tick rule was introduced ... when it was needed to protect the market," he said. "Now the Hong Kong market is much bigger and it is time to relax it. The government should maintain Hong Kong as a free market and remove unnecessary restrictions." Louis Tse Ming-kwong, a director of VC Brokerage, said the tick rule should be kept. "The Hong Kong market has a lot of retail investors who may panic during a falling market," he said. "It is better to have the tick rule in place to prevent the market from being flooded with short-selling activities during a falling market. It is important for the exchange to have regulations to protect the investors' interests." Sun Hung Kai's Mr Tong shared Mr Tse's view. "Investors now can still sell short with the tick rule in place, though it is not allowed in a falling market," he said. "This makes sense, as some overseas markets also have similar restrictions. I prefer to have the rule in place to prevent the market from falling too rapidly."

Centralized slaughtering still in the works but not for 3 years - Centralized poultry slaughtering is still in the pipeline but will not be ready for at least three years, Secretary for Food and Health York Chow Yat-ngok said yesterday. "Segregation of humans from poultry is important to prevent avian flu," Dr Chow said. "So whatever happens, that is something we are planning [for] and it is progressing." The target date for establishing centralized slaughtering, originally next year, is now 2011-12. He said the timetable was "the fastest we can move according to our existing way of planning, tendering and building". Legislator Kwok Ka-ki, who represents the medical functional constituency, criticized the delay and said the government should show more determination. "There is nothing but central slaughtering that can reduce the risk of human infection with bird flu," he said. "The way we are doing it now is dangerous. "We have been talking different arguments for too long. Our government has to be determined, for the public good." Infectious-diseases expert Lo Wing-lok said a central poultry slaughterhouse was one of the most effective precautions against a bird-flu pandemic.

China: Chinese President Hu Jintao held a telephone conversation with Saudi Arabian King Abdullah bin Abdul-Aziz Friday evening, expressing his appreciation for Saudi Arabia's assistance for China's quake-hit area. Hu said King Abdullah offered sympathy and condolences to the Chinese government and people and swiftly provided aid to the quake-stricken area at this crucial moment when a strong earthquake shocked China's southwestern province of Sichuan. The move embodied the profound friendship of the king, the Saudi Arabian government and its people toward the Chinese people. On behalf of the Chinese government and people, especially the people in the quake-hit area, Hu expressed sincere appreciation to King Abdullah, the Saudi Arabian government and its people. He said, "We have determination and confidence to win a full victory in fighting the disaster and relief work with support and help from the international community, including Saudi Arabia." Over the phone, King Abdullah again expressed his sincere condolences to the Chinese government and its people, saying that the Saudi Arabian people enjoy a profound friendship with the Chinese people and pay sincere tribute to them. He hoped the Chinese government and its people will overcome the disaster and rebuild their homes soon. Hu also spoke highly of King Abdullah, who attaches importance to China-Saudi Arabia relations, and his achievement toward the development of bilateral ties. He said, "We always treat Saudi Arabia as a sincere and reliable friend and partner. China is willing to work together with Saudi Arabia to constantly strengthen mutual beneficially cooperation in various fields to push the China-Saudi Arabia friendly strategic and cooperative relations to a higher level." King Abdullah said his country is willing to enhance exchanges and cooperation with China to jointly promote further development of the China-Saudi Arabia relations.

The long-awaited drainage of China's Tangjiashan "quake lake" started at 7:08 a.m. Saturday, when its water flowed into a manmade sluice channel. The flow was rapid, steady and gradually increasing in volume.

A little girl learns to make Zongzi, or glutinous rice wrapped in bamboo leaves in the shape of a pyramid, in Zibo City, Shandong Province on June 4, 2008. On the fifth day of the fifth month of the Chinese lunar calendar, which is Sunday this year, all Chinese celebrate one of their major traditional festivals, the Duanwu Festival, or Dragon Boat Festival. On the fifth day of the fifth month of the Chinese lunar calendar, which is Sunday this year, all Chinese celebrate one of their major traditional festivals, the Duanwu Festival, or Dragon Boat Festival. The highlights of their celebrations include eating zongzi, glutinous rice wrapped in bamboo leaves in the shape of a pyramid, racing dragon boats and sticking mugwort leaves on their doors. There is a touching story behind the festival, too. Qu Yuan, a poet in the Warring States Period more than 2,000 years ago, drowned himself on the fifth day of the fifth lunar month of 278 BC in the Milo River in despair over his country's future. Hearing of his death, people who loved Qu raced in boats to recover his body from the river and threw zongzi into it to feed the fish to keep them away from Qu's body. In 2006, the folk customs for celebrating the Duanwu Festival were approved by the State Council as a national cultural heritage. A year later, the central government decided to add the Duanwu Festival, together with two other traditional festivals - Tomb Sweeping Day and Mid Autumn Festival - to the list of public holidays. According to tradition, our ancestors believed the hot weather in midsummer might cause various diseases. So, to ward off diseases and drive out evil were the main purposes of the Duanwu Festival. As we celebrate the Duanwu Festival for the first time, following the earthquake that rocked Sichuan province, we should make full use of our traditional celebration to drive away bad luck and pray for long-term peace and prosperity for the people and country. However, it is a regretful fact that the traditions of Duanwu are fast disappearing. For an average city dweller, his or her typical celebration is to buy several frozen zongzi from the supermarket. And many young people only know it is associated with Qu. South Korea's Gangneung Danoje Festival, occurring at the same time, and rooted in Chinese culture, was included in UNESCO's Masterpieces of the Oral and Intangible Heritage of Humanity list in 2005. It sparked heated discussion among the Chinese for conservation of our own traditional culture. But it soon lost momentum and no progress was made. Why does the Duanwu Festival no longer receive the same attention as it did? One of the main reasons is accelerating urbanization. As more rural residents swarm into cities, agriculture is replaced by industrialization. Skyscrapers leave no room for dragon boat racing. Built of steel, iron and cement, the apartments do not need mugwort leaves to drive away mosquitoes. Thus, eating zongzi has become the most convenient way to celebrate. This is understandable today, but people cannot help feeling a sense of nostalgia for the lost customs of the festival. As a matter of fact there is a common reason behind people's increasing indifference to the traditional festivals including Duanwu. These festivals are no longer important occasions for entertainment. In our tradition most festivals, except for Tomb Sweeping Day, were days for happiness and celebrated with carnivals, Duanwu was no exception. Parents used colorful threads to make necklaces and bracelets for children, gave them beautiful embroidered bags, painted the Chinese character for "king" (wang) on their foreheads to drive away bad luck, and even taught them how to make bows and arrows as special toys. The Duanwu Festival was also called "kids festival" in some localities. Spending such happy hours with parents and siblings, young children began to understand the festival as well as the traditions and culture behind it. Repeating the customs annually makes it possible for kids to learn the traditions, accept it and pass it on when they become adults. When grown-ups no longer take traditions seriously, it is only natural children follow suit. A random survey by a TV station showed that most people lacked knowledge about Duanwu except for commemorating Qu. While Qu is a respectable figure in our history, he is far from the festival's only significant feature. To restore the former prominent position of traditional festivals, it is necessary to spread knowledge of their rich significance and adapt it to modern society. The decision-makers have made a good start by making traditional festivals public holidays. But they can do more than simply allowing people to take one day off work. More promotion of our traditional culture is needed with extensive participation. This will ensure their conservation.

Passenger car sales in China in the first five months of 2008 rose 17.41 percent over the same period a year earlier.

China to raise reserve requirement ratio - China's central bank on Saturday ordered lenders to set aside more money as reserve, the fifth such move for this year. It was the latest effort to enhance liquidity management in the banking sector. The reserve-requirement ratio would be raised by 0.5 percentage point on June 15, and another 0.5 percentage point on June 25, the People's Bank of China (PBOC) said on its website. This will bring the ratio to a record high of 17.5 percent. The PBOC also said that corporate financial institutions in the worst quake-hit areas would postpone carrying out the regulation. But it didn't say how long the delayed period would be. "The rise, a further materialization of the tight monetary policy, is aimed at strengthening liquidity management in the banking system," the statement said. The PBOC had raised the ratio four times previously this year. The latest was on May 12 when it lifted the ratio to a new high of 16.5 percent. Yin Jianfeng, director of the Institute of Finance and Banking with the Chinese Academy of Social Sciences, said the move would help the country reduce inflationary pressure and to control excessive investment. "But the move will not be as effective as the government expected because inflation nationwide mainly resulted from surging production material and food prices," he said. "A simple monetary policy will not help." The consumer price index (CPI), the main inflation gauge, was up 8.5 percent in April from a year earlier. This was nearly equal to February's 8.7-percent rise, the most since May 1996.

Adding insult to injury - Western stars are learning they cannot ignore Chinese sensitivities - It took just a minute for thousands of people in Sichuan to lose their loved ones and their homes. Actress Sharon Stone sullied her name and wrecked her career in China just as quickly with her comment that the devastating earthquake reminded her of karma, pointing to Beijing's actions in Tibet. Hurtful words can cause great damage, especially in the internet age where they can be circulated worldwide instantly. The lesson was a painful one for Stone. French fashion house Christian Dior immediately dropped her advertisements on the mainland to calm angry citizens, who swore to boycott anything associated with the Basic Instinct actress. Organisers of one of China's most extravagant film and entertainment events, the Shanghai International Film Festival, sent her a letter of protest and are considering not inviting her to the event in future. Her ill-advised comments have also seen the mainland's internet community crown her the "public enemy of China" - quite a dubious achievement for someone with an IQ of 154. But to some western entertainment industry professionals in Hong Kong for the two-day Music Matters conference last week, the Stone episode has been enlightening. Artists, they say, should be respectful, and the industry should adapt to other cultures and systems in order to expand fan bases - and revenue - in foreign markets. There is also a growing realisation that China is the most important foreign market, despite its poor level of intellectual property protection. Piracy on the mainland is something of an obstacle for the entertainment industry, but an increasing fascination with China among western artists nevertheless means most want to be successful there. "There's so much coverage in the US media and there'll just be more when it gets closer to the Olympics. There's a fascination with not just the market of China but also the people," said veteran talent handler Jordan Berliant, who has worked with the likes of Meat Loaf, Duran Duran and the Bee Gees, and is now with multimedia group The Collective. "Touring artists who have been to cities like Sydney and Tokyo recognise that there's a flavour to every culture and every audience. The opportunity [to play in a city] that offers a new flavour is very appealing to every artist of every genre." Stone's insensitive comments have raised the issue of artists' behaviour, especially artists from the west who are used to airing their views on virtually any topic - except perhaps their personal lives - at the drop of a hat. But entertainment industry insiders realise that now is the time for artists to pay attention and learn to be respectful - especially if they want to succeed in foreign markets. Terry McBride, founder and chief executive of Vancouver-based Nettwerk Music Group, which manages widely popular artists such as Avril Lavigne, Sarah McLachlan and Dido, said being sensitive to other cultures was not a negative thing and educating artists was important. In contrast to the outspoken Stone, Mr McBride said he would encourage his artists, especially the younger ones, to be respectful at all times. "I would ask them to be more respectful and engage in conversation rather than criticism. One should understand an issue before claiming to be an expert. "Artist managers who have been to China, experienced and understood China, will talk to the artists. Any artists who have been to China will understand that criticism is not working. I would encourage artists to come over here and see what resonates with them." Mr McBride cites Lavigne as an example. "There are challenges going to China, such as a certain level of censorship, but I think that censorship is based on respect," he said. "For example, when Avril goes to China, she's respectful of the culture and she does not swear. So all the "F" words that you hear in her songs are gone. A lot of people would see that as censorship but she sees that as being respectful. "`How dare you censor me?' some would say, but it's not respectful. It's not cool. Again, it's all about understanding. One can look at it as just how things work here and respect that." Rob McDermott, manager of Californian rock band Linkin Park, who have sold more than 50 million albums worldwide since they formed in 1996, says artists should be socially conscious and responsive to people's needs, but not political. "Some people have their own agenda ... but when people make those comments, I believe there is a lot of ignorance there," Mr McDermott said of Stone's comment. "I'm very lucky that I don't have to worry about that because [Linkin Park] are very smart and respectful. "Using entertainment as a forum for celebrities to address those issues in China is not the most appropriate way to express their opinion." Mr McDermott said an artist's behaviour and attitude were key factors to consider when he was making a decision on signing them up. "It's not about the rules and regulations of how they should behave," he said. "You have to trust the artists to make the right decision. They are adults, for the most part. When we meet with a band, if they are disrespectful you notice it right away and you don't want to work with them. I don't want to work with them." In the case of established artists it is a bit different. Managers only help artists build their careers and give them advice. What they say and how they act in public after that is out of their hands. "No amount of management can prevent that," said U2's manager, Paul McGuinness, about Stone's comment. "I was surprised to read it just as much as anyone else. Artists think for themselves. For my clients, I won't tell them what to do, but I would advise them and discuss the issue. Maybe Sharon didn't [take any advice from her manager]." The talent managers believe that if western artists want to be successful on the mainland, it will take more than just watching what they say in public. A strategically planned business model and marketing campaign aimed at respecting the local culture is just as important. "You must create a marketing plan that is culture-coded," Mr McBride said, adding that his promotion of Lavigne was the first time he had put such a plan to the test. "It's important to know what your audience is and how your audience consume," he said. "We did eight different versions of one of her singles and she asked why. I walked her through it, telling her that most media in China is consumed on mobile phones [ring tone and ring back tone]. If you can do that 30 seconds in Mandarin, it is respectful and people see that you are making an effort. "You won't get paid for most of them but that's not where it's at. You are creating a relationship with your fans and at the end of the day there's no doubt that it can help sell more records." No discussion about the future of the recording industry on the mainland can ignore the issue of piracy. The International Federation of the Phonographic Industry reported in its Digital Music Report 2008 that China was "one of the biggest sources of illegal downloads in the world". It said that the legitimate market for music was "choked by a digital piracy rate of over 99 per cent". "The Chinese market will have huge importance in the future simply because of the size of it, but its importance will only come after someone decides to do something about piracy," federation chairman and chief executive John Kennedy said. Not so, say the talent managers. "If you don't focus on serving the desires and interests of the people that buy what it is you sell, you won't succeed," Mr Berliant said. "What's so disconcerting to us managers is that the industry's focus is to serve the middlemen [record labels], instead of the end users [fans and consumers]. There's an issue of piracy and the lack of intellectual property in China. But any emerging market faces a set of possible barriers." An example was when radio first emerged, he said. The recording industry fought it, fearing that people would not pay to see the artists perform or buy their records. Instead, radio helped create a massive market for music, Mr Berliant said, arguing the internet would do the same. If there was no way to change the piracy situation in China any time soon, the industry should come up with a different model to generate revenue, Mr McDermott said. Bundling music and sales of other collectable items such as T-shirts and concert tickets might work in a market like the mainland, where artists do not appear very often. "If artists can understand that they are a brand, and music is only the emotional connection to the brand, you can still create an amazing situation for an artist. [With that emotional connection] you will have an army of people who can work for you for free. What's left is how to mobilise them," Mr McBride said. And of course, if you are trying to mobilize an army of fans, it helps if you don't insult their country.

Shanghai Zhicheng abandons 1.1b yuan site in tough market - Land to go on the block again after developer forfeits deposit - A sluggish market and tough credit conditions have forced a Shanghai developer to abandon a site it bought eight months ago for 1.1 billion yuan (HK$1.24 billion). The Putuo District Bureau of Housing and Land Administration would now reauction the 26,800 square metre site, sources said. It is expected that the land, which was designated for commercial and residential development, will be put up for resale either later this month or next month at a price expected to be only two-thirds of the previous transaction price. Property analysts said the case was a consequence of irrational exuberance in the marketplace last year, which led developers to bid unrealistic prices. But for now, it appeared to be a one-off example, and it was too early to say whether more developers would follow suit, they said. At the time of the auction in September last year, Shanghai Zhicheng Enterprise outbid seven other bidders, including a company controlled by Gome Electrical Appliances Holdings chairman Wong Kwong-yu. It paid 1.1 billion yuan to buy the land, which was projected to yield a gross floor area of 67,000 sq metres. The price translated into 16,418 yuan per square metre and although this was not a record, it shocked the market since it was four times the minimum asking price. The site is part of a large-scale business development called Changfeng Eco-Business District that the Putuo government wants to develop. Abandoning the land means the developer will now forfeit the 30 million yuan deposit it paid. Neither Zhicheng director Zheng Jianlu nor a Putuo spokesman would comment on the proposed resale of the site. Shortly before the Putuo transaction, Suning Universal Group, property arm of the mainland's second-largest electronics retail chain, Suning Appliance, outbid Hong Kong's biggest developers and international rivals for a commercial site in Shanghai. Suning paid 4.4 billion yuan, or a record 66,927 yuan per square metre, for the 13,709 sq metre site on East Nanjing Road, reputedly the mainland's busiest shopping area. But sentiment on the property market has since turned negative in the wake of policy measures adopted by the Beijing government to halt the frenzied price rises in Shanghai. Midland Realty general manger Jacky Fung Wang-rui said transactions in the primary market were down 20 per cent last month, compared with April. Remy Chan Lap-man, the head of China business development at Jones Lang LaSalle, said: "Prices bid last year were unreasonably high. For a number of transactions, this has meant it will be difficult for developers to generate a satisfactory return." Mr Chan said that as a rule, land cost should be about 10,000 yuan per square metre for a developer to generate a 10 per cent return and he expected the site now up for resale to fetch no more than two-thirds of the price paid by Zhicheng. DTZ (Shanghai) director Vincent Luk Fung-siu said some developers were also struggling with cash-flow problems. "Property transactions have been pretty slow recently and it is difficult for developers to raise capital in the market. In addition, some may be experiencing problems with cash flow, but it is too early to say if it will become a trend," Mr Luk said. The last time a developer gave up land in Shanghai was in April 2005. A site in the Northern Bund area was resold for 1.46 billion yuan with a higher development density after the first developer failed to begin construction after buying the land for 1.45 billion yuan for two years.

June 7 - 8, 2008

Hong Kong: Dole recipients are to get 4.4 percent more to help them fight inflation. But the government's offer, due to be discussed by the Legislative Council's finance committee today, is likely to come under fire, with at least one legislator citing a higher than 5 percent inflation rate and the fact most spend more than half their dole on food. According to the government paper, the increased dole will take the social welfare budget for 2008/09 to HK$17.82 billion, an increase of HK$554 million from the current HK$17.27 billion. Under the proposal, an elderly recipient of Comprehensive Social Security Assistance will receive a basic payment of HK$2,475 a month from the current HK$2,370. For healthy and young recipients, the payment will increase by HK$80 a month to HK$1,900.

Red alert as tomatoes pulled - Hong Kong has been hit by a double food scare after New Zealand banned exports of tomatoes and the United States announced an outbreak of salmonella linked to the fruit. City supermarkets have pulled New Zealand tomatoes off their shelves because of the discovery of a new disease- causing bacteria in the country. And local food and hygiene chiefs are carrying out tests on US-imported tomatoes after outbreaks of salmonella in nine states. The authorities in New Zealand have slapped an export ban on tomatoes and capsicums after the mysterious bug reported to be new to science was found in three commercial hothouses in Auckland. ParknShop in Hong Kong dumped the tomatoes yesterday as a precautionary measure. We still do not know if the products come from the same place as the affected products but we have stopped selling them in our stores, a spokesman said. About 121,534 kilograms of fresh and chilled tomatoes worth HK$4.3 million were imported from New Zealand to Hong Kong in 2007 making it the fourth most popular tomato after those from the mainland, the Netherlands and Italy. Hong Kongs Food and Environmental Hygiene Department has not issued any direction while awaiting more information from the New Zealand authorities. We will closely monitor the situation and we are seeking to understand what is happening. We cannot say when the ban will be lifted as that is the decision of the New Zealand authorities, a spokesman said. The department is also carrying out tests on samples of the US-imported tomatoes. US health authorities blamed the poisonings on large and uncooked tomatoes. The FEHDs test results will be available in a week. Hong Kong imported 16,647kg of fresh or chilled tomatoes from the United States worth HK$608,000 in 2007. The New Zealand pest which spreads the disease could also infect potatoes, chillies and eggplant. And because the bacteria, which mysteriously turned up in New Zealand two years ago, are likely to also feed on native plants they have a year-round reservoir for breeding outside the commercial crops. What happens next will depend on whether the bacteria is also found in commercial crops in customer countries, and whether growers can control the insects spreading the organism. Annual New Zealand tomato exports are worth US$7.3 million (HK$57 million) and capsicum exports US$34 million. Important markets include Japan, the Pacific Islands, Hong Kong, Australia and the United Arab Emirates. Biosecurity New Zealand director of border standards Tim Knox said he did not know if the export ban will be lifted by October, when growers are due to ramp up harvests from the new crops they are now planting for export. The withdrawal of certification was a precautionary measure until more was known about the bacteria, its transmission and distribution. There is no known human health risk from the bacteria, the Ministry of Agriculture and Forestry of New Zealand said. But it also said little is known about the organism or its origins. The bacteria may be spread by a small insect that is widespread in New Zealand and could affect other plants, MAF said. It is the offseason for production and exports resume in the fourth quarter.

