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Listen to MP3 “Business Beyond the Reef” to discuss the problems with imports from China, telling all sides of the story and then expand the discussion to revitalizing Chinatown - Special Guest: Johnson Choi, MBA, RFC. President - Hong Kong.China.Hawaii Chamber of Commerce (HKCHcc) and Danny Au, Manager, Bo Wah Trading
Happy Chinese New Year - Year of the Oz on January 26 2009 (Chinese Spring Festival Jan 26th - Feb 9th)
January 30 - Feb 1, 2009
Hong Kong: The rights of an individual do not come before the public interest, the Court of Appeal ruled yesterday. The decision, which involved the right of a motorist to remain silent, means the government may now pursue some 700 cases in which car owners have refused to identify those who violated traffic rules while driving their vehicles. The three judges of the court unanimously quashed a magistrate's ruling that it was unconstitutional for police to demand that an American freelance journalist identify the driver who jumped red lights while behind the wheel of his car. That case will be now be sent before another magistrate. High Court Chief Judge Geoffrey Ma Tao-li said although the right to a fair trial is absolute it is clear certain facets of this right - such as the right to silence - are not absolute and are subject to qualification. Section 63 of the Road Traffic Ordinance, Ma said, provides an acceptable balance struck between the public interest and fundamental rights of the individual. He said public interest lies very much in the effective regulation of vehicles and their use. In Hong Kong, vehicles are prevalent, and the potential dangers posed by them are self evident. So there has to be an effective regulatory system to govern their use. "Extremely serious social problems would be caused if there was an absence of such a system," Ma said. Court of Appeal vice-president Michael Stuart- Moore said the fact a few thousand notices had been issued in 2007-2008 shows law enforcement authorities would have been unable to commence meaningful investigations into alleged traffic violations if there was no Section 63. The Department of Justice said the appeal ruling affirms the Secretary of Justice's interpretation of the law. The secretary will now consider the best way to approach similar cases. About 700 cases have been adjourned pending the appeal. The journalist, Richard Latker, said he may seek an appeal. If he does, he must lodge it with the Court of Final Appeal within 28 days. According to lawmaker and solicitor Albert Ho Chun-ya, even if Latker decides to appeal police may move on prosecutions of car owners who refused to talk. The 700 pending cases could proceed at any time, he said, because the Court of Appeal has quashed the magistrate's ruling. Latker, 44, was charged last May with failure to disclose the identity of the driver who was captured by a digital camera going through a set of red lights in Sau Mau Ping using his car. He pleaded not guilty and claimed the ordinance breached his right to silence. In his verdict, Kowloon City magistrate David Thomas held that Section 63 contravened the Bill of Rights. He found Latker not guilty and dismissed the summons. Thomas had re-affirmed his ruling after submissions from the prosecution applying for a review. That prompted the Secretary of Justice to lodge the appeal.
Dragon-dance performers get ready to start the show at Harbour City in Tsim Sha Tsui, after the dragon's eyes receive the ceremonial "dotting" that brings it to life – symbolically, of course. The performance celebrates the Lunar New Year with prayers for good luck.
A CLP Power worker upgrades equipment in Mai Po, one of the rural areas where facilities have been enhanced. The power supply in rural areas has become more stable over the past eight years, thanks to a scheme by CLP Power (SEHK: 0002) to replace overhead cables with ones that run underground, among other upgrades. The scheme has benefited more than 100,000 households, who mostly relied on overhead lines and pole-mounted transformers for their electricity, the power supplier said, though land ownership issues in the villages continue to obstruct improvement works. Above-ground equipment is more prone to bad weather and interference by people and animals. The company said the number of power blackouts last year dropped by 40 per cent from 2000. The time lost to an outage was also slashed from nearly 29 minutes in 2000 to about 2.7 minutes last year. It said about 350 households in Mai Po village, where improvements were completed early last year, were not hit by a single outage during the year, compared with two to three times a year before. Under the scheme, overhead cables and outdoor transformers are replaced with underground cables as far as possible. If a replacement is not feasible, a covered substation is built to house the facilities and shield them from bad weather.
Macau casino revenue has fallen for the fourth month in five this month, plunging by an unprecedented 30 per cent from January last year to 7.2 billion patacas, government-owned broadcaster TDM reported yesterday. Preliminary figures suggest the dramatic slowdown in Macau's once-booming gaming industry is worsening in the face of the financial crisis and Beijing's crackdown on mainland visitation to the city. Casinos booked a meagre 169 million patacas in revenue over the three-day Lunar New Year holiday, down considerably from last year, TDM cited a government source as saying. Casino revenues averaged almost 300 million patacas per day last year, according to official figures. Still, January's revenue data excludes the final three days of the month and is only marginally below last month's 7.65 billion patacas and the average 7.78 billion patacas per month for September to December. The dramatic fall-off compared with a year ago can be partly attributed to the timing of the Lunar New Year holiday, which fell in February last year and when play by high rollers typically slows, and the fact that January last year set a monthly record of 10.33 billion patacas in casino revenue due to an influx of new gaming credit to the VIP segment. Macau's VIP segment accounts for 65 to 70 per cent of all casino revenue and has slowed more dramatically than the cash-based mass market in recent months. Analysts and industry executives said this trend was largely the result of a bursting of the VIP credit bubble, which has accelerated as junket agents curtail lending to high rollers. The shake-out in the VIP segment saw the number of companies and individuals registered to act as VIP junket agents decline at the end of last year for the first time since junket licensing began in 2005, government data shows. The number of registered junkets fell to 151 at the end of last month, down 19 per cent from 186 junkets at the end of 2007, according to Macau Gaming Inspection and Co-ordination Bureau information published yesterday in the government gazette. Beijing's eight-month-old travel restrictions have also taken a toll. The central government has cut the number of times mainlanders can travel to Macau under the individual visitation scheme to once every three months, down from twice a month before June last year. As a result, visitor arrivals to the city fell for the first time in 5-1/2 years last month. Total arrivals slumped 2.78 per cent from a year earlier to 2.54 million, the first decrease in 66 months since the Sars-plagued second quarter of 2003. Mainland arrivals fell 4.03 per cent to 1.38 million, the first drop in a similar span, while non-tour-group mainland arrivals under the scheme plummeted 30.4 per cent to 477,859.
The government's scheme of providing tax relief for the interest paid on home loans is expected to be extended in next month's budget. Homeowners would be able to continue to claim tax deductions of up to HK$100,000 a year beyond 10 years under an initiative being considered by Financial Secretary John Tsang Chun-wah, sources close to the government have revealed. The government hopes the measure will provide relief to taxpayers and help stimulate the city's recession-hit economy. The sources did not indicate the likely length of the extension. However, the Democratic Alliance for the Betterment and Progress of Hong Kong has suggested extending the entitlement period from the existing 10 years to 15 years. The mortgage relief measure for homebuyers was announced in the 1998-99 budget by then financial secretary and current chief executive, Donald Tsang Yam-kuen. The measure was initially introduced for five years but in the 2004-05 budget it was extended to seven years. In 2006, the government extended the tax break again - to 10 years - to reduce the pressure on homebuyers from rising interest rates. The finance chief is scheduled to deliver his second budget speech on February 25. The government had originally estimated a deficit of HK$7.5 billion for the 2008-09 financial year, but sources have indicated that by the end of December it had recorded a HK$30 billion surplus. A government source said the public expected the financial secretary to come up with some tax relief measures in the coming budget. However, handouts would not be anywhere as near as big as those last year. In his maiden budget delivered in February last year, the financial secretary offered tax cuts, handouts and subsidies totalling HK$75 billion. The interest rate deduction applies only to taxpayers who live in the properties for which they are claiming. It applies both to existing and first homebuyers, and taxpayers can choose the years in which they claim the deduction. However, the 10-year entitlement period of taxpayers who have claimed the deduction continuously since it was introduced is due to expire this financial year. It is understood that many economists suggested extending the entitlement period during their prebudget meetings with the finance chief. "The extension of entitlement period for the deduction is worth consideration as it would not result in a huge amount of forgone tax revenue," a government source said. The government had estimated that extending the entitlement period would cost HK$1.2 billion in the 2006-07 financial year. In 2006, the administration said that extending the seven-year entitlement period would benefit about 80,000 taxpaying homeowners. Francis Lui Ting-ming, professor of economics at the University of Science and Technology, said he would not be surprised if the government took the "political gesture" to extend the entitlement period for tax deductions for home loan interest, although the actual benefit to qualifying taxpayers would not be that great.
A leading Beijing loyalist has described Taiwanese billionaire Tsai Eng-meng as a smart investor for taking a stake in cash-strapped Asia Television. Chan Wing-kee, a local delegate to the Chinese People's Political Consultative Conference and an ATV shareholder, yesterday confirmed Mr Tsai had agreed to shore up the TV station's finances with a cash injection. Mr Chan declined to discuss the terms of the deal, but said Mr Tsai would buy the shares held by ABN Amro in a joint venture company called Alnery, which holds 47.58 per cent of ATV shares. Asked about the funds from Taiwan, Mr Chan said: "It is absolutely good news. For ATV, we should have a toast ... Mr Tsai is a smart investor." Speaking on Cable TV, Mr Chan suggested that ABN Amro was no longer a preferred business partner. "First, the Dutch bank was acquired by the Royal Bank of Scotland. Second, the Royal Bank of Scotland is under the control of the [British] government," Mr Chan said. He was referring to a series of acquisitions and bank rescues which have occurred during the global financial turmoil that followed the US subprime crisis last year. Mr Chan said in an ATV interview Taiwanese investors would not control the station. "ATV will still be a Hongkonger's TV station, with the Cha family remaining the dominant shareholder." The South China Morning Post (SEHK: 0583, announcements, news) reported yesterday that Mr Tsai, whose net worth has been estimated by Forbes at US$2.6 billion, signed a preliminary agreement last week to become a shareholder of Alnery. Alnery is jointly owned by the Cha family, ABN Amro and former ATV chief executive Louis Page. According to an exchange filing, Mr Tsai, chairman of Taiwan-based Want Want China Holdings, entered a deal in November to buy Taiwan's China Times Group. Want Want, the largest maker of rice crackers and flavoured drinks on the mainland, is not involved in the deal. ATV senior vice-president Kwong Hoi-ying said the TV station was not prepared to comment. A spokesman for the Commerce and Economic Development Bureau said the Broadcasting Authority had not yet received an application from ATV in relation to the deal. "As a licensee, ATV needs to apply for formal approval to the Broadcasting Authority in case there are any changes in the shareholders," the spokesman said. The Cha family also owns a 10.75 per cent stake of ATV through Panfair. Phoenix TV chairman Liu Changle and businessman and former ATV chief executive Chan Wing-kee jointly own a 26.85 per cent stake and Citic Group owns 14.81 per cent. Partly because of a lack of funding, ATV has long been the underdog to TVB (SEHK: 0511). ATV's new executive chairman, Linus Cheung Wing-lam, has admitted that the station was facing a difficult financial situation. At a Legislative Council panel meeting last month, Mr Cheung said the station would need about HK$1 billion to keep going for the next three years. There have been reports the broadcaster is losing up to HK$2 million a day.
A close female friend of Asia Television's executive chairman Linus Cheung Wing-lam has helped line up a deal in which Taiwan billionaire businessman Tsai Eng-meng has agreed to acquire a stake in the financially beleaguered station, a source familiar with the situation said. Cheung's friend Rebecca Huang, 42, is presently a member of the management of Taipei-based Eastern Broadcasting Company. Huang was a presenter at Taiwan network TVBS before joining Eastern Broadcasting. Huang has known Cheung since she worked for Eastern Broadcasting as a presenter in Hong Kong. When Cheung became single in 2001, he and Huang were frequently seen going out together but Huang later returned to Taiwan to head the Asian channel at Eastern Broadcasting. Tsai has agreed to inject HK$1 billion - in the form of convertible bonds - to help keep ATV afloat. Want Want China Holdings (0151) chairman Tsai will inject the funds in his personal capacity and the Cha family will remain the dominant shareholder, according to ATV non-executive director Chan Wing- kee. It is believed the broadcaster will issue convertible bonds to Tsai who will pump in HK$1 billion in several stages. The amount will be sufficient to cover the broadcaster's operations for the next three years. The station is said to be losing HK$1 million a day. Chan said Tsai will buy the ATV stake of Dutch Bank ABN Amro. Huang has an MBA from Harvard University. During her time there, she came to know former Taiwan premier Tang Fei who went to the university to study after stepping down from office.
The minimum wage should be pegged above dole payments to provide an incentive for people to work, newly appointed Executive Council member and Chinese University of Hong Kong vice chancellor Lawrence Lau Juen-yee said yesterday. Asked whether he agreed with a comment by a fellow academic that the new Exco was weak in political power, Lau agreed, partly from a personal point of view because he has just gained Chinese citizenship. "I support setting up a minimum wage level as long as it is tied to the Comprehensive Social Security Assistance. It should be set at a rate which people will not choose not to work because they want to receive CSSA," Lau said. "It's purely my personal opinion and I have not discussed this with the chief executive," Lau said. He said he was not part of any political party or group: "I joined Exco to offer my expertise in the economics field at a time when Hong Kong is facing adversity," Lau, a member of the Chinese People's Political Consultative Conference, said during a Lunar New Year gathering. "I just became a Chinese citizen anyway, so there's not much political power I could have," Lau said. He gave up his American citizenship to take his seat in Exco. He also suggested that a flexible salary level and the taking of no pay leave to ensure workers are not not sacked. Last October Lau was appointed to the Chief Executive's Task Force on Economic Challenges to help deal with the fall-out from the financial meltdown. Legislator Lee Cheuk-yan, of the Hong Kong Confederation of Trade Unions, said he welcomed Lau's suggestion with regard to a minimum wage. "We've been fighting for a minimum wage to be set at HK$33 per hour, which will give people an inventive to work instead of receiving the CSSA," Lee said. However, Lee said Lau was unwise to suggest no-pay leave as a way to minimize costs without the need to sack staff. "Not all companies need to cut salaries. Lau is now an Exco member and he should be cautious when making such comments. The best way to deal with economic adversity is to have a mechanism that will allow employers and employees to discuss the costs issue on an equal footing," Lee said.
Hong Kong exports continued to weaken in December, with the total value of exports plunging 11.4 percent from a year earlier. Economists warned Hong Kong's trade sector will see even gloomier times in coming quarters. "Weak trade performance will likely be a dragging factor for Hong Kong GDP growth this year," Citi economist Cheng Cheng-mount said. December's fall in exports was worse than market expectations and showed the second straight month of declines, after a 5.3 percent fall year on year in November. Re-exports, which are mostly to and from the mainland and constitute the lion's share of Hong Kong exports, fell 10.3 percent year on year in December. Re-exports were down 10.7 percent from November. The value of domestic exports plunged 39 percent year on year in December. "Exports will probably suffer more in coming months on the worsening global economic outlook, as well as the controversial issue of Chinese yuan appreciation," Cheng said. Imports plunged 16.2 percent in December when compared with a year earlier, showing the effects of weakened domestic consumption in Hong Kong. The SAR's trade deficit widened to HK$11.76 billion, from HK$8.15 billion in November. Sherman Chan, an economist at Moody's Economy.com, said imports of consumer goods will continue to weaken in coming months amid rising unemployment. Imports of capital goods will also slow as businesses take a cautious stance on investment, Chan said. Hong Kong's full-year export growth was just 5.1 percent, the worst performance since 2001, when global trade was dampened after the World Trade Center attacks. Imports for the full year of 2008 rose 5.5 percent. "The outlook for Hong Kong's external trade in coming months remains subject to considerable uncertainties and downdrag from the rapidly deteriorating external environment," a government spokesman said. Chan said negative export figures reported by China in recent months have further clouded Hong Kong's export outlook. "As global economic conditions will remain dire for much of 2009, Hong Kong is set to book an annual decline in exports," Chan said.
China: China is determined to keep its currency at a sensible and balanced level and is not to blame for sharp fluctuations in exchange rates, Premier Wen Jiabao said during a trip to Berlin yesterday. Meanwhile, German Chancellor Angela Merkel told Mr Wen she wanted Beijing to hold talks with Tibet's spiritual leader, the Dalai Lama. Click here to find out more! "Given the current economic situation we think the exchange rate ... should be kept at a reasonable and balanced level," Mr Wen told reporters at a joint news conference with Dr Merkel. The new US Treasury secretary, Timothy Geithner, surprised China last week by branding it a currency manipulator for depressing the value of the yuan to support its exports. The International Monetary Fund has said the yuan is undervalued. "There are strong fluctuations in exchange rates between different currencies in the world ... but China is not to blame for this," Mr Wen added. He said China's foreign exchange rate policy stuck "to the principle that it is oriented towards market needs and the exchange rate is flexible or bound to a currency basket". Tibet is one of the most sensitive subjects for western leaders to broach with China, which views the Dalai Lama as a separatist. It took months for China to forgive Dr Merkel for meeting him in 2007. "We talked about the situation in Tibet, and from the German side, I emphasised that we have a common interest that talks with the Dalai Lama get under way," Dr Merkel said at the news conference. "If there is anything Germany can do in this regard, we would like to help." Mr Wen was in Berlin as part of a European tour to discuss co-operation in solving the global financial crisis. Germany and China said in a joint statement that they wanted to reform the international financial system and ensure concrete results at a meeting of leaders from the Group of 20 nations in April. Dr Merkel and Mr Wen promised to strengthen ties between their two countries, the world's two biggest exporters of goods. Dr Merkel said she saw good possibilities for further co-operation on infrastructure projects, such as trains. During Mr Wen's Berlin visit, China's Shanghai Maglev Transportation Development Co signed a memorandum of understanding with Germany's ThyssenKrupp on the Transrapid magnetic high-speed rail project. In another deal, Chinese truck-maker Beiqi Foton and Germany's Daimler signed a previously agreed truck venture. Trade between China and Germany grew significantly last year, with German exports to China rising by an annual 14.3 per cent to €31.3 billion (HK$321.6 billion) through November. Germany imported goods worth €54.3 billion from China during the same period, an increase of 5.6 per cent, official data shows. Mr Wen said he aimed this year to maintain trade with Germany at a similar level to last year. Germany and China are competing for the position of the world's top goods exporter.
Lu Caixia, a 60-year-old retired camera factory worker from Suzhou in Jiangsu province, queues in the foyer of a branch of the Beijing Quanjude restaurant company, the mainland's leading roast duck chain, waiting for the waiter to call her number. Her daughter booked a table for the family's Lunar New Year's Eve dinner at the chain's Tiananmen Square flagship outlet, ensuring that eight members of the family, from Ms Lu's 81-year-old mother-in-law to her 10-month-old grandson, could usher in the new year with a feast together. Despite these recessionary times, distance from home and the devastation of natural disasters, many people still found ways to observe the traditional holiday - some with joy, others with tears. "Our family got what we prayed for last year - a baby, health and jobs - so my daughter suggested we celebrate the new year with a family gathering here to relish the authentic flavour of Beijing roast duck," Ms Lu said, estimating that the meal would cost more than 1,000 yuan (HK$1,136). "This looks a bit expensive to me, but considering that today is Lunar New Year's Eve and the dinner is a once-a-year event, we feel it's worth it," she said on Sunday. "My daughter and her husband work for foreign-funded companies here in Beijing, and the waves of staff cuts amid the global financial crisis did not affect them, which is the biggest thing we want to celebrate." In suburban Tongzhou, far from the bright lights of the capital's inner city, Zhang Lianyou , 41, and his wife prepared their Lunar New Year's Eve meal in a 12-square-metre vegetable market hut. The hut, piled to the rafters with vegetables, is their shop, bedroom and kitchen. The couple cooked five dishes of pork, bean curd and various vegetables and set the feast on their "dining table"- a block of wood on top of a basket of potatoes. "This is the first Lunar New Year's Eve meal we have ever had away from home, and also the first one without our daughter and son around," Mr Zhang said as his wife wept. The couple repeatedly delayed their trip home to see their 13-year-old daughter and nine-year-old son in the central province of Henan as their vegetables sold faster and for higher prices in the weeks leading up to the holiday. When they eventually decided they had earned enough, it was too late - all the train tickets to their hometown were sold out. "My wife argued with me, blaming me for being too late to buy the tickets home," Mr Zhang said, sipping on a glass of erguotou, a popular Beijing liquor. "She misses the children and doesn't want to prepare more dishes for the dinner. "But we need more money for [the children's] education, and our crops did not bring in much. So, by sacrificing our reunion with our children and relatives, we are able to save more for the children's schooling." Hundreds of kilometres from the capital in Wenchuan county, epicentre of the May 12 Sichuan earthquake, truck driver Wang Pingbing , 30, ate Lunar New Year's Eve dinner with nine relatives in a small, one-room, temporary home. Mr Wang said: "Although many of my acquaintances had family members who lost property or were injured in the quake, no one in my family was hurt in the disaster. So, I really have boundless thanks for heaven's blessings." The Wangs managed to cook all the major courses they would normally have prepared for the traditional dinner. The groundwork for a new 105-square-metre house to be built on the site of the family's old home was completed in the days leading up to the lunar new year, and Mr Wang is waiting for spring so he can start building the rest of the house. "My family is hoping to move into our new house in three or four months' time," Mr Wang said. "As for further down the road, I really don't know."
The International Monetary Fund's chief economist said it was not the right time to push China on its foreign-exchange policy, a rebuke to the Obama administration, which said last week the mainland was "manipulating" its currency. "It is probably not the right time to focus on the Chinese exchange rate, given that it is not a central element of the world crisis," Olivier Blanchard told reporters on Wednesday. Calls for China to loosen restrictions on its currency were criticised more forcefully by economists and policymakers at the World Economic Forum in Davos, Switzerland. Allowing the yuan to strengthen would be "economic suicide" amid an economic slump, Stephen Roach, Morgan Stanley's Asia chairman, told a panel. "I've never seen an economy in recession voluntarily raise their currency. It's horrible advice." South Africa's Finance Minister Trevor Manuel said on the same panel: "Shouting from Washington to Beijing is not going to make a difference." United States Treasury Secretary Timothy Geithner said last week President Barack Obama considered China to be "manipulating" its currency. Mr Geithner said the US would "aggressively" push Beijing to move faster on currency policy reform to let market forces play a larger role in setting the yuan's value. Renewed clashes over the yuan threaten to stoke tension between two of the world's biggest economies and undermine co-operation to counter the global recession. The mainland limited the yuan's gains against the US dollar in July last year. It had risen 21 per cent after the removal of a peg three years earlier. In Berlin, Premier Wen Jiabao said yesterday the yuan was at a "reasonable and balanced" exchange rate. "In light of the current economic situation, we are of the opinion that the exchange rate of the [yuan] is being maintained at a reasonable and balanced level," he said after talks with Chancellor Angela Merkel. In Davos, Mr Wen had expressed interest in having "early contacts" with the Obama administration. "A peaceful and harmonious bilateral relationship between these two countries will make both winners," he said. "A confrontational one will make both losers." Mr Blanchard said: "I don't think we should obsess about an exchange rate." He said it was more important to consider whether Beijing was pursuing macroeconomic policies that would help it and other economies around the world.
Chinese Premier Wen Jiabao (L) speaks while German Chancellor Angela Merkel looks on during a news conference in Berlin Jan. 29, 2009. China and Germany have vowed to make joint efforts to stabilize the global economy amid the ongoing financial and economic crisis, said a joint statement issued Thursday. The cooperation between China and Germany, the world's two major export-driven economies, is of special significance for the world's efforts to tackle the financial downturn, said the statement released after visiting Chinese Premier Wen Jiabao's meeting with German Chancellor Angela Merkel. The two sides agreed to strengthen dialogue on economic and trade, currency and fiscal policies and pledged to support each other on their economic stimulus plans based on their own situations, it said. China and Germany have agreed to enhance their comprehensive strategic partnership and cooperation in jointly dealing with the global economic crisis, Wen told a press conference following his meeting with Merkel. The strengthened Sino-German cooperation is of special significance in the context of the current world economic downturn, said Wen.
Tourists take photos in front of red lanterns that pile up as the head of an ox at the National Stadium, or Bird's Nest, on Thursday, January 29, 2009. According to the office in charge of ministry-level coordination on tourism during national holidays, five days into the Spring Festival holiday, the number of tourists are still rising in many cities and travel spots across the country. Statistics show that, as of Thursday, travel agencies in the Guangzhou city of south China's economic powerhouse in Guangdong province had organized 123,900 city residents for travel, up 39.45 percent year on year. Sanya of south China's Hainan Province remains a hot spot for travelers as an average of 96.18 percent of hotel rooms in the city were booked. The hotel reservation in Haikou, capital of Hainan, also reached 81.83 percent. The office calls on related organizations at all levels to strengthen the security services and regulate market order to ensure the smooth run of golden-week travel. Besides domestic boom, more Chinese choose to travel abroad. Earlier reports said a total of 39,377 people in Shanghai, the country's economic hub, would travel abroad between Jan. 21 to Feb. 1, up 5.26 percent year on year, as predicted by the municipal holiday travel office. The number of people heading for Europe and Australia soared by 30 percent to 40 percent year on year during the holiday, according to the Shanghai Spring International Travel Agency. Shopping overseas has become more attractive with the appreciation of the Chinese currency yuan and the drop of commodity price overseas, it said.
January 30, 2009
Hong Kong: Tens of thousands of religious followers sought good fortune at Che Kung and Wong Tai Sin temples yesterday, but pinwheel sellers and fortune- tellers said crowds did not equal sales. The third day of the Lunar New Year is traditionally regarded as unlucky to visit other people's homes. So people turned up in droves at the Che Kung temple in Sha Tin to spin the wheels and bang the drums in the hopes of gaining good luck in the Year of the Ox. Police estimated 74,000 people had visited the Sha Tin temple by 5.30pm. Among the wishes were those for financial security. "I only hope that I can keep my job. That would be enough," said one worshipper. Some said they donated less to the temple and spent less on buying pinwheels this year because of the financial crisis. Others said the cost of making donations and wishes was small so it did not matter. A pinwheel seller said he was afraid to raise the price despite costs increasing by 20 percent and a fortune-teller said smaller crowds this year meant 40 percent less business. A follower said he came to the temple to make a wish for Hong Kong, since Heung Yee Kuk chairman Lau Wong-fat drew a fortune stick indicating "worst luck" for the city on Tuesday - the second "worst luck" stick since 2003. Wong Tai Sin temple has been swamped by people since Lunar New Year's Eve. More than 120,000 visited yesterday, with visitors waiting up to one hour and 20 minutes to get in. Some mainland tourists gave up, saying they did not want to waste their holiday time lining up. Many went to Lantau to take the Ngong Ping 360 cable car and see the Tian Tan Buddha. At one point, a queue of an estimated 1,000 people waited for a ride on the cable car.
Taiwanese billionaire Tsai Eng-meng has agreed to inject funds to shore up the finances of loss-making Asia Television, triggering changes in the broadcaster's shareholding structure, according to informed sources. Mr Tsai, whose net worth is estimated by Forbes at US$2.6 billion, signed a preliminary agreement last week to become a substantial shareholder of Alnery, a company that controls 47.58 per cent of ATV. Alnery is jointly owned by Payson Cha Mou-sing's family, ATV's dominant stakeholder, ABN Amro and former ATV chief executive Louis Page. Mr Tsai and his family are believed to have bought ABN Amro's stake in Alnery, and the deal is believed to be worth several hundred million Hong Kong dollars, according to the sources. In 2007, the Cha family and ABN Amro injected HK$800 million into ATV and became its dominant shareholders. The Cha family also owns another 10.75 per cent stake in ATV through Panfair, with the remaining shares held by Phoenix TV chairman Liu Changle, businessman and former ATV chief executive Chan Wing-kee, and mainland conglomerate Citic Group. Multiple sources have confirmed that fresh capital is being brought in to sustain ATV through changing the shareholding structure of Alnery, in particular the ABN Amro stake. Sources said Alnery had two kinds of shares, voting and non-voting, to ensure the Cha family held more than 51 per cent of voting control over the company, even though the other shareholders may have contributed more capital. As the changes in Alnery's shareholdings brought about by Mr Tsai's investment would not change the Cha family's overall controlling stake in ATV, they would need only simple administrative approval by the Broadcasting Authority. No approval by the Executive Council would be required as the changes would not involve non-local parties taking a controlling stake or breaches to cross-media ownership rules, sources said. Mr Tsai, dubbed the "king of rice crackers", is chairman of Hong Kong-listed Want Want China Holdings, the largest maker of rice crackers and flavoured drinks on the mainland. However, he is believed to have made the ATV investment through a holding company wholly owned by his family. Mr Tsai's investment would provide critical funding to sustain the operations of ATV as the local broadcaster needs about HK$1 billion to keep going for the next three years.
Before-and-after pictures of old buildings along Tai Kok Tsui Road show how well subsidies from the government have worked in the area. The Urban Renewal Authority is to spend HK$64 million on helping owners of old buildings to refurbish their buildings and make them more environmentally friendly. The move follows a recent government announcement that it would create more construction work to combat rising unemployment as the economy contracts in response to the global financial crisis. "Starting in April, more buildings will become eligible for our maintenance loans and free repair materials," authority director of works and contracts Stephen Lam Wai-nam said last week. Two authority schemes, one providing interest-free loans and the other free materials, have aided 518 residential buildings which are more than 20 years old since the schemes' introduction in 2003. The loan scheme, with an upper limit of HK$100,000 per building, is open not just to resident owners, but also to non-profit organisations. "Trade unions and religious bodies often take up a large proportion of old buildings," Mr Lam said. "Without their participation, owners' corporations often cannot afford the costs." But he said the free materials scheme would be extended to include about 150 commercial buildings with at least 75 per cent resident occupiers. "In Central and Western district, many old commercial properties are actually flats instead of offices, but residents were unable to seek aid because of the zoning." While paint, drains and re-roofing materials have been on offer, the authority will also include energy-saving bulbs, waste recycling facilities, potted plants and fire safety doors. Solar energy units and roof gardens might be added to the list, Mr Lam said. Previously, owners received materials by way of subsidy to the value of up to 20 per cent of the total renovation costs, or HK$150,000, whichever was lower. The authority would raise that limit to 30 per cent for small-sized buildings. In Tai Kok Tsui, where most residential building owners have received refurbishment help, the authority would repave streets, replace old street lamps and drains, and put in plants to enhance streetscapes. However, Yau Tsim Mong district councillor Henry Chan Man-yu said Tai Kok Tsui was hard to transform because half of the area north of Tai Kok Tsui Road was occupied by old factories which were vacant or had been converted into offices and flats. "It is difficult to revitalise unless the urban renewal policy covers not just residential, but industrial zones," he said.
Visitors to Sha Tin racecourse are attracted by the HK$1.5 million gold horseshoe. Betting at yesterday's meeting fell this year as people felt the economic pinch. But these prizes and a giveaway of phone straps were not enough to stop a fall in attendance or betting turnover at Sha Tin yesterday. While betting turnover passed HK$1 billion, it was down 7.46 per cent on last year. Just over 83,000 people passed through the turnstiles, a drop of 3.64 per cent. Punters at the track said they intended to cut spending on horse racing because of the poor economy. Peter Chu, who visited the racecourse, said he planned to spend only HK$200 to HK$300 on betting. "I just want to try my luck during this festive season to see if I have the blessing from the god of wealth," he said. Fellow punter Chan Hoi said he would spend about HK$300 betting on the programme of 11 races. "I don't come to the racecourse during the year and only came with my friends today to celebrate the new year," he said. All those who passed through the turnstiles were given a set of phone straps of the four champions of last year's Cathay Pacific (SEHK: 0293) Hong Kong International Races and asked to turn wheel of fortunes near the entrance for their chance to win prizes. An exhibition featuring a giant handmade gold horseshoe, the largest of its kind in Hong Kong, with gold display items by a jewellery chain store - worth more than HK$5 million - attracted many visitors to the track's concourse. The gold horseshoe was valued at HK$1.5 million and weighed 60 taels (2.26kg). Chief Secretary Henry Tang Ying-yen and Jockey Club chairman John Chan Cho-chak opened the race day. Liza Wang and Raymond Lam performed festive songs, and there was a grand carnival parade down the home straight after the final race. The action on the track was headlined by a treble for jockey Weichong Marwing, while the Chinese New Year Cup was won by 5-1 chance Regency Dragon, ridden by Christophe Soumillon for trainer David Ferraris. Jockey Club chief executive Winfried Engelbrecht-Bresges said the day was a "great success in the current circumstances". He said from next week, the Jockey Club would report the gross margin on each race rather than the turnover. "The turnover figure is too misleading for many people and makes them think the Jockey Club is making all this money for itself," he said. More than 80 per cent of turnover was returned to the punters as dividends and the balance was the "gross margin", he said. The gross margin yesterday was HK$176.8 million, of which the government took HK$128.2 million. The remainder was used to pay for the show, he said.
Masked raiders broke into the Lok Ma Chau mansion of millionaire author and art collector Yu Lai-sa early yesterday and gagged and bound her before fleeing with HK$5 million worth of cash and valuables. Yu, who is also known as Yu Hui- yin, told police of her ordeal at the hands of two armed men in dark clothing. The colorful 55-year-old, who hit the headlines recently following complaints about the design of the mansion sewage system and a libel battle with a former business partner, said the raiders looked between 25 and 30 years old. She said they burst into her bedroom as she watched television just after 2am, tied her up and gagged her with wire and tape, leaving only gaps for her eyes. One of them was carrying a fruit knife from her own kitchen while the other held a screwdriver. The men originally told her they only wanted money, Yu said, but upon finding only a couple of hundred dollars in her wallet, they demanded to know the codes to her bank cards. They then carried her to the bathroom, and searched the house for four hours before leaving. The pair got away with six antique watches, including a pair said to have been worn by Sun Yat-sen and his wife and bought at an auction in France. Cartier jewelry was also taken. Yu's credit cards were left on the bed, and paintings and other artifacts were left untouched. After the thieves left, Yu struggled to open the bathroom window and shouted for help. Security guards heard her cries, freed her and rang the police. Yu said her antiques collection is estimated to be worth HK$500 million. She was visibly upset following her ordeal and wanted to know why security staff had not caught the men before they entered her home. It is believed the robbers may have climbed through a window.
Light-emitting bacteria are being used to help the Water Supplies Department ensure Hong Kong reservoirs are not threatened by pollutants. The department's senior chemist Frederick Ma Wai-ping said the "canary bird" warning system can confirm within 45 minutes the presence of more than 1,000 chemical contaminants. "Before the soft launch of the system last April, tests to detect the presence of chemical contaminates could take three to four days," he said. The department can now take water samples for central testing to its Sha Tin plant for biosensor analysis. Utilizing vibrio fischeri bacteria, or light emitting bacteria, chemists can determine whether contaminants are in water based on a test sample's brightness. "The bacteria emits light as it starts to multiply and the presence of chemical contaminants would naturally retard its growth. "If the bacteria thrives, its a good sign, if its doesn't, or if they all die, we know there's a problem. In short, the brighter, the better," he said. With a HK$200,000 light measuring machine determining the level of bacterial growth, chemists can now determine whether water is safe for consumption in 45 minutes. Capable of screening for the presence of contaminants such as metals, pesticides, biological toxins and industrial chemicals, the system can only determine whether contaminants are present, but cannot pinpoint the source. With the closure of factories in the Pearl River Delta registering a marked improvement in water quality, WSD resources manager Edward Cheng Ching-man said the biggest remaining threat to the city's water quality was accidental contamination from dangerous goods being transported around the city's reservoirs. The Kowloon reservoir had a close call in December 1997 when up to 100 kilograms of sodium cyanide from 19 drums rolled off a truck traveling along nearby Tai Po Road. Four of the drums cracked open, spilling the white, powdery substance on the road.
Shopping malls have reported a sharp rise in sales as Hong Kong consumers took advantage of price cuts and special promotions and went on a splurge over the Lunar New Year holidays. Shoppers have become more cautious in the wake of the financial tsunami and shopping centers are planning more promotions to encourage spending, said Sun Hung Kai Real Estate Agency deputy general manager (leasing) Fiona Chung Sau-lin. The company launched marketing campaigns including selling dried seafood packets for HK$1 and flowers for the same amount. Sales in the eight shopping malls owned by Sun Hung Kai Properties (0016) saw sales jumping 20 percent from last year to HK$208 million, while visitor numbers rose 11 percent to 5.33 million from January 21 to 28. Sino Group said its Tuen Mun Town Plaza recorded HK$350 million in revenue in the first half of January and expects total turnover of more than HK$700 for the full month, up 8 percent from the same period last year. Shopping mall tenants selling electronic items recorded a 30 percent rise in revenue, those selling clothes and jewelry saw a 15 percent gain while restaurants had double-digit growth. Mall general manager Ronnie Chan Yam-ling said many people started to shop for the Lunar New Year in early January. There were 500,000 shoppers - the highest ever- on January 25, when the central Tuen Mun mall stayed open for 24 hours. Up to yesterday, 8.2 million people visited the shopping complex. Sino Group's four malls, Tuen Mun Town Plaza, Avon Mall and Regentville Shopping Mall in Fan Ling and Tseung Kwan O's Maritime Bay Shopping Mall, had 10 million visitors up to yesterday. Plaza Hollywood, a shopping mall in Diamond Hill, predicts revenue of HK$240 million for January, up 10 percent. The Link REIT (0823) said its tenants reported that turnover during the holidays was 20 percent higher compared to normal days. Restaurants, especially those serving local cuisine, were the best performers thanks to an influx of mainland tourists.
China: As the China’s economic storm clouds darken and more firms face bankruptcy, factory workers such as Xiang Yongheng have seen their confidence badly shaken in authorities who are supposed to protect their labour rights. Beaten by thugs last week after demanding three months of unpaid wages from his bosses at the “Yi Fan” food processing factory in Shenzhen’s Longgang district, Mr Xiang appealed to the local labour bureau and police for help, but to no avail. “They just said we can’t help you. The authorities are trying to suppress my case, I even took evidence to them but they ignored it and just told me to go away,” said the 25-year-old. The enactment of the labour contract law last year marked a new milestone in the push to safeguard workers’ rights – particularly the 130 million or so migrant workers powering the mainland’s export engine – making it tougher for bosses to fire staff, while boosting social security and severance payouts. While factory owners decried the laws as a crippling cost burden, workers hailed the new legislation – which unleashed a flood of arbitration and labour dispute cases in migrant-heavy manufacturing hubs such as Guangdong’s Pearl River Delta. Now though, Mr Xiang and many others are becoming disillusioned by officials who turn a blind eye to routine violations in order to ease the burden on stricken businesses during the downturn. “From what I’ve seen, workers’ justice hasn’t changed for the better. Like what’s happening here, we don’t sign contracts, nor are things settled using the labour contract law,” Mr Xiang said. The growing anecdotal evidence of the strains on the mainland’s labour laws have been increasingly voiced of late, highlighting the difficult task faced by China’s leaders in balancing economic growth and social stability during the downturn. “The global economic crisis threatens to derail much of the progress made by China’s workers over the last few years,” said labour rights group China Labour Bulletin in a recent editorial. The Dagongzhe Migrant Workers Rights Centre in Shenzhen has also voiced concerns at pervasive “tricks” used by employers to circumvent the new laws. These include reduced overtime pay and using doctored contracts that were either blank, incomplete or written in English to confuse and limit possible legal liabilities. In a survey of 320 workers by Dagongzhe, 79 per cent said they were “dissatisfied” with the situation in factories, while nearly a quarter said factory bosses had hiked both food prices and penalties for minor mistakes on production lines. About 26 per cent of workers never signed any contracts, especially in smaller factories, while 28 per cent said they were paid less than the legal minimum wage. “A lot of factories now are using the financial crisis as a means to protect their own interests,” said Ivy Yu, a coordinator with the Dagongzhe Migrant Workers Rights Centre. In recent weeks, Guangdong’s prosecutor’s office issued a controversial set of guidelines, saying it wouldn’t prosecute key business personnel or technical staff for minor crimes, in a bid to help businesses during the downturn. The move generated a flurry of public criticism. Meanwhile, other local governments in the Pearl River Delta have also weighed in with their own “guidelines” to help keep firms afloat. In Huizhou city, labour authorities recently called on businesses to “stringently adhere” to the labour contract law given the spectre of greater bankruptcies, while advising layoffs be carried out “as much as possible on a small-scale to avoid legal procedures.” But while enforcement of labour laws may have been quietly allowed to slip during the downturn, the stability-obsessed ruling Communist Party hasn’t entirely ignored the plight of workers either given the risk of social unrest. Provisions on mass lay-offs and collective dismissals were recently re-organised under new “guidelines”, so that firms looking to lay off more than 20 people or 10 per cent of their workforce now need to get approval from local authorities. The push seems to have had some success in stanching potentially destabilising waves of layoffs in some cities. “In Shanghai, where there’ve been lots of lay-offs, the local labour bureau told us that so far nobody has even applied and they don’t want to be the first... to deal with the mass layoffs,” said Andreas Lauffs, a labour law expert at global law firm Baker & McKenzie. “From a macro point of view, the [Communist] party is looking at social harmony as much as possible, and super-afraid of millions of people unemployed on the street and causing social unrest,” Mr Lauffs added. While Beijing’s desire to tide things through the crisis may be understandable, some legal scholars say the shifting policies and guidelines have ended up tarnishing China’s rule of law. “It’s always my view that the government should not interfere with the function of the court, nor the function of the enterprises,” said Wang Guiguo, the dean and chair of Chinese and Comparative Law at Hong Kong’s City University. “I think the government should leave the market alone and let the market function itself. If a company is bound to die, let them die. “As far as this labour law is concerned, I think on the whole it’s a good law but most probably has been introduced prematurely to China, it’s too early,” Mr Wang said. For now, however, many factories are opting to simply shut down to avoid paying workers’ claims for unpaid wages and severance pay – a trend that could worsen during the Lunar New Year when many migrants return home for a long annual holiday. “They [factory owners] didn’t have the confidence in the legal system to go through official liquidation and layoffs, so they just walked away and gave up their assets,” said Mr Lauffs. For Mr Xiang, the worker who was severely beaten and cheated out of his wages, the new labour laws have opened his eyes to social injustice, and he has no intention of closing them again. “This incident has made me very pessimistic,” he said. “But I’ve decided to fight till the end. My life has come under threat, and I must deal with this to defend the dignity of workers.”
A group of disaster-zone tourists take photos in the ruins of the Yingxiu secondary school on Lunar New Year's Day. A giant sign hangs outside Mianyang bus station, reaching from the roof of the five-storey building almost to the ground. "One-day tours to Beichuan. Visit the disaster zone in warmth," read huge characters emblazoned onto the red plastic sheet. The provincial city in northern Sichuan province is the main stopping-off point on a tourist trail that has grown up in the areas worst affected by last May's devastating magnitude-8 earthquake. Some 88,000 people died as a result of the violent quake, and the survivors are toughing out the winter in temporary settlements or rickety shanty towns. From Qingchuan town in the north to the epicentre in Yingxiu town, a two-hour drive northeast of Chengdu , day-trippers and holidaymakers have been making use of the Lunar New Year break to witness the destruction first hand. "I just felt I had to come and see with my own eyes the extent of the damage," said Wang Qihong , 29, as he wandered through the remains of Beichuan town, the site of one of the disaster's most famous tragedies. Mr Wang, who works in Chengdu, said he and a colleague had decided to tour the disaster zone during the week-long holiday rather than returning to their hometowns in Zhejiang province.
China will work to provide 60 million more country residents with access to clean drinking water as part of efforts to repair reservoirs and upgrade irrigation facilities. More than 6,000 reservoirs will be fortified and 400 rural counties will be provided with electricity generated by hydroelectric power stations. The Water Resources Ministry says major rivers, canals and lakes are badly polluted by industrial, agricultural and household waste. Some 200 million rural people did not have access to safe drinking water last year. The World Bank has warned that "the combined pressures of rising water demand over limited supplies and deteriorating water quality from widespread pollution suggests that a severe water scarcity crisis is emerging." The mainland spent 29.5 billion yuan (HK$33.46 billion) last year on a program that brought safe drinking water to an additional 48.24 million people. It also plans to spend another 21.3 billion yuan this year on the South-to- North Water Transfer Project, aimed at bringing water to the arid north. When completed, the project's three routes will move billions of tonnes of water from the central, southern and western regions through pipes and man-made canals to Beijing and northern cities. The US$62 billion (HK$483.6 billion) project will pass by 44 cities, and could be nearly three times as expensive as the Three Gorges Dam. More than 300,000 people will be displaced by the project - the largest water diversion program in the world. The first stage is scheduled for completion in 2014. Critics say the project will cause environmental damage and still not quench the thirst of northern boomtowns.
US Secretary of State Hillary Clinton called for a comprehensive dialogue with China, saying George W Bush's administration focused too much on economic issues. "We need a comprehensive dialogue with China," Clinton told her first news briefing since she took charge of US foreign policy. "The strategic dialogue that was begun in the Bush administration turned into an economic dialogue, and that is a very important aspect of our relationship but it is not the only aspect," she said. Clinton vowed to work with the White House as well as the Treasury Department and other agencies to design a more comprehensive approach in line with China's important regional and international role on key issues. "Our economic problems here at home mean that people are being laid off not only here in America, but also in China," Clinton said. "And so the economy will always be a centerpiece of our relationship."
Northwest China's Xinjiang Uygur Autonomous Region is planning to invest 3.5 billion yuan (512 million U.S. dollars) this year in its rural highways, the regional transport department said Thursday. The money will be used to build and upgrade 11,000 km highways in rural areas, enabling 80 towns to have access to asphalt roads and 400 villages to be connected in the highway network, the department said. Xinjiang invested 3.2 billion yuan in rural highways last year, and about 2 million herdsmen and farmers benefited from that. The region has invested 13.4 billion yuan in building and upgrading 55,000 km of rural highways during the past decade. However, many villages in this vast region still have no access to highways. Xinjiang plans to spend another 120 billion yuan and build more than 50,000 km of highways in the coming five years.
January 29, 2009
Hong Kong: Hong Kong inflation dropped to 2.1 percent last month from 3.1 percent in November on the mild price growth of food and cheaper clothes and durable goods, compared to the market forecast of 2.7 percent.
Scenes of shuttle buses carrying students around the sprawling Chinese University campus in Sha Tin will be consigned to history under an ambitious plan to build a network of express lifts and covered walkways to encourage a culture of walking among students. The plan to shrink the fleet is among measures proposed by Edward Cullinan, architect of the university's campus master plan, who has come to Hong Kong to collect opinions from students, staff and alumni about his design. Edward Cullinan Architects and Aedas were chosen from four teams in February last year to design the plan for the 134-hectare Ma Liu Shui campus. The plan, which will guide campus development until 2021, involves a series of moves to transform the remote campus into a sustainable and pedestrian-friendly university. The proposal to build more than 10 covered walkways and express lifts to connect the four existing and five soon-to-be-built colleges would drastically shorten the time taken to get around the campus. Professor Cullinan said a walk from University station to Shaw College would take about 20 minutes. "The number of shuttle buses will be diminished ... to probably next to nothing," he said. Other measures to achieve a carbon-neutral campus include construction of "lock-up cycle racks", energy-efficient buildings using more sturdy insulation materials, natural lighting and roof gardens. Professor Cullinan said a culture of cycling should be nurtured on campus, adding: "Walking not too fast from one place to another is lovely ... the brain works very well when the body is in light activity." Other proposed changes include rezoning the campus into various hubs of learning, and construction of more facilities to accommodate an extra 10,000 students over the next 15 years, up from the current 18,000. The faculty of business administration will be moved from the central campus to near Chung Chi College. The buildings that now house the faculty will be set aside for arts and humanities disciplines. The 5.3-hectare Area 39, which adjoins the Hong Kong Science Park near Tolo Harbour, will be used to expand research facilities. Pro-vice-chancellor Ching Pak-chung, who co-chaired the campus development steering committee with architecture professor Essy Baniassad, said they planned to strengthen research capabilities. Professor Ching said it was impossible to gauge the cost of the master plan at this stage.
As if recession and the prospect of a worsening economic downturn were not enough, Hong Kong yesterday drew the worst possible fortune stick in a ceremony at a Sha Tin temple. Lau Wong-fat, chairman of rural affairs body the Heung Yee Kuk, drew the stick numbered 27 on the city's behalf in the Taoist ceremony at the Che Kung temple. A fortune-teller at the temple who read the stick said it showed the city could not isolate itself from the global economic turbulence, but that Hongkongers should nevertheless be cautiously optimistic. Fung shui masters interpreted the stick's meaning differently. James Lee Shing-chak said it signified possible conflicts between the government and its people. Mr Lau said: "It is a warning to all of us that only a harmonious society with people staying united can enable us to get through our challenges." The last time that stick was drawn, 1992, saw, among other things, the arrival of last governor Chris Patten - who unleashed fierce political strife. When a Sha Tin district councillor drew the ill-omened stick 17 years ago, the council immediately burned it and drew another, lucky one. Yesterday, that option was not open to Mr Lau and, rather than the stick burning, it was a barge used for the Lunar New Year fireworks display that went up in flames last night. The barge, one of three from which fireworks were launched during the 23-minute display, burst into flames near the end of the HK$5 million spectacle that lit up Victoria Harbour. The barge's two crewmen were rescued. No one was hurt. Within minutes thick black smoke had engulfed the bow of the vessel. Fire boats soon doused the flames. Teddy Ng, watching with his 19-year-old daughter, said flames engulfed at least a quarter of the barge. Wilson Mao Wai-shing, chief executive officer of Pyro Magic Productions, which produced the show, could not be reached for comment. A spokesman for the Leisure and Cultural Services Department said it appeared sparks falling onto the barge had started the fire. It wasn't the only mishap on the harbor. Earlier, a pleasure boat taking 41 people to see the fireworks sprang a leak soon after leaving the Kowloon City ferry pier. A lucky 23,888 fireworks formed the display, which was watched by 250,000 people lining both sides of Victoria Harbor and featured the character for ox. The crowd was much smaller than expected. A turnout similar to last year's 400,000 had been forecast. Spectators gasped when curtains of gold and red fireworks cascaded or comets and sparking fireflies seemed to hover on the horizon. As well as the character for ox - which was hard to pick out - the show also featured for the first time the characters for "good luck" and the lucky numbers six, eight and 10. Afterwards spectators were divided about the merits of the show. Some said it was small and that, because it was a windless night, smoke had blanketed the harbor by halfway through the show. An amateur photographer, C. P. Chan, said: "I took pictures and the smoke started to get in the way after just 10 photos." But another spectator, Lois Wong Yu-siu, 19, said: "The combination of the music and fireworks matched." Alex Tsang said he was disappointed because it was quite smoky. Still, he is hopeful about the Year of the Ox. "My new year wish is for a pay rise so that I can get married soon," the sales representative said. Restaurants, too, were optimistic. Several said that business was holding up during the Lunar New Year holiday. More shops were open than a year ago, too, though there was both a positive and a negative reason for that, said Caroline Mak Sui-king, chairwoman of the Retail Management Association. On the one hand, a rise in tourists made it more worthwhile opening, but on the other hand they were forced to open because they needed every opportunity to earn the money to pay ever higher rents, she said. Away from the festivities, pan-democrats petitioned Chief Executive Donald Tsang Yam-kuen - who is on holiday - with their wishes for the Year of the Ox, and reminded him he had a tough year's work ahead. The Hong Kong Observatory issued the cold weather warning for the fifth consecutive day. Urban temperature hovered around 12 degrees Celsius. In the northwestern New Territories they dipped to 8 degrees. Warmer weather is forecast for today.
People throw their wishes into the 4.5 metre tree in Lam Tsuen, Tai Po yesterday. The new one will be 7 metres high. A taller plastic wishing tree will be put up in Lam Tsuen this year to attract more tourists. People used to throw offerings, messages or wishes attached to oranges into the branches of the wishing tree in Lam Tsuen, Tai Po, but the practice was stopped after two people were injured by a falling branch of the Chinese banyan in February 2005. It had been overburdened with offerings. The government banned the tradition soon after the accident and fenced off the sick, century-old tree. The tradition was revived this Lunar New Year as a plastic 4.5 metre tree was erected near the old tree, which is about 9 metres tall, to help visitors experience the fun of throwing their wishes. Tai Po district councilor Chan Cho-leung said the 4.5 metre tree would be replaced by a 7 metre plastic tree in an attempt to bring in more tourists. He said more than 10,000 people had visited the village on Monday and he expected more would come. Jochen Weyrauch, a German who visited Lam Tsuen for the first time, said: "It is interesting. It is different from the tradition in Europe, where we will write down our wish and won't tell anyone, or it won't come true." In Chinese tradition, if the wish stays up in the tree, the person's wish will come true. Sharon Ng, who came with her five-year-old daughter Sammy Cheung Sum-ching, said: "It is fun for children ... It is better than the real one." Another visitor, Soon Fung-ling, said: "It is great ... It can revive the tradition and bring back the atmosphere of the festival." A vegetable and fruit stallholder, surnamed Li, in the village said business was better than last year thanks to a new car park and a carnival nearby. "More people chose not to travel abroad and stayed in the city this Lunar New Year holiday, so we will probably do more business," he said. William Yau, a vendor of traditional Chinese candies, said business was good so far. "The plastic tree has become the talk of the town. I heard visitors saying that they came after hearing news that a plastic tree had been put up here," he said. Ma Yu-sing, a stallholder selling windmills and snacks, said the plastic tree helped make the place livelier than before.
Chilled chickens were 20 per cent more expensive yesterday as lack of supply halted fresh chicken sales for three days during the Lunar New Year holiday. At Kowloon City market, chilled chickens sold for between HK$75 and HK$110, compared to HK$60 during non-peak days, said vendor Chow Hon-ling. She said because vendors were prohibited from keeping live chickens overnight at their stalls, they were unable to stock up. The price of live chickens was up from HK$38 to HK$80 per catty on January 25, the last day of the Year of the Rat, but Ms Chow said all her 300 birds had sold by 4pm. A customer at Hung Hom market, who gave his name as Mr Wan, bought three chickens for dinner and said price was not his main concern. "Chickens are bound to be more expensive, but we Cantonese people must have them - it is a tradition," he said. A dried seafood shop in Sheung Wan treated its employees to a traditional year-opener lunch. Fung Lai-wah, 70, who prepared the eight-course meal, said chickens were more expensive. "In the past chickens cost HK$20 to HK$30 per catty - now they are HK$70 to HK$80," she said. Owner Raymond Ng Wai-hung said despite the economic troubles, his business had seen a 2 to 3 per cent rise in profit as the wholesale price of seafood fell, and he had no plans to cut staff. Meanwhile, 33 underprivileged mainland orphans were treated to a dim sum lunch in Tsim Sha Tsui by the Christian Zheng Sheng Association. The children, 13 from Henan and 20 from Fujian , had come to stay with Hong Kong families for the New Year holiday. Feng Xueyan, 11, whose mother was murdered, said she loved the skyscrapers and the toys. "When I grow up I would like to come again to visit my host family," she said. Louisa Lai Ying-ying, Xueyan's host mother, said the girl was happier after a few days in Hong Kong. "It is an invaluable experience for the child," she said. "Also we take her to places we normally do not visit, so it makes our Lunar New Year more colorful."
