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Sept 30, 2008
Airport rail link not financially viable, study finds - Prohibitive costs and limited demand are expected to plague the proposed 30km rail link between the Hong Kong and Shenzhen airports, which will take more than a decade to eke out a 3 per cent return, according to a Chinese University study. Law Cheung-kwok, associate director of the university's Aviation Policy and Research Centre, said the project was not financially viable. Government officials and Shenzhen airport authorities generally agreed with the study's preliminary findings, Dr Law said, despite a lack of data on the ambitious project. He suggested the government consider other alternatives, including improving the existing SkyPier ferry service between the two airports with smaller and faster boats to increase the efficiency and frequency of service. "The transport infrastructure of Guangzhou, Shenzhen and Hong Kong is evolving and will affect the way visitors in the Pearl River Delta make travel plans and select airports. But how this will impact Hong Kong's aviation industry is unknown," Dr Law said. The full report will be forwarded to the government soon. A government spokesman said a study commissioned by the Task Force on Airport Co-operation between Hong Kong and Shenzhen on the project's feasibility was expected to be completed this year. It will cover rail alignments, detailed planning development and overall transport development strategies as well as economic benefits. The taskforce had its first meeting in January. "On financial viability, it's too early to comment at this stage. We need to complete the consultancy study first," the spokesman said. Assuming the project costs HK$30 billion - and that tickets were priced at HK$400 for a single trip, there were no alternative modes of transport and the number of passengers, estimated at about 689,000, grew 21 per cent a year - the rail link would take a dozen years to generate a 3 per cent rate of return, the study found. Dr Law said few passengers would pay HK$400 to take the rail link, but reducing the price to HK$200 would mean it would take at least two decades to achieve a return. But the rail link would help Hong Kong's airport enlarge its catchment area in the two cities by between 5 per cent and 7 per cent, as more passengers opted for Hong Kong given the shorter travel time via the rail link. The findings assume a direct rail link between the airports for transit passengers, and does not consider the possibility of stations in the city centre or the addition of residential or commercial developments. The rail link was included in 10 large-scale infrastructure projects that Chief Executive Donald Tsang Yam-kuen highlighted in his policy address in October last year. The idea was first floated last year by the Bauhinia Foundation, a think-tank close to the government.
Dah Sing Banking Group (2356) said yesterday it has exposure of 31.9 million euros (HK$355.5 million) to failed US savings and loan Washington Mutual, and said subsidiary Dah Sing Bank will raise HK$400 million of new Tier 2 capital to cover potential losses.
The Shenzhou VII astronauts who successfully completed a spacewalk mission at the weekend may soon have to face another challenge - a trip to Hong Kong to meet their adoring fans. Chief Executive Donald Tsang Yam- kuen yesterday sent a letter to President Hu Jintao to offer the SAR's congratulations on the success of the nation's first spacewalk as well as an invitation to Zhai Zhigang, Liu Boming and Jing Haipeng. No itinerary has been set but the astronauts may be here as early as November. Sept 29, 2008
The five-seaters taxi may disappear from Hong Kong's streets in the next decade because Toyota and Nissan stopped producing the line last month. It was a bad weekend for the residential market as secondary-market prices fell by double-digit percentages after Hongkong and Shanghai Banking Corporation announced a plan to raise mortgage rates by 50 basis points effective today.
Banking giant HSBC has said it is to cut about 1,100 jobs worldwide due to adverse global financial environment, with about 100 to go from its Hong Kong operations. HSBC, or the Hongkong and Shanghai Banking Corporation Limited, will cut the jobs from its global banking and market division, which includes investment banking, treasury and trading operations, a spokesperson told Xinhua. The 100 employees to be dismissed from its Hong Kong operations are mainly members of the support and information technology staff, the spokesperson said. A senior management member said the bank will decide whether to cut more jobs or not later, based on its performance and judgment of the external environment. A few people were seen protesting outside HSBC regional headquarters in Hong Kong Friday against the decision to cut jobs at difficult times.
Premier Wen Jiabao has pledged to advance the country's democracy in a rare interview with a foreign broadcaster that touched on a range of sensitive topics, including the Tibet issue. When asked during the interview with CNN about the lessons he had drawn from the 1989 Tiananmen Square "problem", Mr Wen went silent for a few seconds before replying: "I think the core of your question is about the development of democracy in China." This, he said, covered three areas. "Firstly, we need to gradually improve the democratic election system so that the state power will truly belong to the people and the state power will be used to serve the people," he said in the interview that aired last night. Secondly, the legal system should be improved and the country be run under the rule of law. "We need to build an independent and just judicial system," he said. Thirdly, he said the government should be subjected to oversight by the people, the news media and other parties. Despite repeated calls by activists, China's leadership has described the June 4 crackdown on demonstrators as an "incident" and many dissidents who joined the protest back then are still declined entry into the country. Censorship on the mainland has long drawn criticism from western countries. But in the interview, Mr Wen insisted that China, like many other countries in the world, has imposed some "proper restrictions" to uphold state security while adding that the internet on the mainland carried many postings critical of the state. On the Tibet issue, the premier described the Dalai Lama's advocacy for a "Greater Tibetan region" as a means to "use religion to intervene in politics" - to separate the region from the mainland. "Many people in the United States has no idea how big is the so-called `Greater Tibetan' region ... [it] includes Tibet , Sichuan , Yunnan , Qinghai and Gansu , altogether five provinces and the areas it covered accounted for a quarter of China's territory," he said. "As long as Dalai Lama is willing to recognize Tibet as an inalienable part of China's territory and as long as the Dalai Lama gives up his separatist activities, we are willing to get in touch with him and his representatives." And in what appeared to be a reference to the tainted-milk scandal, Mr Wen said some companies have pursued their profits at the expense of morality. "We would not allow economic growth at the expense of the loss of morality because such approach simply cannot sustain."
China faces "unprecedented difficulties and challenges" in maintaining equilibrium in its balance of payments, says the State Administration of Foreign Exchange. "The domestic and global economic situation has become very complicated," SAFE said in a statement on its website yesterday. The foreign exchange regulator "will dedicate efforts to solving problems that impacted and restricted the payments balance" and"focus on the risks that may threaten the state's economic and financial security in activities linked to the state's overseas business." Administration chief Hu Xiaolian was quoted as saying the aim is to improve the management of cross- border foreign exchange fund flows. But the regulator did not specify what measures it is going to take. On the same topic, David Hale, chairman of Hale Advisors, said at the World Economic Forum in Tianjin yesterday that China's central bank has indicated it may slow the pace at which the yuan is gaining against the US dollar. The yuan has gained 17.3 percent against the dollar since China unpegged its currency in 2005. The yuan was traded at 6.8485 to the dollar on Friday. It has risen 6.7 percent this year, the strongest performer among 10 Asian currencies. "The global economic situation is so uncertain," said Hale, that Beijing authorities "haven't got a real decision - they're just thinking about slowing the pace down," China Petrochemical Corp., or Sinopec Group, on Saturday confirmed it has signed a deal to buy Canada's Tanganyika Oil Co. Ltd. for 2.07 billion Canadian dollars(2 billion U.S. dollars, or 13.7 billion yuan). According to an agreement signed between the two companies, the Chinese refiner has agreed to pay 31.50 Canadian dollars per share. The price represented a 8.8 percent premium to the closing price of 28.95 Canadian dollars on Friday. The deal is subject to approval from China's government, a source at Sinopec Group told Xinhua. Sinopec International Petroleum Exploration and Production Corp. (SIPC) made the bid to buy all Tanganyika outstanding shares. SIPC is Sinopec Group's subsidiary that undertakes overseas investments and operations in the upstream oil and gas sector. The acquisition will be funded through SIPC's internal resources, Tanganyika said in a statement.
China will subsidize loans to dairy producers in an effort to promote raw milk purchases following the tainted milk powder scandal. Lending costs from October to December will be reduced by 3.1 percent, or half of the six-month lending rate, the Ministry of Finance said on Saturday. The move aims to help dairy farmers recover losses. Some dairy farmers started to dump raw milk due to decreased demand as customers lost some confidence in local dairy brands in the wake of the scandal. The ministry also want to restore confidence in the dairy industry. Dairy products, including baby formula and liquid milk, produced by Sanlu and other leading producers have been found contaminated with melamine. The tainted milk powder has caused the deaths of at least three babies and sickened about 53,000 others. Sept 27 - 28, 2008
Greater China's nascent market for online subscription-based business management automation software could soon heat up, as NetSuite launches its service in Hong Kong this week ahead of a planned move into the mainland. Demand in this segment, known in the industry as software-as-a-service (SaaS), will continue to be driven by small firms and business users inside the departments of large companies, according to NetSuite chief executive Zach Nelson. The opening of a Hong Kong office by the US-based firm follows its introduction of new flagship product OneWorld in Australia, New Zealand and Singapore earlier this month. "Asia has been great for us, and we see huge potential for our offering in Greater China," Mr Nelson said. Sales from international markets, of which Asia-Pacific has the fastest-growing rates of adoption, comprised 20 per cent of NetSuite's total revenue of US$36.6 million in the second quarter. He said the company would launch its service on the mainland next year, by first establishing ties with strategic local partners to ensure profitable operations in key cities. A recent survey by Forrester Research found that 61 per cent of Hong Kong and mainland firms plan to adopt SaaS within the next year. NetSuite will also introduce OneWorld in Hong Kong this week for subscription over the internet at HK$18,000 a month. OneWorld allows companies to manage their multinational and subsidiary business operations in real-time globally. It integrates the key business management functions, including customer relationship management, enterprise resource planning and e-commerce. In a research note ThinkPanmure said: "We estimate [OneWorld to be] a US$40 million to US$50 million per year opportunity within [NetSuite's] installed base." The global SaaS market is projected to reach US$19.3 billion by 2011, representing annual growth of about 25 per cent, according to Celent. It forecast the mainland's SaaS market to hit US$3.8 billion by 2011, up from US$1.3 billion last year and US$899 million in 2006. By comparison, the total mainland software market was worth US$3.7 billion in 2006. "Although SaaS awareness has reached a peak, deployments in the region demonstrate that the market is still in its early stages, as most customers have deployed SaaS applications in isolation and have not integrated these with other enterprise applications," said Balaka Baruah Aggarwal, senior manager at Springboard Research. "Vendors must therefore continue to invest further in educating customers on the best ways to derive the benefits of SaaS, especially in China, the Asean markets and India." Ms Aggarwal said Salesforce.com continued to dominate the SaaS market in the Asia-Pacific. Other prominent regional offerings include NetSuite, RightNow Technologies, Cisco Systems' WebEx, Citrix Online and those from larger market players including Microsoft, Oracle and SAP. Educating potential customers on the mainland and across the rest of Asia has become increasingly important for NetSuite amid the global financial crisis, which could impact information technology spending by companies. "During bad times, SaaS delivers cost savings for companies because there is less cash upfront and no big infrastructure to be added when adopting the service," Mr Nelson said. Ronald Tse, director at Vita Green Health Products, a leading provider of vitamins and health products, said: "Because NetSuite is a managed system, we are able to grow without adding more equipment and manpower to maintain servers and support new software."
Listed giant not touched by telco
`50b yuan' report - China Mobile (0941) said reports that its parent was being
told to pay competitors 50 billion yuan (HK$57 billion) to help their CDMA asset
acquisition has nothing to do with the listed company.
Sept 26, 2008
Peg is 'best way' for financial stability - Hong Kong's fixed exchange rate is the "best way'' to achieve financial stability in the city, said Joseph Yam, head of the de facto central bank. The US dollar peg "has provided us with a much needed anchor for currency stability,'' Yam, chief executive of the Hong Kong Monetary Authority, said on the HKMA website in a statement marking the peg's 25th anniversary. Confidence in the currency is of the "utmost importance'' for the stability and prosperity of the city, and this can only be achieved with a robust system able to cope with changes in international money markets, Yam said. The Hong Kong dollar is allowed to trade 5 cents either side of HK$7.80. Warren Buffett has called the market turmoil "an economic Pearl Harbour" and says Secretary of the Treasury Henry Paulson's US$700 billion rescue plan is "absolutely necessary". "The market could not have taken another week" like last week, Mr Buffett told CNBC. "I think it was the last thing Hank Paulson wanted to do, but there's no Plan B." He said the economy was "everybody's problem", likening it to "a bathtub - you can't have cold water in the front and hot water in the back". While other firms sat on cash, he has agreed to spend at least US$25 billion this year to acquire companies and buy securities for Berkshire Hathaway. Mr Buffett, who last year complained he could not find companies big enough to buy, said he was not a fan of cash. "It's nice to have a lot of money, but you know, you don't want to keep it around forever," he said. "I prefer buying things. Otherwise, it's a little like saving sex for your old age." The Securities and Futures Commission will investigate whether banks misrepresented minibonds and other complex debt securities backed by Lehman Brothers. Hong Kong recorded a surplus of 10.3 billion HK dollars (1.3 billion U.S. dollars) in its balance of payment account in the second quarter, the Hong Kong Special Administrative Region (HKSAR) government said Monday. The surplus was about equal to 2.5 percent of its gross domestic product and lower than the first quarter's 55 billion HK dollars. Of the major balance of payments components there was a current account surplus of 34.4 billion HK dollars, according to the Census and Statistics Department. Compared with the same quarter last year, the current account surplus in the second quarter of 2008 was characterized by an increase in visible trade deficit, a rise in invisible trade surplus, an increase in net inflow of external factor income, and a continued net outflow of current transfers. (7.8 HK dollars = 1 U.S. dollar).
China must force through "difficult adjustments" to cope with fallout from the US financial crisis and slowed global demand for Chinese exports, a leading state newspaper said yesterday. Tourists and space enthusiasts were thronging into Jiuquan city in the vast deserts of northwest China on Thursday, keenly anticipating the launch of the nation’s third manned space flight. Eager people from Vice President Xi Jinping on down were expected in the remote area for the evening launch of Shenzhou VII, which would carry three astronauts on the nation’s most ambitious journey into space yet.
China remains the most attractive destination for foreign direct investment (FDI) in the developing world despite the global financial crisis, says a UN report, released yesterday. But this year FDIs across the world will drop 10 percent from the record high of last year because major companies have scaled back their investment plans, the report says. Global FDIs rose 30 percent to $1,833 billion in 2007, even though the international financial crisis became evident midway through the year. Mergers and acquisitions (M&A), major avenues of global capital flow, have already slowed down remarkably, with their value in the first six months being 29 percent lower year-on-year. Last year, China attracted FDIs worth $83.5 billion, the highest among developing countries and sixth in the world, said the World Investment Report, prepared by the UN Conference on Trade and Development (UNCTAD). FDIs are increasingly targeting services, high-tech industries and high value-added businesses in China. About half of last year's capital inflow went into the service sector, compared with 28 percent in 2003. Besides, the number of foreign-invested research and development centers in China has risen from about 700 in 2004 to more than 1,200 this year. This shows multinationals have changed their stance of considering China as a low-cost production base, and instead see it also as a competitive market. On the other hand, it reflects the government's emphasis on attracting quality FDIs, the report says. Brazil, Russia, India, the US and China are the five most attractive destinations for global investors, shows a survey conducted by UNCTAD. And China tops the list because of its strong economic growth and improved investment environment, UNCTAD official Liang Guoyong said. The global crisis will harm financial agencies, forcing them to curb their investments, he said. Financial companies' problems will shrink liquidity and tighten credit for firms in other sectors too, which means the financial storm will influence the entire business environment. The 23rd China-EU Joint Economic and Trade Committee co-chaired by Chinese Commerce Minister Chen Deming and European Trade Commissioner Peter Mandelson in Beijing on Sept. 25 has led to consensus on a variety of issues. Sept 25, 2008
The families of five Hongkongers killed in Saturday night's fire at an illegal Shenzhen nightclub were offered 250,000 yuan (HK$285,000) compensation each after meeting authorities yesterday, but relatives said this was well below their expectations. The Shenzhen government will handle claims and pay compensation for the deaths at the Wuwang (Dance King) club because it operated without a proper licence or third-party insurance. The offer came as one more person died from injuries sustained in the blaze, taking the death toll to 44, with 51 people, including two from Hong Kong, still in hospital.
Hong Kong is now attracting a new group of younger, energized foreign employees, according to associate professor Charles Li Kui-wai of City University of Hong Kong. Li said SARS and pollution initially caused a drop but now a second wave of younger, more vibrant foreigners fresh in their careers is hitting our shores. Despite the resurgence, an American Chamber of Commerce business outlook survey from 2007 showed Hong Kong still received low marks on the environment and availability of high-quality personnel. But the study showed that 43 percent of AmCham member companies with headquarters in Hong Kong were planning on expanding compared to just 19 percent in 2002. Last year only 4 percent of those companies were planning to reduce the size of their offices compared to 22 percent in 2002. A Manpower Hong Kong survey showed China, the United States and Japan are the top providers of employees to fill skill shortages in Hong Kong. Foreign talent is primarily used to fill senior executive, sales representative and middle management positions. Li said Hong Kong for now lacks talent to fill many upper-level jobs and therefore is reliant on foreign hires. The manpower survey also showed about 20 percent of Hong Kong employers are concerned about a brain drain as talent leaves to work abroad, primarily in China, the United States and Singapore. Lancy Chui, general manager of Manpower Hong Kong operations, said while it is true the city needs to do more to retain talent, "we must also consider how we can strengthen our collective employer `brand' to attract more talented workers from overseas to fill our talent shortages." But Li described the concern as "much ado about nothing" since Hong Kong's labor market is already so open. "As long as business is good relative to the global market, rising pay will attract sufficient talent," he said. "Plus less than 20 percent of Hong Kong's labor force will work or study abroad, and most come back." The survey showed 76 percent of the 511 workers polled would be willing to relocate for work in the future. But residents preferred Hong Kong above all international destinations as a place to work. China and the United States were the second and third most preferred work destinations respectively. Employees listed higher pay, better employment opportunities and the desire to experience a new culture as the three top reasons for wanting to work abroad.
Taiwan intends to send a team of experts to the mainland to gather information on the tainted milk crisis. The announcement, made yesterday by Taiwanese Premier Liu Chao-shiuan, comes as some food-processing factories and bakeries on the island were found to have used mainland dairy products in making cakes, breads and drinks. "We need to organise a team of experts, including food-safety specialists and related physicians, to gather information and get a full picture of the incident. This will allow us to have an overall and effective control of the fallout and to take follow-up action," Dr Liu said. The semi-official Straits Exchange Foundation, which represents the island's government in dealing with the mainland, would help arrange the visit by the team, he said. The team can leave once the mainland agrees to the trip. Mr Liu said the government would use existing channels to help Taiwanese firms and consumers seek compensation from the mainland. Taiwan would also set up a system similar to one used by the US Food and Drug Administration to better safeguard consumers' health. Taiwan has already banned all mainland milk products and vegetable-based proteins. But a Taiwanese company was found to have imported 1,000 bags, each weighing 25kg, of milk powder from mainland dairy giant Sanlu in June. State-owned Sanlu was the first company to be identified as a source of dairy products tainted with the industrial chemical melamine, which has killed at least four babies on the mainland and left 52,000 more ill. A report by the central government found that Sanlu had begun receiving complaints as early as December last year but did not carry out any tests to verify the complaints until June. The 1,000 bags the Taiwanese company imported were sold to local food-processing factories and bakeries for use in baking products, beverages and calcium tablets, according to the Department of Health. On Sunday, King Car Industrial, a major food and beverage supplier in Taiwan, recalled eight products containing creamer imported from another dairy company based in Shandong province on the mainland. The products, used in mixing coffee and instant chicken and corn soup, all tested positive for melamine. On Monday, the Department of Health said five other companies had imported or used the creamer from the Shandong company. Tests on products from those five firms were being carried out. The department also said it had discovered that hypermart RT-Mart had used milk powder from the Sanlu Group in its bread products. RT-Mart strongly denied it had used Sanlu milk powder for baking. It sent all its dairy products to the department for testing. Lawmakers from the opposition Democratic Progressive Party said the cabinet had failed to react swiftly to the fallout. Local suppliers, especially smaller bakeries at the end of the supply chain, have lost between 40 to 70 per cent of sales as consumers, unsure about which products are safe, steer clear of dairy products and drinks containing milk powder. DPP lawmakers said Mr Liu was "day-dreaming" if he expected the mainland to reveal all details about the crisis to the team of experts, or help Taiwanese seek compensation. Sept 24, 2008
Mitsubishi UFJ in Morgan Stanley deal as era ends for giants - Mitsubishi UFJ Financial Group will invest up to 900 billion yen (HK$65.73 billion) for up to 20 percent of US investment bank giant Morgan Stanley. Mitsubishi UFJ, Japan's largest bank, will start due diligence in the deal to buy 10 percent to 20 percent of Morgan Stanley. The deal marks an about-face for chairman Ryosuke Tamakoshi, who last week said it would avoid any immediate investments in US banks. The backing will help shore up confidence in Morgan Stanley. The deal comes as Morgan Stanley and its peer, Goldman Sachs, were granted approval to become bank holding firms regulated by the US Federal Reserve, effectively killing off the investment banking model that has dominated Wall Street for more than 20 years. Goldman and Morgan Stanley can now take deposits, gain easier access to financing and gives them more flexibility to buy retail banks. The move was initiated by the banks, the only two big and independent US investment banks left. The change means that previously freewheeling firms will be subject to much tighter regulation by the Fed, including tough capital requirements, reducing their chances of producing the kind of mega profits they had been making until the crisis hit. In exchange, the two gain long-term access to the Fed's discount window and access to bank deposits insured by the Federal Deposit Insurance Corporation. Goldman said it would move assets from a number of units into an entity called GS Bank USA that would have more than US$150 billion (HK$1.17 trillion) in assets, making it one of the 10 largest US banks.
Traditional medicine has radical impact on mainland's astronauts - In the second of a series ahead of the space launch this week, Stephen Chen looks at how traditional Chinese medicine is being used to keep astronauts healthy in space. Working in outer space can take its toll on the human body. Li Yongzhi , chief medical supervisor at the China Astronaut Centre, said health problems in space included - but were not limited to - dehydration, hyperhydration, dizziness, fatigue, vomiting, a decrease in bone calcium, immune system changes, anaemia and nervous breakdowns. But mainland scientists are drawing on a wealth of traditional knowledge to minimise the impact of missions on astronauts - research that may soon benefit life on Earth. Former US senator Jake Garn, who flew aboard the Space Shuttle Discovery in 1985, experienced the range of space-induced illness as a result of microgravity, space radiation and a confined environment, Dr Li said. Even with professionally trained astronauts, illness can sometimes jeopardise an entire mission. "To prevent that from happening, we have traditional Chinese medicine," Dr Li said. Joint research by the CAC and the Catholic University of Louvain in Belgium found that Chinese astronauts returned to Earth healthier than their Russian and European counterparts. "After a short period in space, the functioning of Chinese astronauts' cardiovascular nervous system has shown a very different pattern from that of Russian and European astronauts," the joint report said. The study found that Chinese astronauts had more strength and could stand, sit and move around more easily after returning from space missions. "The adaptability of their cardiovascular system is obviously better than that of their Russian and European counterparts who had gone through similar flight times," the report said. Dr Li said Fei Junlong and Nie Haisheng, who spent five days in space during the Shenzhou VI mission in 2005, also scored higher on health tests than many American astronauts. Comparisons revealed that the US astronauts pumped less blood with each heartbeat, and their hearts had to beat faster upon their return to Earth. "The Chinese astronauts hardly showed any changes [in heartbeat] when they returned," Dr Li said. She said much of the secret was in the traditional herbal medicine they had been taking, included a pill called Taikongyangxindan, or "space heart guardian", to be taken in case of a heart attack in microgravity. The pill is a combination of the root of a roadside herb known as Chinese foxglove; glossy privet seeds; the leaves of an aphrodisiac - short-horned epimedium; and some old, dry orange peel. But Dr Li said the medicines' aim was prevention rather than cure. Dr Li said astronauts were the fittest human beings, and their bodies were capable of handling most problems when they cropped up, as long as long-term preparation was done. And few other therapies met that need more effectively than traditional medicine. "A lot of research has been carried out, but most of it is concentrated at the molecular level, trying to solve the problem by addressing an organ or a kind of cell," she said. "But most of the time, sickness was not caused by just one factor. The Chinese medicine theory, therefore, takes a comprehensive approach by addressing the relation between the human body and the external natural and social environment. "Formulas of Chinese medicine caused few side effects because they address the balance between yin and yang represented by each ingredient. "Therefore, when they come together, they could achieve what western medicines, most of which work independently, cannot. We devise each formula to address multiple systems, layers and targets." Dr Li is trained in western medicine and insisted the centre was not resistant to foreign techniques. "We rely heavily on the methodology and facilities of modern medical science. But we are working with an open attitude to find out what works best," she said. The centre's embrace of the traditional approach is not limited to medicine. Massage therapists and acupuncturists also keep astronauts in peak condition. Dr Li said mainland space scientists had studied astronaut's health for more than 30 years, but the ultimate beneficiaries of the research would be people on Earth. "People face an increasing number of underlying health problems similar to what astronauts encounter in space," she said. "We hope our research can eventually benefit the entire human race." The space heart guardian will be available over the counter soon. China is expected to launch three spacecraft in 2010 to build a small laboratory in space, said Qi Faren, chief designer of the Shenzhou VII manned spaceship. Shenzhou VIII, Shenzhou IX and Shenzhou X are expected to enter space with launch intervals of less than a month of each other, the Shanghai Daily quoted Qi as saying. The report came as China began the final stages of preparation for the blastoff of Shenzhou VII, its third manned space flight that will feature the first Chinese space walk some time between Thursday and next Tuesday. Three astronauts - Zhai Zhigang, Liu Boming and Jing Haipeng, on this week's mission - and three backup colleagues are now at the Jiuquan Satellite Launch Center in Gansu province. They will be quarantined until the launch, set for Thursday unless bad weather upsets plans. Rain and strong wind hit the center on Sunday, raising concerns that severe weather may affect the launch. The astronauts said they were confident that the Shenzhou VII flight will complete all its tasks successfully. China's first manned space flight in 2003 was greeted with triumphant publicity, as was the second in 2005. China is only the third country to put humans in space, after the former Soviet Union and the United States. Last year, China also sent into orbit its first lunar probe. State media are already exulting in the display of technological strength after last month's Beijing Olympics, at which China topped the gold medal chart. "I feel even more profoundly the glory of being an astronaut," Fei Junlong, who flew on China's second manned spaceflight in 2005, told Oriental Outlook magazine. "The Chinese people have stood up in the eyes of foreigners," he said, citing the words of an aged supporter. "I am proud for our great motherland." Sept 23, 2008
China visa restrictions imposed on foreigners in Hong Kong during the Beijing Olympics last month will be lifted from October 16, travel agents say. The long-awaited move will be a relief to many of the city's foreign businesspeople and tourists, who have been burdened with extra red tape over the past six months as the mainland increased security measures. The mainland has resumed visa-free arrangements for Singaporeans visiting for business or tourism, or transiting within 15 days. Visa-free access for Singaporeans was suspended on July 1. Paul Leung Yiu-lam, a vice-chairman of the Association of Travel Agents, said the central government might have decided to wait until after the National Day holiday to relax the visa application processes. Mr Leung said the restrictions had affected many visa arrangements, including the popular "144-hour" visa for groups of at least three tourists visiting Guangdong from Hong Kong by land. The 144-hour visa was banned throughout the Olympics, but would be reinstated from October 16 along with other visas, he said. European Chamber of Commerce chairman Rafael Gil-Tienda said he had heard from members that visa arrangements would now be at "a different level" following the closing ceremony of the Paralympics. He said he did not have any first-hand information. The chamber had been particularly worried and vocal about the impact of the restrictions since learning about six months ago that multiple-entry visas and short-visit visas to Shenzhen would be suspended. This meant foreigners were restricted to single- or double-entry visas valid for up to three months. Valid multiple-entry visas were unaffected. Visa applicants also had to produce advance hotel reservations and return-flight bookings, which proved impractical for businessmen often needing to travel at short notice. Nationals from 33 countries including South Africa, India, Malaysia, the Philippines and Indonesia were also told they could no longer obtain visas in Hong Kong unless they were residents. Beijing granted visa-free access to overseas visitors accredited by the International Olympic Committee for a month before and after the Olympic Games. These visitors included journalists, athletes and support staff. The mainland already grants visa-free entry for visits of up to 15 days to citizens of Japan and Brunei.
Singapore is helping Taiwan investigate money-laundering allegations against former president Chen Shui- bian and his family. Investigators have already been given information on the family's 10 Singaporean bank accounts. "Through the justice ministry and foreign ministry, Singapore has provided us with information," a spokesman for the investigation unit said. The Chen family are reported to have transferred funds to Switzerland via Singaporean bank accounts. Chen, his wife, son, daughter-in-law and brother-in-law have all been named as defendants. Chen has admitted his wife wired US$20 million (HK$156 million) abroad from past campaign funds, but said she did so without his knowledge.
Premier Wen Jiabao has told officials not to underestimate the impact of the international financial turmoil on China's economy, although he showed confidence the nation will be able to maintain steady economic growth. The government will seek to prevent "large ups and downs" as the country grapples with slowing industrial growth, Wen told a government meeting over the weekend, China Central Television reported. "This year has been the most challenging of recent years," Wen said. "Global financial turmoil and an obvious slowdown in the global economy may further intensify the situation." But recent government measures to stimulate the economy "are starting to achieve positive outcomes," he said. China's central bank cut interest rates a week ago for the first time in six years, and reduced the level of reserves that smaller financial institutions must hold. It scrapped the tax on stock purchases and allowed state-owned companies to buy shares in their listed units to shore up investor confidence, prompting a sharp stock market rally on Friday. Wen reiterated China's macroeconomic stance - to balance fast and stable growth and contain inflation. Separately, People's Bank of China vice governor Su Ning stressed the importance of the domestic market. Su said although the international turbulence aggravated risks in China's financial sector, the country is confident and capable of maintaining financial and economic stability. Meanwhile, economists said macro-policy support, with mounting external risks, is crucial for China's slower but steady growth outlook. "The external environment turns more challenging for Chinese exporters. Earlier solid demand ... is likely to slow notably," said JPMorgan economist Frank Gong. Gong said a change of 1 percentage point in GDP growth in the rest of the world leads to a 5.7 percentage point change in China's export growth. JPMorgan estimates a 10.1 percent real GDP growth rate for China this year, and 9.5 percent next year.