Chief Executives Office director Norman Chan Tak-lam admits the government had underestimated the public reaction on the nationality of political appointees. Speaking for the first time since the row rocked the city two weeks ago, Chan said the appointees pay scale is geared to attracting the most capable candidates. Its something new and we need to have various considerations when determining salaries to attract capable and enthusiastic candidates, Chan said yesterday. He stressed the salaries cannot be compared with those of civil servants. The new political appointees do not have housing, traveling and other allowances, Chan said. The salaries of undersecretaries are roughly the same as those of directorate four civil servants and there will be a review in two years. However, there is no guarantee of a pay rise, Chan told a briefing of editors. Neither the undersecretaries nor political assistants will be paid at the minimum level. Food and health political assistant Paul Chan Chi-yuen, 28, will receive HK$134,150 a month compared with his current pay of HK$30,000 with three years' experience. Four undersecretaries will be paid the maximum HK$223,585. It is understood that the issue of foreign citizenship was raised at the interview stage but found not to be precluded under the Basic Law. "If I were to do it again, I would remind those appointees they may face pressure over their foreign citizenship," Norman Chan said. "It was the appointees' personal decision whether or not to renounce their foreign citizenship. The Chief Executive's Office did not request them to stop talking about that." Also at the briefing was Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung who said he advised appointees to weigh their foreign nationalities against long-term careers in politics.

Taxi fares may undergo a major revamp as early as next year if the government goes through with recommendations proposed by the Transport Advisory Committee. In its report on the Review of Taxi Operations released yesterday, TAC suggested taxis be allowed to charge more for short trips but less than current rates for long-haul rides. TAC chairwoman Teresa Cheng Yeuk-wah said this would help restore a level playing field for taxi operators whose businesses have been seriously affected by illicit discount cabbies. Cheng said the changes would also "align the taxi fare structure with those of railways, franchised buses and green mini-buses." The government said it accepts all recommendations with a view to implementing the new policy early next year. No further details were released. Cheng said time will be needed to allow individual taxi operators to agree on a fare scale, subject to the maximum flagfall charge. "This is because in [other] places which [currently] adopt more flexible taxi fare regulatory regimes such as Tokyo, [its] taxi trade structure is dominated by [a few taxi] companies which operate 70 percent of the taxis," Cheng said. "The majority [70 percent] of taxis in Hong Kong, however, are operated by individual rentee-drivers. There are more than 30,000 taxi operators in Hong Kong. Allowing individual taxi operators in Hong Kong to apply for setting different fare scales could create a lot of confusion to passengers and give rise to practical difficulties in processing the large volume of applications." She added: "In the longer term, Hong Kong could consider allowing more flexibility in the taxi fare regulatory regime when its taxi trade market structure develops to one [which is more] similar to [those in places such as] Tokyo's." Hong Kong Tele-call Taxi Association chairman Wong Yu-ping said the government should have adopted such a system years ago. According to Wong, almost all taxi drivers are forced to offer discounts as this has become a trend in the industry for long-haul rides. "You cannot survive if you don't follow the practice."

The Immigration Department has vowed to protect personal data and signed the first undertaking initiated by the Privacy Commission amid the recent tide of government data leakage. Director of Immigration Simon Peh Yun-lu yesterday said the agreement was a joint effort with Privacy Commissioner Roderick Woo Bun. The department will adopt the new measures to enhance the existing personal data protection system, he said. No immigration officer will be allowed to take documents containing sensitive personal data out of the office under a new measure to protect privacy. Other measures include erasing identification of individuals from all documents; categorizing paper and electronic files with personal data; and not allowing highly sensitive documents to be stored on portable electronic devices. Woo welcomed the move, saying he would promote and encourage stepping up data protection among government departments and bureaus. "I do not have the power to make all departments comply with the guidelines, but I will advise them to adopt these measures to protect personal data privacy," Woo said. Last month 27 document files marked confidential, including minutes and internal memos, were leaked on the internet through FOXY file- sharing software. The documents included names and dates of birth of 11 foreigners and three locals. Investigation showed that the incident was due to the carelessness of an immigration officer in handling the documents, which were brought home and used in a personal computer with an internet file-sharing program. The commission has decided not to take further action against the officer responsible for the leak. Personal data of 46,000 people have been leaked by government departments and public organizations in the past three years. A recent spate of scandals over leaks by police, the Immigration Department and the Hospital Authority roused public concern over privacy.

Wah Kwong Maritime Transport decided yesterday to postpone its HK$1.28 billion listing, becoming the 10th company so far this year to pull back an initial public offering.

Further restrictions on yuan services in Hong Kong would have the effect of diverting money from the official, transparent channel for yuan transactions back into unregulated, underground channels, said Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong yesterday. "I hope this does not happen, because individual residents might be exposed to additional risks they might not be aware of or in a position to manage," Yam wrote in his weekly online column. It is inevitable that demand for yuan- denominated transactions will continue to grow, given the increasing economic links between residents in Hong Kong and on the mainland, he explained. "Some people have suggested that there might be a need for measures to restrain the growth of renminbi business in Hong Kong," Yam said. "I have some reservation." Yam said the Hong Kong authorities will work to address concerns in the mainland about yuan services in Hong Kong, especially in light of the continuing upward pressure on the yuan exchange rate. He said he hopes that the continuing issue of yuan bonds in Hong Kong and the use of the yuan for settling purchases of mainland imports to Hong Kong will not be affected. "Increasing the capacity of the financial systems of Hong Kong to handle economic and financial transactions denominated in the renminbi, which is what we are trying to achieve, will be of great benefit to the country," Yam said. Although some people have cautioned that the relatively free convertibility of the yuan by Hong Kong residents could be abused by international currency speculators, Yam said the process for speculators to take advantage of this system would be cumbersome. "Speculators are not interested in such small amounts or in the tedious arrangements ... that would be necessary," he said.

China: Ailing chipmaker in discussions for partnership - Semiconductor Manufacturing International Corp CEO Richard Chang said China's biggest chipmaker is talking to as many as four investors about a partnership.

AmCham Shanghai Participates in Asia Society Conference - Last week, from May 28-30, a delegation of AmCham Shanghai members attended the Asia Society's 18th Asian Corporate Conference in Tianjin. This year's conference was themed "A New Era for Global Business: Sustainable Growth for China and the World." As a supporting organization of the conference, AmCham Shanghai President Brenda Foster led 30 AmCham Shanghai members to join over 1,100 attendees to discuss the opportunities and challenges in China's rapid economic development and several different aspects of sustainability. The conference opened with an address by Chinese Vice President Xi Jinping, who acknowledged China's challenges in improving energy conservation and reducing emissions while reiterating the country's ! commitment to sustainable development. Conference sessions included discussions on innovation and entrepreneurship, investing for growth, internationalization and global competition, the role of culture in commerce, and energy and environment. The conference also featured a captivating keynote address by actor Jet Li on behalf of his Red Cross Society of China Jet Li ONE Foundation, encouraging conference attendees to contribute and get involved with relief efforts in Sichuan Province.

Bohigian on breaking down barriers - On June 3, Chamber leaders and members from the 2008 Door Knock team met for a luncheon discussion on trade and market access issues with David Bohigian, the assistant secretary for market access and compliance in the U.S. Department of Commerce's International Trade Administration. Bohigian profiled his portfolio and on-going commitment to exploring market access issues via every channel available. He highlighted the Department's successes in 2007, notably breaking down barriers to the tune of US$120 per American family. Bohigian addressed the current dialogue between the Chinese and U.S. governments, including the U.S.-China Joint Commission on Commerce and Trade (JCCT) and the Strategic Economic Dialogue (SED), and its fu! ture prospects and the state of play with U.S. trade policy, including FTAs and the WTO Doha round. Bohigian gave an overview of the recently launched "Invest America" program and the returns from outbound investment into the U.S. Members raised a range of business climate and operational issues including bilateral investment and the importance of engagement with relevant Chinese government organizations as well as with key government organizations and bureaus on emerging issues. Market access issues flagged by Chamber members included IPR enforcement, indigenous innovation and R&D in China, and opportunities for cooperation and shared best practices in the key areas of clean technology, energy and environment.

The aerial photo taken on May 26, 2008 shows the landslide mud that formed the Tangjiashan quake lake near Beichuan County in southwest China's Sichuan Province. The earthquake-induced lake is at risk of bursting and threatening thousands of people downstream. Chinese Premier Wen Jiabao went to oversee the safety of the Tangjiashan quake-formed lake by helicopter Thursday afternoon. "Now it's a critical moment for the Tangjiashan quake lake, and the most important thing is to ensure there is no casualty of the people," Wen said. He arrived in Mianyang of southwest China's quake-hit Sichuan Province Thursday afternoon and immediately boarded a helicopter to Tangjiashan. It's the third time for the premier to visit the earthquake areas since May 12.

Food security in China is guaranteed despite the recent major earthquake and heavy snowfalls earlier this year, China's Agriculture Minister Sun Zhengcai said in an interview with Xinhua.

China will float 20 billion yuan (2.9 billion U.S. dollars) worth of "certificated treasury bonds" from June 10, the third such issue this year. The T-bonds include 14 billion yuan worth of three-year bonds that carry a fixed annual interest rate of 5.74 percent, and six billion yuan worth of five-year bonds with a 6.34-percent annual interest rate, said the Ministry of Finance in a notice published on Wednesday. Purchasers must register their names to buy such certificated T-bonds, which could serve as security for loans, but could not be transferred, said the ministry. Interest on the bonds will be calculated from the day of purchase, and purchasers will receive the principal and interests when the certificate T-bonds fall due. The public can buy the bonds from June 10 to 30 at the retailing outlets of 39 designated underwriting institutions, including the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank.

Visitors look at a Rolls-Royce sedan at the auto show in Shenzhen, Guangdong Province, June 4, 2008. China grew to the third largest market of the ultra-luxury brand in 2007.

A farmer harvests rice in a rice field in Qionghai, Hainan province on June 5, 2008. China is a major contributor to world food security by feeding nearly a quarter of the global population and involving in aid to other countries, China's agriculture minister said on Tuesday.

Climbing the stairs of Huangshan - If you want to only climb one mountain in China, then let it be Huangshan Mountain. Its craggy rock faces, hanging mists and clustered pines are a distinctly Chinese landscape. Former Chairman Deng Xiaoping once climbed the mountain and said, "Huangshan is a good place where tourism can prosper. You must boast about it and make it known to the world." The mountain entered a new chapter of development shortly after.

China’s current-account surplus hit US$371.8 billion last year, up from US$249.9 billion in 2006, the foreign-exchange regulator said on Thursday, contributing to a near-doubling of the overall balance of payments surplus. The surplus on the country’s capital and financial account was US$73.5 billion last year, up from US$10 billion in 2006, the State Administration of Foreign Exchange (SAFE) said on its website. Errors and omissions came to US$16.4 billion last year, giving an overall balance of payments surplus of US$461.7 billion, up from US$247 billion in 2006.

June 6, 2008

Hong Kong: The remaining three newly appointed undersecretaries holding overseas passports yesterday announced they were giving up their foreign citizenship. They are Undersecretary for Financial Service and the Treasury Julia Leung Fung-yee (British, right of abode); Undersecretary for Food and Health Gabriel Matthew Leung (Canadian); and Undersecretary for the Environment Kitty Poon Kit (American). A Chief Executive Office spokesman said the undersecretaries acted on their own volition. Julia Leung said she made the decision after the reaction they got from society. Gabriel Leung said he had renounced his Canadian citizenship a few days ago. But he has retained his position at Hong Kong University, "because being a professor is a lifetime job and that there is no conflict of interest." Poon denied bowing to public opinion and stressed it was only a personal decision. Democratic Alliance for the Betterment and Progress of Hong Kong chairman Tam Yiu-chung also confirmed that home affairs political assistant Caspar Tsui Ying-wai has given up his Canadian passport. But education political assistant Jeremy Young Chit-on has still to decide on his British citizenship, according to his father, the Liberal Party's Howard Young How-wah. Standing firm on his British citizenship is Victor Lo Yik-kee, political assistant to the secretary for security. Meanwhile, Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung reiterated the government had considered more than 100 candidates before appointing the latest batch of undersecretaries and political assistants. He declined to reveal individual pay levels, saying the salaries were set according to qualifications, experience and competence. His comments came after legislator Cheung Man-kwong of the Democratic Party called the process a "black-box operation." Lam called Cheung's opinion unfair. "Should we also question the loyalty of legislators with dual nationality even though the law allows 12 of them to possess it?" Lam asked. Liberal Party chairman James Tien Pei-chun said even though the law does not require renouncing foreign citizenship, they should, being political appointees, consider it. Former civil service chief Joseph Wong Wing-ping, speaking on salaries, said taxpayers have the right to know their pay. Albert Ho Chun-yan of the Democratic Party will move a resolution to to demand government disclosure of individual salaries.

Lax security has led to websites ending with .hk and .cn earning notoriety as the internets most dangerous domains to navigate, according to a report by America-based antivirus software vendor McAfee Inc. Domain name registrars with strict checks see far fewer malicious websites, said Shane Keats, lead author of the report. McAfees second annual report identifies domains populated with the highest concentration of risky sites, with 19.2 percent of checked .hk sites found to be dangerous or potentially dangerous. Other potentially dangerous sites are .cn (11.8 percent) and .info (11.7 percent). The safest sites are .gov which are for government use with 0.05 percent, .jp (Japan) with 0.1 percent and .au (Australia) with 0.3 percent. Some 61,572 domain names ending with .hk have been registered, according to the Hong Kong Domain Name Registration Company, a nonprofit outfit responsible for issuing .hk web domains. Maren Leizaola, who runs online services company HK.COM, said the HKDNRs lax policy in order to promote the citys own domain name was short- sighted. Leizaola said Russia-based spammers and online pharmacies out of Canada have flocked to the relatively unregulated domain name to establish their online presence. The ".hk" domain was also attractive to online scammers as the city's reputation as a trade hub lent a veneer of legitimacy to cyber criminals, he said. A HKDNR spokeswoman, however, said the websites tested in the report several months ago no longer exist, as the company has suspended more than 10,000 suspicious domains. She added HKDNR now has some of the most stringent policies and tightened measures in place to minimize incidences of security risks. Internet Society Hong Kong chairman Charles Mok Nai-kwong was also skeptical of the report. Hong Kong is a relatively smaller market compared with some of the other countries mentioned in the study, so one wonders if they did the study looking at absolute numbers, or whether there was a proportionate approach taken," he said. Registration for ".com.hk" requires a business registration certificate and for the owner to be a Hong Kong registered company, HKDNR said. Applicants for ".hk" need only pay a fee, but are subject to random checks. Internet Professional Association chief executive Gary Chao said ".hk" and ".cn" domain names were popular with small to medium sized enterprises that had limited budgets and were reluctant to invest in security.

Paper IPO gets rolling on heels of Little Sheep - China's largest paper producer Shandong Chenming Paper kicked off its four-day retail offering yesterday while chain restaurant operator Little Sheep Group's retail book was already 10 times oversubscribed. Chenming Paper is pitching for up to HK$4.2 billion by pricing its shares at between HK$9 and HK$11.80 apiece. At the high end, one lot of 500 shares would cost about HK$5,959.53. Of the 355.7 million available shares, 10 percent will be offered in its Hong Kong IPO. Yesterday, Chenming received HK$21 million worth of margin applications. Meanwhile, Little Sheep has received about HK$1 billion worth of margin orders, representing 10 times oversubscription of its HK$90.23 million Hong Kong offering. Little Sheep will start trading on June 12, followed by Chenming Paper six days later. Separately, local karaoke group Neway is looking at joining eight other listing hopefuls to float IPOs in Hong Kong before the end of July. "Neway has handed in supplementary information to the Stock Exchange of Hong Kong. Details of the listing schedule will be known in two weeks' time," said a source. "Both Neway and Little Sheep are in the retail industry. If Little Sheep can price its shares at the middle of the indicative range, and not at the low end, it will give confidence to Neway to be more aggressive in its pricing. It would be great if [Neway] can raise about US$200 million [HK$1.56 billion]." Jiangxi-based developer Walter Asia hopes to raise up to HK$1.56 billion in Hong Kong next year, chairman Zhang Xinming said yesterday.

Hong Kong's highly publicized ambition to become an Islamic financial centre has received a boost from an Airport Authority plan to sell the territory's first Islamic bond. The operator of Chek Lap Kok Airport is believed to be close to finalizing arrangements for the up to US$1 billion bond but needs government approval for a tax exemption to make the deal comply with Islamic law. "The Airport Authority has already done a lot of ground work in order to meet Islamic rules," a source said. "What it is waiting for is a tax exemption from the government." Islamic religious law, or sharia, bans interest income but allows profit sharing. Many Islamic investments, such as bonds, are structured so such gains are considered profit rather than interest income. Profits, however, are taxed in Hong Kong while interest income is not. That means the city's tax code will need to be modified to make Islamic bonds economical. Market observers say the government could grant a tax exemption for any Islamic bond on a case-by-case basis before the tax law is amended. The bond's success will be a victory for Chief Executive Donald Tsang Yam-kuen, who wants to see Hong Kong develop an Islamic finance market to attract Middle Eastern oil wealth. The plan had met scepticism because of Hong Kong's distance from the Middle East and its small Muslim population. However, the plan has support, with senior officials saying they could amend the business code to aid growth of the market. Global Islamic financial assets, worth US$1 trillion, were expected to expand 15 per cent a year, Hang Seng Bank (SEHK: 0011, announcements, news) said in January. HSBC (SEHK: 0005, announcements, news) would reportedly arrange the transaction, with Citi also playing a role, sources said. HSBC and Citi declined to comment. Some sources said the issue could be worth up to US$1 billion although another source indicated the size would be much smaller. "We will launch a deal that is manageable in size," the source said. Fund managers said that could mean an issue of about US$500 million. Observers have long expected a public sector company such as the Airport Authority or MTR Corp would be the first to issue Islamic bonds. Their government-backed status translates into a strong credit rating, which is a good way to lure investors to the fledgling market. Both Standard & Poor's and Fitch Ratings give the company an AA rating. "A government entity is the best platform to promote Islamic bonds as they may be too new for the undeveloped Hong Kong bond market," said a chief investment officer at an asset management firm. Another fund manager said: "They could be well received by the market given the high rating of the issuer." Senior officials are committed to the new market but whether privately held firms will join their government-owned peers in selling Islamic bonds remains to be seen. Islamic financing tends be more highly structured than conventional debt, which can make it expensive for borrowers. "There's a lot of government pressure to develop an Islamic market in Hong Kong," said one banking source. "While it is true that there are questions of how much demand there is from the corporate sector, there are people [in Hong Kong] working towards creating a more diversified financing market." As well as overcoming the difficulties of establishing a new market, the Airport Authority will also be selling into markets affected by the continuing credit crisis in the financial sector. "There will continue to be volatility in the debt capital markets in the second half of this year but we expect it to be less so than in the first half," the banker said. "Issuers will need to watch out for opportunities and get pricing right, but there is demand from funds for new issues."