More shops and restaurants are opening during the early days of the lunar new year partly because they need to cover high operating costs, say retailers. Data collected by the Hong Kong Retail Management Association shows at least 92 shop and restaurant chains said they would be open on the first day of the lunar new year, up from 86 a year earlier. Forty-eight of the association's 276 members surveyed this month said their shops would open from yesterday, the second day of the Lunar New Year, compared with 52 during the same period last year. Fifty-nine retailers said they would start doing business from either today or tomorrow, compared with 55 that operated from the third or fourth day of the previous lunar new year. "Retailers have tended to take shorter Lunar New Year breaks in recent years ... because they have to pay rent anyway, they prefer doing business," said Caroline Mak Sui-king, the association's chairwoman. The Lunar New Year is one of the biggest festivals on the calendar and many shops are closed for between a few days and two weeks to let staff celebrate with their families. Hong Kong Federation of Restaurants and Related Trades chairman Anthony Lock Kwok-on said the increasing number of tourists and higher operating costs, such as rent, were among the reasons that many restaurants stayed open. "We also see more large events during the festival. This creates more business opportunities, so restaurants tend to shorten their holiday breaks," Mr Lock said. Cinemas, which operate every day, have done well. Major cinema operators, including UA, MCL and Broadway, said box-office takings were strong. They attributed this to the fact that more people had stayed in town as a result of the financial crisis and because many appealing films were on offer. MCL Multiplex Cinema's general manager June Wong said many screenings had been sold out through advance bookings.
Confidence among heads of the world's top companies meeting in Davos has tumbled to a new low, with the prospect of a long recession torpedoing faith in corporate prospects. The findings from a poll of more than 1,100 CEOs sets a grim backdrop to a four-day meeting of the world's business and political elite in the Swiss ski resort, which begins on Wednesday. Crisis-hit bankers are thin on the ground at the snow-covered mountain town but policymakers will be working behind the scenes ahead of a summit of the G20 group of big and emerging countries in April and a G8 summit in July. Russian Prime Minister Vladimir Putin and Chinese Premier Wen Jiabao will both address the meeting later on Wednesday to give their policy prescriptions for dealing with the worst economic crisis in 80 years. The annual PricewaterhouseCoopers survey suggests the need for action is urgent, as a crisis that started in the US banking system hammers revenues across all regions and industries. Worldwide, just 21 percent of CEOs said they were very confident of growing revenue in the next 12 months, down from 50 percent a year ago. And hopes for a short "V"-shaped recession appear to have evaporated with most business leaders expecting no more than a slow and gradual recovery over the next three years. "The three-year view is a bit better but the bad news is it is not that much better," said Tony Poulter, global head of consulting at PwC. "The message is: there is a long term but we are not going to see it dawning immediately." Collective Gloom - Delegates in Davos were united in the view that an global economic upturn is some way off. Lars Thunnel, head of the International Finance Corporation, the private arm of the World Bank, said he expected economic malaise sparked by the credit crisis to linger.
China: Asian Development Bank (ADB) said it would offer 650,000 U.S. dollars to China to help the country improve its disaster risk management system. The fund will be used to make a thorough examination of the current system and to help China to make a more effective strategy on risk management, ADB told Xinhua on Tuesday. It also aims to involve the participation of civil society and private organizations, said ADB. It is immensely urgent for China and many other countries to set up a more sharing and consistent system of risk management, which incorporates non-governmental organizations. It will help relieve the burden on the government, said ADB. The money is a supplement to the one-million-U.S. dollars technical assistance fund ADB offered in May last year to support reconstruction after the 8.0-magnitude earthquake in Sichuan Province.
China vowed yesterday to increase efforts to stamp out counterfeit goods, after a long-awaited WTO decision found the government had not done enough to protect intellectual property rights. "China has always placed a high degree of importance on the protection of intellectual property," said Ministry of Commerce spokesman Yao Jian. "We will continue to strengthen the work of copyright protection." A panel of judges from the World Trade Organization ruled earlier this week that the mainland had violated two aspects of a key trade agreement by excluding non-state-approved goods from copyright protection and failing to properly dispose of the copies. A third charge was dismissed in the dispute, initiated in 2007 by the United States, which called on the mainland to tighten criminal prosecution of copyright infringers. Mr Yao acknowledged the WTO's decision and said the central government would strengthen its work on protecting intellectual property rights (IPR). It would also continue to promote co-operation with the international community in an effort to improve trade relations, he said. IPR laws have become a sticking point in the touchy trade relationship between the mainland and the US as overseas retailers complain that unchecked counterfeiting has cost them significant loss of revenue. The price tag in terms of 2007 sales might have topped US$3 billion, according to figures from US lobbyists representing various media industries, Bloomberg reported. The WTO findings "are an important victory, because they confirm the importance of IPR protection and enforcement," acting US trade representative Peter Allgeier said in a statement this week. "We will engage vigorously with China on appropriate corrective actions to ensure that US rights holders obtain the benefits of this decision." Both the mainland and the US have an opportunity to appeal the ruling. If the decision stands, the mainland will be obligated to adjust its laws to accord with the findings or else face potential disciplinary action, according to WTO guidelines. While both sides in the dispute recognised the WTO's findings, the mainland government's recognition and enforcement of IPR will likely continue to be debated across the Pacific Ocean. "It will remain a source of tension during the upcoming period," said David Cohen, the director of Asian forecasting at Action Economics in Singapore. "An area of definite concern to American firms is the whole issue of intellectual property and copyright, [because] that comes in industries where the US is quite competitive." The WTO ruling was just the latest ripple to disturb the mainland's relationship with the US. It came just days after news of tough talk from the new US administration. US Secretary of the Treasury Timothy Geithner said in remarks to a congressional committee that President Barack Obama was convinced the mainland government was manipulating its currency. Mainland authorities strongly denied the charge and expressed concern about the dangers of trade protectionism. "This relationship between China and the US is of increasing importance, and there will be some inevitable tension between trading partners," Mr Cohen said. "But at the end of the day, they both recognise that this relationship is only going to become more important and [that] they will just have to work out their differences."
Senior officials at the mainland's biggest state-owned companies face the prospect of fewer - and slimmer - red envelopes this year, as falling earnings trigger pay cuts and Beijing calls for financial sector compensation to be controlled. Senior management at state-owned financial firms such as Industrial and Commercial Bank of China (SEHK: 1398), Bank of China, China Construction Bank (SEHK: 0939) and dozens of smaller rivals can expect less "lucky money" following a Ministry of Finance directive. It called for more "reasonable control" of executive pay and expense accounts and issued a moratorium on stock options for executives. Already, key state-owned industrial companies such as Aluminum Corp of China (SEHK: 2600) (Chinalco) are implementing pay cuts as earnings collapse in the face of falling prices and a broad industrial slowdown. New details about pay cuts at Chinalco, the mainland's biggest producer of alumina and aluminum, emerged yesterday. Xinhua reported that the company planned to reduce labour costs by 30 per cent after slashing compensation for all management-level employees by 30 to 50 per cent. Top executives will have their pay slashed the most. Earlier this month Chinalco deputy general manager Lu Youqing said the planned pay cuts would save 3 billion yuan (HK$3.4 billion) to 4 billion yuan in costs and would be capped at 15 per cent for ordinary staff, rising to 50 per cent for top executives. For financial institutions, the government directive to curb executive pay follows a series of mainland press reports about industry high-fliers pulling in annual salaries greater than 10 million yuan. While modest compared with their Wall Street counterparts, mainland banking and finance executive pay packages have come under fire for being excessive. "We must resolutely prevent ... compensation that is too high from being paid out," the finance ministry said in a directive posted last week on its website. The order called for a ban on stock options for senior executives, for state financial firms to avoid widening the income gap between seniority levels and for corporate chiefs to be more modest with expense accounts. State companies should "strengthen controls and inspection of management expenditures and curb ... violations of ostentation, extravagance and waste", the statement said. All state-owned financial firms are to report back to the ministry on their progress in implementing the new initiatives by Saturday.
Peng Weiyuan hugs his wife on his return - Just over a month ago, Peng Weiyuan's sole aim was to avoid capture by Somali pirates. Now his main goal is to escape the public's gaze and spend time with his family. In the six weeks since he and his 29 crew members dramatically fended off the armed pirates in the Gulf of Aden, Mr Peng has been hailed a national hero - a title he rejects. Click here to find out more! "I'm not a hero. I have always been an ordinary person. I just came across an unusual situation and did what a captain is supposed to do," the 57-year-old told hundreds of people who turned out in sub-zero temperatures and biting winds to welcome the cargo ship Zhenhua 4 home to Shanghai last week. He praised his crew for the immense courage they had shown. When nine gunmen stormed the vessel, Mr Peng and his crew held the would-be hostage-takers at bay for four hours. "I was not that nervous," Mr Peng said. "Instead, I even felt a bit excited ... like we could finally put all our training into practice." Although this was the sailors' first voyage through the Gulf of Aden, the captain implemented emergency drills and prepared for various contingencies in the days before they reached the area. "I knew the Gulf of Aden was plagued by pirates, so I was always thinking about how to defend ourselves," he said. To ensure his crew were mentally prepared, he regularly reminded them of details such as what pirates and their boats looked like and their method of attack. When two pirate boats carrying nine men approached the Zhenhua 4 at about 8am on December 17, the captain raised the alarm and called his company, the Shanghai Zhenhua Port Machinery Corp, and the Chinese maritime authorities for help. After that, everything happened as he and the crew had planned.
Chinese President Hu Jintao sent a congratulatory telegram to the team, saying that the construction of the station will help China further improve scientific research on the continent.
President of the Swiss Confederation Hans-Rudolf Merz (R) meets with visiting Chinese Premier Wen Jiabao in Bern Jan. 27, 2009. China and Switzerland decided on Tuesday to begin a joint feasibility study on creating a bilateral free trade zone in the second half of this year as part of their efforts to tackle the challenges of the global financial crisis. During talks in the Swiss capital, visiting Chinese Premier Wen Jiabao and President of the Swiss Confederation Hans-Rudolf Merz exchanged views and briefed each other on the policies and measures China and Switzerland have taken regarding the crisis. The two leaders agreed that it was an urgent task for the two countries to work more closely together to tide over the difficulties. The feasibility study on a free trade zone was one of the measures the two nations agreed to take. Other measures included deepening financial cooperation, expanding trade and investment, opposing trade protectionism, and promoting reform of the international financial system. China and Switzerland will also boost joint work in technology, energy, environmental protection, as well as in the medical and cultural sectors. The Chinese premier, who arrived here earlier in the day for an official visit to Switzerland, said during the talks with Merz that the political mutual trust between China and Switzerland had been deepened and bilateral cooperation had been fruitful since the two nations set up diplomatic ties 59 years ago.
The government is hoping to boost consumption and help the crisis-hit IT industry by subsidizing computer purchases by rural households.
A performer acting as the "emperor" (C), accompanied by his "corteges" wearing costumes of the royal court of the Qing Dynasty (1644-1911), walks on the marble way at the Tiantan (Temple of Heaven) Park in Beijing, capital of China, Jan. 26, 2009. The Temple of Heaven, first built in 1420 and used to be the imperial sacrificial altar during the Ming (1368-1644) and Qing dynasties, was holding a reenacting of the ancient royal ritual for the worship of the heaven from Jan. 26, the first day of the Chinese lunar New Year, till Jan. 30.
Ritual performers wearing costumes of the royal court of the Qing Dynasty (1644-1911) perform in front of the Hall of Prayer for Good Harvests at the Tiantan (Temple of Heaven) Park in Beijing, capital of China, Jan. 26, 2009. The Temple of Heaven, first built in 1420 and used to be the imperial sacrificial altar during the Ming (1368-1644) and Qing dynasties, was holding a reenacting of the ancient royal ritual for the worship of the heaven from Jan. 26, the first day of the Chinese lunar New Year, till Jan. 30.
January 28, 2009
Hong Kong: Hong Kong filmmakers hope to attract audiences back to the cinema by producing what is believed to be the world's first three-dimensional erotic film. Shooting will begin in April on the HK$30 million movie, titled 3D Sex and Zen, and its producer vows to make the love scenes as realistic as possible. "Just imagine that you'll be watching it as if you were sitting beside the bed," said Stephen Shiu Jnr, chairman of One Dollar Production and the movie's producer. Around 25 to 30 per cent of the movie will be love scenes. "There will be many close-ups. It will look as if the actresses are only a few centimetres from the audience," he said. The producers expect to use adult video actresses from Japan and Taiwan, but not the more conservative local actresses, he said. "But we're having trouble finding a male lead who is willing to undress in front of the camera. It's a lot more difficult to find an actor than an actress for this kind of movie." The movie will be an update of one of Hong Kong's most memorable erotic movies, Sex and Zen, which was produced by Shiu's father, media veteran Stephen Shiu Yeuk-yuen. It was based loosely on a classic of Chinese erotic literature, The Carnal Prayer Mat, written by Li Yu in the 17th century. Mr Shiu Jnr said the 3D version would be a tale about how overindulgence in pleasure can lead to tragedy. "This 3D erotica will probably be the world's first," he said. The movie's 3D effects will be produced by Menfond Electronic Art and Computer Design, a Hong Kong-based special effects company that has worked on major blockbusters, including The Nightmare Before Christmas 3D. Menfond has already produced some sample clips, he said. "Given the fierce level of online piracy, making 3D movies is the only way ahead for Hong Kong cinema," Mr Shiu said. The 3D visual effects can be seen only at cinemas equipped with special projectors and glasses for viewers. Hong Kong audiences like 3D movies, said June Wong, general manager of MCL Circuit, which owns nine 3D-equipped screens. Last year the Hollywood blockbuster Journey to the Centre of the Earth made more than HK$10 million in only six days - 55 per cent of that coming from 10 screens that showed the 3D version. How much success the erotic film has at the box office would depend on whether cinemas screen it, and that depended on a number of factors, she said. "First, we need to know the schedule and the availability of the screens. We also have to identify the market for a movie and whether it would suit the audience of each particular cinema." Mr Shiu said the movie's production would take twice as long as ordinary movies. "We have to come up with a story board and we have to plan how and where to apply the 3D technology," he said. "The shooting will be similar to that of an ordinary movie except that it will be shot with two cameras, which simulates the vision created by two human eyes." The film is scheduled to be released in time for Christmas.
Villagers powerless in face of dumping - Fly-tipping in field ruins rural idyll - None of the villagers know who owns the field. All they know is that, six months ago, a convoy of trucks began dumping construction waste on it, sullying their lush rural idyll. And that what was once a sweet-smelling field full of wild flowers and ginger lilies - which a villager used to cut and sell, earning HK$50,000 a year - is now a stinking jumble of concrete, brick, wood, plastic and lumps of tar. The government says it is unable to remove the part of the waste which is on public land. Demands for its removal have gone unheeded. As for the waste on private land, the owner has consented to its dumping and not breached lease conditions, though the dumping flouted planning law. Green groups say legal loopholes that allow such dumping need plugging. Leonora Sullivan, who lives in the village, Lui Kung Tin in Pat Heung, Yuen Long, remembers how the field used to look. "I used to bring my children for a walk in the Tai Lam Country Park, and when we looked down towards the village, we saw a whole valley of white ginger flowers. We could stop and watch the scene for hours," she said. She recalled trucks passing the village on four occasions in September. When she next visited the country park she realised the field once full of flowers was where the trucks had dumped their loads. "It is bad that people would spoil the environment [like this]. The waste should be dumped in the tips designated for the purpose." The disappearance of the ginger lily field has removed a source of income for villager Lau Tak-ming. "I started harvesting ginger lilies from the field 30 years ago," said Mr Lau, who tended the field in winter and spring, removing weeds and applying fertiliser. From May to October, he would harvest the flowers and sell them to dealers, earning up to HK$50,000 a season for his efforts. "I can no long harvest ginger lilies there, but there is nothing I can do, as it is not my land," Mr Lau said. He is more distressed by the destruction of the environment than by the loss of income. "The place now stinks, and pest and rodent problems are getting worse. The water that flows from the field has turned murky," he said. Village representative Cheung Yat-wah said the village had a history going back more than 100 years. Most of its 200-plus inhabitants are elderly. He said he did not know who owned the field. "It is a pity this pleasant environment has been ruined. But there is little we can do. We have no idea who dumped the construction materials. I do not have the authority to block access to the field by trucks," he said. Yuen Long district councillor Lai Wai-hung said he had pressed the government to remove the waste and restore the field. "I will bring the matter up for discussion at the district council," he said. Investigations by the Lands Department showed that part of the construction waste had been dumped on private land and part on government land, but that no meaningful action could be taken. "As the dumping activity does not contravene the terms of the lease [of the private land], there is no basis for taking enforcement action against such activity," a Lands Department spokeswoman said. She said notices had been posted requiring the removal of the waste dumped on government land but no response had been received. Although under such circumstances, the government could remove the material itself, in this instance the department could not gain access to the area because it was surrounded by private land on three sides. While an access road for emergency services goes along one side of the public land, a steep, shrubby slope separates it from the plot. The spokeswoman said the Lands Department had approached the owner of the private part of the field for permission to traverse it in order to reach the government land. The Environmental Protection Department has received five complaints about dumping in Lui Kung Tin, but said there was nothing it could do. "Consent from the landowner has been obtained for the landfilling on the private land ... there is no violation of the Waste Disposal Ordinance. For the filling on government land ... no responsible party has been identified," a spokesman said. However, the Planning Department confirmed that the dumping contravenes the Town Planning Ordinance. "[We are] instigating prosecution proceedings against the concerned landowner," a spokeswoman for the Planning Department said. Conservancy Association campaign manager Peter Li Siu-man said such "fly-tipping" was quite common, especially when the waste came from small-scale private construction projects since they were difficult to monitor. The government must step up law enforcement to avoid spoiling the rural environment, he said. Edwin Lau Che-feng, director of Friends of the Earth, said responsibility for controlling illegal dumping was fragmented. The government should review laws and strengthen interdepartmental co-ordination to tackle the problem, he said. "There are grey areas and loopholes that make it very difficult to prosecute illegal dumping," he said. "The government should also step up control efforts, particularly in hotspots, by, for example, installing closed circuit television cameras."
China: Chinese Premier Wen Jiabao arrived here Tuesday for an official visit to Switzerland, during which he will also attend the annual meeting of the World Economic Forum (WEF). It is Premier Wen's first visit to Switzerland since he assumed the post. He is scheduled to hold talks with President of the Swiss Confederation Hans-Rudolf Merz and WEF Chairman Klaus Schwab. At the annual WEF meeting in Davos, Wen will give a speech to elaborate on the measures China has taken to deal with the global financial crisis. Switzerland is the first leg of Wen's European tour, which will later take him to Germany, the European Union headquarters, Spain and Britain. Chinese Assistant Foreign Minister Wu Hongbo has characterized Wen's tour as a "trip of confidence," saying it set out China's determination to stick to the policy of reform and opening up, boost economic development, deepen China-EU cooperation and join hands with the international community to tide over the financial crisis.
China said Tuesday it "welcomed" a World Trade Organization verdict involving its dispute on intellectual property rights with the United States while "regretted" part of the ruling related to copyright. The IPR verdict, which was released Monday by the WTO Dispute Settlement Body (DSB), involved the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (known as the TRIPS Agreement). The WTO panel's report said "the United States has not established that the criminal thresholds are inconsistent with China's obligations under the first sentence of Article 61 of the TRIPS Agreement." China "welcomed" this verdict, said Yao Jian, speaking for the Ministry of Commerce in a statement on the ministry's website Tuesday. Meanwhile, the DSB failed to support the opinion of the Chinese side in part of its verdict on the disputes related to customs measures and the Copyright Law. Yao said China felt "regret" about this and "is making a further assessment of the DSB panel report." Stressing that IPR protection was a global issue, Yao said China had always attached great importance to protecting IPR and in the past 30 years had made great strides in IPR laws, enforcement, education and international cooperation. In 2008, China worked out a national strategic program for IPR, Yao said.
China is to promote the use of energy-efficient and new-energy vehicles in public sector in 13 cities, the Ministry of Finance (MOF) said here Monday. According to a joint statement by the MOF and the Ministry of Science and Technology, the central government will offer one-off subsidy for the purchase of mixed-power, electric and fuel-cell vehicles. The statement said the subsidy will be decided by the gap between the prices of energy-efficient vehicles and automobiles powered by traditional fuel. The program will be put into trial in public transport, taxi industry, postal and urban sanitary services in 13 cities including Beijing and Shanghai. The program is aimed at facilitating the technology upgrading and structural optimization of the automobile industry, said the statement. Local governments should also allocate funds for the building and maintenance of related facilities, said the statement.
China wants its restaurant and catering industry to achieve yearly average growth of 18 percent with a goal of 3.3 trillion yuan (about 478 billion U.S. dollars) in sales by 2013, according to guidelines released by the Commerce Ministry. The guidelines, posted online and dated Jan. 22, state that China aims to have 100 restaurant groups in the next five years, with each generating more than 1 billion yuan in annual sales by 2013. Other objectives for 2013 include generating 25 million jobs, building 800 staple food processing and distribution centers and opening 160,000 chain breakfast outlets. Between 1991 and 2007, industry sales rose 22.3 percent annually on average. The growth rate was 7.2 percentage points higher than that of total retail sales. The industry so far has employed nearly 20 million people, with another 2 million added each year. But nearly 90 percent of food businesses are small or medium-sized, with the biggest 100 generating only 8.5 percent of total sales. Under the plan, vegetable production is to be based in the middle and upper reaches of the Yangtze River including Guizhou, Sichuan, Chongqing, Hunan, Hubei and Jiangxi. Fresh water aquatic products will be concentrated in the middle and lower Yangtze River valley, mainly Hubei, Anhui, Zhejiang, Jiangsu and Shanghai. Livestock breeding will be based in the Yellow River Valley, especially Inner Mongolia, Gansu, Hebei, Shanxi, Shaanxi, Henan and Shandong while poultry production will be based in Guangdong, Guangxi, Hainan and Fujian. Raw materials for Muslim food will mainly come from northwestern Gansu, Qinghai, Ningxia and Xinjiang. The Commerce Ministry has told local branches to team up with finance, taxation, industrial, commerce and quality inspection departments to map out policies to encourage the restaurant industry to hire the unemployed and upgrade technology. Food outlets serving the general public, rather than offering luxury cuisine, were likely to see their power and water charges cut, said the guidelines. The guidelines identified catering as a driver of consumption, since it could support industries such as farming, livestock breeding, food processing, construction, manufacturing and vocational training.
China plans to complete its independent global satellite navigation system by launching about 30 more orbiters before 2015, a space technology official said Sunday. China plans to send 10 navigation satellites into the space in 2009 and 2010, said Zhang Xiaojin, director of astronautics department with China Aerospace Science and Technology Corporation (CASC) told China Central Television (CCTV). The plan is to establish a global navigation system consisting of more than 30 satellites by the year of 2015. The system will shake off the dependence on foreign systems, Zhang said. U.S.'s GPS has been widely used for commercial navigation in vehicles, cell phones and other civilian devices in China. Chinese civilian and military users could be guided by their own satellites worldwide after the Beidou becomes the world's fourth edition of global navigation systems. China launched the first satellite, Beidou Navigation System, into geostationary orbit in Oct. 2000, in an effort to build up its own positioning system independent from the U.S.'s Global Positioning System (GPS), E.U.'s Galileo Positioning System and Russia's Global Navigation Satellite System (GLONASS). China has sent five positioning orbiters into the space. The current Beidou system only provides regional navigation service within China's territory. Since Beidou's fifth orbiter launched in April 2007, China has started to upgrade the navigation system to the second generation, code named COMPASS.
Premier Wen Jiabao flies to Europe on Tuesday bearing vows of support for its crisis-rattled economies, in a bridge-mending visit that shows Beijing’s potential to use its financial muscle for diplomatic sway. Mr Wen travels there during the Luna New Year holiday and his diplomats have said his seven-day ”journey of confidence” will sprinkle agreements and uplifting declarations on European states battered by economic woes. This holiday good cheer comes under two months after mainland called off a summit with the European Union, venting anger over French President Nicolas Sarkozy’s meeting with the Dalai Lama. “This visit is intended to have a lot of symbolic value. I think the Spring Festival time was chosen for good reason,” said Zhou Hong, an expert on relations with Europe at the Chinese Academy of Social Sciences, a leading state thinktank in Beijing. “China wants to show it’s ready for a fresh start after the recent troubles, ready to expand communication and co-ordination, especially over the financial crisis.” Such heartening sentiment from the world’s third biggest economy with its US$2 trillion in reserves will probably be welcomed at Mr Wen’s five destinations: Switzerland and the World Economic Forum in Davos, Germany, the EU headquarters in Brussels, Spain and Britain. But Beijing’s gifts have price-tags attached. Mainland is still fuming over Mr Sarkozy’s meeting with the Dalai Lama, the exiled Tibetan leader. Paris is conspicuously off Mr Wen’s itinerary. Too little time for that, assistant foreign minister Wu Hongbo told reporters last week. Mr Wen can use the lure of investment and deals to remind the often jostling European states that Chinese co-operation comes with perhaps unspoken but nonetheless clear conditions, said John Fox, a former British diplomat in Beijing now at the European Council on Foreign Relations in London. “Certainly, from the European side and Number 10 Downing Street the focus off this visit will be almost entirely on the financial crisis,” said Mr Fox, referring to the British Prime Minister’s residence. “But China is also looking for Europe to rebalance relations, to take the sting out of these disputes.” Both sides certainly have a big stake in sound economic ties at this troubled time. The EU bloc is mainland’s biggest trade partner. And it is the 27-member bloc’s second biggest external trade partner, behind only the United States. But that tight embrace can also be uncomfortable. The EU’s trade deficit with mainland hit a record 160 billion euros ($207 billion) in 2007 and has continued to expand, fanning anti-dumping disputes over mainland-made goods from shoes and garments to most recently screws, steel fasteners and steel rods. Mainland has partly addressed Europe’s complaints about currency exchange rates by allowing the yuan to rise sharply against the euro. And with the global economy shaken by credit squeezes and falling growth, bilateral disputes have receded while both sides work on ways to shore up broader confidence. Beijing officials and state media have said Mr Wen will press Europe to avoid any tougher barriers on mainland goods. He will also issue joint statements in the nations he visits, and preside over agreements on investment, trade and technology. Mr Wen will also be looking to persuade Europe and the rest of the world that his government wants to help broader efforts to lift the global economy out of its slump.
People burn joss-sticks as they offer prayers at a temple during the first day of Lunar New Year in Beijing on Monday, greeting the arrival of the Year of the Ox with fireworks and celebrations. The country celebrated the Lunar New Year on Monday with hopes that the Year of the Ox will be more bullish than disaster-stricken 2008. “Goodbye to the snows of 08, the quake of 08, the pain of 08, the bitterness of 08; May 2009 be bullish for you,” read one greeting sent by text message at midnight, as fireworks exploded across the nation in a raucous welcome to the New Year. In Hong Kong, tens of thousands also temporarily shrugged off worries about economic woes, filing into the annual New Year market at Victoria Park late on Sunday. Shoppers wandered amid a traditionally eclectic mix of goods ranging from popular New Year's decorations like water lilies to inflatable oxen and furry ox-shaped caps. Meanwhile, another 20,000 visited the Taoist Wong Tai Sin Temple to light up incense sticks and pray for good luck after a year that saw Hong Kong slip into economic recession. The Year of the Rat was not a good one for the country, despite high hopes for the Olympic games hosted in Beijing in August. Ice storms interrupted the last Lunar New Year. Tibetans staged a brief but widespread uprising. Tainted milk sickened thousands of babies and a slowing economy heralded heavy job losses. In Sichuan, where a devastating May 12 earthquake killed more than 80,000 people, some survivors put on a brave face. “We’ve cobbled together a new house. It’s not too bad,” said Liu Shaoyun, whose nephew was killed when his school dormitory collapsed in Muyuzhen, in northeastern Sichuan. “It’s a little cold, but what can you do?” Premier Wen Jiabao this weekend visited ethnic Qiang villagers near Beichuan, a town that was half-buried by landslides during the earthquake. The economy is a more immediate worry for most people, as a real estate slump at home and drop in export demand from abroad has caused factories to close and businesses to cut bonuses. Many migrant workers, whose remittances sustain the rural economy, are now home for the New Year but could have trouble finding jobs when they return to the cities next month. Unemployed people have been allowed to peddle wares without paying a fee at the temple fair in Beijing’s Temple of the Earth, the Beijing Times said on Monday. President Hu Jintao pledged more “equal development across society” during a pre-holiday visit to Jinggangshan, a poor Communist revolutionary base in the southern mountains that has been mostly left out of the country’s headlong rush to riches over the last three decades of economic reform. State television showed Mr Hu beaming as a baby kissed his cheek, visiting a marketplace, and singing with villagers at Jinggangshan, where an embattled Mao Zedong regrouped communist forces in the late 1920s before embarking on the Long March. Acknowledging the winter storms and power outages that ensnarled much of southern mainland last winter, Mr Hu also visited a power plant and called for steady electricity supply.
January 27, 2009 Chinese Spring Festival Jan 26th - Feb 9th
Hong Kong: No challenge will be too big for Hong Kong in the face of tough economic times, Chief Executive Donald Tsang Yam-kuen will reaffirm in his Lunar New Year message. With a recession in full swing, Mr Tsang hopes to use his Lunar New Year greeting to instil confidence. "Hongkongers are no strangers to adversity," he will say, according to an advance copy issued by the government. "We're used to thriving on challenges. I believe that if we pull together as a community, no challenge will be too big for Hong Kong." In his Christmas message, the chief executive told Hongkongers to stay confident about the future and that the government would be decisive in facing the challenges ahead. The chief executive's new year message will be broadcast on television, radio and on the government's website at noon today and will be repeated tomorrow, Lunar New Year's Day. The message will be in a one-minute video that also shows Mr Tsang and his wife shopping and checking how retailers are faring. "Amid the current global financial turmoil, people may rein in their spending," Mr Tsang says. "I am glad to see the retail market is better than expected and happy to see people going home with bags full of goodies." The video shows the couple visiting a centre for the elderly where they hand out scarves to celebrate the festive season. The couple also distribute items they bought at the annual Hong Kong Brands and Products Expo last month, when Mr Tsang spent more than HK$10,000 on noodles, biscuits, a microwave oven and two electric stoves for distribution to homes for the elderly and charities.
Director John Woo (2nd L) poses with cast members (from L-R) Hu Jun, Lin Chi-ling, Tony Leung, Zhao Wei and Chang Chen during a photocall for the film "Red Cliff" at the 61st Cannes FIlm Festival May 19, 2008. The most expensive Chinese film has finally become the most lucrative. John Woo's battle epic "Red Cliff" has raked in 302 million yuan (44.04 million U.S. dollars) as of Monday, setting a new record for Chinese films, Sohu.com reported.
The police commissioner said
yesterday the rise in drink-driving in Hong Kong was alarming and the force
would support any measures necessary to stamp out the crime. Tang King-shing's
comments came as the driver of a container truck that collided with a taxi on
Friday, killing its driver and five passengers, was charged with dangerous
driving causing death. The 41-year-old will appear in Kowloon City Court today.
If convicted, he could be sentenced to 10 years in jail. The accident, near the
Lok Ma Chau border crossing, shocked the city. Family members of the victims
went to the Fu Shan public mortuary in Sha Tin yesterday to begin arrangements
for their funerals. Among them were the wife of Cheung Yu-lam, who arrived,
weeping, from Shenzhen with their four-year-old daughter. "Where is papa?" the
girl, Shi-ting, said through her tears as she searched the mortuary office,
unable to understand that her father's life had been cut tragically short. The
police commissioner said: "Anything which could help to curb the problem of
[drink-driving], we would support. But I want to stress this requires a wide
discussion to reach a consensus among all in society". While the number of
drink-drivers arrested for causing death or serious injury fell from 147 in 2007
to 107 last year, the proportion of those involved in traffic accidents who were
found to have exceeded the legal alcohol limit for driving rose from 3.3 per
cent in 2007 to 3.8 per cent. Mr Tang said the rise was "alarming" since it
showed the public was still unaware of the seriousness and the consequences of
Local lenders are facing a difficult road ahead, with signs of deteriorating loan quality emerging, the Hong Kong Monetary Authority said yesterday. "Banks' 2008 profitability will be significantly affected," the de facto central bank said in its latest presentation to the Legislative Council, saying the net interest margins of retail banks had been narrowing since March last year. While warning that this year would remain difficult, the HKMA said it had put in place contingency capital facilities for banks in case of need. But while lenders faced a daunting operating environment that could see the profits of some vanish, banks generally remained well capitalised and loan quality was good, the monetary authority said. The remarks came on the heels of a warning by HKMA chief executive Joseph Yam Chi-kwong on Wednesday that the second wave of the financial meltdown loomed large. "More bad news could lie ahead, as companies and financial institutions around the world, including Hong Kong, announce their results in the next two months," said Mr Yam, who will make a presentation to the Legislative Council on February 2. Bank of China, Bank of East Asia (SEHK: 0023), Fubon Bank (Hong Kong) (SEHK: 0636) and Chong Hing Bank (SEHK: 1111) have already issued their first-ever profit warnings on expectations of further write-downs of troubled securities or declines in their revenue as a result of the global financial turmoil. Analysts have been anticipating higher loan provisions this year as more businesses have gone bankrupt or face a slowdown in growth. "The market probably expected the worst to happen last year, but this year is not going to be any better," said Castor Pang, a strategist at Sun Hung Kai Financial. "The loan losses will not go away as long as companies continue to wind up." Seven Hong Kong-listed companies, including watchmaker Peace Mark (SEHK: 0304, announcements, news) (Holdings) and swimwear maker Tack Fat Group International, have filed for provisional liquidation or gone bankrupt, mostly squeezed for credit by banks and hurt by weakening overseas demand. The banks registered an average capital adequacy ratio of 13.8 per cent in September and an average loan-deposit ratio of about 70 per cent by the end of last month - which has been decreasing as banks become cautious about lending. The total loans of retail banks, including trade finance, and loans for use in and outside Hong Kong have also been dropping since reaching a peak in September, figures from the HKMA show. Meanwhile, Mr Yam said the tightened credit conditions would result in a vicious circle that would prolong the downturn of the economy. He expected the unemployment rate to edge up further because of sluggish labour demand. "A more visible slowdown on the mainland would weigh on the growth prospects in Hong Kong," he said in the presentation. "Nevertheless, Hong Kong has entered this crisis in a position of strength and should be able to weather it relatively well."
Just walking around at the Lunar New Year fair in Victoria Park will apparently bring you good luck. And you'll need it if you ever want to get out again. So crowded is the annual year-end flower and novelty product extravaganza that without judicious use of the elbows and careful footwork a person could easily find themselves trapped among the hordes of Hongkongers who have descended on the park. Not that that would be a particularly terrible fate. There's plenty to eat and drink, and the crush of bodies affords a modicum of protection against the chill northerly wind blowing in off the harbour. And even if you do get cold, there are plenty of Year of the Ox novelty beanies to be had. Candy Ng Tsz-ki, a Chinese University student, had managed to resist buying the bovine headgear, but was instead eyeing up a giant, inflatable sweet coconut waffle. "I love all the different products here," said Ms Ng, who was huddling against the cold with several of her university friends. If it is plastic, colourful, slightly fun and pretty much useless, you can find it at the fair, but the traditional side is not completely overlooked. "We've been coming here every year since we were little. The products change every year, but the style is the same with a mix of new and fun and traditional Chinese products," Ms Ng said. Touts stand on milk crates in front of their stalls vying for the attention of the slowly moving crowd.
"Fired up! Ready to go!" One Hong Kong-based US citizen has certainly answered one of his new president's inspirational catch-phrases. After spending two years in Hong Kong, lawyer Andy Green, 31, plans to fly out today and talk to prospective employers in Washington in search of a government job there. "I was hesitant to be interviewed [for this article] ... because it's not about me," said Mr Green. "I want the message to be out there that Americans genuinely believe that we all have to be involved in the remaking and renewal of America. Democracy is not a spectator sport." US President Barack Obama in his inauguration speech last week urged Americans to "begin again the work of remaking America". Mr Green, a board member of Democrats Abroad Hong Kong, has been interested in politics and government for years. He made the decision to pack up his Mid-Levels flat earlier this month. "For me, it was just a question of timing," he said. "Obama's election and the tremendous challenges we face have really made it very clear to me, along with the pretty bad market out here, that this is not the time to be sitting around either twiddling one's thumbs or waiting for the market to get better. "I feel this is an opportunity for me to contribute." Mr Green, a capital markets and corporate law lawyer, is a fluent Putonghua speaker who is interested in the economic relationship between the United States and China. "As we sort through our economic problems, and sort through who's going to finance our debt and how are we going to deal with our global trade and currency issues, there's going to be a lot of talent going to [Washington] DC, but I feel like there may be some need and some opportunity for me to contribute what I've done," said Mr Green. "There's certainly no guarantee I'll succeed or I'll be wanted or used ... and [I] may be back here in six months and practicing law and doing business, and that's wonderful." Still, it's worth a try. "It's not every day that we get a Democrat elected president ... and not every day we have record majorities in the House and the Senate. You have to strike while the iron's hot. I've got to go and roll the dice."
CitySeen: Shiseido unveils theory to sharpen Asian features - Call it a cultural inferiority complex if you will, but many Asian women complain that their bone structure isn't as strong as their European counterparts. Tapping into this insecurity aren't just plastic surgeons, but cosmetics companies. At the Watermark on Wednesday night, Shiseido MAQuillAGE unveiled some new makeup as well as a theory it called the M Rules to make flat features more alive and defined. "The new M Rules is based on research we did where we found out people generally think a person is more attractive with sharper facial features," beauty director Miyako Okamoto said. "We introduced these rules to help Asian women identify their ideal facial proportion, hence create a sharper look." We're not sure it's a science but she illustrated her theory on the faces of models Mikki Yao Shu-yi and Jennifer Tse Ting-ting (pictured with Okamoto). However, what was even more interesting was a one-of-a-kind makeup Shiseido simulator. The device allows users to visualise various makeup applications on a picture of their face - kind of like instant PhotoShop. Shiseido explained the machine would go to different makeup counters over the next month before it was returned to Japan. In case you don't get a chance to try out the cosmetic simulator, here are Okamoto's tips for next season. "Green, blue and gold will be in for the hot summer eye look and pink for the lips," she predicted. "We have already created products for next winter but I think it is too early to disclose the details now."
It may not be the ideal time to open luxury hotels, but once you've spent millions on bricks and mortar you can't exactly change course once this boat has set sail. That's why two major hotels held inaugurations this week. The W Hotel in West Kowloon might have been operating since September, but it only officially opened on Monday, with the usual ceremonial stunts. Financial Secretary John Tsang Chun-wah, Sun Hung Kai Properties (SEHK: 0016) executives Raymond Kwok Ping-luen and Thomas Kwok Ping-kwong, MTR Corp's Chow Chung-kwong, and those from Starwood Hotels & Properties (the parent of W) all gathered to simulate sticking a hotel card key into a podium slot, triggering confetti to rain down. Yesterday morning, the ribbon was cut for the five-star SkyCity Marriott Hotel adjacent to AsiaWorld-Expo, with a similar posse of corporate suits, including Shun Tak Holdings (SEHK: 0242, announcements, news) ' Pansy Ho Chiu-king, Tourism Commissioner Margaret Fong Shun-man, the Airport Authority's Stanley Hui Hon-chung, the Tourism Board's Anthony Lau Chun-hon and Marriot's Australasia executive vice-president, Geoff Garside. Naturally, everyone at both ceremonies was full of confidence and voiced their belief their brand was strong enough to survive. But we're sure that, behind their backs, fingers on both hands were crossed.
China: Guangdong Province remains China's biggest economic powerhouse with last year's gross domestic product nearing 3,570 billion yuan (about 521 billion U.S. dollars), or about 5,400 U.S. dollars per capita, the provincial bureau of statistics said Saturday. This is a 10.1-percent rise from the previous year, 1.1 percent higher than the 9 percent growth rate the provincial government projected early last year, the bureau said in a press release. Still, the actual growth was down 4.6 percentage points from the previous year and 3.7 percent lower than the annual average growth rate posted from 1979 to 2007, it said. The bureau attributed the slowdown to the severe natural disasters affecting most parts of China last year and the impact of the global financial crisis. Despite the setbacks, Guangdong had met its 2010 GDP target of 3,440 billion yuan two years ahead of time, the bureau said. The 2010 target was set in 2006, at the start of the 11th Five-Year-Plan period. Last year, the province's total fixed asset investment climbed 16.5 percent to top 1,000 billion yuan, whereas consumption soared 20.3 percent to 1,277.2 billion yuan. Meanwhile, Guangdong's foreign trade reached 683.3 billion U.S. dollars, up 7.8 percent year-on-year. Export totaled 400 billion U.S. dollars, up 9.4 percent year-on-year. Affected by the global financial crisis, the growth rate of two-way trade was down by 12.4 percentage points, while that of export was down by 12.8 percentage points. Guangdong Province has taken the lead in China's economic development for 20 consecutive years since 1989.
Many Chinese received a smaller bonus this year because of the global financial crisis and decided to tighten their belts - but they still let their hair down for the traditional Spring Festival. The freezing weather and slowdown in economic growth did not affect Chinese people's festivities, with supermarkets and shopping malls crowded with shoppers seeking goods for the Spring Festival celebration. Even dairy products, which have experienced shrinking sales because of the melamine scandal, were selling. Milk powder products of domestic brands have reappeared on the shelves in Wal-Mart at Xuanwumen, Beijing. "This is the safest period for dairy products as the government has intensified quality supervision and inspection after the scandal," said saleswoman Qiao Xinhong. Many Chinese people like to buy boxed milk or yogurt for family reunions or as gifts to friends and relatives during the holiday. Dairy products, however, were only one part of people's shopping list, and snacks with wider varieties, clothes, jewellery and home appliances were also popular. The week-long Spring Festival holiday, which starts from Sunday, is China's closest equivalent to the West's Christmas shopping season. According to the Ministry of Commerce, sales at the country's major retailers on Thursday were 2.4 times as much as that on December 31. China's real retail sales growth in December accelerated 0.8 percentage points from November to 17.4 percent, according to figures released by the National Bureau of Statistics (NBS) Thursday. Retail sales jumped by 21.6 percent last year to 10.8 trillion yuan ($1.6 trillion), which was 4.8 percentage points higher than 2007. The booming Chinese market has become more attractive to foreign retail giants, who have suffered from weak demand caused by the global financial crisis. "Although the global financial crisis has weighed on China's economy, the fundamental of the country's economy remains unchanged and we are very optimistic about the prospects for the Chinese market," Britain's largest retailer Tesco stated. Sales in the rural market, which is believed to have the great potential to boost domestic demand, has reported month-on-month increases since May. November retail sales in rural areas rose 18.3 percent, 8.2 percentage points higher compared with the same period of 2007 and for the first time surpassed urban consumption growth. Wei Wanqian, a farmer in eastern China's Shandong Province, was busy with the last-minute preparations to celebrate the Spring Festival. He bought a new tractor earlier this month. "Boosting domestic demand should be the government's major task of economic work," said Zuo Xiaolei, senior analyst at the Beijing-based Galaxy Securities. "Effective boosting measures along with the improvement of social security system will accelerate the consumption growth by two to three percentage points this year," Zuo said. The State Council, or the Cabinet, has taken an array of measures to enhance domestic consumption. These included improving the rural distribution network, promoting the subsidized home appliance program and boosting festival consumption. More detailed measures would come out in March during the delivery of the government work report, sources said. Although the impacts of global financial crisis were still unfolding, some positive signs surfaced in December economic date, officials and analysts have said. These included the figures on money supply, consumption and industrial output. Whether the "positive changes" represented a trend was unclear, NBS director Ma Jiantang said.
In December 2008, China's light industry enjoyed an output growth of 8.1 percent year-on-year, which sharply outpaced the 4.7 percent growth of heavy industry. The latest statistics from the National Bureau of Statistics show that the output of state-owned enterprises suffered a decline. In December, state-owned and state-controlled enterprises witnessed an output drop of 0.6 percent, while that of private enterprises went up 16.3 percent, overseas-funded enterprises was up 0.3 percent. According to the statistics, in December the country produced 219.9 million tonnes of coal, down 1.3 percent year-on-year; the output of crude oil was 15.7 million tonnes, up 0.4 percent; crude steel fell 10.5 percent to 37.79 million tonnes; and motor vehicles dropped 18.9 percent to 685,700 sets. In December, China's industrial output grew 5.7 percent, or 0.3percentage points faster than the previous month.
The Chinese Academy of Sciences (CAS) has launched an initiative to boost the development of solar energy technology, in a bid to turn it into a major energy source in China by 2050. A CAS official said that the academy had organized academicians and experts to make an action plan and will set up a platform to support scientific innovations involving solar energy. The plan will be carried out in three phases, including "distributed utilization" by 2015, "alternative utilization" by 2025 and "large-scale utilization" by 2035, respectively. This action plan aims to form value chain on technological innovation including basic studies, application studies and market research. CAS experts said that China has a big potential for solar energy development. The duration of sunshine for two-thirds of its territory is more than 2,200 hours a year. It also has vast desertareas, where solar energy could be "harvested". They said that the use of solar energy could effectively reduce the discharge of green-house gases. The United States, Japan and European countries began to develop solar energy in the 1970s. Government investment has greatly promoted solar energy research and development, especially in Japan, Germany and Australia. Germany had promoted the solar energy "family program", and fixed solar energy facilities on the roofs of a large number of homes. Japan launched a program to polarize the use of solar energy, and to cut the price of solar energy by half within three to five years. CAS's advanced energy scientific and technological innovation center invited experts and scholars to carry out investigation and research on China's energy industry. Experts said that lowering the costs for using solar energy would be the key for stepping up the use of this renewable energy in China.
The freezing weather and slowdown in economic growth did not affect Chinese people's festivities, with supermarkets and shopping malls crowded with shoppers seeking goods for the Spring Festival celebration.
More than eight months have passed since the devastating Sichuan earthquake. In the last of our four-part series on how the community has recovered, Al Guo speaks to the residents of Hongbai town. Dong Yongyu was happy. Her family and friends had just finished placing a cross-beam in the roof of her new house. With only the roof and interior decoration to go, Ms Dong, 40, hopes that she and her family would be able to move in within a month. "We lost everything all of a sudden, and today it looks like the day I will start to get everything back," Ms Dong said. Her family pooled together about 70,000 yuan to build a new house on the site where her old home previously stood. They borrowed the entire amount from relatives and friends, even though the government had promised to help cover half the cost in the form of a low-interest loan. "The government promised [to loan us the money], but we would have had to wait until after the Lunar New Year. But three of us would have to go to work by then," Ms Dong said. If everything goes according to plan, Ms Dong's family will get the government loan after the festival. That would enable them to repay the money borrowed from friends in two years. However, Hongbai town deputy party secretary Cheng Yangxu thought Ms Dong was too optimistic. "Yes, the policy is there, but it's always an issue about when you can actually get the loan," Ms Cheng said. Many residents had applied for low-interest loans to rebuild their homes, but only a few have received the money. Ms Cheng said the central government had made it clear that commercial banks should give loans to people to rebuild their homes, but most banks had only paid lip service to the policy. Villagers often came to the town's government offices to complain, but all Ms Cheng could do was tell them to wait. "Banks are not charities. They look into people's records closely. When they feel someone has no way of paying the money back, they simply put the application on hold," she said, adding that it was hard to convince people to be patient especially after the TV news carried a report that the central government had ordered banks to offer loans to people to rebuild their houses. "The central government's policy is good, but the city, town and village governments have twisted it," said 40-year-old Fang Quancai , who visited the town's government offices last week to press for a loan. Mr Fang said his six-member family was eligible for a 25,000 yuan government loan. Ou Qihui , deputy director of Hongbai town's administrative office, said he had to repeatedly explain the difference between policies and reality every time the loan issue was raised. "I understand they want their new houses bigger and better, but you have to work with what you have got. Applicants for loans for smaller and low-budget houses tend to get the money. Those who want loans for bigger houses only scare banks away. It's as simple as that," Mr Ou said. The town's residents say all that they want is a permanent place to live. Fifty-five-year-old Li Yuqin used to live in a three-storey building but now she was ready to settle for a much smaller home. "A low-rent apartment should probably do for us," said Ms Li, whose son-in-law died in the earthquake. She now lives with her daughter and granddaughter in a temporary house. The town plans to build 2,299 houses this year. By Friday, about 30 per cent of those houses had been built. After the disaster, the central government paired a number of quake-damaged cities and towns with others in rich coastal provinces and municipalities. The rich cities were asked to provide resources and talent to help rebuild Sichuan. Hongbai, which is part of Shifang county, was paired with the Beijing city municipality. But because of Beijing city government's pre-occupation with the 2008 Olympics, the rebuilding effort in Hongbai has not been as fast as in cities or towns paired with places like Shanghai. Ms Cheng said she had no complaint because the Olympics was a matter of national pride. But not everyone was as understanding. Residents criticised local officials for the slow start to the rebuilding, the lack of loans or the insufficient supply of building material. "Nobody seems to understand that there is only so much we can do. At least they could shout at us. We have nobody to shout at," Ms Cheng said. Mr Ou said the pent-up frustration among township officials had reached a boiling point. "No holiday, no break and no pay increase. We are the typical `three nos' people. But look at what we have - nothing but frustration and bad health." He joked that he was just one thought away from committing suicide. "Except I'm too busy at work to find time to kill myself," he said.
According to Chinese Zodiac, the Year of 2009 is a Year of the Ox which lasts from January 26, 2009 to February 14, 2010. The Chinese New Year (Lunar New Year) does not begin on 1st of January, but on a date that corresponds with the second New Moon after the winter equinox, so it varies from year to year. The years progress in cycles of 12 and each year is represented by an animal. The Year of the Ox is the second one in the 12-year cycle. The cycle of 12 repeats five times to form a large cycle of 60 years, and in each of the 12-year cycles, the animals are ascribed an element (Wood, Fire, Earth, Metal, or Water) with Yin or Yang characteristics, which determines their characters. The 60 years' circle is also called the Stem-Branch system. This New Year is the year of Ji Chou and 2009 is the 10th year in the current 60-year cycle.
Taiwan leader Ma Ying-jeou (R) visits pandas with children at the Taipei Zoo in Taipei, southeast China's Taiwan Province, Jan. 24, 2009. The panda pair given by the Chinese mainland to Taiwan made their debut at the Taipei Zoo Saturday evening, meeting a select group of visitors including Taiwan leader Ma Ying-jeou and Kuomintang Honorary Chairman Lien Chan.
China's top economic planner said Saturday it would raise the minimum state purchasing prices for rice in major rice-producing areas by as much as 16.9 percent this year. The move was aimed at protecting farmers' interests, keeping grain prices stable and boosting grain output.
More people will choose to travel abroad during the Spring Festival holiday, or the Chinese Lunar New Year, and domestic travel market is shrinking, according to Shanghai's tourism authorities. A total of 39,377 people in Shanghai, the country's economic hub, will travel abroad between Jan. 21 to Feb. 1, up 5.26 percent year on year, according to the municipal holiday travel office. The number of people heading for Europe and Australia soared by30 percent to 40 percent year on year during the holiday, according to the Shanghai Spring International Travel Agency. Shopping overseas has become more attractive with the appreciation of the Chinese currency yuan and the drop of commodity price overseas, it said. The number of people who will travel to Europe, Japan and China's Taiwan region will increase six to eight percent during the festival, said Liu Xiaojun, spokesman for the China CYTS Tours Holdings Co. Ltd. Shanghai branch. A trip to Taiwan costs about 12,000 yuan (1,754 dollars), and a trip to Europe about 14,000 yuan (2,047 dollars). "Outbound travel costs more but it still enjoys a rapid growth, which shows the high-income people have not suffered from the economic crunch," Liu said. Domestic tour, however, is not so optimistic. "The number of people for domestic travel is only a quarter of last year," said Lu Min, holiday program director of Shanghai Jinjiang International Travel Co. Ltd. This indicates that the economic downturn has not taken its toll on the high-income people, but has affected much those with middle and low income," Lu said.
More than 95 per cent of parents whose babies were made ill by melamine-tainted milk have accepted compensation, Xinhua reported yesterday. It said parents of all but two of 891 babies who suffered serious kidney damage and six babies who died after consuming toxic milk products had agreed to take the money and relinquish rights to future claims.
January 26, 2009 Chinese New Year
Hong Kong: Private equity funds including mainland investment guru Fang Fenglei's private equity fund are in talks to buy up to a 20 per cent stake of Gome Electrical Appliances Holding (SEHK: 0493), whose biggest shareholder and former chairman Wong Kwong-yu is being investigated for economic crimes, sources said. Hopu Investment Management, along with its US counterparts Kohlberg Kravis Roberts, Carlyle Group, Warburg Pincus and Bain Capital, had expressed interest, while Citic Capital Holdings, the investment arm of state-owned conglomerate Citic Group, was also expected to approach Gome, sources said. If Hopu or Citic wins, it will be the first time a mainland private equity firm outbids the world's biggest names. Mr Fang is a former chairman of Goldman Sachs' mainland securities venture. Chen Xiao, Gome's newly appointed chairman and chief executive, declined to comment, only saying it was normal for a listed company to communicate with investment banks. Last month, Mr Chen said the retailer had no financial pressure and did not plan to sell shares. A source at Gome said the retailer had not decided to proceed with the stake sale. Another company source said Gome was open to approaches by any potential investor. The mainland's top electrical appliance retailer may sell as much as 20 per cent because it already has a shareholder mandate for a sale of that size. Selling more shares will require a new shareholder vote and may complicate the deal as the company has been unable to contact Mr Wong for months. Mr Wong is under investigation for suspicious trading in stocks of two firms, as well as other offences. Earlier this month the nation's top economic crime-buster was being investigated by the Communist Party for alleged links to Mr Wong. "People are still taking a look but the company's liquidity crunch is behind it to some extent, so the situation is not that urgent in terms of the need for an injection of new capital," said a private equity source. Another source said the political stakes in Mr Wong's case was much higher than business. "This is political at the end of the day because the founder has done a lot of things linked to officials that are in trouble," said the source. "So for anybody to invest, there needs to be some implicit understanding with the government or some kind of understanding that the founder is the founder but the company is the company and will be left alone." Sources said some Japanese retailers had talks with Gome earlier but walked away when their request to have a say in Gome's development direction was refused.