Sept 20 - 22, 2008
Morgan Stanley, the second largest US investment bank, is considering a merger with a financial institution to shore up investor confidence and avert the fate that befell Lehman Brothers in the latest credit crunch. The Hong Kong government is to build a fifth border crossing to the mainland at a cost of HK$9.6 billion. Work on the Liantang-Heung Yuen Wai boundary control point, which will require the resettlement of 300 villagers, will begin in 2014 with a completion date in 2018. The agreement was signed yesterday by Secretary for Development Carrie Lam Cheng Yuet- ngor and Shenzhen executive vice mayor Li Feng. The government expects the new control point to handle up to 20,600 vehicles and 30,700 passengers a day by 2030. Its economic benefit to the city is estimated at about HK$14 billion from 2018 to 2030. "The new boundary control point will enhance passenger and cargo flows and strengthen the link between Hong Kong/Shenzhen and the eastern part of Guangdong and provinces like Jiangxi and Fujian," Lam said. It will also alleviate traffic congestion at Man Kam To and Sha Tau Kok. Lam said the estimated cost of the project included HK$6.1 billion for roads and civil works, HK$1.9 billion for the new control point building, HK$600 million for Shenzhen River improvement works and HK$1 billion for land clearance. Permanent Secretary for Development Raymond Young Lap-moon said the estimated HK$14 billion in economic benefits did not include an increase in employment opportunities and property prices. A 10-kilometer, two-lane highway including three tunnels will connect Tolo Highway and Eastern Corridor in Shenzhen to the Shenzhen- Huizhou and Shenzhen-Shantou Expressways. The control point building will be two stories high on 18 hectares of ground on the Hong Kong side of the border. The ground level will be for goods vehicles and a public transport interchange while the upper level of 4.6 hectares will serve passengers, private cars and coaches. The building will link to the Shenzhen border control building through a passenger hall. The building on the Hong Kong side will require the purchase of land in Chuk Yuen Village. The government began consulting villagers last night. Young said the crossing could enhance development in Ping Che/Ta Kwu Ling. Shenzhen is developing Dayun New Town and Pingshan New Town in the east as a focus for large-scale trade exhibition facilities and new technology. The door to a career in the tourism and hospitality industry for low-skilled workers will open next month when a theme park begins a food and beverage services training program. Ocean Park will join the Labour Department, Vocational Training Council and the Hong Kong Federation of Youth Groups to train 25 selected workers, aged 15 to 24, in the nine-month pilot program. The program originates from an informal 2006 partnership between Ocean Park and skills project Operation Breakthrough - in which training was only provided by the park. Trainees will earn about HK$6,000 a month for working four days a week at 22 of the park's restaurants and refreshment kiosks. They will attend 540 hours of classes provided by the Hospitality Industry Training and Development Centre and five days of induction training by the federation. Top trainees may be offered full-time jobs. "It's a good chance to enter the industry for those without any chances elsewhere," Ocean Park chairman Allan Zeman said. Cheung Chi-wai of the federation said the unemployment rate is the highest among those aged 15 to 19 at 10.7 percent and 6 percent for those in the 20 to 24 age group. "They have low skills, low education and lack working experience. Many employers would rather hire someone without having to teach them," Cheung said. He said even if trainees are not offered employment by Ocean Park, its brand recognition will still give them an edge in seeking relevant jobs. Cheung said many employees avoid hiring young people, fearing they are immature and give up easily, and that the first month is the most critical in adapting to the environment. The tailor-made program together with counseling may help the trainees overcome challenges, he said. Ocean Park food and beverage operations manager Stephen Chow Wai- ming said a mentor will be assigned to each group of five trainees. They will be taught sales techniques, customer service skills, service and product knowledge. An open recruitment session and briefing will be held on Tuesday. Those with a Secondary 3 or above education may apply on 28738864. Although Tianjin is ready for the start of the "through-train" plan that would allow mainland residents to invest directly in Hong Kong equities, its mayor Huang Xingguo admitted it is unlikely to begin immediately. AIG has no plans to sell its Hong Kong operations, said Derek Yung, AIA Hong Kong and Macau senior vice president and general manager. "As far as we know, our parent company doesn't have any plan to sell the Hong Kong operations," Yung said. But such a decision would be up to the new management, chairman Alwin Lam said, noting the new AIG chief had only been appointed the day before. About 2,000 people have redeemed their insurance plans, according to Yung. AIA, he said, would waive any renewal fees or medical checks if those who have redeemed their traditional life-insurance policies decided to join again. The waiver is good for two weeks after the surrender. Financial Secretary John Tsang Chun-wah said the Insurance Authority will keep a close watch on AIA's financial position to ensure a smooth and effective conduct of its daily operations. Commissioner of Insurance Clement Cheung Wan- ching said the authority has not noticed any deterioration in AIA's services, although it has received more inquiries than usual. "The Hong Kong business is profitable," Yung said. "We have enough money to cover all the policies." AIA Hong Kong is well capitalized and meets the regulatory capital requirements, it said in a statement. AIA continues to operate as usual to meet customer needs, it added.
Morgan Stanley Real Estate Fund, one of the big winners in Hong Kong's investment property market over the past few years, has started to offload about HK$5.5 billion worth of properties in the city.
Chief Executive Donald Tsang Yam-kuen officially accepted the resignation of former vice-chairwoman of the Liberal Party Selina Chow Liang Shuk-yee from the Executive Council on Friday.
China's Macao Special Administrative Region (SAR) Friday signed a Mutual Visa Exemption Agreement with Mexico, which will grant Macao SAR Passport holders more convenience when entering the Latin American. The signing ceremony of the agreement took place in the SAR's Government Headquarters on Friday. Under the authorization from China's central government, the SAR's Secretary for Administration and Justice Florinda da Rosa Silva Chan, and the Acting Consul General of Mexico in Hong Kong and Macao Hector Huerta, who represented respectively the two sides, signed the agreement. The agreement will be effective from October 19 this year. After the agreement comes into effect, holders of a valid Macao SAR Passport will be exempted from visa requirements when entering Mexico for a stay of maximum 90 days, according to the agreement. Currently, a total of 77 countries and territories have agreed to grant visa-free or visa-on-arrival access to the Macao SAR passport holders, while nine countries have agreed to grant the visa-free access to the Macao SAR Travel Permit holders. Sept 19, 2008
American International Assurance’s (AIA) Hong Kong operations were sound and there is enough liquidity to handle cancellations of its insurance policies, senior vice-president Derek Yung said on Thursday. Mr Yung said about 2,000 policy holders have surrendered their policies in the past two days following the crisis with the company’s United States parent, American International Group (AIG). The world financial markets were sent into a spin on Tuesday when AIG went to the brink of a collapse, prompting the US Federal Reserve to step in with a US85 billion deal to save it. But despite the Fed move, many customers have cancelled their insurance policies with the firm in places like Singapore and Taiwan.“We have enough liquidity to handle the cancellations and compensation and we will do our best to restore clients’ confidence,” Mr Yung said. He stressed that cancellations by Hong Kong policy holders had not been excessive. “The amount is very small when compared to our 2.2 million policies – which involves 1.3 million policy holders,” he explained. The company also said it would waive re-admission charges and a health declaration requirements for those who decide to revive their life insurance policies with them. “If the customers decide to come back to us in the coming two weeks, we will waive the requirement for them to provide proof of their health conditions,” he said. Mr Yung said AIA had “a deep asset base” of over US$30 billion (HK$234 billion). “Only two per cent of this was involved with sub-prime mortgage investments,” he added. Sub-prime mortgages are those offered to borrowers, regarded as “sub-prime” – or not having a very high rate of credit worthiness. He also denied reports there would be a management buyout plan for AIA. “The operations of AIA in Hong Kong have been financially sound and profitable. So far I believe there is no buyout plan, and none of our staff have left,” he said. To protect policy holders in Hong Kong, Hong Kong’s insurance commissioner has banned AIA from shifting assets to its troubled American parent AIG without approval. Hong Kong’s jobless rate remained stable at three per cent in June-August – the same as in the previous quarter, latest statistics released on Thursday showed. Regulator steps in to protect AIA policyholders' interests - Hong Kong's insurance regulator yesterday moved to protect the interests of the holders of 1.95 million policies issued by the local arm of crisis-hit insurer American International Group (AIG).
Sept 18, 2008
The number of live chicken stalls would drop significantly – when the deadline of the government buyout scheme ends next week, Poultry Wholesalers and Retailers Association chairman Steven Wong Wai-chuen said on Wednesday. In July, after a major outbreak of avian flu in Hong Kong, the government ordered a mass slaughter of poultry and the banning of all stock being kept overnight at wet markets. As these tough measures affected the livelihood of many poultry vendors, the government announced a controversial compensation package. The final deadline for compensation scheme ends next Wednesday. This is to allow more time for chicken vendors to consider whether they will surrender licences for cash or continue in business. Mr Wong said he believed most would surrender their licences. “I expect more than 70 per cent of chicken stalls will surrender their licences when the deadline,” he told local media. He said the number of live chicken stalls would be reduced from 400 to around 100 stalls. He also expects the association will disappear after more than 90 per cent of committee members surrender their licences. Mr Wong said his chicken stalls in North Point would close on Wednesday. He said he would end his 29-year career as a chicken vendor. He said he would sell frozen meat after he surrenders his licences. The government plans to spend HK$1.1 billion in its compensation scheme to buy back all chicken-trade licences. It has also offered buyouts schemes to vendors after imposing a 21-day ban on poultry from the mainland and local farms. Similar schemes will be introduced later for 52 poultry farmers, 71 wholesalers and 250 transporters.
China Communications Construction,
the world's biggest builder of ports, said first-half profit dropped 20 percent
as costs rose and earnings last year were boosted by higher government
compensation. Net income fell to 2.2 billion yuan (HK$2.50 billion), or 0.15
yuan a share, in the first six months, from 2.74 billion yuan, or 0.19 yuan, a
year earlier, the Beijing-based company said. Income excluding compensation
would have risen 1.5 percent to 2.14 billion yuan, it said. The state-owned
builder is struggling with higher cement, energy and steel costs as economic
growth in China decelerates. Government investments may be slowing, spurring
Citigroup, Deutsche Bank and CLSA Asia-Pacific Markets to cut ratings for the
stock this month.
General Electric Co. will soon set up five new regional headquarters in China to further tap a huge market that boasts huge business potential. The U.S. giant now operates two regional headquarters in Shanghai and Beijing. The new locations will be in Shenyang, Wuhan, Chengdu, Xi'an and Guangzhou -- provincial capitals in the country's northeast, central, southwest, northwest and south, according to Chen Xiangli, president of China Technology Center under GE. The move is in line with its new strategy of making China the multinational's second home country, Chen told a GE-sponsored technology conference in Shanghai. "China is not only a market, but also a significant research and development base and a fundamental foothold for GE's future development," he said, stressing the company would rely on its business growth in the country in future. "GE has been following the American and European markets over the past century, but China will turn into a priority in future," said Wang Xiaozhong, the center's public relations chief inspector. The new headquarters would help existing functional departments in different regions to further explore the market and develop more China-oriented products, Wang added. Since last year, GE has invested 55 million U.S. dollars to the center on the research and development of new products for China, with a focus on clean energy, water treatment and new materials, among others. The center now boasts more than 60 advanced labs and employs some 1,400 people. GE's China sales volume accounted for about 2.54 percent of its global turnover of 173 billion U.S. dollars last year. Chen believed the company had great growth potential in China and the country would no longer remain at the end of the international sales chain dominated by the European and U.S. markets. Sept 17, 2008
HSI in peril of 15,000 mark if AIG collapses - Hong Kong stocks tumbled 5.4 percent to a near two-year low yesterday, and investors were holding their breath to see if any more bad news will emerge. As fears mounted that US insurance giant AIG may face demands to produce US$20 billion (HK$156 billion) after a string of credit-rating downgrades, Financial Secretary John Tsang Chun- wah said the insurance regulator has statutory powers to protect policyholders in the event AIG's local subsidiary, AIA Hong Kong, faces a crisis. Heavily armed pirates have seized a Hong Kong chemical tanker with 22 crewmen in the Gulf of Aden off Somalia.
Thousands of young mainland mothers have been flooding into Hong Kong searching for imported milk powder in the aftermath of the contaminated milk powder scandal. However, this is an option that parents of sick babies say they cannot afford. Meanwhile, in Shijiazhuang, hundreds of distraught parents queued yesterday outside the headquarters of the Sanlu Group, the state-run dairy company at the centre of the scandal, demanding explanations and compensation. In Hong Kong, pharmacies and supermarkets along the East Rail line connecting the city with Shenzhen reported panic buying of overseas milk powder brands during the mainland's first Mid-Autumn Festival public holiday. Lau Oi-kwok, chairman of the Hong Kong General Chamber of Pharmacy, said mainland mothers were restricted to a maximum of three cans at each pharmacy, to ensure supplies for local mothers. Mr Lau said pharmacies in Fanling and Sheung Shui could expect milk powder shortages as more mainland mothers attempted to stock up on supplies in Hong Kong. Mainland media reported that one Sha Tau Kok store had transported 1,200 cans of imported milk powder from Sheung Shui to meet huge demand. In Sha Tau Kok, mainlanders do need a Hong Kong travel permit to enter. Luo Min, who transports milk powder from Hong Kong to Shenzhen, said she received 100 orders in the three days after the milk powder scandal broke, nearly three times the usual demand. Many parents said the Sanlu Group had caused them to lose confidence in domestic production, including the mainland's output of overseas brands. Mr Lau said all overseas brand milk powder available in Hong Kong was made in New Zealand or the United States, rather than in the company's mainland factories. But imported formula is out of the reach of almost all the families of children admitted to Shenzhen hospitals with kidney stones. The parents of the eight children diagnosed with kidney stones are struggling migrant workers from Anhui, Henan, Hunan and Sichuan. One of the mothers, 26-year-old Lin Ying, said the family's spending on infant formula could rise from 500 yuan (HK$570) to about 1,200 yuan if they chose imported brands. "My five-month-old son was raised on Sanlu products and we all thought it was safe," Ms Lin said. "Although I don't trust domestic-made milk powder anymore, my salary doesn't allow me to have any other option."
Senior officials of China and the United States gathered here on Tuesday to discuss various business and trade issues in order to seek ways to facilitate bilateral economic relations between the two countries. The 19th meeting of the China-U.S. Joint Commission on Commerce and Trade (JCCT), held in the Nixon Presidential Library near Los Angeles, was co-chaired by Chinese Vice Premier Wang Qishan, U.S. Secretary of Commerce Carlos Gutierrez and U.S. Trade Representative Susan Schwab. The one-day event also marked the 25 anniversary of the China-U.S. JCCT, a high-level government-to-government dialogue, seeking to open market opportunities and resolve trade disputes. In his opening speech, Wang said that it is especially significant that China and the United States maintain close economic and trade exchanges at this moment when the international economic and financial situations are turbulent. "The Chinese government is well aware the fact that the United, which is the world's largest developed country, and China, which is the world's largest developing country, should have constructive and cooperative economic and trade relations," the Chinese vice premier said. Gutierrez and Schwab welcome the Chinese guests in their speeches, and said the high-level dialogue between the two governments to solve problems and disputes would be a mutual benefit. Wang was leading a delegation of senior officials form the Ministry of Commerce, the Foreign Ministry, the Ministry of Finance, the Ministry of Agriculture, the General Administration of Civil Aviation and several other ministries for the meeting.
Sept 16, 2008
Singapore developer Hong Fok will look to Hong Kong to boost revenue when it launches its first residential project here this month as sales in its home market come under a cloud. The company plans to sell 90 units at its 360-unit development - 300 Beach Road - targeting both Singapore and Hong Kong buyers. The project will be completed in 2012. It expects Hong Kong buyers will account for 10 to 15 of the units. Analysts expect the Singapore housing market to see a reversal this year after enjoying a boom last year. Property consultant CB Richard Ellis said in a recent report that a correction in residential prices on the island of 5 to 10 per cent in the second half was likely as the global economy suffered from the subprime mortgage meltdown in the United States and inflation problems. In the wake of the market slowdown, Hong Fok had made some adjustments to the selling prices of the development, said director Cheong Sim Eng. "If we had sold the project last year we could have easily got S$2,000 [HK$10,953] or above per square foot," he said. However, the project would now be marketed at S$1,500 to S$1,800 per square foot, he said. Mr Cheong believed the units would generate 4 to 5 per cent rental returns.
Americans living in Hong Kong do not have to feel distanced from November's presidential election. Both Democrats and Republicans have groups in the city, and there is no shortage of events to bring the campaign trail closer to home. On Thursday, representatives from Democrats Abroad Hong Kong and Republicans Abroad Hong Kong will square off in a debate at the Foreign Correspondents' Club. "The Great Debate", as it is being promoted, will be staged from 6.30pm to 8pm. The free event is open to the public and is sponsored by the League of Women Voters in Hong Kong, a non-partisan group. Participants will field questions prepared by the Advanced Placement US Government and Politics classes at the Hong Kong International School, said Jane Buck, a board member of the League of Women Voters in Hong Kong. Later that evening, Democrats Abroad will hold one of its biggest events of the autumn. The "Barack the Vote" - a rally, party and fund-raiser co-sponsored by the group Hong Kong for Obama - will be held from 8pm to midnight at the Fringe Club rooftop in Central. The suggested minimum donation is US$50 for the Obama campaign. "We'd figure we'd follow that [the debate] next door with a rally for all American Democrats and Independents in Hong Kong who want to see change in Washington and want to elect Barack Obama and Joe Biden, the next president and vice-president," said Andy Green, a Democrats Abroad Hong Kong board member. Guest speakers at the "Barack the Vote" event will include retired Admiral William Owens, former vice-chairman of the US Joint Chiefs of Staff, and also Nancy Hernreich-Bowen, assistant to the president and director of oval office operations during the Clinton administration. Republicans will not hold an event after the FCC debate, with one source saying they would rather concentrate on the issues. "We want to talk about active and constructive engagement with China. We want to make sure that our message of lower taxes continues to be heard, and the message of free trade continues to be heard in Washington," said Chris Exline, a Republicans Abroad Hong Kong board member. Both Democrats and Republicans are registering voters in the city. The Republicans are canvassing and e-mailing. The Democrats are sending people to SoHo, Wan Chai and Central, and plan to go to Discovery Bay, Times Square and Sai Kung. Democrats Abroad will also hold presidential debate-watching parties and other functions, including a conference call with one of Senator Obama's China policy advisers, Jeff Bader, next month. Republicans Abroad gathers for weekly meetings at Madison's in Central every Wednesday at 7pm. It was a way for people to learn how to mobilise the vote or educate the community about the John McCain-Sarah Palin ticket, Mr Exline said. The Republicans also plan to hold fund-raisers, including a US$1,000-a-plate breakfast during a live presidential debate. That get-together starts at 8am on October 16 at The American Club in Central. Those interested in joining Republicans Abroad can visit www.republicans-abroad.org. Those interested in joining Democrats Abroad should send an e-mail to dahkchair@gmail.com. The group Hong Kong for Obama can be contacted at hongkongforobama@gmail.com. The US Consulate will host Voter Registration Day on Wednesday from 4pm to 7pm at 26 Garden Road, Central. Voter registration would also take place at the FCC debate on Thursday, Mr Buck added.
China's State Council, the country's Cabinet, has approved a regulation revision to relax restrictions on the establishment of foreign-funded telecommunications companies. According to the new rules, the minimum registered capital requirement for a foreign-funded telecom company that managed basic services nationwide or intra-provincially was halved to 1 billion yuan (145.9 million U.S. dollars) from the previous requirement. Foreign-funded telecom companies running basic services at provincial-level regions were required to have a minimum registered capital of 100 million yuan, down from 200 million yuan previously. However, the minimum registered capital requirement for companies running value-added telecom services was unchanged compared with previous rules. The new rules also deleted the article banning the foreign listing of domestic telecom enterprises without approval from industry supervisors. The revised rules, with immediate effect, aimed to boost the development of the telecom sector and its opening up to the outside. The proportion of foreign investments should not surpass 49 percent of the total investment in a company for basic services, which could not be over 50 percent for operators doing value-added services. The Administration of Foreign-funded Telecommunications Enterprises Provisions came into effect in 2002. The domestic telecom industry has boomed in recent years due to the rapid economic growth and large population base. Industry revenue reached 72.8 billion yuan in 2007, up 10.9 percent year-on-year.
Sept 15, 2008
A Voluntary Agreement on the Management of Mooncake Packaging and a Mooncake Container Recycling Campaign were officially launched in Hong Kong Saturday. Hong Kong Secretary for the Environment Edward Yau officiated both the signing ceremony of the Voluntary Agreement and the opening ceremony of the recycling campaign at East Point City. "Jointly organized by the Environmental Protection Department (EPD) and Christian Action, the Mooncake Container Recycling Campaign aims to promote the recycling of used mooncake containers," Yau said. "Millions of boxes of mooncakes are consumed every year, generating waste such as metal containers and other packaging materials that can be recycled," he said. From Saturday until Oct. 12, people may return used mooncake containers to the collection points set up at estates, commercial buildings and shopping malls under the management of Sun Hung Kai Properties Limited, City base Property Management Limited, the Link Management Limited, Hong Kong Housing Authority and Hong Kong Housing Society. The containers collected will be delivered for recycling. People may also return the containers through EPD's source separation facilities or similar mooncake container recovery programs by other organizations. In addition to recycling of mooncake containers, efforts are also being made to reduce waste at source in the production of mooncakes. Five local mooncake manufacturers signed a one-year Voluntary Agreement on the Management of Mooncake Packaging with the EPD to reduce the use of packaging materials on their products. Under the agreement, the manufacturers will commit to conserve resources and contain the use of packaging materials through better design and production processes, with due consideration of the "Environmental Guidelines on Mooncake Packaging Design" issued by the EPD. The manufacturers will also strive to adopt recyclable packaging materials and support and facilitate the recovery and recycling of used packaging materials.
After 16 years of consistent construction, the main body of Yangtze River Three Gorges hydropower complex has been preliminarily completed, said Ding Qihua, a senior official from China Three Gorges Corporation. Three Gorges hydropower complex project consists of TGP dam, power plant, water-discharge facilities, ship lock, and Maoping auxiliary dam. Rudimentary construction began in 1992. As of this August, except ship-lifting facilities all the designated projects had been completed. China, which holds a fifth of its currency reserves in Fannie Mae and Freddie Mac debt, may cut the portion held in US dollars, according to China International Capital Corp. The country's tourism industry is set to receive a boost in the wake of Beijing Olympics, a worldwide survey has found. About 45 percent of 26,000 people polled in 26 countries and regions said after seeing the opening ceremony of the Games they now intend to travel to China at some point, the survey conducted by media and information group Nielsen and released on Thursday said. The figure increased to 51 percent after the closing ceremony of the Games on August 24. Those who claimed to have no interest in visiting China dropped from one-third of the total number of respondents to about one-quarter over the course of the Games, which lasted 17 days. Interest in visiting China was highest in Singapore (86 percent). Four in five people from India expressed interest in traveling to the country, while more than two-thirds of those in Mexico (72 percent), South Africans (69 percent) and South Koreans (66 percent) showed similar interest. More than eight in 10 of those surveyed had never visited the Chinese mainland before. "The strong intention among the international audience to visit China has a lot to do with the positive image China has successfully built with the Olympic Games," Grace Pan, head of leisure and travel research at Nielsen Company China, said. The Beijing Games attracted a record 4.7 billion audience, a Nielsen study showed. Seven in 10 viewers across 16 countries and territories agreed that Beijing appeared more modern and hi-tech than they had expected, the recent survey found. In Beijing, 92 percent foreign visitors polled rated Olympic venues as "very good" or "good". As for Beijing's environment, more than half of those polled (56 percent) after the closing ceremony said it exceeded their expectations. Similarly, among those who had visited China before, more than eight in 10 of those polled said they intended to visit the country again. China is poised to become the world's hottest tourist destination by 2020, receiving 137 million overseas tourists in that year alone, the World Tourism Organization has said. The country is also expected to generate 100 million outbound tourists by then. "With the Beijing Olympics generating such strong interest in China, they may well reach these numbers earlier than anticipated," Pan said. Still, sources with travel agencies said the orders they have received so far showed it was not all rosy in the inbound tourism market. Partly because of a stricter visa policy that was adopted for security reasons during the Olympics, Beijing had received 389,000 overseas tourists in August, a drop of 7.2 percent compared with the same period last year, the Beijing tourism administration said. Sept 13 - 14, 2008
Several senior Liberal Party members believe it should shed its image as a government ally. One way to do that, they say, is to opt out of the Executive Council.
Hong Kong's gross premiums of general insurance business in the first half grew 10.1 percent year on year to 14.258 billion HK dollars (1.828 billion U.S. dollars), the Office of the Commissioner of Insurance said Wednesday. Meanwhile, the city's net premiums of general insurance business grew by 9.6 percent to 10.251 billion HK dollars (1.314 billion U.S. dollars), but the overall underwriting profit dropped from 1.039 billion HK dollars (133 million U.S. dollars) to 826 million HK dollars (106 million U.S. dollars). The gross and net premiums of direct business increased by 11 percent to 11.487 billion HK dollars (1.473 billion U.S. dollars) and 13 percent to 8.537 billion HK dollars (1.094 billion U.S. dollars) respectively, driven by growth in accident and health business and pecuniary loss business. The underwriting profit of direct business dropped to 306 million HK dollars (39 million HK dollars) from 599 million HK dollars (77 million U.S. dollars), mainly due to adverse claims experience, with the motor vehicle business turning from a profit of 16 million HK dollars (2.1 million U.S. dollars) to a loss of 68 million HK dollars (8.7 million U.S. dollars), the profit of property damage business more than halved to 55 million HK dollars(7.1 million U.S. dollars), and the losses of employees' compensation business surging to 172 million HK dollars (22 million U.S. dollars).
Bargain Chinese property projects will be up for grabs in coming months as developers scramble to survive falling home sales and a funding crunch. But circling foreign funds can no longer expect a big firesale as the government eases tough steps to cool the market, fearing mass bankruptcies and a damaging property price slide.
China's trade surplus reached a new record high of $28.7 billion in August after its imports significantly slowed as a result of weakening domestic demand. Sept 12, 2008
Hopewell net soars to $6b on
disposals - Hopewell Holdings (0054) said yesterday net profit for the year
ended June 30 soared 127 percent to HK$6 billion, thanks to exceptional gains
totaling HK$4.79 billion from asset disposals.
Singapore developer Hong Fok will look to Hong Kong to boost revenue when it launches its first residential project here this month as sales in its home market come under a cloud.
Slower surge in imports fuels economic worries - China import growth slowed far more than expected last month, fuelling fears of softening domestic demand in the world's fastest-growing economy and adding to pressure for growth-driven policies. Shenzhen's economic growth in the first half of this year slid to its lowest level in almost three decades, as the leading special economic zone grappled with global economic uncertainties and problems at home. The city registered a year-on-year gross domestic product growth of 10.5 per cent in the first six months, the lowest rate since Shenzhen became a special economic zone in 1979, according to official data. Mayor Xu Zongheng told a radio programme on Tuesday that Shenzhen was facing a severe economic situation that was "even tougher and more severe than the 1997 Asian financial crisis". Shenzhen posted GDP growth of more than 27 per cent between 1980 and 2006. Last year, it grew 14.6 per cent. The city's GDP growth for the year had been revised from 14.7 per cent to 12 per cent, Mr Xu said. He said the economic slowdown followed the subprime mortgage crisis in the United States, declining global demand and tightened domestic monetary policy. The government would do its best to ensure growth of 12 per cent this year, including helping businesses raise money and increasing land supply for property development, he said. Mr Xu insisted strong economic growth was still occurring in Shenzhen's telecommunications equipment and petroleum and natural gas transport industries, which would contribute greatly to GDP. Guo Wanda, a vice-president of China Development Institute, a municipal think-tank, said the city would continue to face severe challenges in the coming months in its quest for 12 per cent growth. "For us, the troika driving economic growth are always consumer demand, investment demand and foreign export demand," Mr Guo said. "We have seen a terrible drop in two of them. The US subprime woes, cost increases and the yuan's appreciation have had a negative impact on exports, leading to a flood of shutdowns in labour-intensive industries in Dongguan and Shenzhen." He said the authorities would probably introduce measures to boost investor confidence and the central government had sent several teams to assess the situation in Guangdong and the impact of the external slowdown. "This probably will lead to a change in policy from tightening to stimulating the economy," he said.
Sept 11, 2008
A public passageway which offered drivers a short cut between Cheung Kong Center and Garden Road in Central is being closed off once again - this time, legally, by the management of Citibank Plaza. A traditional Cantonese bamboo theatre will be erected in the heart of Paris next month to showcase award-winning director Johnnie To Kei-fung's fashionable version of Cantonese opera at an all-night cultural extravaganza. To is the first Hong Kong artist invited to take part in Nuit Blanche - literally White Night but also known as All Nighter - held on the first weekend of October every year. The outspoken director will stage an event called Hong Kong Action at the historic Comedie-Francaise theatre, founded in 1680 close to Paris' celebrated Louvre art gallery. To said he was given the space and theatre cast members, and he could do whatever he wanted for the show. "As a film director I hope to do something that's related to film. But I'm still finalising my ideas. It could be something abstract, or some installation art related to film," he said. It is understood a Cantonese opera performance will be staged with projections of classic Japanese samurai films and Hollywood westerns. "Why not give it a try? This is a great opportunity to showcase Hong Kong culture overseas," said To, who is chairman of Hong Kong Arts Development Council's film and media art group. "I heard that all the bars and galleries will open overnight. It's like a carnival. But the truth is that Paris has a very high tolerance for art and people there can communicate beyond language barriers. It is great for us to give it a try." Nuit Blanche was launched in Paris in 2002 under mayor Bertrand Delanoe. The festival kicks off when the sun sets on the first Saturday of October and ends when the sun rises on Sunday. All museums, galleries and many cultural institutions will be open all night for free and many places will be turned into temporary spaces for performances and art installations. Artists participating in this year's Nuit Blanche include American singer-songwriter and poet Patti Smith, Chinese contemporary artist Gu Dexin, Indian film director Shaad Ali, French artist Pierrick Sorin and Japanese sound artist Ryoji Ikeda. The concept has spread to many other cities, including Toronto and Seoul. The event will take place on October 4 and 5. Lee Shau-kee, the chairman of Henderson Land (0012), believes the US government's bailout of the nation's two mortgage finance firms lacks the strength to power up the stock market. Although suicide rates in Hong Kong have been on the decrease since 2002, new research by Hong Kong University shows startling increases among those aged 15 to 24, and unemployed women. Mid-Autumn Festival lanterns are keeping pace with the rise in mooncake prices, forcing shoppers to dig deeper into their pockets to celebrate the annual moon-watching event. Amid the global economic slowdown, fund managers withdrew US$28.5 billion (HK$222.3 billion) of funds under management during the second quarter, according to a quarterly survey by Hongkong and Shanghai Banking Corporation covering 12 fund houses around the world. British warship HMS Kent has been looking forward to the visit in Hong Kong and later in Chinese mainland, its Commanding officer Simon Hopper said Tuesday at a briefing onboard the warship, which called in the Hong Kong Special Administrative Region on Monday. HMS Kent, one of British Royal Navy's most modern warships, called in Hong Kong on Monday for a ten-day visit, following a port visit to Tokyo. Commander Simon Copper said at the briefing, HMS Kent will conduct a logistics stop and meet with the local government's Flying Service to "learn from each other's experience" in rescue at sea. Its 185 crew onboard the warship, for many it is the first time they have visited a Chinese city, will enjoy the excellent recreational and sightseeing opportunities and experience the unique cultural mix in this diverse and modern region, he added. Captain Andrew Tate, British Royal Navy's Naval and Air Attache in British Embassy in Beijing, said HMS Kent will also pay a goodwill visit to Qing Dao in Chinese mainland's Shan Dong Province after it leaves Hong Kong next Thursday, in the hope of "developing a positive bilateral relationship between Chinese PLA navy and British Royal Navy." HMS Kent, weighing 4,900 tonnes and 133 meters long, is British Royal Navy's 14th Type 23 "Duke Class" Frigate. The warship was launched in 1998 and accepted into service in 2000 as the first ship to join British Royal Navy in the 21st century.
China's consumer price index (CPI), a measure of inflation, was up 4.9 percent in August, the National Bureau of Statistics announced on Wednesday. China's outbound investment picks up - For 16 years, China has been the biggest recipient of foreign direct investment. Now, its outbound investment is starting to catch up, as more local businesses are starting to look for bigger overseas markets. Sept 10, 2008
Liberal party shaken by crushing
defeats - The Liberal Party was shaken to the core early on Monday — with a
crushing defeat at the Legislative Council elections.