The impact of the "three direct links" between the mainland and Taiwan on Hong Kong's economy will be slight and short-lived after they come into force, the government predicts. Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung said normal yearly growth in gross domestic product would be enough to offset any side-effects of direct trade, transport and communications links across the strait. He was addressing a Legislative Council meeting at which lawmakers passed a motion urging the government to study ways to strengthen economic ties between Hong Kong and Taiwan, in light of the improving cross-strait relationship. This has raised hopes that the three direct links will be implemented. Hong Kong has been acting as a middle man. "When more Taiwanese companies can invest on the mainland and more mainland capital also flows to Taiwan in the future, the best way out for these businesses will be to list on the Hong Kong stock market," Mr Lam said. "The early implementation of three direct links will strengthen Hong Kong's position as an international financial centre in Asia." Mr Lam also put forward the idea of a free-trade zone comprising the mainland, Taiwan, Hong Kong and Macau. To seize opportunities in tourism, the minister said the government could collaborate with its mainland and Taiwanese counterparts to promote "multistation travel routes". It would also move to attract visitors to convention and exhibition facilities, and to the future cruise terminal in Hong Kong. The motion also called for the government to grant visas to Taiwanese travellers on arrival. "Visitors from Taiwan currently must apply for visas, which is inconvenient," said Howard Young, a Liberal Party legislator. "Even Thailand grants visas on arrival to mainland Chinese. Why can't Hong Kong do the same to Taiwan?" The Democratic Alliance for the Betterment and Progress of Hong Kong suggested waiving visa requirements altogether. "If the two sides implement reciprocal visa waivers, it would help strengthen economic and cultural exchanges between Taiwan and Hong Kong," DAB chairman Tam Yiu-chung said.

China: Chinese people for the first time have come to constitute Japan's largest foreign community, partially thanks to the local government's admission in recent years of more Chinese with advanced degrees, Japanese officials said on Tuesday. At the end of 2007, Chinese residents in Japan with legal status totaled 606,899, accounting for 28.2 percent of the foreign population, according to the Japanese Justice Ministry. The Chinese have replaced the Koreans, who account for 27.6 percent of the foreign population, as the largest source of foreign citizens for the first time since the ministry started collecting data in 1959. A Justice Ministry official said the government has not investigated the reason behind the growth of the Chinese population but that Japan has admitted increasing numbers of Chinese students and those with advanced degrees. To Duan Yuezhong, chief editor of Tokyo-based Duan press, the news comes as no surprise. During a telephone interview with China Daily yesterday, Duan put the actual toll of Chinese living in Japan above 800,000. "The official figure doesn't cover the group of about 110,000 Chinese people that has gained Japanese citizenship and another group of at least 40,000 without legal status," he said. The 50-year-old, who has lived in Japan since 1991, has witnessed the growth. "There were merely more than 100,000 Chinese people living here upon my arrival. The group has expanded, however, at a speed of between 40,000 and 50,000 people a year. Now the Chinese community has turned into the largest foreign group in Japan's history." The fast expanding existence of the Chinese population has exerted profound influence in Japanese society, said Duan. Four companies run by entrepreneurs from the Chinese mainland have been listed in Japan, while more than 5,000 Chinese scholars are teaching or doing research in Japanese universities and institutions, according to the former reporter of Beijing Youth Daily, who has paid close attention to the local Chinese community. Additionally, more than 6,000 Chinese students obtained doctoral degrees in Japan in the past 20 years. "Our diligence has won us a good reputation here. However, one-sided judgment on the Chinese group is still not uncommon, as local media have continuously focused on the dark side." The situation took a favorable turn recently when Japanese society witnessed the solidarity of the Chinese community's earthquake relief efforts and protection of the Olympic torch from Tibet separatists during its Japan leg. The number of foreign residents in Japan rose to an all-time high of 2.15 million at the end of 2007, accounting for 1.7 percent of Japan's population.

A Hong Kong journalist (R) asks for a cup of barley wine in Lhasa, capital of southwest China's Tibet Autonomous Region, June 3, 2008. At the invitation of the Information Office of the Chinese State Council (Cabinet), 31 journalists of 18 media based in Hong Kong and Macao special administrative regions, and Taiwan began their trip in Tibet on June 3.

June 4 - 5, 2008

Hong Kong: Korean Air and China Eastern Airlines have added five flight routes into their code-share cooperation, under which both carriers can sell seats on each other's flights. The five routes, including Shanghai-Seoul and Beijing-Seoul, expanded the cooperation from the two previous routes to seven. The number of flights had been increased from 36 to 160. Under the expanded cooperation, passengers could now choose either 77 flights operated by China Eastern or 74 operated by Korean Air. Korean Air currently operates passenger flights to 21 destinations in China, including Hong Kong.

Creative HK launched in London to mark region's design industry - A series of events showcasing Hong Kong's creative industry was launched on Monday night at Harvey Nichols Department Store in central London to celebrate the 10th anniversary of the Hong Kong Special Economic Region. The events scheduled to last till June 12 are supported by Hong Kong Economic and Trade Office in London. They are comprised of Hong Kong Creation 9707 products in-store display organized by the Hong Kong Design Center, which feature 10 new products by 10 international brands, designed by 10 renowned HK designers. A one-day conference -- Creative Business Forum -- will be held on Tuesday at the London Business School to explore Hong Kong's global influence on design and business from both the economic and creative perspective. In addition, there will be a special exhibition on Contemporary Hong Kong Design at the Design Museum which incorporates the Creation 9707 products to show a total of 100 examples of Hong Kong Designs. Exhibits covering graphics, communications and fashion to environments, product and interactive design help depict the broad scope of creativity that exists in Hong Kong today. "The design industry in Hong Kong has come a long way from plastic flowers and denim jeans to sophisticated creative products. The events will showcase the richness of Hong Kong's design industry," said John Tsang, visiting Financial Secretary of the Government of the Hong Kong Special Administrative Region. According to Tsang, it is the integration of East with West, as well as the "One Country, Two Systems" policy which has helped the industry engage world brands with Hong Kong styles. Tsang also pledged that HK will continue to provide "conducive and supportive environment" for business investing in the special economic region to promote and celebrate creativity. Creative HK is part of part of China Now, Britain's largest ever festival of Chinese culture. The 6-month nationwide festival consists of over 1,000 Chinese events including exhibitions, performances and activities spanning Chinese film, cuisine, comics, art, literature, music, design, science, technology, business, education and sport across Britain. It's intended to celebrate the Chinese culture in the run up to the Beijing Olympics slated for August.

Hong Kong's international investment position remains strong with net external financial assets of 4.07 trillion HK dollars (522.06 billion U.S. dollars) at the end of 2007, a government press release said on Tuesday. According to a press release from Hong Kong Census and Statistics Department, the figure is 41 billion HK dollars (5.26 billion U.S. dollars) up on the same period a year earlier. The figure corresponded to 252 percent of gross domestic product. The department said that ratios of both Hong Kong's external financial assets and liabilities at end-2007 to GDP remained substantial, at 1,318 percent and 1,066 percent, showing Hong Kong is a highly externally oriented economy with considerable cross- territory investment and also a major financial center in the region with considerable cross-territory fund positions. Hong Kong's external financial assets amounted to 21.3 trillion HK dollars (2.73 trillion U.S. dollars) at the end of 2007, up 6.3 trillion HK dollars (808.11 billion U.S. dollars) or 42 percent on 2006, with direct investment accounting for 37.6 percent of the total. Both external financial assets and liabilities rise sharply in the year, showing the generally favorable economic environment and the buoyant performance in many stock markets during the year, the department said.

China Unicom Chairman and CEO Chang Xiaobing (R) shakes hands with his China Netcom counterpart Zuo Xunsheng at a news conference in Hong Kong June 2, 2008. China Unicom said it will acquire fixed-line operator China Netcom in a share swap valued at HK$439.17 billion.

Guangdong property mogul Yeung Kwok-keung, chairman of Country Garden Holdings (2007), may splash out only HK$1.5 billion of his own money to acquire Shaw Brothers (0080) in an estimated HK$10.5 billion deal and rely on private and bank borrowings to finance the rest.

Revenues at Asian casinos will overtake those in the United States by 2012, according to a survey of leading experts on the region's gaming industry. The survey was released yesterday to coincide with the launch of Global Gaming Expo Asia, the region's largest gaming forum at the Venetian casino resort in Macau. "The results of our...survey foretell a remarkable future for the Asian gaming market - from continued revenue growth in Macau to the rise of new jurisdictions such as Japan and Singapore," Frank Fahrenkopf, president and chief executive officer of the American Gaming Association said. The survey of 23 industry chief executives, presidents, directors and consultants has found that 84 percent in agreement that gaming revenues in Asia, led by Macau, is set to surpass those in the United States as early as 2012. Nobody thought it was "unlikely" to happen. According to the association, Asia-Pacific casino revenues are projected to exceed US$30 billion (HK$234 billion) by 2011, while US commercial casino revenue was US$37 billion in 2007. Fifty-two percent believed Macau would maintain its role as the epicenter of Asian gaming for the next three to five years, while 35 percent thought the trend would continue for six to 10 years. Singapore's entry into the fray with two casino projects and Korea and Japan looking to follow closely after some legislative amendments, heated up competition with 50 percent of respondents picking Japan to have the second largest gaming operation in the area within a decade. While some of the region's leading economies are looking to legalize gambling, Taiwan was picked by 45 percent as the next likely place for gaming expansion, followed by Japan which garnered 24 percent and Thailand, 21 percent. Seventy-eight percent of experts believe it would take the better half of a decade before electronic games could rival table gaming in popularity in Asia.

Biggest rise for civil servants in 10 years - Public-sector employees are set to receive their biggest pay increases since 1998. Senior staff will get 6.3 per cent and the rest 5.29 per cent.

China: The recent earthquake will add to China's inflationary pressure as the country is battling to contain rising prices, but the effect will be temporary, said a central bank research report released Tuesday.

A medical worker (R) from east China's Zhejiang Province examines a local man at Qinggang Village, Gucheng Town, Pingwu County, in southwest China's Sichuan Province, on May 23, 2008. Large numbers of medical workers have arrived at local villages in the quake-hit area in Sichuan Province to provide medical treatment and health services. The death toll from the May 12 earthquake increased by 88 overnight to 69,107 as of Tuesday noon, the Information Office of the State Council said. Another 373,577 people were counted as injured and 18,230 still listed as missing from the 8.0-magnitude quake, while 45.69 million people were affected by the disaster. Hospitals had treated 94,565 injured people, of whom 70,657 had been discharged, 21,342 were still being treated and 9,781 were transferred outside of Sichuan Province, the center of the quake, for treatment.

Giant pandas eat bamboo shoots fed by the feeder at the Beijing Zoo in Beijing, capital of China, June 2, 2008. Eight giant pandas, the "Olympic Pandas" chosen by netizens, were flown to Beijing from Chengdu, capital of southwest China's Sichuan Province, on May 24, after they were evacuated from the earthquake-hit Wolong Nature Reserve. They will meet with tourists on June 5.

A girl hands her donation for victims of the Sichuan quake to a fundraising volunteer in Tsukuba, Japan, on Sunday. Chinese students studying at the University of Tsukuba have collected 12 million yen ($114,345) to aid quake relief work since May 12. Overseas Chinese had donated about 1.13 billion yuan ($163.4 million) worth of funds and relief supplies for victims of the May 12 Sichuan quake as of Sunday, an official of the Overseas Chinese Affairs Office of the State Council (OCAO) has said.

Greece's largest port authority said yesterday that China's COSCO Pacific (1199) has submitted the highest bid to manage two of its container wharves, offering a total 4.93 billion euros (HK$59.72 billion).

China Southern Airlines' 60 per cent-owned subsidiary Xiamen Airlines will be among the first to take advantage of direct links between the mainland and Taiwan by launching cross-strait flights at a frequency of up to one per hour. "Some 24 years ago, Xiamen Airlines was founded to implement the historical duty of direct flights [across the Taiwan Strait]," Hu Bin, the general manager of passenger marketing for the regional carrier, said yesterday on the sidelines of the International Air Traffic Association annual meeting. "Now is the time." The airline, with a consecutive 22-year profit track record, said it would use 10 Boeing 737-800s on the route. Although the occasional chartered flights between the mainland and Taiwan during Chinese festivals show greater demand between Taiwan and Shanghai, the carrier is confident there is sufficient traffic in Xiamen to make it a key player. "Taiwan is our main focus as Xiamen is the nearest point between the mainland and the island," said Mr Hu, who believes that direct links between the two could be established by next month. He outlined plans to increase the flight frequency to hourly on the Xiamen to Taipei route, every 90 minutes to Taichung and every two hours to Kaohsiung. The carrier will receive its first B737-800 next year. The firm will expand its fleet to 69 aircraft in 2010 from 47 and up to 130 planes by 2015. Financially sound and with a net gain from interest income last year, Xiamen Airlines will have no problem getting aircraft financing. However, the carrier is not immune to fuel cost pressures. Mr Hu said he was prepared for domestic jet fuel prices to rise to international levels, climbing 1,000 yuan (HK$1,127) to 8,000 yuan per tonne. "We have to fly our aircraft higher where the air is thinner and causes less friction with the aircraft to save on fuel," he said. The airline also will turn down carriage of low-margin air cargo to save on jet fuel.

June 1 - 3, 2008

Hong Kong: Hong Kong Exchange Fund's total assets rose to 1.467 trillion HK dollars (188.16 billion U.S. dollars) in April, up 8.1 billion HK dollars (1.04 billion U.S. dollars) from March, Hong Kong Monetary Authority said on Friday. The Foreign-currency assets fell 15.8 billion HK dollars (2.03 billion U.S. dollars) and Hong Kong dollar assets grew 23.9 billion HK dollars (3.07 billion U.S. dollars), the authority said. The decline in foreign-currency assets was due mainly to valuation losses on foreign-currency investments and redemption of Certificates of Indebtedness. These decreases were partly offset by interest and dividend income from foreign-currency assets. The rise in Hong Kong dollar assets was due mainly to valuation gains on Hong Kong equities held by the Exchange Fund and placements received from fiscal reserves, the authority said. The Monetary Base stood at 326.2 billion HK dollars (41.84 billion U.S. dollars), down 2.5 billion HK dollars (313.87 million U.S. dollars) or 0.8 percent from March. The decline was due mainly to a decrease in Certificates of Indebtedness and the market value of Exchange Fund Bills and Notes outstanding, the authority said. The Backing Assets dropped 4.5 billion HK dollars (577.18 million U.S. dollars) or 1.2 percent to 358.6 billion HK dollars (45.99 billion U.S. dollars). The decrease was attributable mainly to the redemption of Certificates of Indebtedness in the Monetary Base and revaluation losses, which were partly offset by interest from investments. The backing ratio fell to 109.91 percent from 110.44 percent in March, the authority said.

Total deposits with authorized institutions rose 0.3 percent in March in Hong Kong, with Hong Kong dollar deposits up 0.3 percent, Hong Kong Monetary Authority said here Friday. U.S. dollar deposits fell 2.2 percent, while non-U.S. dollar foreign-currency deposits rose 5.9 percent. Renminbi deposits rose33 percent to 76.6 billion yuan (about 11.05 billion U.S. dollars), accounting for 3.1 percent of foreign-currency deposits. Total loans and advances rose 1.6 percent as loans for use in Hong Kong grew 1.6 percent and loans for use outside Hong Kong rose 1.9 percent. The Hong Kong dollar loan-to-deposit ratio rose to 77.4 percent, the authority said. On a seasonally adjusted basis, Hong Kong dollar M1 dropped 0.1percent in April but rose 14.6 percent over a year earlier. Unadjusted Hong Kong dollar M3 grew 0.1 percent during the month and 10.5 percent year on year.

Anti-graft agents have arrested a former Calyon Bank warrants trader, Raymond Ng, whom they allege to be the mastermind behind a HK$100 million warrant trading scam the first of its kind in Hong Kong.

Two surrender foreign passports to defuse row - The row over the foreign citizenship of five recently appointed undersecretaries abated slightly yesterday when two of them gave up their foreign passports. Undersecretary for Commerce and Economic Development Greg So Kam-leung said he has given up his Canadian passport while Undersecretary for Constitutional and Mainland Affairs Raymond Tam Chi-yuen has surrendered his BN(O) travel document. The three others said they are considering their options and will make a decision before assuming office. The case of undersecretaries having dual citizenship had raised questions about their loyalties. It also gave legislators the opportunity to accuse the government of being insensitive to public opinion. So said he had renounced his Canadian citizenship to dispel public concern about his loyalty and end the controversy. "It was a tough decision. In doing so, I have also had to give up my legal practice qualification in Canada where I still have friends and relatives," he said, adding the Basic Law does not require him to renounce his foreign citizenship. "My Canadian citizenship never changed the fact that I am Chinese." So said at age 16 he had moved to Canada where he studied, got married and raised a family. But he returned to Hong Kong two decades ago. So, the former vice chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, said he had never tried to conceal his Canadian citizenship. Those yet to decide are Undersecretary for the Environment Kitty Poon-kit, who holds a US passport; Undersecretary for Financial Services and the Treasury Julia Leung Fung- yee, who holds a BN(O) passport; and Undersecretary for Food and Health, Professor Gabriel Matthew Leung, who has a Canadian passport. The remaining three undersecretaries - Kenneth Chen Wei-on (education), Florence Hui Hiu-fai (home affairs) and Yau Shing-mu (transport and housing) - have HKSAR passports. Secretary for Constitutional and Mainland Affairs Stephen Lam Sui- lung pointed out the Basic Law did not prevent undersecretaries from holding foreign passports. The fact that two had renounced their foreign citizenships showed they were willing to listen to public opinion, he said.

Airport eyes Shenzhen and Zhuhai - A third runway is not merely an option, said outgoing Airport Authority chairman Victor Fung Kwok-king - more are needed if there is full-fledged cooperation with Shenzhen Airport. He told Sing Tao Daily, sister publication of The Standard, the authority is currently developing a 20-year plan that includes ways to improve "the efficiency of the airport, the runways and airport capacity." The key to maximizing efficiency at Hong Kong International Airport, he said, is cooperation with Shenzhen and Zhuhai airports in which Hong Kong's role is that of a "gateway for passengers coming from Shenzhen and Zhuhai" and they will serve as a gateway to other mainland cities in return." "If HKIA cooperates with Shenzhen, we would be needing fifth, sixth, and seventh runways," Fung said. Fung is not worried about such cooperation opening up a pandora's box of airlines preferring Shenzhen Airport. "We are concerned more about capacity. Those passengers will still be HKIA customers," he said. Fung acknowledged the challenge posed by the increasing likelihood that there will be direct links across the Taiwan Strait amid a thaw in relations. The key to seeing off that challenge, Fung said, is with Hong Kong adopting an open-skies policy. He said direct links may have an impact in the short term, but "it should not be a big problem ... it will eventually increase opportunities," Fung said. On budget carriers and the recent demise of Oasis Hong Kong Airlines, he said cooperation with Shenzhen and Zhuhai airports will create openings for budget airlines, as the flight time between these airports is less than an hour. "In the future, there may be more Oases," he quipped. Fung - who steps down tomorrow - had pushed for HKIA's listing but the move has been postponed. He said: "When an enterprise reaches a certain maturity, it should be given a chance to become listed."

PCCW to shift assets in spinoff - PCCW (0008) yesterday said it will reorganize its telecommunications services, media and IT solutions businesses into a new firm called HKT Group and offer investors up to a 45 percent stake in it. Shares of PCCW rose 9.44 percent yesterday to close at HK$5.10 - the biggest intraday jump in the past two years. "The reorganization will improve the operational efficiencies of the group ... and facilitate a future listing," according to a company statement. When PCCW chairman Richard Li Tzar-kai spoke at the annual general meeting two hours before the announcement, he did not disclose the restructuring plan of his telecom flagship. But the city's biggest phone carrier has already won unanimous approval from its board, according to the statement. China Network Communications Group, PCCW's second-largest shareholder, told The Standard it basically supports PCCW's internal restructuring plan as its "direction" and "aim" are good. Two years ago, China Network blocked PCCW's plan to sell its major telecommunications and media assets to Macquarie Bank and TPG-Newbridge. "This time is obviously different from the [Macquarie] deal," Li said. "PCCW will sell less than 45 percent stake of HKT, meaning that the controlling stake in HKT is still with PCCW." But he said China Network will closely monitor the ongoing deal to see who will be introduced as HKT's strategic shareholders. Nomura Securities analyst Kelvin Ho said PCCW is setting up a new company as it wants to unlock hidden value. "If PCCW's money-losing businesses, such as its WiMAX business in the UK, are not included in the newly formed company HKT, the real value of the telecommunications business can be unlocked," said Ho. An investment bank analyst, however, said Li may inject all the businesses of PCCW into HKT as this will help relieve PCCW's tax burden. The PCCW statement did not disclose details of the business structure of HKT. Meanwhile, Li said PCCW will announce an overseas project in the coming few weeks. "The overseas markets are good opportunities for PCCW. In the coming few weeks, you will see that PCCW is actively and prudently investing overseas," he said. In February, PCCW and Mawarid Group partnered to win a license to provide fixed-line phone and broadband internet services in Saudi Arabia. PCCW managing director Alex Arena said the Saudi Arabia project this year would make a "minor revenue contribution" to the company.