More institutions and banks were likely to consider compensating minibond investors after Sun Hung Kai Financial announced it would offer full refunds, a knowledgeable source said yesterday. But the source said they would each propose a deal on their own terms. "I think they will see what has happened with Sun Hung Kai and realise it's a quick, better way to put this behind them," said the source, who did not want to be named. Sun Hung Kai Financial, parent company of Sun Hung Kai Investment Services - which sold minibonds linked to Lehman Brothers, the US investment bank that collapsed in September - announced on Thursday it would buy back minibonds from 310 customers for about HK$85 million. At the same time, the Securities and Futures Commission raised concerns about Sun Hung Kai Investment Services' due diligence, sales-staff training, risk assessment and record-keeping on minibonds. Minibonds are not corporate bonds but consist of high-risk credit-linked derivatives, marketed as a proxy investment in well-known firms. Asked whether other banks might respond with compensation of 70, 80 or 90 per cent of original investments, the source said that would "depend on how serious [the commission's] concerns are about the conduct". But the commission had no authority to force this on them, the source said. A spokeswoman for the Monetary Authority, which regulates banks, also said it could not do so. The source said the deal on Thursday proved the efficacy of a top-down approach, under which the commission investigated whole institutions, not individual complaints. Secretary for Financial Services and the Treasury Chan Ka-keung said Sung Hung Kai Financial's repurchase offer proved the commission's investigation was effective in protecting investors' interests. He would not say if he thought other banks would be pressured into following suit, only that he believed the commission and the Monetary Authority would be fair in their investigations. A banker who asked not to be named said the settlement would put pressure on banks as investors would have high expectations. However, the banker said the top-down approach the SFC used had its drawback as banks would have to compensate all customers if the SFC found they had systematic problems in selling investment products. "It's unfair if we have to pay for all customers unless the systematic problem is very big," the banker said, adding that it was hard to judge how big the problem would need to be to warrant compensating all customers. Another banker expected there would be more pressure for banks to reach a similar agreement with the SFC. But he believed few would strike deals. "It is not because the amounts of minibonds sold by banks are bigger; the major reason is that it's unreasonable. We only compensate customers if we are wrong." Investors poured HK$15.7 billion into Lehman Brothers derivatives. However, Kenny Lee Yiu-sun, chairman of the Hong Kong Stockbrokers Association, said the buy-back offer had set a very good example. "Banks should also refund investors in full if they are found to have made similar mistakes." Peter Chan Kwong-yue, chairman of the Allied Victims of Lehman Products, said the number of clients who bought minibonds from Sun Hung Kai Investment Services and the sum they invested were relatively small, so the repurchase deal was not totally suitable for larger banks. Democratic Party lawmaker Kam Nai-wai said the refund would set a good precedent. "I can't see how other banks and institutions ... with similar structural deficiencies will be able to evade responsibility." Those eligible for the repurchase deal will receive details in the post in the first week of February. KPMG, provisional liquidators of eight Lehman Brothers firms in Hong Kong, will begin meeting creditors on February 11.
Hours after his visit to the scene of a fatal traffic accident in Lok Ma Chau in the morning, Chief Executive Donald Tsang Yam-kuen was in Victoria Park, browsing the stalls selling stuffed toys and flowers and trying on a trucker hat. Mr Tsang yesterday continued his annual custom of walking through the Lunar New Year fair, spending more than HK$1,000 on various items, before leaving for a US vacation. At the park, no mention was made about spending more to spur the economy, as the chief executive did during his visit to the Brands and Products Expo last month. Then, he and his wife, Selina Tsang Pou Siu-mei, spent more than HK$10,000 on various items, and Mr Tsang said the economy could be revived if everyone bought a little. But yesterday, there was at least one complaint that Mr Tsang was too frugal, especially since the proceeds went to charity. One of Mr Tsang's purchases was a trucker hat designed by a local artist. The proceeds of hat sales went to the Make-A-Wish Foundation, an organisation helping children with life-threatening diseases. Mr Tsang said his purchase was especially meaningful because of its charitable aims. However, Eric Tse Hoi-wing, a member of the local pop group EO2, was disappointed. "He should have bought one of each design, not just the one cap," he said. The cap cost HK$120. At the end of his visit, Mr Tsang wished the public a happy Lunar New Year. "I hope this year the weather will continue to be good and more people will come browse the fair," he said, apparently unaware the air pollution index in Causeway Bay in the past two days reached "very high" levels. Speaking about the accident, he said: "This morning, I saw a very serious traffic accident ... a very saddening scene. I, my family and all Hongkongers offer our deepest condolences to the families of the victims." During Mr Tsang's absence, Chief Secretary Henry Tang ying-yen will act as chief executive. Mr Tsang's holiday lasts until February 1.
More Hongkongers decide to stay put to celebrate new year - Travelers are expected to flood the streets to celebrate the Lunar New Year next week, with more people choosing to stay in town for the holiday because of the economic downturn. Travel agents say business is down about 15 per cent. Many people were expected to flock to flower fairs across the city, police said. About 350,000 were likely to visit the Victoria Park fair alone, with tomorrow night expected to be the busiest. On Tuesday, 400,000 are expected to mass on both sides of the harbour for a 23-minute fireworks display. Harbor City shopping mall in Tsim Sha Tsui will open its rooftop car park at Ocean Terminal to allow 10,000 people to watch the show. Crowd-control measures and special traffic arrangements would be in place, roads will be closed and public transport would be increased if needed, police said.
Henderson Land Development (SEHK: 0012) aims to raise HK$18 billion from the sale of 1,500 flats this year as it shrugs off gloomy predictions for the property market. Thomas Lam Tat-man, a deputy general manager of Henderson's sales department, said the plan was to dispose of at least 10 residential projects this year. "The targeted sales will be better than in 2008," said Mr Lam, who did not provide last year's figures. Projects to be sold include the third phase of Beverly Hills in Tai Po and developments at Headland Road and 39 Conduit Road. The sales strategy was unveiled as the company's chairman, Lee Shau-kee, increased his holding in Henderson to 53.74 per cent from 53.71 per cent. Mr Lee paid HK$20.46 million for 708,000 shares in the company from Monday to Wednesday, according to the stock exchange. Shares of the company have dropped 58.76 per cent over the past 12 months amid concern prospects for the real estate market will continue to deteriorate. Mr Lam said the company's Shining Heights in Tai Kok Tsui could be offered for sale after the Lunar New Year holiday. The project comprises more than 300 units ranging from 670 to 1,200 square feet. The average selling price of a typical unit was expected at HK$5,000 per square foot. Mr Lam said home prices would increase 15 per cent in the first half of this year in view of limited new supply. However, property analysts did not share his bullish view. Knight Frank said the residential market rebounded in both sales and leasing activity last month after a sharp fall in November. However, that did not signal a sustainable recovery of the residential market, it said in its research report released on Thursday. "The global financial crisis is expected to translate into a new wave of corporate bankruptcies and the local recession is set to deepen over the first [part] of 2009," it said. Taking into account that the unemployment rate in Hong Kong would also climb further, residential prices and rents would continue to be under pressure until the market benefited from significant economic revivals, it said. Marcos Chan, Jones Lang LaSalle's research head for the Pearl River Delta region, said the fundamentals of Hong Kong's real estate market remained sound and he was optimistic in the long term. "However, the short-term outlook will unavoidably be clouded by the prevailing global credit crunch and by rising concern over the territory's labour market conditions in general," Mr Chan said. In the luxury housing market, Colliers International said: "With challenging internal and external environments, luxury residential rents and capital values are predicted to fall by 15 per cent and 20 per cent, respectively, over the next 12 months". However, positive market signals might emerge when banks started adopting less restrictive lending policies, it said.
Shares in Stanley Ho Hung-sun's Shun Tak Holdings (SEHK: 0242, announcements, news) soared 24.19 per cent yesterday after the company said it would net almost HK$700 million by cashing out of the Mandarin Oriental Macau and spend HK$580 million on a share buy-back. The property developer and ferry and hotel operator said it would sell its 50 per cent stake in the 416-room hotel to Mr Ho's private Sociedade de Turismo e Diversoes de Macau (STDM) for HK$780 million. Based on the HK$41.3 million carrying value of the 25-year-old property, Shun Tak expects to book a one-off exceptional gain of HK$698.7 million on completion. At the same time, Shun Tak said it would buy out STDM's 11.68 per cent stake in the company, paying HK$2.20 per share to repurchase 263.66 million shares for HK$580 million. The buy-back will reduce the Ho family's stake in Shun Tak to 49.28 per cent from 55.2 per cent, while other Shun Tak directors not related to the Hos will retain a 1.27 per cent stake.
New World Strategic Investment, the investment arm controlled by the family of Cheng Yu-tung, plans to invest in the property markets of the United States, Europe and Japan with local investment partners. Adrian Cheng Chi-kong, managing director at New World, said yesterday the company's investments would be increased to HK$10 billion within seven years. It invested about HK$3 billion in various projects on the mainland in October last year. "Prices of properties and companies in the US, Europe and Japan have dropped to an attractive level after the global financial crisis. Properties in Japan offer a rental yield of 7 per cent," he said. "We will look for investment properties in Japan." The company is looking for local partners, such as private equity funds, to co-invest in the markets. "We hope we can finalize a deal in the second half of this year," Mr Cheng said. Separately, he said New World Department Store China would reposition its 33 mainland department stores this year. The stores would be classified according to whether they were focused on "fashion style" or "living style", instead of high-end or middle. The rebranding programme included the store design, VIP loyalty programs and new local and international designer brands. The revamping of its department store at Huai Hai Road in Shanghai had already begun. Mr Cheng said the turnover of the mainland stores recovered in December and January. However, he believed the market would be challenging after the Lunar New Year. Shares in New World Department Store China dropped 1.71 per cent to close at HK$2.87 yesterday. In Kowloon, K11, a new shopping centre in Tsim Sha Tsui developed by New World Development, has leased more than 40 per cent of the total floor area. The mall will be opened by the end of this year.
Hong Kong, now one of Asia's top tourist hubs with 29.5 million visitors last year, is predicting visitor arrivals to dip 1.6 percent in 2009, though a steeper drop of 9.2 percent is forecast for non-Chinese visitors. Across Asia, hotels, airlines and tourism operators are bracing for another tough year as the financial crisis sees long-haul visitors remain at home, and regional travelers tighten purse-strings with shorter, budget trips. "There'll definitely be a drop in business, fewer tourists is a reality," said Laurence Lai, the owner of photo galleries located in two of Hong Kong's busiest tourist hotspots including the Star Ferry pier. "I expect a 30-percent fall at least. I'm having to shift my strategies to confront this financial tsunami, but you just have to stand firm and face the winds," added Lai, who relies on tourists for half his sales. Asia's blend of diverse cultures, geography, bargains and exoticism, with travel gems ranging from snowy Himalayan kingdoms to neon-lit capitals, crumbling Khmer ruins and powdery beaches - have made it one of the world's fastest growing tourism regions in recent years, along with the Middle East. But since the downturn intensified last year, travel markets spanning Asia have suffered sharp contractions, at times worsened by political turmoil, with many projecting negative growth in 2009. Hong Kong, now one of Asia's top tourist hubs with 29.5 million visitors last year, is predicting visitor arrivals to dip 1.6 percent in 2009, though a steeper drop of 9.2 percent is forecast for non-Chinese visitors. Singapore's tourist arrivals, meanwhile, fell 2 percent last year with more gloom expected, while Thailand and Malaysia both expect 9-percent drops in visitors this year.
China: The central bank has warned commercial banks and financial institutions on the mainland to watch out for counterfeit banknotes ahead of the Lunar New Year. "All financial institutions must step up training of their frontline cashiers on knowledge of and skill in fake banknote detection ... so that they can intercept forged notes promptly and accurately," the People's Bank of China said in a statement posted on its website yesterday, two days before Lunar New Year's eve, the beginning of a week of holidays that is traditionally a time of spending sprees. Commercial banks could upgrade their equipment, such as cash detection devices, to improve their ability to distinguish counterfeits, the central bank said. "[Commercial banks] must further better their service facilities, changing and upgrading the relevant devices and equipment in time," it said. These measures "aimed to effectively fight against fake banknotes and safeguard the credibility and reputation of China's currency, the renminbi", it added. News of fake yuan notes widely circulating have been hogging the headlines this month, rousing anxiety across the mainland. As a measure of public attention on the issue, young Chinese have coined a new festive greeting - on top of the traditional "happy new year" - of "be careful not to receive fake money and not to catch cold". The central bank has ordered commercial banks to better share their knowledge in combating fake banknotes with the public, especially among the elderly and migrant workers, two of the groups most susceptible to accepting fake money. Commercial banks have been asked to set up billboards and other displays in their lobbies to tell their customers how to recognise the fake notes. Although the central bank last week denied the existence of a new tide of fake banknotes in the market and held that the volume of fake money was normal compared with previous years, people's confidence in the bills was apparently shaken. "One of my friends got a fake 100-yuan bill out of the ATM at a bank in Beijing days ago, and he reported this to the bank, but they refused to admit the bill was from their machine," said Maria Deborah de Jesus Ostani, the clinical project manager for Novo Nordisk (China) Pharmaceuticals, as she carefully double-checked the banknotes she had just withdrawn from an ATM at a street corner in the central business district in Beijing. "Since that case, I have formed a habit of carefully examining each bank bill every time I take them from the ATM to see whether they carry serial numbers leading with `HD' and `HB'." The vast majority of the fake banknotes with par values of millions of yuan seized over the past weeks carry serial numbers headed "HD" and "HB", making them a quick and easy symbol of detecting fake bills. "We are going to start a one-month long campaign after the Lunar New Year to teach our customers how to detect the fake bills," said Wen Hao , a cashier manager at a China Everbright (SEHK: 0165) Bank outlet in Beijing.
China telecommunications equipment vendor Huawei Technologies and Ericsson of Sweden were the biggest winners in the tender for China Unicom (SEHK: 0762, announcements, news) (Hong Kong)'s nationwide 3G network construction contract, industry sources said yesterday. Unicom is building the world's largest 3G mobile network based on Europe-developed WCDMA technology. The company was awarded a 3G licence earlier this month and will invest 60 billion yuan (HK$68.06 billion) to build 3G networks in 282 cities this year. The tender was understood to cover 55 cities in 30 provinces. Huawei, and United States-based Motorola, which outsourced manufacturing parts to Huawei, won a 30.6 per cent share of the tender. Ericsson and its partners secured a 25.6 per cent share. ZTE Corp (SEHK: 0763), which does not have a significant portion of the global WCDMA equipment market, surprised the market by clinching a 21.5 per cent share of the tender. The sources said the company would provide network equipment in 17 major provinces and cities, including Guangdong, Zhejiang and Fujian. The other winning bidders were Nokia Siemens Networks, which gained an 11.1 per cent share, and Alcatel Lucent, which took 10.2 per cent. Market speculation suggested that ZTE placed an especially low bid for the tender. The firm was ranked third in the technology index in the tender. "We believe ZTE's high market share is the result of a low-price strategy and its high market share in Unicom's GSM network, which enable ZTE to create a high synergy between the 2G and 3G networks," said Credit Suisse analyst Wallace Cheung, yesterday. Industry sources said ZTE was able to provide new technology to support 3G, 3.5G and even 4G mobile technologies at a low cost. The company has developed a new 3.5G technology (HSPA plus), which supports download speeds of 21 megabits per second, much faster than 3G download speeds of 384 kilobits per second. ZTE shares yesterday gained 2.58 per cent to HK$19.90 on the better than expected tender results. Unicom fell 0.87 per cent to HK$6.84.
Shanghai, the mainland's financial hub, was set to launch a real estate investment trust this year to boost the slumbering property market, a senior city official said. Fang Xinghai, the director-general of the Shanghai Financial Service Office, said the Pudong district government had finalised preparations for property investment trusts, and the first fund would debut this year, local media reported yesterday. Shanghai is the first mainland city to announce plans for property investment trusts after the central government approved the product at the end of last year. Tianjin Binhai New Area was also reported to have submitted proposals to the central government for a reit. Admitting that the timing was not good for reits, Mr Fang said the new financing tool would provide a catalyst for the sluggish property market. "The reit is not expected to be popular," he said. "We want to launch it first and optimise the product structure as well as work out the regulatory and legal system governing it." The mainland started considering the launch of reits five years ago. In line with the 4 trillion yuan (HK$4.54 trillion) stimulus package to combat the economic slowdown, the State Council decided to embark on a trial programme to widen property developers' access to funds. "Reits are necessarily needed to ramp up spending on public housing," said He Fuqiang, a director with Beijing-based ZHY Money & Bond Market Investment Consulting Centre. "The regulators will definitely push ahead with the innovations this year." Reits, which pay investors dividends from rents earned by underlying properties, will provide developers with a new source of funding. Beijing will contribute only 1.2 trillion yuan to the 4 trillion yuan investment expansion plan, while local governments and public investors will take care of raising the remaining amount. The central government plans to allot 900 billion yuan for low-cost housing. Mr Fang also said Shanghai was studying ways to help make the yuan a major currency in international trade settlements. The city was likely to run a trial programme to settle international trades using the yuan, he said, adding that the People's Bank of China and his agency had gained an insight into the issue and would publish details of the policy. Shanghai intends to become an international financial centre.
Photo taken on Jan. 23, 2009 at the headquarters of the United Nations in New York shows the message, written and signed by the UN Secretary-General Ban Ki-moon in Chinese, reads: "Happy new year to the Chinese people and all the ethnic Chinese all over the world!" UN Secretary-General Ban Ki-moon Friday sent a message to the Chinese people and the ethnic Chinese across the world to wish them happy new year as the traditional Chinese Spring Festival draws near. The message, written and signed by the UN secretary-general in Chinese, reads: "Happy new year to the Chinese people and all the ethnic Chinese all over the world!" The Spring Festival, or China's Lunar New Year which falls on Monday this year, is China's most important annual event for family reunions.
There were 98,645 new local companies registered in 2008, a 2.1 percent fall on 2007, Hong Kong Companies Registry announced Friday. The total number of live local companies registered under the Companies Ordinance at the end of last year was 710,766, up by 55,728 on 2007. There were 872 non-Hong Kong companies registered under Part XI of the Companies Ordinance during the year, a 16.58 percent rise from 748 in 2007. The total number of non-Hong Kong companies stood at 8,487, up by 406 on 2007. There were 153 prospectuses, including those from 44 mutual funds, registered in 2008, compared with 259 prospectuses, including 82 from mutual funds, in 2007. The total number of documents received for filing fell 4.1 percent to 1,859,205. A total of 3,015,954 searches of document image records were conducted through the Companies Registry's Electronic Search Services, a 3.78 percent rise. The number of searches of the computerized Index of Directors grew by 26.97 percent to 237,764, from 187,264 in 2007, while the number of Company Particulars Reports issued rose 16.86 percent to 157,325. The total number of summonses issued by the Registrar of Companies in 2008 against firms for breaches of the Companies Ordinance, mainly for failure to file annual returns, was 5,442, a fall of 11.15 percent from 6,125 in 2007.
On January 22, the Ministry of Commerce announced that the first round of negotiations for a free trade agreement (FTA) between China and Costa Rica had been held on January 19-21 in San José, capital city of Costa Rica. Consensus have been reached on the negotiation framework for the FTA, the mode of tariff concession for the trade in goods, as well as the mode of negotiations for trade in services.
China's commerce ministry has said textile export growth is poised to slow down further this year and indicated that it does not plan to go back to the quota system in textile trade. China's textiles and garments export growth slowing - Textile firms see profits decline for 1st time in 10 years - New world for textile exports as quota system ends. The growth rate in China's textile exports will continue decreasing this year and there will be no "big increases" in exports to the US and the EU markets although quota restrictions on exports to the two markets have been eliminated from the beginning of this year, the ministry said in a statement on its website. It added China's exports are not going to pose any threats to exporters in other countries. Textile exports totaled $185.17 billion in 2008, up only 8.2 percent from a year earlier, statistics from the General Administration of Customs showed. The growth is 10.7 percentage points lower than that of 2007. Analysts attributed the decline in exports growth to rising labor costs, appreciation of renminbi and weakening demand from major markets. In 2005, Washington and Brussels reached agreements with China to restrict Chinese-made textiles and garments, saying the lapse of previous global restrictions was giving way to a surge of cheap products from China that threatened their own manufacturers. Some US and EU industry groups have called for fresh limits when these agreements expired at the end of 2008. The ministry has urged international textile makers to abide by the principles of free trade and asked importing countries not to erect more trade barriers. China's textile industry saw its profits drop 1.8 percent to 104.2 billion yuan in the first 11 months of last year, the first decline in a decade. Over one-fifth of the textile enterprises were in the red last year while most of the others managed to eke out only meager profits. In order to bail out the industry, which provides 20 million jobs in the country, the government is also drafting a stimulus package for the textile industry, including preferential loans, to boost sales and create jobs, the National Business Daily reported. The newspaper quoted Yang Jichao, secretary general of the China National Textile and Apparel Industry Council, as saying the package aims at accelerating restructuring of the sector, improving innovation, upgrading technology and cultivating self-owned brands.
A model poses beside a Dongfeng Citroen car. Dongfeng Motor Corp, the parent of Dongfeng Motor Group, has drastically lowered its sales growth target for 2009 to 6 percent compared with the achieved growth rate of 16 percent in 2008. China's third-largest automaker is expecting to sell 1.4 million vehicles in 2009, said Xu Ping, general manager, Dongfeng Motor, in the official Shanghai Securities News. It sold 1.3 million units in 2008. Japanese automakers Honda Motor, Nissan Motor and French carmarker PSA Peugeot-Citroen are major partners of Dongfeng, which does not have self-developed car models, but relies on foreign brands to attract customers. The company outsold General Motors in China, thanks to the introduction of various new models by its Japanese partners. Unit sales of vehicles in China, the world's second-largest market after the US, totaled 9.38 million last year, just short of the earlier target of 10 million. The single-digit growth was the lowest in 10 years. To attract car buyers back into showrooms, the government announced last week a 15 billion yuan package that included halving the auto purchase tax for cars with engine sizes below 1.6 liters. Despite government efforts to stem the decline, analysts warned that the measures have failed to address the core problem. "The measures are weaker than our expectations in terms of both scope and scale," Kate Zhu, analyst, Morgan Stanley, said in a report. "Although we agree this plan can partially offset declining demand, it will be difficult to completely reverse market sentiment." Some smaller Chinese automakers, however, have set more aggressive growth targets for 2009, banking in part on policy support to boost demand for pick-up trucks and small cars. Great Wall Motor Co and Geely Automobile Holdings Ltd, which make mostly pick-up trucks and compact cars, are expecting a nearly 70 percent jump in sales this year.
January 24 - 25, 2009
Hong Kong: Special traffic and transport arrangements are in place for Lunar New Year's Eve on Sunday. The MTR will run overnight. Tramway services will be extended until 3am and there will be special services on some franchised bus and minibus routes. Police will implement special crowd management and traffic arrangements on both sides of Victoria Harbour on Tuesday for the Lunar New Year fireworks display. To avoid overcrowding along the waterfronts on both sides of the harbor, a number of roads in Tsim Sha Tsui, Hung Hom, Central and Wan Chai will be closed or rerouted. Details of the special traffic and transport arrangements for major Lunar New Year events are available on www.td.gov.hk.
Sun Hung Kai Investment Services will refund as much as HK$85 million to investors who bought structured notes linked to collapsed US investment bank Lehman Brothers. The firm becomes the first financial institution in Hong Kong to repurchase the minibonds at their original value, the Securities and Futures Commission said last night. SHK Investment, which was also the first firm to be reprimanded by the SFC for lacking internal controls while selling the notes, has now agreed to repurchase all Lehman Brothers-linked minibonds sold directly to 310 clients. Clients who agree to the payout will get their money back within 30 working days, the SFC said. "We are very pleased with the outcome that has been achieved and we believe the approach adopted has produced a result that is in the best interests of the investors," SFC chief executive Martin Wheatley said. Peter Chan Kwong-yue, the chairman of a group of disgruntled minibond investors, said the payback was a significant breakthrough. He said about 1,500 minibond investors have so far received 30 to 50 percent of their money back from institutions besides SHK Investment. Chan urged all institutions involved in what he alleged were "questionable selling practices" of minibonds to offer full refunds to clients. Sun Hung Kai Financial, the parent of SHK Investment, refused to acknowledge any wrongdoing in selling the minibonds. "While we acknowledge the SFC's concerns, SHKF stresses that some of the issues raised date from 2002 and have been rectified. Any outstanding concerns are currently being addressed," it said. Democratic Party lawmaker Kam Nai-wai, who has been assisting several groups of disgruntled minibond holders, said SHK Investment has indirectly admitted responsibility with its decision to buy back the notes. Kam also urged other institutions involved in the affair to offer compensation to clients so the public may rebuild its confidence in the financial sector. As part of its reprimand, the SFC has ordered SHK Investment to engage an independent audit firm to conduct a review of the company's internal control and compliance systems within six months. Failure to do so may result in the partial suspension of the company's license for three years. The SFC said SHK Investment's due diligence on minibond products before distribution to clients and training of sales personnel was inadequate. The SFC declined to comment on whether the SHK Investment case will be used in the possible investigation of other institutions that sold minibonds. The Hong Kong Monetary Authority said it has received 19,984 complaints concerning the Lehman minibonds, as of January 15.
The government is considering reintroducing a corporate rescue bill - shot down by the Legislative Council eight years ago - to help companies with short-term financial difficulties but viable long-term prospects ride out the financial tsunami, Chief Executive Donald Tsang Yam-kuen said yesterday. The measure, first proposed in 2001, is similar to the United States' Chapter 11 bankruptcy code that is intended to save companies from going bust. Tsang said the proposal was among several suggestions put forward by the Task Force on Economic Challenges at its meeting yesterday. He also announced measures to help university graduates and the jobless with the creation of 10,000 jobs. Tsang said the rescue procedure would resemble those in place in the United States and Britain that give firms with serious liquidity problems time to restructure their business, secure new funds and find new investors. He said that under current legislation, companies with liquidity problems had no choice but to go into bankruptcy and dispose of their assets. A similar proposal failed to find consensus in 2001 mainly because of some business people, Tsang said, but the time is now ripe for renewing efforts. "The financial tsunami presents an opportunity for all parties concerned to strike a compromise, and resume the necessary legislative work, so as to minimize business closures and job losses," he said. A bill will be drafted for consultation and the legislative process could take at least a year. Task force member and Chinese University vice chancellor Lawrence Lau Juen-yee cited United Airlines as a successful example of corporate rescue. Lau said the system won't be abused with the participation of various parties. Johnson Kong Chi-how, chairman of the Hong Kong Institute of Certified Public Accountants' restructuring and insolvency faculty, said the association supports the government's move, as a corporate rescue bill would protect not only companies from immediate collapse but also the interests of staff and shareholders. Chinese University associate professor of finance Raymond So Wai-man said the suggestion would allow companies more time to find "white knights," or to negotiate financial restructuring with their creditors. But he fears the plan would meet strong opposition from the banking sector. Meanwhile, seven measures have been introduced to open the employment market. They include an increase in places for tutors, research fellows and postgraduate students in tertiary education; encouraging the business sector to offer internship places, with some 800 temporary jobs to be offered; exploring internship opportunities in the mainland; statutory bodies to recruit 6,000 workers and create 2,000 temporary posts, 5,500 of which are from the Hospital Authority; providing 600 internships under the Innovation and Technology Fund; the Employee Retraining Board to provide 143,000 training places; and the creation of 170 jobs for the removal of abandoned advertising signboards.
China's push to make its energy sector cleaner and more efficient is to receive increased support from the Asian Development Bank (ADB), the lender said on Friday. ADB will provide three technical assistance grants totaling 2.8 million U.S. dollars to support China's efforts to reduce sulfur dioxide gas emissions, increase energy savings, and strengthen a fund that supports clean energy projects, the Manila-based bank said in a statement. Over the past two decades, China's economy has grown at an average rate of over 9.5 percent a year. But the reliance on coal for the bulk of its energy needs has resulted in harmful levels of sulfur dioxide and other air pollutants that are the primary cause of acid rain. To support the Chinese government's target of cutting sulfur dioxide emissions by 10 percent between 2006 and 2010, an ADB technical assistance grant of 500,000 dollars will be used to design and implement a national emissions trading system. This will provide a financial incentive to companies to curb emissions and complement other government measures to reduce air pollution. ADB will also provide technical assistance totaling 1.5 million dollars to support the government's goal of making energy savings of 20 percent by 2010. It will be used to look at steps needed to attract international financial institutions to invest in energy efficiency and conservation projects. The assistance will also help improve the scheduling of power generation by giving higher priority to zero- and low-carbon dioxide emitting power plants. The country's China Clean Development Mechanism Fund, designed to encourage clean energy projects that generate certified emissions reductions that can then be sold to developed countries that need them, is also getting ADB policy and advisory assistance worth 800,000 dollars. It will be used to build up the capacity of the fund for promoting and supporting climate change-related projects.
China: About six million migrant workers have returned to their rural homes after losing their jobs in the cities due to the financial crisis. About a quarter of China's 120 million workers - or 30 million - have gone home to the countryside, said Ma Jiantang, head of the National Bureau of Statistics. About 20 percent of them have done so as the plants where they work have closed down or halted production because of the crisis, he said.
Locals select special purchases for the imminent Spring Festival at Liangshui County of Longnan City, a quake-hit city of northwest China's Gansu Province, Jan. 23, 2009.
Two locals select red lanterns for the imminent Spring Festival at Liangshui County of Longnan City, a quake-hit city of northwest China's Gansu Province, Jan. 23, 2009. Millions of quake zone residents in west China had made their paraperations to welcome the uupcoming Spring Festival, or the Lunar New Year.
China's first private airline, Okay Airways, will begin resuming passenger services on Saturday after being suspended from operating for seven weeks.
China's Yili Industrial Group reported a net loss last year as a result of the baby formula milk scandal, according to its statement to the Shanghai Stock Exchange Market Friday. The company did not disclose the size of loss. Net loss for the producer stood at 20.6 million yuan (3.01 million U.S. dollars) in2007. The first three quarters last year saw a net loss of 109 million yuan. A report from Morgan Stanley expected the company's 2008 loss at 2.3 billion yuan. Chen Lianfang, a senior dairy analyst with Beijing Orient Agribusiness Consultant, agreed with the figure. Yili was more affected by the scandal than the domestic rivals Mengniu Dairy Co and the Bright Group, as Yili took a bigger domestic market share of milk power at 8 percent. The company at the heart of the scandal, the now bankrupt Sanlu Group, had a 17 percent share. Mengniu Dairy was expected to record a net loss of 900 million yuan despite earnings in the first half of last year. The Bright Group posted a third quarter loss at 271 million yuan last year and was expected to experience a full year loss. No specific figure was disclosed. The milk scandal shook domestic dairy market and hurt consumers. An unnamed analyst said gloomy dairy market sentiments also lead the companies to destroy dairy products in inventory, which lead to huge losses. Chen estimated the current sales of these companies have recovered gradually to 70 percent of pre-scandal conditions. He added they would reverse the results when the percentage moves up to 80 percent to 90 percent this year. The Sanlu Group, whose bankruptcy petition was accepted by the Shijiazhuang Intermediate People's Court last month, was fined 49.37 million yuan. Two men were sentenced to death Thursday for producing and selling large amounts of melamine-laced "protein powder." The former board chairwoman of dairy firm Sanlu Group, Tian Wenhua, was sentenced to life imprisonment.
January 23, 2009
Hong Kong: Lehman Brothers minibond investors who bought the financial products with Sun Hung Kai Investment Services will get all their money back under an HK$85 million buyback offer announced last night. The repurchase offer coincided with a reprimand issued by the Securities and Futures Commission, which in its investigation report raised concerns over the way the firm sold the minibonds to clients. It is the first investigation into the minibonds saga completed by the commission. The offer covers some 300 investors, who will be paid a sum equal to the principal they invested. Those who accept the offer can expect to recover the money within 30 days, but will be asked to sign a waiver of claims they may have against Sun Hung Kai Investment Services. The commission's chief executive, Martin Wheatley, said last night it would continue its investigation into other institutions. "We are very pleased with the outcome that has been achieved and we believe the approach adopted has produced a result which is in the best interests of the investors," he said. A source familiar with the issue told the South China Morning Post (SEHK: 0583, announcements, news) the regulatory authorities would be trying to deal with banks and brokerage firms one by one, starting with smaller ones first. "The prime aim is to allow the investors to get back their money as soon as possible," said the source. A total of 21 banks and three brokerage firms were involved in the sale of Lehman Brothers minibonds in Hong Kong. "This case will certainly exert some pressure on other banks or brokerage firms," said the source. About 43,700 Hongkongers invested HK$15.7 billion in financial derivatives issued or guaranteed by Lehman Brothers and sold by Hong Kong banks and stockbrokers. Their investments lost much or all of their value when the US investment bank collapsed in mid-September. Most bought minibonds - which, despite their name, are not corporate bonds but complex credit-linked instruments. Investors claim the derivatives were mis-sold as low-risk. The commission report raised four major concerns with Sun Hung Kai Investment Services. They include the adequacy of due diligence on the minibonds, adequacy of training given to sales staff to enable them to understand the product and its risks, the record-keeping of investment advice given to clients, and the assessment of the risk level of minibonds. Sun Hung Kai Investment Services has agreed to engage an independent audit firm to conduct a review of its internal control and compliance systems. The exercise is expected to be completed in six months. If, within 18 months from the completion of the exercise, the commission still finds the same concerns of "a materially serious nature", the firm will have its licence partially suspended for three years during which it will not be allowed to sell or distribute unlisted or structured products or provide related advice to clients. The company said it did not admit any liability or wrongdoing but acknowledged the seriousness of concerns. A statement from parent company Sung Hung Kai Financial said it did not admit any liability or wrongdoing. Lee Seng-huang, the parent company's executive chairman, said: "We believe that this voluntary initiative will bring closure to our affected customers, particularly in light of this challenging economic environment."
The government is to resume stalled legislative work to enact a corporate rescue law to offer a cooling-off period for troubled companies to restructure and survive the financial crisis. Chief Executive Donald Tsang Yam-kuen said yesterday such a law could prevent some local companies with viable long-term business prospects from going bankrupt unnecessarily. Speaking after the meeting of the Taskforce on Economic Challenges yesterday, he said the introduction of a corporate rescue procedure could provide an opportunity for companies in short-term financial difficulties to turn around or restructure. "We believe that we will be facing a larger number of corporates running into financial difficulties as a result of the financial tsunami that we are facing," Mr Tsang said. He noted there were other alternatives in overseas countries, such as Chapter 11 of the US bankruptcy code which allows a period for a company facing financial difficulties to restructure or seek new investors. When a troubled company in the US is unable to service its debt or pay its creditors, the firm or its creditors can file with a federal bankruptcy court for protection under Chapter 11 of the bankruptcy code. There is also corporate rescue legislation in Britain, Germany, Australia, Canada and Japan. The idea of a corporate rescue in Hong Kong was first suggested in 1996 and a bill which gives troubled companies a six-month grace period to find a white knight before creditors can apply to wind them up, was ready to be presented to the Legislative Council in 1999. The bill was abandoned in 2001 as companies and professionals said it would not work because it required firms to pay employees their wages and entitlements before seeking a rescue plan. "The financial tsunami presents an opportunity for all parties concerned to strike a compromise and resume the necessary legislative work so as to minimise business closures and job losses," Mr Tsang said. Secretary for Financial Services and the Treasury Chan Ka-keung did not say when the government would begin the consultation of the draft law on rescuing corporations, adding that amendments would be made to the original proposed bill after consultations with various parties. Anthony Wu Ting-yuk, chairman of the Bauhinia Foundation Research Centre who wrote to the government in November calling for a corporate rescue law to be enacted, said many good-quality local companies would be able to survive the financial crisis if such a law had been brought in. Paul Chan Mo-po, the legislator representing accountants, said the bill failed last time because employees wanted to have full payment of salaries and compensation before their employers entered the procedure. "This would be difficult and make it unattractive to incoming investors. This time, employees should make a compromise." Johnson Kong Chi-how, chairman of the Hong Kong Institute of Certified Public Accountants' restructuring and insolvency faculty, said: "We should not miss the opportunity as we did about 10 years ago." Clement Chen Cheng-jen, chairman of the Federation of Hong Kong Industries, said he feared some companies might abuse the law. "Some firms may find excuses to avoid repaying debts to creditors," he said.
Four airlines will slash fuel surcharges by almost 50 per cent from next month in response to falling oil prices. The Civil Aviation Department yesterday approved applications by Cathay Pacific Airways (SEHK: 0293), Nippon Airways, Nepal Airlines and Singapore Airlines to lower their surcharges from February 1 to March 31. Three more airlines, Dragon Airlines, Thai Airways and another that did not want to be named were applying for a reduction. "The new maximum levels of fuel surcharges will be HK$61 for short-haul flights and HK$280 for long-haul flights, which represent a reduction of about 44 per cent from the current maximum levels," a department spokesman said. It is the third consecutive reduction. In October, Cathay's surcharge on long-haul flights was cut to HK$832 from HK$924. According to the International Air Transport Association, the average global price of aviation fuel was US$62 a barrel on January 16, down 42.4 per cent from last year. In mid-2004, when the surcharge was introduced, the average global price of aviation fuel was US$48 a barrel, whilst Cathay was allowed to charge a US$5 levy for short-haul flights and $14 per flight for intercontinental traffic. The executive director of the Travel Industry Council, Joseph Tung Yao-chung, demanded that the fuel surcharge be scrapped completely. "It was implemented when the fuel price was increasing astonishingly. But times have changed ... the air industry faces the challenge of luring more passengers due to the financial tsunami."
The Hong Kong government plans to inject another HK$4 billion into a trust fund set up to support the reconstruction of quake-hit areas in Sichuan. The money will take forward second-stage rebuilding work in the province, support 80 projects in education, medical, rehabilitation and social welfare, and fund 23 reconstruction projects at the Wolong Giant Panda Natural Reserve. The amount, if approved by the Legislative Council's finance committee next month, will take the total contribution from Hong Kong to HK$6 billion. The massive earthquake in May left tens of thousands dead and millions homeless. Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lung dismissed any suggestion that the donation would be a burden for the government. "We are fully aware of the difficulties in the face of the financial tsunami. Hong Kong, compared with other Asian cities, is more prepared and less affected by the financial turmoil. Yet the need for Sichuan people to reconstruct their homeland bears no delay. We will stick to our pledge in helping them." The Hong Kong government had pledged to provide up to HK$10 billion in government and private funds for reconstruction in Sichuan. Based on a co-operation arrangement with the Sichuan government in October, the Hong Kong government has taken part in the first batch of 20 reconstruction projects to rebuild schools, buy medical facilities, provide social services and construct infrastructure facilities in the area. It estimates that it will spend HK$1.9 billion in the first stage of support work. It has also granted HK$87 million from the trust fund for nine non-governmental organisations to run reconstruction projects. The government submitted a report to the Legco development panel yesterday specifying that the city needed to pay HK$3.65 billion for all first- and second-stage projects this year. The bills will be lower in 2010 and 2011 - HK$1.88 billon and HK$312 million. "As the expenditure is paid in phases, we believe the cash flow is realistic and reasonable," Mr Lam said. He added that the government would liaise with the Hong Kong Jockey Club and other local commercial enterprises to explore the possibility of them undertaking some of the projects. "If necessary, we will also exercise flexibility and make suitable adjustments to the list of recommended projects and the relevant project details as appropriate." Lawmaker Lee Wing-tat of the Democratic Party suggested the government divide the HK$4 billion commitment into more phases and pay it over a longer period to ease the financial burden.
Hong Kong inflation dropped to 2.1 percent last month from 3.1 percent in November on the mild price growth of food and cheaper clothes and durable goods, compared to the market forecast of 2.7 percent.
The Exchange Fund is still capable of supporting the Hong Kong dollar's exchange value and ensure monetary stability although it posted a record investment loss last year, Hong Kong Monetary Authority (HKMA) Chief Executive Joseph Yam said here on Thursday. In his weekly Viewpoint column published here on Thursday, Yam, head of Hong Kong's de facto central bank, said an investment loss of 74.9 billion HK dollars (9.66 billion U.S. dollars), or 5.6 percent of the entire investment portfolios, is "not such a terrible result" amid the biggest financial crisis in a century. Yam noted that the growth in the Exchange Fund's size reflected the fact that the amount of money available for maintaining monetary and financial stability in Hong Kong has increased despite the financial crisis. "This reflects the inflow of funds into the Hong Kong dollar, which results in an expansion of the Aggregate Balance and the U.S. dollar assets backing it," he said. However, Yam warned of possible sharp adjustments in the structure of the Exchange Fund's balance sheet. "A reversal of capital inflows into Hong Kong, for whatever reason, is a possibility although we do not see any reason why this should occur in the near term," he warned, adding "such a reversal would be manifested in a fall in the Aggregate Balance and the corresponding U.S. dollar assets backing it." Yam expected the performance of global financial markets might also continue to disappoint, a situation that might result in further downward adjustments in the Accumulated Surplus of the Fund.
China: The growth of China economy slowed sharply to 6.8 per cent in the fourth quarter of last year and 9 per cent for the full year, its weakest pace in seven years as the global recession dragged down exports, according to figures from the National Bureau of Statistics. "The global financial crisis is deepening and spreading with continuing negative impact on the domestic economy," Ma Jiantang, the commissioner of the bureau, told a briefing in Beijing yesterday. Still, Mr Ma said the world's third-largest economy had shown signs of "positive changes" last month and predicted gross domestic product would hit the government's 8 per cent growth target for this year. GDP growth for the fourth quarter dropped from 11.2 per cent in the same period a year earlier and was significantly lower than the 9 per cent growth in the previous quarter as the full force of the global financial crisis struck home. The deceleration dragged down annual growth to 9 per cent, totalling 30.07 trillion yuan (HK$34.13 trillion) last year. This was the slowest level since 2001 and well below the 13 per cent expansion for 2007. Qu Hongbin, the chief China economist with HSBC (SEHK: 0005, announcements, news) Group, blamed the slowdown on collapsing exports and massive heavy industry destocking. Exports had been booming month after month by 20 to 40 per cent in recent years and accounted for a third of GDP. But they contracted in November and December as orders fell sharply from the ailing United States and European economies. "Export growth had stayed above 20 per cent until October, but dropped off in November and December, dragging down the fourth quarter's average growth rate to a seven-year low of 4.4 per cent year on year, from 23.1 per cent in the third quarter," Mr Qu said. UBS Securities chief China economist Tao Wang said he downgraded his GDP growth forecast for this year to 6.5 per cent as a result of a sharper than expected slowdown in the fourth quarter of last year. "The lower fourth-quarter growth brings down the 2009 calendar year average growth rate if we assume the same sequential growth," Mr Wang said. However, Mr Ma said the drop in growth would be as short-lived as the winter weather in Beijing. He cited signs of "positive changes" in the December figures. Outstanding local currency loans for last month expanded 771.8 billion yuan, up 723.3 billion from December 2007, according to official data. Real retail sales growth last month edged up 0.8 percentage point from November to 17.4 per cent. Industrial output also rose, by 5.7 per cent, up 0.3 percentage point from the annual rate of November. Mr Qu agreed, saying the December figures suggested the worst might be over for destocking in heavy industries, although the inventory adjustment had not yet run its course. "I can responsibly tell all of you, my friends, that I am full of confidence for China's economy in 2009 and the future," Mr Ma said. He added that the mainland would meet its growth target of 8 per cent for this year. Value-added industrial production last year rose 12.9 per cent. Urban fixed-asset investment grew 26.1 per cent. The consumer price index rose 5.9 per cent, compared with 2007's 4.8 per cent rise, and the producer price index rose 6.9 per cent, after a 3.1 per cent gain, according to the statistics bureau. The GDP deceleration comes despite Beijing's launch in November of a 4 trillion yuan stimulus package and five lending rate cuts totalling 216 basis points since September. Mr Qu said the massive stimulus, once it filtered through starting in the second quarter, would lift GDP growth to more than 8 per cent in the second half of this year. Many international institutions have forecast a lower 5 to 7 per cent growth for this year. Mr Wang said that with additional policy measures on the way, growth could surprise on the upside, even though he also expected declining corporate profits and the risk of core price deflation. Mr Ma said the mainland's moderately loose monetary policy was proving to be effective and the underlying fundamentals that drove mainland growth remained unchanged. He denied there had been widespread factory closures on the mainland.
China court yesterday sentenced former Sanlu Group chairwoman Tian Wenhua to life in prison and two individual milk suppliers to death for the scandal over tainted dairy products. The tainted milk killed at least six babies and affected 300,000 others on the mainland. Among the 12 people sentenced by Shijiazhuang Intermediate People's Court in Hebei province , two were given the death penalty and one a suspended death sentence, three were jailed for life, and the other six got jail terms ranging from five to 15 years. The emotionally charged trial of middlemen and executives of the Sanlu Group, who authorities said were responsible for the scandal, was closely observed on the mainland as well as overseas. Some relatives of the babies who died tried to attend the hearing but were prevented from doing so by police. Tian, 66, had pleaded guilty last month to charges of manufacturing and selling fake or substandard products. She was also fined 24.6 million yuan (HK$28 million). Three other former executives of Sanlu were jailed for between five and 15 years and fined between 600,000 and 23 million yuan. The court also fined the Sanlu Group 49.37 million yuan. The dairy company, once a market leader in baby formula on the mainland, has since declared bankruptcy. Tian and her colleagues were accused by the authorities of intentionally covering up the scandal and continuing to produce and sell the tainted baby formula, knowing it was contaminated. Liu Xinwei, a defence lawyer for Tian, said the life term was "expected" and he needed to study the verdict carefully before deciding whether to appeal. The two men sentenced to death, Zhang Yujun and Geng Jinping, were middlemen who supplied tainted milk to Sanlu. Zhang was said to have produced and sold melamine-laced "protein powder" to dairy farmers, who then mixed the powder into substandard milk to boost nutrition readings. Geng was accused of selling toxic milk to milk collectors. Melamine is an industrial chemical used to make plastics. It is added to substandard food, such as watered-down milk, to boost its nitrogen content, allowing it to pass testing for protein levels In all, 21 people have gone on trial in recent weeks for their involvement in the food-safety scare. Domestically, it also triggered a social and political crisis, with angry and panic-stricken parents criticising the central government for lack of oversight. More than 30 officials and people from the dairy industry have been arrested. The head of the national quality watchdog agency, Li Changjiang, was forced to quit. The central government said justice had now been served but victims' families accused authorities of "show trials". "She should have been shot," Zheng Shuzhen, 48, said of Tian Wenhua. "So many children died but they kept the official number down so that she could get life [in jail], not death." She said her granddaughter died in June of kidney failure after drinking Sanlu milk formula, but was not included in the list of victims. Sanlu is the only large mainland dairy firm to be charged so far, even though the food-safety watchdog earlier named 22 firms selling tainted milk products - including market giants Mengniu and Yili, ordered to pay 1.1 billion yuan in compensation.
US President Barack Obama has set the stage for a possible trade war with Beijing by branding the Asian giant a currency manipulator, a term his predecessor George W. Bush had skilfully avoided despite pressure from lawmakers. “President Obama – backed by the conclusions of a broad range of economists – believes that China is manipulating its currency,” his Treasury secretary-designate Timothy Geithner said Thursday in written testimony to senators quizzing him over his pending confirmation. Mr Obama, who took office only Tuesday, has pledged to “use aggressively all the diplomatic avenues open to him to seek change in Beijing’s currency practices,” Mr Geithner said. Under the Bush administration, the Treasury had stopped short of identifying China a currency manipulator in its semiannual global currency reviews, acknowledging however that the yuan was relatively undervalued against the US dollar. By directly branding Beijing, Mr Obama has laid the groundwork for trade friction between the key powers, both reeling from global financial turmoil that has slammed the brakes on growth and triggered a host of domestic problems. “This is definitely setting the stage for some bad blood between the two countries and I anticipate that over the next year or so, trade fiction is going to become somewhat more heated,” said Eswar Prasad, former China division head at the International Monetary Fund. He said Mr Obama’s charges came as Beijing used its competitively priced exports to fuel growth and check rising unemployment, disregarding international advice that it wean away from exports by using domestic consumption as a linchpin for economic expansion. “It signals a much harder line I think the Obama administration is going to take in public,” Prasad said, contrasting the new administration’s policy with the Bush administration’s strategy of prodding Beijing in private to allow the yuan to appreciate. As an Illinois senator, Mr Obama had co-sponsored legislation aimed at changing how the US government formally determines currency manipulation and authorises new trade reprisal measures. During the presidential campaign, he had accused Beijing of suppressing its currency’s true strength to make its exports more competitive, echoing some US lawmakers who blamed the snowballing US trade deficit with China on the weak yuan and have sought sanctions against Beijing. “If there is a rise in trade tensions, it is much more a reflection of deeper reality rather than anything else,” said Brad Setser, a former US Treasury official, citing the current economic crisis facing the two powers amid a global trade slump. “Certainly, it is a signal that the Obama administration is going to put a focus heavily on the Chinese exchange rate regime and make that a key issue in discussions between the US Treasury and the Obama administration and China.” Geithner, who is expected to be confirmed as Treasury chief, hinted that any moves to tighten laws against currency manipulation would ensure that “countries like China cannot continue to get a free pass for undermining fair trade principles.” “The question is how and when to broach the subject in order to do more good than harm,” he added. But heavy US dependence on Chinese capital may limit Mr Obama’s options against Beijing. China has overtaken Japan as America’s biggest foreign creditor, and as of October last year held US$652.9 billion (HK$5,065.9 billion) in US Treasury bonds, according to the latest Treasury Department figures. “To engage in any action that would lead the Chinese to misunderstand actions by the US and therefore sell these holdings would be dangerous,” warned Andrew Busch, global forex strategist with BMO Capital Markets. US lawmakers had previously proposed legislation aimed at imposing steep tariffs on mainland products entering the United States if Beijing refused to make its currency flexible. They also wanted currency manipulation to be classified as an illegal subsidy under US trade law, paving the way for American companies to demand “countervailing duties” on mainland products.
Premier Wen Jiabao hopes to reach agreement with European leaders on measures to combat the global slowdown when he visits Europe next week, a senior official said yesterday.
China's three telecom operators will spend 400 billion yuan (HK$453.85 billion) over the next three years to build third-generation mobile networks covering all leading towns and cities, the country's telecoms regulator said yesterday. The firms plan to sign up 50 million customers for their 3G services, the Ministry of Industry and Information Technology said in a statement posted on its website. About 170 billion yuan will be spent on 3G network construction this year, according to the regulator. The ministry said it will speed up the approval process for projects related to the homegrown 3G standard, TD- SCDMA. Beijing will also increase financial incentives and support for the TD-SCDMA value chain and promote development of software for phones on that standard, the ministry said. The development of TD- SCDMA will also receive the support of local governments, according to the regulator. China Mobile (0941) is responsible for deploying 3G services based on the still-immature standard. Li Dongsheng, chairman of Shenzhen-based handset maker TCL Communication (2618), was quoted by Reuters yesterday as saying he expects TD- SCDMA phones to become a growth driver for the company. TCL has three phones based on the technology which are awaiting approval to hit the market, Li said. China Mobile's parent company is expected to invest 58.8 billion yuan this year in deploying 60,000 3G base stations based on TD- SCDMA. By the end of the year, China Mobile will provide 3G services in 238 cities, covering 70 percent of the country, the ministry said. The parent company of China Telecom (0728) will spend about 30 billion yuan on the first phase of its 3G network construction and seeks to have 3G coverage in 100 cities by the end of March. China Unicom (0762) will spend 30 billion yuan on the first phase of its 3G rollout, which will cover 30 cities and provinces by the end of the first half.
China has started a daily bird flu reporting system for poultry and human cases after four people were infected, three fatally, with the H5N1 virus this month. And Shandong province, where a woman died of bird flu, has banned the raising of chickens in cities. The Health Ministry, Agriculture Ministry and the State Administration for Industry and Commerce ordered provincial departments to report every day on whether or not there have been infections in their areas. Daily reporting has been implemented during previous outbreaks of bird flu and severe acute respiratory syndrome, or SARS, and it underscores the government's worries over potential epidemics. A Health Ministry spokesman said the system was put in place this week when the death of a 16-year-old student infected with the virus in southwest China was announced. A 27-year-old woman in Jinan, capital of the eastern province of Shandong, and a 19-year-old woman in Beijing have also died from the disease this month. A two-year-old girl remains in hospital in the north. Her mother, who like the toddler was also exposed to live poultry, died from pneumonia earlier this month, but health officials say they cannot confirm that she had been infected with H5N1. The Agriculture Ministry has ordered increased monitoring and management of live poultry markets before next week's Lunar New Year holiday. The Health Ministry said there was no evidence of a large-scale outbreak despite the new cases. The illnesses were isolated and unrelated, and did not show significant mutations of the H5N1 virus. No sick poultry have been found in the areas where the four people fell ill, although officials inspected hundreds of thousands of birds. This could mean that surveillance needs to be tightened or that poultry may be carrying the virus but not showing symptoms or falling sick. Vaccinations also reduce the amount of virus circulating, but low levels of H5N1 may still be causing outbreaks without the obvious signs of dying birds. The World Health Organization has said that the lack of reports of poultry outbreaks raises questions about the strength of China's monitoring system.
Actress Zhang Ziyi poses with an ox toy and sends her New Year's wishes out to fans. With the Chinese Spring Festival just around the corner, actress Zhang Ziyi poses with an ox toy and sends her best wishes out to fans through her official website. "Too many stories happened in the past year. Some are heartbreaking, some are soul-stirring, some deeply touching, and some hard to forget," she wrote Thursday on helloziyi.com, which underwent a facelift the same day. "The numerous memories helped us learn to appreciate, and made us stronger, more beautiful and prouder." "Wish all the kind-hearted people in the world a happy Chinese New Year!" The "Crouching Tiger, Hidden Dragon" star was actively involved in promoting the Beijing Olympics and fundraising for victims of the deadly Sichuan earthquake in 2008.
Photo taken on Jan. 21, 2009 shows a satellite ground station at China's Zhongshan Station in Antarctica. The Zhongshan Station is under reconstruction and upgrade. Built in 1989, the Zhongshan Station is one of China's first two research stations in Antarctica.
By the end of December, the total number of telephone subscribers in China had reached 982 million. Of them, there are 641 million mobile phone subscribers and 298 million Internet users. This network is the largest one in the world.
January 22, 2009
Hong Kong: Hong Kong and Guangdong finally agreed yesterday to set up a taskforce to promote monetary co-operation after years of discussions, in an attempt to facilitate cross-border capital flow. Making the announcement after meeting Guangdong Vice-Governor Wan Qingliang, Chief Secretary Henry Tang Ying-yen said: "The taskforce will work on a number of projects; in the long run, financial resources will be able to move freely in the Pearl River Delta." A total of 21 taskforces, ranging from environment to transport, have been formed under the Guangdong-Hong Kong Joint Co-operation Conference. But none of them have dealt with financial co-operation despite years of discussions. Both sides also agreed to set up a committee on how to implement the newly announced Pearl River Delta Development Framework, which the National Development and Reform Commission drafted to guide the delta's growth. Experts welcomed the move, saying financial co-operation would give Hong Kong a big hinterland and eventually consolidate its status as an international financial centre. They also said the future of Hong Kong and Guangdong were inseparable and that pursuing co-operation was the "right direction". Charles Li Kui-wai, associate professor of City University's economics and finance department, said: "Setting up a taskforce on financial co-operation means they are narrowing down the discussion. It will be easier for them to reach a consensus." Mr Wan, meanwhile, reiterated the provincial government would spend 1 billion yuan (HK$1.1 billion) to help Hong Kong, Macau and Taiwanese exporters through the global financial crisis. He said the 30 rescue measures mainly focused on cutting costs, such as reducing fees and taxes, and assistance to those wanting to enter the mainland market. The two governments also took the opportunity to map out their 2009 work plan, vowing work on the long-awaited Hong Kong-Macau-Zhuhai bridge would begin this year. The Legislative Council yesterday approved HK$230 million in the first batch of funding reserved for the bridge's early design and surveying. While both sides will speed up the Lok Ma Chau Loop's development, making it a university town, they agreed there should be a division of labour among ports and airports to ensure effective use of resources. Hong Kong, Guangdong and Macau will examine how to set up a framework to promote co-operation in the Pearl River Delta. "Implementing the central government's development framework for the delta is the provincial government's most important task," said Qiu Shan , professor at Guangdong's Academy of Social Sciences. "Forming a Hong Kong-Guangdong committee on the framework's execution will be beneficial to both sides."
Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong warned yesterday of a second wave of global financial turmoil after unveiling a full-year investment loss of HK$74.9 billion for the Exchange Fund, its first ever loss. "We are seeing a new wave of volatilities, a new wave of difficulties being experienced by the financial system, particularly the banking system in Europe and America. "I fear the new wave could be even more contagious than the first," he said, referring to last September after US banking giant Lehman Brothers collapsed. The Exchange Fund, the reserve that backs the Hong Kong dollar, recorded a negative return of 5.6 per cent last year. An investment profit of HK$8.4 billion in the fourth quarter had helped to offset some of the losses in the first three quarters. Mr Yam attributed the investment losses, the first since the authority was set up in 1993, to the "once-in-a-century" meltdown that had severely hit investor confidence. Major equity indices dropped by about 30 to 50 per cent last year, and other financial markets were also extremely volatile. He expected financial markets to remain volatile this year, noting that the first wave of the turmoil had weakened the fundamentals of some emerging markets. More bad news could lie ahead, too, as companies and financial institutions around the world, including Hong Kong, announced their results in the next two months. Equities investment accounted for most of the losses of the fund last year. Its combined valuation loss stood at HK$151.1 billion, of which HK$77.9 billion was posted by Hong Kong equities. The Hang Seng Index fell 48.27 per cent last year, its worst performance in 34 years. Mr Yam said the fund achieved a HK$3 billion investment income if the Hong Kong equities were excluded. The government bought the Hong Kong equities 10 years ago as part of efforts to contain the Asian financial turmoil. They were long-term investments that could not be sold. Law Ka-chung, chief economist and strategist at Hong Kong's Bank of Communications (SEHK: 3328), suggested that the government should change the policy and allow the Exchange Fund to buy and sell shares if necessary. "It could help to improve the performance of the fund," he said. Foreign exchange also recorded a loss last year, of HK$12.4 billion, due to the depreciation of other currencies against the US dollar. Bonds, however, which comprised about 77 per cent of the fund, generated an investment return of HK$88.6 billion. The accumulated surplus of the fund fell HK$136.3 billion to HK$480.7 billion from the end of 2007. Total assets of the fund increased 10 per cent to HK$1.55 trillion.
Vonnie Chan touts CLSA's fung shui index, saying investors need something that gives them hope. Investors looking forward to a fresh start have been counting the days until the Year of the Ox kicks off, but the zodiac signs point to more trouble ahead, according to CLSA's fung shui index released yesterday. The stock market's Hang Seng Index might chart a path through the first three quarters of this year that resembled the figure of a cow rather than the ox or bull, CLSA said. Through the first half of the year, the benchmark would rise and fall, forming a "pair of horns", before bottoming out into an "udder" around the third quarter. It would then finish the year higher than when it started after a moderate recovery. "That's why we named it the Year of the Cow instead of the Year of the Bull," said Vonnie Chan, a senior institutional sales manager at CLSA. "Cows [are] gentle, weak and soft and we think the Hang Seng Index is going to behave like a cow." The Year of the Ox will match up with the earth element for the first time since 1949. Metal-related industries such as mining would benefit because earth generated metal, said Ms Chan. And since earth absorbs water, the new year could make waves for industries such as logistics, beverages and marine transport. The Hang Seng Index could dip below last October's lows during the summer months, before rebounding later this year, she added. The benchmark's rally might trail that of the H-share index, however, because of a lucky arrangement of zodiac signs for the mainland government's leaders. "Hu Jintao and Wen Jiabao were born in the Year of the Horse, so they have a lucky star to provide them with money and support [for] China," Ms Chan said. CLSA originally launched its tongue-in-cheek fung shui index in 1992 as a Lunar New Year greeting card for clients. The guide became an annual fixture and after briefly being discontinued in 2005, it was released again yesterday. Two fung shui masters collaborated with CLSA on the latest instalment. "Fung shui is a very helpful indicator from a Chinese perspective," said Ms Chan. "And investors are really, really desperate and they [need] something that gives them hope." In a note to clients last year, Ms Chan used fung shui principles to correctly predict a drop in property prices and the onset of a string of hazardous natural disasters. Francis Lun Sheung-nim, a general manager at Fulbright Securities, said: "I am not a superstitious person and I don't believe all this. Another approach is not buying any stocks, just buying gold and real things that you can carry and you can count."
Secretary for Financial Services and the Treasury Chan Ka-keung would be the first government official to face the Legislative Council subcommittee investigating the Lehman Brothers minibonds fiasco, lawmakers decided yesterday. After his public appearance before the subcommittee on February 20, it will hear testimony from Professor Chan's deputy, Julia Leung Fung-yee. The subcommittee has already said it will summon Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong and his deputy Choi Yiu-kwan to give evidence. They will testify after Ms Leung. After that, the subcommittee will hear from five officials from the Securities and Futures Commission - its chief executive, Martin Wheatley, executive directors Brian Ho, Mark Steward and Alexa Lam, and senior director Stephen Po. "After that we will see if we will need to summon other less senior officials," said subcommittee chairman Raymond Ho Chung-tai, who announced the names after the panel met behind closed doors yesterday. "We may invite bank [representatives] in the future ... and we will not rule out calling these officials back" for further questioning. About 43,700 Hongkongers invested HK$15.7 billion in financial derivatives issued or guaranteed by Lehman Brothers and sold by Hong Kong banks and stockbrokers. Their investments lost much or all of their value when the US investment bank collapsed in mid-September. Most bought minibonds - which, despite their name, are not corporate bonds but complex credit-linked instruments. Investors claim the derivatives were mis-sold as low-risk. The subcommittee has been granted special powers and privileges allowing it in effect to summon witnesses and compel the production of documents for the inquiry. Witnesses will testify under oath. Raymond Ho said the subcommittee was preparing documents on the areas its questioning would cover. Officials called upon to appear would be asked to submit written evidence beforehand. The hearings would be open unless there were public-interest grounds for hearing testimony behind closed doors. "This is because we need to have high transparency," he said.
Applications by financial institutions to launch investment funds in Hong Kong have dropped by 58 per cent year on year since US investment bank Lehman Brothers collapsed in mid-September amid the global financial meltdown. The drop reflected investors' weak appetite for new investment products, said Alexa Lam, deputy chief executive of the Securities and Futures Commission. "The global market changed a lot in the last three months and investors are scared to put in new capital for investment products," Mrs Lam said. However, wealthy people were still looking for investment products to help their capital grow, she said, and the money being paid into Mandatory Provident Fund accounts every month offered a "tremendous source" of capital to help boost the fund industry. The fund market this year would be full of opportunities, Mrs Lam said, recommending fund houses launch more innovative products. Of 91 applications for new fund launches that the commission received in the three months following Lehman Brothers' collapse, 82 were approved, she said. That took the number of funds available to investors in Hong Kong last year to 2,218, an increase of 8.7 per cent over 2007's total.
China: China court has ordered three Chinese firms to pay a German bus maker more than 20 million yuan (HK$22.69 million) for design violations, one of the largest awards to a foreign company under intellectual property laws. The Beijing court ordered the firms to pay MAN Group's Neoplan Bus 20 million yuan in damages plus 1.16 million yuan in costs, said mainland judicial website Chinacourt.org. When Neoplan filed the lawsuit seeking 40 million yuan of damages against the firms in 2006, it was touted as one of the country's 10 landmark court cases of that year, given the large amount sought. It was also the first lawsuit brought by a foreign firm for violation of intellectual property rights involving bus design since China joined the World Trade Organisation in 2001. The First Intermediate People's Court of Beijing found mainland bus maker Zhongwei Passenger Bus, its parent Zonda Group, and a Beijing vehicle sales firm guilty of copying the design of Neoplan's Starliner model, said Chinacourt. The court ordered an immediate halt to production and sales of the buses. The ruling is expected to strengthen foreign companies' faith in the mainland legal system. The court ruled last week that Zhongwei's Zonda A9 bus was a copy of the Neoplan Starliner and infringed on the Neoplan design, said Urs Vollrath, the managing director of MAN Truck & Bus China. Both Neoplan and MAN Truck & Bus China belong to MAN Group. "The verdict shows our faith in the Chinese legal system was warranted and [intellectual property rights are] taken seriously in China. The Starliner design is protected in China as a registered design," said Mr Vollrath. Zonda would appeal the ruling to a higher court in about 15 days, said a company spokesman, who declined to name the higher court. "We think this verdict is unfair." Lawyers said the 21.16 million yuan award was large by the standards of payments to foreign firms in Chinese intellectual property cases. "It's one of the larger awards given to a foreign firm in a Chinese [intellectual property rights] judgment, but relative to the damages, it's a small amount. When Chinese courts rule in favour of foreign firms, the awards tend to be low, disproportionate to the damages," said an Australian lawyer based in Shanghai. In contrast, when Chinese firm Chint Group won an intellectual property rights lawsuit against French firm Schneider Electric in 2007, the court ordered Schneider to pay Clint 334.8 million yuan. "Foreign intellectual property owners are more willing to test their cases in Chinese courts in recent years, as the Chinese judicial system is more transparent and sophisticated. Many had good success with their cases, and this positive trend augurs well for China's [intellectual property] and legal development," said Tan Loke-Khoon, a partner at Baker & McKenzie, Hong Kong and China, who was not involved in this case.
Shanghai's economy expanded last year at the slowest rate in 17 years as the unfolding global economic crisis took its toll on exports from the mainland's wealthiest city. The growth even fell short of mayor Han Zheng's gloomy expectations when he warned of difficult times ahead in a rare speech at the opening of the Shanghai People's Congress earlier this month. The city said its gross domestic product grew 9.7 per cent to 1.37 trillion yuan (HK$1.55 trillion). The bearish news was announced a day before the release of national data. It was the first time since 1992 that Shanghai has failed to post double-digit economic growth and underscores the impact of the crisis on the mainland's economic fortunes. Mr Han forecast 10 per cent growth in his speech a week ago. "The global financial crisis has hit Shanghai's real economy hard, with industrial output and exports declining sharply in the second half," said Cai Xuchu, the chief economist at the Shanghai Statistics Bureau, admitting that some big problems remained as the city moved to adjust its industrial mix. Growth in overseas shipments dropped to 17.7 per cent from 26.7 per cent in 2007. Export value totalled US$169.3 billion. Exports to Hong Kong saw the smallest growth compared with the European Union and the United States, increasing a scant 0.5 per cent. Industrial output grew 8.3 per cent to 564.9 billion yuan, down 4.3 percentage points from 2007. "Shanghai provides a vivid example that China's faltering economy won't survive unless it shifts its growth model," said Mei Xinyu, a researcher with the Ministry of Commerce. "China, as a major world economy, will have to go it alone to spur its own development." Economists said Shanghai had yet to face the worst, with all signs indicating that traditional growth engines would no longer work this year. Mr Han projected 9 per cent gross domestic product growth for this year. Mr Cai said the situation was much worse than when the Asian financial crisis hit the city. "It was not easy for Shanghai to sustain growth last year because the global financial crisis has had a bigger impact" than the regional crisis of the 1990s, he said. Shanghai's economy grew 10.3 per cent in 1998 and 10.4 per cent in 1999. Analysts said the city's lower than expected expansion overshadowed the national figure due to be released today in Beijing. Economists predicted that the national economy grew only 6 per cent in the last quarter of last year. Shanghai GDP climbed 14.3 per cent in 2007, 1.3 percentage points higher than the national figure. Shanghai was the first mainland city whose per capita GDP exceeded US$10,000. Last year, per capita GDP was valued at US$10,529. Mr Cai said there were still some opportunities ahead, such as the stimulus package launched by the central government. Shanghai is also hoping the establishment of a Disney amusement park will help shore up the ailing economy. As the economic locomotive of the Yangtze River Delta, the city drew foreign direct investment of US$10 billion last year, a year-on-year increase of 27.3 per cent. Beijing announced yesterday that its GDP grew 9 per cent last year. The earthquake-hit province of Sichuan reported a 9.5 per cent increase.
China will invest 850 billion yuan (HK$965 billion) on health care reform in the next three years to try to make services more affordable. A State Council meeting chaired by Premier Wen Jiabao yesterday revealed the much-anticipated plan, after three years of interdepartmental debates and waiting by the public, a Central China Television report said. It remains unclear how the investment, which is said to be paid for by "different levels of governments", will be spent in terms of how much in each year and in which areas. The report said the reform aimed to ensure the non-profit nature of the mainland's health care system and make basic care accessible to all. If the amount is divided evenly through 2011, the government will spend some 283 billion yuan each year - compared with 177.8 billion yuan in 2006. The total health care expenditure by all parties that year - including government and individuals - was 984.3 billion yuan, of which government expenditure took up only 18.1 per cent, official statistics show. The meeting highlighted five focuses for reform until 2011, including more than 90 per cent of coverage by two insurance schemes for urban dwellers and rural co-operative medical insurance. The additional funding will also be used to raise the government subsidies for participants in rural co-operative medical insurance to 120 yuan per person every year. The current level of government investment in the scheme is 80 yuan for each participant in the coastal provinces and 100 yuan per participant in the inland provinces. The government will also raise the contribution participants should make, as well as raising the level of reimbursement for medical bills and the maximum amount of medical fees each participant may claim. Although most rural residents can access the scheme now, critics said it reimburses only a small share of the medical bills. The government will also establish a system to procure and supply basic medicine at low profit margins to make sure they are affordable to the public. Another focus is improving the facilities of community and grass-roots level hospitals and clinics, as well as setting up a unified medical record database across the country from this year. However, the government will adopt a cautious approach in tackling the controversial public hospital reform - which is regarded by experts as the worst problem with the mainland's health care reform. The State Council said it would start some trials this year and increase the number in 2011. The report released yesterday gives only vague guidelines about the trials; they aim to reform hospital management and operation, the hospital supervision system, and how hospitals can receive funding and generate income. Health Minister Chen Zhu said earlier that the government would scrap the 15 per cent surcharge on medicines, which hospitals had been allowed to impose, so that the public can afford it. But how to compensate the loss in income and meet the shortfall of funding remains a question, although Mr Chen suggested earlier that the hospitals could raise medication consultation fees. Chen Yude , a professor at Peking University's department of health policy and management, said the government had not yet resolved how to make up the losses of income after the surcharge on medicine was cancelled. "Income generated from medicine makes up half of the income of hospitals," he said. "Once they are scrapped, where do hospitals get the money from? There is no clear solution yet. "There is no mention of how many hospitals will experiment with the reforms and where these experiments will take place. Unless the hospital reform has started, it is hard for health care reform to progress."
China will invest 850 billion yuan (HK$965 billion) on health care reform in the next three years to try to make services more affordable. A State Council meeting chaired by Premier Wen Jiabao yesterday revealed the much-anticipated plan, after three years of interdepartmental debates and waiting by the public, a Central China Television report said. It remains unclear how the investment, which is said to be paid for by "different levels of governments", will be spent in terms of how much in each year and in which areas. The report said the reform aimed to ensure the non-profit nature of the mainland's health care system and make basic care accessible to all. If the amount is divided evenly through 2011, the government will spend some 283 billion yuan each year - compared with 177.8 billion yuan in 2006. The total health care expenditure by all parties that year - including government and individuals - was 984.3 billion yuan, of which government expenditure took up only 18.1 per cent, official statistics show. The meeting highlighted five focuses for reform until 2011, including more than 90 per cent of coverage by two insurance schemes for urban dwellers and rural co-operative medical insurance. The additional funding will also be used to raise the government subsidies for participants in rural co-operative medical insurance to 120 yuan per person every year. The current level of government investment in the scheme is 80 yuan for each participant in the coastal provinces and 100 yuan per participant in the inland provinces. The government will also raise the contribution participants should make, as well as raising the level of reimbursement for medical bills and the maximum amount of medical fees each participant may claim. Although most rural residents can access the scheme now, critics said it reimburses only a small share of the medical bills. The government will also establish a system to procure and supply basic medicine at low profit margins to make sure they are affordable to the public. Another focus is improving the facilities of community and grass-roots level hospitals and clinics, as well as setting up a unified medical record database across the country from this year. However, the government will adopt a cautious approach in tackling the controversial public hospital reform - which is regarded by experts as the worst problem with the mainland's health care reform. The State Council said it would start some trials this year and increase the number in 2011. The report released yesterday gives only vague guidelines about the trials; they aim to reform hospital management and operation, the hospital supervision system, and how hospitals can receive funding and generate income. Health Minister Chen Zhu said earlier that the government would scrap the 15 per cent surcharge on medicines, which hospitals had been allowed to impose, so that the public can afford it. But how to compensate the loss in income and meet the shortfall of funding remains a question, although Mr Chen suggested earlier that the hospitals could raise medication consultation fees. Chen Yude , a professor at Peking University's department of health policy and management, said the government had not yet resolved how to make up the losses of income after the surcharge on medicine was cancelled. "Income generated from medicine makes up half of the income of hospitals," he said. "Once they are scrapped, where do hospitals get the money from? There is no clear solution yet. "There is no mention of how many hospitals will experiment with the reforms and where these experiments will take place. Unless the hospital reform has started, it is hard for health care reform to progress."
Villagers in Luping inspect new homes that they will soon be able to move into in exchange for the land their destroyed houses stood on. Nearly 100 families in Luping village, devastated by last May's earthquake, have reason to celebrate this week as the Lunar New Year approaches - new homes that are theirs to own. And best of all is the price. "They don't have to pay a penny. They move in and it's their apartment forever," Luping village director Zhang Shirong said. The homes are in 180 new two- or three-storey buildings. Each person has an average space of 375 sq ft, and each family has separate living and guest rooms, as well as a kitchen and bathroom. The Sichuan government decided late last year to build Luping as a model for overall rebuilding efforts in quake-hit regions and assigned the provincial Bureau of Land Resources to oversee the effort. The bureau has spent more than 100 million yuan (HK$113 million) on the project, with the goal of allowing some villagers to move into the new apartments before the holiday starts on Monday. Contractors hired to build the homes broke ground in late August and raced against the clock to meet the government-imposed deadline. The construction workers were divided into three teams, with each team working an eight-hour shift. "It was 24/7, no holiday and no long break," project manager Zhang Jianmin said. Senior provincial officials are to visit the new apartments this week to ensure everything is in place, and there is talk that national leaders could include the village in their tours over the holiday to check on overall rebuilding efforts in quake-hit areas. Land resources bureau official Xu Zhijun acknowledged the link between the speed of the apartments' construction and leaders' visits, but he denied that it was a "face project". "I call it a `sample project', not a `face project'," Mr Xu said. In his mind, face projects were done to please only leaders; this effort mostly benefited villagers. Some of the families on the upper floors will have views of cleared roads and newly planted trees from their balconies. "Villagers will be happy, and leaders touring the village will be happy, too. It is a win-win situation." But there is a catch: villagers who move into these new homes surrender ownership of their collapsed houses and the land-use rights to the parcels of land on which they sit. Mr Xu said his bureau could then use that land for commercial buildings or other projects that could generate income to cover the apartments' construction costs. A number of families who could not wait for the buildings' official opening toured their allocated apartments last Friday as workers were still fitting out the interiors. They said they did not fully understand how the land swap worked but were obviously excited about the prospect of owning a new apartment for free. "I cannot wait to move in. It is 10 times better than our old building," Dong Shiji , 67, said as she and her husband viewed their two-bedroom flat. With little more than 1,000 yuan in annual income from her 2,000 square metre plot of farmland, Ms Dong said she would not have hesitated to accept any policy that got her a free apartment. Li Shumin , 57, was amazed by the spacious bathroom, something she never thought she could own. "The space and quality are more than excellent," she said. "I have been watching the construction process from day one and I know everything they put in here was of the best available quality." Many of Ms Li's relatives and friends worked on the building site and were paid about 70 yuan a day, depending on their jobs. She said she was told that the structure was built to the highest standards and the building could easily survive a magnitude-8 earthquake like last May's. Huang Yulong, who was a construction worker for 12 years in the provincial capital, Chengdu , said the quality of the flats was on a par with, if not better than, high-end commercial buildings in the city. "The thickness of the steel frame and the quality of cement are way better than most Chengdu buildings," he said. Land resources official Mr Xu was so confident of the buildings' soundness that he said: "They could stand here for 100 years without major changes, at least."
Chinese President Hu Jintao, who is also General Secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission (CMC), talks with a soldier of Beijing Military Area Command in Beijing, capital of China, Jan. 21, 2009. Hu Jintao paid visits to the Beijing Military Area Command and a local communication station of the Chinese People's Liberation Army (PLA) on Wednesday, just days ahead of the traditional Lunar New Year. Hu conveyed New Year greetings to the soldiers on behalf of the CPC Central Committee and the Central Military Commission.
China yesterday offered a nervous welcome to Barack Obama, expressing concern over the direction he may take bilateral ties while paying tribute to the efforts of George W Bush. The China Daily, a vehicle for the government to air views to a foreign audience, published an editorial calling for Obama to follow the lead of his predecessor. "Given the popular American eagerness for a break from the Bush years, many wonder, or worry to be precise, whether the new president would ignore the hard-earned progress in bilateral ties," it said. "After decades of dramatic ups and downs, the once volatile relations are just beginning to show signs of stabilizing." The most important legacy of Bush's eight years in power were the improved Sino-US relations, according to the editorial. "The good news for Obama is that his predecessor, through eight years in office, has laid a decent foundation for one of the world's most influential relationships. That is a fine bequest he should generously embrace." While China's foreign ministry has been more neutral in recent days, there were other signs of trepidation within the Chinese leadership about where Obama may take Sino-US ties. The defense ministry on Tuesday also warned Obama against continuing US military support to Taiwan, a long- standing point of tension between the two world powers. The China Daily editorial acknowledged that Bush's foreign policy efforts were full of disappointments, and described the "yet-to-be-justified" war on Iraq as a discredit to both the former president and the United States. But it said there were merits, namely his handling of US-China ties.
China's top electronics retailer,
Gome Electrical Appliances (0493), will keep its retail network at about 1,300
stores this year, closing up to 100 poor performers but opening a similar number
of new stores, a company official said yesterday. "It will be no more than 100
stores" that might be closed, said the official, who requested anonymity. "The
total number of stores will remain around 1,300."
January 21, 2009
Hong Kong: The Chinese mainland and Hong Kong signed a three-year currency swap deal worth 200 billion yuan (28.6 billion U.S. dollars) on Tuesday. The move, made by the central government, is aimed at helping to stabilize Hong Kong's economy and its currency. Zhou Xiaochuan, governor of the People's Bank of China (PBOC), and Joseph Yam, Chief Executive of Hong Kong Monetary Authority (HKMA), signed the deal in Beijing on behalf of both sides. Zhou said it was another area of monetary cooperation between the PBOC and the HKMA in addition to existing collaborative work. With the agreement, short-term liquidity support can be provided to mainland operations of Hong Kong banks and Hong Kong operations of mainland banks in case of need. This will bolster investor confidence in Hong Kong's financial stability and also help promote the development of yuan-denominated trade transactions between Hong Kong and the mainland, Zhou added. The term of the swap agreement can be extended upon agreement by both parties. It provides liquidity support of up to 200 billion yuan or 227 billion HK dollars in both directions. Yam said the establishment of a currency swap arrangement would help to address contingent needs and maintain financial stability in the region. The deal is one of the 14 support measures Premier Wen Jiabao promised the special administrative region when he met Hong Kong's Chief Executive Donald Tsang in Beijing on Dec. 19. Also in December, China and the Republic of Korea reached a three-year deal on currency swap worth 180 billion yuan, which analysts said was another step for the yuan's internationalization.
Shares in HSBC Holdings (SEHK: 0005) fell as much as 8.8 per cent in Hong Kong on Tuesday to their lowest since October 1998, raising the prospect that the company will have to raise a massive amount of capital to offset losses as more loans and mortgages go sour. The seven-day slide in HSBC’s shares has heightened market expectations that Europe’s largest lender will have to raise funds via a rights offering or selling its prized stakes in mainland companies. A growing number of analysts also expect it will cut its dividend to conserve cash. HSBC said on Monday it would not turn to the UK government for help after Britain threw its troubled banks a second lifeline in three months, but it has not ruled out a capital raising. The Royal Bank of Scotland earlier on Monday unveiled the biggest loss in British corporate history, further shaking confidence in banks as the global financial crisis rages. “Given the continued deterioration in the macro environment with the US reporting worse than expected unemployment … we do not rule out HSBC having to raise funds some time in 2009,” said BOCI analyst K.W. Wong in a research note on Tuesday. But Mr Wong stood by BOCI’s belief that HSBC does not need to raise funds before its 2008 results are released on March 2. HSBC has indicated it is sticking with its mainland investments, but that has not stopped analysts from predicting which stake would be the first to go if the bank chooses to sell out. HSBC owns 19 per cent of Bank of Communications (SEHK: 3328), 16.8 per cent of Ping An Insurance (SEHK: 2318) and 62.1 per cent of Hong Kong’s Hang Seng Bank (SEHK: 0011). “HSBC is more likely to sell its stake in Hang Seng Bank [if they really have to] rather than selling their China footprint in Bocomm and or Ping An,” a Cazenove Asia note said on Tuesday. The Hang Seng Bank stake is worth around US$13.2 billion and the Bank of Communications shares US$5.9 billion. One analyst, who did not want to be identified because he is not allowed to speak publicly to the media, said HSBC would consider selling its Ping An stake first, if it chose to raise capital without a rights offering. Analyst Paul Lee disagreed, saying that HSBC was unlikely to follow some of its cash-strapped foreign peers such as RBS and sell its mainland holdings at this point. “I think they’d rather raise capital through a rights issue,” said Mr Lee, of Tai Fook Research. “HSBC views these [its China stakes] as long-term investments.” Hong Kong shares of HSBC fell as low as HK$56.80 on Tuesday after RBS shares slumped despite the latest UK rescue plan. HSBC said on Monday it “has not sought capital support from the UK government and cannot envisage circumstances where such action would be necessary.” The stock ended down 7.7 per cent on Tuesday, helping drag down Hong Kong’s benchmark Hang Seng index 2.9 per cent. HSBC is the worst performing Hong Kong blue chip this year, having lost 22 per cent through Monday. Last week, Morgan Stanley analysts wrote that HSBC may need to raise as much as US$30 billion to bolster its capital base. While HSBC was one of the earliest banks during the financial crisis to reveal credit quality issues – in its US consumer finance unit – it had until recently been seen as comparatively insulated from the meltdown plaguing its biggest rivals in the United States and Europe. Its focus on emerging markets, especially in Asia, was viewed as a bulwark against the worst of the global sector’s weakness. But a number of Asian economies, including Hong Kong, now appear to be slipping deeper into recession while mainland is slowing. “We question HSBC’s safe haven status and we expect this to unravel in 2009,” Societe Generale Cross Asset Research said in a research note on Monday. Seventy per cent of HSBC’s loans are from mature markets where there is a risk of higher impairment charges, while a slowdown in emerging markets is evident, Societe Generale wrote. HSBC will have to strengthen its capital position given peers’ recent capital increases, and with a weak earnings outlook, a dividend cut in 2009 is required to strengthen its capital base, SocGen said. The loss at RBS has shattered investor confidence, said Alex Tang, research director at Core Pacific-Yamaichi International in Hong Kong. But HSBC’s downside is limited, based on Goldman’s price target of HK$49 and Morgan Stanley’s HK$52, Mr Tang said. “Investors should start buying, and between HK$50 and HK$57 are good entry points,” Mr Tang said. “By the end of the year, it could generate 20-30 per cent profit.”
The Executive Council on Tuesday approved the Star Ferry company's application for fare rises for its Central to Tsim Sha Tsui and Wan Chai to Tsim Sha Tsui routes, said a government spokesman. The fare increase will be implemented in two phases. From March 29, the company will raise all weekday fares by 10 cents and increase weekend fares by 20 to 30 cents. From January 1, 2010, the weekday full fare will go up by a further 10 to 20 cents and the weekend fare by a further 30 to 50 cents. The spokesman said the Exco had approved the fare adjustment after considering various relevant factors, such as the financial condition of the ferry operator, forecasts of changes in operating cost, revenue and return, past performance of the ferry operator and public acceptance of the proposed fares. The government noted that the increase in operating costs and the decrease in patronage had caused the operator financial losses since 2007 that threatened the viability of the ferry service. “Despite the effect of the recent decline in oil prices, it is forecast that the Star Ferry will continue to incur losses this year and next year even with these fare increases,” the spokesman said. Originally, the Star Ferry company had applied for a one-off fare rise of 30 cents on weekdays, and 80 cents on weekends and during holidays, but received no official response to the proposal. The company then sent the government this revised proposal. “The revised proposal reflects its [Star Ferry’s] willingness to ride out the present difficulties with the community,” the government spokesman said. Johnny Leung Tak-hing, the company’s general manager, had earlier said the number of daily passengers had dropped by as much as 19 per cent since the ferry service moved from its old Central pier to the new pier alongside the outlying island ferries in 2006. The company made the original application 11 months ago.
CE Donald Tsang stand with new Exco members (from left): Anna Wu Hung-yuk, Lau Wong-fat, Professor Lawrence Lau Juen-yee, V Nee Yeh at Central Government Offices on Tuesday. Chief Executive Donald Tsang Yam-kuen on Tuesday announced a new Executive Council lineup which he hoped could help Hong Kong increase economic co-operation with the mainland. Former head of the Equal Opportunity Commission Anna Wu Hung-yuk, Chinese University vice-chancellor Lawrence Lau Juen-yee, Heung Yee Kuk chairman Lau Wong-fat, textile businesswoman Majorie Yang Mun-tak and entrepreneur V-Nee Yeh will join the top advisory body to replace five outing members. Their appointments will come into effect on Wednesday. Flanked by every new members except Ms Yang, who was on an overseas business trip, Mr Tsang said his new aides were perceptive and committed to Hong Kong, and they excelled in their own fields. “They have a deep understanding across the spectrum of public affairs ranging from district affairs, social policies, business and financial services, to economics and education,” he said. Mr Tsang highlighted the recognition of the mainland’s role shared by the new members, saying it would help his administration generate ideas to boost cross-border co-operation, which he said was crucial to Hong Kong. “They all have a thorough appreciation of the rapid development of the mainland. They will certainly have a positive impact on Hong Kong’s strategy in participating in the development of the entire country, and the Pearl River Delta region in particular,” he said. “The mainland’s development is now most important [to Hong Kong]. As we can foresee, opportunities from European and United States markets will become comparatively small,” Mr Tsang said. “Whether Hong Kong people can raise their living standards and wages will largely depend on how we seize the opportunities offered by the mainland’s development.” The new lineup came about three months after Mr Tsang said he was planning a reshuffle of his cabinet. The chief executive dismissed suggestions that the government had delayed the cabinet reshuffle due to difficulty in finding suitable candidates, saying much of his efforts in recent months had been spent dealing with the global financial crisis. Chinese University political commentator Choy Chi-keung, however, said the reshuffle was designed to address public calls for improved governance, but described the new lineup as the “weakest team in the SAR’s history”. “Exco used to include legislators from different political parties as a way to garner enough votes for its bills. But this time, Mr Tsang seems to have failed to invite such members to his team,” said Mr Choy. “The pan-democracy group secured 60 per cent of votes in the last Legislative Council election but they are not in the lineup. Even representatives of the Liberal Party and the Alliance, which together have about 10 Legco seats, have been missed out.” “I believe the government will find it more difficult to garner Legco votes for its policy as a result,” he said.
Hong Kong Tourism Board's management will see at least a 10 per cent cut in their bonuses this year because of the worse-than-expected number of visitors and tourist spending last year. Saying that the amount of bonus was based on a set of performance-related indicators, the board's executive director Anthony Lau Chun-hon said he expected smaller bonuses this year as the city's tourism industry had been hit by the global financial crisis. Visitor arrivals and tourist spending are two key performance indicators which contribute to 10 per cent of the assessment for discretionary performance pay, according to a source familiar with the situation. However, the number of visitors to Hong Kong only increased 4.7 per cent year on year last year to 29.5 million, 3.3 percentage points lower than the board's target, while tourists spent HK$4.1 billion less than the expected HK$152.7 billion. This means the management's bonuses will be at least 10 per cent lower than the full amount they are entitled to. In Mr Lau's case, he could earn no more than HK$453,600 - instead of HK$504,000 - in discretionary performance pay this year, on top of the basic annual salary of over HK$2.85 million he is earning for the year 2008-2009. Including Mr Lau, 13 members of the baord's management are entitled to discretionary performance pay. Other performance-related indicators include leadership and management, which contribute 40 per cent of the assessment. Another 20 per cent is based on visitors' length of stay and tourists' satisfaction, while the remaining 30 per cent is related to meeting certain strategic targets.
Richard Li Tzar-kai's sweetened offer to privatize PCCW (0008) may succeed with the help of institutional investors, as the top US shareholder advisory firm is now giving a thumbs-up on the deal.
A top Securities and Futures Commission official and his tax assessor wife appeared in court yesterday accused of trying to swindle a housing allowance out of the government. The SFC's senior director of enforcement, Eric Cheng Kai-sum, and his wife Irene Tsoi Chi-yi, who works for the Inland Revenue Department, pleaded not guilty at the District Court yesterday to providing deceiving information to the government to obtain housing allowance. Cheng, 48, whose department within the securities and futures watchdog is responsible for ensuring disclosure of interests and financial irregularities, and his wife, 47, denied all four counts of giving false information before Deputy District Judge Johnny Chan Jong-herng. Cheng is accused of having ownership and/or a financial interest in property for which Tsoi had applied for Private Tenancy Allowance while she was working at the Inland Revenue Department. Tsoi, who still works for the tax office as a senior assessor but is on leave at present, applied for the allowance for flats at Evelyn Towers on Cloudview Road, North Point and Goodview Garden on Stubbs Road, Mid Levels once her salary level permitted her to claim in September 1990. Tsoi has been charged in connection with applications made between 1990 and 1994, when the then Civil Service Branch processed claims before they were transferred to the Treasury. Civil Service Regulations state that "a government officer shall not claim Private Tenancy Allowance in respect of accommodation owned by the officer and/or any family member of the officer; or accommodation in which the officer and/or any family member of the officer has or have financial interest," prosecutor John Murray told the court. Murray said that in November 1989 Cheng had signed a Provisional Sale and Purchase Agreement, in his own name, for an Evelyn Towers flat which his wife later rented and applied for reimbursement under the Private Tenancy Allowance scheme. Similar dealings occurred between 1992 and 1994 for another flat at Goodview Garden on Stubbs Road, court heard. The case was adjourned until today. More than 10 people are slated as prosecution witnesses.
The number of people entering and exiting Hong Kong in 2008 exceeded 223 million, up by 2.3 percent from 2007. Among them, the number of visitors entering Hong Kong was 29.5 million, up by 4.7 percent from 2007, according to information released on January 19 by the Immigration Department of the Government of the Hong Kong Special Administrative Region. Among the travelers visiting Hong Kong in 2008, those who traveled over land and those who traveled by sea to Hong Kong increased by 8.3 percent and 4.8 percent from 2007, respectively, but those who entered via Hong Kong International Airport slightly dropped by 1.2 percent. Meanwhile, in 2008, over 729,000 Chinese mainland tourists visited Hong Kong during the Spring Festival and over 481,000 during the National Day golden week. This is up by 13.6 percent and 9.5 percent respectively from the same periods in 2007, according to data provided by the Immigration Department. To facilitate and expedite entry into Hong Kong, the Immigration Department introduced some measures in 2008, including using completely new application forms and entry guides, and simplifying relevant application procedures. Hong Kong has always implemented an open visa policy and now residents from about 170 countries and regions can visit Hong Kong visa free.
The current financial crisis provided an opportunity for Asia to consider establishing a rating agency of its own, most probably with some public source of funding support, Hong Kong Exchange and Clearing Ltd. Chairman Ronald Arculli said Tuesday. Speaking at the second Asian Financial Forum, Arculli said that there has been a lot of discussions over the past year or so on an Asian rating agency and that it was clear that there have been deficiencies in how credit was rated. "I think the financial crisis has focused on that in part because some people feel that some of the existing agencies fell asleep or did not adhere to the bible that made them so successful," he said. Arculli said there was nothing wrong with the methodologies but the visions of the rating agencies were "momentarily blurred" when they went completely commercial. "One question that keeps resurfacing recently is whether rating agencies should be paid by issuers of credit," he said. He proposed that there be some public source of funding for the potential Asian rating agency, like certain governmental or exchange support. One of the options is for the exchange to levy a tiny fee so as to collect the fund needed for getting the rating agency started, he said. Nevertheless he acknowledged it would be just as difficult to put together the experts as getting the fund, declining to specify any detailed timeline. Arculli said one of the key lessons that the international community should learn from the current crisis was that the basics should not be forgotten. "There is no such thing as low risk and high returns," he said. While cautioning against overcorrecting with heavy-handed regulation in the aftermath of the financial tsunami, he called for "better discipline all along the financial chain," such as better risk control and power supervision. The weathered financial professional also proposed better supervision of over-the-counter products by allowing them to be traded on exchanges.
560,000 mainland jobs axed in 3 months - 5:15pm More than half a million people
were thrown out of work in the last three months of last year as the impact of
the global financial crisis deepened, the government said on Tuesday.
The Chinese cartoon "Pleasant Goat and Big Big Wolf" has become the biggest box office winner of home-made animations with a take of 30 million yuan (about 4.39 million U.S. dollars) from its opening weekend box office. The revenue well surpassed the record holder "Storm Rider - Clash of Evils", an animated adaptation of the Storm Riders comic, which raked in 25 million yuan in two weeks from last summer's release, Tuesday's Beijing News reported. The film made 8 million yuan on its first day of release on Jan. 16. Zhao Jun, general manager of the China Film South Cinema Circuit Co. Ltd., called the cartoon movie a "dark horse" and forecasted a minimum 60-million-yuan in its total box office. Insiders attributed the cartoon's success to the large group of potential viewers cultivated by a 500-episode popular TV animation series that had been aired for three years. The film, based on the TV series and starring the same characters, tells a story about several goats and their old enemy Big Big Wolf, who defeat their common enemy - bacteria - together. A manager of the Beijing-based Stellar International Cineplex was quoted as saying that the cinema has assigned a big hall which was scheduled to screen "Red Cliff II" for "Pleasant Goat and Big Big Wolf" to satisfy viewer's demand. "Red Cliff II", an historical epic directed by Hollywood-based Hong Kong director John Woo, opened on Jan. 7 and reportedly raked in almost 180 million yuan in 11 and a half days.
China's top economic crime-buster, who made his name arresting notorious Hong Kong gangster Cheung Tse-keung, is being investigated by the Communist Party for alleged links to disgraced appliance billionaire Wong Kwong-yu. Zheng Shaodong , 50, assistant minister of public security and director of the ministry's Economic Criminal Investigation Bureau, was taken away on January 12 by officers from the party's Central Commission for Discipline Inspection. His deputy, Xiang Huaizhu , was taken away on the same day, according to Caijing magazine. The report did not elaborate on the two officials' alleged involvement, but did say the disciplinary action was linked to Neptune Group investor Lin Chiu, who was detained late last month for allegedly laundering money for Mr Wong. Mr Wong was regularly invited to go on casino cruises with Mr Lin. Mr Lin was also detained for allegedly trying to help Mr Wong's wife, Du Juan , 37, flee the country, the report said. Mr Wong, former chairman and director of retail giant Gome Electrical Appliances (SEHK: 0493), is under investigation for stock manipulation and other financial offences. His wife is under house arrest for alleged bribery. The Hong Kong-based Information Centre for Human Rights and Democracy said the Ministry of Public Security's Commission for Discipline Inspection confirmed that Mr Zheng and Mr Xiang were being detained. Unnamed sources said they were being held at a People's Liberation Army General Political Department detention centre. The information centre said Mr Zheng's wife was also detained, but at a different location. Mr Zheng's last public appearance was a national teleconference at the end of last month, when he warned police to be cautious in the use of detention and other tough measures in criminal investigations involving company executives. He said detention and arrest of executives should be the last resort for those investigating corporate crime because "it could disrupt business ... and even cause social unrest in some cases". Mr Zheng - a native of Shantou , Guangdong - joined the police in 1980 and headed teams that cracked several high-profile cases, such as the HK$15 million robbery of the Bank of China Macau branch in 1995 and the robbery and murder of 23 sailors in 1998. Mr Wong is also from Guangdong. Cheung - who committed serious offences in Hong Kong, Macau and on the mainland - was eventually arrested in Guangzhou under Mr Zheng's direction in January 1998 and executed later that year. Mr Zheng was promoted to assistant minister of public security in April 2005, after holding the post of bureau chief of criminal investigation in the Guangdong Department of Public Security and heading up the ministry's economic criminal investigation bureau. Mr Xiang, 44, from Yimeng , Shandong , was promoted to the Ministry of Public Security from the Shandong Department of Public Security's economic crime investigation division in 2007. He was directly in charge of securities crimes.
Lenovo Group (SEHK: 0992) held on to its standing as Asia's top personal computer supplier in the fourth quarter last year, despite falling sales and the region suffering its first drop in quarterly computer shipments in a decade. Hurt by weak demand in its core mainland market, the world's fourth-largest personal computer maker shipped 3.4 million units in the quarter to December to post a negative 4.4 per cent sales growth year on year, according to preliminary estimates from market research firm International Data Corp (IDC). That was enough for the mainland technology giant to corner a 19.5 per cent market share during the period, almost the same as a year ago, to keep at bay chief rivals Hewlett-Packard, Dell and Acer, respectively, the world's top three personal computer vendors. IDC estimated personal computer shipments in Asia-Pacific, excluding Japan, slowed to 17.2 million units in the fourth quarter, falling about 14 per cent from the previous quarter and 5.3 per cent year on year. However, analyst firm Gartner's estimates put personal computer shipments in the fourth quarter at 19.5 million units in the region, which resulted in 1.8 per cent growth. "This quarter was quite a jaw-dropper, not just in China, but also in India where economic and channel issues really took their toll," said Bryan Ma, the director of Asia-Pacific personal systems research at IDC. Mr Ma said a barrage of dismal global economic news during the quarter further affected market sentiment and heightened buyer cautiousness across the region. Although Lenovo retained its No1 computer vendor position in Asia, the company issued a profit warning for the quarter to December because of the challenging economic environment. It also announced a restructuring programme that will cut 2,500 of its international workforce, slash executive pay by up to 50 per cent, trim marketing and support costs and revamp its Asia-Pacific operations by March. "We regard the restructuring and cost-cutting as positive developments, but do not believe they warrant an immediate rating upgrade, as we expect Lenovo to continue to lose market share," said Joseph Ho, an analyst at Daiwa Institute of Research. Lenovo's share price fell 4.52 per cent to close at HK$1.48 yesterday. According to IDC, personal computer shipments in Asia-Pacific, excluding Japan, grew only 9 per cent last year, compared with 22 per cent in 2007. The last time the region posted a single-digit growth rate was in 2001. Still, last year's results were better compared to zero per cent growth in 1998. "The clouds are darkening this year, although there might be some pockets of shelter in the region's public sector," Mr Ma said. Governments in the region and the rest of the world are expected to boost spending to stimulate demand. "We are looking at major government tenders in Singapore and Australia, for example," Mr Ma said. IDC also expects low-cost mini-notebooks, commonly known as netbooks, will increase sales from about 5 per cent of total laptops shipped last year in the Asia-Pacific, excluding Japan, to more than 10 per cent this year. Strong netbook sales powered the ascent of Asustek Computer to among the region's elite computer vendors in the fourth quarter, when the Taiwanese company ousted mainland computer supplier Founder from the top-five ranking. Lenovo has so far not made a strong showing in the netbook category because of its weak distribution and brand awareness in the overseas consumer market segment, according to Mr Ho. "For instance, we estimate Lenovo shipped about 200,000 netbooks in the fourth quarter last year, against 3 million units for Acer and 1.6 million units for Asustek," Mr Ho said.
Alibaba chairman Jack Ma has cut by up to 60 per cent the charges on companies marketing goods on its website to sustain demand. Alibaba Group Holding, the mainland internet firm whose biggest shareholder is Yahoo, said it would increase hiring this year to tap growth in the world's largest online market. The parent of Hong Kong-listed Alibaba.com (SEHK: 1688) planned to hire 5,000 people to increase its headcount to more than 17,000 by the end of this year, spokesman John Spelich said yesterday. The Hangzhou-based firm hired about 4,000 people last year. Chairman Jack Ma Yun cut the prices that Alibaba charged companies to market goods on its website as much as 60 per cent last year to sustain demand as the global recession eroded overseas demand for shoes, toys and electronics. The company has earmarked 5 billion yuan (HK$5.68 billion) of spending on its Taobao online-auction site as consumers in the fastest-growing major economy increase purchases on the internet. "The lower pricing will help them expand their market share," said ABN Amro Holdings' Wendy Huang, who rates Alibaba.com shares "hold". Other Chinese web companies including Shanda Interactive Entertainment had also indicated plans to increase hiring, Ms Huang said. Alibaba Group owns a 74 per cent stake in Alibaba.com, which owns China's largest electronic-commerce site. It also operates Yahoo's mainland website and Taobao, the country's biggest online auctioneer. Alibaba.com shares rose 0.54 per cent to HK$5.54 while the benchmark Hang Seng Index gained 0.09 per cent yesterday. Recruitment this year would be focused on China, while Alibaba also planned to extend hiring in the United States and Europe, Mr Spelich said. Taobao would get the investment from Alibaba over five years, chief financial officer Joseph Tsai said in October last year. China surpassed the United States to become the world's biggest internet market, with 298 million Web users at the end of last year, according to the China Internet Network Information Centre, a state-controlled agency.
Premier Wen Jiabao has called for urgent action to revive the mainland's slowing economy to ensure job creation and social stability. Wen said yesterday that Beijing would use its full power to revive growth this quarter, according to a statement on the government website. With last year's five interest rate cuts buying time and helping to stabilize the situation, he said effort was needed to ensure social welfare and social stability as the job market outlook gets worse. Economists said fourth quarter 2008 data, due to be released on Thursday, would show GDP growth had slowed to an average 6.8 percent, the lowest for seven years, as exports and foreign direct investment continue to fall. Morgan Stanley chief China economist Wang Qing yesterday cut its 2009 growth forecast to 5.5 percent, which would be the weakest growth for nearly two decades, from 7.5 percent. BNP Paribas is also predicting 5.5 percent growth and Royal Bank of Scotland expects 5 percent. Wang said the economy will "get much worse before it gets better," and that the fourth quarter of 2008 could record a 1.7 percent quarterly fall in GDP. "The shock impact of the hard landing in the fourth quarter last year on the confidence of private investors and households will likely last," he said. However, the Chinese Academy of Social Sciences, in an apparent effort to boost confidence, yesterday released a research report suggesting that the mainland economy could expand 8.3 percent this year as a result of last year's 4 trillion yuan (HK$4.54 trillion) stimulus plan. In the third quarter of 2009, according to Yang Xiaoguang, a researcher at the government think-tank, China's will be the first economy to recover, on the back of 10 percent spending growth. Deutsche Bank chief China economist Ma Jun said China could sustain 7 percent growth in 2008, compared to 9 percent the previous year, in light of a 2.8 percent dip in exports last month. Exports fell 2.2 percent in November. "December's figure will slow moderately due to a recovery in industrial output to more than 6 percent growth, against 5.4 percent in November, as well as rapid lending growth of 18.8 percent last month," Ma said. In contrast to Wang Qing, Morgan Stanley Asia chairman Stephen Roach forecast 6 to 7 percent year-on-year growth for the fourth quarter of 2008.
Angola has become China's largest trade partner in Africa,Chinese Minister of Commerce Chen Deming said during a meeting with Angolan Prime Minister Antonio Paulo Kassoma held on January 18. China is willing to strengthen the cooperation between the two parties in fields including agriculture, infrastructure, public health and human resources, in joint efforts to cope with the challenges of the financial crisis, he added. Chen said that bilateral trade volume between China and Angola reached 25.3 billion USD in 2008. China has earnestly implemented the eight-step package providing major assistance to Africa announced at the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) held in November 2006, forgiven Angola’s matured debts equivalent to 67.38 million yuan and given Angola duty free favorable treatment on 466 categories of products. China will make full use of the opportunities offered by mechanisms such as the FOCAC and the China-Portuguese Speaking Countries Economic and Trade Forum to continue developing China-Angola bilateral economic and trade relations, encourage reputable and capable Chinese enterprises to take part in Angola's national reconstruction programs, and make more investments in Angola. Prime Minister Kassoma spoke highly of the current China-Angola relationship and hopes to broaden the scope of cooperation with China in areas such as agricultural development and expanding investment.
January 20, 2009
Hong Kong: Hong Kong projects its economy will contract in the first half of this year, extending a recession brought on by the global financial crisis and economic downturn. The territory tipped into recession in the third quarter of last year as exports and consumption weakened. Chief Executive Donald Tsang Yam-kuen told a conference on Monday that the territory projected gross domestic product had contracted in the fourth quarter. “We have a long and difficult road ahead of us in terms of economic recovery,” Mr Tsang said. “We anticipate negative growth figures for the fourth quarter of 2008 and negative growth for the first half of this year.” Mr Tsang said some economists forecast the economy could start to recover in the second half but he said that would depend on the global economy. The territory’s economic slump marks a swift reversal from a boom that saw gross domestic product grow by an average 7.3 per cent between 2004 and 2007 as the city benefited from mainland’s surging economic growth. However, as an open economy and financial and trading hub, the territory is now being hit hard by the global downturn and by mainland’s economic slowdown. Mr Tsang said last week that exports from Hong Kong in December saw a double-digit decline from a year earlier. That is the first double-digit drop in seven years, tracking a regional trend as US and European demand for Asian goods is weakening. Consumers are reining in spending amid rising unemployment and expectations that many companies will freeze wages this year and because their wealth is being eroded by falling property prices and a near 50-per cent drop in the local stock market last year. The International Monetary Fund has forecast Hong Kong’s economy will grow 2 per cent this year but some economists say gross domestic product will contract by 1 per cent. That would make it the worst performing economy in Asia after Singapore, which is also in recession and expected to shrink 2 per cent this year, according to some forecasts. The Hong Kong government has announced a series of measures to help the territory weather the economic and financial crisis, including loans to small businesses and guaranteeing bank deposits for two years.
Hong Kong's jobless rate climbed 0.3 percentage points to 4.1 per cent in December – the highest level since September 2007 – as the economic slowdown caused more job cuts, government figures released on Monday showed. The seasonally-adjusted unemployment rate for October-December 2008 was up from 3.8 from the September-November period, figures from the Census and Statistics Department showed. It was the second consecutive period the jobless rate posted a 0.3 percentage points rise. Most of the jobs shed during the period were in the decoration maintenance trades, restaurants, import/export trades, transport and manufacturing sectors, the department said. In the October-December period, the number of unemployed people climbed by 4,900 to 141,300 while the number of underemployed people increased by 4,700 to 69,800. The underemployment rate covers the number of people who cannot find more than 35 hours of work per week. Total employment expanded by 11,200 to 3.54 million, as labor demand was boosted by increased business activities during the run-up to Christmas and New Year holidays, the department said. However, the employment growth was outpaced by labour force growth – which rose by 16,200 to an all-time high of 3.68 million. Secretary for Labor and Welfare Matthew Cheung Kin-chung said the global financial crisis that began last September was taking its toll on Hong Kong’s labor market.
About 8.62 million people will travel in and out of Hong Kong – an increase of about 8 per cent on last year – via land, sea and air control checkpoints during the coming Lunar New Year holiday.
QualiEd College students Wong Tsz-shan, Sit Tsz-ting, Mak Wai-ying, Fong Suk-fong, Ryan Yan Pat-to and Cho Ka-hong prepare for the fair. Vendors at the Lunar New Year fair in Victoria Park are looking forward to a prosperous new year following the successful Hong Kong Brands and Products Expo, which ended earlier this month. Despite the economic downturn, a record 2.16 million people attended the 23-day expo and sales totalled HK$270 million, 20 per cent up on the previous year. To vendors such as the students of QualiEd College, the success of the expo increased their confidence in the Lunar New Year fair. "The expo showed that people still had money to spare. I am optimistic," said Ryan Yan Pat-to, teacher-in-charge of a group of Form Six business students, who were responsible for running their stall. The students will sell self-designed toys, resembling a stick of beefballs with new year greetings printed on them. Mr Yan said they had especially designed the product for the Year of the Ox. Although he was optimistic about sales, he said they would not raise prices, as people had become more cautious about their spending. "We might still make a profit with a lower selling price, as the cost was also lower," he said. Aska So Ka-wai, who will also sell self-designed products, said he was confident the stall could break even. "The Lunar New Year fair is only held once a year and people will visit no matter what," he said. But he added that prices could not be lowered as costs were quite high. "The yuan has become more expensive and so we need to pay more for the products," he said. Mr So and his friends, who have never been vendors at the fair, would sell cushions and long pillows that resemble food, soft drinks and oxen. He expected his major source of customers to be young people who were more interested in "cute" products. So Chuen-moon said he would like to make his products special by distancing them from the Year of the Ox. "Too many people are selling inflated oxen dolls, so I am selling something different." His stall will offer inflated dolls of iPhones and lipstick, as he believes these are the products that will interest young people. Doll and handicraft wholesaler Leung Tak-yuen said most vendors preferred plush toys this year, as inflated dolls had became commonplace in the past two years. He said his orders had fallen by 20 per cent this year, which might be the result of the economic downturn and the fact Lunar New Year was earlier this year. "It takes at least a month from ordering to delivery. We do not have enough time, as some vendors only contacted us this month," he said. New Year fairs will run from tomorrow until January 26 at 14 venues around the city, including Victoria Park, Fa Hui Park in Sham Shui Po and Morse Park in Wong Tai Sin.
Dozens of hikers defied government advice and continued their walk despite fires raging at Pat Sin Leng Country Park in Tai Po for more than 36 hours. The trail walkers walked past Agriculture, Fisheries and Conservation Department officers, dismissing warnings of hill fires in the east New Territories country park yesterday. The officers reminded trekkers to bring cellphones, first-aid kits and whistles after 11 hikers had to be evacuated on Saturday. The first of two major fires started at 1.59pm on Saturday at the country park's Shun Yeung Fung Peak. Consuming a hectare of trees at the peak, the fire was brought under control and extinguished a little more than 24 hours later by 120 firefighters. Before the blaze was doused, another fire started roughly a kilometer to the east at Wong Leng Peak at 9.03am. With the first alarm raised at 1pm and the second at 6.41pm, the fire line stretched 1,500 meters shortly after 7pm, consuming over 1.5 hectares and more than 2,000 trees.
Hong Kong surgeon Fan Ning will be joining a Medecins Sans Frontieres group heading for war-ravaged Gaza. Fan, MSF's Hong Kong president and general surgeon, left for Jerusalem yesterday to join the group's medical teams in the region, two of which are now stationed in Gaza with two more awaiting permission to enter from Rafah near the Egyptian border. MSF has been working in Gaza since 1989 and before the conflict had three international staff and 70 local staff in the area to provide post-operative care, pediatric services and medical support. Fan said he hopes to enter from Jerusalem, but MSF staff said this would depend on security conditions. One team of six entered from the Israeli side of Gaza on Saturday after waiting 10 days to obtain clearance from Israel. Fan, who has worked in Kenya, Sri Lanka and Sichuan after the earthquake last May, said this would be his first work in a war zone. "I do have some worries and obviously my family is concerned, but conditions seem to be improving and teams are working around the clock and they need my help," he said at the airport. He added the group has been supplying Al Shifa Hospital in Gaza City with medical supplies and making use of Palestinian staff to make house calls to injured residents unable to get to hospitals due to safety fears. Fan will likely stay in the region at least three weeks. Meanwhile, around 200 protesters went to Government House and the offices of the US Consulate General yesterday to call for an end to the conflict. The protesters, led by more than a dozen groups including the International Migrants' Alliance and the Asia Pacific Students and Youth Association, decried what they described as "genocidal attacks" on Gaza. They carried signs that read "end the terror" and "stop the genocide, stop the massacre."