Hong Kong’s total port cargo throughput recorded an increase of seven per cent year on year in the second quarter of the year, to 68.2 million tons, new figures released on Monday showed. The Census and Statistics Department figures showed inward and outward cargo went up by two per cent and 13 per cent respectively to 38.1 million tons and 30.1 million tonnes during the period. “For the first half of this year, total port cargo throughput increased by 10 per cent over a year earlier to 130.8 million tons,” a department spokesman said. Within this total, inward and outward port cargo rose by seven per cent and 15 per cent to 74.4 million tons and 56.4 million tons respectively,” he added. On a seasonally adjusted quarter-to-quarter comparison, total port cargo throughput increased by 1 per cent in the second quarter. “Within this total, inward port cargo recorded virtually no change, while outward port cargo rose by one per cent,” he said. Within port cargo, seaborne and river cargo grew by 2 per cent and 21 per cent over a year earlier to 47.1 million tons and 21.1 million tonnes, respectively, in the second quarter of this year. Hong Kong, one of the busiest international container ports in the world, handled some 24 million TEUs of containers last year.
The 3rd Asia Brand Ceremony will be held in Hong Kong on September 9, 2008. Lenovo Group Ltd edges into the top ten of 500 largest brands in Asia in 2008 for the first time. It lies in the eighth place. In terms of the global management, Lenovo establishes a triangular structure of innovation taking China, the United States and Japan as the core. This kind of business model optimizes Lenovo's strategic arrangement in the world and achieves the unique superiority for Lenovo. Meanwhile, Lenovo has formed a common and clear cultural structure---"New Lenovo Culture" and shaped an enterprise style after it purchased the PC business from the IBM.
The mainland will adopt five new measures to facilitate exchanges with Taiwan - a move apparently aimed at paving the way for its main negotiator to visit the island next month. The measures were announced by Wang Yi , head of the Taiwan Affairs Office, at a forum in Xiamen yesterday. Top of the list was to greatly simplify travel permits for Taiwanese on the mainland - a step close to granting them identity cards. Other new measures include allowing mainlanders to travel to Taiwan proper through the so-called mini-three links - mainly ferry services between the mainland and the islands of Quemoy, Matsu and Penghu, which are controlled by Taiwan. In addition, the mainland will add six cities - Beijing, Nanjing , Chongqing , Hangzhou , Guilin and Shenzhen - to the list of cities that can handle travel permits for Taiwanese. Beijing will also study the possibility of allowing more mainlanders to visit Taiwan under an earlier travel relaxation policy that was put forward by both sides. Relaxing the rules on issuing travel permits carries special symbolic meaning since under the new policy the mainland will assign a permanent permit number for each Taiwanese applicant - a step that amounts to issuing a permanent travel document or identity card on the mainland to Taiwanese. The new step will help to simplify bureaucratic restrictions on Taiwanese who live on the mainland because many government documents often require submission of the permit numbers and their transient nature was a headache for many Taiwanese. Taiwanese businessmen have long complained about the tedious process needed to renew travel permits and have been urging Beijing to simplify the procedures. According to Mr Wang, the new rule will come into force from September 25 and an additional five mainland cities will be able to handle renewal applications from October 20. The announcement by Mr Wang followed initiatives mapped out by Taiwan's Mainland Affairs Council last week, which allowed more mainlanders to visit Quemoy, Matsu and Penghu. Meanwhile, Mr Wang also said that two pandas the mainland had offered to Taiwan could be delivered to the island soon. Chen Yunlin , head of the semi-official Association for Relations Across the Taiwan Straits, is scheduled to visit Taiwan next month and hold talks with Wu Poh-hsiung, chairman of Taiwan's ruling Kuomintang, and Chiang Pin-kung, head of the Straits Exchange Foundation. The visit by Mr Chen - the first by a top mainland negotiator to Taiwan in more than a decade - will be closely watched as the two sides of the Taiwan Strait take steps to repair ties damaged under the government of former Taiwanese president Chen Shui-bian. China's railway investment soared 37.5 percent from January to July. The numbers are attributed to a building boom of high-speed lines and the country's desire to link together poor regions. The investment reached 133.78 billion yuan (19.6 billion U.S. dollars), the Ministry of Railways (MOR) said on Monday. More people than ever are using railways. In the first 7 months of the year trains carried 855.3 million passengers, up 12.6 percent from the same period last year. Cargo volume was 1.94 billion tons, up 6.8 percent from a 2007. The MOR had planned to invest 1.25 trillion yuan (182.6 billion U.S. dollars) in railway building and renovation through 2010 extending the train network by 17,000 kilometers. China started construction on the 1,318-km-long Beijing-Shanghai high-speed railway on April 18. The train is designed to run 350km per hour. The total project cost 220.9 billion yuan (32.3 billion U.S. dollars). Sept 6 - 9, 2008
An average of 490,900 passenger trips a day were made across Hong Kong's land border last year, up 10 per cent from 2006, a government survey shows.
Hong Kong's HK$1.4 trillion Exchange Fund is likely to be in the red in the third quarter on the poor global market performance, warned Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong. While the price of crude oil price has fallen below US$110 (HK$858) per barrel from the July peak exceeding US$147 a barrel, the fuel cost pressure on Cathay Pacific Airways (0293) has not dissipated, chief executive Tony Tyler said yesterday.
Telefonica said on Thursday it would raise its stake in mainland partner China Netcom by 5.75 per cent to give it a leading stake in the imminent merger of China Netcom and China Unicom.
Beijing Paralympics to highlight Olympic spirit
and glory of humanity - The Paralympic movement, concept and spirit constitute
an outstanding contribution to the modern Olympic Movement. Paralympic Games
seek to showcase the noble nature of mankind, such as the enterprising spirit,
transcendence, enthusiasm in participation, as well as harmony and fraternity. The Ministry of Finance said on Friday that it would float 25.99 billion yuan (3.8 billion U.S. dollars) worth of book-entry treasury bonds, the 16th batch of its kind this year. Sept 5, 2008
Hong Kong fishing industry has long harvested a greater catch from Hong Kong waters than they can sustain, in order to satisfy diners' demand for seafood. As a result fish stocks are severely depleted, the marine ecosystem is dangerously stressed and the industry faces an uncertain future. Action to turn this situation around is long overdue. The government's sweeping proposals to modernise the industry are therefore welcome. They deserve support because they tackle the root of the problem of overfishing - bottom trawling. The Committee on Sustainable Fisheries has recommended banning trawling in local waters and buying out the boats. As we report today, it will consult the fishing trade, green groups and other stakeholders before issuing a final report. Bottom trawling harms the seabed environment and yields an indiscriminate catch including infant and immature fish. Since most Hong Kong waters are breeding and nursery grounds, it seriously disrupts the reproductive chain. The proposal to ban it is bound to meet resistance from local fishermen and their supporters, who cite poor government management of the industry as a factor. But the modernisation plan offers the industry a more sustainable future. Oceans the world over are being overfished to meet soaring demand - particularly in Asia which, with the Pacific, constitutes the world's biggest fishery. In Hong Kong, where we eat three times as much fish per head as the average person, the problem is magnified by the lack of regulation, conservation measures or even reliable surveys of fish stocks. Water pollution and coastal development add to it. Fishermen do not need licences to operate, and can use trawlers with drag nets that scoop up everything from the seabed to the surface - a practice common in Southeast Asia but now illegal in many places compelled to practise conservation. The city now has about 4,000 fishing vessels, of which about 1,200 trawlers account for most of the catch. About 550 of them operate within Hong Kong waters. Even so, most of the seafood we consume comes from other sources. The local industry meets only 20 per cent of local demand. However, fishing has played an important part in Hong Kong's cultural history. And the industry still employs about 12,000 Hongkongers and 8,000 mainlanders. It is important, therefore, that the government's final restructuring blueprint presents a clear vision of how our marine environment can be rejuvenated and what the future holds for the people in the industry. If there is to be a ban on trawlers, the committee supports a phased buy-out option at reasonable prices and retraining assistance. This could include the opportunity to learn aquaculture and financial assistance to set up new enterprises. Serious attempts at conservation can no longer be put off. The committee has revived proposals for fishery protection zones in Tolo Harbour and Port Shelter off Sai Kung, with fishermen to be encouraged to switch to leisure fishing businesses. It also proposes redeeming all 430 fishing permits for marine parks and banning all commercial fishing in marine parks. These measures should mark the beginning of a strong management and conservation regime. The committee's recommendations are a blueprint for restoring a marine environment that can sustain marine resources and a viable fishing industry. It is sobering to think it could take a decade or two to rehabilitate the ecosystem. There is no time to lose. The construction of a new cargo terminal at Hong Kong International Airport at Chek Lap Kok would boost the city’s competitiveness in the global airfreight market, Secretary for Transport and Housing Eva Cheng Yu-wah said on Thursday. Speaking at Cathay Pacific’s cargo terminal groundbreaking ceremony, Ms Cheng said the cargo terminal would help Hong Kong maintain its position as the largest international air cargo handling hub. “The new cargo terminal will bring our air cargo handling capacity to more than 6.6 million tonnes per year, enabling us to maintain our position as the largest international air cargo handling centre in the world," said Ms Cheng. "The award of the project to Cathay Pacific’s subsidiary has been made by the Airport Authority through a strenuous tendering process. "The company’s HK$4.8 billion investment in the project shows its confidence in Hong Kong as an aviation hub, as well as the importance of the private sector’s contribution to the development of our airport," she said. On March 18, the board of the Airport Authority awarded a non-exclusive, 20-year franchise to Cathay Pacific Services – a wholly owned subsidiary of Cathay Pacific Airways (SEHK: 0293) – to design, construct and operate a new cargo terminal at Hong Kong International Airport. The new terminal, scheduled to open in the second half of 2011, will have an annual capacity of about 2.6 million tonnes and be located on a 10-hectare site in the cargo terminal area. It will increase the airport’s general and express cargo handling capacity to 7.4 million tonnes per annum. According to Cathay Pacific Services, construction of the new terminal will create more than 400 jobs. When it starts operation, the facility will employ more than 1,700 people. The Airport Authority said that due to the rapid economic development of the mainland and robust global trade, cargo throughput at Hong Kong’s airport rose 4.5 per cent in 2007, to 3.74 million tonnes. The air cargo industry handled more than HK$1.9 trillion worth of goods in 2007, representing 35 per cent of Hong Kong’s total external trade. For the 11th consecutive year, Hong Kong International Airport is the world’s busiest international cargo airport.
Wen warns quake zone - Premier Wen
Jiabao has warned winter will bring hardship for people in China's quake zone as
he confirmed that more than 80,000 people died in the disaster that hit Sichuan
and neighboring provinces on May 12.
U.S. entrepreneur Tom Watson doesn't regret not investing in China over the past three decades. "Time was not on our side then," said Watson, whose company sells air filtration systems. "But we can catch up now." Watson is in China with a U.S. delegation seeking clean energy and environmental investment opportunities in China and India. U.S. Assistant Secretary of Commerce David Bohigian is leading the delegation of 19 U.S. companies. Watson's Filter One designs and manufactures industrial air filtration systems for the likes of military bases in the United States, airlines, and aircraft and engine manufacturers such as Boeing and GE. It employs less than 50 people. "Our experience in the industry over the years will help us find more opportunities in China," Watson said. But Filter One is a latecomer to China's clean energy and environment sector. Helix Micro, an energy conservation company based in the Silicon Valley, saw the opportunity earlier. "The market potential in China is so huge and our revenue is expected to soar by 100-fold next year from last year's 1 million U.S. dollars," Wu Bing, its president, said. Helix Micro's business includes energy storage and transmission, but its focus is batteries. In China, it's targeting laptop and electric bicycle batteries. Wu expects the two sectors to bring the company huge opportunities. Several domestic laptop producers have shown interest in the company's technology so that they can make their own batteries and reduce manufacturing costs, Wu said. The technology can also extend the life of electric bicycles, which would make locally produced bikes more competitive on the market, he said. "We're talking with leading PC maker Lenovo for the use of that technology," Wu said. "We're also negotiating with electric bicycle manufacturers." Watson will travel with the U.S. delegation from Beijing to Jinan in Shandong province and to Shanghai. From there they will fly to India - another big market for renewable energy. "The 19 companies participating in this mission represent the cutting edge of U.S. innovation, which can benefit China and India to meet their massive energy demand while improving environment quality," Bohigian said. Statistics suggest China's clean technology market will increase to 186 billion diollars by 2010 and 555 billion dollars by 2020. China and the U.S. signed a 10-year agreement to cooperate on energy and environmental protection at the strategic economic dialogue held in July. The two governments agreed to increase energy efficiency and reduce pollution, calling for cooperation on a range of issues - from energy efficiency in power generation, transport and water treatment to reducing air pollution and preserving wetlands and forests. Han Wenke, president of the energy research institute under the National Development and Reform Commission, said China and the U.S. should cooperate to tackle rising energy costs. He said it is crucial to make existing or new technologies affordable. "New technologies can reduce energy consumption and they are especially vital for big energy consumers like China and the U.S.," Han said. Covanta Energy Corp is also expanding its business in China, targeting the Bohai Rim, Yangtze River Delta and Pearl River Delta. A subsidiary of Covanta Holding Corp, it runs large-scale energy-from-waste and renewable energy projects. "Although we haven't got wholly owned plants in China, we still wish to share our world-leading technologies and innovation abilities with our Chinese partners," Joe O. Neuhof III, director of business development at Covanta Energy, said. Covanta Energy entered China in April 2007 when it bought a 40 percent stake in Chongqing Sanfeng Environmental Industry Co Ltd, a subsidiary of Chongqing Iron & Steel Ltd. China economy "slowing but resilient," HSBC report says - China's economy will maintain strong growth thanks to resilient investment and exports and the government's strong fiscal position, an HSBC report said on Wednesday. Fixed-asset investment will remain resilient despite the sluggish property sector because there is still plenty of room for more investment in infrastructure such as mass transit networks, said the global banking group in "China Economic Spotlight". For example, only 15 of 660 cities in China have or are building subway systems. Real growth in urban fixed-asset investment has slowed from 22 percent year-on-year in 2007 but was "still over 17 percent year-on-year" in the first seven months of this year, according to the report. Export growth eased to 22.7 percent year-on-year in the first seven months of 2008 from 28.7 percent a year earlier. "China's exports to the United States and European Union are expected to dip further in coming quarters, but exports to other global emerging markets should remain strong, providing a floor to the slowing but still resilient export sector," said the report. The government, which is still in a good fiscal position, can prevent growth from slowing below 8 percent to 9 percent by boosting spending or cutting taxes, it noted. Government revenues grew 32.4 percent in 2007. China's economic growth decelerated in the past three quarters, from 11.3 percent in the last quarter of 2007 to 10.6 percent in the first quarter of 2008 and 10.1 percent in the second quarter. Sept 4, 2008
China may introduce property trusts this year, giving developers a much needed new source of funding, according to a top industry association official who believes Beijing is easing its tough stance as the property market cools. The move could come as part of a government change of tack to ease tight monetary policies, many of which have been aimed at the property industry, according to Nie Meisheng, president of the China Real Estate Chamber of Commerce. Beijing intensified a campaign late last year to clamp down on bank loans to the property sector, asking for higher down payments from homebuyers, as part of a wider effort to curb inflation and rein in runaway growth. The steps hit home sales – down 50 per cent in Beijing, Shanghai and Shenzhen in July from a year earlier – and prices in some areas of Guangdong province have fallen 25 per cent. Nie said the measures were aimed at cutting the industry’s dependence on bank loans, which account for half of developers’ funding, but added that Beijing was keen to ensure the property market did not collapse and hurt the broader economy. “When one door closes, others will open,” she said. China has given the green light to big developers, such as China Vanke, Poly Real Estate and China Merchant to issue corporate bonds or new shares to replace loans coming due and to fund further expansion this year. Setting up real estate investment trusts (reits) – securities that pay rent from their property as dividends – will provide developers with a new avenue for funding, allowing them to effectively sell finished commercial buildings to investors. “There will be some breakthrough by the end of this year,” Nie said, referring to the introduction of reits in China. She said China’s central bank was soliciting opinions from different government departments but declined to give a timeframe for any launch of reits, or give any other details. Many analysts believe property trusts will catch on in China because insurers are keen for stable investments to match their long-term liabilities, especially at a time when their stock investments have been hit hard by rocky markets. Reits tend to yield more than bonds, and offer capital gains if property values rise, but they are typically less volatile than stocks. China’s insurance industry regulator said Beijing will soon allow insurers to invest in property, which could unleash as much as US$40-60 billion of investment if they follow global industry norms of 10-15 per cent portfolio allocations to the asset class. Nie said the policies on property were “overly tight” because much had changed since they were rolled out last year when housing prices were soaring and developers raked in bumper profits. The official property outlook index, a measure of industry confidence, fell to 102.36 points in July from its November peak of 106.59. Nationally, property sales fell 10.8 per cent in terms of area sold in the first seven months from a year earlier. However, Nie, an industry veteran who has spent her whole career working on infrastructure and real estate, was confident most property firms would ride through the difficult times. “Prices haven’t dropped, bankruptcies haven’t occurred,” Nie said. “That means developers can still hold on, and there will be no big problem.” She said some local governments were not implementing the measures as strictly as before. Some were allowing developers to delay payments for land purchases, instead of taking plots back after two years if construction had not started, she said. “The policies look tight, but they’re softening quietly,” she said. “Otherwise, why haven’t developers died yet?” The China Real Estate Chamber of Commerce launched a trial reit last year, although it is not publicly traded, unlike trusts in Japan, Singapore and Hong Kong, where the securities have caught on in the last six years. The trust, which started with 2 billion yuan (US$292.7 million) of funds from China’s biggest developers, has invested in some projects and would quickly expand once the government officially allowed reits, Nie said. It is aiming for a 35 per cent annual return on capital but would settle for 20 per cent, according to China Union Trust and Investment Ltd, a partner in the launch. Hong Kong exports of watches and clocks were enjoying strong growth this year, Chief Secretary Henry Tang Ying-yen said on Wednesday. Mr Tang, opening Hong Kong’s Watch and Clock Fair 2008 at the Convention and Exhibition Centre, said the industry contributed much to the economy. “In the first half of this year, the industry’s total export value was more than HK$25 billion, equivalent to about US$3.2 billion. “That’s an increase of 17.3 per cent compared with the same period last year,” he said. Mr Tang said the industry’s current focus was developing original designs and brand names. “We have partnered with the industries and introduced measures to facilitate our manufacturers, many of whom are based in the Pearl River Delta (PRD).” The chief secretary said the industry was also investing in education programs. “Another initiative is our unique free trade pact with the mainland called the Closer Economic Partnership Arrangement.” He said Cepa provided opportunities for companies incorporated in Hong Kong, regardless of the nationality of their owners and shareholders, to have World Trade Organisation access to the mainland market. “Last month a new Cepa supplement was signed which increases the number of service sectors covered by the arrangement to 40,” he noted. The Hong Kong Watch and Clock Fair 2008 – the largest fair of its kind – will run from September 3 to 7. It is jointly organised by the Hong Kong Trade Development Council (HKTDC), the Hong Kong Watch Manufacturers Association and the Federation of Hong Kong Watch Trades and Industries. According to industry statistics, Hong Kong was the world’s second largest exporter of complete watches and complete clocks in terms of value and quantity in 2005. In 2007, Hong Kong’s total exports of watches and clocks amounted to US$6.4 billion (around HK$50 billion), a 6 per cent increase over 2006. Organisers expect over 800 exhibitors internationally to visit this year. The fair is divided into major exhibit categories, including complete watches and clocks, parts and components, equipment, machinery, packaging and trade services.
Iraq’s cabinet has approved a US$3 billion oil service contract with China, the government of Prime Minister Nuri al-Maliki said on Tuesday, in a move that could signal the shape of anticipated future oil deals. “The cabinet has approved a service contract to develop and produce the Adhab oilfield between the [Iraqi] Northern Oil Company and a Chinese company, according to terms initialled by both sides,” government spokesman Ali al-Dabbagh said in a statement. The Iraqi government recently announced renegotiated terms of the oil deal with the Chinese National Petroleum Company (CNPC (SEHK: 0135)), which was originally signed in 1997. The deal marks the first major oil contract with a foreign firm for Iraq, which boasts the world’s third-largest proven reserves, since the fall of Saddam Hussein. Oil Minister Hussain al-Shahristani told reporters he would summon Chinese officials to Baghdad this month to sign the deal. CNPC, the parent company of PetroChina (SEHK: 0857, announcements, news) and Asia’s biggest oil and gas company, has a head start as foreign firms line up to sign lucrative long-term oil deals with Iraq. The CNPC deal is sure to be watched closely by firms seeking to secure the most profitable terms they can in contracts brokered with Iraq, with proven reserves of 115 billion barrels. Yet Iraq toughened its terms in renegotiating the CNPC deal, changing the contract to a set-fee service deal from the oil production sharing agreement (PSA) signed under Saddam. “The Oil Ministry refused anything but a service contract. Iraqis will not share their oil, Initial work on the Adhab field would begin in two months, Shahristani said. “We don’t consider the security situation in Iraq an excuse to slow the work,” he said. Violence has dropped in Iraq to four-year lows, but many foreign businesses remain reluctant to set up shop in a country still plagued by roadside bombs and suicide explosions. Shahristani said last month that under the revised deal, Adhab, south of Baghdad in Wasit province, will produce 110,000 barrels per day (bpd), up from a previous target of 90,000 bpd. Speaking on Tuesday, he said production capacity would reach 125,000 bpd in six years. The OPEC member is also moving ahead with plans to award the coveted long-term development contracts, which it hopes will be signed by June next year, for its largest producing fields that would raise output by a combined 1.5 million bpd. After decades of sanctions and war, Iraq’s giant, accessible fields are in need of major investment and expertise. Iraq has also been seeking to sign half a dozen short-term oil technical support contracts. But talks on those deals have proceeded slowly, and their conclusion remains in doubt. Shahristani said that Iraq would hold a press conference in London on October 13 where information on fields up for long-term contracts would be made available. Iraq will then announce a second round of bidding by the end of the year, he said. The government plans to announce a new bidding round every six months. Companies bidding for long-term oil contracts must open an office in Baghdad, officials say.
Taiwan set to provide landing visas
to mainland tourists - Taiwan said on Tuesday it plans to offer landing visas to
mainland tourists travelling to two Taiwanese-controlled islands off the
mainland, in another goodwill gesture to Beijing. Sept 3, 2008
Change in policy sees 33 shut out by Macau - At least 33 mainland tourists were denied entry to Macau yesterday under a tightened visa policy, after they had arrived by ferries from Hong Kong. ICAC nabs `graveyard ghouls' - Seven serving and two former staff of the board of management of the Chinese Permanent Cemeteries are among 18 people who have been arrested for allegedly soliciting and accepting monetary advantages for allowing improper exhumations. The Independent Commission Against Corruption said yesterday that five tombstone contractors and four funeral agents were also arrested in connection with the scam, which saw families exhume bodies that may not have been fully decomposed after 10 years. Among those arrested were two supervisors, five assistant supervisors, a former acting supervisor and a former assistant supervisor of the CPC board. According to regulations, families must exhume the remains from lots with non- renewable 10-year leases only at the end of that term. If remains are not fully decomposed, they must be interred for an additional six months before being exhumed again. Most families hire tombstone contractors to take care of exhumation. A Home Affairs Bureau spokesman said the CPC board attaches great importance to the conduct of its staff, and that it will review the existing situation and study whether there is room for improvement.
China sees Japan ties steady
post-Fukuda, say experts - China and Japan will stay focused on improving
long-strained ties after the departure of Japanese Prime Minister Yasuo Fukuda,
even if conservative Taro Aso succeeds him, mainland.
The gold medals handed out at the Beijing Games were nicknamed jinxiangyu, which means "jade framed in gold", the combination of two ultimate treasures. They were said to be the most expensive gold medals in Olympic history, costing 2,000 yuan (HK$2,300) each. But for a Chinese athlete, gold is priceless. It is the glory of all glories, won at home. It also means unprecedented government and corporate rewards, a handsome advertising income and a guarantee of lifetime security and state support. The first thing young gymnast Jiang Yuyuan reportedly said after winning the women's team gold was: "Mother, now you don't have to beg." Her mother once threatened Yuyuan, when 10, that if she gave up on the harsh training, the only option she had was to come home and beg. Her father made a meagre income as a cab driver in Guanxi .At a party thrown at judo gold medallist Yang Xiuli's Liaoning home to celebrate her victory, city officials announced a prize of 100,000 yuan in cash and a flat. The mayor pledged that "from now on, if Yang's family has any problems, the city government will always be there to help". Just before the Olympics, Yang's family could not even afford 9,000 yuan for her younger brother's university fees and they had to borrow from relatives. Under the state-controlled sports system, athletes are recruited young and many come from struggling households. Becoming a top athlete offers a ticket out of poverty, but until they win world titles their lives rely on a monthly government cheque. Shooting champion Qiu Jian's wife said the couple could now pay off their 150,000 yuan mortgage after he had snatched gold. The family of weightlifter Chen Xiexia got a huge plasma television on the first day of the Olympics as a gift from the village government so residents could watch Chen, who won the host country's first gold. A gold medallist can expect about 1 million yuan in state bonuses. The central government has promised 350,000 yuan, a 75 per cent increase from Athens and 33 times that of the prize from Seoul in 1988. But other government awards can be lucrative. Shaanxi province offered 1 million yuan; Zhejiang 500,000 yuan; and Liaoning 300,000 yuan. Last weekend, the Hong Kong-based Henry Fok Education Foundation awarded each gold medallist a kilogram of gold (worth more than US$29,000) and US$80,000. Yanjing Beer promised each water sports gold medallist 1 million yuan. For those with the right looks, and the right sport, the gold offers advertising opportunities worth millions of yuan. Economists estimated that when Liu Xiang dropped out of the 110 metres hurdles, it cost him 1 billion yuan. "Athletes who do sports that are difficult to promote, such as shooting, weightlifting and boxing, tend not to have a wide appeal, although diving has been an exception," said China Stars Sports Culture Communications manager Wang Qi . "And a `first' is always good, like a sport China has never won in." Little known before the Olympics, Chen Xiexia is already expected to pocket at least 10 million yuan from adverts and 3 million yuan in government and corporate prize money. She will be also be seen on sets of commemorative stamps. Shanghai University of Sports professor Liu Bing said a gold, above all, offered lifelong security. "Under the Chinese training system, athletes are not well-equipped for society," Professor Liu said. "Money is one-off, but a gold medal guarantees a job after they retire from sports, or the admission into the best schools. The government will definitely take care of these people over the years. They can't be seen living on the streets." Many earlier gold medallists have remained within the system as coaches, such as "father of shooting" Wang Yifu or as a sports bureaucrat like table tennis queen Deng Yaping. An increasing number have also been recruited into politics. Former gymnast Li Ning (SEHK: 2331) is the definitive success story - from the three gold medals in Los Angeles in 1984 to becoming a successful businessman with his own brand. However, at least for two gold medallists this year, winning could simply mean the fulfilment of a personal goal. Sichuan gymnast Zou Kai, who won three golds, has decided to auction one and donate the proceeds to quake victims. Shooter Guo Wenjun has already denied rumours that she was hoping to be reunited with her father, who left the family nine years ago. But after hearing her heartbreaking tale, at least 10,000 netizens have signed up to help find him. Chinese families across the country are able to send their children to school tuition-free in the nine-year compulsory education period as of Monday. From this fall semester, about 28.21 million urban students in primary schools and in junior high schools joined rural students to benefit from the plan, according to the Ministry of Education. The students still must pay for textbooks and uniforms. Students in rural areas have already started to enjoy the treatment, benefiting about 150 million students. The fees are not much for ordinary urban families but still a burden for low-income families like Liu Yang's. The 12-year-old boy is in the sixth grade, the last year of primary school, in central Hunan's provincial capital Changsha. His father is sick and his mother is a domestic helper. "I paid about 300 yuan, including fees for textbooks and uniforms, every semester in the first three years. In the past two years, the school exempted me from some fees," he said. "This semester, tuition and incidental expenses were exempted. The school did not charge me for textbooks or uniforms, either." Other policies are helping children like him get an education. Zhao Linxi, an 11-year-old girl in west Beijing, has received subsidies of 400 yuan from the school and 600 yuan from the government annually for three years. "We are having some financial problems but I feel no burden to send my child to school," said Zhao's father, who has a spleen disorder that keeps him from working. The family depends on her mother's income. "We are working on a comprehensive system to help children from poor families, including subsidies, scholarships and other preferential policies," said Cheng Binquan, an official with the civil affairs department of the Xicheng district government in Beijing. Along with more than 3,000 teachers and students, Premier Wen Jiabao attended the opening of a temporary middle school in southwest China's quake zone as the new semester started on Monday. Beichuan Middle School was among the hardest-hit schools in the May 12 earthquake. Wen visited students and teachers at the school three times prior to the Monday event.
ICBC says overseas assets exceed $43
bln - Overseas assets of the Industrial and Commercial Bank of China (ICBC)
reached 43 billion U.S. dollars by the end of June, up 22 percent, or 7.8
billion U.S. dollars, from the end of 2007, an ICBC spokesman said on Tuesday. Sept 1 - 2, 2008
Hong Kong and Singapore have signed a new aviation agreement which would help improve aircraft maintenance, Civil Aviation Department director-general Norman Lo Shung-man said on Friday. The Civil Aviation Department (CAD) of Hong Kong and the Civil Aviation Authority of Singapore (CAAS) said the new memorandum of understanding (MOU) was an extension of an MOU signed on December 16, 2004. It expands mutual recognition of approvals of maintenance for all aircraft, engines and components. "The agreement allows maintenance organizations in Hong Kong to maintain aircraft registered in Singapore without seeking additional approval from CAAS," he said. "Likewise, maintenance organizations in Singapore can also aircraft registered in Hong Kong without separate approval from CAD," said Mr Lo. "Partnership and co-operation among regulatory authorities can reduce duplication of approvals, thus maximizing the utilization of resources of both industry partners. It will also improve the quality of aircraft maintenance through use of common airworthiness standards," he said. Hong Kong has had similar mutual recognition arrangements on aircraft maintenance with Canada since 2005.
Beijing-backed CITIC Pacific (0267) said its first-half net profit decreased 12 percent to HK$4.38 billion, causing it to cut the interim dividend for the first time in at least 14 years. China Telecom (0728) reported first-half net profit fell 8.2 percent to 12.63 billion yuan (HK$14.39 billion), missing estimates, and chairman Wang Xiaochu warned there will be short-term downward pressure on profit despite the coming launch of mobile services. China's tallest building, the 492-meter Shanghai World Financial Center - which opens to the public tomorrow - is on track to reach 90 percent occupancy within a year despite worries over the economy, its developer and top shareholder said. The building in Shanghai's Lujiazui financial district has already achieved a 45 percent occupancy rate, with tenants including Sumitomo Mitsui Banking Corp, Mizuho Corporate Banking Corp, BNP Paribas and Commerzbank, Japan's Mori Building Co said. "Generally speaking there is some chaos in the global financial markets but I'm confident it will not affect Shanghai's financial environment," Mori chief executive officer Minoru Mori said at the 101-story tower. Mori expects to recoup investment on the 125 billion yen (HK$8.9 billion) tower, partly owned by Wall Street bank Morgan Stanley, within 12 years. The per capita income of people in China's rural areas rose 10.3 percent in the first half of 2008, the greatest increase for the six-month period for four years.