An institutional shareholder in Li Ning Ltd (2331), the Chinese sportswear maker founded by a former world gymnastics champion, is seeking as much as HK$470.5 million selling shares, according to a term sheet sent to investors.

Peak Tram has inflation-busting 120th birthday bash - More than 6,000 tourists and Hong Kong residents on Friday morning queued up outside the Peak Tram station on Friday morning for a nostalgic ride to celebrate the tram’s 120th birthday.

China: Kuomintang (KMT) Chairman Wu Poh-hsiung said here he hoped the cross-strait relationship will be better with concerted efforts of people on both sides of the Taiwan Strait.

There is a butterfly breeding park at the foot of the Wuzhishan Mountain in Hainan Province with an area of 1200 mu (800,000 square meters). In late May, it becomes a land of peace away from the crowded world, with blooming flowers and fluttering butterflies. It is the only butterfly park in the fields, where there are more than 1,000 species of butterflies, including about 200 species of foreign ornamental butterflies, as well as scores of butterfly species under first class State protection. Experts contend that the value of popular science and professional research in this butterfly park leads in the country.

Chinese President Hu Jintao shakes hands with Nong Duc Manh, Communist Party of Vietnam (CPV) Central Committee general secretary, on Sunday at the Great Hall of the People in Beijing, May 30, 2008. China, Vietnam to end land border demarcation this year - China and Vietnam will complete erecting markers along their land border by year end, a visiting Vietnamese leader said here on Friday. In talks with Chinese President Hu Jintao, Nong Duc Manh, Communist Party of Vietnam (CPV) Central Committee general secretary, reaffirmed efforts to meet this deadline set in 1999. China and Vietnam signed a treaty in December that year delineating their 1,350 kilometers of frontier. They officially started to plant land markers in 2002. The two countries finished their latest round of talks on land border demarcation in Beijing last week, vowing to speed up the work. Following the demarcation, China and Vietnam will also sign new documents on regulating the border within 2008, according to a statement on the talks between Hu and Manh. anh, who arrived in Beijing at Friday noon, handed over to China a list of relief materials totaling 15 tons. According to the list, Vietnam will provide 150 tents and 10,000 boxes of milk to the areas hit by an 8.0-magnitude earthquake on May 12. After inspecting the honor guards of the People's Liberation Army, Hu and Manh held a two-hour talk in the Great Hall of People. The two reviewed the traditional friendship forged by the older leaders in the last century. They hailed the rapid growth of bilateral ties in recent years, citing Sino-Vietnam cooperation in trade, rule of country, regional and international issues, as well as problems left over from history. Hu proposed China and Vietnam seek stronger ties in culture, education, science and technology, agriculture and youth exchange. Manh echoed Hu's view, reiterating his country's efforts to work more closely with China in various fields. Hu called for an early blueprint outlining a five-year trade cooperation between the two countries. In response, Manh encouraged Chinese businessmen to invest in big projects in Vietnam and help his country develop in a sustainable manner. Hu suggested a proper solution to existing issues between the countries on the basis of friendly consultation and mutual benefit. Manh shared Hu's view and said the two countries should communicate promptly about their concerns. They also exchanged views on party building and international issues. After the talk, Hu and Manh witnessed the signing of several bilateral deals on protection and quarantine of animals and plants, as well as in other fields. During Manh's four-day tour, he will also visit the east Jiangsu Province.

A top official from European aircraft maker Airbus said on Friday it was negotiating with its Chinese counterparts to join China's jumbo jet manufacturing program, which was officially inaugurated in Shanghai on May 11. "I'm sure we will expand our business in China, although some factors might make China our competitor," said Laurence Barron, Airbus China president, in an exclusive interview with Xinhua on Friday at the 18th Asian Corporate Conference of Asia Society. "Not a single country could make a plane on its own. The generator, instruments and even the oil used by Airbus all come from different partners. China need such support." China's first ever jumbo passenger aircraft company, named Commercial Aircraft Corporation of China Ltd.(CACC), will be responsible for researching, developing, manufacturing and marketing the homegrown large passenger aircraft.

Sharon Stone apologizes over karma remarks - U.S. actress Sharon Stone has released a statement through her agency apologizing for saying the earthquake that struck China may have been the result of bad karma, media reported Thursday.

Dogelio Padron Rodrigvez (second from left) with the Cuba medical rescue team and Liu Pan (second from right) from the Sichuan Provincial People's Hospital attend to a patient in Chengdu, Sichuan, May 29, 2008. Language no barrier for caring doctors - CHENGDU: As well as jet lag, Jose Jorge Rodrigvez worried language barriers might hamper his disaster relief efforts. But after arriving in China, the leader of a Cuban medical relief team found that friendship, teamwork and the devotion shown by both nations' doctors could bridge any divide. "Our partnership with Chinese medical workers is very pleasant. It's like the friendship between our two nations," he said. "When one party is in difficulty, the other is duty-bound to help. We will stay as long as our Chinese friends need us." Under this motto, Rodrigvez is heading a team of 35 medical professionals who also brought disaster relief materials to Chengdu last week. Working closely with local counterparts at the Sichuan Provincial People's Hospital, the team, consisting of professionals working in orthopedics, X-ray, gynecology, surgery and rehabilitation, has so far treated 430 patients. "We are encouraged by the resolve showed by those injured in the earthquake," Rodrigvez said. "After a week, we have become accustomed to the new environment while volunteers help with language differences." At a ward housing those suffering fractures yesterday, Dr Dogelio Padron Rodrigvez was checking patients with Chinese doctors. After observing an X-ray sheet of a patient, the physician politely inquired about the treatment administered. "There is some unspoken consensus between the two sides, after some wearing-in in the past week," Jiang Hong, deputy director of international affairs at the hospital, said. Patients also welcome foreign professionals, especially after Rafael Suri, a pediatrician, has become the most popular among underage patients. "They are very friendly and passionate, and some would like to hold my hand," the 64-year-old man, said. "I talked to them and tried to restore their confidence in life." The medical veteran has also showed his kindness by kissing children's cheeks just as they do in Cuba. While Cubans must overcome the language barrier, medical workers from Macao who also arrived last week face no such hurdles. According to Lei Wai Seng, who heads a 20-member team helping at the Third People's Hospital of Chengdu, their teamwork with mainland peers is exciting. "Some doctors are very exhausted after working long hours since the outbreak of the disaster. "Now we can help them on fronts such as surgery, ICU department and nursing," he said, adding that Macao could also help restore healthcare systems in hard-hit areas. "We have much expertise in the sector," Lei said. "We can help set up communities with better medical systems."

Despite the massive relief and reconstruction effort diverting resources to quake-ravaged Sichuan, Olympic preparations remain on track. "Preparations have moved into the last and critical stage," said Vice President Xi Jinping. "We will do it well while working hard for quake relief. We will pay equal importance to the two things and not delay one for the other." Officials said the disaster, while tragic, has offered a rare opportunity for Beijing to practice its crisis- management skills.

The landslide-blocked river at Tangjiashan in southwest Sichuan province is now the most pressing danger after an earthquake devastated the region on May 12. The official death toll from the quake is 68,858 and is sure to rise with 18,618 missing. Aftershocks have toppled 420,000 houses, most already uninhabitable, and there is worry that landslide-blocked rivers could bring more havoc. The official Xinhua news agency said Tan Li, Communist Party Secretary of Mianyang city in the quake zone, issued an order that 1.3 million people living downstream from Tangjiashan, a swollen quake lake, must “evacuate to higher ground”. But Zhou Hua, a Mianyang city official who is spokesman for the lake relief effort, told Reuters the report was inaccurate. “There is a virtual training exercise scheduled for tomorrow to test our contingency plan to move that many people,” he said. “But there is no public participation, and we see no reason at all to actually implement the plan at this stage.” Mianyang, a city of 5.3 million people including many in rural areas, has a concentration of high-tech businesses. At the unstable Tangjiashan lake, hundreds of troops have removed more than a third of the earth for a channel intended to ease pressure from the rising waters in the mountainous province of Sichuan, an official spokesman said on Friday. Up to 190,000 residents downstream had moved to higher ground – usually hillsides close to where they were living before – to avoid a surge of water if the blockage suddenly gave way, Mr Zhou said. Xinhua news agency said the water level was nearly 23 metres below the lowest point of the barrier, which experts have said could give way quickly once breached. Troops have also built escape paths in the event that happens, Xinhua said. A mainland meteorological authority official, Zhai Panmao, said the authority did not expect unusually heavy rain in the area in the next 10 days. “We’ve adopted extremely important measures and are opening up a breach and so on,” he said. “We have full confidence in solving this problem.” Post-quake reconstruction work has only just begun, and tens of thousands of survivors are now threatened by more than 30 quake lakes, formed by landslides, that could break through the natural dams, flooding downstream towns and reservoirs. Japan had shelved plans for its military to fly tents and blankets to China, a Japanese government official said on Friday, after messages on a mainland internet sites recalled war time atrocities by Japanese troops. Meanwhile, an official investigator pinpointed the poor design and construction of at least one of the many schools that collapsed during the quake, killing thousands of children. Domestic media reports compiled by Reuters put the combined toll from deaths of children and teachers in the rubble of schools at more than 9,000. The Chinese public has been outraged by the disproportionate number. An official investigator said one the schools that crumpled, the Juyuan Middle School, where hundreds of children died, was fatally weakened by poor design and materials. “There were certainly problems with site selection, the building’s structure and structural features, the construction and materials,” Chen Baosheng, an expert from Tongji University in Shanghai, told the Southern Weekend. The number of prospective orphans in the quake area has dropped dramatically as more children were reunited with their parents, Xinhua quoted local officials as saying. There were about 1,000 “unclaimed children” in Sichuan as of Wednesday, down from more than 8,000 immediately after the earthquake, Xinhua said, adding civil affairs authorities had been overwhelmed by calls seeking to adopt those quake orphans.

May 29 - 31, 2008

Hong Kong: A senior expatriate marine police inspector has been arrested after a spate of thefts from fellow officers at the station where he worked. Detectives are understood to have arrested the inspector - who has around 20 years' service in the force - at Marine Police Headquarters in Sai Wan Ho yesterday. According to a source, cash and valuables had been going missing from offices and lockers over the past few weeks and one of the victims fitted a hidden camera in order to catch the culprit. It is understood a number of the thefts involved HK$500 notes taken from wallets. An inspector at his level of experience would be earning around HK$60,000 a month.

Former Democratic Alliance for the Betterment and Progress of Hong Kong vice-chairman Greg So Kam-leung is expected to give up his Canadian passport today before taking up his post as Undersecretary for Commerce and Economic Development on Monday. Other recently appointed undersecretaries and political assistants are also expected to make clear their nationalities in the next few days. Sos double nationality has been the subject of much controversy in recent days, with several legislators saying those appointed to serve in the government should not hold passports belonging to other nations. Former secretary for justice and current vice director of the Basic Law Committee Elsie Leung Oi-see circumvented the issue yesterday saying the government has a free hand to do what is best for Hong Kong and which is not against the Basic Law. Leung said the current situation with underscretaries is similar to the implementation of the accountability system several years ago, which did not require an amendment of the Basic Law. She said the SAR government is free to decide on its own political system and there is no limit to the appointment of undersecretaries and political assistants. The pan-democrats, however, received a boost when pro-Beijing Federation of Trade Unions legislator Wong Kwok-hing called on dual- nationality undersecretaries to give up their foreign passports.

Movie and media giant Shaw Brothers (0080) said yesterday no agreement has yet been reached on a sale of chairman Run Run Shaw's stake in the company. he statement, made in an official announcement to the Hong Kong Stock Exchange, differs from reports that a sale - which has drawn intense media interest because Shaw Brothers controls Television Broadcasts (0511) - was a done deal. "No expressions of interest in respect to a possible purchase of shares in the company held by Shaw Holdings or its subsidiaries has resulted in any agreement to date," Shaw Brothers said. Shaw, who chairs both companies, put in a personal appearance at TVB's annual general meeting yesterday, none the worse for wear amid speculation about his health following recent hospital visits. But the centenarian kept his lips sealed. TVB vice president Norman Leung Nai-pang became testy when asked whether Country Garden (2007) chairman Yeung Kwok-keung had made an offer of at least HK$10 billion to acquire Shaw Brothers, which holds a 26 percent stake in TVB. "You should not be asking this question, and I will not answer your question either," the former Broadcasting Authority chief said. "Your question has little to do with the business development of TVB." Shaw Brothers is worth HK$9.12 billion on yesterday's close. Before its announcement, the counter hit a two-year high of HK$23.50 per share, before closing at HK$22.25, down 2.84 percent. TVB rose 2.29 percent to close at HK$51.30.

A gang who used a catapult and pulley system to smuggle high-tech goods across the river that divides Hong Kong and Shenzhen under the cover of darkness has been caught after a major customs surveillance operation. The gang, composed of Hong Kong and mainland men, were ferrying the contraband from the Hong Kong side of the Shenzhen River to cash in by avoiding mainland import tariffs. Customs said they rigged up a pulley system - using fishing gut to maximise the weight the 300-meter line could carry - high up in a block of flats on the Shenzhen side which connected to the roof of a two-storey stone hut in the Sha Tau Kok-Hong Kong boundary area. The audacious high-wire smugglers only "worked" at night in a bid to avoid detection. But their lucrative venture smuggling computer RAMs, mobile phones and memory cards was short-lived - neighbors noticed the noise and alerted the authorities. In a joint operation, mainland and Hong Kong customs arrested 16 suspected smugglers on both sides of the border at Sha Tau Kok in the earlier hours of Tuesday after a week of surveillance. They seized 5,830 mobile phones, 2,100 computer RAMs and 450 memory cards worth HK$6 million. The suspected smugglers comprise four Hong Kong men, aged between 33 and 38, and 12 mainlanders, aged between 25 and 45. Head of the intelligence coordination group Leo Sin Wai-sum said the syndicate rented a flat in a Sha Tau Kok high-rise and used the fishing line to connect to the roof of a two-storey stone hut near Chung Ying Street on the Hong Kong side. A catapult was used to shoot the line to the roof of the hut on the opposite side of the Shenzhen River. Sin said the fishing line could carry a load of three to five kilograms each time, and the whole smuggling operation only took 10 to 15 seconds. The goods were wrapped in black plastic bags. Officers estimated it would take about 110 conveyor runs to transfer all the goods from one side to another. "We believe the group had operated in the area for two to three weeks at night, taking advantage of the geographical environment in Sha Tau Kok. Another smuggling ring was smashed in April by a joint Hong Kong-Shenzhen customs operation. That syndicate had tried to smuggle HK$5 million worth of electronic goods and silver bars through the underground drainage system near Shenzhen river at Ta Kwu Ling. They used a drain outlet near a mainland border guard post. Sin said the arrests and seizures showed cooperation with the Shenzhen Customs was effective and that they will coordinate closely with them in the future to crack down on illegal activities on the border.

The merger and acquisition market for Hong Kong lenders is getting hotter as several smaller banks have been approached recently by interested buyers. Amid Wing Lung Bank's (0096) ongoing proposed sale of a 53 percent stake, Wing Hang Bank (0302) was yesterday said to be in talks with China Life Insurance (2628) on a potential share sale. China Life has contacted Wing Hang chairman Patrick Fung Yuk-bun and his family - the largest shareholder in Wing Hang - to acquire their combined 21.3 percent interest in the bank, according to 21st Century Business Herald. Wing Hang shares surged up to 8.9 percent on the news, before easing to close up 5.1 percent. In a statement yesterday after the market close, Wing Hang said there are no negotiations or agreements relating to any intended acquisitions that should be disclosed. A China Life spokesperson also denied the insurer was in talks with Wing Hang. Based on yesterday's closing price, Wing Hang's 2008 price-to-book ratio is 2.9 times - higher than the 1.8 times PB average acquisition price of banks in recent years. "Existing shareholders of Wing Hang are unlikely to consider any sale without an attractive premium," an analyst said. Meanwhile, another local lender, Dah Sing Banking Group (2356), said it has been approached by potential buyers but there are currently no deals going on. "Interested parties include Chinese banks and foreign banks," chairman David Wong Shou-yeh said.

Tycoon Robert Kuok, his family and the Kerry Group have donated 123 million yuan (HK$139 million) and HK$10 million to people affected by the earthquake in Sichuan since the tremor struck two weeks ago, Xinhua reported last night. Meanwhile, the auctioning of a Qing dynasty enamelled-glass brush pot owned by Taiwanese businessman Robert Tsao raised more than HK$30 million for victims of the earthquake. The brush pot, made for the emperor Qianlong, fetched HK$65 million at Christie's spring sale at the Hong Kong Convention and Exhibition Centre. Christie's waived its commission and premium charges for the sale, to a Taiwanese private collector, and Mr Tsao, who bought the brush pot for HK$67.5 million last autumn, said half of the proceeds (HK$32.5 million) would go to victims of the quake. Speaking on behalf of the people of Sichuan, the director of the central government's liaison office in Hong Kong, Gao Siren , yesterday praised Mr Kuok and his family for their contributions to the disaster-relief efforts. He said such charitable acts demonstrated the tycoon's patriotism and his compassion for the quake victims as his fellow countrymen. Mr Kuok has also donated 4,000 tents to the refugees. Tents are urgently needed for millions of homeless people and the central government has openly asked the international community to help. Mr Kuok has pledged to provide help to 500 middle school students and university undergraduates in central Sichuan, where the earthquake struck. Each will receive 8,000 yuan per year in study subsidies for seven years, Xinhua reported. To relay the gratitude of Sichuan people, Mr Gao yesterday met Kerry Group representative Kuok Khoon Ean, who is also chairman of SCMP Group, which publishes the South China Morning Post (SEHK: 0583, announcements, news) , and Ang Keng Lam, executive director of Kerry Properties (SEHK: 0683). Also yesterday, an Olympic torch donated by Hong Kong squash player Christina Mak Pui-hin fetched HK$1.8 million at a charity auction organised by Commercial Radio. The track suit and sports shoes the Asian Games medallist wore on May 2 for the torch relay in the city fetched HK$13,000 and HK$7,000 respectively and a headband HK$6,000. Proceeds will go to the Caring for Children Foundation to help make artificial limbs for children injured during the earthquake. Mak said she was pleased with the results.

The Southern District Council has welcomed Ocean Park's decision to modify its expansion plan after residents complained of the impact it would have on the neighbourhood. Alongside a HK$5.5 billion redevelopment plan expected to be completed by 2012-13, the park is planning to build three hotels, offering a total of 1,300 rooms and expected to open in 2011 or 2012. But to ease the fears of residents about their views being spoiled, it has agreed to reduce the height of one of the hotels, next to its main entrance, from 27 storeys to seven or eight, according to a spokeswoman. In order to meet the targeted 660 rooms, the proposed hotel may be split into two buildings, she said. District councillor Lam Kai-fai said the expansion plans had won unanimous support from the district council. Mr Lam, who is a planning and co-ordination consultant, said disturbance to the environment and traffic flow would be unavoidable, but he urged people to look at the "big picture". "The development of Ocean Park will be a milestone for Southern District, and for Hong Kong," he said. "For example, it has contributed to the construction of the South Island MTR line and it will further boost tourism in Hong Kong." He added that Ocean Park had been "extraordinarily sincere", as shown in its close communications with the district council and the promises the park had made, like changing the hotel plans, limiting tree cutting and creating a larger green belt than originally intended. But residents remain concerned about the impact of the proposed hotels. Owners of properties in Orchid Valley, a high-end development, wrote to Ocean Park chairman Allan Zeman earlier this month to oppose the construction of a hotel in the lowlands of the park. They said the hotel would spoil the ambience of the area and worsen traffic congestion. Ocean Park's spokeswoman said the parameters of the hotels had yet to be decided before being taken to the Town Planning Board for approval later this year. She said the park was sympathetic to the concerns of neighbours.

Hong Kong would gain French expertise and experience in wine-related trade, tourism and education under an arrangement with France, the chief secretary said yesterday. The arrangement will take effect in the summer and is expected to help raise the city's international profile in its bid to become the region's wine hub. The government halved wine duties to 40 per cent last year and then scrapped them three months ago to promote the development of wine-related businesses such as auctions, storage and distribution of fine wine. Speaking at the Vinexpo Asia- Pacific trade show opening, Henry Tang Ying-yen said: "Under the arrangement, France would share with us its experience in promoting wine-related trade and tourism, as well as providing training on wine tasting. "The market response to zero duties in Hong Kong has been very positive and very encouraging. "Within two months, our wine imports increased by over 120 per cent compared to the same period last year. In terms of value, it has increased by over 200 per cent." Anne Marie Idrac, French Secretary of Foreign Trade, said she welcomed the abolition of duties, which had boosted French wine exports. However, she expressed concern at the "high level of duties on spirits", which has remained unchanged at 100 per cent. "We hope that the government would consider decreasing this tax in the next year," she said. Vinexpo Asia-Pacific has a record 692 exhibitors from 32 countries at the Hong Kong Convention and Exhibition Centre. In April, expo organisers said zero wine duties were expected to raise consumption in Hong Kong but it was difficult to assess by how much.