Activist shareholder Knight Vinke Asset Management charged yesterday that HSBC (0005) has a "substantial and worsening capital shortfall" and may be forced to launch the largest rights issue ever made in the United Kingdom. "HSBC's capital structure is much weaker than would be suggested by the Tier 1 ratio, a regulatory metric, which is all that its management ever talks about," the investment firm said. "As shareholders of Citigroup, UBS, Barclays and now Deutsche Bank will know to their detriment, having a strong Tier 1 ratio is absolutely no guarantee that additional capital will not be required." HSBC's American depositary receipts fell 0.9 percent in New York trading on Friday to close at the equivalent of HK$62, their lowest level in almost 10 years. There is "little doubt" that HSBC will need substantial additional capital if its US consumer-lending unit, HSBC Finance, is not restructured, Knight Vinke chief executive Eric Knight said. "HSBC should stop pretending that a restructuring of [HSBC Finance] is inconceivable," he said. "All major banks with similar problems are now thinking what was previously unthinkable." Knight noted that debt issued by HSBC Finance is not guaranteed by HSBC. "There is no reason why [HSBC] shareholders should bear all of the pain," Knight said. HSBC declined to comment. On Friday, Fitch Ratings lowered its outlook on HSBC's credit rating to "negative" from "stable." The London-based bank is facing rising revenue and asset quality pressures outside the United States, and HSBC Finance still has a poor earnings outlook, Fitch said. "HSBC's Tier 1 ratio is now lower than many of its peers," Fitch analyst James Longsdon said. "In Fitch's opinion, the likelihood of HSBC needing to raise, preserve or release capital to support subsidiaries' needs is increasing." HSBC is likely to report weak underlying profitability for the fourth quarter of 2008, Longsdon said. With the economic outlook still weakening, operating profitability for 2009 is likely to be "significantly lower" than what is normal for HSBC, he said.
The Securities and Futures Commission will not oppose opinions suggesting changes to the extension of the blackout period as long as they do not obstruct market development. "We must listen to opinions before the implementation of the extended blackout period, which will come into effect from April 1," chairman Eddy Fong Ching said yesterday. "The launch of any new policies needs to be merged with opinions from different aspects." The Listing Committee of Hong Kong Exchanges and Clearing (0388) last week decided that after the Lunar New Year holiday it will revisit the controversial measure to ban company directors from trading their securities in their firms for up to seven months. HKEx chief executive Paul Chow Man-yiu has said in a letter that the authority wants to bundle the blackout period issue with the introduction of mandatory quarterly reporting. Fong urged parties, including the listing division of HKEx and the Listing Committee, to consider more opinions from various sides as soon as possible. But he declined to comment on whether the SFC agrees with the quarterly reporting plan. Fong also said he welcomes the views of the Hong Kong Association of Banks, which does not agree with the SFC's "twin peaks approach" to separate regulatory functions between the two regulators. "We cannot rule out the possibility of more ideas coming from other financial organizations and we have four opinions for them to consider," he said. Fong said the two reports, submitted by the SFC and the Hong Kong Monetary Authority, may need to be discussed by the Legislative Council. The government and regulators should cautiously listen to the industry and market participants and a regulatory system change could not be made overnight, he said. He added that while the SFC regards the "twin peaks approach" as special, it has not taken any preference, and will leave the final decision to Financial Secretary John Tsang Chun- wah.
The pilot scheme recently announced by China to settle trade outside the mainland with renminbi (RMB) can help affirm Hong Kong's position as the only international financial center linking the Chinese mainland and Asia, Hong Kong Special Administrative Region (HKSAR) Chief Executive Donald Tsang said here on Monday. Speaking at the second Asian Financial Forum in Hong Kong, Tsang said the pilot scheme will make it possible to settle trade between the economic powerhouses of Guangdong province and the Yangtze River Delta and Hong Kong and Macao. Exporters in the southern provinces of Guangxi and Yunan will also be able to settle trade payments with their trade partners in 10 ASEAN members, he added. Tsang said RMB business is one of the fronts that authorities in Hong Kong were working on to strengthen its unique role as the gateway to the mainland. "Through this scheme, Hong Kong will be able to increase the scope of financial services and expand its role as a financial gateway to the mainland and as a leading financial services hub in Asia," Tsang told about one thousand guests at the forum. Hong Kong has rich experience in RMB business, which was first launched in the city in 2004, followed by the first RMB- denominated bond in 2007. It remained the only jurisdiction outside the mainland to provide RMB banking services.
China: Beijing has warned of the risk of further human cases of bird flu in the runup to the Lunar New Year holiday after reporting two new cases over weekend.
Even as the banks world over grapple with financial crisis and huge losses, Agricultural Bank of China recorded a 51.1 billion yuan profit for last year, reports on Sunday said. Two China banks reported a jump in profits for the last year, boosting their shares in the market on Monday. Industrial Bank, a medium-sized bank based in Fujian province, on Monday reported a 32.34 increase in its profit while on Sunday, Agricultural Bank of China reported a 19.1 per cent profit surge. Industrial Bank said its net profit last year rose to 11.36 billion yuan (HK$12.9 billion). Revenues for last year climbed 35.3 per cent to 29.85 billion yuan, the bank said in a preliminary report on its last year’s earnings. Earnings per share rose to 2.27 yuan from 1.75 yuan, while net assets per share rose to 9.80 yuan from 7.78 yuan. It gave no further details about its results. A full report will be made in coming weeks. The full-year profit growth figure compares with a 126 per cent rise the previous year and 80 per cent growth for the first half. On Sunday Xinhua News Agency reported Agricultural Bank of China recorded a 51.1 billion yuan profit for last year, citing statistics from the bank. AgBank, the last of mainland major state lenders to undergo restructuring into a commercially oriented bank, saw “a great improvement in profitability last year”, Xinhua quoted president Zhang Yun as saying at an annual work conference. The banks return on assets (ROA) was 0.79 per cent last year, while its return on equity (ROE) was 19.1 per cent, it said without providing comparative figures. It had added 807.8 billion yuan, or 15 per cent, in new deposits last year, while lending out 135.3 billion yuan more in agriculture-related loans, Xinhua said. The bank planned to lend 160 billion yuan in 2009, the agency said, citing Mr Zhang. “[AgBank] will adhere to its orientation of providing financial services to rural areas,” Mr Zhang said. Agbank, mainland’s third-largest lender by assets, formally became a joint stock company earlier this month, marking another step in the state bank’s transformation among commercial lines. Agbank received a US$19 billion capital injection in November from Central Huijin, an arm of the country’s sovereign wealth fund, to begin cleaning up its books, burdened by a legacy of providing politically driven credit to farmers and rural enterprises. It also hived off 111 billion yuan of bad loans in the same month, transferring them to an asset management company. The bank, in which Ministry of Finance and Central Huijin each have a 50 per cent stake, has said it would be technically ready for an initial public offering by the second half of this year, but market conditions might force a postponement until 2010.
Thick fog blanketing much of the western mainland has delayed dozens of flights and left more than 16,000 passengers stranded at airports ahead of the Lunar New Year holiday, Xinhua reported yesterday. At least 10,000 passengers were stranded at Shuangliu International Airport in Chengdu , the capital of Sichuan province , after it closed for more than five hours, Xinhua said. Some 121 incoming and outgoing flights were delayed and four cancelled, the agency said, quoting the airport authority. Airport spokesman Lu Junming said most of the 485 flights scheduled for yesterday would be delayed for at least four hours. The fog had also closed expressways linking Chengdu to other cities in the province, and left 6,000 passengers stranded at Urumqi International Airport in Xinjiang. It comes as hundreds of millions of mainlanders board planes, trains and automobiles to return home for the Lunar New Year, dubbed the world's biggest human migration. Last year, the bitterest winter in decades saw millions of migrant workers stranded at railway stations and on clogged highways across large swathes of the country's centre and south. Mainland trains made a record 5 million passenger trips on Saturday, the China Youth Daily said. The early Lunar New Year holiday this year has caused an unprecedented crunch of students, tourists and family visitors joining millions of migrant workers on their way home. The peak travel period is expected to see a record 2.3 billion trips.
Chen Xiao, a 25-year-old Hunan native living in Beijing, began selling her time on Mop.com, a website popular among young adults, early last month. "Life has no meaning," her advertisement read. "But I can't die ... So I've decided to let you, my friends on the internet, arrange every day of my life. I just want to do something for others."
The warships sent to pirate-infested waters off Somalia saw action for the first time when they were called upon to protect a Chinese commercial vessel being chased by two speedboats, the People's Liberation Army Daily reported yesterday. The missile destroyer Wuhan, one of the three PLA vessels sent to the Gulf of Aden to protect Chinese ships, was called to the aid of the Tianhe, owned by Cosco, after the cargo ship sent out an emergency request for help. The ship reported it was being chased by two speedboats as it headed towards the Suez Canal. However, the conversation between the Tianhe and the PLA warships broke up abruptly, the newspaper said, when the cargo vessel's transmission was jammed - a tactic often used by Somali pirates before launching attacks. The naval force switched channels, and when contact was re-established, the captain of the Tianhe pleaded for immediate help. The fleet commander, Rear Admiral Du Jingchen , ordered helicopters to prepare and the warships to assume a battle formation, the newspaper said. He ordered the Wuhan, the warship closest to the Tianhe, to head towards the pirates at full speed and told the cargo ship to switch off its lights. The pirates gave up the chase when they spotted the Wuhan over the horizon, and the warship did not pursue, the newspaper said. It escorted the Tianhe to its destination.
Workers in ancient Chinese dress decorate the street with mock Tanghulu, a Beijing's traditional snack made of sugarcoated haws and other fruit on a stick, for the royal temple fair in the Summer Palace in Beijing, Jan. 18, 2009. Visiting temple fairs, or "Miaohui" in Chinese, is one of the most important traditional activities during the Spring Festival holidays.
Air China Ltd, the nation's largest international carrier, expects to report its first annual loss in at least eight years on waning travel demand and wrong-way bets on fuel prices. The carrier made paper losses of 6.8 billion yuan (994.5 million U.S. dollars) on fuel-hedging in 2008, it said on Friday in a Hong Kong stock exchange statement. The airline made a 3.88-billion-yuan annual profit in 2007. Air China joins China Southern Airlines Co and China Eastern Airlines Corp in forecasting a 2008 loss after the nation's cooling economy damped business and leisure travel. The Beijing-based carrier also reported hedging losses after jet-fuel prices tumbled 70 percent in less than six months. "Air China is more exposed to the global crisis" than China Southern and China Eastern, said Li Jun, an Everbright Securities Co analyst in Shanghai. "As such, most of its advantages turned into disadvantages last year." The carrier has been profitable since at least 2000, data complied by Bloomberg News showed, helped by having a wider overseas network than domestic rivals. "The aviation market experienced a general shrinking demand in 2008 and traffic revenue was significantly lower than expected," the Beijing-based company said in the statement. The hedging contracts "will have a considerable effect on the financial results for the year." The airline is also able to hedge a greater proportion of its fuel needs than rivals, as Chinese carriers are barred from hedging purchases of fuels for domestic flights. That has previously enabled Air China to limit the effect of increasing fuel prices. The airline's passenger numbers fell 1.7 percent in 2008 to 34.2 million, the first decline in five years. Its cargo and mail volume dropped 3.8 percent to 898,962 tons. The shares have dived 80 percent in the past year and closed 3.9 percent higher at 1.88 Hong Kong dollars (24 U.S. cents) a share on Friday in Hong Kong trading.
Tourists visit the bustling snack street of Wangfujing Street in Beijing, capital of China, Jan. 18, 2009, the traditional Chinese "Little New Year" festival, a week before "New Year," or Spring Festival. The 23rd day of the 12th lunar month is called "xiao nian" in Chinese, which literally means "Little New Year." Traditionally it is an important occasion when people offer sacrifices to the "Kitchen God" who looks after the family's fortunes.
Commercial banks in China reported a sharp decline in both non-performing loans (NPLs) and the NPL ratio last year, the China Banking Regulatory Commission (CBRC) said Sunday.
January 19, 2009
Hong Kong: The government yesterday abandoned its quest to introduce any time soon a "personal health care reserve" scheme requiring employee contributions, saying mandatory funding options lacked public support. Such a scheme, which would require employees to contribute 3 per cent to 5 per cent of their income to fund medical insurance and a medical savings reserve they could tap after retirement, has until now been the government's preferred solution. Any reforms would, for now, involve voluntary payments, Secretary for Food and Health York Chow Yat-ngok said, and the government was seeking only "supplementary financing" for health care. He also announced that the launch of a second round of public consultation on options for financing reform was being delayed until late this year because of the financial crisis. The government had previously said a consultation paper would be issued in the first half of the year. "Financing reform will be step by step ... While we still envisage the long-term solution to sustainable financing rests with some form of mandatory solution, we do not believe the community is ready for mandatory financing at this time," Dr Chow said. A public consultation last year, and an opinion poll, on the government's six financing options found a majority of people opposed paying more taxes or any scheme requiring mandatory contributions. The other options are social health insurance, higher treatment fees, medical savings accounts, voluntary private health insurance and mandatory private health insurance. Dr Chow, who was speaking at a conference on health care reform organised by the Bauhinia Foundation Research Centre, a think-tank, said the government was committed to remaining the main source of funding for health care. Other speakers at the conference opposed medical savings schemes. Tang Shenglan, a World Health Organisation expert on health care financing, said such schemes - to which employers and employees contribute a portion of salaries - had not worked on the mainland. Nicholas Mays, professor of health policy at the London School of Hygiene and Tropical Medicine, agreed a medical savings scheme was not the right way to go. Reacting to Dr Chow's comments, Kwok Ka-ki, who until September represented the medical functional constituency in the Legislative Council, said: "The government has their own agenda and if that agenda cannot be pushed through they delay it and find all sorts of excuses for not doing anything." A government spokesman said: "In view of the financial tsunami, the chief executive has requested all policy bureaus to review their policy priorities ... Prior to the launching of controversial policies, thorough analysis and careful assessment of public reaction should be conducted ... to minimise social tension."
Marine biology major Alky Yip takes a shot at becoming an island caretaker - whose job is to rave about tropical northern Australia. Job fairs are normally crowded affairs - attracting thousands of graduates, postgraduates and PhD holders desperate for a chance at any entry-level job on offer. One would assume that for a job billed as the "best in the world" - A$150,000 (HK$775,000) for six months doing a video blog about how wonderful tropical northern Australia is and with all accommodation and expenses paid - the employer would be absolutely swamped. So by lunchtime yesterday, how many people had swarmed through Tourism Queensland's recruitment day at New World Centre in Tsim Sha Tsui? Hundreds? Thousands? "Eight," regional marketing officer Monica Au said. Far from dealing with hordes of people dying to submit their one-minute application videos, most of the staff were standing around fiddling with their recording equipment. Kamal Chandra, from Nepal, was applicant No8. "I used to be a cook," Mr Chandra said after finishing his video. "But I am looking to change jobs. This would be a dream come true. "It is difficult to find adventure, but here you have adventure every day and it is part of your work." As he left, 25-year-old Alky Yip Sing-yung, an effervescent sales assistant, began recording her self- presentation. "My friend told me about this yesterday," Ms Yip said. "She told me it would be perfect for me because it was all about diving, swimming and adventure. "I am actually a marine biology major, so I really love this sort of thing. I'd do this for free because this is what I love doing!" She was full of praise for the help Tourism Queensland gave in submitting her application. "I could not do it otherwise because I do not have access to a video camera," she said.
China: Millions of migrant workers returning to Shanghai to look for work after the Lunar New Year presented a big concern in the current economic climate, the city's mayor acknowledged yesterday. Han Zheng pledged to give help to migrants who were unable to find jobs and said the municipal government was investigating ways to "integrate them into the local welfare system". "We are very concerned about this issue," Mr Han said. "After the Spring Festival we will see a large influx of migrant workers coming from rural areas into Shanghai." Mr Han was speaking at his annual press conference after the close of the Shanghai People's Congress and National Chinese People's Political Consultative Conference. "There will be two types of migrant workers coming back to Shanghai," he said. "Many will have stable jobs in Shanghai, and they will be needed as the city wants to achieve 9 per cent economic growth, and a lot of projects are about to kick off in preparation for the Shanghai Expo [in 2010]." But he conceded that not all would be so lucky. "There will be people who will not be able to find jobs. The government will keep a close track on that and give support accordingly. "Given the current economic situation, it is becoming more and more difficult for these migrant workers to find jobs than it was during the good times. It is likely the supply of jobs will continue to decrease." The mayor said there were about 4 million migrant workers in the city, whom he said had played an "integral and indispensable role" in the development of Shanghai. "What is at stake is no longer just the employment of these migrants. We have to integrate them into the welfare system." And with just a week left before the Lunar New Year break, he issued a stern warning to unscrupulous employers who might be thinking of short-changing their non-local staff. "We need to make sure all migrant workers are paid in full before going for the Spring Festival," he said. "Underpayment or delayed payment of New Year bonuses cannot be tolerated in Shanghai." Agriculture Ministry statistics show the gap between urban and rural incomes expanded to 11,100 yuan (HK$12,600) last year, with the ratio of richer city residents to people in the countryside rising to 3.36:1. Incomes in Shanghai and some other big cities are about a third higher than the national average. Mr Han also highlighted education of migrant workers' children. "There are some 350,000 children of migrant workers in Shanghai," he said. "More than 60 per cent of them are now taught in public schools in the city. We need to improve on this." The mayor last week pledged to keep unemployment below 4.5 per cent within the urban limits of the city this year and unveiled a "one plus three" plan to do so. The strategy involves a special package to promote innovation and start-ups, plus vocational training for fresh graduates, efforts to get the long-term unemployed back to work and measures to dissuade employers from laying off staff.
Chinese actor Liuxiaolingtong (top) performs in Ottawa, Canada, Jan. 16, 2009. A lot of overseas Chinese gathered here to watch the performance by Chinese and Canadian artists to celebrate the approaching Spring Festival on Friday.
China does not usually attract much notice at the North American International Auto Show in Detroit. But mainland carmaker BYD has caused quite a splash at the annual car show this week. As we report on our Motoring page today, it is showing a purely electric car with a driving range, on a single charge, of 400km. This puts it on par with some of the world's major manufacturers, such as Ford, GM and Toyota, all of which are, belatedly, introducing their own electric cars in North America. The success of BYD, in which world-famous investor Warren Buffet holds a substantial stake, shows what many have argued about China: because it is developing so many industries and building new cities, it is in a much better position to quickly adopt clean and green technology than many developed economies. At the moment, however, the signs are not good. The nation's transport boom is posing a growing challenge to the environment. More than 84,800km of highways are being laid across the country. The number of cars on its roads grows by 14,000 every day. By the end of the next decade, the mainland will have 130 million cars. At current rates, the number of cars on its roads will exceed the number registered in the US sometime between 2040 and 2050. The nation must start promoting hybrid and electric cars, otherwise vehicles will surpass coal-fired power stations as the biggest source of air pollution. But China can have a greener future. As the major oil companies and most carmakers are state-owned, it is much easier for the central government to make them launch, by fiat or administrative means, initiatives in the use of alternative energy and environment-friendly vehicles. Unlike Hong Kong, where relatively few people own cars, the mainland has a potentially large market and the necessary economies of scale to make "green" car production commercially viable. As highways are built, service stations mushroom. This provides an opportunity to establish a nationwide service infrastructure - with chargers for electric-car batteries and battery-replacement services. Already, several big cities have experimented with electric buses and minivans, but they have not made the transition to mainstream service. Municipal authorities should be given incentives to do so. China has an opportunity to set itself up as a pioneer in electric vehicles. Indeed, given the worrying levels of its pollution it has no other choice.
Pedestrians walk at the Lujiazui Finance & Trade Zone in Shanghai, China Jan. 13, 2009. Shanghai is hoping to score a nine percent increase in gross domestic product (GDP) this year, said Mayor Han Zheng Tuesday while delivering a work report to the annual meeting of the municipal people's congress. China's GDP is expected to drop to 8.4 percent this year from last year's 9.1 percent. ·The report said China contributed to about 22 percent of the global growth in 2008. ·Growth of the world economy was expected to fall to 1 percent from 2.5 percent in 2008.
Alibaba Group Holding, the mainland internet firm whose biggest shareholder is Yahoo, said it would increase hiring this year to tap growth in the world's largest online market.
The Shanghai municipal government and the Walt Disney Co. have reached an agreement concerning the major issues of building the first Disneyland on the Chinese mainland, mayor Han Zheng said Saturday. "The project should be approved by the State Council (China's Cabinet) before it is carried out," Han told a press conference held in Shanghai, without disclosing the "major issues" of the agreement. He said the government has been in talk with Disney for more than ten years, and the two sides have kept smooth communication. According to a Xinhua report on Thursday, the park would be built in the southeast suburbs of Shanghai's Pudong area, which is20 minutes' drive from the Pudong International Airport. The area of the new park was expected to be the largest among all Disney theme parks. The project is still under negotiation, and the details will not be disclosed until the agreement is officially signed, Han said.
January 17 - 18, 2009
Hong Kong: Hong Kong’s subway operator MTR Corp said on Friday it has entered into an agreement on the construction and operation of a metro railway project in Hangzhou with the local government and a partner. The Metro Line 1 project will span 48km and require an investment of 22 billion yuan (HK$25 billion), MTRC (SEHK: 0066) said. MTRC will own 49 per cent of a co-operative joint venture that will be responsible for the second part of the project, with the remaining 51 per cent of the venture to be held by its partner Hangzhou Metro Group. They will contribute a combined 37 per cent of the 22 billion yuan investment required and construct Part B of the project, which mainly covers the electrical and mechanical systems, as well as the operation of the entire metro line, MTRC said. The civil construction of the metro system of Part A of the project will be undertaken by the Hangzhou Metro Group, which will also have to put in 63 per cent of the total 22 billion yuan of the investment required.
Shares in HSBC (SEHK: 0005) fell 3.5 per cent on Friday after Goldman Sachs downgraded the stock to sell from neutral on expectations of losses for 2009. The stock was down at HK$63.70 soon after the trading started. Goldman, which added HSBC to its conviction sell list, slashed its target price on the Hong Kong-listed stock to HK$49, lower than Morgan Stanley’s cut earlier this week to HK$52, which had sparked a sharp two-day sell-off in the stock. Goldman Sachs said it now forecasts about US$1.5 billion in losses for the bank in 2009. “The bills continue to add up for HSBC, particularly for its US$134 billion household subprime business and US$92 billion US consumer/commercial property loan book,” it said in a research report. Among the risks seen for the lender were a 40 per cent peak-to-trough fall in US property prices and a 32 per cent cumulative loss on subprime mortgages, Goldman said. On Wednesday, Morgan Stanley cut HSBC’s 2008-2010 profit forecasts and revised down its price target by 31 per cent to HK$52 per share as a global recession hits the bank’s earnings. It said it also expected the lender to need US$20 billion to US$30 billion of capital and to halve its dividend. The following day, the stock closed down 5.7 per cent at HK$66 in Hong Kong.
The ongoing recession has claimed yet another victim in Hong Kong with the leading language learning centre Linguaphone closing down on Friday. According to a notice posted on its website on Friday, the company’s board of directors who met on Tuesday have decided to apply for bankruptcy. RSM Nelson Wheeler Corporate Advisory has been appointed as provisional liquidators to take control the language centre’s assets, the notice said. A spokesman for the provisional liquidators said about 500 learners and 30 staff were affected. Linguaphone’s centre in Cheung Sha Wan was closed and no staff were present, local media reported. According to Linguaphone Hong Kong, it has been operating in the city for over 30 years. Based in Britain, the Linguaphone Group has more than 90 training centres in 30 countries around the world and has developed self-learning materials for 33 languages.
A scheme to relax peak-hour clearways restrictions for taxis has been extended for another 12 months until January 31 next year, a Transport Department spokesman said on Friday. The scheme, first introduced six years ago, was put in place to control traffic congestion. It covers the relaxation of peak-hour clearways and clearways on roads with speed limits of less than 70 kilometres per hour between the hours of 7am to 7pm. A government spokesman said: “As it has not caused any major traffic congestion or obstruction on the whole, and will facilitate taxis to provide a point-to-point service for passengers, the government has decided to further extend the scheme.” He explained that the relaxation of rules also included no stopping restricted (NSR) zones. “Taxis will be given a further 12-month exemption – from February 1 this year to January 31 next year – from the restrictions for picking up and setting down passengers at the no stopping restricted zones concerned. Taxi drivers should continue to exercise self-discipline and to strictly observe the ‘pick up, drop-off and go’ and ‘no waiting’ rules,” he said. The spokesman asked taxi drivers not to be complacent. “If there are violations of these rules, or obstruction and inconvenience caused to other road users, the government will consider terminating the relaxation before expiry of the extended period,” the spokesman added. He also reminded taxi drivers to renew their current restricted zone permits and the department’s plans to help facilitate this.
Listing Committee members decided yesterday that after the Lunar New Year holiday they will revisit the controversial measure that bans company directors from trading shares in their firms for as much as seven months. However, after more than two hours of talks, the committee had not set a date and it was not clear if the blackout period extension would be examined on February 9, the planned policy meeting, or even earlier, sources said. The discussion came after Paul Chow Man-yiu, chief executive of Hong Kong Exchanges and Clearing (0388) and also ex-officio member of the Listing Committee, sent letters to all 28 members asking them to consider the blackout period extension together with the introduction of mandatory quarterly reporting. "The letter to committee members was aimed at providing a platform for both sides to solve the matter," a HKEx spokeswoman said. The government and listed companies welcomed the development. "We noticed that HKEx and the SFC have been suggested to further consider the extension of the blackout period jointly with quarterly reporting, which is workable and could help the situation," said a Financial Services and Treasury Bureau spokesman. Lo Ka-shui, former GEM board listing committee head and also chairman of Great Eagle Holdings (0045), said Chow's move is a positive one which lets both parties sit down and talk.
China: Mainland’s sovereign wealth fund has been buying shares in the country’s three largest commercial banks, the fund’s chairman Lou Jiwei told reporters on Friday. Mainland said in September that Central Huijin, a domestic investment arm of the country’s wealth fund, would buy shares in Industrial and Commercial Bank of China (SEHK: 1398), Bank of China and China Construction Bank (SEHK: 0939). Mr Lou said on Friday that it had been continuously buying shares in the three banks. In September reports said Central Huijin had bought 2 million Shanghai-listed shares in each of them. About two-thirds of China Investment Corp (CIC), the country’s US$200 billion sovereign wealth fund, consists of money under the umbrella of Central Huijin, a vehicle long used to recapitalise state-owned banks and other financial institutions. CIC was closely watching the selling of the mainland banks’ Hong Kong-listed shares by foreign investors, Mr Lou added. Over the past three weeks, Bank of America, UBS and Royal Bank of Scotland have all sold or reduced their stakes in their mainland partner banks. Mr Lou also said that CIC would continue to invest abroad, but he declined to name any specific assets or targets. Mr Lou was attending the official launch of Agricultural Bank of China as a joint stock company.
A bank clerk shows local villagers how to identify fake banknotes in Yanling, China's central Henan province. Beijing' s central bank warned consumers last week to be wary of counterfeits ahead of Lunar New Year. A flood of counterfeit banknotes that has alarmed consumers stocking up on gifts ahead of the Chinese Lunar New Year holiday, was still stinging shoppers on Thursday despite government pledges of a crackdown. Beijing’s central bank warned consumers last week to be wary of counterfeits, after local media said high-quality fake banknotes had been found in 14 provinces across the country. “I was so unfortunate. How could I get a fake note? It looked real in my eyes,” a reporter surnamed Zhao told reporters, after her 50-yuan note (HK$56) was refused by cash-detecting machines in Beijing. Mr Zhao said several of her friends had also been stung by fake 50-yuan bills, amid media reports fake notes were being openly sold in southern China and had appeared in Hong Kong and Macau. The sale of fake notes appeared to be rife in Guangdong, with several online sellers in the southern province bordering Hong Kong boasting their notes could “cheat detectors”. One website calling itself a “direct distributor” of Taiwan-made fake currency, but carrying a phone number with an area code for the southern city of Shenzhen, was selling batches of notes for 15 yuan per 100 yuan bill. Beijing’s central bank denied the counterfeit notes were “high-quality fakes” and sought to reassure consumers in a statement posted on its website late on Thursday. “Whether in terms of the amount received by financial institutions, or investigations and seizures by police, there is no obvious change in the amount of fake currency compared to previous years,” it said. The spread of fake banknotes, however, has raised warning bells in Taiwan, after media reports suggested they had originated from the self-ruled island. In recent years, an issue of newly minted notes has decreased the incidence of fake bills in the mainland which was once awash with counterfeit notes. But most shopkeepers keep cash-detectors, and the ritual of stroking a note and holding it up to the light remains common among local consumers.
The parents of the first mainland child killed by tainted milk formula have received US$29,000 (HK$225,013) compensation, state media said, with the government hoping the payments and a trial will quell popular anger. The melamine scandal has battered faith in China-made products after a series of other food- and product-safety scares, and led to recalls of China-made dairy products around the world. The five-month-old son of Yi Yongsheng and Jiao Hongfang died in May from kidney stones and agonising complications after drinking formula adulterated with melamine, one of six infants whose deaths have been blamed on milk powder made by the now-moribund Sanlu Group. The couple, farmers in northwest China’s Gansu province, were given 200,000 yuan (HK$225,013) by Sanlu as part of a compensation drive orchestrated by the government, which has faced bitter complaints from the families of the some 296,000 children affected by the tainted milk. By taking the money, the grieving couples have to give up any chance of suing in court over the death. Some parents have said they will refuse to accept compensation, calling it too little for the scandalous failure of Sanlu and other mainland dairy companies to block melamine, which can be used to fool nutrition checks. The couple’s lawyer, Shen Xianlei, “said in developed regions the amount offered by the companies might not be acceptable”, Xinhua reported. By late December, there were still 861 children in hospital with kidney problems, the report said. Sanlu and other dairy companies have offered 200,000 yuan (HK$225,013) for families whose children died, 30,000 yuan (HK$34,023) for serious illness, and 2,000 yuan (HK$2,268) for less severe cases, it said. Executives from Sanlu are awaiting sentencing after trial late last year. They have been accused of covering up the spreading scandal. Tian Wenhua, 66-year-old former general manager of Sanlu Group, pleaded guilty to charges of “producing and selling fake or substandard products”. Sanlu is partly owned by New Zealand’s Fonterra Group.
Foreign Minister Yang Jiechi says Beijing will not abandon Africa, despite the global recession. Mr Yang told reporters on Thursday the rich world should do the same. He was in Malawi during what has become China’s traditional New Year tour of Africa. Mr Yang signed an agreement to build a US$90 million (HK$698 million) hotel conference centre in the capital, Lilongwe. Beijing is also building a Parliament house and a highway linking northern Malawi to Zambia. Ambassador Lin Songtian says mainland businessmen who accompanied Mr Yang discussed buying Malawi tobacco for what he says are 350 million smokers in the mainland. Malawi’s Tobacco Control Commission general manager Godfrey Chapola says Malawi needs to “look east” because of growing western anti-smoking sentiment.
Almost 100 Taiwanese vessels will sail through pirate-infested Somali waters in the next two months, and since these ships will fly foreign flags, the island's government could do nothing to prevent them seeking the mainland navy's help, a senior government official admitted yesterday. Taipei is caught up in an embarrassing situation after the People's Liberation Army said its warships had escorted a Taiwanese oil tanker through the Gulf of Aden. The mission was much trumpeted by Beijing, which sees itself as the sole legitimate protector for all Chinese. Chao Chien-min, vice-chairman of the Mainland Affairs Council in Taipei, said at least 94 Taiwanese vessels would pass through the troubled waters in the coming months. He said none of them had applied for help from Taiwanese authorities. Asked whether any of these vessels would violate Taiwanese law if they sought the mainland's help, Dr Chao said that since they were registered abroad, they must be considered non-Taiwanese, and Taiwan could do nothing about it. Taipei would turn to "international assistance" if any of its vessels asked the government for protection, Dr Chao said. MAC chairwoman Lai Shin-yuan said warships from seven countries were patrolling in the troubled area, and "we would help our vessels in seeking their assistance". "The US has already said it would support us in the event of urgent need," she said. In Beijing, when asked to comment on Washington's offer to protect Taiwanese ships, Foreign Ministry spokeswoman Jiang Yu said the PLA would protect Taiwanese ships if necessary.
China Eastern Airlines (0670), the country's third-largest carrier, plans to defer orders of 15 Airbus and Boeing planes to combat overcapacity problems brought about by the slowdown in traffic demand.
Aircraft are flying with many empty seats a month after daily direct flights began between Taiwan and the mainland, and travel officials are urging that some of the restrictions in the landmark deal be loosened.
Photo taken on Jan. 16, 2009 shows the inauguration ceremony of the new Agricultural Bank of China Ltd. in Beijing, Jan. 16, 2009. The state-owned Agricultural Bank of China (ABC) officially became a shareholding company Friday. It is the last of the "big four" state-owned commercial banks to complete the restructuring. The state-owned Agricultural Bank of China (ABC) officially become a shareholding company Friday, the last of the "big four" state-owned commercial banks to complete the restructuring. The Agricultural Bank of China Ltd. had a registered capital of260 billion yuan (38 billion U.S. dollars). The Central Huijin Investment Co., an arm of China's sovereign wealth fund, and the Ministry of Finance each held 50 percent in the new corporation. Former ABC President Xiang Junbo was appointed chairman of board of directors, and former ABC Vice-President Zhang Yun was appointed president of the new bank and vice-chairman of board of directors. The new company received its business registration license Thursday. It inherits the assets, liabilities and businesses of the original bank. The ABC was the last unlisted bank of China's "big four" state-owned commercial banks. Its non-performing loan ratio was 4.3 percent by the end of 2008. The other three state-owned banks -- the Industrial and Commercial Bank of China, China Construction Bank and Bank of China -- have successfully listed on both Shanghai and Hong Kong bourses. The three lenders all went through three stages: restructuring, inviting strategic investors and going public. The Central Huijin Investment Co. injected 22.5 billion U.S. dollars each into the Bank of China (BOC) and the China Construction Bank (CCB) in December, 2003. The Industrial and Commercial Bank of China received 15 billion U.S. dollars in April 2005 from the investment company and the ABC received 19 billion U.S. dollars in December last year. The State Council, or the Cabinet, approved the ABC restructuring plan in October last year. The ABC planned to make a public offering, but there was no schedule and the preparation would take at least a year, Pan Gongsheng, vice president of the bank, said at the official launch ceremony. He said ABC businesses would cover both urban and rural areas and also expand abroad. The country's rural market would be huge and neighboring regions like China's Hong Kong and Southeast Asia would be the focus. Foreign strategic investors offloaded shares in the BOC and CCB, which drew the ABC's attention. Pan said the ABC was considering when and how to introduce strategic investors, and no official talks had begun.
January 16, 2009
Hong Kong: Chinese medicine works better than traditional western treatment in relieving irritable bowel syndrome (IBS), said a study revealed by the Chinese University of Hong Kong on Thursday. The university's Faculty of Medicine conveyed a study more than a year ago, in which 84 patients with IBS, a common digestive disease in Hong Kong, were divided into groups receiving different treatments. The results show that after eight week's treatment, 46 percent of the patients taking traditional Chinese medicines which include seven types of herbal medicines reported overall improvement in symptoms, compared to 29 percent from the western medicine group. The above trend was maintained after stopping treatment for eight weeks, with patients taking Chinese medicine still had significant improvement in bowel movements. Director of Institute of Digestive Disease of the University Professor Joseph Sung said that over 70 percent of the IBS patients have troublesome abdominal pain and diarrhea that lead to major disturbance on daily activities and psychological well-being. Sung said that conventional Western medicine cannot provide satisfactory and sustained relief of IBS symptoms. Many patients even experience worsening of symptoms after taking these medicines. "This pilot study suggests that traditional Chinese medicine can be a promising treatment for IBS," he added.
HKEx chief Paul Chow has called on all listing committee members to review the quarterly reporting and blackout period together. The government has thrown its weight behind the stock exchange's compromise on the contentious blackout period for directors' share sales that may see quarterly financial reporting introduced in exchange for a possible easing of the ban. "We noted that executives at the stock exchange and the Securities and Futures Commission have both said they want to review as a bundle the issue of introducing quarterly reporting together with the blackout period," a spokesman for the Financial Services and the Treasury Bureau said. "We believe there is merit in adopting such an overall approach to review the relevant new measures together. "We would like to see the SFC and the exchange continue their discussion with the market participants." The bureau spokesman denied the government had put pressure on the exchange to soften its stance on the blackout period but conceded the administration had close contact with both the SFC and Hong Kong Exchanges and Clearing (SEHK: 0388) amid market concerns over the extended blackout period. "At the end of the day, it will be up to the stock exchange's listing committee to decide on this matter," the spokesman said. This is the first time the government has revealed its position on the extension of the blackout period, which is aimed at cracking down on insider dealing. The plan has drawn criticism from directors and major shareholders. The new rule, scheduled to be implemented on April 1, will ban directors and major shareholders from trading shares in their companies from the close of books until the results announcements. Should companies report earnings at the end of the fourth-month deadline for annual results and three months after for interim earnings, the blackout period will be seven months a year, compared with two months now. Opposition to the plan led the listing committee to delay the start of the implementation from January 1 to April 1 but it denied requests for another round of consultation. But in a sign a compromise may be in the offing, HKEx listing head Richard Williams said on Tuesday that the committee might review the rule but only if Hong Kong introduced quarterly reporting. Mr Williams said quarterly reporting would improve market transparency and if such a rule was adopted, then the blackout period could be shortened. On the same day, HKEx chief executive Paul Chow Man-yiu sent a letter to all listing committee members calling on them to review the quarterly reporting and blackout period together. A source said the listing committee decided yesterday to discuss the new proposal on February 9. Mr Williams would prepare information related to the new plan for the committee. The listing committee last year urged the SFC to adopt British-style quarterly reporting this year in which companies need to give management statement updates in the second and fourth quarters.
Mickey Mouse performs a Chinese drum dance in a taste of what visitors can expect from Disneyland's Lunar New Year celebrations. Hong Kong Disneyland says its business has not been affected by the global financial crisis and expects a year-on-year increase in visitors over the Lunar New Year. "The [worse] economic situation has not yet affected the number of visitors to our park," marketing director Frederick Chan Kwok-yu said yesterday. Mr Chan said visitor spending on souvenirs and food at the park had also been unaffected by the economic downturn. He said that although the global financial turmoil had led to fewer tourists coming to Hong Kong, the park had achieved stable growth in visitor numbers since the second half of last year. He did not provide any figures, however. "We are confident that we will have growth in attendance over the Chinese New Year," Mr Chan said, adding that the occupancy rate of the park's hotels over the holiday remained as high as the same period last year. "This is because we have new activities [for the Lunar New Year] and we have adopted the marketing strategy to contact different customers," he said. Today, the park launches its Lunar New Year celebration, which includes a lion dance performance and Chinese drum dance by Mickey Mouse. Park attendance rose by 8 per cent in its third year, from October 2007 to September last year. It had received a total of 15 million visitors since its opening in September 2005 until early last month. Mr Chan said the park would closely monitor the market and adopt measures, such as strengthening its facilities, to woo visitors.
Hong Kong's barristers are free to publicise their services on television, in newspapers, on the internet or in other media - in an appropriate manner - after the Bar Association voted yesterday to drop its absolute ban on advertising. After the association's annual general meeting, new chairman Russell Coleman announced that the advertising ban had been removed from its Code of Conduct. Acknowledging that outsiders sometimes perceived the Bar as a "cloistered profession and a little out of touch", Mr Coleman said he hoped the reform would help dispel that impression. The removal of the ban has been discussed in the past, but it received renewed impetus after a recent Court of Appeal ruling against a similar ban for doctors. Some barristers abstained from the vote, Mr Coleman said, possibly because while conservative barristers might not have personally agreed that advertising was proper, they did not want to obstruct the amendment to the code. As of today, barristers can distribute promotional material in any form, in any area of the media. Their adverts can carry profile photographs, the nature of legal services they provide, their qualifications and affiliations, cases in which they have been involved, the identity of clients for whom they have acted, and their fee scale. However, a new section will be inserted into the code to ensure advertisements are not "inaccurate, unverifiable or likely to mislead" - and do not bring the profession into disrepute. The association will be empowered to ask barristers to verify claims they make in promotional materials. Restrictions remain in the code against the wearing of wigs and gowns outside court premises. This means barristers will not be able to promote themselves on the streets while dressed in their full regalia. The new chairman acknowledged that the profession's previous desire not to draw attention to itself might have been due to stringent controls on anything that could be deemed to be advertising. Barristers might now be more likely to draw attention to significant cases in which they had been involved. Mr Coleman said he knew that some chambers had already begun searching for experts to help them set up websites. He said the reform, which would improve the public's access to information about the profession, would be an "important way of assisting the administration of justice in Hong Kong".
Fresh meat retailers were slammed yesterday for raking in fat profits by not lowering prices when wholesale prices dropped in recent months. The Consumer Council said the fresh pork wholesale and retail price differential widened substantially from HK$15.60 per catty in January 2007 to HK$25.30 last November. The average wholesale price began to escalate from mid-2007, peaked at HK$15 per catty last March and fell 28 percent to HK$10.80 last November. But the average retail price only dropped 10.2 percent from a peak of HK$40.20 last June to HK$36.10 in November. The gap between wholesale and retail prices for beef also widened, rising from HK$22.50 in January 2007 to HK$35.50 last November. Council vice chairman Ron Hui Shu- yuen said there is room for retail price reduction. "Seeing the large drop in wholesale prices, there should be more room for retail prices to go down." Pork Traders General Association deputy chairman Hui Wai-kin disagreed, saying the data failed to consider factors such as salary and transport costs. "Basically, the retailers will not adjust prices quickly and suddenly because of the fluctuating wholesale price," said Hui. Hui said costs, such as rents and transport, have increased more than 10 percent in 2007. The wholesales prices peaked at around HK$20 per catty by that time, but Hui said the retail price remained at HK$48 to HK$50 per catty instead of going up to HK$56 to cover overhead costs. He expected retail prices to go down slightly after the Lunar New Year. Hui said monopoly fears are "unreasonable and ridiculous," as the daily trading process has become more transparent under monitoring by the Food and Environmental Hygiene Department. The Food and Health Bureau has said food prices should be adjusted based on the free-market principle.
Construction of the new West Island Line is expected to create 3,000 jobs, with MTR Corp hoping to break ground in the middle of this year. The three-kilometer extension is forecast to cost HK$8.9 billion with a HK$6 billion cash injection from the government. To be completed by 2013 or 2014, the line will serve 90 percent of those living in Western, adding 100,000 more passengers to the network from the district's 200,000 population. Full access thoroughfares and dedicated entrance lifts will be the hallmarks of the West Island Line's three new stations. Project design manager Stephen Hamill yesterday said the innovations would match the entrance layouts with the district's steep topography. With entrances at low-lying, middle and higher main roads such as Des Voeux Road, Queen's Road West, Bonham and Pok Fu Lam roads, planners will introduce high capacity lifts at entrances to bring passengers down to street and concourse levels rapidly, he said. With lower areas served by conventional escalator entrances, Hamill said the public would be free to traverse concourses and exits without entering paid areas. "The public will be able to make full use of the station concourses and exits during the middle of summer and climb the district's hills in the air-conditioned comfort of the MTR stations without paying," he said. High capacity lifts for 25 to 28 people will take passengers to and from concourse levels in under 20 seconds. With four dedicated high-capacity lifts serving the Bonham Road and Second Street exits, the station will also have exits at the Sai Woo Lane playground, Des Voeux Road West, Centre Street Cooked Food Center and Ki Ling Lane. The University Station will have exits on Belcher's Street, Hill Road, Queen's Road West, Pok Fu Lam Road and Hong Kong University.
Shake-up will cost customers, lenders warn - Hong Kong lenders fear the proposed physical segregation of branches and sales teams may result in operational problems and higher costs to be ultimately passed on to clients, said Hong Kong Association of Banks chairman Peter Wong Tung-shun.
Cathay Pacific Airways (0293) will defer completion of its new Hong Kong cargo terminal by up to 24 months to mid-2013, it said yesterday, as the global economic slowdown hits cargo traffic. Cathay warned on Tuesday its cargo and mail traffic dived nearly a quarter last month on weak demand from China, while passenger numbers fell slightly. The carrier said the first quarter of 2009 will be weak, and revised its cargo capacity to Europe and North America downward. "The deferral is aimed at better matching supply and demand in the airfreight business given the current market outlook. It is also important for the company to maintain a strong balance sheet until the market strengthens," Cathay Pacific said. It added that it remains fully committed to building and operating the third cargo terminal. The Hong Kong Airport Authority has agreed to the delay for the facility, which was originally scheduled for opening in the second half of 2011. Cathay Pacific Services, a wholly owned subsidiary of the airline, holds a non- exclusive 20-year franchise to operate the terminal. Cathay's shares dropped 2.4 percent to close at HK$8.38 yesterday.
China: Shanghai has been badly hit by the global financial crisis and the government's revenue is likely to drop sharply this year, the city's Communist Party chief has admitted. Yu Zhengsheng told the Shanghai People's Congress on Wednesday that the grim outlook made it unlikely the city would be able to reduce taxes, but he warned against putting too much emphasis on raw economic statistics. "You should not worry about certain figures going down in the short term or simply chase figures for the sake of figures. We need to focus on the long term," Mr Yu told the meeting, adding that he would not prop up the property market. The meeting was closed to overseas journalists but was reported by Shanghai media yesterday. Mr Yu named employment as the municipal government's top priority, particularly finding work for students about to graduate in summer from university, of which there are about 150,000 in the city. "Some comrades have spoken about non-standard employment and whether we could have a policy on non-standard employment that could encourage creativity to increase employment under the current circumstances," Mr Yu said. "We need to think about more ways to achieve this." Although a proportion of university students in Shanghai come from other parts of the country, a government source said the actual number of job-seeking graduates could be as high as 200,000. "For every one student leaving Shanghai, we estimate there will be five coming back from universities in other cities," he said. "Students from Shanghai are most likely to come home to look for work when they graduate." Mayor Han Zheng also committed resources to shoring up employment figures in a speech made to the congress yesterday, pledging to launch a "one plus three" strategy to tackle the problem. The plan involved a "professional plan" to promote creativity and three "special plans", which would focus on vocational training for fresh graduates, measures to attract enterprises to employ longer-term job seekers and a series of short-term measures to dissuade businesses from laying off workers. "This year, this city will place maintaining growth as its primary economic duty," Mr Han said. He pledged to speed up development of the city's service industries, particularly its roles as a financial centre and air transport hub. In his speech to the opening of the congress on Tuesday, Mr Han cut back predictions for growth in the city's gross domestic product to just 9 per cent for this year, which would be the first single-digit annual growth since 1991. Growth is anticipated to have been about 10 per cent last year, down from 13.3 per cent in 2007.
Expert: China not to blame for crisis - Special Report: Global Financial Crisis - -The global credit bubble started with U.S. policies rather than the savings of China and oil exporters, a leading World Bank economist said. "The global credit bubble started with U.S. policies," David Dollar, World Bank's country director for China, said in an exclusive interview with China Daily Thursday. The Financial Times on Jan. 2 cited U.S. Treasury Secretary Hank Paulson as saying, "In the years leading up to the crisis, super-abundant savings from fast-growing emerging nations such as China and oil exporters ... put downward pressure on yields and risk spread everywhere." Paulson said this laid the seeds of a global credit bubble, the newspaper reported. US Federal Reserve Chairman Ben Bernanke, according to the Financial Times, largely endorsed Paulson's argument. "After 2001, the U.S. stimulated its economy by reducing taxes and increasing government spending," Dollar said. "This was appropriate for a short time, but the U.S. stuck with the stimulus for too long." After the burst of the Internet bubble in 2000, the Federal Reserve slashed interest rates 13 times to a record low of 1 percent, trying to give a boost to the economy. The low borrowing cost then led to an investment binge in the real estate sector, which later turned out to be another bubble. The blame on China's surplus as the cause of the bubble is absurd, Albert Keidel, a senior fellow with Carnegie Endowment for International Peace, a Washington think-tank, said in an earlier interview with China Daily. "China's exchange reserve only started to grow after its entry into the WTO in 2001, but before that the bubble in the U.S. was already brewing," he said. Keidel reckons excessive deregulation of the financial market, which then allowed banks to lower oversight on mortgage applications, is the main reason for the subprime crisis. In testimony last year before the U.S. House Oversight Committee, former Federal Reserve Chairman Alan Greenspan acknowledged he had made a "mistake" in believing that banks operating in their own self-interest would be sufficient to protect their shareholders and the equity in their institutions. Greenspan said that he had found "a flaw in the model that I perceived is the critical functioning structure that defines how the world works". "When the U.S. stimulus continued for too long, normally interest rates would have risen and that would have slowed the U.S. bubbles," Dollar said. "But the large trade surpluses in China, Japan, Germany, and the oil exporters provided lots of low-interest lending to the U.S., enabling the bubbles to keep growing."
China National Nuclear Corp (CNNC) said it expected to start construction of three nuclear power plants with a total of five reactors in 2009. CNNC, the country's largest nuclear power company, will start construction of the Sanmen nuclear power plant in Zhejiang in March. The project will have two 1,250-megawatt reactors, said a source with the company. The company will start building another nuclear power plant in Haiyang, Shandong province, at the end of September, said the source, who declined to be named. Both plants will use AP1000 technology from US-based Westinghouse. China in 2007 signed an agreement with Westinghouse for use of the third-generation nuclear technology. CNNC is expected to start construction of an inland nuclear plant, the Taohuajiang nuclear power project, within the year, said the source. The project would be among the first batch of China's inland nuclear power projects. China's top economic planning body, the National Development and Reform Commission has approved preparation work for the Taohuajiang project, according to CNNC. As one of China's two main nuclear power plant builders, revenues of CNNC's main business in 2008 were 36.6 billion yuan, an increase of 39 percent from a year earlier. The company's profit was 4.8 billion yuan, an increase of 85 percent from 2007. The company produced 37.9 billion kilowatts of electricity in 2008. Last year, CNNC made improvements in its other nuclear projects in Zhejiang, Guangdong, Shandong, Fujian, Anhui, Liaoning, Gansu and Henan. China plans to increase its nuclear power capacity to 40 gigawatts by 2020, which would account for 4 percent of the nation's power capacity. However, in line with the boom in the industry, industry insiders said that the 40-gigawatts plan would be elevated. China now has a total of 11 nuclear reactors in operation, with a combined capacity of 9,080 megawatts.
Actor Chang Chen of Taiwan (L) and actress Lin Chi-ling of Taiwan pose during a news conference promoting "Red Cliff 2" in Taipei January 14, 2009.
Actor Tony Leung of Hong Kong (L) and Hong Kong director John Woo pose during a news conference promoting "Red Cliff 2" in Taipei January 14, 2009.
January 15, 2009
Hong Kong: Chief Executive Donald Tsang Yam-kuen said the city faces a bleak economic outlook this year and that he expects more companies to close. Tsang said ''negative economic growth seems inevitable'' this year. Tsang said the jobless rate in the fourth quarter was more than 4 percent, adding that employment was a major challenge. ''After the Chinese New Year, the market will become relatively weak and a wave of layoffs and corporate closures will take place,'' he said. Hong Kong slipped into recession in the third quarter as financial services and exports were hit by the credit crisis and a slowdown in European and US demand. The jobless rate rose to 3.8 percent in the three-month period to the end of November.
A consultation on electoral methods for chief executive in 2012 would be deferred because the city needed concentrate on the economy, Chief Executive Donald Tsang Yam-kuen said on Thursday. At the Legislative Council, Mr Tsang said the city was being hit by the economic downturn, with the hardest blow expected in the first half of the year, making people more concerned about economy than politics. “In view of the possibility that the peak of the economic crisis will occur in the first half of the year, people are most concerned about the economy and their livelihoods,” Mr Tsang said. “The present moment is not an ideal time for public consultation. I therefore have decided to defer the public consultation to the fourth quarter of this year.” The consultation on methods of selecting the next chief executive and deciding electoral legislature was originally planned to be held in the first half of the year. Mr Tsang described the impact of economic downturn as “unprecedented”, with the city’s exports shrinking from November and job losses expected to increase in the coming months. Mr Tsang said the government was drafting plans to stimulate the economy. They included proposals for further economic co-operation with the mainland, the creation of 11,000 new government jobs and the speeding up of banking procedures on loans to small-and-medium-sized firms. Pro-democratic legislator Lee Cheuk-yan said Mr Tsang failed to keep his promise by delaying the consultation on democratic reforms. “It is very disappointing that you use the economic downturn as an excuse to delay discussions on the 2012 election,” he said. “There is a big problem with your integrity.” Liberal Party chairwoman Miriam Lau Kin-yee agreed discussions on political reform could still be carried out when the territory was struggling to improve its economy. But Tam Yiu-chung, chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, said delaying the consultation was appropriate. “All we need to do is complete legislation [on the 2012 election] by 2011... There is plenty of time for the public [to be consulted],” he said.
Hong Kong recorded a double-digit decline in exports in December, pointing to a deterioration in its already recession-hit economy. Chief Executive Donald Tsang’s office did not give precise figures for December exports but warned of more lay-offs and bankruptcies after the Lunar New Year holiday late this month. The sharp fall in exports tracked a regional trend as Asia is being hit by weakening consumer demand in advanced economies. Taiwan’s exports plunged by a record 42 per cent in December from a year earlier while South Korean exports slumped 17 per cent and exports from mainland dropped 2.8 per cent. Hong Kong, as a re-export centre for goods going to and from mainland and an open economy, relies heavily on trade and finance. Figures show this is being hit hard by the global economic downturn and financial crisis and the SAR has already slipped into recession in the third quarter of 2008. A number of economists forecast gross domestic product this year will contract 1 per cent, making it the worst performing economy in Asia after Singapore, where some analysts see GDP contracting 2 per cent in 2009. The Hong Kong government has announced a series of measures to help the territory weather the economic and financial crisis, including facilitating loans to small businesses and guaranteeing bank deposits for two years. It is set to see a sharp fall in tax revenues now that the economy is in recession. Accountants PricewaterhouseCoopers on Thursday forecast the government will run a HK$50 billion fiscal deficit for the year ending March 2009, well above the government’s original estimate for a HK$7.5 billion deficit. The deficits will rise to around HK$60 billion in 2009/10 and HK$85 billion in 2010/11, PricewaterhouseCoopers forecast. In further bad news, the Hong Kong Tourism Board forecasts tourism to decline this year by 1.6 per cent to 29 million visitors due to the global economic downturn. Tourists account for 20 to 30 per cent of retail sales in the territory. The government is due to release precise October-December jobless data on Monday and December trade data on January 29.
The Lands Registry registered 35 lease modifications and three land exchanges during the fourth quarter last year that has generated over HK$1 billion revenue for the administration, a spokesman of the Lands Department said on Thursday. Of the lease modifications, 28 were for residential purposes and 10 for non-residential development. “Among these 38 land transactions, 15 are located on Hong Kong Island, 17 in Kowloon and six in the New Territories. The land transactions realised a total land premium of about HK$1.55 billion,” he said. Meanwhile, another two lots were granted by private treaty during the period. One lot was selected for the site of an electricity substation in Kowloon while the other was granted to the Hong Kong Housing Authority for an existing public housing development.