*News information are obtained via various sources deemed reliable, but not guaranteed
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Skype - FREE
Voice Over IP
Holidays Greeting from President Obama &
Johnson Choi
Hong Kong:
US lawmakers have rejected a US$700 billion financial rescue plan, throwing
efforts to calm the financial crisis rocking global markets into turmoil. The
House of Representatives voted 228 to 205 against a bill that would authorise
the biggest government intervention in the markets since the Great Depression.
The Dow Jones Industrial Average fell 458.3 points, or 4.1 per cent, in
afternoon trade following the vote, after falling more than 700 points at one
point as it became clear that the vote was headed for failure. "The American
people rejected this bailout and now Congress did likewise," Republican Mike
Pence said. House Financial Services Committee chairman Barney Frank said: "I'm
very disappointed. The Republicans killed this." The legislation would have
given Treasury Secretary Henry Paulson broad authority to buy troubled assets
from financial companies. US President George W. Bush had lobbied lawmakers to
support the bill, making a live televised statement before Wall Street opened to
push for the package, saying it was needed to "help keep the crisis in our
financial system from spreading throughout our economy". The revised plan
considered by the House would have given Mr Paulson an immediate US$250 billion
to buy bad loans from financial companies, with the rest to be doled out in
stages. The compromise also included a proposal by House Republicans, whose
objections scuttled an earlier agreement in principle, for government insurance
for mortgage-backed securities. The plan included a bipartisan oversight board
to monitor the purchase and sale of assets, and imposed limits on the
compensation of executives at participating companies. House Republican leaders,
in speeches on the House floor, urged their colleagues to support the bipartisan
House and Senate compromise crafted over several days. Still, lingering
opposition from many Republicans prompted Democratic leaders, including House
Speaker Nancy Pelosi and majority whip James Clyburn, to circulate among
Democrats on the House floor to seek more support. After an initial tally of 207
to 226, the vote was held open for negotiations - during which lawmakers could
change their minds - but procedures were suspended after only two members
switched their votes. The vote came as the world's central banks redoubled
efforts to revive the global financial system, with the US Federal Reserve
announcing a US$330 billion expansion of currency swap arrangements with nine
central banks to boost US dollar liquidity throughout the system. It also came
after a day of falls in global equity markets in the wake of the near-collapse
of major European financial institutions and growing doubts about the ability of
the planned bailout to avert a global meltdown. The Hang Seng Index dropped the
most in nearly two weeks, plunging 801.41 points, or 4.29 per cent, to
17,880.68. Elsewhere in the region, Japan slid 1.26 per cent, South Korea
dropped 1.35 per cent and Singapore lost 2.08 per cent. In London, the FTSE 100
lost 5.3 per cent. The Hong Kong market outpaced losses in the region after a
round of mortgage rate rises by city lenders sparked a sell-off of property
stocks. Cheung Kong (Holdings) (SEHK: 0001) and Sun Hung Kai Properties (SEHK:
0016) fell 6.95 and 5.09 per cent respectively. Sino Land closed down 7.77 per
cent.
Shares of Ping An Insurance (2318) plunged to a 16-month low yesterday on
concerns of profit erosion after investment loss on shares of Dutch-Belgian
financial firm Fortis which have slumped 71 percent since November. 
China:
Visa approvals surge in Beijing - The number of visas issued to foreigners
wanting to visit or reside in Beijing increased sharply after the Olympics,
Xinhua said yesterday. The agency said "a record number" of temporary-residency
and entry visas had been issued by the Beijing Public Security Bureau in recent
weeks. Between September 18 and Sunday, the authorities had processed 12,000
visa applications. Xinhua said the daily number of visas issued was twice that
during the Olympics. The report was the latest indication that the mainland has
relaxed the visa restrictions it imposed on foreigners during the Beijing
Olympics and Paralympics. Officially, however, Beijing has never admitted that
it tightened entry and residential visa requirements for foreigners during the
Games, attributing the high number of refusals during the period to "technical
reasons". Xinhua said yesterday that many foreigners chose to visit Beijing
after the Games to avoid the rush. As well, many visitors who came for the
Olympics wanted to stay longer in the capital, and many foreigners residing in
Beijing returned to their home countries for the summer holiday and returned
after the Olympics. All these factors pushed up the number of visa applications.
Beijing granted visa-free access to overseas visitors accredited by the
International Olympic Committee for a month before and after the Games. These
visitors included journalists, athletes and support staff. It tightened visa
rules for other foreigners during the Olympics, causing great inconvenience to
many foreign businesspeople and tourists. Earlier, travel agents in Hong Kong
confirmed that mainland authorities would lift the visa restrictions on
foreigners in the city from October 16.
The tainted-milk scare deepened yesterday as British chocolate maker Cadbury
announced it was recalling 11 of its products made on the mainland after
melamine was detected in them.
Astronauts Zhai Zhigang
(centre), Liu Boming (right) and Jing Haipeng wave to the crowds as they return
to the Beijing Aerospace Centre.
Hongkongers' concern for heritage and the
environment could soon become a "core value" in the promotion of the Hong Kong
brand, the financial secretary and an official responsible for promoting the
city hinted yesterday. Information Services Department assistant director Mary
Leung Lai Yim-ming, tasked with revitalising the Hong Kong brand, said: "I want
to emphasise this is not a review of the flaming dragon exercise. We haven't
said we have to change it or we have to keep it. "If there is something we have
to change, it is the promotion of the core values." Feedback from consultations
with various sectors and the public would determine whether the city's logo
needed changing, she said. The government has been consulting since May and has
spent HK$1.3 million to hire a public relations firm to take a fresh look at
what cost HK$9 million to produce in 2001. The "BrandHK" concept included the
flaming dragon logo, which drew fire for what some critics said was a waste of
money. During the launch of the myhk2020.com website, which will serve as a
platform for gauging public views on the city's values, Financial Secretary John
Tsang Chun-wah said Hongkongers' attitudes towards heritage and the environment
had changed considerably since 2001. "[The current brand] represents people's
vision for Hong Kong and shared values from that period of time," Mr Tsang said.
"Has that vision and those shared values since changed? This is something we
need to think about. In truth, in the past seven years ... Hong Kong's attitude
towards protection of the environment has changed." After the data had been
analysed in the middle of next year, new attitudes towards heritage and
environmental protection could be included as core values in the promotion of
the city, with perhaps a greater emphasis on eco-tourism, Mrs Leung said. "When
I asked a child what he wanted to see in Hong Kong in 2020, he said more
dolphins," she said. Promotional materials now list "progressive", "stable",
"free", "opportunity" and "high quality" as Hong Kong's core values.
Competitions involving music videos, lyric writing and drawing were launched
yesterday to encourage young people to express their visions of Hong Kong. The
consultation will run until the end of November. 
The MTR Corp's bid to improve its single-journey ticketing system at its Kowloon
Tong, Nam Cheong and Mei Foo interchange stations ran into problems, with many
commuters confused by the removal of the ticket turnstiles. Under the new
system, commuters transferring to other lines through these stations are no
longer required to exit and reenter. But a number of passengers were unaware of
the new arrangement even though the MTRC had dispatched around 50 additional
staff to help direct interchange passengers. Operations head Wilfred Lau Cheuk-
man said a further 100 staff in yellow and green shirts will be deployed today
and more signs will be put up. He added there will be a one-week grace period
during which passengers will not be forced to pay for two separate journeys. An
MTRC spokeswoman said there were 700 cases of people leaving the network
accidentally as by 8pm last night . At Kowloon Tong, passengers complained they
could not reach the Beacon Hill exit, while those at Mei Foo said 10 minutes had
been tacked onto their journey due to stopped escalators. "With all this
confusion and bungling, I hope this all can be sorted out before Monday's
morning rush," said one concerned mother. The removal of ticketing gates at the
interchanges will eliminate second charges for single-journey ticket holders,
while barriers between the Tung Chung Line and Hong Kong-bound trains will be
removed at Nam Cheong station. 
Astronauts Zhai
Zhigang (left), Liu Boming (center) and Jing Haipeng wave after yesterday's
landing in Inner Mongolia. Three Chinese astronauts returned safely to Earth
yesterday after a 68-hour voyage and the country's first spacewalk. The Shenzhou
VII spacecraft's re-entry module parachuted down onto the Inner Mongolian steppe
just before 5.40pm, concluding China's third successful manned spaceflight in
five years. Doctors rushed to check astronauts Zhai Zhigang , Liu Boming and
Jing Haipeng as they emerged from the module, readjusted to gravity and
recovered from the punishing re-entry. "It was a glorious mission, full of
challenges, with a perfect result. I'm proud of my country," Colonel Zhai, the
mission commander, said. He wrote his name into the history books on Saturday
with a 19-minute spacewalk which made China the third country after the US and
Russia to achieve the feat. All three astronauts looked relaxed, with big smiles
on their faces. The control centre announced later, after extensive physical
checks, that all three were in very good condition. Watching at the Beijing
ground control centre, Premier Wen Jiabao called the trip "a new and important
success in our nation's space technology" and "an inspiration to the Chinese
people". "Your historic feat will be remembered by the country and the people,"
he said. China has attached great importance to the manned space programme and
sees expansion in outer space as a way to strengthen the nation's global
competitiveness. Mr Wen pledged again yesterday that China was committed to the
peaceful exploration of space. "It is the Chinese people's persistent aspiration
to develop manned spaceflight technologies for the peaceful exploration and use
of outer space," he said. President Hu Jintao watched the launch in Jiuquan ,
Gansu , on Thursday and talked to Colonel Zhai via satellite phone on Saturday
after his spacewalk. Space program officials said the successful return had
helped lay a firm foundation for China's ambitious space plans, which include
building a space station and a mission to the moon. Program spokesman Wang
Zhaoyao said China could take advantage of the momentum generated to test its
outer-space docking technology by 2010. By 2020, China would launch a space
vehicle capable of hosting multiple astronauts for a longer period of time, he
said, before planning for a moon landing. "Landing on the moon is a very
challenging task, but we feel like we have to do something there because it has
such strategic importance for our country," Mr Wang said. Despite its recent
success and lofty goals, Beijing reminded citizens that the nation was still a
latecomer in the space club. Xinhua quoted experts as saying China still lagged
far behind space leaders such as the United States and Russia. The journey home
started at 5.01pm when the ground control centre ordered the spacecraft to
return. The re-entry module opened its parachute at 5.25pm, before a soft
landing on flat grassland. A military helicopter arrived at the landing spot
almost simultaneously.
Dai Xianglong says the pension fund
earned 100 billion yuan from the stock market last year, which can be used to
cover this year's losses. The mainland's national pension fund intends to become
a strategic investor in China Development Bank, a policy lender that will become
a commercial bank, the head of the fund said yesterday. The National Social
Security Fund, which managed 516 billion yuan (HK$586.07 billion) at the end of
last year, was actively investing in equity funds, directly in industrial and
commerce companies, and in infrastructure and energy projects, chairman Dai
Xianglong said on the sidelines of the World Economic Forum in Tianjin. With a
3.1 per cent stake in Britain's Barclays Bank, CDB is an infrastructure lender
in support of government policies. The CDB said earlier this month it was aiming
for a stock market listing after turning into a joint-stock company through a
restructuring. Mr Dai did not provide details of the purchase plan. The lender
had assets of 2.89 trillion yuan at the end of last year, up 25.1 per cent year
on year, according to its annual report. Net profit was 29.6 billion yuan and
non-performing loan ratio stood at 0.59 per cent. At the end of last year, China
SAFE Investments, an investment vehicle of the central government, injected
US$20 billion into the policy bank, raising its capital adequacy ratio to 12.77
per cent, which is above the minimum 8 per cent requirement. Since last year,
CDB has sponsored several village banks in Sichuan, Qinghai, Gansu, Jilin and
Hubei provinces as the controlling shareholder as part of its efforts to boost
commercial operations. Mr Dai also called for the faster approval of investments
under the qualified domestic institutional investor or QDII scheme so that
mainlanders can use foreign exchange or change yuan funds into foreign funds to
invest in overseas stock markets. This would create a "two-way, orderly and
win-win" flow of foreign exchange in and out of the country, he said. "We should
not only see the risk from a faster opening of our capital account, we also need
to see the risk of not doing so," he said, referring to foreign exchange losses
from the depreciation of the US dollar. Mr Dai said mainland financial
institutions should be allowed to decide for themselves whether to invest
overseas, adding that the opening of the capital accounts should be increased to
pave the way for the yuan to be freely convertible eventually. He also said the
fund would continue to look for investment opportunities. "So it's important to
choose good fund management companies," he said. Earlier media reports said the
bank had selected about eight global asset management firms to look after its
investment portfolios. On the fund's performance, Mr Dai said: "Last year, we
earned 100 billion yuan from the mainland stock market, which can be used to
cover this year's losses." The mainland stock market has plummeted 56.4 per cent
so far this year. The fund owns shares in Bank of Communications (SEHK: 3328),
Bank of China, Industrial and Commercial Bank of China (SEHK: 1398) and other
listed companies. "The fund will amount to 1 trillion yuan in two years. By
then, the social security fund, commercial insurance fund, social insurance fund
and corporate annuities will total more than 7 trillion yuan," Mr Dai said. "A
considerable part of the fund can be invested in the stock market. It can help
stabilise the market." The State Council allows the fund to use up to 10 per
cent of its capital to invest in equity investment funds and up to 20 per cent
in direct investments to industrial and commercial companies. At a forum in
Tianjin in June, Mr Dai emphasised the country's policy commitment to
"vigorously develop" domestic private equity funds. The fund has invested almost
US$500 million in two leading mainland private-equity funds, CDH Investments and
Hony Capital. "We must step up the expansion of our investment channels to boost
returns. If I only put China's pension money in low-earning deposits, how will I
answer to the public?" Mr Dai said. 
China Telecommunications Corporation
said it would invest 80 billion yuan to upgrade its newly acquired CDMA network.
Hong Kong homebuyers who have yet to
complete purchase contracts on flats that have plunged in value since they put
down their deposits may be tempted to forfeit their down payments and walk away
from the deals, veteran property investors and analysts warn. "They may cut
their losses if they can because this property consolidation will last for two
years," said Edwin Leong Siu-hung, managing director of developer Tai Hung Fai
Enterprise. Analysts also expect grade-A office prices in Admiralty would plunge
by 44 per cent during this consolidation period. "The current financial crisis
is the worst I have ever seen - worse than the financial crisis of [1997-1998]
and the Sars crisis in 2003," said the chairman of Coda Properties, Richard Tong
Kwan-ming. "Foreign investment funds are now offloading their properties before
the market sinks further." Estate agents reported that asking prices on units up
for sale had fallen sharply this week after the latest blows to market
confidence from the failure of United States investment bank Lehman Brothers
Holdings and the forced sale of Merrill Lynch and a sharp rise in domestic
wholesale money market rates that could spill over into higher home financing
costs. The Hong Kong Monetary Authority was last week obliged to inject funds
into the market after one-month interbank rates more than doubled to nearly 5
per cent as local credit conditions tightened. "We have seen sellers drop their
asking prices by 3 to 5 per cent this week to quit the market before things get
worse," said Fredy Wu Yat-fat, the chief executive at Hong Kong Property. As
such, speculators were likely to be first in the exit queue as funding costs
rose and the values of their investment properties plunged, analysts said. Mr
Tong, who spent more than HK$260 million buying two commercial properties
earlier this year, said he now feared that Hong Kong's residential market would
be trapped in a three-year correction while the mainland real estate market
might take eight years to recover. The New Territories and Tseung KwanO, where
major residential projects were offered for pre-sale this year, would be worst
hit, he said. "Investors who bought new units in these areas may be considering
if they should cancel the deals if they are caught in financial difficulties."
Mr Leong echoed these concerns. The firm had acquired several old buildings and
development sites this year and its first joint-venture serviced apartment
project with Shama was opened in Fortress Hill this year. "End-users may proceed
with uncompleted deals, but speculators could be tempted to cut and run," he
said, since prices could fall further. "If you are not yet in the market and
plan to buy a flat for your own use, you may pick up some bargains this time
next year, or wait until rental yields reach 5 per cent," Mr Leong said. Veteran
investor and property trader Tang Shing-bor, who owns car trading firm Success
Group and is an active trader in retail shops, said now was not the right time
to buy as prices had further to fall. "If you bought a flat at the peak level
for your own use and you can afford to hold, you could do so and wait for
another up cycle in the property market. The property market will not always be
in a down cycle," he said. "But you will be in great trouble if you bought the
property for speculation with a high level of debt." Leland Sun, managing
director of Pan Asian Mortgage, said with the present outlook for the market
some homeowners could be better off quitting the market now - particularly if
they were holding investment properties - and re-entering later. "In the past,
the Hong Kong property market has lagged events on the stock market by several
months and most industry experts would probably agree that property prices could
fall a further 25 per cent or more in the coming six to 12 months," he said.
Since reaching a historical high of 31,958 points in late October last year, the
Hang Seng Index has see-sawed in volatile trading conditions and closed at
18,872 points yesterday. Nicholas Brooke, chairman of Professional Property
Services Group, said most investors and end-users were now adopting a
wait-and-see attitude. "It may not therefore be practical to contemplate sale
until we see some resolution to the current financial market difficulties," Mr
Brooke said. "Most analysts seem to consider that we are in a bumpy road for the
next 12 to 18 months." They also forecast a bleak outlook for the grade-A office
market. Mr Tong predicted prices at No9 Queen's Road Central would tumble 44 per
cent to HK$10,000 per square foot from a high of HK$18,000 per square foot late
last year, while Lippo Centre dropped 30 per cent to HK$9,000 per square foot
from HK$13,000 per square foot last month. Mr Leong believed merchant banks hit
by the financial crisis would be forced to relocate to areas with lower rents,
which would put downward pressure on grade-A office rental, and prices in
Admiralty would fall at least 10 per cent. But he said a correction in the
retail leasing sector would not take place until the second half of next year as
supply was limited in prime locations. David Watt, chairman for North Asia at
DTZ, said it was impossible to predict the full extent of the impact on the Hong
Kong real estate occupational market. "Only one thing is for sure, it won't be
positive," he said.
Top food and health official York Chow Yat-ngok has put the stamp of approval on
all baby formula still on shelves, an assurance which came even as a fifth
kidney stone case related to the melamine- laced milk scandal was detected
yesterday. The 10-year-old lives in Hong Kong and travels to the mainland on
holidays. He has been drinking two packs of 250ml low fat high-calcium milk
purchased in Hong Kong since 2005. He initially drank Mengniu milk but switched
to Yili in 2007 and also began taking two Yili milk tablets purchased in the
mainland in March. The boy was checked at the Queen Elizabeth Hospital special
assessment center which found two stones in his left kidney yesterday. He is
being treated at Princess Margaret Hospital and is in stable condition.
Meanwhile, Secretary for Food and Health Chow said the Centre for Food Safety
has tested most baby and dairy products in the past two weeks. All were safe but
they will be tested again over time. Starting today all fresh milk imports from
the mainland will be tested before they can be sold. Kowloon Dairy and Trappist
Dairy welcomed the new measure, with the latter saying the tests will be taken
once the milk is delivered at the border gate. The results will be made known to
the factory and the companies the same day. Meanwhile, Macau authorities
yesterday found melamine in Lotte Koala Chocolate Biscuits (50g), Mengniu
Monmilk Breakfast Malt Milk Beverage (250ml) and Nestle Neslac Gold 1+ Growing
Up Milk Powder (one year onwards) (900g). They contained 24ppm, 2.35ppm and less
than 1ppm of melamine respectively. In Hong Kong, ParknShop last night recalled
all China-made Lotte Koala Chocolate Biscuits. But the melamine in the Nestle
product did not exceed the legal limit in Hong Kong. Chow also said there are
about 60,000 children with Hong Kong residency living in the mainland, and
warned the SAR may not cope with a rush of these children for checks. Some may
be given an appointment and assessment services will continue for at least six
more months. The Hospital Authority will open two additional special assessment
centers at Kwong Wah Hospital and North District Hospital today to handle
referrals from special outpatient clinics. The 18 clinics has assessed 1,495
children under 12 yesterday in which 353 were referred to the special assessment
centers.
Premier Wen Jiabao said Beijing is not
seeking global influence, even as it increasingly opens up to the world
politically and economically. "In international relations, China does not seek
to build alliance or become a leader and will never do so in the future," Wen
told the UN General Assembly. The United States has expressed concern about
China's rapid military buildup, but Wen tried to assure world leaders that his
country has no wish to become a military power. "China's development is
peaceful. It will not harm anyone or pose a threat to anyone. China does not
seek hegemony now, nor will it do so in the future. China keeps and develops an
appropriate level of military capability solely for the purpose of safeguarding
its sovereignty and territorial integrity." Wen also warned that the impact of
the US financial crisis could become "more serious" and called for concerted
efforts to contain the turmoil. He indicated that China, which has tens of
billions of dollars in US treasury bills, is ready to help in an international
bid to ease the turbulence that has rocked financial markets across the globe.
"The ongoing financial volatility has affected many countries and its impact is
likely to become more serious," Wen "To tackle the challenge, we must all make
concerted efforts." Wen also hinted that the United States should work more
closely with the international community to tackle the turmoil. "So long as
people of all countries, especially their leaders, can do away with hostility,
estrangement and prejudice, treat each other with sincerity and an open mind,
and forge ahead hand in hand, mankind will overcome all difficulties and embrace
a brighter and better future," he said. 
Chinese Premier Wen Jiabao(R)
shakes hands with Bill Gates, chairman of Bill & Gates Foundation during their
talks on the sidelines of the a high-level UN meeting for Millennium Development
Goals (MDGs) in New York, the United States, on Sept. 25, 2008. 
China's Zheng Jie celebrates scoring during the women's singles quarterfinal
against Serbia's Ana Ivanovic at the 2008 China Open in Beijing, capital of
China, Sept. 26, 2008. Zheng won 2-1 and qualified for the semifinal.
Olympic diving champion Guo Jing and
shooting gold medalist Pang Wei, both born in Hebei Province, are rewarded
respectively with 1.6 million yuan and 800,000 yuan by Hebei provincial
government, September 25, 2008. 
Premier Wen Jiabao speaks with
US President George W. Bush before a dinner on Tuesday at the United Nations
building in New York. Premier Wen Jiabao has praised strengthening ties with the
US and expressed hope that the co-operation will continue "no matter who wins"
the presidential race in November. In a wide-ranging speech to US-China business
leaders in New York before his address yesterday to the UN General Assembly, Mr
Wen said the two countries "are not competitors, but partners". "Two countries
that appreciate each other and learn from each other should be able to live
together in amity and achieve common progress." Mr Wen did not endorse either
candidate, but said Beijing was confident that Sino-US relations would continue
to "move forward". "No matter who becomes the next American president, China
hopes to maintain and develop a constructive and co-operative relationship with
the United States," Mr Wen said in his speech on Tuesday. In his speech to the
UN General Assembly, Mr Wen warned of the possible ongoing impact of the US
financial crisis. "The ongoing financial volatility, in particular, has affected
many countries and its impact is likely to become more serious," he said. "To
tackle the challenge, we must all make concerted efforts. So long as people of
all countries, especially their leaders, can do away with hostility,
estrangement and prejudice, treat each other with sincerity and an open mind,
and forge ahead hand in hand, mankind will overcome all difficulties and embrace
a brighter and better future." He also reaffirmed Beijing's stance that
following its hosting of the Olympics it would continue to pursue reform and
opening up. And he thanked the international community for the support it had
offered China after the May 12 Sichuan earthquake which killed 88,000 people. In
his earlier speech, Mr Wen said: "Due to differences in our social systems,
development level, history and culture, China and the United States may not see
eye to eye on certain issues, but this is nothing to be afraid of. As long as
the two sides engage in dialogue and consultation on the basis of equality and
mutual respect, we will be able to gradually dispel misgivings and enhance
mutual trust. "We have reason to believe and expect that the world's biggest
developing nation and the strongest developed nation will have sufficient
courage and wisdom to overcome any difficulties and obstacles, and together
build a bright future." Mr Wen also spoke about Taiwan. "The Taiwan problem is
still the most central and most sensitive problem in Sino-US relations. History
has proven that whether Sino-US relations can develop smoothly depends to a
great extent on whether the Taiwan problem can be properly resolved," he said.
"We hope the United States will support improvement of cross-strait relations
and help the two sides realise common development. This serves the interests of
people on both sides of the Taiwan Strait, and is conducive to Sino-US relations
and world peace." Jin Canrong, Renmin University Sino-US relations professor,
said there was bound to be distrust arising from different strategic concerns.
"Premier Wen is sending a message to the next American leader that the Taiwan
issue should not be taken lightly," he said. 
The Long-March II-F carrier rocket carrying the Shenzhou-7 spaceship blasts off
from the launch pad at the Jiuquan Satellite Launch Center in northwest China's
Gansu Province, on 21:10 p.m., Sept. 25, 2008.
The video grab taken on Sept. 25, 2008 at the Beijing Space Command and Control
Center in Beijing, China, shows Chinese taikonauts in the return module of the
Shenzhou-7 spacecraft. The center is prepared for the launching of Shenzhou-7 as
all three Chinese taikonauts have entered the spacecraft at the Jiuquan
Satellite Launch Center in northwest China 18:28 p.m. Thursday, about three
hours ahead of its scheduled launch.
Hundreds
of customers descended on Bank of East Asia branches amid unconfirmed rumours
questioning the bank's stability on Wednesday. Bank of East Asia (SEHK: 0023)
(BEA) on Wednesday denied local rumours questioning its stability - which caused
some of its customers to panic - and drove its shares down more than seven per
cent. Worried by rumours, many BEA clients rushed to the bank to withdraw their
money. Speaking at a press conference, BEA executive director Joseph Pang Yuk
Wing said the bank did not have any financial problems. “As far as I know, there
were a number of individual clients withdrawing money since the spread of the
rumours and we have prepared enough liquidity to facilitate their needs.” To
restore confidence, he said the bank would allow investors to prematurely
withdraw money from fixed-term deposit accounts. Mr Pang said the operations of
the bank had been affected by malicious rumours. “Those who spread the rumours
are intending to disrupt the city’s financial system’s normal operations. We
have reported the case to the police and they are investigating the source of
the rumours,” he said. Mr Pang said the bank extended its service for half an
hour on Wednesday to help clients. The lender affirmed in a statement issued on
Wednesday its capital adequacy ratio stood at 14.6 per cent – well above
international standards. It said its total exposure to troubled Lehman Brothers
and AIG was HK$422.8 million and HK$49.9 million, respectively. At the end of
Wednesday’s trading day, BEA’s share price fell 7.2 per cent to HK$25.05.
Speaking at a luncheon on Wednesday, Financial Secretary John Tsang Chun-wah
said local banks remained in good financial shape. “Local banks remained
profitable in the first six months of 2008. Their aggregate direct and indirect
exposures to sub-prime mortgage and related products are immaterial relative to
their total assets,” he said. His comments were echoed by a spokesman for the
Hong Kong Monetary Authority. “Local banks are well capitalised and highly
liquid. Their asset quality is good and their operations have been strong. “The
rumours of the financial instability of Bank of East Asia are unfounded,” the
spokesman added.
Two new patients as cake, sweets go on
tainted list - The number of Hong Kong children found with kidney stones rose to
four as the industrial chemical melamine believed to be responsible was found in
cakes for the first time.
Jiang Chaoliang edged closer to taking
the helm of China Development Bank after resigning as chairman of Bank of
Communications (SEHK: 3328) and being appointed as deputy party secretary of the
policy lender yesterday. Mr Jiang, 51, will soon be designated as governor of
the Beijing-based policy bank, according to sources, as it attempts to transform
into a commercial lender. Xinhua reported yesterday that CDB governor Chen Yuan
had been appointed party secretary of the policy bank and Mr Jiang, along with
Yao Zhongmin, were named deputy party secretaries. The new chairman,
vice-chairman and governor would be reappointed later, it said. Mr Chen, 63,
will become CDB chairman amid the reshuffle, according to sources.
Shanghai-based Bocom, the mainland's fifth-largest lender, said in a statement
yesterday that Mr Jiang resigned "due to reassignment of work". The South China
Morning Post (SEHK: 0583, announcements, news) reported on September 8 that Mr
Jiang would replace Mr Chen as governor to accelerate the policy bank's
transformation into a commercial lender. Bocom at the time denied the report.
Sources said Hu Huaibang, chairman of the supervisory board of China Investment
Corp, the mainland's US$200 billion sovereign wealth fund, would succeed Mr
Jiang as head of Bocom. Mr Hu, 53, became commissioner of disciplinary
inspection of the China Banking Regulatory Commission in February 2005. He was
appointed chief supervisor of CIC in September last year. Bocom said an
announcement on the new chairman would be made later this week. Mr Jiang, a
former assistant to the governor of the People's Bank of China and a deputy
governor of Hubei, carries a ranking of vice-minister and his appointment as CDB
governor is seen as a stepping stone to a higher position. He was likely to
replace Mr Chen as No1 official at the bank when the latter retired in a few
years, insiders said. "Mr Jiang is a capable banking official, but it remains to
be seen whether he can manage the policy bank well," a source said. "CDB is at a
critical stage because it is an uphill task to transform into a commercial
bank." The bank was established by the State Council in 1994 to provide
long-term financing for domestic infrastructure projects. Last year, it
announced a plan to evolve into a commercial lender and is now working on
detailed restructuring proposals. However, the road to becoming a commercial
entity is expected to be a long one for the bank since it has yet to develop a
deposit business and create other financing channels. It 4 can only issue bonds
to raise money. CDB rose to global prominence in July last year when it paid
US$3 billion for a 3 per cent stake in British bank Barclays. Since then, the
lender has been mentioned whenever there is talk of mainland investors trying to
buy into stricken western financial institutions. In January, its attempted US$2
billion investment into Citigroup was blocked by the central government.
Premier Wen Jiabao speaks during a
luncheon hosted by the US China Relations Committee at the Waldorf Astoria in
New York on Tuesday. Wen vows food safety overhaul after milk scandal - Quality
chief says milk scandal 'under control'. Authorities in Beijing, seeking to
assure the world that Chinese products are safe, said on Wednesday that the
tainted milk scandal had been brought under control. And in New York, Premier
Wen Jiabao told an audience that his government would seize the crisis as an
opportunity to overhaul safety controls. “There is no problem,” Xiang Yuzhang,
the national quality watchdog’s chief inspection official, told reporters in
Beijing. “It has been brought under control, more or less. There are no more
problems in the market. As far as I know, there will be no more bad news.” But
China could face an uphill struggle to convince its own people and those abroad
that it has the situation in hand. The government has said the Sanlu Group, the
company at the centre of the scandal, knew for months there was a problem with
its milk powder before reporting it. Australia on Wednesday issued fresh
warnings for China and nearby nations in the wake of the scandal, advising its
citizens overseas to avoid all mainland-made milk products, unless companies
have confirmed their goods are free from contamination. Beijing is battling
public alarm and international dismay after close to 13,000 mainland children
crowded hospitals, ill from infant milk formula tainted with melamine, a cheap
industrial chemical that can be used to cheat quality checks. Nitrogen-rich
melamine can be added to watered-down milk to fool quality checks, which often
use nitrogen levels to measure the amount of protein in milk. The chemical is
used in making plastics. China has a bad record of glossing over or ignoring bad
news, initially covering up the SARS epidemic in 2003, for example. So far, four
deaths have been blamed on kidney stones and complications caused by the toxic
milk. China’s latest food safety crisis has triggered arrests, official sackings
and bans and tightened inspections by trade partners. China would “strengthen
institutional development, and take seriously supervision and inspections in
every link of production, truly ensuring the interests of consumers”, Xinhua
news agency quoted Mr Wen as saying. This was not the first time that a Chinese
leader has sought to reassure a foreign audience that the country was cracking
down on unsafe products. Last year, China launched a quality drive after a surge
of scares over toys, toothpaste, pharmaceutical ingredients and pet food
ingredients – which were also laced with melamine. At that time, mainland
officials often said foreign media and critics had exaggerated the country’s
problems. But now they are focused on quelling domestic alarm and anger, with
54,000 mainland children affected and more than 100 in serious condition,
revelations of a government-blessed cover-up, and consumers wondering just what
milk products might be safe. China has said it found melamine in nearly 10 per
cent of milk and drinking yoghurt samples from three major dairy companies.