China: The Communist Party of China (CPC) and the Kuomintang (KMT) should firmly maintain peaceful development of cross-Straits relations and live up to the expectations of people, Jia Qinglin, member of the Standing Committee of the CPC Central Committee Political Bureau, said yesterday. "The two sides should live up to the expectations of people, safeguard the good trend in cross-Straits relations, grasp and make good use of the rare opportunity, and make persistent efforts, so as to jointly open up a new chapter for the peaceful development of cross-Straits relations," said Jia, while meeting with visiting KMT Chairman Wu Poh-hsiung in Beijing. Jia also said that the two parties should intensify communication and strengthen the interaction of grassroots organizations in order to push forward exchanges in all aspects. Jia, also chairman of the National Committee of the Chinese People's Political Consultative Conference, highlighted the importance of Wu's visit, who is here at the invitation of the CPC Central Committee and General Secretary Hu Jintao. Wu arrived in Beijing on the second stop of his six-day mainland trip yesterday afternoon. He was welcomed yesterday at Beijing's Capital International Airport by Chen Yunlin, director of the Taiwan Work Office of the CPC Central Committee. In his speech at the airport, Wu said that as new opportunities appear across the Straits, "we should not waste these opportunities but instead make continuous efforts for positive interaction". He wished the upcoming Beijing Olympic Games a great success. In a welcoming speech, Chen spoke highly of Wu's mainland visit, saying it showed "the two parties are willing to shoulder the major historic task entrusted by people of the two sides to jointly create a great future for our nationality". Leading his 16-member delegation, Wu also paid homage to Dr Sun Yat-sen's Mausoleum in Nanjing, capital of East China's Jiangsu province. Wu laid a floral wreath at Dr Sun's statue in the memorial hall and made bowed for a minute in reverence. Sun Yat-sen, a founder of Kuomintang, or the Nationalist party of China, died in 1925 in Beijing and his coffin was moved to and buried in Nanjing in 1929. In his speech at the mausoleum, Wu stressed that both the mainland and Taiwan belong to the Chinese nation, and are "closely tied by blood", which no one could obliterate. He said that both sides across the Taiwan Straits should face history directly, reality squarely and open up to the future. He said Kuomintang will send a delegation to Nanjing next year to attend memorial activities of the 80th anniversary of Dr Sun Yat-sen's internment at the mausoleum. Wu is scheduled to meet Hu Jintao, general secretary of the CPC Central Committee, today, and fly to Shanghai tomorrow to visit Taiwan businessmen based there.

Hu Jintao meets KMT chairman - General Secretary of the Communist Party of China Central Committee Hu Jintao met with Kuomintang (KMT) Chairman Wu Poh-hsiung in Beijing Wednesday afternoon.

China has suffered a lot recently – Western media distortion, a train crash and a horrific earthquake. However, Chinese people are always brave. Glance at the T-shirts in the streets and you will know. Love-China T-shirts appeared when the Olympic Torch bearer was attacked in Paris. After a series of incidents, people in the country, even all over the world, wore the shirts to show their love for China. Called wenhuashan in Chinese, these T-shirts display the wearer's personality and ideas. Now with summer coming, aiguo wenhuashan, Love-China T-shirts, dot the streets. Most of them are white, with red patterns. Some have a heart and a China map. The Beijing Olympic logo even appears on your chest if you choose the Olympic series. Others combine a red heart with the Chinese National Flag, with five yellow stars at the left top. A college student has designed all of the 100 Chinese surnames with the red heart, to show that "all the people in China support our country whole-heartedly." Each individual can choose his or her own surnamed T-shirt to wear and add more individualized features. Those who are interested can visit retailers at Huawei Building in Xidan, Wudaokou Clothing Market, the clothing markets around the Beijing Zoo and Tianyu Market near Tuanjiehu. Buying a love-my-country T-shirt online may be more convenient. Many big online shops, for example, taobao.com, eachnet.com and ebay.com, provide the product at a very low price and some of the online shop owners claim that they will donate all the money to areas that suffered in the earthquake. If you are lucky, you may happen to find some factories online which produce these T-shirts. Order there if you need large quantities- it will save some money.Because the patterns and colors are simple, each love-China T-shirt costs no more than 50 yuan, except those that have really good material and designs. Some sell for about 25 yuan online, and if you order in large quantities, you can get as cheap as 8 to 10 yuan each. Cheap and reasonable. So why not show off your muscles and your love towards China this summer with a T-shirt?

Workers at the Beijing Wuzhou Guardtex New Type Material Co Ltd make tents around the clock. The factory is one of 75 tent makers in China appointed by the Ministry of Civil Affairs to work day and night to make 900,000 tents before June 20.

Rough run-up to Games may cut visitor numbers - A senior tourism official in Beijing has admitted that a storm of bad publicity surrounding the country in the run-up to the Olympics could reduce the number of foreigners attending the Games.

New aftershocks toppled 420,000 houses and injured dozens in southwest China on Tuesday, heaping destruction and fear on a region struggling to recover from the country's worst earthquake in decades.

May 27 - 28, 2008

Hong Kong: The Hong Kong Monetary Authority and the Dubai International Financial Center Authority have signed a memorandum of understanding to boost cooperation in finance, the Hong Kong Monetary Authority said Monday. The MOU, signed on May 20, sets out the framework agreed between the two organizations regarding cooperation, communication and information sharing in financial development, particularly the development of Islamic finance. They will exchange advice on the development of legal and regulatory frameworks and the standardization and harmonization of relevant standards, promote training and educational programs and facilitate dialogue with Sharia scholars. The two organizations will also explore ways to foster cross- border Islamic finance, including the trading of sukuk, or securities that comply with the Islamic law and its investment principles, and other Sharia-compliant financial instruments. They will also work on the development of payment systems. Technical cooperation and linkages between their financial infrastructure developments are also included in their fields of cooperation. Joint studies on the extent to which each party's financial infrastructure can support financial infrastructure development in the other party's jurisdiction, and workshops, seminars and conferences will also be conducted. Eddie Yue, deputy chief executive of the Monetary Authority, said the agreement marked an important milestone and "will enhance the co-operation between the HKMA and the DIFC Authority, particularly in the development of Islamic finance, which in turn will benefit Hong Kong the international financial center."

Passengers on 11 airlines will have to pay 37 percent more in fuel surcharges because of rocketing oil prices. The Civil Aviation Department has also allowed two other carriers to maintain their current surcharges at the existing levels. A CAD spokesman said passengers who pay for their tickets before this Sunday will not be affected by the increases even if they are traveling after then. Cathay Pacific Airways and Singapore Airlines which currently levy fuel surcharges ranging from HK$125 to HK$518 will from June 1 charge HK$171 to HK$710. Air China, China Eastern Airlines and Shanghai Airlines will raise their charges from HK$125 to HK$171 for short-haul journeys. Air Canada, Air Mauritius and Turkish Airlines will raise their surcharges from HK$518 to HK$710 while Aeroflot will increase its levy from HK$508 to HK$620.

Troubled Sun Hung Kai Properties (0016) chairman Walter Kwok Ping- sheung was removed as chairman of the company at a crunch board meeting Monday.

The government is considering a review of its airline regulatory system in the wake of the collapse of budget carrier Oasis. espite claiming the Oasis case is an isolated one, Deputy Secretary for Transport and Housing Esmond Lee Chung-sin said efforts must be made to guarantee that no airline will suffer the same fate. Oasis, which had been in business 17 months, operated daily flights to London and six flights weekly to Vancouver. It folded last month because it was losing money and there was disagreement among key shareholders. Lee yesterday assured a Legislative Council economic development panel hearing that the current license-granting system is still effective, saying no similar case had occurred before. He said the administration will examine the financial report, business plans and budget of every hopeful airline before granting a license. Lee admitted, however, that it usually takes time for a new airline to break even. "We will consider reviewing the regulatory system to see if there is any room for improvement," he said, adding it will be more cautious in processing new applications for budget airlines.

The Olympics is less than three months away but there is still no sign of a stampede of visitors, the Hong Kong Tourism Board said. Only about 50 percent of the available hotel rooms have been booked for the Olympic month of August, which is even 10 percent less than it was this time last year. Board chairman James Tien Pei- chun confessed yesterday there was nothing the board could do to boost bookings other than continue with the planned promotion activities. Federation of Hong Kong Hotel Owners executive director Michael Li Hon-shing described the bookings as "unsatisfactory." He attributed this to the equestrian events' lack of appeal. "Even [the government] has no idea how many spectators the events could attract," Li said. He said the complicated procedures introduced when applying for mainland visas and the Sichuan earthquake had also lowered the interest of tourists, who may have planned to visit the mainland after the events in Hong Kong. However, Tien is confident total tourist arrivals in August will show a single digit growth when compared with last August, which recorded a 17 percent growth over the previous year. Tien said the board had tried to assess the impact the Sichuan earthquake would have on Hong Kong tourism but could not arrive at a figure. He said tourists from Sichuan accounted for less than 1 percent of the annual total tourist arrivals of 28 million last year. Mainland tourist arrivals between May 13 - the day after the earthquake - and May 25 showed a 25 percent rise on the same period last year. Tien said this was because most tourists made their travel plans before the earthquake struck. Meanwhile, Tien kicked off the HK$32 million promotion called Hong Kong Summer Temptations. Between July 1 and September 21, tourists will get stamps from 18 designated attractions, including the twotheme parks, the Avenue of Stars and The Peak with which they can redeem gifts. Other activities include a lucky draw with prizes worth HK$1.2 million, special retail and hotel offers, free MTR tour guide books and the opening of the Hong Kong Olympic Piazza. Tien also revealed former executive director Clara Chong Ming-wah had not yet refunded the HK$140,000 spent on medical insurance for her family. Executive director Lau Chun-hon has been asked to pursue the matter.

Ocean Park has injected a local flavor into its menu with egg tarts, milk tea, "yuen yang" - a mix of coffee and milk tea - Hainan chicken rice and other local favorites offered at its first cha chen tang, which opened yesterday. Cafe Ocean formerly served western-style buffets, but park chairman Allan Zeman says sales can double with the cha chen tang - an eatery unique to Hong Kong. Zeman is also confident tourists will be interested in the coffee shop and enjoy authentic Hong Kong food. "The menu is geared towards local tastes," he added, "and foreigners will have to adapt to it." The restaurant, with a capacity of 240 , has been redecorated with a 1970s look. Pictures of former top singers like Teresa Carpio hang side-by-side with handwritten menus. Even the music has been fine-tuned, with old-time favorites such as Adam Cheng Siu-chow's The Heaven Sword and Dragon Saber helping digest that egg-tart. Park food and beverage operations manager Stephen Chow Wai-ming said he will ensure the cha chen tang displays the cleanliness and tidiness found in high-end restaurants. "You won't see our waiters with their fingers in your tea as was the case in the old days," he said. Also yesterday, the park announced a one-off 50 percent discount on admission for secondary five and seven students between now and June 30. And on the park program: an exhibition of five sturgeon fish and a summer water party. Zeman noted too yesterday that the caretaker of resident giant pandas Ying Ying and Le Le, He Changgui, was safe, though several of the handlers at the Sichuan Wolong panda reserve were killed when the area was ravaged by the May 12 earthquake.

Henderson Land Development (0012) will invest up to 63 billion yuan (HK$70.79 billion) over the next five years in China as a sign of its confidence in the outlook for mainland property development. Of that amount, 11 billion yuan will be spent in first-tier cities and the rest in nine second-tier cities, including Nanjing, Chongqing and Shenyang. To carry out its expansion plan, the company said it is looking to acquire more land as none has been added to its reserve since August last year. Executive director John Yip Ying- chee said the company will invest up to 10 billion yuan to build an International Financial Center in Shenyang, capital of Liaoning province. The project, with gross floor area of 5.7 million square feet, will generate a 12 percent yield upon completion of the initial phase in 2012. In response to concerns on the possibility of an earthquake hitting the city, Yip said the 89-floor commercial building will be able to withstand any quake measuring up to 8 on the Richter scale. Riding growing wealth and surging property prices in China, Henderson Land has two other projects due to start soon, including a high-end establishment with a gross floor area of 13 million sq ft. This building will cater to both residential and commercial users. Due to the booming development of Shenyang in the heart of northeast China, Yip predicts housing prices to pick up. Henderson Land, controlled by Lee Shau-kee, said last year it expected annual sales in China to reach 10 billion yuan this year. Lee, the third-wealthiest individual in Hong Kong, holds substantial shares in several mainland developers, including Country Garden (2007), whose founder Yeung Kwok-keung has close ties with Lee.

Country Garden Holdings (2007) chairman Yeung Kwok-keung is seeking a syndicated loan of about HK$7 billion to buy Run Run Shaw's stake in Television Broadcasts (0511). ccording to Basis Point, Citigroup is coordinating the loan for Yeung's potential purchase of the TVB stake. More than 10 banks have been invited, each underwriting at least HK$1 billion. The size of the facility is currently set at about HK$7 billion with an initial margin of more than 300 basis points. Invited banks include Bank of China (Hong Kong), Bank of Communications, Bank of Tokyo-Mitsubishi UFJ, GE Commercial Finance, ICBC Asia, Mizuho Corporate Bank, Standard Chartered Bank and Sumitomo Mitsui Banking Corp. Acquiring Run Run Shaw's 26 percent stake in TVB will cost between HK$10 billion and HK$11 billion, a source said. Aside from the syndicated loan of HK$7 billion, Yeung previously borrowed HK$3 billion from Henderson Land Development (0012) chairman Lee Shau-kee. On Sunday, Lee confirmed The Standard report that he had loaned money to Yeung but declined to disclose if the collateral involved was shares in Country Garden or Shaw Brothers (Hong Kong) (0080). Run Run Shaw has a total beneficial interest of 32.49 percent in TVB. He indirectly holds a 26 percent stake in TVB through his 75 percent ownership of Shaw Brothers (Hong Kong). In addition, The Shaw Foundation Hong Kong Ltd holds a 6.23 percent interest in TVB.

Hong Kong is still enjoying strong export growth – with the total value of exports in April rising 14.5 per cent over a year earlier to HK$243.4 billion, latest statistics released on Tuesday showed.

China: China Petroleum and Chemical Corp. (CPCC), the country's largest oil refiner, said it received 7.1 billion yuan (one billion U.S. dollars) in oil subsidies in April. Board chairman Su Shulin released the information at the annual shareholder's meeting on Monday. This followed the 5 billion yuan in government subsidies in 2006, 4.9 billion yuan in 2007, and 7.4 billion yuan in the first quarter this year. The move was part of the government's efforts to compensate the country's big oil refiners in oil refining division and to mobilize their production enthusiasm. In the first quarter this year, the company processed 41.89 million tons of crude oil, an increase of 9.57 percent, said its first-quarter report. However, its refining business saw 20.64 billion yuan in losses during the same period, compared with a profit of 4.38 billion yuan a year earlier.

Chinese President Hu Jintao (L) shakes hands with visiting President Lee Myung-bak of the Republic of Korea (ROK) during a welcome ceremony held in Beijing, capital of China, May 27, 2008. Lee Myung-bak arrived in Beijing Tuesday afternoon, starting a four-day state visit to China. The two leaders jointly met with the press after their talks. China and the ROK have reached agreement that Chinese President Hu Jintao will visit the ROK at a "convenient time" for both sides in the second half of this year. Lee told the press that he will attend the opening ceremony of the Beijing Olympic Games this August. South Korean President Lee Myung Bak starts a China visit today, aiming to boost business with his country's biggest trade partner and dispel the notion he considers it second to traditional allies the United States and Japan. A large delegation of top corporate executives will accompany Lee on his three-day trip, underlining his determination to lift two-way trade from the US$145 billion (HK$1.13 trillion) it hit last year. "The president will talk about activating shuttle diplomacy and expanding substantive cooperation in business and trade," said an official at the Blue House presidential office. South Korean firms are eyeing a greater share of the Chinese market in sectors ranging from telecommunications and autos to construction and retail sales. But although China may push for the start of free-trade talks, Seoul, saddled with a powerful farm lobby, has so far been reluctant to move in this direction. A free-trade deal could create a market for South Korean exporters four times the size of their domestic market, according to some studies. However, officials say it could cost some 10 trillion won (HK$75 billion) in lost business if there were a surge in cheap farm imports, so it would be a risky route for the increasingly unpopular Lee to take just three months into his job. Beijing may be looking to gauge where Lee, who it does not see as a pro-China leader, aims to take ties between the neighbors, said Shin Sang Jin, a China expert at Kwangwoon University in Seoul. "South Korea has put 10 years of effort into cultivating China as a partner," Shin said. "But Lee has been seen as unreservedly pro-US even from his Seoul mayor days. China may be looking for signs that that is changing." The conservative former chief executive and mayor of the capital, who won the presidency by the biggest margin in the country's history in December elections, has seen his public support dragged down by a deal with the United States to resume imports of US beef.

Taiwan's Kuomintang (KMT) Chairman Wu Poh-hsiung(3rd right, front) arrives at the Hong Kong Airport in the Hong Kong Special Administrative Region (SAR), south China, May 26, 2008. Wu transited at Hong Kong to fly to Nanjing, the first stop of his week-long visit to the mainland from Monday.

A Long March-4C launch vehicle carrying the Fengyun-3 (FY-3), the second Olympic weather forecasting satellite, lifts off from the Taiyuan Satellite Launch Center in north China's Shanxi Province at 11:02 a.m Beijing Time. It entered the preset orbit 27 minutes later. Gao Huoshan, general director of the FY-3 research team, said the satellite would send back images with the highest spatial resolution of 250 meters and its temperature sensitivity would reach 0.1 degree Fahrenheit. Both indices were close to the most advanced level of similar satellites in the world. The highest spatial resolution of existing satellites in China had been 1.1 kilometers, according to Gao. "The 250-m resolution images will be of vital significance for censoring global climate changes and possible subsequent natural disasters," said Gao. It would also contribute to key geographical data for the research on aviation, navigation, agriculture, forestry and oceanography, he added. The satellite was equipped with a dozen of advanced detectors such as the infrared scan actinograph and the microwave formatter. It is able to carry out a three-dimensional, all-weather, multi-spectrum quantitative detection to acquire data from the ground surface, the ocean and the space, according to sources with the China National Space Administration. Experts said the data collected by the satellite would not only facilitate weather forecast in China but also in other countries. China Meteorological Administration (CMA), in cooperation with Swedish meteorological authorities, had established a data collection terminal at the north pole to transmit data collected by the FY-3, according to an official with the National Satellite Meteorological Center (NSMC), which is affiliated with the CMA. The World Meteorological Organization had said it would use data offered by China's FY-3, Europe's METOP and US NPOESS to detect changes of the atmosphere, the ocean and the ground surface, said the official. The 2,295-kilogram satellite will provide accurate and timely information about weather changes to facilitate more precise weather forecasts during the Beijing Olympic Games, said a CMA official earlier. The CMA official said the new satellite, with a bigger payload, would provide medium-range weather forecasts up to 10 to 15 days.

China grappled with backed-up rivers and reservoirs in danger of collapse, along with looming storms heralding the start of a rainy season that threatens to compound damage from the country's worst earthquake in three decades. Two weeks after the magnitude 8 earthquake centered in Sichuan province, the confirmed death toll rose to 65,080 yesterday with 23,150 still missing. The government says the death count may exceed 80,000. To fight the flood risk, 1,800 soldiers arrived on foot at the new Tangjiashan lake in Beichuan county, carrying explosives to blast through the debris. The lake is 3.2 kilometers upstream from the center of Beichuan county. Thousands of people who remained there after the initial earthquake have been evacuated. With the clearing of weather that had prevented helicopter flights, heavy equipment was also lifted into the area to help remove debris. But thunderstorms were forecast for parts of Sichuan late yesterday and today, said the China Meteorological Administration, adding they "could increase the risks posed by river blockages in some quake-hit areas." The rains are likely to put more pressure on dams and reservoirs weakened by the quake. The storms herald the start of the summer rainy season that accounts for more than 70 percent of the 60 centimeters of rain that falls on the area each year. The backed-up lake is one of several dozen in Sichuan. In Anxian county, about 50km south of Beichuan, a landslide blocked the Chaping river, submerging Shuangdian village. Residents say the lake has been rising by about 2.5 meters a day. "The water was covering the road, and two days later I could not see the roof of my house anymore," said Liu Zhongfu, a truck driver who built his two-story wooden house himself. Water there was backed up 3.2km along the river, said Wang Li, county Communist Party secretary.