Harrah's Entertainment, the world's biggest destination entertainment company, has unveiled its vision of Caesars Golf Macau, a five-star golfing lifestyle destination, with the first-in-Asia Butch Harmon School of Golf. The resort promises much more than golf, with ambitious plans worthy of the Harrah's and Caesars brands. The new Caesars facility will see the existing clubhouse expanded to 32,000 square feet, with a 4,000 sq ft spa facility that includes eight treatment rooms, a 2,500 sq ft golf lifestyle boutique, meeting facilities and two VIP golf and entertainment suites. A new floor will offer select guests an unforgettable experience. Featuring a discreet entrance, a lift will lead to the two custom-designed penthouse VIP suites, each of which includes personal wardrobes for golfers, massage rooms, rainforest showers, large balconies with sweeping vistas, plus a private dining room and living room with a karaoke lounge. Special guests will be pampered in a true, full-day resort experience. The centerpiece of the clubhouse will be the high-end, fine-dining restaurant, operated by Macau's leading restaurateurs, the G&L Group. Macau Government Tourist Office director Joao Manuel Costa Antunes said: "As a multi-faceted golf, spa, dining, retail and entertainment destination, Caesars Golf Macau will represent a unique asset in Macau's portfolio of leisure attractions. The Macau Government Tourist Office looks forward to a long and fruitful partnership with Harrah's." One of the "driving forces" for the resort, right from the start, is the Butch Harmon School of Golf. With decades of experience from the Harmon family, plus the revamped 18-hole course and a state-of-the-art teaching facility, golf is going to be a major activity within Caesars, while promising to put Macau on the world map of golf. Unique in the region is the Macau Golf Association's junior program at Caesars Golf Macau. This program will provide opportunities for children to experience golf, and help to identify and develop talented young Macanese players. Features of the youth program include offering dedicated driving range bays to registered juniors on a complimentary basis, hosting tryouts for aspiring golfers and providing a permanent home for the association's summer student holiday golf program. The program will also help to develop a junior squad for the city, who will receive complimentary access to the golf course every afternoon, coaching sessions, and one of the club's Butch Harmon-trained instructors as a team coach for the territory for overseas events. About Harrah 's - Harrah's Entertainment is the world's largest destination entertainment company. Since its founding in Reno, Nevada, more than 70 years ago, Harrah's resort portfolio has grown to encompass over 50 properties on five continents, operating primarily under the Caesars, Harrah's, Horseshoe and London Clubs International brand names. Harrah's also owns and operates the prestigious World Series of Poker tournament, the richest sporting event in the world. With more than 100 million customers visiting the company's properties each year, Harrah's entertainment is focused on building customer loyalty through a unique combination of great service, excellent products, operational excellence and technology leadership. Giving - Ranked by Business Week magazine as corporate America's "most generous cash giver as a percentage of pre-tax profits," Harrah's and its Foundation are committed to reinvesting in the communities in which the company operates, by distributing, on average, nearly US$1.5 million (HK$11.7 million) a week to non-profit causes. And now Macau - Although Caesars Palace, Las Vegas, part of the Harrah's group, has been serving Macau customers for at least 25 years, Caesars Golf Macau will be its first on-the-ground establishment.
China: The World Bank said on Wednesday it had barred seven firms – four from the China and three from the Philippines – from bidding on its projects due to alleged corruption. The firms were involved in a road project in the Philippines financed by the Washington-based bank. China Road and Bridge Corp was debarred for eight years, China State Construction Corp and China Wu Yi Co for six years, and China Geo-Engineering Corp for five years. Investigation by the bank “uncovered evidence of a major cartel involving local and international firms bidding on contracts under phase one of the Philippines National Roads Improvement and Management Programme, known as NRIMP 1,” the bank said. The probe “closely analysed the procurement process the firms participated in and conducted numerous interviews before closing the investigations and initiating sanctions proceedings against the entities,” it said. No World Bank funds from the project were disbursed to the now-sanctioned firms, the statement said, adding that it had stopped about US$33 million from being awarded. “This is one of our most important and far-reaching cases, and it highlights the effectiveness of the World Bank’s investigative and sanctions process,” said Leonard McCarthy, World Bank vice-president for integrity. The bank was also in the process of conducting a worldwide review of its activity in the roads sector, Mr McCarthy said. He did not elaborate. Philippine firm E.C. de Luna Construction Corp and its sole proprietor, Eduardo de Luna, were both debarred indefinitely – the first permanent debarments since 2004, the bank said. The other Philippine firms, Philip-Cavite Ideal International Construction and Development Corp and CM Pancho Construction were each debarred for four years. Another South Korean firm, Dongsung Construction, was separately debarred in August this year for four years for alleged fraudulent and corrupt practices in relation to the project, the bank said.
Passengers pack a train ticket office temporarily set-up for Spring Festival travel peak at Beijing West Railway Station in Beijing on January 11. Million of Chinese are expected to cramp onto China's train network in the coming weeks to return home for the Chinese Lunar New Year. Beijing warned on Thursday that the mass migration home over the Chinese New Year holiday would be especially hard due to lack of train tickets and told rail officials to "use their brains" to ensure things run smoothly. Chinese New Year, or Spring Festival, is the biggest of two “Golden Week” holidays, giving migrant workers their only chance of the year of returning to their home provinces with gifts for the family, the biggest movement of humanity in the world. Last year, that movement was disrupted by the worst winter weather in the south in decades, and this year the holiday, which begins on January 26, has little meaning for millions who have lost their jobs as factories have shut down in the once-booming south and gone home early. With about 188 million people expected to take to the railways over this year’s holiday, 13.7 million people more than last year, pressure for tickets will be high. “This year the contradiction between supply and demand over the Spring Festival is extremely serious,” President Hu Jintao was quoted as saying in a statement by the Ministry of Railways on its website. “The Ministry of Railways must use their brains, study and take numerous measures to benefit the people and publicise them to lessen contradictions, ensuring the Spring Festival mission is completed smoothly,” Mr Hu added. Crowding on to overbooked trains to stand for cramped rides lasting days in some cases is an annual ritual, but Beijing is especially worried this year about the prospect of unrest from frustrated travellers who may not have jobs to come back to. “Increase guidance of public opinion and do a good job at putting out positive propaganda,” the statement also quoted Vice Premier Zhang Dejiang as saying. Xinhua news agency said that for rail workers, this year’s holiday would be “a real test of their capability to promote harmony as the global financial crisis and weakening domestic economy have aggravated the winter blues”. Chai Zeliang, deputy chief of the Beijing Bureau of the Railroad Police, told Xinhua that a guiding principle this year was to exercise restraint and ensure security. “Safety is extraordinarily significant this year because the financial crisis has left many people jobless and with less cash,” he was quoted as saying. “For a harmonious Spring Festival, it is essential to ensure all passengers, especially rural migrants and those on low incomes, can travel home safely with salaries and bonuses secure in their pockets.”
The number of internet users in China jumped nearly 42 per cent to 298 million by the end of this year from the previous year, cementing the country’s position as the world’s largest internet population, the China Internet Network Information Centre (CNNIC) said. The number of mobile Web surfers surged 113 per cent to 117.6 million this year and mobile internet is expected to grow explosively in the next few years after the recent issuance of third-generation (3G) licenses, the state-run agency said. The internet penetration rate in mainland has risen to 22.6 per cent, slightly higher than the world’s average of 21.9 per cent, CNNIC said in a report on Tuesday. In addition, the number of internet news readers has risen to 2.34 million and websites have become a crucial area for publicity, the report said. News portals in mainland, such as Sina Corp and Sohu.com, are the major sources of information for a large number of internet users across the country. Wary of threats to its grip on information, Beijing launched a crackdown on “vulgar” Web content this month after conducting numerous censorship efforts targeting pornography, political criticism and web scams in the past.
China's State Council unveiled a support package for the auto and steel sectors Wednesday to boost the two "pillar industries." Under the plan, the government will lower the purchase tax on cars under 1.6 liters from 10 percent to 5 percent from Jan. 20 to Dec. 31.
China will suspend fuel surcharges on domestic flights from Jan. 15 due to fall in kerosene prices, China's top economic planner and the Civil Aviation Administration of China (CAAC)jointly announced Wednesday. Future fuel surcharges would be decided on kerosene price changes, they said. The National Development and Reform Commission, the top economic planner, and the CAAC on Dec. 25 lowered the surcharge from 150 yuan (22 U.S. dollars) to 40 yuan for flights that were more than 800 kilometers, and from 80 yuan to 20 yuan for those under 800 kilometers. China will also cut retail prices of gasoline by 2 percent and diesel by 3.2 percent as of midnight Wednesday.
Former U.S. President Jimmy Carter (2nd L, front) and his wife (3rd L, front) pose in front of a local medical center at a village in Hong'an County, central China's Hubei Province / Former U.S. President Jimmy Carter (L) receives a souvenir from Li Hongzhong, governor of Hubei Province, in Wuhan, capital of central China's Hubei Province, on Jan. 14, 2009. Former U.S. President Jimmy Carter said Wednesday he believes the incoming administration of President-elect Barack Obama will expand common interests of the United States and China. Carter, 84, flew to central China's Hubei Province after attending a series of events in Beijing to mark the 30th anniversary of China-U.S. diplomatic ties. He visited a memorial hall for Li Xiannian, who was Chinese president from June 1983 to April 1988. The memorial hall is located in Hong'an County, the hometown of Li. Carter said the two countries had witnessed rapid growth in cooperation, and U.S.-China ties had become the most important bilateral link in the world. Meeting with Hubei Governor Li Hongzhong, Carter said he felt very proud of the decision with former Chinese leader Deng Xiaoping to resume ties. Carter said a deeper U.S.-China friendship helped to maintain peace and stability in the whole world. He said China's reform and opening-up policy brought about dramatic changes, creating an economic miracle. Deng Xiaoping and other Chinese leaders had indeed changed China with their wisdom. Calling Carter an old friend of the Chinese people, the governor appreciated the former U.S. president's important role in forging bilateral ties. He called for closer economic and cultural cooperation between both countries. Carter is scheduled to fly to Shanghai on Thursday.
China's ambassador to the United States Zhou Wenzhong will attend US President-elect Barack Obama's inauguration on January 20, Chinese Foreign Ministry spokeswoman Jiang Yu said Thursday. Sino-US relations were in an important era and the two countries marked the 30th anniversary of diplomatic ties this year, Jiang said at a regular press conference. China was ready to work with the United States to advance the constructive partnership from a strategic and long-term perspective, she said. China would work with the United States to deepen dialogue, exchanges and cooperation. As the biggest developing and developed countries, China and the United States shared responsibilities for peace and development of the world, she added.
January 13 - 14, 2009
Hong Kong: Hong Kong ranks world's freest economy for 15th straight years - Hong Kong continued to take the top place in the ranking of the 2009 Index of Economic Freedom for the 15th consecutive year, revealed the U.S. Heritage Foundation here Tuesday. According to the ranking, Hong Kong scores 90 this year, 0.3 point better than last year, well above the world average of 59.5. Among the 10 individual areas assessed, Hong Kong ranks first in trade freedom, investment freedom and financial freedom. Hong Kong also ranks in the top 10 in another three areas, namely business freedom, monetary freedom and property rights. The Heritage Foundation noted that Hong Kong's institutional strengths had allowed it to achieve high levels of prosperity reinforced by vibrant entrepreneurial activity. The income and corporate tax rates in Hong Kong were very competitive, and overall taxation was relatively small as a percentage of gross domestic product (GDP), according to the Heritage Foundation. The foundation also noted that Hong Kong's business regulation was straightforward, and the labor market was flexible. The foundation said Hong Kong was one of the world's leading financial centers, and the regulation of banking and financial services was transparent and efficient. The study noted that property rights were well protected by an independent and corruption-free judiciary. In the Heritage Foundation ranking, Singapore, Australia, Ireland, New Zealand, the United States, Canada, Denmark, Switzerland and the United Kingdom took another spots in the top 10 ranking. Compared with Singapore, Hong Kong fares better in trade freedom, fiscal freedom, investment freedom and financial freedom, while Singapore fares better in business freedom, government size, monetary freedom, freedom from corruption and labor freedom. Welcoming the study, Financial Secretary of Hong Kong John Tsang said, "We are determined to uphold Hong Kong as the freest economy in the world and we see the role of the government as that of a facilitator." Tsang noted that the Hong Kong government provides a business-friendly environment where all firms can compete on a level playing field and establish an appropriate regulatory regime to ensure the integrity and smooth functioning of a free market. The study measured the degree of economic freedom of 179 economies worldwide by assessing 10 factors: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labor freedom.
Green activists say proposed exemptions for red minibuses parked with idling engines are too broad. A government source said earlier that any two red minibuses plying the same route would be exempted from a proposed ban on idling engines if there were passengers in the first vehicle waiting at a stop. Clean Air Action Group convenor Yolanda Ng Yuen-ting said that that would not help improve air quality in busy districts. She said a stop for red minibuses usually had buses plying many routes and the vehicles parked separately. "The exemption virtually allows all the vehicles to park without shutting off their engines," Ms Ng said. She feared the exemption would make a ban difficult to enforce. Phil Heung Fu-lap, vice-chairman of Clean The Air, called for a ban without any exemptions. Meanwhile, Annelise Connell, honorary secretary of Mini Spotters, said many red minibuses had been waiting for passengers on the street, outside minibus stops, but police seldom took action against them. She said she had doubts that the police had enough manpower to enforce the ban on idling engines if the law was passed. Ms Ng said a hotline allowing people to report cases of illegal parking and idling engines should be established.
Lawmakers are seeking an explanation from the government for the reported use by Chief Executive's Office director Norman Chan Tak-lam of a public relations firm run by an election aide to Donald Tsang Yam-kuen. Democratic Party lawmaker Cheung Man-kwong yesterday wrote to Chief Secretary Henry Tang Ying-yen expressing concern that Mr Chan may have deviated from proper administrative procedures. A media report on Monday said Mr Chan had arranged lunch meetings with senior executives of media organizations last month through Suki Yau Suk-yee, a co-managing director of corporate communications consultant firm Citigate Dewe Rogerson. Ms Yau served on Mr Tsang's campaign team for his 2005 election and 2007 re-election. Apple Daily reported that she was present in gatherings she arranged for Mr Chan. "Why did Mr Chan skip existing government procedures, bypass staff at his own office, the information coordinator and the Information Services Department to make the invitations?" Mr Cheung asked in his letter. The legislator later said government communication through a private company could lead to confidentiality concerns, and criticized Mr Chan for lacking political sensitivity. "When you're in a position as high as him, you have to do everything by the book," said Mr Cheung. "There should be no conflict of interest. But here, the government seems to be giving an interest to this company." A spokeswoman for the Chief Executive's Office said: "Neither the Chief Executive's Office nor the director has hired any companies or individuals to provide public relations or media services. The director had lunches with people from different sectors from time to time." Ms Yau said yesterday that she and Mr Chan had lunched with a media practitioner in the middle of last year. She said it was just a social occasion. Civic Party leader Audrey Eu Yuet-mee said she would not jump to conclusions, but since the public was concerned, Mr Chan should explain. Ip Kwok-him, of the Democratic Alliance for the Betterment and Progress of Hong Kong, did not see much of a problem if Ms Yau had been present in a private capacity. "But if she was there on behalf of the government, I would want to know why the government did not use the Information Services Department," he said. However, League of Social Democrats chairman Wong Yuk-man said: "If the public knows, then it's not private is it?"
Shares of HSBC Holdings (SEHK: 0005, announcements, news) fell as much as 12.3 per cent to a decade low in London yesterday after Morgan Stanley said the bank might need to raise capital of up to US$30 billion and slash its dividend by half. The stock slid to 561.25 pence (HK$63.17), the lowest since February 1999, before recovering to trade 9.77 per cent down at 577.5 pence in late activity. Earlier, it sank to as low as HK$69.70 in Hong Kong trading before closing with a loss of 4.11 per cent at HK$70, the lowest since September 11, 2001. Morgan Stanley also cut the bank's target price to HK$52 from HK$75 after trimming its forecast on the lender's earnings per share for last year and this year by 17 per cent and 39 per cent, respectively, on expected further write-downs and weaker revenue in key markets. "We now expect earnings to fall more sharply in 2009, with no recovery until 2011 at the earliest," Morgan Stanley said in a report. Ben Kwong Man-bun, the chief operating officer at KGI Asia, said the share price of HSBC would remain under pressure due to the expected earnings decline. Mr Kwong agreed that there were opportunities for the London-based lender to raise capital like its rivals Standard Chartered and DBS Group Holdings, which tapped the market for funds last month. "It will be a very difficult year for HSBC [amid the global economic downturn]," he said, adding it was difficult to predict whether the share price would fall to as low as HK$52. CLSA cut its price target for HSBC to HK$64 on December 15 from HK$92 and suggested the bank should seek opportunities to raise as much as US$14 billion through share sales to offset rising provisions for subprime mortgage loans. JP Morgan cut HSBC's price target to HK$72 early last month, while Goldman Sachs reduced the target to HK$77 in November. Goldman put it under further review last month after HSBC said it had provided US$1 billion of financing to some institutional clients who had invested in funds with Madoff Investment Securities. Morgan Stanley said HSBC was highly likely to cut its dividend this year and could issue rights shares of as much as £20 billion in the worst-case scenario. It estimated that HSBC had a core capital ratio of 7.3 per cent at the end of last year, one of the weaker capital ratios among European banks and in Asia. Louis Tse Ming-kwong, a director at VC Brokerage, said it was understandable if HSBC reduced its dividend as its earnings were expected to decline because of the global financial crisis. Mr Tse said the market was not surprised that HSBC might try to raise funds.
Poon Kwai-chun, 86, reaps the rewards after queuing early at HSBC in Kwun Tong yesterday to get new banknotes for lai see packets. Lai see packets may escape the effects of the economic downturn, if the evidence outside banks yesterday is anything to go by. Queues of people eager to get their hands on crisp new banknotes began to form as early as 5am - and most said they would not be economising this year. One hour before the Kwun Tong branch of HSBC (SEHK: 0005, announcements, news) opened, more than 100 mostly elderly customers were already waiting. Juleaner Chan, who arrived at about 9am, is among those who will not cut their spending on red packets. Ms Chan said she had set aside HK$21,000 and would not give out HK$10 notes. "I only give red packets to my good friends, and it is not nice if I just give them HK$10," she said. "After all it's just once a year." Poon Kwai-chun, 86, said she would not give out less money this year, although she had always been cautious in handing out red packets. "Even with my grandchildren, I am just giving them HK$20 each." Ho Chi-nam was first in line, arriving at 5am when the temperature was 9 degrees Celsius. He said he would spend HK$2,000 to HK$3,000 on red packets, a few hundred dollars less than last year. While he gave out more HK$50 packets last year, this time there would be HK$10 and HK$20 packets.
Some 500 restaurants will dish out red packets with coupons worth around HK$100 million over the Lunar New Year holiday to boost business ahead of the expected post-festival downturn. Simon Wong Ka-wo, president of the Federation of Restaurants and Related Trades, said they had originally planned to distribute coupons worth HK$20 million but the value of the coupons had increased fivefold because of an overwhelming response from restaurants. "This is because the catering industry is worried that business will dive after the [Lunar] New Year. Therefore we are trying our best to launch some events to stimulate spending," Mr Wong said. "The most important thing is to keep the overall sentiment good. Shopping vouchers can attract more people to go to restaurants and shopping malls and make some purchases. This is one of our strategies." The participating restaurants and karaoke parlours, operated by 38 companies, will give away 120,000 red packets containing cash coupons worth HK$20, HK$50 and HK$100 to their customers on the first three days of the lunar new year. The coupons can be used from February 15 to the end of March. Mr Wong said some might include some conditions, such as a minimum spending amount, for consumers to redeem against meals. He said the federation would also give out 10,000 "fortune bags" when shoppers spent a certain amount at designated shopping malls. The bags would be filled with gifts such as brown rice, sauce and cooking oil worth about HK$500. Bonnie Cheow Po-yee, assistant sales and marketing manager at Hang Heung's Kitchen, said the group's two restaurants joined the campaign to offer dining coupons worth HK$20, which diners could use if they spent HK$100 or more. Ms Cheow said the move was one of the group's promotions and was aimed at boosting business because consumer spending might shrink after the festival. The campaign follows the federation's launch of a HK$1 campaign - under which more than 100 restaurants, food stores and karaoke establishments took turns to offer menu items for HK$1. A spokeswoman for the Tao Heung Group said it would give HK$10 in cash to each customer on the first day of the lunar new year, and offer discounts.
Victor Lui, executive director at Sun Hung Kai Real Estate Agency, expects revenues of HK$5 billion from the sale of the first batch of 200 units in the 825-unit Cullinan Towers. In Hong Kong's becalmed property market all eyes are now on the uptake of units in Cullinan Towers - Sun Hung Kai Properties (SEHK: 0016)' newly launched project at Kowloon Station. In a bold pre-launch move, SHKP said it expected to fetch HK$50,000 per square foot or HK$200 million for the penthouse in the development. It was also asking about HK$30,000 per square foot for four special units on floors 83 to 90. If its price expectations are met, the 825-unit development will generate record revenues. SHKP has targeted revenues of HK$5 billion from the sale of the first batch of 200 units, which are expected to be available for occupancy in the fourth quarter. Now industry players are waiting to see if the bold pricing move by SHKP pays off and whether Cullinan Towers turns out to be another Leighton Hill - the development that marked a turnaround in market sentiment after the long price decline that followed the bursting of the dotcom bubble in 2001. Located next to Hong Kong's tallest building, the International Commerce Centre (ICC), Cullinan Towers is the tallest "curtain-walled" residential block in Hong Kong (that is, with no balconies). The penthouse and special units are already being marketed and Victor Lui Ting, an executive director at Sun Hung Kai Real Estate Agency, told the South China Morning Post (SEHK: 0583, announcements, news) on Monday that 10 potential buyers had expressed interest in the penthouse. "We may sell the special units by Lunar New Year," Mr Lui said. The most expensive apartment in Hong Kong is a 7,088 per square foot penthouse at Kerry Properties (SEHK: 0683)' Branksome Crest in Mid-Levels, which was sold for HK$39,786 per square foot or HK$282 million in December 2007. The special units are also opened for offers and the higher the prices they commanded, the more SHKP could ask for the standard units. Prices of these units - which will be launched after Lunar New Year - are pitched at about HK$15,000 per square foot for a unit with a garden view and HK$20,000 per square foot for units with sea views. Transaction prices at the nearby development, the Arch, have ranged from HK$9,103 to HK$19,523 per square foot in the past 90 days, according to data from Centaline Properties Agency. The Cullinan comprises two towers with a total of 825 units. In the three years to 2011, the developer will sell 200 units each year. The remaining 225 units at the same tower with W Hotel will be available for leasing only. Mr Lui said the Cullinan provided the only new residential units in integrated redevelopment at Kowloon Station. "These are the only residences linked to the ICC. It is rare." The construction cost of the Cullinan is the highest of all SHKP residential projects at HK$5,000 per square foot. Despite the poor economic outlook and the fact that property prices at Kowloon Station had dropped almost 30 per cent since the financial crisis broke out, Mr Lui was confident SHKP would achieve its target prices. "We launched Leighton Hill in Happy Valley in 2001 after the bursting of the dotcom bubble," he said. "Many people didn't think the project could achieve strong sales before we launched the project. However, the sales were strong," The developer sold all of the 544 units in the luxury project in less than a month and generated about HK$9 billion in revenue. Property agents said the strong sales were due to its prime location, limited new supply in the area, good quality and reasonable prices. Mr Lui expects half of the buyers of the Cullinan apartments will be foreigners and mainlanders, while most of the local buyers will be from old families less affected by the global financial crisis. On the wider property market outlook, he expects the number of deals and prices will increase in the first half of this year from the lower levels in the second half of last year. "The market will benefit from low interest rates, limited new supply and the hesitancy of investors to investing in the financial market," Mr Lui said. However, while mass residential and top-end residences would remain in demand, "sales of middle-class residences will be affected as the middle-class suffered the most in the financial crisis", he said.
In a step seen to be a softening of his stance on the extension of the blackout period, Hong Kong Exchanges and Clearing (0388) chief executive Paul Chow Man-yiu is asking the Listing Committee to take a second look at the controversial rule change. And he wants to bundle it with another thorny issue - the introduction of mandatory quarterly reporting, a letter obtained by The Standard reveals.
No to politics as Coleman promises to raise the Bar - No politics, speaking on issues only when necessary and a dash of color - that is what the Hong Kong Bar Association can expect under Russell Coleman who is set to be elected chairman today, succeeding Rimsky Yuen Kwok-keung.
The financial tsunami has hit the sea cargo transport business so badly that freight firms are slashing rates to rock bottom, says a research company. "Rates have been zero in some places for a couple of months already," Transport Tracker's founder Charles de Trenck said. "Nominally, rates have also gone down a lot, from US$300 (HK$2,340) per box." De Trenck said the trade flow from Asia to Europe will drop by 9 percent this year against a previous annual trans-pacific growth rate of 8 percent for the past 15 years. He estimates flow from Asia to the United States has dropped by up to 7percent in the previous year. "My forecast for this year is negative 5percent, from Asia to US." De Trenck said that offers of zero rates from shippers are not logical, given the nature of the market. However, they will need to do whatever it takes to survive. As an analogy, he said it is like an airline offering spare seats to passengers at no cost, for the possibility of gaining revenues from other services such as food. There are reports of idle ships in Singapore with consultancies suggesting this is due to a drastic decrease of demand and not a mere economic cycle slowdown. Brokers are reportedly also slashing and waiving fees for shipments.
The Hang Seng Index is heading toward 10,000 points in the first half of the year as the recent bear market rally is over and corporate earnings may be poorer than estimated, according to Citi analysts. "Earnings estimates remain too high, in our view, and we believe the bulls should be prepared to sit out a cold winter before thinking about coming out in the second half of 2009," said Citi head of Hong Kong research Anil Daswani in a report. The local benchmark closed fractionally higher yesterday, up 0.3 percent to 13,704.61, ending six sessions of decline. The HSI has lost 9 percent from its close of 15,042.8 on January 2. Daswani said the index may retest troughs in the first half, and Citi set a target of 9,100 based on the trough price- to-earnings of 8.1 times. "The first quarter will be a reality check, as the market will show whether the stimulus is effective and how much corporate earnings did decline over the past year," Citi head of investment strategy and research Catherine Cheung said. She said the stock market risks a rapid fall if investors are disappointed by worse-than-expected results. Citi expects corporate earnings to decline 10 percent to 20 percent this year. Cheung said Hong Kong-listed Chinese shares may enjoy a "honeymoon period" this quarter due to the low price- to-book ratio, but fluctuations are expected. She said the Hang Seng China Enterprises Index may hover between 7,500 and 10,000 during the first half. The index climbed 2 percent to 7,219.04 yesterday. Citi estimates the SAR economy to regain growth of 1.7 percent and 4.9 percent in the third and fourth quarters, from declines of 0.4 percent and 1.5 percent in the first and second quarters, respectively. Meanwhile, Khiem Do, head of Asia multi-asset at Baring Asset Management, said because of their sound foundations, the Hong Kong and China markets are tipped to recover in the second half and lead a global rebound.
China: China websites offering high-quality fake banknotes were still operating yesterday despite regulators promising a crackdown before the Lunar New Year, when cash transactions typically peak for the year. Several online sellers of the fake notes in Guangdong claim the notes' security threads and watermarks can cheat detectors, and are ideal for shopping or gambling. The vendors said potential buyers could view the forged notes before purchasing, and many promised a full refund if clients could not offload their stocks. Many said they had stopped supplying fake notes with serial numbers starting with either "HD" or "HB" because the public had been alerted to counterfeits with those numbers. A fake-banknote distributor in Shenzhen said on his website that he only supplied "authentic Taiwan-made forged notes with foreign technology". The vendor claimed to offer the latest forged notes and coins in various denominations, with "genuine colour, touch and major anti-counterfeiting characteristics". But suppliers said the guarantee of quality did not extend to depositing the money in bank accounts because tellers had learned how to spot the hi-tech fakes. "Surely we wouldn't sell fake banknotes to you if we could deposit them in bank accounts ourselves," one unapologetic Guangzhou counterfeit-money wholesaler said. He offered counterfeit 100 yuan (HK$113) notes at 15 yuan each and a 30 per cent discount for repeat customers. "You can choose the face value you like, but the minimum order for each kind of banknote is a face value of 10,000 yuan. We recommend smaller denomination banknotes that people are less alert to and unlikely to examine with detectors each time," he said. All counterfeiters offered door-to-door deliveries after receiving payments from customers. Guangdong is notorious for producing 90 per cent of the country's counterfeit notes, although the fake 100 yuan notes recently in circulation are believed to have been produced by a fraud syndicate in Taiwan. Guangdong police say they have seized more than 1.7 billion yuan in counterfeit currency between 2005 and last year. Mainland bankers estimate that the seizures account for 80 per cent of the total of forged money seized in the country during this period. Meanwhile, a Guangxi farmer was sentenced to 10 months in jail and fined 15,000 yuan on Tuesday for using 52 counterfeit 100 yuan notes he bought in Guangzhou. Xinhua said the man bought 55 fake banknotes that all started with "HD90" in early November. He had been jailed for six months in Dongguan in 2005 for concealing counterfeit notes.
Huawei Technologies, China's biggest telecommunications equipment maker, has won a US$235 million contract to install a 3G mobile network for 935,000 customers in Costa Rica, according to reports. Deputy manager Claudio Bermudez of the Costa Rican Electricity Institute (ICE), which awarded the contract, said the 3G network should be operational by the end of this year. The contract, which Huawei won in bidding against Sweden's Ericsson and mainland rival ZTE Corp (SEHK: 0763), will be submitted for approval to Costa Rica's General Accounting Office. An initial bid in August was won by Huawei with a US$583 million price tag against no opposition as other companies rejected ICE demands for the contract. President Oscar Arias intervened, asking ICE to withhold adjudication of the contract until another auction could be held. The 3G network will give mobile users access to high-end data applications, including interactive gaming and internet access, video conferencing and video streaming. Huawei forecast global contract sales of more than US$30 billion this year after jumping 46 per cent last year to US$23.3 billion, the China Business News reported last week. Huawei normally announces only contract sales, while actual sales average about 72 to 75 per cent of that figure, according to the report. "The global economic situation is very complicated, offering both challenges and opportunities," chairman Sun Yafang was quoted as saying in an e-mail to Huawei employees.
The Communist Party of China (CPC) has vowed to step up investigations into corruption involving cadres who colluded with traders for personal gains or deal between power and money. A communique released Wednesday at the end of a three-day plenary session of the CPC Central Commission for Discipline Inspection (CCDI) also warned that efforts to prosecute cadres who accepted bribes would be stepped up. The principle that everyone is equal before the law must be enforced and no corrupt official should be able to escape punishment under the law, the communique said. The crackdown on corruption in 2009 will also focus on cases involving food and work safety, environmental protection, land use, oil prices, use of government special funds and other issues of public concern, it said. The third plenary session of the 17th CCDI outlined the anti-corruption work for 2009. The CPC will step up efforts to build an anti-corruption system that pays attention to both prevention and punishment, to further gain trust from the public and ensure stability and development, the communique said. Education on eradicating corruption and upholding integrity should be incorporated into the train agenda of Party officials, said the communique. The self-discipline organs should fight all forms of corruption and illegalities, it said. The CCDI warned officials against unacceptable practices, including accepting cash or financial instruments as gifts, occupying apartments not in accordance with their rank, and allowing spouses or children to take advantage of their influence for illicit gain on the stock market or in business. The crackdown will also focus on officials who seek to profit from involvement in construction contracts, the communique said. Officials are banned from seeking profits for their "special concerned persons" through use of social connections with other officials, according to the communique. The CPC would extend its campaign to strengthen supervision over government-paid trips aboard, restricting expenses, trip members and numbers of trips, it said. The authorities banned almost 4,000 Party and government officials from joining more than 550 publicly-funded overseas trips in the six months to the end of November last year, figures from the CCDI showed. In total, 830,000 official passport-holders went abroad in that period, down 18.9 percent year on year. Commission members agreed that supervision and inspection will be launched to ensure all the decisions and policies made by the CPC Central Committee and the scientific outlook on development are carefully implemented. Inspection on the implementation of policies concerning expanding domestic demand, protection of arable land, land and resource conservation, environmental protection, as well as use of disaster relief funds should be stepped up, they agreed. Officials should improve their work style and build close relations with the people. Relevant inspection and supervision would be carried out accordingly to rectify officials' defects, such as those who turned a blind eye to people's difficulties. Officials should increase economic awareness to frugally conduct all undertakings. Those who do great harm to the interests of the country, the public, or the citizen's rights would be severely punished, said the communique. Party committees at all levels should deepen the reform in crucial fields and key phases. Regulating officials' power, improving the market system and strengthening supervision and punishment should be integrated during the reform and innovation, it said. The evaluation of officials should be improved in accordance with the Scientific Outlook on Development and items subjected for administrative approval should be reduced. Relevant organs should also deepen the reform in fiscal charges, investment system and state-owned companies. The National Bureau of Corruption Prevention should be fully effective. The supervision of work of government officials, especially those at high level, should be strengthened, regulating them to wield power reasonably. Officials should visit subordinate departments and communities more often to get a clearer understanding of grassroots work. Government at all levels should conduct their work in a more transparent and open way. Administrative supervision should be strengthened in three aspects: law execution, anti-corruption and working results. The building of a clean Party at basic levels should be strengthened in rural areas, state-owned companies and financial organizations, colleges and universities and communities in urban areas. Statistics from the CCDI showed that 4,960 officials above county head level were penalized nationwide during the year ending last November. Of those, 801 have been prosecuted. The officials were involved in corruption, commercial bribery, harming the public interest and other disciplinary or illegal activities.
The snow carving Happy Birthday is presented during the 14th Harbin International Snow Carving Contest in Harbin, capital of north China's Heilongjiang Province Jan. 13, 2009. The carving made by a Russian team won the first prize during the contest on Tuesday, as part of the 25th Harbin International Ice and Snow Festival.
Builders work at a construction site of the "Sunny Valley" located at the Expo Boulevard for 2010 Shanghai World Expo in Shanghai, east China, Dec. 22, 2008. The "Sunny Valley" project, containing six horn-like structures, was considered to be the most difficult part of Expo Boulevard and one of the highlights of World Expo 2010. The World Expo scheduled for 2010 in China's Shanghai will boost the global economy, Leo Delcroix, commissioner of the Belgian government for the exhibition, told Xinhua on Tuesday.
January 12, 2009
Hong Kong: The government is expected to come up with a series of initiatives to boost Hong Kong's economy and provide jobs at a high-level taskforce meeting next week, with options including subsidies for companies hiring graduates. A government source said the administration was pondering how to help sectors in need during the current hard times. "The government has introduced measures to help people like social security recipients and public housing tenants. "The job prospects of university students who graduate this summer merit attention as we expect they will face huge difficulties in seeking jobs," the source said. In July, Chief Executive Donald Tsang Yam-kuen unveiled an HK$11 billion relief package for poorer community sectors hard hit by spiralling inflation. It included an extra month's payment for social security and disability allowance recipients, and an extra two months' payment of the old age allowance. Public housing tenants will get an additional two months rent-free. The chief executive announced after a meeting of the taskforce on economic challenges early last month that the government would provide HK$100 billion in loan guarantees to businesses. It would also create more than 60,000 jobs through speeding up civil service recruitment and infrastructure projects. The taskforce will hold its third meeting on January 22. The government source said that one option was to subsidise the hiring of university graduates by companies or provide training posts for them. It is understood that Lawrence Lau Juen-yee, a taskforce member and vice-chancellor of the Chinese University, had urged the government during previous taskforce meetings to help job-seeking university graduates. Another government source said it was likely the government would move on that issue. Six business chambers launched the "one company, one job" campaign in July 2002. Under the campaign, each of the 10,000 companies the chambers represent were asked to employ at least one intern more than usual, with preference given to holders of degrees or diplomas. The scheme, which generated about 3,000 jobs for 2002 graduates, lasted a year and each intern was paid at least HK$6,000 a month. Shih Wing-ching, a taskforce member and chairman of the Centaline Property Agency, said he believed the government might introduce a similar scheme. "But such schemes can only provide short-term relief," he said. "The government should hire people on its own to take part in short-term projects like environmental protection." Paul Yin Tek-shing, president of the Chinese Manufacturers' Association of Hong Kong, said the idea of subsidising companies to employ graduates was well-intentioned and could ease unemployment in the short term. "The business community prefers employing staff who pledge loyalty to companies," Mr Yin said. "Many companies are concerned about the cost incurred in training graduates who may hop to other firms." Stanley Lau Chin-ho, deputy chairman of the Federation of Hong Kong Industries, said many companies would be willing to join such a programme as a gesture of social responsibility.
Chief Executive Donald Tsang Yam-kuen and his wife, Selina Tsang Pou Siu-mei (front right), at the start of the Hong Kong and Kowloon Walk at Hong Kong Stadium. Donations to the Community Chest, one of Hong Kong's biggest charities, have plunged to a 10-year low, its vice-patron Dennis Sun Tai-lun said yesterday. The organisation was expecting to collect HK$210 million this financial year but, so far, has raised only about HK$160 million. Dr Sun said it was the worst figure in the 10 years he had been vicepatron. "This year, we had budgeted HK$210 million in funds to be allocated to 144 social welfare agencies. But we estimated that the funds raised so far were about HK$160 million," Dr Sun said. "We think that would be the result in the best-case scenario. So there would be a total shortfall of HK$50 million. "But, over the years, we have accumulated some reserves, which are sufficient to cover the HK$50 million." Donations to the Community Chest shrank to HK$168.63 million in the 2002/03 financial year but steadily increased to HK$258.5 million in 2007/08. Dr Sun said much of the money raised by charities last year was for relief efforts after major disasters, such as May's devastating Sichuan earthquake, which affected donations to the Community Chest. He said the charity would introduce more fund-raising events. The recession and global financial troubles have also affected donations. With corporate profits and household incomes hit by the downturn, donations have suffered as companies and individuals cut costs and rein in their spending. The charity yesterday kicked off its Hong Kong and Kowloon Walk with Chief Executive Donald Tsang Yam-kuen. More than 18,000 people participated, with funds raised to benefit 21 member agencies providing family and child welfare services. The charity's remaining events this financial year include a corporate challenge for marathon runners on January 18 and the annual New Territories Walk on February 15.
Cash-rich China shoppers are continuing to spend, spend, spend, despite the global financial crisis, according to operators of MTR Corp's shopping malls. Travelers from the mainland are particularly splashing their cash at the high-end Elements shopping mall in Tsim Sha Tsui, with some forking out as much as HK$1 million in a single spree. MTRC chief development manager Betty Leong Sin-ling says that overall, there was an average 15 to 20 percent increase in customer traffic at all MTRC malls over the Christmas and New Year period. Elements showed a 15 percent year-on- year increase in traffic, reaching 175,000 customers a day during the Christmas period. On New Year's Eve, there was a 60 percent surge compared to normal days. "It was better than we forecast, the market was still bullish. We expect there will be 5 to 10 percent increase in customer traffic during Chinese New Year," said Leong, who did not disclose the corresponding business volumes. She said 35 percent of shoppers are from the mainland, who spend from HK$20,000 to HK$1 million each. "They mainly buy jewelry, clothes and handbags. Some still bought more than HK$1 million worth of jewelry in October and November despite the financial tsunami," Leong added. Rents in Elements are high, but Leong said the mall is 100 percent leased, with a waiting list of potential high-end tenants. Asked if there was pressure to cut rents, Leong said the mall only opened in October 2007, and most companies have three-to five- year leases. She wouldn't say if rents could come down at other MTRC shopping malls. Hong Kong's major travel agencies sent a joint letter to major developers, including the MTRC, requesting a 50 percent cut in rents in the coming six months. None of the developers has responded, and the railway corporation has increased its management fees and air-conditioning charges. To alleviate pressure on shop owners, Leong said the corporation will take care of 70 percent of the cost of promoting its malls, up from the previous 50 percent. She said more will be spent on coupons and other incentives for customers instead of mall decorations. The MTRC spends about HK$100 million on mall promotion each year.
China: Huawei Technologies, the mainland's biggest telecommunications equipment maker, has won a US$235 million contract to install a 3G mobile network for 935,000 customers in Costa Rica.
China Eastern Airlines (SEHK: 0670) has unveiled a larger-than-expected 6.2 billion yuan (HK$7.04 billion) hedging loss for last year, the biggest loss in jet-fuel contracts reported by a mainland carrier so far amid plunging oil prices. The nation's third-largest carrier said the fair-value losses from wrong-way bets on fuel costs jumped 239 per cent at the end of last year, compared with 1.83 billion yuan in October. As a result, the company would report a "significant loss" for the year, China Eastern said in a statement filed with the stock exchange yesterday. The figure far exceeded analyst forecasts of 3 billion yuan, triggering concerns that Air China (SEHK: 0753, announcements, news) will also suffer from worse-than-expected losses. "The loss on fuel-hedging contracts in the industry has been underestimated," said transport analyst Li Lei at Citics China Securities. The Shanghai-based carrier said an actual cash loss on settling jet-fuel hedging contracts reached US$14.15 million last month, against US$420,000 in November. The loss increases the burden on the company, which has been grappling with falling demand and heavy financial loads. The company recorded a loss of about 2.29 billion yuan and had a gearing ratio of 98.49 per cent in the first three quarters of last year. Last week, it said passenger numbers fell 5.39 per cent last year, the first decline in a decade. To help the airline cope with its financial woes, the government will inject 7 billion yuan into the company, more than double the initially planned 3 billion yuan. "The mark-to-market loss is a result of falling spot prices of aviation fuel," said a spokesman for the carrier yesterday. "We will write back some when the price of oil rebounds. "I do not know if this is the biggest loss among Chinese counterparts. They have not yet announced their figures, we are the first to report a full-year loss for fuel hedging." Like other carriers, China Eastern agreed to hedging deals because fuel prices doubled in a year to hit a record in July last year. Such contracts guard against the risk of further price increases. China Eastern's hedging volume comprised 36 per cent of its estimated fuel consumption for this year, the company said earlier. Those contracts have turned into losses with an almost 70 per cent slump in crude oil prices from a peak in July of more than US$147 to US$45.59 per barrel at the end of the year. Last week, Cathay Pacific Airways (SEHK: 0293) reported losses on fuel-hedging contracts for last year amounting to HK$7.6 billion, sending the previously profitable Hong Kong carrier into an expected record loss. Air China, the second-largest mainland carrier, said earlier that its hedging losses widened to 3.1 billion yuan by the end of October. Analysts said its hedging loss could increase to 4.5 billion yuan last year. China Southern Airlines had a US$6.28 million hedging loss last year but stopped jet fuel contracts in September on worries that oil prices might keep falling, according to mainland media. "Hedging loss is commonly underestimated because air carriers often will not disclose all the substantial details of their hedging contracts," Mr Li said, adding that if international crude rose to US$50 per barrel or more, China Eastern might be able to regain some of the loss. International crude prices, which dropped below US$40 per barrel last week, should rebound this year, he added. "China Eastern still has a chance to turn around with a net profit this year if the airline industry revives with higher demand." Shares in China Eastern closed at HK$1.12, down 5 per cent from Thursday's close. It fell 85.46 per cent to HK$1.17 last year.
The major museums of once-bitter rivals Taiwan and the mainland are planning unprecedented exchanges and could hold a joint exhibition as relations warm. Chou Kung-hsin, director of the National Palace Museum in Taipei, plans to visit the museum's counterpart in Beijing, or, precisely speaking, its predecessor from where most of the Taipei museum's rich collection of Chinese art pieces and artefacts originated. The visit, if realised, would mark the highest-level contact between the two museums in the 60 years since the Kuomintang fled the mainland, taking the collection with it. While there, Ms Chou and her delegates "will take a look at the collection of the Beijing Palace Museum and explore the possibility of future co-operation", Fung Ming-chu, a spokeswoman for the Taipei museum, said. Cheng Xinmiao, head of the Palace Museum in Beijing's Forbidden City, would make a reciprocal visit in March, she said. The planned exchange of visits would have been unimaginable less than a year ago when Taiwan was ruled by then-president Chen Shui-bian of the pro-independence Democratic Progressive Party, who repeatedly challenged Beijing with provocative remarks about the island's sovereignty. But the tensions across the Taiwan Strait have eased dramatically since Ma Ying-jeou, of the China-friendly KMT, took office in May. The attempt to promote bilateral co-operation seems to have got off to a good start. The Beijing museum had agreed to lend its Taipei counterpart 17 artefacts to enrich an exhibition due to take place in October on emperor Yongzheng (1678-1735) of the last imperial Qing dynasty (1644-1911), Ms Fung said. "The exhibits could also be jointly sponsored by the two sides, with details of the co-operation waiting further discussion," she said. The 17 pieces will include portraits of the emperor dressed in western clothes and as a Tibetan Buddhist monk. "We have never had Yongzheng portraits such as these in our collection," Ms Fung said, mindful of the frequent comparisons between the two museums. The Taipei museum boasts more than 655,000 Chinese artefacts spanning 7,000 years from the prehistoric Neolithic period to the end of the Qing dynasty. But the notion that Taiwan would lend anything to Beijing any time soon was met with scepticism by Ms Fung, because she said there was no guarantee of its return. There is no judicial agreement between the two sides that guarantees the return of loaned items, and the Taipei museum fears their artefacts could be held by mainland authorities who regard the island as part of its territory. The National Palace Museum was founded in Beijing in 1925 and its treasures - considered by former KMT leader Chiang Kai-shek to be a crucial symbol of China's political legacy - were crated and moved around the mainland during the second world war and, later, the civil war between the KMT and the communists. Chiang was defeated by the communists led by Mao Zedong and fled to the island in 1949, where he established the rival Republic of China. The collection was shipped across the Taiwan Strait to Taiwan between 1948 and 1949. "It is the legacy of the bloody civil war," said George Tsai, political science professor at the Chinese Culture University in Taipei. Each year, about 10,000 mainlanders visit the museum to admire the treasures they regard as stolen. The Taipei museum draws more than 1.5 million tourists a year.
Vice President Xi Jinping called on the people of Macau yesterday to strengthen their resolve and find solutions to the hardships facing the region. In the afternoon he went from Macau to Zhuhai where he was welcomed by Guangdong party secretary Wang Yang. Xi is expected to visit factories in the Pearl River Delta that are suffering from the financial crisis. Xi said the two-day visit to Macau was fruitful and that just like the rest of China the region is being battered by the financial tsunami. But the Macau government, he said, has sought orderly and effective measures to tackle the crisis. "As long as you don't let the spirit fall, there will be more solutions than hardships," Xi said. "The Macau government and people will have one heart, one mind to tackle the financial crisis, which can be turned into opportunities. Macau will be prosperous and the people can live well." Xi did not respond to a question on what qualities the second chief executive should possess. Two potential candidates, Secretary for Social and Cultural Affairs Fernando Chui Sai-on and Secretary for Economy and Finance Francis Tam Pak-yuen, went with Xi on parts of his Macau tour. With Macau marking the 10th anniversary of its handover to the mainland at the end of this year, Xi said the coming year's job will be glorious but tough.
China railway stations registered a record number of passengers on the first day of the peak Lunar New Year travel period yesterday. A total of 4.7 million passengers heading home for the holidays were estimated to have taken trains nationwide yesterday, the highest number in the mainland's history, China Central Television reported. A member of staff with the Guangzhou Railway Group's news office estimated that more than 310,000 passengers would depart from Guangdong yesterday and that 7.08 million passengers would return to their hometowns from Guangdong before the Lunar New Year. According to the group's figures, the number of passengers transported on Saturday was up 41.3 per cent compared to the day before last year's peak travel period. But she said last night that it was too early to provide a figure for the increase in the number of passengers yesterday. Since Guangdong employed the greatest number of migrant workers on the mainland, the group could meet only the ticket demands of one third of more than 20 million potential passengers in the province, the staff member said. In Beijing, Xinhua said the railway authorities would transport nearly 10 million passengers during the 40-day peak travel period and that the number of passengers yesterday had increased by over 20 per cent from last year. It said a record 2.3 billion passenger trips were expected on the mainland during the holiday period. A Guangdong Railway Group staff member said the huge increase in passengers was due partly to the severe snowstorm that damaged power supplies along the Beijing-Guangzhou railway last year, trapping millions of migrant workers heading home from the Pearl River Delta. "Tens of thousands migrant workers trapped in Guangdong by the snowstorm last year will want to return this year," she said. To cope with a possible snowstorm similar to last year, the group had prepared 50 locomotives in Guangzhou and in Zhuzhou , Hunan , and 150 emergency generators along the Beijing-Guangzhou and Shanghai-Kunming railways. She said 15,000 staff had been trained to clear any ice and snow that might block the railway and that the group had also drawn up several emergency responses for situations such as bad weather, big delays, equipment failure and train accidents. Chenzhou in Hunan completely lost power and water supplies for 10 days during last year's snowstorm. The local railway authority told the Southern Metropolis News it had enough locomotives and generators and that there would not be a railway jam even if a snowstorm happened again. But the authority also said the recent warm weather was similar to last year's weather before the snowstorm hit. Many residents said they were stocking up on rice, according to the report. The Central Meteorological Station forecast yesterday that central and eastern parts of the mainland would be affected by a strong, cold wind in the coming three days and that in some areas the temperature would drop sharply, by up to 10 degrees Celsius. Guangdong announced yesterday that parts of the Beijing-Zhuhai highway had been closed 11 times since December 21 because of ice on the road.
China could be the first to recover from the global financial crisis, and will introduce more measures in the next two months to bolster the economy, Premier Wen Jiabao has said. "Our aim is to be the first to recover from the financial crisis. We must have faith and determination," Wen said on a tour of export powerhouse Jiangsu province over the weekend. The government will put forward a series of new measures, which top policymakers are working on, before the annual session of the National People's Congress that begins on March 5, he said. Policymakers have used proactive fiscal and moderately loose monetary policies to maintain the economy's momentum. Plus, the government is drafting another policy package to help nine key industrial sectors hit hard by the global economic downturn. The National Development and Reform Commission, the country's top planning body, is likely to announce the detailed policy for the auto sector soon. The policy will offer measures like tax and credit incentives to increase the sale of vehicles. Wen said the government would expedite the investment of 600 billion yuan ($88 billion) into six major projects, approved in the country's master plan for scientific and technological development over medium and long terms. The premier did not give details of the six projects but the master plan, released in 2006, included 16 scientific and technological schemes that were expected to be completed by 2020. Among them the development of the indigenously built jumbo passenger aircraft and the manned space program. The country's economy has been losing steam over the past six months because the global economic downturn has dealt a blow to its exports sector. Exports dropped in November, the first time in seven years, and the industrial output growth fell to 5.4 percent, the lowest in 10 months. But "our measures have already taken effect", Wen said, adding that the December data were "better than expected". Some economic indicators such as corporate revenue and electricity use have already begun to rebound, he said. According to China Electricity Council, an industry association, the country's use of electricity rose to 273.7 billion KWh in December, up 6.8 percent from the previous month. In October, the use of electricity, largely considered an indicator of the country's economic activities, dropped about 4 percent year-on-year - the first time in a decade. The $586-billion fiscal stimulus package, announced on Nov 9, is expected to help the economy rebound this year, economists with the Standard Chartered Bank said in a research note on global economic outlook. They remained upbeat over the country's long-term growth prospects, too, despite the current slowdown. Yi Gang, central bank vice-governor, said at a forum over the weekend that the country's economic growth would pick up between the second and third quarters because local enterprises are likely to have reduced their inventories substantially by then.
China actor Li Yapeng is today better known as the husband of singer and acting superstar Faye Wong, but 10 years ago he was an icon among young people and even bigger than his wife. His glory is largely attributed to the teen television drama Cherish Our Lover Forever (Jiang Aiqing Jinxing Daodi). The show focused on the lives and loves of a group of university students and was a huge hit in the late 1990s. Li was the leading star and quickly became a teen idol. But Li, who studied at the Central Academy of Drama, has never forgotten his roots and on New Year's Eve launched a play based on the old TV series. The Li-produced theater production made its debut at the TNT mini theater in Beijing. Something about Love is the first presentation of Li's Spring Drama Studio and the plot is a sequel to his smash-hit television show. Li has kept the production young and fresh. Director Rao Xiaozhi and all the actors are less than 30 years old. "As a graduate of the Central Academy of Drama, some part of me never gives up the love for theater after all these years," Li says. "So I want to help young aspiring directors and actors. Theater is not as popular as movies and TV now, but I hope more people will find its charms." Featuring good-looking young actors and a romantic-dramatic storyline, the TV show resembled the currently popular American TV series One Tree Hill and High School Musical. For many people born in the late 1970s and early 80s, Li's old TV series was part of their collective memory and first guidebook on love. The play follows the original characters 10 years after graduation from university. Director Rao says the play also explores the path of love taken by young people today. For Li, now a father of two girls, love is about family. After marrying Wong in 2005, the couple always made headlines. Some reports would scream their marriage was in danger, other articles focused on their daughter's cleft lip, or on their charity fund set up to help children with the same disease. The two stars recently returned from a trip to Tibet where they financially helped some sick children. About six months ago, Li made headlines after attacking the paparazzi at a Thailand airport. But he insisted he was just protecting his beloved family. Last week, Wong showed up to the play's premiere, attracting the flashlights of press photographers. She gave no comment on her husband's production. But her voice was heard on the night. The play's opening music was her song, To Love. Something about Love will be staged until Jan 17.
January 11, 2009
Hong Kong: The head of the Monetary Authority defended the city's financial regulatory system yesterday, saying there was no need for "major surgery", a day after the financial secretary called for an "immediate review" of the way institutions are supervised. On Thursday, Financial Secretary John Tsang Chun-wah ordered a review of the regulatory system. He was responding to reports submitted by the HKMA and the Securities and Futures Commission on last year's Lehman Brothers minibond fiasco. The reports were submitted to the government on December 31 but only released on Thursday. However, HKMA chief executive Joseph Yam Chi-kwong said the city's financial regulatory framework was not the cause of the Lehman minibond scandal and there was no need for "major surgery". "I haven't seen any foreign regulatory system that's better than Hong Kong's amid the global financial tsunami," he said. Nevertheless, the regulatory framework that governs the securities business conducted by banks will be a major part of the review the financial secretary has called for. The collapse of Lehman Brothers in September left 43,000 investors with near worthless minibonds. Many customers complained they were misled by bank employees who sold the bonds as low-risk products when, in fact, they were complex and risky credit-linked derivatives. The review ordered by Mr Tsang could lead to a power struggle between the HKMA and the SFC over the control of the way banks sell investment products. The reports by the two regulators offered different reform proposals. The HKMA wants to take over the SFC's power to investigate and punish banks when it comes to selling investment products. But the SFC wants banks to follow the example of other countries and set up separate subsidiaries to sell securities, which would be under SFC regulation. Mr Yam said the current model, in which banks are supervised by two regulators, was preferable, though he admitted there was room for improving the system. In fact, the HKMA yesterday issued seven measures to be implemented before March. But his comment was criticized by legislators. Chim Pui-chung, the legislator representing the financial services sector, said Mr Yam's comment and the two regulators' reports did not admit their own failures over the many allegations of mis-selling of Lehman minibonds. "There should be only one regulator, preferably the SFC, to oversee all the securities business of brokers and banks," he said. The Democratic Party said the two reports "lacked credibility" and it was disappointed with their tone, which suggested the regulators were passing the responsibility to each other. Lawmaker James To Kun-sun said Mr Yam's comments that there was no problem with his own institution's regulation highlighted the lack of credibility of a such a review. Peter Wong Tung-shun, the chairman of the Hong Kong Association of Banks, said he supported the HKMA's proposal that it be the sole regulator for banks' securities business. He said a "twin-peak" model suggested by the SFC - with one regulator to monitor a bank's financial stability and another to oversee the behaviour of salespeople - would lead to overlapping of management efforts and cost increases that would be passed on to customers.