Robert Madelin, director-general for health and consumer protection at the
European Commission, told the same conference that Xiang attended that the
scandal had implications beyond China. “In an area such as melamine, what we can
say is that all big players are in a world market. So what happens in China is
affecting also foreign investors in China, with European capital or American
capital. It is affecting traders in Europe with interests in China, with friends
in China, with sources in China,” he said. New Zealand dairy export giant
Fonterra Co-operative Group slashed the value of its big investment in Sanlu
Group by nearly 70 per cent on Wednesday. Many of the infant poisonings are
linked to Sanlu’s popular milk powder. The company has ceased production. Xinhua
news agency reported that Sanlu knew for many months that its infant milk powder
was tainted. Fonterra repeated that it first knew of the contamination in early
August, and took what it regarded as the best action by working with local
mainland authorities on a product recall. “If something did exist prior to that
we’re shocked that it did and we obviously feel that if people were aware of it,
it should have gone to the board,” chief executive Andrew Ferrier told a media
briefing in Auckland. Fonterra cut the value of its 43 per cent stake in Sanlu
to about NZ$62 million (US$42 million). It said the write-down reflected the
damage done to the Sanlu brand and the likelihood it would not recover.
China will send its third manned mission into space on Thursday evening on a
mission which will include its first space walk, the government said on
Wednesday. The Shenzhou VII will lift off from the Jiuquan space centre in a
remote desert area of the northwestern province of Gansu between 9.07pm and
10.27pm, mission spokesman Wang Zhaoyao told a news conference. Fuelling of the
rocket has already begun, meaning the launch is “irreversible,” the Xinhua said.
In October 2003, China became the third country to put a man in space with its
own rocket, after the former Soviet Union and the United States. It sent two
more astronauts on a five-day flight on its Shenzhou VI craft in October 2005.
China named three men – Zhai Zhigang, Liu Boming and Jing Haipeng, all aged 42 –
for the mission. “All of this training has been a massive test of the health and
psychology of us, the astronauts,” Mr Jing said, in comments carried live on
state television. “We’ve overcome hardship, won over ourselves and challenged
the extreme limits,” he added, dressed in a blue jumpsuit and seated next to his
two colleagues. Last year, China sent its first lunar probe into orbit. China’s
longer-term goals include establishing a space station and landing on the moon.
On this mission, two of the three “taikonauts” – the Chinese name for astronaut,
taken from the Mandarin word for “space” – will don suits ready for a space
walk, spokesman Wang told a small group of Chinese and foreign reporters. “One
taikonaut will get out of the cabin and take back the test samples loaded
outside the module,” he added. “After the extra-vehicular activity is completed,
the spacecraft will release a small monitoring satellite.” One taikonaut would
wear a Chinese-made suit, and the other a Russian one, Mr Wang said, although it
was not clear which would be used on the spacewalk. “Extra-vehicular activity is
a big leap for the manned space programme,” he said. “The process cannot be
simulated completely on the ground and some of the newly developed products are
to be tested in flight for the first time.” The craft will land in the northern
region of Inner Mongolia, he added, without giving a date. In the future, China
may also train foreign astronauts, Xinhua quoted Chen Shanguang, the head of the
China Astronaut Research and Training Centre, as saying. “China’s two successful
manned space missions so far showed the country’s technical ability of
independently training astronauts and it was one of the centre’s goals to train
international astronauts in future,” Mr Chen said. “International co-operation
is an inevitable trend in manned space flights, which are large-scale projects
with complex technologies and huge investment,” he added.
Chinese astronauts
ready to make history - Chinese astronauts Jing Haipeng(L), Zhai Zhigang(C) and
Liu Boming wave hands during a press conference in Jiuquan Satellite Launch
Center (JSLC) in Northwest China's Gansu Province, September 24, 2008. The
Shenzhou VII spaceship will blast off Thursday evening from the JSLC to send the
three astronauts into space for China's third manned space mission.
Spacewalker-to-be Zhai Zhigang, a reserve for the two previous Shenzhou
missions, leads the starting lineup of astronauts for Shenzhou VII and is slated
to make history at 4:30 pm on Saturday. Three 42-year-old astronauts, all
without any space flight experience, will be onboard the craft. Liu Boming and
Jing Haipeng, both Shenzhou VI reserves, will join Zhai in this historic 68-hour
mission. The crew's identities were revealed during a brief media session
Wednesday afternoon at Jiuquan Satellite Launch Center (JSLC) in the
northwestern Gansu province. All three astronauts appeared at a fully
quarantined facility in their apartment compound. With Zhai sitting at the
center, the trio was introduced by Chen Shanguang, head and chief designer of
the astronaut system. "As astronauts, it is our utmost honor to be able to
represent our motherland and trek into space," said Zhai, whose 14-year-old son
is named Tianxiong, or "Sky Hero". It"s not a mere addition of numbers from
Shenzhou V, VI to VII. The Shenzhou VII mission is a new breakthrough and major
leap in China"s space exploration; it is a glorious mission that has historic
implications," he said. Astronauts are an indispensible part of this mission,
which will conduct China's first extra vehicular activity (EVA). "How well the
astronauts can operate independently in space will be a key factor to the
success of this mission," said Wang Zhaoyao, a spokesperson with the China
Manned Space Program Office. Aviation academy alumni Zhai and Liu will be
working in the orbital module upon the spaceship's entry into orbit. All earlier
reports and sources say Zhai will be the actual spacewalker. Officials have
still not announced who among the two will perform the task, but Zhai was
introduced yesterday as commander of Shenzhou VII. Zhang Jianqi, Deputy
Commander-in-Chief of China's manned space program, earlier said the duo's roles
are interchangeable. Chen, meanwhile, said all three astronauts were capable of
spacewalking. Both Zhai and Liu are from the northern Heilongjiang province.
Both joined the air force in June 1985 and attended aviation academy in the same
year. Both were stationed in Tianjin for years before selected as astronauts in
1998. Jing, who will work in the reentry capsule, was also drafted in June 1985.
A native of Shanxi province, he and Liu were substitutes to the Shenzhou VI
mission in 2005. The spacecraft will enter the orbit an estimated 583 seconds
after liftoff tonight. Afterwards, Jing will remain in the reentry capsule while
Zhai and Liu move to the orbital module. The half-hour spacewalk will be
broadcast live on national television. The primary crew and their backups Chen
Quan, Fei Junlong and Nie Haisheng were selected out of all 14 of China"s
astronauts in February. The starters and backups as well as their respective
roles were announced in May, according to Huang Weifen, deputy chief designer of
the Shenzhou VII project"s astronaut system. Upon the mission's success, six of
the 14 astronauts, all fighter pilots selected in 1998 from the air force, will
have flown in space. Yang Liwei became the first "taikonaut" five years ago with
the launch of Shenzhou V. Fei and Nie joined a five-day flight on Shenzhou VI in
2005. A number of the astronauts, who are well into their 40s, will retire after
the mission, Chen said. A younger group of no more than 14 astronauts is soon to
be selected. The Shenzhou taikonauts built on experience from China"s first 19
astronauts picked in 1971 as part of the Shuguang-I project, which was later
aborted due to budget constraints.
Wang Yong , an obscure name before this week, has found himself in the hot seat
as the new chief of China's beleaguered product and food safety watchdog, in the
wake of the snowballing toxic milk scandal. The 53-year-old Liaoning native was
named deputy minister of the State-Owned Assets Supervision and Administration
Commission in 2003 and promoted to deputy secretary general of the State Council
six months ago. From Monday, the little-known bureaucrat was suddenly put into
one of the nation's most controversial ministerial-level posts. He had climbed
the ladder from deputy director of the China Aerospace Science and Industry
Corp's political department to head of state enterprise staff in the Central
Committee of the Communist Party's organisation department. His predecessor Li
Changjiang resigned on Monday over the tainted dairy products found in almost
all big brands. Mr Li had been in the spotlight over contaminated goods ranging
from toxic eel in Hong Kong in 2005 to tainted pet food and toothpaste in the
west last year. The beleaguered General Administration of Quality Supervision,
Inspection and Quarantine, heavily criticised by China's netizens for corruption
and incompetence, is again in the eye of the storm after melamine was added to
raw milk across the industry for over three years. Public pressure was one of
the reasons Mr Li, who served in President Hu Jintao's power base, the Youth
League, in the 1980s, resigned. Since the Sanlu milk scandal surfaced, internet
chat rooms have been filled with messages calling for his resignation.
Beijing-based lawyer Zhou Ze said he wrote an open letter calling for Mr Li's
resignation after the Sanlu scandal broke. "They have this exemption system
given to famous brands," he said. "The more famous the brand is, the higher the
need to check its products, but the watchdog gives these products exemption from
safety checks. It is dereliction of duty." Mr Zhou said many netizens had
supported his open letter by posting follow-up messages and he believed Mr Li's
resignation was a victory for the public. The food and products safety watchdog
has also been hit by corruption scandals. The head of the food safety
department, Wu Jianping, recently committed suicide amid reports he was being
investigated for corruption. So all eyes are on the new chief of the food safety
watchdog and whether he can rescue the reputation of China's foods and products.
On sohu.com, a person named Cai Wei urged Mr Wang to increase transparency and
keep the business sector at arm's length. In addition to domestic anger, Mr Wang
will also have to face mounting international pressure because the watchdog was
in charge of the safety of export goods, analysts said.
Investors who bought Lehman Brothers products attend a meeting at the Caritas
community hall in Caine Road yesterday. Some are considering calling for a
police investigation. The Hong Kong Monetary Authority says it will investigate
whether banks used improper tactics to market Lehman Brothers mini-bonds, as
angry bond holders demand answers about their investments. The authority was
collecting complaints from investors and information from banks to assess
whether the banks used improper methods to sell the mini-bonds, the authority's
executive director Raymond Li Ling-cheung said yesterday after a meeting with
bond holders. If the banks are found guilty, the authority, in consultation with
the Securities and Futures Commission, could take disciplinary action, demand a
fine or suspend the banks' licences, he said. However, it could not help
investors with their losses. The authority has set up a complaints hotline -
81002314 - operating from 9am to 6pm and launched a website. Even before they
were set up, they had received seven complaints and Mr Li said the number "is
likely to rise quickly". Seven banks have also created special phone lines at
the authority's urging for customers to inquire about the mini-bonds they
bought, and more are expected to do the same in coming days. Mr Li met bond
holders, representatives of seven distributor banks and Democratic Party
chairman Albert Ho Chun-yan, who helped organise the meeting. The bond holders,
many of them retirees who spent much of their savings on the investments,
complained that the banks had not told them of the risks. Representatives from
Bank of China (Hong Kong), Standard Chartered, DBS, ABN Amro, Dah Sing (SEHK:
0440) Bank, Wing Hang Bank (SEHK: 0302) and Sun Hung Kai Financial attended.
Some 800 investors gathered to air their grievances. Six representatives from
the authority were there to listen to their cases. Wong Kin-ming, one of the
investors, said he and his wife invested HK$2.52 million through Chiyu Banking
Corporation. He said he had no idea of the high risk involved. The Securities
and Futures Commission said investors held HK$36 billion in mini-bonds,
including HK$12.7 billion from Lehman Brothers. Twenty-one banks are thought to
have distributed Lehman Brothers mini-bonds. The authority has yet to provide an
estimate of how many investors and banks are involved. HSBC (SEHK: 0005,
announcements, news) said it was liaising with issuers and other Lehman Brothers
entities to ascertain their intentions and ability to service payments under the
notes and whether there was a possibility of early redemption. The bond holders
are considering applying for legal assistance from the Consumer Council to take
action against the banks for using improper methods to market the bonds, and are
also considering asking the police to investigate. The Consumer Council had not
received any complaints regarding the banks by yesterday afternoon, a
spokeswoman said. The police Commercial Crimes Bureau had not received any crime
reports relating to the Lehman Brothers mini-bonds, a spokesman said. Financial
Secretary John Tsang Chun-wah said the government was communicating with the
banks and investors in the hope of finding an early solution. BOCHK (SEHK: 2388)
said all its sales staff were qualified and licensed securities agents. It had
strict guidelines to ensure the selling process complied with regulatory
requirements, a spokeswoman said. A spokeswoman for the Bank of East Asia (SEHK:
0023) said it would have to evaluate each case to ascertain whether staff acted
incorrectly. The Securities and the Futures Commission said it had handled 780
inquiries and more than 130 complaints. Complaints relating to alleged mis-selling
by banks are being referred to the monetary authority. 
Anxiety has turned to anger for scores
of parents with children needing medical checks over the chaotic conditions at
Princess Margaret Hospital. The parents and their children, who were at the Lai
Chi Kok hospital since 9am yesterday, were first told to register at the
Accident and Emergency Unit. They were then told the children needed blood and
urine tests at the specialist outpatient clinic and ultrasound checks. But some
parents said they could only make an appointment for the next day, while others
were furious at being "double charged." A woman, surnamed Tang, whose
eight-year-old son had been drinking up to four packs of Mengniu and Yili milk
each day for two years, was extremely upset over what she called "messy
arrangements." "No one was there to guide the confused parents on what to do
next," she said. "We have been waiting for almost an hour in vain." The
hospital, Tang said, also did not provide any water for the children, nor remind
parents to have the children drink more water before the urine test. Some
parents said they were charged HK$200 for the A&E unit and the clinic, while
some were only charged HK$100. Another mother, surnamed Pang, said she and her
two daughters, aged two and five, drank Mengniu milk. She said some parents went
to the clinic without registration, filling the quota quickly. 
Hong Kong-listed banks' liquidity
remains strong although most have seen a decline in average liquidity ratio, a
KPMG study of 13 Hong Kong banks shows. Overall, operating profit before loan
impairment allowances was unchanged in the first half from the same period a
year ago, but core profit excluding write downs rose 15 percent to HK$63.7
billion. After-tax profit fell by 6.4 percent on average. "Hong Kong-listed
banks recorded strong profit for the first half, although the investment write
downs following the credit crisis have offset some profits," said Martin Wardle,
partner in financial services at KPMG. In the first six months, the 13 listed
banks wrote down a total of HK$6.4 billion on asset-backed securities,
collateralized debt obligations and structured investment vehicle investments.
The carrying value of those investments totaled HK$18.1 billion as at June 30.
"We expect further write downs in the second half, but they may be less than the
first half. It all depends on what's happening in the US," Wardle said. Net
interest income remained the main component of income during the first six
months, rising 15.4 percent on the back of 17.6 percent loan growth and
expansion of higher-yield lending. The KPMG study also indicated that 14
mainland banks registered 67.3 percent net profit growth in the first half.
A newly
elected legislator has warned of the possibility of a HK$70 billion budget
deficit and called on the government to stop giving away sweeteners to the
public. "The government recently announced a relief package of HK$11 billion and
also said it would donate HK$10 billion for Sichuan earthquake relief," said
accountancy sector lawmaker Paul Chan Mo-po. "A drastic drop in revenue from
land sales and stamp duty could result in a further loss of HK$50 billion," he
told The Standard. Chan said he will put these observations to Chief Executive
Donald Tsang Yam-kuen when they meet later this week to discuss Tsang's policy
address. Chan's prediction is about 10 times more than the government's
estimated deficit of HK$7.5 billion. Revenue from land sales in fiscal 2007/08
reached HK$63.1 billion and stamp duties realized HK$49.6 billion, the two
comprising one-third of total government revenue. "The economy looks worse than
many expect," Chan said. "It may take a few years for it to turn around." He
believes revenue from salaries tax and profits tax will be stable next year but
could fall in subsequent years because of the lowering of the two taxes. Despite
calling for an end to sweeteners, Chan said the government must still help the
needy or face fierce opposition. "I agree the subsidy for the elderly should be
increased to HK$1,000 a month, but I have doubts about the subsidy on
electricity bills," he said. Chan admitted there was little the government could
do to stimulate the economy, but he supported the decision to develop
infrastructure as this would help ease unemployment. Despite interference by
most governments in the financial markets, Chan hoped the Hong Kong government
will keep its hands off the local market. "I was worried when the government
acquired stocks in 1998 as such action sends a message to investors that the
market is going to be very bad," Chan said. Tsang, who was then financial
secretary, gave the green light to spend HK$118 billion of public money buying
about 15 percent of Hang Seng Index constituent stocks in August 1998. "I think
there's no need for government to buy stocks or to inject money into the market
as our currency is not at stake this time," Chan said. The Hong Kong Monetary
Authority last Thursday injected HK$1.56 billion of liquidity after interbank
rates rocketed to an 11-month high. Chan suggested the government evaluate its
role as a regulator and the Securities and Futures Commission review its
regulations.
Jay Xu Jie has long had a connection with the Asian Art Museum (AAM) in San
Francisco - it was the first museum outside China that he learned about while
working as a young curator in Shanghai. So when 45-year-old Xu was named
director of the AAM earlier this year, a member of the museum commission
described the appointment as "destiny". Securing the top job at one of the
west's largest institutions devoted to Asian art was no mean feat. Formerly head
curator at the Art Institute of Chicago, Xu was chosen after an international
search that at one point included 100 candidates. But he has been something of a
high-flier since arriving in the US in 1990 to pursue a doctorate at Princeton.
His meteoric career, leapfrogging from one prestigious institution to another,
is a tribute to his heart and mind, says Jane Chang Tom, secretary of the Asian
Art Commission, which runs the museum. "There is a Chinese saying that
translates something like this: 'The right time, the right place and the right
person [doing] the right thing'. That's how I see Jay." Xu's first public role
in his new job was to open an exhibition of Ming court art put together in a
collaboration with three of the mainland's most important institutions - the
Palace Museum in Beijing, the Nanjing Municipality Museum and the Shanghai
Museum. Even though he didn't have a hand in the show, it points to where some
of the AAM's attention will be directed: training. Since 2003, Xu has served on
the Mellon Programme for Chinese Museum Professionals, which helps develop
expertise for the mainland's rapidly expanding museums. "During the past 20
years, China has had arguably the fastest economic development in the world.
This has seen construction going on everywhere, and wherever you dig, you find
ancient objects. As they keep coming up, you need to build museums to house
them," Xu says. "They're building museums in just about every county in China as
we speak, and there are a lot of counties. "When building museums at such a fast
pace, it's difficult for the cultural infrastructure to keep pace," Xu says.
"China needs seasoned curators, directors and managers." In his new role, Xu
hopes to plug the AAM into the teaching loop with a curator-in-residence
programme. "I envision inviting one or two people a year to see how our curator
works, because stylistically and organisationally, it's a little different," he
says. The AAM's galleries and curatorial structure are organised into seven
large, loosely defined cultural areas - South Asia, West Asia, Southeast Asia,
the Himalayas, China, Korea and Japan. Xu, who studied Chinese literature at
Shanghai University, is widely schooled in art and antiquities, and says
achieving balance in the AAM's exhibitions will be a focus. He jokingly
describes himself as Shanghai "born and riced". He began his career in the 1980s
as secretary to the director of the Shanghai Museum, Ma Chengyuan, who soon
encouraged him to move into curating. A brief secondment in 1988 to assist
visiting Princeton professor and Chinese antiquities scholar Robert Bagley
yielded an invitation to study in the US. "Six months later he wrote to ask if I
was interested in the doctoral programme in art history and archaeology at
Princeton," Xu recalls. He arrived in the US in 1990 with wife Jennifer Chen, a
specialist in Chinese ceramics whom he met working at the Shanghai Museum. "As
you might imagine, we were a little bit younger, with wide-open eyes and full of
the spirit of exploration. I'd been to America once. My wife had never been," he
says. He was determined to make the most of Princeton even if plans beyond that
were a little vague. But he told himself he would apply total dedication to
whatever post he got, "and that once I had the first job, I would never apply
for another". It was an attitude he got from his parents, he says. "I learned
from them that effort is more important than results. They instilled in me the
value that I should achieve the best I am capable of, even if it is modest."
After his doctorate, Xu took up the offer of a fellowship at the Metropolitan
Museum of Art in New York before landing his first major post, as head of Asian
art at the Seattle Art Museum. Seven years later, the Art Institute of Chicago
asked if he was interested in the head curator's job. He couldn't refuse such a
post at what he calls "one of the best museums in the world", so he relocated to
Chicago, expecting to stay until retirement. But five years into the job, a call
from a headhunter eventually sent Xu and his family back to the US west coast,
to the AAM. Mimi Gardner Gates, the director of the Seattle Art Museum who
appointed him to his first big job, reckons San Francisco is fortunate to have
Xu. "Jay has good judgment, intelligence, diplomatic skills and as much of a
passion for people as for museums and Asian art. He's a superb scholar and, when
he needs to be, a tough negotiator," she says. "He knows how to assess what will
appeal and be meaningful to the community." Xu says contemporary art has been an
important focus at the Chicago Art Institute, which has acquired some fine work
by Asian artists, including Hong Kong's Wucius Wong, for its permanent
collection. And the AAM is even better positioned to support contemporary art,
he says. Increasing international interest in young mainland artists over the
past decade has raised fears Chinese antiquities may be neglected, but Xu says
there's no danger of that. That said, Xu is excited about what he calls the
"tremendous enthusiasm and momentum in contemporary Chinese art". Viewing the
boom as an art historian, he says, "It calls on us to be very selective and
focused and to do our homework and to make sure the art we show as a museum -
and the great contemporary artists - survive the test of time." Xu divides
Chinese contemporary art into two genres. "One is very conceptual: artists
commenting visually on political history, for example. You see many artists
using Mao's likeness and motif. This art is shoulder to shoulder with
international development all over the world." Then there is what he calls
"tradition-inspired contemporary art" - work that shows a strong connection with
tradition but which is internationalised. "This art is less visible but equally
important and wonderful," he says. Personal passions aside, Xu will be
channelling his energy towards other goals at the AAM. "Museum work is
fundamentally creative," he says. "Directing a museum is like conducting an
orchestra, and every colleague is ike a musician." Museum commission
vice-chairman David Lei says it's too early to tell what kind of influence Xu
will have internationally, but that he has "the desire, ability and willingness
to collaborate". But the AAM's new director is already making his presence felt
in the institution. "Within a couple of months," says Chang, "he has instilled
in the museum culture a dynamic sense of change, optimism and a strategic
vision." 
President Hu Jintao and US President George W. Bush spoke by telephone on Monday
about the financial crisis engulfing Wall Street, China News Service reported.
The state-run news agency said the two leaders spoke at Mr Bush’s request. “We
have noticed that the United States has taken some important measures to
stabilise the domestic financial market, and we hope these measures can achieve
quick results so that economic and financial conditions in the United States
will gradually improve and turn better,” the news agency paraphrased Mr Hu as
saying. The two spoke at the end of a weekend of intensive talks in Washington
between Bush’s administration and Congress to hammer out details of an
unprecedented US$700 billion bank bailout to forestall further financial market
turmoil that risks plunging the economy into a deep recession. Hu said the US
plan was in the interests of both the United States and China. “It is also
conducive to maintaining international financial market stability in order to
promote the stable and healthy development of the world economy,” China News
Service paraphrased Hu as saying. Seven mainland banks have reported exposure of
more than US$700 million to failed investment bank Lehman Brothers. Lehman also
guaranteed US$500 million in structured notes held by a Chinese overseas
investment fund. But China’s capital controls and the overwhelmingly domestic
focus of its banks and insurers have largely insulated the country from the
immediate fallout of the turmoil on Wall Street. However, China has a huge stake
in the health of the US financial system, not least because an estimated
two-thirds of its US$2 trillion in foreign exchange reserves is invested in
dollar bonds. Beijing is a big holder of US treasuries and of debt issued by the
two mortgage agencies, Fannie Mae and Freddie Mac, that the US Treasury
effectively nationalised this month. So a ballooning of US government debt that
drove down bond prices or the value of the dollar would spell big losses for
China. Looked at in another way, the United States could remain heavily reliant
on Beijing to buy the extra US debt needed to fund the bailout. The China News
Service story did not say whether Mr Hu and Mr Bush discussed possible
investments by Chinese institutions in US financial firms desperate to replenish
capital depleted by write-downs on mortgage loans and securities. China
Investment Corporation, the country’s US$200 billion sovereign wealth fund, is
in talks to increase its 9.9 per cent stake in Morgan Stanley. US Treasury
Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke hatched the
unprecedented rescue plan amid concerns that other major banks could collapse
and that credit markets were close to freezing, threatening the US and global
economy. Under his plan, foreign banks with operations in the United States
could also be eligible to sell illiquid residential and commercial
mortgage-related assets to the Treasury. Some US lawmakers are demanding in
return that foreign governments set up similar bailout programmes. “We have a
global financial system and we are talking very aggressively with other
countries around the world, and encouraging them to do similar things, and I
believe a number of them will,” Mr Paulson said on ABC television on Sunday.
A 10-meter-long narrow passageway became a corridor of death as panicked
clubbers fought to flee a smoke-filled Shenzhen nightclub in the dark. Search
and rescue teams entering the Shenzhen club early yesterday found themselves
knee-deep in human bodies and abandoned shoes of those who scrambled to get out.
"There was only a narrow aisle leading out of the hall. Many people got hurt or
were killed in the stampede," club staffer Yang Zhi said. He escaped by dousing
his clothes with water before fleeing, but he still suffered burns to the neck.
Another staff member, surnamed Zhang, said there was another exit at the rear of
the club, but this was not known to most patrons. A woman surnamed Deng, nursing
a bruised face, said: "I could not see anything. I could only feel a lot of
people around me and we were stepping on each other. Nobody knew there was
another exit, everybody rushed in the same direction." Another woman, surnamed
Liu, was nursing numerous cuts to her body. She was still awaiting news of her
younger brother and 18 friends who were on the third floor. "Everybody just
started running out and we lost contact," she said.
The Shenzhou-7 manned spaceship, the
Long-March II-F rocket and the escape tower are vertically transferred to the
launch pad at the Jiuquan Satellite Launch Center in northwest China's Gansu
Province Sept. 20, 2008. The transfer finished at 3:15 p.m. on Saturday, marking
the final stage of the launching preparation.
The Shenzhou-7 manned spaceship, the
Long-March II-F rocket and the escape tower are vertically transferred to the
launch pad at the Jiuquan Satellite Launch Center in northwest China's Gansu
Province Sept. 20, 2008. The transfer finished at 3:15 p.m.on Saturday, marking
the final stage of the launching preparation.
Hong Kong's two biggest grocery ch ains
removed milk made by the mainland's Mengniu Dairy Company from their shelves on
Friday after traces of a chemical that has killed and sickened babies was found
in products in mainland China.
China's Mengniu Dairy
Company executive director and chief financial officer Yao Tongshan, left, and
chief administrative afficer Lei Yongsheng sample their products in Hong Kong on
Friday. Amid growing fears about tainted baby milk formula – Hong Kong’s leading
grocery chains on Friday have begun removing milk made by Mengniu Dairy (SEHK:
2319) from their shelves. This is after traces of a chemical which has killed
and sickened babies was found in Mengniu Dairy products in the mainland. Baby
milk powder laced with melamine – used in plastics and fertilisers – has been
blamed for the deaths of four children. More than 6,000 others have been
sickened. Some 1,300 babies, mostly newborns, remain hospitalised, with 158
suffering from acute kidney failure. On Friday morning, Park’n Shop and Wellcome
supermarket chains began taking milk produced by Mengniu Dairy off their
shelves. Park’n Shop spokeswoman Pinky Chan said the move had been prompted by
recent developments in China. Mainland regulators found milk sold by Mengniu and
two other major Chinese dairy companies, Yili and Guangming, also contained
melamine. Latest tests have now found traces of melamine in 24 batches of milk
produced by these companies. Wellcome supermarket corporate communications
manager Annie Sin told SCMP.com it has removed all Yili products – including
milk, yogurt and ice cream. The Centre for Food Safety recalled all Yili
products on Thursday after melamine was detected in eight Yili products. Ms Sin
confirmed Wellcome staff had been removing Mengniu’s diary products from its
chains on Friday afternoon. “Although the Centre for Food Safety has not yet
released results of tests it has been carrying out on Mengniu products, we
removed all of their products from our shelves for safety reasons.” Ms Sin
explained. “We made this decision after we noted their products might contain
chemicals which are harmful to consumers’ health,” she added. Representatives of
Mengniu in Hong Kong did not return telephone calls seeking comment. Meanwhile,
the Centre for Food Safety controller Constance Chan said the centre was
examining diary products produced in the mainland. “On average we can examine 60
samples per day and our targets are diary products manufactured in the mainland,
including the overseas brands which were manufactured in China,” Dr Chan said.
“We will keep updating the latest results of our tests every day,” she added. Dr
Chan said all 46 diary products’ samples tested on Friday did not contain
melamine. She said 36 were Mengniu dairy products and 10 were other brands. The
Hospital Authority has also established a paediatric renal taskforce to treat
Hong infants who might be affected by milk powders tainted with melamine. The
authority’s quality and safety director Leung Pak-yin stressed this was only a
precautionary step. He said they did not expect many kidney patients would seek
treatment. 
Secretary for Food and Health
Dr. York Chow and Controller for the Centre for Food Safety Dr Constance Chan
speak to the media after briefing legislators on the latest developments
relating to dairy products. The Legislative Council would introduce new laws to
forbid any diary products being imported to Hong Kong containing the industrial
chemical melamine, Secretary for Food and Health York Chow Yat-ngok said on
Friday. Dr Chow was speaking to legislators at a meeting on Friday in the wake
of the tainted baby formula scandal which has sparked an outcry in the mainland
– and is also worrying parents in Hong Kong. Baby milk powder laced with
melamine – used in plastics and fertilisers – has been blamed in the deaths of
four children. More than 6,000 others have been sickened. Some 1,300 babies,
mostly newborns, remain hospitalised, with 158 suffering from acute kidney
failure. Dr Chow told Legco Hong Kong authorities were closely monitoring the
situation. “I have informed China’s General Administration of Quality
Supervision, Inspection and Quarantine, and requested all diary products
imported to Hong Kong must contain sanitary inspection certificates,” he said.
“The Centre for Food Safety would make references to overseas laws and to
prepare new laws in Hong Kong,” he said. But Dr Chow said all milk powders for
infants in Hong Kong were safe. The authorities would continue to closely
examine all diary products manufactured in the mainland, he stressed. “The three
baby formulas available in Hong Kong, including Superkid, Nestle Carnation and
Nestle are safe to consume,” he explained. He said tests conducted by the Centre
for Food Safety showed the samples did not contain melamine. “At this moment,
the hospital authority did not receive any reports about any Hong Kong’s babies
being sick after taking the milk powder,” the health secretary said. “The centre
will keep expand testing to cover all mainland’s milk powder, fresh milk, dairy
products and products which might have use the mainland’s milk powders such as
chocolate and cakes,” he said. He accepted that many parents from the mainland
would come to Hong Kong to buy milk powder for babies. Dr Chow appealed to local
suppliers to ensure stable supplies of milk powder so mothers in Hong Kong could
buy at reasonable prices. He said the government had liaised with importers of
overseas milk powders for babies and believed the supplies would be adequate.