PCCW faces legal threat over fees - CSL has warned PCCW it faces legal action after the fixed-line giant slapped a 25 percent connection fee increase on mobile operators - branding the move an unfair bid to squeeze the industry as its monopoly comes to an end.

Lovebirds rushing to tie the knot in Taiwan - About 5,000 couples from China will get wedding photos taken at Taiwan's world-renowned studios, which seldom receives them now due to political tensions, as part of a travel agreement, an industry source has said. A cultural promotion company close to the Chinese government has agreed with Taiwan's Saromant International Wedding Photo Group chain to send the couples over on direct weekend flights expected to begin in July pending a long-awaited agreement between the two sides, said chain chief Celine Liu. About 20 couples from Beijing have signed up for the first weekend flight, Liu said. Taiwan , with 1,300 wedding studios seeking new business as local clients save their money in tight economic times, is well known among Chinese in Hong Kong, Southeast Asia and the United States for bridal packages which include outfits plus access to natural photo scenery.

May 24 - 26, 2008

Hong Kong: Olympic skeet shooting gold medalist and Sichuan native Zhang Shan yesterday thanked Hong Kong people for their generosity in helping the victims. "Your support makes me feel that when one experiences misfortune, others will give a helping hand," Zhang said. The 1992 Barcelona Olympic champion was in Hong Kong yesterday, along with 2000 Sydney Olympic diving gold medalist Li Na, for a marketing event. "The earthquake ruined the homes of many Sichuan people, but it has united all Chinese. The strength of Sichuan people will inspire Chinese athletes to do even better in the Beijing Olympics," she said. The earthquake struck when she was driving in Chengdu last Monday. She only thought the vibrations were due to the bumpy road. "I saw a lot of people running around in the street looking very scared. Everyone tried to make calls but the phones were disconnected. All the girls were crying." She is confident the Olympics will not be negatively impacted and that it would be staged even better because the entire country is backing the Games. Also at yesterday's event at the APM Shopping Mall in Kwun Tong was this year's bun-tower climbing champion Lai Chi-wai. The 25-year-old rock climber said although climbing is not yet an Olympic event, he hopes he can coach Hong Kong representatives when it becomes one in the future. Meanwhile, a poker tournament, being held in Macau from today to Sunday, is aiming to raise HK$1 million for the Macau Red Cross. Organizers have already raised HK$160,000 from online players.

Hong Kongs inflation rate surged by 5.4 percent last month over a year earlier on rising food and fuel costs, beating market expectations. Economists said inflation in the near future will continue to increase as the Sichuan earthquake will drive food prices even higher. The inflation number suggests the underlying trend will remain upwards, but inflation is not out of control, said Citi senior economist Joe Lo. High food prices, a weak Hong Kong dollar and yuan appreciation will force inflation to rise further. In the next one to two months, headline inflation will continue to stay above 5 percent. The consumer price index figures, released yesterday by the Census and Statistics Department, showed the surge in inflation at a 5.4 percent pace was substantial when compared with 4.2 percent in March. The surge is due partly to a lower base, as the CPI fell in April last year when the government waived rates. Excluding this distortion, the inflation rate rose modestly to 5.4 percent last month from 5.3 percent in March, said Lo. Among the various CPI components, food prices surged the most with a 19.4 percent increase from a year ago. Hang Seng Bank (0011) senior economist Irina Fan said food prices will accelerate further in the next two months because of the earthquake. Hang Seng is revising its forecast for average inflation this year from 4.6 percent to above 5 percent. DBS Bank (Hong Kong) senior investment strategist Daniel Chan Po- ming estimated inflation could 7 percent by the end of the year. Citi's Lo said that inflation may ease in the second half. "Headline inflation in the second half will average 4 percent due to fiscal measures and slower economic growth," he said. Financial Secretary John Tsang Chun-wah said he is aware of the extra burden price rises place on low-income earners and that some of the relief measures will be implemented in July.

The Hong Kong Jockey Club is sparing no expense in its meticulous planning for the Olympics this August, pouring HK$22 million into its dressage and jumping arena at the Hong Kong Olympic Equestrian Venue in Sha Tin.

The High Court refused to grant an injunction to chairman of Sun Hung Kai Properties Walter Kwok Ping-sheung to prevent an attempt by his brothers to force him out of the company.

The Hospital Authority will introduce measures from June 1 to curb the high turnover rate of nurses in public hospitals. The measures, which will cost the authority HK$140 million, are expected to take a year to complete. One proposal is for the reopening of two schools in September and October at Tuen Mun Hospital and Caritas Medical Centre to train registered and enrolled nurses. The schools can train a combined total of 480 nurses. At present only two nursing schools, one at Queen Elizabeth Hospital and the other at Kowloon Hospital, are operating. The Hospital Authority's director for cluster services, Cheung Wai-lun, said 690 nursing graduates were expected to enter the workforce in the 2008-09 financial year, compared with only 600 the previous year. In 2007-08, there was a record high dropout rate of 4.5 per cent of 19,400 nurses working at authority hospitals. The second-highest dropout rate was recorded in 2003-04 after the severe acute respiratory syndrome outbreak, with 4.4 per cent. Susie Lum Shun-shui, the authority's chief manager of nursing, said gynaecology, intensive care, paediatric and medical wards recorded the highest dropout rates. Another authority proposal to be implemented is the addition of a senior clinical position called the nurse consultant post. The new post is equivalent to the existing rank of senior nursing officer, with a salary in the range of HK$47,485 to HK$59,580. Furthermore, the authority also plans to offer six-year contracts to registered nurses who have completed a three-year contract, providing job security. As well, nurses with six years' experience would qualify for a permanent position if they received three good performance reports. This proposal aimed to show nurses working in the public sector and people considering joining the profession that there were good career prospects within the health sector, Dr Lum said. Another measure would promote 400 registered nurses to the more senior advanced practice nurse level, he said. The authority will also increase pay for advanced practice nurses, who are responsible for the management of wards and units. Some of these measures were proposed in March and authority nurses were able to comment on the proposals in a consultation. In the meantime, the authority will set up more 24-hour pharmacies in hospitals aiming to reduce nurses' workload. Dr Cheung hoped all the measures would help reduce the dropout rate of nurses.

China: The death toll in China's major earthquake increased by 4,589 to 55,740 as of Friday noon, according to the Information Office of the State Council. And 292,481 people were injured and 24,960 missing in the 8.0-magnitude quake that jolted southwestern Sichuan Province on May 12. Meanwhile, 11.37 million quake survivors were relocated, the office said. The Ministry of Health said that 3,451 people injured in the quake had died in hospitals as of Friday noon. The hospitals have taken in 73,939 injured people since the quake. By noon on Friday, 38,683 people had been treated and discharged while 28,377 were still being treated, the ministry said. Meanwhile, 3,428 patients have been transferred outside of Sichuan for further treatment and 86,517 medical staff from the country over were working in the quake areas. Power supply restored in most part of quake-hit areas, with Beichuan county, one of the worst hit places, and Hongyuan county remaining black out. Lixian county had seen electricity cut off again due to aftershocks, while power had fully restored in Jiuzhaigou, a tourist attraction, the State Electricity Regulatory Commission said in a statement.

China, Russia ink joint statement - President Hu and Russian Prsident Medvedev on Friday signed a joint statement outlining their positions on major international issues.

Temporary housing built for residents affected by an earthquake is seen in Dujiangyan, west of Chengdu, Sichuan Province May 22, 2008. Local authorities in earthquake-hit areas were requested to build 1 million temporary homes by August 10 to accommodate quake victims of the May 12 earthquake.

The central government has kicked off a long-awaited overhaul of the world’s largest telecoms industry, orchestrating a series of leadership changes and directing the parent of China Mobile (SEHK: 0941, announcements, news) to take over a smaller rival, sending telecoms stocks soaring on Friday. China Mobile would take over fixed-line peer Railcom while absorbing executives from rivals, the opening act of an overhaul that was likely to culminate in fixed-line operator Netcom merging with wireless player Unicom (SEHK: 0762, announcements, news) , analysts and a source briefed by top management at one of the firms said. Sources with direct knowledge of impending moves said the government was also orchestrating management changes at the country’s other telecoms providers, including moving Unicom’s president, Shang Bing, to fixed-line leader China Telecom (SEHK: 0728) as its party boss. A sector revamp could unleash billions of dollars in spending for gear-makers such as Motorola and Nortel as newly merged firms expand networks to compete, and leave the mainland with three giants offering wireless and fixed-line services. “The next step will be a reshuffle of Unicom and Netcom,” said DBS Vickers Securities analyst Steven Liu. “Looking at the management changes ... it’s most likely the reshuffle will regroup five firms into three.” China Telecom and Netcom will benefit if they gain entry to a fast-growing wireless market with about 575 million subscribers - more than the combined populations of the United States, Japan Britain and Germany - and where China Mobile has a two-thirds share. Shares in Unicom, China Mobile’s sole rival, and Netcom jumped 11 per cent to 12 per cent before they were suspended from trade. China Telecom rose 7 per cent. In Shanghai, China United Telecommunications, part of the Unicom group, gained 5.1 per cent before it was suspended. China Mobile closed down 3.8 per cent as competition fears weighed. Market watchers were initially sceptical as a restructuring had been discussed and debated over the past three to four years. An overhaul of the sector, dominated by four players that have evenly split mobile and fixed-line services, precedes the issuance of licences to offer faster third-generation services - a potential boon for global equipment vendors. But analysts said it could be at least a year before the central government gave out 3G operating licences. “The additional spending will come from 3G, but that’s still years away,” Gartner research director Sandy Shen said. For users, allowing three providers offers more choice as the country moves toward adopting 3G technology, which enables faster wireless internet access and multimedia streaming. “It’s good news for consumers. With more products, lower telecoms fees are inevitable,” said Richard Wu at consultancy Analysys. For now, investors will need to grapple with the specifics of a government blueprint that begins with personnel changes, moves on to policy, and culminates in acquisitions that will likely link investment banks, government officials and corporations. The central government had already decided to merge Netcom and Unicom, a source briefed by top management at one of the firms but not authorised to speak to press said, creating a full-service provider to compete directly with China Mobile. Analysts said Unicom might end up selling one of its networks, which ABN Amro valued at HK$40 billion, to China Telecom as part of an eventual deal. The parent of China Mobile will take over Railcom, a nationwide fixed-line carrier, Railcom spokesman Guo Xiaozhao told Reuters. The firm will continue to operate as an independent firm, but a fully owned unit. China Mobile chairman Wang Jianzhou will head the combined company. China Mobile would also take in Zhang Chunjiang, chairman of Netcom, the smaller of the mainland’s two fixed-line carriers, as its new party boss, Xinhua said, a political appointment. Li Zhengmao, a Unicom vice-president, would be vice-president at the larger company, Xinhua said, adding that Netcom senior vice-president Zhang Xiaotie also joined China Mobile. A China Telecom source said the firm would issue a statement later on Friday that would touch on personnel changes. A source with listed China Mobile said its parent was working on a separate announcement, without elaborating. China Railway (SEHK: 0390) Communication has assets of 42.4 billion yuan (HK$47 billion) and employs 72,000 staff across China. The firm grew revenue 7 per cent to 16.6 billion yuan last year, but profit plunged 96 per cent that same year to 10 million yuan because of heightening competition, Railcom’s Mr Guo said.

May 22 - 23, 2008

Hong Kong: Billionaire investor George Soros said the "acute phase" of the global credit crisis is over, and the fallout will lead to recessions in the United Kingdom and the United States.

Trade between the Chinese mainland and Taiwan reached 43.91 billion U.S. dollars in the first four months of this year, up 21.7 percent year-on-year, according to the Ministry of Commerce (MOC) on Wednesday. The mainland's exports to Taiwan reached 8.17 billion U.S. dollars and imports from the island reached 35.74 billion U.S. dollars, up 16.9 percent and 22.8 percent, respectively. the MOC's figures showed. During the same period, the mainland attracted investment from Taiwan in 731 projects, down 36.9 percent, while the actual use ofT aiwan investment reached 650 million U.S. dollars, up 29.6 percent. As of the end of April 2008, cumulative investment from Taiwan in the mainland totaled 46.41 billion U.S. dollars in 75,877 projects. The figures date back to 1988, when mainland-Taiwan trade opened up.

Trade between the Chinese mainland and the Hong Kong Special Administrative Region (HKSAR) reached 62.98 billion U.S. dollars in the first four months of 2008, up 9.3 percent year-on-year, statistics from the Ministry of Commerce (MOC) showed. The mainland's exports to the HKSAR reached 58.57 billion U.S. dollars, and imports from the HKSAR reached 4.41 billion U.S. dollars, up 8.5 percent and 20.5 percent, respectively, according to the MOC. The mainland attracted direct investment from the HKSAR in 4,548 projects, up 6.7 percent, and the actual use of Hong Kong direct investment reached 15.1 billion U.S. dollars, up 113.7 percent.

Trade between China's mainland and the Macao Special Administrative Region (MSAR) reached 630 million U.S. dollars in the first quarter of 2008, a 2-percent rise year-on-year, according to the Ministry of Commerce (MOC). The mainland's exports to Macao totaled 570 million U.S. dollars, up 2.8 percent, while imports from Macao fell 4.3 percent to 60 million U.S. dollars, the ministry said. The mainland attracted direct investment from the MSAR in 99 projects in the first three months, down 44.7 percent, and the actual use of Macao direct investment reached 200 million U.S. dollars, up 18.6 percent year-on-year. As of the end of March 2008, direct investment of the MSAR in the mainland totaled 7.86 billion U.S. dollars in 11,652 projects. These figures are cumulative since 1978, the year of the opening up of trade between the mainland and Macao. The actual use of the MSAR's direct investment in the mainland accounted for 1 percent of all actually used direct investment from outside the Chinese Mainland.

Jet Li takes part in relief work in quake-hit Sichuan - Renowned kung fu star Jet Li arrived in Chengdu on May 17 and took part in relief activities for the May 12 quake mainly hitting Sichuan. The One Foundation Project, initiated by Jet Li in 2007, has raised 42.7 million yuan for quake relief by noon of May 17.

Bus passengers will have to dig deeper into their pockets from next month but the bus companies say its not deep enough. The new fares with hikes between 2 percent and 7.24 percent are effective from June 8. About 85 percent of passengers will have to pay an extra 40 cents a trip, Secretary for Transport and Housing Eva Cheng Yu-wah said after yesterdays Exco meeting that approved the hikes. But a government source told The Standard that fares of most daily routes will rise by 70 cents, with 88 percent of KMB passengers paying an extra 40 cents.

Debate rages on police station spruce-up plan - A HK$1.8 billion facelift for the old Central police station site has the support of most sectors of the community but not local residents and district councilors, according to the findings of a six-month consultation process.

Shares of Asia Cement (China) Holdings (0743) rose 39 percent to close at HK$6.89 on its trading debut yesterday. "The good performance of Asia Cement is due to the rising demand for cement after the recent Sichuan earthquake," said CASH Financial Services Group (0510) director Horace Kwan Pak-leung. The cement maker opened at a high of HK$8, up 62 percent from its IPO price of HK$4.95. During the day, the shares managed to trade above the offering price, fluctuating between HK$8 and HK$6.55. About 190 million shares changed hands, translating into a turnover of HK$1.34 billion. Asia Cement is the ninth mainboard listing in Hong Kong this year, excluding companies switching to the mainboard from the second-board Growth Enterprise Market. Among these nine, the shares of five companies plunged on trading debut to close below their offering prices. "Upcoming initial public offerings are unlikely to show a similar performance to Asia Cement. This is only an individual case. In fact, the response for Asia Cement was not that encouraging before the earthquake," said Kwan. Meanwhile, Shandong Chenming Paper Holdings, which is already listed on the stock exchanges of Shenzhen and Shanghai, will list in Hong Kong on June 18. "Chenming Paper is likely to have its roadshow from May 26 to June 10. The retail book may begin on June 3 or 4," said a source. Chenming Paper and A8 Digital Music will both conduct their investor luncheons in Hong Kong next Tuesday. Chenming Paper is seeking to raise about HK$4 billion by selling 409 million shares, including a greenshoe option. A8 is pitching for a maximum of HK$220 million by selling 91 million shares at between HK$1.66 and HK$2.38. The retail book of A8 will be open from June 2 to 5, while its trading debut is set for June 12.

China: Chinese Premier Wen Jiabao announced here on Wednesday the central government will allocate 70 billion yuan (10.14 billion U.S. dollars) this year for the establishment of a reconstruction fund for the quake-hit regions. He also pledged to arrange funds for the reconstruction in next two years.

A senior official on Tuesday reiterated the government's call for more tents to shelter an estimated 5 million people left homeless by the May 12 earthquake. About 280,000 tents have been dispatched to the quake-hit areas, but they are far from enough, Jiang Li, vice-minister of civil affairs, told a press conference held by the State Council Information Office on the progress of relief work. The ministry has ordered 700,000 tents from factories, which are working at full capacity to meet demand, she said. Meanwhile, 1 million temporary shelter units will be built within three months, the disaster-relief headquarters of the State Council said in a statement on Tuesday. The government is setting up temporary housing for quake victims unable to find shelter with relatives or friends, but there is a "desperate need for tents" to accommodate them, said Jiang. She said the government has purchased enough materials to make 800,000 makeshift sheds and is pressing for the construction of mobile homes. "We will do our utmost to ensure that homeless people find a place to live." The government will procure and deliver more tents and awnings to quake-affected provinces, the State Council's earthquake relief headquarters agreed at a meeting on Tuesday. The meeting, presided over by Premier Wen Jiabao, planned to collect 40,000 tents to distribute in disaster areas before the end of May and send 30,000 tents each day afterwards along with a total of 800,000 awnings in June. Tents and awnings have been reported as the most wanted materials by more than 110,000 military and civilian rescuers. All forms of transport have been told to give priority to tent and awning shipments. Wen pledged to transport 6,000 units of temporary housing to the quake areas in the next two days, 250,000 units by the end of June and 1 million units within three months. He also urged the Water Resources Ministry to send experts to dams and reservoirs in quake-hit areas for 24-hour patrols since the weather forecast is for heavy rains in the next 48 hours. Jiang also said on Tuesday that the government will ensure that the survivors have food, drinking water and tools to start the reconstruction of their homes. "Even after generous donations, the disaster is so great that victims still face a challenge finding accommodation," she said. To ensure donations reach the quake-hit regions timely, the authorities have imposed rigid rules to make their disbursal "effective and transparent". Donations reached 13.9 billion yuan ($2 billion), with 12.5 billion yuan in cash and 1.4 billion yuan in relief materials by Tuesday noon, according to the State Council Information Office. Apart from tents, 783,984 cotton-padded quilts, 1,783,600 items of cotton-padded clothes and food and drinking water worth 218 million yuan have been sent to the disaster areas, the Ministry of Civil Affairs said. The ministry, along with the Ministry of Finance and the National Audit Office (NAO), will jointly supervise the use of donations, Jiang said. The NAO pledged last week it would audit the use of cash and goods to ensure resources were strictly managed and used properly. The Ministry of Civil Affairs is making public the allocation of the donations every day, Jiang said. But she added that as grass-roots governments are still focusing on rescuing lives and accommodating the relocated people as "they need time to publicize their use of the donations". Pang Chenmin, deputy director-general of the disaster-relief department at the Ministry of Civil Affairs, said that all organizations receiving donations are banned from levying "administrative or operational fees". "I assure you we will efficiently and completely deliver your donations to the quake-stricken areas," said Pang. "We also welcome the public, including the media, to supervise the use of donations," he said.