Chan Siu-lun, a government agriculture official, eyes some of the produce on show at FarmFest 2009 - billed as the city's biggest outdoor farmers' market. The event opened yesterday in Fa Hui Park, Shek Kip Mei. It features 200 stalls promoting the produce of Hong Kong farms and fisheries, some of it organic. Visitors can attend shows, talks on green living and enjoy games booths.
Hong Kong Airlines laid off 55 workers yesterday, citing a business restructuring rather than the financial situation as the reason. The Hong Kong Confederation of Trade Unions said workers contacted it yesterday afternoon after about 50 of them received letters from the airline saying their jobs were being terminated with immediate effect. The letters, which were issued by the company's human resources and administration division, did not state any reason for the 55 workers' dismissal. Sung Chee-tak, organizing secretary of the union, said that when workers asked the company if their positions had become redundant, it refused to comment. "Workers feel furious." Last night a spokesman said the company had decided to focus on cargo flights, so some workers had to be laid off in the restructuring. "Workers were compensated according to labor ordinances," the spokesman said. In November, the company fired 40 employees and accused them of unsatisfactory performance, but it refused to supply evidence to back its claims. The company later said the airline needed to cut down on manpower because business had dropped by 10 to 15 per cent with the economic downturn and because of a seasonal business low. It added at the time that it was difficult to say whether there would be further layoffs and that the company would make a decision depending on market conditions.
Some money changers in Hong Kong are refusing to accept 100 yuan banknotes with serial numbers starting with HD90 as panic over fake mainland notes spills over the border. Hong Kong police said yesterday that they were staying in close contact with their mainland counterparts to keep updated on the issue. Yesterday, some money changers in Hong Kong put up notices at their shops saying suspect 100 yuan banknotes would not be accepted. A Sham Shui Po money changer said: "To play it safe and to protect our interests, we are not accepting 100 yuan notes with serial numbers starting with HD90." Local media reported yesterday that more high-quality counterfeit 100 yuan notes had been found in some major mainland cities, including Guangzhou and Shanghai. Quoting mainland media reports, RTHK said many Guangdong residents had bought the fake notes via websites. One Hong Kong man said he believed he had been given a fake note by a money changer in Kwai Chung. The man told Cable TV that he had wanted to use the note to make a purchase in Shenzhen but was told by the shopkeeper it was fake. The People's Bank of China said on Thursday that there was no cause for panic. It said the fakes were easily distinguishable from genuine notes. The mainland's central bank said some notes with HD90 in their serial numbers were genuine and serial numbers alone could not be used to determine authenticity. It also said the public could tell whether a note was genuine or not from its security fibers, security thread and watermark. Edwin Shiu Man-chak, of Ngau Kee Money Changer in Sheung Wan, said: "The problem does not seem to be as serious here as in China. So far we have not found any fake 100 yuan banknotes. But we shall be on alert." Mr Shiu said he had confidence in his cash detectors and that his experienced staff could tell whether a note was fake or not by touch. According to police figures, 7,975 counterfeit yuan banknotes were seized in the first nine months of last year, up 21 per cent from the same period in 2007. Last Sunday, two mainland men were arrested when they attempted to make a purchase in a Tsim Sha Tsui shop using fake yuan notes. Police seized 13 counterfeit 100 yuan notes, which were reportedly of high quality and with similar serial numbers.
Rents of serviced apartments are expected to drop further this year due to falling demand as a result of declining global economic growth. "Rents of luxury-end serviced apartments have dropped by 10 to 15 per cent after the global financial crisis," said Edina Wong, a senior director of residential leasing at Savills. Ms Wong said the rental cuts were in line with declining demand for serviced apartments that emerged in the fourth quarter of last year. She added that it was too early to tell whether this was due to the financial crisis, but early signs were that reservations for coming months signaled a continued fall in demand. "One-bedroom and studio units have higher vacancy rates, while the larger units with two or three bedrooms still have high occupancy," she said, suggesting that there would be steady demand in the mid-rental range especially for the boutique-style quality designer suites. "Take-up for the high-end units will be slow as the clientele of these units were mostly from the financial sector." Ms Wong expects there will be correction in rents of between 20 and 30 per cent in high-end serviced apartments this year where the effect of the financial turmoil will be greater. However, mid- and lower-priced apartments could see a moderate reduction of 10 to 15 per cent in rents. "There is support at this level since more clients are opting for the flexible lease terms on offer because of the global uncertainty. This will contribute to a steady demand." Anne-Marie Sage, a regional director of the residential department at Jones Lang LaSalle, said rents in serviced apartments remained firm, in contrast to the decline in luxury residential rentals of 18 per cent in the final quarter. "The serviced apartment sector has not been hit the same as the residential market. In the short term the market has done quite well." The only major trend change in the sector since the global financial crisis in September was that an increasing number of tenants did not want to commit to long-term leases, she said. But in her experience, landlords had not responded with across-the-board cuts in rents, although some such as Shama Group and Four Seasons Place had offered a few studio or one-bedroom units at a discount if tenants were willing to commit to a certain length of stay. While rents had remained firm in the past few months, it was too early to tell what would happen this year, she said. According to Jones Lang LaSalle data, four new serviced apartments with hundreds of rooms will be launched this year. Ms Sage said vacancy rates were likely to rise and high-end serviced apartments would suffer the most during the consolidation as a result of the change in demand.
China: China's big bet on the South Korean car industry is heading for disaster after Ssangyong Motor, majority owned by SAIC Motor Corp, filed for court receivership. Ssangyong's lenders, the Korean government and SAIC yesterday failed to agree on a rescue plan, putting in jeopardy the mainland company's more than US$500 million investment in the troubled sports utility vehicle maker. "The board of directors decided to apply for court receivership in order to cope with the current liquidity crisis and turn the company into an entity capable of continuous growth," Ssangyong said. "At the same time, we will work out measures to normalize the company." Ssangyong, which is 51.33 per cent held by SAIC, would cut salaries among its 7,200 employees by as much as 30 per cent over the next two years, it said in a regulatory filing yesterday after a restructuring meeting was held on Thursday. Ssangyong chief executive Zhang Haitao had stepped down due to changes within SAIC and president Choi Hyung-tak resigned for personal reasons, Ssangyong said. The Korean court will make a decision on whether Ssangyong can receive bankruptcy protection in one week. "Ssangyong's operation is being frozen," said Zhang Xin, an analyst with Guotai Junan Securities. "SAIC will have to totally walk away from its investment in South Korea if the court declares Ssangyong can go into bankruptcy." Ssangyong's plight adds to a growing list of international investments by China that have soured in recent years, adding to the likelihood Beijing will toughen rules for firms seeking to make overseas deals. It is already considering a requirement that companies get Ministry of Commerce approval for overseas investments in excess of US$100 million.
Shenzhen customs has busted a cross-border syndicate that allegedly smuggled 700 million yuan (HK$795 million) worth of bird's nests from Hong Kong and sold them to hundreds of mainland retailers in 40 cities, mainland newspapers reported yesterday. Customs officials said the gang, headed by Hong Kong and Shenzhen residents, hired more than 200 smugglers to transport a total of 28 tons of cliff-swallow nests from Hong Kong to Shenzhen between 2007 and last year, evading 226 million yuan in taxes, the Southern Metropolis News reported. The report described the bust as the biggest bird's-nest-smuggling case of the past six decades. The authorities arrested 19 people, most of them from two families in Hong Kong and Shenzhen. Police said mainland buyers first placed orders with Hong Kong retailers, then the gang's ringleaders bought the bird's nests and got the smugglers to take the contraband across the border. Once on the other side, the delicacy was mailed out to the mainland buyers. Customs authorities said at least 80 Hong Kong retailers and another 480 mainland buyers from 40 cities in 15 provinces were involved in the case. Customs officials said the gang was highly organized, with daily meetings and training on smuggling skills and its own system for rewards and punishment. Smugglers were required to monitor customs officers closely and used mobile phones to report any unusual circumstances. If one smuggler was detained, the gang would suspend all scheduled smuggling that day to avoid further losses. Smugglers were also taught to avoid fixed routes and frequently change buses to cover their tracks. Those in the business said the smuggling of tonic ingredients such as bird's nest was rife because tariffs on the mainland were higher than in Hong Kong, the report said. "Mainland customs levies heavy taxes of nearly 50 per cent on the nests, but swallow's nests in Guangdong cost only a little bit more than in Hong Kong," a retailer said. Though the mainland imports only a limited quantity of bird's nests every year, one market in Guangzhou alone sells 20 tonnes annually, the retailer noted, suggesting that most of the nests available in the province must have been smuggled.
The central government announced yesterday that it would issue more than 9 billion yuan (HK$10.2 billion) in special subsidies to the mainland's needy in the lead-up to the Lunar New Year as the global financial crisis further erodes living standards. Civil Affairs Vice-Minister Jiang Li said in a nationwide teleconference that 74 million people living below the poverty line would get the money before the holiday, which starts on January 26. "We have to act quickly and effectively ... to make sure people get the subsidies before the Lunar New Year," Mr Jiang said. Impoverished urban dwellers will receive 150 yuan each, while rural residents will get 100 yuan because their living costs are much lower. Those who either joined the Communist Party before 1949 or made a special contribution to the country but are still living in poverty will receive 180 yuan each. The details followed a statement from the ministry in mid-December that announced the subsidy plan but did not mention the amounts. The central government has gradually increased subsidies to rural and urban residents as inflation pushed up commodity prices in the first six months and the global financial crisis bit into the latter half, adding financial pressures on the poorest. Many economists have suggested that the government issue cash subsidies to the public as a way of spurring the sluggish domestic consumption to compensate for a slump in the mainland's exports. This policy appears to focus more on helping the needy. The government seems to see the subsidies as a way to ease anger during the tough economic times. "We have to see this task from [the point of view of] the importance of maintaining social stability and achieving the goal of social harmony," Mr Jiang said. People living in poverty, with an annual income below 1,067 yuan, or a little higher in cities, can receive year-end subsidies from more than just the central government. Provincial and city governments started subsidizing needy families last month. Jiangsu province announced last month that residents living in poverty would each receive a 100 yuan subsidy and low-cost medical care. Chengdu , Sichuan , issued a 100 yuan shopping coupon to each needy person and about 150,000 training coupons worth 500 yuan each to those wanting to upgrade their skills.
Taiwan's top envoy Chiang Pin-kung, chairman of Taiwan's Straits Exchange Foundation for handling ties with the mainland yesterday called on Guangdong to implement Beijing's recent pledge to provide loans to Taiwanese businesses. In an open-door meeting with Guangdong vice-governor Wan Qingliang , Chiang Pin-kung, chairman of Taiwan's Straits Exchange Foundation (SEF), stressed again that timely loans were crucial to the enterprises' survival. He also sought "equal treatment" of Taiwanese businesses on the mainland, urging the authorities to lift bans on the island's investments in the service sector. Such a move would help Taiwanese exporters, suffering from falling demand, to become service providers, he said. Beijing pledged 130 billion yuan (HK$147.5 billion) in loans late last month to Taiwanese businesses operating on the mainland, as part of an economic co-operation package to help the island weather the global financial crisis. The loans were one of 10 measures announced at the end of a two-day cross-strait economic forum. Under the measures, mainland banks will make available the 130 billion yuan in new loans to Taiwanese firms over the next three years. "Taiwanese businesses need help badly," said Mr Chiang. "Credit lines are what keep them afloat when overseas orders shrink. The problem now is how to implement Beijing's plan. We hope local government will provide assistance." He suggested recent tax records could guide lenders in making loans. Mr Chiang was on the third day of his visit to Shenzhen, Dongguan , Guangzhou and Nanjing to seek support for the island's enterprises. The year ahead, he said, would be very difficult for Taiwanese businesses because the largest export markets - US and Europe - were badly hit by the financial crisis. Mr Chiang urged "national treatment" for the island's businesses, saying the SEF would compile a list of sectors, many in services, that do not accept Taiwanese investment. He also asked the vice-governor to consider ways to lower business costs, such as cutting taxes, relaxing the unpopular labor law, increasing export tax rebates and giving cash subsidies to retrain workers. Mr Wan also stressed that the province's determination to get rid of low-end and resources-intensive manufacturers had been exaggerated, as had been the extent of factory closures. About 22,600 Taiwanese businesses operated in Guangdong, Mr Wan said. He did not disclose how many of them had folded.
A model shows a Chinese fashion designers' creations on the united press conference held at the Shanghai International Fashion Week, Shanghai, China, Nov. 4, 2008. Fashion conferences came to an end on Tuesday and different types of spring/summer fashions 2009 were showcased on the fashion week.
Chinese President Hu Jintao (C) poses with member of the Chinese Academy of Engineering Wang Zhongcheng (R) and academician of the Chinese Academy of Sciences Xu Guangxian (L), who won China's 2008 State Top Scientific and Technological Awards, during the presenting ceremony of the awards at the Great Hall of the People in Beijing, capital of China, Jan. 9, 2009.
January 10, 2009
Hong Kong: Financial Secretary John Tsang Chun-wah yesterday ordered "an immediate review" of Hong Kong's financial regulatory structure after both the Securities and Futures Commission and the Monetary Authority issued reports on last year's Lehman Brothers minibond fiasco. The government will first focus on "administrative measures" to improve existing regulations and better protect investors. These would include a cooling-off period for buyers and restricting the sale of investment products at bank branches. "Later we will carry out a structural review that may be required for improving the regulatory structure and protecting investors as well as other measures that need to be implemented through legislation or legislative amendment," Mr Tsang said. The SFC wants laws changed to give it the power to order financial intermediaries to compensate investors in the event of misselling or other irregularities. In the longer term, consideration should be given to establishing a financial services ombudsman, both regulators say. A government source said the administration would soon issue a consultation paper on how and when to implement short-term measures. In the longer term, the government wanted to review the entire regulatory structure for banks' securities businesses. This would include whether to allow banks to use their branch networks and teller staff to sell investment products. Mr Tsang ordered the review after the government released reports submitted by the HKMA and the SFC on the minibond crisis. When US bank Lehman Brothers collapsed in September, 43,700 Hong Kong investors were left holding derivatives it had issued or guaranteed but which had lost much or all of their value. Most were minibonds, which, despite their name, are complex, credit-linked derivatives. Investors claim banks and brokers mis-sold the products as low-risk. The SFC and HKMA called for tighter oversight of the sale of financial products but rejected - at least in the short run - a call for a single regulator to oversee their sale. At present banks and their securities businesses are regulated by the HKMA. The SFC regulates brokers but is also responsible for investigating and sanctioning bank staff who sell investment products. The HKMA report recommended that all bank security business be brought under its supervision. Both the SFC and HKMA reports said having the same bank branch sell investment products and handle client deposits created a conflict of interest. The SFC said banks may consider establishing a clear-cut division between their banking and securities services by registering separate subsidiaries or affiliates with the SFC. "This is not the only way, however, that such separations of functions can be achieved," the SFC report said. There could be "a clear demarcation of premises and staff to avoid confusing customers as to the nature of the services being offered". Both reports called for introducing a cooling-off period for investors within which they could cancel their investments, as well as a requirement that intermediaries disclose the commissions they receive for selling such products. The SFC would also require all investments to contain a brief description of the product and include a "risk reminder" for investors. Both reports rejected calls to ban the sale of investment products without regulatory approval.
The central government has for the first time outlined a long-term development blueprint for economic co-operation and interaction in the Pearl River Delta region among Hong Kong, Macau and Guangdong. Speaking at a media briefing on reform and development of the Pearl River Delta until 2020, Du Ying, vice-chairman of the National Development and Reform Commission, also revealed that the central government would provide 5 billion yuan (HK$5.68 billion) towards the cost of building a bridge linking Hong Kong, Macau and Zhuhai. Mr Du said the funding was unprecedented and construction would begin this year. Under the plan, the Pearl River Delta would become "globally competitive" and the "most vigorous area in the Asia-Pacific region" by 2020. "We believe that further strengthening of close co-operation among Hong Kong, Macau and Guangdong is a prerequisite for overcoming the difficulties of the current economic crisis and realising new development," Mr Du said. He said the plan was a comprehensive and complete strategy for the enhancement of economic co-operation among the three regions. Under the plan, Guangdong "will pursue convergence with Hong Kong and Macau in terms of urban planing, rail transit networks, information networks, energy base networks and urban water supply". It also calls for accelerated construction of cross-border transport and infrastructure projects. The development plan aimed to strengthen industrial co-operation and explore co-operation in education, culture, health care and social security. Mr Du said the delta, once in the vanguard of the mainland's capitalist economic reforms, would continue in its role as a test bed for the country's deepening reforms and opening to the outside world. Guangdong's economic output exceeded that of Taiwan in 2007 for the first time, topping 3.06 trillion yuan (US$448 billion), representing one-eighth of the mainland's total, he said. The province surpassed Singapore and Hong Kong in 1998 and 2003, respectively. However, Huang Longyun, Guangdong's executive vice-governor, said at the same briefing that provincial economic growth slowed sharply last year as exports plunged amid the global downturn, closing factories and sparking an exodus of migrant workers. Growth in provincial gross domestic product slowed to 10.1 per cent in 2008 from 14.7 per cent a year earlier, while export growth tumbled to 5.6 per cent last year from 22.3 per cent in 2007, he said. "The situation is grim," Mr Huang said. Mr Huang said 62,400 companies in the province went out of business last year. Most were small firms in the delta in traditional industries. As a result, about 600,000 migrant workers had left the province.
Up to 80 schools using Chinese as their medium of instruction would be allowed to teach in English under a government proposal submitted to lawmakers yesterday. The legislators will discuss next week the plans to relax the limits on teaching in English, which have been drawn up after consultation with the education sector. The proposals, which would affect junior secondary classes, are aimed at boosting education in English. Secretary for Education Michael Suen Ming-yeung, who issued the proposals yesterday, also announced scholarships to attract graduates to teaching, and training for teachers from Chinese-medium schools in conducting classes in English. The measures would cost more than HK$1 billion. "If schools want to switch to English teaching, they have to make sure their teachers are up to scratch," Mr Suen said. The minister first suggested the changes in June. He is proposing that schools where at least 17 in 20 Form One pupils are in the top 40 per cent of their age group be allowed to decide which language to teach in. Schools where fewer than 17 in 20 Form One pupils meet that criterion would be allowed to use English for up to a quarter of teaching - in subjects other than languages - to promote "extended learning activities". The proposals will be considered by the Legislative Council's education panel on Thursday. "I will finalise [the proposals] after considering their response," Mr Suen said. The government wants to bring in the changes at the start of the next school year in September. Schools which teach only in Chinese have been regarded as second-rate by many parents, but Mr Suen said: "We should not use medium of instruction as the sole yardstick against which to judge a school." To avoid parents judging schools only on their medium of instruction, he said schools should not be allowed to publicise the number of classes they taught in English, though they should state the language each subject was taught in. Mother-tongue teaching has been controversial since its introduction 11 years ago, when all but 114 secondary schools were ordered to switch teaching in lower secondary forms to Chinese. The language divide bred resentment among parents whose children attended Chinese-medium schools. The policy has also been blamed for a decline in students' English proficiency.
Secretary for Constitutional and Mainland Affairs Stephen Lam (right) and Taichung Mayor Jason Hu after their meeting yesterday. Hong Kong and Taichung, Taiwan's third largest city, have agreed to set up an intercity forum to strengthen ties. The move was announced by Secretary for Constitutional and Mainland Affairs Stephen Lam Sui-lun after he met Taichung's mayor, Jason Hu Chih-chiang, and his delegation yesterday. He said the forum was aimed at boosting co-operation in such areas as tourism, trade, cultural exchanges and city management. "We, the Hong Kong government, treasure our relationship with Taiwan very much," Mr Lam said. "We hope through all these practical exchanges, we can establish communications and understanding between people from the two cities, as well as at the leaders' level explore new possibilities for co-operation." Mr Hu said officials hoped to return to Hong Kong to start a dialogue within three months, followed by a visit by a Hong Kong delegation to Taichung. He said he had already invited Hong Kong officials to visit. The Kuomintang mayor received a more enthusiastic welcome on this visit than on one less than a year ago when the rival Democratic Progressive Party still ruled the island. On that occasion he had no formal meetings with officials. Mr Hu's delegation was also received by Financial Secretary John Tsang Chun-wah on Wednesday to exchange information on the economic situation of the two cities. "It's different from my previous visits," Mr Hu said. "When I previously met [Hong Kong government officials], we met as friends on a private and friendly basis. But this time, it's open and more on official ground." Mr Hu, who was also in Hong Kong to promote tourism in the Taiwanese city, said the island and Hong Kong could launch joint promotions to attract mainland visitors. Cindy Chen Chun-yi, deputy general manager of Taiwanese company Wani Food, believed the forum would provide the island's firms with more business opportunities. She said her company was planning to open an outlet in Hong Kong this year, mainly because of the city's high number of mainland visitors. She believed enhanced communication between Taiwan and Hong Kong would allow her to understand the Hong Kong market better. Susie Chiang, president of the Taiwan Business Association in Hong Kong, supported the intercity initiative and said there was a lot of room for the two cities to co-operate. Steve Huen Kwok-chuen, executive director of Hong Kong company EGL Tours, also welcomed stronger ties between the island and Hong Kong. "Closer co-operation will have a positive impact on the tourism and aviation industries," Mr Huen said, adding that his firm would further promote package tours to Taiwan. The office director of the Taiwan Visitors Association, Wang Chun-bao, said the island had 556,170 visitors from Hong Kong and Macau in the first 11 months of last year, up more than 26 per cent on a year earlier. Hong Kong Tourism Board figures showed that more than 2 million Taiwanese visitors came to Hong Kong from January to November last year, 1.2 per cent higher than the same period in 2007.
About 100,000 people are expected to join the festivities at a Lunar New Year parade in Tsim Sha Tsui on January 26. Organised by the Hong Kong Tourism Board, the 1-1/2-hour parade will start at 8pm on the first evening of the Year of the Ox, featuring 13 floats and 26 performing groups from 12 countries and regions. The parade is again being sponsored by Cathay Pacific Airways (SEHK: 0293), which has been title sponsor for the past 11 years. James Tien Pei-chun, the board's chairman, said it had looked for other title sponsors, which must be large, locally listed companies. "We sent out letters to over 100 companies and had talks with three of them. In the end, we signed an agreement with Cathay Pacific again," he said. The parade and activities were estimated to cost HK$27 million, with more than HK$6 million from sponsors, Mr Tien said. The parade will start from the Hong Kong Cultural Centre and go along Salisbury Road to Mody Lane before making a U-turn to end the show at the New World Centre. Of the 13 floats, four are first-time participants, including Hong Kong 2009 East Asian Games, Michelin Asia, The Pirates' Float from Spain and the Seoul metropolitan government from South Korea. Over half of the performing groups will make their first public appearance in Hong Kong. They include the Japanese Shizuoka PR Unit, featuring popular cartoon characters, Washington Redskins cheerleaders and Poco Loco from Denmark, who will show off their Samba dancing skills. About 1,500 tickets, priced from HK$180 to HK$300, will be sold at the Tourism Board's visitor centres in Tsim Sha Tsui and Causeway Bay from Sunday. Half-price concession will be given to those aged 65 or older and children aged three to 11. Last year, close to 900,000 tourists - two-thirds from the mainland - visited the city during the first 10 days of the Lunar New Year. Aside from the parade, a fireworks show will be staged above Victoria Harbor at 8pm on January 27.
The central government has stumped up 5 billion yuan (HK$5.68 billion) - more than two-thirds of Guangdong's share of the cost of the Hong Kong-Macau-Zhuhai bridge - to ensure that construction of the HK$37.45 billion link can start by the end of this year. In a briefing, National Development and Reform Commission vice-director Du Ying said the country's support for the bridge project was unprecedented. "We are highly concerned about the economic situation in Hong Kong and Macau," Mr Du said. "We believe Guangdong and the two cities must work closely together to survive the global economic crisis ... that includes promoting cross-boundary infrastructure." Mainland affairs commentator Johnny Lau Yui-siu said the central government had been very helpful, as without its financial support Hong Kong could still be stuck in negotiation with Guangdong officials. "The bridge was no longer as attractive to the province as it was when the idea was proposed 20 years ago," Mr Lau said. "Guangdong doesn't want to pay a lot for a project it considers more beneficial to Hong Kong now." The three governments originally agreed last February that Hong Kong would pay 50.2 per cent of the difference between the construction cost and the private investment under a cost-to-benefit principle. Guangdong would have paid 35.1 per cent and Macau 14.7 per cent. But the ratio was changed six months later to 42.9 per cent for Hong Kong, 44.5 per cent for Guangdong and 12.5 per cent for Macau. A private consortium will finance 58 per cent of the project. Guangdong will now pay only 2 billion yuan - one-third of Hong Kong's capital payment of 6.75 billion yuan. Secretary for Transport and Housing Eva Cheng said earlier that the future managing board of the bridge - comprising officials from the three governments - would not give the biggest investor control over the development. But Mr Lau said that as the central government would probably leave operational matters - such as the bridge's tendering of design and construction work - to the three governments, disputes could arise over such matters as who gets which contracts. "Guangdong will certainly want to keep the most benefit for its people, while the Hong Kong government, despite paying most for the project, lacks teeth in this regard."
The Hong Kong government said it would look for a clearer division of roles among airports in the Pearl River Delta region after the central government said the region should become a regional hub for international logistics. The National Development and Reform Commission said yesterday that the region would develop a modern service structure that accommodated the needs of Hong Kong, and become a centre for international shipping, logistics, trade, conferences, exhibitions and tourism. The Hong Kong government said it would work with neighbouring cities to ensure a clear division of roles for ports and airports in the region. Hung Wing-tat, a logistics expert and professor at Polytechnic University, said the development plan hinted that the region's airports should co-operate, rather than compete, with each other. "Under this clear instruction, the Hong Kong government should consider going ahead with the logistics park proposed for Lantau Island as early as possible." Bauhinia Foundation senior fellow Zhu Wenhui said the commission's announcement yesterday endorsed new planning concepts and would clear some hurdles to cross-boundary integration. Hong Kong universities had not been allowed to set up branches on the mainland, and there had been limits on using funding from a city on one side of the border to study issues on the other side, he said. "These problems are expected to be solved soon." Zheng Tianxiang, a professor of economics at Zhongshan University's Pearl River Delta Research Institute in Guangzhou, said closer co-operation between Guangdong and Hong Kong was easier said than done. Some "fundamental differences" between Hong Kong and Guangdong needed to be sorted out first, he said. "Hong Kong still seems to treat Guangdong as its backyard factory."
Hong Kong's financial sector may benefit from a stream of financial initiatives proposed for the Pearl River Delta. The reforms include allowing companies to issue corporate bonds, the introduction of venture capital, the setting up of a guarantee fund for small and medium enterprises, developing financial companies and starting yuan derivatives. The commission also encouraged the use of the yuan for trade settlement. A source said relevant details will be announced soon but it is believed most of the offshore yuan-denominated trade will be settled in Hong Kong. The report also stated Shenzhen should soon set up a Growth Enterprise Market board. Companies are encouraged to list and develop financial backup services. The report said because of the initiatives being offered in the mainland and Hong Kong, the region will be looking for professionals familiar with international standards of finance, law and accounting to set up companies for recruitment, cross- boundary trading, and the protection of investors' interests. With Macau thrown into the mix, the region aims to provide one of the best business environments in the world. Under the Closer Economic Partnership Arrangement, the mutual recognition of professional qualifications will be broadened in the banking, securities, insurance, surveying, accountancy, education and medical sectors.
China: The Ministry of Commerce has released draft rules tightening supervision on overseas investments by mainland firms amid concerns about losses as the financial crisis deepens. The draft rules said overseas investments exceeding US$100 million must be approved by the ministry. Approval is also required for investments in countries that have no diplomatic relations with China, and in overseas infrastructure projects in high-risk areas. Overseas investments of between US$10 million and US$100 million as well as all those in the energy, mining and property sectors regardless of size will also need approval at provincial level, with an exception for central government enterprises. Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Co-operation under the ministry, said the rules would provide proper guidance to avoid unnecessary risk and reckless overseas investments. Beijing has encouraged domestic companies to invest overseas in recent years to ease the appreciation pressure on the yuan and secure natural resources. But unlike previous rules, the new draft rules do not specifically mention government support and encouragement for firms with comparative advantages to invest abroad. As of late 2007, more than 7,000 firms were putting their money in offshore projects, with the direct investment funds amounting to US$117.9 billion, according to ministry data. With asset values plunging worldwide, heavy paper losses have been incurred by some high-profile entities, including the US$200 billion sovereign wealth fund China Investment Corp and Ping An Insurance (Group) (SEHK: 2318). Mr Mei said given the nation's tremendous foreign reserves, mainland companies would continue to invest overseas in the next few years, especially with the rest of the world in financial doldrums. China's foreign reserves, the world's largest, stood at US$1.906 trillion at the end of September, when official figures were last reported. State Administration of Foreign Exchange official Cai Qinsheng said last month that the reserves had fallen below US$1.9 trillion. SAFE said on Monday that China had introduced an overseas direct investment information system to help businesses invest overseas and bolster risk supervision.
Pinched by the world's economic woes, the country's oldest and largest trade show, the biannual Canton Fair, is offering to cut fees for the first time to entice exhibitors. The Ministry of Commerce, which fears the mainland's export slump will shrink the budgets of exhibitors and reduce the number of visitors to the coming 105th China Import and Export Fair, will refund some exhibitor fees, according to the ministry's website yesterday. The ministry did not specify the amount of the refund, but sources close to the organizer said the amount was about 2,000 yuan (HK$2,269) per exhibitor. According to the ministry, Vice-Minister Zhong Shan vowed to increase the number of buyers and exhibitors and support exports during the Canton Fair in Guangzhou in April. The fee discount was unprecedented in the fair's 52-year history, underscoring the severity of the impact of the global downturn on Chinese-made exports, economists said. The registration date for the exhibitors of textiles, clothing, shoes and office automation products was extended by about two months to March 5, according to the Canton Fair website. Economists suspected the move was related to the closure of suppliers in these labour-intensive industries. Last year's two fairs generated about US$70 billion in export orders, or 5 per cent of total exports in the first 11 months of last year. November's exports contracted 2.2 per cent from a year ago, the first decline in seven years. The country is due to reveal the full-year set of trade figures as early as today. The fee concession was confined to mainland exporters, which account for 98 per cent of exhibitors. However, selected importers from Hong Kong, Thailand, Malaysia and Taiwan do not qualify for the fee incentive. The Canton Fair, a barometer of overseas appetite for Chinese-made exports from toys, clothes, food and electronics to heavy-duty machinery, saw fewer visitors last year, with attendance declining 7.48 per cent to about 367,000. Shanshan Group, a Ningbo-based garment exporter, said it would skip April's fair because the company had a smaller budget, even though it had attended for the past six years. Susan Zhu, an assistant to the president of the group's international trade department, said yesterday that the group spent 500,000 yuan on the fairs last year but went home with lacklustre orders. "It's an expensive event for us. We spent 500,000 yuan on renting the booths, hotel accommodation, hiring people, decorating the booths and travel. However, the event did not turn out to be as good as we had expected." Hong Kong snack firm Edo Trading, which took part as an importer at the fair, has yet to decide whether to return in April, according to marketing manager Victor Fung.
Cross-strait talks between the two semi-official organizations representing the mainland and Taiwan will be held every six months, the island's top envoy for handling ties with Beijing revealed yesterday. The high-level negotiations will, therefore, become a regular exchange for the first time. Chiang Pin-kung, chairman of Taiwan's Straits Exchange Foundation (SEF), announced the agreement he had reached with his mainland counterpart - Chen Yunlin , chief of the Association for Relations Across the Taiwan Strait (Arats) - as he met Taiwanese businesspeople in Dongguan to hear about their needs in the current global financial crisis. The mainland and Taiwan resumed talks in June after a nine-year freeze. Their second meeting was held in November. On the second day of his visit to four mainland cities - Shenzhen, Dongguan, Guangzhou and Nanjing - to lobby for mainland support, Mr Chiang said the next cross-strait talk would be on the mainland, but a venue had not been selected. There are 6,500 Taiwanese enterprises in Dongguan. About 800 closed last year because of the deteriorating business environment, according to the Taiwan Businessmen's Association Dongguan. Taiwanese businesses operating on the mainland are mainly found in the Pearl and Yangtze river deltas. They have been seeking support from Beijing and local governments - such as tax concessions, higher export tax rebates, relaxed credit from mainland banks and permission for Taiwanese lenders to issue loans on the mainland - to help them weather the financial crisis.
The pressure on strategic investors to sell is contributing to the gloomy outlook of mainland banks as Royal Bank of Scotland, a strategic stakeholder of Bank of China (3988), said it may cash in its two billion BOC shares.
Rescuers work at the construction site on Line 11 where a fire broke out in Shanghai, east of China, Jan. 8, 2009. The fire broke out 20 meters underground at the construction site, killing one worker and injuring six others, according to the fire brigade.
Beijing is trying to do more to attract overseas talent at a time when the global financial turmoil is forcing many western companies to cut jobs. A document released by the General Office of the Communist Party of China Central Committee called for all government bodies to "open their minds" and "revamp their existing policies" to attract overseas talent to work on the mainland, according to a Xinhua report on Wednesday. The decision came as record numbers of students overseas return home with the hope of landing jobs on the mainland. For many, the employment opportunities are much better than in embattled western economies. "History has proved that attracting overseas talent is a shortcut to breaking the bottleneck of scientific and technological developments," a senior Communist Party personnel department official told Xinhua. Although the document did not rule out trying to attract overseas talent without direct Chinese roots, it said overseas Chinese were the most important resources in the recruitment plan. Of the country's key government-sponsored research projects, 72 per cent of the chief scientists or researchers involved have advanced degrees from overseas. Among 720 members of the Chinese Academy of Sciences, the country's highest scientific research body, 81 per cent had studied overseas. The document made clear the primary targets of the campaign were about 67,000 overseas Chinese under the age of 45 who held positions equal to or higher than assistant professor. Another 15,000 or so high-end personnel working for big international companies or organisations would also be sought. It urged government departments, universities and research institutes to create favourable conditions to lure them back. The talent drive was, in fact, in place long before the party's instruction. Provinces and municipalities, such as Guangdong, Shanghai and Sichuan , have been reaching out as far as the United States and Europe in an effort to attract top overseas Chinese. At a Guangzhou job fair aimed especially at overseas Chinese students last month, the city government offered 200 million yuan (HK$227 million) to those who came to the city to start businesses. Wang Dazong , general manager of the Beijing Automobile Industry Holding Company, suggested that reaching out to high-end personnel in western countries could help Chinese firms quickly bridge the gap in technological development. As the "Big Three" carmakers were struggling, Mr Wang suggested mainland carmakers lure back engineers to help their own development.
The China Construction Bank (CCB) said Thursday its strategic cooperation with the Bank of America will not be affected by the U.S. lender's sale of a 2.41 percent stake in the Chinese bank. "The Bank of America made the decision to reduce its shareholding because of its own financial difficulties."
Giant China movie production house Huayi Brothers has sued five popular websites, which host video-sharing, for copyright infringement of its hit romantic comedy, If You Are the One. Huayi Brothers chief executive Wang Zhonglei said Beijing's Haidian District People's Court had agreed on Tuesday to hear the company's 110,000 yuan (HK$125,000) suit against Sina.com, Sohu.com, Youku.com, Tudou.com and VOC-one for copyright violations. The company claimed five of its movies produced in 2007 and last year, including Assembly, The Equation of Love and Death and The Forbidden Kingdom, were found available for downloading or viewing without authorization shortly after they were released. If You Are the One, which has earned more than 302 million yuan since it was released on December 18, was viewed millions of times during the New Year holiday, Mr Wang said. "Today we found another website providing a download. The infringement not only violates the rights of Huayi Brothers but also damages the interests of authorized distributors of other versions such as DVDs." The websites removed the content at Huayi's request, Mr Wang said. He said the company was also concerned about the source of the upload because, unlike versions taped in movie theatres, these uploaded copies were high resolution. Video-sharing websites are increasingly becoming targets of intellectual property rights infringement lawsuits. In May, a Shanghai court ordered Tudou to pay 50,000 yuan in costs and damages for infringing the copyright of Nubb, owner of the online distribution rights of the hit comedy Crazy Stone. Tudou was repeatedly taken to court last year for copyright infringement over the alleged unauthorized use of hundreds of films and television series. This week more than 80 copyright holders, including record label Orange Sky Entertainment, formed an anti-piracy alliance, announcing at the same time that the group was collecting evidence to be used in a suit against Tudou for unauthorized use of its video content.
The Walt Disney Co. denied Thursday a report in a Chinese newspaper, which claimed that the company had agreed with Shanghai to build the Chinese mainland's first Disneyland. "The report is not true and no agreement has been reached," said an assistant to senior manager Tiffany Huang at the Shanghai-based Walt Disney Co. of China. A report published on Thursday by the Shanghai Securities News quoted unidentified sources, who were said to be policy experts who had been involved in the Disneyland project for years, as saying that the company and the Shanghai government had signed an agreement for a theme park. The report also said that the project would open in 2013. It would also, according to the newspaper, involve Shanghai Lujiazui Group Company and the Waigaoqiao Group Company. A spokeswoman with the Shanghai municipal government told Xinhua: "No further progress has been made, and such a big project has to wait for the central government's approval." Rumors about the project emerged in 2002, and negotiations reportedly went through multiple tough rounds. Earlier reports said the Disneyland would be located in the southeast suburbs of Shanghai's Pudong area, which is only 20 minutes' drive from the Shanghai Pudong International Airport. According to the China Daily website, 10 sq km of land has been set aside for the park, which is estimated to cost 40 billion yuan (about 5.9 billion U.S. dollars).
Director John Woo waves to media at the news briefing of Movie Red Cliff (part two) in Shanghai, east China, Jan. 7, 2009. Movie Red Cliff (part two) held its premiere news briefing on Wednesday. Director John Woo and some main actors Zhang Fengyi and Tong Dawei attended the briefing.
About 600,000 migrant workers left Guangdong province last year as the economic crisis caused exports to shrink and forced factories to close in south China's industrial heartland.
China expects 2.32 billion travelers during the upcoming 40-day travel peak as people flock home for the traditional Spring Festival holiday, government authorities said Thursday. That represents an 3.5-percent growth from the same period of last year, according to officials at a teleconference held here Thursday by eight central government departments. The eight departments included the Ministry of Transport, the Ministry of Public Security and the National Development and Reform Commission (NDRC). Local officials must step up scrutiny to ensure travel safety and make preparations for emergencies, said Liu Tienan, deputy chief of the NDRC, the country's top economic planner. Freezing rains and snow over the past few days have blocked some roads in southern China. Local governments have been urged to step up maintenance efforts to ensure major roads are safe and clear. Early last year, a worst-in-decades snow and ice onslaught hit southern regions and paralyzed many roads and railways, stranding millions heading for a family re-union during the Chinese Lunar New Year. The country will see a record 188 million train takers in this year's Spring Festival travel rush, 8 percent more than the same period last year, Xinhua learnt from the Thursday meeting. Railway authorities in the cities of Beijing, Guangzhou, Shanghai and Hangzhou have added 319 temporary express passengers trains for the holiday rush. In the busy period, which lasts from January 11 to February 19, the number of air travelers will rise 12 percent year on year to 23.2 million. Travelers by bus and by water will reach 2.07 billion and 31 million respectively, up 3 percent and 8 percent. The Spring Festival falls on January 26 this year.
Guangdong and Shanghai, the two economic powerhouses of China, have suffered setbacks because of the global financial crisis and forecast even worse prospects. Guangdong province, which neighbors Hong Kong and is host to a large cluster of export-oriented manufacturing units, now faces the most severe challenge since the Asian financial crisis in 1998, Deputy Governor Huang Longyun said Thursday. The province's GDP growth last year was 10.1 percent, down from 14.7 percent in 2007, while its exports grew by just 5.6 percent, down from 22.3 percent from the previous year, Huang told a news conference in Beijing. In terms of GDP, Guangdong's economy crossed Singapore's in 1998 and Hong Kong's in 2003. It caught up with Taiwan when it topped 3 trillion yuan ($439.2 billion) in 2003, making up nearly one-eighth of the Chinese mainland's total GDP. The latest figures from Shanghai have been so alarming that city-based economists say the municipal government would have to try its best to "prevent East (China) from falling". According to the Chinese-language magazine, Caijing, Shanghai's industrial output saw a record double-digit decline in December 2008. The city's revenue in the first quarter of this year, too, could be worrisome, Caijing quoted city mayor Han Zheng as having said. Shi Lei, professor of Fudan University and a consultant to the Shanghai municipal government, said the slowdown had exposed the city economy's structural problem, or its lack of competitive edge in manufacturing technologies and high-end services, compared with provinces neighboring it. The threat to the economy is also reflected in the discouraging job market data. Guangdong Deputy Governor Huang said the slowing economy might have forced as many as 600,000 migrant workers to leave the South China province and return home last year. In other words, nearly one in every three migrant workers employed in Guangdong might have left. According to Guangdong-based Nanfang Monthly, about 19 million workers from outside the province had been working there at the end of 2007. Officials, however, said, Guangdong would not abandon its ambition to develop into a world-class manufacturing and service base. Nor would it halt its efforts to raise its per capita GDP from the existing $7,000 to $20,000 by 2020. Much closer business ties will be forged between the province and Hong Kong and Macao, said Cheng Jiansan, an economist with the Guangdong Academy of Social Sciences. Policies are being drafted, said Huang, to provide more help to Hong Kong businesses to sell their products on the mainland.
China's mergers and acquisitions (M&A) activity remained resilient in 2008 despite the global financial meltdown, making it the best performer in the Asia region, according to information company Thomson Reuters. M&A activity in the country was at an all-time high of $159.6 billion worth of deals last year, 44 percent more than in 2007, compared with the year-on-year 11.1 percent fall in Asia, excluding Japan, Thomson Reuters said in a report. "China was the only country in the region to experience growth in such a tumultuous environment, and it's also the most targeted nation in Asia with a 26.9 percent market share, " the report pointed out. "The market's better performance is mainly due to the fact that the impact of the economic crunch started in the US is delayed when passing down to the domestic transaction activities, and the Beijing Olympics in August helped bolster the strong spirit of the market," said Xie Tao, PricewaterhouseCoopers (PwC) transactions partner based in Beijing. Xie added that unlike in other markets, Chinese companies are not in dearth of cash, which is crucial for M&A activity. The largest transaction of the year was Aluminum Corp of China and Alcoa's stake purchase in Rio Tinto for $14.3 billion through their Singapore-based joint venture Shining Prospect Pte Ltd. The country's inbound activity posted a 34.2 percent year-on-year increase, and made China a global investment haven. Cross-boarder M&A activity rose 51.1 percent from a year ago to $78.4 billion worth of deals in 2008. "Protection policies to set barriers for cross-boarder M&As have been partly pared when facing the economic meltdown, which helped boost the outbound M&A deals for Chinese companies," said Xu Wenfei, an analyst at Beijing-based investment research and consulting firm China Venture. However, transactions were unsurprisingly caught up in the second half of the year when the worst financial woes unfolded in September. With 543 announced deals between July and November, transaction activity in domestic M&A dropped by a staggering 47 percent compared to the same period in 2007, although it followed a strong growth in the first half to reach 920 announced transactions, according to PwC's report. "Activity levels dropped dramatically in the second half, largely as a result of regulatory policies to cool the economy in early 2008 amid the fallout from the global economic crisis, and a valuation gap arising from the unwillingness of domestic sellers to meet lower bids for buyers also contributed to the drop," Xie pointed out. Looking to 2009, Xie predicts that overall M&A activity in China will remain slow in the first half of the year, but will pick up in the second half as pricing expectations align. "We expect domestic M&A activity to recover quicker than other regions of the world mainly due to the government's 4 trillion yuan ($586 billion) stimulus package, and regulators having room to lower interest rates. Private equity deals may be the first to recover," said Christopher Chan, PwC's transactions partner.
January 9, 2009
Hong Kong: The health minister yesterday ordered the Hospital Authority to deal with "irresponsible staff" and make sure another blunder similar to the recent loss of a baby's body cannot happen again. The loss of the body from Pamela Youde Nethersole Eastern Hospital's mortuary came to light about two weeks after the Caritas Medical Centre failed to treat a man who had a heart attack outside its hospital building and subsequently died. Secretary for Food and Health York Chow Yat-ngok yesterday said he was "very much disappointed" and "very sad" about the missing body. He said it was "hard to believe" it had happened. There have been repeated mix-ups of bodies at public mortuaries but this is the first time a body has gone missing. "Certainly, I will personally ensure that the Hospital Authority and the mortuary management of other public mortuaries will learn from this particular incident to ensure that nothing like this will happen again," Dr Chow said at Legco. "I think it is important that we try our very best to find the whereabouts of this baby's body ... I have asked the authority to seriously deal with irresponsible staff and those who have performed poorly." Dr Chow said an investigation must determine why mortuary staff put the body in the same container as an adult male's body, and why it took three days for the staff to report the incident to hospital management. Chairman of the Legislative Council health services panel Joseph Lee Kok-long said the mistake had caused the parents of the baby boy much pain. He said the panel would discuss the matter on Monday. The Hospital Authority's director of quality and safety, Leung Pak-yin, said the authority would improve training for non-clinical staff. Dr Leung said the two latest incidents illustrated attitude problems among some frontline staff. "We have in the past mostly focused on risk management on the medical services side," he said. "These two cases showed that we have to enhance training and risk management also in non-clinical areas. Some staff may be becoming less alert when doing routine daily work." The president of the Public Doctors Association, Ho Pak-leung, said repeated blunders at public hospitals illustrated that the authority was "ageing" and reform was needed. "There should be an overall review of staff management and culture at such a big organisation. It has been very difficult for management to suspend poorly performing staff." Medical sector legislator Leung Ka-lau said the authority had to introduce measures to ensure such mistakes were not repeated in the future.
Mount Everest, the Great Barrier Reef, the Grand Canyon and the Yangtze River are obvious contenders for the seven natural wonders of the world ... but Amah Rock? The distinctively shaped geographical feature overlooking Sha Tin is the Hong Kong entry on a shortlist of 260 contenders upon which internet users are being asked to vote in a global contest. The nomination of Amah Rock has divided experts. The shortlist was drawn up based on voting on 441 natural features the world's public nominated last year. The competition is being run by the New7Wonders campaign, a non-profit foundation led by Swiss adventurer Bernard Weber which ran a similar contest to choose the seven man-made wonders of the world. That drew nearly a billion voters. The Great Wall and the Colosseum in Rome topped that poll. "We are calling on people all over the world to actively show their appreciation for our ... natural world," a campaign spokeswoman said. The 15-metre-high Amah Rock in Lion Rock Country Park is so named because it is said to resemble a woman carrying a baby on her back. Its Cantonese name is mong fu shek - "stone watching for husband". The name derives from the legend of a fisherman's wife who climbed the hill every day carrying her baby to watch for her husband, not knowing he had died at sea. The goddess of the sea was moved and rewarded her by turning her into a rock so her spirit could unite with that of her husband. "Everyone in Hong Kong knows the rock," Chinese University geography professor Ng Sai-leung said. "When valuing a rock, it is not its shape that matters but also the story attached to it. The story of Amah Rock is sad and beautiful." Young Ng Chun-yeong, chairman of the Association for Geoconservation, had a different view. "When judging a natural site, one should look into its rarity, aesthetic value and if it is spectacular enough. Amah Rock is very ordinary." The association carried out a ballot of 13,000 people last month. They chose Po Pin Chau, a striking accordion-shaped island consisting of compressed volcanic ash, as Hong Kong's top "geo wonder". The Tourism Board said it was pleased to see Amah Rock as the city's nominee and urged Hong Kong people to vote for it. Voting will continue until July 7, when the New7Wonders of Nature panel of experts will choose 21 finalists to be put to a popular vote. The winners will be declared in 2011. The spokeswoman said Amah Rock would need official support - from the government, for example - to be named a finalist.
Cathay Pacific Airways (SEHK: 0293) has joined its American and Chinese counterparts in reporting huge fuel-hedging losses, plunging the previously profitable Asian carrier into an expected record loss for last year. The mark-to-market loss on Cathay's fuel-hedging contracts as of the end of last month amounted to HK$7.6 billion, deepening from the HK$2.8 billion loss estimated to have been incurred at the end of October, according to the third profit warning filed by the airline in recent months. A realised loss of HK$300 million will also be booked for hedging contracts exercised last year. As a result of the abrupt drop in crude prices, with an almost 70 per cent slump from their historical peak in July to US$45.59 per barrel at the end of the year, global carriers are getting burned by fuel-hedging contracts locked in at much higher prices. Air China (SEHK: 0753, announcements, news) , the second-largest mainland carrier, said earlier that its hedging losses widened to 3.1 billion yuan (HK$3.52 billion) by the end of October while China Eastern Airlines (SEHK: 0670) Corp said it had 1.8 billion yuan of hedging losses as of October. United Airlines posted US$519 million in hedging losses in the third quarter last year while Southwest Airlines recorded its first quarterly loss in 17 years due to a US$247 million loss in fuel hedging in the third quarter. "We remain unconvinced that hedging provides airline investors with material benefit," said Damien Horth, a transport analyst at UBS. "It is very difficult to hedge more than 12 months in advance." Cathay reiterated that since fuel was the biggest single cost for airlines, it was keen to hedge a portion of its fuel purchases over the next three years. However, its policy is not to enter into hedging contracts which in aggregate exceed its expected fuel consumption. The profit warning yesterday surprised some analysts since they had yet to factor in an adequate amount for fuel-hedging losses. The earnings forecasts for Cathay for last year range from a HK$1.45 billion gain to a HK$7.35 billion loss while the median estimate is for a loss of HK$3.45 billion, according to Bloomberg. Under international accounting standards, the airline is obliged to make the mark-to-market losses of all its fuel-hedging contracts by the end of last year, although HK$4.9 billion losses would be incurred this year on contract maturity, losses of HK$2.2 billion would be incurred next year and HK$500 million in 2011. "There is still hope the company could write back some of the losses when oil prices rebound," said Karen Chan, a transport analyst at RCM. Cathay has not disclosed how much crude oil nor at what levels the contracts were hedged. However, Mr Horth assumed that the company had covered 30 million barrels of crude oil under open fuel-hedging contracts, with the average put option sold at US$76 per barrel. He had estimated the hedging loss at HK$7 billion. Shares in Cathay edged up 0.21 per cent to close at HK$9.71 yesterday.
Crews of Hong Kong-registered ships in the pirate-infested Gulf of Aden are getting double pay as they pass through the high-risk zone. The 100 per cent bonuses are being paid under an agreement signed at a meeting of the International Bargaining Forum in Hong Kong in November. Death and disability compensation rates are also doubled while in the gulf, where numerous ships have been seized by Somali pirates. The agreement applies to about 900 vessels that are registered in Hong Kong or owned by shipowners here. Captain Chung Tung-tong, the general secretary of Hong Kong's Merchant Navy Officers' Guild, said it took two days for vessels to pass through the Gulf of Aden. An experienced captain earned about US$10,000 a month, so the daily salary was about HK$2,600, Captain Chung said. Under the agreement, crew members also have the option of leaving the ship before entering the zone. Navy vessels from countries including China, the United States and Britain escort the ships through the designated corridor. Captain Chung said Hong Kong vessels seeking protection from the Chinese navy had to file an application with the Marine Department. He said the guild did not support crew members resisting pirates because it endangered their lives.
Tycoon Li Ka-shing and Bank of America reduced their stakes in Bank of China (3988) and China Construction Bank (0939), respectively, reaping a total of HK$17 billion profit. Market watchers warned the cash sales could spark similar moves by other stakeholders to reduce their equity in mainland banks as lock-up periods for several strategic investors are due to expire this year. Such warnings, in turn, dragged the stock market lower, battering Hong Kong-listed mainland shares - commonly referred to as H shares - which plunged 4.6 percent. Li, the city's wealthiest man, is likely to fetch as much as HK$4.06 billion by selling two billion BOC shares, reaping a profit of as much as HK$1.8 billion, having bought the stock when it stood at HK$1.13. According to the sales document The Standard obtained, Li sold shares through Merrill Lynch with a price range of HK$1.98 to HK$2.03 each, representing a 5 percent to 7.5 percent discount to yesterday's closing price of HK$2.14. The shares were sold by Li's charity arm Li Ka Shing Foundation, which bought a total of five billion shares at a cost of HK$1.13 each prior to BOC's listing as strategic investor in mid-2006. "The Foundation sold two billion shares and we still holds three billion shares," a spokesman for the Foundation confirmed to The Standard. "It was due to normal capital needs of the Foundation, but we affirm the remaining three billion [BOC] shares in our portfolio will be for the long term." Bank of China spokesman Wang Zhaowen said he was not aware of the sale, but he reiterated other strategic investors, including Royal Bank of Scotland, have not notified their intention of selling any shares. RBS and other strategic investors have signed agreements stipulating they will notify BOC one month ahead of their sales. The Li Ka-shing Foundation did not sign such a pact, a source said. Bank of America placed 5.62 billion CCB shares for HK$22 billion at HK$3.92 each, a discount of 12 percent to Tuesday's closing price of HK$4.45. BOA stands to reap as much as HK$15.1 billion from the sale, having bought the stock at HK$1.223 each prior to CCB's listing in October 2005. BOA has been the largest strategic investor in CCB. On December 4 it exercised its options to raise its stake to 19.13 percent, from 10.8 percent, by acquiring 19.58 billion H shares at HK$2.31 each from Huijin Investment. With yesterday's sale, BOA reduced its stake to 16.6 percent. The share sales by Li and BOA come after UBS sold all its shares in BOC last month to raise funds to shore up its balance sheet. CCB dropped as much as 8.8 percent yesterday while BOC slipped about 3 percent. Other mainland banks including Industrial & Commercial Bank of China (1398) and China CITIC Bank (0998) were also down, ranging from 3 percent to 7 percent, as investors feared their strategic investors might follow suit. For example, Allianz and American Express, strategic investors in ICBC, will have their shares unlocked this April and October respectively. Allianz owns about 5 percent and AMEX about 2 percent of ICBC's total H shares. Amid a need for fresh capital by financial institutions worldwide, analysts expect ICBC to be the next victim of a stake sale. According to Bank of China's IPO prospectus, Li holds 473 million BOC shares bought at HK$2.95 each through his flagships Cheung Kong (0001) and Hutchison Whampoa (0016), which comes to about less than a 5 percent stake in the lender.