The new border crossing at an
18-hectare site in Heung Yuen Wai can only be completed if the government
resettles a village with more than 200 residents. The Development Bureau will
spend HK$1 billion to compensate the villagers. It will also take the bureau 4
1/2 years to acquire land, including Chuk Yuen village, within the frontier
closed area. The government chose to resettle Chuk Yuen over neighboring
villages that had fung shui trees and cultural heritage sites. The village was
already relocated once in the 1970s. In a meeting with Secretary for Development
Carrie Lam Cheng Yuet-ngor yesterday, the villagers were asked to set up a
committee to represent them in negotiations. Villagers will be offered cash or
housing compensation. In general, they will be given a 700 sq ft house, said
Deputy Director of Lands Herbert Leung Yuk-she. Villagers who own larger sites
will be given more, but a cap will be imposed. For those who want cash, the
compensation will be equivalent to the market value of a 700 sq ft house in the
area. Those who want to build a house themselves will receive a site and
construction subsidies. Deputy Secretary for Development Raymond Young Lap-moon
said the government was still looking for a site nearby. He said the government
would seek support from the Heung Yee Kuk rural authority on the relocation.
Chuk Yuen village representative Yiu Kwun-wah said he had not yet talked to
villagers about compensation. But kuk chairman Lau Wong-fat said villagers were
not resisting the resettlement. He expected HK$1 million to HK$1.2 million to be
paid to each indigenous villager who owned a house. The kuk will also seek
compensation on behalf of non-indigenous villagers. 
Parents seek answers on tainted milk -
Hundreds of mainland parents, some cradling infants, converged on the company at
the heart of a tainted baby formula scandal, demanding refunds and asking what
they can safely feed their babies.
Prime Minister Wen Jiabao will detail proposals on how to realise goals on
global poverty alleviation when he attends a UN development summit in New York
next week, a top official said on Friday. Mr Wen will address the UN Millennium
Development Goals (MDGs) summit while also outlining China’s foreign policy and
developmental strategy at a meeting of the UN General Assembly, Vice Foreign
Minister He Yafei said. “He will introduce China’s progress and shortcomings in
implementing the MDGs and... propose initiatives on the joint challenges faced
by all nations and how to resolve some of the difficulties,” Mr He told
journalists. The millennium summit is scheduled for September 25. Mr Wen would
spend only about 48 hours in New York and attend more than 20 bilateral and
multilateral meetings, He said. In 1996, the United Nations set the goal of
cutting global hunger in half by 2015. But the UN’s Food and Agricultural
Organization said this week the target may be difficult to realise after 75
million people joined the ranks of the famished last year, with high food prices
one of the main reasons. Jacques Diouf, director-general of the Rome-based
agency, said the number of malnourished people rose from 850 million to 925
million last year. China had 14.7 million people who were facing difficulties
feeding themselves, while 28.3 million Chinese had food “but not enough,” Huang
Yanxin, a leading agriculture ministry official told journalists. China has a
population of more than 1.3 billion people. 
Bank of East Asia (SEHK: 0023) has discovered suspect valuations on its equity
derivatives portfolio and hence slashed its reported this year interim earnings
by almost 12 per cent, the bank said after its shares were suspended from trade
on Thursday. The bank said it had discovered and recorded a trading loss of
HK$93 million and was revising down its after-tax profit by HK$109 million
(US$14 million) – about 11.7 per cent of the HK$930 million of first-half profit
after taxes the bank reported in August. Shares in Bank of East Asia fell 6.6
per cent to HK$27.55 before trading was suspended, as global financial turmoil
triggered a heavy sell-off in banks listed in Hong Kong. The lender added that
it would issue a statement to elaborate. Share trading was suspended “pending an
announcement by the bank in relation to an unauthorised manipulation of the
valuation of certain equity derivatives held by the bank”, it said in an initial
statement. There would be no material effect on the bank’s balance sheet or
capital, it added. 
The next few days will be crucial because some of the largest financial
organizations have serious confidence problems that require more than government
action to solve, Hong Kong Monetary Authority chief Joseph Yam Chi-kwong said.
He said the city's financial system has no structural problem and the worries of
investors over the Hong Kong subsidiaries of troubled US firms should be handled
as isolated cases. "The current situation, especially in the US, is very
complicated. But I think there isn't any structural problem in Hong Kong's
financial system." Yam said. He said the regulatory mechanism for banks,
securities and insurance are comprehensive after years of reform. "Eventually,
the situation will be stable when market participants are clear about the
prospects in the free market," he added. Stanley Wong Yuan-fai, deputy general
manager of the Industrial and Commercial Bank of China (Asia) (0349), said the
Fed's decision to keep the interest rate unchanged is normal. "A rate cut has
limited function as financial firms are facing a lack of capital," Wong said.
"If the problem is due to the increased liquidity cost, the crisis can be solved
by cutting the rate."
Amid fireworks, tears and
pride, the curtain fell on the 12-day Paralympics last night at the iconic
"Bird's Nest" National Stadium. The head director of the opening and closing
ceremonies for the Olympics and Paralympics, Zhang Yimou , again adeptly
combined bright colours, traditional Chinese music, dance and a sky full of
fireworks to create a finale of romance and fairy tales. The spectacular finish
capped a competition in which China again finished first in gold medals. The
host country's squad of 332 athletes cemented China's position as a Paralympic
superpower by ending the event with 89 golds and 211 medals, more than double
second-placed Britain's total on both counts. In a letter of congratulations,
the Central Committee of the Chinese Communist Party and the central government
hailed the result as historic. "You have finished first in both the gold medal
and total medal counts, accomplishing a historical breakthrough, winning great
honour for the motherland ... and making an important contribution to the target
of `Two Games with Equal Splendour'," the letter said. Before the Olympics
started last month, Beijing promised to produce the two different Games with
equal splendour. International Paralympics Committee chief Sir Philip Craven
described the 12 days as the best Paralympics ever. "These Games have been a
great Games. I think everybody realises that." The 58-year-old former wheelchair
basketball player showed he had been practising his Putonghua when he said:
"Thanks Hong Kong; Thanks Qingdao ; Thanks Beijing; Thanks China". The
Paralympics have also won wide applause for their superb organisation and the
large crowds, particularly those at the athletics and swimming events. Many
foreign disabled athletes were moved by the spectator interest, although
government agencies arranged for some members of the audience to attend. 
China has agreed to lift a bird
flu-related ban on imports of poultry products from six US states but remains
closed to all imports of American beef. The breakthrough on poultry products was
announced at the end of high-level talks in Yorba Linda, California. The two
sides also further pledged closer cooperation on steps to combat piracy of
intellectual property and the sale of counterfeit goods in China. US Commerce
Secretary Carlos Gutierrez said two of the most significant agreements pertained
to trade in health- care products - accords to clamp down on tainted drugs
exported from China and to follow simpler procedures for testing of US medical
products going in the opposite direction. Taken as a whole, the various
agreements are especially important in light of the current economic slowdown
and turmoil rattling financial markets, Gutierrez said. With China heavily
invested in the United States, Beijing has a great stake in the success of the
US economy, he said, adding that Vice Premier Wang Qishan, leader of Beijing's
delegation, "wants to make sure that our trading relationship is on firm ground
and firm footing." China has become the third-largest export market for US
goods, taking in a record US$65.2 billion (HK$508.56 billion) last year. But
imports from China jumped to a record US$321.5 billion over the year, rattling
US manufacturers and prompting calls from Congress for the White House to take a
tougher stance against "unfair" China trade. "Against the backdrop of
international economic and financial volatilities, it is of crucial importance
that China and the United States have closer interactions in our economic
relations and financial trade," Wang said. 
United States Deputy Secretary of
State John Negroponte speaks during an American Chamber of Commerce luncheon in
Hong Kong on Wednesday. One of America's top diplomats on Wednesday moved to
ease local fears about the US economy - telling Hong Kong no one should doubt
its fundamental strengths. Asked about Wall Street’s crisis of confidence,
Deputy Secretary of State John Negroponte said the US remained a very large,
strong and transparent economy. “All of us have an almost instantaneous
visibility … into what is going on and what is happening,” he said after a
speech to the US Chamber of Commerce. “We remain a very open market for a large
portion of the manufacturing capacity of the rest of the world,’’ said Mr
Negroponte. “I think those fundamental … strengths of the US economy will
continue going forward and I don’t think people should have any doubt about the
continued fundamental strength of the American economy,” he added. His comments
come as Hong Kong digested news of the US government’s historic US$85 million
bailout of insurance giant, American International Group (AIG) – both America’s
and Hong Kong’s largest insurer. The bailout came a day after the bankruptcy of
the Lehman Brothers investment bank, another long-established Wall Street giant.
He was in Hong Kong as part of a three-day regional trip that earlier included
Cambodia and Vietnam – all part of a Bush administration mission to shore-up
traditional alliances while improving ties with newer friends. Mr Negroponte has
met Chief Executive Donald Tsang Yam-kuen and American business leaders.
Hong Kong's Yu Chui-yee, who won gold in the Category A individual wheelchair
fencing foil, is flanked by China's silver medallist Zhang Chuncui (left) and
Hong Kong's bronze winner Fan Pui-shan.
Sir Philip Craven, president of
International Paralympic Committee addresses the closing ceremony of Beijing
2008 Paralympic Games in the National Stadium, or the Bird's Nest, in Beijing,
capital of China, Sept. 17, 2008. The closing ceremony kicked off at 8 p.m.
sharp on Wednesday.
Chinese President Hu Jintao (1st R)
talks to International Paralympic Committee President Philip Craven during the
closing ceremony of the Beijing 2008 Paralympic Games at the National Stadium in
Beijing, China, Sept. 17, 2008.
Lehman
Brothers leases more than 100,000 square feet at Two IFC and about 40,000 sqft
at Man Yee Building in Central. Troubles at US financial firms, Lehman Brothers,
Merrill Lynch and American International Group will affect Hong Kong's prime
office market, with property consultants predicting a 10 to 15 per cent decline
in rents in Central over the next six months. As financial businesses played a
key role in Hong Kong's economy, the consolidation of US investment banks would
have an impact on the city's office market and economy, said Piers Brunner, a
managing director at international property consultant Colliers International's
Hong Kong office. "Nobody knows how much pain there will be at the moment. But
the immediate impact is that more space will be available, putting pressure on
rents," Mr Brunner said. According to property agents, Lehman Brothers leases
more than 100,000 square feet at Two International Finance Centre and about
40,000 sqft at Man Yee Building in Central. The lease with Sun Hung Kai
Properties (SEHK: 0016) at Two IFC will expire in 2012, while the lease with Man
Yee Building will expire next year. Merrill Lynch, which has agreed to be sold
to Bank of America, rents about 100,000 sqft at Citibank Tower, owned by
Champion Real Estate Investment Trust. American International Assurance, an AIG
unit, owns a 90 per cent stake in AIG Tower in Central. The office building
provides a total lettable area of 364,000 sqft. About half of the floor area is
occupied by the group. It was expected that Lehman Brothers, which has filed a
for bankruptcy protection in the US, would give up a large portion of its space
in Hong Kong, but the extent remained unclear, analysts said. Merrill Lynch may
also consolidate its office space in the city after being sold, they added.
However, the company's lease in Citibank Plaza would not expire until late 2011.
Mr Brunner said Central's office rents, an indicator of Hong Kong's economy,
would fall more than 15 per cent if more US investment banks faced problems.
"When Central rents are up, everything is up," he said. Adrian Lee Ching-ming,
an executive director and chief executive of Eagle Asset Management - the
manager of Champion Real Estate Investment Trust - said rental growth would be
under pressure amid the deteriorating economy. But he said Bank of America's
takeover of Merrill Lynch would have limited impact on his company's rental
business because the two US banks had few overlapping activities in Hong Kong.
"Bank of America doesn't have investment banking and asset management services
here in the city, thus the risk of personnel and office space redundancy should
be much lower than the [JP Morgan takeover of] Bear Stearns," Mr Lee said. JP
Morgan was still paying rent for Bear Stearns' former office in Citibank Plaza,
he added.
Owners of flats in the 10 biggest private housing estates in Hong Kong yesterday
cut asking prices by an average of 3.2 per cent amid the changing global
financial landscape, Ricacorp property agency said. The company's research found
that prices fell by 7 to 10 per cent in Kornhill, Heng Fa Chuen and Sunshine
City in Ma On Shan. In Happy Valley, Tiona Li, senior district manager of
Ricacorp Properties, said the owner of a luxury flat in the area had cut the
asking price by HK$1 million to HK$18 million. Jessy Ng, district manager of
Ricacorp in Quarry Bay, said: "Since the beginning of this month, flat owners
are no longer optimistic about the economic outlook. They are insecure and
willing to cut asking prices further after the collapse of Lehman Brothers."
There were about 330 flats in Kornhill on the secondary market. Mr Ng said the
average asking price had fallen by about 8 per cent since early this month.
Centaline Properties contacted flat owners in Island East to ask whether they
would cut their asking prices after yesterday's stock market slump. Patrick
Tsang, senior district director at Centaline Properties, said: "More than half
of the flat owners in the district are willing to cut their asking prices by 5
to 10 per cent." "We're seeing this in Taikoo Shing, Kornhill, and also at Grand
Promenade [in Sai Wan Ho]." Raymond Szeto, a manager of Hong Kong Property,
said: "A flat owner in Kornhill cut his asking price by 9.79 per cent to HK$3.5
million from HK$3.88 million this morning." At Grand Waterfront in To Kwa Wan an
investor cut the asking price for a 1,239 sq ft flat from HK$10 million to
HK$9.2 million, Hong Kong Property said. But despite falling prices, Mr Szeto
said potential buyers were still cautious.
The Hong
Kong government and the insurance regulator are keeping a close eye on American
International Assurance, the largest life insurer in the city, after parent
company AIG became the latest focus of the US financial meltdown. AIA has more
than 1 million life insurance policyholders and is the fourth largest pension
provider in the city, covering 600,000 employees. Some Hong Kong policyholders
rushed to AIA's Causeway Bay office or called their agents yesterday, worried
about the fate of their policies as the US insurance giant American
International Group saw its share price in New York plunge 61 per cent on
Monday, and a further 32 per cent in early trading yesterday. It was also
downgraded by credit rating agencies - a move that will make it harder to raise
funds. Moody's Investors Service cut AIG's rating two notches yesterday to A2
from Aa3, while S&P lowered the rating to A-minus from AA-minus. AIA has a Hong
Kong market share of 16.2 per cent, or HK$21.51 billion of premium income in
life policies in 2006, according to the latest annual report by the Office of
the Commissioner of Insurance. AIA Pension and Trustee is the city's fourth
largest pension provider with 600,000 employee accounts and HK$40 billion worth
of assets under its management. Financial Secretary John Tsang Chun-wah said the
government was closely monitoring the situation. The insurance authority would
act accordingly to protect the interests of policyholders. "AIG is facing a
global problem and its policyholders all over the world are affected similarly,"
Mr Tsang said. "The insurance authority has a wide range of statutory powers to
protect the interests of policyholders and to ensure industry players are
operating under a sound regulatory framework." The insurance regulator in Hong
Kong said AIA had a solid financial performance and was capable of covering the
insurance liabilities of policyholders. Clement Cheung Wan-ching, the
commissioner of insurance, said: "AIA in Hong Kong has arrangements with its
parent company to ensure its Hong Kong business is operated as a separate
entity. The next two to three days will be critical moments of decision for the
whole insurance group." AIG Hong Kong's office issued a statement yesterday to
reassure policyholders. "Although AIG faces short-term liquidity pressures, we
have strong, well-positioned businesses in diverse markets around the world and
a deep asset base. We can assure our customers of AIG's commitment to meeting
their needs and keeping their business," the statement said. "The insurance
policies written by AIA Hong Kong are subject to stringent regulatory and
capital requirements. AIA Hong Kong is well-capitalised and will continue to
operate in the normal course to meet our obligations to our policyholders in
Hong Kong and Macau." A spokesman for the Mandatory Provident Fund Schemes
Authority said it would also closely monitor developments at AIG. An AIA
insurance agent, who wanted to be known as Mr Yip, said: "Management in Hong
Kong was in a meeting with the Asia-Pacific team all day. Since it affects every
policyholder of AIG worldwide, it's impossible for the US government to let the
company close down." An executive from AIG Hong Kong, who did not want to be
identified, said the company's hotlines were ringing constantly from worried
clients. "The phone kept on ringing as many customers have inquiries about the
implications of their policies. Our colleagues have tried their best to assure
them that the Hong Kong operations are fine and well capitalised," the executive
said. "For us, it is business as usual."
China slowdown to extend to next year, predicts ADB - With slowing external
demand and tightened monetary policy, the pace of expansion in China will
moderate in 2008 and 2009, but it will remain among the world's fastest growing
economies, says a report from the Asian Development Bank. Explosive growth in
the Asian region will put further pressure on global crude oil supply and keep
prices elevated above US$100 (HK$780) a barrel until at least 2020, the report
says. "China's weaker external demand and the impact of monetary policy
tightening trimmed economic expansion to a still rapid 10.4 percent in the first
half this year," ADB chief economist Ifzal Ali said yesterday. 
A 42-year-old fighter pilot has been
chosen to become the first Chinese person to walk in space, with the historic
mission set for next Thursday. Zhai Zhigang, a colonel in the People's
Liberation Army, and two other astronauts will be on board the Shenzhou VII for
China's third manned space mission when it blasts off for a 68-hour flight, the
State Council said. He will then undertake a 40-minute maneuver outside the
spacecraft on the afternoon of either September 26 or 27. Zhai, who is married
with one son, will release a small satellite capable of broadcasting video
images of his walk outside the craft. His pressurized spacesuit is largely based
on Russian designs and will include two lifelines that will supply oxygen and
communications. The Shenzhou VII is scheduled to launch from the Jiuquan
Satellite Launch Center in the desert of Gansu province, according to the
cabinet. The return capsule is scheduled to land on the the grasslands of Inner
Mongolia on September 28. Riding with him in the spacecraft will be Liu Boming
and Jing Haipeng, both also 42 and PLA fighter pilots. All three astronauts, or
taikonauts as they are known in China, are members of the Communist Party. They
formed the back-up team for the October 2005, Shenzhou VI space mission, which
carried two astronauts on a five-day flight. The blast-off takes place after a
successful Olympics and Paralympics, and ahead of National Day on October 1.
China has even greater space ambitions, with an eventual plan to put a man on
the moon by about 2020, according to some sections of China's state-run press.
The United States, Japan and other nations have previously expressed concern
that modernizing China's space program could pose a military threat. Those
concerns spiked in January 2006 after a test exercise in which China became only
the third nation to shoot down a satellite with a missile. However, President Hu
Jintao and other leaders have repeatedly sought to play down fears of a rising
China space threat. "The development of our nation's outer space exploration is
completely for peaceful purposes," Hu said last year.
Growing and brewing tea was elevated to an art form by Lu Yu of the Tang Dynasty
(AD 618-907), whose treatise is considered the bible of tea culture throughout
Asia. But the new government guidelines for growers and processors, to be
released on October 1, are not about sipping tea in a pavilion by a lily pond -
they are serious business. Tea is one of China's major export commodities. The
country shipped 151,000 tons of tea worth a total of $344 million to overseas
markets in the first half of this year, up 5.49 percent year-on-year. Officials
and analysts said that if planters and processors improve the quality of their
tea, they could not only sell more but also boost profit margins. For instance,
Chinese tea is sold at an average of $2.27 a kg - 60 percent cheaper than Sri
Lankan tea. The appreciating renminbi is also undermining local exporters'
competitiveness and rising fertilizer, labor and transport costs are trimming
profits. The only way for local tea planters and processors to compete and stay
profitable is to improve quality, industry analysts said. "If China wants to
make a breakthrough in tea exports, it must put more effort into quality
control," Zhu Zhonghai, director of the China Tea Marketing Association's
information department, said. Stricter inspections in markets such as Japan and
the European Union on imported tea and other produce is adding to the pressure.
From 2009, Japan's list of inspection items will increase to 144 from 83. Not
all Chinese tea exports will meet those standards. The country's inspection
system is currently limited to checking harmful chemical levels. The new
guidelines will be far more comprehensive, industry sources said. Although they
will not be compulsory, it is expected that planters and processors will abide
by them because of the benefits they will bring. "If exporters follow the new
guidelines and give instructions to the tea planters and processors, they will
be able to regulate their production process and avoid export risks," Li Jia,
who has worked for a tea exporter for three years, said. The guidelines will be
adjusted down the track and could eventually become compulsory, Zhu said. But
some tea exporters said their products already meet the most stringent foreign
import requirements. "I have heard of the new document, but since it's not
compulsory, it might not affect us," Jiang Wei, of the Shanshan Tea Co in
Zhejiang province, said. Shanshan Tea has three factories and several tea
gardens. Jiang said the tea producer communicates directly with its clients -
most of whom accept the existing standards - and directs its growers
accordingly. China is the world's biggest tea producer, but it is the fourth
largest tea exporter. Zhu said poor marketing is holding back growth. "China
does have quality tea," Zhu said. "But compared with bigger exporters like Sri
Lanka and India, we haven't been as active when it comes to promoting local
teas." Sri Lankan and Indian producers have successfully promoted their strong
black teas to foreign markets, but China's tea culture remains relatively
unknown, Zhu said.
Deutsche Boerse will go ahead with plans
to open an office in Beijing to attract Chinese IPOs, despite the global
financial crisis, a senior official at the exchange said on Friday. "We are at
the downward phase, but it won't hinder us to promote the Deutsche Boerse in
China," the exchange's Alexander Graf von Preysing, a senior vice president
responsible for IPOs, said at the Hamburg Summit: China meets Europe. The
exchange hopes to get regulator approval to open a Beijing office by the end of
this year, after putting China on its radar two years ago. But it is a late
comer among major exchanges' race to Beijing to lure Chinese offerings as IPOs
elsewhere dwindle. The NYSE Euronext and Nasdaq OMX opened offices in December
last year. The London Stock Exchange raised 109 million euros ($152.7 million)
in the first main market floatation by a Chinese issuer on the German bourse.
That was followed by two main market listings in 2007, Asia Bamboo and Greater
China Precision Components, which raised a combined 111 million euros. In July
this year, Business Media China raised 31 million euros. But Graf von Preysing
acknowledged that investors were becoming increasingly nervous. So far this
year, 34 Chinese firms have listed overseas, raising $7.2 billion in total, down
80 percent from the $37.7 billion raised by 107 Chinese issuers in 2007,
according to Thomson Reuters. China's wireless data card provider Vtion Wireless
Technology shelved its 152 million euros German IPO plan in November due to
unfavourable market conditions. All recent Chinese offerings on the German
bourse are trading below their IPO levels, with many plummeting over 50 percent
from their issue prices. ZhongDe shares, which traded 58 percent above their
listing price of 26 euros two months after the IPO, have since lost more than
half of their value. However, Graf von Preysing is confident the exchange will
draw Chinese listings with its lower listing costs and better trading in the
secondary market. The Deutsche Boerse aimed to attract trading and liquidity
rather than targeting IPOs for listing fees, he said. The Frankfurt exchange
charges a listing fee of 5,500 euros, while the LSE charges 200,000 euros. The
overall listing costs range from 7.5 percent to 9.5 percent of the IPO proceeds
in Germany, compared with London's 8.9 percent to 17 percent. So far, the
Deutsche Boerse has only targeted China, Russia and India for international
listings. It has no plan to expand its scope in near future.
Eight-year-old Kelly Wing Lai-ki (second right) and nine-year-old Odette Lau
Hoi-heng (right) enjoy the lanterns in Victoria Park, Causeway Bay, last night
to mark the Mid-Autumn Festival. It was the hottest night for the festival in
Hong Kong for 13 years.
Third-generation fisherman Keung Pak-ho
(left), supervises sorting of the catch. The city's consumers will be the first
to suffer from a proposed ban on trawling because reduced local supply will mean
more expensive seafood, a veteran fisherman warns. "If there is no local
trawling, seafood would have to come from farther away," Sam Mun Sai trawler
captain Keung Pak-ho said. The 61-year-old has fished for decades. "The
consumers will be then forced to pay more for prawns and fish because of more
fuel spent in the longer distance travelled." The government is consulting
fishermen's groups about a sustainable fisheries strategy that proposes banning
trawling in local waters and buying out their boats. According to the
consultation paper, trawlers accounted for 45 per cent of the local catch each
year. Mr Keung's family has operated a trawler since his grandfather's time.
While he said trawling practices remained largely unchanged - except for
advances in navigational equipment - he said there were real changes in the sea.
He said local fishermen should not be blamed for overfishing. He blamed
pollution and unethical mainland fisherman who electrocuted fish and used other
illegal means to deplete stocks. "Mirs Bay used to be a rich fishing ground you
could trawl with no difficulties," he said. "But now the seabed is filled with
rocks, concrete debris, rubbish and mud." He said the sea off Sai Kung was the
victim of marine projects, including the Yantian Port construction, while
rampant cross-border smuggling made trawling dangerous. "It was not uncommon for
these smugglers to throw everything into the sea when they were chased by the
marine police." he said. "Some contractors also dumped dredged mud when no one
was looking," he added. Mr Keung said many mainland fishing vessels operated in
Hong Kong waters, usually in large groups, and that local fishermen often had to
give way to them. "You can never stop that as it would require huge resources,"
he said. "That means some politicians would not like it." The veteran fisherman
claimed trawling was not destructive because it helped improve the environment
by removing plastic bags or bottles from the sea. "There are tens of thousands
of these items in the sea, thanks to the neighbouring developments," he said.
"If you don't remove them, they would be left there to rot and decompose. So
when you put a net down the sea, you'll find it blackened instantly. "Trawling
is like sweeping the floor. It works for the seabed, too. If one day all
trawlers are gone, the waters in Hong Kong would all be smelly." Mr Keung said
he did not know if he would surrender his 25-year-old wooden fishing boat to the
government until he saw a specific proposal. He also rejected upgrading his
vessel so he could fish in deeper waters. "It's all one's own decision whether
you want to operate a small or large business, depending on how much risk you
want," he said. "It is better for us to eat as much as we can find from the
sea."
The trade talks come amid US
concerns about the yuan and the mainland's trade surplus with the US, which hit
a record US$256.2 billion last year. The United States and China hold
cabinet-level trade talks in California this week amid tensions over the massive
Chinese export surplus and worries about the slowing global economy. The talks
come at the end of George W. Bush's Republican presidency that has seen trade
disputes with the mainland over a host of issues, ranging from copyright
infringement, vehicle parts and investment barriers to toxic toys and pet food.
The latest attempt to get the World Trade Organisation's Doha Round of
negotiations off the ground foundered in July, leaving the world's largest
economy and Asia's superpower still at odds with each other over the issues. US
Secretary of Commerce Carlos Gutierrez and US Trade Representative Susan Schwab,
the lead negotiator at the July Doha talks in Geneva, will host Vice-Premier
Wang Qishan for the one-day meeting tomorrow. Mr Gutierrez and Ms Schwab will
co-chair the talks with Mr Wang, who is responsible for economic and trade
matters. US Secretary of Agriculture Edward Schafer will also take part in the
session. The talks would focus on three main issues - "market access,
intellectual property rights and transparency", Department of Commerce
spokeswoman Ann Marie Hauser said. The meeting will mark the 25th anniversary of
the US-China Joint Commission on Commerce and Trade, a bilateral dialogue the
commerce department bills as an effort "to resolve bilateral trade issues to
expand trade opportunities". The silver anniversary venue fittingly is the
Richard Nixon presidential library in southern California. In 1972, Nixon was
the first US president to visit the country since the People's Republic of China
was established in 1949. He sought greater dialogue with China, and that
included trade. The bilateral trade talks come amid long-standing US concerns
about the yuan, which critics say is kept undervalued, and its bulging trade
surplus. US officials repeatedly have raised the issue of the value of the yuan,
which some say is artificially low and thus a factor in the massive trade
imbalance between the two nations. The US is saddled with a ballooning trade
deficit with China, which reached a record US$256.2 billion last year. The yuan
has appreciated about 20 per cent against the dollar since China delinked its
currency from the greenback in July 2005. Critics say China keeps its yuan
currency undervalued to bolster exports, and US lawmakers blame outsourcing to
China for the loss of thousands of jobs. The US had lost four million
manufacturing jobs in the past eight years, most of them in Mr Bush's first term
in office, Lloyd Wood of the American Manufacturing Trade Coalition said. "We
want China to play by the rules," he said, citing the yuan and US trade
complaints against China filed at the WTO. Mr Wood recalled that after the
Republican-led Congress "got fired" two years ago, no legislation sanctioning
China over its currency has been voted on. "There's lots of blame to share on
the issue. Our government is not doing anything." Erin Ennis, a vice-president
of the US-China Business Council, downplayed expectations for the talks, saying
its jurisdiction "is fairly narrow". "We're not expecting any major
breakthroughs at this meeting." Asked about the political implications on US
trade policy of a new president in the White House in January, Ms Ennis said the
council did not expect a shift in the US approach to trade with China because it
has been on a "steady footing for 30 years". 
A nearly full moon over the
National Stadium or better known as the Bird's Nest in Beijing on early
September 14, 2008, which is now hosting the athletic competition for the 2008
Beijing Paralympic Games. Paralympians in Beijing will get a taste of China's
Mid-Autumn Festival, which falls on September 14 this year.
A visitor takes photos of the
moon from the Marco Polo Bridge in Beijing on September 13, 2008, one day before
the full-moon Mid-Autumn Festival.
The government has cut back on
import taxes on spare parts of large equipment and canceled the import tariff
exemption on some complete sets. The adjustments were made to support the
domestic manufacturing of large equipment, said the Ministry of Finance. Taxes
levied on domestic enterprises for importing key spare parts of large equipment,
including ultra- and extra-high voltage transmission equipment and transformers,
large petro-chemical equipment and large coal-chemical equipment, would be
refunded and injected into the enterprises as investment from the nation, it
said. The policy applied to imports after Jan. 1, 2008, depending on the date of
declaration of imports. In the meantime, the import of some complete sets of
equipment by enterprises approved after Sept. 1, 2008 would no longer enjoy the
tax exemption. Both domestic and foreign-funded projects are subject to the new
policy, the ministry said. Imports of such equipment by enterprises approved
before Sept. 1 would continue to enjoy the previous tax policies until March
1,2009. 
"The Assembly," a warfare film by
Chinese director Feng Xiaogang became the biggest winner at the 29th Full
Blossom biennial awards given by the audiences in China's northeast seaport of
Dalian on Saturday evening. 
The
German pork industry, Europe's largest, is turning its attention to China, not
only a vast market but one with a taste for pigs' ears, feet and other
delicacies that are shunned at home. After two years of negotiations, Berlin
sealed a deal last week in Beijing opening the door to China for German pork.
"It is extremely positive," said Michael Stab, in charge of the meat sector for
the German Farmers Association. "There is demand for products that are not worth
much here such as trotters and ears and we are going to try to get quite a good
price for them." Pig's tail soup or chopped ears and soy sauce is just some of
the choice dishes that Chinese connoisseurs crave. Previous experience in Hong
Kong, the traditional gateway to the Chinese mainland market for German
companies, looks promising. Pork exporters delivered 70,000 tonnes of pig tails,
offal and other cheap but tasty morsels to the country in the first half of the
year, according to Matthias Kohlmueller of agricultural market research firm ZMP.