Chinese Foreign Ministry spokesman Qin Gang Tuesday briefed reporters on the latest aid provided by the international community and reiterated China's gratitude to international condolences and aid over the deadly earthquake in Sichuan Province. "All the international condolences and aid have fully shown the friendly affection of these foreign governments and peoples toward the Chinese people and their noble humanitarian spirit," Qin said. So far 166 countries and 30 international organizations have expressed condolences to China and international aid has been coming in, he said. Flags of more than 100 foreign embassies and offices of international organizations in China flew at half-mast during China's three-day national mourning from Monday to Wednesday, and foreign diplomats and international representatives to China came in an endless stream to the Foreign Ministry to mourn, according to Qin. He said the rescue teams sent by Japan, Russia, the Republic of Korea and Singapore to the quake-hit southeastern part of China have worked against time, difficulties and danger in the quake relief, which showed their respect for lives and their high professional level and had deeply moved the Chinese people. "We are sincerely grateful to the four countries' governments, peoples and rescuers," Qin said. In response to a Japanese journalist's question, Qin specially thanked Japan which was the first country to send a rescue team to Sichuan, saying the hard work of the Japanese rescuers was extensively known by the Chinese people. China has also agreed to accept medical teams from Germany, Italy, Russia and Japan to go to the quake-hit area and would consider accepting more foreign medical teams according to the medical aid progress in the quake-hit area, said Qin.

Members of Japanese medical team walk to board at the Narita airport in Chiba Prefecture, Japan, May 20, 2008. A 22 member Japanese medical team flew to Chengdu, capital of the quake-hit southwest China's Sichuan Province on Tuesday.

Members of Russian medical team unload relief materials from a chartered plane carrying a Russian medical team in Chengdu, capital of the quake-hit Sichuan province, May 20, 2008. Along with the team arrived a mobile hospital, vehicles and relief materials. Another 36-tonnes of humanitarian assistance materials from Russia will arrive in the city on Tuesday afternoon including medicines weighing 7 tonnes.

Britain prioritizes China as a top collaborator in its national innovation development. According to the British Embassy to China, the British government white paper called Innovation Nation, the blueprint of the country's innovation strategy, highlights the continued engagement with the emerging economies of China, Brazil and India to realize the strategy. The Chinese language version of the strategy was released formally on Monday at a forum in Shanghai, where British Embassy Science and Innovation Counsellor David Concar said that China and the UK are both making it a priority to create innovation-oriented societies. The aim of the new UK strategy is to create a nation in which innovation flourishes across every area of the economy and at every level of society. The UK hopes innovation will play a key role in addressing some bigger global challenges like global warming and sustainable development. In line with the new innovation strategy, the UK has created a new public body to carry forward many key initiatives aimed at bringing together companies, academics and other key players in the UK's innovation system. The new body, the Technology Strategy Board, will have an annual budget of around 1 billion pounds (RMB14 billion).

The death toll in China's major earthquake increased by 1,278 to 41,353 as 12 p.m. Wednesday, according to the State Council Chinese mainland.

Donations related to quake made less taxing - China's tax authority has cut or waived a tax levy, offered a tax refund, and reiterated the tax concession on donations related to the earthquake in Sichuan Province as means of helping to support victims.

May 20 - 21, 2008

Hong Kong: Hong Kong came to a standstill at 2.28pm yesterday and for three minutes its seven million people remained silent, their silence broken only by the sound of car horns and the moaning of fog horns from ferries and ocean vessels in the harbor. The silence was Hong Kong's response to Beijing's call for a three-day mourning period for the victims of the Sichuan earthquake. A similar silence was observed in Macau. Chief Executive Donald Tsang Yam-kuen and his Cabinet, all dressed in black, faced the flags at half staff at SAR government headquarters. Tsang, a Catholic, made the sign of the cross at the end of the tribute. Flags on all government buildings and schools and many commercial buildings were at half staff yesterday and will remain so until tomorrow. Customs and Immigration services such as automatic e-channels at all control points stopped for three minutes. The only activity was tourists walking to join the queues at the airport immigration counters. The big TV screen at Times Square attracted more than 800 white-collar workers and tourists despite the rain, with all standing silent and somber. All were touched by what they saw on the screen. "Life is precious. It is a blessing to be alive," said an elderly man in tears. A British tourist surnamed Baker praised Beijing's efforts. Many vehicles responded to the calls to sound their horns. All MTR trains sounded horns for 10 seconds and announcements were made at all stations reminding passengers to observe the silence. The fog horns and whistles from ferries and ships echoed on both sides of the harbor. "My heart aches as if my family members are dying," one passer-by at Tsim Sha Tsui Ferry pier said. Many schools held assemblies for students. Many entertainment venues are observing the three-day mourning period - Silver Theater in Kwun Tong has stopped screening until tomorrow; the singing stopped at karaoke chain California Red for three minutes; the Jockey Club canceled the race at Happy Valley tomorrow night. At Disneyland and Ocean Park, all rides were suspended. Disneyland visitors were invited to join cast members in observing the silence, and the evening fireworks were canceled. Ngong Ping 360 stopped for three minutes. The Symphony of Lights was also canceled. All Television Broadcast artists and staff attended a mourning ceremony in Studio One. Many large corporations in Hong Kong also held their mourning sessions. Li Ka-shing's flagship companies, Cheung Kong Holdings and Hutchison Whampoa, flew their flags at half staff while some departments gathered employees to mourn in silence. Chairman Ronald Arculli and chief executive Paul Chow Man-yiu officiated on the trading floor of the stock exchange in the afternoon, with some traders taking off their red-vest uniforms to show their grief. Hang Seng Bank, Bank of East Asia and Bank of China (Hong Kong) suggested employees mourn at their desks, but counter services were not affected. The Chinese Gold and Silver Exchange Society also observed a minute of silence. Before the Legislative Council's constitutional affairs panel meeting began in the afternoon, Secretary for Constitutional Affairs Stephen Lam Sui- lung, president Rita Fan Hsu Lai-tai, lawmakers, staff and visiting students marked the occasion in the car park. Central Government Liaison Office director Gao Siren led his deputies in bowing in memory of the dead. The Office of the Commissioner of the Ministry of Foreign Affairs has arranged one hall for visitors and diplomats to offer their condolences in a book. Diplomats from Australia, Mexico, Canada and Kuwait have signed in already. The United States consulate-general along with the embassy in Beijing and all other consulates-general in the mainland flew their flags at half staff. In Macau the national and regional flags at all government agencies were also flown at half staff, with Chief Executive Edmund Ho Hau-wah and his ministers leading. In some casinos, including the Galaxy and The Venetian, gambling stopped for three minutes. Over 10,000 people at Tiananmen Square in Beijing sang the national anthem, shouted encouragement to those in Sichuan and waved national flags. The Democratic Alliance for the Betterment and Progress of Hong Kong is hosting a memorial service tomorrow night at Chater Garden, Central.

Hong Kong-born Jackie Chan (L) and Emperor Group chairman Albert Yeung Sau-shing have contributed 10 million yuan. Chinese entertainment stars are opening their hearts and wallets to help victims of Sichuan's May 12 earthquake.

NEW YORK, May 18 - More than 200 Chinese American entertainers staged a benefit performance here Sunday afternoon raising more than 106,000 U.S. dollars for victims of China's May 12 earthquake. The performers, including singers, musicians, martial arts practitioners and a competitor in this year's local beauty queen contest, endured showers during much of the five-hour event. "None of the performers changed their appearance because of the rain," said Richard Li, one of the event's organizers. Organizers were able to pull off the benefit performance in just three days, thanks to a tremendous outpouring of sympathy and support from the local Chinese community, Li said. All logistics and services, including the venue, the audio systems and other supplies, were provided for free. One of the anchors at the event broke into tears time and again, especially when she saw children offer their piggy-bank dollars to the quake victims. "How I wish those children in the quake-stricken areas were as happy as you are," she sobbed. Many of the more than 32,000 people who perished in the earthquake were children. Many had teary eyes at the event, including Peng Keyu, the Chinese consul-general in New York. Diplomats at the Consulate General have been working overtime over the past few days helping Americans, both of Chinese and other ethnic background, donate to the quake victims. Hundreds of checks have been sent in daily, Peng said, some from people visiting the visa office. Ellen Young, a Taiwan-born New York State Assemblywoman, read two letters, one to the Standing Committee of Sichuan Provincial People's Congress, the other to the Sichuan Provincial Government, in Sichuan dialect, expressing sympathy for and solidarity with the Chinese people. "I am sure that people in the disaster-stricken area will, proceeding from the Chinese nation's spirit of perseverance in hard times, pass the period of difficulty soon," Young said. The assemblywoman said she would propose establishing a sister state-province relationship between New York and Sichuan so as to better help the quake-hit province's reconstruction efforts. Near the benefit performance's venue outside Flushing Mall, in Flushing, home to one of New York's largest Chinese communities, many local Chinese organizations continued collecting donations for quake victims despite the rain. Lily Costa, a Sichuan native, has been collecting donations since Tuesday, one day after the 8.0-magnitude quake. The nine-member family of her stepmother's brother was in Beichuan near the epicenter; only three survived.

Country Garden (2007) chairman Yeung Kwok-keung is the front-runner in the bidding for Run Run Shaws indirect stake in Television Broadcasts Ltd (0511), sources told The Standard, after he secured HK$3 billion in financing from Lee Shau-kee, top left, that gives him a clear edge over the other suitors.

A lawmaker has called on the government to update its construction noise- control laws as government data show there has been no improvement in recent years. However, a representative of the construction industry maintains the ear- splitting decibels with which residents are bombarded six days a week are the price that must be paid for economic development. General construction work between 7am to 7pm from Monday to Saturday is not subject to any controls. But the early start-time has become the subject of complaints, especially following the introduction of the government's five-day working week last year. IT programmer Trupiti Patel, 26, is one of those unable to bear the noise. He does not finish work until 9pm and goes to sleep around 1am but is awakened early due to the noise. "I have been disappointed by the government's response. They say the developers are allowed to work at these times. But we have to change the times because this is not acceptable. The people are being ignored at the expense of development," Patel said. He urged the government to change the regulations so that construction work starts at 8.30am and is restricted to half-a-day on Saturday. Lawmaker Choy So-yuk called for the Noise Control Ordinance introduced in 1989 to be amended. She said the ordinance was brought in to restrict percussive piling, which is no longer commonly used due to advanced technology. Choy said construction companies could carry out less noisy chores between 7am and 9am. "Different professions require different work patterns and we must amend the laws to suit these needs," Choy said. But Nicholas Yeung Shu-yan, chairman of the Construction Industry Institute and a member of the Provisional Construction Industry Co-ordination Board, believes the noise is a price the city must pay for its economic development. "I do not think construction noise is that much of a problem. People are more concerned with pollution," Yeung said. "We have to bear this in a way because of the prosperity of the city." The Environmental Protection Department received 1,248 noise-related complaints in 2007, 1,316 in 2006 and 1,106 in 2005. Forty-seven firms were prosecuted in 2005 and 50 in 2006, with fines imposed of up to HK$120,000. The department has reduced percussive piling times to three to five hours a day and general construction noise must be below a range of 45 to 70 decibels.

Billionaire investor Lee Shau-kee said his investment strategy will switch to aggressive from defensive in August, and he forecasts the Hang Seng Index to hit 30,000 by that time. "The present moment might not be a good chance to enter the market. As I mentioned before, the right chance to buy more stocks is when [the Hang Seng] is at about 22,000," Lee told reporters yesterday after the annual general meeting of Hong Kong and China Gas (0003). Lee said the market will be "quiet" in summer, when stocks' performance tends to be unsatisfactory. "I will rather be defensive instead of aggressive," he said. Lee expects the blue-chip index will hover around 27,000 in the summer. "The investment environment will improve in August. When opportunities come, I will invest more." Recently, Lee added Datang Power (0991) to his long-term investment portfolio, which also includes CITIC Pacific (0267), Country Garden (2007) and China Overseas Land (0688). "They are not alright [for reaping profits] in the coming few months. You've got to hold these stocks for two to three years," he explained. Meanwhile, Lee sees continuing weakness in the US dollar in the coming 12 months. "Three years ago we already converted the currency of our assets into the Australian dollar when it was at about 70 US cents. With the Aussie dollar having increased to about 95 US cents, the value of our assets has risen about 30 percent," said Lee.

Hong Kong and China Gas (0003), better known as Towngas, said it will spend about HK$3 billion annually over coming years in emerging energy projects and pipeline construction.

Taiwan's new President Ma Ying-jeou called on Tuesday in his inauguration address for a resumption of dialogue with the mainland aimed at bolstering ties and ensuring regional peace. Taiwan swears in a new president today who promises a clean break with his predecessor's confrontational stance toward the mainland. The soft-spoken Ma Ying-jeou contrasts sharply with the combative outgoing president, Chen Shui-bian. Ma has pledged to reinvigorate Taiwan's sluggish economy and stabilize relations with Beijing. Chen pushed policies that, if taken to their logical conclusion, would have led to an independent Taiwan. The policies angered Beijing along with Washington, which saw risky brinkmanship. Ma favors cooperation. He wants to hitch Taiwan's economic wagon to the mainland boom and sign a still- undefined peace treaty with Beijing. "Taiwan in the future will be a responsible stakeholder, meaning a peacemaker instead of a troublemaker," he said last week. Even before taking office, his vice president met with President Hu Jintao on Hainan island and won agreement to allow a major expansion of mainland tourist traffic to Taiwan. They also discussed direct flights.

Chief Executive Donald Tsang Yam-kuen on Tuesday announced a list of eight under secretaries – who will rank as deputy bureau directors and support the bureau secretaries. Mr Tsang discussed the new positions at a press conference at the Central Government Office. “The new under secretaries are drawn from the financial, legal and medical professions, as well as academia and the media,” he explained. Mr Tsang said they would assist bureau secretaries in implementing government policies. “The appointments mark a key milestone in Hong Kong’s development of its accountability system. The appointees will assist the respective bureau secretaries in implementing my policy blueprint and agenda to better serve the community,” Mr Tsang explained. “I am confident that they will work closely as a team with the bureau secretaries and other civil servants in serving Hong Kong,” he added. Mr Tsang said the process for appointing additional political appointees is still under way. Further announcements on the remaining posts of under secretaries and political assistants would be made later. The under secretaries are chosen under the political appointment system on non-civil service terms for the period until June 30, 2012. The eight appointees are: Under Secretary for Commerce and Economic Development, Gregory So Kam-leung; Under Secretary for Constitutional and Mainland Affairs, Raymond Tam Chi-yuen; Under Secretary for Education, Kenneth Chen Wei-on; Under Secretary for the Environment, Dr Kitty Poon Kit; Under Secretary for Financial Services and the Treasury, Julia Leung Fung-yee; Under Secretary for Food and Health, Gabriel Matthew Leung; Under Secretary for Home Affairs, Florence Hui Hiu-fai; and Under Secretary for Transport and Housing, Yau Shing-mu.

China: Rescuers had reached all the 1,044 quake-hit villages that are under 134 townships in southwestern Sichuan Province by Tuesday evening, according to a military source. Soldiers and armed police are still trying to rescue survivors from the debris and bring food and water to villages that have been isolated since the earthquake, the source said. At a meeting on Monday afternoon, Premier Wen Jiabao asked the armed force to reach victims in every quake-hit village within 24 hours. The rescuers will carry a certain amount of food and water and the army will keep air-dropping necessities to remote villages amid deep mountains, said Guo Boxiong, vice chairman of the Central Military Commission, who was overseeing rescue work at Yinghua township, Shifang city, Sichuan Province. Medical workers will arrive at villages together, he said. The armed forces will also set up mobile field kitchens at large-scale temporary shelters to provide hot meals to residents, Guo added.

Chinese banks have offered 2.99 billion yuan (429 million U.S. dollars) of loans for reconstruction work in the earthquake-hit areas in Sichuan Province as of yesterday noon, the top banking regulator said. The China Banking Regulatory Commission also said yesterday on its Website that banks and their employees have donated 750 million yuan to the quake-hit area. The destructive 8.0-magnitude quake hit the province on May 12 and so far the death took has reached more than 34,073 lives as yesterday noon. Industrial & Commercial Bank of China, the country's largest bank, plans to grant over 10 billion yuan of loans to the relief work, the regulator said. More than 90 percent of banking outlets have resumed operations in Sichuan. ICBC allocated 100 automatic teller machines to the province to smooth cash withdrawals in the quake-hit area. Up to May 15, 589 outlets of the bank have resumed operations, representing 91 percent of its network in the province. The Chengdu Branch of the Export-Import Bank of China also signed credit contracts worth 600 million yuan with three Chengdu-based companies for quake relief on Sunday. More than 90 percent of banks' outlets resumed operations on May 16 even though some are just "tent banks" as employees work to offer basic financial support in the severely hit area. The People's Bank of China offered more credit support to the quake-hit area to ensure ample cash supply in the area. The central bank gave loans of 1.5 billion yuan to its Chengdu branch to ensure rural cooperatives have an adequate supply of credit in the quake-hit area, while another 1 billion yuan was offered to Chengdu and Mianyang City, the central bank said on its Website yesterday. The central bank said last Wednesday it decided to offer credit worth 5.5 billion yuan - 3.3 billion yuan of credit to Sichuan Province and 2.2 billion yuan of credit to Gansu Province - to ensure cash supply in the disaster area.

Senior Chinese leaders including Hu Jintao, Wu Bangguo, Wen Jiabao, Jia Qinglin, Li Changchun, Xi Jinping, He Guoqiang and Zhou Yongkang mourn during a silent tribute to the dead in the earthquake hitting southwest China's Sichuan Province, in Beijing, capital of China, May 19, 2008. Former President Jiang Zemin also stood in silence, separately, while Li Keqiang, another senior Chinese leader, observed the period of silence in Beichuan County of Sichuan on May 19.

Chinese people mourn for quake victims during a silent tribute at the Chinese Embassy in Singapore May 19, 2008. China began on May 19 a three-day mourning for the victims of the 8.0-magnitude quake hitting southwest and northwest China on May 12.

Soldiers mourn during a silent tribute at the rescue site in Yinhua town of Shifang, southwest China's Sichuan Province, May 19, 2008. China began on May 19 a three-day mourning for the victims of the 8.0-magnitude quake hitting southwest and northwest China on May 12.

Medical workers with Renmin Hospital of Guilin mourn during a silent tribute in Guilin, southwest China's Guangxi Zhuang Autonomous Region, May 19, 2008. China began on May 19 a three-day mourning for the victims of the 8.0-magnitude quake hitting southwest and northwest China on May 12.

Citizens and tourists mourn during a silent tribute in Tian'anmen square in central Beijing, capital of China, May 19, 2008. China began on May 19 a three-day mourning for the victims of the 8.0-magnitude quake hitting southwest and northwest China on May 12.

People mourn during a silent tribute in Xining, capital of northwest China's Qinghai Province, May 19, 2008. China began on May 19 a three-day mourning for the victims of the 8.0-magnitude quake hitting southwest and northwest China on May 12.

The death toll from the devastating earthquake in southwest China's Sichuan Province rose to 40,075 nationwide as of 6 p.m. Tuesday, while 247,645 people were injured.

Chinese rescuers carry a woman to safety after getting her out of the rubble of a market in Beichuan, Sichuan province, May 19, 2008. The woman was saved about 164 hours after a killer earthquake struck a week ago.

Citizens mourn around candles during a memorial ceremony in Nanning, capital of Guangxi Zhuang Autonomous Region, May 19, 2008.

Film star Zhang Ziyi (L) has personally donated one million yuan (140,000 U.S. dollars). Chinese entertainment stars are opening their hearts and wallets to help victims of Sichuan's May 12 earthquake.

Chinese stood in silence and grief on Monday afternoon to mourn the tens of thousands of victims of the worst earthquake in decades, but their sorrows didn't shake their confidence in China's economy, said analysts. European Union (EU) investment in China shrank in 2007 despite a strong growth of the 27-nation bloc's cash flow into foreign companies, official figures showed on Monday.