The MTR Corp is clawing back its HK$1.50 concession for ferry commuters. The concession, covering four ferry routes to Sok Kwu Wan, Yung Shue Wan, Peng Chau and Mui Wo, will not continue past next Tuesday's expiry date. "When we installed the fare savers on July 14 last year, we were hoping for a win-win situation with the ferry companies so that we could attract more people to use both modes of transport," an MTRC spokeswoman said. "Our findings showed the company was incurring losses - so the promotion will not be extended." With a combined 1,200 to 1,300 people using the four fare savers daily, the MTRC said the machines had only brought in an additional 150 new passengers a day to the rail network. A captive to the HK$17.70 daily fare for her ferry ride from Sok Kwu Wan on Lamma Island to Central, 25-year-old human rights worker Rebecca Cheng Yat-man said when the fare saver started it was a welcome relief because it offset a ferry fare hike in the same month. "The HK$1.50 really adds up over time and now that oil prices have fallen while ferry fares are still the same, they should either leave the machine or cut ferry fares," she said. MTRC could not confirm or deny if its monthly and day passes for the East Rail and West Rail lines would also get the boot, following the scheme's June expiry date. "The offer of promotional schemes and their details are commercial decisions," Secretary for Transport Eva Cheng Yu-wah told lawmakers yesterday. On a lighter note, some 30 senior citizens from Mei Foo and Pak Tin took advantage of the MTRC's Wednesday HK$2 concession to enjoy a half-day trip to the Hong Kong Space Museum. MTRC general manager Jenny Yeung Mei-chun said during the Lunar New Year period, the MTRC will organize a series of activities for senior citizens.
Hang Lung Group (0010) and Hang Lung
Properties (0101) declared their support yesterday for an extension of a
blackout period on directors dealing in shares of their own companies, denying
they were part of a concern group asking for the new rule to be dropped.
Hong Kong's official foreign currency reserve assets amounted to 182.5 billion U.S. dollars at the end of December in 2008, Hong Kong Monetary Authority announced Wednesday. The 16.6 billion U.S. dollars increase in settled foreign currency assets from November of 2008 was mainly due to the purchase of foreign currencies with Hong Kong dollars, the authority said. Including unsettled forward contracts, the foreign currency reserve assets at the end of December 2008 stood at 184.8 billion U.S. dollars, up from 166 billion U.S. dollars in November, 2008. Hong Kong is the world's eighth largest holder of foreign currency reserves based on the latest published figures, after the Chinese mainland, Japan, Russia, China's Taiwan province, India, Brazil and South Korea. The total foreign currency reserve assets of 182.5 billion U.S. dollars represent about eight times the currency in circulation, or 44 percent of Hong Kong dollar M3.
China: More than 180,000 Communist Party officials have reported the job details of their spouses and children, which the mainland's top graft watchdog touts as a "new advance" in self-discipline. But analysts say the disclosures are just a minor step in fighting corruption. The party's Central Commission for Discipline Inspection announced on Tuesday that 185,940 officials had registered job information about their spouses or children since the 17th party congress in October 2007, according to the China News Service. The practice started with a pilot scheme in July 2004, when officials in Xiangfan , Hubei ; Suzhou , Jiangsu ; Shanxi province and the Beijing Petroleum Machinery Factory and Guohua Power were required to report employment details of their immediate families. Officials were asked to register the information and report whether the jobs fell within their own jurisdictions or created a conflict of interest. The scheme has grown, and more and more places have asked officials to register. In Beijing, officials were requested to report details in 2007. The data was restricted for the use of party disciplinary organs, and only a few places - including Sanya in Hainan ; and Hunan province - have released the information to wider "relevant circles". Information relating to national-level officials has never been released, though the disciplinary commission said nearly 500 officials had to address issues arising from the jobs of spouses or children, and 82 others were punished for violating regulations. The commission also said that 24,864 officials voluntarily reported they had violated relevant regulations, with part-time or side jobs, including retired officials who became independent board members of listed companies. They had turned in cash and securities worth 160,000 yuan (HK$182,000). Beijing Institute of Technology economics and China issues professor Hu Xingdou welcomed the efforts to clean up the party but said the effect was limited. "It's necessary to supervise and fight corruption within the system, but it's far more effective to get the public and media involved," he said. The most effective way to discipline corrupt officials, Professor Hu said, would be to publish their incomes and that of their families so the public could keep an eye on them. Currently, only ministerial-level officials or above have to report their family members' incomes. The commission also cut overseas travel of 18,416 officials suspected of wasting public money for private purposes. Several provinces, such as Zhejiang and Jiangsu, have issued notices urging greater monitoring of overseas travel. The purpose of the travel should be official only and the itineraries strictly followed, according to a Caijing Magazine report. A recent tour by officials of Las Vegas caused a public outcry.
Police block the entrance to a rural market in Yanjiao, Hebei province, yesterday as poultry markets closed for disinfection. Beijing municipal officials banned all live poultry from entering the capital after a rural migrant died from bird flu on Monday. Checkpoints were set up on highways and at railways to make sure no live poultry was smuggled in, Xinhua said. Huang Yanqing , 19, died after eating ducks she had bought live from a wet market on December 19 in Yanjiao county, Hebei , which is near Beijing's Tongzhou district. Xinhua said yesterday that the live-poultry section of Xinggong market had been shut down and birdcages were disinfected yesterday. But there was no information on whether the market was the source of infection, whether other live poultry in the wet market was infected with H5N1, or how many birds from the market were sold before the authorities shut it down. On December 22, three days after Huang bought the birds, she ate three of the cooked ducks with relatives. She fell sick on December 24 but did not go to hospital until December 27. It was several more days before a test determined that she was suffering from bird flu. Xinhua quoted a local official from Sanhe , Hebei, as saying the order had been received to disinfect the market early yesterday - three weeks after the woman bought the ducks suspected to be the source of infection. Sanhe's government yesterday said no bird flu case now existed in the city. This case was the first in Beijing and the first fatal one on the mainland since last February. Beijing authorities said no bird flu virus had been found in animals near Huang's home and that they had increased monitoring of the live-poultry trade and inspections of slaughterhouses and poultry farms. More than 100 people, including family members, neighbours and medical personnel, had been in close contact with the victim during her illness, Xinhua reported. The World Health Organisation said on Tuesday that the case did not appear to signal a new public health threat. It added that Huang's case was similar to others reported worldwide and did not appear to involve human-to-human transmission. "This single case, which appears to have occurred during the slaughtering and preparation of poultry, does not change our risk assessment," the WHO's Beijing office said.
China computer giant Lenovo has announced it will cut about 2,500 jobs, roughly 11 percent of its worldwide workforce, after suffering losses due to the global economic crisis. The company said in a statement to the Hong Kong Stock Exchange that the ''resource redeployment plan'' would help save HK$300 million (HK$2.34 billion) in the financial year ending March 31, 2010. Lenovo, the world's fourth-biggest personal computer maker, said preliminary estimates showed it would make a loss in the fourth quarter of last year. Lenovo said in November its net profit for the three months ending September 30 slumped 78 percent from a year earlier to US$23.4 million.
Desperate mainland graduates, facing grim job prospects amid slowing economic growth, are clamoring to find posts as nannies and domestic helpers for the rich in Guangdong.
China is expected to take delivery of 241 aircraft in 2009, including 16 delayed orders from 2008, according to the Civil Aviation Administration of China (CAAC). Leases on 43 planes are expected to expire this year, but the newly delivered aircraft would increase available passenger seats by 16 percent in 2009, the CAAC said. The aviation industry expanded 20 percent a year for three years, after 2004, it said. The number of aircraft increased from751 in 2005 to 1,254 at the end of 2008. Many of the new planes due for delivery this year were ordered a few years ago. However, the world aviation industry has, like many other industries, been hit by the financial crisis. Through the end of last year, more than 20 international airlines went into bankruptcy. China's aviation industry was also affected. From January to November, Chinese airlines lost 7.07 billion yuan (1.03 billion U.S. dollars). Air China, one of the three major state-owned airlines, reported 1.92 billion yuan in losses in the third quarter alone. Experts said they believed that China's aviation industry would have trouble making a profit this year as the global crisis continued. CAAC deputy head Yang Guoqing has encouraged carriers to cancel or delay orders for new aircraft in 2009 and encouraged them to return leased aircraft and ground or sell older planes. He also said the administration would be cautious about approving new aircraft orders this year. About 192 million people traveled by air in China last year, up 3.3 percent year-on-year. That growth rate was 13 percentage points less than in 2006. Airlines carried 4.03 million tons of cargo, up 0.2 percent. That rate was 14.8 percentage points below that of 2006.
China has stepped up anti-corruption efforts in the medical sector, with doctors turning in 37.66 million yuan (5.51 million U.S. dollars) in illicit revenue since November 2007, the Communist Party of China Central Commission for Discipline Inspection (CCDI) said here Wednesday. The money included kickbacks to doctors for prescribing certain drugs and "thank-you money" from surgery patients, according to the CCDI, the top anti-corruption body. According to the commission, 21 of the 31 provinces, municipalities and autonomous regions on the mainland have adopted a government-led bidding system for drug procurement, and nearly 90 percent of the prescriptions written at medical facilities were covered by that system. Regulations on drug pricing and registration have been revised to further curb corruption, it said.
January 8, 2009
Hong Kong: Hong Kong's gross domestic product was forecast to fall by 2.6 per cent in the first quarter of 2009 compared with the same period last year, a new survey released on Wednesday showed.
Cash-strapped Bank of America has sold a US$2.83 billion chunk of its holding in China Construction Bank on Wednesday to weather a dismal market at home. Top US lender Bank of America, raising cash to weather a dismal market at home, sold a US$2.83 billion chunk of its holding in China Construction Bank (SEHK: 0939) on Wednesday, dragging the Chinese bank's stock 5 per cent lower. The mainland’s three largest banks attracted big strategic investments from western financial giants at the time of their initial public offerings. Those investors are now under pressure to sell as the global financial crisis ravages the banking industry, and further sales are expected. Bank of America sold more than 5.62 billion shares, or nearly 13 per cent of its holding in Construction Bank, at HK$3.92 apiece, in a widely anticipated sale, according to a term sheet obtained by Reuters and a person familiar with the matter. “The news has been expected but investors will still take it hard because BoA will most definitely sell more. They need the money,” said Francis Lun, general manager with Fulbright Securities in Hong Kong. Bank of America realises a profit of about US$1.13 billion on the stake sale, based on Construction Bank’s IPO price. It sold the stake at a 12 per cent discount to the stock’s Tuesday closing price, according to the term sheet. Bank of America had planned a similar sale last month, but cancelled it, sources familiar with the situation said. The stake sold represents about 2.5 per cent in Construction Bank, and will leave Bank of America with a 16.6 per cent holding in the Beijing-controlled lender once the sale is completed. Bank of America bought its initial stake in Construction Bank ahead of the mainland lender’s 2005 IPO and built its holding up to just over 19 per cent. Speculation that the US bank would look to trim its stake has been rife since a 3-year lock-up on the initial chunk expired. Construction Bank’s shares fell 5.2 percent to HK$4.22 by 11.45am in a flat broader market. Embattled Swiss bank UBS recently sold its holding in Bank of China. British lender Royal Bank of Scotland also holds a large stake in Bank of China. Citigroup said Bank of China may see stake sales this year by Royal Bank of Scotland, which holds 8.3 per cent, and Singapore state investment agency Temasek Holdings, which owns 4.1 per cent. Lockups on those stakes lapsed in December, it said. Industrial and Commercial Bank of China (SEHK: 1398) could also come under stake sale pressure this year. Goldman Sachs, Allianz and American Express own a combined 7.3 per cent in ICBC, with lockups lapsing in April and October, Citigroup said in a note. ICBC shares were down 4.9 per cent. Bank of America’s newly acquired Merrill Lynch arm, as well as UBS, handled Wednesday’s share sale. Buyers of the shares must hold them for at least 120 days, the term sheet said. China Construction Bank said the sale does not change its relationship with Bank of America. “Bank of America has said many times that it will reduce some of its stake, and it will not change its status as an important shareholder,” the bank said in a statement. “China Construction Bank will continue to work with and further strengthen cooperation with Bank of America in business development,” it said.
The view from a Peak restaurant yesterday. Such popular tourist spots are expected to see a drop in visitor numbers. Hong Kong may record fewer visitors year on year amid an uncertain economic outlook in the key US and EU tourist markets, Tourism Board chairman James Tien Pei-chun has warned. A decline in visitor numbers would make 2009 the worst year for arrivals since 2003, when the Sars outbreak resulted in a 6.2 per cent drop in the year's total arrivals. Mr Tien said about 29.5 million people visited the city from overseas and the mainland last year. This was up a lower-than-expected 4.7 per cent from the roughly 28.2 million arrivals recorded in 2007. The board had initially aimed at about 30.4 million visitors for 2008. "In the past two months, the number of visitors from the US and EU fell over 10 per cent while mainland arrivals grew," Mr Tien said on RTHK yesterday. "We really cannot gauge the outlook of our long-haul markets, given the state of the economy in the US and EU. "But, if we take the slight decrease in our visitor numbers throughout October, November and December as a trend, Hong Kong would be doing quite well this year if the number of arrivals at least matches last year's 29.5 million total." Natural disasters, political turmoil, high oil prices, the Beijing Olympics as well as the current global economic troubles all took a heavy toll on the tourism industry last year. Many in the trade are bracing themselves for a tough year ahead despite efforts to tap new and emerging markets such as the Middle East, India and Russia. Increasingly relaxed travel restrictions for Taiwanese visitors to the mainland had hurt arrival numbers since they did not have to fly via Hong Kong, Mr Tien said. Last month, the number of Taiwanese visitors fell about 10 per cent year on year. He said multi-destination itineraries would be promoted to encourage Taiwanese visitors to stay over in Hong Kong before travelling to Guangzhou and back. Meanwhile, economist and gaming analyst Zeng Zhonglu said a drop in Macau's arrivals was unlikely, as the number of mainland travellers, which accounted for more than half of the city's visitors, showed no sign of decreasing. "With tightened control on Macau visits, [growth in] tourist arrivals has slowed down, but there hasn't been any decline," Professor Zeng, of Macau Polytechnic Institute, said. "It's unlikely the mainland government will further tighten travel curbs." He said Macau might see single-digit growth in arrivals this year.
Security cameras will be used to monitor a popular shopping area in Mong Kok from next month in an effort to curb crime and deter people who throw objects from a height. The Yau Tsim Mong District Council is to install two sets of surveillance cameras on the roofs of Park-In Commercial Centre at Dundas Street and Hollywood Plaza at the junction of Soy Street and Sai Yeung Choi Street South. Each set will have up to four cameras positioned at different angles overseeing Sai Yeung Choi Street South, where two bottles of acid were thrown from a height, injuring 46 people, last month. No one has been arrested so far. The district council hopes the cameras, which will cost HK$400,000 to install, will begin operating after Lunar New Year. It will discuss funding tomorrow. The acid attack prompted district councillors to consider installing a surveillance system, following the effectiveness of similar systems in public housing estates. Hau Wing-cheong, the chairman of the council's interdepartmental taskforce managing the pedestrian area in Mong Kok, believed the cameras would be more cost-effective than patrolling officers in deterring and detecting acid attacks. Mr Hau said the council had sought guidance from the Office of Privacy Commissioner for Personal Data, and the system would be designed so the cameras would not be intrusive or pointing directly at households. "We have already struck a balance between protecting the privacy of the people and residents, and the safety of shoppers on the streets," he said. He said camera footage would only be used for detecting major crimes, and with prior consent from the District Council chairman, the taskforce chairman and the district officer. "We are talking about major crimes such as falling objects that hurt people or major robberies. The footage certainly would not used by hygiene officers to catch litterbugs," he said. All footage would be encrypted and kept on a hard drive for no more than 10 days. Only authorized officers from the Electrical and Mechanical Services Department will be able to access the system, for regular maintenance. A spokeswoman for the privacy commissioner said the district council should examine other means to achieve its purpose before going ahead with installing the cameras. She said that if cameras were needed, the council should formulate a policy on the collection, storage and use of the data, and that there should be signs to inform the public that the area was under surveillance.
China visitors have driven sales higher at cosmetics stores, but watch and jewellery shops say sales have dropped about 30 per cent. The recession is changing the tenant mix of Hong Kong's prime street-front office and retail space as restaurants and vendors of luxury goods quit their leases because of falling sales. Among the new tenants lining up to take over the space at much- reduced rentals are medium to low-priced restaurants, shops selling discounted cosmetics, and even hard-bargaining banks looking for longer leases - a trend that presents landlords with a dilemma, agents say. "In a rising market, owners generally prefer retailers to banks as tenants because they are more willing to pay a premium above market rentals to secure a good location," said Joseph Leung Lik-wang, a director in the retail department at property consultants Savills (Hong Kong). "Banks, on the other hand, are generally willing to pay only market rentals and usually negotiate longer-term leases that limit the ability of landlords to increase rents or switch tenants." Led by a sharp fall in private consumption expenditure (down 0.2 per cent in the third quarter against a rise of 3.2 per cent in the previous quarter), Hong Kong officially entered a recession last year, and data for the final quarter is expected to show a further slide into negative growth. Rising unemployment, falling real wages and the negative wealth effect arising from share market losses have sharply changed spending patterns among shoppers.
Favorable exchange rates and cheaper air tickets have given travel agencies a boost in the race to attract holiday travelers after the Lunar New Year seasonal peak. Hong Thai Travel Services was first out of the gates, offering about 600 "buy two, get one free" Thailand package deals. The company also pledged to set aside HK$7 million as year-end bonus for its 1,100 staff and offer 30 new jobs despite a 10 percent fall in business and 15 percent slump in revenue last year. General manager Susanna Lau Mei- sze said the average cost of a tour has dropped by 10 to 15 percent on last year. She said 80 percent of approximately 1,000 tours departing during the peak January 25 to 28 season are full. Australia and South Korea, whose currencies have weakened against the Hong Kong dollar, are so hot among holidaymakers that all 20 Hong Thai tours to Australia are full and only a few slots of 50 South Korea tours remain. Many tropical paradise lovers have opted for destinations like Vietnam, the Philippines and Cambodia rather than Thailand, due to the unstable political situation there. Over the Christmas period, the number of groups to Thailand dropped by 60 percent.
A philanthropist who owns Bruce Lee's Kowloon Tong residence has agreed to donate the property to the government, paving the way for a commemorative venue honoring the legendary kung fu star. The government had suggested restoring the property to its original state to lure tourists while maintaining its integrity. After a closed door meeting with Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan, billionaire Yu Panglin said he will donate the property to the government. "The government has Yu's agreement to return the estate to its original state," the tycoon's interpreter Michael Choi Ngai-meen said after the meeting. The Commerce and Economic Development Bureau last night described the meeting between Lau and Yu as constructive. It is looking at ways of developing the property to allow Lee's fans to understand the intricacies of his daily life. According to Choi, Yu was concerned about whether the site is attractive enough and whether the original floor space is sufficient to cater to his plans of transforming the place into a museum. But the government convinced Yu that it might not be necessary to expand the site. Yu's original proposition that the site be expanded to accommodate venues including a library, martial arts center and cinema have taken a back seat while the government stressed the important issue is not its size but rather its drawing power, Choi explained. Although no definite timeline has been set, Yu said he hopes plans can be set in motion "as soon as possible." "When Yu has donated the land to the government, it will be up to the government to decide how to operate everything," Choi said, and explained the government would consult on plans for the Kowloon Tong property and enter into discussions with Yu once ready. "Yu is very happy about the government's suggestions so far," Choi said. Yu had earlier planned to sell the Kowloon Tong home to raise funds for the May 2008 Sichuan earthquake efforts, but changed his mind after Lee fans lobbied against the plan.
The Hong Kong Monetary Authority said it will auction an extra HK$18 billion of Exchange Fund paper, following high demand from local banks that continue to park their extra cash in the ultra-safe bills instead of lending it out.
China: Shares of Lenovo (SEHK: 0992) were suspended on Wednesday, as market talk swirled that the world’s No 4 PC seller was set to announce a major restructuring amid flagging sales in the global downturn. The company said in a statement its shares were suspended pending the release of price-sensitive information, but did not give further details. A company spokeswoman in Hong Kong declined to comment. Market talk has swirled for days that Lenovo may soon announce a major restructuring that could reach all the way up to its top management. Lenovo saw its share of the global PC market drop to 7.4 per cent in the third quarter of this year from 8.0 per cent a year earlier, as it battled aggressive smaller rivals such as Acer and Asustek, both of Taiwan, and Japan’s Toshiba. All the industry’s major players are also having to cope with increasing softness in the market due to reduced consumer and business spending in the global economic downturn. According to a report earlier in the week in Caijing magazine, Lenovo, which acquired IBM’s PC arm in 2005 for US$1.25 billion, plans to lay off 200 employees at its headquarters in Beijing as it fights tough economic conditions. It has suspended hiring and plans to sack contractors at its factories, the magazine said. China Business News, a Chinese-language business daily, reported earlier that Lenovo might merge its Greater China and Russia operations with its Asia-Pacific operations. Goldman Sachs said in a research note earlier this week that though Lenovo has been undergoing some restructuring efforts since mid-this year, there remains the potential for further major restructuring plans. “Lenovo might be prompted to do the same due to increasingly difficult market conditions and thus needs to better streamline its organisation,” Goldman said. Shares of the world’s No 4 personal computer tumbled 70 per cent last year amid concerns about its eroding position in the worldwide market, compounded by effects of the sell-off in global stock markets. It shares rose 17.8 per cent this week before the suspension.
A man talks over his mobile phone as banners promoting the TD-SCDMA third-generation mobile services are displayed outside a China Mobile shop in Beijing. On Wednesday the government finally announced granting of 3G licenses to the telephone operators.
Chinese Foreign Minister Yang Jiechi (R) meets with visiting U.S. Deputy Secretary of State John D. Negroponte in Beijing, China, Jan. 7, 2009. China on Wednesday said it hoped to achieve even greater progress in Sino-U.S. relations in the next 30 years.
Global contract sales of Huawei Technologies, mainland’s largest telecoms gear maker, jumped 46 per cent in 2008 to US$23.3 billion.
China will launch a trial real estate investment trust (REIT) scheme in a bid to aid developers and revive the property market, a central bank official said yesterday. Huo Yingli, financial markets deputy director of the People's Bank of China, said the initial framework of a REIT system had been completed and was being studied by government agencies. The plan was awaiting approval from the State Council. An analyst at a mainland investment company said the REIT system might help ease the cash flow of companies in the property sector, which is considered vital to China's economic growth in 2009. According to Qi Ji, Vice Minister of the Ministry of Housing and Urban- Rural Development, sales volume of commercial residential buildings in 2008 was estimated at 600 million square meters (6.46 billion square feet), a 21 percent decline from 762 million square meters in 2007. The key to boosting property sales was a return to reasonable prices, as current prices were still "not affordable for ordinary people," the official Xinhua News Agency reported. Xinhua said price cuts by developers such as China Vanke were "effective to a certain extent," and urged more developers to modify prices. Goldman Sachs forecasts property prices in China will drop by 10-15 percent in 2009, as developers face pressure from high inventories and tight cash flow. Lu Qilin, a Shanghai analyst, told the China Business News that sales in Shanghai improved at the end of 2008 after developers cut prices. But more price cuts were needed. A Credit Suisse report said that to ease liquidity, the property market will need a 40-50 percent year-on-year volume bounce in the next selling season. But sales would be further affected by newly-launched social welfare housing projects for low-income families.
A ship of China Ocean Shipping Group Company (COSCO) sails in the Gulf of Aden under the escort of a Chinese naval fleet (not seen in the picture) Jan. 6, 2009. The Chinese naval fleet arrived Tuesday in the waters of the Gulf of Aden off Somalia to carry out the first escort mission against pirates. Four Chinese ships, including one from China's Hong Kong Special Administrative Region, were escorted by the fleet.
January 7, 2009
Hong Kong: The Housing Authority was expected to register a loss of about HK$220 million in the 2008-09 financial year, HA finance committee chairman Wong Yuen-fai said on Tuesday.
A single financial services regulator is probably the way forward for the SAR, former Hong Kong Monetary Authority deputy chief executive David Carse said yesterday. "I think it is the direction to go in," Carse told the Legislative Council's financial affairs panel. "A single regulator may be the best long-term solution," he said, noting: "It is a fragmented system at the moment." Carse, hired as a consultant by the HKMA, was presenting the conclusions of his report on its role in banking stability. The authority plans a response to his report within six months, he said. Creating a unified financial services regulator could take at least five years because of the changes to legislation required. Still, it should be a long-term goal as the regulatory system should not be changed wholesale in a crisis, Carse said. In the short term, the relationship between the authority and the Securities and Futures Commission needs to be reviewed, he said, because responsibilities of the two have become blurred as selling investment products becomes a larger part of retail banks' business. Asked if a unified financial services regulator would be good for Hong Kong, HKMA chief executive Joseph Yam Chi-kwong said: "It's the right direction in the long term." He added: "But it's not good to talk about it before we finish handling prob- lems from Lehman Brothers." Carse also said the time is ripe for the HKMA to set up an ombudsman to act as an independent arbiter between banks and their clients. "I think it's a gap in the current financial arrangements in Hong Kong," he said. "The time may have come ... to think about setting up such a body." The HKMA should not resolve individual disputes, Carse said, but the ombudsman could replace the ad-hoc arbitration services as arranged by the HKMA in the Lehman minibond affair. Carse said the authority's guidelines on derivatives are "outdated." This is a "quite significant" gap that needs to be filled "as soon as possible," he said. The HKMA should have more powers of sanction and investigation in line with those available to the Securities and Futures Commission, Carse added.
Hong Kong home transactions slumped for the sixth consecutive month in December, falling 65.1 percent year-on- year. Overall, property prices fell 22.4 percent last year after financial turmoil battered sentiment in the second half. According to the Land Registry, flat sales in December decreased 65.1 percent from a year earlier to 4,706 units, but were up 44.2 percent on the previous month. Home transactions by value fell 66.4 percent year-on-year to HK$17.7 billion, an increase of 96.1 percent on November. "New projects such as Peak One and La Grove keep registering transactions ... bringing the number of sales in the primary market to a six-month high," said Midland Realty chief analyst Buggle Lau Ka-fai. There were 891 sales in the primary residential market last month, up 630 percent on November, and 3,269 flats changed hands in the secondary market, up 23.1 percent on the previous month, according to Wong Leung-sing, Centaline Property Agency's associate director for research. Sun Hung Kai Properties (0016) recorded 412 deals at La Grove in Yuen Long and 372 deals at Peak One in Sha Tin, Wong said. According to Centaline, the volume of residential transactions in 2008 fell 22.4 percent on the previous year to 95,931 and value declined 20.8 percent to HK$343.8 billion. Lau expects satisfactory sales this month at City 18 in Jordan, developed by Henderson Land Development (0012), and Sun Hung Kai Properties' Bedford 28 project located in Tai Kok Tsui.
Hong Kong Airport Services (HAS) ground staff held a three hour strike after talks on regarding their annual bonuses broke down on December 27. The dispute between Hong Kong airport ground staff and their employer over payment of a Chinese New Year bonus ended in agreement early on Tuesday. After 15 hours of negotiations, representatives from Hong Kong Airport Services (HAS) agreed to give a bonus to staff equivalent to 18 days salary. They will also give each staff member a red packet containing HK$1,000 at Lunar New Year, local media reported. HAS has also agreed to consult the union representatives about their views on distributing the bonus. A HAS spokesman said: “Our company and the unionists have agreed to closely work together in the future to ensure the smooth operation of the Hong Kong International Airport.” HAS had initially said it was scrapping the bonus – which this year was to be equivalent to four weeks pay. After negotiations, it said it would pay two weeks’ bonus, but workers wanted a month. Matthew Cheung Kin-chung, the Secretary for Labor, said he was pleased the dispute had now been resolved. Mr Cheung said employers and employees needed communicate even more during the global economic crisis. “Members of the public are encouraged to contact the Labor Department for inquiries and assistance regarding labor relations issues,” he added. Air staff and thousands of travelers were held up on December 27 when about 1,000 ground staff launched a three-hour strike. Many passengers left the airport without their luggage.
The High Court yesterday threw lifelines to a trio of Hong Kong companies battered by the global financial crisis. Insolvent appliance chain Tai Lin Radio Services, 3D Gold Jewellery Holdings and toymaker Smart Union Group (Holdings) all won extensions to their court-ordered creditor protection plans amid efforts to restructure the firms' operations. A hearing in the Court of First Instance was told that efforts were under way to resuscitate Tai Lin, one of Hong Kong's oldest appliance store chains. Mr Justice Aarif Barma ordered that a hearing be held on March 2 to update the court on the state of talks aimed at saving the chain. A group of self-employed technicians demanded millions of dollars in unpaid wages from Tai Lin shortly after it collapsed in October, in a sign of distress that has become familiar as thousands of workers in the city have lost jobs. One of the technicians ran out of a meeting with Tai Lin's provisional liquidator in October and threatened to jump off a roof unless the firm wrote cheques for unpaid work. Meanwhile, the court heard that Smart Union may have found a white knight to help it out of its financial woes. No details were revealed about the identity of the potential buyer or any timeline for a possible deal. Mr Justice Barma adjourned Smart Union's next court hearing until April 6. The Hong Kong-listed toymaker laid off thousands of workers after it shut several factories on the mainland in October. The judge also adjourned further hearings on the wind-up of 3D Gold Jewellery and its Hang Fung Jewellery retail unit until May 4 as the company and its creditors worked on a restructuring plan. 3D Gold, best known for making the world's most expensive toilet, was thrown into disarray several months ago following the arrest of several company executives, including Jane Lam Chan Yam-fai, the widow of company founder Lam Sai-Wing. Five senior executives were arrested in connection with the alleged theft of HK$179 million worth of gold bars stored in the company's vault. Lam, 53, who developed 3D Gold into one of the city's biggest manufacturers of gold and precious metals products, died suddenly at his Bowen Road home in September. A police investigation and several lawsuits sparked by the "missing" gold bars were launched within weeks of Lam's death. The Official Receiver's Office said last month that business bankruptcy petitions in the city had risen 10 per cent to 66 in October, the highest level in two years. The Federation of Hong Kong Industries warned several months ago that as many as 2.5 million people in the Pearl River Delta could lose their jobs as the global slowdown dented the region's economy.
The education chief has pledged more support for high-quality English teaching and greater flexibility for schools under revisions to the vexed medium-of-instruction policy due to be announced on Thursday. Secretary for Education Michael Suen Ming-yeung was speaking at a forum attended by about 100 parent representatives in a last-ditch effort to gain support for the revised policy. "It's now the best time to finalise the details of the adjustment policy after consulting the opinions of stakeholders for more than a year," he said. Mr Suen reiterated interim proposals announced in June which stipulate that schools with 85 per cent of their Form One intake in the top 40 per cent academically can have total autonomy in deciding language policies. Schools that fall short of that threshold can set aside no more than 25 per cent of class time in non-language subjects for "extended learning activities conducted in English". Under the policy, he said, dual streaming of schools into Chinese and English schools would be abolished and schools would be able to split classes, subjects and lesson periods according to students' ability and needs and teachers' ability. "There will be more flexibility for schools. Those which adopt English as their medium of instruction can use Chinese to teach such subjects as religion, ethics and liberal studies so that students can have more affinity with the subjects." he said. Those that taught mostly in Chinese would be given more resources to strengthen their English-learning environment. The final proposal would be submitted to the Legislative Council education panel for review and the measures would take effect in the 2011-12 academic year.
Cheaper flats in the New Territories are defying the slowing housing market, with transaction values surging to an 11-year high. Total sales were valued at HK$97.21 billion between January and December 23. This was an increase of 1.78 per cent from the HK$95.51 billion achieved in last year's boom. The number of transactions in the New Territories, however, was 45,265 during the period, 7.3 per cent below that for all of last year. Still, the fall was relatively small compared with the 34.3 per cent drop in Kowloon and the 21.4 per cent decline on Hong Kong Island, said Midland Realty chief analyst Buggle Lau Ka-fai. Mr Lau said cheaper flats were more resistant during the current financial crisis. Prices for these flats had not surged as fast as the cost of luxury flats last year, and now the pace of decline is slower. The increase in the value of small units was also partly due to an increase in the transaction volume of flats valued from HK$2 million to HK$5 million, such as Park Island in Ma Wan, according to Midland. Strong support in cheaper flats was also indicated in a study by Centaline Property Agency. Wong Leung-sing, an associate director of the agency's research team, said Kingswood Villas in Tin Shui Wai, where unit prices averaged between HK$1 million and HK$2 million, were the most popular among 10 key housing estates. There were 1,338 deals at Kingswood Villas last year. This was followed by 1,014 deals at another housing estate, City One Sha Tin. Mei Foo Sun Chuen ranked third with 933 units sold. Midland Realty said potential buyers were more eager to view flats valued at between HK$1,700 and HK$3,000 per square foot during the Christmas holiday. According to estate agents, average prices in housing estates fell about 20 per cent in the fourth quarter. Meanwhile, home sales in Hong Kong dropped last month to their lowest level in 17 years.
A senior executive from a credit card company and up to20 other people are being investigated by the Independent Commission Against Corruption over a suspected HK$100 million loan racket.
Blooming flowers at the start of the Lunar New Year signify prosperity and romance, and florists hope this belief brings them fortune as they join the HK$1 bandwagon to stimulate consumer spending. To spur sales, Sun Hung Kai Real Estate Agency is offering daffodils and Pearl of Chiba for HK$1. The market price for daffodils is HK$180 and for Pearl of Chiba, HK$128. Each variety is limited to 100 pots and buyers can only get one when the flower market opens on January 11 at East Point City, Tseung Kwan O. Some florists will cut prices by 50 percent. Four new species of orchid - the Red Diamond, Giant Petal, Japanese Lady and Green Stone - will be sold at HK$128. They usually sell for HK$180 to HK$280. Chairman of the Hong Kong Wholesale Florist Association Sunny Lai Wing-chun said supplies of flowers and clementines - or kut in Cantonese, which sounds like the word for luck - have fallen by up to 50 percent due to this year's colder winter. As flowers symbolize good fortune, Lai said, people will still be willing to spend money on them to welcome in the Year of the Ox, but traders will not make large price adjustments. Lai expects more shoppers prefer to buy flowers in Hong Kong due to the high exchange rate of the yuan. Emmy Leung Yuen-shan, senior promotions manager at Sun Hung Kai Real Estate Agency, said it will hold more HK$1 promotions to stimulate sales at its plazas. The flower market is expected to boost footfall at East Point City by 15 percent to 2.3 million and turnover by 13 percent on last year to HK$130 million. The agency expects that business at its eight plazas will be satisfactory this year, withfootfall of 260 million, an increase of 13 percent, and turnover of HK$6 billion, up 10 percent from last year.
China: The Centre for Health Protection said it had received notification from the Ministry of Health on Tuesday concerning a confirmed human case of avian influenza H5N1 in Beijing.
Shanghai Pudong Development Bank, a medium-sized mainland commercial bank partly owned by Citigroup, said on Tuesday its unaudited net profit rose 127.53 per cent this year from last year. But its earnings growth in the fourth quarter of this year apparently slowed down sharply, in line with the declining pace of mainland’s economic growth throughout the year. The bank posted a net profit of 12.512 billion yuan (HK$14.21 billion) this year against 5.499 billion yuan last year, it said in a filing to the Shanghai Stock Exchange. But Reuters’ calculations based on its financial statements showed Pudong Bank made a net profit of 2.668 billion yuan in the fourth quarter of this year against 1.576 billion yuan a year earlier, up only 69.29 per cent. That was less than half the 150.92 per cent growth posted for the first three quarters of this year from the same period last year. Mainland’s economic growth, hit by the global financial crisis, slowed to a year-on-year 9.0 per cent in the third quarter from 10.1 per cent in the second quarter and 10.6 per cent in the first quarter, falling into the single digits for the first time in at least three years. Many economists expect it to slip below 8 per cent in the fourth quarter. Pudong Bank posted on Tuesday unaudited operational income of 34.412 billion yuan this year, up 32.99 per cent from last year, and operational profit of 15.248 billion yuan this year, up 41.67 per cent from the prior year. It did not make comments on the results. The bank is scheduled to publish audited this year earnings results on February 28, with full explanations.
A helicopter of the Chinese naval fleet attends a landing exercise at night on Dec. 28, 2008, while the Chinese naval fleet heads for the Gulf of Aden. The Chinese naval fleet including two destroyers and a supply ship set off on Dec. 26 for waters off Somalia for an escort mission against piracy. Chinese naval fleet carries out first escort mission off Somalia. A Chinese naval fleet arrived Tuesday in the waters of the Gulf of Aden off Somalia to carry out the first escort mission against pirates. Four Chinese merchant ships, including one from China's Hong Kong Special Administrative Region, were escorted by the fleet. Rear-Admiral Du Jingchen, commander of the force, said the escort mission has started and "we would strictly observe UN resolutions and relevant international laws to fulfill our obligations." Du said the task force will carry out careful deployment, enhance coordination and keep close watch to ensure the safety of the vessels and crew being protected. The fleet, two destroyers and one supply ship, left a naval base on China's Hainan island last Friday under authorization from both the United Nations Security Council and Somalia's transitional government to primarily escort Chinese merchant ships. The fleet includes about 800 crew members, including 70 soldiers from the Navy's special force, and is equipped with missiles, cannons and light weapons. The UN Security Council adopted four resolutions in 2008 calling on all countries and regions to help patrol the gulf and waters off Somalia, where increasing piracy has endangered international shipping in one of the world's busiest sea lanes. The latest resolution authorized countries to take all necessary measures in Somalia, including in its airspace, to stop the rampant piracy. The London-based International Maritime Bureau said more than 100 vessels had been attacked in the gulf in 2008 and 14 ships are currently being held for ransom, including Saudi supertanker Sirius Star and the Faina, a Ukrainian cargo vessel carrying 32 tanks.
Hopes that Beijing's Olympic baseball venue would be preserved for the future development of the sport in China have been dashed as the stadium's developer revealed it would be dismantled and replaced by a shopping mall. The 15,000-seat Wukesong Sports Centre baseball field, listed by Olympic organizers as a temporary venue even before the Games were held in August, had become the first venue slated for the wrecking ball, the Beijing News said on Monday. “Our preliminary plan is to supply Beijing residents with a leisure centre combined with shopping, culture, sports and entertainment,” Guo Jinjiao, deputy manager of the development company, told the paper. The 200 million yuan stadium played host to a Major League Baseball exhibition game between the Los Angeles Dodgers and San Diego Padres last March. But apart from the MLB’s rental fee for that game, it had not derived any income, the paper said. “It could only be guaranteed if there were enough activities to attract people to the venue. We absolutely could not accept any suggestion of [keeping the field] to be used only once or twice a year,” said Guo. MLB officials had had “many conversations” with Chinese Olympic and sport authorities and the developer to try to save the venue, Michael Marone, a Beijing-based MLB spokesman, told Reuters. “Obviously it’s a shame. You would prefer to have it kept as a relic of the Olympic Games and to help baseball culture to further develop here,” Marone said. An official with the Chinese Baseball League said the league did not have the resources for the stadium’s upkeep. “We also wanted to save the venue but we are not the owners. It was a temporary facility,” Chen Gang, a CBL official told reporters. China’s national baseball team struggled against the world’s big hitters at the Beijing Games, finishing eighth out of eight teams. Baseball remains a fringe sport in China, and the six-team professional league set up in 2002 struggles to attract more than a few dozen spectators to regular matches. The field’s demise has nonetheless been greeted with dismay be local baseball fans. “It is the best field in China, a place borne with the dreams of countless baseball fans and that has witnessed historic moments. It is already a Holy Land in our heart,” said a post on the website of the China Baseball League.
Protesters gather outside Beijing municipal government after construction of their residential block stopped after an official was found guilty taking bribes from the developer on Sunday. Xinhua warns of national wave of unrest - China faces surging protests and riots this year as rising unemployment stokes discontent among migrant workers and university graduates, a state-run magazine said in a blunt warning about unrest in this sensitive year. The unusually stark report was in this week’s Liaowang [Outlook] magazine, issued by Xinhua news agency, which laid out the hazards facing the mainland and ruling Communist Party as growth falters during the global economic crisis. “Without doubt, now we’re entering a peak period for mass incidents,” a senior Xinhua reporter, Huang Huo, told the magazine, using the official euphemism for riots and protests. “In this year, Chinese society may face even more conflicts and clashes that will test even more the governing abilities of all levels of the party and government.” President Hu Jintao has vowed to make China a “harmonious society”, but his promise is being strained by rising tension over shrinking jobs and incomes, as well as long-standing discontent over corruption and land seizures. Beijing is also facing a year of politically tense anniversaries, especially the 20th year since the June 1989 armed crackdown on pro-democracy protests. That anniversary has already galvanized a campaign by dissidents and rights advocates demanding deep democratic reforms. Mr Huang said many Chinese citizens had shed their reluctance to confront officials. “Social conflicts have already formed a certain social, mass base so that as soon as there is an appropriate fuse it always swiftly explodes and clashes escalate quickly,” said Huang. The magazine arrived with subscribers on Tuesday and the article also appeared on Xinhua’s website. Mainland leaders are usually secretive about threats to their control and the unusually blunt public warning may be intended to help snap officials to attention. The biggest threats to the nation’s stability will come from graduating university students, facing a shrinking job market and diminished incomes, and from a tide of migrant laborers who have lost their jobs as export-driven factories have shut. Factory closures, sackings and difficulties paying social security had already unleashed a surge of protests, the report said. Officials in provinces that have provided tens of millions of low-paid workers for coastal factories have reported a leap in the number returning to their farm homes without work. State statistical authorities estimated that close to 10 million rural migrant workers had lost their jobs, the magazine said, without specifying when the sackings happened. Including students who graduated last year and had not found work, there would be more than seven million university and college graduates hunting for jobs this year, Huang calculated. The government’s goal of annual GDP growth for this year of eight per cent would generate only eight million new jobs for the whole country, he added. In 1989, discontented students formed the core of the pro-democracy protests. “If this year there is a large number of unemployed rural migrant laborers who cannot find work for half a year or longer, milling around in cities with no income, the problem will be even more serious,” said Huang. Mr Huang is Xinhua’s bureau chief in the southwest city of Chongqing, which has long been a cauldron of unrest. Other parts of China have also seen intense but brief and localized protests over police abuses, corruption and factory closures. Ian Bremmer, president of the prominent political risk consultancy Eurasia Group, said he foresaw no departure from that pattern and no overwhelming crisis from unrest. “The party has built a large stockpile of domestic goodwill over the past three decades,” Bremmer told reporters in an interview this week, offering a more optimistic outlook. “Toughening economic times will erode some of that credit, but the reserves are too deep for China to reach a crisis point this year.” The mainland’s economy expanded by 9.9 per cent from a year earlier in the first nine months of last year. But some economists doubt that the government can achieve its goal of 8 per cent growth for this year. The magazine report also stressed that China’s social strains are about more than just GDP growth. Protesters were becoming increasingly politicized, making it even more difficult for officials to contain protests by force, the report said.
Top negotiators from Taiwan and Beijing will meet again this week to discuss issues facing island investors who see the mainland as an important but increasingly difficult place to do business amid the global economic crisis. Taiwan negotiator P. K. Chiang will visit four mainland cities from Wednesday to see counterpart China Chen Yunlin and scores of Taiwan investors, Mr Chiang’s office said on Tuesday. Thousands of Taiwan investors have poured about US$100 billion into the mainland, where they are lured by a common language and culture as well as relatively low labor costs. Since Beijing-friendly Taiwan President Ma Ying-jeou took office in May on pledges to ease tension, the two negotiators have met twice to sign landmark trade and transit deals. Investors and some of the approximately 750,000 other Taiwan business people stationed in the mainland say that shaky investment guarantees, rising labor costs and personal safety in region make their work increasingly tough. Mr Chiang, who will travel to the mainland for four days, and his counterpart will lead investor forums in the cities of Guangzhou and Nanjing to discuss financing channels and possible tax cuts, Taiwan enterprise association leaders in Guangdong said. “It’s got harder to operate a businesses here,” said Samuel Kuo, former head of the Taiwan investor association in Dongguan, near Guangzhou. “The visits aren’t to sign agreements, but to understand our situation.”
Lenovo is making its boldest move yet in redesigning the venerable ThinkPad notebook with the introduction of the W700ds – the industry’s first dual-screen mobile workstation.
China launched a major crackdown on internet pornography yesterday, targeting popular online portals and leading search engines such as Google. Seven government agencies will work together on the campaign to "purify the internet's cultural environment and protect the healthy development of minors," according to an announcement on the government's website, china. com.cn. Pornography is banned in China, though the government's internet police struggle to block websites based abroad. The government announcement said Google and Baidu, China's two most heavily used search engines, had failed to take efficient measures after receiving notices from the country's internet watchdog that they were providing links to pornographic material. Baidu dominates the Chinese web search market, with about two-thirds of the audience. Google, the global market leader, is a distant second in China. The statement also named popular web portals Sina and Sohu, as well as a number of video-sharing sites and online bulletin boards, that it said contain problematic photos, blogs and postings. It said violators will be severely punished, but did not give details of penalties or say how long the campaign will last. A Google spokeswoman in China, Cui Jin, defended the site's operations, saying it does not contain any pornographic content. "If we find any violation, we will take action. So far, I haven't seen any examples of violations," Cui said. China has the world's largest population of internet users, with more than 250 million. The central government has blocked access to many websites it considers subversive or too political. The campaign coincides with Communist Party efforts to stifle dissent and protest as the economy slows and China enters a year of sensitive anniversaries, especially the 20th year since the bloody crackdown on the Tiananmen Square pro-democracy protests in 1989. "Some websites have exploited loopholes in laws and regulations," said Cai Mingzhao, a deputy chief of the State Council Information Office, who chaired the meeting, according to the report on the official website. "They have used all kinds of ways to distribute content that is low-class, crude and even vulgar, gravely damaging mores on the internet."
People play at the Harbin Ice and Snow World in Harbin, capital of northeast China's Heilongjiang Province, Jan. 5, 2009. The 25th Harbin International Ice and Snow Festival of China was opened on Monday at the local park in Harbin, capital of northeast China's Heilongjiang province, featuring ice and snow art, sports, trade and tourism.
January 1 - 6, 2009
Hong Kong: Local toy manufacturers and exporters worried about the global economic downturn hope to turn to emerging markets such as Russia and Vietnam to help make up for fewer orders from the United States and Europe. Many of the more than 2,000 exhibitors at the four-day Hong Kong Toys & Games Fair, the world's second-largest trade show of its kind, are projecting business from the two major markets to shrink between 10 and 20 per cent this year. The US is Hong Kong's biggest market for toy exports, accounting for 27 per cent of the US$12.61 billion of exports of toys, dolls and games recorded in the first 11 months of last year. "There is definitely concern about the impact of the economic downturn on toy orders," said Jeffrey Lam Kin-fung, the managing director of toy manufacturer Forward Winsome Industries. "Christmas sales in the US and EU managed to hold relatively steady although prices dropped." The uncertain outlook comes as more than half of the mainland's toy exporters shut down last year, according to the General Administration of Customs. Hong Kong toy manufacturers have most of their factories on the mainland. "Christmas is over and I think we have already experienced the worst," said Wong Tit-shing, the chairman of the Trade Development Council's toys advisory committee. "The situation should stabilize now and not deteriorate further." Hong Kong's toy exports rose 11 per cent year on year in the first 11 months of last year. Exports to the mainland grew 8 per cent during the period, while the EU recorded a 50 per cent growth. Relatively new markets such as Russia imported 27 per cent more toys from Hong Kong, according to the council. The 35-year-old fair features a new World of Toys Pavilion this year in collaboration with German organiser Spielwarenmesse. The new pavilion was included in other leading toy fairs in Dubai and Moscow.
Lisa Wang Ming-chuen (left) and Yuen Siu-fai (right) show a model of the proposed Cantonese opera centre they want to be housed in the North Kowloon Magistracy. A key Cantonese opera society has unveiled a plan to convert a historic building into a training centre and museum dedicated to the local art. But some opera veterans said the proposed centre would never be able to replace the Sunbeam Theatre, if the renowned North Point venue were to shut down next month after the Lunar New Year holiday. The theatre is at the centre of a rent debate. The Chinese Artists Association said it had submitted an application to turn the North Kowloon Magistracy into a cultural centre for Cantonese opera under the Development Bureau's Revitalizing Historic Buildings Through Partnership Scheme. The building was among the seven historic structures listed in the first phase of the scheme. The association's chairwoman, Lisa Wang Ming-chuen, said the group's application was among the final three of the 21 submitted for the North Kowloon Magistracy. The results will be announced next month. She said meetings had been held with the vetting committee, which was most concerned about how the proposed centre would be operated and managed. She declined to speculate on the likelihood that the association's application would be accepted, but she said it was necessary that immediate steps be taken to preserve Cantonese opera. "Hong Kong has a more original form of Cantonese opera than what is practised on the mainland. Its development is different and incomplete because of the Cultural Revolution," Ms Wang said. The North Kowloon Magistracy would be the ideal venue for an opera centre as Sham Shui Po was slated to become a new cultural hub, she said. The proposed centre would have six floors and include a traditional tea house where Cantonese opera songs would be performed, a museum, an archive of Cantonese opera materials, rehearsal studios, and offices. The top floor of the building would be transformed into a dormitory available for visiting Cantonese opera troupes or tourists. Parts of the historic building, including two former holding cells and one of the four court rooms, would be preserved. Ms Wang said the government would provide HK$150 million to pay for renovations and HK$5 million for the first three years of operation. "But we will still have to raise at least another HK$15 million in order to cover all the costs," she said. Admission fees for the museum, expected to be HK$30 for adults, and rent from the dormitory, which would be HK$500 to HK$600 a night for a room for two people, would be the main sources of income, she said. But association vice-chairman Yuen Siu-fai said the centre would not be able to replace the Sunbeam Theatre because of its history and location. He said the landlord was less concerned about raising the rent than the apparent lack of a plan for development of Cantonese opera. The Home Affairs Bureau said Secretary for Home Affairs Tsang Tak-sing had met with the landlord and the operator of the Sunbeam Theatre last month and that the bureau hoped negotiations for a lease extension could be continued. The lease is up at the end of this month but the landlord agreed to extend it until after the Lunar New Year. The bureau said it could consider adopting a different funding plan.
China: The Chinese navy will begin guiding several mainland vessels - plus a Hong Kong-flagged cargo ship - through the dangerous waters off Somalia from today in its historic expedition to join international efforts in fighting rampant piracy in the area. A ship from Taiwan may also be among the vessels being protected by the PLA naval mission. An official from the China Shipowners' Association said owners of the Taiwanese ship had approached the association seeking protection. But since the group was not authorised to handle applications from outside the mainland, the shipping company was referred to the Straits Exchange Foundation, the body that deals with Taiwan-related affairs. About 20 vessels from Hong Kong and the mainland had sought Chinese protection as of yesterday, including seven applications filed by Hong Kong shipowners through the Marine Department. Only one of the seven applications was approved. Hong Kong Shipowners Association assistant director Gilbert Feng Jiapei said he was told the six rejected cases either were travelling outside the authorities' specified protected region, or were not vessels registered in Hong Kong. The Chinese mission begins two days after a French warship foiled attacks on two cargo vessels in the Gulf of Aden and caught 19 pirates. The French defence ministry said pirates attempted to attack a Croatian and a Panamanian ship and that French forces seized assault rifles, two rocket launchers and more than 1,000 litres of oil. In Beijing, the Ministry of Communications said that ships sailing into the Gulf of Aden west of longitude 57 degrees east and south of latitude 15 degrees north were qualified to seek protection. The Chinese naval mission that will arrive in the region today - two destroyers and a supply ship - will meet up with cargo ships in waters north of the Socotra Archipelago before escorting them on their voyage. Director of Marine Roger Tupper said only one or two Hong Kong-flagged vessels traverse the dangerous waters off Somalia each day on average. Since last week, the department has informed 227 shipping companies that own Hong Kong- registered vessels about the escort service provided by the People's Liberation Army Navy. "The arrival of the mainland vessels is most welcomed by ship owners in Hong Kong," Mr Tupper said. Ships seeking protection need to submit details such as the vessel's type, speed, date of arrival and particulars of crew members seven days before arriving at the Gulf of Aden. But Mr Feng said demand for the escort service may not be high in the short term. "The ship cargo business is usually slack after the New Year holiday, and some ship owners do not like disclosing their vessels' full details to the authorities; others do not think the service is necessary," he said. "After all, the most important thing is someone will come to your rescue quickly when you need it." The Ministry of Defence has pledged full co-operation with navies from countries that have sent ships to the gulf. China decided to take part in its first official overseas naval operation in modern times after nearly 100 vessels have been attacked or hijacked by pirates off Somalia.
With Beijing's decision to increase 3G infrastructure development, the country's top telecommunications network operators are preparing aggressive marketing campaigns to support the launch of high-speed mobile broadband services later this year. China Mobile (SEHK: 0941, announcements, news) Communications Corp, which has built an extensive pilot 3G network based on the mainland-developed TD-SCDMA technology, is the first to publicise a new image with its G3 brand. UBS analyst Wang Jinjin said the Ministry of Industry and Information Technology is expected to issue licences to the three state-owned network operators - China Mobile, China Telecom Corp (SEHK: 0728) and China Unicom (SEHK: 0762) - this month. That process began after the State Council issued approval to the ministry on December 31. China Mobile, which is keen to bolster its lead in the country's nascent 3G market, has started to recast its image as an operator, using the G3 brand to compete against China Telecom's Surfing mobile service. "The launch of the new brand will surely pave the way for China Mobile's mainstream promotion of its TD-SCDMA service," said a source, who noted that a marketing campaign based on the operator's 188 prefix number for the service is coming later this month. China Mobile's G3 brand was less focused on the mobile broadband technology it used, compared with the previous branding it adopted, the highly unimaginative "TD-SCDMA" service, the source said. Market watchers noted that the strategy would help deflect negative impressions among users of the technology, as TD-SCDMA will compete directly with the more evolved western 3G mobile standards - WCDMA from Europe and CDMA2000 from the United States. China Mobile is expected to set up 150,000 mobile base stations by 2011, according to CCID Consulting. It has been providing trial 3G services in 10 cities - including Beijing, Guangzhou and Shanghai - since April last year. The operator is expected to use the G3 brand to encompass its existing services, such as the business-focused GoTone, M-Zone for youngsters and Shenzhouxin for prepaid users. "The new G3 brand will focus more on all the new services available under China Mobile's network, rather than be positioned as an independent brand. So the branding campaign will include advanced features such as mobile internet, gaming and shopping," a source said. Last week, China Mobile unveiled tariff cuts of up to 67 per cent for its 2.5G mobile internet service. Beijing Mobile, a subsidiary operating in the mainland capital, lowered 2.5G mobile internet data usage to 5 yuan (HK$5.67) for 30-megabyte usage, compared with only 10 MB previously. It also provides a package targeting business subscribers costing 200 yuan per month for 2 gigabytes. China Mobile also offers several monthly tariff plans that bundle Wi-fi access at wireless broadband hot spots such as coffee shops. The discounting scheme, according to market watchers, is a defensive strategy for China Mobile as it started to compete last month against China Telecom's Surfing service. China Telecom, the country's dominant fixed-line network operator, acquired the CDMA2000 mobile-telephone system from Unicom in October last year, following an industry restructuring. With its vast fixed-line communications subscriber base, China Telecom has begun a cross-selling program that combined CDMA2000 and fixed-line broadband services. Scott Siegler, an analyst for mobility infrastructure at market researcher Dell'Oro Group, expected China Telecom to "begin launching its [more advanced] CDMA 1X network beginning in 2010". Ms Wang, however, said China Mobile's efforts may be given some help. "We believe the government could announce policies in favor of TD-SCDMA, such as tax benefits, to help grow the homemade technology," she wrote in a recent report. China Mobile is expected to provide TD-SCDMA mobile services in 38 cities by June this year.
*News information are obtained via various sources deemed reliable, but not guaranteed