German pork production is set to reach 4.6 million tonnes this year, 30 percent
of which is intended for export. Meanwhile, the emergence of a quickly expanding
Chinese middle class is fuelling the demand for meat. "The country has gone from
being an exporter to being a net importer extremely fast," Kohlmueller said,
citing natural disasters endured by the Chinese livestock industry as
contributing factors. Currently the United States, Denmark, France and Canada
are the biggest meat suppliers to China. But the German Meat Federation said
Berlin's negotiators had made rapid success in their talks with the Chinese,
sailing past "countries such as the Netherlands which still have not reached an
accord although they started negotiations much earlier." But for German
suppliers, even with this agreement in hand, there are still open questions.
Each potential exporter must be inspected by a veterinary team and certified by
Chinese authorities. In the coming months, five to 10 applicant companies are
set to win approval and begin deliveries in 2009, according to the federation.
But Stab said the Chinese market needn't fear a glut of German meat. "The
volumes will not be enormous," said Stab of the Farmers' Association. "The
primary market (for German meat) will remain Germany, then the European Union
and then the rest of the world." Kohlmueller said major exporters would have an
advantage, however, in the giant new market. "Offices on the ground will be
needed to deal with the administrative formalities, insurance and other things
that small farmers cannot afford," he said. He said the Chinese market could
soon pave the way to the rest of Asia, with German pigs found on South Korean
barbecue spits or in Japanese noodle soups as early as next year.
Consumers could turn their backs on US manufacturer Procter and Gamble (P&G) and
British firm Unilever after they raised prices in July on consumer goods by up
to 20 percent in China to offset surging raw materials costs. That's according
to a recent Sina.com suvey. More than 84 percent of 3,042 respondents surveyed
by the website said the price hike was "unreasonable", while 87 percent
threatened to switch to cheaper brands. "Committed users are normally more
tolerant to short-term changes in variables such as pricing. However, if the
international brands remain unfavorably priced compared to local brands in the
long term, consumers are likely to re-evaluate and may shift," Ashok Sethi,
regional director of TNS, a UK-based market research and business information
services provider, said. "Even if the loss of current customers is limited, the
increased price may slow further acquisitions by the brands," Sethi added. Xu
Ailu is loyal to several P&G haircare brands, but her commitment is waning after
the recent price hike. "I rushed to the nearest supermarket to buy up Pantene
shampoos when I heard P&G would raise prices," the 29-year-old, who works for a
fashion design company in Shanghai, said. "Prices are still affordable, but if
they rise beyond 30 percent, which is my upper limit, I will definitely shift to
other brands that are more reasonably priced," she said. Li Hui, a 27-year-old
college teacher, said if P&G prices go up again she will also consider turning
to local brands. Analysts said Chinese consumers would also shift toward local
brands out of national allegiance, particularly after the success of the Beijing
Olympics. Shoppers who prefer local brands far outnumber those who choose
foreign products for most consumer goods, according to a recent survey by the
Boston Consulting Group (BCG). Over half the Sina.com respondents said they were
more likely to buy Chinese brands if their prices remain stable.
Health
chiefs have warned people not to eat two varieties of one of the city's most
popular soups as hundreds of thousands of cans were cleared from supermarket
shelves. The move to take certain flavors of Campbell's Soup off the market came
after complaints that some cans gave off a bad smell when opened. Campbell's
Soup is recalling 14,000 cases - about 330,000 cans - of two varieties, the 405g
cans of condensed cream of mushroom soup and the 410g cans of condensed creamy
chicken mushroom soup in Hong Kong and Macau. Campbell Soup Asia said there are
no problems with the smaller cans of the two soups. The company said it decided
on the recall after it received three complaints in the past week of a bad smell
when the cans were opened. "We haven't received any health complaints and there
is no evidence these products will pose any risks to health and security but,
with our commitment to quality, we've decided to recall them," a company
spokeswoman said. The Centre for Food Safety told people to stop eating the
products concerned and said these soups were produced from November 2007 to
August 2008 and that there were about 350,000 cans on the market. Campbell's
said they were produced in Malaysia. The center has urged consumers not to buy
the products and has informed retailers to stop selling the soups. It also plans
to do random checks to ensure the cans are not being sold. ParknShop and
Vanguard supermarket chains said customers who bought the products should bring
their receipts to receive refunds or store credit. A spokeswoman for Wellcome
has said that customers will need a receipt to get refunds, but Campbell's
insists it has an agreement that ensures consumers may return cans to Wellcome
without a receipt. The Consumer Council said people with cans of the soup are
entitled to refunds even without supporting receipts. "The supermarkets should
help their customers return the products to increase their shopping confidence,"
a council spokesman said. Although it remains unclear whether consumer
confidence in Campbell's soups has been shaken by the recall, some people are
concerned. Wong Shek-hung, who usually keeps two to three cans of Campbell's
soup at home, said she may stop buying them in the future. "I may stop buying if
there are a lot of complaints. Who knows what's in the cans?" ParknShop and
Wellcome said all the affected products were taken off the shelves yesterday,
but they had yet to tally how many cans were removed.
Modern Beauty Salon Holdings chairman
Joyce Tsang says a Goldman Sachs trader made accumulator deals without her
consent. The owner of one of Hong Kong's leading beauty parlour chains claims
that she is HK$60 million out of pocket after one customer got more than facial
treatments out of their relationship. Modern Beauty Salon Holdings chairman
Joyce Tsang Yue is taking legal action against Goldman Sachs, alleging a former
salesman at the company who visited her chain for beauty treatments traded risky
derivatives without her permission through her accounts, leading to HK$60
million in losses. Ms Tsang alleges that Ronnie Wong Wang, who received facial
treatments at Modern Beauty and worked at the wealth management department of
Goldman, traded a number of different products, including highly leveraged
"accumulators", from October last year to February this year. A Goldman
spokesman yesterday said the bank was "confident that the legal process under
way will show the claims are without merit". A bank spokesman said Ms Wong had
left the company earlier this year but declined to give a reason for her
departure. Ms Wong could not be contacted for comment yesterday. Ms Tsang filed
a writ to the High Court against Goldman in May but only gave full details of
the trading records at a press conference yesterday. A court hearing is
scheduled for November. Ms Tsang said she had known Ms Wong for eight years and
opened two trading accounts at Goldman in 2005 when Ms Wong joined the company.
In January this year, Ms Tsang said she found her accounts had problematic
trades which she alleged had been conducted by Ms Wong without her consent. The
problematic trades included eight accumulator contracts. Accumulator contracts
have come under fire after wealthy investors suffered huge losses. The investors
complained that bankers promoted the high-risk products without explaining the
risks in a falling market. Accumulators work like a put option in that investors
can make big gains in a rising market but suffer huge losses in a falling
market. "I signed the account opening document which clearly indicated that all
trades must be done only after my authorisation," Ms Tsang said yesterday. "I
did not intend to open discretionary accounts. But now, someone may have
breached the rule." Yesterday she played what she alleged was an audio recording
of Ms Wong stating she would sell her property to repay HK$18 million to Ms
Tsang. Although Ms Wong had promised to make repayments, Ms Tsang said she had
not received any monetary compensation. "Why doesn't Goldman promise to
compensate for my losses? I have complained to Goldman and have reported the
case to the police and the Securities and Futures Commission but I have not yet
received a satisfactory response," she said. A spokesman at the SFC said it
could not comment on individual cases due to privacy provisions.
Senior fireman Siu Wing-fong was laid to rest in Gallant Garden yesterday after
colleagues, members of the public and residents of the Mong Kok building where
he died paid their final tributes to the valiant firefighter in a full-honours
funeral service. Tears flowed as colleagues and residents of Cornwall Court,
where Siu, 46, and fellow fireman Chan Siu-lung, 25, died, observed the solemn
official ceremony at the Universal Funeral Parlour in Hung Hom, at Cornwall
Court and at Mong Kok Fire Station, where Siu had worked for six years. "He was
a good fireman. He is a hero," said a fireman giving his name as Mr Ma, who met
Siu when they were both stationed at Tsim Sha Tsui East more than 10 years ago.
Senior government officials, legislators and dozens of firemen lined the
pavement of Cheong Hang Road, flanked by dozens of wreaths outside the Universal
Funeral Parlour, from which Siu started his final ride on a fire engine that
would be his hearse. When it arrived at the site of the fatal fire, at least 300
onlookers, some in tears, gathered on both sides of Nathan Road. A platoon of
firemen gave the passing coffin a solemn salute. Halfway to Gallant Garden, the
funeral cortege stopped for a few moments outside Mong Kok Fire Station on
Prince Edward Road West. The hearse paused in the middle of the road in front of
a wreath as the government's bagpipe band played a tribute to Siu's 24-year
career. Tse Sze-ho, a teammate of Siu's in the force's volleyball team and a
participant in the ceremony, said Siu had a "great sense of responsibility". Tse
Tak-fai, Mong Kok's senior station officer, said Siu "liked to be with juniors.
Like this time, he risked his life with a junior". He added that Siu's death was
a huge loss. At Gallant Garden, Wo Hop Shek Cemetery in Fanling, Siu's daughter,
carrying the fireman's portrait, and his widow were offered condolences by his
colleagues and officials of the disciplined forces. Director of Fire Services
Gregory Lo Chun-hung, among more than 20 other officials at the ceremony,
removed his hat as a sign of reverence when the bugle call reveille signalled a
one-minute silence. The service concluded when the coffin was lowered into the
grave beside Chan, Siu's colleague, who was buried last week. Siu's yellow
service helmet, bearing the letters "MK" for Mong Kok, was also buried, and the
Hong Kong flag that was draped over the coffin was given to his widow. During
the six-hour blaze on August 10, the masks of Siu and Chan ran out of oxygen as
they helped two stranded residents on the top floor to the roof. The residents
were later rescued but the two firemen were found unconscious. Siu, who was
awarded the Fire Services Department Long Service Medal in 2002, was survived by
his wife and daughter.
Britain's Sophie Christiansen on Lambrusco III last night. The final three
Paralympic equestrian competitions concluded in front of a crowd of 4,000 at Sha
Tin last night, with Britain winning two of the gold medals on offer. Sophie
Christiansen came first in the individual Grade 1a freestyle, while compatriot
Lee Pearson won the Grade 1b freestyle, collecting his third gold medal from the
five days of competition. The Grade 3 freestyle title went to Hannelore Brenner
of Germany. Britain, host of the next Games in London in 2010, won five of the
11 equestrian gold medals. British team leader Will Connell said Hong Kong had
done a fantastic job in organising the competition. "The decision to move the
equestrian events to Hong Kong was a bit late, as it was not made until 2005,
but the hosts coped with it very well," he said. "They provided the facilities
they were asked to provide, and it was just fantastic. "Also, organisation of
the event was very professional and there has been no complaint from any of the
teams. Hong Kong should be proud of this." Katrine Puttick, head coach of South
Africa, said the events were "absolutely amazing", adding that the volunteers
had given the teams a big hand. "People here are so helpful and friendly," she
said. "Some of them look very tired after working for hours at the venue. "But
they will come up with a big smile and offer their helping hand whenever they
see you." More than 30,000 spectators - of a possible full capacity of 45,000 -
attended the Paralympic equestrian events, an attendance rate of more than 60
per cent. Lam Woon-kwong, chief executive of the Equestrian Company, which
organised the event, was happy with the overall attendance. "The figure is much
better than we expected and is a very high attendance rate for any international
event," he said. "The spectators helped create a good atmosphere and showed
strong support to the competitors."
Despite a
gloomy outlook, Hongkong Post has no plans to increase charges. Postmaster
General Tam Wing-pong made the promise while reporting last year's total postal
volume increased 6percent, netting a profit of about HK$400 million. The
registered airmail service recorded the highest increase - 21 percent. But Tam
estimated that both figures would shrink, though not significantly, in the
coming year given economic fluctuations and fierce competition. With soaring oil
prices and international calls to increase terminal dues, Tam said there is
pressure to raise postal charges, and warned that the HK$470 million 2006-07
profit would shrink to HK$400 million for the next period. Tam added yesterday
that Hongkong Post will develop other revenue streams such as e-commerce. "There
is always pressure to maintain our revenue, but we will try to overcome this by
developing new types of business related to our service." To maintain postal
volume, Hongkong Post will spend about HK$2 million on a one-stop e-commerce
platform in November when customers may buy products from recognized retailers,
with the department providing postal services such as logistics and mail
delivery. Tam hopes to attract customers from all over the world to services and
products that will be retailed by small and medium-sized enterprises. Tam said
the Customs and Excise Department will play an important role in maintaining the
authentication of the products. Hongkong Post will also try out automatic
mailing machines in certain post offices. With no aircraft of its own, Hongkong
Post has to negotiate with airlines to keep costs down. Hongkong Post this year
distributed 31 million promotion leaflets on the Legislative Council election.
Chinese President Hu Jintao, other
top party and state leaders Wu Bangguo, Wen Jiabao, Jia Qinglin, Li Changchun,
Xi Jinping, Li Keqiang, He Guoqiang and Zhou Yongkang, International Paralympic
Committee President Philip Craven and International Olympic Committee Honorary
President Juan Antonio Samaranch pose for a group photo with artists of China
Disabled People's Performing Art Troupe after the performance "My Dream" at the
Poly Theatre in Beijing, China, Sept. 11, 2008.
Tsingtao Brewery, one of China's largest beer makers, will buy Carlsberg Hong
Kong's remaining 25 percent stake in Tsingtao Beer Shanghai Songjiang Co for
51.25 million yuan. After the purchase, the Qingdao-based brewer will own the
entire equity interest of the Shanghai company. Tsingtao bought a 75 percent
stake in the subsidiary from Carlsberg in 2000. The latest acquisition was
"proposed by Carlsberg, and we agreed because we wanted to consolidate our
autonomy in managing the company", a Tsingtao executive identified as Wang said.
"The price for the deal is quite cheap given the (Shanghai) subsidiary's net
assets of 438 million yuan in 2007," said Shi Jiangang, an analyst at TX
Investment Consulting Co Ltd. The price for the 25 percent stake was agreed in
2000 when the Danish brewer sold 75 percent of then Carlsberg Brewery (Shanghai)
Ltd to Tsingtao for $19 million. Through the previous purchase, Tsingtao
successfully filled its market vacancy in Shanghai. "Unlike other beer markets,
foreign brands like Japanese Suntory and Singaporean Reeb Beer are the dominant
players in the market," Shi said, adding that the acquisition is an extension of
its 2000 purchase that will help Tsingtao boost its market share in the region.
The Shanghai subsidiary mainly brews beer for China's eastern region. Analysts
said Carlsberg's move to sell the stake could be partly because it is losing
market share to local brewers. "Carlsberg's weak performance in retail dragged
down its total achievements in the country, where it has only a 1.3 percent
market share, down 0.1 of a percentage point from 2006," Huang Qiong, an analyst
at Euromonitor International, said. Domestic products, in contrast, accounted
for over 99 percent of total volume sales in China last year, when Tsingtao had
a 13 percent market share following China Resources Enterprises Co Ltd, the
second largest brewer in China, according to Euromonitor figures. Tsingtao
posted a net profit of 560 million yuan last year, up 27.7 percent from 2006.
"Middle and high-end beers are Tsingtao's main products, so it's good news and
in line with the market trend," Shi said. Local consumers are taking to premium
beer brands such as Tsingtao Premium and Heineken, Euromonitor said. But "the
average profit for beer in China is less than 100 yuan per ton, which is very
low for brewers. As a result, the leading manufacturers are increasingly focused
on developing high-end products to boost profits." The Shanghai plant posted a
net profit of 16.79 million yuan in 2007, up 30 percent from a year earlier,
according to Tsingtao's statement to the Shanghai Stock Exchange. Tsingtao's A
shares slid 0.77 percent to close at 16.81 yuan yesterday. "Through the
transaction, Carlsberg can continuously focus its resources to develop its
rapidly growing Carlsberg brand as well as other major beer business within
China," the company said in a statement. 
MTR
passengers will be able to enjoy fare reductions of up to HK$9 from September
28, rail system bosses said yesterday. When the KCR and MTR networks merged last
December, Octopus card holders were handed fare reductions that were often not
available to single journey commuters when passing through an interchange
station joining the two rail systems. However, MTR Corp head of operations
Wilfred Lau Cheuk-man said integrated single-journey ticket automatic fare
collection will be implemented soon. The interchange ticketing gates at Kowloon
Tong, Mei Foo and Nam Cheong stations will be removed by December to bring about
seamless travel within the entire MTR network. This month the MTRC will remove
turnstiles at the three stations, allowing travelers to move freely between
lines and eliminating the need to swipe cards or insert tickets an additional
time. Customer service ambassadors will be present during the trial phase to
assist those getting used to the new system. Passengers will notice a price
reduction of HK$9, or 35.3 percent of the original fare, when they travel from
Tin Shui Wai to Sha Tin. A journey from Ma On Shan to Yau Ma Tei will see a
HK$4, or 26.7 percent, reduction. Students with specially coded Octopus cards
will also benefit from fare reductions across the board when they travel on most
MTR lines, Light Rail, or MTR buses in September. Concessions will be up to 50
percent of regular fares. For cash-strapped youngsters who now have to recharge
their student status Octopus cards at HK$50 a time, the MTRC will also introduce
an add- value amount of HK$10 at their customer service centers. Tsim Sha Tsui
and East Tsim Sha Tsui stations will not see any changes throughout the process
because they are not considered direct interchange stations. Single-journey
travelers will still have to exit one station and purchase a separate ticket at
the other in order to switch between the two lines.
Mainland investors lured
by Henderson Land's 382-day deferred payment plan bought units last year at
Grand Waterfront in To Kwa Wan. Affluent mainland investors who borrowed heavily
to pay peak prices for properties in Hong Kong last year are struggling to
finance their deals and are being forced to walk away to cut their losses. The
squeeze comes as their wealth evaporates amid the stock market and property
price slump on the mainland, and as Hong Kong housing prices are also softening.
At the height of the market boom last year, leading Hong Kong developers bussed
mainland visitors into the city to visit show flats in new projects. The
marketing blitz attracted hundreds of mainland buyers, mostly speculators from
Shenzhen, Shanghai and Wenzhou. Their main targets were projects such as Grand
Waterfront in To Kwa Wan, Long Beach and One Silver Sea in Tai Kok Tsui, and
Central Peak Towers in Tin Shui Wai, which were among the worst hit by the
turnaround, property agents said. Fredy Wu Yat-fat, the chief executive of
estate agency at Hong Kong Property, said some mainlanders had either forfeited
their uncompleted purchases or sold the assets at a loss in the secondary
market. They were quitting their deals as a result of cash-flow problems arising
from the combined effects of the mainland property and stock market slump, Mr Wu
said. "In the fourth quarter of last year, mainlanders who had made big profits
from their stock and property investments [at home] were happy to buy Hong Kong
property. But as property and stock prices fell this year, they have come under
increasing cash-flow pressure," he said. Prices in Hong Kong's mass housing
market have dropped 5 to 10 per cent this year and analysts expect a further 20
per cent decline. In October last year, Hong Kong Property arranged for about
400 mainland investors, mainly from Shenzhen, to view units at Long Beach and
One Silver Sea. About 10 per cent bought units, mainly in Long Beach. Some of
these buyers had completed their purchases by April and some were due to close
the deals next month, agents said. Sources said two of the buyers in this
project had already forfeited their deals and 10 others were expected to walk
away when their contract completions are due next month. "They stand to lose
HK$500,000 or more," the source said. Of those who have completed their deals,
more than 10 are selling in the secondary market at an 8 to 10 per cent discount
to their purchase prices. They make up 10 per cent of Long Beach properties on
the secondary market. Wilson Chan Wai-kwan, an assistant district manager of the
Hong Kong Property branch at Grand Waterfront, said a Shanghai investor recently
sold a 757 square foot unit at a loss of HK$147,000. Mr Chan said the investor
bought the unit for HK$4.51 million in October last year and resold it for
HK$4.37 million through the branch. "Buyers holding more than one unit are
offering to sell at 5 per cent below market prices or even at a loss," he said.
Lured by Henderson Land Development (SEHK: 0012)'s 382-day deferred payment
scheme, investors accounted for about 70 per cent of sales when the developer
offered three blocks of Grand Waterfront on the market that month, Mr Chan said.
Now about 30 units in the development were being offered at discounts in the
secondary market as the owners did not want to arrange mortgage loans to pay
outstanding balances next month. Perry Fong Kai-ming, a sales director in the
Tuen Mun and Tin Shui Wai districts at Centaline Property Agency, said half of
the 40 transactions concluded at Central Park Towers were recorded at a loss
last month. "Buyers suffered losses of about HK$100,000 each," Mr Fong said.
Some of the owners were willing to take the losses now rather than face greater
losses if they waited, while others were under pressure to liquidate their
assets to finance mainland investments amid a credit crunch, he said. The units
were bought at HK$2,500 to HK$4,000 per square foot and were sold at about 5 per
cent below their transaction prices. Meanwhile, residential rents in the
development have dropped 25 per cent to HK$9 per square foot as more units are
being offered for lease.
Nan Fung Development's
project in Tai Kok Tsui is scheduled for release later this year. Buoyed by
signs of a recovery in demand for quality flats, developers plan to launch 12
new residential projects offering a total of 9,163 units in Hong Kong in the
next few months, say agents. The move follows encouraging sales recorded
recently by Le Bleu Deux in Tung Chung, and Soho 38 in Central, according to
Fredy Wu Yat-fat, the chief executive of Hong Kong Property Agency. Three
projects - Seasons Monarch, a low-density residential project by Cheung Kong
(Holdings) (SEHK: 0001) in Yuen Long; Hongkong Land Holdings' Sail at Victoria
in Kennedy Town; and Wheelock Properties (SEHK: 0049)' Babington in Western -
are expected to pre-sell shortly. Seasons Monarch in Kam Tin, to the north of
the Shek Kong Barracks, provides 244 villas and semi-detached houses ranging
from 2,700 to 5,000 square feet. It is the third phase of the Seasons Villa
development and asking prices are expected to range between HK$8 million and
HK$12 million per unit. But the project looks likely to face strong competition
from developments planned for release at the same time, with Sun Hung Kai
Properties (SEHK: 0016) due to launch two low-density projects in Yuen Long by
the end of the year. The SHKP developments are La Maison Vineyard in Ngau Tam
Mei - the second phase of the Vineyard project - and One Hyde Park in Tai Tong.
La Maison Vineyard provides 26 houses ranging in size from 2,000 to 2,500 sq ft.
The minimum entry prices for the units are expected to be about HK$20 million
each, according to SHKP. Ricacorp Properties managing director Willy Liu
Wai-keung said other large projects due for release later this year included
SHKP's Cullinan at Kowloon Station; Nan Fung Development's Tai Kok Tsui project;
Cheung Kong's Tai Wai project; and Henderson Land (SEHK: 0012)'s Wu Kai Sha
project - all of which were planned for pre-sale at year-end. Mr Liu said he
expected buyers to respond positively to the new supply and help lift prices in
the primary market by some 5 per cent by the year-end. Mr Wu said the sales
performance of Soho 38 and Le Bleu Deux had proved that demand remained strong.
"Prices at Soho 38 reached HK$25,000 per square foot, while Le Bleu Deux sold
400 units within two weeks at prices that were 20 to 30 per cent higher than the
secondary market in the district," he said. "This proved that projects could
still command record strong sales if they were of a good quality." But while
sentiment in the primary market was showing signs of picking up, data on
secondary market deals continue to track a decline in demand. David Chan, a
director at Ricacorp Properties, said sales in the leading 50 housing estates
monitored by the firm amounted to 219 last week - down 11 per cent from a week
earlier. Its research also showed that the average price of deals done in the
housing estates was down 0.6 per cent - the 11th consecutive weekly decline. He
believed the poor performance in the secondary market was due to the stock
market slump and the launch of Le Bleu Deux, which had attracted the attention
of potential buyers, and that deal volumes could rebound this week as no new
projects would be launched. Although transaction volumes might rise, prices in
the secondary market could continue to fall, he said.
Products with more than three layers of packaging or those that occupy less than
45 percent of package space will be banned if a draft regulation is passed as
law. Such products can neither be produced nor sold in the country, says the
draft, put up for public hearing yesterday. The packaging cost should not exceed
15 percent of the product's price, says the draft, prepared jointly by the
General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ)
and the National Development and Reform Commission, the nation's highest
planning body. "The regulation will apply to all goods produced and sold in the
country and the imported ones, too", Liu Zhaobin, director of the AQSIQ's laws
and regulation department, said at the public hearing. People and firms that
make or sell such products face fines of up to 50,000 yuan ($7,300). To ensure
that producers and retailers do not get away with violations, the draft makes it
mandatory for all producers to maitain records for packaging of their products.
The draft will be submitted to the State Council, the country's cabinet, soon,
Liu said. It is part of the State Council's legislative agenda this year. But
before that, it is necessary to hear what the public has to say about it. The
move is aimed at "saving resources, protecting the environment and rights and
interests of consumers", he said. "Excessive or luxury packaging is becoming an
increasingly serious business causing huge loss of resources". At least
one-third of the about 280 billion yuan worth of packaging material that Chinese
people throw away every year is considered excessive, Liu said. Di Jiankai,
director of the Ministry of Commerce's commercial services administration
department, said such packages and wrappers make up half of the volume of solid
rubbish in cities. And its percentage has been increasing at an alarming 10
percent a year. Liu specially referred to the Mid-Autumn Festival delicacy, moon
cakes, saying they are among the most excessively packaged products.
The launch of a health care voucher scheme next year is expected to benefit
660,000 elderly people in the city in the first year of operation. The
three-year pilot scheme, which starts on January 1, will provide an annual
private medical care subsidy of HK$250 to those aged 70 or older. Under the
scheme, eligible senior citizens will be entitled to five electronic vouchers,
worth HK$50 each, every year. Although inflation is on the rise, Deputy Director
of Health Gloria Tam Lai-fan said the subsidy would not be increased, but the
government would consider reviewing it at a later date. "I am afraid the amount
will not be changed from January 1, as funding has been calculated on the basis
of the Finance Committee allocation approved earlier this year," Dr Tam said.
"We will have an interim evaluation after its second year and a full evaluation
after the third year. So we will not rule out any necessary adjustments after
the reviews." The scheme will be operated electronically and the elderly will
not be required to pre-register or collect vouchers. They will only have to
present their identity cards when seeking consultation with doctors
participating in the scheme. They can use more than one voucher at a time and
can retain unused vouchers for use in the second or third year. But they are not
allowed to use the following year's vouchers in advance. Interested health care
providers - from nine sectors - can begin enrolling in the scheme on the
internet or by filling the application forms from September 30. They can join at
any time during the three-year period. The nine sectors are western medical
practitioners, Chinese medicine practitioners, dentists, chiropractors,
registered nurses and enrolled nurses, physiotherapists, occupational
therapists, radiographers and medical laboratory technicians. Participating
medical providers will have to display a special logo at their clinics or
workplaces and will be given access to patients' account details and voucher
information. After consultation, a patient will have to sign a hard copy
printout, which the provider will have to keep for the record. Reimbursements
will also be made electronically. Dentists, physiotherapists and doctors expect
a poor response. Dental Association president Sigmund Leung Sai-man expected
only 20 per cent of their 1,600 members would enrol in the scheme. "Many of us
will observe how the scheme goes first. The elderly usually consult western and
Chinese practitioners more frequently than us," he said. "Another concern is
many of us do not have computers or access to the internet. Many will not want
to invest in internet access as we are still uncertain how many people will
consult us. We have to bear great cost." His view was echoed by Kwan Chi-yee,
president of the Hong Kong Chinese Herbalists Association. "Chinese medicine
practitioners seldom use computers in their clinics. We may not want to get a
computer specifically for the service," he said. However, Dr Tam said the
department was optimistic the scheme would attract a number of health care
providers. 
China Life (SEHK: 2628, announcements, news) Insurance, the nation's leading
insurer, says it has been approached by foreign financial firms seeking to raise
funds but is cautious in looking for overseas investments. Chairman Yang Chao
said yesterday the insurer had been frequently approached by overseas banks,
funds and insurance companies seeking fresh capital amid losses incurred from
the subprime loan crisis. "We are looking for some quality assets that will
benefit both parties," Mr Yang said. "We must ensure every investment will
generate a satisfactory return." China Life has been looking to diversify its
portfolio of investments after a 60 per cent slide in the mainland's benchmark
stock index eroded income from equity holdings. It booked a 4.3 billion yuan
(HK$4.9 billion) gain from selling equities in the first half of this year,
including about 3 million Visa shares bought in the credit card firm's initial
public offering in March. Analysts said China Life's prudent and conservative
investment approach had led to a better investment track record than its closest
rival, Ping An Insurance (Group) (SEHK: 2318), and mainland lenders. "It's not
reasonable for any company to consider buying low now just because it wants to
enhance its global presence," an analyst said. "Many of China Life's peers and
lenders have already paid the price." China Life's exposure to the equity market
is 13.3 per cent of its investment portfolio, the same as in June but down from
the 22.95 per cent in December last year. Opportunities had risen from the
mainland market slump, it said. "We are discovering some good investment values
in the medium to long term," said Wang Junhui, the vice-president of China Life
Insurance Asset Management. Mr Wang said the firm was ready to invest in private
equities in sectors such as energy and electricity once the regulator issued
approvals. To support earnings growth, it was also keen to expand into rural
markets while seeking investment opportunities abroad, Mr Yang said. He said
that China Life would target villages such as Dunhuang's Huangqu, where farmers
earned an average of 4,500 yuan a year but wanted health insurance in case of
serious illnesses. "That market is huge. The rural market is certainly where we
are very keen to secure greater success," Mr Wang said. He noted that China Life
already dominated the market in many third-tier rural cities and had a more than
80 per cent share of the domestic life insurance market. Separately, Mr Yang
said the company had not considered a listing for the whole group, contradicting
comments from the head of the industry regulator. Wu Dingfu, the chairman of the
China Insurance (SEHK: 0966) Regulatory Commission, said last week that the
parent companies of China Life and PICC Property and Casualty (SEHK: 2328) were
considering listing their entire groups to better manage risks and allocate
resources. "The regulator might have a much longer view on this issue. We still
have to manage our credit losses. The market is still not mature enough [for us]
to do this," he said.
Coca-Cola's takeover bid for Huiyuan
Juice, facing opposition from rival juice makers, is the latest test of
Beijing's openness to foreign investment. Coca-Cola's planned HK$19.65 billion
purchase of China Huiyuan Juice Group is facing opposition from rival juice
makers, a worrying sign that growing protectionist sentiment on the mainland
will scuttle foreign investment deals. The European Chamber of Commerce in China
warned yesterday that surging economic nationalism was holding back European
business on the mainland and deterring foreign investment. European companies
were carefully watching how mainland regulators dealt with Coca-Cola's bid for
Huiyuan Juice, chamber president Joerg Wuttke said in Beijing. Coca-Cola's
attempted takeover of Huiyuan Juice is the latest test of Beijing's openness to
foreign investment after United States buyout company Carlyle Group recently
admitted defeat in its three-year battle to buy a stake in Xugong Group, the
mainland's biggest maker of construction equipment. ArcelorMittal, the world's
top steelmaker, on Monday said it also faced obstacles over expanding through
acquisitions in the country. Rival local juice makers are planning to fight the
Coke deal, which will give Coca-Cola a dominant share of the country's rapidly
growing juice market as well as control of a well-known national brand.