May 19, 2008

Hong Kong: A fresh contingent of 19 doctors and nurses from the Hospital Authority will be sent to West China Hospital in Chengdu today and tomorrow to help those injured in the Sichuan earthquake. The Hospital Authority's Liu Shao-haei announced the mission at the end of his tour of the mainland yesterday. The chief manager for infection, emergency and contingency had travelled with a team to the Sichuan provincial capital on Thursday to assess the situation at the city's hospital and work out what personnel and supplies were needed. Dr Liu said the new team would be led by Lau Chor-chiu, chief of the accident and emergency department at Pamela Youde Nethersole Eastern Hospital. Specialists in orthopaedics and traumatology, infection control, intensive care, operating theatres, anaesthetics, physiotherapy, nephrology, injuries and wound management would be part of the team. In addition to providing medical expertise, the team members will also carry specialist medical supplies and equipment. Dr Liu said that while West China Hospital had comprehensive facilities - including 4,300 beds - its medical workers needed specialist assistance, particularly in the orthopaedics department. The hospital had received 1,000 patients by Friday, with 300 to 400 requiring orthopaedic treatment. Doctors in the hospital have also performed more than 70 amputations since the earthquake. However, there were several patients waiting to undergo complicated operations, and the Hong Kong doctors' experience would be of much use, Dr Liu said. Several orthopaedic specialists from the authority will head to the city tomorrow. They are expected to provide clinical assistance during complicated operations. Dr Liu said more patients were likely to seek treatment at the hospital, which would increase work pressures on the orthopaedics department. The Post's reporter at West China Hospital witnessed how busy the hospital was yesterday. Many of the wards have been converted into temporary orthopaedics areas due to the many patients requiring treatment for skeletal and muscular injuries. The doctors said they were so busy they were lucky to catch a few hours' sleep each day. Dr Liu visited a hospital in Deyang yesterday afternoon. The authority will keep in close touch with the mainland authorities and may send more doctors and medical staff to help if necessary. The Hospital Authority's director of quality and safety, Leung Pak-yin, said psychologists would be sent on Wednesday to provide counselling services to the quake victims, especially those in the children's hospitals. Ho Pak-leung, a University of Hong Kong microbiologist, and two colleagues from the Hospital Authority, will head to the mainland today to meet Ministry of Health officials to discuss infectious disease controls for later stages of the recovery effort.

A five-member Government Flying Service team left yesterday for Sichuan to join the Hong Kong government's search and rescue team on its dangerous mission. The flying team, which will be providing technical assistance, consists of two pilots, two aircrew members and an aircraft engineer. A service spokesman said the team arrived in Chengdu yesterday afternoon, and would stay in Sichuan for at least a week. They are based at an aviation base in the town of Guanghan, just outside Chengdu, where a fleet of helicopters is stationed. The team will work with the Ministry of Communications and are on standby to fly key missions, such as evacuations and airdrops. On Thursday, a 41-member rescue squad flew to Sichuan. It has been working in Mianzhu county , after being assigned by the mainland rescue command, searching a collapsed administrative building at the Dongfang Electric factory. Acting director of Fire Services Chan Chor-kam said members of the team were experiencing serious aftershocks, nearly a week after Monday's earthquake. Mr Chan said more rescuers would be deployed as necessary. The squad would stay in the disaster area for at least seven days. Hong Kong Red Cross deputy secretary Wilson Wong Mok-fai said the biggest difficulty for rescuers was that the transport network had been destroyed. "Roads heading to the most affected areas are not yet cleared."

Hong Kong stockbrokers and fund companies have geared up to capture investment opportunities in Taiwan that they expect to emerge when Ma Ying-jeou becomes president on Tuesday. Taiwan's stock market has lagged behind its regional peers, with its benchmark index now at about 8,000 points, well off its peak of 12,000 some years ago. The reason is simple - for the past eight years, government policy has been cold, if not hostile, towards Beijing, which has hurt the local market. While Mr Ma will not form his new government until Tuesday, the president-elect has already declared he would like to relax restrictions on mainland tourists visiting Taiwan and that he wants direct transport links with the mainland. His well-known views explain why the Taiwan stock market has risen 12 per cent this year. By comparison, its peers have been falling because of concerns over the subprime crisis and a US recession. The Shanghai Composite Index has dropped 27 per cent, the Hang Seng Index has fallen 8 per cent, South Korea is down 13 per cent and India's market has been slashed by 23 per cent. "Investors have a positive outlook on the Taiwan market because they believe Mr Ma's new political and economic policies will ease travel and investment restrictions across the Taiwan Strait," Stephen Hui Chiu-chung, chief executive of OSK Asia, said. OSK believes the Taiwan stock market may rise sharply, even up to 13,000 by the end of this year. Several brokerages, such as KGI Asia, the Hong Kong arm of the leading Taiwan brokerage KGI Group, have held seminars for thousands of Hong Kong investors in the past two months to introduce Taiwan stocks. Phillip Capital Management director Louis Wong Wai-kit said his firm had seen a growing number of Hong Kong investors interested in trading Taiwan securities. "I believe the Taiwan index will go up to 9,500 or 9,800, but it would find it difficult to pass the 10,000 mark," Mr Wong said. He believes infrastructure, utility, tourism, finance, real-estate and transportation stocks will be the most actively traded by investors, since the companies in these sectors are likely to benefit the most from Mr Ma's new policies. Christopher Cheung Wah-fung, chairman of the Hong Kong Securities Professionals Association, said it was natural for Hong Kong investors to chase Taiwan stocks. "Taiwan and Hong Kong have the same cultural and language background," he said. "Hong Kong investors are familiar with many Taiwan companies. "We didn't invest in the Taiwan market before mainly because the outgoing government's policies have hurt Taiwan's relationship with the mainland. Mr Ma's new policies have given new hope to investors." Besides focusing directly on the stock market, many are investing through Taiwan funds managed by large houses such as JF, Fidelity and Schroders. Fund-industry experts say the size of Taiwan funds in general has increased by 30 per cent in the first quarter. JF, the largest Taiwan fund in Hong Kong at US$1.3 billion now, has seen a US$300 million inflow since January, according to Peter Tang of the JF Taiwan Fund. But he also warned that, since the Taiwan market has risen 20 per cent, investors should be careful not to chase the rising stocks blindly. "I will say the expectations have been very high about Mr Ma, so the market has been raised in advance, even before he takes office," he said. "It is still not known if he can deliver on his promises. But then, I expect his team will be able to deliver, since the new people slated for the cabinet are men and women of action." Hang Seng Bank (SEHK: 0011, announcements, news) in March also launched a Taiwan index fund, which has already attracted US$80 million in investments, according to Andrew Fung Hau-chung, general manager and head of investment and insurance at Hang Seng Bank. "We have a positive view on the economic outlook and corporate earnings in Taiwan under the new government," Mr Fung said. Mr Ma has proposed a range of construction projects worth NT$4 trillion (HK$1.02 trillion) for logistics centres and ports over the next eight years. Mr Hui believes these projects will need to raise funds. In addition, Mr Ma's economic reforms are likely to boost the island's economy and increase the need for Taiwanese companies to list on the stock market to raise funds. This month, a Hong Kong Securities and Futures Commission research paper showed the city was a favourite market for Taiwanese firms to list their shares because of its liquidity and international exposure. There were 24 new Taiwanese listings in Hong Kong raising HK$30.8 billion from 2005 to 2008, more than double the 11 firms that raised HK$16.7 billion during the period 2002 to 2004, the SFC report said.

TV fund-raiser helps push effort for quake past the HK$1b mark - Hong Kong citizens have already contributed a record of more than HK$1 billion to help victims of the Sichuan earthquake. During a three-hour fund-raising show Operation Relief for Sichuan Earthquake on TVB (SEHK: 0511) last night, several hundred million dollars was added to the estimated HK$800 million collected since the earthquake struck. All proceeds from last night's show will go to the Home Affairs Department and the Hong Kong Red Cross, World Vision, Oxfam, the United Nations Children's Fund and the Salvation Army. The fund-rasing campaign last night featured about a hundred entertainers, including Andy Lau Tak-wah, Jacky Cheung Hok-yau and Aaron Kwok Fu-shing, all dressed in white T-shirts for the sombre occasion. Movie star Liza Wang Ming-chuen, who hosted the show last night, said she had felt hopeless after watching the news of the disaster. "I don't know how to describe my feelings," the iconic actress said. "Sichuan is a million miles away and what we can do is so little." Acting chief executive Henry Tang Ying-yen urged all members of public to show their love and support to those suffering on the mainland. "Huge resources will be needed for rescue and reconstruction works in the affected areas. I am calling on Hong Kong's people to help, no matter how little they can give." The donations have already exceeded the HK$600 million which was collected for victims of flooding in eastern China in 1991. Before the show, TVB chairman Sir Run Run Shaw contributed HK$100 million. A number of businesses also contributed significant amounts to the relief effort. The Bank of China (Hong Kong) donated HK$10 million while HSBC (SEHK: 0005, announcements, news) presented a cheque of 10 million yuan (HK$11.16 million) during the telecast. Other donors included the Liberal Party, which donated HK$12 million, and the Hang Seng Bank (SEHK: 0011, announcements, news) and Cathay Pacific (SEHK: 0293), with HK$2 million. Meanwhile, the Hong Kong Kidney Foundation established a fund with a donation of HK$500,000. The money would be transferred directly to a dialysis centre in Sichuan. The Chamber of Hong Kong Computer Industry pitched in with an auction which raised nearly HK$30,000 for the Hong Kong Red Cross.

Hutchison eyes water treatment business - Hutchison Whampoa (SEHK: 0013) said yesterday that it planned to increase its exposure to the water production and treatment business. Eyeing the rising demand for water as populations and industries grow, the conglomerate will launch a new division, Hutchison Water, to provide water production and treatment solutions. Hutchison Water chief executive Amikam Cohen said the company would set up offices in Hong Kong, on the mainland and in the Middle East, and build the business through acquisitions, alliances and investing in water technology companies. He said the new division had already recruited technology experts in the areas of desalination, water reuse, water treatment and wastewater treatment. "Increasing demand, coupled with depleting natural resources from global warming, over usage and contamination, has created significant opportunities in this field." said Hutchison Whampoa group managing director Canning Fok Kin-ning. "Hutchison Water intends to rapidly develop its business in this burgeoning water market." Credit Suisse analyst Cusson Leung said it was a positive move for Hutchison because water-related businesses would provide good earnings growth for the company. "The China water-treatment business has strong growth potential given the shortages of drinking water on the mainland," he said. Mr Leung said it was hard to quantify the result of setting up the new division as details had yet to be announced. He added that industrial waste water treatment, drinking water production and desalination had different profit margins, but the overall outlook for the water sector was promising. A central government report in early 2006 estimated that more than 300 million rural residents still have limited access to safe drinking water. Meanwhile, more people are facing water shortages. The United Nations Development Programme's Human Development Report 2006 said that across much of the developing world, unclean water was an immeasurably greater threat to human security than violent conflict. Global investment in desalination plants, which clean and filter water for households, may reach US$25 billion by the end of 2010, according to research group Global Water Intelligence, Hutchison Whampoa shares closed yesterday at HK$78.95, up 0.32 per cent before the announcement.

China: The total non-performing loans (NPL) of the Agricultural Bank of China (ABC) probably reached 803.1 billion yuan in the first quarter, down 0.42 percent from a year earlier, according to a website statement on Wednesday by the China Banking Regulatory Commission (CBRC).

China's accommodation and catering retail sales reached 112.2 billion yuan (16 billion U.S. dollars) in April, up 25.2 percent over the same period of last year and accounting for 13.8 percent of the total consumer goods retail sales, statistics published by the Ministry of Commerce showed on Friday. The April's growth was 6.8 percentage higher than that of the same month of last year. The ministry said the high monthly level was mainly attributed to food price rises and a low base of comparison. Over the first four months, accommodation and catering retail sales were up 23.9 percent over the same period last year, reaching 408.9 billion yuan, which accounted for 14.3 percent of the total consumer goods retail sales. During the four-month period, foreign investors have set up 229new accommodation and catering enterprises, down 7.7 percent, and utilized 350 million U.S. dollars up 30 percent. Retail sales of catering enterprises with more than 40 workers and annual sales reached 134.7 billion yuan during the first four months, up 21.8 percent. China's consumer price index (CPI) rose 8.5 percent year-on-year in April and food price soared 22.1 percent, 0.7 percentage points higher than that in March, the National Bureau of Statistics (NBS) said on Monday.

President Hu renews call to save lives - Chinese President Hu Jintao urged rescue teams to reach remote villages in the Sichuan's quake areas as soon as possible.

Members of the Japanese rescue team mourn for a victim at Qiaozhuang Town of Qingchuan County in the quake-stricken Sichuan Province, May 17, 2008.

A China Unicom service center is seen in this file photo. China Unicom is working round-the-clock to restore its base telecommunication station in Sichuan province. Free domestic calls are being offered to users in the province.

China has received 6.023 billion yuan ($860 million) in cash and goods for earthquake relief from donors at home and abroad as of 1 pm Saturday, according to the Information Office of the State Council. Domestic donations nearly doubled the figure on Friday to reach 4.9 billion yuan, including 4.185 billion yuan in cash and 720 million yuan of relief materials, the office said. This is the first day that domestic donations have surpassed relief supplies allocated by the central budget, which rose to 3.982 billion yuan as of Saturday afternoon. The Ministry of Civil Affairs (MCA) had received donations of 122 million yuan and the China Charity Federation had received about 450 million yuan. Local governments, domestic companies and social institutions had donated or pledged to donate 3.18 billion yuan to the affected areas. The Red Cross Society of China announced it had received 1.83 billion yuan of relief supplies as of midday on Saturday from home and abroad, and had delivered 400 million yuan in cash and goods to affected areas. Donations from Hong Kong, Macao and Taiwan reached 580 million yuan on Saturday, which included 558 million yuan in cash and 22 million yuan in relief goods. The Ministry of Civil Affairs ordered its local agencies on Saturday to conduct donation work in a "fair and transparent" way and step up management of donated money and relief materials to prevent embezzlement and ensure they reached the quake victims as soon as possible. The MCA and the Ministry of Finance jointly launched an emergency procurement program on Wednesday to buy relief materials, including tents, lamps, clothes, cotton-padded quilts and make-shift toilets, direct from factories. The ministries have decided to expand the procurement list on Saturday by adding larger tents with a size of 36 square meters, mobile homes and prefabricated homes. The One Foundation Project, initiated by kung fu star Jet Li in 2007, had raised 42.7 million yuan for quake relief by Saturday noon with almost 500,000 people making donations via the Internet. Accompanying the first batch of the foundation's supplies, Jet Li arrived in Sichuan provincial capital Chengdu on Saturday afternoon. Li said apart from relief supplies, he brought with him nearly 500,000 loving hearts. "In face of the devastating disaster, the kind-hearted nature of human beings has been aroused."

US Health Secretary Michael Leavitt on Friday confirmed plans by the US Food and Drug Administration (FDA) to establish a local presence in China.

Total losses to insured and uninsured property from the 7.8-magnitude earthquake in China will likely exceed 140 billion yuan (HK$156.2 billion), catastrophe risk modeling firm AIR Worldwide estimates. However, due to the low penetration of insured properties in the Sichuan region, insured losses will likely reach 7 billion yuan, and be at least 2 billion yuan, in residential, commercial/industrial and construction-all-risks/erection- all-risks lines of business, it said. Chinese insurers yesterday also estimated the value of claims due to the earthquake incident will be more than 13.5 billion yuan. China's largest property and casualty insurer PICC (Group), the parent of PICC Property & Casualty (2328), said it has 13.26 billion yuan in potential life insurance claims in three southwestern cities, including Chengdu, Sichuan's provincial capital, the Securities Times reported yesterday. PICC, which is 9.9 percent-owned by American International Group, had 52,000 life insurance policyholders in cities including Chengdu, Deyang and Mianyang, the paper said. The largest insurer, China Life (2628), said on Wednesday that claims related to about 150 cases will amount to 134 million yuan. Ping An Insurance (2318), the No2 insurer, expects claims worth 1.608 million yuan. So far, 484 cases have been reported and 213,400 yuan paid out. China Insurance International Holdings (0998) executive director and chief executive officer Kenneth Ng yesterday estimated its claims payout at about HK$30 million. "We have done enough risk cover - after reinsurance CIIH only needs to share claims of about HK$3 million," Ng said. "AIR estimates total claims will only be about 2 to 7 billion yuan. It will affect our profit by about HK$60 million and is what we can manage," Ng said. CIIH has about a 1 percent market share of the mainland property and casualty insurance industry.

May 17 - 18, 2008

Hong Kong: The central Chinese city of Luohe held a press conference in Hong Kong on Friday to invite investments in over 160 projects and promote a food exposition that will be held there in August this year. The 6th China (Luohe) Food Exposition, slated for opening in Luohe on August 27 with 1,000 booths in a total exhibition area of 20,000 square meters, is expected to attract over 5,000 businessmen from both within the country and abroad, city mayor QiJinli told a press conference in the Hong Kong Special Administrative Region. "The preparation for the food expo is proceeding as planned and I am sure we will make the exposition a top-notch national fair," he said. Qi said the fair, an upgraded edition of the Central China Food Festival, which has been staged annually over the past five years, will comprise investment invitation, promotion and trade, with special sections reserved for Hong Kong, Taiwan and foreign business organizations. Overseas exhibitors will be given free booths, he said. The 5th Central China Food Festival held last year attracted 5,122 businessmen representing over 800 enterprises from 19 countries and regions. Luohe is home to indigenous food brands such as Shineway (Shuanghui), which is the largest meat processor in Asia, and Nanjiecun, the instant noodle producer. It is one of the Chinese cities for pilot reform projects and an inland special economic zone. The city is about an hour's drive from the international airport in Zhengzhou, capital of the central province of Henan, China. Luohe has been inviting investments in more than 160 projects over the past 10 months, with agreements signed on Friday on seven of the projects to represent a total investment of 334 million U.S. dollars. A letter of intent was signed on one of the industry parks, involving a potential investment of 150 million U.S. dollars.

"There is no change in China's opening-up policy, nor in its visa policy in line with this policy, " says a Chinese Foreign Ministry official in Hong Kong. Song Ronghua, spokesman of the Office of the Commissioner of China's Ministry of Foreign Affairs in the Hong Kong Special Administrative Region, made the remarks in a letter to the South China Morning Post newspaper, which was publicized Wednesday. Recently, China's visa policy has caused concern in the Hong Kong media and business community, and some people expressed confusion and wrote articles speculating that China has changed its opening-up policy, he says. "With a view to addressing any misunderstandings, I would like to make some clarification and candidly explain our visa policy and current practices to your readers," Song says. "First, one thing must be made clear - there is no change in China's opening-up policy, nor in its visa policy in line with this policy," he says. Commemorating the 30th anniversary of China's reform and opening up is as much a monumental event this year for us as hosting the Olympics, he says. In his keynote speech "Continuing Reform and Opening up and Advancing Win-win Co-operation" at the just-concluded Boao Forum for Asia in Hainan Province, Chinese President Hu Jintao talked at length on China's commitment to reform and opening up and resolving to continue peaceful development, he says. "The issuing of visas is part of the exercise of national sovereignty," says Song, adding that recently, some appropriate arrangements for issuance of visas have been made with reference to practices of previous hosting countries of the Olympics and other major international sporting events, and in line with China's relevant laws and regulations. Applicants are now required to provide some of the following documents: an invitation letter, certificate for relationship, hotel vouchers, onward and return tickets. "Compared with most other countries, it is more convenient to get a Chinese visa," he says, citing the fact that foreigners are not asked to provide biometrics information and a visa is issued in a relatively short period of time. "The current visa arrangements are conducive to creating a safe and comfortable environment for foreign visitors in China. We hope that your readers can understand this," he says. Song says that the Commissioner's Office has taken full account of Hong Kong's unique status and special situation and has adopted all the necessary measures to facilitate the visa applications of foreign nationals in Hong Kong.

The European Chamber of Commerce has issued another letter - the first sent a month ago is still unanswered - to the Chinese authorities underlining the impact of visa restrictions on the foreign business community.

Sensational accusations fly as SHKP chairman takes his fight to court - The final battle in the long-running Kwok family saga was put on hold yesterday, after Walter Kwok Ping-sheung got a last-minute court injunction preventing the Sun Hung Kai Properties (0016) board from voting on his ouster.

Run Run leads way as hearts and wallets open to disaster victims - Entertainment tycoon Sir Run Run Shaw yesterday became the most generous individual Hong Kong donor to relief efforts in earthquake-devastated Sichuan when he pledged HK$100 million for rebuilding schools in the province. "Mr Shaw deeply cares about the education of young people," TVB general manager (broadcasting) Stephen Chan Chi-wan said. The donation from the Shaw Foundation will be presented to Central Government Liaison Office representatives tomorrow during a TVB relief special. Shaw's Television Broadcasts is mobilizing its 5,000 local and overseas staff to raise funds while the station's artistes will conduct fund-raising drives at 14 locations today and tomorrow. Hong Kong artistes will also team up with those in Taiwan and the mainland to ensure orphaned earthquake survivors can continue with the schooling. Hong Kong Performing Artistes Guild president Alan Tam Wing-lun said a relief committee would be set up to look after the livelihood and schooling of children orphaned by the quake. Tam will be on the Hong Kong region committe