"Economic nationalism is rising and that's a concern for us," Mr Wuttke said at
the launch of the chamber's annual position paper on business in China. European
companies were routinely excluded from bidding for public projects and local
standard-setting put foreign companies at a disadvantage, Mr Wuttke said. He
added that European energy companies had lost infrastructure contracts to local
rivals despite offering competitive prices and better technology, while no
European company had yet made a substantial acquisition on the mainland.
"Economic nationalism is primarily driven by economic interest groups that want
to either maintain monopolies or gain monopolies that try to exclude foreigners
as a competitive force," Mr Wuttke said. Beijing is closely watching
developments in the Coca-Cola bid, the largest ever attempted by a foreign
company on the mainland, with some predicting the government will be reluctant
to see a national brand fall into American hands. Li Su, a lawyer representing
Wahaha Group workers in their dispute with estranged joint-venture partner
Groupe Danone, which has agreed to sell its stake in Huiyuan Juice to Coca-Cola,
said he would issue an open letter of protest to the Ministry of Commerce this
week. "The local juice makers we approached expressed opposition and concern
about the deal," Mr Li said. "They worry if the deal goes through, they'll be
dead within six months. "We must do something to keep the Huiyuan brand because
we have so few national brands on the mainland." Coca-Cola's takeover bid is
also sure to test the country's new anti-monopoly law, which contains special
provisions designed to protect national brands. "We are really watching the Coca
Cola-Huiyuan case very closely in order to see if that is dealt with by the law
or if it is dealt with in respect to media and public concerns," Mr Wuttke said.
He added that barriers designed to protect strategic industries, such as steel
and car-making, were one reason why the 27-member European Union now accounted
for less than 5 per cent of foreign direct investment inflows into the mainland.
ArcelorMittal tried to take over steel company China Oriental (SEHK: 0581) last
year but had to pull back to a 47 per cent stake as the central government
restricts ownership of steel assets. "I wish China would let us do more. We
tried to expand by acquiring more in China, but so far have not been lucky
enough," said Lakshmi Mittal, the chairman and chief executive of the company.
Secretary of the Treasury Henry Paulson
(L) and Jim Lockhart, Director of the the new independent regulator, the Federal
Finanace Agency (FHFA), announce that the government is taking control of
mortgage finance companies Fannie Mae and Freddie Mac during a news conference
at the Office of Management Supervision in Washington, DC, Sept. 7, 2008.
Global trading group Li & Fung is raising
HK$3.88 billion from selling a 4.62 per cent stake to Singapore's Temasek
Holdings, boosting its capital for acquisitions. Li & Fung said it agreed to
sell 168 million new shares at HK$23.09 each, a 2.39 per cent premium to the
stock's closing price of HK$22.55 on Friday. The deal will make the Singapore
sovereign wealth fund its second-largest shareholder after the Fung family. "We
are very pleased to have Temasek as one of our strategic shareholders in view of
its long-term approach to this investment," said William Fung Kwok-lun, the
managing director of Li & Fung. The deal may help restore some investor
confidence in the group, whose shares have dropped 28.41 per cent this year amid
an economic slowdown in the United States, its biggest market. David Heng, the
managing director of Temasek, said Li & Fung was a global leader in consumer
goods sourcing and had excellent potential. To increase income from outside the
US, Li & Fung has been making acquisitions in other markets. The purchase of the
world's biggest mail-order group and department store KarstadtQuelle boosted its
exposure in Europe by 7.8 percentage points to 30.5 per cent in the first half
of this year. At the same time, sales to the US decreased 7.6 percentage points
to account for 60.3 per cent of total turnover. "We have no doubt that this
strategic investment by Temasek will be of benefit to Li & Fung's activities in
Asia and will further enable us to take advantage of any acquisition
opportunities that may arise in this economic environment," Mr Fung said. The
group also needs fresh capital to help finance the purchase of New York handbag
importer Van Zeeland for as much as HK$3.87 billion announced last month. Mr
Fung has said the company was considering either issuing bonds or shares to
raise funds for the deal. However, Standard & Poor's Ratings Services warned of
a possible rating cut on Li & Fung and the group's US$500 million bonds if the
company funded the acquisition with debt. The company is rated A-minus, four
steps above non-investment grade. Temasek, which manages US$134 billion in
assets, has agreed not to sell the Li & Fung shares for 12 months. Temasek is
also the second-largest shareholder in Citic Resources Holdings (SEHK: 1205),
the Hong Kong-listed unit of state-owned conglomerate Citic Group. The Singapore
government's investment arm holds 11.47 per cent of Citic Resources. The firm
also has stakes in Hong Kong-listed companies such as China Construction Bank (SEHK:
0939, announcements, news) Corp, Bank of China, Sino-Forest Corp and Dongfeng
Motor Group (SEHK: 0489). Li & Fung's first-half net profit jumped 17.7 per cent
to HK$1.24 billion. Six acquisitions fuelled sales growth of 25.5 per cent to
HK$47.39 billion from a year earlier.
Cost-conscious companies and a middle
class hit by the stock market slump are cutting back on their Mid-Autumn
Festival spending this year, gift shops say. Customers of Far East Flora, which
targets the upper-class market, have cut their spending by around 20 percent,
according to senior manager Kelly Lau Ching-mei, while customer numbers have
fallen about 10 percent. "This year, more customers are choosing hampers in the
mid-price range of HK$500 to HK$600 rather than something costing over HK$1,000,
which they did last year," Lau said. Mid-Autumn hampers usually comprise a box
of mooncakes, Chinese tea leaves, seasonal fruits and, at the upper end, bottles
of wine to go with decorations and bouquets to make the gift more appealing. The
prices of such hampers range from around HK$300 to more than HK$4,000. Hong Kong
Flower Shop, which also provides Mid-Autumn hampers to an elite clientele, said
most customers were opting for items priced at around HK$700 this year compared
with more than HK$1,000 last year. Along with poor economic conditions, shops
also have to deal with inflation with higher costs for hamper contents, higher
wages and increased delivery charges. "For example, even the rattan baskets we
use have gone up by about 20 percent, as has the price of fruit. However, we try
not to pass these additional costs to our customers, which means our profit
margins are down by around 10 percent," Lau said. To save money, some customers
are going instead for basic gift items such as mooncakes without the trimmings.
This has boosted sales of major bakeries. Peter Tse Hing-chi, director of Tai
Tung Bakery, one of the city's oldest bakeries, said more customers were buying
directly from his outlet even though the retail price had gone up 7 to 10
percent. A box of four basic mooncakes is now selling for around HK$170, up
HK$20 from last year. "Buying mooncakes on their own is a lot cheaper than
ordering the hampers. But sending mooncakes to business partners and relatives
is a tradition which cannot be skipped no matter how poor the economy is," Tse
said.
The entrance
to the nightclub on the second floor of the fire-ravaged Cornwall Court. The
club has applied for a karaoke permit and an employee said it was open for
business. Despite obvious fire damage, the Mei Ko Mui Night Club on the second
floor of the residential-commercial building in Mong Kok was displaying an "open
for business" sign on the door yesterday and staff could be seen inside. "Many
residents are very worried, as they do not know if the nightclub has obtained a
licence and is well-equipped with fire-safety facilities," district councillor
Wong Shu-ming said. "They fear that another big fire might destroy their homes
again," said Ms Wong, who is helping residents restore their damaged flats in
the wake of the August 10 blaze that killed four people, including two
firefighters. The Food and Environmental Hygiene Department said the nightclub
did not have a karaoke establishment permit. "The club has applied for the
karaoke establishment permit and the application is being processed now. If
karaoke activities are conducted inside the premises without the permit, the
department will prosecute," the department said in a written reply. But a
nightclub employee told a South China Morning Post (SEHK: 0583, announcements,
news) reporter posing as a customer that patrons could sing at the club
yesterday. A mezzanine-floor nightclub and a karaoke bar on the first floor of
the Nathan Road building, where the fire broke out, remained padlocked
yesterday. Police are still investigating the cause of the blaze. Electricity
and water supplies resumed in the past few days, Ms Wong said, and about 80 to
90 per cent of residents have returned home. But more work still has to be done,
including installing new fire prevention doors. "The fire prevention doors are
too old and the design is no good. So, all have to be replaced," Ms Wong said.
Blackened walls, broken windows and doors, and the smell of burning remained in
the narrow staircase of the 15-storey building. Melted fire hose reels and
electrical wires are still waiting to be replaced. Noise of construction work
echoed on nearly every floor, and construction waste was piled up in the public
corridor with fire prevention doors left wide open for the convenience of repair
workers. Some residents have opted to leave while work continues. Ms Chin, who
used to live on the 12th floor, said she had moved out of the building already,
while a Miss Pang on the 13th floor said she could not afford to move out so had
to stay. 
The Hong Kong Jockey Club broke with
tradition yesterday and made Rita Fan Hsu Lai-tai the first woman on its board
of stewards. Mrs Fan, 62, officially takes up her duties today. The board's 12
members set the direction of the club's business and charitable activities. Mrs
Fan will remain president of the Legislative Council until the end of this
month, following the election on Sunday. Her appointment comes as the club seeks
growth opportunities amid intensifying competition from Macau as well as
Singapore, Thailand and Vietnam, which are rapidly developing facilities to
foster their gambling, entertainment and convention industries. Jockey Club
chairman John Chan Cho-chak, who called Mrs Fan's election yesterday at the
general meeting historic, said more needed to be done to ensure funds from local
betting remained in Hong Kong to benefit the community. The club, which is the
city's single biggest taxpayer, contributed HK$13.2 billion in taxes and betting
duties last year, the most in a decade. More than HK$1.05 billion was
distributed to charities, while HK$957 million went to the Lotteries Fund. Mrs
Fan was elected a voting member of the club in 2005 and was a part-owner of the
horse First Among Equals. In March, she was elected to the Standing Committee of
the National People's Congress. She played down the significance of her role in
the mainland's top legislative body and said it was different and separate from
her responsibilities to the club. Mrs Fan said friends were asking about her
Jockey Club connections last month in Beijing, where it has a facility. "Many
friends of mine in Beijing asked if I could take them there but I just gave them
a rain check." 
House prices on the mainland have been depressed this year by a range of policy
measures but the retail and office leasing markets in Beijing and Shanghai have
been left largely unscathed by the downturn in the residential sector, say
analysts. The two markets' outperformance was fuelled by multinational companies
continuing their expansion into the mainland despite uncertainties overhanging
the global economic outlook, they add. Research conducted by the Beijing office
of property consultant Jones Lang LaSalle shows that retail and office rents in
Beijing rose an average of 5.2 and 4.5 per cent respectively in the first half.
Rental growth was much higher in prime areas. Ian Choy Chi-keung, the chief
representative of Sun Hung Kai Properties (SEHK: 0016) (Beijing), said average
rents in the sought-after shopping areas of Wangfujing Street and Xidan in
Beijing had risen between 12 and 15 per cent so far this year. "Competition for
tenants in the retail leasing market was strong in the first half in the run-up
to the Olympics, as many new shopping centres were timed to open for the influx
of visitors," Mr Choy said. "But the performance of retail spaces in traditional
shopping areas such as Wangfujing Street and Xidan remained strong as they were
sought by international brands." Rents in Sun Hung Kai Properties' rebranded
Beijing APM - formerly known as Beijing Sun Dong An Plaza - rose 30 to 40 per
cent after it was renovated. The mall reported receiving 150,000 visitors per
day during the Games period - double the number for the same period last year.
But Mr Choy said developers of shopping malls would face a challenging market
next year, when new retail projects would boost the stock of retail space to
about 5 million square metres from 2.8 million. Traditional shopping areas would
be less affected, he said. "In the last few years, young executives in Beijing
have enjoyed 15 per cent salary increases each year. Their purchasing power is
strong," he said. "As a result, international brands have shown their optimism
on Beijing's retail market. An international sportswear retailer is planning to
expand to 3,000 sq metres in our mall after initially opening a 1,000 sq metre
shop for half a year." Mr Choy expects retail rents in prime Beijing locations
to rise 20 to 30 per cent over the next year. Denis Ma, an associate director of
the research department at Jones Lang LaSalle Beijing, said the recent ending of
the Olympics was driving a temporary slowdown in Beijing's retail sector. Lower
take-up levels, compounded by a large amount of newly completed space coming on
to the market, drove vacancy rates up by 2.4 percentage points to 9.5 per cent
in the second quarter, Mr Ma said. While landlords of established high-quality
developments continued to enjoy high occupancy levels, new projects entered the
market this quarter with minimal pre-leasing commitments. In Shanghai, a
spokesman for Kerry Properties (SEHK: 0683) said the average rents it fetched in
its Shanghai retail portfolio had risen steadily this year as demand was strong
- particularly from new foreign entrants into the retail or food and beverage
sectors. At some popular Beijing shopping centres, international and local
retailers have had to wait one to two years before securing a retail space, he
said. Significant new supply would come into the market from 2010 to 2012, the
spokesman said. But with Shanghai's rapid economic and double-digit foreign
direct investment growth, the market should be able to absorb the increased
supply soon, further boosting rents particularly in malls in the city centre, he
said. He expected the occupancy rate and rents at Kerry's retail portfolio to
remain stable in the next 12 months. Kerry is controlled by Kuok Group, the
controlling shareholder of SCMP Group which publishes the South China Morning
Post (SEHK: 0583, announcements, news). Shaun Brodie, a senior analyst at DTZ in
Shanghai, said rents at high-end retail property stabilised in the second
quarter. High-end ground floor rents in the five core commercial hubs in
Shanghai stood at 50.60 yuan per square metre per day, up 0.9 per cent quarter
on quarter and 4.1 per cent year on year, the firm said. Retail sales in
Shanghai jumped 18.5 per cent year on year in July to 37.7 billion yuan (HK$43.2
billion), the highest recorded for a single month this year. He said retailers
were still very keen to expand in the city's retail market.
The number of cross-boundary mainland
visitors coming to Hong Kong is continuing to increase, a new survey released by
the Planning Department on Thursday shows. The survey found mainland visitors
made up 16 per cent of all cross-boundary passengers From November 19 to
December 2, 2007, a total of 55,600 passengers and 16,100 drivers were
interviewed during the two-week cross-boundary travel survey period. The survey
was carried out at 11 immigration control points. It revealed that 6.9 million –
or a daily average of 490,900 cross-boundary passenger trips – were made during
the two-week survey period. This was an increase of 10 per cent over the same
period in a 2006 survey. Lo Wu and Lok Ma Chau continued to be the busiest
control points – taking up 51 per cent and 23 per cent of the passenger trips,
respectively. There were 662,400 frequent travellers, who usually travelled at
least once a week between the mainland and Hong Kong. The most common reasons
for these travellers were leisure (39 per cent) and business (32 per cent). A
department spokesman said trips by Hong Kong residents took up the largest
share. "Trips by people living in Hong Kong constituted 71 per cent of all
cross-boundary trips. Half of these trips were for leisure, followed by business
[22 per cent] and trips to visit relatives and friends [17 per cent]," he said.
"Among the mainland cities, Shenzhen remained the most common trip destination,
accounting for about two-thirds of the trips," he said. The survey also found
that the number of trips by visitors from the mainland increased by 18 per cent
compared with 2006, reaching on average 76,800 a day, of which more than half
were under the individual visit scheme.
Chinese Premier Wen Jiabao visits Qiang
ethnic group village in Beichuan County, southwest China's Sichuan Province,
Sept. 1, 2008. Wen inspected repair work and raised morale among residents over
the past three days, during a visit to southwestern Sichuan Province nearly four
months after the devastating May 12 earthquake. 
Legislative Council candidates have been
warned that those who use exit polls to influence the outcome of an election
will have the total costs of the poll included in their election expenses.
Electoral Affairs Commission chairman Pang Kin-kee also said yesterday pollsters
who make data available before polling ends will have their permits to conduct
exit polls revoked. Seven organizations have applied for permission to conduct
exit polls in polling stations, Pang said. The applications are being reviewed
and details of those who are successful will be announced. The toughened stance
came as Hong Kong University public opinion program director Robert Chung Ting-yiu
announced he was delaying by eight hours the first results of exit polls. The
first data will be released to the five media sponsors at 8pm on voting day. An
earlier plan was to release data at noon, 5pm, 9.30pm and 10.30pm. The change
could help remove people's fear of leaks and still facilitate the work of media
sponsors, Chung said. He denied he was bowing to pressure from political
parties. Seven democratic camps, including the Civic and Democratic parties,
were also focused on exit polls yesterday. They called on voters not to take
part in exit polls, including the one being conducted by the university. They
blamed the government and the EAC for not coming up with a proper set of rules
for pollsters despite suggestions and also wondered why the commission was
reviewing applications by seven groups to conduct polls just four days before
the election. "As a scholar, I also want to defend academic freedom," said Civic
Party secretary-general Joseph Cheng Yu-shek. "But an election cannot be carried
out in a fair manner if there are no proper regulations to guard against the
abuse of exit polls." Cheng, a political science professor, said democrats would
not use any exit poll data to alarm voters. Democratic Alliance for the
Betterment and Progress of Hong Kong chairman Tam Yiu-chung disagreed with the
democrats, saying academics would like to use Legco election data for study and
this would benefit constitutional development. Meanwhile, Hong Kong Transition
Project director Michael DeGolyer predicted the turnout rate on Sunday could be
between 53 and 57 percent. It was 55.64 percent in the 2004 election. People can
learn about voting can at mock polling stations at Leighton Hill Community Hall,
Kowloon Park Sports Center, Tuen Mun Town Hall and Tai Po Community Center from
today to Saturday.
Claiming the stock market plunge this
year is a normal market consolidation, Hong Kong Monetary Authority chief
executive Joseph Yam Chi-kwong said there is no need for the central government
to implement market-saving policies. Yam made the comment yesterday before the
Shanghai Composite Index closed at a 20-month low 2,276.67, down 1.2 percent.
Based on yesterday's close, the index has dived 63 percent from its peak of
6,092.06 points on October 16 last year. "A dive from last year's high is not
unreasonable," said Yam in an interview with a local television station. "What
should be noted, in fact, is whether it will bring about structural problems or
crackdowns in the financial system. But so far, no such things were observed.
"The fall is simply normal market consolidation. There should not be any
[market-saving] measures." The city's de facto central bank chief added that
market-saving measures by the world's central banks are temporarily sufficient
as similar "explosive" events such as the bailout of Lehman Brothers or the
Fannie Mae and Freddie Mac issues are unlikely to happen. "But that does not
mean [the subprime] issue is over," Yam said. "The key problem is that the US
housing market has been falling. It has not yet bottomed out."
The families of two firemen who died rescuing
victims of the city's worst fire in a decade are to get nearly HK$7 million in
compensation. Senior fire officer Siu Wing-fong, 46, and fire officer Chan Siu-lung,
25, died from smoke inhalation as they battled to save residents trapped in a
blazing Mong Kok tower block on August 10. Chan's family have been granted a
record HK$3.78 million while Siu's wife and 12-year-old daughter will get
HK$3.15 million under the government's "financial assistance scheme for family
members of those who sacrificed their lives to save others." The youngest in his
family, Chan is survived by his parents, a brother and two sisters. A Labour and
Welfare Bureau spokeswoman said Chan's grant was the biggest so far, topping a
previous payout of HK$3.6 million to the family of doctor Kate Cheng Ha-yan who
died of SARS in May 2003 after contracting it during frontline duties at Tai Po
Hospital. The scheme, set up in 2002 to provide financial assistance to the
families of those who save or protect others, gives grants based on the age,
retirement age and the prevailing median monthly employment earnings of the
deceased, ranging from HK$3.15 million to HK$6.3 million. In recognition of
their actions during the fire, which killed two other people and injured 55, the
two firemen have been posthumously awarded the Gold Medal for Bravery, which
will be presented in October. Secretary for Labour and Welfare Matthew Cheung
Ki-chung said Siu and Chan had displayed bravery and selfless devotion during
their rescue and firefighting operation despite the great risk to their own
lives. "Their high level of professionalism and self-sacrifice commands our
greatest respect," he said. The pair from the Mong Kok fire station were
carrying out rescue operations on the 12th floor of 15-story Cornwall Court,
responding to trapped residents. Officials praised them for pressing on with
their rescue efforts despite their dwindling air supply, saving two residents
before succumbing to the smoke. Siu and Chan were taken to hospital but were
dead on arrival. Chan's funeral is tomorrow and Siu's next Thursday. They will
be interred with full honors in Gallant Garden.
Aluminum Corp of China (SEHK: 2600) (Chalco),
the country's largest producer of aluminium, will cut domestic capital
expenditure by as much as 30 per cent over the next three years to preserve
funds for merger and acquisition opportunities that may arise amid an industry
downturn. "Chalco will postpone the completion of some projects and reassess new
projects to tighten control on expenditure," said chairman Xiao Yaqing
yesterday. "On the one hand, it will help to ensure sufficient working capital.
On the other, it will also increase our strength for acquisitions when smaller
rivals can't survive soaring production costs and fierce competition." Mr Xiao
said the company would not necessarily need to build new plants if acquisitions
were a more effective path to growth. He said Chalco was seeking overseas
acquisitions, especially resources-related. "The best buying opportunities are
always amid economic downturns. More cash on hand will provide better
opportunities," he said. Capital spending by the aluminium producer is about 20
billion yuan (HK$22.83 billion) a year. From the second half, spending would be
cut by 20 to 30 per cent, Mr Xiao said. The belt tightening comes four days
after Chalco posted a 65 per cent year-on-year drop in first-half earnings,
dented by high production costs, output disruptions and an oversupply in the
market. Chalco is not the first to scale back capital spending. China Petroleum
& Chemical Corp (Sinopec (SEHK: 0386)), the nation's top oil refiner, last week
said it had cut its planned spending on new production capacity by 8.2 billion
yuan or 6.7 per cent this year after heavy refining losses caused net cash
inflows to dwindle. On Monday, its unit Sinopec Shanghai Petrochemical (SEHK:
0338) said it would cut this year's capital spending to between 1.6 billion and
1.8 billion yuan from 2.5 billion yuan because of tighter cash flow. Industries
from textiles, to electronics, to metal producers are feeling the pain of
soaring raw materials and fuel prices combined with slower growth in the global
economy. Thousands of export-oriented small and medium-sized factories have shut
and heavy industries are cutting output because of weaker demand and higher
costs. Mainland aluminium producers slashed output by more than 10 per cent from
August because of a shortage of electricity which accounts for up to 40 per cent
of costs. Mr Xiao said Chalco's production target for this year remained
unchanged but aluminium production might be reduced if prices fell too low,
especially in regions in which power tariffs were higher. Earlier this year, the
company said it planned to produce 10.2 million tonnes of alumina and 3.6
million tonnes of aluminium. Chalco is also looking to buy coal mines and build
power stations to reduce output costs. Mr Xiao said the firm had bought minority
stakes in two coal mines in Gansu and Henan provinces and would buy more when
valuations were more "rational". The company also plans to increase its ratio of
self-generated power to 50 per cent from 20 per cent but did not give a
timetable. Chalco aims to raise its bauxite resources and expects company-owned
bauxite to rise to 50 per cent by next year from 25 per cent. In addition to
mainland mines, Chalco has sealed a bauxite and alumina project in Australia and
is in talks to buy bauxite mines in Vietnam and Indonesia to ensure supplies.
Bright new Wan Chai Market opens to
applause from vendors and shoppers - Vendors and shoppers gave a thumbs-up to
the spacious and air conditioned new Wan Chai Market, which was packed on its
opening day yesterday.
Asian currencies fell yesterday, with the South Korean won plunging to its
lowest level in almost four years as speculation mounted that overseas investors
are pulling out of local bond and stock markets. "We've got the potential to
unwind a lot of the secular bull run that we've seen in these Asian currencies
all of this decade," said State Street strategist Dwyfor Evans. "It looks as if
Korea is at the fore of all the countries and currencies that are at risk." The
won fell 2.5 percent to 1,116.00 against the dollar. The Korean government is
"seriously concerned" about the decline, top currency official Choi Jong Ku said
yesterday. Senior government officials, he said, will meet today to discuss the
situation. Indicators show the South Korean economy is in its worst shape since
the Asian financial crisis, finance minister Kang Man Soo told a parliamentary
session yesterday. outh Korea posted a net capital outflow of US$5.77 billion
(HK$45 billion) in July, the largest since December 1997. However, Kang insisted
the current economic situation is different from that of 1997, especially the
level of foreign debt. The Philippine peso fell to its lowest level for a year
after oil prices rose, increasing the nation's demand for dollars to pay for the
commodity. The currency declined 0.9 percent to 46.32 versus the dollar.
Taiwan's currency fell to a six-month low on speculation its central bank will
seek a weaker currency to support exports. The New Taiwan dollar dropped as much
as 0.4 percent to NT$31.65 against the US dollar. "The trend still points to
weaker Asian currencies," said Christy Tan, a Singapore- based strategist at
Bank of America. "What's dragging not just Taiwan, but the rest of the region,
is the fact that growth is slowing while inflation is still staying firm.
Shoring up growth is gaining priority." India's rupee hit a 17-month low after
data showed a fourth straight month of net foreign fund outflow from the stock
market. The Singapore dollar weakened 0.6 percent and the Thai baht 0.2 percent.
The opening ceremony of the Beijing Olympics may be hard to beat, but the show
marking the start of the Paralympics on Saturday will be just as exciting and
"warmly spectacular", Games organisers promise. Canto-pop king Andy Lau Tak-wah,
who performed at the Olympics closing ceremony a week ago, will sing the theme
song Everyone Is No1 at the Bird's Nest. The gala will last two hours and 50
minutes and involve more than 6,000 performers, including the disabled,
according to the Beijing Morning Post. Xinhua said yesterday that one of the
artists would be blind singer Cai Yuzhu , 30, from the island province of
Hainan. Organisers promised the show would be as "exciting, touching and
unforgettable" as that for the Olympics last month. Contrasted with the
Olympics' opening, Paralympic athletes will enter the National Stadium before
the performance starts, and some front seats will be reserved for the
handicapped athletes. Zhang Jigang , director of the Paralympics opening
ceremony and deputy director of the Olympics opening ceremony, said the theme of
the show would be "life", "an ode to the creativity of life, humanity and great
humanitarianism". "It will be a nice surprise for the world," Mr Zhang was
quoted by the report as saying. While the Olympics opening ceremony featured the
idea of harmony, the Paralympics' festivities would stress humanitarian
concerns, hope and warmth, musical director Fang Ming told the newspaper. "The
Olympics opening ceremony gave people a strong [visual] impact," Mr Fang was
quoted as saying. "People will feel the same strong impact during the
Paralympics opening show, but it will be a warm one." Bocog executive
vice-president Tang Xiaoquan , who is also vice-president of the China Disabled
Persons Federation, said it "would be the same - exciting, touching and
unforgettable". Four hundred deaf girls will perform a sign-language dance
called Hello, Stars in the style of the popular Thousand-Hand Guanyin dance. And
about 2,200 students aged eight to 12 and staff from Henan's Fengtagou Kung Fu
School will perform an animated robot dance. Blind singer Cai will join a
40-year-old polio victim to sing a duet, entitled Invited Forever. The People's
Daily reported that the flexible LED screen, which formed a huge scroll during
the Olympics opening ceremony, would be used again during the opening of the
Paralympics. But the much anticipated cauldron ritual has remained a secret,
except a guarantee by the organisers that it would be "as exciting as the
Olympics opening", in which former gymnast Li Ning (SEHK: 2331) lit the cauldron
after "running" around the Bird's Nest more than 50 metres above the ground.
Meteorologists have forecast mostly fine weather for Saturday, with temperatures
between 19 and 29 degrees Celsius.
Improving attendance at Hong Kong Disneyland is
the park's top priority, its new chief, Andrew Kam Min-ho, said on his first day
yesterday. Efforts would focus on local customers and visitors from the mainland
and Southeast Asia, as the calendar of public holidays in these markets was
similar, he said. Halloween also offers marketing opportunities for Disneyland
as well as Ocean Park on Hong Kong Island. Mr Kam, a 20-year mainland management
veteran, acknowledged that more needed to be done to market the theme park to
mainland visitors. In its second year of operation last year, mainland visitors
accounted for 40 per cent of the total 4.17 million. Playing down concerns that
the newest Disney park was too small to keep visitors entertained for a whole
day, he said he had spent eight days exploring the park and there were still
areas he had not seen. "Hong Kong Disneyland has the same land resources as the
park in California. This is just phase one. It is difficult and unfair to
compare a three-year-old baby to a 50-year-old adult," Mr Kam said, referring to
the Hong Kong and US theme parks. According to recent media reports about
government discussions with Disney over how to fund the park's expansion plans,
the government will not relinquish control and will continue to be a majority
shareholder, although it may reduce its 57 per cent equity stake. Asked about
persistent rumours of a possible Shanghai Disneyland, Mr Kwok pointed to the US,
which is home to two Disney theme parks. "Disney is a business that always looks
for expansion. The most important issue is how to grow the pie." Hong Kong
Disneyland was more appealing to children than Ocean Park, which offered an
entirely different experience, he said. However, for Halloween - with its scary
themes - Disney's usually tame offerings were becoming increasingly frightening,
with attractions geared more towards a young adult audience. Ocean Park had
invested an eight-figure sum in its Halloween program, which runs from September
26 to November 2, chairman Allan Zeman said. "Our Halloween bash is our
signature event, and Halloween itself is becoming a bigger holiday in China,
especially southern China." This year's offering will have a greater focus on
Chinese horror attractions. Six of the nine haunted houses are based on local
ghost stories, such as a cursed Chinese opera theatre. Mr Zeman said he expected
October attendance to exceed last year's record of about 500,000 visitors. He is
hoping for a double-digit percentage growth in overall attendance, with mainland
travellers making up 10 to 15 per cent.
Urgent
checks on old trees after teen death - The city's more than 400 old trees are
being given a thorough checkup after a century-old tree collapsed and killed a
19-year-old university student on Wednesday.
Caterpillar expects sales on the
mainland and emerging markets will offset slow global demand. Caterpillar, the
world's largest maker of mining and construction equipment, is expanding its
mainland operations to meet booming demand for heavy machinery used in mining,
power generation and infrastructure building. The Illinois-based company will
invest more than US$100 million to triple production at Shandong SEM Machinery,
a leading mainland wheel-loader manufacturer that it bought in February.
Caterpillar will also spend US$20 million on completing the first phase of a new
research and design centre in the Jiangsu city of Wuxi, chairman and chief
executive Jim Owens said yesterday. The announcement came after Caterpillar said
it would open a production facility for hydraulic excavators in Nanjing and
began construction on a major plant for wheel loaders in Suzhou that would start
production in April next year. Despite forecasting that economic weakness in
major industrialized economies would persist into next year, Mr Owens said
Caterpillar's sales on the mainland and in other emerging economies would offset
slowing global demand. "The biggest challenge we have here is supply
constraints. Demand appears to be very strong," he said. With its order books
full until the end of the year, Caterpillar expects sales on the mainland to
exceed US$2 billion this year and double to US$4 billion by 2010. Caterpillar
has been a major beneficiary of the boom in global oil and commodity prices,
which have driven demand for construction and mining equipment. However, the
higher cost of raw materials, especially steel, also forced the firm to raise
prices at mid-year. Tokyo-based rival Komatsu has warned that prices may have to
rise by as much as 10 per cent this year. "We're going to take prices in line
with what the global market will allow us to take and that are competitive," Mr
Owens said. "We're responding to a very significant increase in the prices of
some of the basic materials we use a lot."
